As filed with the Securities and Exchange Commission on October 3, 2001
Securities Act File No. 333-67880
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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[X] Pre-Effective Amendment No. 1 [_] Post-Effective Amendment No.
(Check appropriate box or boxes)
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SUNAMERICA EQUITY FUNDS
(Exact Name of Registrant as Specified in its Charter)
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1-800-858-8850
(Area Code and Telephone Number)
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733 Third Avenue
Third Floor
New York, NY 10017
(Address of Principal Executive Offices:
Number, Street, City, State, Zip Code)
----------------
Robert M. Zakem, Esq.
c/o SunAmerica Asset Management Corp.
733 Third Avenue
Third Floor
New York, NY 10017
(Name and Address of Agent for Service)
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Copies to:
Counsel for the Fund:
Shearman & Sterling
599 Lexington Avenue
New York, NY 10022
Attention: Joel H. Goldberg, Esq.
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Approximate Date of Proposed Public Offering: As soon as practicable after
the Registration Statement becomes effective under the Securities Act of 1933.
Title of Securities Being Registered: Shares of Beneficial Interest, Par
Value $.01 per share.
No filing fee is required because of reliance on Section 24(f) under the
Investment Company Act of 1940, as amended.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Securities and Exchange Commission,
acting pursuant to said Section 8(a), may determine.
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NORTH AMERICAN FUNDS
Balanced Fund
Large Cap Growth Fund
Growth & Income Fund
Mid Cap Growth Fund
286 Congress Street
Boston, Massachusetts 02210
----------------
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
----------------
TO BE HELD ON NOVEMBER 7, 2001
To our Shareholders:
NOTICE IS HEREBY GIVEN that a joint special meeting of shareholders (the
"Meeting") of the Balanced Fund (the "NAF Balanced Fund"), Large Cap Growth
Fund (the "NAF Large Cap Growth Fund"), Growth & Income Fund (the "NAF Growth &
Income Fund") and Mid Cap Growth Fund (the "NAF Mid Cap Growth Fund," and
together with the NAF Balanced Fund, NAF Large Cap Growth Fund and NAF Growth &
Income Fund, the "Acquired Funds") of North American Funds will be held at the
principal executive offices of North American Funds, 286 Congress Street,
Boston, Massachusetts 02210 on November 7, 2001 at 10:00 a.m. Eastern Time, for
the following purposes:
(1) All Acquired Funds: to approve or disapprove a new investment
advisory agreement (the "New Investment Advisory Agreement") between
American General Asset Management Corp. ("AGAM") and North American Funds
on behalf of each of the Acquired Funds, the terms of which are the same in
all material respects as the previous investment advisory agreement with
AGAM;
(2) (a) NAF Balanced Fund: to approve or disapprove an Agreement and
Plan of Reorganization (the "Balanced Funds Agreement and Plan") providing
for the acquisition of substantially all of the assets, and assumption of
substantially all of the liabilities, of the NAF Balanced Fund by the
SunAmerica Balanced Assets Fund (the "SunAmerica Balanced Assets Fund" or
an "Acquiring Fund") of SunAmerica Equity Funds, solely in exchange for an
equal aggregate value of newly issued shares of the SunAmerica Balanced
Assets Fund, as described in the accompanying proxy statement and
prospectus. The Balanced Funds Agreement and Plan also provides for
distribution of the shares of the SunAmerica Balanced Assets Fund to
shareholders of the NAF Balanced Fund. A vote in favor of this proposal
will constitute a vote in favor of the termination of the NAF Balanced Fund
as a separate investment portfolio of North American Funds;
(b) NAF Large Cap Growth Fund: to approve or disapprove an Agreement and
Plan of Reorganization (the "Large Cap Growth Funds Agreement and Plan")
providing for the acquisition of substantially all of the assets, and
assumption of substantially all of the liabilities, of the NAF Large Cap
Growth Fund by the SunAmerica Blue Chip Growth Fund of SunAmerica Equity
Funds (the "SunAmerica Blue Chip Growth Fund" or an "Acquiring Fund"),
solely in exchange for an equal aggregate value of newly issued shares of
the SunAmerica Blue Chip Growth Fund, as described in the accompanying
proxy statement and prospectus. The Large Cap Growth Funds Agreement and
Plan also provides for distribution of the shares of the SunAmerica Blue
Chip Growth Fund to shareholders of the NAF Large Cap Growth Fund. A vote
in favor of this proposal will constitute a vote in favor of the
termination of the NAF Large Cap Growth Fund as a separate investment
portfolio of North American Funds;
(c) NAF Growth & Income Fund: to approve or disapprove an Agreement and
Plan of Reorganization (the "Growth & Income Funds Agreement and Plan")
providing for the acquisition of substantially all of the assets, and
assumption of substantially all of the liabilities, of the NAF Growth &
Income Fund by the SunAmerica Growth and Income Fund of SunAmerica Equity
Funds (the "SunAmerica Growth and Income Fund" or an "Acquiring Fund"),
solely in exchange for an equal aggregate value of newly issued shares of
the SunAmerica Growth and Income Fund, as described in the accompanying
proxy statement and prospectus. The Growth & Income Funds Agreement and
Plan also provides for distribution of the shares of the SunAmerica Growth
and Income Fund to shareholders of the NAF Growth & Income Fund. A vote in
favor of this proposal will constitute a vote in favor of the termination
of the NAF Growth & Income Fund as a separate investment portfolio of North
American Funds;
(d) NAF Mid Cap Growth Fund: to approve or disapprove an Agreement and
Plan of Reorganization (the "Mid Cap Growth Funds Agreement and Plan")
providing for the acquisition of substantially all of the assets, and
assumption of substantially all of the liabilities, of the NAF Mid Cap
Growth Fund by the SunAmerica Growth Opportunities Fund of SunAmerica
Equity Funds (the "SunAmerica Growth Opportunities Fund" or an "Acquiring
Fund"), solely in exchange for an equal aggregate value of newly issued
shares of the SunAmerica Growth Opportunities Fund, as described in the
accompanying proxy statement and prospectus. The Mid Cap Growth Funds
Agreement and Plan also provides for distribution of the shares of the
SunAmerica Growth Opportunities Fund to shareholders of the NAF Mid Cap
Growth Fund. A vote in favor of this proposal will constitute a vote in
favor of the termination of the NAF Mid Cap Growth Fund as a separate
investment portfolio of North American Funds; and
(3) To transact such other business as properly may come before the
Meeting or any adjournment thereof.
The Board of Trustees of North American Funds has fixed the close of
business on September 17, 2001 as the record date for the determination of
shareholders entitled to notice of, and to vote at, the Meeting or any
adjournment thereof.
A complete list of the shareholders of each of the Acquired Funds entitled
to vote at the Meeting will be available and open to the examination of any
shareholders of each Acquired Fund for any purpose germane to such Meeting
during ordinary business hours from and after October 24, 2001 at the offices
of North American Funds, 286 Congress Street, Boston, Massachusetts and at the
Meeting.
You are cordially invited to attend the Meeting. Shareholders who do not
expect to attend the Meeting in person are requested to complete, date and sign
the enclosed respective form of proxy and return it promptly in the postage-
paid envelope provided for that purpose. Alternatively, you may vote your
shares by calling a specially designated telephone number (toll free 1-888-221-
0697) or via the Internet at http://www.proxyweb.com. Each of the enclosed
proxies is being solicited on behalf of the Board of Trustees of North American
Funds.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each Acquired Fund approve the New Investment Advisory
Agreement and the respective Agreement and Plan of Reorganization.
By Order of the Board of Trustees,
/s/ John I. Fitzgerald
John I. Fitzgerald
Secretary, North American Funds
Boston, Massachusetts
Dated: October 1, 2001
COMBINED PROXY STATEMENT AND PROSPECTUS
SUNAMERICA EQUITY FUNDS
NORTH AMERICAN FUNDS
----------------
JOINT SPECIAL MEETING OF SHAREHOLDERS OF
BALANCED FUND
LARGE CAP GROWTH FUND
GROWTH & INCOME FUND
AND
MID CAP GROWTH FUND
OF
NORTH AMERICAN FUNDS
----------------
NOVEMBER 7, 2001
This Proxy Statement and Prospectus is furnished to you because you are a
shareholder of one or more of the North American Funds referenced above. The
Funds are holding a Joint Special Meeting of Shareholders (the "Meeting") on
November 7, 2001 to consider the two proposals described in this Proxy
Statement and Prospectus.
This Proxy Statement and Prospectus describes a proposal to approve or
disapprove a new investment advisory agreement with American General Asset
Management Corp. ("AGAM") for your Fund. The terms of the new investment
advisory agreement are the same in all material respects as your Fund's
previous investment advisory agreement with AGAM. Your Board of Trustees is
seeking your proxy to vote in favor of this proposal.
In addition, your Board of Trustees is seeking your approval of a
transaction involving your Fund. Under the proposal, your Fund would reorganize
with a comparable portfolio of SunAmerica Equity Funds, as set forth in the
chart below. If this reorganization is approved by shareholders, you will
become a shareholder of the SunAmerica fund listed opposite your Fund's name.
Your Fund SunAmerica Fund
--------- ---------------
Balanced Fund SunAmerica Balanced Assets Fund
Large Cap Growth Fund SunAmerica Blue Chip Growth Fund
Growth & Income Fund SunAmerica Growth and Income Fund
Mid Cap Growth Fund SunAmerica Growth Opportunities Fund
This Proxy Statement and Prospectus serves as a prospectus of SunAmerica
Equity Funds under the Securities Act of 1933, as amended (the "Securities
Act"), in connection with the issuance of shares to you pursuant to the terms
of the reorganizations.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROXY STATEMENT AND PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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The Date of this Proxy Statement and Prospectus is October 1, 2001.
Both North American Funds and SunAmerica Equity Funds are open-end series
management investment companies organized as Massachusetts business trusts.
This Proxy Statement and Prospectus sets forth concisely the information
about SunAmerica Equity Funds that you should know before considering a
reorganization and should be retained for future reference. North American
Funds has authorized the solicitation of proxies solely on the basis of this
Proxy Statement and Prospectus and the accompanying documents.
The following documents are included in the package of documents that you
received with this Proxy Statement and Prospectus:
. The prospectus relating to SunAmerica Equity Funds, dated January 29,
2001, as supplemented (the "Acquiring Funds Prospectus"). This document
is incorporated herein by reference (legally considered to be a part of
this Proxy Statement and Prospectus).
. The Annual Report to Shareholders of SunAmerica Equity Funds for the year
ended September 30, 2000, and the Semi-Annual Report to Shareholders of
SunAmerica Equity Funds for the six month period ended March 31, 2001.
These documents are incorporated herein by reference (legally considered
to be a part of this Proxy Statement and Prospectus).
Additional information about the proposed transactions is contained in a
statement of additional information relating to this Proxy Statement and
Prospectus (the "Statement of Additional Information"), including pro forma
financial statements giving effect to the consummation of each reorganization,
and is on file with the Securities and Exchange Commission (the "Commission").
The Statement of Additional Information is available without charge, upon
request by calling one of the toll free numbers set forth below or by writing
North American Funds or SunAmerica Equity Funds at the addresses set forth
below. The Statement of Additional Information, dated October 1, 2001, is
incorporated by reference into this Proxy Statement and Prospectus.
Other documents containing information about the Funds have been filed with
the Commission. These other documents are available without charge by writing
to the address or calling the toll free number set forth below:
If they relate to North
American Funds: If they relate to SunAmerica Equity Funds:
North American Funds SunAmerica Equity Funds
286 Congress Street The SunAmerica Center
Boston, Massachusetts 02210 733 Third Avenue
1-800-872-8037 New York, New York 10017
1-800-858-8850
These documents are:
. A statement of additional information relating to SunAmerica Equity
Funds, dated January 29, 2001, as supplemented (the "Acquiring Funds
Statement").
. The preliminary prospectus relating to SunAmerica Equity Funds, subject
to completion and dated August 14, 2001, as supplemented.
. The preliminary statement of additional information relating to
SunAmerica Equity Funds, subject to completion and dated August 14, 2001,
as supplemented.
. The current prospectuses relating to North American Funds, each dated
March 1, 2001, as supplemented (the "Acquired Funds Prospectuses"). These
documents are incorporated herein by reference (legally considered to be
a part of this Proxy Statement and Prospectus).
. A statement of additional information relating to North American Funds,
dated March 1, 2001, as supplemented (the "Acquired Funds Statement").
. The Annual Report to Shareholders of North American Funds for the year
ended October 31, 2000 and the Semi-Annual Report to Shareholders of
North American Funds for the six month period ended April 30, 2001.
The Commission maintains a web site (http://www.sec.gov) that contains the
Statement of Additional Information, the Acquiring Funds Prospectus, the
Acquired Funds Prospectuses, the Acquiring Funds Statement, the Acquired Funds
Statement, other material incorporated by reference and other information
regarding the Funds.
The address of the principal executive offices of SunAmerica Equity Funds is
The SunAmerica Center, 733 Third Avenue, New York, New York 10017, the
telephone number is 1-800-858-8850 and the web address is
http://www.sunamericafunds.com. The address of the principal executive offices
of North American Funds is 286 Congress Street, Boston, Massachusetts 02210,
the telephone number is 1-800-872-8037 and the web address is
http://www.northamericanfunds.com.
The shareholders solicited and entitled to vote on Proposals 1, 2a, 2b, 2c
and 2d of this Proxy Statement and Prospectus are outlined in the following
table:
Proposal Fund
-------- ----
1.Approval of New Investment Advisory Agreement All North American Funds
referenced above, each voting
separately
2.(a) Approval of Agreement and Plan of Balanced Fund
Reorganization relating to Balanced Fund
(b) Approval of Agreement and Plan of Large Cap Growth Fund
Reorganization relating to Large Cap
Growth Fund
(c) Approval of Agreement and Plan of Growth & Income Fund
Reorganization relating to Growth &
Income Fund
(d) Approval of Agreement and Plan of Mid Cap Growth Fund
Reorganization relating to Mid Cap
Growth Fund
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TABLE OF CONTENTS
Page
----
INTRODUCTION.............................................................. 2
SUMMARY................................................................... 3
THE AIG MERGER AND THE NEW INVESTMENT ADVISORY AGREEMENT.................. 3
THE REORGANIZATIONS....................................................... 3
What Shareholders of an Acquired Fund Will Receive in a Reorganization..
Reasons for the Reorganizations.........................................
FEE TABLES AND EXAMPLES................................................... 6
THE FUNDS................................................................. 20
Business of the Acquired Funds.......................................... 20
Business of the Acquiring Funds......................................... 20
Comparison of the Funds................................................. 20
PRINCIPAL RISK FACTORS AND SPECIAL CONSIDERATIONS......................... 26
PRINCIPAL RISKS OF INVESTING IN THE FUNDS................................. 26
All Funds............................................................... 26
Balanced Funds.......................................................... 26
Mid Cap Growth Funds.................................................... 27
PROPOSAL NO. 1: APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT......... 28
THE AIG MERGER AND THE NEW INVESTMENT ADVISORY AGREEMENT.................. 28
Board Considerations.................................................... 28
Description of the New Investment Advisory Agreement.................... 29
Additional Information About AGAM....................................... 30
PROPOSALS NOS. 2(a) - (d): APPROVAL OF THE PLANS.......................... 32
COMPARISON OF THE FUNDS................................................... 32
Investment Policies..................................................... 32
Trustees and Officers................................................... 35
Management Arrangements................................................. 38
Distribution and Shareholder Servicing Arrangements..................... 42
Other Service Agreements with Affiliates................................ 43
Purchase, Exchange and Redemption of Shares............................. 43
Performance............................................................. 47
Shareholder Rights...................................................... 49
Tax Information......................................................... 49
Portfolio Transactions.................................................. 49
Portfolio Turnover...................................................... 49
Additional Information.................................................. 50
THE REORGANIZATIONS....................................................... 52
General................................................................. 52
Terms of the Plans...................................................... 52
NAF Board Considerations: Potential Benefits to Shareholders as a Result
of the Reorganizations................................................. 54
Federal Income Tax Consequences of the Reorganizations.................. 56
Capitalization.......................................................... 58
GENERAL................................................................... 60
Page
----
INFORMATION CONCERNING THE MEETING........................................ 60
Date, Time and Place of Meeting......................................... 60
Solicitation, Revocation and Use of Proxies............................. 60
Record Date and Outstanding Shares...................................... 60
Security Ownership of Certain Beneficial Owners and Management of the
Funds.................................................................. 61
Voting Rights and Required Vote......................................... 64
ADDITIONAL INFORMATION.................................................... 65
LEGAL PROCEEDINGS......................................................... 65
LEGAL OPINIONS............................................................ 66
EXPERTS................................................................... 66
SHAREHOLDER PROPOSALS..................................................... 66
EXHIBIT I................................................................. I-1
EXHIBIT II................................................................ II-1
INTRODUCTION
This Proxy Statement and Prospectus is furnished in connection with the
solicitation of proxies on behalf of the Board of Trustees of North American
Funds (the "NAF Board") for use at the Meeting to be held at the principal
executive offices of North American Funds, 286 Congress Street, Boston,
Massachusetts 02210 on November 7, 2001, at 10:00 a.m., Eastern Time. The
mailing address for North American Funds is 286 Congress Street, Boston,
Massachusetts 02210. The approximate mailing date of this Proxy Statement and
Prospectus is October 5, 2001.
Before we describe the proposals any further, we need to define certain
words or phrases that are used in this Proxy Statement and Prospectus:
Acquired Fund: Your Fund, which is a portfolio of North American Funds.
Acquiring Fund: The portfolio of SunAmerica Equity Funds that is
acquiring a comparable portfolio of North American Funds.
Balanced Funds: The Balanced Fund of North American Funds and the
SunAmerica Balanced Assets Fund.
Balanced Combined Fund: The SunAmerica Balanced Assets Fund after the
Reorganization.
Blue Chip Growth Combined Fund: The SunAmerica Blue Chip Growth Fund
after the Reorganization.
Combined Fund: The Acquiring Fund after completion of the
Reorganization.
Fund: Either the Acquired Fund or Acquiring Fund, depending on the
context.
Growth and Income Funds: The Growth & Income Fund of North American
Funds and the SunAmerica Growth and Income Fund.
Growth and Income Combined Fund: The SunAmerica Growth and Income Fund
after the Reorganization.
Growth Opportunities Combined Fund: The SunAmerica Growth Opportunities
Fund after the Reorganization.
Investment Company Act: The Investment Company Act of 1940, as amended.
Large Cap Growth Funds: The Large Cap Growth Fund of North American
Funds and the SunAmerica Blue Chip Growth Fund.
Mid Cap Growth Funds: The Mid Cap Growth Fund of North American Funds
and the SunAmerica Growth Opportunities Fund.
NAF Balanced Fund: The Balanced Fund of North American Funds.
NAF Growth & Income Fund: The Growth & Income Fund of North American
Funds.
NAF Large Cap Growth Fund: The Large Cap Growth Fund of North American
Funds.
NAF Mid Cap Growth Fund: The Mid Cap Growth Fund of North American
Funds.
Plan: The Agreement and Plan of Reorganization, which sets forth the
terms of each Reorganization and is being submitted for shareholder
approval.
Reorganization: The transaction through which an Acquired Fund will be
acquired by an Acquiring Fund and shareholders of an Acquired Fund will
become shareholders of an Acquiring Fund.
2
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement and Prospectus (including documents incorporated by
reference) and is qualified in its entirety by reference to the more complete
information contained in this Proxy Statement and Prospectus and in the forms
of the New Investment Advisory Agreement and the Plans, attached hereto as
Exhibits I and II, respectively.
THE AIG MERGER AND THE NEW INVESTMENT ADVISORY AGREEMENT
On August 29, 2001, American International Group, Inc. ("AIG") acquired
American General Corporation ("American General"), the parent company of AGAM
(the "AIG Merger"). As a result of the AIG Merger, AGAM became a subsidiary of
AIG. AIG is also the parent company of SunAmerica Asset Management Corp.
("SAAMCo").
As a result of the AIG Merger, applicable law requires shareholder approval
of a new investment advisory agreement (the "New Investment Advisory
Agreement") with AGAM for your Fund. The terms of the New Investment Advisory
Agreement are the same in all material respects as your Fund's previous
investment advisory agreement with AGAM (the "Previous Investment Advisory
Agreement"). See "Proposal No. 1: Approval of the New Investment Advisory
Agreement" below for a description of the New Investment Advisory Agreement and
the services to be provided by AGAM thereunder.
In connection with its approval of the New Investment Advisory Agreement,
the NAF Board received a presentation relating to AIG and SAAMCo, as well as a
presentation from AGAM. The NAF Board considered that the AIG Merger did not
involve any changes in the overall form of the advisory contract, the advisory
fees, or any of the Acquired Funds' objectives or policies. The NAF Board also
considered that AGAM and SAAMCo had indicated that while they intended to
propose the Reorganizations to the NAF Board at a subsequent meeting, until
such Reorganizations were approved and consummated, SAAMCo and AIG represented
there would be no material change in the nature and quality of services
provided by AGAM. As part of its deliberations, the NAF Board took into account
the following, among other factors: the nature and quality of the services
provided or reasonably anticipated to be provided and the results achieved or
reasonably anticipated to be achieved by AGAM; the amount and structure of
investment advisers' fees generally and the fees payable under the New
Investment Advisory Agreement; the financial strength of AIG; the management,
personnel and operations of AIG and SAAMCo; the commitment of AIG to the
financial services industry; and the structure of the AIG Merger.
AGAM is a wholly owned subsidiary of American General. Prior to the AIG
Merger, American General was one of the nation's largest diversified financial
services organizations with assets of approximately $128 billion and market
capitalization of $23 billion at June 30, 2001. SAAMCo is the investment
adviser for the Acquiring Funds. SAAMCo has been in the business of investment
management since 1982 and as of June 30, 2001, managed, advised and/or
administered approximately $28.5 billion of assets. AIG, SAAMCo's parent, a
Delaware corporation, is a holding company which through its subsidiaries is
engaged in a broad range of insurance and insurance-related activities and
financial services in the United States and abroad.
THE REORGANIZATIONS
What Shareholders of an Acquired Fund Will Receive in a Reorganization
If shareholders approve their Fund's Reorganization and the Reorganization
takes place:
. The Acquiring Fund will acquire substantially all of the assets and
assume substantially all of the liabilities of the Acquired Fund;
3
. Shareholders of the Acquired Fund will become shareholders of the
Acquiring Fund;
. Shareholders holding Class A, Class B, Class C and Institutional Class I
shares of the Acquired Fund will receive Class A, Class B, Class II and
Class I shares, respectively, of the Acquiring Fund (the "Corresponding
Shares"); and
. Corresponding Shares received by shareholders of the Acquired Fund will
have the same aggregate net asset value as the shares of the Acquired
Fund held immediately prior to the Reorganization.
No sales charges will be imposed on the Corresponding Shares issued in
connection with the Reorganizations. Each Reorganization has been structured
with the intention that it qualify for Federal income tax purposes as a tax-
free reorganization under the Internal Revenue Code of 1986, as amended (the
"Code"). This means that, in the opinion of counsel, no gain or loss will be
recognized by a shareholder of an Acquired Fund for Federal income tax purposes
as a result of a Reorganization.
Reasons for the Reorganizations
On August 2, 2001, the NAF Board unanimously approved each Reorganization,
subject to shareholder approval and completion of the AIG Merger. The NAF
Board, including all of the NAF Independent Trustees (as defined below), has
determined that each Reorganization is in the best interests of the respective
Acquired Fund and its shareholders. In addition, the NAF Board, including all
of the NAF Independent Trustees, has determined that the interests of existing
shareholders of each Acquired Fund will not be diluted as a result of effecting
the respective Reorganization because each such shareholder will receive
Corresponding Shares of the Acquiring Fund having an aggregate net asset value
equal to the aggregate net asset value of his or her shares of the Acquired
Fund outstanding as of the Valuation Time (as defined in the Plans). Although,
as a result of the Reorganizations, a shareholder of an Acquired Fund may
receive Corresponding Shares which represent a smaller percentage of ownership
in the respective Acquiring Fund than he or she held in that Acquired Fund
prior to the respective Reorganization, the total dollar value of the shares
will be the same. The NAF Independent Trustees are the Trustees who are not
"interested persons" of North American Funds (within the meaning of the
Investment Company Act).
The NAF Board unanimously recommends that you vote FOR the Plan relating to
the Reorganization involving your Fund. Your Board of Trustees has based this
recommendation on its consideration of the principal reasons underlying each
Reorganization, including the following:
. the fact that following each Reorganization, shareholders of each
Acquired Fund would remain invested in a mutual fund having substantially
the same or similar investment objective and similar investment
techniques;
. the fees and expenses of the Acquired Funds, the Acquiring Funds and the
Combined Funds;
. potential benefits to shareholders likely to result from each
Reorganization, such as the potential for reduced operating expenses over
time due to economies of scale; and
. the fact that the Reorganizations will not result in dilution of the
interests of Acquired Fund shareholders.
For a more detailed discussion of the factors considered by your Board in
approving the Reorganizations, see "Proposals Nos. 2(a)-(d): The
Reorganizations " below.
If all of the requisite approvals are obtained and certain conditions are
either met or waived, it is anticipated that (i) AGAM will continue to serve as
the investment adviser of the Acquired Funds until the closing of the
Reorganizations (which is currently anticipated to occur during the fourth
calendar quarter of 2001), (ii) the Reorganizations will occur as soon as
practicable thereafter, provided that the Funds have
4
obtained prior to that time an opinion of counsel concerning the tax
consequences of the Reorganizations as set forth in the Plans, and (iii) after
the consummation of the Reorganizations, SAAMCo will manage the assets of the
Acquired Funds as part of the Combined Funds. The Plans may be terminated, and
the Reorganizations abandoned, whether before or after the requisite approval
by the shareholders of the Acquired Funds, at any time prior to the Closing
Date (as defined herein), (i) by mutual agreement of the NAF Board and the
Board of Trustees of SunAmerica Equity Funds (the "SunAmerica Board"); (ii) by
an Acquired Fund if any condition to such Acquired Fund's obligations has not
been fulfilled or waived; or (iii) by an Acquiring Fund if any condition to
such Acquiring Fund's obligations has not been fulfilled or waived.
5
FEE TABLES AND EXAMPLES
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Class A Shares Class B Shares
-------------- --------------
Actual Pro Forma Actual Pro Forma
------------------- --------- ------------------- ---------
SunAmerica SunAmerica
NAF Balanced Balanced NAF Balanced Balanced
Balanced Assets Combined Balanced Assets Combined
Fund Fund Fund Fund Fund Fund
-------- ---------- --------- -------- ---------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. 5.75% 5.75% 5.75% None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... None None None 5.00% 5.00% 5.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None None
Redemption Fee (3)...... None None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.77% 0.73% 0.73% 0.77% 0.73% 0.73%
Distribution and/or
Service (12b-1) Fees
(4)................... 0.35% 0.35% 0.35% 1.00% 1.00% 1.00%
Other Expenses......... 0.61% 0.36% 0.35% 0.61% 0.33% 0.33%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 1.73% 1.44% 1.43% 2.38% 2.06% 2.06%
Expense Reimbursement
(5).................... 0.02% -- -- 0.02% -- --
Net Expenses............ 1.71% 1.44% 1.43% 2.36% 2.06% 2.06%
6
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Institutional Class I/Class I
Class C/Class II Shares Shares
----------------------------- -----------------------------
Actual Pro Forma Actual Pro Forma
------------------- --------- ------------------- ---------
SunAmerica SunAmerica
NAF Balanced Balanced NAF Balanced Balanced
Balanced Assets Combined Balanced Assets Combined
Fund Fund Fund Fund Fund Fund **
-------- ---------- --------- -------- ---------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. None 1.00% 1.00% None N/A None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... 1.00% 1.00% 1.00% None N/A None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None N/A None
Redemption Fee (3)...... None None None None N/A None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.77% 0.73% 0.73% 0.77% N/A 0.73%
Distribution and/or
Service (12b-1) Fees
(4)................... 1.00% 1.00% 1.00% None N/A None
Other Expenses......... 0.61% 0.39% 0.38% 0.86% N/A 0.77%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.38% 2.12% 2.11% 1.63% N/A 1.50%
Expense Reimbursement
(5)(6)................. 0.02% 0.07% -- 0.02% N/A 0.17%
Net Expenses............ 2.36% 2.05% 2.11% 1.61% N/A 1.33%
7
These examples are intended to help you compare the cost of investing in the
Balanced Funds with the cost of investing in other mutual funds.
Examples:
An investor would pay the following expenses on a $10,000 investment,
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid for the Period of:
--------------------------------------------------
1 Year 3 Years 5 Years 10 Years (b)
--------- ----------- ----------- ---------------
Expenses if you did redeem
your shares at the end of
the period:
Class A Shares
NAF Balanced Fund (a)..... $ 739 $ 1,087 $ 1,458 $ 2,497
SunAmerica Balanced Assets
Fund..................... 713 1,004 1,317 2,200
Pro Forma Balanced
Combined Fund #.......... 712 1,001 1,312 2,190
Class B Shares
NAF Balanced Fund (a)..... $ 739 $ 1,141 $ 1,469 $ 2,553
SunAmerica Balanced Assets
Fund..................... 709 946 1,308 2,231
Pro Forma Balanced
Combined Fund #.......... 709 946 1,308 2,228
Class C/Class II Shares
NAF Balanced Fund (a)..... $ 339 $ 741 $ 1,269 $ 2,715
SunAmerica Balanced Assets
Fund (a)................. 406 736 1,192 2,455
Pro Forma Balanced
Combined Fund #.......... 412 754 1,223 2,517
Institutional Class I/Class
I Shares
NAF Balanced Fund (a)..... $ 164 $ 512 $ 885 $ 1,931
SunAmerica Balanced Assets
Fund..................... N/A N/A N/A N/A
Pro Forma Balanced
Combined Fund (a)#....... 135 421 729 1,601
Cumulative Expenses Paid for the Period of:
--------------------------------------------------
1 Year 3 Years 5 Years 10 Years (b)
--------- ----------- ----------- ---------------
Expenses if you did not
redeem your shares at the
end of the period:
Class A Shares
NAF Balanced Fund (a)..... $ 739 $ 1,087 $ 1,458 $ 2,497
SunAmerica Balanced Assets
Fund..................... 713 1,004 1,317 2,200
Pro Forma Balanced
Combined Fund #.......... 712 1,001 1,312 2,190
Class B Shares
NAF Balanced Fund (a)..... $ 239 $ 741 $ 1,269 $ 2,553
SunAmerica Balanced Assets
Fund..................... 209 646 1,108 2,231
Pro Forma Balanced
Combined Fund #.......... 209 646 1,108 2,228
Class C/Class II Shares
NAF Balanced Fund (a)..... $ 239 $ 741 $ 1,269 $ 2,715
SunAmerica Balanced Assets
Fund (a)................. 306 736 1,192 2,455
Pro Forma Balanced
Combined Fund #.......... 312 754 1,223 2,517
Institutional Class I/Class
I Shares
NAF Balanced Fund (a)..... $ 164 $ 512 $ 885 $ 1,931
SunAmerica Balanced Assets
Fund..................... N/A N/A N/A N/A
Pro Forma Balanced
Combined Fund (a)#....... 135 421 729 1,601
8
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Class A Shares Class B Shares
------------------------------ ------------------------------
Actual Pro Forma Actual Pro Forma
-------------------- --------- -------------------- ---------
NAF SunAmerica Blue Chip NAF SunAmerica Blue Chip
Large Cap Blue Chip Growth Large Cap Blue Chip Growth
Growth Growth Combined Growth Growth Combined
Fund Fund Fund Fund Fund Fund
--------- ---------- --------- --------- ---------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of
offering price) (1).... 5.75% 5.75% 5.75% None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... None None None 5.00% 5.00% 5.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None None
Redemption Fee (3)...... None None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.90% 0.75% 0.75% 0.90% 0.75% 0.75%
Distribution and/or
Service (12b-1) Fees
(4)................... 0.35% 0.35% 0.35% 1.00% 1.00% 1.00%
Other Expenses......... 0.61% 0.33% 0.33% 0.61% 0.34% 0.34%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 1.86% 1.43% 1.43% 2.51% 2.09% 2.09%
Expense Reimbursement
(5).................... 0.49% -- -- 0.49% -- --
Net Expenses............ 1.37% 1.43% 1.43% 2.02% 2.09% 2.09%
9
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds (as of September 30, 2000) and Pro Forma Fee Table for each
of the Combined Funds
(as of March 31, 2001) *
Class C/Class II Shares Institutional Class I/Class I Shares
--------------------------- -----------------------------------------
Actual Pro Forma Actual Pro Forma
----------------- --------- --------------------------- ------------
NAF
Large SunAmerica Blue Chip NAF Large Blue Chip
Cap Blue Chip Growth Cap SunAmerica Growth
Growth Growth Combined Growth Blue Chip Combined
Fund Fund Fund Fund Growth Fund Fund **
------ ---------- --------- ------------ ------------- ------------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. None 1.00% 1.00% None N/A None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... 1.00% 1.00% 1.00% None N/A None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None N/A None
Redemption Fee (3)...... None None None None N/A None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.90% 0.75% 0.75% 0.90% N/A 0.75%
Distribution and/or
Service (12b-1) Fees
(4)................... 1.00% 1.00% 1.00% None N/A None
Other Expenses......... 0.61% 0.59% 0.41% 0.86% N/A 0.68%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.51% 2.34% 2.16% 1.76% N/A 1.43%
Expense Reimbursement
(5)(6)................. 0.49% 0.17% -- 0.49% N/A 0.10%
Net Expenses............ 2.02% 2.17% 2.16% 1.27% N/A 1.33%
10
These examples are intended to help you compare the cost of investing in the
Large Cap Growth Funds with the cost of investing in other mutual funds.
Examples:
An investor would pay the following expenses on a $10,000 investment,
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid for the Period of:
--------------------------------------------------
1 Year 3 Years 5 Years 10 Years (b)
--------- ----------- ----------- ---------------
Expenses if you did redeem
your shares at the end of
the period:
Class A Shares
NAF Large Cap Growth Fund
(a)...................... $ 706 $ 1,081 $ 1,480 $ 2,592
SunAmerica Blue Chip
Growth Fund.............. 712 1,001 1,312 2,190
Pro Forma Combined Blue
Chip Growth Fund #....... 712 1,001 1,312 2,190
Class B Shares
NAF Large Cap Growth Fund
(a)...................... $ 705 $ 1,135 $ 1,492 $ 2,649
SunAmerica Blue Chip
Growth Fund.............. 712 955 1,324 2,252
Pro Forma Combined Blue
Chip Growth Fund #....... 712 955 1,324 2,252
Class C/Class II Shares
NAF Large Cap Growth Fund
(a)...................... $ 305 $ 735 $ 1,292 $ 2,809
SunAmerica Blue Chip
Growth Fund (a).......... 418 772 1,253 2,578
Pro Forma Combined Blue
Chip Growth Fund #....... 417 769 1,248 2,568
Institutional Class I/Class
I Shares
NAF Large Cap Growth Fund
(a)...................... $ 129 $ 506 $ 908 $ 2,033
SunAmerica Blue Chip
Growth Fund.............. N/A N/A N/A N/A
Pro Forma Combined Blue
Chip Growth Fund (a)#.... 135 421 729 1,601
Cumulative Expenses Paid for the
Period of:
---------------------------------
3 5
1 Year Years Years 10 Years (b)
------ ------ ------ ------------
Expenses if you did not redeem your shares
at the end of the period:
Class A Shares
NAF Large Cap Growth Fund (a)............. $706 $1,081 $1,480 $2,592
SunAmerica Blue Chip Growth Fund.......... 712 1,001 1,312 2,190
Pro Forma Combined Blue Chip Growth Fund
#........................................ 712 1,001 1,312 2,190
Class B Shares
NAF Large Cap Growth Fund (a)............. $205 $ 735 $1,292 $2,649
SunAmerica Blue Chip Growth Fund.......... 212 655 1,124 2,252
Pro Forma Combined Blue Chip Growth Fund
#........................................ 212 655 1,124 2,252
Class C/Class II Shares
NAF Large Cap Growth Fund (a)............. $205 $ 735 $1,292 $2,809
SunAmerica Blue Chip Growth Fund (a)...... 318 772 1,253 2,578
Pro Forma Combined Blue Chip Growth Fund
#........................................ 317 769 1,248 2,568
Institutional Class I/Class I Shares
NAF Large Cap Growth Fund (a)............. $129 $ 506 $ 908 $2,033
SunAmerica Blue Chip Growth Fund.......... N/A N/A N/A N/A
Pro Forma Combined Blue Chip Growth Fund
(a)#..................................... 135 421 729 1,601
11
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds (as of September 30, 2000) and Pro Forma Fee Table for each
of the Combined Funds (as of March 31, 2001) *
Class A Shares Class B Shares
--------------------------- ---------------------------
Actual Pro Forma Actual Pro Forma
----------------- --------- ----------------- ---------
NAF Growth NAF Growth
Growth SunAmerica and Growth SunAmerica and
& Growth and Income & Growth and Income
Income Income Combined Income Income Combined
Fund Fund Fund Fund Fund Fund
------ ---------- --------- ------ ---------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. 5.75% 5.75% 5.75% None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... None None None 5.00% 5.00% 5.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None None
Redemption Fee (3)...... None None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.67% 0.75% 0.73% 0.67% 0.75% 0.73%
Distribution and/or
Service (12b-1) Fees
(4)................... 0.35% 0.35% 0.35% 1.00% 1.00% 1.00%
Other Expenses......... 0.63% 0.34% 0.34% 0.63% 0.32% 0.32%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 1.65% 1.44% 1.42% 2.30% 2.07% 2.05%
Expense Reimbursement
(5).................... 0.19% -- -- 0.19% -- --
Net Expenses............ 1.46% 1.44% 1.42% 2.11% 2.07% 2.05%
12
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Institutional Class I/Class
Class C/Class II Shares I Shares
---------------------------- ---------------------------
Actual Pro Forma Actual Pro Forma
------------------ --------- ----------------- ---------
NAF Growth NAF Growth
Growth SunAmerica and Growth SunAmerica and
& Growth and Income & Growth and Income
Income Income Combined Income Income Combined
Fund Fund Fund Fund Fund Fund **
------- ---------- --------- ------ ---------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. None 1.00% 1.00% None N/A None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is
lower) (2)............. 1.00% 1.00% 1.00% None N/A None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None N/A None
Redemption Fee (3)...... None None None None N/A None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.67% 0.75% 0.73% 0.67% N/A 0.73%
Distribution and/or
Service (12b-1) Fees
(4)................... 1.00% 1.00% 1.00% None N/A None
Other Expenses......... 0.63% 0.36% 0.34% 0.88% N/A 0.68%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.30% 2.11% 2.07% 1.55% N/A 1.41%
Expense
Reimbursement (5)(6)... 0.19% 0.01% -- 0.19% N/A 0.09%
Net Expenses............ 2.11% 2.10% 2.07% 1.36% N/A 1.32%
13
These examples are intended to help you compare the cost of investing in the
Growth and Income Funds with the cost of investing in other mutual funds.
Examples:
An investor would pay the following expenses on a $10,000 investment,
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid for the Period of:
--------------------------------------------------
1 Year 3 Years 5 Years 10 Years (b)
--------- ----------- ----------- ---------------
Expenses if you did redeem
your shares at the end of
the period:
Class A Shares
NAF Growth & Income Fund
(a)...................... $ 715 $ 1,048 $ 1,404 $ 2,402
SunAmerica Growth and
Income Fund.............. 713 1,004 1,317 2,200
Pro Forma Combined Growth
and Income Fund #........ 711 999 1,307 2,179
Class B Shares
NAF Growth & Income Fund
(a)...................... $ 714 $ 1,100 $ 1,413 $ 2,458
SunAmerica Growth and
Income Fund.............. 710 949 1,314 2,239
Pro Forma Combined Growth
and Income Fund #........ 708 943 1,303 2,218
Class C/Class II Shares
NAF Growth & Income Fund
(a)...................... $ 314 $ 700 $ 1,213 $ 2,621
SunAmerica Growth and
Income Fund (a).......... 411 751 1,218 2,507
Pro Forma Combined Growth
and Income Fund #........ 408 742 1,202 2,476
Institutional Class I/Class
I Shares
NAF Growth & Income Fund
(a)...................... $ 138 $ 471 $ 827 $ 1,829
SunAmerica Growth and
Income Fund.............. N/A N/A N/A N/A
Pro Forma Combined Growth
and Income Fund (a)#..... 134 418 723 1,590
Cumulative Expenses Paid for the Period of:
---------------------------------------------------
1 Year 3 Years 5 Years 10 Years (b)
--------- ----------- ----------- --------------
Expenses if you did not
redeem your shares at the
end of the period:
Class A Shares
NAF Growth & Income Fund
(a).................... $ 715 $ 1,048 $ 1,404 $ 2,402
SunAmerica Growth and
Income Fund............ 713 1,004 1,317 2,200
Pro Forma Combined
Growth and Income Fund
#...................... 711 999 1,307 2,179
Class B Shares
NAF Growth & Income Fund
(a).................... $ 214 $ 700 $ 1,213 $ 2,458
SunAmerica Growth and
Income Fund............ 210 649 1,114 2,239
Pro Forma Combined
Growth and Income Fund
#...................... 208 643 1,103 2,218
Class C/Class II Shares
NAF Growth & Income Fund
(a).................... $ 214 $ 700 $ 1,213 $ 2,621
SunAmerica Growth and
Income Fund (a)........ 311 751 1,218 2,507
Pro Forma Combined
Growth and Income Fund
#...................... 308 742 1,202 2,476
Institutional Class
I/Class I Shares
NAF Growth & Income Fund
(a).................... $ 138 $ 471 $ 827 $ 1,829
SunAmerica Growth and
Income Fund............ N/A N/A N/A N/A
Pro Forma Combined
Growth and Income Fund
(a)#................... 134 418 723 1,590
14
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Class A Shares Class B Shares
----------------------------------- -----------------------------------
Actual Pro Forma Actual Pro Forma
--------------------- ------------- --------------------- -------------
NAF SunAmerica NAF SunAmerica
Mid Cap Growth Growth Mid Cap Growth Growth
Growth Opportunities Opportunities Growth Opportunities Opportunities
Fund Fund Combined Fund Fund Fund Combined Fund
------- ------------- ------------- ------- ------------- -------------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. 5.75% 5.75% 5.75% None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... None None None 5.00% 5.00% 5.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None None
Redemption Fee (3)...... None None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.93% 0.75% 0.75% 0.93% 0.75% 0.75%
Distribution and/or
Service (12b-1) Fees
(4)................... 0.35% 0.35% 0.35% 1.00% 1.00% 1.00%
Other Expenses......... 0.63% 0.33% 0.33% 0.63% 0.35% 0.35%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 1.91% 1.43% 1.43% 2.56% 2.10% 2.10%
Expense
Reimbursement (5)...... 0.38% -- -- 0.38% -- --
Net Expenses............ 1.53% 1.43% 1.43% 2.18% 2.10% 2.10%
15
Actual Fee Table for Shareholders of each of the Acquired Funds + and each of
the Acquiring Funds
(as of September 30, 2000) and Pro Forma Fee Table for each of the Combined
Funds
(as of March 31, 2001) *
Institutional Class I/Class I
Class C/Class II Shares Shares
----------------------------------- -----------------------------------
Actual Pro Forma Actual Pro Forma
--------------------- ------------- --------------------- -------------
NAF SunAmerica NAF SunAmerica Growth
Mid Cap Growth Growth Mid Cap Growth Opportunities
Growth Opportunities Opportunities Growth Opportunities Combined Fund
Fund Fund Combined Fund Fund Fund **
------- ------------- ------------- ------- ------------- -------------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price) (1)............. None 1.00% 1.00% None N/A None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is lower)
(2).................... 1.00% 1.00% 1.00% None N/A None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None N/A None
Redemption Fee (3)...... None None None None N/A None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees........ 0.93% 0.75% 0.75% 0.93% N/A 0.75%
Distribution and/or
Service (12b-1) Fees
(4)................... 1.00% 1.00% 1.00% None N/A None
Other Expenses......... 0.63% 0.35% 0.35% 0.88% N/A 0.74%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.56% 2.10% 2.10% 1.81% N/A 1.49%
Expense
Reimbursement (5)(6)... 0.38% 0.01% -- 0.38% N/A 0.16%
Net Expenses............ 2.18% 2.09% 2.10% 1.43% N/A 1.33%
16
These examples are intended to help you compare the cost of investing in the
Mid Cap Growth Funds with the cost of investing in other mutual funds.
Examples:
An investor would pay the following expenses on a $10,000 investment,
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid for the
Period of:
---------------------------------
3 5
1 Year Years Years 10 Years (b)
------ ------ ------ ------------
Expenses if you did redeem your shares at
the end of the period:
Class A Shares
NAF Mid Cap Growth Fund (a)............... $722 $1,106 $1,514 $2,650
SunAmerica Growth Opportunities Fund...... 712 1,001 1,312 2,190
Pro Forma Combined Growth Opportunities
Fund #................................... 712 1,001 1,312 2,190
Class B Shares
NAF Mid Cap Growth Fund (a)............... $721 $1,160 $1,526 $2,708
SunAmerica Growth Opportunities Fund...... 713 958 1,329 2,260
Pro Forma Combined Growth Opportunities
Fund #................................... 713 958 1,329 2,260
Class C/Class II Shares
NAF Mid Cap Growth Fund (a)............... $321 $ 760 $1,326 $2,867
SunAmerica Growth Opportunities Fund (a).. 410 748 1,212 2,497
Pro Forma Combined Growth Opportunities
Fund #................................... 411 751 1,218 2,507
Institutional Class I/Class I Shares
NAF Mid Cap Growth Fund (a)............... $146 $ 533 $ 945 $2,095
SunAmerica Growth Opportunities Fund...... N/A N/A N/A N/A
Pro Forma Combined Growth Opportunities
Fund (a)#................................ 135 421 729 1,601
Cumulative Expenses Paid for the
Period of:
---------------------------------
3 5
1 Year Years Years 10 Years (b)
------ ------ ------ ------------
Expenses if you did not redeem your shares
at the end of the period:
Class A Shares
NAF Mid Cap Growth Fund (a)............... $722 $1,106 $1,514 $2,650
SunAmerica Growth Opportunities Fund...... 712 1,001 1,312 2,190
Pro Forma Combined Growth Opportunities
Fund #................................... 712 1,001 1,312 2,190
Class B Shares
NAF Mid Cap Growth Fund (a)............... $221 $ 760 $1,326 $2,708
SunAmerica Growth Opportunities Fund...... 213 658 1,129 2,260
Pro Forma Combined Growth Opportunities
Fund #................................... 213 658 1,129 2,260
Class C/Class II Shares
NAF Mid Cap Growth Fund (a)............... $221 $ 760 $1,326 $2,867
SunAmerica Growth Opportunities Fund (a).. 310 748 1,212 2,497
Pro Forma Combined Growth Opportunities
Fund #................................... 311 751 1,218 2,507
Institutional Class I/Class I Shares
NAF Mid Cap Growth Fund (a)............... $146 $ 533 $ 945 $2,095
SunAmerica Growth Opportunities Fund...... N/A N/A N/A N/A
Pro Forma Combined Growth Opportunities
Fund (a)#................................ 135 421 729 1,601
17
--------
+ As reflected in the Acquired Funds Prospectuses.
* "Other Expenses," "Total Annual Fund Operating Expenses Before Expense
Reimbursement" and "Expense Reimbursement" are estimated for each of the
Combined Funds.
** The Acquiring Funds do not currently offer Class I shares. Each Combined
Fund will commence offering Class I shares upon completion of the applicable
Reorganization.
(1) The front-end sales charge on Class A shares decreases with the size of the
purchase to 0% for purchases of $1 million or more.
(2) With respect to the Acquired Funds, (i) purchases of Class A shares of $1
million or more are subject to a CDSC of 1.00% on redemptions made within
one year of purchase, (ii) the CDSC on Class B shares applies only if
shares are redeemed within six years of their purchase in accordance with
the Acquired Funds' CDSC schedule set forth under "Proposals Nos. 2(a)-(d):
Approval of the Plans," and (iii) the CDSC on Class C shares applies only
if shares are redeemed within one year of their purchase. See the Acquired
Funds Prospectuses for more information regarding the CDSCs applicable to
the Acquired Funds. The CDSC schedules applicable to Class A, Class B and
Class C shares of an Acquired Fund will continue to apply to the respective
Corresponding Shares received in the applicable Reorganization by
shareholders of a Combined Fund who were shareholders of the corresponding
Acquired Fund as of the date of the closing of such Reorganization (even if
you exchange your shares for shares of another fund distributed by SACS (as
defined below). Future purchases of Class A, Class B or Class II shares of
a Combined Fund will be subject to the CDSC schedule applicable to the
Combined Fund.
With respect to the Acquiring Funds (and to future purchases of Class A,
Class B or Class II shares of the Combined Funds after the closing of the
Reorganizations), (i) purchases of Class A shares of $1 million or more are
subject to a CDSC on redemptions made within two years of purchase (1.00%
on shares sold within one year of purchase and 0.50% on shares sold after
the first year and within the second year after purchase), (ii) the CDSC on
Class B shares applies only if shares are redeemed within six years of
their purchase in accordance with the Acquiring Funds' CDSC schedule set
forth under "Proposals Nos. 2(a)-(d): Approval of the Plans," and (iii) the
CDSC on Class II shares applies only if shares are redeemed within eighteen
months of their purchase. See the Acquiring Funds Prospectus for more
information about the CDSCs applicable to the Acquiring Funds and the
Combined Funds.
(3) In the case of the Acquiring Funds (and hence the Combined Funds) a $15.00
fee may be imposed on wire and overnight mail redemptions.
(4) Because these fees are paid out of a Fund's assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges.
(5) With respect to each Acquired Fund, amounts reflect AGAM's contractual
obligation to waive, and to the extent necessary, reimburse certain fees
and expenses of such Acquired Fund through February 28, 2002. If
shareholders do not approve the Reorganizations, there is no assurance AGAM
would continue to provide such fee reductions and expense reimbursements
past such date.
(6) With respect to Class II shares of the Acquiring Funds and Class I shares
of the Combined Funds, the SunAmerica Board, including a majority of the
Trustees who are not "interested persons" of SunAmerica Equity Funds
(within the meaning of the Investment Company Act) (the "SunAmerica
Independent Trustees"), approved the Acquiring Funds' (and hence the
Combined Funds') Investment Advisory and Management Agreement with SAAMCo
subject to the net expense ratios set forth above. SunAmerica will waive
fees and reimburse expenses should the Total Annual Fund Operating Expenses
Before Expense Reimbursement be higher than the net expense ratio.
SunAmerica may not increase such ratios, which are contractually required
by agreement with the SunAmerica Board, without the approval of the
SunAmerica
18
Board, including a majority of the SunAmerica Independent Trustees. The
expense waivers and fee reimbursements will continue indefinitely, subject
to termination by the SunAmerica Board, including a majority of the
SunAmerica Independent Trustees.
# Assuming the Reorganization had taken place on March 31, 2001.
(a) Expenses used for the Example include fee waivers and expense
reimbursements described in footnotes (5) and/or (6) above.
(b) Class B shares generally convert to Class A shares approximately eight
years after purchase. Therefore, expense information for years 9 and 10 is
the same for both Class A and Class B shares.
The foregoing Fee Tables are intended to assist investors in understanding
the costs and expenses that a shareholder bears directly or indirectly as
compared to the costs and expenses that would be borne by such investors on a
pro forma basis taking into account the consummation of the Reorganizations.
All pro forma amounts are based on what the estimated expenses of the Pro Forma
Combined Funds would be assuming the Reorganizations were completed on March
31, 2001.
The Examples set forth above assume reinvestment of all dividends and
distributions and utilize a 5% annual rate of return as mandated by Commission
regulations. The Examples should not be considered a representation of past or
future expenses or annual rates of return, and actual expenses or annual rates
of return may be more or less than those assumed for purposes of the Examples.
See "Proposals Nos. 2(a)-(d): Approval of the Plans."
19
THE FUNDS
Business of the Acquired Funds
Each Acquired Fund is organized as a separate investment portfolio or
series of North American Funds, a Massachusetts business trust, which was
established on September 28, 1988 pursuant to its Declaration of Trust.
Business of the Acquiring Funds
Each Acquiring Fund is organized as a separate investment portfolio or
series of SunAmerica Equity Funds, a Massachusetts business trust, which was
established on June 18, 1986 pursuant to its Declaration of Trust.
Comparison of the Funds
A discussion of the investment objectives and principal investment policies
of the Funds is set forth below. Those objectives and policies that are
identified as fundamental may not be changed without shareholder approval. The
investment objective of each of the Acquired Funds is fundamental and the
investment objective of each of the Acquiring Funds is non-fundamental. Each
of the Funds is diversified within the meaning of the Investment Company Act.
The discussion below uses the terms "growth strategy" and "value strategy."
A growth strategy refers to a strategy of investing in securities believed to
offer the potential for capital appreciation. A growth strategy focuses on
securities which are considered to have a historical record of above-average
growth rate, to have significant growth potential; to have above-average
earnings growth or value or the ability to sustain earnings growth, to offer
proven or unusual products or services; or to operate in industries
experiencing increasing demand. A value strategy refers to a strategy of
investing in securities believed to be undervalued in the market. A value
strategy reflects a contrarian approach, in that the potential for superior
relative performance is believed to be highest when stock of fundamentally
solid companies are out of favor. The selection criteria is usually calculated
to identify stocks of large, well known companies with solid financial
strength and generous dividend yields that have low price earnings ratios and
have generally been overlooked by the market.
The main differences between the Funds, each of which is discussed in more
detail below, are as follows:
With respect to the Balanced Funds,
. while both Funds seek capital appreciation, the NAF Balanced Fund also
seeks current income. The SunAmerica Balanced Assets Fund does not seek
current income but does seek conservation of principal,
. the NAF Balanced Fund is not focused on the common stock of companies
with a particular size or market capitalization whereas the SunAmerica
Balanced Assets Fund actively trades in common stocks that demonstrate
the potential for capital appreciation issued by companies with over $1.5
billion in market capitalization.
With respect to the Mid Cap Growth Funds,
. the NAF Mid Cap Growth Fund and the SunAmerica Growth Opportunities Fund
have different definitions for what constitutes a mid-cap company,
. investments in technology companies may constitute a more significant
portion of the SunAmerica Growth Opportunities Fund's portfolio than the
NAF Mid Cap Growth Fund's portfolio, and
. a significant portion of the SunAmerica Growth Opportunities Fund's
assets may also be invested in common stocks of small-cap and large-cap
companies.
20
The principal investment strategies of the NAF Large Cap Growth Fund and the
NAF Growth & Income Fund are substantially similar to the principal investment
strategies of the SunAmerica Blue Chip Growth Fund and the SunAmerica Growth
and Income Fund, respectively.
Balanced Funds
Investment Objectives
The NAF Balanced Fund seeks to provide its shareholders with current income
and capital appreciation, while the SunAmerica Balanced Assets Fund seeks to
provide its shareholders with capital appreciation and conservation of
principal. Although the NAF Balanced Fund seeks current income while the
SunAmerica Balanced Assets Fund does not, both Funds seek capital appreciation
and pursue their objectives through similar strategies.
Investment Policies
Strategies. Both Balanced Funds pursue their respective investment
objectives by investing in a combination of common stocks and fixed-income
securities.
Equity Securities. The portion of the NAF Balanced Fund's portfolio invested
in equity securities emphasizes U.S. and foreign common stocks of companies
that the NAF Balanced Fund's subadviser believes to have better-than-average
earnings growth potential, as well as companies within industries believed to
be well-positioned for the current and expected economic climate. This may be
considered to be a growth strategy. The SunAmerica Balanced Assets Fund also
selects equity securities as part of its asset allocation by using a growth
strategy. The principal difference between the two Balanced Funds' strategy
relating to equity securities is that unlike the NAF Balanced Fund which is not
focused on companies with a particular size or market capitalization, the
SunAmerica Balanced Assets Fund actively trades in common stocks that
demonstrate the potential for capital appreciation issued by companies with
over $1.5 billion in market capitalization.
Fixed-Income Securities. Both Funds invest at least 25% of their assets in
senior fixed-income securities, primarily investment grade debt securities. The
fixed income component of the SunAmerica Balanced Assets Fund may exceed 25%
when the Fund's adviser believes such an adjustment in portfolio mix to be
necessary in order to conserve principal, such as in anticipation of a decline
in the equities market.
Large Cap Growth Funds
Investment Objectives
The NAF Large Cap Growth Fund seeks long-term capital growth and the
SunAmerica Blue Chip Growth Fund seeks capital appreciation. These investment
objectives are substantially similar.
Investment Policies
Strategies. Both Large Cap Growth Funds pursue their respective investment
objectives through a growth strategy by investing primarily in common stocks of
large-cap companies (approximately $9 billion or more in market
capitalization).
Equity Securities. The NAF Large Cap Growth Fund invests at least 65% of its
total assets in the common stocks of well-established, high-quality growth
companies whose earnings are expected by the Fund's subadviser to increase
faster than the market average. The SunAmerica Blue Chip Growth Fund actively
trades in common stocks of large-cap companies that offer the potential for
capital appreciation. These strategies are substantially similar.
21
Growth and Income Funds
Investment Objectives
The NAF Growth & Income Fund seeks long-term growth of capital and income
consistent with prudent investment risk, while the SunAmerica Growth and Income
Fund seeks to provide its shareholders with capital appreciation and current
income. These investment objectives are substantially similar.
Investment Policies
Strategies. Both Growth and Income Funds pursue their respective investment
objectives by investing primarily in dividend-paying common stocks of U.S.
issuers.
Equity Securities. The NAF Growth & Income Fund typically invests in a
diversified portfolio of common stocks of larger U.S. companies that the Fund's
subadviser believes are of high quality. The NAF Growth & Income Fund may
participate in the initial public offering ("IPO") market, and a portion of the
Fund's returns may be attributable to the Fund's investments in IPOs. The
SunAmerica Growth and Income Fund selects equity securities by using a growth
and value strategy. The SunAmerica Growth and Income Fund actively trades in
common stocks that offer the potential for capital appreciation and that are
believed to be undervalued. These strategies are substantially similar.
Mid Cap Growth Funds
Investment Objectives
The investment objective of the NAF Mid Cap Growth Fund is long-term capital
appreciation, while the investment objective of the SunAmerica Growth
Opportunities Fund is capital appreciation. These investment objectives are
substantially similar.
Investment Policies
Strategies. Both Mid Cap Growth Funds pursue their respective investment
objectives by investing in common stocks of mid-cap companies that offer the
potential for capital appreciation. The principal difference between these
strategies is in the way that each Mid Cap Growth Fund defines a mid-cap
company. The NAF Mid Cap Growth Fund considers mid-cap companies to be those
that have market capitalizations ranging from approximately $2 billion to $15
billion, whereas the SunAmerica Growth Opportunities Fund considers mid-cap
companies to be those with market capitalizations within the Style Box
categories designed by Morningstar, Inc. Currently, this range is between
approximately $1.4 billion and $9.9 billion. Both Mid Cap Growth Funds select
securities using a growth strategy.
Equity Securities. The core of the NAF Mid Cap Growth Fund's portfolio will
be invested in securities of established companies that are leaders in
attractive growth markets with a history of strong returns. The NAF Mid Cap
Growth Fund's strategy relies on many short-term factors including current
information about a company, investor interest, price movements of a company's
securities and general market and monetary conditions. Consequently, the NAF
Mid Cap Growth Fund's investments usually will be bought and sold frequently,
which may cause the Fund to incur higher trading costs and/or to have a
relatively high amount of short-term capital gains, which are generally taxable
at ordinary income tax rates. The SunAmerica Growth Opportunities Fund invests
in common stocks that demonstrate the potential for capital appreciation,
issued generally by mid-cap companies. One of the principal differences between
the Mid Cap Growth Funds' strategy relating to equity securities is that
although both Mid Cap Growth Funds may invest in technology companies, such
investments may at times constitute a significant portion of the SunAmerica
Growth Opportunities Fund's portfolio. Another principal difference is that a
significant portion of the SunAmerica Growth Opportunities
22
Fund's assets also may be invested in common stocks of small-cap and large-cap
companies. Within the Style Box categories designed by Morningstar, Inc., the
capitalization ranges are currently below $1.4 billion for small-cap companies
and $9.9 billion or more for large-cap companies.
All Funds
Principal Risk Factors
For a discussion of the principal risks of investing in each Fund, see
"Principal Risk Factors and Special Considerations."
Trustees and Officers
Each of North American Funds and SunAmerica Equity Funds is governed by a
Board of Trustees that meets regularly to review its respective Funds'
investments, performance, expenses, and other business affairs. Each Board of
Trustees elects its respective Funds' officers.
Management Arrangements
Comparison of Management and Administrative Arrangements and Fees. AGAM
serves as the investment adviser for the Acquired Funds and SAAMCo serves as
the investment adviser for the Acquiring Funds. Each of AGAM and SAAMCo is
responsible for the management of the investment portfolio of each Acquired
Fund and Acquiring Fund, respectively, and for providing certain administrative
services to such Fund. See "Proposals Nos. 2(a)-(d): Approval of the Plans" for
more detailed information regarding the advisory arrangements of the Funds.
The table below sets forth the fees, as a percentage of average daily net
assets, payable by each Acquired Fund and Acquiring Fund to AGAM and SAAMCo,
respectively, for their management and administrative services:
Advisory Fee:
------------------------------------------------
Between Between Between Excess
Between $50 $200 Million $350 Million $500 Million over
First $50 Million and and and and $700
Fund: Million $200 Million $350 Million $500 Million $700 Million Million
----- --------- ------------ ------------ ------------ ------------ -------
NAF Balanced Fund....... 0.775% 0.725% 0.675% 0.675% 0.625% 0.625%
SunAmerica Balanced
Assets Fund............ 0.750% 0.750% 0.750% 0.700% 0.700% 0.650%
NAF Large Cap Growth
Fund................... 0.900% 0.850% 0.825% 0.825% 0.800% 0.800%
SunAmerica Blue Chip
Growth Fund............ 0.750% 0.750% 0.750% 0.700% 0.700% 0.650%
NAF Growth & Income
Fund................... 0.725% 0.675% 0.625% 0.625% 0.550% 0.550%
SunAmerica Growth and
Income Fund............ 0.750% 0.750% 0.750% 0.700% 0.700% 0.650%
NAF Mid Cap Growth
Fund................... 0.925% 0.900% 0.875% 0.875% 0.850% 0.850%
SunAmerica Growth
Opportunities Fund..... 0.750% 0.750% 0.750% 0.700% 0.700% 0.650%
The advisory fee rate payable by each Combined Fund after consummation of
the Reorganizations will be the same as the advisory fee rates payable by the
Acquiring Funds. After the Reorganizations, the net assets of each Combined
Fund will increase by the amount of the net assets of the respective Acquired
Fund. With respect to the Growth and Income Combined Fund, this increase in net
assets may cause a lower advisory fee rate to apply in accordance with the
breakpoint schedule referenced above. The table below sets forth the pro
23
forma effective fee rate of each Combined Fund as of March 31, 2001, as a
percentage of average daily net assets, assuming the Reorganizations had been
completed as of such date:
Combined Fund: Pro Forma Effective Advisory Fee Rate:
Combined Balanced Fund.................. 0.73%
Combined Blue Chip Growth Fund.......... 0.75%
Combined Growth and Income Fund......... 0.73%
Combined Growth Opportunities Fund...... 0.75%
Investment Advisory Agreements. The investment advisory agreement between
SunAmerica Equity Funds on behalf of the Acquiring Funds and SAAMCo (the
"SunAmerica Investment Advisory Agreement") is similar to both the New and
Previous Investment Advisory Agreements applicable to the Acquired Funds
(collectively, the "NAF Investment Advisory Agreement"), except for certain
matters including the advisory fees, the effective dates, and the identity of
the adviser. See "Proposals Nos. 2(a)-(d): Approval of the Plans" for further
discussion regarding these agreements.
Subadvisory Arrangements. Under a "Manager of Managers" order granted to the
Acquired Funds by the Commission, AGAM is permitted to change unaffiliated
subadvisers or the fees paid to subadvisers without obtaining shareholder
approval. AGAM has ultimate responsibility under the "Manager of Managers"
structure to oversee the subadvisers, including making recommendations to the
NAF Board regarding the hiring, termination and replacement of subadvisers. The
subadvisory fees are paid out of AGAM's advisory fee at no additional cost to
the Acquired Funds or their shareholders. See "Proposals Nos. 2(a)-(d):
Approval of the Plans" for additional information regarding the Acquired Funds'
subadvisory arrangements. Although SAAMCo is also authorized to appoint
subadvisers for SunAmerica Equity Funds under a separate "Manager of Managers"
order granted by the Commission, as of the date hereof, SAAMCo has not
appointed any subadvisers for any of the Acquiring Funds and does not presently
rely on that order in connection with SunAmerica Equity Funds. If shareholders
approve the Reorganizations, the portfolios of the Acquired Funds will be
managed by SAAMCo as part of the Combined Funds following completion of the
Reorganizations.
Distribution and Shareholder Servicing Arrangements
Distributor. American General Funds Distributors, Inc. ("AGFD" or the "NAF
Distributor"), an affiliate of AGAM, acts as the distributor of the shares of
the Acquired Funds. SunAmerica Capital Services, Inc. ("SACS" or the
"SunAmerica Distributor"), an affiliate of SAAMCo, acts as the distributor of
the shares of the Acquiring Funds. See "Proposals Nos. 2(a)-(d): Approval of
the Plans" for additional information regarding the Funds' distribution
arrangements.
Shareholder Servicing Fees for Class I. AGAM provides certain recordkeeping
and shareholder services to retirement and employee benefit plans and certain
asset allocation funds of North American Funds that invest in Institutional
Class I shares of the Acquired Funds. SACS will provide these services after
the Reorganization with respect to Class I shares of the Combined Funds. See
"Proposals Nos. 2(a)-(d): Approval of the Plans" for additional information
regarding these services.
Other Service Agreements with Affiliates
SunAmerica Fund Services, Inc. ("SAFS"), an affiliate of SAAMCo, acts as a
servicing agent assisting State Street Bank and Trust Company ("State Street"),
the transfer agent and custodian of the Acquiring Funds, in connection with
certain services offered to the shareholders of the Acquiring Funds. See
"Proposals Nos. 2(a)-(d): Approval of the Plans" for additional information
regarding these service agreements.
Other
Shares. As with all mutual funds, investors purchase shares when they invest
in the Funds. Share certificates are not generally issued.
24
Each full share and fractional share entitles the shareholder to receive a
proportional interest in the respective Fund's capital gain distributions and
to cast one vote per share, with fractional shares voting proportionally, on
certain Fund matters, including the election of trustees, changes in
fundamental policies, or approval of changes in investment advisory agreements.
The table below sets forth the share classes currently offered by each of
the Acquired Funds and the Acquiring Funds and the share classes that will be
offered by the Combined Funds after consummation of the respective
Reorganizations.
Acquired Funds Acquiring Funds* Combined Funds
-------------- ---------------- --------------
A, B, C, Institutional Class I A, B, II A, B, II, I
--------
* The SunAmerica Growth and Income Fund also currently offers Class Z shares;
however, Class Z of the SunAmerica Growth and Income Fund is not involved in
the Reorganization relating to that Fund.
Purchase of Shares. The procedures for purchasing shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2(a)-(d): Approval of the
Plans" below, "Investing in the North American Funds" in the Acquired Funds
Prospectuses and "Shareholder Account Information" in the Acquiring Funds
Prospectus.
Redemption of Shares. The procedures for redeeming shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2(a)-(d): Approval of the
Plans" below, "Investing in the North American Funds" in the Acquired Funds
Prospectuses and "Shareholder Account Information" in the Acquiring Funds
Prospectus.
Exchanges of Shares. The procedures for exchanging shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2(a)-(d): Approval of the
Plans" below, "Account Services" and "Section III: Investing in the North
American Funds Institutional Classes of Shares" in the Acquired Funds
Prospectuses and "Transaction Policies" in the Acquiring Funds Prospectus.
Dividends. The Funds currently have the same or similar policies with
respect to dividends. See "Proposals Nos. 2(a)-(d): Approval of the Plans"
below, "Pricing of Shares" and "Dividends and Distributions from North American
Funds" in the Acquired Funds Prospectuses and "Dividend Distribution and
Account Policies" in the Acquiring Funds Prospectus.
Net Asset Value. The price at which each Fund's shares are purchased or
redeemed is the Fund's next determined net asset value per share after receipt
of the purchase or redemption order. The net asset value per share is
calculated once daily as of the close of regular trading on the New York Stock
Exchange ("NYSE") (currently 4:00 p.m., Eastern Time). For further discussion
on net asset value and how it is determined, see "Proposals Nos. 2(a)-(d):
Approval of the Plans" below, "Pricing of Fund Shares" in the Acquired Funds
Prospectuses and "Transaction Policies" in the Acquiring Funds Prospectus.
Tax Considerations. The tax consequences associated with an investment in
shares of an Acquired Fund are substantially the same as the tax consequences
associated with an investment in shares of the respective Acquiring Fund. See
"Taxes" in the Acquired Funds Prospectuses and "Dividend, Distribution and
Account Policies" in the Acquiring Funds Prospectuses.
Each Reorganization has been structured with the intention that it qualify
for Federal income tax purposes as a tax-free reorganization under the Code.
This means that in the opinion of counsel no gain or loss will be recognized by
a shareholder of an Acquired Fund for Federal income tax purposes as a result
of a Reorganization. For a more detailed discussion regarding potential tax
consequences of the Reorganizations, see "Proposals Nos. 2(a)-(d): Approval of
the Plans."
25
PRINCIPAL RISK FACTORS AND SPECIAL CONSIDERATIONS
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
Many of the investment risks associated with an investment in an Acquired
Fund are substantially the same as those associated with an investment in the
respective Acquiring Fund. A discussion of the principal risks of investing in
the Funds is set forth below. See the Acquired Funds Prospectuses, the
Acquiring Funds Prospectus, the Acquired Funds Statement and the Acquiring
Funds Statement for more detailed discussions of investment risks associated
with an investment in the Funds. There is no guarantee that the investment
objective of a Fund will be achieved or that the value of a shareholder's
investment in the Fund will not decrease.
The main differences in principal risks, each of which is discussed in more
detail below, are: (i) with respect to the Balanced Funds, that the SunAmerica
Balanced Assets Fund may be more subject to credit risk than the NAF Balanced
Fund, and (ii) with respect to the Mid Cap Growth Funds, that the SunAmerica
Growth Opportunities Fund may be more subject to small cap risk and the risks
associated with investments in common stocks issued by technology companies
than the NAF Mid Cap Growth Fund. The principal risks of the Large Cap Growth
Funds and the Growth and Income Funds are substantially similar.
All Funds
Stock Market Volatility
All Funds invest significantly in equity securities. As with any equity
fund, the value of your investment in a Fund may fluctuate in response to stock
market movements. In addition, individual stocks selected for any of the Funds
may underperform the market generally. For the NAF Large Cap Growth Fund, this
risk includes, in particular, the risks associated with growth stocks and
investing in IPOs. For the Growth and Income Funds, this risk includes, in
particular, the risks associated with value stocks and the risk that the stocks
the Growth and Income Funds buy may stop paying dividends.
Securities Selection
All Funds are subject to securities selection risk. Securities selection
risk is when a strategy used by a Fund, or securities selected by its portfolio
manager, may fail to produce the intended return.
Balanced Funds
Interest Rate Risk
Both Balanced Funds are subject to interest rate risk. As with any bond
fund, the value of your investment in a Balanced Fund may go up or down in
response to changes in interest rates. As interest rates rise, bond prices
typically fall. Movements in the bond market generally may affect a Balanced
Fund's performance.
Credit Risk
Each Balanced Fund is subject to credit risk, which is the risk that the
companies in which the Balanced Fund invests, or with which it does business,
will fail financially or otherwise fail to honor their obligations. This risk
is greater for the SunAmerica Balanced Assets Fund because the SunAmerica
Balanced Assets Fund may invest a significant portion (up to 15%) of its assets
in junk bonds while the NAF Balanced Fund does not invest in these securities
to any significant extent.
26
Mid Cap Growth Funds
Small Cap Risk
An investment in both Mid Cap Growth Funds is subject to the risk associated
with investing in small capitalization issuers, however, this risk is greater
for the SunAmerica Growth Opportunities Fund which may invest a significant
portion of its assets in the common stock of small cap companies. Companies
with smaller market capitalizations (particularly under $1 billion) tend to be
at early stages of development with limited product lines, market access for
products, financial resources, access to new capital, or depth in management.
It may be difficult to obtain reliable information and financial data about
such companies. Consequently, securities of smaller companies may not be as
readily marketable and may be subject to more abrupt or erratic market
movements.
Technology Companies
Although both Mid Cap Growth Funds are subject to the risks associated with
investments in common stocks issued by technology companies, this risk may be
greater for the SunAmerica Growth Opportunities Fund because such investments
may at times constitute a significant portion of the SunAmerica Growth
Opportunities Fund's portfolio. Industries in which technology companies can be
found can be significantly affected by short product cycles, aggressive pricing
of products and services, competition from new market entrants, worldwide
scientific and technological developments and changes in government regulation
and policies.
27
PROPOSAL NO. 1:
APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
THE AIG MERGER AND THE NEW INVESTMENT ADVISORY AGREEMENT
Board Considerations
On August 29, 2001, AIG acquired American General in the AIG Merger. As a
result of the AIG Merger, AGAM became a subsidiary of AIG.
As required by the Investment Company Act, the Previous Investment Advisory
Agreement provided for automatic termination upon its "assignment." Under the
Investment Company Act, a change of control of an investment adviser
constitutes an "assignment." The consummation of the AIG Merger resulted in the
assignment of the Previous Investment Advisory Agreement and its automatic
termination. Therefore, as described below, shareholders are being asked to
approve the New Investment Advisory Agreement.
At a meeting held on July 16-17, 2001, the NAF Board, including all of the
NAF Independent Trustees, unanimously approved an interim investment advisory
agreement (the "Interim Investment Advisory Agreement") between AGAM and North
American Funds with respect to the Acquired Funds pursuant to Rule 15a-4 under
the Investment Company Act. This has allowed AGAM to continue to serve as
investment adviser for the Acquired Funds after the AIG Merger. This Rule
allows, under certain circumstances, interim advisory agreements to take
effect, and to remain in effect for up to 150 days, without receiving prior
shareholder approval, as long as the fees payable under such agreement do not
exceed the fees payable under the predecessor agreement that had been approved
by the shareholders and certain other contractual provisions are included in
the interim agreement. The Interim Investment Advisory Agreement requires all
advisory fees earned by AGAM to be escrowed pending shareholder approval of the
New Investment Advisory Agreement. If the New Investment Advisory Agreement is
not approved, AGAM will be entitled to receive from escrow the lesser of any
costs incurred in performing the Interim Investment Advisory Agreement (plus
interest earned on the amount while in escrow), and the total amount in the
escrow account (plus interest earned). The Interim Investment Advisory
Agreement will terminate on the earlier of the effective date of the New
Investment Advisory Agreement or 150 days after the completion of the AIG
Merger.
Pursuant to the terms of the Interim Investment Advisory Agreement, AGAM is
responsible for the management of the investment portfolio of each Acquired
Fund and for providing certain administrative services to each Acquired Fund.
The terms of the Interim Investment Advisory Agreement are similar in all
material respects as those of the Previous Investment Advisory Agreement. The
Interim Investment Advisory Agreement differs from the Previous Investment
Advisory Agreement only with respect to the effective date, the term, and the
escrow provisions relating to AGAM's fees (as described above). Under the
Investment Company Act, AGAM may continue to serve as the investment adviser
for each Acquired Fund beyond an interim period of 150 days only if
shareholders of such Acquired Fund approve a new investment advisory agreement
with AGAM. Consequently, the NAF Board unanimously approved, and recommended
shareholder approval of, the New Investment Advisory Agreement on July 16-17,
2001. The New Investment Advisory Agreement, if approved by shareholders, would
take effect immediately upon such approval. The terms of the New Investment
Advisory Agreement, including advisory fees, are the same in all material
respects as those of the Previous Investment Advisory Agreement. The New
Investment Advisory Agreement differs from the Previous Investment Advisory
Agreement only with respect to its effective date. See "--Description of the
New Investment Advisory Agreement" below for a description of the New
Investment Advisory Agreement and the services to be provided by AGAM
thereunder.
In addition, each of the Acquired Funds has a subadviser that is
unaffiliated with AGAM. Each previously existing subadvisory agreement provided
that it terminated upon termination of the Previous Investment Advisory
Agreement. The NAF Board also approved the continuation of each subadvisory
agreement for the Acquired Funds. Such approval was made in accordance with a
"Manager of Managers" order granted by the
28
Commission to North American Funds and therefore the subadvisory agreements for
the Acquired Funds do not require shareholder approval.
In connection with its approval of the New Investment Advisory Agreement,
the NAF Board received a presentation relating to AIG and SAAMCo, as well as a
presentation from AGAM. The NAF Board considered that the AIG Merger did not
involve any changes in the overall form of the advisory contract, the advisory
fees, or any of the Acquired Funds' objectives or policies. The NAF Board also
considered that AGAM and SAAMCo had indicated that while they intended to
propose the Reorganizations to the NAF Board at a subsequent meeting, until
such Reorganizations were approved and consummated, SAAMCo and AIG represented
there would be no material change in the nature and quality of services
provided by AGAM. As part of their deliberations, the NAF Board took into
account the following, among other factors: the nature and quality of the
services provided or reasonably anticipated to be provided and the results
achieved or reasonably anticipated to be achieved by AGAM; the amount and
structure of investment advisers' fees generally and the fees payable under the
New Investment Advisory Agreement; the financial strength of AIG; the
management, personnel and operations of AIG and SAAMCo; the commitment of AIG
to the financial services industry; and the structure of the AIG Merger.
Section 15(f) of the Investment Company Act provides that an investment
adviser (such as AGAM) to a registered investment company, and the affiliates
of such adviser, may receive any amount or benefit in connection with a sale of
any interest in such investment adviser which results in an assignment of an
investment advisory contract if the following two conditions are satisfied: (1)
for a period of three years after such assignment, at least 75% of the board of
directors of the investment company are not "interested persons" (within the
meaning of Section 2(a)(19) of the Investment Company Act) of the new
investment adviser or its predecessor; and (2) no "unfair burden" (as defined
in the Investment Company Act) may be imposed on the investment company as a
result of the assignment or any express or implied terms, conditions or
understandings applicable thereto. Consistent with the first condition of
Section 15(f), AIG advised the NAF Board that for a period of three years after
the AIG Merger, it will not take or recommend any action that would cause more
than 25% of the NAF Board (or SunAmerica Board) to be interested persons of
SAAMCo or AGAM. With respect to the second condition of Section 15(f), an
"unfair burden" on an investment company is defined in the Investment Company
Act to include any arrangement during the two-year period after any such
transaction occurs whereby the investment adviser or its predecessor or
successor, or any interested person of such adviser, predecessor or successor,
receives or is entitled to receive any compensation of two types, either
directly or indirectly. The first type is compensation 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 bona fide ordinary
compensation as principal underwriter for such company. The second type is
compensation from the investment company or its security holders for other than
bona fide investment advisory or other services. AIG advised the NAF Board that
it will not take or recommend any action that would constitute an unfair burden
on North American Funds (or the Acquiring Funds) within the meaning of Section
15(f).
Description of the New Investment Advisory Agreement
As a proposal separate from the proposal to approve a Reorganization,
shareholders of each Acquired Fund are being asked to approve the New
Investment Advisory Agreement with AGAM to cover the period subsequent to
shareholder approval and prior to consummation of the Reorganization (which is
currently anticipated to occur during the fourth calendar quarter of 2001). If
this proposal is approved, but a Reorganization is not approved, by the
shareholders of an Acquired Fund, AGAM will continue to serve as that Acquired
Fund's adviser under the New Investment Advisory Agreement. The terms of the
New Investment Advisory Agreement are the same in all material respects as
those of the Previous Investment Advisory Agreement. The New Investment
Advisory Agreement differs from the Previous Investment Advisory Agreement only
with respect to the effective date. The Previous Investment Advisory Agreement
is dated June 1, 2000 and was last approved by the shareholders of the Acquired
Funds at a meeting held on the same date in connection with its initial
approval. A description of the New Investment Advisory Agreement and the
services
29
to be provided by AGAM is set forth below. This description is qualified in its
entirety by reference to the form of the New Investment Advisory Agreement
attached to this Proxy Statement and Prospectus as Exhibit I.
As compensation for its services under the New Investment Advisory
Agreement, the Acquired Funds will pay to AGAM the same fee, as a percentage of
average daily net assets, that was payable to AGAM under the Previous
Investment Advisory Agreement. Such fee will be payable monthly and accrued
daily. See "Summary" for a description of the fees payable to AGAM under the
Previous Investment Advisory Agreement. AGAM has agreed, until February 28,
2002, to reduce fees payable to it by, or reimburse expenses to, the Acquired
Funds.
For the fiscal year ended October 31, 2000, North American Funds paid total
advisory fees to AGAM of $7,339,733. Of such amount, $486,301, $571,885,
$2,086,628 and $555,072 were attributable to the NAF Balanced Fund, the NAF
Large Cap Growth Fund, the NAF Growth & Income Fund and the NAF Mid Cap Growth
Fund, respectively. These amounts do not reflect certain fee waivers and
expense reimbursements for which the Acquired Funds were reimbursed.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each Acquired Fund approve the New Investment Advisory
Agreement. Shareholders of each Acquired Fund vote separately on the approval
of the New Investment Advisory Agreement. Approval of the New Investment
Advisory Agreement by one Acquired Fund is not contingent upon approval of the
New Investment Advisory Agreement by any other Acquired Fund. If the New
Investment Advisory Agreement is not approved by shareholders of an Acquired
Fund, the NAF Board will determine the appropriate actions in the best
interests of shareholders to be taken with respect to such Acquired Fund's
advisory arrangements at that time.
Additional Information About AGAM
General
CypressTree Investments, Inc. ("CypressTree") and its affiliates were formed
in 1996 to acquire, advise and distribute mutual funds through broker-dealers
and other intermediaries. CypressTree Asset Management Corporation, Inc.
("CAM") was CypressTree's wholly owned advisory subsidiary and CypressTree
Funds Distributors, Inc. ("CFD") was CypressTree's wholly owned distribution
subsidiary. On March 10, 2000, CypressTree sold substantially all of its
assets, including all of the stock of CAM and CFD, to American General.
Thereafter, CAM was renamed American General Asset Management Corp. and CFD was
renamed American General Funds Distributors, Inc. Pursuant to the Previous
Advisory Agreement, AGAM oversaw the administration of all aspects of the
business and affairs of the Acquired Funds, and selected, contracted with and
compensated subadvisers to manage the assets of the Acquired Funds. AGAM has
continued to perform these functions under the Interim Investment Advisory
agreement since the completion of the AIG Merger.
AGAM is located at 286 Congress Street, Boston, Massachusetts 02210. Prior
to the AIG Merger, AGAM was wholly owned by American General, which is located
at 2929 Allen Parkway, Houston, Texas 77019. As a result of the AIG Merger,
American General is wholly owned by AIG. The principal address of AIG is 70
Pine Street, New York, New York 10270.
30
The directors and principal executive officer of AGAM, if any, their
business addresses, position(s) with AGAM and a description of their principal
occupations are set forth below.
Name and Address Position with AGAM and Principal Occupation(s)
---------------- ----------------------------------------------
John A. Graf Director; Senior Vice Chairman, Asset Accumulation,
2929 Allen Parkway American General.
Houston, TX 77019
Kent E. Barrett Director and Treasurer; Senior Vice President and General
2929 Allen Parkway Auditor, American General.
Houston, TX 77019
In addition, the following officers of North American Funds also are
employees of AGAM:
Thomas J. Brown, Treasurer and Vice President of North American Funds and
Chief Financial Officer and Chief Administrative Officer of AGAM.
John I. Fitzgerald, Secretary and Vice President of North American Funds and
Assistant Secretary and Counsel of AGAM.
John N. Packs, Assistant Treasurer and Vice President of North American
Funds and Director of Research of AGAM.
Additional Payments to AGAM and its affiliates by Acquired Funds
The Previous Investment Advisory Agreement provided for reimbursement to
AGAM for various expenses related to financial, accounting and administrative
services provided to the Acquired Funds. For the fiscal year ended October 31,
2000, North American Funds paid in the aggregate $1,387,842 to AGAM for such
services. Of such amount, $101,734, $92,681, $488,309 and $87,397 were
attributable to the NAF Balanced Fund, the NAF Large Cap Growth Fund, the NAF
Growth & Income Fund and the NAF Mid Cap Growth Fund, respectively.
For the fiscal year ended October 31, 2000, AGAM was paid fees on Class I
shares under the NAF Services Agreement (as defined below) of $2,974, $9,860,
$6,405 and $7,458 by the NAF Balanced Fund, the NAF Large Cap Growth Fund, the
NAF Growth & Income Fund and the NAF Mid Cap Growth Fund, respectively.
For the fiscal year ended October 31, 2000, the Acquired Funds paid the NAF
Distributor the following distribution and service fees:
Distribution and Service Fees
------------------------------
Class A Class B Class C
-------- ---------- ----------
NAF Balanced Fund............................ $ 20,979 $ 127,489 $ 434,292
NAF Large Cap Growth Fund.................... 26,687 269,230 250,016
NAF Growth & Income Fund..................... 141,047 1,077,287 1,627,385
NAF Mid Cap Growth Fund...................... 30,089 247,274 232,919
The Acquired Funds did not pay any brokerage commissions to affiliated
brokers for the fiscal year ended October 31, 2000.
31
PROPOSALS NOS. 2(a)-(d): APPROVAL OF THE PLANS
COMPARISON OF THE FUNDS
Investment Policies
In addition to the principal investment policies set forth under "Summary"
above, the Funds may also employ the investment policies set forth below.
The principal differences in these investment policies, each of which is
discussed in more detail below, are as follows:
With respect to the Balanced Funds,
. the SunAmerica Balanced Assets Fund may invest in junk bonds to a
greater extent than the NAF Balanced Fund.
With respect to the Growth and Income Funds,
. unlike the NAF Growth & Income Fund, which may not borrow for investment
purposes, the SunAmerica Growth and Income Fund may borrow for
investment purposes up to the maximum amount permitted by law.
With respect to the Mid Cap Growth Funds,
. unlike the SunAmerica Growth Opportunities Fund, the NAF Mid Cap Growth
Fund may, for temporary defensive purposes, invest in equity securities
of companies that, at the time of purchase, have total market
capitalization of $5 billion or greater.
With respect to all Funds,
. each Acquired Fund is limited in the amount of total assets that it may
invest in foreign securities, whereas each Acquiring Fund is not subject
to a similar limitation,
. unlike the Acquired Funds which are not subject to such a limitation, each
Acquiring Fund may, in order to provide liquidity to meet redemptions,
invest up to 10% of its assets in money market instruments,
. unlike the Acquired Funds, the Acquiring Funds may sell covered call
and, in the case of the SunAmerica Balanced Assets Fund, put options to
enhance income through the receipt of premiums, and
. the Acquired Funds may borrow greater amounts than the Acquiring Funds
for temporary or emergency purposes.
Balanced Funds
Foreign Securities. Both Balanced Funds may invest in the securities of
issuers located outside of the United States, including emerging markets. The
principal difference between the Balanced Funds' investment policies relating
to foreign securities is that the NAF Balanced Fund is limited in the amount of
its total assets that it may invest in such securities while the SunAmerica
Balanced Assets Fund is not subject to a similar limitation. In particular,
pursuant to a non-fundamental investment restriction, the NAF Balanced Fund may
32
invest no more than 25% of its total assets in foreign securities (not
including American Depository Receipts (ADRs), U.S. dollar-denominated
securities of foreign issuers and Canadian securities). The SunAmerica Balanced
Assets Fund is authorized to invest, without limitation, in foreign securities
and, under normal circumstances, may invest a significant amount of its assets
in such securities. However, the SunAmerica Balanced Assets Fund may not invest
more than 25% of its total assets in the securities of issuers domiciled in any
one foreign country.
Small-Capitalization Issuers. Both Balanced Funds invest in securities of
small-cap companies. Small cap companies are companies with market
capitalizations within the Style Box categories designed by Morningstar, Inc.
Currently, this range is $1.4 billion or less.
High Yield/High Risk Securities; Junk Bonds. Although both Balanced Funds
may invest in high yield and high risk securities (commonly known as junk
bonds), the SunAmerica Balanced Assets Fund may invest in such securities to a
greater extent. The NAF Balanced Fund may invest in high yield/high risk
corporate debt securities and foreign sovereign debt securities but does not
invest in these securities to any significant extent. The SunAmerica Balanced
Assets Fund may invest up to 15% of its assets in junk bonds.
Large Cap Growth Funds
Fixed-Income Securities. Both Large Cap Growth Funds may invest in fixed-
income securities, primarily investment grade debt securities. The NAF Large
Cap Growth Fund may invest in high-quality bonds, debentures and other
corporate or government obligations rated at the time of purchase "Baa" or
higher by Moody's Investors Service, Inc. ("Moody's") or "BBB" or higher by
Standard & Poor's Ratings Services, a division of McGraw-Hill Companies, Inc
("Standard & Poor's"). The NAF Large Cap Growth Fund may not invest more than
5% of its total assets in unrated or below investment grade fixed-income
securities (other than preferred stocks the Fund believes to be equivalent in
quality to the rated securities the Fund may buy). The NAF Large Cap Growth
Fund may not invest in convertible or preferred stocks rated below "B." The NAF
Large Cap Growth Fund may also invest in unrated convertible securities and
preferred stocks if the Fund's subadviser believes that they are equivalent in
quality to the rated securities the NAF Large Cap Growth Fund may buy. The
SunAmerica Blue Chip Growth Fund may, under normal circumstances, invest up to
35% of its total assets in debt securities that have the potential for capital
appreciation and are rated "BBB" or higher by Standard & Poor's or "Baa" or
higher by Moody's (or unrated securities of equivalent quality).
Foreign Securities. Both Large Cap Growth Funds may invest in the
securities of issuers located outside of the United States, including emerging
markets. The principal difference between the Large Cap Growth Funds'
investment policies relating to foreign securities is that the NAF Large Cap
Growth Fund is limited in the amount of its total assets that it may invest in
such securities while the SunAmerica Blue Chip Growth Fund is not subject to a
similar limitation. Although, pursuant to a non-fundamental investment
restriction, the NAF Large Cap Growth Fund may invest up to 30% of its total
assets in foreign securities (not including ADRs and U.S. dollar-denominated
securities of foreign issuers), it does not expect to make a significant
investment in such securities. In addition, pursuant to a non-fundamental
investment restriction, the NAF Large-Cap Growth Fund may not invest more than
25% of its total assets in any one foreign country. The SunAmerica Blue Chip
Growth Fund is authorized to invest, without limitation, in foreign securities.
However, the SunAmerica Blue Chip Growth Fund may not invest more than 25% of
its total assets in the securities of issuers domiciled in any one foreign
country.
Growth and Income Funds
Foreign Securities. Both Growth and Income Funds may invest in the
securities of issuers located outside of the United States, including emerging
markets. The principal difference between the Growth and Income Funds'
investment policies relating to foreign securities is that the NAF Growth &
Income Fund is limited in the amount of its total assets that it may invest in
such securities while the SunAmerica Growth and
33
Income Fund is not subject to a similar limitation. In particular, pursuant to
a non-fundamental investment restriction, the NAF Growth & Income Fund may
invest no more than 20% of its total assets in foreign securities (not
including ADRs and U.S. dollar-denominated securities of foreign issuers). The
SunAmerica Growth and Income Fund is authorized to invest, without limitation,
in foreign securities. However, the SunAmerica Growth and Income Fund may not
invest more than 25% of its total assets in the securities of issuers domiciled
in any one foreign country.
Fixed-Income Securities. Both Growth and Income Funds invest in fixed-income
securities, primarily investment grade debt securities. The NAF Growth & Income
Fund may invest in marketable debt securities of domestic issuers and of
foreign issuers (payable in U.S. dollars) rated at the time of purchase "A" or
better by Moody's or Standard & Poor's, or unrated securities considered to be
of equivalent quality in the subadviser's judgment. The SunAmerica Growth and
Income Fund generally will not invest in debt securities in the lowest rating
categories ("CC" or lower for Standard & Poor's or "Ca" or lower for Moody's)
unless its adviser believes the financial condition of the issuer or the
protection afforded the particular securities is stronger than would otherwise
be indicated by such low ratings.
Small Capitalization Issuers. Although the NAF Growth & Income Fund
typically invests in common stock of large-capitalization companies, both
Growth and Income Funds also may invest in common stock of small-cap companies.
Small-cap companies are companies with market capitalizations within the Style
Box categories designed by Morningstar, Inc. Currently, this range is $1.4
billion or less.
Mid Cap Growth Funds
Fixed-Income Securities. The NAF Mid Cap Growth Fund also has the
flexibility of investing in other types of securities, including preferred
stocks, convertible securities and bonds. The SunAmerica Growth Opportunities
Fund may also invest in these securities, and under normal circumstances, may
invest up to 35% of its total assets in debt securities that have the potential
for capital appreciation and are rated "BBB" or higher by Standard & Poor's or
"Baa" or higher by Moody's (or unrated securities of equivalent quality). These
strategies are substantially similar.
Foreign Securities. Both Mid Cap Growth Funds may invest in the securities
of issuers located outside of the United States, including emerging markets.
The principal difference between the Mid Cap Growth Funds' investment policies
relating to foreign securities is that the NAF Mid Cap Growth Fund is limited
in the amount of its total assets that it may invest in such securities while
the SunAmerica Growth Opportunities Fund is not subject to a similar
limitation. In particular, pursuant to a non-fundamental investment
restriction, the NAF Mid Cap Growth Fund may invest up to 25% of its total
assets in foreign securities (not including ADRs, U.S. dollar-denominated
securities of foreign issuers and Canadian securities). Although foreign
securities are generally not expected to constitute a significant portion of
the SunAmerica Growth Opportunities Fund's investment portfolio, the Fund is
authorized to invest, without limitation, in foreign securities. However, the
SunAmerica Growth Opportunities Fund may not invest more than 25% of its total
assets in the securities of issuers domiciled in any one foreign country.
All Funds
Cash and Short-Term Securities. All Funds may invest in short-term money
market securities. Each Acquiring Fund may, in order to provide liquidity to
meet redemptions, invest up to 10% of its assets in money market instruments.
The Acquired Funds are not subject to a similar limitation.
Derivatives. All Funds may invest in derivatives, including options and
futures. All Funds will use derivatives for hedging purposes. Unlike the
Acquired Funds, however, the Acquiring Funds may also write (i.e., sell)
covered call and, in the case of the SunAmerica Balanced Assets Fund, put
options to enhance income through the receipt of premiums. With respect to an
Acquiring Fund, up to 100% of the Fund's total assets may be subject to covered
calls. An Acquired Fund may not sell put options if, as a result, the Fund
34
would be required to segregate more than 50% of its assets to cover its
potential obligations under put options other than those with respect to
futures contracts.
Defensive Investments. Each Fund may make temporary defensive investments
without limitation in response to adverse market, economic, political or other
conditions. Defensive investments include high quality fixed income securities
and money market instruments. The NAF Mid Cap Growth Fund also may, for
temporary defensive purposes, invest in equity securities of companies that, at
the time of purchase, have total market capitalizations of $5 billion or
greater.
Illiquid Securities. As a non-fundamental restriction, no Fund may invest
more than 15% of its net assets in illiquid securities.
Borrowing. All Funds may borrow for temporary or emergency purposes and the
NAF Funds may also borrow in connection with reverse repurchase agreements,
mortgage rolls and similar transactions. When borrowing for temporary or
emergency purposes, the Acquired Funds may borrow up to 33 1/3% of the value of
their respective total assets while the Acquiring Funds may borrow up to 5% of
the value of their respective assets (valued at the lower of cost or current
value). The SunAmerica Growth and Income Fund may increase its ownership of
securities by borrowing at fixed rates of interest up to the maximum extent
permitted under the Investment Company Act (presently 33 1/3% of total assets,
including the amount borrowed) and investing the borrowed funds, subject to the
restrictions stated in the Fund's prospectus. Each Fund's policy regarding the
use of leverage is a fundamental policy.
Lending. The Funds may not make loans, except through repurchase agreements
and the purchase of portfolio securities consistent with a Fund's investment
objectives and policies. In addition, each Fund may lend portfolio securities
subject to comparable limitations. The restrictions on lending are fundamental
for all Funds.
Short Sales. No Fund may engage in short sales, except short sales "against
the box." A short sale is against the box to the extent that the Fund
contemporaneously owns, or has the right to obtain without payment, securities
identical to those sold short. An Acquiring Fund may not enter into a short
sale, including a short sale against the box, if, as a result, more than 25% of
its total assets would be subject to such short sales. The limitation on short
sales is a non-fundamental policy for the Acquired Funds and a fundamental
policy for the Acquiring Funds.
Special Situations. The Acquiring Funds may invest in special situation
securities. A special situation arises when, in the opinion of an Acquiring
Fund's adviser, the securities of a particular issuer will be recognized and
appreciated in value due to a specific development with respect to that issuer.
Trustees and Officers
SunAmerica Equity Funds is governed by the SunAmerica Board which currently
consists of five individuals, four of whom are SunAmerica Independent Trustees.
The SunAmerica Board is responsible for the overall supervision of
SunAmerica Equity Funds and performs various duties imposed on trustees of
investment companies by the Investment Company Act and under SunAmerica Equity
Funds' Declaration of Trust. Trustees and officers of SunAmerica Equity Funds
are also trustees and officers of some or all of the other investment companies
managed, administered or advised by SAAMCo, and distributed by SACS and other
affiliates. The SunAmerica Board elects the Acquiring Funds' officers. See
"Trustees and Officers" in the Acquiring Funds Statement.
The following table lists the Trustees and executive officers of SunAmerica
Equity Funds, their ages and principal occupations during the past five years.
The business address of each Trustee and executive officer is The SunAmerica
Center, 733 Third Avenue, New York, New York 10017-3204. For the purposes of
this Proxy Statement and Prospectus, the SunAmerica Mutual Funds ("SAMF")
consist of SunAmerica Equity Funds, SunAmerica Income Funds, SunAmerica Money
Market Funds, Inc., SunAmerica Style Select Series, Inc. and
35
SunAmerica Strategic Investment Series, Inc. An asterisk indicates that the
Trustee is an interested person of the SunAmerica Equity Funds within the
meaning of Section 2(a)(19) of the Investment Company Act.
Position with the Principal Occupations During
Name, Age and Address Trust Past 5 Years
--------------------- ----------------- ----------------------------
S. James Coppersmith, 68.. Trustee Retired; formerly, President
and General Manager, WCVB-TV,
a division of the Hearst
Corp. (1982 to 1994);
Director/Trustee of SAMF and
Anchor Series Trust ("AST")
Samuel M. Eisenstat, 60... Chairman of the Board Attorney, solo practitioner;
Chairman of the Boards of
Directors/Trustees of SAMF
and AST.
Stephen J. Gutman, 58..... Trustee Partner and Managing Member
of B.B. Associates LLC
(menswear specialty retailing
and other activities) since
June 1988; Director/Trustee
of SAMF and AST.
Peter A. Harbeck*, 47..... Trustee and President Director and President,
SAAMCo, since August 1995;
Director, AIG Asset
Management International,
Inc. ("AIGAMI") since
February 2000; Managing
Director, John McStay
Investment Counsel, L.P.
("JMIC") since June 1999;
Director, SACS, since August
1993; Director and President,
SunAmerica Fund Services,
Inc. ("SAFS"), since May
1988; President, SAMF and
AST.
Sebastiano Sterpa, 72..... Trustee Founder and Chairman of the
Board of the Sterpa Group
(real estate) since 1962;
Director, Real Estate
Business Service and
Countrywide Financial;
Director/Trustee of SAMF.
J. Steven Neamtz, 42...... Vice President Executive Vice President,
SAAMCo, since April 1996;
Director and Chairman of the
Board, AIGAMI, since February
2000; Vice President, SAMF,
since November 1999; Director
and President, SACS, since
April 1996.
Peter C. Sutton, 36....... Treasurer Senior Vice President,
SAAMCo, since April 1997;
Vice President, AIGAMI, since
February 2000; Treasurer and
Controller of Seasons Series
Trust ("Seasons"), SunAmerica
Series Trust ("SAST") and
Anchor Pathway Fund ("APF")
since February 2000;
Treasurer of SAMF and AST
since February 1996; Vice
President of SAST and APF
since 1994; formerly
Assistant Treasurer of SAST
and APF from 1994 to February
2000; Vice President,
Seasons, since April 1997;
formerly Vice President,
SAAMCo, from 1994 to 1997.
Robert M. Zakem, 43....... Secretary and Chief Senior Vice President and
Compliance Officer General Counsel, SAAMCo,
since April 1993; Vice
President, General Counsel
and Assistant Secretary,
AIGAMI, since February 2000;
Executive Vice President,
General Counsel and Director,
SACS, since August 1993; Vice
President, General Counsel
and Assistant Secretary,
SAFS, since January 1994;
Vice President, SAST, APF and
Seasons; Assistant Secretary,
SAST and APF, since September
1993; Assistant Secretary,
Seasons, since April 1997.
36
At a meeting of the SunAmerica Board held on August 22, 2001, the SunAmerica
Board elected Dr. Judith L. Craven and William F. Devin to the SunAmerica
Board, effective on or about November 9, 2001. Dr. Craven and Mr. Devin are
currently members of the NAF Board. Dr. Craven and Mr. Devin would join the
SunAmerica Board as SunAmerica Independent Trustees and as members of the Audit
and Nominating Committees.
The following table lists the ages, business addresses and principal
occupations during the past five years of Dr. Craven and Mr. Devin.
Dr. Judith L. Craven, Retired Administrator.Trustee, North American Funds
55... 3212 Ewing Street Variable Product Series II, 15 investment
Houston, TX 77004 portfolios (November 1998 to present); Director,
North American Funds Variable Product Series I, 21
investment portfolios (August1998 to present);
Director, USLIFE Income Fund, Inc. (November 1998
to present); Director, Compaq Computer Corporation
(1992 to present); Director, A.G. Belo Corporation,
a media company (1992 to present); Director, Sysco
Corporation, a food marketing and distribution
company (1996 to present); Director, Luby's, Inc.,
a restaurant chain (1998 to present); Director,
University of Texas Board of Regents (May 2001 to
present). Formerly, Director, CypressTree Senior
Floating Rate Fund, Inc. (June 2000 to May 2001);
Formerly, President, United Way of the Texas Gulf
Coast, a not for profit organization (1992-1998);
Formerly, Director, Houston Branch of the Federal
Reserve Bank of Dallas (1992-2000); Formerly, Board
Member, Sisters of Charity of the Incarnate Word
(1996--1999).
William F. Devin, 63.... Member of the Board of Governors, Boston Stock
44 Woodland Road Exchange (1985 to present). Formerly, Executive
Braintree, MA 02184 Vice President, Fidelity Capital Markets, a
division of National Financial Services Corporation
(1966 to 1996); Formerly, Director, CypressTree
Senior Floating Rate Fund, Inc. (October 1997 to
May 2001).
SunAmerica Equity Funds pays each SunAmerica Independent Trustee annual
compensation in addition to reimbursement of out-of-pocket expenses in
connection with attendance at meetings of the SunAmerica Board. Specifically,
each SunAmerica Independent Trustee received a pro rata portion (based upon the
SunAmerica Equity Funds' net assets) of an aggregate of $40,000 in annual
compensation for acting as director or trustee to SAMF. In addition, each
SunAmerica Independent Trustee received $20,000 in annual compensation for
acting as trustee to AST. Beginning January 1, 2001 each SunAmerica Independent
Trustee of the retail funds in SAMF receives an additional $2,500 per quarterly
meeting. In addition, Mr. Eisenstat receives an aggregate of $2,000 in annual
compensation for serving as Chairman of the Boards of the retail funds in SAMF.
Officers of SunAmerica Equity Funds receive no direct remuneration in such
capacity from SunAmerica Equity Funds or any of the Acquiring Funds.
In addition, each SunAmerica Independent Trustee also serves on the Audit
Committee of the SunAmerica Board. The Audit Committee is charged with
recommending to the full SunAmerica Board the engagement or discharge of
SunAmerica Equity Funds' independent accountants; directing investigations into
matters within the scope of the independent accountant's duties; reviewing with
the independent accountants the audit plan and results of the audit; approving
professional services provided by the independent accountants and other
accounting firms; reviewing the independence of the independent accountants;
considering the range of audit and non-audit fees; and preparing and submitting
Committee minutes to the full SunAmerica Board. Each member of the Audit
Committee receives an aggregate of $5,000 in annual compensation for serving on
the Audit Committee of SAMF and AST. With respect to SunAmerica Equity Funds,
each member of the Committee receives a pro rata portion of the $5,000 annual
compensation, based on the relative net assets of
37
SunAmerica Equity Funds. SunAmerica Equity Funds also has a Nominating
Committee, comprised solely of SunAmerica Independent Trustees, which
recommends to the SunAmerica Board those persons to be nominated for election
as Trustees by shareholders and selects and proposes nominees for election by
Trustees between shareholders' meetings. Members of the Nominating Committee
serve without compensation.
The Trustees (and Directors) of SAMF and AST have adopted the SunAmerica
Disinterested Trustees' and Directors' Retirement Plan (the "Retirement Plan")
effective January 1, 1993 for the SunAmerica Independent Trustees. The
Retirement Plan provides generally that if a SunAmerica Independent Trustee who
has at least 10 years of consecutive service as a disinterested Trustee of any
of SAMF or AST (an "Eligible Trustee") retires after reaching age 60 but before
age 70 or dies while a Trustee, such person will be eligible to receive a
retirement or death benefit from each SAMF with respect to which he or she is
an Eligible Trustee. With respect to Sebastiano Sterpa, the SunAmerica
Independent Trustees have determined to make an exception to existing policy
and allow Mr. Sterpa to remain on the SunAmerica Board past age 70, until he
has served for ten years. Mr. Sterpa ceased accruing retirement benefits upon
reaching age 70, although such benefits will continue to accrue interest as
provided for in the Retirement Plan. As of each birthday, prior to the 70th
birthday, each Eligible Trustee will be credited with an amount equal to (i)
50% of his or her regular fees (excluding committee fees) for services as a
disinterested Trustee of each SAMF for the calendar year in which such birthday
occurs, plus (ii) 8.5% of any amounts credited under clause (i) during prior
years. An Eligible Trustee may receive any benefits payable under the
Retirement Plan, at his or her election, either in one lump sum or in up to
fifteen annual installments.
The following table sets forth information summarizing the aggregate
compensation of each SunAmerica Independent Trustee for his services as a
member of the SunAmerica Board for the fiscal year ended September 30, 2000,
except as otherwise indicated. Neither the Trustees who are interested persons
of SunAmerica Equity Funds nor any officers of SunAmerica Equity Funds receive
any compensation.
Pension or
Retirement Total Compensation
Aggregate Benefits Accrued Estimated Annual From Registrant
Compensation from as Part of Trust Benefits Upon and Fund Complex
Trustee Registrant Expenses Retirement* Paid to Trustees**
------- ----------------- ---------------- ---------------- ------------------
S. James Coppersmith.... $12,503 $47,982 $29,670 $67,500
Samuel M. Eisenstat..... $13,139 $30,673 $46,083 $71,500
Stephen J. Gutman....... $12,503 $42,123 $60,912 $67,500
Sebastiano Sterpa***.... $12,829 $11,447 $ 7,900 $45,833
--------
* Assuming participant elects to receive benefits in 15 yearly installments.
** Information is as of March 31, 2001 for the five investment companies in
the complex that pay fees to these directors/trustees. The complex consists
of SAMF and AST.
*** Mr. Sterpa is not a trustee of AST.
Management Arrangements
Comparison of Management and Administrative Arrangements and Fees
AGAM serves as the investment adviser for the Acquired Funds and SAAMCo
serves as the investment adviser for the Acquiring Funds. Each of AGAM and
SAAMCo is responsible for the management of the investment portfolio of each
Acquired Fund and Acquiring Fund, respectively, and for providing certain
administrative services to such Fund.
AGAM was organized as a Delaware corporation in 1996 and is located at 286
Congress Street, Boston, Massachusetts, 02210. Prior to the AIG Merger, AGAM
and the NAF Distributor were both wholly owned subsidiaries of American
General. Prior to the AIG Merger, American General was one of the nation's
largest diversified financial services organizations with assets of
approximately $128 billion and market capitalization
38
of $23 billion at June 30, 2001. AGAM is now a subsidiary of AIG. The principal
executive offices of AIG are located at 70 Pine Street, New York, New York
10270.
SAAMCo was organized as a Delaware corporation in 1982 and is located at The
SunAmerica Center, 733 Third Avenue, New York, NY 10017-3204. SAAMCo is a
wholly owned subsidiary of SunAmerica Inc., which in turn is a wholly owned
subsidiary of AIG. AIG, a Delaware corporation, is a holding company which
through its subsidiaries is engaged in a broad range of insurance and
insurance-related activities and financial services in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities include financial services and asset
management. As of June 30, 2001, SAAMCo managed, advised and/or administered
more than $28.5 billion of assets.
Comparison of the NAF Investment Advisory Agreement and SunAmerica
Investment Advisory Agreement. The SunAmerica Investment Advisory Agreement is
similar to the NAF Investment Advisory Agreement, except for certain matters,
including the advisory fees, the effective dates and the identity of the
adviser.
The advisory fees payable by the Acquired Funds to AGAM are discussed above
under "Proposal No. 1: Approval of the New Investment Advisory Agreement." The
advisory fees payable by the Acquiring Funds to SAAMCo are discussed above
under "Summary."
The effective advisory fees payable by each Acquiring Fund under the
SunAmerica Investment Advisory Agreement are at a lower annual rate than the
effective advisory fees payable by the respective Acquired Fund under the NAF
Investment Advisory Agreement, except in the case of the Growth and Income
Funds. However, SAAMCo expects that, following completion of the applicable
Reorganization, the net operating expenses (as a percentage of net assets) of
the Growth and Income Combined Fund will be less than such net operating
expenses of the NAF Growth & Income Fund. See "--NAF Board Considerations:
Potential Benefits to Shareholders as a Result of the Reorganizations."
The advisory fee rate payable by each Combined Fund after consummation of
the Reorganizations will be the same as the advisory fee rates payable by the
Acquiring Funds. After the Reorganizations, the net assets of each Combined
Fund will increase by the amount of the net assets of the respective Acquired
Fund. With respect to the Growth and Income Combined Fund, this increase in net
assets may cause a lower advisory fee rate to apply in accordance with the
advisory fee break point schedule applicable to such Acquiring Fund. The pro
forma effective fee rate of each Combined Fund, as a percentage of average
daily net assets, after taking into account the completion of the
Reorganizations, is shown above under "Summary."
In addition, the SunAmerica Investment Advisory Agreement provides that in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of SAAMCo's (and its affiliates') obligations or duties thereunder
("disabling conduct"), SAAMCo is not subject to liability to an Acquiring Fund
(or to any shareholder thereof) for any act or omission in the course of
rendering services to such Acquiring Fund (except to the extent specified in
the Investment Company Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services). The SunAmerica
Investment Advisory Agreement also provides that except for such disabling
conduct, an Acquiring Fund will indemnify SAAMCo (and its affiliates) from any
liability arising from SAAMCo's conduct under the SunAmerica Investment
Advisory Agreement. The NAF Investment Advisory Agreement does not contain
similar provisions.
Both the NAF Investment Advisory Agreement and the SunAmerica Investment
Advisory Agreement provide that the adviser may, at its own cost and expense
and subject to the requirements of the Investment Company Act retain one or
more subadvisers (each, a "Subadviser") to manage all or a portion of the
investment portfolio of an Acquired Fund or Acquiring Fund, respectively.
Subadvisory Arrangements. In addition to the ability to retain Subadvisers
under their respective investment advisory agreements referenced above, each of
AGAM and SAAMCo is authorized to retain (or
39
change) such Subadviser(s) without shareholder approval pursuant to separate
"Manager of Managers" orders granted by the Commission. SAAMCo and AGAM are
ultimately responsible under their respective "Manager of Managers" order to
oversee any Subadvisers for the Acquired Funds and Acquiring Funds,
respectively. AGAM has retained various Subadvisers for the Acquired Funds
pursuant to the Acquired Funds' "Manager of Managers" order. As of the date
hereof, SAAMCo has not appointed any Subadvisers for any of the Acquiring Funds
and does not rely on its "Manager of Managers" order with respect to the
Acquiring Funds. Accordingly, if shareholders approve the Reorganizations,
following consummation of the Reorganizations, the portfolios of the Acquired
Funds will be managed by SAAMCo as part of the Combined Funds.
40
The current Subadvisers of the Acquired Funds as well as certain information
regarding each Subadviser, including the fees payable to each Subadviser, are
set forth below. As compensation for their services, the Subadvisers receive
fees from AGAM computed separately for each Acquired Fund. Such fees are paid
out of AGAM's advisory fee at no additional cost to the Acquired Funds or their
shareholders.
Acquired Fund: Subadviser: Information: Subadvisory Fee Rate:
-------------- ----------- ------------ ---------------------
NAF Balanced INVESCO Funds Group, INVESCO has been the NAF Balanced Fund:
Fund and NAF Mid Inc. ("INVESCO") Subadviser to the NAF 0.400% on the first
Cap Growth Fund 7800 E. Union Blvd. Balanced Fund and the NAF $100 million, 0.350%
Denver, Colorado 80237 Mid Cap Growth Fund since between $100 million
March 2000. Established in and $250 million, and
1932, INVESCO is one of 0.300% on the excess
the oldest existing mutual over $250 million.
fund management companies
in the United States. As NAF Mid Cap Growth
of August 31, 2001, Fund: 0.550% on the
INVESCO and its affiliates first $50 million,
managed approximately 0.500% between $50
$30.1 billion in assets. million and $100
million, 0.450%
between $100 million
and $250 million,
0.400% between $250
million and $500
million and 0.350% on
the excess over $500
million.
NAF Large Cap Founders Asset Founders is a registered 0.500% on the first
Growth Fund Management, LLC investment adviser first $50 million, 0.450%
("Founders") established as an asset between $50 million
2930 East Third Avenue manager in 1938, and is a and $200 million,
Denver, Colorado 80206 subsidiary of Mellon 0.425% between $200
Financial Corporation. As million and $500
of August 31, 2001, million, 0.400%
Founders had over $5.6 between $500 million
billion of assets under and $850 million, and
management, including 0.350% on the excess
approximately $3.7 billion over $850 million.
in mutual fund accounts
and $1.9 million in other
advisory accounts.
NAF Growth & Wellington Management Wellington Management and 0.325% on the first
Income Fund Company, LLP its predecessor $50 million, 0.275%
("Wellington organizations have between $50 million
Management") provided investment and $200 million,
75 State Street management services to 0.225% between $200
Boston, Massachusetts investment companies, million and $500
02109 employee benefit plans, million and 0.150% on
endowments, foundations the excess over $500
and other institutions and million.
individuals since 1928. As
of September 1, 2001,
Wellington Management had
investment management
authority with respect to
approximately $296 billion
of assets.
41
Under the terms of each of the subadvisory agreements between AGAM and a
Subadviser, the Subadviser for the respective Acquired Fund manages the
investment and reinvestment of the assets of such Acquired Fund, subject to the
supervision of the NAF Board. The Subadviser formulates a continuous investment
program for such Acquired Fund consistent with its investment objectives and
policies. The Subadviser implements such programs by purchases and sales of
securities and regularly reports to AGAM and the NAF Board with respect to
their implementation.
Distribution and Shareholder Servicing Arrangements
Distributor
American General Funds Distributors, Inc. (previously defined as "AGFD" or
the "NAF Distributor"), an affiliate of AGAM, acts as the principal distributor
of the shares of the Acquired Funds. SunAmerica Capital Services, Inc.
(previously defined as "SACS" or the "SunAmerica Distributor"), an affiliate of
SAAMCo, acts as the distributor of the shares of the Acquiring Funds. As
compensation for their respective services, AGFD and SACS receive the initial
and deferred sales charges in respect of the Acquired Funds and Acquiring
Funds, respectively. In addition, AGFD and SACS receive fees under each
respective Acquired Fund's and Acquiring Fund's plan pursuant to Rule 12b-1
under the Investment Company Act. The address of the NAF Distributor is 286
Congress Street, Boston, Massachusetts 02210. The address of the SunAmerica
Distributor is The SunAmerica Center, 733 Third Avenue, New York, New York
10017-3204. After consummation of the Reorganizations, the SunAmerica
Distributor will continue to provide distribution services to each Combined
Fund.
Distribution and Service (12b-1) Fees
Each of the Acquired Funds and Acquiring Funds have adopted a plan under
Rule 12b-1 under the Investment Company Act that allows it to pay distribution
and other fees for the sale and distribution of its shares. Class A, Class B
and Class C shares of each Acquired Fund and Class A, Class B and Class II
shares of each Acquiring Fund are subject to the same respective distribution
and account maintenance and service fees pursuant to a plan under Rule 12b-1.
The table below sets forth the distribution and account maintenance and service
fees for each of these classes.
Account
Acquired Acquiring Maintenance
Fund Class Fund Class Distribution Fee and Service Fee
---------- ---------- ---------------- ---------------
A A 0.10% 0.25%
B B 0.75% 0.25%
C II 0.75% 0.25%
Because these fees are paid out of a Fund's assets on an ongoing basis, over
time they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
Shareholder Servicing Fees for Class I
The Acquired Funds have entered into a Services Agreement (the "NAF Services
Agreement") with AGAM for the provision of recordkeeping and shareholder
services to retirement and employee benefit plans and certain asset allocation
funds of North American Funds that invest in Institutional Class I shares of
the Acquired Funds. Under the NAF Services Agreement, as compensation for
services rendered, AGAM receives a fee on Institutional Class I shares of each
Acquired Fund equal to .25% of average net assets of such class. SACS will
provide these services after the Reorganizations with respect to Class I shares
of the Combined Funds for the same fee.
42
Other Service Agreements with Affiliates
SAFS acts as a servicing agent assisting State Street in connection with
certain services offered to the shareholders of each of the Acquiring Funds
pursuant to the terms of a Service Agreement (the "SunAmerica Service
Agreement"). Under the SunAmerica Service Agreement, as compensation for
transfer agency services rendered, SAFS receives a fee from each Acquiring
Fund, computed and payable monthly based upon an annual rate of .22% of average
daily net assets of each Acquiring Fund with respect to Class A, Class B and
Class II shares. Upon completion of the Reorganizations, SAFS will receive the
same fee with respect to Class I shares of each Acquiring Fund. For Class Z
shares of the SunAmerica Growth and Income Fund, SAFS receives reimbursements
from the Fund of its costs, which include all direct transfer agency fees and
out-of-pocket expenses allocated to providing services to Class Z shares. From
this fee, SAFS pays a fee to State Street, and its affiliate, National
Financial Data Services. In addition, pursuant to the Service Agreement, SAFS
may receive reimbursement of its costs in providing shareholder services on
behalf of the Acquiring Funds. SAFS is located at The SunAmerica Center, 733
Third Avenue, New York, New York 10017-3204.
Purchase, Exchange and Redemption of Shares
The following chart highlights the purchase, redemption and exchange
features of the Acquired Funds as compared to such features of the Acquiring
Funds.
Purchase, Redemption
and Exchange Features Acquired Funds Acquiring Funds
--------------------- -------------- ---------------
Minimum initial . non-retirement accounts: . non-retirement accounts:
investment............... $1,000 $500
. retirement accounts: $50 . retirement accounts: $250
. automatic investment . dollar cost averaging: $500
programs: $50 to open
Class B shares are available
for purchases of $250,000 or
less
Class C shares are available
for purchases under $1 million
Institutional Class I shares
are available for purchases of
$1 million or more
Minimum subsequent
investments.............. $50 . non-retirement account: $100
. retirement account: $25
. dollar cost averaging: at
least $25 per month
Initial Sales Charge
(as a percentage of
offering price).......... Class A: 5.75% Class A: 5.75%
Class B: None Class B: None
Class C: None Class II: 1.00%
Institutional Class I: None Class I: None (a)
Purchases over $1 million are Initial sales charge is waived
sold without an initial sales for certain investors
charge
Deferred Sales Charge..... Class A: Purchases of shares Class A: Purchases of Class A
worth $1 million or more that shares of $1 million or more
are sold without an initial that are redeemed within a
sales charge and redeemed certain period of time are
within 1 year are subject to a subject to a CDSC (1% for
1% CDSC at redemption (c) redemptions within one year of
purchase and 0.50% for
redemptions after the first
year and within the second
year of purchase) (c)
43
Purchase, Redemption
and Exchange Features Acquired Funds Acquiring Funds
--------------------- -------------- ---------------
Class B: Shares redeemed Class B: Shares redeemed
within 6 years are subject to within 6 years are subject to
a CDSC (b)(c) a CDSC (b)(c)
Class C: Shares redeemed Class II: Shares redeemed
within one year are subject to within 18 months after
a 1% CDSC (c) purchase are subject to a 1%
CDSC (c)
Institutional Class I: None Class I: None (a)
Purchases................. By mail (check), wire or By mail (check), wire or
through broker-dealers through a broker or financial
advisor
Redemption................ Class A, B and C: By mail, Class A, B and II: By mail
wire (if a minimum of $1,000), (any amount), wire, telephone
telephone or through broker- (for amounts less than
dealers $100,000) or through a broker
or financial advisor
Institutional Class I: Contact Class I: Contact the financial
the financial intermediary or intermediary or other
other organization from whom organization from whom shares
shares were purchased were purchased (a)
Conversion................ Class B shares automatically Class B shares automatically
convert into Class A shares convert into Class A shares
eight years after purchase approximately eight years
after purchase
Exchanges................. Shares of an Acquired Fund may Shares of an Acquiring Fund
be exchanged for shares of the may be exchanged for shares of
same class of any other the same class of any other
Acquired Fund or other series fund distributed by SACS
of North American Funds
For Institutional Class I
shares, all or part of an
existing plan balance may be
exchanged from one investment
option to another if permitted
by an employer retirement plan
--------
(a) Although not currently offered by the Acquiring Funds, Class I shares will
be offered by the Combined Funds upon consummation of the Reorganizations.
(b) The CDSC of Class B shares of the Acquiring Funds is either the same as or
less than the CDSC relating to Class B shares of the Acquired Funds. The
table below sets forth the schedule of Class B CDSC for all Funds.
CDSC on shares being sold
------------------------------
Years after Purchase Acquired Funds Acquiring Funds
-------------------- -------------- ---------------
1st year................. 5.00% 5.00%
2nd year................. 5.00% 4.00%
3rd year................. 4.00% 3.00%
4th year................. 3.00% 3.00%
5th year................. 2.00% 2.00%
6th year................. 1.00% 1.00%
7th year and thereafter.. None None
(c) The CDSC schedules applicable to Class A, Class B and Class C shares of an
Acquired Fund will continue to apply to the respective Corresponding Shares
received in the applicable Reorganization by
44
shareholders of a Combined Fund who were shareholders of the respective
Acquired Fund as of the date of the closing of such Reorganization (even if
you exchange your shares for shares of another fund distributed by SACS).
Each CDSC is based on the original purchase cost or the current market
value of the shares being sold, whichever is less. Future purchases of
Class A, Class B or Class II Shares of a Combined Fund will be subject to
the CDSC schedule applicable to the Combined Fund. There is no CDSC on
Combined Fund shares that are purchased through reinvestment of dividends.
In the case of a partial redemption of Combined Fund shares, those shares
in the shareholder's account that are not subject to a CDSC will be sold
first. If there are not enough of these shares available, shares that have
the lowest CDSC will be sold next.
Dividend Distribution and Account Policies
The following is a summary of the dividend distribution and account
policies of each of the Funds and is qualified in its entirety by the more
complete information contained in the Acquired Funds Prospectuses, Acquiring
Funds Prospectuses, Acquired Funds Statement and Acquiring Funds Statement.
Valuation of Fund Shares. The net asset value per share for each Fund and
class is determined once daily as of the close of regular trading on the New
York Stock Exchange (generally 4 p.m. Eastern time) by dividing the net assets
(the value of all assets less liabilities) of each class by the number of its
shares outstanding. See "Purchase, Redemption and Pricing--Determination of
Net Asset Value" in the Acquired Funds Statement and "Determination of Net
Asset Value" in the Acquiring Funds Statement.
Buy and Sell Prices. When you buy shares of a Fund, you pay the net asset
value plus any applicable sales charges. When you sell shares of a Fund, you
receive the net asset value minus any applicable CDSCs.
Dividends. Each of the Acquired Funds declare and pay capital gains and
income dividends, if any, annually. Income dividends, if any, are paid
quarterly by the SunAmerica Balanced Assets Fund and the SunAmerica Growth and
Income Fund and annually by the other Acquiring Funds. Capital gains
distributions, if any, are paid at least annually by the Acquiring Funds. See
"Pricing of Fund Shares" in the Acquired Funds Prospectus and "Dividends,
Distributions and Taxes--Dividends and Distributions" in the Acquiring Funds
Statement.
Dividend Reinvestments. The policy relating to dividend reinvestments is
substantially the same for all Funds. Unless cash payment is requested (and
such payment is more than $10 in the case of the Acquiring Funds), all
dividends and distributions, if any, will be reinvested. Alternatively, in the
case of the Acquiring Funds, dividends and distributions may be reinvested in
any fund distributed by SACS. See "Pricing of Fund Shares" in the Acquired
Funds Prospectus and "Dividends, Distributions and Taxes--Dividends and
Distributions" in the Acquiring Funds Statement.
Redemptions-in-kind. Each Acquired Fund reserves the right to pay
redemption proceeds in whole or in part by a distribution "in kind" of
securities held by the Acquired Fund, subject to the limitation that each
Acquired Fund is obligated to redeem shares solely in cash up to the lesser of
$250,000 or 1% of the net asset value of the Acquired Fund during any 90-day
period for any one account. Subject to this same limitation, each
Acquiring Fund also may pay redemption proceeds by a distribution "in kind" of
securities held by the Acquiring Fund, if it determines that it would be
detrimental to the best interests of the remaining shareholders of the
Acquiring Fund to make payment of redemption proceeds wholly or partly in
cash. See "Purchase Redemption and Pricing--Redemption in Kind" in the
Acquired Funds Statement and "Additional Information Regarding Redemption of
Shares" in the Acquiring Funds Statement.
Payment Following Redemption. Each Fund will normally send the proceeds
from a redemption (less any applicable CDSC) on the next business day, but may
delay payment for up to seven days. Payment may be delayed if the shares to be
redeemed were purchased by a check that has not cleared. During periods of
extreme volatility or market crisis, each Fund may temporarily suspend the
right to redemption and may
45
postpone the payment of proceeds, as allowed by the federal securities laws.
See "Section III: Investing in the North American Funds" and "Purchase,
Redemption and Pricing--Payment for the Shares Presented" in the Acquired Funds
Prospectuses and Acquired Funds Statement, respectively, and "Shareholder
Account Information--Transaction Policies" in the Acquiring Funds Prospectus.
Programs that Reduce Sales Charges. Each of the Funds offers programs
pursuant to which shareholders pay reduced sales charges. With respect to the
Acquired Funds and the Acquiring Funds, these programs are only applicable to
purchases of Class A shares. Under the Rights of Accumulation program, a
shareholder pays the sales charge applicable to the shareholder's total account
balance in all classes of shares. Under a Letter of Intent (or statement of
intention), a shareholder agrees to invest a certain amount over 13 months and
will pay the sales charge based on the shareholder's goal. In addition, the
Acquiring Funds also offer reduced sales charges for group purchases, pursuant
to which members of qualified groups may purchase Class A shares of an
Acquiring Fund under the Rights of Accumulation program described above. The
Acquiring Funds also offer a Combined Purchase Privilege, pursuant to which
certain persons may qualify for sales charge reductions or elimination by
combining purchases of Acquiring Fund shares into a single transaction. See
"Section III: Investing in the North American Funds" in the Acquired Funds
Prospectuses and "Additional Information Regarding Purchase of Shares" in the
Acquiring Funds Statement for more information regarding these programs.
Reinstatement Privileges. Each of the Funds offers a reinstatement
privilege. In the case of the Acquired Funds, if a shareholder redeems Class A
shares (under $1 million) and reinvests within 90 days, the shareholder will
not have to pay a sales charge. If a shareholder redeems Class A shares over $1
million, or Class B or Class C shares and pays a CDSC and then reinvests within
90 days, the shareholder's account will be credited the amount of the CDSC. In
the case of the Acquiring Funds, a shareholder may redeem shares of an
Acquiring Fund and within one year after the sale invest some or all of the
proceeds in the same share class of the same Acquiring Fund without a sales
charge. A shareholder may use the reinstatement privilege only one time after
redeeming such shares. If a shareholder paid a CDSC on the redemption of his or
her shares, the shareholder's account will be credited with the dollar amount
of the CDSC at the time of redemption. See "Account Services" in the Acquired
Funds Prospectus relating to Class A, Class B, and Class C shares and
"Shareholder Account Information--Sales Charge Reductions and Waivers" in the
Acquiring Funds Prospectus for more information regarding this privilege.
Other Shareholder Services. Each of the Acquired Funds and Acquiring Funds
offers other shareholder services which are similar, although not identical,
such as automatic investment plans and systematic withdrawal plans. In
addition, Anchor National Life Insurance Company offers an Asset Protection
Plan to certain investors in the Acquiring Funds, which provides for benefits
payable at death that relate to the amounts paid to purchase Acquiring Fund
shares (and not subsequently redeemed prior to death) and to the value of
Acquiring Fund shares held for the benefit of insured persons. Anchor National
Life Insurance company charges a premium for this coverage. For additional
information regarding these additional shareholder services, see "Account
Services" in the Acquired Funds Prospectuses and "Shareholder Account
Information--Additional Investor Services (Classes A, B and II)" and
"Additional Information Regarding Purchase of Shares" in the Acquiring Funds
Prospectus and Acquiring Funds Statement, respectively.
Small Accounts. The Acquired Funds require that for Class A, Class B and
Class C shares you maintain a minimum account balance of $500, or $50 for
retirement plans and other automatic investing programs. The Acquiring Funds
require that you maintain a minimum account balance of $500, or $250 for
retirement plan accounts. If your account with an Acquiring Fund falls below
the minimum requirement due to withdrawals, you may be asked to purchase more
shares within 60 days. If you do not take action, the Acquiring Fund may close
out your account and mail you the proceeds. Alternatively, you may be charged a
$2.00 monthly charge to maintain your account with an Acquiring Fund. Your
account with an Acquiring Fund will not be closed if its drop in value is due
to performance of the Acquiring Fund or the effects of sales charges.
46
Performance
General
The following tables provide performance information for shares of the Funds
for the periods indicated. Past performance is not indicative of future
performance.
Important information about the Acquiring Funds is also contained in
management's discussion of each Acquiring Fund's performance contained in the
Annual Report to Shareholders of the Acquiring Funds for the year ended
September 30, 2000, which accompanies this Proxy Statement and Prospectus.
Average annual total return is determined separately for each Class in
accordance with a formula specified by the Commission. Average annual total
return is computed by finding the average annual compounded rates of return for
the 1-, 3-, 5-, and 10-year periods or for the lesser included periods of
effectiveness. The calculation assumes that:
(a) The maximum sales load (i.e., either the front-end sales load or the
CDSC that would be applicable to a complete redemption of the investment at
the end of the specified period) is deducted from the initial $1,000
purchase payment;
(b) All dividends and distributions are reinvested at net asset value;
and
(c) Complete redemption occurs at the end of the 1-, 3-, 5-, or 10-year
periods or fractional portion thereof with all nonrecurring charges
deducted accordingly.
47
Average Annual Total Returns
(Period Ended June 30, 2001)
NAF Balanced Fund* SunAmerica Balanced Assets Fund
------------------------------------------------------------ ---------------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
------------- ------------- -------------- -------------- -------------- -------------- -------------
Year to Date.... -12.84% -12.47% -8.80% -7.52% -14.21% -13.79% -11.05%
One year........ -15.68% -15.51% -12.31% N/A -22.30% -22.18% -19.69%
Three year...... -4.31% -4.28% -3.11% N/A 0.83% 1.22% N/A
Five year....... 4.04% 4.30% 4.56% N/A 8.83% 9.15% N/A
Ten year........ N/A N/A 7.85% N/A N/A 10.44% N/A
Since
Inception...... 6.11% 6.36% 6.33% -12.28% 9.37% 10.97% -2.69%
(since 4/1/94) (since 4/1/94) (since 8/28/89) (since 7/10/00) (since 9/24/93) (since 1/29/85) (since 2/2/99)
Average Annual Total Returns
(Period Ended June 30, 2001)
NAF Large Cap Growth Fund* SunAmerica Blue Chip Growth Fund
------------------------------------------------------------ ---------------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
------------- ------------- -------------- -------------- -------------- -------------- -------------
Year to Date.... -23.45% -23.24% -19.97% -18.84% -17.89% -17.55% -14.92%
One year........ -41.54% -41.54% -39.07% N/A -29.84% -29.79% -27.56%
Three year...... -7.11% -7.24% -5.95% N/A 3.32% 3.77% N/A
Five year....... 4.23% 4.42% 4.76% N/A 12.17% 12.50% N/A
Ten year........ N/A N/A N/A N/A N/A 13.31% N/A
Since
Inception...... 5.92% 6.25% 6.39% -39.44% 11.90% 11.26% -0.94%
(since 3/4/96) (since 3/4/96) (since 3/4/96) (since 7/10/00) (since 10/8/93) (since 3/3/85) (since 2/2/99)
Average Annual Total Returns
(Period Ended June 30, 2001)
NAF Growth & Income Fund* SunAmerica Growth and Income Fund
------------------------------------------------------------ ---------------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
------------- ------------- -------------- -------------- -------------- -------------- -------------
Year to Date.... -12.43% -12.03% -8.33% -7.03% -17.82% -17.39% -14.85%
One year........ -19.76% -19.63% -16.21% N/A -26.33% -26.21% -23.91%
Three year...... 0.82% 0.88% 2.18% N/A 1.89% 2.33% 2.89%
Five year....... 12.21% 12.55% 12.79% N/A 11.92% 12.29% N/A
Ten year........ N/A N/A 12.95% N/A N/A N/A N/A
Since
Inception...... 13.79% 14.06% 12.58% -16.13% 15.42% 15.76% 5.71%
(since 4/1/94) (since 4/1/94) (since 5/1/91) (since 7/10/00) (since 7/1/94) (since 7/6/94) (since 2/2/98)
Average Annual Total Returns
(Period Ended June 30, 2001)
NAF Mid Cap Growth Fund* SunAmerica Growth Opportunities Fund
------------------------------------------------------------ ---------------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
------------- ------------- -------------- -------------- -------------- -------------- -------------
Year to Date.... -26.42% -26.16% -23.00% -21.84% -29.08% -28.77% -26.52%
One year........ -39.54% -39.48% -36.90% N/A -43.68% -43.64% -41.83%
Three year...... -3.14% -3.28% -1.95% N/A 13.63% 14.32% N/A
Five year....... 5.22% 5.35% 5.71% N/A 13.96% 14.22% N/A
Ten year........ N/A N/A N/A N/A 14.38% N/A N/A
Since
Inception...... 5.58% 5.83% 6.01% -37.41% 13.34% 12.64% 8.80%
(since 3/4/96) (since 3/4/96) (since 3/4/96) (since 7/10/00) (since 1/28/87) (since 10/4/93) (since 2/2/98)
-------
* AGAM waived certain fees in respect of the Acquired Funds. Absent such
waivers, the returns for the Acquired Funds shown above would be lower.
48
Shareholder Rights
Shareholder rights are the same in all of the Funds. Each full share and
fractional share of a Fund entitles the shareholder to receive a proportional
interest in the respective Fund's capital gain distributions and to cast one
vote per share, with fractional shares voting proportionally, on certain Fund
matters, including the election of directors, changes in fundamental policies,
or approval of changes in the Fund's investment advisory agreement.
Corresponding Shares issued in the Reorganizations will be fully paid and
nonassessable and will have no preemptive rights. In the event of the
liquidation of a Fund, shareholders of such Fund are entitled to share pro rata
in the net assets of such Fund available for distribution to shareholders.
The Funds are not required to hold annual meetings and do not intend to do
so except when certain matters, such as a change in a Fund's fundamental
policies, are to be decided. In addition, shareholders representing at least
10% of all eligible votes may call a special meeting if they wish, for the
purpose of voting on the removal of any Fund trustee.
Tax Information
The tax consequences associated with an investment in shares of an Acquired
Fund are substantially the same as the tax consequences associated with an
investment in shares of the respective Acquiring Fund. See "Taxes" in the
Acquired Funds Prospectuses and "Dividend, Distribution and Account Policies"
in the Acquiring Funds Prospectus.
Portfolio Transactions
The procedures for engaging in portfolio transactions are generally the same
for the Acquired Funds and the Acquiring Funds. Each of the Acquired Funds'
Subadvisers and SAAMCo may consider the nature and extent of research services
provided when brokers are selected and may cause a Fund to pay such broker-
dealer commissions that exceed those that other broker-dealers may have
charged, if in their view the commissions are reasonable in relation to the
value of the brokerage and/or research services provided. For further
discussion of these procedures, see "Portfolio Brokerage" in the Acquired Funds
Statement and "Portfolio Transactions and Brokerage" in the Acquiring Funds
Statement.
Portfolio Turnover
None of the Funds has placed a limit on its portfolio turnover and portfolio
changes are made when the Fund's investment adviser (or Subadviser) believes
they are advisable, usually without reference to the length of time that a
security has been held.
The table below sets forth the portfolio turnover rates for the Acquired
Funds and the Acquiring Funds for the fiscal years ended October 31, 2000 and
September 30, 2000, respectively. Some of these portfolio turnover rates exceed
100%. A 100% portfolio turnover rate would occur if all of the securities in
the portfolio were replaced during the period. Higher portfolio turnover rates
increase the brokerage costs a Fund pays and may adversely affect its
performance. Higher portfolio turnover may also result in an increased
proportion of capital gains constituting short-term capital gains instead of
long-term capital gains. If a Fund realizes capital gains when it sells
portfolio investments, it generally must pay those gains out to shareholders,
increasing their taxable distributions. This may adversely affect the after-tax
performance of a Fund for shareholders with taxable accounts.
49
SunAmerica
NAF Balanced Balanced Assets NAF Large Cap SunAmerica Blue
Fund Fund Growth Fund Chip Growth Fund
------------ --------------- ------------- ----------------
217% 259% 196% 75%
SunAmerica
SunAmerica Growth
NAF Growth & Growth and NAF Mid Cap Opportunities
Income Fund Income Fund Growth Fund Fund
------------ --------------- ------------- ----------------
31% 61% 210% 139%
Additional Information
Independent Auditors
Currently PricewaterhouseCoopers LLP serves as the independent auditors of
the Acquired Funds and Ernst & Young LLP serves as the independent auditors of
the Acquiring Funds. If the Reorganizations are completed, it is currently
anticipated that Ernst & Young LLP will serve as the independent auditors of
the Combined Funds. The principal business address of PricewaterhouseCoopers
LLP is 1177 Avenue of the Americas, New York, New York 10036. The principal
business address of Ernst & Young LLP is 787 Seventh Avenue, New York, New York
10019.
Custodian
State Street acts as the custodian of the assets of the Acquired Funds and
Acquiring Funds. If the Reorganizations are completed, it is currently
anticipated that State Street will continue to serve as the custodian of the
Combined Funds. The principal business address of State Street is 1776 Heritage
Drive, North Quincy, Massachusetts 02171.
Transfer Agent
Boston Financial Data Services, Inc., 66 Brooks Drive, Braintree,
Massachusetts 02184, serves as the transfer agent with respect to each Acquired
Fund. State Street, 1776 Heritage Drive, North Quincy, Massachusetts 02171,
serves as the transfer agent with respect to each Acquiring Fund. Transfer
agent functions are performed for State Street by National Financial Data
Services, P.O. Box 219572, Kansas City, Missouri 64121-5972, an affiliate of
State Street. Each transfer agent is responsible for the issuance, transfer and
redemption of shares and the opening, maintenance and servicing of shareholder
accounts for the respective Fund. If the Reorganizations are completed, it is
currently anticipated that State Street will continue to serve as the transfer
agent of the Combined Funds.
Capital Stock
Each Acquired Fund is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $0.001 per share, divided
into four classes designated Class A, Class B, Class C and Institutional Class
I. Each Acquiring Fund is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $0.01 per share, divided
into four classes (five classes in the case of the SunAmerica Growth and Income
Fund), designated Class A, Class B, Class II, Class I (and Class Z in the case
of the SunAmerica Growth and Income Fund). See "--Shareholder Rights" above and
"Capital Stock" in the North American Funds Statement and "Description of
Shares" in the SunAmerica Equity Funds Statement for further discussion of the
rights and preferences attributable to shares of each Acquired Fund and each
Acquiring Fund, respectively. See "Summary" above and "Section II: Fees and
Expenses" (in the case of Class A, Class B and Class C shares) and "Section II:
Fees and Expenses of the North American Funds-- Institutional Class I Shares"
(in the case of Institutional Class I shares) in the Acquired Funds
Prospectuses and "Fund Highlights--What are the Fund's Expenses?" in the
Acquiring Funds Prospectus for further discussion on the expenses attributable
to shares of the Acquired Funds and the Acquiring Funds, respectively. See "--
Issuance and Distribution of Corresponding Shares" for a description of the
classes of Corresponding Shares to be issued in the Reorganizations.
50
Each of North American Funds and SunAmerica Equity Funds is an entity of the
type commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for its obligations. However, the Declaration of
Trust of each of North American Funds and SunAmerica Equity Funds contains an
express disclaimer of shareholder liability for acts or obligations of each
Acquired Fund and Acquiring Fund, respectively, and provides for
indemnification and reimbursement of expenses out of that Fund's property for
any shareholder held personally liable for the obligations of that Fund. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Funds themselves would be
unable to meet their obligations. Given the above limitations on shareholder
personal liability and the nature of the Funds' assets and operations, the
possibility that a Fund would be unable to meet its obligations is remote and
each of North American Funds and SunAmerica Equity Funds believes that the risk
of personal liability to shareholders is therefore also remote.
Shareholder Inquiries
Shareholder inquiries with respect to the Acquired Funds may be addressed to
each Acquired Fund at 286 Congress Street, Boston, Massachusetts 02210 or by
calling toll free 1-800-872-8037. Shareholder inquiries with respect to the
Acquiring Funds may be addressed to each Acquiring Fund at The SunAmerica
Center, 733 Third Avenue, New York, NY 10017-3204 or by calling toll free 1-
800-858-8850.
51
THE REORGANIZATIONS
General
Under each Plan, the applicable Acquiring Fund will acquire substantially
all of the assets, and assume substantially all of the liabilities, of the
respective Acquired Fund solely in exchange for an equal aggregate value of
Corresponding Shares of such Acquiring Fund. Upon receipt by an Acquired Fund
of Corresponding Shares, such Acquired Fund will distribute such Corresponding
Shares to its shareholders, as described below. All issued and outstanding
shares of the Acquired Funds will be cancelled, and each Acquired Fund's
existence as a separate investment portfolio of North American Funds will be
terminated as soon as practicable following consummation of the respective
Reorganization.
Generally, the assets transferred by an Acquired Fund to the respective
Acquiring Fund will include all investments of such Acquired Fund held in its
portfolio as of the Valuation Time and all other assets of such Acquired Fund
as of such time.
In the course of each Reorganization, each holder, if any, of Class A, Class
B, Class C and Institutional Class I shares of an Acquired Fund will receive
Class A, Class B, Class II and Class I Corresponding Shares, respectively, of
the respective Acquiring Fund. No sales charges will be imposed on the
Corresponding Shares issued in connection with the Reorganizations.
Each Acquired Fund will distribute the Corresponding Shares received by it
in connection with its Reorganization pro rata to its shareholders in exchange
for such shareholders' proportional interests in such Acquired Fund. The
Corresponding Shares received by an Acquired Fund's shareholders will have the
same aggregate net asset value as each such shareholder's interest in such
Acquired Fund as of the Valuation Time. See "--Terms of the Plans" for
information concerning the calculation of net asset value.
Since the Corresponding Shares will be issued at net asset value in exchange
for the net assets of an Acquired Fund having a value equal to the aggregate
net asset value of the shares of such Acquired Fund as of the Valuation Time,
the net asset value per share of the respective Acquiring Fund should remain
virtually unchanged solely as a result of the applicable Reorganization. Thus,
the Reorganizations should not result in dilution of the net asset value of the
Acquired Funds or the Acquiring Funds immediately following consummation of the
Reorganizations. However, as a result of the Reorganizations, a shareholder of
an Acquired Fund may hold a smaller percentage of ownership in the respective
Acquiring Fund than he or she did in the Acquired Fund prior to the
Reorganizations. In addition, a shareholder of an Acquired Fund may end up with
a different number of shares compared to what he or she originally held, but
the total dollar value of shares held will remain the same.
If the shareholders of the Acquired Funds approve the Reorganizations at the
Meeting, all required regulatory approvals are obtained, and certain conditions
are either met or waived, it is expected that the Reorganizations will take
place during the fourth calendar quarter of 2001. One Reorganization is not
dependent on the consummation of any other Reorganization. If an Acquired
Fund's shareholders do not approve the respective Reorganization, the NAF Board
will consider other possible courses of action which may be in the best
interests of shareholders.
Terms of the Plans
The following is a summary of the significant terms of the Plans. This
summary is qualified in its entirety by reference to the Plans, a form of which
is attached hereto as Exhibit II.
Valuation of Assets and Liabilities
The respective assets and liabilities of the Acquired Funds and the
Acquiring Funds will be valued as of the Valuation Time. The assets in each
Fund will be valued according to the procedures set forth under
52
"Transaction Policies--Valuation of Shares" and "Determination of Net Asset
Value" in the Acquiring Funds Prospectus and the Acquiring Funds Statement,
respectively. Purchase orders for an Acquired Fund's shares which have not been
confirmed as of the Valuation Time will be treated as assets of such Acquired
Fund for purposes of the respective Reorganization; redemption requests with
respect to an Acquired Fund's shares which have not settled as of the Valuation
Time will be treated as liabilities of such Acquired Fund for purposes of the
respective Reorganization.
Issuance and Distribution of Corresponding Shares
On the Closing Date (as defined in the Plans), each Acquiring Fund will
issue to the respective Acquired Fund a number of full and fractional
Corresponding Shares the aggregate net asset value of which will equal the
aggregate net asset value of shares of such Acquired Fund as of the Valuation
Time. Such Acquired Fund will then distribute the Corresponding Shares received
by it pro rata to its shareholders of record as of the Valuation Time in
exchange for such shareholders' proportional interests in such Acquired Fund.
Such issuance and distribution will be done as follows: each holder, if any, of
Class A, Class B, Class C and Institutional Class I shares of an Acquired Fund
will receive Class A, Class B, Class II and Class I Corresponding Shares,
respectively, of the respective Acquiring Fund. The Corresponding Shares
received by an Acquired Fund's shareholder will have the same aggregate net
asset value as such shareholder's interest in such Acquired Fund as of the
Valuation Time.
Expenses
All costs of the Reorganizations will be borne by AIG or an affiliate
thereof, regardless of whether the Reorganizations are consummated. No portion
of the expenses of the Reorganizations will be borne directly or indirectly by
the Funds or their shareholders.
Required Approvals
The completion of each Reorganization is conditioned upon, among other
things, the receipt of certain regulatory approvals, including the receipt of
an order from the Commission pursuant to Section 17(b) of the Investment
Company Act. An application for such order has been filed with the Commission;
however, there is no assurance that it will be received. In addition, the
Declaration of Trust of North American Funds (as amended to date) requires
approval of each Reorganization by the affirmative vote of the respective
Acquired Fund's shareholders representing no less than a majority of the
outstanding voting securities of that Fund, voting together as a single class,
cast at a meeting at which a quorum is present. "Majority" for this purpose
under the Investment Company Act means the lesser of (i) more than 50% of the
outstanding shares of the applicable Acquired Fund and (ii) 67% or more of the
shares of that Acquired Fund represented at the Meeting if more than 50% of
such shares are represented.
Amendments and Conditions
The Plans may be amended at any time prior to the Closing Date with respect
to any of the terms therein. The obligations of each Acquired Fund and
Acquiring Fund pursuant to the respective Plan are subject to various
conditions, including the requisite approval of the respective Reorganization
by such Acquired Fund's shareholders, the receipt of an opinion of counsel as
to tax matters and the confirmation by the respective Acquired Fund and
Acquiring Fund of the continuing accuracy of their respective representations
and warranties contained in such Plan.
Termination, Postponement and Waivers
Each Plan may be terminated, and the respective Reorganization abandoned at
any time, whether before or after adoption thereof by the respective Acquired
Fund's shareholders, prior to the Closing Date or the Closing Date may be
postponed: (i) by mutual agreement of the NAF Board and the SunAmerica Board;
(ii) by an
53
Acquired Fund if any condition to such Acquired Fund's obligations has not been
fulfilled or waived; or (iii) by an Acquiring Fund if any condition to such
Acquiring Fund's obligations has not been fulfilled or waived.
NAF Board Considerations: Potential Benefits to Shareholders as a Result of the
Reorganizations
In approving the Reorganizations, based upon their evaluation of all
relevant information, and after meeting with counsel to the NAF Independent
Trustees regarding the legal issues involved, the NAF Board considered that,
following each Reorganization, shareholders of an Acquired Fund will remain
invested in a mutual fund which has substantially the same or similar
investment objective and similar, though not identical, investment techniques.
In addition, the NAF Board considered the following, among other things:
. Terms and conditions of the Reorganizations.
. The fact that the Acquiring Funds will assume substantially all the
liabilities of the respective Acquired Funds.
. The historical performance records of the Acquired Funds and Acquiring
Funds.
. The gross and net expense ratios of the Acquired Funds and the Acquiring
Funds before the Reorganizations and the estimated expense ratios of the
Combined Funds on a pro forma basis after the Reorganizations.
. The relative annual rates of advisory fees payable by the Acquired Funds
and the Acquiring Funds.
. The fact that the Reorganizations would not result in dilution of
Acquired Fund shareholders' interests.
. The fact that AGAM has agreed to waive fees or reimburse expenses for
the Acquired Funds, but there is no assurance that the current fee
waivers and expense reimbursements would continue after February 28,
2002.
. The fact that SAAMCo has agreed to waive fees or reimburse expenses for
certain classes of Acquiring Fund shares.
. The investment experience, expertise and resources of SAAMCo and other
service providers to the Acquiring Funds in the areas of distribution,
investment, and shareholder services.
. The service and distribution resources available to the Acquiring Funds
and compatibility of the Funds' service features available to
shareholders.
. The fact that each Reorganization has been structured with the intention
that it qualify for Federal income tax purposes as a tax-free
reorganization under the Code.
. The fact that AIG or an affiliate thereof will bear all expenses
relating to the Reorganizations.
. The effect of the Reorganizations on Acquired Fund shareholders and the
value of their interests.
. Alternatives available to Acquired Fund shareholders, including the
ability to redeem their shares.
The NAF Board also identified and considered certain potential benefits to
shareholders that are likely to result from the Reorganizations. For example,
the net assets of each of the Acquiring Funds would increase by the amount of
the net assets of each of the respective Acquired Funds at the time of the
Reorganization. With respect to the Growth and Income Combined Fund, this
increase in net assets may cause a lower advisory fee rate to apply in
accordance with the advisory fee breakpoint schedule applicable to such
Acquiring Fund. See "Proposals Nos. 2(a)-(d): Approval of the Plans." In
addition, because SunAmerica has broad distribution channels, it is also
possible that the asset base for the Combined Funds will increase over the long
term, which would tend to result in a lower overall operating expense ratio. Of
course, there is no guarantee that such increases in asset base would in fact
occur. The table below sets forth the total net assets of each of the Acquiring
Funds (for the share classes involved in the Reorganizations) and each of the
Acquired Funds, in each case as of March 31, 2001, as well as the net assets of
each of the Combined Funds, on a pro forma basis, assuming the Reorganizations
had been completed on such date.
54
Total Net Assets
as of March 31, 2001
SunAmerica Balanced Pro Forma Combined
NAF Balanced Fund Assets Fund Balanced Fund
---------------------------- ------------------------ ------------------------
Class A $ 7,286,284 Class A $264,131,925 Class A $271,416,621
Class B $ 12,382,963 Class B $123,535,316 Class B $135,915,580
Class C $ 29,242,368 Class II $ 26,489,926 Class II $ 55,725,922
Institutional Total $414,157,167 Class I $ 5,104,080
Class I $ 5,105,193 Total $468,162,203
Total $ 54,016,808
SunAmerica Blue Chip Pro Forma Blue Chip
NAF Large Cap Growth Fund Growth Fund Growth Combined Fund
---------------------------- ------------------------ ------------------------
Class A $ 6,870,643 Class A $101,438,796 Class A $108,300,596
Class B $ 22,463,736 Class B $ 45,213,129 Class B $ 67,647,954
Class C $ 12,157,925 Class II $ 8,667,156 Class II $ 20,809,434
Institutional Total $155,319,081 Class I $ 15,354,566
Class I $ 15,374,353 Total $212,112,550
Total $ 56,866,657
SunAmerica Growth and Pro Forma Growth and
NAF Growth & Income Fund Income Fund Income Combined Fund
---------------------------- ------------------------ ------------------------
Class A $ 41,401,558 Class A $ 95,679,367 Class A $137,043,954
Class B $ 77,404,149 Class B $131,647,428 Class B $208,982,456
Class C $124,750,461 Class II $ 34,648,188 Class II $159,287,247
Institutional Total $261,974,983 Class I $ 10,996,195
Class I $ 11,006,023 Total $516,309,852
Total $254,562,191
Pro Forma Growth
SunAmerica Growth Opportunities Combined
NAF Mid Cap Growth Fund Opportunities Fund Fund
---------------------------- ------------------------ ------------------------
Class A $ 7,248,056 Class A $124,773,186 Class A $132,011,239
Class B $ 17,253,698 Class B $ 75,131,892 Class B $ 92,361,775
Class C $ 12,360,468 Class II $ 45,045,280 Class II $ 57,388,687
Institutional Total $244,950,358 Class I $ 7,720,949
Class I $ 7,731,621 Total $289,482,650
Total $ 44,593,843
The NAF Board considered that certain fixed costs, such as printing of
prospectuses and reports sent to shareholders, legal and audit fees, and
registration fees would be spread across a larger asset base. This would tend
to lower the expense ratio borne by shareholders of both the Acquiring Funds
and the Acquired Funds, but the effect would be relatively more significant in
the case of shareholders of the Acquired Funds. This is because these Acquired
Funds are smaller than the respective Acquiring Fund and will benefit more from
potential economies of scale. To illustrate potential benefits to the Acquired
Funds as a result of the Reorganizations, including potential economies of
scale, see the total and net operating expenses, as a percentage of net assets,
for the Acquired Funds and the Acquiring Funds as of March 31, 2001, and the
total and net operating expenses, as a percentage of net assets, for the
Combined Funds, on a pro forma basis, assuming the Reorganizations had been
completed as of such date, under "Fee Tables" above.
In addition to the potential economies of scale which may be realized
through combination of the Funds, the NAF Board also considered the advantages
of eliminating the competition and duplication of effort inherent in marketing
funds that have similar investment objectives.
AGAM is contractually obligated to provide the fee reductions and expense
reimbursements referenced in the "Fee Tables" above through February 28, 2002.
If shareholders do not approve the Reorganizations, each
55
Acquired Fund will continue with its current fee structure except that there is
no assurance that AGAM would continue to provide such fee reductions and
reimbursements past this date. If shareholders approve the Reorganizations, the
respective Combined Funds' expense structure will apply.
Based on the foregoing, together with other factors and information
considered to be relevant and recognizing that there can be no assurance that
any operating efficiencies or other benefits will in fact be realized, the NAF
Board concluded that the Reorganizations present no significant risks or costs
(including legal, accounting and administrative costs) that would outweigh the
benefits discussed above. In connection with the approval of the
Reorganizations, the NAF Board also approved directed brokerage arrangements
with certain brokers to reduce the costs that might otherwise be incurred to
align the portfolios of each of the Acquired Funds with those of the respective
Acquiring Fund to facilitate a smooth transition upon consummation of the
Reorganizations. Because the Acquired Funds and Acquiring Funds have
substantially the same or similar investment objectives and similar investment
strategies, it is not anticipated that the securities held by an Acquired Fund
will be sold in significant amounts in order to comply with the objectives and
investment policies of the respective Acquiring Fund in connection with the
applicable Reorganization. The Acquired Funds will not dispose of assets to an
extent or in a manner that would jeopardize the tax-free nature of the
Reorganizations under the Code. However, the disposition of assets by an
Acquired Fund may result in the realization of taxable gains or losses by
Acquired Fund shareholders.
In approving the Reorganizations, the NAF Board, including all of the NAF
Independent Trustees, determined that each Reorganization is in the best
interests of the respective Acquired Fund and its shareholders. In addition,
the NAF Board, including all of the NAF Independent Trustees, also determined
that the interests of the shareholders of each Acquired Fund would not be
diluted as a result of effecting the respective Reorganization because each
such shareholder will receive Corresponding Shares of the Acquiring Fund having
an aggregate net asset value equal to the aggregate net asset value of his or
her shares of the Acquired Fund outstanding as of the Valuation Time.
Consequently, the NAF Board approved the Plans and directed that each Plan be
submitted to the shareholders of each respective Acquired Fund for approval.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each Acquired Fund approve the respective Plan. Approval of
the respective Plan by one Acquired Fund is not contingent upon the approval of
the respective Plan by any other Acquired Fund.
The SunAmerica Board has also approved the Plans on behalf of the Acquiring
Funds.
Federal Income Tax Consequences of the Reorganizations
General
Each Reorganization has been structured with the intention that it qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a) of the Code. This means that, in the opinion of counsel, no gain or loss
will be recognized by a shareholder of an Acquired Fund for Federal income tax
purposes as a result of a Reorganization.
As a condition to the closing of each Reorganization, each of the Acquired
Funds and Acquiring Funds will receive an opinion of Shearman & Sterling,
counsel to the Acquiring Funds, substantially to the effect that, among other
things, for Federal income tax purposes, upon consummation of each
Reorganization (i) no gain or loss will be recognized by an Acquired Fund or an
Acquiring Fund as a result of its respective Reorganization, (ii) no gain or
loss will be recognized by a shareholder of an Acquired Fund upon his or her
receipt of Corresponding Shares in the respective Reorganization solely in
exchange for his or her shares of such Acquired Fund, (iii) an Acquired Fund
and an Acquiring Fund each will be a "party to a reorganization" under Section
368(b) of the Code, (iv) the holding period of the assets of an Acquired Fund
acquired by the respective Acquiring Fund will include the period during which
such assets were held by such Acquired Fund, (v) the holding period for
Corresponding Shares of an Acquiring Fund received by each shareholder of the
respective
56
Acquired Fund in exchange for his or her shares such Acquired Fund will include
the period during which such shareholder held shares of such Acquired Fund
(provided such Acquired Fund shares were held as capital assets on the date of
the exchange), and (vi) immediately after a Reorganization, the tax basis of
the Corresponding Shares received by shareholders of the respective Acquired
Fund in such Reorganization will be equal, in the aggregate, to the tax basis
of the shares of such Acquired Fund surrendered in exchange therefor. Shearman
& Sterling's opinion will be based upon certain representations made by the
parties to the Reorganizations.
An opinion of counsel does not have the effect of a private letter ruling
from the Internal Revenue Service ("IRS") and is not binding on the IRS or any
court. If a Reorganization is consummated but fails to qualify as a
reorganization within the meaning of Section 368 of the Code, the
Reorganization would be treated as a taxable sale of assets followed by a
taxable liquidation of the respective Acquired Fund, and Acquired Fund
shareholders would recognize a taxable gain or loss equal to the difference
between their basis in the Acquired Fund shares and the fair market value of
the Corresponding Shares received.
To the extent an Acquiring Fund has unrealized capital gains at the time of
the respective Reorganization, the respective Acquired Fund's shareholders may
incur taxable gains in the year that such Acquiring Fund realizes and
distributes those gains. This will be true notwithstanding that the unrealized
gains were reflected in the price of such Acquiring Fund's shares at the time
they were exchanged for assets of such Acquired Fund in the respective
Reorganization. Conversely, shareholders of an Acquiring Fund would share in
unrealized capital gains of the respective Acquired Fund after the respective
Reorganization and bear a tax consequence on the subsequent realization of such
gains.
To the extent that an Acquired Fund has loss carryforwards at the time of
the respective Reorganization, Acquired Fund shareholders may not be able to
benefit from such loss carryforwards after the Reorganizations.
Shareholders should consult their tax advisers regarding the effect of the
Reorganizations in light of their individual circumstances. As the foregoing
relates only to Federal income tax consequences, shareholders also should
consult their tax advisers as to the non-United States, state, local and other
tax consequences of the Reorganizations.
Status as a Regulated Investment Company
All Funds have elected and qualified to be taxed as regulated investment
companies under Sections 851-855 of the Code, and after the Reorganizations,
the Acquiring Funds intend to continue to qualify as regulated investment
companies. An Acquired Fund's existence as a separate investment portfolio of
North American Funds will be terminated as soon as practicable following the
consummation of the applicable Reorganization.
57
Capitalization
The following table sets forth the capitalization of each Acquired Fund and
each Acquiring Fund (for the share classes involved in the Reorganizations) as
of March 31, 2001, and the capitalization of each Combined Fund, on a pro
forma basis, as if the Reorganizations had occurred on that date.
NAF Balanced Fund SunAmerica Balanced Assets Fund
-------------------------------------------------- -------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
----------- ----------- ------------ ------------- ------------ ------------ -----------
Total Net
Assets......... $ 7,286,284 $12,382,963 $ 29,242,368 $ 5,105,193 $264,131,925 $123,535,316 $26,489,926
Shares
Outstanding..... 927,998 1,580,602 3,684,912 649,582 17,644,795 8,277,263 1,773,072
Net Asset Value
Per Share....... $7.85 $7.83 $7.94 $7.86 $14.97 $14.92 $14.94
Pro Forma Combined Balanced Fund
--------------------------------------------------
Class A Class B Class II Class I
------------ ------------ ------------ -----------
Total Net
Assets......... $271,416,621 $135,915,580 $ 55,725,922 $ 5,104,080
Shares
Outstanding..... 18,131,415 9,107,039 3,729,966 340,954
Net Asset Value
Per Share....... $14.97 $14.92 $14.94 $14.97
NAF Large Cap Growth Fund SunAmerica Blue Chip Growth Fund
-------------------------------------------------- -------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
----------- ----------- ------------ ------------- ------------ ------------ -----------
Total Net
Assets......... $ 6,870,643 $22,463,736 $ 12,157,925 $15,374,353 $101,438,796 $ 45,213,129 $ 8,667,156
Shares
Outstanding..... 579,537 1,969,356 1,066,645 1,287,367 5,895,625 2,841,331 545,600
Net Asset Value
Per Share....... $11.86 $11.41 $11.40 $11.94 $17.21 $15.91 $15.89
Pro Forma Combined Balanced Fund
--------------------------------------------------
Class A Class B Class II Class I
------------ ------------ ------------ -----------
Total Net
Assets......... $108,300,596 $ 67,647,954 $ 20,809,434 $15,354,566
Shares
Outstanding..... 6,294,335 4,251,439 1,309,746 892,189
Net Asset Value
Per Share....... $17.21 $15.91 $15.89 $17.21
SunAmerica Growth and
NAF Growth & Income Fund Income Fund
-------------------------------------------------- -------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
----------- ----------- ------------ ------------- ------------ ------------ -----------
Total Net
Assets......... $41,401,558 $77,404,149 $124,750,461 $11,006,023 $ 95,679,367 $131,647,428 $34,648,188
Shares
Outstanding..... 2,049,152 3,953,119 6,338,466 543,089 7,089,474 10,094,368 2,661,158
Net Asset Value
Per Share....... $20.20 $19.58 $19.68 $20.27 $13.50 $13.04 $13.02
Pro Forma Combined
Growth and Income Fund
--------------------------------------------------
Class A Class B Class II Class I
------------ ------------ ------------ -----------
Total Net
Assets......... $137,043,954 $208,982,456 $159,287,247 $10,996,195
Shares
Outstanding..... 10,153,517 16,024,968 12,234,050 814,533
Net Asset Value
Per Share....... $13.50 $13.04 $13.02 $13.50
58
SunAmerica Growth
NAF Mid Cap Growth Fund Opportunities Fund
------------------------------------------------ ------------------------------------
Institutional
Class A Class B Class C Class I Class A Class B Class II
---------- ----------- ----------- ------------- ------------ ----------- -----------
Total Net
Assets.......... $7,248,056 $17,253,698 $12,360,468 $7,731,621 $124,773,186 $75,131,892 $45,045,280
Shares
Outstanding..... 715,655 1,795,035 1,283,728 759,324 6,131,576 4,006,776 2,403,768
Net Asset Value
Per Share....... $10.13 $9.61 $9.63 $10.18 $20.35 $18.75 $18.74
Pro Forma Combined
Growth Opportunities Fund
-----------------------------------------------
Class A Class B Class II Class I
------------ ----------- ----------- ----------
Total Net
Assets.......... $132,011,239 $92,361,775 $57,388,687 $7,720,949
Shares
Outstanding..... 6,487,254 4,925,703 3,062,434 379,408
Net Asset Value
Per Share....... $20.35 $18.75 $18.74 $20.35
The table set forth above should not be relied upon to reflect the number of
shares to be received in the Reorganizations; the actual number of shares to be
received will depend upon the net asset value and number of shares outstanding
of each Fund at the Valuation Time.
59
GENERAL
INFORMATION CONCERNING THE MEETING
Date, Time and Place of Meeting
The Meeting will be held on November 7, 2001, at the principal executive
offices of the North American Funds, 286 Congress Street, Boston, Massachusetts
02210, at 10:00 a.m., Eastern Time.
Solicitation, Revocation and Use of Proxies
A shareholder executing and returning a proxy has the power to revoke it at
any time prior to its exercise by executing a superseding proxy (i.e., later-
dated and signed), by submitting a notice of revocation to the Secretary of
North American Funds or by subsequently registering his or her vote by
telephone or via the Internet. In addition, although mere attendance at the
Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw his or her proxy and vote in person.
All shares represented by properly executed proxies received at or prior to
the Meeting, unless such proxies previously have been revoked, will be voted at
the Meeting in accordance with the directions on the proxies; if no direction
is indicated on a properly executed proxy, such shares will be voted "FOR"
approval of the New Investment Advisory Agreement and the respective Plan.
It is not anticipated that any matters other than the approval of the New
Investment Advisory Agreement and approval of the respective Plan will be
brought before the Meeting. If, however, any other business properly is brought
before the Meeting, proxies will be voted in accordance with the judgment of
the persons designated on such proxies.
Record Date and Outstanding Shares
Only holders of record of shares of the Acquired Funds at the close of
business on September 17, 2001 (the "Record Date") are entitled to vote at the
Meeting or any adjournment thereof. The following chart sets forth the shares
of each class of the Acquired Funds issued and outstanding and entitled to vote
at the close of business on the Record Date.
Institutional Total Number of
Class A Shares Class B Shares Class C Shares Class I Shares Shares
-------------- -------------- -------------- -------------- ---------------
NAF Balanced Fund....... 918,837.9350 1,515,003.5320 3,288,737.3300 660,043.9310 6,382,622.7280
NAF Large Cap Growth
Fund................... 524,598.9500 1,857,832.4990 816,511.8950 1,461,368.1190 4,660,311.4630
NAF Growth & Income
Fund................... 2,068,230.2000 3,455,615.6880 5,545,337.3340 2,361,532.2650 13,430,715.4870
NAF Mid Cap Growth
Fund................... 673,855.0320 1,754,833.3910 1,096,687.2500 832,619.5890 4,357,995.2620
60
Security Ownership of Certain Beneficial Owners and Management of the Funds
To the knowledge of each Fund, as of August 31, 2001, the following
shareholders, if any, owned beneficially or of record more than 5% of the
outstanding voting securities of such Fund:
Percentage of Class of Shares
Percentage of Class of of Combined Fund After the
Shares and Type of Reorganization on a Pro Forma
Name of Fund Name and Address of Shareholder Ownership Basis*
------------ ------------------------------- --------------------------- -----------------------------
NAF Balanced Fund....... VALIC Seed Account 50.41% of Institutional 50.41% of Class I
Attn: Greg Kingston Class I, owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Trust as Custodian 30.06% of Institutional 30.06% of Class I
FBO The North Carolina Class I, beneficially owned
Baptist Hospitals Inc 403B
Ret. Sav. Plan
Attn: Kathleen Janos
2929 Allen Parkway #L3-00
Houston, TX 77019-7100
VALIC Trust as Custodian 7.84% of Institutional 7.84% of Class I
FBO Hamot Health Class I, beneficially owned
Foundation 403B
Attn: Kathleen Janos
2929 Allen Parkway #L3-00
Houston, TX 77019-7100
VALIC Seed Account 16.04% of Class A, 0.44% of Class A
Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Seed Account 8.17% of Class B, 0.80% of Class B
Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
Salomon Smith Barney 5.14% of Class A, 0.14% of Class A
Inc., 00168A80340 beneficially owned
333 West 34th Street
3rd Floor
New York, NY 10001-2483
NAF Large Cap Growth
Fund.................... VALIC Seed Account 8.64% of Class A, 0.50% of Class A
Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
Aggressive Growth 28.29% of Institutional 28.29% of Class I
Lifestyle Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
61
Percentage of Class of Shares
Percentage of Class of of Combined Fund After the
Name and Address Shares and Type of Reorganization on a Pro Forma
Name of Fund of Shareholder Ownership Basis*
------------ -------------------------- --------------------------- -----------------------------
Moderate Growth Lifestyle 19.23% of Institutional 19.23% of Class I
Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Trust as Custodian 15.99% of Institutional 15.99% of Class I
FBO The North Carolina Class I, beneficially owned
Baptist Hospitals Inc 403B
Ret. Sav. Plan
Attn: Kathleen Janos
2929 Allen Parkway #L3-00
Houston, TX 77019-7100
Conservative Growth 12.65% of Institutional 12.65% of Class I
Lifestyle Fund, Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Seed Account 6.87% of Institutional 6.87% of Class I
Attn: Greg Kingston Class I, owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
NAF Growth &
Income Fund............. INVESCO TTEE FBO AG 42.67% of Institutional 42.67% of Class I
Employees Thrift & Class I, beneficially owned
Incentive Plan #001248
PO Box 4054
Concord, CA 94524-4054
INVESCO TTEE FBO AG 31.33% of Institutional 31.33% of Class I
Agents & Mgrs Thrift Class I, beneficially owned
Plan #001269
PO Box 4054
Concord, CA 94524-4054
Moderate Growth Lifestyle 8.14% of Institutional 8.14% of Class I
Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
Aggressive Growth 7.05% of Institutional 7.05% of Class I
Lifestyle Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
62
Percentage of Class of Shares
Percentage of Class of of Combined Fund After the
Name and Address Shares and Type of Reorganization on a Pro Forma
Name of Fund of Shareholder Ownership Basis*
------------ ------------------------- --------------------------- -----------------------------
Conservative Growth 5.05% of Institutional 5.05% of Class I
Lifestyle Fund, Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
NAF Mid Cap Growth
Fund................... VALIC Seed Account 9.11% of Class A, 0.53% of Class A
Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Trust as Custodian 30.63% of Institutional 30.63% of Class I
FBO RC Def. Comp. Plan Class I, beneficially owned
Attn: Katleen Janos
2929 Allen Parkway #L3-00
Houston, TX 77019-7100
VALIC Seed Account 16.72% of Institutional 16.72% of Class I
Attn: Greg Kingston Class I, owned of record
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
VALIC Trust as Custodian 15.77% of Institutional 15.77% of Class I
FBO RC Def. Comp. Plan Class I, beneficially owned
Attn: Kathleen Janos
2929 Allen Parkway #L3-00
Houston, TX 77019-7100
Aggressive Growth 15.19% of Institutional 15.19% of Class I
Lifestyle Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
Moderate Growth Lifestyle 11.27% of Institutional 11.27% of Class I
Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
Conservative Growth 5.44% of Institutional 5.44% of Class I
Lifestyle Fund Class I, owned of record
c/o VALIC
Attn: Greg Seward
2919 Allen Parkway #L7-01
Houston, TX 77019-2142
63
Percentage of Percentage of Class of Shares
Class of Shares of Combined Fund After the
and Type of Reorganization on a Pro Forma
Name of Fund Name and Address of Shareholder Ownership Basis*
------------ --------------------------------- ------------------ -----------------------------
SunAmerica
Blue Chip Merrill Lynch, Pierce, 6.90% of Class B, 4.67% of Class B
Growth Fund............ Fenner & Smith, Inc. owned of record
Attn: Service Team, Section 97ME8
4800 Deer Lake Drive East
Jacksonville, FL 32246-6486
SunAmerica Growth and Merrill Lynch, Pierce, 5.48% of Class B, 3.47% of Class B
Income Fund............ Fenner & Smith, Inc., owned of record
Jacksonville, FL 32246
SunAmerica Growth Merrill Lynch, Pierce, 11.52% of Class B, 9.27% of Class B
Opportunities Fund..... Fenner & Smith, Inc., owned of record
Jacksonville, FL 32246
--------
* Assuming that the value of the shareholder's interest in the Fund on the
date of consummation of the applicable Reorganization was the same as on
August 31, 2001.
At August 31, 2001, the directors and officers of North American Funds as a
group (13 persons) owned an aggregate of less than 1% of the outstanding shares
of each Acquired Fund and owned an aggregate of less than 1% of the outstanding
shares of common stock of North American Funds.
At August 31, 2001, the directors and officers of SunAmerica Equity Funds as
a group (8 persons) owned an aggregate of less than 1% of the outstanding
shares of each Acquiring Fund and owned an aggregate of less than 1% of the
outstanding shares of common stock of SunAmerica Equity Funds.
Voting Rights and Required Vote
Each share of an Acquired Fund is entitled to one vote, with fractional
shares voting proportionally. Shareholders of each Acquired Fund vote
separately on whether to approve the New Investment Advisory Agreement and
approval with respect to one Acquired Fund is not dependent on approval with
respect to any other Acquired Fund. Approval of the Plan with respect to one
Acquired Fund is not dependent on approval of the Plan with respect to any
other Acquired Fund. Approval of the New Investment Advisory Agreement and each
Plan with respect to an Acquired Fund requires the affirmative vote of a
majority of the outstanding voting securities of that Fund, voting together as
a single class, cast at a meeting at which a quorum is present. "Majority" for
this purpose under the Investment Company Act means the lesser of (i) more than
50% of the outstanding shares of the applicable Acquired Fund and (ii) 67% or
more of the shares of that Acquired Fund represented at the Meeting if more
than 50% of such shares are represented.
Broker-dealer firms holding shares of any of the Acquired Funds in "street
name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares before
the Meeting. Broker-dealer firms will not be permitted to grant voting
authority without instructions with respect to the approval of the Plans. Each
of the Acquired Funds will include shares held of record by broker-dealers as
to which such authority has been granted in its tabulation of the total number
of shares present for purposes of determining whether the necessary quorum of
shareholders exists. Properly executed proxies that are returned but that are
marked "abstain" or with respect to which a broker-dealer has declined to vote
on any proposal ("broker non-votes") will be counted as present for the
purposes of determining a quorum. Assuming the presence of a quorum,
abstentions and broker non-votes (if applicable) will have the same effect as a
vote against approval of the New Investment Advisory Agreement or of the
applicable Plan, as the case may be.
64
A quorum for each Acquired Fund for purposes of the Meeting consists of
thirty percent of the shares of such Acquired Fund entitled to vote at the
Meeting, present in person or by proxy. If, by the time scheduled for each
Meeting, a quorum of the applicable Acquired Fund's shareholders is not present
or if a quorum is present but sufficient votes in favor of approval of the New
Investment Advisory Agreement or of the applicable Plan are not received from
the shareholders of the respective Acquired Fund, the persons named as proxies
may propose one or more adjournments of such Meeting to permit further
solicitation of proxies from shareholders. An affirmative vote of less than
thirty percent of the shares of the applicable Acquired Fund present in person
or by proxy and entitled to vote at the session of the Meeting will suffice for
any such adjournment. The persons named as proxies will vote in favor of any
such adjournment if they determine that adjournment and additional solicitation
are reasonable and in the interests of the shareholders of such Acquired
Fund.
The vote of shareholders of the Acquiring Funds are not being solicited by
this Proxy Statement and Prospectus and are not required to carry out the
respective Reorganizations.
ADDITIONAL INFORMATION
The expenses of preparation, printing and mailing of the enclosed form of
proxy, the accompanying Notice and this Proxy Statement and Prospectus will be
borne by AIG or an affiliate thereof. Such expenses are currently estimated to
be approximately $250,000 in the aggregate.
AIG or an affiliate thereof will reimburse banks, brokers and others for
their reasonable expenses in forwarding proxy solicitation materials to
beneficial owners of the Acquired Funds and will reimburse certain officers or
employees that it may employ for their reasonable expenses in assisting in the
solicitation of proxies from such beneficial owners.
In order to obtain the necessary quorums at the Meetings, supplementary
solicitation may be made by mail, telephone, telegraph or personal interview by
officers of the Acquired Funds. North American Funds has retained Georgeson
Shareholder, 17 State Street, New York, New York 10004 to aid in the
solicitation of proxies at a cost estimated not to exceed $12,800, plus out-of-
pocket expenses. The cost of soliciting proxies will be borne by AIG or an
affiliate thereof.
This Proxy Statement and Prospectus does not contain all of the information
set forth in the registration statements and the exhibits relating thereto
which North American Funds and SunAmerica Equity Funds have filed on behalf of
their respective Funds with the Commission under the Securities Act and the
Investment Company Act, to which reference is hereby made.
The Funds are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the Investment Company Act, and in
accordance therewith file reports and other information with the Commission.
Proxy material, reports and other information filed by the Funds (or by North
American Funds on behalf of the Acquired Funds or SunAmerica Equity Funds on
behalf of the Acquiring Funds) can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such materials also can be obtained by mail
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549, at
prescribed rates. The Commission maintains a web site (http://www.sec.gov) that
contains the Statements of Additional Information and Prospectuses of the
Acquired Funds and Acquiring Funds, as well as other material incorporated by
reference and other information regarding the Funds.
LEGAL PROCEEDINGS
There are no material legal proceedings to which any of the Funds is a
party.
65
LEGAL OPINIONS
Certain legal matters in connection with the issuance of Corresponding
Shares have been passed upon by Robert M. Zakem, Esq., General Counsel for
SAAMCo. Certain tax matters in connection with the Reorganizations will be
passed upon for the Funds by Shearman & Sterling, 599 Lexington Avenue, New
York, New York 10022, counsel for the Acquiring Funds.
EXPERTS
The financial highlights of the Acquired Funds and Acquiring Funds
incorporated by reference into this Proxy Statement and Prospectus have been so
included in reliance on the reports of PricewaterhouseCoopers LLP and Ernst &
Young LLP, respectively, independent auditors, given on their authority as
experts in auditing and accounting. The principal business address of
PricewaterhouseCoopers LLP is 1177 Avenue of the Americas, New York, New York
10036. The principal business address of Ernst & Young LLP is 787 Seventh
Avenue, New York, New York, 10019.
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at any subsequent meeting of
shareholders of an Acquired Fund must be received by such Acquired Fund in a
reasonable time before the solicitation by the Board of Trustees of North
American Funds relating to such meeting is to be made in order to be considered
in such Acquired Fund's proxy statement and form of proxy relating to the
meeting. If proposals Nos. 2(a)-(d) are approved at the Meeting, there will
likely not be any future shareholder meetings of the Acquired Funds.
By Order of the Board of Trustees of
North American Funds
/s/ John I. Fitzgerald
John I. Fitzgerald
Secretary, North American Funds
66
EXHIBIT I
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of this day of , 2001,
between NORTH AMERICAN FUNDS, a Massachusetts business trust (the "Trust"), and
AMERICAN GENERAL ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser, subject to the supervision of the
Trustees of the Trust and the terms of this Agreement, as the investment
adviser for each of the portfolios of the Trust specified in Appendix A to this
Agreement (the "Funds"). The Adviser accepts such appointment and agrees to
render the services and to assume the obligations set forth in this Agreement
commencing on its effective date. The Adviser will be an independent contractor
and will have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent unless expressly authorized in this Agreement or
another writing by the Trust and Adviser.
2. DUTIES OF THE ADVISER
a. Subject to the general supervision of the Trustees of the Trust and
the terms of this Agreement, the Adviser will at its own expense select,
contract with, and compensate investment subadvisers ("Subadvisers") to
manage the investments and determine the composition of the assets of the
Funds; provided, that any contract with a Subadviser (the "Subadvisory
Agreement") shall be in compliance with and approved as required by the
Investment Company Act of 1940, as amended ("Investment Company Act").
Subject always to the direction and control of the Trustees of the Trust,
the Adviser will monitor compliance of each Subadviser with the investment
objectives and related investment policies, as set forth in the Trust's
registration statement as filed with the Securities and Exchange
Commission, of any Fund or Funds under the management of such Subadviser,
and review and report to the Trustees of the Trust on the performance of
such Subadviser.
b. The Adviser will oversee the administration of all aspects of the
Trust's business and affairs and in that connection will furnish to the
Trust the following services:
(1) Office and Other Facilities. The Adviser shall furnish to the Trust
office space in the offices of the Adviser or in such other place as may be
agreed upon by the parties hereto from time to time and such other office
facilities, utilities and office equipment as are necessary for the Trust's
operations.
(2) Trustees and Officers. The Adviser agrees to permit individuals who
are directors, officers or employees of the Adviser to serve (if duly
elected or appointed) as Trustees or President, Vice President, Treasurer
or Secretary of the Trust, without remuneration from or other cost to the
Trust.
(3) Other Personnel. The Adviser shall furnish to the Trust, at the
Trust's expense, any other personnel necessary for the operations of the
Trust.
(4) Financial, Accounting, and Administrative Services. The Adviser
shall maintain the existence and records of the Trust; maintain the
registrations and qualifications of Trust shares under federal and state
law; and perform all administrative, financial, accounting, bookkeeping and
recordkeeping functions of the Trust except for any such functions that may
be performed by a third party pursuant to a custodian, transfer agency or
service agreement executed by the Trust. The Trust shall reimburse the
Adviser for its expenses associated with all such services, including the
compensation and related personnel expenses and expenses of office space,
office equipment, utilities and miscellaneous office expenses, except any
such expenses directly attributable to officers or employees of the Adviser
who are serving as President, Vice President, Treasurer or Secretary of the
Trust. The Adviser shall determine the expenses to be reimbursed by the
Trust pursuant to expense allocation procedures established by the Adviser
in accordance with generally accepted accounting principles.
I-1
(5) Liaisons with Agents. The Adviser, at its own expense, shall
maintain liaison with the various agents and other persons employed by the
Trust (including the Trust's transfer agent, custodian, independent
accountants and legal counsel) and assist in the coordination of their
activities on behalf of the Trust. Fees and expenses of such agents and
other persons will be paid by the Trust.
(6) Reports to Trust. The Adviser shall furnish to or place at the
disposal of the Trust such information, reports, valuations, analyses and
opinions as the Trust may, at any time or from time to time, reasonably
request or as the Adviser may deem helpful to the Trust, provided that the
expenses associated with any such materials furnished by the Adviser at the
request of the Trust shall be borne by the Trust.
(7) Reports and Other Communications to Trust Shareholders. The Adviser
shall assist the Trust in developing (but not pay for) all general
shareholder communications including regular shareholder reports.
3. EXPENSES ASSUMED BY THE TRUST
In addition to paying the advisory fee provided for in Section 4, the Trust
will pay all expenses of its organization, operations and business not
specifically assumed or agreed to be paid by the Adviser as provided in this
Agreement, by a Subadviser as provided in a Subadvisory Agreement, or by the
Distributor as provided in the Distribution Agreement. Without limiting the
generality of the foregoing, the Trust, in addition to certain expenses
described in Section 2 above, shall pay or arrange for the payment of the
following:
a. Custody and Accounting Services. All expenses of the transfer,
receipt, safekeeping, servicing and accounting for the Trust's cash,
securities, and other property, including all charges of depositories,
custodians and other agents, if any;
b. Shareholder Servicing. All expenses of maintaining and servicing
shareholder accounts, including all charges of the Trust's transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other
agents, if any;
c. Shareholder Communications. All expenses of preparing, setting in
type, printing, and distributing reports and other communications to
shareholders;
d. Shareholder Meetings. All expenses incidental to holding meetings of
Trust shareholders, including the printing of notices and proxy material,
and proxy solicitation therefor;
e. Prospectuses. All expenses of preparing, setting in type, and
printing of annual or more frequent revisions of the Trust's prospectus and
statement of additional information and any supplements thereto and of
mailing them to shareholders;
f. Pricing. All expenses of computing the net asset value per share for
each of the Funds, including the cost of any equipment or services used for
obtaining price quotations and valuing its investment portfolio;
g. Communication Equipment. All charges for equipment or services used
for communication between the Adviser or the Trust and the custodian,
transfer agent or any other agent selected by the Trust;
h. Legal and Accounting Fees and Expenses. All charges for services and
expenses of the Trust's legal counsel and independent auditors;
i. Trustees and Officers. Except as expressly provided otherwise in
paragraph 2.b.(2), all compensation of Trustees and officers, all expenses
incurred in connection with the service of Trustees and officers, and all
expenses of meetings of the Trustees and Committees of Trustees;
j. Federal Registration Fees. All fees and expenses of registering and
maintaining the registration of the Trust under the Investment Company Act
and the registration of the Trust's shares under the Securities Act of
1933, as amended (the "1933 Act"), including all fees and expenses incurred
in connection with the preparation, setting in type, printing and filing of
any registration statement and prospectus under the 1933 Act or the
Investment Company Act, and any amendments or supplements that may be made
from time to time;
I-2
k. State Registration Fees. All fees and expenses of qualifying and
maintaining qualification of the Trust and of the Trust's shares for sale
under securities laws of various states or jurisdictions, and of
registration and qualification of the Trust under all other laws applicable
to the Trust or its business activities (including registering the Trust as
a broker-dealer, or any officer of the Trust or any person as agent or
salesman of the Trust in any state);
l. Issue and Redemption of Trust Shares. All expenses incurred in
connection with the issue, redemption, and transfer of Trust shares,
including the expense of confirming all share transactions, and of
preparing and transmitting certificates for shares of beneficial interest
in the Trust;
m. Bonding and Insurance. All expenses of bond, liability and other
insurance coverage required by law or regulation or deemed advisable by the
Trust's Trustees including, without limitation, such bond, liability and
other insurance expense that may from time to time be allocated to the
Trust in a manner approved by its Trustees;
n. Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale, or lending of the Trust's portfolio
securities;
o. Taxes. All taxes or governmental fees payable by or with respect to
the Trust to federal, state, or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes, and all expenses incurred
in the preparation of tax returns;
p. Trade Association Fees. All fees, dues, and other expenses incurred
in connection with the Trust's membership in any trade association or other
investment organization; and
q. Nonrecurring and Extraordinary Expenses. Such nonrecurring expenses
as may arise, including the costs of actions, suits, or proceedings to
which the Trust is, or is threatened to be made, a party and the expenses
the Trust may incur as a result of its legal obligation to provide
indemnification to its Trustees, officers, agents and shareholders.
4. COMPENSATION OF ADVISER
The Adviser will pay the Subadviser with respect to each Fund the
compensation specified in Appendix A to this Agreement (the "Compensation").
5. NON-EXCLUSIVITY
The services of the Adviser to the Trust are not to be deemed to be
exclusive, and the Adviser shall be free to render investment advisory or other
services to others (including other investment companies) and to engage in
other activities. It is understood and agreed that the directors, officers, and
employees of the Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors, trustees or employees of any other firm or
corporation, including other investment companies.
6. SUPPLEMENTAL ARRANGEMENTS
The Adviser may enter into arrangements with other persons affiliated with
the Adviser to better enable it to fulfill its obligations under this Agreement
for the provision of certain personnel and facilities to the Adviser.
7. CONFLICTS OF INTEREST
It is understood that Trustees, officers, agents and shareholders of the
Trust are or may be interested in the Adviser as directors, officers,
stockholders, or otherwise; that directors, officers, agents and stockholders
of the Adviser are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise; that the Adviser may be interested in the Trust; and
that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Articles of
Incorporation of the Adviser, respectively, or by specific provision of
applicable law.
I-3
8. REGULATION
The Adviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
The Adviser will comply in all material respects with Rule 17j-1 under the
Investment Company Act.
9. DURATION AND TERMINATION OF AGREEMENT
Unless sooner terminated, this Agreement will continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees
of the Trust or by a majority of the outstanding voting securities of each of
the Portfolios, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
interested persons (as defined in the Investment Company Act) of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Fund by the
vote of a majority of the outstanding voting securities of such Fund, on sixty
days' written notice to the Adviser, or by the Adviser on sixty days' written
notice to the Trust. This Agreement will automatically terminate, without the
payment of any penalty, in the event of its assignment (as defined in the
Investment Company Act).
10. PROVISION OF CERTAIN INFORMATION BY ADVISER
The Adviser will promptly notify the Trust in writing of the occurrence of
any of the following events:
a. the Adviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Adviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement;
b. the Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before or
by any court, public board or body, involving the affairs of the Trust; and
c. the chief executive officer or controlling stockholder of the Adviser
or the portfolio manager of any Fund changes.
11. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Funds affected by the amendment and by the vote of a
majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Fund if a majority of the outstanding voting securities of
the series of shares of that Fund vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Fund affected by the
amendment or (b) all the Funds of the Trust.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
I-4
14. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or Adviser
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. Notice shall be deemed given on the date
delivered or mailed in accordance with this section.
15. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
16. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the
laws of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, con-flict with applicable provisions of the Investment Company Act,
the latter shall control.
17. LIMITATION OF LIABILITY
The Declaration of Trust establishing the Trust, dated September 29, 1988,
as amended and restated February 18, 1994, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "North
American Funds" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their private property, for the
satisfaction of any obligation or claim, in connection with the affairs of the
Trust or any Fund thereof, but only the assets belonging to the Trust, or to
the particular Fund with which the obligee or claimant dealt, shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
North American Funds
By:
---------------------------------
American General Asset Management
Corp.
By:
---------------------------------
I-5
EXHIBIT II
Agreement and Plan of Reorganization
Dated as of September 28, 2001
TABLE OF CONTENTS
Page No.
--------
1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.......... 2
a. Definitions...................................................... 2
b. Use of Defined Terms............................................. 5
c. Sections and Exhibits............................................ 5
d. Miscellaneous Terms.............................................. 5
2. The Reorganization(s).............................................. 5
a. Transfer of Assets............................................... 5
b. Assumption of Liabilities........................................ 6
c. Issuance and Valuation of Corresponding Shares in the
Reorganization................................................... 6
d. Distribution of Corresponding Shares to the Acquired Fund
Shareholders..................................................... 6
e. Interest; Proceeds............................................... 6
f. Valuation Time................................................... 6
g. Evidence of Transfer............................................. 6
h. Termination...................................................... 6
i. Separate Agreements; Reorganizations Not Conditioned on One
Another.......................................................... 6
3. Representations and Warranties of the Acquired Fund................ 7
a. Formation and Qualification...................................... 7
b. Licenses......................................................... 7
c. Authority........................................................ 7
d. Financial Statements............................................. 7
e. Semi-Annual Report to Shareholders............................... 7
f. Prospectus and Statement of Additional Information............... 7
g. Litigation....................................................... 8
h. Material Contracts............................................... 8
i. No Conflict...................................................... 8
j. Undisclosed Liabilities.......................................... 8
k. Taxes............................................................ 8
l. Assets........................................................... 8
m. Consents......................................................... 8
n. N-14 Registration Statement...................................... 8
o. Capitalization................................................... 9
p. Books and Records................................................ 9
4. Representations and Warranties of the Acquiring Fund............... 9
a. Formation and Qualification...................................... 9
b. Licenses......................................................... 9
c. Authority........................................................ 9
d. Financial Statements............................................. 10
e. Semi-Annual Report to Stockholders............................... 10
f. Prospectuses and Statements of Additional Information............ 10
g. Litigation....................................................... 10
h. Material Contracts............................................... 10
i. No Conflict...................................................... 10
j. Undisclosed Liabilities.......................................... 10
k. Taxes............................................................ 11
l. Consents......................................................... 11
m. N-l4 Registration Statement...................................... 11
n. Capitalization................................................... 11
o. Corresponding Shares............................................. 11
5. Covenants of the Acquired Fund and the Acquiring Fund.............. 11
a. Special Shareholders' Meeting.................................... 11
b. Unaudited Financial Statements................................... 12
c. Share Ledger Records of the Acquiring Fund....................... 12
i
Page No.
--------
d. Conduct of Business.............................................. 12
e. Termination of the Acquired Fund................................. 12
f. Filing of N-14 Registration Statement............................ 12
g. Corresponding Shares............................................. 12
h. Tax Returns...................................................... 12
i. Combined Proxy Statement and Prospectus Mailing.................. 13
j. Confirmation of Tax Basis........................................ 13
k. Shareholder List................................................. 13
l. Class I Shares................................................... 13
6. Closing Date....................................................... 13
7. Conditions of the Acquired Fund.................................... 13
a. Representations and Warranties................................... 13
b. Performance...................................................... 14
c. Shareholder Approval............................................. 14
d. Approval of Board of Trustees.................................... 14
e. Deliveries by the Acquiring Fund................................. 14
f. No Material Adverse Change....................................... 15
g. Absence of Litigation............................................ 15
h. Proceedings and Documents........................................ 15
i. N-14 Registration Statement; Acquiring Fund Post-Effective
Amendment........................................................ 15
j. Compliance with Laws; No Adverse Action or Decision.............. 15
k. Commission Orders or Interpretations............................. 15
8. Conditions of the Acquiring Fund................................... 15
a. Representations and Warranties................................... 15
b. Performance...................................................... 15
c. Shareholder Approval............................................. 16
d. Approval of Board of Trustees.................................... 16
e. Deliveries by the Acquired Fund.................................. 16
f. No Material Adverse Change....................................... 16
g. Absence of Litigation............................................ 16
h. Proceedings and Documents........................................ 16
i. N-l4 Registration Statement; Acquiring Fund Post-Effective
Amendment........................................................ 16
j. Compliance with Laws; No Adverse Action or Decision.............. 16
k. Commission Orders or Interpretations............................. 17
l. Dividends........................................................ 17
9. Termination, Postponement and Waivers.............................. 17
a. Termination of Agreement......................................... 17
b. Commission Order................................................. 17
c. Effect of Termination............................................ 17
d. Waivers; Non-Material Changes.................................... 18
10. Survival of Representations and Warranties........................ 18
11. Other Matters..................................................... 18
a. Obligations...................................................... 18
b. Further Assurances............................................... 18
c. Notices.......................................................... 18
d. Entire Agreement................................................. 19
e. Amendment........................................................ 19
f. Governing Law.................................................... 19
g. Assignment....................................................... 19
h. Costs of the Reorganization...................................... 19
i. Severability..................................................... 19
j. Headings......................................................... 19
k. Counterparts..................................................... 19
ii
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
the 28th day of September 2001, by and between NORTH AMERICAN FUNDS, a
Massachusetts business trust, on behalf of each Acquired Fund (as defined
herein), each a separate investment portfolio of North American Funds, and
SUNAMERICA EQUITY FUNDS, a Massachusetts business trust, on behalf of each
Acquiring Fund (as defined herein), each a separate investment portfolio of
SunAmerica Equity Funds.
PLANS OF REORGANIZATION
WHEREAS, this Agreement constitutes a separate agreement and plan of
reorganization between North American Funds on behalf of each of its separate
investment portfolios (each an "Acquired Fund," and collectively, the "Acquired
Funds") and SunAmerica Equity Funds on behalf of each of its separate
investment portfolios (each an "Acquiring Fund" and collectively, the
"Acquiring Funds") set forth below:
Acquired Fund: Acquiring Fund:
-------------- ---------------
Balanced Fund (the "NAF Balanced Fund") SunAmerica Balanced Assets Fund (the
"SunAmerica Balanced Fund")
Large Cap Growth Fund (the "NAF Large Cap SunAmerica Blue Chip Growth Fund (the
Growth Fund") "SunAmerica Blue Chip Fund")
Growth & Income Fund (the "NAF Growth & SunAmerica Growth and Income Fund (the
Income Fund") "SunAmerica Growth and Income Fund")
Mid Cap Growth Fund (the "NAF Mid Cap SunAmerica Growth Opportunities Fund (the
Growth Fund") "SunAmerica Opportunities Fund")
WHEREAS, each Acquired Fund owns securities that generally are assets of the
character in which the respective Acquiring Fund is permitted to invest;
WHEREAS, each reorganization will consist of (i) the acquisition of an
Acquired Fund's Assets (as defined herein), and assumption of that Acquired
Fund's Assumed Liabilities (as defined herein), by the respective Acquiring
Fund solely in exchange for an aggregate value of newly issued shares of
beneficial interest, $.01 par value per share, of such Acquiring Fund (the
"Shares"), equal to the net asset value of such Acquired Fund's Assets
determined in accordance with Section 2(c) hereof, and (ii) the subsequent
distribution by that Acquired Fund of the Shares to its shareholders in
liquidation of the Acquired Fund, all upon and subject to the terms hereinafter
set forth (each a "Reorganization" and collectively the "Reorganizations");
WHEREAS, in the course of each Reorganization, Shares of an Acquiring Fund
will be issued to an Acquired Fund and distributed to the shareholders thereof
as follows: each holder, if any, of Class A, Class B, Class C and Institutional
Class I shares of an Acquired Fund will be entitled to receive Class A, Class
B, Class II and Class I Shares, respectively (the "Corresponding Shares"), of
the respective Acquiring Fund on the Closing Date (as defined herein);
WHEREAS, the aggregate net asset value of the Corresponding Shares to be
received by each shareholder of an Acquired Fund will equal the aggregate net
asset value of the respective Acquired Fund shares owned by such shareholder as
of the Valuation Time (as defined herein);
WHEREAS, it is intended that each Reorganization described herein shall be a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and any successor provision and the
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368(a) of the Code; and
WHEREAS, the consummation of one Reorganization is not conditioned upon the
consummation of any other Reorganization.
AGREEMENT
NOW, THEREFORE, in order to consummate each Reorganization and in
consideration of the premises and the covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, each
Acquired Fund and Acquiring Fund hereby agree as follows:
1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.
a. Definitions. As used herein the following terms have the following
respective meanings:
"Acquired Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Acquired Fund" shall refer to the NAF Balanced Fund in respect of the
Balanced Funds Reorganization, the NAF Large Cap Growth Fund in respect of
the Large Cap Growth Funds Reorganization, the NAF Growth & Income Fund in
respect of the Growth and Income Funds Reorganization, and the NAF Mid Cap
Growth Fund in respect of the Mid Cap Growth Funds Reorganization.
"Acquiring Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Acquiring Fund" shall refer to the SunAmerica Balanced Fund in respect of
the Balanced Funds Reorganization, the SunAmerica Blue Chip Fund in respect
of the Large Cap Growth Funds Reorganization, the SunAmerica Growth and
Income Fund in respect of the Growth and Income Funds Reorganization, and
the SunAmerica Opportunities Fund in respect of the Mid Cap Growth Funds
Reorganization.
"Acquiring Fund Post-Effective Amendment" has the meaning ascribed
thereto in Section 5(l) hereof.
"Agreement" has the meaning ascribed thereto in the introduction hereof.
"Assets" has the meaning ascribed thereto in Section 2(a) hereof. For
purposes of this Agreement, the term "Assets" shall refer to Assets of (i)
the NAF Balanced Fund in the case of the Balanced Funds Reorganization,
(ii) the NAF Large Cap Growth Fund in the case of the Large Cap Growth
Funds Reorganization, (iii) the NAF Growth & Income Fund in the case of the
Growth and Income Funds Reorganization, and (iv) the NAF Mid Cap Growth
Fund in the case of the Mid Cap Growth Funds Reorganization.
"Assumed Liabilities" has the meaning ascribed thereto in Section 2(b)
hereof. For purposes of this Agreement, the term "Assumed Liabilities"
shall refer to the Assumed Liabilities of (i) the NAF Balanced Fund in the
case of the Balanced Funds Reorganization, (ii) the NAF Large Cap Growth
Fund in the case of the Large Cap Growth Funds Reorganization, (iii) the
NAF Growth & Income Fund in the case of the Growth and Income Funds
Reorganization, and (iv) the NAF Mid Cap Growth Fund in the case of the Mid
Cap Growth Funds Reorganization.
"Balanced Funds Reorganization" consists of (i) the acquisition of the
NAF Balanced Fund's Assets, and assumption of the NAF Balanced Fund's
Assumed Liabilities, by the SunAmerica Balanced Fund solely in exchange for
an aggregate value of Corresponding Shares of the SunAmerica Balanced Fund,
equal to the net asset value of the NAF Balanced Fund's Assets determined
in accordance with Section 2(c) hereof, and (ii) the subsequent
distribution by the NAF Balanced Fund of such Corresponding Shares to its
shareholders in proportion to such shareholders' interest in the NAF
Balanced Fund in liquidation of the NAF Balanced Fund.
"Closing Date" has the meaning ascribed thereto in Section 6 hereof.
"Code" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"Commission" shall mean the Securities and Exchange Commission.
II-2
"Corresponding Shares" has the meaning ascribed thereto under the
heading "Plans of Reorganization." For purposes of this Agreement, the term
"Corresponding Shares" shall refer to the Corresponding Shares of (i) the
SunAmerica Balanced Fund in the case of the Balanced Funds Reorganization,
(ii) the SunAmerica Blue Chip Fund in the case of the Large Cap Growth
Funds Reorganization, (iii) the SunAmerica Growth and Income Fund in the
case of the Growth and Income Funds Reorganization, and (iv) the SunAmerica
Opportunities Fund in the case of the Mid Cap Growth Funds Reorganization.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" shall mean any governmental or quasi-
governmental authority, including, without limitation, any Federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body, department
or other instrumentality or political unit or subdivision, whether domestic
or foreign.
"Growth and Income Funds Reorganization" consists of (i) the acquisition
of the NAF Growth & Income Fund's Assets, and assumption of the NAF Growth
& Income Fund's Assumed Liabilities, by the SunAmerica Growth and Income
Fund solely in exchange for an aggregate value of Corresponding Shares of
the SunAmerica Growth and Income Fund, equal to the net asset value of the
NAF Growth & Income Fund's Assets determined in accordance with Section
2(c) hereof, and (ii) the subsequent distribution by the NAF Growth &
Income Fund of such Corresponding Shares to its shareholders in proportion
to such shareholders' interest in the NAF Growth & Income Fund in
liquidation of the NAF Growth & Income Fund.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investments" shall mean, with respect to any Person, (i) the
investments of such Person shown on the schedule of its investments as of
the date set forth therein, with such additions thereto and deletions
therefrom as may have arisen in the course of such Person's business up to
such date; and (ii) all other assets owned by such Person or liabilities
incurred as of such date.
"Large Cap Growth Funds Reorganization" consists of (i) the acquisition
of the NAF Large Cap Growth Fund's Assets, and assumption of the NAF Large
Cap Growth Fund's Assumed Liabilities, by the SunAmerica Blue Chip Fund
solely in exchange for an aggregate value of Corresponding Shares of the
SunAmerica Blue Chip Fund, equal to the net asset value of the NAF Large
Cap Growth Fund's Assets determined in accordance with Section 2(c) hereof,
and (ii) the subsequent distribution by the NAF Large Cap Growth Fund of
such Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the NAF Large Cap Growth Fund in liquidation of
the NAF Large Cap Growth Fund.
"Licenses" has the meaning ascribed thereto in Section 3(b) hereof.
"Lien" shall mean any security agreement, financing statement (whether
or not filed), mortgage, lien (statutory or otherwise), charge, pledge,
hypothecation, conditional sales agreement, adverse claim, title retention
agreement or other security interest, encumbrance, restriction, deed of
trust, indenture, option, limitation, exception to or other title defect in
or on any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale, lease, consignment
or bailment given for security purposes, trust receipt or other title
retention agreement with respect to any property or asset of such Person,
whether direct, indirect, accrued or contingent.
"Majority Shareholder Vote" shall mean the lesser of (i) more than 50%
of the outstanding shares of the Acquired Fund and (ii) 67% or more of the
shares of the Acquired Fund represented at the special shareholders'
meeting referenced in Section 5(a) hereof if more than 50% of such shares
are represented.
"Material Adverse Effect" shall mean, with respect to any Person, any
event, circumstance or condition that, individually or when aggregated with
all other similar events, circumstances or conditions
II-3
could reasonably be expected to have, or has had, a material adverse effect
on: (i) the business, property, operations, condition (financial or
otherwise), results of operations or prospects of such Person or (ii) the
ability of such Person to consummate the transactions contemplated
hereunder in the manner contemplated hereby, other than, in each case, any
change relating to the economy or securities markets in general.
"Mid Cap Growth Funds Reorganization" consists of (i) the acquisition of
the NAF Mid Cap Growth Fund's Assets, and assumption of the NAF Mid Cap
Growth Fund's Assumed Liabilities, by the SunAmerica Opportunities Fund
solely in exchange for an aggregate value of Corresponding Shares of the
SunAmerica Opportunities Fund, equal to the net asset value of the NAF Mid
Cap Growth Fund's Assets determined in accordance with Section 2(c) hereof,
and (ii) the subsequent distribution by the NAF Mid Cap Growth Fund of such
Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the NAF Mid Cap Growth Fund in liquidation of the
NAF Mid Cap Growth Fund.
"NAF Balanced Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization."
"NAF Growth & Income Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"NAF Large Cap Growth Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"NAF Mid Cap Growth Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"North American Funds Declaration of Trust" shall mean the Amended and
Restated Agreement and Declaration of Trust of North American Funds dated
as of February 18, 1994, as amended or supplemented from time to time.
"North American Funds Prospectuses" shall mean the prospectuses relating
to the Acquired Funds each dated March 1, 2001, in each case as amended or
supplemented.
"North American Funds Statement of Additional Information" shall mean
the statement of additional information relating to the Acquired Funds,
dated March 1, 2001, as amended or supplemented.
"N-l4 Registration Statement" has the meaning ascribed thereto in
Section 3(n) hereof.
"Permitted Liens" shall mean, with respect to any Person, any Lien
arising by reason of (i) taxes, assessments, governmental charges or claims
that are either not yet delinquent, or being contested in good faith for
which adequate reserves have been recorded, (ii) the Federal or state
securities laws, and (iii) imperfections of title or encumbrances as do not
materially detract from the value or use of the Assets or materially affect
title thereto.
"Person" shall mean any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"Reorganization" has the meaning ascribed thereto in the second
paragraph under the heading "Plans of Reorganization" hereof. For purposes
of this Agreement, the term "Reorganization" shall refer to the Balanced
Funds Reorganization, the Large Cap Growth Funds Reorganization, the Growth
and Income Funds Reorganization or the Mid Cap Growth Funds Reorganization,
as the context requires.
"RICs" has the meaning ascribed thereto in Section 3(b) hereof.
"Rule 17a-8(a)" shall mean Rule 17a-8(a) under the Investment Company
Act.
"S&S" shall mean Shearman & Sterling, counsel to SunAmerica Equity Funds
and the Acquiring Funds.
II-4
"Section 17 Order" shall mean an order obtained from the Commission
pursuant to Section 17(b) of the Investment Company Act to exempt
consummation of a Reorganization from the prohibitions of Section 17(a) of
such Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"SunAmerica Balanced Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"SunAmerica Blue Chip Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"SunAmerica Equity Funds Declaration of Trust" shall mean the
Declaration of Trust of SunAmerica Equity Funds, dated as of June 18, 1986,
as amended or supplemented from time to time.
"SunAmerica Equity Funds Prospectuses" shall mean the prospectus
relating to the Acquiring Funds, dated January 29, 2001 and the preliminary
prospectus contained in the Acquiring Fund Post-Effective Amendment in the
case of Class I Shares, in each case as amended or supplemented.
"SunAmerica Equity Funds Statements of Additional Information" shall
mean the statement of additional information relating to the Acquiring
Funds, dated January 29, 2001, and the preliminary statement of additional
information contained in the Acquiring Fund Post-Effective Amendment in the
case of Class I Shares, in each cases as amended or supplemented.
"SunAmerica Growth and Income Fund" has the meaning ascribed thereto
under the heading "Plans of Reorganization."
"SunAmerica Opportunities Fund" has the meaning ascribed thereto under
the heading "Plans of Reorganization."
"Valuation Time" has the meaning ascribed thereto in Section 2(f)
hereof.
b. Use of Defined Terms. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
c. Sections and Exhibits. References in this Agreement to Sections, Exhibits
and Schedules are to Sections, Exhibits and Schedules of and to this Agreement.
The Exhibits and Schedules to this Agreement are hereby incorporated herein by
this reference as if fully set forth herein.
d. Miscellaneous Terms. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause where such terms may appear. The term
"including" shall mean "including, but not limited to."
2. The Reorganization(s).
a. Transfer of Assets. Subject to receiving the requisite approval of the
shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquired Fund shall convey, transfer
and deliver to the Acquiring Fund, and the Acquiring Fund shall purchase,
acquire and accept from the Acquired Fund, free and clear of all Liens (other
than Permitted Liens), all of the property and assets (including cash,
securities, commodities, interests in futures and dividends, any deferred or
prepaid expenses and interest accrued on debt instruments, in each case as of
the Valuation Time) owned by the Acquired Fund (as to each Acquired Fund, such
assets are collectively referred to herein as the "Assets").
II-5
b. Assumption of Liabilities. Subject to receiving the requisite approval of
the shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquiring Fund will assume and agree
to pay, perform and discharge when due all of the obligations and liabilities
of the Acquired Fund then existing, whether absolute, accrued, contingent or
otherwise (as to each Acquired Fund, such liabilities are collectively referred
to herein as the "Assumed Liabilities").
c. Issuance and Valuation of Corresponding Shares in the
Reorganization. Full Corresponding Shares, and to the extent necessary, a
fractional Corresponding Share, of an aggregate net asset value equal to the
net asset value of the Assets (after deducting the Assumed Liabilities)
acquired by the Acquiring Fund hereunder, determined as hereinafter provided
shall be issued by the Acquiring Fund to the Acquired Fund in exchange for such
Assets. The net asset value of each of the Acquired Fund's Assets and the
Acquiring Fund's Corresponding Shares shall be determined in accordance with
the procedures described in the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statements of Additional Information as of the
Valuation Time. Such valuation and determination shall be made by the Acquiring
Fund in cooperation with the Acquired Fund.
d. Distribution of Corresponding Shares to the Acquired Fund
Shareholders. Pursuant to this Agreement, as soon as practicable after the
Valuation Time, the Acquired Fund will distribute all Corresponding Shares
received by it from the Acquiring Fund in connection with the Reorganization to
its shareholders in proportion to such shareholders' interest in the Acquired
Fund. Such distribution shall be accomplished by the opening of shareholder
accounts on the share ledger records of the Acquiring Fund in the amounts due
the shareholders of the Acquired Fund based on their respective holdings in the
Acquired Fund as of the Valuation Time.
e. Interest; Proceeds. The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any interest or proceeds it receives on or after the Closing
Date with respect to its Assets.
f. Valuation Time. (i) The Valuation Time shall be the close of the New York
Stock Exchange (generally 4:00 P.M., New York time) on November 9, 2001, or
such earlier or later day and time as may be mutually agreed upon in writing
between the parties hereto (the "Valuation Time").
(ii) In the event that at the Valuation Time (a) the New York Stock Exchange
or another primary trading market for portfolio securities of the Acquiring
Fund or the Acquired Fund shall be closed to trading or trading thereon shall
be restricted; or (b) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the
Valuation Time shall be postponed until the close of the New York Stock
Exchange on the first business day after the day when trading shall have been
fully resumed and reporting shall have been restored.
g. Evidence of Transfer. The Acquiring Fund and the Acquired Fund will
jointly file any instrument as may be required by the Commonwealth of
Massachusetts to effect the transfer of the Assets to the Acquiring Fund.
h. Termination. The Acquired Fund's existence as a separate investment
portfolio of North American Funds will be terminated as soon as practicable
following the consummation of the applicable Reorganization by making any
required filings with the Commonwealth of Massachusetts, as provided in Section
5(e) hereof.
i. Separate Agreements; Reorganizations Not Conditioned on One Another. Each
of the respective parties hereto hereby agrees that this Agreement shall
constitute a separate agreement and plan of reorganization as to each of (i)
the Balanced Funds Reorganization, (ii) the Large Cap Growth Funds
Reorganization, (iii) the Growth and Income Funds Reorganization, and (iv) the
Mid Cap Growth Funds Reorganization. The parties further agree that the
consummation of one Reorganization shall not be conditioned on the consummation
of any other Reorganization.
II-6
3. Representations and Warranties of the Acquired Fund.
The Acquired Fund represents and warrants to the Acquiring Fund as follows:
a. Formation and Qualification. The Acquired Fund is a separate investment
portfolio of North American Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquired Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. North American Funds is duly qualified, registered or licensed to do
business and is in good standing in each jurisdiction in which the ownership of
its properties or assets or the character of its present operations makes such
qualification, registration or licensing necessary, except where the failure to
so qualify or be in good standing would not have a Material Adverse Effect on
the Acquired Fund.
b. Licenses. The Acquired Fund (or North American Funds on behalf of the
Acquired Fund) holds all permits, consents, registrations, certificates,
authorizations and other approvals (collectively, "Licenses") required for the
conduct of its business as now being conducted; all such Licenses are in full
force and effect and no suspension or cancellation of any of them is pending or
threatened; and none of such Licenses will be affected by the consummation of
the transactions contemplated by this Agreement in a manner that would have a
Material Adverse Effect on the Acquired Fund. North American Funds is duly
registered under the Investment Company Act as an open-end management
investment company (File No. 811-05797), and such registration has not been
suspended, revoked or rescinded and is in full force and effect. The Acquired
Fund has elected and qualified for the special tax treatment afforded regulated
investment companies ("RICs") under Sections 851-855 of the Code at all times
since its inception and intends to continue to so qualify for its current
taxable year.
c. Authority. North American Funds, on behalf of the Acquired Fund, has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Acquired Fund and
no other proceedings on the part of North American Funds or the Acquired Fund
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby, except for the approval of the Acquired Fund
shareholders as provided in Section 7(c) hereof. This Agreement has been duly
and validly executed by North American Funds, on behalf of the Acquired Fund,
and, subject to receipt of the requisite shareholder approval, and assuming due
authorization, execution and delivery of this Agreement by the Acquiring Fund,
this Agreement constitutes a legal, valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and the remedy of specific
performance and injunctive and other forms of equitable relief.
d. Financial Statements. The Acquiring Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquired Fund, each as of October 31, 2000, said
financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly
present in all material respects the financial position of the Acquired Fund as
of the dates and for the periods referred to therein and in conformity with
generally accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Shareholders. The Acquiring Fund has been furnished
with the Acquired Fund's Semi-Annual Report to Shareholders for the six months
ended April 30, 2001, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquired
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. Prospectuses and Statement of Additional Information. The Acquiring Fund
has been furnished with the North American Funds Prospectuses and the North
American Funds Statement of Additional Information,
II-7
and insofar as they relate to the Acquired Fund, said Prospectuses and
Statement of Additional Information do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquired Fund,
threatened against the Acquired Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquired Fund. The Acquired Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquired Fund.
h. Material Contracts. There are no material contracts outstanding to which
North American Funds on behalf of the Acquired Fund is a party that have not
been disclosed in the N-14 Registration Statement, the North American Funds
Prospectuses or the North American Funds Statement of Additional Information.
i. No Conflict. The execution and delivery of this Agreement by North
American Funds on behalf of the Acquired Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) North American Funds' Declaration of Trust or by-
laws, each as amended, supplemented and in effect as of the date hereof, (ii)
any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which North American Funds
on behalf of the Acquired Fund is a party or to which its assets or properties
are subject, or (iii) any judgment, injunction, order or decree, or other
instrument binding upon the Acquired Fund or any of its assets or properties,
except where such contravention, default or violation would not have a Material
Adverse Effect on the Acquired Fund.
j. Undisclosed Liabilities. The Acquired Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business since April 30, 2001, and those incurred in connection with the
Reorganization.
k. Taxes. The Acquired Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquired Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquired Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Assets. The Acquired Fund has good and marketable title to the Assets,
free and clear of all Liens, except for Permitted Liens. The Acquired Fund is
the direct sole and exclusive owner of the Assets. At the Closing Date, upon
consummation of the transactions contemplated hereby, the Acquiring Fund will
have good and marketable title to the Assets, free and clear of all Liens,
except for Permitted Liens.
m. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquired Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), (ii) a Majority Shareholder Vote, and
(iii) if necessary, receipt of a Section 17 Order.
n. N-14 Registration Statement. The registration statement filed, or to be
filed, by SunAmerica Equity Funds on Form N-14 relating to the Corresponding
Shares to be issued pursuant to this Agreement, which includes the proxy
statement of the Acquired Fund and the prospectus of the Acquiring Fund with
respect to the transactions contemplated hereby, and any supplement or
amendment thereto or to the documents therein
II-8
(as amended and supplemented, the "N-14 Registration Statement"), on the
effective date of the N-14 Registration Statement, at the time of the
shareholders' meeting referred to in Section 5(a) hereof and on the Closing
Date, insofar as it relates to the Acquired Fund (i) complied, or will comply,
as the case may be, in all material respects, with the applicable provisions of
the Securities Act, the Exchange Act and the Investment Company Act and the
rules and regulations promulgated thereunder, and (ii) did not, or will not, as
the case may be, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
o. Capitalization. Under the Declaration of Trust of North American Funds,
the Acquired Fund is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $0.001 per share, divided
into four classes designated Class A, Class B, Class C and Institutional Class
I shares. All issued and outstanding shares of the Acquired Fund are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B shares of the Acquired
Fund to automatically convert to Class A shares of the Acquired Fund eight
years after the purchase thereof, or (ii) in connection with any automatic
dividend reinvestment plan available to the Acquired Fund shareholders, there
are no options warrants, subscriptions, calls or other rights, agreements or
commitments obligating the Acquired Fund to issue any of its shares or
securities convertible into its shares.
p. Books and Records. The books and records of the Acquired Fund made
available to the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect to the
operations of the Acquired Fund.
4. Representations and Warranties of the Acquiring Fund.
The Acquiring Fund represents and warrants to the Acquired Fund as follows:
a. Formation and Qualification. The Acquiring Fund is a separate investment
portfolio of SunAmerica Equity Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquiring Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. SunAmerica Equity Funds is duly qualified, registered or licensed as
a foreign corporation to do business and is in good standing in each
jurisdiction in which the ownership of its properties or assets or the
character of its present operations makes such qualification, registration or
licensing necessary, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect on the Acquiring Fund.
b. Licenses. The Acquiring Fund (or SunAmerica Equity Funds on behalf of the
Acquiring Fund) holds all Licenses required for the conduct of its business as
now being conducted; all such Licenses are in full force and effect and no
suspension or cancellation of any of them is pending or threatened; and none of
such Licenses will be affected by the consummation of the transactions
contemplated by this Agreement in a manner that would have a Material Adverse
Effect on the Acquiring Fund. SunAmerica Equity Funds is duly registered under
the Investment Company Act as an open-end management investment company (File
No. 811-4801), and such registration has not been revoked or rescinded and is
in full force and effect. The Acquiring Fund has elected and qualified for the
special tax treatment afforded to RICs under Sections 851-855 of the Code at
all times since its inception and intends to continue to so qualify both until
consummation of the Reorganization and thereafter.
c. Authority. SunAmerica Equity Funds, on behalf of the Acquiring Fund, has
full power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on the part of
the Acquiring Fund and no other proceedings on the part of the Acquiring Fund
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed by SunAmerica Equity
II-9
Funds, on behalf of the Acquiring Fund, and assuming due authorization,
execution and delivery of this Agreement by the Acquired Fund, this Agreement
constitutes a legal, valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance with its terms, subject to
the effects of bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws relating to or affecting creditors' rights generally and court
decisions with respect thereto and the remedy of specific performance and
injunctive and other forms of equitable relief.
d. Financial Statements. The Acquired Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquiring Fund, each as of September 30, 2000,
said financial statements having been audited by Ernst & Young LLP, independent
public accountants. Such audited financial statements fairly present in all
material respects the financial position of the Acquiring Fund as of the dates
and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Stockholders. The Acquired Fund has been furnished
with the Acquiring Fund's Semi-Annual Report to Stockholders for the six months
ended March 31, 2001, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquiring
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. Prospectuses and Statements of Additional Information. The Acquired Fund
has been furnished with the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statements of Additional Information, and insofar as
they relate to the Acquiring Fund, said Prospectuses and Statements of
Additional Information do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquiring Fund,
threatened against the Acquiring Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquiring Fund.
h. Material Contracts. There are no material contracts outstanding to which
SunAmerica Equity Funds on behalf of the Acquiring Fund is a party that have
not been disclosed in the N-14 Registration Statement, the SunAmerica Equity
Funds Prospectus, or the SunAmerica Equity Funds Statement of Additional
Information.
i. No Conflict. The execution and delivery of this Agreement by SunAmerica
Equity Funds on behalf of the Acquiring Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) the SunAmerica Equity Funds Declaration of Trust or
by-laws, each as amended, supplemented and in effect as of the date hereof,
(ii) any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which SunAmerica Equity
Funds on behalf of the Acquiring Fund is a party or to which its assets or
properties are subject, or (iii) any judgment, injunction, order or decree, or
other instrument binding upon the Acquiring Fund or any of its assets or
properties, except where such contravention, default or violation would not
have a Material Adverse Effect on the Acquiring Fund.
j. Undisclosed Liabilities. The Acquiring Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business as an investment company since March 31, 2001 and those incurred in
connection with the Reorganization.
II-10
k. Taxes. The Acquiring Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing, and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquiring Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquiring Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquiring Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act, or
state securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), (ii) such actions as shall be necessary
to have the Acquiring Fund establish and offer Class I shares, and (iii) if
necessary, receipt of a Section 17 Order.
m. N-l4 Registration Statement. The N-14 Registration Statement, on its
effective date, at the time of the shareholders' meeting referred to in Section
5(a) hereof and on the Closing Date, insofar as it relates to the Acquiring
Fund (i) complied, or will comply, as the case may be, in all material
respects, with the applicable provisions of the Securities Act, the Exchange
Act and the Investment Company Act and the rules and regulations promulgated
thereunder, and (ii) did not, or will not, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
n. Capitalization. Under the Declaration of Trust of SunAmerica Equity
Funds, the Acquiring Fund is authorized to issue an unlimited number of full
and fractional shares of beneficial interest, par value $0.01 per share,
divided into four classes, designated Class A, Class B, Class II and Class Z
(in the case of the SunAmerica Growth and Income Fund). All issued and
outstanding shares of the Acquiring Fund are duly authorized, validly issued,
fully paid and non-assessable and free of preemptive rights. Except for (i) the
right of Class B shares of the Acquiring Fund to automatically convert to Class
A shares of the Acquiring Fund approximately eight years after the purchase
thereof or (ii) in connection with any automatic dividend reinvestment plan
available to the Acquiring Fund shareholders, there are no options, warrants,
subscriptions, calls or other rights, agreements or commitments obligating the
Acquiring Fund to issue any of its shares or securities convertible into its
shares.
o. Corresponding Shares.
i. The Corresponding Shares to be issued by the Acquiring Fund to the
Acquired Fund and subsequently distributed by the Acquired Fund to its
shareholders as provided in this Agreement have been, or in the case of
Class I Shares will be, duly and validly authorized and, when issued and
delivered pursuant to this Agreement, will be legally and validly issued
and will be fully paid and nonassessable and will have full voting rights,
and no shareholder of the Acquiring Fund will have any preemptive right of
subscription or purchase in respect thereof.
ii. At or prior to the Closing Date, the Corresponding Shares to be
issued by the Acquiring Fund to the Acquired Fund on the Closing Date will
be duly qualified for offering to the public in all states of the United
States in which the sale of shares of the Acquiring Fund presently are
qualified, and there are a sufficient number of such shares registered
under the Securities Act, the Investment Company Act and with each
pertinent state securities commission to permit the Reorganization to be
consummated.
5. Covenants of the Acquired Fund and the Acquiring Fund.
a. Special Shareholders' Meeting. The Acquired Fund agrees to call a special
meeting of its shareholders to be held as soon as practicable after the
effective date of the N-14 Registration Statement for the purpose of
II-11
considering the Reorganization as described in this Agreement and to take all
other action necessary to obtain shareholder approval of the transactions
contemplated herein.
b. Unaudited Financial Statements.
i. The Acquired Fund hereby agrees to furnish or cause its agents to
furnish to the Acquiring Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and
liabilities of the Acquired Fund with values determined in accordance with
Section 2(c) hereof and an unaudited schedule of Investments of the
Acquired Fund (including the respective dates and costs of acquisition
thereof), each as of the Valuation Time. Such unaudited financial
statements will fairly present in all material respects the financial
position of the Acquired Fund as of the dates and for the periods referred
to therein and in conformity with generally accepted accounting principles
applied on a consistent basis.
ii. The Acquiring Fund hereby agrees to furnish or cause its agents to
furnish to the Acquired Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and
liabilities of the Acquiring Fund with values determined in accordance with
Section 2(c) hereof and an unaudited schedule of Investments of the
Acquiring Fund (including the respective dates and costs of acquisition
thereof), each as of the Valuation Time. Such unaudited financial
statements will fairly present in all material respects the financial
position of the Acquiring Fund as of the dates and for the periods referred
to therein and in conformity with generally accepted accounting principles
applied on a consistent basis.
c. Share Ledger Records of the Acquiring Fund. The Acquiring Fund agrees, as
soon as practicable after the Valuation Time, to open shareholder accounts on
its share ledger records for the shareholders of the Acquired Fund in
connection with the distribution of Corresponding Shares by the Acquired Fund
to such shareholders in accordance with Section 2(d) hereof.
d. Conduct of Business. The Acquired Fund and the Acquiring Fund each
covenants and agrees to operate its respective business in the ordinary course
as presently conducted between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and distributions.
e. Termination of the Acquired Fund. North American Funds agrees that as
soon as practicable following the consummation of the Reorganization, it will
terminate the existence of the Acquired Fund in accordance with the laws of the
Commonwealth of Massachusetts and any other applicable law.
f. Filing of N-14 Registration Statement. SunAmerica Equity Funds, on behalf
of the Acquiring Fund, will file or cause its agents to file the N-14
Registration Statement with the Commission and will use its best efforts to
cause the N-14 Registration Statement to become effective as promptly as
practicable after the filing thereof. The Acquired Fund and the Acquiring Fund
agree to cooperate fully with each other, and each will furnish to the other
the information relating to itself to be set forth in the N-14 Registration
Statement as required by the Securities Act, the Exchange Act, the Investment
Company Act, and the rules and regulations thereunder and the state securities
or blue sky laws (if applicable).
g. Corresponding Shares. The Acquired Fund will not sell or otherwise
dispose of any of the Corresponding Shares to be received by it from the
Acquiring Fund in connection with the Reorganization, except in distribution to
the shareholders of the Acquired Fund in accordance with the terms hereof.
h. Tax Returns. The Acquired Fund and the Acquiring Fund each agrees that by
the Closing Date all of its Federal and other tax returns and reports required
to be filed on or before such date shall have been filed and all taxes shown as
due on said returns either shall have been paid or adequate liability reserves
shall have been
II-12
provided for the payment of such taxes. In connection with this provision, the
Acquiring Fund and the Acquired Fund agree to cooperate with each other in
filing any tax return, amended return or claim for refund, determining a
liability for taxes or a right to a refund of taxes or participating in or
conducting any audit or other proceeding in respect of taxes.
i. Combined Proxy Statement and Prospectus Mailing. The Acquired Fund agrees
to mail to its shareholders of record entitled to vote at the special meeting
of shareholders at which action is to be considered regarding this Agreement,
in sufficient time to comply with requirements as to notice thereof, a combined
Proxy Statement and Prospectus which complies in all material respects (except
as to information therein relating to the Acquiring Fund) with the applicable
provisions of Section 14(a) of the Exchange Act and Section 20(a) of the
Investment Company Act, and the rules and regulations promulgated thereunder.
j. Confirmation of Tax Basis. The Acquired Fund will deliver to the
Acquiring Fund on the Closing Date confirmations or other adequate evidence as
to the tax basis of each of the Assets delivered to the Acquiring Fund
hereunder.
k. Shareholder List. As soon as practicable after the close of business on
the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list
of the names and addresses of all of the shareholders of record of the Acquired
Fund on the Closing Date and the number of shares of the Acquired Fund owned by
each such shareholder as of such date, certified to the best of its knowledge
and belief by the transfer agent or by North American Funds on behalf of the
Acquired Fund.
l. Class I Shares. SunAmerica Equity Funds, on behalf of the Acquiring Fund,
shall (i) cause a post-effective amendment to its Registration Statement on
Form N-1A (the "Acquiring Fund Post-Effective Amendment") to be filed with the
Commission in a timely fashion to register the Class I Shares of the Acquiring
Fund for sale under the Securities Act prior to the Closing Date, and (ii)
prior to the Closing Date, amend the Acquiring Fund's plan under Rule 18f-3
under the Investment Company Act to reflect the addition of such Class I Shares
and take such other steps as may be necessary to establish a new class of
shares of the Acquiring Fund.
6. Closing Date.
The closing of the transactions contemplated by this Agreement shall be at
the offices of Shearman & Sterling, 599 Lexington Avenue, New York, NY 10022
after the close of the New York Stock Exchange on November 9, 2001, or at such
other place, time and date agreed to by the Acquired Fund and the Acquiring
Fund. The date and time upon which such closing is to take place shall be
referred to herein as the "Closing Date." To the extent that any Assets, for
any reason, are not transferable on the Closing Date, the Acquired Fund shall
cause such Assets to be transferred to the Acquiring Fund's custody account
with State Street Bank and Trust Company at the earliest practicable date
thereafter.
7. Conditions of the Acquired Fund.
The obligations of the Acquired Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquired Fund only and, other than with respect to the condition set
forth in Section 7(c) hereof, may be waived, in whole or in part, by the
Acquired Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquiring Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date all
with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
II-13
b. Performance. The Acquiring Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Trustees. This Agreement shall have been adopted and
the Reorganization shall have been approved by the Board of Trustees of
SunAmerica Equity Funds, on behalf of the Acquiring Fund, including a majority
of the Trustees who are not "interested persons" of North American Funds or
SunAmerica Equity Funds as defined in Section 2(a)(19) of the Investment
Company Act, which shall have found, as required by Rule 17a-8(a), that (i)
participation in the Reorganization is in the best interests of the Acquiring
Fund and (ii) the interests of the existing shareholders of the Acquiring Fund
will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquiring Fund. At or prior to the Closing Date, the
Acquiring Fund shall deliver to the Acquired Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquired Fund, executed by the President (or a Vice President) of
SunAmerica Equity Funds on behalf of the Acquiring Fund, dated as of the
Closing Date, certifying that the conditions specified in Sections 7(a),
(b), (d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquiring Fund required by
Section 5(b)(ii) hereof;
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquired Fund, to the effect that, for Federal income tax purposes, (i)
the transfer of the Assets to the Acquiring Fund in return solely for the
Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
assuming that such transfer, issuance and assumption qualifies as a
reorganization within the meaning of Section 368(a) of the Code, the
Acquired Fund and the Acquiring Fund will each be deemed to be a "party to
the reorganization" within the meaning of Section 368(b) of the Code; (ii)
in accordance with Sections 357 and 361 of the Code, no gain or loss will
be recognized to the Acquired Fund as a result of the Asset transfer solely
in return for the Corresponding Shares and the assumption by the Acquiring
Fund of the Assumed Liabilities or on the distribution (whether actual or
constructive) of the Corresponding Shares to the Acquired Fund shareholders
as provided for in the Agreement; (iii) under Section 1032 of the Code, no
gain or loss will be recognized to the Acquiring Fund on the receipt of the
Assets in return for the Corresponding Shares and the assumption by the
Acquiring Fund of the Assumed Liabilities as provided for in the Agreement;
(iv) in accordance with Section 354(a)(1) of the Code, no gain or loss will
be recognized to the shareholders of the Acquired Fund on the receipt
(whether actual or constructive) of Corresponding Shares in return for
their shares of the Acquired Fund; (v) in accordance with Section 362(b) of
the Code, the tax basis of the Assets in the hands of the Acquiring Fund
will be the same as the tax basis of such Assets in the hands of the
Acquired Fund immediately prior to the consummation of the Reorganization;
(vi) in accordance with Section 358 of the Code, immediately after the
Reorganization, the tax basis of the Corresponding Shares received (whether
actually or constructively) by the shareholders of the Acquired Fund in the
Reorganization will be equal, in the aggregate, to the tax basis of the
shares of the Acquired Fund surrendered in return therefor; (vii) in
accordance with Section 1223 of the Code, a shareholder's holding period
for the Corresponding Shares will be determined by including the period for
which such shareholder held the shares of the Acquired Fund exchanged
therefor, provided, that the Acquired Fund shares were held as a capital
asset; (viii) in accordance with Section 1223 of the Code, the Acquiring
Fund's holding period with respect to the Assets acquired by it will
include the period for which such Assets were held by the Acquired Fund;
and (ix) in accordance with Section 381(a) of the Code and regulations
thereunder, the Acquiring Fund will succeed to and take into account
certain tax attributes of the Acquired Fund, subject to applicable
limitations, such as earnings and profits, capital loss carryovers and
method of accounting.
II-14
f. No Material Adverse Change. There shall have occurred no material adverse
change in the financial position of the Acquiring Fund since March 31, 2001
other than changes in its portfolio securities since that date, changes in the
market value of its portfolio securities or changes in connection with the
payment of the Acquiring Fund's customary operating expenses, each in the
ordinary course of business.
g. Absence of Litigation. There shall not be pending before any Governmental
Authority any material litigation with respect to the matters contemplated by
this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquired Fund and its counsel, and the
Acquired Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquired Fund
or its counsel may reasonably request.
i. N-14 Registration Statement; Acquiring Fund Post-Effective Amendment. The
N-14 Registration Statement and Acquiring Fund Post-Effective Amendment each
shall have become effective under the Securities Act, and no stop order
suspending such effectiveness shall have been instituted or, to the knowledge
of the Acquiring Fund or the Acquired Fund, contemplated by the Commission.
j. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this
Agreement, the Reorganization or the consummation of any of the transactions
contemplated hereby and thereby; (ii) the Commission shall not have issued an
unfavorable advisory report under Section 25(b) of the Investment Company Act,
nor instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment
Company Act, and (iii) no other legal, administrative or other proceeding shall
be instituted or threatened by any Governmental Authority which would
materially affect the financial condition of the Acquiring Fund or that seeks
to restrain, enjoin, prevent, materially delay, prohibit or otherwise make
illegal the performance of this Agreement, the Reorganization or the
consummation of any of the transactions contemplated hereby or thereby.
k. Commission Orders or Interpretations. The Acquired Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquired Fund deems reasonably necessary or
desirable under the Securities Act and the Investment Company Act in connection
with the Reorganization; provided that such counsel shall have requested such
orders or interpretations as promptly as practicable, and all such orders shall
be in full force and effect.
8. Conditions of the Acquiring Fund.
The obligations of the Acquiring Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquiring Fund only and, other than with respect to the condition set
forth in Section 8(c) hereof, may be waived, in whole or in part, by the
Acquiring Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquired Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date all
with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
b. Performance. The Acquired Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
II-15
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Trustees. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Trustees of
North American Funds, on behalf of the Acquired Fund, including a majority of
the Trustees who are not "interested persons" of North American Funds or
SunAmerica Equity Funds within the meaning of Section 2(a)(19) of the
Investment Company Act, which shall have found, as required by Rule 17a-8(a),
that (i) participation in the Reorganization is in the best interests of the
Acquired Fund and (ii) the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquired Fund. At or prior to the Closing Date, the
Acquired Fund shall deliver to the Acquiring Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquiring Fund, executed by the President (or a Vice President) of North
American Funds on behalf of the Acquired Fund, dated as of the Closing
Date, certifying that the conditions specified in Sections 8(a), (b), (c),
(d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquired Fund required by
Section 5(b)(i) hereof; and
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquiring Fund, with respect to the matters specified in Section
7(e)(iii) hereof.
f. No Material Adverse Change. There shall have occurred no material
adverse change in the financial position of the Acquired Fund since April 30,
2001 other than changes in its portfolio securities since that date, changes
in the market value of its portfolio securities or changes in connection with
the payment of the Acquired Fund's customary operating expenses, each in the
ordinary course of business. The Acquired Fund reserves the right to sell any
of its portfolio securities in the ordinary course of business, but will not,
without the prior written consent of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the Acquiring
Fund is permitted to invest.
g. Absence of Litigation. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident
thereto, shall be reasonably satisfactory to the Acquiring Fund and its
counsel, and the Acquiring Fund and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Acquiring Fund or its counsel may reasonably request.
i. N-14 Registration Statement; Acquiring Fund Post-Effective
Amendment. The N-14 Registration Statement and Acquiring Fund Post-Effective
Amendment each shall have become effective under the Securities Act, and no
stop order suspending such effectiveness shall have been instituted or, to the
knowledge of the Acquired Fund or the Acquiring Fund, contemplated by the
Commission.
j. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of
this Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby and thereby; (ii) the Commission shall not
have issued an unfavorable advisory report under Section 25(b) of the
Investment Company Act, nor instituted or threatened to institute any
proceeding seeking to enjoin consummation of the Reorganization under Section
25(c) of the Investment Company Act, and (iii) no other legal, administrative
or other proceeding shall be instituted or threatened by any Governmental
Authority which would materially affect the financial condition of the
Acquired Fund or that seeks to restrain, enjoin, prevent, materially delay,
prohibit
II-16
or otherwise make illegal the performance of this Agreement, the Reorganization
or the consummation of any of the transactions contemplated hereby or thereby.
k. Commission Orders or Interpretations. The Acquiring Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquiring Fund, deems reasonably necessary
or desirable under the Securities Act and the Investment Company Act in
connection with the Reorganization; provided that such counsel shall have
requested such orders or interpretations as promptly as practicable, and all
such orders shall be in full force and effect.
l. Dividends. Prior to the Closing Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all such previous
dividends, shall have the effect of distributing to its shareholders all of its
investment company taxable income as of the Closing Date, if any (computed
without regard to any deduction for dividends paid), and all of its net capital
gain, if any, realized as of the Closing Date.
9. Termination, Postponement and Waivers.
a. Termination of Agreement. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 10 hereof, this Agreement may be
terminated and the Reorganization abandoned at any time (whether before or
after approval thereof by the shareholders of the Acquired Fund) prior to the
Closing Date, or the Closing Date may be postponed, by notice in writing prior
to the Closing Date:
i. by the Acquired Fund or the Acquiring Fund if:
(1) the Board of Trustees of North American Funds and the Board of
Trustees of SunAmerica Equity Funds so mutually agree in writing; or
(2) any Governmental Authority of competent jurisdiction shall have
issued any judgment, injunction, order, ruling or decree or taken any
other action restraining, enjoining or otherwise prohibiting this
Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby or thereby and such judgment,
injunction, order, ruling, decree or other action becomes final and
non-appealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 9(a)(i)(3) shall have used its
reasonable best efforts to have such judgment, injunction, order,
ruling, decree or other action lifted, vacated or denied.
ii. by the Acquired Fund if any condition of the Acquired Fund's
obligations set forth in Section 7 of this Agreement has not been fulfilled
or waived by it; or
iii. by the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 8 of this Agreement has not been fulfilled
or waived by it.
b. Commission Order. If any order or orders of the Commission with respect
to this Agreement, the Reorganization or any of the transactions contemplated
hereby or thereby shall be issued prior to the Closing Date and shall impose
any terms or conditions which are determined by action of the Board of Trustees
of North American Funds and the Board of Trustees of SunAmerica Equity Funds to
be acceptable, such terms and conditions shall be binding as if a part of this
Agreement without further vote or approval of the shareholders of the Acquired
Fund, unless such terms and conditions shall result in a change in the method
of computing the number of Corresponding Shares to be issued by the Acquiring
Fund to the Acquired Fund in which event, unless such terms and conditions
shall have been included in the proxy solicitation materials furnished to the
shareholders of the Acquired Fund prior to the meeting at which the
Reorganization shall have been approved, this Agreement shall not be
consummated and shall terminate unless the Acquired Fund promptly shall call a
special meeting of shareholders at which such conditions so imposed shall be
submitted for approval and the requisite approval of such conditions shall be
obtained.
c. Effect of Termination. In the event of termination of this Agreement
pursuant to the provisions hereof, the same shall become null and void and have
no further force or effect, and there shall not be any liability on
II-17
the part of either the Acquired Fund or the Acquiring Fund, North American
Funds or SunAmerica Equity Funds, or Persons who are their directors, trustees,
officers, agents or shareholders in respect of this Agreement.
d. Waivers; Non-Material Changes. At any time prior to the Closing Date, any
of the terms or conditions of this Agreement may be waived by the party that is
entitled to the benefit thereof if such action or waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of such party on behalf of which such action is taken. In
addition, each party has delegated to its investment adviser the ability to
make non-material changes to this Agreement if such investment adviser deems it
to be in the best interests of the Acquired Fund or Acquiring Fund for which it
serves as investment adviser to do so.
10. Survival of Representations and Warranties.
The respective representations and warranties contained in Sections 3 and 4
hereof shall expire with, and be terminated by, the consummation of the
Reorganization, and neither the Acquired Fund nor the Acquiring Fund nor any of
their officers, trustees, agents or shareholders shall have any liability with
respect to such representations or warranties after the Closing Date. This
provision shall not protect any officer, trustee or agent of the Acquired Fund
or the Acquiring Fund, or of North American Funds or SunAmerica Equity Funds
against any liability to the entity for which such Person serves in such
capacity, or to its shareholders, to which such Person would be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties in the conduct of such office.
11. Other Matters.
a. Obligations. Copies of the North American Funds Declaration of Trust and
SunAmerica Equity Funds Declaration of Trust are on file with the Secretary of
State of the Commonwealth of Massachusetts and notice is hereby given that this
instrument is executed on behalf of the Trustees of North American Funds on
behalf of the Acquired Fund and on behalf of the Trustees of SunAmerica Equity
Funds on behalf of the Acquiring Fund, as trustees and not individually, and
that the obligations of or arising out of this instrument are not binding upon
any of the trustees, officers, employees, agents or shareholders of North
American Funds or SunAmerica Equity Funds individually, but are binding solely
upon the assets and property of the Acquired Fund and the Acquiring Fund,
respectively.
b. Further Assurances. Each party hereto covenants and agrees to provide the
other party hereto and its agents and counsel with any and all documentation,
information, assistance and cooperation that may become necessary from time to
time with respect to the transactions contemplated by this Agreement.
c. Notices. Any notice, report or other communication hereunder shall be in
writing and shall be given to the Person entitled thereto by hand delivery,
prepaid certified mail or overnight service, addressed to the Acquired Fund or
the Acquiring Fund, as applicable, at the address set forth below. If the
notice is sent by certified mail, it shall be deemed to have been given to the
Person entitled thereto upon receipt and if the notice is sent by overnight
service, it shall be deemed to have been given to the Person entitled thereto
one (1) business day after it was deposited with the courier service for
delivery to that Person. Notice of any change in any address listed below also
shall be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived by the party entitled to
receive such notice.
If to the Acquired Fund, to: North American Funds 286 Congress
StreetBoston, MA 02210 Attention: Nori
Gabert, Esq.
With a copy to: Sullivan & Worcester LLP 1025
Connecticut Avenue, N.W. Suite 1000
Washington, DC 20036 Attention: David
M. Leahy, Esq.
II-18
If to the Acquiring Fund, to:
SunAmerican Equity Funds 733 Third
Avenue, Third Floor New York, NY 10017
Attention: Robert M. Zakem, Esq.
With a copy to:
Shearman & Sterling 599 Lexington
Avenue New York, NY 10022 Attention:
Margery K. Neale, Esq.
d. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated herein and
supersedes all previous agreements or understandings between the parties
related to such matters.
e. Amendment. Except as set forth in Section 9(d) hereof, this Agreement may
be amended, modified, superseded, canceled, renewed or extended, and the terms
or covenants hereof may be waived, only by a written instrument executed by all
of the parties hereto or, in the case of a waiver, by the party waiving
compliance; provided that, following the meeting of shareholders of the
Acquired Fund pursuant to Section 5(a) hereof, no such amendment may have the
effect of changing the provisions for determining the number of Corresponding
Shares to be issued to the Acquired Fund shareholders under this Agreement to
the detriment of such shareholders without their further approval. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
a similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
f. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York applicable to agreements made and to be performed in
said state, without giving effect to the principles of conflict of laws
thereof.
g. Assignment. This Agreement shall not be assigned by any of the parties
hereto, in whole or in part, whether by operation of law or otherwise, without
the prior written consent of the other party hereto. Any purported assignment
contrary to the terms hereof shall be null, void and of no effect. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
h. Costs of the Reorganization. All costs of the Reorganization shall be
borne by American International Group, Inc. or an affiliate thereof, regardless
of whether the reorganizations are consummated.
i. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
j. Headings. Headings to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading of any section.
k. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original but all such counterparts together shall constitute but one
instrument.
II-19
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
Attest: North American Funds on behalf of
Balanced Fund
By: _________________________________ Large Cap Growth Fund
Name: Growth & Income Fund
Title: Mid Cap Growth Fund
By: __________________________________
Name:
Title:
Attest: SunAmerica Equity Funds on behalf of
SunAmerica Balanced Assets Fund
By: _________________________________ SunAmerica Blue Chip Growth Fund
Name: SunAmerica Growth and Income Fund
Title: SunAmerica Growth Opportunities Fund
By: __________________________________
Name:
Title:
II-20
--------------------------------------------------------------------------------
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NORTH AMERICAN FUNDS
Global Equity Fund
International Equity Fund
International Small Cap Fund
286 Congress Street
Boston, Massachusetts 02210
----------------
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
----------------
TO BE HELD ON NOVEMBER 7, 2001
To our Shareholders:
Notice Is Hereby Given that a joint special meeting of shareholders (the
"NAF Meeting") of the Global Equity Fund, International Equity Fund and
International Small Cap Fund of North American Funds will be held at the
principal executive offices of North American Funds, 286 Congress Street,
Boston, Massachusetts 02210 on November 7, 2001 at 10:00 a.m. Eastern Time.
The Global Equity Fund, International Equity Fund and International Small
Cap Fund of North American Funds are collectively referred to as the "NAF
Acquired Funds." The accompanying proxy statement and prospectus also relates
to a Special Meeting of Shareholders of the International Equity Portfolio of
SunAmerica Style Select Series, Inc. (the "SunAmerica Acquired Fund"). Only
proposals 1 and 2 (a) below apply to the NAF Acquired Funds.
The purpose of the NAF Meeting is to consider:
1. Each NAF Acquired Fund: approval or disapproval of a new investment
advisory agreement (the "New Investment Advisory Agreement") between
American General Asset Management Corp. and North American Funds on behalf
of each NAF Acquired Fund, the terms of which are the same in all material
respects as the previous investment advisory agreement with American
General Asset Management Corp.;
2. (a) Each NAF Acquired Fund: approval or disapproval of an Agreement
and Plan of Reorganization (the "NAF Acquired Funds Agreement and Plan")
providing for the acquisition of substantially all of the assets, and
assumption of substantially all of the liabilities, of each NAF Acquired
Fund by the SunAmerica International Equity Fund of SunAmerica Equity Funds
(the "New SunAmerica International Equity Fund"), solely in exchange for an
equal aggregate value of newly issued shares of the New SunAmerica
International Equity Fund, as described in the accompanying proxy statement
and prospectus. The New SunAmerica International Equity Fund is a newly
created series of SunAmerica Equity Funds, created for the purpose of
receiving the assets of the NAF Acquired Funds and the SunAmerica Acquired
Fund. The NAF Acquired Funds Agreement and Plan also provides for
distribution of the shares of the New SunAmerica International Equity Fund
to shareholders of each NAF Acquired Fund. A vote in favor of this proposal
will constitute a vote in favor of the termination of each NAF Acquired
Fund as a separate investment portfolio of North American Funds;
(b) Not applicable to NAF Acquired Fund shareholders.
3. To transact such other business as properly may come before the NAF
Meeting or any adjournment thereof.
If shareholders of the NAF Acquired Funds approve the NAF Acquired Funds
Agreement and Plan, the three NAF Acquired Funds will reorganize into the newly
created New SunAmerica International Equity Fund. Shareholders of the
SunAmerica Acquired Fund are concurrently being asked to approve the
reorganization of their fund into the New SunAmerica International Equity Fund.
The New SunAmerica International Equity Fund will be the surviving Fund and,
subject to shareholder approval, its assets will consist initially of the
assets of the three NAF Acquired Funds and the SunAmerica Acquired Fund. The
NAF Acquired Funds Agreement and Plan is being voted on separately by
shareholders of each NAF Acquired Fund, and is not dependent on the approval by
shareholders of any other NAF Acquired Fund or by the shareholders of the
SunAmerica Acquired Fund.
The Board of Trustees of North American Funds has fixed the close of
business on September 17, 2001 as the record date for the determination of
shareholders entitled to notice of, and to vote at, the NAF Meeting or any
adjournment thereof.
A complete list of the shareholders of each of the NAF Acquired Funds
entitled to vote at the NAF Meeting will be available and open to the
examination of any shareholders of each NAF Acquired Fund for any purpose
germane to the NAF Meeting during ordinary business hours from and after
October 24, 2001 at the offices of North American Funds, 286 Congress Street,
Boston, Massachusetts and at the NAF Meeting.
You are cordially invited to attend the NAF Meeting. Shareholders who do not
expect to attend the NAF Meeting in person are requested to complete, date and
sign the enclosed respective form of proxy and return it promptly in the
postage-paid envelope provided for that purpose. Alternatively, you may vote
your shares by calling a specially designated telephone number (toll free 1-
888-221-0697) or via the Internet at http://www.proxyweb.com. Each of the
enclosed proxies is being solicited on behalf of the Board of Trustees of North
American Funds.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each NAF Acquired Fund approve the New Investment Advisory
Agreement and the NAF Acquired Funds Agreement and Plan of Reorganization.
By Order of the Board of Trustees,
_/s/ John I. Fitzgerald
John I. Fitzgerald
Secretary, North American Funds
Boston, Massachusetts
Dated: October 1, 2001
2
SUNAMERICA STYLE SELECT SERIES, INC.
International Equity Portfolio
The SunAmerica Center
733 Third Avenue
Third Floor
New York, New York 10017
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
----------------
TO BE HELD ON NOVEMBER 7, 2001
To our Shareholders:
Notice Is Hereby Given that a special meeting of shareholders (the
"SunAmerica Meeting") of the International Equity Portfolio of SunAmerica Style
Select Series, Inc. will be held at the principal executive offices of
SunAmerica Style Select Series, Inc., The SunAmerica Center, 733 Third Avenue,
New York, New York 10017 on November 7, 2001 at 10:00 a.m. Eastern Time.
The International Equity Portfolio of SunAmerica Style Select Series, Inc.
is referred to as the "SunAmerica International Equity Portfolio" or the
"SunAmerica Acquired Fund." The accompanying proxy statement and prospectus
also relates to a Joint Special Meeting of Shareholders of three portfolios of
North American Funds (the "NAF Acquired Funds"). Only proposal 2 (b) below
applies to your Fund.
The purpose of the SunAmerica Meeting is to consider:
1. Not applicable to SunAmerica Acquired Fund shareholders.
2. (a) Not applicable to SunAmerica Acquired Fund shareholders.
(b) Approval or disapproval of an Agreement and Plan of
Reorganization (the "SunAmerica Acquired Fund Agreement and Plan")
providing for the acquisition of substantially all of the assets, and
assumption of substantially all of the liabilities, of the SunAmerica
International Equity Portfolio by the SunAmerica International Equity
Fund of SunAmerica Equity Funds (the "New SunAmerica International
Equity Fund"), solely in exchange for an equal aggregate value of newly
issued shares of the New SunAmerica International Equity Fund, as
described in the accompanying proxy statement and prospectus. The New
SunAmerica International Equity Fund is a newly created series of
SunAmerica Equity Funds, created for the purpose of receiving the
assets of the SunAmerica International Equity Portfolio and the NAF
Acquired Funds. The SunAmerica Acquired Fund Agreement and Plan also
provides for distribution of such shares of the New SunAmerica
International Equity Fund to shareholders of the SunAmerica
International Equity Portfolio. A vote in favor of this proposal will
constitute a vote in favor of the termination of the SunAmerica
International Equity Portfolio as a separate investment portfolio of
SunAmerica Style Select Series, Inc.; and
3. To transact such other business as properly may come before the
SunAmerica Meeting or any adjournment thereof.
If shareholders of the SunAmerica Acquired Fund approve the SunAmerica
Acquired Fund Agreement and Plan, the SunAmerica Acquired Fund will reorganize
into the newly created New SunAmerica International Equity Fund. Shareholders
of three NAF Acquired Funds are concurrently being asked to approve the
reorganization of their funds into the New SunAmerica International Equity
Fund. The New SunAmerica International Equity Fund will be the surviving Fund
and, subject to shareholder approval, its assets will consist initially of the
assets of the SunAmerica Acquired Fund and the three NAF Acquired Funds. The
SunAmerica
Acquired Fund Agreement and Plan is being voted on separately by shareholders
of the SunAmerica Acquired Fund, and is not dependent on the approval by
shareholders of any of the NAF Acquired Funds.
The Board of Directors of the SunAmerica Acquired Fund has fixed the close
of business on September 17, 2001 as the record date for the determination of
shareholders entitled to notice of, and to vote at, the SunAmerica Meeting or
any adjournment thereof.
A complete list of the shareholders of the SunAmerica Acquired Fund entitled
to vote at the SunAmerica Meeting will be available and open to the examination
of any shareholders of the SunAmerica Acquired Fund for any purpose germane to
the SunAmerica Meeting during ordinary business hours from and after October
24, 2001 at the offices of SunAmerica Style Select Series, Inc., The SunAmerica
Center, 733 Third Avenue, Third Floor, New York, New York, 10017 and at the
SunAmerica Meeting.
You are cordially invited to attend the SunAmerica Meeting. Shareholders who
do not expect to attend the SunAmerica Meeting in person are requested to vote
their shares by proxy by following the instructions on the enclosed form of
proxy. The enclosed proxy is being solicited on behalf of the Board of
Directors of SunAmerica Style Select Series, Inc.
The Board of Directors of SunAmerica Style Select Series, Inc. unanimously
recommends that the shareholders of the SunAmerica International Equity
Portfolio approve the SunAmerica Acquired Fund Agreement and Plan of
Reorganization.
By Order of the Board of Directors,
_________________________________
Robert M. Zakem
Secretary, SunAmerica Style Select
Series, Inc.
New York, New York
Dated: October 1, 2001
2
COMBINED PROXY STATEMENT AND PROSPECTUS
SUNAMERICA EQUITY FUNDS
SUNAMERICA STYLE SELECT SERIES, INC.
NORTH AMERICAN FUNDS
---------------
SPECIAL MEETINGS OF SHAREHOLDERS OF
GLOBAL EQUITY FUND AND INTERNATIONAL EQUITY
INTERNATIONAL EQUITY FUND PORTFOLIO
INTERNATIONAL SMALL CAP FUND OF
OF SUNAMERICA STYLE SELECT
NORTH AMERICAN FUNDS SERIES, INC.
---------------
NOVEMBER 7, 2001
This Proxy Statement and Prospectus relates to two separate special meetings
of shareholders, both of which will be held on November 7, 2001 (each, a
"Meeting"). One Meeting is for shareholders of the three separate portfolios of
North American Funds listed above. The other Meeting is for shareholders of the
SunAmerica Fund indicated above. We have prepared a joint Proxy Statement and
Prospectus because one of the proposals relates to all four Funds.
Specifically, as described below, you, along with the shareholders of the other
three Funds, will be asked to vote on a proposal to transfer the assets and
operations of your Fund into the newly created SunAmerica International Equity
Fund (the "New SunAmerica International Equity Fund") of SunAmerica Equity
Funds. If each of these proposals is approved, all four Funds will be combined
into a single Fund, the New SunAmerica International Equity Fund.
For Shareholders of North American Funds only:
This Proxy Statement and Prospectus describes a proposal to approve or
disapprove a new investment advisory agreement with American General Asset
Management Corp. ("AGAM") for your Fund. The terms of the new investment
advisory agreement are the same in all material respects as your Fund's
previous investment advisory agreement with AGAM.
The Board of Trustees is seeking your proxy to vote in favor of this
proposal.
In addition, your Board of Trustees is seeking your approval of a
transaction involving your Fund. Under the proposal, your Fund, the other North
American Funds referenced above and a SunAmerica fund would reorganize with a
newly created comparable portfolio of SunAmerica Equity Funds. If you approve
this reorganization, you will become a shareholder of the New SunAmerica
International Equity Fund.
For Shareholders of the International Equity Portfolio of SunAmerica Style
Select Series, Inc. only:
The Board of Directors is seeking your approval of a transaction involving
your Fund. Under the proposal, your Fund and the North American Funds
referenced above would reorganize with a newly created comparable portfolio of
SunAmerica Equity Funds. If this reorganization is approved by shareholders,
you will become a shareholder of the New SunAmerica International Equity Fund.
For All Shareholders:
This Proxy Statement and Prospectus serves as a prospectus of SunAmerica
Equity Funds under the Securities Act of 1933, as amended (the "Securities
Act"), in connection with the issuance of shares to you pursuant to the terms
of the reorganizations.
---------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROXY STATEMENT AND PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
THE DATE OF THIS PROXY STATEMENT AND PROSPECTUS IS OCTOBER 1, 2001.
North American Funds, SunAmerica Equity Funds and SunAmerica Style Select
Series, Inc. are open-end series management investment companies. North
American Funds and SunAmerica Equity Funds are organized as Massachusetts
business trusts and SunAmerica Style Select Series, Inc. is organized as a
Maryland corporation. The New SunAmerica International Equity Fund is newly
created and has not yet commenced operations.
The following documents are included in the package of documents that you
received with this Proxy Statement and Prospectus:
. The prospectus relating to the SunAmerica Equity Funds, dated January 29,
2001, as supplemented (the "Acquiring Fund Prospectus"). This document is
incorporated herein by reference (legally considered to be a part of this
Proxy Statement and Prospectus).
. The Annual Report to Shareholders of SunAmerica Style Select Series, Inc.
for the year ended October 31, 2000 and the Semi-Annual Report to
Shareholders for the six month period ended April 30, 2001. These
documents are incorporated herein by reference (legally considered to be
a part of this Proxy Statement and Prospectus).
Additional information about the proposed transactions is contained in a
statement of additional information relating to this Proxy Statement and
Prospectus (the "Statement of Additional Information"), including pro forma
financial statements giving effect to the consummation of the Reorganizations,
and is on file with the Securities and Exchange Commission (the "Commission").
The Statement of Additional Information is available without charge, upon
request by calling one of the toll free numbers set forth below or by writing
North American Funds, SunAmerica Style Select Series, Inc. or SunAmerica Equity
Funds at the addresses set forth below. The Statement of Additional
Information, dated October 1, 2001, is incorporated by reference into this
Proxy Statement and Prospectus.
Other documents containing information about the Funds have been filed with
the Commission. These other documents are available without charge by writing
to the address or calling the toll free number set forth below:
If they relate to
If they relate to North If they relate to SunAmerica Style Select
American Funds: SunAmerica Equity Funds: Series, Inc.:
North American Funds The SunAmerica Center The SunAmerica Center
286 Congress Street 733 Third Avenue 733 Third Avenue
Boston, Massachusetts
02210 New York, New York 10017 New York, New York 10017
1-800-872-8037 1-800-858-8850 1-800-858-8850
These documents are:
. A statement of additional information relating to SunAmerica Equity
Funds, dated January 29, 2001, as supplemented (the "Acquiring Funds
Statement").
. The preliminary prospectus relating to SunAmerica Equity Funds, subject
to completion and dated August 14, 2001, as supplemented.
. The preliminary statement of additional information relating to
SunAmerica Equity Funds, subject to completion and dated August 14, 2001,
as supplemented.
. The current prospectuses relating to the North American Funds, each dated
March 1, 2001, as supplemented (the "NAF Acquired Funds Prospectus").
These documents are incorporated herein by reference (legally considered
to be a part of this Proxy Statement and Prospectus).
. The current prospectus relating to SunAmerica Style Select Series, Inc.,
dated February 28, 2001, as supplemented (the "SunAmerica Acquired Fund
Prospectus"). The document is incorporated by reference (legally
considered to be a part of this Proxy Statement and Prospectus).
. A statement of additional information of North American Funds, dated
March 1, 2001, as supplemented (the "NAF Acquired Funds Statement").
. A statement of additional information of SunAmerica Style Select Series,
Inc., dated February 28, 2001 as supplemented (the "SunAmerica Acquired
Fund Statement").
. The Annual Report to Shareholders of North American Funds for the year
ended October 31, 2000 and the Semi-Annual Report to Shareholders for the
six month period ended April 30, 2001.
This Proxy Statement and Prospectus sets forth concisely the information
about the SunAmerica Equity Funds that you should know before considering the
reorganization of your Fund and should be retained for future reference. North
American Funds and SunAmerica Style Select Series, Inc. have authorized the
solicitation of proxies solely on the basis of this Proxy Statement and
Prospectus and the accompanying documents.
The Commission maintains a web site (http://www.sec.gov) that contains the
Statement of Additional Information, the Acquiring Fund Prospectus, the NAF
Acquired Funds Prospectus, the SunAmerica Acquired Fund Prospectus, the
Acquiring Fund Statement, the NAF Acquired Funds Statements, the SunAmerica
Acquired Fund Statement, other material incorporated by reference and other
information regarding the Funds.
The address of the principal executive offices of SunAmerica Equity Funds
and SunAmerica Style Select Series, Inc. is The SunAmerica Center, 733 Third
Avenue, New York, New York 10017, the telephone number is 1-800-858-8850 and
the web address is http://www.sunamericafunds.com. The address of the principal
executive offices of North American Funds is 286 Congress Street, Boston,
Massachusetts 02210, the telephone number is 1-800-872-8037 and the web address
is http://www.northamericanfunds.com.
The shareholders solicited and entitled to vote on Proposals 1, 2(a) and
2(b) of this Proxy Statement and Prospectus are outlined in the following
table:
Proposal Fund
-------- ----
1. Approval of New Investment The NAF Acquired Funds, each voting
Advisory Agreement separately
2 (a). Approval of Agreement and Plan of The NAF Acquired Funds, each voting
Reorganization relating to the separately
NAF Global Equity Fund, NAF
International Equity Fund and NAF
International Small Cap Fund
2 (b). Approval of Agreement and Plan of The SunAmerica Acquired Fund
Reorganization relating to the
SunAmerica International Equity
Portfolio
----------------
TABLE OF CONTENTS
Page
----
INTRODUCTION............................................................. 1
SUMMARY.................................................................. 2
THE AIG MERGER AND THE NEW NAF INVESTMENT ADVISORY AGREEMENT........... 2
THE REORGANIZATIONS...................................................... 3
Reorganizations of the North American Funds............................ 3
Reorganization of the SunAmerica International Equity Portfolio........ 4
Procedure.............................................................. 5
FEE TABLES AND EXAMPLES.................................................. 6
THE FUNDS................................................................ 13
Business of the Acquired Funds......................................... 13
Business of the Acquiring Fund......................................... 13
Comparison of the Funds................................................ 13
PRINCIPAL RISK FACTORS AND SPECIAL CONSIDERATIONS........................ 20
PROPOSAL NO. 1: APPROVAL OF THE NEW NAF INVESTMENT ADVISORY AGREEMENT--
THE AIG MERGER AND THE NEW NAF INVESTMENT ADVISORY AGREEMENT............ 22
Board Considerations................................................... 22
Description of the New NAF Investment Advisory Agreement............... 23
Additional Information About AGAM...................................... 24
PROPOSALS NOS. 2 (a)-(b): APPROVAL OF THE PLANS--COMPARISON OF THE
FUNDS................................................................... 26
Investment Policies.................................................... 26
Directors and Officers................................................. 27
Management and Subadvisory Arrangements................................ 31
Distribution and Shareholder Servicing Arrangements.................... 34
Other Service Agreements with Affiliates............................... 35
Purchase, Exchange and Redemption of Shares............................ 36
Performance............................................................ 40
Shareholder Rights..................................................... 41
Tax Information........................................................ 42
Portfolio Transactions................................................. 42
Portfolio Turnover..................................................... 42
Additional Information................................................. 42
THE REORGANIZATIONS...................................................... 45
General................................................................ 45
Terms of the Plans..................................................... 45
NAF Board Considerations: Potential Benefits to Shareholders as a
Result of the Reorganizations......................................... 47
SunAmerica Style Select Board Considerations: Potential Benefits to
Shareholders
as a Result of the Reorganization..................................... 49
Net Assets of the Funds................................................ 50
SunAmerica Equity Board................................................ 51
Federal Income Tax Consequences of the Reorganizations................. 51
Capitalization......................................................... 52
GENERAL.................................................................. 53
Page
----
INFORMATION CONCERNING THE NAF MEETING.................................... 53
Date, Time and Place of NAF Meeting..................................... 53
Solicitation, Revocation and Use of Proxies............................. 53
Record Date and Outstanding Shares...................................... 53
Security Ownership of Certain Beneficial Owners and Management of the
NAF Acquired Fund...................................................... 54
Voting Rights and Required Vote......................................... 54
INFORMATION CONCERNING THE SUNAMERICA MEETING............................. 55
Date, Time and Place of SunAmerica Meeting.............................. 55
Solicitation, Revocation and Use of Proxies............................. 55
Record Date and Outstanding Shares...................................... 56
Security Ownership of Certain Beneficial Owners and Management of the
SunAmerica International Equity Portfolio.............................. 56
Voting Rights and Required Vote......................................... 56
ADDITIONAL INFORMATION.................................................... 57
LEGAL PROCEEDINGS......................................................... 58
LEGAL OPINIONS............................................................ 58
EXPERTS................................................................... 58
SHAREHOLDER PROPOSALS..................................................... 58
EXHIBIT I.................................................................
EXHIBIT II................................................................
EXHIBIT III...............................................................
INTRODUCTION
This Proxy Statement and Prospectus is furnished in connection with the
solicitation of proxies on behalf of the Board of Trustees of North American
Funds (the "NAF Board") for use at the Meeting of North American Funds to be
held at the principal executive offices of North American Funds at 286 Congress
Street, Boston, Massachusetts 02210 on November 7, 2001 at 10:00 a.m. Eastern
Time. It is also furnished in connection with the solicitation of proxies on
behalf of the Board of Directors of SunAmerica Style Select Series, Inc. (the
"SunAmerica Style Select Board") for use at its Meeting to be held at the
principal executive offices of SunAmerica Style Select Series, Inc., The
SunAmerica Center, 733 Third Avenue, New York, New York 10017 on November 7,
2001 at 10:00 a.m. Eastern Time. The mailing address for North American Funds
is 286 Congress Street, Boston, Massachusetts 02210. The mailing address for
SunAmerica Style Select Series, Inc. is The SunAmerica Center, 733 Third
Avenue, New York, New York 10017. The approximate mailing date of this Proxy
Statement and Prospectus is October 5, 2001.
Before we describe the proposals any further, we need to define certain
words or phrases that are used in this Proxy Statement and Prospectus:
Acquired Fund: Your Fund, which is either a NAF Acquired Fund or the
SunAmerica Acquired Fund.
Acquiring Fund: The newly created SunAmerica International Equity Fund,
a portfolio of SunAmerica Equity Funds, which is acquiring each NAF
Acquired Fund and the SunAmerica Acquired Fund.
Combined Fund: The Acquiring Fund after completion of the
Reorganization.
Fund: Either an Acquired Fund or the Acquiring Fund, depending on the
context.
International Acquired Fund: Any of NAF Global Equity Fund, NAF
International Equity Fund, NAF International Mid Cap Fund and/or
SunAmerica International Equity Portfolio.
Investment Company Act: The Investment Company Act of 1940, as amended.
NAF Acquired Fund: Your Fund, if it is Global Equity Fund of North
American Funds, International Equity Fund of North American Funds or
International Small Cap Fund of North American Funds.
NAF Global Equity Fund: The Global Equity Fund of North American Funds.
NAF International Equity Fund: The International Equity Fund of North
American Funds.
NAF International Small Cap Fund: The International Small Cap Fund of
North American Funds.
Plan: The Agreement and Plan of Reorganization, which sets forth the
terms of each Reorganization and is being submitted for shareholder
approval.
Reorganization: The transaction through which an Acquired Fund will be
acquired by the Acquiring Fund and shareholders of an Acquired Fund will
become shareholders of the Acquiring Fund.
SunAmerica Acquired Fund: Your Fund, if it is SunAmerica International
Equity Portfolio of SunAmerica Style Select Series, Inc.
SunAmerica International Equity Portfolio: The International Equity
Portfolio of SunAmerica Style Select Series, Inc.
1
SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement and Prospectus (including documents incorporated by
reference) and is qualified in its entirety by reference to the more complete
information contained in this Proxy Statement and Prospectus and in the forms
of the New NAF Investment Advisory Agreement (as defined below), and Plans,
attached hereto as Exhibits I, II and III, respectively.
If You Are A SunAmerica International Equity Portfolio Shareholder You May
Skip To "The Reorganizations--Reorganization Of The SunAmerica International
Equity Portfolio" On Page 4. The Following Section "The AIG Merger And The New
NAF Investment Advisory Agreement" Is Applicable Only To North American Funds
Shareholders.
THE AIG MERGER AND THE NEW NAF INVESTMENT ADVISORY AGREEMENT
On August 29, 2001, American International Group, Inc. ("AIG") acquired
American General Corporation ("American General"), the parent company of AGAM
(the "AIG Merger"). As a result of the AIG Merger, AGAM became a subsidiary of
AIG. AIG is also the parent company of SunAmerica Asset Management Corp.
("SAAMCo").
As a result of the AIG Merger, applicable law requires shareholder approval
of a new investment advisory agreement (the "New NAF Investment Advisory
Agreement") with AGAM. The terms of the New NAF Investment Advisory Agreement
are the same in all material respects as your Fund's previous investment
advisory agreement with AGAM (the "Previous NAF Investment Advisory
Agreement"). See "Proposal No. 1: Approval of the New NAF Investment Advisory
Agreement" below for a description of the New NAF Investment Advisory Agreement
and the services to be provided by AGAM thereunder.
In connection with its approval of the New NAF Investment Advisory
Agreement, the NAF Board received a presentation relating to AIG and SAAMCo, as
well as a presentation from AGAM. The NAF Board considered that the AIG Merger
did not involve any changes in the overall form of the advisory contract, the
advisory fees, or any of the NAF Acquired Funds' objectives or policies. The
NAF Board also considered that AGAM and SAAMCo had indicated that while they
intended to propose the Reorganizations to the NAF Board at a subsequent
meeting, until such Reorganizations were approved and consummated, SAAMCo and
AIG represented there would be no material change in the nature and quality of
services provided by AGAM. As part of its deliberations, the NAF Board also
took into account the following, among other factors: the nature and quality of
the services provided or reasonably anticipated to be provided and the results
achieved or reasonably anticipated to be achieved by AGAM; the amount and
structure of investment advisers' fees generally and the fees payable under the
New NAF Investment Advisory Agreement; the financial strength of AIG; the
management, personnel and operations of AIG and SAAMCo; the commitment of AIG
to the financial services industry; and the structure of the AIG Merger.
AGAM is a wholly owned subsidiary of American General. Prior to the AIG
Merger, American General was one of the nation's largest diversified financial
services organizations with assets of approximately $128 billion and market
capitalization of $23 billion at June 30, 2001. SAAMCo is the investment
adviser for the Acquiring Fund. SAAMCo has been in the business of investment
management since 1982 and as of June 30, 2001, managed, advised and/or
administered approximately $28.5 billion of assets. AIG, SAAMCo's parent, a
Delaware corporation, is a holding company which through its subsidiaries is
engaged in a broad range of insurance and insurance-related activities and
financial services in the United States and abroad.
2
THE REORGANIZATIONS
Reorganizations of the North American Funds
What Shareholders of a NAF Acquired Fund Will Receive in a Reorganization
If shareholders approve their Fund's Reorganization and the Reorganization
takes place:
. The Acquiring Fund will acquire substantially all of the assets and
assume substantially all of the liabilities of the NAF Acquired Fund;
. Shareholders of the NAF Acquired Fund will become shareholders of the
Acquiring Fund;
. Shareholders holding Class A, Class B, Class C and Institutional Class I
shares of the NAF Acquired Fund will receive Class A, Class B, Class II
and Class I shares, respectively, of the Acquiring Fund (the
"Corresponding Shares"); and
. Corresponding Shares received by shareholders of the NAF Acquired Fund
will have the same aggregate net asset value as the shares of the NAF
Acquired Fund held immediately prior to the Reorganization.
No sales charges will be imposed on the Corresponding Shares issued in
connection with the Reorganizations. Each Reorganization has been structured
with the intention that it qualify for Federal income tax purposes as a tax-
free reorganization under the Internal Revenue Code of 1986, as amended (the
"Code"). This means that, in the opinion of counsel, no gain or loss will be
recognized by a shareholder of a NAF Acquired Fund for Federal income tax
purposes as a result of a Reorganization.
Reasons for the Reorganizations
On August 2, 2001, the NAF Board unanimously approved the Reorganization,
subject to shareholder approval and completion of the AIG Merger. The NAF
Board, including all of the NAF Independent Trustees (as defined below), has
determined that the Reorganization is in the best interests of each NAF
Acquired Fund and its respective shareholders. In addition, the NAF Board,
including all of the NAF Independent Trustees, has determined that the
interests of existing shareholders of each NAF Acquired Fund will not be
diluted as a result of effecting the respective Reorganization because each
such shareholder will receive Corresponding Shares of the Acquiring Fund having
an aggregate net asset value equal to the aggregate net asset value of his or
her shares of the NAF Acquired Fund outstanding as of the Valuation Time (as
defined in the Plans). Although, as a result of a Reorganization, a shareholder
of a NAF Acquired Fund may receive Corresponding Shares which represent a
smaller percentage of ownership in the Combined Fund than he or she held in
that NAF Acquired Fund prior to the respective Reorganization, the total dollar
value of the shares will be the same. The NAF Independent Trustees are the
Trustees who are not "interested persons" of North American Fund (within the
meaning of the Investment Company Act).
The NAF Board unanimously recommends that you vote FOR the Plan relating to
the Reorganization involving your Fund. Your Board of Trustees has based this
recommendation on its consideration of the principal reasons underlying the
Reorganization, including the following:
. the fact that following the Reorganization, shareholders of each NAF
Acquired Fund would remain invested in a mutual fund having similar,
though not identical, investment objectives and investment techniques;
. the fees and expenses of the NAF Acquired Funds, the Acquiring Fund and
the Combined Fund;
. potential benefits to shareholders likely to result from each
Reorganization, such as the potential for reduced operating expenses over
time due to economies of scale; and
3
. the fact that the Reorganizations will not result in dilution of the
interests of NAF Acquired Fund shareholders.
For a more detailed discussion of the factors considered by the NAF Board in
approving the Reorganizations, see "Proposals Nos. 2(a)-(b): The
Reorganizations" below.
Reorganization of the SunAmerica International Equity Portfolio
What Shareholders of the SunAmerica Acquired Fund Will Receive in the
Reorganization
If shareholders approve the Fund's Reorganization and the Reorganization
takes place:
. The Acquiring Fund will acquire substantially all of the assets and
assume substantially all of the liabilities of the SunAmerica Acquired
Fund;
. Shareholders of the SunAmerica Acquired Fund will become shareholders of
the Acquiring Fund;
. Shareholders holding Class A, Class B and Class II shares of the
SunAmerica Acquired Fund will receive Class A, Class B and Class II
shares, respectively, of the Acquiring Fund (the "Corresponding Shares");
and
. Corresponding Shares received by shareholders of the SunAmerica Acquired
Fund will have the same aggregate net asset value as the shares of the
SunAmerica Acquired Fund held immediately prior to the Reorganization.
No sales charges will be imposed on the Corresponding Shares issued in
connection with the Reorganizations. Each Reorganization has been structured
with the intention that it qualify for Federal income tax purposes as a tax-
free reorganization under the Code. This means that, in the opinion of counsel,
no gain or loss will be recognized by a shareholder of the SunAmerica Acquired
Fund for Federal income tax purposes as a result of the Reorganization.
Reasons for the Reorganization
On August 22-23, 2001, the SunAmerica Style Select Board unanimously
approved the Reorganization, subject to shareholder approval. The SunAmerica
Style Select Board, including all of the SunAmerica Independent Directors, as
defined below, has determined that the Reorganization is in the best interests
of the Acquired Fund and its shareholders. In addition, the SunAmerica Style
Select Board, including all of the SunAmerica Independent Directors, has
determined that the interests of existing shareholders of the SunAmerica
Acquired Fund will not be diluted as a result of effecting the Reorganization
because each shareholder will receive Corresponding Shares of the Acquiring
Fund having an aggregate net asset value equal to the aggregate net asset value
of his or her shares of the SunAmerica Acquired Fund outstanding as of the
Valuation Time (as defined herein). Although, as a result of the
Reorganization, a shareholder of the SunAmerica Acquired Fund may receive
Corresponding Shares which represent a smaller percentage of ownership in the
Combined Fund than he or she held in the SunAmerica Acquired Fund prior to the
Reorganization, the total dollar value of the shares will be the same. The
SunAmerica Independent Directors are the Directors who are not "interested
persons" of SunAmerica Style Select Series, Inc. (within the meaning of the
Investment Company Act).
The SunAmerica Style Select Board unanimously recommends that you vote FOR
the Plan relating to the Reorganization of your Fund. Your Board of Directors
has based this recommendation on its consideration of the principal reasons
underlying the Reorganization, including the following:
. the fact that following the Reorganization, shareholders of the
SunAmerica Acquired Fund would remain invested in a mutual fund having
substantially the same investment objective and similar investment
techniques;
4
. the fees and expenses of the SunAmerica Acquired Fund, the Acquiring Fund
and the Combined Fund;
.potential benefits to shareholders likely to result from the
Reorganization, such as the potential for reduced operating expenses over
time due to economies of scale; and
.the fact that the Reorganization will not result in dilution of the
interests of Acquired Fund shareholders.
For a more detailed discussion of the factors considered by your Board in
approving the Reorganization, see "Proposals Nos. 2(a)-(b): The
Reorganizations" below.
Procedure
If all of the requisite approvals are obtained and certain conditions are
either met or waived, it is anticipated that (i) American General Asset
Management Corp. ("AGAM") and SAAMCo will continue to serve as the investment
adviser of the NAF Acquired Funds and SunAmerica Acquired Fund, respectively,
until the closing of the Reorganizations (which currently is anticipated to
occur during the fourth calendar quarter of 2001), (ii) the Reorganizations
will occur as soon as practicable thereafter, provided that the Funds have
obtained prior to that time an opinion of counsel concerning the tax
consequences of the Reorganizations as set forth in the Plans, and (iii) after
the consummation of the Reorganizations, SAAMCo will manage the assets of the
Acquired Funds as part of the Combined Fund, and AIG Global Investment Corp.
("AIGGIC") AIGGIC will serve as subadviser to the Combined Fund. Employees of
AIGGIC in their capacity as employees of SAAMCo have already been advising the
SunAmerica International Equity Portfolio. AIGGIC is an indirect wholly owned
subsidiary of American International Group, Inc. ("AIG"). A Plan may be
terminated, and a Reorganization abandoned, whether before or after the
requisite approval by the shareholders of the Acquired Funds, at any time prior
to the Closing Date (as defined herein): (i) as to a NAF Acquired Fund, by
mutual agreement of the NAF Board and the Board of Trustees of SunAmerica
Equity Funds (the "SunAmerica Equity Board"); (ii) as to the SunAmerica
Acquired Fund, by the SunAmerica Style Select Board and the SunAmerica Equity
Board; (iii) by an Acquired Fund if any condition to such Acquired Fund's
obligations has not been fulfilled or waived; or (iv) by the Acquiring Fund if
any condition to such Acquiring Fund's obligations has not been fulfilled or
waived.
5
FEE TABLES AND EXAMPLES
Actual Fee Table for Shareholders of each of the Acquired Funds+ and Pro Forma
Fee Table for the Combined Fund (each as of March 31, 2001)*
Class A
---------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price)(1).............. 5.75% 5.75% 5.75% 5.75% 5.75%
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is
lower)(2).............. None None None None None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None
Redemption Fee(3)....... None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees......... 0.90% 0.90% 1.05% 1.10% 1.00%
Distribution and/or
Service (12b-1)
Fees(4)................ 0.35% 0.35% 0.35% 0.35% 0.35%
Other Expenses.......... 1.01% 0.79% 1.16% 0.62% 0.58%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.26% 2.04% 2.56% 2.07% 1.93%
Expense Reimbursement... 0.09% 0.34% 0.61% 0.04% 0.03%
Net Expenses(5)(6)...... 2.17% 1.70% 1.95% 2.03% 1.90%
6
Actual Fee Table for Shareholders of each of the Acquired Funds+ and Pro Forma
Fee Table for the Combined Fund (each as of March 31, 2001)*
Class B
---------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price)................. None None None None None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is
lower)(2).............. 5.00% 5.00% 5.00% 5.00% 5.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None
Redemption Fee(3)....... None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees......... 0.90% 0.90% 1.05% 1.10% 1.00%
Distribution and/or
Service (12b-1)
Fees(4)................ 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses.......... 1.01% 0.79% 1.16% 0.62% 0.58%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.91% 2.69% 3.21% 2.72% 2.58%
Expense Reimbursement... 0.09% 0.34% 0.61% 0.04% 0.03%
Net Expenses(5)(6)...... 2.82% 2.35% 2.60% 2.68% 2.55%
7
Actual Fee Table for Shareholders of each of the Acquired Funds+ and Pro Forma
Fee Table for the Combined Fund (each as of March 31, 2001)*
Class C/II
---------------------------------------------------------------
NAF SunAmerica Pro Forma
NAF International International Combined
NAF Global International Small Cap Equity Fund
Equity Fund Equity Fund Fund Portfolio (Class
(Class C) (Class C) (Class C) (Class II) II)
----------- ------------- ------------- ------------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price)................. None None None 1.00% 1.00%
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is
lower)(2).............. 1.00% 1.00% 1.00% 1.00% 1.00%
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None None None
Redemption Fee(3)....... None None None None None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees......... 0.90% 0.90% 1.05% 1.10% 1.00%
Distribution and/or
Service (12b-1)
Fees(4)................ 1.00% 1.00% 1.00% 1.00% 1.00%
Other Expenses.......... 1.01% 0.79% 1.16% 0.68% 0.59%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.91% 2.69% 3.21% 2.78% 2.59%
Expense Reimbursement... 0.09% 0.34% 0.61% 0.10% 0.04%
Net Expenses(5)(6)...... 2.82% 2.35% 2.60% 2.68% 2.55%
8
Actual Fee Table for Shareholders of each of the Acquired Funds+ and Pro Forma
Fee Table for the Combined Fund (each as of March 31, 2001)*
Institutional Class I/Class I
--------------------------------------------------------------------
NAF NAF SunAmerica
NAF Global International International International Pro Forma
Equity Fund Equity Fund Small Cap Fund Equity Combined
(Institutional (Institutional (Institutional Portfolio Fund
Class I) Class I) Class I) (Class I) (Class I)
-------------- -------------- -------------- ------------- ---------
Shareholder Fees (fees
paid directly from your
investment):
Maximum Sales Charge
(Load) Imposed on
Purchases (as a
percentage of offering
price)................. None None None N/A None
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption price,
whichever is
lower)(2).............. None None None N/A None
Maximum Sales Charge
(Load) Imposed on
Reinvested Dividends... None None None N/A None
Redemption Fee(3)....... None None None N/A None
Annual Fund Operating
Expenses (as a
percentage of average
net assets) (expenses
that are deducted from
Fund assets):
Management Fees......... 0.90% 0.90% 1.05% N/A 1.00%
Distribution and/or
Service (12b-1)
Fees(4)................ None None None N/A None
Other Expenses.......... 1.26% 1.04% 1.41% N/A 0.89%
Total Annual Fund
Operating Expenses
Before Expense
Reimbursement.......... 2.16% 1.94% 2.46% N/A 1.89%
Expense Reimbursement... 0.09% 0.34% 0.61% N/A 0.09%
Net Expenses(5)(6)...... 2.07% 1.60% 1.85% N/A 1.80%
9
The foregoing Fee Tables are intended to assist investors in understanding the
costs and expenses that a shareholder bears directly or indirectly as compared
to the costs and expenses that would be borne by such investors on a pro forma
basis taking into account the consummation of the Reorganizations. All pro
forma amounts are based on what the estimated expenses of the Pro Forma
Combined Funds would be assuming the Reorganizations were completed on March
31, 2001. Although information is presented in the Fee Table for each Acquired
Fund, please compare the specific costs and expenses of your Fund against the
costs and expenses of the Pro Forma Combined Fund.
These examples are intended to help you compare the cost of investing in the
Funds with the cost of investing in other mutual funds. As with the Fee Table,
although information is presented in the Examples for each Acquired Fund,
please compare the specific costs of investing in your Fund against the costs
and expenses of the Pro Forma Combined Fund.
Examples:
An investor would pay the following expenses on a $10,000 investment and
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid
for the Period of:
-----------------------------------
10
1 Year 3 Years 5 Years Years(b)
------ ------- ------- --------
Expenses if you did redeem your shares at
the end of the period:
Class A Shares (a)
NAF Global Equity Fund.................. $782 $1,233 $1,708 $3,014
NAF International Equity Fund........... 738 1,147 1,581 2,782
NAF International Small Cap Fund........ 762 1,271 1,806 3,261
SunAmerica International Equity
Portfolio.............................. 769 1,175 1,605 2,798
Pro Forma Combined Fund #............... 757 1,138 1,542 2,669
Class B Shares (a)
NAF Global Equity Fund.................. $785 $1,292 $1,725 $3,073
NAF International Equity Fund........... 738 1,203 1,595 2,840
NAF International Small Cap Fund........ 763 1,332 1,826 3,321
SunAmerica International Equity
Portfolio.............................. 771 1,132 1,620 2,860
Pro Forma Combined Fund #............... 758 1,094 1,555 2,727
Class C/II Shares (a)
NAF Global Equity Fund.................. $385 $ 892 $1,525 $3,227
NAF International Equity Fund........... 338 803 1,395 2,997
NAF International Small Cap Fund........ 363 932 1,626 3,471
SunAmerica International Equity
Portfolio.............................. 468 924 1,506 3,082
Pro Forma Combined Fund #............... 456 886 1,442 2,956
Institutional Class I/Class I Shares (a)
NAF Global Equity Fund.................. $210 $ 667 $1,151 $2,486
NAF International Equity Fund........... 163 576 1,016 2,237
NAF International Small Cap Fund........ 188 708 1,256 2,750
SunAmerica International Equity
Portfolio.............................. N/A N/A N/A N/A
Pro Forma Combined Fund #............... 183 566 975 2,116
10
An investor would pay the following expenses on a $10,000 investment and
assuming (1) the Total Annual Fund Operating Expenses set forth in the table
above for the relevant Fund and (2) a 5% annual return throughout the period:
Cumulative Expenses Paid
for the Period of:
-----------------------------------
10
1 Year 3 Years 5 Years Years(b)
------ ------- ------- --------
Expenses if you did not redeem your shares
at the end of the period:
Class A Shares (a)
NAF Global Equity Fund.................. $782 $1,233 $1,708 $3,014
NAF International Equity Fund........... 738 1,147 1,581 2,782
NAF International Small Cap Fund........ 762 1,271 1,806 3,261
SunAmerica International Equity
Portfolio.............................. 769 1,175 1,605 2,798
Pro Forma Combined Fund #............... 757 1,138 1,542 2,669
Class B Shares (a)
NAF Global Equity Fund.................. $285 $ 892 $1,525 $3,073
NAF International Equity Fund........... 238 803 1,395 2,840
NAF International Small Cap Fund........ 263 932 1,626 3,321
SunAmerica International Equity
Portfolio.............................. 271 832 1,420 2,860
Pro Forma Combined Fund #............... 258 794 1,355 2,727
Class C/II Shares (a)
NAF Global Equity Fund.................. $285 $ 892 $1,525 $3,227
NAF International Equity Fund........... 238 803 1,395 2,997
NAF International Small Cap Fund........ 263 932 1,626 3,471
SunAmerica International Equity
Portfolio.............................. 368 924 1,506 3,082
Pro Forma Combined Fund #............... 356 886 1,442 2,956
Institutional Class I/Class I Shares (a)
NAF Global Equity Fund.................. $210 $ 667 $1,151 $2,486
NAF International Equity Fund........... 163 576 1,016 2,237
NAF International Small Cap Fund........ 188 708 1,256 2,750
SunAmerica International Equity
Portfolio.............................. N/A N/A N/A N/A
Pro Forma Combined Fund #............... 183 566 975 2,116
--------
+ As reflected in the Acquired Funds Prospectuses.
* "Other Expenses," "Total Annual Fund Operating Expenses Before Expense
Reimbursement" and "Expense Reimbursement" in connection with the Acquiring
and Combined Fund have been estimated, since the Acquiring Fund has not yet
commenced operations.
(1) The front-end sales charge on Class A shares decreases with the size of
the purchase to 0% for purchases of $1 million or more.
(2) With respect to a NAF Acquired Fund, (i) purchases of Class A shares of $1
million or more will be subject to a CDSC of 1.00% on redemptions made
within one year of purchase, (ii) the CDSC on Class B shares applies only
if shares are redeemed within six years of their purchase in accordance
with the NAF Acquired Funds' CDSC schedule set forth under "Proposal No. 2
(a)-(b): Approval of the Plans" and (iii) the CDSC on Class C shares
applies only if shares are redeemed within one year of their purchase. See
the NAF Acquired Funds Prospectuses for more information regarding the
CDSCs applicable to the NAF Acquired Funds. The CDSC schedules applicable
to Class A, Class B and Class C shares of a NAF Acquired Fund will
continue to apply to the Corresponding Shares received in the
Reorganization by shareholders of the Combined Fund who were shareholders
of the NAF Acquired Fund as of the date of the closing of the
Reorganization (even if you exchange your shares for shares of another
fund distributed by SACS (as defined below)). Future purchases of Class A,
Class B or Class II shares of the Combined Fund will be subject to the
CDSC schedule applicable to the Combined Fund.
With respect to the SunAmerica Acquired Fund and the Acquiring Fund (and to
future purchases of Class A, Class B or Class II shares of the Combined
Fund after the closing of the Reorganizations), (i) purchases of Class A
shares of $1 million or more are subject to a CDSC on redemptions made
within two years of purchase (1.00% on shares sold within one year of
purchase and 0.50% on shares sold after the first year and within the
second year after purchase), (ii) the CDSC on Class B shares applies only
if shares are redeemed within six years of their purchase in accordance with
the SunAmerica Acquired Fund's and Acquiring Fund's CDSC schedule set forth
under "Proposal No. 2(a)-(b): Approval of the Plans" and (iii) the CDSC on
Class II shares applies only if shares are redeemed within eighteen months
of their purchase. See the SunAmerica Acquired Fund and Acquiring Fund
Prospectuses for more information about the CDSCs applicable to the
SunAmerica Acquired Fund, Acquiring Fund and the Combined Fund.
11
(3) In the case of the SunAmerica Acquired Fund and the Acquiring Fund (and
hence the Combined Fund) a $15.00 fee may be imposed on wire and overnight
mail redemptions.
(4) Because these fees are paid out of a Fund's assets on an ongoing basis,
over time these fees will increase the cost of your investment and may cost
you more than paying other types of sales charges.
(5) With respect to each NAF Acquired Fund, amounts reflect AGAM's contractual
obligation to waive, and to the extent necessary, reimburse certain fees
and expenses of such NAF Acquired Fund through February 28, 2002. If
shareholders do not approve the Reorganizations, there is no assurance AGAM
would continue to provide such fee reductions and expense reimbursements
past such date.
(6) The SunAmerica Style Select Board and the SunAmerica Equity Board,
including a majority of the Independent Directors of each, approved each of
the SunAmerica Acquired Fund's and SunAmerica Acquiring Fund's Investment
Advisory and Management Agreements with SAAMCo subject to the net expense
ratios set forth above. SAAMCo will waive fees and reimburse expenses
should the Total Annual Fund Operating Expenses Before Expense
Reimbursement be higher than the net expense ratio. SAAMCo may not increase
such ratios, which are contractually required by agreement with the
respective Boards, without the approval of the respective Board, including
a majority of the Independent Directors. The expense waivers and fee
reimbursements will continue indefinitely, subject to termination by the
respective Board, including a majority of the Independent Directors.
# Assuming the Reorganization had taken place on March 31, 2001.
(a) Expenses used for the Example include fee waivers and expense
reimbursements described in footnotes (5) and/or (6) above.
(b) Class B shares generally convert to Class A shares approximately eight
years after purchase. Therefore, expense information for years 9 and 10 is
the same for both Class A and Class B shares.
The Examples set forth above assume reinvestment of all dividends and
distributions and utilize a 5% annual rate of return as mandated by Commission
regulations. The Examples should not be considered a representation of past or
future expenses or annual rates of return, and actual expenses or annual rates
of return may be more or less than those assumed for purposes of the Examples.
See "Proposals Nos. 2(a)-(b): Approval of the Plans."
12
THE FUNDS
In the following pages, we compare your Fund against the Acquiring Fund in
terms of investment objective and policies. As before with your review of the
Fee Table and Examples, although information is presented for each Acquired
Fund, please compare your specific Fund against the Acquiring Fund (rather than
the other Acquired Funds).
For shareholders of the SunAmerica International Equity Portfolio: since the
Acquiring Fund is intended to be a successor to your Fund, you will find that
the investment objective and policies of your Fund are in most instances
identical to those of the Acquiring Fund.
For shareholders of all Funds:
Business of the Acquired Funds
Each NAF Acquired Fund is organized as a separate investment portfolio or
series of North American Funds, a Massachusetts business trust, which was
established on September 28, 1988 pursuant to its Declaration of Trust.
The SunAmerica Acquired Fund is a separate investment portfolio or series of
SunAmerica Style Select Series, Inc., a Maryland corporation, which was
incorporated on July 3, 1996.
Business of the Acquiring Fund
The Acquiring Fund is organized as a separate investment portfolio or series
of SunAmerica Equity Funds, a Massachusetts business trust, which was
established on June 18, 1986 pursuant to its Declaration of Trust. The
Acquiring Fund is newly created and has not yet commenced operations. It is
intended to be a successor to the SunAmerica International Equity Portfolio.
Comparison of the Funds
A discussion of the investment objectives and principal investment policies
of the Funds is set forth below. The objectives and policies that are
identified as fundamental may not be changed without shareholder approval.
The SunAmerica Acquired Fund and the Acquiring Fund utilize substantially
similar principal investment policies.
The main differences between the principal investment policies of each NAF
Acquired Fund and the Acquiring Fund, each of which is discussed in more detail
below, are as follows:
With respect to the NAF Global Equity Fund,
. that this Fund is diversified, while the Acquiring Fund is non-
diversified,
. that this Fund will not utilize active trading as a principal investment
strategy, while the Acquiring Fund will,
. that this Fund may invest in U.S. securities and emphasizes common stocks
of emerging and established growth companies, while the Acquiring Fund
may, but generally will not, invest in U.S. securities and may employ, in
any combination, elements of "value" investing, "growth" investing and
"country allocation" (each of which is described below), and
. that investing in initial public offerings will be used as a principal
investment strategy for this Fund, but not for the Acquiring Fund.
13
With respect to the NAF International Equity Fund,
. that this Fund is diversified, while the Acquiring Fund is non-
diversified,
. that this Fund will not invest in U.S. securities, while the Acquiring
Fund may, but generally will not,
. that this Fund will primarily invest in accordance with country and
sector weightings which in the aggregate will closely replicate broad
market indices, while the Acquiring Fund may employ, in any combination,
elements of "value" investing, "growth" investing and "country
allocation" (each of which is described below), and
. that investing in derivatives will be used as a principal investment
strategy for this Fund, but not for the Acquiring Fund.
With respect to the NAF International Small Cap Fund,
. that this Fund is diversified, while the Acquiring Fund is non-
diversified,
. that this Fund will invest primarily in securities of small-cap
companies, while the Acquiring Fund selects securities without regard to
market capitalization,
. that this Fund may invest in U.S. securities, while the Acquiring Fund
may, but generally will not, and
. that investing in initial public offerings will be used as a principal
investment strategy for this Fund, but not for the Acquiring Fund.
Investment Objectives
The investment objectives for all of the Funds are substantially similar as
shown below. Each NAF Acquired Fund's investment objective is a fundamental
policy, and the SunAmerica Acquired Fund's investment objective is a non-
fundamental policy. The Acquiring Fund's investment objective is a non-
fundamental policy.
Fund Investment Objective
---- --------------------
NAF Global Equity Fund Long-term capital appreciation
NAF International Equity Fund Long-term capital appreciation
NAF International Small Cap Fund Capital appreciation
SunAmerica International Equity Portfolio Long-term growth of capital
Acquiring Fund Capital appreciation
Investment Policies
Both the Acquiring Fund and SunAmerica International Equity Portfolio seek
to achieve their objective by active trading of equity securities and other
securities with equity characteristics of non-U.S. issuers located in at least
three countries other than the U.S. and selected without regard to market
capitalization at the time of purchase. Active trading is the frequent trading
of portfolio securities to achieve an investment goal. Each Fund may
incorporate, in any combination, elements of "value" investing, "growth"
investing and "country allocation." The growth oriented philosophy is that of
investing in securities believed to offer the potential for long-term growth of
capital and focuses on securities considered to have a historical record of
above-average growth rate; to have significant growth potential; to have above-
average earnings growth or the ability to sustain earnings growth; to offer
proven or unusual products or services; or to operate in industries
experiencing increasing demand. The value oriented philosophy is that of
investing in securities believed to be undervalued in the market and reflects a
contrarian approach, in that the potential for superior relative performance is
believed to be highest when stocks of fundamentally solid companies are out of
favor. Country allocation is an investment strategy where the Fund purchases
securities based on research involving investment opportunities in particular
countries or regions, as opposed to opportunities in particular industries or
types of stocks.
14
NAF Global Equity Fund seeks to achieve its objective by investing in a
globally diversified portfolio of equity securities. The Fund normally invests
at least 65% of total assets in equity securities of growth companies in a
variety of markets throughout the world. NAF Global Equity Fund may purchase
securities in any foreign country, as well as in the U.S., and emphasizes
common stocks of both emerging and established growth companies that generally
have proven performance records and strong market positions. NAF Global Equity
Fund's portfolio will always invest at least 65% of its total assets in three
or more countries. NAF Global Equity Fund will not invest more than 50% of its
total assets in the securities of any one foreign country.
NAF International Equity Fund seeks to achieve its objective by investing
primarily, in accordance with country and sector weightings determined by its
subadviser, in equity securities of non-U.S. issuers which, in the aggregate,
closely replicate broad market indices. The Fund seeks to maintain a
diversified portfolio of international equity securities based on a top-down
approach that emphasizes country and sector selection and weighting rather than
individual stock selection.
NAF International Small Cap Fund seeks to achieve its objective by investing
primarily in equity securities of foreign small-cap companies. Small-cap
companies are defined as those companies where the total market value of its
outstanding securities (market capitalization) is less than $1.5 billion. The
Fund invests in companies that are located in both established and emerging
economies throughout the world. At least 65% of the Fund's total assets will
normally be invested in foreign securities from a minimum of three countries.
The Fund may also invest in larger foreign companies or in U.S.-based companies
if they represent better prospects for capital appreciation.
Certain Investments and Techniques of the Funds
Investments in the U.S. The NAF International Equity Fund will not invest in
securities of U.S. issuers. The NAF Global Equity Fund and NAF International
Small Cap Fund, SunAmerica International Equity Portfolio and the Acquiring
Fund may invest in securities of U.S. issuers. However, the SunAmerica
International Equity Portfolio and the Acquiring Fund generally will not invest
in securities of U.S. issuers.
Emerging Markets. All Funds may invest in emerging market countries and,
with regard to such investments, may make global and regional allocations to
emerging markets, as well as allocations to specific emerging market countries.
Emerging market countries may be more likely to experience political turmoil or
rapid changes in economic conditions than more developed countries, and the
financial condition of issuers in emerging market countries may be more
precarious than in other countries. The characteristics result in greater risk
of price volatility in emerging market countries, which may be heightened by
currency fluctuations relative to the U.S. dollar.
Active Trading. All of the Funds except NAF Global Equity Fund utilize
active trading as a principal investment strategy. The Acquiring Fund will use
active trading as a principal investment strategy.
ADRs. All of the Funds may invest in American Depositary Receipts and
American Depositary Shares ("ADRs"). ADRs are receipts representing shares of a
foreign corporation held by a U.S. bank that entitle the holder to all
dividends and capital gains on the underlying foreign securities. ADRs are
denominated in U.S. dollars and trade in the U.S. securities markets. This is a
principal investment strategy for NAF International Small Cap Fund but not for
the other Acquired Funds and the Acquiring Fund.
IPOs. All of the Funds may invest in the initial public offerings ("IPO")
market and a portion of a Fund's returns may be attributable to investments in
IPOs. This is a principal investment strategy for NAF Global Equity Fund and
NAF International Small Cap Fund but not for the other Acquired Funds and the
Acquiring Fund.
Derivatives. All of the Funds may invest in "derivatives" which are various
instruments that derive their values from those of specified securities
indices, currencies or other points of reference for both hedging and
15
non-hedging purposes. These derivatives, including those used to manage risk,
are themselves subject to risks of the different markets in which they trade
and, therefore, may not serve their intended purposes. This is a principal
investment strategy for NAF International Equity Fund, but not for the other
Acquired Funds and the Acquiring Fund; rather, the latter Funds will normally
use certain types of derivatives as part of efficient portfolio management or
for return enhancement purposes.
Currency Transactions. All of the Funds may engage in currency transactions.
Currency transactions include the purchase and sale of currencies to facilitate
securities transactions and forward currency contracts, which are used to hedge
against changes in currency exchange rates.
Principal Risk Factors
For a discussion of the principal risks of investing in each Fund, see
"Principal Risk Factors and Special Considerations."
Directors and Officers
North American Funds, SunAmerica Style Select Series, Inc. and SunAmerica
Equity Funds are each governed by a Board of Trustees or Directors that meets
regularly to review its respective Fund's investments, performance, expenses,
and other business affairs. Each Board elects its respective Fund's officers.
Management and Subadvisory Arrangements
Comparison of Management and Administrative Arrangements and Fees. AGAM
serves as the investment adviser for the NAF Acquired Funds and SAAMCo serves
as the investment adviser for the SunAmerica Acquired Fund and the Acquiring
Fund. As investment adviser to the respective Funds, AGAM and SAAMCo select and
manage the investments, provide various administrative services and supervise
the daily business affairs, except to the extent they have delegated portfolio
management of a Fund to a subadviser. The NAF Acquired Funds utilize
subadvisers as described below. The SunAmerica Acquired Fund is currently
advised by SAAMCo without any subadvisers. The Acquiring Fund will be
subadvised by AIGGIC, an affiliate of SAAMCo. See "Proposals Nos. 2(a)-(b):
Approval of the Plans" for more detailed information regarding the advisory
arrangements of the Funds.
The table below sets forth the fees, as a percentage of average daily net
assets, payable by each NAF Acquired Fund to AGAM and by the SunAmerica
Acquired Fund to SAAMCo for its management and administrative services. The
table also sets forth the annual fee rate that the Acquiring Fund will pay to
SAAMCo for its management and administrative services. Please compare the
specific advisory fee rate of your Fund to the advisory fee rate of the
Acquiring Fund.
Advisory Fee
--------------------------------------------------
Between Between
$50 Million $200 Million
First and and Excess over
Fund $50 Million $200 Million $500 Million $500 Million
---- ----------- ------------ ------------ ------------
NAF Global Equity Fund..... 0.90% 0.90% 0.70% 0.70%
NAF International Equity
Fund...................... 0.90% 0.85% 0.80% 0.75%
NAF International Small Cap
Fund...................... 1.05% 1.00% 0.90% 0.80%
SunAmerica International
Equity Portfolio.......... 1.10% 1.10% 1.10% 1.10%
Acquiring Fund............. 1.00% 1.00% 1.00% 1.00%
The advisory fee rate that will be payable by the Acquiring Fund will be
lower than the advisory fee rates currently payable by two of the Acquired
Funds (NAF International Small Cap Fund and SunAmerica International Equity
Portfolio), but higher than the advisory fee rates currently payable by the
other two Acquired Funds (NAF Global Equity Fund and NAF International Equity
Fund). See "Summary--Fee Tables and Examples" above.
16
For the NAF Global Equity Fund, although the advisory fee rate paid by the
Acquiring Fund would be higher, the expenses paid by a shareholder will not
increase. See "Summary--Fee Tables and Examples" above.
For the NAF International Equity Fund, the advisory fee rate is lower than
for the Acquiring Fund, and the total expenses before expense reimbursements
paid by a shareholder will not increase. However, although the net expenses
(after fee waiver) of the NAF International Equity Fund will increase, the NAF
Board considered that the fee waiver for the NAF International Equity Fund
terminates on February 28, 2002 while the contractual fee waiver and expense
reimbursements arrangements agreed to by SAAMCo will continue indefinitely,
subject to termination by the SunAmerica Equity Board, including a majority of
the Independent Trustees of SunAmerica Equity Funds who are not "interested
persons" (within the meaning of the Investment Company Act) of SunAmerica
Equity Funds (the "SunAmerica Independent Trustees"). SAAMCo may not increase
the net expense ratio, which is contractually required by agreement with the
SunAmerica Equity Board, without the approval of the SunAmerica Equity Board,
including a majority of the SunAmerica Independent Trustees. See "Summary--Fee
Tables and Examples" above.
Investment Advisory Agreements. The investment advisory agreement between
SunAmerica Equity Funds, on behalf of the Acquiring Fund, and SAAMCo (the
"Acquiring Fund Investment Advisory Agreement") is similar to both the New and
Previous NAF Investment Advisory Agreements applicable to the NAF Acquired
Funds (collectively, the "NAF Investment Advisory Agreement") and to the
Investment Advisory and Management Agreement between SAAMCo and SunAmerica
Style Select Series, Inc. on behalf of the SunAmerica Acquired Fund (the
"SunAmerica Acquired Fund Investment Advisory Agreement"), except for certain
matters including the advisory fees, the effective dates, and, for the NAF
Acquired Funds, the identity of the adviser. See "Proposals Nos. 2 (a)-(b):
Approval of the Plans" for further discussion regarding these agreements.
Comparison of Subadvisory Arrangements and Fees. As stated above, each NAF
Acquired Fund employs a subadviser that is responsible for investment decisions
(a "Subadviser"). The SunAmerica Acquired Fund employed two Subadvisers until
September 1, 2001, when SAAMCo assumed direct management of the portfolio. The
Acquiring Fund will employ a Subadviser. The chart below sets forth the
Subadvisers for the Funds and the annual rate of fees that are, or will be,
payable. The Subadvisers' fees are paid out of AGAM's and SAAMCo's advisory
fee, respectively, at no additional cost to the respective Fund or
shareholders.
Fund Subadviser Subadvisory Fee
---- ---------- ---------------
NAF Global Equity Fund Founders Asset Management, LLC .500% on the first $50 million,
("Founders") .450% between $50 million and
2930 East Third Avenue $200 million, .400% between
Denver, Colorado 80206 $200 million and $500 million
and .350% on the excess over
$500 million.
NAF International Equity Morgan Stanley Investment Management .500% on the first $50 million,
Fund Inc. ("MS") .450% between $50 million and
1221 Avenue of the Americas $200 million, .400% between
New York, New York 10020 $200 million and $500 million
and .350% on the excess over
$500 million.
NAF International Small Founders (defined above) .500% on the first $300
Cap Fund million, .450% between $300
million and $500 million and
.400% on the excess over $500
million.
SunAmerica International None N/A
Equity Portfolio
Acquiring Fund AIGGIC .470% on all assets.
175 Water Street
New York, New York 10038
17
Subadvisory Agreements. The subadvisory agreement between SAAMCo and AIGGIC
for the Acquiring Fund (the "Acquiring Fund Subadvisory Agreement") is similar
to the subadvisory agreements applicable to the NAF Acquired Funds
(collectively, the "NAF Subadvisory Agreement") except for certain matters
including the advisory fees, the effective dates, and the identity of the
subadviser. See "Proposals Nos. 2(a)-(b): Approval of the Plans" for further
discussion regarding these agreements.
Distribution and Shareholder Servicing Arrangements
Distributor. American General Funds Distributors, Inc. ("AGFD" or the "NAF
Distributor"), an affiliate of AGAM, acts as the distributor of the shares of
the NAF Acquired Funds. SunAmerica Capital Services, Inc. ("SACS" or the
"SunAmerica Distributor"), an affiliate of SAAMCo, acts as the distributor of
the shares of the SunAmerica Acquired Fund and the shares of the Acquiring
Fund. See "Proposals Nos. 2 (a)-(b) Approval of the Plans" for additional
information regarding the Funds' distribution arrangements.
Shareholder Servicing Fees for Class I. AGAM provides certain recordkeeping
and shareholder services to retirement and employee benefit plans and certain
asset allocation funds of North American Funds that invest in Institutional
Class I shares of the NAF Acquired Funds. SACS will provide these services
after the Reorganization with respect to Class I shares of the Combined Fund.
See "Proposals Nos. 2 (a)-(b): Approval of the Plans" for additional
information regarding these services.
Other Service Agreements with Affiliates
SunAmerica Fund Services, Inc. ("SAFS"), an affiliate of SAAMCo, acts as a
servicing agent assisting State Street Bank and Trust Company ("State Street"),
the transfer agent and custodian of the SunAmerica Acquired Fund and Acquiring
Fund, in connection with certain services offered to the shareholders of such
Funds. See "Proposals Nos. 2 (a)-(b): Approval of the Plans" for additional
information regarding these service agreements.
Other
Shares. As with all mutual funds, investors purchase shares when they invest
in the Funds. Share certificates are not generally issued.
Each full share and fractional share entitles the shareholder to receive a
proportional interest in the respective Fund's capital gain distributions and
to cast one vote per share, with fractional shares voting proportionally, on
certain Fund matters, including the election of directors, changes in
fundamental policies, or approval of changes in investment advisory agreements.
The table below sets forth the share classes currently offered by each of
the Acquired Funds and the Acquiring Fund and the share classes that will be
offered by the Combined Fund after consummation of the Reorganization.
NAF Acquired Funds SunAmerica Acquired Fund Acquiring Fund* Combined Fund
------------------ ------------------------ --------------- -------------
A, B, C, Institutional
Class I A, B, II A, B, II, I A, B, II, I
--------
* The New SunAmerica International Equity Fund has not yet commenced
operations and therefore has not issued shares of any class.
Purchase of Shares. The procedures for purchasing shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2 (a)-(b): Approval of the
Plans" below, "Investing in the North American Funds" in the NAF Acquired Funds
Prospectuses and "Shareholder Account Information" in the SunAmerica Acquired
Fund and Acquiring Fund Prospectuses.
18
Redemption of Shares. The procedures for redeeming shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2(a)-(b): Approval of the
Plans" below, "Investing in the North American Funds" in the NAF Acquired Funds
Prospectuses and "Shareholder Account Information" in the SunAmerica Acquired
Fund and Acquiring Fund Prospectuses.
Exchanges of Shares. The procedures for exchanging shares are similar, but
not identical, for all Funds. See "Proposals Nos. 2(a)-(b): Approval of the
Plans" below, "Account Services" and "Section III: Investing in the North
American Funds Institutional Classes of Shares" in the NAF Acquired Funds
Prospectuses and "Transaction Policies" in the SunAmerica Acquired Fund and
Acquiring Fund Prospectuses.
Dividends. The Funds currently have the same policies with respect to
dividends. See "Proposals Nos. 2(a)-(b): Approval of the Plans" below, "Pricing
of Shares and Dividends and Distributions from North American Funds" in the
Acquired Funds Prospectuses and "Dividend, Distribution and Account Policies"
in the SunAmerica Acquired Fund and Acquiring Funds Prospectuses.
Net Asset Value. The price at which each Fund's shares are purchased or
redeemed is the Fund's next determined net asset value per share after receipt
of the purchase of redemption order. The net asset value per share is
calculated once daily as of the close of regular trading on the New York Stock
Exchange ("NYSE") (currently 4:00 p.m., Eastern Time). For further discussion
on net asset value and how it is determined, see "Proposals Nos. 2(a)-(b):
Approval of the Plans" below, "Pricing of Fund Shares" in the SunAmerica
Acquired Fund and Acquired Funds Prospectuses and "Transaction Policies" in the
SunAmerica Acquired Fund and Acquiring Funds Prospectuses.
Tax Considerations. The tax consequences associated with an investment in
shares of an Acquired Fund are substantially the same as the tax consequences
associated with an investment in shares of the Acquiring Fund. See "Taxes" in
the SunAmerica Acquired Fund and Acquired Funds Prospectuses and "Dividend,
Distribution and Account Policies" in the SunAmerica Acquired Fund and
Acquiring Funds Prospectuses.
Each Reorganization has been structured with the intention that it qualify
for Federal income tax purposes as a tax-free reorganization under the Code.
This means that, in the opinion of counsel, no gain or loss will be recognized
by a shareholder of an Acquired Fund for Federal income tax purposes as a
result of a Reorganization. For a more detailed discussion regarding potential
tax consequences of the Reorganizations, see "Proposals Nos. 2(a)-(b): Approval
of the Plan."
19
PRINCIPAL RISK FACTORS AND SPECIAL CONSIDERATIONS
PRINCIPAL RISKS OF INVESTING IN THE FUNDS
In the following pages, we compare the principal risks of your Fund and the
Acquiring Fund. Although information is presented for each Acquired Fund,
please compare your Fund with the Acquiring Fund.
For shareholders of the SunAmerica International Equity Portfolio: since the
Acquiring Fund is intended to be a successor to your Fund, you will find that
the principal risks of your Fund are almost identical to those of the Acquiring
Fund.
Many of the investment risks associated with an investment in a NAF Acquired
Fund are substantially the same as those associated with an investment in the
Acquiring Fund. A discussion of the principal risks of investing in the Funds
is set forth below. See the NAF Acquired Funds Prospectuses, the SunAmerica
Acquired Fund Prospectus, the NAF Acquired Funds Statement and the Acquiring
Funds Statements for more detailed discussions of investment risks associated
with an investment in the Funds. There is no guarantee that the investment
objective of a Fund will be achieved or that the value of a shareholder's
investment in the Fund will not decrease. The primary differences in principal
investment risks between the Acquiring Fund and the NAF Acquired Funds, each of
which is discussed in more detail below, are: (1) the Acquiring Fund is subject
to non-diversification risk whereas the NAF Acquired Funds are not; and (2) the
NAF International Small Cap Fund is subject to a greater degree of small cap
risk than the Acquiring Fund.
Risks of Investing in Equity Securities. All of the Funds invest primarily
in equity securities. As with any equity fund, the value of your investments in
any of the Funds may fluctuate in response to stock market movements. In
addition, individual stocks selected for any of the Funds may underperform the
market generally.
Securities Selection. All of the Funds are subject to securities selection
risk. Securities selection risk is when a strategy used by a Fund, or
securities selected by its portfolio manager, may fail to produce the intended
return.
Foreign Investment Risk. Each Fund will invest in foreign securities and
will be subject to the risk that the value of the Fund's foreign investments
will decline as a result of foreign political, social or economic changes. In
addition, fluctuations in the exchange rates between the U.S. dollar and
foreign currencies may negatively affect an investment. Furthermore, there may
be less publicly available information about a foreign company and it may not
be subject to the same uniform accounting, auditing and financial reporting
standards as U.S. companies. Foreign governments may not regulate securities
markets and companies to the same degree as the U.S. government. Consequently,
foreign securities may be less liquid, more volatile and more difficult to
price than U.S. securities. These risks are heightened when the issuer is in an
emerging market.
Emerging Markets. All of the Funds are subject to emerging markets risk. An
emerging market country is one that the World Bank, the International Finance
Corporation or the United Nations or its authorities has determined to have a
low or middle income economy. Historical experience indicates that the markets
of emerging market countries have been more volatile than more developed
markets; however, such markets can provide higher rates of return to investors.
Currency Risk. All of the Funds are subject to currency risk which is the
risk that the value of the foreign portfolio investments may fluctuate due to
changes in currency rates. A decline in the value of foreign currencies
relative to the U.S. dollar generally can be expected to depress the value of a
Fund's non-dollar securities.
Liquidity Risk. All of the Funds are subject to liquidity risk. This is the
risk that a Fund may be unable to sell a security because there are too few
people who actively trade that security on a regular basis.
20
Risks of Non-Diversification. The SunAmerica International Equity Portfolio
and the Acquiring Fund are non-diversified, which means that they can invest a
larger portion of their assets in the stock of a single company than can some
other mutual funds, including the three NAF Acquired Funds. By concentrating in
a smaller number of stocks, a Fund's risk is increased because the economic
effect of each stock on the Fund's performance is greater. The NAF Acquired
Funds are diversified.
Small Cap Risk. The NAF International Small Cap Fund is subject to small cap
risk as a principal risk and the other Funds are subject to this risk to a
lesser degree. This is the risk that companies with smaller market
capitalizations (particularly under $1 billion) tend to be at early stages of
development with limited product lines, market access for products, financial
resources, access to new capital, or depth in management. It may be difficult
to obtain reliable information and financial data about these companies.
Consequently, securities of smaller companies may not be as readily marketable
and may be subject to more abrupt or erratic market movements.
Derivatives. Each Fund is subject to derivatives risk. Derivatives have
heightened sensitivity to market volatility, interest rate fluctuations,
illiquidity and creditworthiness of the counterparty to the derivatives
transactions.
IF YOU ARE A SUNAMERICA INTERNATIONAL EQUITY PORTFOLIO SHAREHOLDER YOU MAY
SKIP TO PROPOSALS NOS. 2 (a)-(b) ON PAGE 26. THE FOLLOWING PROPOSAL IS ONLY
APPLICABLE TO NORTH AMERICAN FUND SHAREHOLDERS.
21
PROPOSAL NO. 1: APPROVAL OF THE NEW NAF INVESTMENT ADVISORY AGREEMENT
THE AIG MERGER AND THE NEW NAF INVESTMENT ADVISORY AGREEMENT
Board Considerations
On August 29, 2001, AIG acquired American General in the AIG Merger. As a
result of the AIG Merger, AGAM became a subsidiary of AIG.
As required by the Investment Company Act, the Previous NAF Investment
Advisory Agreement provided for automatic termination upon its "assignment."
Under the Investment Company Act, a change of control of an investment adviser
constitutes an "assignment." The consummation of the AIG Merger resulted in the
assignment of the Previous NAF Investment Advisory Agreement and its automatic
termination. Therefore, as described below, shareholders are being asked to
approve the New NAF Investment Advisory Agreement.
At a meeting held on July 16-17, 2001, the NAF Board, including all of the
NAF Independent Trustees, unanimously approved an interim investment advisory
agreement (the "Interim NAF Investment Advisory Agreement") between AGAM and
North American Funds with respect to the NAF Acquired Funds pursuant to Rule
15a-4 under the Investment Company Act. This has allowed AGAM to continue to
serve as investment adviser for the NAF Acquired Funds after the AIG Merger.
This Rule allows, under certain circumstances, interim advisory agreements to
take effect, and to remain in effect for up to 150 days, without receiving
prior shareholder approval, as long as the fees payable under such agreement do
not exceed the fees payable under the predecessor agreement that had been
approved by the shareholders and certain other contractual provisions are
included in the interim agreement. The Interim NAF Investment Advisory
Agreement requires all advisory fees earned by AGAM to be escrowed pending
shareholder approval of the New NAF Investment Advisory Agreement. If the New
NAF Investment Advisory Agreement is not approved, AGAM will be entitled to
receive from escrow the lesser of any costs incurred in performing the Interim
NAF Investment Advisory Agreement (plus interest earned on the amount while in
escrow), and the total amount in the escrow account (plus interest earned). The
Interim NAF Investment Advisory Agreement will terminate on the earlier of the
effective date of the New NAF Investment Advisory Agreement or 150 days after
the completion of the AIG Merger.
Pursuant to the terms of the Interim NAF Investment Advisory Agreement, AGAM
is responsible for the management of the investment portfolio of each NAF
Acquired Fund and for providing certain administrative services to each NAF
Acquired Fund. The terms of the Interim NAF Investment Advisory Agreement are
the same as those of the Previous NAF Investment Advisory Agreement. The
Interim NAF Investment Advisory Agreement differs from the Previous NAF
Investment Advisory Agreement only with respect to the effective date, the
term, and the escrow provisions relating to AGAM's fees (as described above).
Under the Investment Company Act, AGAM may continue to serve as the investment
adviser for each NAF Acquired Fund beyond an interim period of 150 days only if
shareholders of such NAF Acquired Fund approve a new investment advisory
agreement with AGAM. Consequently, the NAF Board unanimously approved, and
recommended shareholder approval of, the New NAF Investment Advisory Agreement
on July 16-17, 2001. The New NAF Investment Advisory Agreement, if approved by
shareholders, would take effect immediately upon such approval. The terms of
the New NAF Investment Advisory Agreement, including advisory fees, are the
same in all material respects as those of the Previous NAF Investment Advisory
Agreement. The New NAF Investment Advisory Agreement differs from the Previous
NAF Investment Advisory Agreement only with respect to its effective date. See
"--Description of the New NAF Investment Advisory Agreement" below for a
description of the New NAF Investment Advisory Agreement and the services to be
provided by AGAM thereunder.
In addition, each of the NAF Acquired Funds has a Subadviser that is
unaffiliated with AGAM. Each previously existing subadvisory agreement provided
that it terminated upon termination of the Previous NAF Investment Advisory
Agreement. The NAF Board also approved the continuation of each subadvisory
agreement for the NAF Acquired Funds. Such approval was made in accordance with
a "Manager of Managers" order granted by the Commission to North American Funds
and therefore the subadvisory agreements for the NAF Acquired Funds do not
require shareholder approval.
22
In connection with its approval of the New NAF Investment Advisory
Agreement, the NAF Board received a presentation relating to AIG and SAAMCo, as
well as a presentation from AGAM. The NAF Board considered that the AIG Merger
did not involve any changes in the overall form of the advisory contract, the
advisory fees, or any of the NAF Acquired Funds' objectives or policies. The
NAF Board also considered that AGAM and SAAMCo had indicated that while they
intended to propose the Reorganizations to the NAF Board at a subsequent
meeting, until such Reorganizations were approved and consummated, SAAMCo and
AIG represented there would be no material change in the nature and quality of
services provided by AGAM. As part of their deliberations, the NAF Board took
into account the following, among other factors: the nature and quality of the
services provided or reasonably anticipated to be provided and the results
achieved or reasonably anticipated to be achieved by AGAM; the amount and
structure of investment advisers' fees generally and the fees payable under the
New NAF Investment Advisory Agreement; the financial strength of AIG; the
management, personnel and operations of AIG and SAAMCo; the commitment of AIG
to the financial services industry, and the structure of the AIG Merger.
Section 15(f) of the Investment Company Act provides that an investment
adviser (such as AGAM) to a registered investment company, and the affiliates
of such adviser, may receive any amount or benefit in connection with a sale of
any interest in such investment adviser which results in an assignment of an
investment advisory contract if the following two conditions are satisfied: (1)
for a period of three years after such assignment, at least 75% of the board of
directors of the investment company are not "interested persons" (within the
meaning of Section 2(a)(19) of the Investment Company Act) of the new
investment adviser or its predecessor; and (2) no "unfair burden" (as defined
in the Investment Company Act) may be imposed on the investment company as a
result of the assignment or any express or implied terms, conditions or
understandings applicable thereto. Consistent with the first condition of
Section 15(f), AIG advised the NAF Board that for a period of three years after
the AIG Merger, it will not take or recommend any action that would cause more
than 25% of the NAF Board (or SunAmerica Equity Board) to be interested persons
of SAAMCo or AGAM. With respect to the second condition of Section 15(f), an
"unfair burden" on an investment company is defined in the Investment Company
Act to include any arrangement during the two-year period after any such
transaction occurs whereby the investment adviser or its predecessor or
successor, or any interested person of such adviser, predecessor or successor,
receives or is entitled to receive any compensation of two types, either
directly or indirectly. The first type is compensation 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 bona fide ordinary
compensation as principal underwriter for such company. The second type is
compensation from the investment company or its security holders for other than
bona fide investment advisory or other services. AIG advised the NAF Board that
it will not take or recommend any action that would constitute an unfair burden
on North American Funds (or the Acquiring Fund) within the meaning of Section
15(f).
Description of the New NAF Investment Advisory Agreement
As a proposal separate from the proposal to approve a Reorganization,
shareholders of each NAF Acquired Fund are being asked to approve the New NAF
Investment Advisory Agreement with AGAM to cover the period subsequent to the
shareholder approval and prior to consummation of the Reorganization (which is
currently anticipated to occur during the fourth calendar quarter of 2001). If
this proposal is approved, but a Reorganization is not approved by the
shareholders of a NAF Acquired Fund, AGAM will continue to serve as that NAF
Acquired Fund's adviser under the New NAF Investment Advisory Agreement. The
terms of the New NAF Investment Advisory Agreement are the same in all material
respects as those of the Previous NAF Investment Advisory Agreement. The New
NAF Investment Advisory Agreement differs from the Previous NAF Investment
Advisory Agreement only with respect to the effective date. The Previous NAF
Investment Advisory Agreement is dated June 1, 2000 and was last approved by
the shareholders of the NAF Acquired Funds at a meeting held on the same date
in connection with its initial approval. A description of the New NAF
Investment Advisory Agreement and the services to be provided by AGAM is set
forth below. This description is qualified in its entirety by reference to the
form of the New NAF Investment Advisory Agreement attached to this Proxy
Statement and Prospectus as Exhibit I.
23
As compensation for its services under the New NAF Investment Advisory
Agreement, the NAF Acquired Funds will pay to AGAM the same fee, as a
percentage of average daily net assets, that was payable to AGAM under the
Previous Investment Advisory Agreement. Such fee will be payable monthly and
accrued daily. See "Summary" for a description of the fee payable to AGAM under
the Previous Investment Advisory Agreement. AGAM has agreed, until February 28,
2002, to reduce fees payable to it by, or reimburse expenses to, the NAF
Acquired Funds.
For the fiscal year ended October 31, 2000, North American Funds paid total
advisory fees to AGAM of $7,339,733. Of such amount, $523,879, $299,101 and
$320,210 were attributable to the NAF Global Equity Fund, the NAF International
Equity Fund, and the NAF International Small Cap Fund, respectively. These
amounts do not reflect certain fee waivers and expense reimbursements for which
the NAF Acquired Funds were reimbursed.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each NAF Acquired Fund approve the New NAF Investment
Advisory Agreement. Shareholders of each NAF Acquired Fund vote separately on
the approval of the New NAF Investment Advisory Agreement. Approval of the New
NAF Investment Advisory Agreement by one NAF Acquired Fund is not contingent
upon approval of the New NAF Investment Advisory Agreement by any other NAF
Acquired Fund. If the New NAF Investment Advisory Agreement is not approved by
shareholders of a NAF Acquired Fund, the NAF Board will determine the
appropriate actions in the best interests of shareholders to be taken with
respect to such NAF Acquired Fund's advisory arrangements at that time.
Additional Information About AGAM
General
CypressTree Investments, Inc. ("CypressTree") and its affiliates were formed
in 1996 to acquire, advise and distribute mutual funds through broker-dealers
and other intermediaries. CypressTree Asset Management Corporation, Inc.
("CAM") was CypressTree's wholly-owned advisory subsidiary and CypressTree
Funds Distributors, Inc. ("CFD") was CypressTree's wholly-owned distribution
subsidiary. On March 10, 2000, CypressTree sold substantially all of its
assets, including all of the stock of CAM and CFD, to American General.
Thereafter, CAM was renamed American General Asset Management Corp. and CFD was
renamed American General Funds Distributors, Inc. Pursuant to the Previous NAF
Advisory Agreement, AGAM oversaw the administration of all aspects of the
business and affairs of the NAF Acquired Funds, and selected, contracted with
and compensated Subadvisers to manage the assets of the NAF Acquired Funds.
AGAM has continued to perform these functions under the Interim NAF Investment
Advisory Agreement since the completion of the AIG Merger.
AGAM is located at 286 Congress Street, Boston, Massachusetts 02210. Prior
to the AIG Merger, AGAM was wholly owned by American General, which is located
at 2929 Allen Parkway, Houston, Texas 77019. As a result of the AIG Merger,
American General is wholly owned by AIG. The principal address of AIG is 70
Pine Street, New York, New York 10270.
The directors and principal executive officer of AGAM, if any, their
business addresses, position(s) with AGAM and a description of their principal
occupations are set forth below.
Name and Address Position with AGAM and Principal Occupation(s)
---------------- ----------------------------------------------
John A. Graf............ Director; Senior Vice Chairman, Asset Accumulation, American
2929 Allen Parkway General.
Houston, TX 77019
Kent E. Barrett......... Director and Treasurer; Senior Vice President and General
2929 Allen Parkway Auditor, American General.
Houston, TX 77019
24
In addition, the following officers of North American Funds also are
employees of AGAM:
Thomas J. Brown, Treasurer and Vice President of North American Funds and
Chief Financial Officer and Chief Administrative Officer of AGAM.
John I. Fitzgerald, Secretary and Vice President of North American Funds and
Assistant Secretary and Counsel of AGAM.
John N. Packs, Assistant Treasurer and Vice President of North American
Funds and Director of Research of AGAM.
Additional Payments to AGAM and its Affiliates by NAF Acquired Funds
The Previous NAF Investment Advisory Agreement provided for reimbursement to
AGAM for various expenses related to financial, accounting and administrative
services provided to the NAF Acquired Funds. For the fiscal year ended October
31, 2000, North American Funds paid in the aggregate $1,387,842 to AGAM for
such services. Of such amount, $100,111, $48,918 and $46,369 were attributable
to the NAF Global Equity Fund, the NAF International Equity Fund and the NAF
International Small Cap Fund, respectively.
For the fiscal year ended October 31, 2000, AGAM was paid fees on
Institutional Class I shares under the NAF Services Agreement (as defined
below) of $10,494 by the NAF International Equity Fund. The NAF Global Equity
Fund and the NAF International Small Cap Fund paid no fees to AGAM under the
NAF Services Agreement.
For the fiscal year ended as follows: October 31, 2000, the NAF Acquired
Funds paid the NAF Distributor the following distribution and service fees:
Distribution and Service
Fees
-------------------------
Class A Class B Class C
------- -------- --------
NAF Global Equity Fund............................... $32,316 $178,789 $310,964
NAF International Equity Fund........................ 19,093 162,244 63,986
NAF International Small Cap Fund..................... 21,276 129,910 114,276
For the fiscal year ended October 31, 2000, the NAF Acquired Funds paid
brokerage commissions to affiliated brokers as follows:
NAF International Equity Fund............................................. $759
25
PROPOSALS NOS. 2 (a)-(b): APPROVAL OF THE PLANS
COMPARISON OF THE FUNDS
Investment Policies
In the following pages, in addition to the principal investment policies set
forth under Summary--The Funds--Comparison of the Funds above, we further
compare the investment policies of your Fund against those of the Acquiring
Fund. Although information is presented for each Acquired Fund, please compare
your Fund with the Acquiring Fund.
For shareholders of the SunAmerica International Equity Portfolio: since the
Acquiring Fund is intended to be a successor to your Fund, you will find that
the investment policies of your Fund are almost identical to those of the
Acquiring Fund.
The principal differences between the investment policies of the NAF
Acquired Funds and the Acquiring Fund, each of which is discussed in more
detail below, are as follows:
With respect to all of the NAF Acquired Funds,
. that these Funds may invest up to 35% of their total assets in securities
other than equity securities, while the Acquiring Fund may only invest up
to 20% of its assets in such securities,
. that these Funds may invest without limit in short-term investments to
meet redemptions and cover expenses, while the Acquiring Fund may invest
no more than 10% of its total assets in such investments, unless for
defensive purposes,
. that these Funds may not borrow for investment purposes, while the
Acquiring Fund may borrow up to 50% of the value of its assets for
investment purposes,
. that these Funds are diversified, while the Acquiring Fund is non-
diversified,
. that these Funds generally do not invest in foreign investment companies,
while the Acquiring Fund may invest to a significant extent in foreign
investment companies.
With respect to the NAF International Small Cap Fund, that this Fund will
not invest more than 5% of its total assets in junk bonds, while the Acquiring
Fund may invest up to 20% of its assets in such securities.
Fixed-income Securities. Although each Fund generally emphasizes investments
in equity securities, each may also invest in fixed-income securities,
including corporate bonds, notes, debentures, preferred stocks, convertible
securities, U.S. government securities and mortgage-backed and asset-backed
securities when these investments offer opportunities to achieve a Fund's
investment goal. The SunAmerica International Equity Portfolio and Acquiring
Fund may invest up to 20% of its total assets in fixed-income securities. The
NAF Acquired Funds may invest up to 35% of their total assets in securities
other than equity securities.
Junk Bonds. Junk bonds are high yield, high risk bonds that do not meet the
credit quality standards of investment grade securities. "Investment grade" is
a designation applied to intermediate and long-term corporate debt securities
rated within the highest four rating categories assigned by Standard & Poor's
Corporation, a division of the McGraw-Hill Companies ("Standard & Poor's")
(AAA, AA, A or BBB) or Moody's Investors Service, Inc. ("Moody's") (Aaa, Aa, A
or Baa).
NAF International Small Cap Fund will not invest more than 5% of its total
assets in unrated or below investment-grade fixed income securities. The
SunAmerica International Equity Portfolio and Acquiring Fund may invest up to
20% of total assets in these securities.
26
Foreign Investment Companies. The SunAmerica International Equity Portfolio
and Acquiring Fund may invest to a significant extent in foreign investment
companies as necessitated by certain foreign laws or because it is less
expensive or more expedient than direct investments in foreign securities.
Foreign investment companies invest in certain foreign markets, including
emerging markets. Investing through such vehicles may involve frequent or
layered fees or expenses and the SunAmerica International Equity Portfolio and
Acquiring Fund will not invest in such investment companies unless, in the
judgment of management, the potential benefits justify the payment of any
associated fees and expenses. The other Funds generally do not invest in
foreign investment companies.
Short-Term Investments and Defensive Instruments. The Acquiring Fund may
invest up to 10% of total assets in short-term investments to meet redemptions
and cover expenses; the NAF Acquired Funds may invest without limit and the
SunAmerica International Equity Portfolio may invest up to 25%. All Funds may
invest without limit for defensive purposes.
Special Situations. The SunAmerica International Equity Portfolio and
Acquiring Fund may also invest in special situations. A special situation
arises when, in the opinion of a Fund's management, the securities of a
particular issuer will be recognized and appreciated in value due to a specific
development with respect to that issuer.
Illiquid Securities. All Funds are limited to a maximum of 15% of net assets
in illiquid securities.
Borrowing. All Funds may borrow for temporary or emergency purposes and in
connection with reverse repurchase agreements, mortgage dollar rolls and
similar transactions. When borrowing for temporary or emergency purposes, each
Fund may borrow up to 33 1/3% of the value of its respective total assets. The
NAF Acquired Funds may not borrow for investment purposes, but the SunAmerica
International Equity Portfolio and Acquiring Fund may borrow for investment
purposes (up to 50% of total net assets). Borrowing is a fundamental policy.
Diversification. The NAF Acquired Funds are diversified while the SunAmerica
International Equity Portfolio and the Acquiring Fund are non-diversified.
Accordingly, the NAF Acquired Funds are subject to the restriction that, with
respect to 75% of each fund's total assets, they may not purchase the
securities of any issuer if the purchase would cause more than 5% of the value
of the Fund's total assets to be invested in the securities of any one issuer
(excluding U.S. Government securities) or cause more than 10% of the voting
securities of the issuer to be held by the Fund. The other Funds are subject to
the same limits as to 50% of its portfolio.
Lending. The Funds may not make loans, except through repurchase agreements
and the purchase of portfolio securities consistent with a Fund's investment
objectives and policies. In addition, each Fund may lend portfolio securities
subject to comparable policies. Lending is a fundamental policy.
Short Sales. As a non-fundamental policy, the NAF Acquired Funds may not
engage in short sales, except short sales "against the box." A short sale is
against the box to the extent that the Fund contemporaneously owns, or has the
right to obtain without payment, securities identical to those sold short. The
SunAmerica International Equity Portfolio and the Acquiring Fund may engage in
short sales, whether or not "against the box," up to 25% of its total assets.
Directors and Officers
SunAmerica Equity Funds is governed by the Board of Trustees (previously
defined as the "SunAmerica Equity Board") which currently consists of the same
five individuals as those serving on the SunAmerica Style Select Board (each, a
"SunAmerica Board"). Four of the members of the SunAmerica Board are SunAmerica
Independent Directors. The NAF Acquired Funds have a different Board of
Directors from the SunAmerica Board. (SunAmerica Style Select Series, Inc. has
a Board of Directors, while each of SunAmerica Equity Funds and North American
Funds has a Board of Trustees. However, the offices of Director and Trustee are
considered equivalent under the Investment Company Act and the terms "Director"
and "Trustee" are used interchangeably.)
27
The SunAmerica Board is responsible for the overall supervision of
SunAmerica Equity Funds and performs various duties imposed on directors of
investment companies by the Investment Company Act and under the SunAmerica
Equity Funds' Declaration of Trust and Massachusetts law. Trustees and officers
of SunAmerica Equity Funds are also directors and officers of some or all of
the other investment companies managed, administered or advised by SAAMCo, and
distributed by SACS and other affiliates (including the SunAmerica Acquired
Fund). The SunAmerica Equity Board elects the Acquiring Fund's officers. See
"Trustees and Officers" in the Acquiring Fund Statement.
The following table lists the Trustees and executive officers of SunAmerica
Equity Funds, their ages and principal occupations during the past five years.
The business address of each Trustee and executive officer is The SunAmerica
Center, 733 Third Avenue, New York, New York 10017. For the purposes of this
Proxy Statement and Prospectus, the SunAmerica Mutual Funds ("SAMF") consist of
SunAmerica Equity Funds, SunAmerica Income Funds, SunAmerica Money Market
Funds, Inc., SunAmerica Style Select Series, Inc. and SunAmerica Strategic
Investment Series, Inc. An asterisk indicates that the Trustee is an interested
person of SunAmerica Equity Funds within the meaning of Section 2(a)(19) of the
Investment Company Act.
Position with the
Name, Age and Address Acquiring Fund Principal Occupations During Past 5 Years
--------------------- ----------------- -----------------------------------------
S. James Coppersmith, Trustee Retired; formerly, President and General
68..................... Manager, WCVB-TV, a division of the Hearst
Corp. (1982 to 1994); Director/Trustee of
SAMF and Anchor Series Trust ("AST").
Samuel M. Eisenstat, Chairman of the Attorney, solo practitioner; Chairman of
60..................... Board the Boards of Directors/Trustees of SAMF
and AST.
Stephen J. Gutman, 58... Trustee Partner and Managing Member of B.B.
Associates LLC (menswear specialty
retailing and other activities) since June
1988; Director/Trustee of SAMF and AST.
Peter A. Harbeck*, 47... Trustee and Director and President, SAAMCo, since
President August 1995; Director, AIG Asset Management
International, Inc. ("AIGAMI") since
February 2000; Managing Director, John
McStay Investment Counsel, L.P. ("JMIC")
since June 1999; Director, SACS, since
August 1993; Director and President,
SunAmerica Fund Services, Inc. ("SAFS"),
since May 1988; President, SAMF and AST.
Sebastiano Sterpa, 72... Trustee Founder and Chairman of the Board of the
Sterpa Group (real estate) since 1962;
Director, Real Estate Business Service and
Countrywide Financial; Director/Trustee of
SAMF.
J. Steven Neamtz, 42.... Vice President Executive Vice President, SAAMCo, since
April 1996; Director and Chairman of the
Board, AIGAMI, since February 2000; Vice
President, SAMF, since November 1999;
Director and President, SACS, since April
1996.
28
Position with the
Name, Age and Address Acquiring Fund Principal Occupations During Past 5 Years
--------------------- ----------------- -----------------------------------------
Peter C. Sutton, 36..... Treasurer Senior Vice President, SAAMCo, since April
1997; Vice President, AIGAMI, since
February 2000; Treasurer and Controller of
Seasons Series Trust ("Seasons"),
SunAmerica Series Trust ("SAST") and Anchor
Pathway Fund ("APF") since February 2000;
Treasurer of SAMF and AST since February
1996; Vice President of SAST and APF since
1994; formerly Assistant Treasurer of SAST
and APF from 1994 to February 2000; Vice
President, Seasons, since April 1997;
formerly Vice President, SAAMCo, from 1994
to 1997.
Robert M. Zakem, 43..... Secretary and Chief Senior Vice President and General Counsel,
Compliance Officer SAAMCo, since April 1993; Vice President,
General Counsel and Assistant Secretary,
AIGAMI, since February 2000; Executive Vice
President, General Counsel and Director,
SACS, since August 1993; Vice President,
General Counsel and Assistant Secretary,
SAFS, since January 1994; Vice President,
SAST, APF and Seasons; Assistant Secretary,
SAST and APF, since September 1993;
Assistant Secretary, Seasons, since April
1997.
At a meeting of the SunAmerica Board held on August 22, 2001, the SunAmerica
Board elected Dr. Judith L. Craven and William F. Devin to the SunAmerica
Board, effective on or about November 9, 2001. Dr. Craven and Mr. Devin are
currently members of the NAF Board. Dr. Craven and Mr. Devin would join the
SunAmerica Board as SunAmerica Independent Directors and as members of the
Audit and Nominating Committees.
The following table lists the ages, business addresses and principal
occupations during the past five years of Dr. Craven and Mr. Devin.
Dr. Judith L. Craven,
55..................... Retired Administrator. Trustee, North American Funds
3212 Ewing Street Variable Product Series II, 15 investment portfolios
Houston TX 77004 (November 1998 to present); Director, North American
Funds Variable Product Series I, 21 investment portfolios
(August 1998 to present); Director, USLIFE Income Fund,
Inc. (November 1998 to present); Director, Compaq
Computer Corporation (1992 to present); Director, A.G.
Belo Corporation, a media company (1992 to present);
Director, SYSCO Corporation, a food marketing and
distribution company (1996 to present); Director, Luby's
Inc., a restaurant chain (1998 to present); Director,
University of Texas Board of Regents (May 2001 to
present); Formerly, Director, CypressTree Senior Floating
Rate Fund, Inc. (June 2000 to May 2001); Formerly,
President, United Way of the Texas Gulf Coast, a not for
profit organization (1992 to 1998); Formerly, Director,
Houston Branch of the Federal Reserve Bank of Dallas
(1992 to 2000); Formerly, Board Member, Sisters of
Charity of the Incarnate Word (1996 to 1999).
William F. Devin, 63.... Member of the Board of Governors, Boston Stock Exchange
44 Woodland Road (1985 to present); Formerly, Executive Vice President,
Braintree, MA 02184 Fidelity Capital Markets, a division of National
Financial Services Corporation (1966-1996); Formerly,
Director, CypressTree Senior Floating Rate Fund, Inc.
(October 1997 to May 2001).
29
SunAmerica Equity Funds pays each SunAmerica Independent Director annual
compensation in addition to reimbursement of out-of-pocket expenses in
connection with attendance at meetings of the SunAmerica Equity Board.
Specifically, each SunAmerica Independent Director receives a pro rata portion
(based upon the SunAmerica Equity Funds' net assets) of an aggregate of $40,000
in annual compensation for acting as director or trustee to SAMF. In addition,
each SunAmerica Independent Director received $20,000 in annual compensation
for acting as trustee to AST. Beginning January 1, 2001 each SunAmerica
Independent Director of the retail funds in SAMF receives an additional $2,500
per quarterly meeting. In addition, Mr. Eisenstat receives an aggregate of
$2,000 in annual compensation for serving as Chairman of the Boards of the
retail funds in SAMF. Officers of SunAmerica Equity Funds receive no direct
remuneration in such capacity from SunAmerica Equity Funds.
In addition, each SunAmerica Independent Director also serves on the Audit
Committee of the SunAmerica Board. The Audit Committee is charged with
recommending to the full SunAmerica Board the engagement or discharge of
SunAmerica Equity Funds' independent accountants; directing investigations into
matters within the scope of the independent accountant's duties; reviewing with
the independent accountants the audit plan and results of the audit; approving
professional services provided by the independent accountants and other
accounting firms; reviewing the independence of the independent accountants;
considering the range of audit and non-audit fees; and preparing and submitting
Audit Committee minutes to the full SunAmerica Board. Each member of the Audit
Committee receives an aggregate of $5,000 in annual compensation for serving on
the Audit Committee of SAMF and AST. With respect to SunAmerica Equity Funds,
each member of the Audit Committee receives a pro rata portion of the $5,000
annual compensation, based on the relative net assets of SunAmerica Equity
Funds. SunAmerica Equity Funds also has a Nominating Committee, comprised
solely of SunAmerica Independent Directors, which recommends to the SunAmerica
Board those persons to be nominated for election as Directors by shareholders
and selects and proposes nominees for election by Directors between
shareholders' meetings. Members of the Nominating Committee serve without
compensation.
The Directors of SAMF and AST have adopted the SunAmerica Disinterested
Trustees' and Directors' Retirement Plan (the "Retirement Plan") effective
January 1, 1993 for the SunAmerica Independent Directors. The Retirement Plan
provides generally that if a SunAmerica Independent Director who has at least
10 years of consecutive service as a disinterested Director of any SAMF or AST
(an "Eligible Director") retires after reaching age 60 but before age 70 or
dies while a Director, such person will be eligible to receive a retirement or
death benefit from each SAMF with respect to which he or she is an Eligible
Director. With respect to Sebastiano Sterpa, the SunAmerica Independent
Directors have determined to make an exception to existing policy and allow Mr.
Sterpa to remain on the SunAmerica Board past age 70, until he has served for
ten years. Mr. Sterpa ceased accruing retirement benefits upon reaching age 70,
although such benefits will continue to accrue interest as provided for in the
Retirement Plan. As of each birthday, prior to the 70th birthday, each Eligible
Director will be credited with an amount equal to (i) 50% of his or her regular
fees (excluding committee fees) for services as a Disinterested Director of
each SAMF for the calendar year in which such birthday occurs, plus (ii) 8.5%
of any amounts credited under clause (i) during prior years. An Eligible
Director may receive any benefits payable under the Retirement Plan, at his or
her election, either in one lump sum or in up to fifteen annual installments.
30
The following table sets forth information summarizing the aggregate
compensation of each SunAmerica Independent Director for his services as a
member of the SunAmerica Board for the fiscal year ended September 30, 2000,
except as otherwise indicated. Neither the Trustees who are interested persons
of SunAmerica Equity Funds nor any officers of SunAmerica Equity Funds receive
any compensation.
Pension or
Retirement
Aggregate Benefits Accrued Total Compensation
Compensation as Part of From SunAmerica
from SunAmerica Estimated Annual Equity Funds and
SunAmerica Equity Funds Benefits Upon Fund Complex Paid
Director Equity Funds Expenses Retirement* to Directors**
-------- ------------ ---------------- ---------------- ------------------
S. James Coppersmith.... $12,503 $47,982 $29,670 $67,500
Samuel M. Eisenstat..... $13,139 $30,673 $46,083 $71,500
Stephen J. Gutman....... $12,503 $42,123 $60,912 $67,500
Sebastiano Sterpa***.... $12,829 $11,447 $ 7,900 $45,833
--------
* Assuming participant elects to receive benefits in 15 yearly installments.
** Information is as of March 31, 2001 for the five investment companies in the
complex that pay fees to these directors/trustees. The complex consists of
SAMF and AST.
*** Mr. Sterpa is not a trustee of AST.
Management and Subadvisory Arrangements
Comparison of Management and Administrative Arrangements and Fees
AGAM serves as the investment adviser for the NAF Acquired Funds and SAAMCo
serves as the investment adviser for the SunAmerica Acquired Fund and the
Acquiring Fund. As investment adviser to the respective Funds, AGAM and SAAMCo
select and manage the investments, provide various administrative services and
supervise the daily business affairs, except to the extent they have delegated
portfolio management of a Fund to a Subadviser. The NAF Acquired Funds utilize
Subadvisers as described below. The SunAmerica Acquired Fund is currently
advised by SAAMCo without any Subadvisers. The Acquiring Fund will be
subadvised by AIGGIC, an affiliate of SAAMCo.
AGAM was organized as a Delaware corporation in 1996 and is located at 286
Congress Street, Boston, Massachusetts, 02210. Prior to the Merger, AGAM and
the NAF Distributor were both wholly owned subsidiaries of American General.
Prior to the Merger, American General was one of the nation's largest
diversified financial services organizations with assets of approximately $128
billion and market capitalization of $23 billion at June 30, 2001. AGAM is now
a subsidiary of AIG. The principal executive offices of AIG are located at 70
Pine Street, New York, New York 10270.
SAAMCo was organized as a Delaware corporation in 1982 and is located at The
SunAmerica Center, 733 Third Avenue, New York, NY 10017-3204. SAAMCo is a
wholly owned subsidiary of SunAmerica Inc., which in turn is a wholly owned
subsidiary of AIG. AIG, a Delaware corporation, is a holding company which
through its subsidiaries is engaged in a broad range of insurance and
insurance-related activities and financial services in the United States and
abroad. AIG's primary activities include both general and life insurance
operations. Other significant activities include financial services and asset
management. As of June 30, 2001, SAAMCo managed, advised and/or administered
more than $28.5 billion of assets.
Comparison of the NAF Investment Advisory Agreement, SunAmerica Acquired
Fund Investment Advisory Agreement and Acquiring Fund Investment Advisory
Agreement. The Acquiring Fund Investment Advisory Agreement is similar to the
NAF Investment Advisory Agreement except for certain matters, including the
advisory fees, the effective dates and the identity of the adviser. The
Acquiring Fund Investment Advisory Agreement is substantially the same as the
SunAmerica Acquired Fund Investment Advisory Agreement, except for the
effective dates and that it provides for a lower advisory fee rate.
31
The advisory fees payable by each NAF Acquired Fund to AGAM and by the
SunAmerica Acquired Fund to SAAMCo are discussed above under "Proposal No. 1:
Approval of the New Investment Advisory Agreement--Description of the New
Investment Advisory Agreement." The advisory fees payable by the Acquiring Fund
to SAAMCo are discussed above under "Summary--The Funds--Comparison of the
Funds--Management Agreement."
The effective advisory fee rates payable by the Acquiring Fund will be lower
than the advisory fee rates currently payable by the NAF International Small
Cap Fund and SunAmerica International Equity Portfolio. The advisory fees
payable by the Acquiring Fund will be higher than the effective advisory fee
rates currently payable by the NAF Global Equity Fund and the NAF International
Equity Fund.
For the NAF Global Equity Fund, although the advisory fee rate paid by the
Acquiring Fund would be higher, the expenses paid by a shareholder will not
increase.
For the NAF International Equity Fund, its advisory fee rate is lower than
the Acquiring Fund, and the total expenses before expense reimbursements paid
by a shareholder will not increase. However, although the net expenses (after
fee waiver) of the NAF International Equity Fund will increase, the NAF Board
considered the fee waiver for the NAF International Equity Fund terminates on
February 28, 2002 while the contractual fee waiver and expense reimbursements
arrangements agreed to by SAAMCo will continue indefinitely, subject to
termination by the SunAmerica Equity Board, including a majority of the
Independent Trustees. SAAMCo may not increase such expense ratios, which are
contractually required by agreement with the SunAmerica Equity Board, without
the approval of the SunAmerica Equity Board, including a majority of the
SunAmerica Independent Trustees. See "Proposals Nos. 2(a)-(b): Approval of the
Plans."
In addition, the SunAmerica Acquired Fund Investment Advisory Agreement and
the Acquiring Fund Investment Advisory Agreement provide that in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
SAAMCo's (and its affiliates') obligations or duties thereunder, SAAMCo is not
subject to liability to the respective Fund (or to any shareholder thereof) for
any act or omission in the course of rendering services to such Fund (except to
the extent specified in the Investment Company Act concerning loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services). The SunAmerica Investment Advisory Agreement and the Acquiring Fund
Investment Advisory Agreement also provide that except for such disabling
conduct, a Fund will indemnify SAAMCo (and its affiliates) from any liability
arising from SAAMCo's conduct under the respective Investment Advisory
Agreement. The NAF Investment Advisory Agreement does not contain similar
provisions.
Subadvisory Arrangements. The NAF Investment Advisory Agreement, SunAmerica
Acquired Fund Investment Advisory Agreement and Acquiring Fund Investment
Advisory Agreement each provides that the adviser may, at its own cost and
expense and subject to the requirements of the Investment Company Act, retain
one or more subadvisers (each, a "Subadvisor"), to manage all or a portion of
the investment portfolio of an Acquired Fund or Acquiring Fund, respectively.
In addition to the ability to retain Subadvisers under their respective
investment advisory agreements referenced above, each of AGAM and SAAMCo is
authorized to retain (or change) a Subadviser to which it is not affiliated, as
defined in the Investment Company Act ("Unaffiliated Subadviser"), without
shareholder approval pursuant to a separate "Manager of Managers" order granted
by the Commission. AGAM and SAAMCo are ultimately responsible under their
respective "Manager of Managers" order to oversee any Unaffiliated Subadvisers.
AGAM has retained an Unaffiliated Subadviser for each NAF Acquired Fund
pursuant to the NAF Acquired Funds' "Manager of Managers" order. SAAMCo does
not intend to rely on its "Manager of Managers" order with respect to the
Acquiring Fund. (AIGGIC is an affiliated adviser and thus is not subject to the
"Manager of Managers" order.)
If shareholders approve the Reorganizations, upon consummation of the
Reorganizations, the Acquired Funds will become part of the Acquiring Fund and
will be managed by SAAMCo and subadvised by AIGGIC.
32
Comparison of the Subadvisory Arrangements of the Funds. The current
Subadvisers of the Acquired Funds and the Subadviser for the Acquiring Fund as
well as certain information regarding each Subadviser, including the fees
payable to each Subadviser, are set forth below. As compensation for their
services, the Subadvisers for each NAF Acquired Fund and the Acquiring Fund
receive fees from AGAM or SAAMCo, respectively, that are computed separately
for each Fund. Such fees are paid out of AGAM's or SAAMCo's and the Acquiring
Fund advisory fee at no additional cost to the Fund or its shareholders.
Information Regarding
Fund Subadviser the Subadviser Subadvisory Fee Rate
---- ---------- ------------------------ ------------------------
NAF Global Equity Founders Founders is a registered 0.500% on the first $50
Fund investment adviser first million, 0.450% between
established as an asset $50 million and $200
manager in 1938, and is million, 0.400% between
a subsidiary of Mellon $200 million and $500
Financial Corporation. million and 0.350% on
As of June 30, 2001, the excess over $500
Founders had over $5.65 million
billion of assets under
management.
NAF International MS MS, a wholly owned 0.500% on the first $50
Equity Fund subsidiary of Morgan million, 0.450% between
Stanley Dean Witter & $50 million and $200
Co., conducts a million, 0.400% between
worldwide fund $200 million and $500
management business, million and 0.350% on
providing a broad range the excess over $500
of fund management million
services to customers in
the United States and
abroad. As of December
31, 2001, MS, together
with its affiliated
institutional asset
management companies,
managed investments
totaling approximately
$173 billion, including
fiduciary assets.
NAF International Small Founders See NAF Global Equity 0.500% on the first $300
Cap Fund Fund million, 0.450% between
$300 million and $500
million and 0.400% on
the excess over $500
million
SunAmerica International None N/A N/A
Equity Portfolio
Acquiring Fund AIGGIC AIGGIC is an affiliate 0.470%
of SunAmerica. As of
June 30, 2001, AIGGIC
and its affiliated
companies had
approximately $195.7
billion of assets under
management.
33
Under the terms of each of the Subadvisory Agreements between AGAM and a
Subadviser (the "NAF Subadvisory Agreements"), the Subadviser for the
respective NAF Acquired Fund manages the investment and reinvestment of the
assets of such NAF Acquired Fund, subject to the supervision of the NAF Board.
The Subadviser formulates a continuous investment program for such NAF Acquired
Fund consistent with its investment objectives and policies. The Subadviser
implements such programs by purchases and sales of securities and regularly
reports to AGAM and the NAF Board with respect to their implementation.
Under the terms of the subadvisory agreement between SAAMCo and AIGGIC,
AIGGIC will be responsible for the portfolio management of the Acquiring Fund,
subject to the oversight of the SunAmerica Equity Board. In addition, the
subadvisory agreement provides that except for damages resulting directly from
willful misfeasance, bad faith, gross negligence or reckless disregard of
AIGGIC's (and its affiliates') obligations or duties thereunder, on the part of
AIGGIC, AIGGIC is not subject to liability to SAAMCo (or its affiliates) or the
Acquiring Fund (or to any shareholder thereof) for any act or omission in the
course of rendering services to sthe Acquiring Fund (except to the extent
specified in the Investment Company Act concerning loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services).
The agreement also provides that except for such disabling conduct, SAAMCo will
indemnify AIGGIC (and its affiliates) from any liability arising from AIGGIC's
conduct under the agreement.
Distribution and Shareholder Servicing Arrangements
Distributor
American General Funds Distributors, Inc. (previously defined as "AGFD" or
the "NAF Distributor"), an affiliate of AGAM, acts as the principal distributor
of the shares of the NAF Acquired Funds. SunAmerica Capital Services, Inc.
(previously defined as "SACS" or the "SunAmerica Distributor"), an affiliate of
SAAMCo, acts as the distributor of the shares of the SunAmerica Acquired Fund
and the Acquiring Fund. As compensation for their respective services, AGFD
receives the initial and deferred sales charges in respect of the NAF Acquired
Funds, and SACS receives the initial and deferred sales charges in respect of
the SunAmerica Acquired Fund and the Acquiring Fund. In addition, AGFD receives
fees under each NAF Acquired Fund's plan pursuant to Rule 12b-1 under the
Investment Company Act, and SACS receives fees under the SunAmerica Acquired
Fund's and the Acquiring Fund's plans pursuant to Rule 12b-1 under the
Investment Company Act. The address of the NAF Distributor is 286 Congress
Street, Boston, Massachusetts 02210. The address of the SunAmerica Distributor
is The SunAmerica Center, 733 Third Avenue, New York, New York 10017-3204.
After consummation of the Reorganizations, the SunAmerica Distributor will
continue to provide distribution services to the Combined Fund.
Distribution and Service (12b-1) Fees
Each of the Acquired Funds and Acquiring Fund has adopted a plan under Rule
12b-1 under the Investment Company Act that allows it to pay distribution and
other fees for the sale and distribution of its shares. Class A, Class B and
Class C shares of each NAF Acquired Fund, Class A, Class B and Class II shares
of the SunAmerica Acquired Fund and Class A, Class B and Class II shares of the
Acquiring Fund are subject to the same respective distribution and account
maintenance and service fees pursuant to the applicable plan under Rule 12b-1.
The table below sets forth the distribution and account maintenance and service
fees for each of these classes.
SunAmerica Account
NAF Acquired Acquired Acquiring Maintenance
Fund Class Fund Class Fund Class Distribution Fee and Service Fee
------------ ---------- ---------- ---------------- ---------------
A A A 0.10% 0.25%
B B B 0.75% 0.25%
C II II 0.75% 0.25%
34
Because these fees are paid out of a Fund's assets on an ongoing basis, over
time they will increase the cost of your investment and may cost you more than
paying other types of sales charges.
Shareholder Servicing Fees for Class I
The NAF Acquired Funds have entered into a Services Agreement (the "NAF
Services Agreement") with AGAM for the provision of recordkeeping and
shareholder services to retirement and employee benefit plans and certain asset
allocation funds of North American Funds that invest in Institutional Class I
shares of the NAF Acquired Funds. Under the NAF Services Agreement, as
compensation for services rendered, AGAM receives a fee on Institutional Class
I shares of each NAF Acquired Fund equal to .25% of average net assets of such
class. SACS will provide these services after the Reorganizations with respect
to Class I shares of the Acquiring Fund for the same fee.
Other Service Agreements with Affiliates
SAFS acts as a servicing agent assisting State Street in connection with
certain services offered to the shareholders of the SunAmerica Acquired Fund
and Acquiring Fund pursuant to the terms of a Service Agreement (the
"SunAmerica Service Agreement"). Under the SunAmerica Service Agreement, as
compensation for transfer agency services rendered, SAFS receives a fee from
the SunAmerica Acquired Fund and Acquiring Fund, computed and payable monthly
based upon an annual rate of .22% of average daily net assets of Classes A, B
and II of each Acquiring Fund. Upon completion of the Reorganizations, SAFS
will receive the same fee with respect to Class I shares of the Acquiring Fund.
From this fee, SAFS pays a fee to State Street, and its affiliate, National
Financial Data Services. In addition, pursuant to the SunAmerica Service
Agreement, SAFS may receive reimbursement of its costs in providing shareholder
services on behalf of the SunAmerica Acquired and Acquiring Fund. SAFS is
located at The SunAmerica Center, 733 Third Avenue, New York, New York 10017.
35
Purchase, Exchange and Redemption of Shares
The following chart highlights the purchase, redemption and exchange
features of the Acquired Funds as compared to such features of the Acquiring
Fund.
Purchase, Redemption SunAmerica
and Exchange Features NAF Acquired Funds Acquired Fund Acquiring Fund
--------------------- ------------------ ------------- --------------
Minimum initial . non-retirement . non-retirement . non-retirement
investment accounts: $1,000 accounts: $500 accounts: $500
. retirement . retirement . retirement
accounts: $50 accounts: $250 accounts: $250
. automatic
investment . dollar cost . dollar cost
programs: $50 to averaging: $500 to averaging: $500 to
open open open
Class B shares are
available for
purchases of $250,000
or less
Class C shares are
available for
purchases under $1
million
Institutional Class I
shares are available
for purchases
of $1 million or more
Minimum subsequent $50 . non-retirement . non-retirement
investments accounts: $100 accounts: $100
. retirement . retirement
accounts: $25 accounts: $25
. dollar cost . dollar cost
averaging: averaging:
$25/month $25/month
Initial Sales Charge Class A: 5.75% Class A: 5.75% Class A: 5.75%
(as a percentage of Class B: None Class B: None Class B: None
offering price) Class C: None Class II: 1.00% Class II: 1.00%
Institutional Class Class I: None (a)
I: None
Purchases of $1 Initial sales charge Initial sales charge
million or more are is waived for certain is waived for certain
sold without an investors investors
initial sales charge
Deferred Sales Charge Class A: Purchases of Class A: Purchases of Class A: Purchases of
shares worth $1 Class A shares of $1 Class A shares of $1
million or more that million or more that million or more that
are sold without an are redeemed within a are redeemed within a
initial sales charge certain period of certain period of
and redeemed within 1 time are subject to a time are subject to a
year are subject to a CDSC (1% for CDSC (1% for
1% CDSC at redemption redemptions within redemptions within
(c) one year of purchase one year of purchase
and 0.50% for and 0.50% for
redemptions after the redemptions after the
first year and within first year and within
the second year of the second year of
purchase) (c) purchase) (c)
36
Purchase,
Redemption
and
Exchange SunAmerica
Features NAF Acquired Funds Acquired Fund Acquiring Fund
---------- ------------------ ------------- --------------
Class B: Shares Class B: Shares Class B: Shares
redeemed within 6 redeemed within 6 redeemed within 6
years are subject to years are subject to years are subject to
a CDSC (b)(c) a CDSC (b)(c) a CDSC (b)(c)
Class C: Shares Class II: Shares Class II: Shares
redeemed within one redeemed within 18 redeemed within 18
year are subject to a months after purchase months after purchase
1% CDSC (c) are subject to a 1% are subject to a 1%
CDSC (c) CDSC (c)
Institutional Class Class I: None (a)
I: None
Purchases By mail (check), wire By mail (check), wire By mail (check), wire
or through broker- or through a broker or through a broker
dealers or financial advisor or financial advisor
Redemption Class A, B and C: By All Classes: By mail Class A, B and II: By
mail, wire (if a (any amount), by wire mail (any amount), by
minimum of $1,000), or telephone (for wire or telephone
telephone or through amounts less than (for amounts less
broker-dealers $100,000), or through than $100,000), or
a broker or financial through a broker or
advisor financial advisor
Institutional Class Class I: contact the
I: contact the financial
financial intermediary or other
intermediary or other organization from
organization from whom shares were
whom shares were purchased (a)
purchased
Conversion Class B shares Class B shares Class B shares
automatically convert automatically convert automatically convert
into Class A shares into Class A shares into Class A shares
eight years after approximately eight approximately eight
purchase years after purchase years after purchase
Exchanges Shares of an NAF Shares of the Shares of the
Acquired Fund may be SunAmerica Acquired Acquiring Fund may be
exchanged for shares Fund may be exchanged exchanged for shares
of the same class of for shares of the of the same class of
any other NAF same class of any any other fund
Acquired Fund or other fund distributed by SACS
other series of North distributed by SACS
American Funds
For Institutional
Class I shares, all
or part of an
existing plan balance
may be exchanged from
one investment option
to another if
permitted by an
employer retirement
plan
--------
(a) Although not currently offered by the Acquiring Fund, Class I shares will
be offered by the Acquiring Fund upon consummation of the Reorganizations.
(b) The CDSC of Class B shares of the Acquiring Fund is either the same as or
less than the CDSC relating to Class B shares of the NAF Acquired Fund. The
CDCS of Class B shares of the Acquiring Fund is the same as the CDSC of the
SunAmerica Acquired Fund. The table below sets forth the schedule of Class
B CDSC for all Funds.
37
CDSC on shares being sold
NAF Acquired SunAmerica
Years after Purchase Funds Acquired Fund Acquiring Fund
-------------------- ------------ ------------- --------------
1st year........................... 5.00% 5.00% 5.00%
2nd year........................... 5.00% 4.00% 4.00%
3rd year........................... 4.00% 3.00% 3.00%
4th year........................... 3.00% 3.00% 3.00%
5th year........................... 2.00% 2.00% 2.00%
6th year........................... 1.00% 1.00% 1.00%
7th year and thereafter............ None None None
(c) The CDSC schedules applicable to Class A, Class B and Class C shares of a
NAF Acquired Fund will continue to apply to the Corresponding Shares
received in a Reorganization by shareholders of the Acquiring Fund who were
shareholders of the respective Acquired Fund as of the date of the closing
of such Reorganization (even if you exchange your shares for shares of
another fund distributed by SACS). Each CDSC is based on the original
purchase cost or the current market value of the shares being sold,
whichever is less. Future purchases of Class A, Class B or Class II Shares
of the Acquiring Fund will be subject to the CDSC schedule applicable to
the Acquiring Fund. There is no CDSC on Acquiring Fund shares that are
purchased through reinvestment of dividends. In the case of a partial
redemption of Acquiring Fund shares, those shares in the shareholder's
account that are not subject to a CDSC will be sold first. If there are not
enough of these shares available, shares that have the lowest CDSC will be
sold next.
Dividend Distribution and Account Policies
The following is a summary of the dividend distribution and account policies
of each of the Funds and is qualified in its entirety by the more complete
information contained in the Acquired Funds Prospectuses, Acquiring Fund
Prospectus, Acquired Funds Statements and Acquiring Fund Statement.
Valuation of Fund Shares. The net asset value per share for each Fund and
class is determined once daily as of the close of regular trading on the New
York Stock Exchange (generally 4 p.m. Eastern Time) by dividing the net assets
(the value of all assets less liabilities) of each class by the number of its
shares outstanding. See "Purchase, Redemption and Pricing--Determination of Net
Asset Value" in the NAF Acquired Funds Statement and "Determination of Net
Asset Value" in the SunAmerica Acquired Fund and Acquiring Fund Statements.
Buy and Sell Prices. When you buy shares of a Fund, you pay the net asset
value plus any applicable sales charges. When you sell shares of a Fund, you
receive the net asset value minus any applicable CDSCs.
Dividends. Each Fund declares and pays capital gains and income dividends,
if any, annually. See "Pricing of Fund Shares" in the Acquired Funds Prospectus
and "Dividends, Distributions and Taxes-- Dividends and Distributions" in the
SunAmerica Acquired Fund Statement and the Acquiring Fund Statement.
Dividend Reinvestments. The policy relating to dividend reinvestments is
substantially the same for all Funds. Unless cash payment is requested (and
such payment is more than $10 in the case of the SunAmerica Acquired Fund and
Acquiring Fund), all dividends and distributions, if any, will be reinvested.
Alternatively, in the case of the Acquiring Fund, dividends and distributions
may be reinvested in any fund distributed by SACS. See "Pricing of Fund Shares"
in the NAF Acquired Funds Prospectus and "Dividends, Distributions and Taxes--
Dividends and Distributions" in the SunAmerica Acquired Fund and Acquiring Fund
Statements.
Redemptions-in-kind. Each Acquired Fund reserves the right to pay redemption
proceeds in whole or in part by a distribution "in kind" of securities held by
the Acquired Fund, subject to the limitation that each Acquired Fund is
obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of
the net asset value of the Acquired Fund during any 90-day period for any one
account. The Acquiring Fund is not subject to this limitation and therefore may
pay redemption proceeds by a distribution "in kind" of securities, if it
determines that it would be detrimental to the best interests of the remaining
shareholders of the Fund to make payment of redemption proceeds wholly or
partly in cash. See "Purchase Redemption and Pricing--Redemption in Kind" in
the NAF Acquired Funds Statement and "Additional Information Regarding
Redemption of Shares" in the SunAmerica Acquired Fund and Acquiring Fund
Statements.
38
Payment Following Redemption. Each Fund will normally send the proceeds from
a redemption (less any applicable CDSC) on the next business day, but may delay
payment for up to seven days. Payment may be delayed if the shares to be
redeemed were purchased by a check that has not cleared. During periods of
extreme volatility or market crisis, each Fund may temporarily suspend the
right to redemption and may postpone the payment of proceeds, as allowed by the
federal securities laws. See "Shareholder Account Information--Transaction
Policies and Additional Information Regarding Redemption of Shares" in the
SunAmerica Acquired Fund and Acquiring Fund Prospectuses and Statements,
respectively, and "Section III: Investing in the North American Funds" and
"Purchase, Redemption and Pricing--Payment for the Shares Presented" in the NAF
Acquired Funds Prospectus and NAF Acquired Funds Statement, respectively.
Programs that Reduce Sales Charges. Each of the Funds offers programs
pursuant to which shareholders pay reduced sales charges. With respect to the
SunAmerica Acquired Fund and Acquiring Fund, these programs are only applicable
to purchases of Class A shares. Under the "Rights of Accumulation program," a
shareholder pays the sales charge applicable to the shareholder's total account
balance in all classes of shares. Under a "Letter of Intent" (or statement of
intention), a shareholder agrees to invest a certain amount over 13 months and
will pay the sales charge based on the shareholder's goal. In addition, the
SunAmerica Acquired Fund and Acquiring Fund also offer reduced sales charges
for group purchases, pursuant to which members of qualified groups may purchase
Class A shares of the SunAmerica Acquired Fund and Acquiring Fund under the
Rights of Accumulation program described above. The SunAmerica Acquired Fund
and Acquiring Fund also offers a Combined Purchase Privilege, pursuant to which
certain persons may qualify for sales charge reductions or elimination by
combining purchases of Acquiring Fund shares into a single transaction. See
"Section III: Investing in the North American Funds" in the NAF Acquired Funds
Prospectuses and "Additional Information Regarding Purchase of Shares" in the
SunAmerica Acquired Fund and Acquiring Fund Statements for more information
regarding these programs.
Reinstatement Privileges. Each of the Funds offers a reinstatement
privilege. In the case of the NAF Acquired Funds, if a shareholder redeems
Class A shares (under $1 million) and reinvests within 90 days, the shareholder
will not have to pay a sales charge. If a shareholder redeems Class A shares
over $1 million, or Class B or Class C shares and pays a CDSC and then
reinvests within 90 days, the shareholder's account will be credited the amount
of the CDSC. In the case of the SunAmerica Acquired Fund and Acquiring Fund, a
shareholder may redeem shares of the Fund and within one year after the sale
invest some or all of the proceeds in the same share class of the same Fund
without a sales charge. A shareholder may use the reinstatement privilege only
one time after redeeming such shares. If a shareholder paid a CDSC on the
redemption of his or her shares, the shareholder's account will be credited
with the dollar amount of the CDSC at the time of redemption. See "Account
Services" in the NAF Acquired Funds Prospectus relating to Class A, Class B,
and Class C shares and "Shareholder Account Information" in the SunAmerica
Acquired Fund and Acquiring Fund Prospectuses for more information regarding
this privilege.
Other Shareholder Services. Each of the Acquired Funds and the Acquiring
Fund offers other shareholder services which are similar, although not
identical, such as automatic investment plans and systematic withdrawal plans.
In addition, Anchor National Life Insurance Company offers an Asset Protection
Plan to certain investors in the SunAmerica Acquired Fund and Acquiring Fund,
which provides for benefits payable at death that relate to the amounts paid to
purchase Acquiring Fund shares (and not subsequently redeemed prior to death)
and to the value of Acquiring Fund shares held for the benefit of insured
persons. Anchor National Life Insurance Company charges a premium for this
coverage. For additional information regarding these additional shareholder
services, see "Account Services" in the NAF Acquired Funds Prospectuses and
"Shareholder Account Information" and "Additional Information Regarding
Purchase of Shares" in the SunAmerica Acquired Fund and Acquiring Fund
Prospectuses and Statements, respectively.
Small Accounts. The NAF Acquired Funds require that you maintain a minimum
account balance of $500, or $50 for retirement plans and other automatic
investing programs. The Sun America Acquired Fund and Acquiring Fund require
that you maintain a minimum account balance of $500, or $250 for retirement
plan
39
accounts. If your account with the SunAmerica Acquired Fund and Acquiring Fund
falls below the minimum requirement due to withdrawals, you may be asked to
purchase more shares within 60 days. If you do not take action, the Fund may
close out your account and mail you the proceeds. Alternatively, you may be
charged a $2.00 monthly charge to maintain your account with the SunAmerica
Acquired Fund or Acquiring Fund. Your account with the SunAmerica Acquired Fund
or Acquiring Fund will not be closed if its drop in value is due to performance
of the Sun America Acquired Fund or Acquiring Fund or the effects of sales
charges.
Performance
General
The following tables provide performance information for shares of the Funds
for the periods indicated. Past performance is not indicative of future
performance.
Performance information of the SunAmerica International Equity Portfolio
will survive after the Reorganizations and will be the performance history of
the Acquiring Fund. Accordingly, we present the performance comparison shown
below. Additionally, important information about the SunAmerica International
Equity Portfolio is also contained in management's discussion of the SunAmerica
International Equity Portfolio's performance contained in the Annual Report to
shareholders of SunAmerica Style Select for the year ended October 30, 2000,
which accompanies this Proxy Statement and Prospectus.
Average annual total return is determined separately for each Class in
accordance with a formula specified by the Commission. Average annual total
return is computed by finding the average annual compounded rates of return for
the 1-, 3-, 5-, and 10-year periods or for the lesser included periods of
effectiveness. The calculation assumes that:
(a) The maximum sales load (i.e., either the front-end sales load or the
CDSC that would be applicable to a complete redemption of the investment at
the end of the specified period) is deducted from the initial $1,000
purchase payment;
(b) All dividends and distributions are reinvested at net asset value;
and
(c) Complete redemption occurs at the end of the 1-, 3-, 5-, or 10-year
periods or fractional portion thereof with all nonrecurring charges
deducted accordingly.
40
Average Annual Total Returns
(Periods Ending June 30, 2001)
NAF Global Equity Fund*
---------------------------------------------
Class A Class B Class C
-------------- -------------- ---------------
Year to Date...................... -22.99% -22.66% -19.33%
One Year.......................... -37.12% -37.06% -34.36%
Three Year........................ -18.39% -18.37% -17.23%
Five Year......................... -5.08% -4.88% -4.47%
Ten Year.......................... N/A N/A 2.26%
Since Inception................... -2.01% -1.75% 2.26%
(since 4/1/94) (since 4/1/94) (since 11/1/90)
NAF International Equity Fund*
------------------------------------------------------------
Class A Class B Class C Class I
-------------- -------------- -------------- ---------------
Year to Date...... -17.10% -16.77% -13.29% -12.07%
One Year.......... -25.07% -25.10% -22.10% N/A
Three Year........ -4.87% -4.97% -3.80% N/A
Five Year......... 0.53% 0.62% 0.96% N/A
Ten Year.......... N/A N/A N/A N/A
Since Inception... 2.42% 2.73% 2.68% -21.95%
(since 1/9/95) (since 1/9/95) (since 1/9/95) (since 7/10/00)
NAF International Small Cap Fund*
--------------------------------------------
Class A Class B Class C
-------------- -------------- --------------
Year to Date....................... -27.19% -26.88% -23.77%
One Year........................... -43.35% -43.42% -41.05%
Three Year......................... -3.27% -3.47% -2.06%
Five Year.......................... 2.36% 2.41% 2.84%
Ten Year........................... N/A N/A N/A
Since Inception.................... 3.66% 3.87% 4.09%
(since 3/4/96) (since 3/4/96) (since 3/4/96)
SunAmerica International Equity Portfolio**
------------------------------------------------
Class A Class B Class II
---------------- ---------------- --------------
Year to Date................... -22.94% -22.56% -20.11%
One Year....................... -34.40% -34.36% -32.28%
Three Year..................... -7.37% -7.11% -6.47%
Five Year...................... N/A N/A N/A
Ten Year....................... N/A N/A N/A
Since Inception................ -2.58% -2.45% -2.52%
(since 11/19/96) (since 11/19/96) (since 3/6/97)
--------
* AGAM waived certain fees. Absent such waivers, the returns for the Funds
shown above would be lower.
** SAAMCo waived certain fees. Absent such waivers, the returns for the Fund
shown above would be lower.
Shareholder Rights
Shareholder rights are the same in all of the Funds. Each full share and
fractional share of a Fund entitles the shareholder to receive a proportional
interest in the respective Fund's capital gain distributions and to cast one
vote per share, with fractional shares voting proportionally, on certain Fund
matters, including the election of directors, changes in fundamental policies,
or approval of changes in the Fund's investment advisory
41
agreement. Corresponding Shares issued in the Reorganizations will be fully
paid and nonassessable and will have no preemptive rights. In the event of the
liquidation of a Fund, shareholders of such Fund are entitled to share pro rata
in the net assets of such Fund available for distribution to shareholders.
The Funds are not required to hold annual meetings and do not intend to do
so except when certain matters, such as a change in a Fund's fundamental
policies, are to be decided. In addition, shareholders representing at least
10% of all eligible votes may call a special meeting if they wish, for the
purpose of voting on the removal of any Fund trustee.
Tax Information
The tax consequences associated with an investment in shares of an Acquired
Fund are substantially the same as the tax consequences associated with an
investment in shares of the Acquiring Fund. See "Taxes" in the NAF Acquired
Funds Prospectuses and "Dividend, Distribution and Account Policies" in the
SunAmerica Acquired Fund and Acquiring Fund Prospectuses.
Portfolio Transactions
The procedures for engaging in portfolio transactions are generally the same
for the Acquired Funds and the Acquiring Fund. Each of the NAF Acquired Funds'
Subadvisers and AIGGIC may consider the nature and extent of research services
provided when brokers are selected and may cause a Fund to pay such broker-
dealer's commissions that exceed those that other broker-dealers may have
charged, if in their view the commissions are reasonable in relation to the
value of the brokerage and/or research services provided.
Portfolio Turnover
None of the Funds has placed a limit on its portfolio turnover and portfolio
changes are made when the Fund's investment adviser (or subadviser) believes
they are advisable, usually without reference to the length of time that a
security has been held.
The table below sets forth the portfolio turnover rates for the Acquired
Funds for the fiscal year ended October 31, 2000. The Acquiring Fund has been
recently created and has not yet commenced operations; consequently, it does
not have portfolio turnover figures. Some of these portfolio turnover rates
exceed 100%. A 100% portfolio turnover rate would occur if all of the
securities in the portfolio were replaced during the period. Higher portfolio
turnover rates increase the brokerage costs a Fund pays and may adversely
affect its performance. Higher portfolio turnover may also result in an
increased proportion of capital gains constituting short-term capital gains
instead of long-term capital gains. If a Fund realizes capital gains when it
sells portfolio investments, it generally must pay those gains out to
shareholders, increasing their taxable distributions. This may adversely affect
the after-tax performance of a Fund for shareholders with taxable accounts.
SunAmerica
NAF Global NAF International NAF International International
Equity Fund Equity Fund Small Cap Fund Equity Portfolio
----------- ----------------- ----------------- ----------------
207% 126% 537% 89%
Additional Information
Independent Auditors
Currently PricewaterhouseCoopers LLP serves as the independent auditors of
the Acquired Funds and Ernst & Young LLP will serve as the independent auditors
of the Acquiring Fund. If the Reorganizations are completed, it is currently
anticipated that Ernst & Young LLP will serve as the independent auditors of
the
42
Combined Fund. The principal business addresses of PricewaterhouseCoopers LLP
is 1177 Avenue of the Americas, New York, New York 10036. The principal
business address of Ernst & Young LLP is 787 Seventh Avenue, New York, New York
10019.
Custodian
State Street acts as the custodian of the assets of the Acquired Funds and
Acquiring Fund. If the Reorganizations are completed, it is currently
anticipated that State Street will continue to serve as the custodian of the
Combined Fund. The principal business address of State Street is 1776 Heritage
Drive, North Quincy, Massachusetts 02171.
Transfer Agent
Boston Financial Data Services, Inc., 66 Brooks Drive, Braintree,
Massachusetts 02184, serves as the transfer agent with respect to each NAF
Acquired Fund. State Street, 1776 Heritage Drive, North Quincy, Massachusetts
02171, serves as the transfer agent with respect to the SunAmerica Acquired
Fund and the Acquiring Fund. Transfer agent functions are performed for State
Street by National Financial Data Services, P.O. Box 219572, Kansas City,
Missouri 64121-5972, an affiliate of State Street. Each transfer agent is
responsible for the issuance, transfer and redemption of shares and the
opening, maintenance and servicing of shareholder accounts for the respective
Fund. If the Reorganizations are completed, it is currently anticipated that
State Street will continue to serve as the transfer agent of the Combined Fund.
Capital Stock
Each NAF Acquired Fund is authorized to issue an unlimited number of full
and fractional shares of beneficial interest, par value $0.001 per share,
divided into four classes designated Class A, Class B, Class C and
Institutional Class I. The SunAmerica Acquired Fund is authorized to issue
1,000,000,000 shares of common stock, par value $0.0001 per share, divided into
three classes, designated Class A, Class B and Class II. The Acquiring Fund is
authorized to issue an unlimited number of full and fractional shares of
beneficial interest, par value $0.01 per share, divided into four classes,
designated Class A, Class B, Class II and Class I. See "--Shareholder Rights"
above and "Capital Stock" in the North American Funds Statement and
"Description of Shares" in the SunAmerica Acquired Fund and Acquiring Funds
Statements for further discussion of the rights and preferences attributable to
shares of each Acquired Fund and the Acquiring Fund. See "Summary--Fee Tables
and Examples" above and "Section II: Fees and Expenses" (in the case of Class
A, Class B and Class C shares) and "Section II: Fees and Expenses of the North
American Funds--Institutional Class I Shares" (in the case of Institutional
Class I shares) in the NAF Acquired Funds Prospectuses and "Fund Highlights--
What are the Fund's Expenses?" in the SunAmerica Acquired Fund and Acquiring
Fund Prospectuses for further discussion on the expenses attributable to shares
of the NAF Acquired Funds, SunAmerica Acquired Fund and the Acquiring Fund,
respectively. See "--Terms of the Plans--Issuance and Distribution of
Corresponding Shares" for a description of the classes of Corresponding Shares
to be issued in the Reorganizations.
Each of North American Funds and SunAmerica Equity Funds is an entity of the
type commonly known as a "Massachusetts business trust." Under Massachusetts
law, shareholders of such a trust may, under certain circumstances, be held
personally liable as partners for its obligations. However, the Declaration of
Trust of each of North American Funds and SunAmerica Equity Funds contains an
express disclaimer of shareholder liability for acts or obligations of each NAF
Acquired Fund and Acquiring Fund, respectively, and provides for
indemnification and reimbursement of expenses out of that Fund's property for
any shareholder held personally liable for the obligations of that Fund. Thus,
the risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Funds themselves would be
unable to meet their obligations. Given the above limitations on shareholder
personal liability and the nature of the Funds' assets and operations, the
possibility that a Fund would be unable to meet its obligations is remote and
both North American Funds and SunAmerica Equity Funds believe that the risk of
personal liability to shareholders is
43
therefore also remote. SunAmerica Style Select is a corporation organized under
Maryland law. In contrast to the laws governing Massachusetts business trusts
as described above, there is no provision under Maryland law governing
corporations providing for shareholder liability for obligations of a
corporation.
Shareholder Inquiries
Shareholder inquiries with respect to the NAF Acquired Funds may be
addressed to each NAF Acquired Fund at 286 Congress Street, Boston,
Massachusetts 02210 or by calling toll free 1-800-872-8037. Shareholder
inquiries with respect to the SunAmerica Acquired Fund and the Acquiring Fund
may be addressed to the respective Fund at The SunAmerica Center, 733 Third
Avenue, New York, New York 10017 or by calling toll free 1-800-858-8850.
44
THE REORGANIZATIONS
General
Under each Plan, the Acquiring Fund will acquire substantially all of the
assets, and assume substantially all of the liabilities, of the Acquired Fund
solely in exchange for an equal aggregate value of Corresponding Shares of the
Acquiring Fund. Upon receipt by an Acquired Fund of Corresponding Shares, the
Acquired Fund will distribute such Corresponding Shares to its shareholders, as
described below. All issued and outstanding shares of the Acquired Funds will
be cancelled, and each NAF Acquired Fund's and the SunAmerica Acquired Fund's
existence as a separate investment portfolio of North American Funds and
SunAmerica Style Select, respectively, will be terminated as soon as
practicable following consummation of the Reorganizations.
Generally, the assets transferred by an Acquired Fund to the Acquiring Fund
will include all investments of such Acquired Fund held in its portfolio as of
the Valuation Time and all other assets of such Acquired Fund as of such time.
In the course of each Reorganization, each holder, if any, of Class A, Class
B, Class C/Class II and Institutional Class I shares of an Acquired Fund will
receive Class A, Class B, Class II and Class I Corresponding Shares,
respectively, of the Acquiring Fund. No sales charges will be imposed on the
Corresponding Shares issued in connection with the Reorganizations.
Each Acquired Fund will distribute the Corresponding Shares received by it
in connection with its Reorganization pro rata to its shareholders in exchange
for such shareholders' proportional interests in such Acquired Fund. The
Corresponding Shares received by an Acquired Fund's shareholders will have the
same aggregate net asset value as each such shareholder's interest in such
Acquired Fund as of the Valuation Time. See "--Terms of the Plans--Valuation of
Assets and Liabilities" for information concerning the calculation of net asset
value.
The Corresponding Shares will be issued at net asset value in exchange for
the net assets of an Acquired Fund having a value equal to the aggregate net
asset value of the shares of such Acquired Fund as of the Valuation Time. Thus,
the Reorganizations should not result in dilution of the net asset value of the
Acquired Funds or the Acquiring Fund immediately following consummation of the
Reorganizations. However, as a result of the Reorganizations, a shareholder of
an Acquired Fund may hold a smaller percentage of ownership in the Combined
Fund than he or she did in the Acquired Fund prior to the Reorganizations. In
addition, a shareholder of an Acquired Fund will end up with a different number
of shares compared to what he or she originally held, but the total dollar
value of shares held will remain the same.
If the shareholders of the Acquired Funds approve the Reorganizations at the
Meeting, all required regulatory approvals are obtained, and certain conditions
are either met or waived, it is expected that the Reorganizations will take
place during the fourth calendar quarter of 2001. One Reorganization is not
dependent on the consummation of any other Reorganization. If a NAF Acquired
Fund's or the SunAmerica Acquired Fund's shareholders do not approve the
respective Reorganization, the NAF Board and SunAmerica Style Select Board,
respectively, will consider other possible courses of action which may be in
the best interests of shareholders.
Terms of the Plans
The following is a summary of the significant terms of the Plans. This
summary is qualified in its entirety by reference to the Plans, forms of which
are attached hereto as Exhibits II and III.
Valuation of Assets and Liabilities
The respective assets and liabilities of the Acquired Funds and the
Acquiring Fund will be valued as of the Valuation Time. The assets in each Fund
will be valued according to the procedures set forth under "Transaction
Policies--Valuation of Shares" and "Determination of Net Asset Value" in the
Acquiring Fund
45
Prospectus and the Acquiring Fund Statement, respectively. Purchase orders for
an Acquired Fund's shares which have not been confirmed as of the Valuation
Time will be treated as assets of such Acquired Fund for purposes of the
Reorganization; redemption requests with respect to an Acquired Fund's shares
which have not settled as of the Valuation Time will be treated as liabilities
of such Acquired Fund for purposes of the respective Reorganization.
Issuance and Distribution of Corresponding Shares
On the Closing Date (as defined in the Plans), the Acquiring Fund will issue
to the respective Acquired Fund a number of full and fractional Corresponding
Shares the aggregate net asset value of which will equal the aggregate net
asset value of shares of such Acquired Fund as of the Valuation Time. Such
Acquired Fund will then distribute the Corresponding Shares received by it pro
rata to its shareholders of record as of the Valuation Time in exchange for
such shareholders' proportional interests in such Acquired Fund. Such issuance
and distribution will be done as follows: each holder, if any, of Class A,
Class B, Class C/Class II and Institutional Class I shares of an Acquired Fund
will receive Class A, Class B, Class II and Class I Corresponding Shares,
respectively, of the Acquiring Fund. The Corresponding Shares received by an
Acquired Fund's shareholder will have the same aggregate net asset value as
such shareholder's interest in such Acquired Fund as of the Valuation Time.
Expenses
All costs of the Reorganization will be borne by AIG or an affiliate
thereof, regardless of whether the Reorganizations are consummated. No portion
of the expenses of the Reorganizations will be borne directly or indirectly by
the Funds or their shareholders.
Required Approvals
The completion of each Reorganization is conditioned upon, among other
things, the receipt of certain regulatory approvals, including the receipt of
an order from the Commission pursuant to Section 17(b) of the Investment
Company Act. An application for such order has been filed with the Commission;
however, there is no assurance that it will be received.
The Declaration of Trust of North American Funds (as amended to date)
requires approval of each Reorganization by the affirmative vote of the
respective NAF Acquired Fund's shareholders representing no less than a
majority of the outstanding voting securities of that Fund, voting together as
a single class, cast at a meeting at which a quorum is present. "Majority" for
this purpose under the Investment Company Act means the lesser of (i) more than
50% of the outstanding shares of the applicable Acquired Fund and (ii) 67% or
more of the shares of that Acquired Fund represented at the Meeting if more
than 50% of such shares are represented.
As to the SunAmerica Acquired Fund, the Reorganization must be approved by a
majority of the total number of shares of the Fund outstanding and entitled to
vote on the Reorganization.
Amendments and Conditions
The Plans may be amended at any time prior to the Closing Date with respect
to any of the terms therein. The obligations of each Acquired Fund and the
Acquiring Fund pursuant to the respective Plan are subject to various
conditions, including the requisite approval of the respective Reorganization
by such Acquired Fund's shareholders, the receipt of an opinion of counsel as
to tax matters and the confirmation by the respective Acquired Fund and
Acquiring Fund of the continuing accuracy of their respective representations
and warranties contained in such Plan.
46
Termination, Postponement and Waivers
Each Plan may be terminated, and the respective Reorganization abandoned at
any time, whether before or after adoption thereof by the respective Acquired
Fund's shareholders, prior to the Closing Date or the Closing Date may be
postponed: (i) by mutual agreement of the NAF Board or SunAmerica Style Select
Board and the SunAmerica Equity Board; (ii) by an Acquired Fund if any
condition to such Acquired Fund's obligations has not been fulfilled or waived;
or (iii) by the Acquiring Fund if any condition to such Acquiring Fund's
obligations has not been fulfilled or waived.
NAF Board Considerations: Potential Benefits to Shareholders as a Result of the
Reorganizations
In approving the Reorganizations, based upon its evaluation of all relevant
information, and after meeting with counsel to the NAF Independent Trustees
regarding the legal issues involved, the NAF Board considered that, following
each Reorganization, shareholders of a NAF Acquired Fund will remain invested
in a mutual fund which has a similar, though not identical, investment
objective and investment techniques. In addition, the NAF Board considered the
following, among other things:
. The terms and conditions of the Reorganizations.
. The fact that the Acquiring Fund will assume substantially all the
liabilities of the respective Acquired Fund.
. The comparative historical performance records of the NAF Acquired Funds
and the SunAmerica International Equity Portfolio (to which the Acquiring
Fund is intended to be a successor).
. The gross and net expense ratios of the NAF Acquired Funds before the
Reorganizations, the anticipated gross and net expense ratios of the
Acquiring Fund and the estimated expense ratios of the Combined Fund on a
pro forma basis after the Reorganizations.
. The relative annual rates of advisory fees payable by the NAF Acquired
Funds and the Acquiring Fund.
. The fact that the Reorganizations would not result in material dilution
of NAF Acquired Fund shareholders' interests.
. The fact that AGAM has agreed to waive fees or reimburse expenses for the
NAF Acquired Funds, but there is no assurance that the current fee
waivers and expense reimbursements would continue after February 28,
2002.
. The fact that SAAMCo has contractually agreed to waive fees or reimburse
expenses for the Acquiring Fund.
. The investment experience, expertise and resources of SAAMCo and other
service providers to the Acquiring Fund in the areas of distribution,
investment, and shareholder services.
. The service and distribution resources available to the Acquiring Fund
and compatibility of the Funds' service features available to
shareholders.
. The fact that each Reorganization has been structured with the intention
that it qualify for Federal income tax purposes as a tax-free
reorganization under the Code.
. The fact that AIG or an affiliate thereof will bear all expenses
relating to the Reorganizations.
. The effect of the Reorganizations on NAF Acquired Fund shareholders and
the value of their interests.
. Alternatives available to NAF Acquired Fund shareholders, including the
ability to redeem their shares.
The NAF Board also identified and considered certain potential benefits to
shareholders that are likely to result from the Reorganizations. For example,
the NAF Board considered that certain fixed costs, such as printing of
prospectuses and reports sent to shareholders, legal and audit fees, and
registration fees would be
47
spread across a larger asset base. This would tend to lower the expense ratio
borne by shareholders of each NAF Acquired Fund. To illustrate potential
benefits to the NAF Acquired Funds as a result of the Reorganizations, see the
total and net operating expenses, as a percentage of net assets, for the NAF
Acquired Funds as of March 31, 2001, and the total and net operating expenses,
as a percentage of net assets, for the Combined Fund, on a pro forma basis,
assuming the Reorganizations had been completed as of such date under "Fee
Tables" above. In addition, because SunAmerica has broad distribution channels,
it is also possible that the asset base for the Combined Fund will increase
over the long term, which would tend to result in a lower overall operating
expense ratio. Of course, there is no guarantee that such an increase in asset
base would in fact occur.
Although the combined pro forma net expenses of the Acquiring Fund are
higher than those of the NAF International Equity Fund, this is after taking
into account certain fee waivers and expense reimbursements that are in place
with respect to the NAF Institutional Equity Fund through February 28, 2002.
There can be no assurance that AGAM would continue with these waivers and
reimbursements past that date.
AGAM is contractually obligated to provide the fee reductions and expense
reimbursements referenced in the above table through February 28, 2002. If
shareholders do not approve the Reorganizations, each NAF Acquired Fund will
continue with its current fee structure except that there is no assurance that
AGAM would continue to provide such fee reductions and reimbursements past this
date. If shareholders approve the Reorganizations, the Combined Fund expense
structure will apply.
In addition to the potential economies of scale which may be realized
through combination of the Funds, the NAF Board also considered the advantages
of eliminating the competition and duplication of effort inherent in marketing
funds that have similar investment objectives.
Based on the foregoing, together with other factors and information
considered to be relevant, and recognizing that there can be no assurance that
any operating efficiencies or other benefits will in fact be realized, the NAF
Board concluded that the Reorganizations present no significant risks or costs
(including legal, accounting and administrative costs) that would outweigh the
benefits discussed above. In connection with the approval of the
Reorganizations, the NAF Board also approved directed brokerage arrangements
with certain brokers to reduce the costs that might otherwise be incurred to
align the portfolios of each of the NAF Acquired Funds with that of the
Acquiring Fund to facilitate a smooth transition upon consummation of the
Reorganization. Because the NAF Acquired Funds and Acquiring Fund have
substantially similar investment objectives and similar investment strategies,
it is not anticipated that the securities held by a NAF Acquired Fund will be
sold in significant amounts in order to comply with the policies and investment
policies of the Acquiring Fund in connection with the Reorganizations. The NAF
Acquired Funds will not dispose of assets to an extent or in a manner that
would jeopardize the tax-free nature of the Reorganizations under the Code.
However, the disposition of assets by a NAF Acquired Fund may result in the
realization of taxable gains or losses by NAF Acquired Fund shareholders.
In approving the Reorganizations, the NAF Board, including all of the NAF
Independent Trustees, determined that each Reorganization is in the best
interests of the respective NAF Acquired Fund and its shareholders. In
addition, since the Corresponding Shares of the Acquiring Fund will be issued
at net asset value in exchange for the net assets of the respective NAF
Acquired Fund having a value equal to the aggregate net asset value of the
shares of the NAF Acquired Fund outstanding as of the Valuation Time (as
defined herein), the net asset value per share of each Acquiring Fund should
remain virtually unchanged solely as a result of the respective Reorganization.
Thus, the NAF Board, including all of the Independent Trustees, also determined
that the net asset value of the NAF Acquired Funds, and therefore the interests
of the NAF Acquired Fund shareholders, would not be diluted as a result of the
Reorganizations. Consequently, the NAF Board approved the Plans and directed
that the Plans be submitted to the shareholders of each respective NAF Acquired
Fund for approval.
The Board of Trustees of North American Funds unanimously recommends that
the shareholders of each NAF Acquired Fund approve the respective Plan.
Approval of the respective Plan by one NAF Acquired Fund is not contingent upon
the approval of the respective Plan by another NAF Acquired Fund.
48
SunAmerica Style Select Board Considerations: Potential Benefits to
Shareholders as a Result of the Reorganization
In approving the Reorganization, based upon their evaluation of all relevant
information, the SunAmerica Style Select Board identified and considered
certain potential benefits to shareholders that are likely to result from the
Reorganization. The SunAmerica Style Select Board also considered that because
the New SunAmerica International Equity Fund is intended to be a successor to
the SunAmerica International Equity Portfolio, shareholders will remain
invested in a mutual fund with a similar investment objective and investment
techniques. In connection with their consideration of the Reorganization with
the three NAF Acquired Funds, the SunAmerica Style Select Board also reviewed
the SunAmerica Acquired Fund's subadvisory arrangements. The Board determined
that it would be in the best interests of SunAmerica Acquired Fund shareholders
to terminate the Fund's current subadvisory arrangements with its two
unaffiliated subadvisers and determined that the Fund would be more appropriate
as a single adviser fund, rather than a multi-managed fund. Therefore, as of
September 4, 2001, SAAMCo assumed responsibility for day-to-day portfolio
management of the Fund. The Acquiring Fund will be managed by SAAMCo and
subadvised by AIGGIC, an affiliate of SAAMCo. The Board reviewed an analysis of
the performance records of AIGGIC and its investment capabilities. SAAMCo has
available to it the resources of AIGGIC. In addition, the SunAmerica Style
Select Board considered the following, among other things:
. The terms and conditions of the Reorganization.
. The gross and net expense ratios of the SunAmerica International Equity
Portfolio before the Reorganization and the estimated expense ratios of
the Combined Fund on a pro forma basis after the Reorganization.
. The lower rate of advisory fees payable by the Combined Fund.
. The fact that the Reorganization would not result in dilution of
shareholders' interests.
. SAAMCo has contractually agreed to waive fees or reimburse expenses for
the Acquiring Fund.
. SAAMCo will continue to be the Acquiring Fund's adviser.
. The investment experience, expertise and resources of AIGGIC which will
provide subadvisory services.
. The other service providers will continue in the areas of distribution,
investment, and shareholder services.
. The Reorganization has been structured with the intention that it
qualify for Federal income tax purposes as a tax-free reorganization
under the Code.
. AIG or an affiliate thereof will bear all expenses relating to the
Reorganizations.
The SunAmerica Style Select Board also identified and considered that both
the advisory fees and the total operating expenses of the SunAmerica Acquired
Fund are expected to decrease following the Reorganization. The SunAmerica
Style Select Board considered the potential for further reduced operating
expenses over time due to economies of scale, since the net assets of the
Acquiring Fund will include not only the net assets of the SunAmerica Acquired
Fund but also the amount of the net assets of each of the NAF Acquired Funds
(assuming shareholder approval). See "Proposals Nos. 2 (a)-(b): Approval of the
Plans." The SunAmerica Style Select Board considered that certain fixed costs,
such as printing of prospectuses and reports sent to shareholders, legal and
audit fees, and registration fees would be spread across a larger asset base.
This would tend to lower the expense ratio borne by shareholders of the Fund.
To illustrate potential benefits to the Fund as a result of the Reorganization,
including potential economies of scale, see the total and net operating
expenses, as a percentage of net assets, for the Fund as of March 31, 2001, and
the total and net operating expenses, as a percentage of net assets, for the
Combined Fund, on a pro forma basis, assuming the Reorganization had been
completed as of such date under "Fee Tables" above.
49
Based on the foregoing, together with other factors and information
considered to be relevant and recognizing that there can be no assurance that
any operating efficiencies or other benefits will in fact be realized, the
SunAmerica Style Select Board concluded that the Reorganization presents no
significant risks or costs (including legal, accounting and administrative
costs) that would outweigh the benefits discussed above. In connection with the
approval of the Reorganizations, the SunAmerica Style Select Board also
approved directed brokerage arrangements with certain brokers to reduce the
costs that might otherwise be incurred to align the portfolio of the Fund with
that of the Acquiring Fund to facilitate a smooth transition upon consummation
of the Reorganization. Because the SunAmerica Acquired Fund and the Acquiring
Fund have substantially the same or similar investment objectives and identical
investment strategies, it is not anticipated that the securities held by the
Fund will be sold in significant amounts in order to comply with the policies
and investment policies of the Acquiring Fund in connection with the
Reorganization. The SunAmerica Acquired Fund will not dispose of assets to an
extent or in a manner that would jeopardize the tax-free nature of the
Reorganization under the Code. However, the disposition of assets by the Fund
may result in the realization of taxable gains or losses by the Fund's
shareholders.
In approving the Reorganizations, the SunAmerica Style Select Board,
including all of the SunAmerica Independent Directors, determined that the
Reorganization is in the best interests of the SunAmerica Acquired Fund and its
shareholders. In addition, the SunAmerica Board, including all of the
SunAmerica Independent Directors, also determined that the interests of the
shareholders of each SunAmerica Acquired Fund would not be diluted as a result
of effecting the respective Reorganization, because each such shareholder will
receive Corresponding Shares of the Acquiring Fund having an aggregate net
asset value equal to the aggregate net asset value of his or her shares of the
Acquired Fund outstanding as of the Valuation Time. Consequently, the
SunAmerica Style Select Board approved the Plan and directed that the Plan be
submitted to the shareholders of the SunAmerica Acquired Fund for approval.
The Board of Directors of SunAmerica Style Select unanimously recommends
that the shareholders of the SunAmerica International Equity Portfolio approve
the Plan. Approval of the Plan by the SunAmerica Acquired Fund is not
contingent upon the approval of a Plan by any of the NAF Acquired Funds.
Net Assets of the Funds
In connection with the Boards' considerations described above of the
potential for reduced operating expenses over time due to economies of scale
expected after the Reorganization, the table below sets forth the total net
assets of each of the Acquired Funds, in each case as of April 30, 2001, as
well as the net assets of the Combined Fund, on a pro forma basis, assuming the
Reorganizations had been completed on such date. The Acquiring Fund is newly
created and has not yet commenced operations; accordingly, it had no assets as
of such date.
Total Net Assets
as of April 30, 2001
NAF Global Equity Fund SunAmerica International Pro Forma Combined Fund
Class A $ 6,020,969 Equity Fund Class A $ 56,920,066
Class B $ 5,858,867 Class A N/A Class B $ 67,505,698
Class C $12,607,863 Class B N/A Class II $ 40,282,280
Institutional Class II N/A Class I $ 19,369,329
Class I $ 0 Total N/A Total $184,077,373
Total $24,487,699
NAF International NAF International Small SunAmerica International
Equity Fund Cap Fund Equity Portfolio
Class A $ 9,488,858 Class A $ 4,974,607 Class A $36,464,673
Class B $14,225,983 Class B $ 8,182,070 Class B $ 39,279,134
Class C $ 3,772,697 Class C $ 6,050,312 Class II $40,282.2804
Institutional Institutional Total $93,629,018
Class I $19,392,021 Class I $ 0
Total $19,206,989
Total $46,879,559
50
SunAmerica Equity Board
The SunAmerica Equity Board has also approved the Plans on behalf of the
Acquiring Fund.
Federal Income Tax Consequences of the Reorganizations
General
Each Reorganization has been structured with the intention that it qualify
for Federal income tax purposes as a tax-free reorganization under Section
368(a) of the Code. This means that, in the opinion of counsel, no gain or loss
will be recognized by a shareholder of an Acquired Fund for Federal income tax
purposes as a result of a Reorganization.
As a condition to the closing of each Reorganization, each of the Acquired
Funds and the Acquiring Fund will receive an opinion of Shearman & Sterling,
counsel to the SunAmerica Acquired Fund and Acquiring Fund, substantially to
the effect that, among other things, for Federal income tax purposes, upon
consummation of a Reorganization (i) no gain or loss will be recognized by an
Acquired Fund or the Acquiring Fund as a result of its respective
Reorganization, (ii) no gain or loss will be recognized by a shareholder of an
Acquired Fund upon his or her receipt of Corresponding Shares in the respective
Reorganization solely in exchange for his or her shares of such Acquired Fund,
(iii) each Acquired Fund and the Acquiring Fund will be a "party to a
reorganization" under Section 368(b) of the Code, (iv) the holding period of
the assets of the Acquired Funds by the Acquiring Fund will include the period
during which such assets were held by the Acquired Fund, (v) the holding period
for Corresponding Shares of an Acquiring Fund received by each shareholder of
the respective Acquired Fund in exchange for his or her shares in Acquired Fund
will include the period during which such shareholder held shares of the
Acquired Fund (provided the Acquired Fund shares were held as capital assets on
the date of the exchange), and (vi) immediately after a Reorganization, the tax
basis of the Corresponding Shares received by shareholders of the respective
Acquired Fund in such Reorganization will be equal, in the aggregate, to the
tax basis of the shares of such Acquired Fund surrendered in exchange therefor.
Shearman & Sterling's opinion will be based upon certain representations made
by the parties to the Reorganizations.
An opinion of counsel does not have the effect of a private letter ruling
from the Internal Revenue Service ("IRS") and is not binding on the IRS or any
court. If a Reorganization is consummated but fails to qualify as a
reorganization within the meaning of Section 368 of the Code, the
Reorganization would be treated as a taxable sale of assets followed by a
taxable liquidation of the respective Acquired Fund, and Acquired Fund
shareholders would recognize a taxable gain or loss equal to the difference
between their basis in the Acquired Fund shares and the fair market value of
the Corresponding Shares received.
The shareholders of an International Acquired Fund may incur taxable gains
attributable to unrealized gains of another International Acquired Fund in the
year that the Acquiring Fund realizes and distributes such gains. This will be
true notwithstanding that the price of the Acquiring Fund shares reflected the
appreciation in value attributable to such unrealized gains at the time of the
Reorganizations.
To the extent that an Acquired Fund has loss carryforwards at the time of
the respective Reorganization, Acquired Fund shareholders may not be able to
benefit from such loss carryforwards after the Reorganizations.
Shareholders should consult their tax advisers regarding the effect of the
Reorganizations in light of their individual circumstances. As the foregoing
relates only to Federal income tax consequences, shareholders also should
consult their tax advisers as to the non-United States, state, local and other
tax consequences of the Reorganizations.
51
Status as a Regulated Investment Company
All Acquired Funds have elected and qualified to be taxed as regulated
investment companies under Sections 851-855 of the Code, and after the
Reorganizations, the Acquiring Fund intends to elect, qualify and continue to
qualify as regulated investment companies. An Acquired Fund's existence as a
separate investment portfolio of North American Funds or SunAmerica Style
Select will be terminated as soon as practicable following the consummation of
the applicable Reorganization.
Capitalization
The following table sets forth the capitalization of each Acquired Fund as
of April 30, 2001 and the capitalization of the Combined Fund, on a pro forma
basis, as if the Reorganizations had occurred on that date. The capitalization
of the Acquiring Fund will be the same as that of the Combined Fund upon the
Reorganization. As a newly created series of SunAmerica Equity Funds, the New
SunAmerica International Equity Fund had no assets as of such date.
CLASS A
-----------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- -----------
Total Net Assets........ $ 6,020,969 $ 9,488,858 $4,974,607 $36,464,673 $56,920,066
Shares Outstanding...... 683,465 1,133,053 367,822 3,187,045 4,975,103
Net Asset Value Per
Share.................. $ 8.81 $ 8.37 $ 13.52 $ 11.44 $ 11.44
CLASS B
-----------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- -----------
Total Net Assets........ $ 5,858,867 $14,225,983 $8,182,070 $39,279,134 $67,505,698
Shares Outstanding...... 684,919 1,734,548 635,049 3,546,279 6,093,803
Net Asset Value Per
Share.................. $ 8.55 $ 8.20 $ 12.88 $ 11.08 $ 11.08
CLASS C/II
-----------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- -----------
Total Net Assets........ $12,607,863 $ 3,772,697 $6,050,312 $17,885,211 $40,282,280
Shares Outstanding...... 1,467,680 461,350 467,502 1,614,972 3,638,194
Net Asset Value Per
Share.................. $ 8.59 $ 8.18 $ 12.94 $ 11.07 $ 11.07
INSTITUTIONAL CLASS I/I
-----------------------------------------------------------------
NAF SunAmerica
NAF International International Pro Forma
NAF Global International Small Cap Equity Combined
Equity Fund Equity Fund Fund Portfolio Fund
----------- ------------- ------------- ------------- -----------
Total Net Assets........ N/A $19,392,021 N/A N/A $19,369,329
Shares Outstanding...... N/A 2,319,337 N/A N/A 1,693,123
Net Asset Value Per
Share.................. N/A $ 8.36 N/A N/A $ 11.44
The table set forth above should not be relied upon to reflect the number of
shares to be received in the Reorganizations; the actual number of shares to be
received will depend upon the net asset value and number of shares outstanding
of each Fund at the Valuation Time.
52
IF YOU ARE A SUNAMERICA INTERNATIONAL EQUITY PORTFOLIO SHAREHOLDER, YOU MAY
SKIP TO "INFORMATION CONCERNING THE SUNAMERICA MEETING" ON P. 55
GENERAL
INFORMATION CONCERNING THE NAF MEETING
Date, Time and Place of NAF Meeting
The NAF Meeting will be held on November 7, 2001, at the principal executive
offices of the North American Funds at 286 Congress Street, Boston,
Massachusetts, 02210, at 10:00 a.m., Eastern Time.
Solicitation, Revocation and Use of Proxies
A shareholder executing and returning a proxy has the power to revoke it at
any time prior to its exercise by executing a superseding proxy (i.e., later-
dated and signed), by submitting a notice of revocation to the Secretary of
North American Funds or by subsequently registering his or her vote by
telephone or via the Internet. In addition, although mere attendance at the NAF
Meeting will not revoke a proxy, a shareholder present at the NAF Meeting may
withdraw his or her proxy and vote in person.
All shares represented by properly executed proxies received at or prior to
the NAF Meeting, unless such proxies previously have been revoked, will be
voted at the NAF Meeting in accordance with the directions on the proxies; if
no direction is indicated on a properly executed proxy, such shares will be
voted "FOR" approval of the New NAF Investment Advisory Agreement and NAF
Acquired Funds Plan.
It is not anticipated that any matters other than the approval of the New
NAF Investment Advisory Agreement and approval of the NAF Acquired Funds Plan
will be brought before the NAF Meeting. If, however, any other business
properly is brought before the NAF Meeting, proxies will be voted in accordance
with the judgment of the persons designated on such proxies.
Record Date and Outstanding Shares
Only holders of record of shares of the NAF Acquired Funds at the close of
business on September 17, 2001 (the "Record Date") are entitled to vote at the
NAF Meeting or any adjournment thereof. The following chart sets forth the
shares of each class of the NAF Acquired Funds issued and outstanding and
entitled to vote at the close of business on the Record Date.
Class A Institutional
Shares Class B Shares Class C Shares Class I Shares Total Shares
------------ -------------- -------------- -------------- --------------
NAF Global Equity Fund.. 564,992.3210 519,321.0660 1,212,626.4300 0 2,296,939.8170
NAF International Equity
Fund................... 955,880.1000 1,483,785.8720 372,042.0530 2,573,760.3380 5,385,468.3630
NAF International Small
Cap Fund............... 256,818.4400 544,576.1800 417,495.0590 0 1,218,889.6790
53
Security Ownership of Certain Beneficial Owners and Management of the NAF
Acquired Funds
To the knowledge of each Fund, as of August 31, 2001, the following
shareholders, if any, owned beneficially or of record more than 5% of the
outstanding voting securities of such Fund:
Percentage of Class
of Shares of
Combined Fund After
Percentage of Class of the Reorganization
Name and Address of Shares and Type of on a
Name of Fund Shareholder Ownership Pro Forma Basis*
------------ ------------------- ---------------------- -------------------
NAF Global Equity Fund None N/A N/A
NAF International Equity VALIC Seed Account 29.54% of Class A, 5.19% of Class A
Fund Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, Texas 77019-2142
VALIC Seed Account 16.73% of Class B, 3.54% of Class B
Attn: Greg Kingston owned of record
2919 Allen Parkway #L7-01
Houston, Texas 77019-2142
VALIC Seed Account 22.58% of Institutional 22.58% of Class I
Attn: Greg Kingston Class I, owned of record
2919 Allen Parkway #L7-01
Houston, Texas 77019-2142
Aggressive Growth Lifestyle 29.93% of Institutional 29.93% of Class I
Fund c/o VALIC Class I, owned of record
Attn: Greg Seward
2919 Allen Parkway
Houston, Texas 77019
Moderate Growth Lifestyle 26.63% of Institutional 26.63% of Class I
Fund c/o VALIC Class I, owned of record
Attn: Greg Seward
2919 Allen Parkway
Houston, Texas 77019
Conservative Growth Life Fund 10.71% of Institutional 10.71% of Class I
Attn: Greg Seward Class I, owned of record
2919 Allen Parkway
Houston, Texas 77019
NAF International Prudential FBO 7.67% of Class B, 0.87% of Class B
Small Cap Robert Freeman beneficially owned
Fund 14 Kanawha Road
Richmond, VA 23226-3308
--------
* Assuming that the value of the shareholder's interest in the Fund on the
date of consummation of the Reorganization was the same as on August 31,
2001.
At August 31, 2001, the directors and officers of North American Funds as a
group (13 persons) owned an aggregate of less than 1% of the outstanding shares
of each NAF Acquired Fund and owned an aggregate of less than 1% of the
outstanding shares of beneficial interest of North American Funds.
Voting Rights and Required Vote
Each share of a NAF Acquired Fund is entitled to one vote, with fractional
shares voting proportionally. Shareholders of each NAF Acquired Fund vote
separately on whether to approve the New NAF Investment
54
Advisory Agreement and approval with respect to one NAF Acquired Fund is not
dependent on approval with respect to any other NAF Acquired Fund. Approval of
the NAF Acquired Funds Plan with respect to each NAF Acquired Fund is not
dependent on approval of the Plan with respect to any other NAF Acquired Fund
or the SunAmerica Acquired Fund. Approval of the New NAF Investment Advisory
Agreement and the NAF Acquired Funds Plan with respect to a NAF Acquired Fund
requires the affirmative vote of a majority of the outstanding voting
securities of that Fund, voting together as a single class, cast a meeting at
which a quorum is present. "Majority" for this purpose under the Investment
Company Act means the lesser of (i) more than 50% of the outstanding shares of
the applicable NAF Acquired Fund and (ii) 67% or more of the shares of that NAF
Acquired Fund represented at the NAF Meeting if more than 50% of such shares
are represented.
Broker-dealer firms holding shares of any of the NAF Acquired Funds in
"street name" for the benefit of their customers and clients will request the
instructions of such customers and clients on how to vote their shares before
the NAF Meeting. Broker-dealer firms will not be permitted to grant voting
authority without instructions with respect to the approval of the NAF Acquired
Fund Plan. Each of the NAF Acquired Funds will include shares held of record by
broker-dealers as to which such authority has been granted in its tabulation of
the total number of shares present for purposes of determining whether the
necessary quorum of shareholders exists. Properly executed proxies that are
returned but that are marked "abstain" or with respect to which a broker-dealer
has declined to vote on any proposal ("broker non-votes") will be counted as
present for the purposes of determining a quorum. Assuming the presence of a
quorum, abstentions and broker non-votes, if any, will have the same effect as
a vote against approval of the NAF Investment Advisory Agreement or of the NAF
Acquired Funds Agreement and Plan as the case may be.
A quorum for each NAF Acquired Fund for purposes of the NAF Meeting consists
of thirty percent of the shares of such Acquired Fund entitled to vote at the
NAF Meeting, present in person or by proxy. If, by the time scheduled for the
NAF Meeting, a quorum of a NAF Acquired Fund's shareholders is not present or
if a quorum is present but sufficient votes in favor of approval of the New NAF
Investment Advisory Agreement or of the NAF Acquired Funds Plan are not
received from the shareholders of the respective NAF Acquired Fund, the persons
named as proxies may propose one or more adjournments of such NAF Meeting to
permit further solicitation of proxies from the NAF Acquired Fund's
shareholders. An affirmative vote of less than thirty percent of the shares of
the applicable NAF Acquired Fund present in person or by proxy and entitled to
vote at the session of the NAF Meeting will suffice for any such adjournment.
The persons named as proxies will vote in favor of any such adjournment if they
determine that adjournment and additional solicitation are reasonable and in
the interests of the shareholders of such NAF Acquired Fund.
The votes of shareholders of the Acquiring Fund are not being solicited by
this Proxy Statement and Prospectus and are not required to carry out the
Reorganization.
IF YOU ARE A NAF ACQUIRED FUND SHAREHOLDER YOU MAY SKIP TO "ADDITIONAL
INFORMATION" ON P. 57
INFORMATION CONCERNING THE SUNAMERICA MEETING
Date, Time and Place of SunAmerica Meeting
The SunAmerica Meeting will be held on November 7, 2001, at the principal
offices of SunAmerica Style Select Series, Inc., The SunAmerica Center, 733
Third Avenue, New York, New York 10017, at 10:00 a.m., Eastern Time.
Solicitation, Revocation and Use of Proxies
A shareholder executing and returning a proxy has the power to revoke it at
any time prior to its exercise by executing a superseding proxy (i.e., later-
dated and signed), by submitting a notice of revocation to the Secretary of
SunAmerica Style Select or by subsequently registering his or her vote by
telephone or via the Internet. In addition, although mere attendance at the
SunAmerica Meeting will not revoke a proxy, a shareholder present at the
SunAmerica Meeting may withdraw his or her proxy and vote in person.
55
All shares represented by properly executed proxies received at or prior to
the SunAmerica Meeting, unless such proxies previously have been revoked, will
be voted at the SunAmerica Meeting in accordance with the directions on the
proxies; if no direction is indicated on a properly executed proxy, such shares
will be voted "FOR" approval of the SunAmerica Acquired Fund Plan.
It is not anticipated that any matters other than the SunAmerica Acquired
Fund Plan will be brought before the SunAmerica Meeting. If, however, any other
business properly is brought before the SunAmerica Meeting, proxies will be
voted in accordance with the judgment of the persons designated on such
proxies.
Record Date and Outstanding Shares
Only holders of record of shares of the SunAmerica International Equity
Portfolio at the close of business on September 17, 2001 (the "Record Date")
are entitled to vote at the SunAmerica Meeting or any adjournment thereof. The
following chart sets forth the shares of each class of the SunAmerica
International Equity Portfolio issued and outstanding and entitled to vote at
the close of business on the Record Date.
Class A Shares Class B Shares Class II Shares
-------------- -------------- ---------------
2,861,80.041 3,296,724.650 1,540,678,069
------------ -------------- ---------------
Security Ownership of Certain Beneficial Owners and Management of the
SunAmerica International Equity Portfolio
To the knowledge of the SunAmerica International Equity Portfolio, as of
August 31, 2001, the following shareholders, if any, owned beneficially or of
record more than 5% of the outstanding voting securities of the Fund:
Percentage of Class of
Percentage of Class Shares of Combined
of Shares and Type After the Reorganization on
Name and Address of Shareholder of Ownership a Pro Forma Basis*
------------------------------- ------------------- ---------------------------
PaineWebber FBO 6.40% of Class A, 4.32% of Class A
Zurich Capital Markets owned of record
New York, New York 10005
SunAmerica, Inc. 8.46% of Class A, 5.71% of Class A
Century City, California 90067 owned of record
Merrill Lynch, Pierce, Fenner & Smith, Inc. 5.31% of Class B, 3.20% of Class B
Jacksonville, Florida 32246 owned of record
--------
* Assuming that the value of the shareholder's interest in the Fund on the
date of consummation of the Reorganization was the same as on August 31,
2001.
At August 31, 2001, the directors and officers of SunAmerica Style Select
Series, Inc. as a group (8 persons) owned an aggregate of less than 1% of the
outstanding shares of the SunAmerica International Equity Portfolio and owned
an aggregate of less than 1% of the outstanding shares of common stock of
SunAmerica Style Select Series, Inc.
At August 31, 2001, the directors and officers of SunAmerica Equity Funds as
a group (8 persons) owned an aggregate of less than 1% of the outstanding
shares of the Acquiring Fund and owned an aggregate of less than 1% of the
outstanding shares of beneficial interest of SunAmerica Equity Funds.
Prior to consummation of the Reorganization, shares of the Acquiring Fund
were held by SAAMCo as the sole initial shareholder.
Voting Rights and Required Vote
Each share of SunAmerica International Equity Portfolio is entitled to one
vote, with fractional shares voting proportionally. Approval of the SunAmerica
Acquired Fund Plan with respect to the SunAmerica International Equity
Portfolio requires a majority of the total number of shares of the Fund
outstanding and
56
entitled to vote on the SunAmerica Acquired Fund Plan. Approval of the Plan
with respect to the SunAmerica Acquired Fund is not dependent on the approval
of a Plan by any NAF Acquired Fund.
Broker-dealer firms holding shares of the SunAmerica International Equity
Portfolio in "street name" for the benefit of their customers and clients will
request the instructions of such customers and clients on how to vote their
shares before the SunAmerica Meeting. Broker-dealer firms will not be permitted
to grant voting authority without instructions with respect to the approval of
the SunAmerica Acquired Fund Plan. The SunAmerica International Equity
Portfolio will include shares held of record by broker-dealers as to which such
authority has been granted in its tabulation of the total number of shares
present for purposes of determining whether the necessary quorum of
shareholders exists. Properly executed proxies that are returned but that are
marked "abstain" or broker non-votes will be counted as present for the
purposes of determining a quorum. Assuming the presence of a quorum,
abstentions and broker non-votes will have the same effect as a vote against
approval of the SunAmerica Acquired Fund Plan.
A quorum for the SunAmerica International Equity Portfolio consists of the
presence in person or by proxy of shareholders entitled to cast a majority of
all votes entitled to be cast at the SunAmerica Meeting. If, by the time
scheduled for the SunAmerica Meeting, a quorum of the SunAmerica International
Equity Portfolio's shareholders is not present or if a quorum is present but
sufficient votes in favor of approval of the SunAmerica Acquired Fund Plan are
not received from the shareholders of the Fund, the persons named as proxies
may propose one or more adjournments of such SunAmerica Meeting to permit
further solicitation of proxies from shareholders. Any such adjournment will
require the affirmative vote of the shares of the SunAmerica International
Equity Portfolio present in person or by proxy and entitled to vote at the
session of the SunAmerica Meeting to be adjourned. The persons named as proxies
will vote in favor of any such adjournment if they determine that adjournment
and additional solicitation are reasonable and in the interests of the
shareholders of the SunAmerica International Equity Portfolio.
The votes of shareholders of the Acquiring Fund are not being solicited by
this Proxy Statement and Prospectus and are not required to carry out the
Reorganization.
ADDITIONAL INFORMATION
ALL SHAREHOLDERS
The expenses of preparation, printing and mailing of the enclosed form of
proxy, the accompanying Notice and this Proxy Statement and Prospectus will be
borne by AIG or an affiliate thereof. Such expenses are currently estimated to
be approximately $250,000 in the aggregate.
AIG or an affiliate thereof will reimburse banks, brokers and others for
their reasonable expenses in forwarding proxy solicitation materials to
beneficial owners of the Acquired Funds and will reimburse certain officers or
employees that it may employ for their reasonable expenses in assisting in the
solicitation of proxies from such beneficial owners.
In order to obtain the necessary quorums at the Meetings, supplementary
solicitation may be made by mail, telephone, telegraph or personal interview by
officers of the Acquired Funds. North American Funds has retained Georgeson
Shareholder, 17 State Street, 27th Floor, New York, New York 10004 to aid in
the solicitation of proxies at a cost estimated not to exceed $2,800, plus out-
of-pocket expenses. SunAmerica Style Select Series, Inc. has retained Georgeson
Shareholder to aid in the solicitation of proxies at a cost estimated not to
exceed $9,500. The cost of soliciting proxies will be borne by AIG or an
affiliate thereof.
This Proxy Statement and Prospectus does not contain all of the information
set forth in the registration statements and the exhibits relating thereto
which North American Funds, SunAmerica Style Select Series, Inc. and SunAmerica
Equity Funds have filed on behalf of their respective Funds with the Commission
under the Securities Act and the Investment Company Act, to which reference is
hereby made.
57
The Funds are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the Investment Company Act, and in
accordance therewith are required to file reports and other information with
the Commission. Proxy material, reports and other information filed by the
Funds (or by North American Funds on behalf of the NAF Acquired Funds,
SunAmerica Style Select Series, Inc. on behalf of the SunAmerica Acquired Fund
or SunAmerica Equity Funds on behalf of the Acquiring Fund) can be inspected
and copied at the public reference facilities maintained by the Commission at
450 Fifth Street, N.W. Washington, D.C. 20549. Copies of such materials also
may be obtained by mail from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a web
site (http://www.sec.gov) that contains the Statements of Additional
Information and Prospectuses of the Acquired Funds and Acquiring Fund, as well
as other material incorporated by reference and other information regarding the
Funds.
LEGAL PROCEEDINGS
There are no material legal proceedings to which any of the Funds is a
party.
LEGAL OPINIONS
Certain legal matters in connection with the issuance of Corresponding
Shares have been passed upon by Robert M. Zakem, Esq., General Counsel for
SAAMCo. Certain tax matters in connection with the Reorganizations will be
passed upon for the Funds by Shearman & Sterling, 599 Lexington Avenue, New
York, New York 10022, counsel for the SunAmerica Acquired Fund and the
Acquiring Fund.
EXPERTS
The financial highlights and reports of the Acquired Funds incorporated by
reference into this Proxy Statement and Prospectus, have been so included in
reliance on the reports of PricewaterhouseCoopers LLP, independent auditors of
the Acquired Funds, given on their authority as experts in auditing and
accounting. The principal business address of PricewaterhouseCoopers LLP is
1177 Avenue of the Americas, New York, New York 10036. The independent auditors
of the Acquiring Fund are Ernst & Young LLP. The principal business address of
Ernst & Young is 787 Seventh Avenue, New York, New York 10019.
SHAREHOLDER PROPOSALS
A shareholder proposal intended to be presented at any subsequent meeting of
shareholders of an Acquired Fund must be received by such Acquired Fund in a
reasonable time before the solicitation by the respective Board relating to
such meeting is to be made in order to be considered in such Acquired Fund's
proxy statement and form of proxy relating to the meeting. If Proposals Nos.
2(a)-(b) are approved at the NAF Meeting, there will likely not be any future
shareholder meetings of the NAF and SunAmerica Acquired Funds, respectively.
By Order of the Board of Trustees of By Order of the Board of Directors
North American Funds of SunAmerica Style Select Series,
Inc.
/s/ John I. Fitzgerald /s/ Robert M. Zakem,
Secretary, North American Funds Secretary, SunAmerica Style Select
Series, Inc.
58
EXHIBIT I
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT made as of this day of , 2001,
between NORTH AMERICAN FUNDS, a Massachusetts business trust (the "Trust"), and
AMERICAN GENERAL ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"). In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. APPOINTMENT OF ADVISER
The Trust hereby appoints the Adviser, subject to the supervision of the
Trustees of the Trust and the terms of this Agreement, as the investment
adviser for each of the portfolios of the Trust specified in Appendix A to this
Agreement (the "Funds"). The Adviser accepts such appointment and agrees to
render the services and to assume the obligations set forth in this Agreement
commencing on its effective date. The Adviser will be an independent contractor
and will have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent unless expressly authorized in this Agreement or
another writing by the Trust and Adviser.
2. DUTIES OF THE ADVISER
a. Subject to the general supervision of the Trustees of the Trust and
the terms of this Agreement, the Adviser will at its own expense select,
contract with, and compensate investment subadvisers ("Subadvisers") to
manage the investments and determine the composition of the assets of the
Funds; provided, that any contract with a Subadviser (the "Subadvisory
Agreement") shall be in compliance with and approved as required by the
Investment Company Act of 1940, as amended ("Investment Company Act").
Subject always to the direction and control of the Trustees of the Trust,
the Adviser will monitor compliance of each Subadviser with the investment
objectives and related investment policies, as set forth in the Trust's
registration statement as filed with the Securities and Exchange
Commission, of any Fund or Funds under the management of such Subadviser,
and review and report to the Trustees of the Trust on the performance of
such Subadviser.
b. The Adviser will oversee the administration of all aspects of the
Trust's business and affairs and in that connection will furnish to the
Trust the following services:
(1) Office and Other Facilities. The Adviser shall furnish to the Trust
office space in the offices of the Adviser or in such other place as may be
agreed upon by the parties hereto from time to time and such other office
facilities, utilities and office equipment as are necessary for the Trust's
operations.
(2) Trustees and Officers. The Adviser agrees to permit individuals who
are directors, officers or employees of the Adviser to serve (if duly
elected or appointed) as Trustees or President, Vice President, Treasurer
or Secretary of the Trust, without remuneration from or other cost to the
Trust.
(3) Other Personnel. The Adviser shall furnish to the Trust, at the
Trust's expense, any other personnel necessary for the operations of the
Trust.
(4) Financial, Accounting, and Administrative Services. The Adviser
shall maintain the existence and records of the Trust; maintain the
registrations and qualifications of Trust shares under federal and state
law; and perform all administrative, financial, accounting, bookkeeping and
recordkeeping functions of the Trust except for any such functions that may
be performed by a third party pursuant to a custodian, transfer agency or
service agreement executed by the Trust. The Trust shall reimburse the
Adviser for its expenses associated with all such services, including the
compensation and related personnel expenses and expenses of office space,
office equipment, utilities and miscellaneous office expenses, except any
such expenses directly attributable to officers or employees of the Adviser
who are serving as President, Vice President, Treasurer or Secretary of the
Trust. The Adviser shall determine the expenses to be reimbursed by the
Trust pursuant to expense allocation procedures established by the Adviser
in accordance with generally accepted accounting principles.
I-1
(5) Liaisons with Agents. The Adviser, at its own expense, shall
maintain liaison with the various agents and other persons employed by the
Trust (including the Trust's transfer agent, custodian, independent
accountants and legal counsel) and assist in the coordination of their
activities on behalf of the Trust. Fees and expenses of such agents and
other persons will be paid by the Trust.
(6) Reports to Trust. The Adviser shall furnish to or place at the
disposal of the Trust such information, reports, valuations, analyses and
opinions as the Trust may, at any time or from time to time, reasonably
request or as the Adviser may deem helpful to the Trust, provided that the
expenses associated with any such materials furnished by the Adviser at the
request of the Trust shall be borne by the Trust.
(7) Reports and Other Communications to Trust Shareholders. The Adviser
shall assist the Trust in developing (but not pay for) all general
shareholder communications including regular shareholder reports.
3. EXPENSES ASSUMED BY THE TRUST
In addition to paying the advisory fee provided for in Section 4, the Trust
will pay all expenses of its organization, operations and business not
specifically assumed or agreed to be paid by the Adviser as provided in this
Agreement, by a Subadviser as provided in a Subadvisory Agreement, or by the
Distributor as provided in the Distribution Agreement. Without limiting the
generality of the foregoing, the Trust, in addition to certain expenses
described in Section 2 above, shall pay or arrange for the payment of the
following:
a. Custody and Accounting Services. All expenses of the transfer,
receipt, safekeeping, servicing and accounting for the Trust's cash,
securities, and other property, including all charges of depositories,
custodians and other agents, if any;
b. Shareholder Servicing. All expenses of maintaining and servicing
shareholder accounts, including all charges of the Trust's transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other
agents, if any;
c. Shareholder Communications. All expenses of preparing, setting in
type, printing, and distributing reports and other communications to
shareholders;
d. Shareholder Meetings. All expenses incidental to holding meetings of
Trust shareholders, including the printing of notices and proxy material,
and proxy solicitation therefor;
e. Prospectuses. All expenses of preparing, setting in type, and
printing of annual or more frequent revisions of the Trust's prospectus and
statement of additional information and any supplements thereto and of
mailing them to shareholders;
f. Pricing. All expenses of computing the net asset value per share for
each of the Funds, including the cost of any equipment or services used for
obtaining price quotations and valuing its investment portfolio;
g. Communication Equipment. All charges for equipment or services used
for communication between the Adviser or the Trust and the custodian,
transfer agent or any other agent selected by the Trust;
h. Legal and Accounting Fees and Expenses. All charges for services and
expenses of the Trust's legal counsel and independent auditors;
i. Trustees and Officers. Except as expressly provided otherwise in
paragraph 2.b.(2), all compensation of Trustees and officers, all expenses
incurred in connection with the service of Trustees and officers, and all
expenses of meetings of the Trustees and Committees of Trustees;
j. Federal Registration Fees. All fees and expenses of registering and
maintaining the registration of the Trust under the Investment Company Act
and the registration of the Trust's shares under the Securities Act of
1933, as amended (the "1933 Act"), including all fees and expenses incurred
in connection with the preparation, setting in type, printing and filing of
any registration statement and prospectus under the 1933 Act or the
Investment Company Act, and any amendments or supplements that may be made
from time to time;
I-2
k. State Registration Fees. All fees and expenses of qualifying and
maintaining qualification of the Trust and of the Trust's shares for sale
under securities laws of various states or jurisdictions, and of
registration and qualification of the Trust under all other laws applicable
to the Trust or its business activities (including registering the Trust as
a broker-dealer, or any officer of the Trust or any person as agent or
salesman of the Trust in any state);
l. Issue and Redemption of Trust Shares. All expenses incurred in
connection with the issue, redemption, and transfer of Trust shares,
including the expense of confirming all share transactions, and of
preparing and transmitting certificates for shares of beneficial interest
in the Trust;
m. Bonding and Insurance. All expenses of bond, liability and other
insurance coverage required by law or regulation or deemed advisable by the
Trust's Trustees including, without limitation, such bond, liability and
other insurance expense that may from time to time be allocated to the
Trust in a manner approved by its Trustees;
n. Brokerage Commissions. All brokers' commissions and other charges
incident to the purchase, sale, or lending of the Trust's portfolio
securities;
o. Taxes. All taxes or governmental fees payable by or with respect to
the Trust to federal, state, or other governmental agencies, domestic or
foreign, including stamp or other transfer taxes, and all expenses incurred
in the preparation of tax returns;
p. Trade Association Fees. All fees, dues, and other expenses incurred
in connection with the Trust's membership in any trade association or other
investment organization; and
q. Nonrecurring and Extraordinary Expenses. Such nonrecurring expenses
as may arise, including the costs of actions, suits, or proceedings to
which the Trust is, or is threatened to be made, a party and the expenses
the Trust may incur as a result of its legal obligation to provide
indemnification to its Trustees, officers, agents and shareholders.
4. COMPENSATION OF ADVISER
The Adviser will pay the Subadviser with respect to each Fund the
compensation specified in Appendix A to this Agreement (the "Compensation").
5. NON-EXCLUSIVITY
The services of the Adviser to the Trust are not to be deemed to be
exclusive, and the Adviser shall be free to render investment advisory or other
services to others (including other investment companies) and to engage in
other activities. It is understood and agreed that the directors, officers, and
employees of the Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors, trustees or employees of any other firm or
corporation, including other investment companies.
6. SUPPLEMENTAL ARRANGEMENTS
The Adviser may enter into arrangements with other persons affiliated with
the Adviser to better enable it to fulfill its obligations under this Agreement
for the provision of certain personnel and facilities to the Adviser.
7. CONFLICTS OF INTEREST
It is understood that Trustees, officers, agents and shareholders of the
Trust are or may be interested in the Adviser as directors, officers,
stockholders, or otherwise; that directors, officers, agents and stockholders
of the Adviser are or may be interested in the Trust as Trustees, officers,
shareholders or otherwise; that the Adviser may be interested in the Trust; and
that the existence of any such dual interest shall not affect the validity
hereof or of any transactions hereunder except as otherwise provided in the
Agreement and Declaration of Trust of the Trust and the Articles of
Incorporation of the Adviser, respectively, or by specific provision of
applicable law.
I-3
8. REGULATION
The Adviser shall submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
information, reports or other material which any such body by reason of this
Agreement may request or require pursuant to applicable laws and regulations.
The Adviser will comply in all material respects with Rule 17j-1 under the
Investment Company Act.
9. DURATION AND TERMINATION OF AGREEMENT
Unless sooner terminated, this Agreement will continue in effect for a
period more than two years from the date of its execution only so long as such
continuance is specifically approved at least annually either by the Trustees
of the Trust or by a majority of the outstanding voting securities of each of
the Portfolios, provided that in either event such continuance shall also be
approved by the vote of a majority of the Trustees of the Trust who are not
interested persons (as defined in the Investment Company Act) of any party to
this Agreement cast in person at a meeting called for the purpose of voting on
such approval.
This Agreement may be terminated at any time, without the payment of any
penalty, by the Trustees of the Trust, by the vote of a majority of the
outstanding voting securities of the Trust, or with respect to any Fund by the
vote of a majority of the outstanding voting securities of such Fund, on sixty
days' written notice to the Adviser, or by the Adviser on sixty days' written
notice to the Trust. This Agreement will automatically terminate, without the
payment of any penalty, in the event of its assignment (as defined in the
Investment Company Act).
10. PROVISION OF CERTAIN INFORMATION BY ADVISER
The Adviser will promptly notify the Trust in writing of the occurrence of
any of the following events:
a. the Adviser fails to be registered as an investment adviser under the
Investment Advisers Act or under the laws of any jurisdiction in which the
Adviser is required to be registered as an investment adviser in order to
perform its obligations under this Agreement;
b. the Adviser is served or otherwise receives notice of any action,
suit, proceeding, inquiry or investigation, at law or in equity, before or
by any court, public board or body, involving the affairs of the Trust; and
c. the chief executive officer or controlling stockholder of the Adviser
or the portfolio manager of any Fund changes.
11. AMENDMENTS TO THE AGREEMENT
This Agreement may be amended by the parties only if such amendment is
specifically approved by the vote of a majority of the outstanding voting
securities of each of the Funds affected by the amendment and by the vote of a
majority of the Trustees of the Trust who are not interested persons of any
party to this Agreement cast in person at a meeting called for the purpose of
voting on such approval. The required shareholder approval shall be effective
with respect to any Fund if a majority of the outstanding voting securities of
the series of shares of that Fund vote to approve the amendment,
notwithstanding that the amendment may not have been approved by a majority of
the outstanding voting securities of (a) any other Fund affected by the
amendment or (b) all the Funds of the Trust.
12. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement of the
parties.
13. HEADINGS
The headings in the sections of this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
I-4
14. NOTICES
All notices required to be given pursuant to this Agreement shall be
delivered or mailed to the last known business address of the Trust or Adviser
in person or by registered mail or a private mail or delivery service providing
the sender with notice of receipt. Notice shall be deemed given on the date
delivered or mailed in accordance with this section.
15. SEVERABILITY
Should any portion of this Agreement for any reason be held to be void in
law or in equity, the Agreement shall be construed, insofar as is possible, as
if such portion had never been contained herein.
16. GOVERNING LAW
The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of The Commonwealth of Massachusetts, or any of the
applicable provisions of the Investment Company Act. To the extent that the
laws of The Commonwealth of Massachusetts, or any of the provisions in this
Agreement, con-flict with applicable provisions of the Investment Company Act,
the latter shall control.
17. LIMITATION OF LIABILITY
The Declaration of Trust establishing the Trust, dated September 29, 1988,
as amended and restated February 18, 1994, a copy of which, together with all
amendments thereto (the "Declaration"), is on file in the office of the
Secretary of The Commonwealth of Massachusetts, provides that the name "North
American Funds" refers to the Trustees under the Declaration collectively as
Trustees, but not as individuals or personally; and no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal
liability, nor shall resort be had to their private property, for the
satisfaction of any obligation or claim, in connection with the affairs of the
Trust or any Fund thereof, but only the assets belonging to the Trust, or to
the particular Fund with which the obligee or claimant dealt, shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers as of the date first
mentioned above.
North American Funds
By:
---------------------------------
American General Asset Management
Corp.
By:
---------------------------------
I-5
EXHIBIT II
Agreement and Plan of Reorganization
Dated as of September 28, 2001
Table of Contents
Page No.
--------
1.Defined Terms; Sections and Exhibits; Miscellaneous Terms........... 1
a.Definitions....................................................... 1
b.Use of Defined Terms.............................................. 4
c.Sections and Exhibits............................................. 4
d.Miscellaneous Terms............................................... 4
2.The Reorganization.................................................. 4
a.Transfer of Assets................................................ 4
b.Assumption of Liabilities......................................... 4
c.Issuance and Valuation of Corresponding Shares in the
Reorganization..................................................... 4
d.Distribution of Corresponding Shares to the Acquired Fund
Shareholders....................................................... 4
e.Interest; Proceeds................................................ 5
f.Valuation Time.................................................... 5
g.Evidence of Transfer.............................................. 5
h.Termination....................................................... 5
3.Representations and Warranties of the Acquired Fund................. 5
a.Formation and Qualification....................................... 5
b.Licenses.......................................................... 5
c.Authority......................................................... 6
d.Financial Statements.............................................. 6
e.Semi-Annual Report to Shareholders................................ 6
f.Prospectus and Statement of Additional Information................ 6
g.Litigation........................................................ 6
h.Material Contracts................................................ 6
i.No Conflict....................................................... 6
j.Undisclosed Liabilities........................................... 7
k.Taxes............................................................. 7
l.Assets............................................................ 7
m.Consents.......................................................... 7
n.N-14 Registration Statement....................................... 7
o.Capitalization.................................................... 7
p.Books and Records................................................. 7
4.Representations and Warranties of the Acquiring Fund................ 8
a.Formation and Qualification....................................... 8
b.Licenses.......................................................... 8
c.Authority......................................................... 8
d.Prospectuses and Statements of Additional Information............. 8
e.Litigation........................................................ 8
f.Material Contracts................................................ 8
g.No Conflict....................................................... 9
h.Consents.......................................................... 9
i.N-14 Registration Statement....................................... 9
j.Capitalization.................................................... 9
k.Corresponding Shares.............................................. 9
5.Covenants of the Acquired Fund and the Acquiring Fund............... 9
a.Special Shareholders' Meeting..................................... 9
b.Unaudited Financial Statements.................................... 10
c.Share Ledger Records of the Acquiring Fund........................ 10
d.Conduct of Business............................................... 10
e.Termination of the Acquired Fund.................................. 10
i
Page No.
--------
f.Filing of N-14 Registration Statement............................. 10
g.Corresponding Shares.............................................. 10
h.Tax Returns....................................................... 10
i.Combined Proxy Statement and Prospectus Mailing................... 10
j.Confirmation of Tax Basis......................................... 11
k.Shareholder List.................................................. 11
l.New Series........................................................ 11
6.Closing Date........................................................ 11
7.Conditions of the Acquired Fund..................................... 11
a.Representations and Warranties.................................... 11
b.Performance....................................................... 11
c.Shareholder Approval.............................................. 11
d.Approval of Board of Trustees..................................... 11
e.Deliveries by the Acquiring Fund.................................. 12
f.Absence of Litigation............................................. 12
g.Proceedings and Documents......................................... 12
h.N-14 Registration Statement; Acquiring Fund Post-Effective
Amendment.......................................................... 13
i.Compliance with Laws; No Adverse Action or Decision............... 13
j.Commission Orders or Interpretations.............................. 13
8.Conditions of the Acquiring Fund.................................... 13
a.Representations and Warranties.................................... 13
b.Performance....................................................... 13
c.Shareholder Approval.............................................. 13
d.Approval of Board of Directors.................................... 13
e.Deliveries by the Acquired Fund................................... 13
f.No Material Adverse Change........................................ 14
g.Absence of Litigation............................................. 14
h.Proceedings and Documents......................................... 14
i.N-l4 Registration Statement; Acquiring Fund Post-Effective
Amendment.......................................................... 14
j.Compliance with Laws; No Adverse Action or Decision............... 14
k.Commission Orders or Interpretations.............................. 14
l.Dividends......................................................... 14
9.Termination, Postponement and Waivers............................... 14
a.Termination of Agreement.......................................... 14
b.Commission Order.................................................. 15
c.Effect of Termination............................................. 15
d.Waivers; Non-Material Changes..................................... 15
10.Survival of Representations and Warranties......................... 15
11.Other Matters...................................................... 16
a.Obligations under Massachusetts Law............................... 16
b.Further Assurances................................................ 16
c.Notices........................................................... 16
d.Entire Agreement.................................................. 16
e.Amendment......................................................... 16
f.Governing Law..................................................... 17
g.Assignment........................................................ 17
h.Costs of the Reorganization....................................... 17
i.Severability...................................................... 17
j.Headings.......................................................... 17
k.Counterparts...................................................... 17
ii
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
the 28th day of September 2001, by and between SUNAMERICA STYLE SELECT SERIES
INC., a Maryland corporation, on behalf of the Acquired Fund (as defined
herein), and SUNAMERICA EQUITY FUNDS, a Massachusetts business trust, on behalf
of the Acquiring Fund (as defined herein), a separate investment portfolio of
SunAmerica Equity Funds.
PLAN OF REORGANIZATION
WHEREAS, this Agreement constitutes an agreement and plan of reorganization
between SunAmerica Style Select Series, Inc. on behalf of its separate
investment portfolio (the "Acquired Fund") and SunAmerica Equity Funds on
behalf of its separate investment portfolio (the "Acquiring Fund") set forth
below:
Acquired Fund: Acquiring Fund:
-------------- ---------------
International Equity Portfolio (the "Style
Select Series International Equity
Portfolio")................................... International Equity Fund (the
"International Equity Fund")
WHEREAS, the Acquired Fund owns securities that generally are assets of the
character in which the Acquiring Fund is permitted to invest;
WHEREAS, the reorganization will consist of (i) the acquisition of the
Acquired Fund's Assets (as defined herein), and assumption of the Acquired
Fund's Assumed Liabilities (as defined herein), by the Acquiring Fund solely in
exchange for an aggregate value of newly issued shares of beneficial interest,
$.01 par value per share, of the Acquiring Fund (the "Shares"), equal to the
net asset value of the Acquired Fund's Assets determined in accordance with
Section 2(c) hereof, and (ii) the subsequent distribution by the Acquired Fund
of the Shares to its shareholders in liquidation of the Acquired Fund, all upon
and subject to the terms hereinafter set forth (the "Reorganization");
WHEREAS, in the course of the Reorganization, Shares of the Acquiring Fund
will be issued to the Acquired Fund and distributed to the shareholders thereof
as follows: each holder, if any, of Class A, Class B and Class II Shares of the
Acquired Fund will be entitled to receive Class A, Class B and Class II Shares,
respectively (the "Corresponding Shares"), of the Acquiring Fund on the Closing
Date (as defined herein);
WHEREAS, the aggregate net asset value of the Corresponding Shares to be
received by each shareholder of the Acquired Fund will equal the aggregate net
asset value of the Acquired Fund shares owned by such shareholder as of the
Valuation Time (as defined herein); and
WHEREAS, it is intended that the Reorganization described herein shall be a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and any successor provision and the
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368(a) of the Code.
AGREEMENT
NOW, THEREFORE, in order to consummate the Reorganization and in
consideration of the premises and the covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, the
Acquired Fund and the Acquiring Fund hereby agree as follows:
1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.
a. Definitions. As used herein the following terms have the following
respective meanings:
"Acquired Fund" has the meaning ascribed thereto under the heading "Plan
of Reorganization." For purposes of this Agreement, the term "Acquired
Fund" shall refer to the Style Select Series International Equity
Portfolio.
"Acquiring Fund" has the meaning ascribed thereto under the heading
"Plan of Reorganization." For purposes of this Agreement, the term
"Acquiring Fund" shall refer to International Equity Fund.
"Acquiring Fund Post-Effective Amendment" has the meaning ascribed
thereto in Section 5(l) hereof.
"Agreement" has the meaning ascribed thereto in the introduction hereof.
"Assets" has the meaning ascribed thereto in Section 2(a) hereof. For
purposes of this Agreement, the term "Assets" shall refer to Assets of the
Style Select Series International Equity Portfolio.
"Assumed Liabilities" has the meaning ascribed thereto in Section 2(b)
hereof. For purposes of this Agreement, the term "Assumed Liabilities"
shall refer to the Assumed Liabilities of the Style Select Series
International Equity Portfolio.
"Closing Date" has the meaning ascribed thereto in Section 6 hereof.
"Code" has the meaning ascribed thereto under the heading "Plan of
Reorganization."
"Commission" shall mean the Securities and Exchange Commission.
"Corresponding Shares" has the meaning ascribed thereto under the
heading "Plan of Reorganization." For purposes of this Agreement, the term
"Corresponding Shares" shall refer to the Corresponding Shares of the
International Equity Fund.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Governmental Authority" shall mean any governmental or quasi-
governmental authority, including, without limitation, any Federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body, department
or other instrumentality or political unit or subdivision, whether domestic
or foreign.
"International Equity Portfolio" has the meaning ascribed thereto under
the heading "Plan of Reorganization."
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investments" shall mean, with respect to any Person, (i) the
investments of such Person shown on the schedule of its investments as of
the date set forth therein, with such additions thereto and deletions
therefrom as may have arisen in the course of such Person's business up to
such date; and (ii) all other assets owned by such Person or liabilities
incurred as of such date.
"Licenses" has the meaning ascribed thereto in Section 3(b) hereof.
"Lien" shall mean any security agreement, financing statement (whether
or not filed), mortgage, lien (statutory or otherwise), charge, pledge,
hypothecation, conditional sales agreement, adverse claim, title retention
agreement or other security interest, encumbrance, restriction, deed of
trust, indenture, option, limitation, exception to or other title defect in
or on any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale, lease, consignment
or bailment given for security purposes, trust receipt or other title
retention agreement with respect to any property or asset of such Person,
whether direct, indirect, accrued or contingent.
"Majority Shareholder Vote" shall mean a majority of the total number of
shares of the Style Select Series International Equity Portfolio
outstanding and entitled to vote on the Reorganization.
"Material Adverse Effect" shall mean, with respect to any Person, any
event, circumstance or condition that, individually or when aggregated with
all other similar events, circumstances or conditions could reasonably be
expected to have, or has had, a material adverse effect on: (i) the
business, property, operations, condition (financial or otherwise), results
of operations or prospects of such Person or (ii) the ability of such
Person to consummate the transactions contemplated hereunder in the manner
contemplated hereby, other than, in each case, any change relating to the
economy or securities markets in general.
2
"N-14 Registration Statement" has the meaning ascribed thereto in
Section 3(n) hereof.
"Permitted Liens" shall mean, with respect to any Person, any Lien
arising by reason of (i) taxes, assessments, governmental charges or claims
that are either not yet delinquent, or being contested in good faith for
which adequate reserves have been recorded, (ii) the Federal or state
securities laws, and (iii) imperfections of title or encumbrances as do not
materially detract from the value or use of the Assets or materially affect
title thereto.
"Person" shall mean any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"Reorganization" has the meaning ascribed thereto in the third paragraph
under the heading "Plan of Reorganization" hereof.
"RICs" has the meaning ascribed thereto in Section 3(b) hereof.
"Rule 17a-8(a)" shall mean Rule 17a-8(a) under the Investment Company
Act.
"S&S" shall mean Shearman & Sterling, counsel to SunAmerica Style Select
Series, Inc. and SunAmerica Equity Funds.
"Section 17 Order" shall mean an order obtained from the Commission
pursuant to Section 17(b) of the Investment Company Act to exempt
consummation of a Reorganization from the prohibitions of Section 17(a) of
such Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"Style Select Series International Equity Portfolio" has the meaning
ascribed thereto under the heading "Plan of Reorganization."
"Style Select Series International Equity Portfolio Reorganization"
consists of (i) the acquisition of the Style Select Series International
Equity Portfolio's Assets, and assumption of the Style Select Series
International Equity Portfolio's Assumed Liabilities, by the International
Equity Fund solely in exchange for an aggregate value of Corresponding
Shares of the International Equity Fund, equal to the net asset value of
the Style Select Series International Portfolio's Assets determined in
accordance with Section 2(c) hereof, and (ii) the subsequent distribution
by the Style Select Series International Equity Portfolio of such
Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the Style Select Series International Equity
Portfolio in liquidation of the Style Select Series International Equity
Portfolio.
"SunAmerica Equity Funds Declaration of Trust" shall mean the
Declaration of Trust of SunAmerica Equity Funds, dated as of June 18, 1986,
as amended from time to time.
"SunAmerica Equity Funds Prospectuses" shall mean the preliminary
prospectus relating to SunAmerica Equity Funds, dated January 29, 2001, in
the case of Class A, Class B and Class II Shares, and the Prospectus
contained in the Acquiring Fund Post-Effective Amendment in the case of
Class I Shares.
"SunAmerica Equity Funds Statements of Additional Information" shall
mean the statement of additional information relating to the Acquiring
Fund, dated January 29, 2001, in the case of Class A, Class B and Class II
Shares, and the preliminary statement of additional information contained
in the Acquiring Fund Post-Effective Amendment in the case of Class I
Shares.
"SunAmerica Style Select Series, Inc. Articles of Incorporation" shall
mean the Articles of Incorporation of SunAmerica Style Select Series, Inc.
dated as of July 3, 1996, as amended from time to time.
3
"SunAmerica Style Select Series, Inc. Prospectuses" shall mean the
prospectus relating to the Acquired Fund, dated February 28, 2001 in the
case of Class A, Class B and Class II Shares, and the prospectus contained
in the Acquiring Fund Post-Effective Amendment in the case of Class I
Shares, in each case as amended or supplemented.
"SunAmerica Style Select Series, Inc. Statement of Additional
Information" shall mean the statement of additional information relating to
the Acquiring Fund, dated February 28, 2001, in the case of Class A, Class
B and Class II Shares, and the statement of additional information
contained in the Acquiring Fund Post-Effective Amendment in the case of
Class I Shares, in each case as amended or supplemented.
"Valuation Time" has the meaning ascribed thereto in Section 2(f)
hereof.
b. Use of Defined Terms. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
c. Sections and Exhibits. References in this Agreement to Sections, Exhibits
and Schedules are to Sections, Exhibits and Schedules of and to this Agreement.
The Exhibits and Schedules to this Agreement are hereby incorporated herein by
this reference as if fully set forth herein.
d. Miscellaneous Terms. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause where such terms may appear. The term
"including" shall mean "including, but not limited to."
2. The Reorganization.
a. Transfer of Assets. Subject to receiving the requisite approval of the
shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquired Fund shall convey, transfer
and deliver to the Acquiring Fund, and the Acquiring Fund shall purchase,
acquire and accept from the Acquired Fund, free and clear of all Liens (other
than Permitted Liens), all of the property and assets (including cash,
securities, commodities, interests in futures and dividends, any deferred or
prepaid expenses and interest accrued on debt instruments, in each case as of
the Valuation Time) owned by the Acquired Fund (such assets are collectively
referred to herein as the "Assets").
b. Assumption of Liabilities. Subject to receiving the requisite approval of
the shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquiring Fund will assume and agree
to pay, perform and discharge when due all of the obligations and liabilities
of the Acquired Fund then existing, whether absolute, accrued, contingent or
otherwise (such liabilities are collectively referred to herein as the "Assumed
Liabilities").
c. Issuance and Valuation of Corresponding Shares in the
Reorganization. Full Corresponding Shares, and to the extent necessary, a
fractional Corresponding Share, of an aggregate net asset value equal to the
net asset value of the Assets (after deducting the Assumed Liabilities)
acquired by the Acquiring Fund hereunder, determined as hereinafter provided
shall be issued by the Acquiring Fund to the Acquired Fund in exchange for such
Assets. The net asset value of the Acquired Fund's Assets and the Acquiring
Fund's Corresponding Shares shall be determined in accordance with the
procedures described in the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statements of Additional Information as of the
Valuation Time. Such valuation and determination shall be made by the Acquiring
Fund in cooperation with the Acquired Fund.
d. Distribution of Corresponding Shares to the Acquired Fund Shareholders.
Pursuant to this Agreement, as soon as practicable after the Valuation Time,
the Acquired Fund will distribute all
4
Corresponding Shares received by it from the Acquiring Fund in connection with
the Reorganization to its shareholders in proportion to such shareholders'
interest in the Acquired Fund. Such distribution shall be accomplished by the
opening of shareholder accounts on the share ledger records of the Acquiring
Fund in the amounts due the shareholders of the Acquired Fund based on their
respective holdings in the Acquired Fund as of the Valuation Time.
e. Interest; Proceeds. The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any interest or proceeds it receives on or after the Closing
Date with respect to its Assets.
f. Valuation Time.
i. The Valuation Time shall be the close of the New York Stock Exchange
(generally 4:00 P.M., New York time) on November 9, 2001, or such earlier
or later day and time as may be mutually agreed upon in writing between the
parties hereto (the "Valuation Time").
ii. In the event that at the Valuation Time (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted; or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Valuation Time shall be postponed until the close of the
New York Stock Exchange on the first business day after the day when
trading shall have been fully resumed and reporting shall have been
restored.
g. Evidence of Transfer. The Acquiring Fund and the Acquired Fund will
jointly file any instrument as may be required by the State of Maryland to
effect the transfer of the Assets to the Acquiring Fund.
h. Termination. The Acquired Fund's existence as a separate investment
portfolio of SunAmerica Style Select Series, Inc. will be terminated as soon as
practicable following the consummation of the Reorganization by making any
required filings with the Secretary of State of Maryland, as provided in
Section 5(e) hereof.
3. Representations and Warranties of the Acquired Fund.
The Acquired Fund represents and warrants to the Acquiring Fund as follows:
a. Formation and Qualification. The Acquired Fund is a separate investment
portfolio of SunAmerica Style Select Series, Inc., a corporation duly
organized, validly existing and in good standing in conformity with the laws of
Maryland, and the Acquired Fund has all requisite power and authority to own
all of its properties or assets and carry on its business as presently
conducted. SunAmerica Style Select Series, Inc. is duly qualified, registered
or licensed to do business and is in good standing in each jurisdiction in
which the ownership of its properties or assets or the character of its present
operations makes such qualification, registration or licensing necessary,
except where the failure to so qualify or be in good standing would not have a
Material Adverse Effect on the Acquired Fund.
b. Licenses. The Acquired Fund (or SunAmerica Style Select Series, Inc. on
behalf of the Acquired Fund) holds all permits, consents, registrations,
certificates, authorizations and other approvals (collectively, "Licenses")
required for the conduct of its business as now being conducted; all such
Licenses are in full force and effect and no suspension or cancellation of any
of them is pending or threatened; and none of such Licenses will be affected by
the consummation of the transactions contemplated by this Agreement in a manner
that would have a Material Adverse Effect on the Acquired Fund. SunAmerica
Style Select Series, Inc. is duly registered under the Investment Company Act
as an open-end management investment company (File No. 811-04708), and such
registration has not been suspended, revoked or rescinded and is in full force
and effect. The Acquired Fund has elected and qualified for the special tax
treatment afforded regulated investment companies ("RICs") under Sections 851-
855 of the Code at all times since its inception and intends to continue to so
qualify for its current taxable year.
5
c. Authority. SunAmerica Style Select Series, Inc., on behalf of the
Acquired Fund, has full power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of the Acquired Fund and no other proceedings on the part of
SunAmerica Style Select Series, Inc. or the Acquired Fund are necessary to
authorize this Agreement or the consummation of the transactions contemplated
hereby, except for the approval of the Acquired Fund shareholders as provided
in Section 7(c) hereof. This Agreement has been duly and validly executed by
SunAmerica Style Select Series, Inc., on behalf of the Acquired Fund, and,
subject to receipt of the requisite shareholder approval, and assuming due
authorization, execution and delivery of this Agreement by the Acquiring Fund,
this Agreement constitutes a legal, valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and the remedy of specific
performance and injunctive and other forms of equitable relief.
d. Financial Statements. The Acquiring Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquired Fund, each as of October 31, 2000, said
financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly
present in all material respects the financial position of the Acquired Fund as
of the dates and for the periods referred to therein and in conformity with
generally accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Shareholders. The Acquiring Fund has been furnished
with the Acquired Fund's Semi-Annual Report to Shareholders for the six months
ended April 30, 2001, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquired
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. Prospectuses and Statement of Additional Information. The Acquiring Fund
has been furnished with the SunAmerica Style Select Series, Inc. Prospectuses
and the SunAmerica Style Select Series, Inc. Statement of Additional
Information, and insofar as they relate to the Acquired Fund, said Prospectuses
and Statement of Additional Information do not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquired Fund,
threatened against the Acquired Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquired Fund. The Acquired Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquired Fund.
h. Material Contracts. There are no material contracts outstanding to which
SunAmerica Style Select Series, Inc. on behalf of the Acquired Fund is a party
that have not been disclosed in the N-14 Registration Statement, the SunAmerica
Style Select Series, Inc. Prospectuses or the SunAmerica Style Select Series,
Inc. Statement of Additional Information.
i. No Conflict. The execution and delivery of this Agreement by SunAmerica
Style Select Series, Inc. on behalf of the Acquired Fund and the consummation
of the transactions contemplated hereby will not contravene or constitute a
default under or violation of (i) SunAmerica Style Select Series, Inc. Articles
of Incorporation or by-laws, each as amended, supplemented and in effect as of
the date hereof, (ii) any agreement or contract (or require the consent of any
Person under any agreement or contract that has not been obtained) to which
6
SunAmerica Style Select Series, Inc. on behalf of the Acquired Fund is a party
or to which its assets or properties are subject, or (iii) any judgment,
injunction, order or decree, or other instrument binding upon the Acquired Fund
or any of its assets or properties, except where such contravention, default or
violation would not have a Material Adverse Effect on the Acquired Fund.
j. Undisclosed Liabilities. The Acquired Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business since April 30, 2001, and those incurred in connection with the
Reorganization.
k. Taxes. The Acquired Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquired Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquired Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Assets. The Acquired Fund has good and marketable title to the Assets,
free and clear of all Liens, except for Permitted Liens. The Acquired Fund is
the direct sole and exclusive owner of the Assets. At the Closing Date, upon
consummation of the transactions contemplated hereby, the Acquiring Fund will
have good and marketable title to the Assets, free and clear of all Liens,
except for Permitted Liens.
m. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquired Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), (ii) a Majority Shareholder Vote, and
(iii) if necessary, receipt of a Section 17 Order.
n. N-14 Registration Statement. The registration statement filed, or to be
filed, by SunAmerica Equity Funds on Form N-14 relating to the Corresponding
Shares to be issued pursuant to this Agreement, which includes the proxy
statement of the Acquired Fund and the prospectus of the Acquiring Fund with
respect to the transactions contemplated hereby, and any preliminary supplement
or amendment thereto or to the documents therein, on the effective date of the
N-14 Registration Statement, at the time of the shareholders' meeting referred
to in Section 5(a) hereof and on the Closing Date, insofar as it relates to the
Acquired Fund (i) complied, or will comply, as the case may be, in all material
respects, with the applicable provisions of the Securities Act, the Exchange
Act and the Investment Company Act and the rules and regulations promulgated
thereunder, and (ii) did not, or will not, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
o. Capitalization. Under the Articles of Incorporation SunAmerica Style
Select Series, Inc., the Acquired Fund is authorized to issue an 1,000,000,000
of full and fractional Shares of common stock, par value $0.0001 per share, of
which 100,000,000 unissued shares have been designated as the Acquired Fund and
have been divided into four classes designated Class A, Class B, Class II and
Class Z Shares. All issued and outstanding shares of the Acquired Fund are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B Shares of the Acquired
Fund to automatically convert to Class A Shares of the Acquired Fund eight
years after the purchase thereof, or (ii) in connection with any automatic
dividend reinvestment plan available to the Acquired Fund shareholders, there
are no options warrants, subscriptions, calls or other rights, agreements or
commitments obligating the Acquired Fund to issue any of its shares or
securities convertible into its shares.
p. Books and Records. The books and records of the Acquired Fund made
available to the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect to the
operations of the Acquired Fund.
7
4. Representations and Warranties of the Acquiring Fund.
The Acquiring Fund represents and warrants to the Acquired Fund as follows:
a. Formation and Qualification. The Acquiring Fund is a separate investment
portfolio of SunAmerica Equity Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquiring Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. SunAmerica Equity Funds is duly qualified, registered or licensed as
a foreign corporation to do business and is in good standing in each
jurisdiction in which the ownership of its properties or assets or the
character of its present operations makes such qualification, registration or
licensing necessary, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect on the Acquiring Fund. The
Acquiring Fund has not yet commenced operations, and the only shares issued
have been to an initial seed investor.
b. Licenses. The Acquiring Fund (or SunAmerica Equity Funds on behalf of the
Acquiring Fund) holds all Licenses required for the conduct of its business as
now being conducted; all such Licenses are in full force and effect and no
suspension or cancellation of any of them is pending or threatened; and none of
such Licenses will be affected by the consummation of the transactions
contemplated by this Agreement in a manner that would have a Material Adverse
Effect on the Acquiring Fund. SunAmerica Equity Funds is duly registered under
the Investment Company Act as an open-end management investment company (File
No. 811-4801), and such registration has not been revoked or rescinded and is
in full force and effect. The Acquiring Fund intends to qualify for the special
tax treatment afforded to RICs under Sections 851-855 of the Code from and
after consummation of the Reorganization.
c. Authority. SunAmerica Equity Funds, on behalf of the Acquiring Fund, has
full power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on the part of
the Acquiring Fund and no other proceedings on the part of the Acquiring Fund
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed by SunAmerica Equity Funds, on behalf of the Acquiring Fund, and
assuming due authorization, execution and delivery of this Agreement by the
Acquired Fund, this Agreement constitutes a legal, valid and binding obligation
of the Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto and the remedy of
specific performance and injunctive and other forms of equitable relief.
d. Prospectuses and Statements of Additional Information. The Acquired Fund
has been furnished with the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statements of Additional Information, and insofar as
they relate to the Acquiring Fund, said Prospectuses and Statements of
Additional Information do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
e. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquiring Fund,
threatened against the Acquiring Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquiring Fund.
f. Material Contracts. There are no material contracts outstanding to which
SunAmerica Equity Funds on behalf of the Acquiring Fund is a party that have
not been disclosed in the N-14 Registration Statement, the SunAmerica Equity
Funds Prospectuses, or the SunAmerica Equity Funds Statement of Additional
Information.
8
g. No Conflict. The execution and delivery of this Agreement by SunAmerica
Equity Funds on behalf of the Acquiring Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) the SunAmerica Equity Funds Declaration of Trust or
by-laws, each as amended, supplemented and in effect as of the date hereof,
(ii) any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which SunAmerica Equity
Funds on behalf of the Acquiring Fund is a party or to which its assets or
properties are subject, or (iii) any judgment, injunction, order or decree, or
other instrument binding upon the Acquiring Fund or any of its assets or
properties, except where such contravention, default or violation would not
have a Material Adverse Effect on the Acquiring Fund.
h. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquiring Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act, or
state securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico) and (ii) if necessary, receipt of a
Section 17 Order.
i. N-14 Registration Statement. The N-14 Registration Statement, on its
effective date, at the time of the shareholders' meeting referred to in Section
5(a) hereof and on the Closing Date, insofar as it relates to the Acquiring
Fund (i) complied, or will comply, as the case may be, in all material
respects, with the applicable provisions of the Securities Act, the Exchange
Act and the Investment Company Act and the rules and regulations promulgated
thereunder, and (ii) did not, or will not, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
j. Capitalization. Under the Declaration of Trust of SunAmerica Equity
Funds, the Acquiring Fund is authorized to issue an unlimited number of full
and fractional shares of beneficial interest, par value $0.01 per share,
divided into four classes, designated Class A, Class B, Class II and Class I.
All issued and outstanding shares of the Acquiring Fund (if any) are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B Shares of the Acquiring
Fund to automatically convert to Class A Shares of the Acquiring Fund
approximately eight years after the purchase thereof or (ii) in connection with
any automatic dividend reinvestment plan available to the Acquiring Fund
shareholders, there are no options, warrants, subscriptions, calls or other
rights, agreements or commitments obligating the Acquiring Fund to issue any of
its shares or securities convertible into its shares.
k. Corresponding Shares.
i. The Corresponding Shares to be issued by the Acquiring Fund to the
Acquired Fund and subsequently distributed by the Acquired Fund to its
shareholders as provided in this Agreement have been duly and validly
authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and nonassessable and
will have full voting rights, and no shareholder of the Acquiring Fund will
have any preemptive right of subscription or purchase in respect thereof.
ii. At or prior to the Closing Date, the Corresponding Shares to be
issued by the Acquiring Fund to the Acquired Fund on the Closing Date will
be duly qualified for offering to the public in all states of the United
States in which the sale of shares of the Acquiring Fund presently are
qualified, and there are a sufficient number of such shares registered
under the Securities Act, the Investment Company Act and with each
pertinent state securities commission to permit the Reorganization to be
consummated.
5. Covenants of the Acquired Fund and the Acquiring Fund.
a. Special Shareholders' Meeting. The Acquired Fund agrees to call a special
meeting of its shareholders to be held as soon as practicable after the
effective date of the N-14 Registration Statement for the purpose of
considering the Reorganization as described in this Agreement and to take all
other action necessary to obtain shareholder approval of the transactions
contemplated herein.
9
b. Unaudited Financial Statements.
(i) The Acquired Fund hereby agrees to furnish or cause its agents to
furnish to the Acquiring Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and
liabilities of the Acquired Fund with values determined in accordance with
Section 2(c) hereof and an unaudited Schedule of Investments of the
Acquired Fund (including the respective dates and costs of acquisition
thereof), each as of the Valuation Time. Such unaudited financial
statements will fairly present in all material respects the financial
position of the Acquired Fund as of the dates and for the periods referred
to therein and in conformity with generally accepted accounting principles
applied on a consistent basis.
(ii) The Acquiring Fund hereby agrees to furnish or cause its agents to
furnish to the Acquired Fund, at or prior to the Closing Date, for the
purpose of determining the number of Corresponding Shares to be issued by
the Acquiring Fund to the Acquired Fund pursuant to Section 2(c) hereof, an
accurate, correct and complete unaudited statement of assets and
liabilities of the Acquiring Fund with values determined in accordance with
Section 2(c) hereof and an unaudited schedule of Investments of the
Acquiring Fund (including the respective dates and costs of acquisition
thereof), each as of the Valuation Time. Such unaudited financial
statements will fairly present in all material respects the financial
position of the Acquiring Fund of Portfolio as of the dates and for the
periods referred to therein and in conformity with generally accepted
accounting principles applied on a consistent basis.
c. Share Ledger Records of the Acquiring Fund. The Acquiring Fund agrees, as
soon as practicable after the Valuation Time, to open shareholder accounts on
its share ledger records for the shareholders of the Acquired Fund in
connection with the distribution of Corresponding Shares by the Acquired Fund
to such shareholders in accordance with Section 2(d) hereof.
d. Conduct of Business. The Acquired Fund covenants and agrees to operate
its business in the ordinary course as presently conducted between the date
hereof and the Closing Date, it being understood that such ordinary course of
business will include customary dividends and distributions.
e. Termination of the Acquired Fund. SunAmerica Style Select Series, Inc.
agrees that as soon as practicable following the consummation of the
Reorganization, it will terminate the existence of the Acquired Fund in
accordance with the laws of Maryland and any other applicable law.
f. Filing of N-14 Registration Statement. SunAmerica Equity Funds, on behalf
of the Acquiring Fund, will file or cause its agents to file the N-14
Registration Statement with the Commission and will use its best efforts to
cause the N-14 Registration Statement to become effective as promptly as
practicable after the filing thereof. The Acquired Fund and the Acquiring Fund
agree to cooperate fully with each other, and each will furnish to the other
the information relating to itself to be set forth in the N-14 Registration
Statement as required by the Securities Act, the Exchange Act, the Investment
Company Act, and the rules and regulations thereunder and the state securities
or blue sky laws (if applicable).
g. Corresponding Shares. The Acquired Fund will not sell or otherwise
dispose of any of the Corresponding Shares to be received by it from the
Acquiring Fund in connection with the Reorganization, except in distribution to
the shareholders of the Acquired Fund in accordance with the terms hereof.
h. Tax Returns. The Acquired Fund agrees that by the Closing Date all of its
Federal and other tax returns and reports required to be filed on or before
such date shall have been filed and all taxes shown as due on said returns
either shall have been paid or adequate liability reserves shall have been
provided for the payment of such taxes.
i. Combined Proxy Statement and Prospectus Mailing. The Acquired Fund agrees
to mail to its shareholders of record entitled to vote at the special meeting
of shareholders at which action is to be considered
10
regarding this Agreement, in sufficient time to comply with requirements as to
notice thereof, a combined Proxy Statement and Prospectus which complies in all
material respects (except as to information therein relating to the Acquiring
Fund) with the applicable provisions of Section 14(a) of the Exchange Act and
Section 20(a) of the Investment Company Act, and the rules and regulations
promulgated thereunder.
j. Confirmation of Tax Basis. The Acquired Fund will deliver to the
Acquiring Fund on the Closing Date confirmations or other adequate evidence as
to the tax basis of each of the Assets delivered to the Acquiring Fund
hereunder.
k. Shareholder List. As soon as practicable after the close of business on
the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list
of the names and addresses of all of the shareholders of record of the Acquired
Fund on the Closing Date and the number of shares of the Acquired Fund owned by
each such shareholder as of such date, certified to the best of its knowledge
and belief by the transfer agent or by SunAmerica Style Select Series, Inc. on
behalf of the Acquired Fund.
l. New Series. SunAmerica Equity Funds, on behalf of the Acquiring Fund,
shall cause a post-effective amendment to its Registration Statement on Form N-
1A (the "Acquiring Fund Post-Effective Amendment") to be filed with the
Commission in a timely fashion to register the shares of the Acquiring Fund for
sale under the Securities Act prior to the Closing Date.
6. Closing Date.
The closing of the transactions contemplated by this Agreement shall be at
the offices of Shearman & Sterling, 599 Lexington Avenue, New York, NY 10022
after the close of the New York Stock Exchange on November 9, 2001, or at such
other place, time and date agreed to by the Acquired Fund and the Acquiring
Fund. The date and time upon which such closing is to take place shall be
referred to herein as the "Closing Date." To the extent that any Assets, for
any reason, are not transferable on the Closing Date, the Acquired Fund shall
cause such Assets to be transferred to the Acquiring Fund's custody account
with State Street Bank and Trust Company at the earliest practicable date
thereafter.
7. Conditions of the Acquired Fund.
The obligations of the Acquired Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquired Fund only and, other than with respect to the condition set
forth in Section 7(c) hereof, may be waived, in whole or in part, by the
Acquired Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquiring Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date all
with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
b. Performance. The Acquiring Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Trustees. This Agreement shall have been adopted and
the Reorganization shall have been approved by the Board of Trustees of
SunAmerica Equity Funds, on behalf of the Acquiring Fund, including a majority
of the Directors who are not "interested persons" of SunAmerica Style Select
Series, Inc.
11
or SunAmerica Equity Funds as defined in Section 2(a)(19) of the Investment
Company Act, which shall have found, as required by Rule 17a-8(a), that (i)
participation in the Reorganization is in the best interests of the Acquiring
Fund and (ii) the interests of the existing shareholders of the Acquiring Fund
will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquiring Fund. At or prior to the Closing Date, the
Acquiring Fund shall deliver to the Acquired Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquired Fund, executed by the President (or a Vice President) of
SunAmerica Equity Funds on behalf of the Acquiring Fund, dated as of the
Closing Date, certifying that the conditions specified in Sections 7(a),
(b), (d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquiring Fund required by
Section 5(b)(ii) hereof; and
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquired Fund, to the effect that, for Federal income tax purposes, (i)
the transfer of the Assets to the Acquiring Fund in return solely for the
Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
assuming that such transfer, issuance and assumption qualifies as a
reorganization within the meaning of Section 368(a) of the Code, the
Acquired Fund and the Acquiring Fund will each be deemed to be a "party to
a reorganization" within the meaning of Section 368(b) of the Code; (ii) in
accordance with Sections 357 and 361 of the Code, no gain or loss will be
recognized to the Acquired Fund as a result of the Asset transfer solely in
return for the Corresponding Shares and the assumption by the Acquiring
Fund of the Assumed Liabilities or on the distribution (whether actual or
constructive) of the Corresponding Shares to the Acquired Fund shareholders
as provided for in the Agreement; (iii) under Section 1032 of the Code, no
gain or loss will be recognized to the Acquiring Fund on the receipt
(whether actual or constructive) of the Assets in return for the
Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement; (iv) in accordance
with Section 354(a)(1) of the Code, no gain or loss will be recognized to
the shareholders of the Acquired Fund on the receipt of Corresponding
Shares in return for their shares of the Acquired Fund; (v) in accordance
with Section 362(b) of the Code, the tax basis of the Assets in the hands
of the Acquiring Fund will be the same as the tax basis of such Assets in
the hands of the Acquired Fund immediately prior to the consummation of the
Reorganization; (vi) in accordance with Section 358 of the Code,
immediately after the Reorganization, the tax basis of the Corresponding
Shares received (whether actually or constructively) by the shareholders of
the Acquired Fund in the Reorganization will be equal, in the aggregate, to
the tax basis of the shares of the Acquired Fund surrendered in return
therefor; (vii) in accordance with Section 1223 of the Code, a
shareholder's holding period for the Corresponding Shares will be
determined by including the period for which such shareholder held the
shares of the Acquired Fund exchanged therefor, provided that the Acquired
Fund shares were held as a capital asset; (viii) in accordance with Section
1223 of the Code, the Acquiring Fund's holding period with respect to the
Assets acquired by it will include the period for which such Assets were
held by the Acquired Fund; and (ix) in accordance with Section 381(a) of
the Code and regulations thereunder, the Acquiring Fund will succeed to and
take into account certain tax attributes of the Acquired Fund, subject to
applicable limitations, such as earnings and profits, capital loss
carryovers and method of accounting.
f. Absence of Litigation. There shall not be pending before any Governmental
Authority any material litigation with respect to the matters contemplated by
this Agreement.
g. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquired Fund and its counsel, and the
Acquired Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquired Fund
or its counsel may reasonably request.
12
h. N-14 Registration Statement; Acquiring Fund Post-Effective Amendment. The
N-14 Registration Statement and Acquiring Fund Post-Effective Amendment each
shall have become effective under the Securities Act, and no stop order
suspending such effectiveness shall have been instituted or, to the knowledge
of the Acquiring Fund or the Acquired Fund, contemplated by the Commission.
i. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this
Agreement, the Reorganization or the consummation of any of the transactions
contemplated hereby and thereby; (ii) the Commission shall not have issued an
unfavorable advisory report under Section 25(b) of the Investment Company Act,
nor instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment
Company Act, and (iii) no other legal, administrative or other proceeding shall
be instituted or threatened by any Governmental Authority which would
materially affect the financial condition of the Acquiring Fund or that seeks
to restrain, enjoin, prevent, materially delay, prohibit or otherwise make
illegal the performance of this Agreement, the Reorganization or the
consummation of any of the transactions contemplated hereby or thereby.
j. Commission Orders or Interpretations. The Acquired Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquired Fund deems reasonably necessary or
desirable under the Securities Act and the Investment Company Act in connection
with the Reorganization; provided that such counsel shall have requested such
orders or interpretations as promptly as practicable, and all such orders shall
be in full force and effect.
8. Conditions of the Acquiring Fund.
The obligations of the Acquiring Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquiring Fund only and, other than with respect to the condition set
forth in Section 8(c) hereof, may be waived, in whole or in part, by the
Acquiring Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquired Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date all
with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
b. Performance. The Acquired Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Directors. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Directors of
SunAmerica Style Select Series, Inc., on behalf of the Acquired Fund, including
a majority of the Directors who are not "interested persons" of SunAmerica
Style Select Series, Inc. or SunAmerica Equity Funds within the meaning of
Section 2(a)(19) of the Investment Company Act, which shall have found, as
required by Rule 17a-8(a), that (i) participation in the Reorganization is in
the best interests of the Acquired Fund and (ii) the interests of the existing
shareholders of the Acquired Fund will not be diluted as a result of the
Reorganization.
e. Deliveries by the Acquired Fund. At or prior to the Closing Date, the
Acquired Fund shall deliver to the Acquiring Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquiring Fund, executed by the President (or a Vice President) of
SunAmerica Style Select Series, Inc. on behalf of the Acquired Fund,
13
dated as of the Closing Date, certifying that the conditions specified in
Sections 8(a), (b), (c), (d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquired Fund required by
Section 5(b)(i) hereof; and
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquiring Fund, with respect to the matters specified in Section
7(e)(iii) hereof.
f. No Material Adverse Change. There shall have occurred no material
adverse change in the financial position of the Acquired Fund since April 30,
2001 other than changes in its portfolio securities since that date, changes
in the market value of its portfolio securities or changes in connection with
the payment of the Acquired Fund's customary operating expenses, each in the
ordinary course of business. The Acquired Fund reserves the right to sell any
of its portfolio securities in the ordinary course of business, but will not,
without the prior written consent of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the Acquiring
Fund is permitted to invest.
g. Absence of Litigation. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident
thereto, shall be reasonably satisfactory to the Acquiring Fund and its
counsel, and the Acquiring Fund and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Acquiring Fund or its counsel may reasonably request.
i. N-l4 Registration Statement; Acquiring Fund Post-Effective
Amendment. The N-14 Registration Statement and Acquiring Fund Post-Effective
Amendment each shall have become effective under the Securities Act, and no
stop order suspending such effectiveness shall have been instituted or, to the
knowledge of the Acquired Fund or the Acquiring Fund, contemplated by the
Commission.
j. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of
this Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby and thereby; (ii) the Commission shall not
have issued an unfavorable advisory report under Section 25(b) of the
Investment Company Act, nor instituted or threatened to institute any
proceeding seeking to enjoin consummation of the Reorganization under Section
25(c) of the Investment Company Act, and (iii) no other legal, administrative
or other proceeding shall be instituted or threatened by any Governmental
Authority which would materially affect the financial condition of the
Acquired Fund or that seeks to restrain, enjoin, prevent, materially delay,
prohibit or otherwise make illegal the performance of this Agreement, the
Reorganization or the consummation of any of the transactions contemplated
hereby or thereby.
k. Commission Orders or Interpretations. The Acquiring Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquiring Fund, deems reasonably necessary
or desirable under the Securities Act and the Investment Company Act in
connection with the Reorganization; provided that such counsel shall have
requested such orders or interpretations as promptly as practicable, and all
such orders shall be in full force and effect.
l. Dividends. [intentionally left blank]
9. Termination, Postponement and Waivers.
a. Termination of Agreement. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 10 hereof, this Agreement may be
terminated and the Reorganization abandoned at any time
14
(whether before or after approval thereof by the shareholders of the Acquired
Fund) prior to the Closing Date, or the Closing Date may be postponed, by
notice in writing prior to the Closing Date:
i. by the Acquired Fund or the Acquiring Fund if:
(1) the Board of Directors of SunAmerica Style Select Series, Inc.
and the Board of Trustees of SunAmerica Equity Funds so mutually agree
in writing; or
(2) any Governmental Authority of competent jurisdiction shall have
issued any judgment, injunction, order, ruling or decree or taken any
other action restraining, enjoining or otherwise prohibiting this
Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby or thereby and such judgment,
injunction, order, ruling, decree or other action becomes final and
non-appealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 9(a)(i)(3) shall have used its
reasonable best efforts to have such judgment, injunction, order,
ruling, decree or other action lifted, vacated or denied;
ii. by the Acquired Fund if any condition of the Acquired Fund's
obligations set forth in Section 7 of this Agreement has not been fulfilled
or waived by it; or
iii. by the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 8 of this Agreement has not been fulfilled
or waived by it.
b. Commission Order. If any order or orders of the Commission with respect
to this Agreement, the Reorganization or any of the transactions contemplated
hereby or thereby shall be issued prior to the Closing Date and shall impose
any terms or conditions which are determined by action of the Board of
Directors of SunAmerica Style Select Series, Inc. and the Board of Trustees of
SunAmerica Equity Funds to be acceptable, such terms and conditions shall be
binding as if a part of this Agreement without further vote or approval of the
shareholders of the Acquired Fund, unless such terms and conditions shall
result in a change in the method of computing the number of Corresponding
Shares to be issued by the Acquiring Fund to the Acquired Fund in which event,
unless such terms and conditions shall have been included in the proxy
solicitation materials furnished to the shareholders of the Acquired Fund prior
to the meeting at which the Reorganization shall have been approved, this
Agreement shall not be consummated and shall terminate unless the Acquired Fund
promptly shall call a special meeting of shareholders at which such conditions
so imposed shall be submitted for approval and the requisite approval of such
conditions shall be obtained.
c. Effect of Termination. In the event of termination of this Agreement
pursuant to the provisions hereof, the same shall become null and void and have
no further force or effect, and there shall not be any liability on the part of
either the Acquired Fund or the Acquiring Fund, SunAmerica Style Select Series,
Inc. or SunAmerica Equity Funds, or Persons who are their directors, trustees,
officers, agents or shareholders in respect of this Agreement.
d. Waivers; Non-Material Changes. At any time prior to the Closing Date, any
of the terms or conditions of this Agreement may be waived by the party that is
entitled to the benefit thereof if such action or waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of such party on behalf of which such action is taken. In
addition, each party has delegated to its investment adviser the ability to
make non-material changes to this Agreement if such investment adviser deems it
to be in the best interests of the Acquired Fund or Acquiring Fund for which it
serves as investment adviser to do so.
10. Survival of Representations and Warranties.
The respective representations and warranties contained in Sections 3 and 4
hereof shall expire with, and be terminated by, the consummation of the
Reorganization, and neither the Acquired Fund nor the Acquiring Fund nor any of
their officers, trustees, agents or shareholders shall have any liability with
respect to such representations or warranties after the Closing Date. This
provision shall not protect any officer, trustee or agent of the Acquired Fund
or the Acquiring Fund, or of SunAmerica Style Select Series, Inc. or SunAmerica
Equity
15
Funds against any liability to the entity for which such Person serves in such
capacity, or to its shareholders, to which such Person would be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties in the conduct of such office.
11. Other Matters.
a. Obligations under Massachusetts Law. Copies of the SunAmerica Equity
Funds Declaration of Trust are on file with the Secretary of State of the
Commonwealth of Massachusetts and notice is hereby given that this instrument
is executed on behalf of the Trustees of SunAmerica Equity Funds on behalf of
the Acquiring Fund, as trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of the trustees,
officers and employees of SunAmerica Equity Funds individually, but are binding
solely upon the assets and property of the Acquiring Fund, respectively.
b. Further Assurances. Each party hereto covenants and agrees to provide the
other party hereto and its agents and counsel with any and all documentation,
information, assistance and cooperation that may become necessary from time to
time with respect to the transactions contemplated by this Agreement.
c. Notices. Any notice, report or other communication hereunder shall be in
writing and shall be given to the Person entitled thereto by hand delivery,
prepaid certified mail or overnight service, addressed to the Acquired Fund or
the Acquiring Fund, as applicable, at the address set forth below. If the
notice is sent by certified mail, it shall be deemed to have been given to the
Person entitled thereto upon receipt and if the notice is sent by overnight
service, it shall be deemed to have been given to the Person entitled thereto
one (1) business day after it was deposited with the courier service for
delivery to that Person. Notice of any change in any address listed below also
shall be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived by the party entitled to
receive such notice.
If to the Acquired Fund, to: SunAmerica Style Select Series, Inc.
733 Third Avenue, Third Floor
New York, NY 1017
Attention: Robert M. Zakem, Esq.
With a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Margery K. Neale, Esq.
If to the Acquiring Fund, to: SunAmerican Equity Funds
733 Third Avenue, Third Floor
New York, NY 10017
Attention: Robert M. Zakem, Esq.
With a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Margery K. Neale, Esq.
d. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated herein and
supersedes all previous agreements or understandings between the parties
related to such matters.
e. Amendment. Except as set forth in Section 9(d) hereof, this Agreement may
be amended, modified, superseded, canceled, renewed or extended, and the terms
or covenants hereof may be waived, only by a
16
written instrument executed by all of the parties hereto or, in the case of a
waiver, by the party waiving compliance; provided that, following the meeting
of shareholders of the Acquired Fund pursuant to Section 5(a) hereof, no such
amendment may have the effect of changing the provisions for determining the
number of Corresponding Shares to be issued to the Acquired Fund shareholders
under this Agreement to the detriment of such shareholders without their
further approval. Except as otherwise specifically provided in this Agreement,
no waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or at any prior or subsequent time.
f. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York applicable to agreements made and to be performed in
said state, without giving effect to the principles of conflict of laws
thereof.
g. Assignment. This Agreement shall not be assigned by any of the parties
hereto, in whole or in part, whether by operation of law or otherwise, without
the prior written consent of the other party hereto. Any purported assignment
contrary to the terms hereof shall be null, void and of no effect. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
h. Costs of the Reorganization. All costs of the Reorganization shall be
borne by American International Group, Inc. or an affiliate thereof, regardless
of whether the Reorganization is consummated.
i. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
j. Headings. Headings to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading of any section.
k. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original but all such counterparts together shall constitute but one
instrument.
17
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
ATTEST: SunAmerica Style Select Series,
Inc.on behalf ofSunAmerica
InternationalEquity Portfolio
By:
__________________________________
Name: By:
Title: ___________________________________
Name:
ATTEST: Title:
By: SunAmerica Equity Funds on Behalf of
__________________________________ SunAmerica International Equity Fund
Name:
Title: By:
___________________________________
Name:
Title:
18
EXHIBIT III
Agreement and Plan of Reorganization
Dated as of September 28, 2001
Table of Contents
Page No.
--------
1.Defined Terms; Sections and Exhibits; Miscellaneous Terms........... 2
a.Definitions....................................................... 2
b.Use of Defined Terms.............................................. 5
c.Sections and Exhibits............................................. 5
d.Miscellaneous Terms............................................... 5
2.The Reorganization(s)............................................... 5
a.Transfer of Assets................................................ 5
b.Assumption of Liabilities......................................... 5
c.Issuance and Valuation of Corresponding Shares in the
Reorganization..................................................... 5
d.Distribution of Corresponding Shares to the Acquired Fund
Shareholders....................................................... 5
e.Interest; Proceeds................................................ 6
f.Valuation Time.................................................... 6
g.Evidence of Transfer.............................................. 6
h.Termination....................................................... 6
i.Separate Agreements; Reorganizations Not Conditioned on One
Another............................................................ 6
3.Representations and Warranties of the Acquired Fund................. 6
a.Formation and Qualification....................................... 6
b.Licenses.......................................................... 6
c.Authority......................................................... 7
d.Financial Statements.............................................. 7
e.Semi-Annual Report to Shareholders................................ 7
f.Prospectus and Statement of Additional Information................ 7
g.Litigation........................................................ 7
h.Material Contracts................................................ 7
i.No Conflict....................................................... 8
j.Undisclosed Liabilities........................................... 8
k.Taxes............................................................. 8
l.Assets............................................................ 8
m.Consents.......................................................... 8
n.N-14 Registration Statement....................................... 8
o.Capitalization.................................................... 8
p.Books and Records................................................. 9
4.Representations and Warranties of the Acquiring Fund................ 9
a.Formation and Qualification....................................... 9
b.Licenses.......................................................... 9
c.Authority......................................................... 9
d.Prospectuses and Statements of Additional Information............. 9
e.Litigation........................................................ 10
f.Material Contracts................................................ 10
g.No Conflict....................................................... 10
h.Consents.......................................................... 10
i.N-14 Registration Statement....................................... 10
j.Capitalization.................................................... 10
k.Corresponding Shares.............................................. 10
5.Covenants of the Acquired Fund and the Acquiring Fund............... 11
a.Special Shareholders' Meeting..................................... 11
b.Unaudited Financial Statements.................................... 11
c.Share Ledger Records of the Acquiring Fund........................ 11
d.Conduct of Business............................................... 11
i
Page No.
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e.Termination of the Acquired Fund.................................. 11
f.Filing of N-14 Registration Statement............................. 11
g.Corresponding Shares.............................................. 12
h.Tax Returns....................................................... 12
i.Combined Proxy Statement and Prospectus Mailing................... 12
j.Confirmation of Tax Basis......................................... 12
k.Shareholder List.................................................. 12
l.New Series........................................................ 12
6.Closing Date........................................................ 12
7.Conditions of the Acquired Fund..................................... 12
a.Representations and Warranties.................................... 12
b.Performance....................................................... 13
c.Shareholder Approval.............................................. 13
d.Approval of Board of Trustees..................................... 13
e.Deliveries by the Acquiring Fund.................................. 13
f.Absence of Litigation............................................. 14
g.Proceedings and Documents......................................... 14
h.N-14 Registration Statement; Acquiring Fund Post-Effective
Amendment.......................................................... 14
i.Compliance with Laws; No Adverse Action or Decision............... 14
j.Commission Orders or Interpretations.............................. 14
8.Conditions of the Acquiring Fund.................................... 14
a.Representations and Warranties.................................... 14
b.Performance....................................................... 14
c.Shareholder Approval.............................................. 15
d.Approval of Board of Trustees..................................... 15
e.Deliveries by the Acquired Fund................................... 15
f.No Material Adverse Change........................................ 15
g.Absence of Litigation............................................. 15
h.Proceedings and Documents......................................... 15
i.N-14 Registration Statement; Acquiring Fund Post-Effective
Amendment.......................................................... 15
j.Compliance with Laws; No Adverse Action or Decision............... 15
k.Commission Orders or Interpretations.............................. 16
l.Dividends......................................................... 16
9.Termination, Postponement and Waivers............................... 16
a.Termination of Agreement.......................................... 16
b.Commission Order.................................................. 16
c.Effect of Termination............................................. 16
d.Waivers; Non-Material Changes..................................... 17
10.Survival of Representations and Warranties......................... 17
11.Other Matters...................................................... 17
a.Obligations under Massachusetts Law............................... 17
b.Further Assurances................................................ 17
c.Notices........................................................... 17
d.Entire Agreement.................................................. 18
e.Amendment......................................................... 18
f.Governing Law..................................................... 18
g.Assignment........................................................ 18
h.Costs of the Reorganization....................................... 18
i.Severability...................................................... 18
j.Headings.......................................................... 18
k.Counterparts...................................................... 18
ii
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made as of
the 28th day of September 2001, by and between NORTH AMERICAN FUNDS, a
Massachusetts business trust, on behalf of each Acquired Fund (as defined
herein), each a separate investment portfolio of North American Funds, and
SUNAMERICA EQUITY FUNDS, a Massachusetts business trust, on behalf of the
Acquiring Fund (as defined herein), a separate investment portfolio of
SunAmerica Equity Funds.
PLANS OF REORGANIZATION
WHEREAS, this Agreement constitutes a separate agreement and plan of
reorganization between North American Funds on behalf of each of its separate
investment portfolios (each an "Acquired Fund," and collectively, the "Acquired
Funds") and SunAmerica Equity Funds on behalf of its separate investment
portfolio (the "Acquiring Fund") set forth below:
Acquired Fund: Acquiring Fund:
-------------- ---------------
Global Equity Fund (the "NAF Global International Equity Fund (the "SunAmerica
Equity Fund") International Equity Fund")
International Equity Fund (the "NAF SunAmerica International Equity Fund
International Equity Fund")
International Small Cap Fund (the SunAmerica International Equity Fund
"NAF International Small Cap
Fund")
WHEREAS, each Acquired Fund owns securities that generally are assets of the
character in which the respective Acquiring Fund is permitted to invest;
WHEREAS, each reorganization will consist of (i) the acquisition of an
Acquired Fund's Assets (as defined herein), and assumption of that Acquired
Fund's Assumed Liabilities (as defined herein), by the Acquiring Fund solely in
exchange for an aggregate value of newly issued shares of beneficial interest,
$.01 par value per share, of such Acquiring Fund (the "Shares"), equal to the
net asset value of such Acquired Fund's Assets determined in accordance with
Section 2(c) hereof, and (ii) the subsequent distribution by that Acquired Fund
of the Shares to its shareholders in liquidation of the Acquired Fund, all upon
and subject to the terms hereinafter set forth (each a "Reorganization" and
collectively the "Reorganizations");
WHEREAS, in the course of each Reorganization, Shares of the Acquiring Fund
will be issued to an Acquired Fund and distributed to the shareholders thereof
as follows: each holder, if any, of Class A, Class B, Class C and Institutional
Class I Shares of an Acquired Fund will be entitled to receive Class A, Class
B, Class II and Class I Shares, respectively (the "Corresponding Shares") of
the Acquiring Fund on the Closing Date (as defined herein);
WHEREAS, the aggregate net asset value of the Corresponding Shares to be
received by each shareholder of an Acquired Fund will equal the aggregate net
asset value of the respective Acquired Fund shares owned by such shareholder as
of the Valuation Time (as defined herein);
WHEREAS, it is intended that each Reorganization described herein shall be a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and any successor provision and the
parties intend, by executing this Agreement, to adopt a plan of reorganization
within the meaning of Section 368(a) of the Code; and
WHEREAS, the consummation of one Reorganization is not conditioned upon the
consummation of any other Reorganization.
AGREEMENT
NOW, THEREFORE, in order to consummate each Reorganization and in
consideration of the premises and the covenants and agreements hereinafter set
forth, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, and intending to be legally bound, each
Acquired Fund and Acquiring Fund hereby agree as follows:
1. Defined Terms; Sections and Exhibits; Miscellaneous Terms.
a. Definitions. As used herein the following terms have the following
respective meanings:
"Acquired Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Acquired Fund" shall refer to the NAF Global Equity Fund in respect of the
Global Equity Funds Reorganization, the NAF International Equity Fund in
respect of the International Equity Fund Reorganization and the NAF
International Small Cap Fund in respect of the International Small Cap Fund
Reorganization.
"Acquiring Fund" has the meaning ascribed thereto under the heading
"Plans of Reorganization." For purposes of this Agreement, the term
"Acquiring Fund" shall refer to the SunAmerica International Equity Fund in
respect of the Global Equity Fund Reorganization, the International Equity
Portfolio Reorganization and the International Small Cap Fund
Reorganization.
"Acquiring Fund Post-Effective Amendment" has the meaning ascribed
thereto in Section 5(l) hereof.
"Agreement" has the meaning ascribed thereto in the introduction hereof.
"Assets" has the meaning ascribed thereto in Section 2(a) hereof. For
purposes of this Agreement, the term "Assets" shall refer to Assets of (i)
the NAF Global Equity Fund in the case of the Global Equity Fund
Reorganization, (ii) the NAF International Equity Fund in the case of the
International Equity Fund Reorganization and (iii) the NAF International
Small Cap Fund in the case of the International Small Cap Fund
Reorganization.
"Assumed Liabilities" has the meaning ascribed thereto in Section 2(b)
hereof. For purposes of this Agreement, the term "Assumed Liabilities"
shall refer to the Assumed Liabilities of (i) the NAF Global Equity Fund in
the case of the Global Equity Fund Reorganization, (ii) the NAF
International Equity Fund in the case of the International Equity Fund
Reorganization and (iii) the NAF International Small Cap Fund in the case
of the International Small Cap Fund Reorganization.
"Closing Date" has the meaning ascribed thereto in Section 6 hereof.
"Code" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"Commission" shall mean the Securities and Exchange Commission.
"Corresponding Shares" has the meaning ascribed thereto under the
heading "Plans of Reorganization." For purposes of this Agreement, the term
"Corresponding Shares" shall refer to the Corresponding Shares of the
SunAmerica International Equity Fund in the case of the Global Equity Fund
Reorganization, the International Equity Fund Reorganization and the
International Small Cap Fund Reorganization.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Global Equity Fund Reorganization" consists of (i) the acquisition of
the NAF Global Equity Fund's Assets, and assumption of the NAF Global
Equity Fund's Assumed Liabilities, by the SunAmerica International Equity
Fund solely in exchange for an aggregate value of Corresponding Shares of
the SunAmerica International Equity Fund, equal to the net asset value of
the NAF International Equity Fund's Assets determined in accordance with
Section 2(c) hereof, and (ii) the subsequent distribution by
2
the NAF Global Equity Fund of such Corresponding Shares to its shareholders
in proportion to such shareholders' interest in the NAF Global Equity Fund
in liquidation of the NAF Global Equity Fund.
"Governmental Authority" shall mean any governmental or quasi-
governmental authority, including, without limitation, any Federal, state,
territorial, county, municipal or other governmental or quasi-governmental
agency, board, branch, bureau, commission, court, arbitral body, department
or other instrumentality or political unit or subdivision, whether domestic
or foreign.
"International Equity Fund Reorganization" consists of (i) the
acquisition of the NAF International Equity Fund's Assets, and assumption
of the NAF International Equity Fund's Assumed Liabilities, by the
SunAmerica International Equity Fund solely in exchange for an aggregate
value of Corresponding Shares of the SunAmerica International Equity Fund,
equal to the net asset value of the NAF International Equity Fund's Assets
determined in accordance with Section 2(c) hereof, and (ii) the subsequent
distribution by the NAF International Equity Fund of such Corresponding
Shares to its shareholders in proportion to such shareholders' interest in
the NAF International Equity Fund in liquidation of the NAF International
Equity Fund.
"International Small Cap Fund Reorganization" consists of (i) the
acquisition of the NAF International Small Cap Fund's Assets, and
assumption of the NAF International Small Cap Fund's Assumed Liabilities,
by the SunAmerica International Equity Fund solely in exchange for an
aggregate value of Corresponding Shares of the SunAmerica International
Equity Fund, equal to the net asset value of the NAF International Small
Cap Fund's Assets determined in accordance with Section 2(c) hereof, and
(ii) the subsequent distribution by the NAF International Small Cap Fund of
such Corresponding Shares to its shareholders in proportion to such
shareholders' interest in the International Small Cap Fund in liquidation
of the NAF International Small Cap Fund.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended.
"Investments" shall mean, with respect to any Person, (i) the
investments of such Person shown on the schedule of its investments as of
the date set forth therein, with such additions thereto and deletions
therefrom as may have arisen in the course of such Person's business up to
such date; and (ii) all other assets owned by such Person or liabilities
incurred as of such date.
"Licenses" has the meaning ascribed thereto in Section 3(b) hereof.
"Lien" shall mean any security agreement, financing statement (whether
or not filed), mortgage, lien (statutory or otherwise), charge, pledge,
hypothecation, conditional sales agreement, adverse claim, title retention
agreement or other security interest, encumbrance, restriction, deed of
trust, indenture, option, limitation, exception to or other title defect in
or on any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale, lease, consignment
or bailment given for security purposes, trust receipt or other title
retention agreement with respect to any property or asset of such Person,
whether direct, indirect, accrued or contingent.
"Majority Shareholder Vote" shall mean the lesser of (i) more than 50%
of the outstanding shares of the Acquired Fund and (ii) 67% or more of the
shares of the Acquired Fund represented at the special shareholders'
meeting referenced in Section 5(a) hereof if more than 50% of such shares
are represented.
"Material Adverse Effect" shall mean, with respect to any Person, any
event, circumstance or condition that, individually or when aggregated with
all other similar events, circumstances or conditions could reasonably be
expected to have, or has had, a material adverse effect on: (i) the
business, property, operations, condition (financial or otherwise), results
of operations or prospects of such Person or (ii) the ability of such
Person to consummate the transactions contemplated hereunder in the manner
contemplated hereby, other than, in each case, any change relating to the
economy or securities markets in general.
3
"NAF Global Equity Fund" has the meaning ascribed thereto under the
heading "Plans of Reorganization."
"NAF International Equity Fund" has the meaning ascribed thereto under
the heading "Plans of Reorganization."
"NAF International Small Cap Fund" has the meaning ascribed thereto
under the heading "Plans of Reorganization."
"North American Funds Declaration of Trust" shall mean the Amended and
Restated Agreement and Declaration of Trust of North American Funds dated
as of February 18, 1994, as amended from time to time.
"North American Funds Prospectuses" shall mean the prospectuses relating
to the Acquired Funds each dated March 1, 2001, in each case as amended or
supplemented.
"North American Funds Statement of Additional Information" shall mean
the statement of additional information relating to the Acquired Funds,
dated March 1, 2001, as amended or supplemented.
"N-14 Registration Statement" has the meaning ascribed thereto in
Section 3(n) hereof.
"Permitted Liens" shall mean, with respect to any Person, any Lien
arising by reason of (i) taxes, assessments, governmental charges or claims
that are either not yet delinquent, or being contested in good faith for
which adequate reserves have been recorded, (ii) the Federal or state
securities laws, and (iii) imperfections of title or encumbrances as do not
materially detract from the value or use of the Assets or materially affect
title thereto.
"Person" shall mean any individual, corporation, limited liability
company, limited or general partnership, joint venture, association, joint
stock company, trust, unincorporated organization, or government or any
agency or political subdivision thereof.
"Reorganization" has the meaning ascribed thereto in the third paragraph
under the heading "Plans of Reorganization" hereof. For purposes of this
Agreement, the term "Reorganization" shall refer to the Global Equity Fund
Reorganization, the International Equity Fund Reorganization and the
International Small Cap Fund Reorganization, as the context requires.
"RICs" has the meaning ascribed thereto in Section 3(b) hereof.
"Rule 17a-8(a)" shall mean Rule 17a-8(a) under the Investment Company
Act.
"S&S" shall mean Shearman & Sterling, counsel to SunAmerica Equity Funds
and the Acquiring Fund.
"Section 17 Order" shall mean an order obtained from the Commission
pursuant to Section 17(b) of the Investment Company Act to exempt
consummation of a Reorganization from the prohibitions of Section 17(a) of
such Act.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Shares" has the meaning ascribed thereto under the heading "Plans of
Reorganization."
"SunAmerica Equity Funds Declaration of Trust" shall mean the
Declaration of Trust of SunAmerica Equity Funds, dated as of June 18, 1986,
as amended from time to time.
"SunAmerica Equity Funds Prospectuses" shall mean the preliminary
prospectus relating to the SunAmerica Equity Funds, dated January 29, 2001,
in the case of Class A, Class B and Class II Shares, and the Prospectus
contained in the Acquiring Fund Post-Effective Amendment in the case of
Class I Shares.
"SunAmerica Equity Funds Statements of Additional Information" shall
mean the statement of additional information relating to the Acquiring
Fund, dated January 29, 2001, in the case of Class A,
4
Class B and Class II Shares, and the statement of additional information
contained in the Acquiring Fund Post-Effective Amendment in the case of
Class I Shares.
"SunAmerica International Equity Fund" has the meaning ascribed thereto
under the heading "Plans of Reorganization."
"Valuation Time" has the meaning ascribed thereto in Section 2(f)
hereof.
b. Use of Defined Terms. Any defined term used in the plural shall refer to
all members of the relevant class, and any defined term used in the singular
shall refer to any one or more of the members of the relevant class. The use of
any gender shall be applicable to all genders.
c. Sections and Exhibits. References in this Agreement to Sections, Exhibits
and Schedules are to Sections, Exhibits and Schedules of and to this Agreement.
The Exhibits and Schedules to this Agreement are hereby incorporated herein by
this reference as if fully set forth herein.
d. Miscellaneous Terms. The term "or" shall not be exclusive. The terms
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Agreement as a whole and not merely to the specific
article, section, paragraph or clause where such terms may appear. The term
"including" shall mean "including, but not limited to."
2. The Reorganization(s).
a. Transfer of Assets. Subject to receiving the requisite approval of the
shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquired Fund shall convey, transfer
and deliver to the Acquiring Fund, and the Acquiring Fund shall purchase,
acquire and accept from the Acquired Fund, free and clear of all Liens (other
than Permitted Liens), all of the property and assets (including cash,
securities, commodities, interests in futures and dividends, any deferred or
prepaid expenses and interest accrued on debt instruments, in each case as of
the Valuation Time) owned by the Acquired Fund (as to each Acquired Fund, such
assets are collectively referred to herein as the "Assets").
b. Assumption of Liabilities. Subject to receiving the requisite approval of
the shareholders of the Acquired Fund, and to the other terms and conditions
contained herein and on the basis of the representations and warranties
contained herein, on the Closing Date, the Acquiring Fund will assume and agree
to pay, perform and discharge when due all of the obligations and liabilities
of the Acquired Fund then existing, whether absolute, accrued, contingent or
otherwise (as to each Acquired Fund, such liabilities are collectively referred
to herein as the "Assumed Liabilities").
c. Issuance and Valuation of Corresponding Shares in the
Reorganization. Full Corresponding Shares, and to the extent necessary, a
fractional Corresponding Share, of an aggregate net asset value equal to the
net asset value of the Assets (after deducting the Assumed Liabilities)
acquired by the Acquiring Fund hereunder, determined as hereinafter provided
shall be issued by the Acquiring Fund to the Acquired Fund in exchange for such
Assets. The net asset value of each of the Acquired Fund's Assets and the
Acquiring Fund's Corresponding Shares shall be determined in accordance with
the procedures described in the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statement of Additional Information as of the Valuation
Time. Such valuation and determination shall be made by the Acquiring Fund in
cooperation with the Acquired Fund.
d. Distribution of Corresponding Shares to the Acquired Fund
Shareholders. Pursuant to this Agreement, as soon as practicable after the
Valuation Time, the Acquired Fund will distribute all Corresponding Shares
received by it from the Acquiring Fund in connection with the Reorganization to
its shareholders in proportion to such shareholders' interest in the Acquired
Fund. Such distribution shall be
5
accomplished by the opening of shareholder accounts on the share ledger records
of the Acquiring Fund in the amounts due the shareholders of the Acquired Fund
based on their respective holdings in the Acquired Fund as of the Valuation
Time.
e. Interest; Proceeds. The Acquired Fund will pay or cause to be paid to the
Acquiring Fund any interest or proceeds it receives on or after the Closing
Date with respect to its Assets.
f. Valuation Time.
i. The Valuation Time shall be the close of the New York Stock Exchange
(generally 4:00 P.M., New York time) on November 9, 2001 or such earlier or
later day and time as may be mutually agreed upon in writing between the
parties hereto (the "Valuation Time").
ii. In the event that at the Valuation Time (a) the New York Stock
Exchange or another primary trading market for portfolio securities of the
Acquiring Fund or the Acquired Fund shall be closed to trading or trading
thereon shall be restricted; or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate appraisal of
the value of the net assets of the Acquiring Fund or the Acquired Fund is
impracticable, the Valuation Time shall be postponed until the close of the
New York Stock Exchange on the first business day after the day when
trading shall have been fully resumed and reporting shall have been
restored.
g. Evidence of Transfer. The Acquiring Fund and the Acquired Fund will
jointly file any instrument as may be required by the Commonwealth of
Massachusetts to effect the transfer of the Assets to the Acquiring Fund.
h. Termination. The Acquired Fund's existence as a separate investment
portfolio of North American Funds will be terminated as soon as practicable
following the consummation of the applicable Reorganization by making any
required filings with the Commonwealth of Massachusetts, as provided in Section
5(e) hereof.
i. Separate Agreements; Reorganizations Not Conditioned on One Another. Each
of the respective parties hereto hereby agrees that this Agreement shall
constitute a separate agreement and plan of reorganization as to each of (i)
the Global Equity Fund Reorganization, (ii) the International Equity Fund
Reorganization and (iii) the International Small Cap Fund Reorganization. The
parties further agree that the consummation of one Reorganization shall not be
conditioned on the consummation of any other Reorganization.
3. Representations and Warranties of the Acquired Fund.
The Acquired Fund represents and warrants to the Acquiring Fund as follows:
a. Formation and Qualification. The Acquired Fund is a separate investment
portfolio of North American Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquired Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. North American Funds is duly qualified, registered or licensed to do
business and is in good standing in each jurisdiction in which the ownership of
its properties or assets or the character of its present operations makes such
qualification, registration or licensing necessary, except where the failure to
so qualify or be in good standing would not have a Material Adverse Effect on
the Acquired Fund.
b. Licenses. The Acquired Fund (or North American Funds on behalf of the
Acquired Fund) holds all permits, consents, registrations, certificates,
authorizations and other approvals (collectively, "Licenses") required for the
conduct of its business as now being conducted; all such Licenses are in full
force and effect and no suspension or cancellation of any of them is pending or
threatened; and none of such Licenses will be affected by the consummation of
the transactions contemplated by this Agreement in a manner that would have
6
a Material Adverse Effect on the Acquired Fund. North American Funds is duly
registered under the Investment Company Act as an open-end management
investment company (File No. 811-05797), and such registration has not been
suspended, revoked or rescinded and is in full force and effect. The Acquired
Fund has elected and qualified for the special tax treatment afforded regulated
investment companies ("RICs") under Sections 851-855 of the Code at all times
since its inception and intends to continue to so qualify for its current
taxable year.
c. Authority. North American Funds, on behalf of the Acquired Fund, has full
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary action on the part of the Acquired Fund and
no other proceedings on the part of North American Funds or the Acquired Fund
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby, except for the approval of the Acquired Fund
shareholders as provided in Section 7(c) hereof. This Agreement has been duly
and validly executed by North American Funds, on behalf of the Acquired Fund,
and, subject to receipt of the requisite shareholder approval, and assuming due
authorization, execution and delivery of this Agreement by the Acquiring Fund,
this Agreement constitutes a legal, valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in accordance with its
terms, subject to the effects of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto and the remedy of specific
performance and injunctive and other forms of equitable relief.
d. Financial Statements. The Acquiring Fund has been furnished with an
accurate, correct and complete statement of assets and liabilities and a
schedule of Investments of the Acquired Fund, each as of October 31, 2000, said
financial statements having been audited by PricewaterhouseCoopers LLP,
independent public accountants. Such audited financial statements fairly
present in all material respects the financial position of the Acquired Fund as
of the dates and for the periods referred to therein and in conformity with
generally accepted accounting principles applied on a consistent basis.
e. Semi-Annual Report to Shareholders. The Acquiring Fund has been furnished
with the Acquired Fund's Semi-Annual Report to Shareholders for the six months
ended April 30, 2001, and the unaudited financial statements appearing therein
fairly present in all material respects the financial position of the Acquired
Fund as of the dates and for the periods referred to therein and in conformity
with generally accepted accounting principles applied on a consistent basis.
f. Prospectuses and Statement of Additional Information. The Acquiring Fund
has been furnished with the North American Funds Prospectuses and the North
American Funds Statement of Additional Information, and insofar as they relate
to the Acquired Fund, said Prospectuses and Statement of Additional Information
do not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
g. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquired Fund,
threatened against the Acquired Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquired Fund. The Acquired Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquired Fund.
h. Material Contracts. There are no material contracts outstanding to which
North American Funds on behalf of the Acquired Fund is a party that have not
been disclosed in the N-14 Registration Statement, the North American Funds
Prospectuses or the North American Funds Statement of Additional Information.
7
i. No Conflict. The execution and delivery of this Agreement by North
American Funds on behalf of the Acquired Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) North American Funds' Declaration of Trust or by-
laws, each as amended, supplemented and in effect as of the date hereof, (ii)
any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which North American Funds
on behalf of the Acquired Fund is a party or to which its assets or properties
are subject, or (iii) any judgment, injunction, order or decree, or other
instrument binding upon the Acquired Fund or any of its assets or properties,
except where such contravention, default or violation would not have a Material
Adverse Effect on the Acquired Fund.
j. Undisclosed Liabilities. The Acquired Fund has no material liabilities,
contingent or otherwise, other than those shown on its statements of assets and
liabilities referred to herein, those incurred in the ordinary course of its
business since April 30, 2001, and those incurred in connection with the
Reorganization.
k. Taxes. The Acquired Fund has filed (or caused to be filed), or has
obtained extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid (or caused to be paid) or has obtained
extensions to pay, all taxes shown on said returns to be due and owing and all
assessments received by it, up to and including the taxable year in which the
Closing Date occurs. All tax liabilities of the Acquired Fund have been
adequately provided for on its books, and no tax deficiency or liability of the
Acquired Fund has been asserted and no question with respect thereto has been
raised by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid, up to and including the taxable year
in which the Closing Date occurs.
l. Assets. The Acquired Fund has good and marketable title to the Assets,
free and clear of all Liens, except for Permitted Liens. The Acquired Fund is
the direct sole and exclusive owner of the Assets. At the Closing Date, upon
consummation of the transactions contemplated hereby, the Acquiring Fund will
have good and marketable title to the Assets, free and clear of all Liens,
except for Permitted Liens.
m. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquired Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act or state
securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico), (ii) a Majority Shareholder Vote, and
(iii) if necessary, receipt of a Section 17 Order.
n. N-14 Registration Statement. The registration statement filed, or to be
filed, by SunAmerica Equity Funds on Form N-14 relating to the Corresponding
Shares to be issued pursuant to this Agreement, which includes the proxy
statement of the Acquired Fund and the prospectus of the Acquiring Fund with
respect to the transactions contemplated hereby, and any supplement or
amendment thereto or to the documents therein (as amended and supplemented, the
"N-14 Registration Statement"), on the effective date of the N-14 Registration
Statement, at the time of the shareholders' meeting referred to in Section 5(a)
hereof and on the Closing Date, insofar as it relates to the Acquired Fund (i)
complied, or will comply, as the case may be, in all material respects, with
the applicable provisions of the Securities Act, the Exchange Act and the
Investment Company Act and the rules and regulations promulgated thereunder,
and (ii) did not, or will not, as the case may be, contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
o. Capitalization. Under the Declaration of Trust of North American Funds,
the Acquired Fund is authorized to issue an unlimited number of full and
fractional shares of beneficial interest, par value $0.001 per share, divided
into four classes designated Class A, Class B, Class C and Class I shares. All
issued and outstanding shares of the Acquired Fund are duly authorized, validly
issued, fully paid and non-assessable and free of preemptive rights. Except for
(i) the right of Class B shares of the Acquired Fund to automatically convert
to Class A shares of the Acquired Fund eight years after the purchase thereof,
or (ii) in connection with any automatic dividend reinvestment plan available
to the Acquired Fund shareholders, there are no options
8
warrants, subscriptions, calls or other rights, agreements or commitments
obligating the Acquired Fund to issue any of its shares or securities
convertible into its shares.
p. Books and Records. The books and records of the Acquired Fund made
available to the Acquiring Fund and/or its counsel are substantially true and
correct and contain no material misstatements or omissions with respect to the
operations of the Acquired Fund.
4. Representations and Warranties of the Acquiring Fund.
The Acquiring Fund represents and warrants to the Acquired Fund as follows:
a. Formation and Qualification. The Acquiring Fund is a separate investment
portfolio of SunAmerica Equity Funds, a business trust duly organized, validly
existing and in good standing in conformity with the laws of the Commonwealth
of Massachusetts, and the Acquiring Fund has all requisite power and authority
to own all of its properties or assets and carry on its business as presently
conducted. SunAmerica Equity Funds is duly qualified, registered or licensed as
a foreign corporation to do business and is in good standing in each
jurisdiction in which the ownership of its properties or assets or the
character of its present operations makes such qualification, registration or
licensing necessary, except where the failure to so qualify or be in good
standing would not have a Material Adverse Effect on the Acquiring Fund. The
Acquiring Fund has not yet commenced operations, and the only Shares issued
have been to an initial seed investor.
b. Licenses. The Acquiring Fund (or SunAmerica Equity Funds on behalf of the
Acquiring Fund) holds all Licenses required for the conduct of its business as
now being conducted; all such Licenses are in full force and effect and no
suspension or cancellation of any of them is pending or threatened; and none of
such Licenses will be affected by the consummation of the transactions
contemplated by this Agreement in a manner that would have a Material Adverse
Effect on the Acquiring Fund. SunAmerica Equity Funds is duly registered under
the Investment Company Act as an open-end management investment company (File
No. 811-4801), and such registration has not been revoked or rescinded and is
in full force and effect. The Acquiring Fund intends to qualify for the special
tax treatment afforded to RICs under Sections 851-855 of the Code from and
after consummation of the Reorganization and thereafter.
c. Authority. SunAmerica Equity Funds, on behalf of the Acquiring Fund, has
full power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly and validly authorized by all necessary action on the part of
the Acquiring Fund and no other proceedings on the part of the Acquiring Fund
are necessary to authorize this Agreement or the consummation of the
transactions contemplated hereby. This Agreement has been duly and validly
executed by SunAmerica Equity Funds, on behalf of the Acquiring Fund, and
assuming due authorization, execution and delivery of this Agreement by the
Acquired Fund, this Agreement constitutes a legal, valid and binding obligation
of the Acquiring Fund enforceable against the Acquiring Fund in accordance with
its terms, subject to the effects of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto and the remedy of
specific performance and injunctive and other forms of equitable relief.
d. Prospectuses and Statements of Additional Information. The Acquired Fund
has been furnished with the SunAmerica Equity Funds Prospectuses and the
SunAmerica Equity Funds Statements of Additional Information, and insofar as
they relate to the Acquiring Fund, said Prospectuses and Statements of
Additional Information do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
9
e. Litigation. There are no claims, actions, suits or legal, administrative
or other proceedings pending or, to the knowledge of the Acquiring Fund,
threatened against the Acquiring Fund that could reasonably be expected to have
a Material Adverse Effect on the Acquiring Fund. The Acquiring Fund is not
charged with or, to its knowledge, threatened with any violation, or
investigation of any possible violation, of any provisions of any Federal,
state or local law or regulation or administrative ruling relating to any
aspect of its business that could reasonably be expected to have a Material
Adverse Effect on the Acquiring Fund.
f. Material Contracts. There are no material contracts outstanding to which
SunAmerica Equity Funds on behalf of the Acquiring Fund is a party that have
not been disclosed in the N-14 Registration Statement, the SunAmerica Equity
Funds Prospectuses, or the SunAmerica Equity Funds Statements of Additional
Information.
g. No Conflict. The execution and delivery of this Agreement by SunAmerica
Equity Funds on behalf of the Acquiring Fund and the consummation of the
transactions contemplated hereby will not contravene or constitute a default
under or violation of (i) the SunAmerica Equity Funds Declaration of Trust or
by-laws, each as amended, supplemented and in effect as of the date hereof,
(ii) any agreement or contract (or require the consent of any Person under any
agreement or contract that has not been obtained) to which SunAmerica Equity
Funds on behalf of the Acquiring Fund is a party or to which its assets or
properties are subject, or (iii) any judgment, injunction, order or decree, or
other instrument binding upon the Acquiring Fund or any of its assets or
properties, except where such contravention, default or violation would not
have a Material Adverse Effect on the Acquiring Fund.
h. Consents. No filing or registration with, or consent, approval,
authorization or order of, any Person is required for the consummation by the
Acquiring Fund of the Reorganization, except for (i) such as may be required
under the Securities Act, the Exchange Act, the Investment Company Act, or
state securities laws (which term as used herein shall include the laws of the
District of Columbia and Puerto Rico) and (ii) if necessary, receipt of a
Section 17 Order.
i. N-14 Registration Statement. The N-14 Registration Statement, on its
effective date, at the time of the shareholders' meeting referred to in Section
5(a) hereof and on the Closing Date, insofar as it relates to the Acquiring
Fund (i) complied, or will comply, as the case may be, in all material
respects, with the applicable provisions of the Securities Act, the Exchange
Act and the Investment Company Act and the rules and regulations promulgated
thereunder, and (ii) did not, or will not, as the case may be, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
j. Capitalization. Under the Declaration of Trust of SunAmerica Equity
Funds, the Acquiring Fund is authorized to issue an unlimited number of full
and fractional shares of beneficial interest, par value $0.01 per share,
divided into four classes, designated Class A, Class B, Class II and Class I.
All issued and outstanding shares of the Acquiring Fund (if any) are duly
authorized, validly issued, fully paid and non-assessable and free of
preemptive rights. Except for (i) the right of Class B shares of the Acquiring
Fund to automatically convert to Class A shares of the Acquiring Fund
approximately eight years after the purchase thereof or (ii) in connection with
any automatic dividend reinvestment plan available to the Acquiring Fund
shareholders, there are no options, warrants, subscriptions, calls or other
rights, agreements or commitments obligating the Acquiring Fund to issue any of
its shares or securities convertible into its shares.
k. Corresponding Shares.
i. The Corresponding Shares to be issued by the Acquiring Fund to the
Acquired Fund and subsequently distributed by the Acquired Fund to its
shareholders as provided in this Agreement will be duly and validly
authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and nonassessable and
will have full voting rights, and no shareholder of the Acquiring Fund will
have any preemptive right of subscription or purchase in respect thereof.
10
ii. At or prior to the Closing Date, the Corresponding Shares to be
issued by the Acquiring Fund to the Acquired Fund on the Closing Date will
be duly qualified for offering to the public in all states of the United
States in which the sale of shares of the Acquiring Fund presently are
qualified, and there are a sufficient number of such shares registered
under the Securities Act, the Investment Company Act and with each
pertinent state securities commission to permit the Reorganization to be
consummated.
5. Covenants of the Acquired Fund and the Acquiring Fund.
a. Special Shareholders' Meeting. The Acquired Fund agrees to call a special
meeting of its shareholders to be held as soon as practicable after the
effective date of the N-14 Registration Statement for the purpose of
considering the Reorganization as described in this Agreement and to take all
other action necessary to obtain shareholder approval of the transactions
contemplated herein.
b. Unaudited Financial Statements.
(i) The Acquired Fund hereby agrees to furnish or cause its agents to
furnish to the Acquiring Fund, at or prior to the Closing Date, for the purpose
of determining the number of Corresponding Shares to be issued by the Acquiring
Fund to the Acquired Fund pursuant to Section 2(c) hereof, an accurate, correct
and complete unaudited statement of assets and liabilities of the Acquired Fund
with values determined in accordance with Section 2(c) hereof and an unaudited
schedule of Investments of the Acquired Fund (including the respective dates
and costs of acquisition thereof), each as of the Valuation Time. Such
unaudited financial statements will fairly present in all material respects the
financial position of the Acquired Fund as of the dates and for the periods
referred to therein and in conformity with generally accepted accounting
principles applied on a consistent basis.
(ii) The Acquiring Fund hereby agrees to furnish or cause its agents to
furnish to the Acquired Fund, at or prior to the Closing Date, for the purpose
of determining the number of Corresponding Shares to be issued by the Acquiring
Fund to the Acquired Fund pursuant to Section 2(c) hereof, an accurate, correct
and complete unaudited statement of assets and liabilities of the Acquiring
Fund with values determined in accordance with Section 2(c) hereof and an
unaudited schedule of Investments of the Acquiring Fund (including the
respective dates and costs of acquisition thereof), each as of the Valuation
Time. Such unaudited financial statements will fairly present in all material
respects the financial position of the Acquiring Fund of Portfolio as of the
dates and for the periods referred to therein and in conformity with generally
accepted accounting principles applied on a consistent basis.
c. Share Ledger Records of the Acquiring Fund. The Acquiring Fund agrees, as
soon as practicable after the Valuation Time, to open shareholder accounts on
its share ledger records for the shareholders of the Acquired Fund in
connection with the distribution of Corresponding Shares by the Acquired Fund
to such shareholders in accordance with Section 2(d) hereof.
d. Conduct of Business. The Acquired Fund and the Acquiring Fund each
covenants and agrees to operate its respective business in the ordinary course
as presently conducted between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include customary
dividends and distributions.
e. Termination of the Acquired Fund. North American Funds agrees that as
soon as practicable following the consummation of the Reorganization, it will
terminate the existence of the Acquired Fund in accordance with the laws of the
Commonwealth of Massachusetts and any other applicable law.
f. Filing of N-14 Registration Statement. SunAmerica Equity Funds, on behalf
of the Acquiring Fund, will file or cause its agents to file the N-14
Registration Statement with the Commission and will use its best efforts to
cause the N-14 Registration Statement to become effective as promptly as
practicable after the filing thereof. The Acquired Fund and the Acquiring Fund
agree to cooperate fully with each other, and each will
11
furnish to the other the information relating to itself to be set forth in the
N-14 Registration Statement as required by the Securities Act, the Exchange
Act, the Investment Company Act, and the rules and regulations thereunder and
the state securities or blue sky laws (if applicable).
g. Corresponding Shares. The Acquired Fund will not sell or otherwise
dispose of any of the Corresponding Shares to be received by it from the
Acquiring Fund in connection with the Reorganization, except in distribution to
the shareholders of the Acquired Fund in accordance with the terms hereof.
h. Tax Returns. The Acquired Fund each agrees that by the Closing Date all
of its Federal and other tax returns and reports required to be filed on or
before such date shall have been filed and all taxes shown as due on said
returns either shall have been paid or adequate liability reserves shall have
been provided for the payment of such taxes.
i. Combined Proxy Statement and Prospectus Mailing. The Acquired Fund agrees
to mail to its shareholders of record entitled to vote at the special meeting
of shareholders at which action is to be considered regarding this Agreement,
in sufficient time to comply with requirements as to notice thereof, a combined
Proxy Statement and Prospectus which complies in all material respects (except
as to information therein relating to the Acquiring Fund) with the applicable
provisions of Section 14(a) of the Exchange Act and Section 20(a) of the
Investment Company Act, and the rules and regulations promulgated thereunder.
j. Confirmation of Tax Basis. The Acquired Fund will deliver to the
Acquiring Fund on the Closing Date confirmations or other adequate evidence as
to the tax basis of each of the Assets delivered to the Acquiring Fund
hereunder.
k. Shareholder List. As soon as practicable after the close of business on
the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list
of the names and addresses of all of the shareholders of record of the Acquired
Fund on the Closing Date and the number of shares of the Acquired Fund owned by
each such shareholder as of such date, certified to the best of its knowledge
and belief by the transfer agent or by North American Funds on behalf of the
Acquired Fund.
l. New Series. SunAmerica Equity Funds, on behalf of the Acquiring Fund
shall cause a post-effective amendment to its Registration Statement on Form N-
1A (the "Acquiring Fund Post-Effective Amendment") to be filed with the
Commission in a timely fashion to register the shares of the Acquiring Fund for
sale under the Securities Act prior to the Closing Date.
6. Closing Date.
The closing of the transactions contemplated by this Agreement shall be at
the offices of Shearman & Sterling, 599 Lexington Avenue, New York, NY 10022
after the close of the New York Stock Exchange on November 9, 2001, or at such
other place, time and date agreed to by the Acquired Fund and the Acquiring
Fund. The date and time upon which such closing is to take place shall be
referred to herein as the "Closing Date." To the extent that any Assets, for
any reason, are not transferable on the Closing Date, the Acquired Fund shall
cause such Assets to be transferred to the Acquiring Fund's custody account
with State Street Bank and Trust Company at the earliest practicable date
thereafter.
7. Conditions of the Acquired Fund.
The obligations of the Acquired Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquired Fund only and, other than with respect to the condition set
forth in Section 7(c) hereof, may be waived, in whole or in part, by the
Acquired Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquiring Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of
12
the Closing Date all with the same effect as if made at and as of such dates,
except that any representations and warranties that relate to a particular date
or period shall be true and correct in all material respects as of such date or
period.
b. Performance. The Acquiring Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Trustees. This Agreement shall have been adopted and
the Reorganization shall have been approved by the Board of Trustees of
SunAmerica Equity Funds, on behalf of the Acquiring Fund, including a majority
of the Trustees who are not "interested persons" of North American Funds or
SunAmerica Equity Funds as defined in Section 2(a)(19) of the Investment
Company Act, which shall have found, as required by Rule 17a-8(a), that (i)
participation in the Reorganization is in the best interests of the Acquiring
Fund and (ii) the interests of the existing shareholders of the Acquiring Fund
will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquiring Fund. At or prior to the Closing Date, the
Acquiring Fund shall deliver to the Acquired Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquired Fund, executed by the President (or a Vice President) of
SunAmerica Equity Funds on behalf of the Acquiring Fund, dated as of the
Closing Date, certifying that the conditions specified in Sections 7(a),
(b), (d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquiring Fund required by
Section 5(b)(ii) hereof; and
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquired Fund, to the effect that, for Federal income tax purposes, (i)
the transfer of the Assets to the Acquiring Fund in return solely for the
Corresponding Shares and the assumption by the Acquiring Fund of the
Assumed Liabilities as provided for in the Agreement will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
assuming that such transfer, issuance and assumption qualifies as a
reorganization within the meaning of Section 368(a) of the Code, the
Acquired Fund and the Acquiring Fund will each be deemed to be a "party to
a reorganization" within the meaning of Section 368(b) of the Code; (ii) in
accordance with Sections 357 and 361 of the Code, no gain or loss will be
recognized to the Acquired Fund as a result of the Asset transfer solely in
return for the Corresponding Shares and the assumption by the Acquiring
Fund of the Assumed Liabilities or on the distribution (whether actual or
constructive) of the Corresponding Shares to the Acquired Fund shareholders
as provided for in the Agreement; (iii) under Section 1032 of the Code, no
gain or loss will be recognized to the Acquiring Fund on the receipt of the
Assets in return for the Corresponding Shares and the assumption by the
Acquiring Fund of the Assumed Liabilities as provided for in the Agreement;
(iv) in accordance with Section 354(a)(1) of the Code, no gain or loss will
be recognized to the shareholders of the Acquired Fund on the receipt
(whether actually or constructively) of Corresponding Shares in return for
their shares of the Acquired Fund; (v) in accordance with Section 362(b) of
the Code, the tax basis of the Assets in the hands of the Acquiring Fund
will be the same as the tax basis of such Assets in the hands of the
Acquired Fund immediately prior to the consummation of the Reorganization;
(vi) in accordance with Section 358 of the Code, immediately after the
Reorganization, the tax basis of the Corresponding Shares received (whether
actual or constructive) by the shareholders of the Acquired Fund in the
Reorganization will be equal, in the aggregate, to the tax basis of the
shares of the Acquired Fund surrendered in return therefor; (vii) in
accordance with Section 1223 of the Code, a shareholder's holding period
for the Corresponding Shares will be determined by including the period for
which such shareholder held the shares of the Acquired Fund exchanged
therefor, provided that the Acquired Fund shares were held as a capital
asset; (viii) in
13
accordance with Section 1223 of the Code, the Acquiring Fund's holding
period with respect to the Assets acquired by it will include the period
for which such Assets were held by the Acquired Fund; and (ix) in
accordance with Section 381(a) of the Code and regulations thereunder, the
Acquiring Fund will succeed to and take into account certain tax attributes
of the Acquired Fund, subject to applicable limitations, such as earnings
and profits, capital loss carryovers and method of accounting.
f. Absence of Litigation. There shall not be pending before any Governmental
Authority any material litigation with respect to the matters contemplated by
this Agreement.
g. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident thereto,
shall be reasonably satisfactory to the Acquired Fund and its counsel, and the
Acquired Fund and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as the Acquired Fund
or its counsel may reasonably request.
h. N-14 Registration Statement; Acquiring Fund Post-Effective Amendment. The
N-14 Registration Statement and Acquiring Fund Post-Effective Amendment each
shall have become effective under the Securities Act, and no stop order
suspending such effectiveness shall have been instituted or, to the knowledge
of the Acquiring Fund or the Acquired Fund, contemplated by the Commission.
i. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of this
Agreement, the Reorganization or the consummation of any of the transactions
contemplated hereby and thereby; (ii) the Commission shall not have issued an
unfavorable advisory report under Section 25(b) of the Investment Company Act,
nor instituted or threatened to institute any proceeding seeking to enjoin
consummation of the Reorganization under Section 25(c) of the Investment
Company Act, and (iii) no other legal, administrative or other proceeding shall
be instituted or threatened by any Governmental Authority which would
materially affect the financial condition of the Acquiring Fund or that seeks
to restrain, enjoin, prevent, materially delay, prohibit or otherwise make
illegal the performance of this Agreement, the Reorganization or the
consummation of any of the transactions contemplated hereby or thereby.
j. Commission Orders or Interpretations. The Acquired Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquired Fund deems reasonably necessary or
desirable under the Securities Act and the Investment Company Act in connection
with the Reorganization; provided that such counsel shall have requested such
orders or interpretations as promptly as practicable, and all such orders shall
be in full force and effect.
8. Conditions of the Acquiring Fund.
The obligations of the Acquiring Fund hereunder shall be subject to the
satisfaction, at or before the Closing Date (or such other date specified
herein), of the conditions set forth below. The benefit of these conditions is
for the Acquiring Fund only and, other than with respect to the condition set
forth in Section 8(c) hereof, may be waived, in whole or in part, by the
Acquiring Fund at any time in its sole discretion.
a. Representations and Warranties. The representations and warranties of the
Acquired Fund made in this Agreement shall be true and correct in all material
respects when made, as of the Valuation Time and as of the Closing Date all
with the same effect as if made at and as of such dates, except that any
representations and warranties that relate to a particular date or period shall
be true and correct in all material respects as of such date or period.
b. Performance. The Acquired Fund shall have performed, satisfied and
complied with all covenants, agreements and conditions required to be
performed, satisfied or complied with by it under this Agreement at or prior to
the Closing Date.
14
c. Shareholder Approval. This Agreement shall have been adopted, and the
Reorganization shall have been approved, by a Majority Shareholder Vote.
d. Approval of Board of Trustees. This Agreement shall have been adopted
and the Reorganization shall have been approved by the Board of Trustees of
North American Funds, on behalf of the Acquired Fund, including a majority of
the Trustees who are not "interested persons" of North American Funds or
SunAmerica Equity Funds within the meaning of Section 2(a)(19) of the
Investment Company Act, which shall have found, as required by Rule 17a-8(a),
that (i) participation in the Reorganization is in the best interests of the
Acquired Fund and (ii) the interests of the existing shareholders of the
Acquired Fund will not be diluted as a result of the Reorganization.
e. Deliveries by the Acquired Fund. At or prior to the Closing Date, the
Acquired Fund shall deliver to the Acquiring Fund the following:
i. a certificate, in form and substance reasonably satisfactory to the
Acquiring Fund, executed by the President (or a Vice President) of North
American Funds on behalf of the Acquired Fund, dated as of the Closing
Date, certifying that the conditions specified in Sections 8(a), (b), (c),
(d) and (f) have been fulfilled;
ii. the unaudited financial statements of the Acquired Fund required by
Section 5(b)(i) hereof; and
iii. an opinion of S&S, in form and substance reasonably satisfactory to
the Acquiring Fund, with respect to the matters specified in Section
7(e)(iii) hereof.
f. No Material Adverse Change. There shall have occurred no material
adverse change in the financial position of the Acquired Fund since April 30,
2001 other than changes in its portfolio securities since that date, changes
in the market value of its portfolio securities or changes in connection with
the payment of the Acquired Fund's customary operating expenses, each in the
ordinary course of business. The Acquired Fund reserves the right to sell any
of its portfolio securities in the ordinary course of business, but will not,
without the prior written consent of the Acquiring Fund, acquire any
additional securities other than securities of the type in which the Acquiring
Fund is permitted to invest.
g. Absence of Litigation. There shall not be pending before any
Governmental Authority any material litigation with respect to the matters
contemplated by this Agreement.
h. Proceedings and Documents. All proceedings contemplated by this
Agreement, the Reorganization, and all of the other documents incident
thereto, shall be reasonably satisfactory to the Acquiring Fund and its
counsel, and the Acquiring Fund and its counsel shall have received all such
counterpart originals or certified or other copies of such documents as the
Acquiring Fund or its counsel may reasonably request.
i. N-l4 Registration Statement; Acquiring Fund Post-Effective
Amendment. The N-14 Registration Statement and Acquiring Fund Post-Effective
Amendment each shall have become effective under the Securities Act, and no
stop order suspending such effectiveness shall have been instituted or, to the
knowledge of the Acquired Fund or the Acquiring Fund, contemplated by the
Commission.
j. Compliance with Laws; No Adverse Action or Decision. Since the date
hereof, (i) no law, statute, ordinance, code, rule or regulation shall have
been promulgated, enacted or entered that restrains, enjoins, prevents,
materially delays, prohibits or otherwise makes illegal the performance of
this Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby and thereby; (ii) the Commission shall not
have issued an unfavorable advisory report under Section 25(b) of the
Investment Company Act, nor instituted or threatened to institute any
proceeding seeking to enjoin consummation of the Reorganization under Section
25(c) of the Investment Company Act, and (iii) no other legal, administrative
or other proceeding shall be instituted or threatened by any Governmental
Authority which would materially affect the financial condition of the
Acquired Fund or that seeks to restrain, enjoin, prevent, materially delay,
prohibit
15
or otherwise make illegal the performance of this Agreement, the Reorganization
or the consummation of any of the transactions contemplated hereby or thereby.
k. Commission Orders or Interpretations. The Acquiring Fund shall have
received from the Commission such orders or interpretations, including a
Section 17 Order, as counsel to the Acquiring Fund, deems reasonably necessary
or desirable under the Securities Act and the Investment Company Act in
connection with the Reorganization; provided that such counsel shall have
requested such orders or interpretations as promptly as practicable, and all
such orders shall be in full force and effect.
l. Dividends. [intentionally left blank]
9. Termination, Postponement and Waivers.
a. Termination of Agreement. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 10 hereof, this Agreement may be
terminated and the Reorganization abandoned at any time (whether before or
after approval thereof by the shareholders of the Acquired Fund) prior to the
Closing Date, or the Closing Date may be postponed, by notice in writing prior
to the Closing Date:
i. by the Acquired Fund or the Acquiring Fund if:
(1) the Board of Trustees of North American Funds and the Board of
Trustees of SunAmerica Equity Funds so mutually agree in writing; or
(2) any Governmental Authority of competent jurisdiction shall have
issued any judgment, injunction, order, ruling or decree or taken any
other action restraining, enjoining or otherwise prohibiting this
Agreement, the Reorganization or the consummation of any of the
transactions contemplated hereby or thereby and such judgment,
injunction, order, ruling, decree or other action becomes final and
non-appealable; provided that the party seeking to terminate this
Agreement pursuant to this Section 9(a)(i)(3) shall have used its
reasonable best efforts to have such judgment, injunction, order,
ruling, decree or other action lifted, vacated or denied;
ii. by the Acquired Fund if any condition of the Acquired Fund's
obligations set forth in Section 7 of this Agreement has not been fulfilled
or waived by it; or
iii. by the Acquiring Fund if any condition of the Acquiring Fund's
obligations set forth in Section 8 of this Agreement has not been fulfilled
or waived by it.
b. Commission Order. If any order or orders of the Commission with respect
to this Agreement, the Reorganization or any of the transactions contemplated
hereby or thereby shall be issued prior to the Closing Date and shall impose
any terms or conditions which are determined by action of the Board of Trustees
of North American Funds and the Board of Trustees of SunAmerica Equity Funds to
be acceptable, such terms and conditions shall be binding as if a part of this
Agreement without further vote or approval of the shareholders of the Acquired
Fund, unless such terms and conditions shall result in a change in the method
of computing the number of Corresponding Shares to be issued by the Acquiring
Fund to the Acquired Fund in which event, unless such terms and conditions
shall have been included in the proxy solicitation materials furnished to the
shareholders of the Acquired Fund prior to the meeting at which the
Reorganization shall have been approved, this Agreement shall not be
consummated and shall terminate unless the Acquired Fund promptly shall call a
special meeting of shareholders at which such conditions so imposed shall be
submitted for approval and the requisite approval of such conditions shall be
obtained.
c. Effect of Termination. In the event of termination of this Agreement
pursuant to the provisions hereof, the same shall become null and void and have
no further force or effect, and there shall not be any liability on
16
the part of either the Acquired Fund or the Acquiring Fund, North American
Funds or SunAmerica Equity Funds, or Persons who are their directors, trustees,
officers, agents or shareholders in respect of this Agreement.
d. Waivers; Non-Material Changes. At any time prior to the Closing Date, any
of the terms or conditions of this Agreement may be waived by the party that is
entitled to the benefit thereof if such action or waiver will not have a
material adverse effect on the benefits intended under this Agreement to the
shareholders of such party on behalf of which such action is taken. In
addition, each party has delegated to its investment adviser the ability to
make non-material changes to this Agreement if such investment adviser deems it
to be in the best interests of the Acquired Fund or Acquiring Fund for which it
serves as investment adviser to do so.
10. Survival of Representations and Warranties.
The respective representations and warranties contained in Sections 3 and 4
hereof shall expire with, and be terminated by, the consummation of the
Reorganization, and neither the Acquired Fund nor the Acquiring Fund nor any of
their officers, trustees, agents or shareholders shall have any liability with
respect to such representations or warranties after the Closing Date. This
provision shall not protect any officer, trustee or agent of the Acquired Fund
or the Acquiring Fund, or of North American Funds or SunAmerica Equity Funds
against any liability to the entity for which such Person serves in such
capacity, or to its shareholders, to which such Person would be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties in the conduct of such office.
11. Other Matters.
a. Obligations under Massachusetts Law. Copies of the North American Funds
Declaration of Trust Secretary of State of the Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Trustees of North American Funds on behalf of the Acquired Fund, as trustees
and not individually, and that the obligations of or arising out of this
instrument are not binding upon any of the trustees, officers, employees,
agents or shareholders of North American Funds individually, but are binding
solely upon the assets and property of the Acquired Fund.
b. Further Assurances. Each party hereto covenants and agrees to provide the
other party hereto and its agents and counsel with any and all documentation,
information, assistance and cooperation that may become necessary from time to
time with respect to the transactions contemplated by this Agreement.
c. Notices. Any notice, report or other communication hereunder shall be in
writing and shall be given to the Person entitled thereto by hand delivery,
prepaid certified mail or overnight service, addressed to the Acquired Fund or
the Acquiring Fund, as applicable, at the address set forth below. If the
notice is sent by certified mail, it shall be deemed to have been given to the
Person entitled thereto upon receipt and if the notice is sent by overnight
service, it shall be deemed to have been given to the Person entitled thereto
one (1) business day after it was deposited with the courier service for
delivery to that Person. Notice of any change in any address listed below also
shall be given in the manner set forth above. Whenever the giving of notice is
required, the giving of such notice may be waived by the party entitled to
receive such notice.
If to the Acquired Fund, to: North American Funds
286 Congress Street
Boston, MA 02210
Attention: Nori Gabert, Esq.
With a copy to: Sullivan & Worcester LLP
1025 Connecticut Avenue, N.W.
Suite 1000
Washington, DC 20036
Attention: David M. Leahy, Esq.
17
If to the Acquiring Fund, to:
SunAmerican Equity Funds
733 Third Avenue, Third Floor
New York, NY 10017
Attention: Robert M. Zakem, Esq.
With a copy to: Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Attention: Margery K. Neale, Esq.
d. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the matters contemplated herein and
supersedes all previous agreements or understandings between the parties
related to such matters.
e. Amendment. Except as set forth in Section 9(d) hereof, this Agreement may
be amended, modified, superseded, canceled, renewed or extended, and the terms
or covenants hereof may be waived, only by a written instrument executed by all
of the parties hereto or, in the case of a waiver, by the party waiving
compliance; provided that, following the meeting of shareholders of the
Acquired Fund pursuant to Section 5(a) hereof, no such amendment may have the
effect of changing the provisions for determining the number of Corresponding
Shares to be issued to the Acquired Fund shareholders under this Agreement to
the detriment of such shareholders without their further approval. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of
a similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
f. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York applicable to agreements made and to be performed in
said state, without giving effect to the principles of conflict of laws
thereof.
g. Assignment. This Agreement shall not be assigned by any of the parties
hereto, in whole or in part, whether by operation of law or otherwise, without
the prior written consent of the other party hereto. Any purported assignment
contrary to the terms hereof shall be null, void and of no effect. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm, or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
h. Costs of the Reorganization. All costs of the Reorganization shall be
borne by American International Group, Inc. or an affiliate thereof, regardless
of whether the Reorganization is consummated.
i. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
j. Headings. Headings to sections in this Agreement are intended solely for
convenience and no provision of this Agreement is to be construed by reference
to the heading of any section.
k. Counterparts. This Agreement may be executed in any number of
counterparts, each of which, when executed and delivered, shall be deemed to be
an original but all such counterparts together shall constitute but one
instrument.
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
Attest: North American Funds on behalf of
Global Equity Fund
International Equity Fund
By: _________________________________ International Small Cap Fund
Name:
Title:
By: __________________________________
Name:
Title:
Attest: SunAmerica Equity Funds on behalf of
SunAmerica International Equity Fund
By: _________________________________
Name: By: __________________________________
Title: Name:
Title:
19
STATEMENT OF ADDITIONAL INFORMATION
SUNAMERICA EQUITY FUNDS
733 Third Avenue, Third Floor
New York, NY 10017
(800) 858-8850
----------------
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Proxy Statements and Prospectuses (the "Proxy
Statements and Prospectuses"), each dated October 1, 2001, which have been
filed with the Securities and Exchange Commission by SunAmerica Equity Funds
(sometimes referred to herein as the "Registrant") with respect to the matters
described in "General Information" below. Copies of the Proxy Statements and
Prospectuses may be obtained at no charge upon request by writing to the
Registrant at the address indicated above or by calling toll-free 1-800-858-
8850. This Statement of Additional Information has been incorporated by
reference into each Proxy Statement and Prospectus.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Proxy Statements and
Prospectuses.
Further information about the Existing Acquiring Funds (as defined below) is
contained in the Existing Acquiring Funds' Prospectus and Statement of
Additional Information, each dated January 29, 2001, as supplemented, and the
Annual Reports to Shareholders of the Existing Acquiring Funds for the year
ended September 30, 2000 and the Semi-Annual Report to Shareholders of the
Existing Acquiring Funds for the six months ended March 31, 2001. Further
information about the NAF Acquired Funds (as defined below) is contained in the
NAF Acquired Funds' Prospectuses and Statement of Additional Information, each
dated March 1, 2001, as supplemented, the Annual Report to Shareholders of the
NAF Acquired Funds for the year ended October 31, 2000 and the Semi-Annual
Report to Shareholders of the NAF Acquired Funds for the six months ended April
30, 2001. Further information about SunAmerica International Equity Portfolio,
a separate investment portfolio of SunAmerica Style Select Series, Inc.
("SunAmerica International Equity Portfolio" or the "SunAmerica Acquired
Fund"), is contained in the SunAmerica Acquired Fund's Prospectus and Statement
of Additional Information, each dated February 28, 2001, as supplemented, the
Annual Report to Shareholders of the SunAmerica Acquired Fund for the year
ended October 31, 2000 and the Semi-Annual Report to Shareholders of the
SunAmerica Acquired Fund for the six months ended April 30, 2001.
The following documents are incorporated herein by reference and accompany
this Statement of Additional Information:
. The Statement of Additional Information of the Existing Acquiring Funds,
dated January 29, 2001, as supplemented.
. The Annual Report to Shareholders of the Existing Acquiring Funds for the
year ended September 30, 2000.
. The Semi-Annual Report to Shareholders of the Existing Acquiring Funds
for the six months ended March 31, 2001.
. The Statement of Additional Information of the NAF Acquired Funds, dated
March 1, 2001, as supplemented.
. The Annual Report to Shareholders of the NAF Acquired Funds for the year
ended October 31, 2000.
. The Semi-Annual Report to Shareholders of the NAF Acquired Funds for the
six months ended April 30, 2001.
The date of this Statement of Additional Information is October 1, 2001.
B-1
. The Statement of Additional Information of the SunAmerica Acquired Fund,
dated February 28, 2001, as supplemented.
. The Annual Report to Shareholders of the SunAmerica Acquired Fund for the
year ended October 31, 2000.
. The Semi-Annual Report to Shareholders of the SunAmerica Acquired Fund
for the six months ended April 30, 2001.
The Securities and Exchange Commission maintains a web site
(http://www.sec.gov) that contains the prospectuses and combined statements of
additional information of the Funds, other material incorporated by reference
and other information regarding the Funds.
B-2
TABLE OF CONTENTS
General Information...................................................... B-4
Financial Statements..................................................... B-5
NAF Balanced Fund and SunAmerica Balanced Assets Fund
Pro Forma Combined Statement of Assets and Liabilities (unaudited) as
of March 31, 2001..................................................... B-6
Pro Forma Combined Statement of Operations (unaudited) as of March 31,
2001.................................................................. B-8
Pro Forma Combined Portfolio of Investments (unaudited) as of March 31,
2001.................................................................. B-9
Notes to Pro Forma Financial Statements................................ B-14
NAF Large Cap Growth Fund and SunAmerica Blue Chip Growth Fund
Pro Forma Combined Statement of Assets and Liabilities (unaudited) as
of March 31, 2001..................................................... B-16
Pro Forma Combined Statement of Operations (unaudited) as of March 31,
2001.................................................................. B-18
Pro Forma Combined Portfolio of Investments (unaudited) as of March 31,
2001.................................................................. B-19
Notes to Pro Forma Financial Statements................................ B-24
NAF Growth & Income Fund and SunAmerica Growth and Income Fund
Pro Forma Combined Statement of Assets and Liabilities (unaudited) as
of March 31, 2001..................................................... B-26
Pro Forma Combined Statement of Operations (unaudited) as of March 31,
2001.................................................................. B-28
Pro Forma Combined Portfolio of Investments (unaudited) as of March 31,
2001.................................................................. B-29
Notes to Pro Forma Financial Statements................................ B-33
NAF Mid Cap Growth Fund and SunAmerica Growth Opportunities Fund
Pro Forma Combined Statement of Assets and Liabilities (unaudited) as
of March 31, 2001..................................................... B-36
Pro Forma Combined Statement of Operations (unaudited) as of March 31,
2001.................................................................. B-38
Pro Forma Combined Portfolio of Investments (unaudited) as of March 31,
2001.................................................................. B-39
Notes to Pro Forma Financial Statements................................ B-44
NAF Global Equity Fund, NAF International Equity Fund, NAF International
Small Cap Fund and SunAmerica International Equity Portfolio
Pro Forma Combined Statement of Assets and Liabilities (unaudited) as
of March 31, 2001..................................................... B-47
Pro Forma Combined Statement of Operations (unaudited) as of March 31,
2001.................................................................. B-49
Pro Forma Combined Portfolio of Investments (unaudited) as of March 31,
2001.................................................................. B-50
Notes to Pro Forma Financial Statements................................ B-71
B-3
GENERAL INFORMATION
The shareholders of each separate investment portfolio of North American
Funds, a Massachusetts business trust, set forth below (each a "NAF Acquired
Fund," collectively, the "NAF Acquired Funds" and together with the SunAmerica
Acquired Fund, the "Acquired Funds"), are being asked to approve or disapprove
a new investment advisory agreement (the "New Investment Advisory Agreement")
between American General Asset Management Corp. ("AGAM") and North American
Funds on behalf of each of the NAF Acquired Funds, the terms of which are the
same in all material respects as the previous investment advisory agreement
with AGAM. In addition, shareholders of each NAF Acquired Fund and shareholders
of the SunAmerica International Equity Portfolio are being asked to approve or
disapprove an Agreement and Plan of Reorganization (each a "Plan") between each
of the Acquired Funds and the respective investment portfolio of SunAmerica
Equity Funds, a Massachusetts business trust, set forth below (each an
"Acquiring Fund," and collectively, the "Acquiring Funds"):
Acquired Fund: Acquiring Fund:
-------------- ---------------
Balanced Fund SunAmerica Balanced Assets Fund
Large Cap Growth Fund SunAmerica Blue Chip Growth Fund
Growth & Income Fund SunAmerica Growth and Income Fund
Mid Cap Growth Fund SunAmerica Growth Opportunities Fund
Global Equity Fund SunAmerica International Equity Fund (the "New
SunAmerica International Equity Fund")
International Equity Fund New SunAmerica International Equity Fund
International Small Cap Fund New SunAmerica International Equity Fund
SunAmerica International Equity
Portfolio New SunAmerica International Equity Fund
The SunAmerica Balanced Assets Fund, SunAmerica Blue Chip Growth Fund,
SunAmerica Growth and Income Fund and SunAmerica Growth Opportunities Fund of
SunAmerica Equity Funds are sometimes referred to herein as the "Existing
Acquiring Funds."
Each Plan provides for the acquisition by an Acquiring Fund of substantially
all of the assets, and assumption of substantially all of the liabilities, of
the respective Acquired Fund, solely in exchange for an equal aggregate value
of newly issued shares (the "Corresponding Shares") of such Acquiring Fund.
Each such transaction is referred to herein as a "Reorganization" and
collectively, as the "Reorganizations." Immediately thereafter, and as part of
the respective Reorganization, such Acquired Fund will distribute the
Corresponding Shares received in such Reorganization to its shareholders. The
consummation of one Reorganization is not conditioned upon the consummation of
any other Reorganization. The Acquired Funds and the Acquiring Funds are
sometimes collectively referred to herein as the "Funds."
Shareholders will receive the same class of Corresponding Shares as the
shares of the respective Acquired Fund held by them immediately prior to the
applicable Reorganization although the name of the class may be different. For
example, if a shareholder owns Class C shares of an Acquired Fund, he or she
will receive Class II shares of the respective Acquiring Fund since the
Acquiring Funds do not have a class of shares called Class C. The aggregate net
asset value of the Corresponding Shares will equal the aggregate net asset
value of a shareholder's Acquired Fund shares. This means that a shareholder
may end up with a different number of shares compared to the number that he or
she originally held, but the total dollar value of the shares will be the same.
A Joint Special Meeting of the Acquired Funds' shareholders to consider the
New Investment Advisory Agreement and the Plans will be held at the principal
executive offices of North American Funds, 286 Congress Street, Boston,
Massachusetts 02210 on November 7, 2001, at 10:00 a.m., Eastern Time. The
approximate mailing date of the Proxy Statement and Prospectus is October 5,
2001.
For further information about the Reorganizations, see the Proxy Statements
and Prospectuses.
B-4
FINANCIAL STATEMENTS
Unaudited Pro forma financial statements reflecting consummation of each
Reorganization are included herein.
Acquired Funds
Audited financial statements and accompanying notes for the fiscal year
ended October 31, 2000 for the NAF Acquired Funds and the independent auditor's
report thereon are incorporated herein by reference from the NAF Acquired
Funds' Annual Report to Shareholders, which accompanies this Statement of
Additional Information. Unaudited financial statements and accompanying notes
for the six months ended April 30, 2001 for the NAF Acquired Funds are
incorporated herein by reference from the NAF Acquired Funds' Semi-Annual
Report to Shareholders, which accompanies this Statement of Additional
Information.
Audited financial statements and accompanying notes for the fiscal year
ended October 31, 2000 for the SunAmerica International Equity Portfolio and
the independent auditor's report thereon are incorporated herein by reference
to SunAmerica International Equity Portfolio's Annual Report to Shareholders,
which accompanies this Statement of Additional Information. Unaudited financial
statements and accompanying notes for the six months ended April 30, 2001 for
the SunAmerica International Equity Portfolio are incorporated herein by
reference from the SunAmerica International Equity Portfolio's Semi-Annual
Report to Shareholders, which accompanies this Statement of Additional
Information.
Acquiring Funds
Audited financial statements and accompanying notes for the fiscal year
ended September 30, 2000 for the Existing Acquiring Funds and the independent
auditor's report thereon are incorporated herein by reference from the Existing
Acquiring Funds' Annual Report to Shareholders, which accompanies this
Statement of Additional Information. Unaudited financial statements and
accompanying notes for the six months ended March 31, 2001 for the Existing
Acquiring Funds are incorporated herein by reference from the Existing
Acquiring Funds Semi-Annual Report to Shareholders, which accompanies this
Statement of Additional Information.
B-5
SUNAMERICA EQUITY FUNDS BALANCED ASSETS FUND
NORTH AMERICAN FUNDS BALANCED FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Balanced Funds Balanced Pro Forma Combined
Fund Assets Fund Adjustments (Note 1)
------------- --------------- ------------- --------------
ASSETS:
Investment securities, at value (identified cost $56,751,145,
$406,280,050, and $463,031,195, respectively) $ 51,541,340 $ 392,008,491 -- $ 443,549,831
Short-term securities (identified cost $1,000, $0, and
$1,000, respectively) 1,000 -- -- 1,000
Repurchase agreements (cost equals market) 2,261,000 12,796,000 -- 15,057,000
Cash 824 422 -- 1,246
Foreign cash 202,833 -- -- 202,833
Receivable for investments sold 65,586 11,357,499 -- 11,423,085
Receivable for shares of beneficial interest sold 2,356 297,479 -- 299,835
Interest and dividends receivable 298,810 2,462,126 -- 2,760,936
Receivable from investment adviser -- 514 -- 514
Prepaid expenses and other assets 79,246 7,655 (11,772)(A) 75,129
Receivable for foreign tax withholding reclaims 4,276 -- -- 4,276
------------- ------------- ------------- -------------
Total assets 54,457,271 418,930,186 (11,772) 473,375,685
------------- ------------- ------------- -------------
LIABILITIES:
Payable for investments purchased -- 3,153,990 -- 3,153,990
Payable for shares of beneficial interest 248,192 760,198 -- 1,008,390
Investment advisory and management
fees payable 23,798 270,001 -- 293,799
Distribution and service maintenance
fees payable 39,956 215,779 -- 255,735
Other accrued expenses 128,517 302,795 -- 431,312
Dividends payable -- 70,256 -- 70,256
------------- ------------- ------------- -------------
Total liabilities 440,463 4,773,019 0 5,213,482
------------- ------------- ------------- -------------
Net assets $ 54,016,808 $ 414,157,167 ($ 11,772) $ 468,162,203
============= ============= ============= =============
NET ASSETS WERE COMPOSED OF:
Shares of beneficial interest, $.001, $.01, and $.01, par value $ 6,843 $ 276,951 $ 29,300 (B) $ 313,094
Paid-in capital 63,307,347 433,212,867 (29,300)(B) 496,490,914
------------- ------------- ------------- -------------
63,314,190 433,489,818 0 496,804,008
Accumulated undistributed net
investment income (loss) 79,334 (150,685) (11,772)(A) (83,123)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (4,159,592) (4,910,407) -- (9,069,999)
Net unrealized appreciation (depreciation) on
investments (5,209,805) (14,271,559) -- (19,481,364)
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities (7,319) -- -- (7,319)
------------- ------------- ------------- -------------
Net assets $ 54,016,808 $ 414,157,167 ($ 11,772) $ 468,162,203
============= ============= ============= =============
B-6
SUNAMERICA EQUITY FUNDS BALANCED ASSETS FUND
NORTH AMERICAN FUNDS BALANCED FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Balanced Funds Balanced Pro Forma Combined
Fund Assets Fund Adjustments (Note 1)
--------------- ---------------- -------------------- - -------------
Class A:
Net assets $ 7,286,284 $ 264,131,925 ($1,588) (A) $271,416,621
Shares outstanding 927,998 17,644,795 (441,378) (B) 18,131,415
Net asset value and redemption price per
share $ 7.85 $ 14.97 -- $ 14.97
Maximum sales charge (5.75% of offering
price) 0.48 0.91 -- 0.91
------------ --------------- ------------------- ------------
Maximum offering price to public $ 8.33 $ 15.88 -- $ 15.88
============ =============== =================== ============
Class B:
Net assets $ 12,382,963 $ 123,535,316 ($2,699) (A) $135,915,580
Shares outstanding 1,580,602 8,277,263 (750,826) (B) 9,107,039
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 7.83 $ 14.92 -- $ 14.92
============ =============== =================== ============
Class II:
Net assets -- $ 26,489,926 $29,235,996 (D) $ 55,725,922
Shares outstanding -- 1,773,072 1,956,894 (B)(D) 3,729,966
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) -- $ 14.94 -- $ 14.94
Maximum sales charge (1.00% of offering
price) -- 0.15 -- 0.15
------------ --------------- ------------------- ------------
Maximum offering price to public -- $ 15.09 -- $ 15.09
============ =============== =================== ============
Class C:
Net assets $ 29,242,368 -- ($29,242,368)(A)(D) $ 0
Shares outstanding 3,684,912 -- (3,684,912)(B)(D) 0
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 7.94 -- -- --
============ =============== =================== ============
Class I:
Net assets $ 5,105,193 -- ($1,113)(A) $ 5,104,080
Shares outstanding 649,582 -- (308,628)(B)(C) 340,954
Net asset value, offering and redemption
price per share $ 7.86 $ 14.97 -- $ 14.97
============ =============== =================== ============
(A) To adjust for the remaining balances of any prepaid expenses on the North
American Funds Balanced Fund to be expensed prior to the reorganization
(B) To adjust for a tax free exchange of North American Funds Balanced shares
for shares of SunAmerica Equity Funds Balanced Assets
(C) Class I shares will be offered on SunAmerica Equity Funds Balanced Assets
and will assume the net asset value of Class A
(D) Class C shares of North American Funds Balanced will receive Class II
shares of SunAmerica Equity Funds Balanced Assets
See Notes to Pro Forma Financial Statements
B-7
SUNAMERICA EQUITY FUNDS BALANCED ASSETS FUND
NORTH AMERICAN FUNDS BALANCED FUND
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED MARCH 31, 2001
(unaudited)
North America SunAmerica
Fund Equity Funds Pro Forma
Balanced Balanced Assets Pro Forma Combined
Fund Fund Adjustments (Note 1)
------------- ------------- ------------- -------------
INVESTMENT INCOME:
Income:
Interest $ 1,485,894 $ 10,593,564 $ 0 $ 12,079,458
Dividends* 380,088 2,232,479 0 2,612,567
------------- ------------- ------------- -------------
Total investment income 1,865,982 12,826,043 0 14,692,025
------------- ------------- ------------- -------------
Expenses:
Investment advisory and management fees 443,842 3,663,559 (39,202)(E) 4,068,199
Distribution and service maintenance fees
Class A 27,437 1,048,783 0 1,076,220
Class B 133,277 1,720,845 0 1,854,122
Class II 0 266,632 311,481 (D) 578,113
Class C 311,481 0 (311,481)(D) 0
Class I 13,641 0 0 13,641
Transfer agent fees and expenses 165,518 0 (165,518)(E) 0
Class A 0 822,694 21,166 (E) 843,860
Class B 0 436,637 33,319 (E) 469,956
Class II 0 61,095 90,329 (E) 151,424
Class I 0 0 16,369 (E) 16,369
Registration fees 39,909 0 (39,909)(E) 0
Class A 0 45,768 1,000 (E) 46,768
Class B 0 18,336 1,000 (E) 19,336
Class II 0 16,252 4,000 (E) 20,252
Class I 0 0 8,000 (E) 8,000
Accounting/Administration 62,181 0 (62,181)(E) 0
Custodian fees and expenses 31,924 224,200 (8,815)(E) 247,309
Audit and legal fees 26,625 25,555 (19,680)(F) 32,500
Miscellaneous expenses 28,707 92,891 (28,000)(F) 93,598
------------- ------------- ------------- -------------
Total expenses 1,284,542 8,443,247 (188,122) 9,539,667
Less: expenses waived/reimbursed by investment adviser (53,973) (11,817) 21,827 (G) (43,963)
Less: custody credits earned on cash balances 0 0 0 0
------------- ------------- ------------- -------------
Net expenses 1,230,569 8,431,430 (166,295) 9,495,704
------------- ------------- ------------- -------------
Net investment income (loss) 635,413 4,394,613 166,295 5,196,321
------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (3,656,126) 23,609,906 0 19,953,780
Net realized gain (loss) on foreign currency and
other assets and liabilities (399) 0 0 (399)
Net change in unrealized appreciation/depreciation of
investments (3,942,149) (151,940,091) 0 (155,882,240)
Net change in unrealized appreciation/depreciation on
foreign currency and other assets and liabilities (904) 0 0 (904)
------------- ------------- ------------- -------------
Net realized and unrealized gain (loss) on investments,
foreign currency and other assets and liabilities (7,599,578) (128,330,185) 0 (135,929,763)
------------- ------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS: ($ 6,964,165) ($123,935,572) $ 166,295 ($130,733,442)
============= ============= ============= =============
*Net of foreign withholding taxes on dividends of $ 0 $ 17,080 $ 0 $ 17,080
============= ============= ============= =============
(D) Class C shares of North American Funds Balanced will receive Class II
shares of SunAmerica Equity Funds Balanced Assets
(E) Reflects adjustments to expenses based on surviving fund's fee schedules
and combined net assets
(F) Reflects the elimination of duplicate services or fees
(G) Reflects adjustments to expenses waived/reimbused by investment adviser
based on pro forma expenses
See Notes to Pro Forma Financial Statements
B-8
SunAmerica Equity Funds Balanced Assets Fund
North American Funds Balanced Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
----------------------------------------------
SunAmerica SunAmerica
North Equity North Equity
American Funds American Funds
Fund Balanced Fund Balanced
Balanced Assets Pro Forma Maturity Balanced Assets
Fund Fund Combined Description Coupon Date Fund Fund
------------ ------------ ---------------------------------------------------------- -------- -------- --------- --------
COMMON STOCK 64.2% 53.2%
Apparel & Textiles 0.0% 0.3%
- 66,300 66,300 Oakley, Inc. +
Automotive 1.0% 0.0%
10,300 - 10,300 General Motors Corp.
Banks 3.1% 2.7%
16,500 90,000 106,500 Bank of New York Co., Inc.
- 129,700 129,700 FleetBoston Financial Corp.
- 42,600 42,600 Mellon Financial Corp.
17,600 - 17,600 Wells Fargo & Co.
Broadcasting & Media 4.0% 3.3%
19,000 138,450 157,450 AOL Time Warner, Inc. +
24,400 95,000 119,400 AT&T Corp.-Liberty Media Group, Class A +
- 85,300 85,300 Comcast Corp., Class A +
15,500 80,000 95,500 EchoStar Communications Corp., Class A +
7,600 - 7,600 Omnicom Group, Inc.
- 48,100 48,100 Pegasus Communications Corp. +
Business Services 0.0% 0.4%
- 70,000 70,000 Waste Management, Inc.
Chemicals 0.8% 0.0%
13,000 - 13,000 Dow Chemical Co.
Communication Equipment 3.6% 1.0%
24,500 190,800 215,300 Cisco Systems, Inc. +
20,400 - 20,400 Corning, Inc.
24,800 - 24,800 Crown Castle International Corp. +
4,600 10,000 14,600 Juniper Networks, Inc. +
- 71,100 71,100 Lucent Technologies, Inc.
25,700 - 25,700 Nokia Corp., Class A ADR
Computers & Business Equipment 1.9% 2.7%
- 150,000 150,000 Dell Computer Corp. +
16,700 140,000 156,700 EMC Corp. +
- 35,000 35,000 International Business Machines Corp.
4,900 - 4,900 Redback Networks, Inc. +
30,600 - 30,600 Sun Microsystems, Inc. +
Computer Software 1.9% 2.2%
14,200 163,200 177,400 Microsoft Corp. +
5,600 - 5,600 VERITAS Software Corp. +
Conglomerate 1.4% 5.1%
17,600 340,000 357,600 General Electric Co.
- 161,600 161,600 Tyco International Ltd.
Electronics 3.1% 4.5%
11,500 - 11,500 Analog Devices, Inc. +
9,000 120,000 129,000 Applied Materials, Inc. +
- 35,600 35,600 Emerson Electric Co.
17,400 179,200 196,600 Intel Corp.
9,500 70,000 79,500 Micron Technology, Inc. +
Principal/Shares Market Value
---------------------------------------------- -----------------------------------
Balanced Pro Forma Pro Forma Balanced Pro Forma
Balanced Assets Combined Description Combined Balanced Assets Combined
------------ ------------ -------------------------------------------------------- --------- ---------- ---------- ----------
COMMON STOCK 54.5%
Apparel & Textiles 0.3%
- 66,300 66,300 Oakley, Inc. + - 1,178,151 1,178,151
Automotive 0.1%
10,300 - 10,300 General Motors Corp. 534,055 - 534,055
Banks 2.7%
16,500 90,000 106,500 Bank of New York Co., Inc. 812,460 4,431,600 5,244,060
- 129,700 129,700 FleetBoston Financial Corp. - 4,896,175 4,896,175
- 42,600 42,600 Mellon Financial Corp. - 1,726,152 1,726,152
17,600 - 17,600 Wells Fargo & Co. 870,672 - 870,672
Broadcasting & Media 3.4%
19,000 138,450 157,450 AOL Time Warner, Inc. + 762,850 5,558,767 6,321,617
24,400 95,000 119,400 AT&T Corp.-Liberty Media Group, Class A + 341,600 1,330,000 1,671,600
- 85,300 85,300 Comcast Corp., Class A + - 3,577,269 3,577,269
15,500 80,000 95,500 EchoStar Communications Corp., Class A + 429,156 2,215,000 2,644,156
7,600 - 7,600 Omnicom Group, Inc. 629,888 - 629,888
- 48,100 48,100 Pegasus Communications Corp. + - 1,106,300 1,106,300
Business Services 0.4%
- 70,000 70,000 Waste Management, Inc. - 1,729,000 1,729,000
Chemicals 0.1%
13,000 - 13,000 Dow Chemical Co. 410,410 - 410,410
Communication Equipment 1.3%
24,500 190,800 215,300 Cisco Systems, Inc. + 387,406 3,017,025 3,404,431
20,400 - 20,400 Corning, Inc. 422,076 - 422,076
24,800 - 24,800 Crown Castle International Corp. + 367,350 - 367,350
4,600 10,000 14,600 Juniper Networks, Inc. + 174,616 379,600 554,216
- 71,100 71,100 Lucent Technologies, Inc. - 708,867 708,867
25,700 - 25,700 Nokia Corp., Class A ADR 616,800 - 616,800
Computers & Business Equipment 2.6%
- 150,000 150,000 Dell Computer Corp. + - 3,853,125 3,853,125
16,700 140,000 156,700 EMC Corp. + 490,980 4,116,000 4,606,980
- 35,000 35,000 International Business Machines Corp. - 3,366,300 3,366,300
4,900 - 4,900 Redback Networks, Inc. + 64,092 - 64,092
30,600 - 30,600 Sun Microsystems, Inc. + 470,322 - 470,322
Computer Software 2.1%
14,200 163,200 177,400 Microsoft Corp. + 776,562 8,925,000 9,701,562
5,600 - 5,600 VERITAS Software Corp. + 258,944 - 258,944
Conglomerate 4.7%
17,600 340,000 357,600 General Electric Co. 736,736 14,232,400 14,969,136
- 6,985,968 6,985,968
- 161,600 161,600 Tyco International Ltd. 4.3%
Electronics 416,760 - 416,760
391,500 5,220,000 5,611,500
11,500 - 11,500 Analog Devices, Inc. + - 2,205,776 2,205,776
9,000 120,000 129,000 Applied Materials, Inc. + 457,838 4,715,200 5,173,038
- 35,600 35,600 Emerson Electric Co. 394,535 2,907,100 3,301,635
17,400 179,200 196,600 Intel Corp.
9,500 70,000 79,500 Micron Technology, Inc. +
B-9
SunAmerica Equity Funds Balanced Assets Fund
North American Funds Balanced Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
----------------------------------------------
SunAmerica SunAmerica
North Equity North Equity
American Funds American Funds
Funds Balanced Funds Balanced
Balanced Assets Pro Forma Maturity Balanced Assets
Fund Fund Combined Description Coupon Date Fund Fund
------------ ------------ ---------------------------------------------------------- -------- -------- --------- --------
- 110,000 110,000 Texas Instruments, Inc. +
Energy Services 1.0% 1.5%
- 40,300 40,300 Nabors Industries, Inc. +
- 45,000 45,000 Noble Drilling Corp. +
- 60,000 60,000 Santa Fe International Corp.
9,200 - 9,200 Schlumberger Ltd.
Energy Sources 3.4% 2.4%
7,500 - 7,500 AES Corp.
10,800 47,400 58,200 Apache Corp.
- 28,400 28,400 Burlington Resources Inc.
- 60,000 60,000 Devon Energy Corp.
10,296 32,500 42,796 Exxon Mobil Corp.
Financial Services 6.5% 9.0%
13,600 - 13,600 Allmerica Financial Corp.
- 75,000 75,000 American Express Co.
- 77,400 77,400 Capital One Financial Corp.
19,533 180,000 199,533 Citigroup, Inc.
16,300 223,340 239,640 J P Morgan Chase & Co., Inc.
- 70,000 70,000 Lehman Brothers Holdings, Inc.
10,900 42,900 53,800 Morgan Stanley Dean Witter & Co.
- 100,000 100,000 Providian Financial Corp.
24,000 - 24,000 Stilwell Financial, Inc.
Food, Beverage & Tobacco 0.8% 0.5%
11,000 - 11,000 H.J. Heinz & Co.
- 45,000 45,000 Philip Morris Cos., Inc.
Forest Products 0.0% 0.5%
- 70,000 70,000 Georgia-Pacific Group
Household Products 1.8% 0.0%
7,100 - 7,100 Colgate-Palmolive Co.
19,000 - 19,000 Gillette Co.
Internet Content 1.2% 0.0%
18,700 - 18,700 eBay, Inc. +
Leisure & Tourism 1.3% 0.0%
23,000 - 23,000 Harrah's Entertainment, Inc. +
Medical Products 0.0% 2.1%
- 65,800 65,800 Amgen, Inc. +
- 52,100 52,100 Johnson & Johnson Co.
Metals & Mining 2.4% 0.0%
17,200 - 17,200 Alcoa, Inc.
6,500 - 6,500 Minnesota Mining & Manufacturing Co.
Pharmaceuticals 11.0% 7.6%
14,400 - 14,400 Abbott Laboratories, Inc.
14,800 - 14,800 American Home Products Corp.
- 50,000 50,000 Biogen, Inc. +
- 90,000 90,000 Bristol Myers Squibb Co.
13,800 23,200 37,000 Genentech, Inc. +
Principal/Shares Market Value
---------------------------------------------- -----------------------------------
Balanced Pro Forma Pro Forma Balanced Pro Forma
Balanced Assets Combined Description Combined Balanced Assets Combined
------------ ------------ -------------------------------------------------------- --------- ---------- ---------- ----------
- 110,000 110,000 Texas Instruments, Inc. + - 3,407,800 3,407,800
Energy Services 1.4%
- 40,300 40,300 Nabors Industries, Inc. + - 2,089,152 2,089,152
- 45,000 45,000 Noble Drilling Corp. + - 2,077,200 2,077,200
- 60,000 60,000 Santa Fe International Corp. - 1,950,000 1,950,000
9,200 - 9,200 Schlumberger Ltd. 530,012 - 530,012
Energy Sources 2.6%
7,500 - 7,500 AES Corp. 374,700 - 374,700
10,800 47,400 58,200 Apache Corp. 622,188 2,730,714 3,352,902
- 28,400 28,400 Burlington Resources Inc. - 1,270,900 1,270,900
- 60,000 60,000 Devon Energy Corp. - 3,492,000 3,492,000
10,296 32,500 42,796 Exxon Mobil Corp. 833,976 2,632,500 3,466,476
Financial Services 8.7%
13,600 - 13,600 Allmerica Financial Corp. 705,704 - 705,704
- 75,000 75,000 American Express Co. - 3,097,500 3,097,500
- 77,400 77,400 Capital One Financial Corp. - 4,295,700 4,295,700
19,533 180,000 199,533 Citigroup, Inc. 878,594 8,096,400 8,974,994
16,300 223,340 239,640 J P Morgan Chase & Co., Inc. 731,870 10,027,966 10,759,836
- 70,000 70,000 Lehman Brothers Holdings, Inc. - 4,389,000 4,389,000
10,900 42,900 53,800 Morgan Stanley Dean Witter & Co. 583,150 2,295,150 2,878,300
- 100,000 100,000 Providian Financial Corp. - 4,905,000 4,905,000
24,000 - 24,000 Stilwell Financial, Inc. 643,680 - 643,680
Food, Beverage & Tobacco 0.6%
11,000 - 11,000 H.J. Heinz & Co. 442,200 - 442,200
- 45,000 45,000 Philip Morris Cos., Inc. - 2,135,250 2,135,250
Forest Products 0.5%
- 70,000 70,000 Georgia-Pacific Group - 2,058,000 2,058,000
Household Products 0.2%
7,100 - 7,100 Colgate-Palmolive Co. 392,346 - 392,346
19,000 - 19,000 Gillette Co. 592,230 - 592,230
Internet Content 0.1%
18,700 - 18,700 eBay, Inc. + 676,706 - 676,706
Leisure & Tourism 0.1%
23,000 - 23,000 Harrah's Entertainment, Inc. + 676,890 - 676,890
Medical Products 1.8%
- 65,800 65,800 Amgen, Inc. + - 3,960,338 3,960,338
- 52,100 52,100 Johnson & Johnson Co. - 4,557,187 4,557,187
Metals & Mining 0.3%
17,200 - 17,200 Alcoa, Inc. 618,340 - 618,340
6,500 - 6,500 Minnesota Mining & Manufacturing Co. 675,350 - 675,350
Pharmaceuticals 8.0%
14,400 - 14,400 Abbott Laboratories, Inc. 679,536 - 679,536
14,800 - 14,800 American Home Products Corp. 869,500 - 869,500
- 50,000 50,000 Biogen, Inc. + - 3,165,625 3,165,625
- 90,000 90,000 Bristol Myers Squibb Co. - 5,346,000 5,346,000
13,800 23,200 37,000 Genentech, Inc. + 696,900 1,171,600 1,868,500
B-10
SunAmerica Equity Funds Balanced Assets Fund
North American Funds Balanced Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
----------------------------------------------
North SunAmerica North SunAmerica
American Equity Funds American Equity Funds
Funds Balanced Funds Balanced
Balanced Assets Pro Forma Maturity Balanced Assets
Fund Fund Combined Description Coupon Date Fund Fund
------------ ------------ ---------------------------------------------------------- -------- -------- --------- --------
21,800 - 21,800 King Pharmaceuticals, Inc. +
9,600 106,900 116,500 Merck & Co., Inc.
17,800 142,200 160,000 Pfizer, Inc.
14,800 90,000 104,800 Pharmacia Corp.
- 90,000 90,000 Schering Plough Corp.
10,800 - 10,800 Teva Pharmaceutical Industries Ltd. ADR
Retail Stores 3.5% 4.6%
- 180,000 180,000 Gap, Inc.
- 50,000 50,000 Home Depot, Inc.
18,200 - 18,200 Radioshack Corp.
16,900 96,000 112,900 Target Corp.
12,400 185,000 197,400 Wal Mart Stores, Inc.
Telecommunications 5.6% 1.4%
- 12,500 12,500 CIENA Corp. +
32,600 64,500 97,100 General Motors Corp., Class H +
30,300 - 30,300 Nextel Communications, Inc., Class A +
- 70,000 70,000 QUALCOMM, Inc. +
20,318 - 20,318 Qwest Communications International, Inc. +
15,000 - 15,000 SBC Communications, Inc.
11,900 - 11,900 Verizon Communications
Transportation 0.9% 0.0%
28,100 - 28,100 Norfolk Southern Corp.
Utilities 4.0% 1.4%
- 75,000 75,000 Calpine Corp. +
16,800 - 16,800 Duke Energy Co.
12,553 - 12,553 El Paso Corp.
- 28,400 28,400 Exelon Corp.
18,000 - 18,000 Unocal Corp.
Total Common Stock
(cost $40,438,963; 233,690,565; $274,129,528)
BONDS & NOTES 19.9% 8.7%
Aerospace & Military Technology 0.0% 1.0%
- 4,000,000 4,000,000 Lockheed Martin Corp. 7.25 05/15/06
Automotive 0.0% 1.1%
- 5,000,000 5,000,000 Daimler Chrysler Corp. 7.45 03/01/27
Electronics 0.0% 0.7%
- 3,000,000 3,000,000 Texas Instruments, Inc. 6.13 02/01/06
Financial Services 0.0% 4.7%
- 5,000,000 5,000,000 CS First Boston Mortgage Securities Corp. 6.48 05/17/08
- 5,000,000 5,000,000 Ford Motor Credit Co. 8.00 06/15/02
- 5,000,000 5,000,000 Goldman Sachs Group LP * 6.60 07/15/02
- 4,000,000 4,000,000 Morgan Stanley Group, Inc. 6.88 03/01/07
Food, Beverage & Tobacco 0.0% 1.2%
- 5,000,000 5,000,000 Hershey Foods Corp. 7.20 08/15/27
Telecommunications 7.7% 0.0%
Principal/Shares Market Value
---------------------------------------------- -----------------------------------
Balanced Pro Forma Pro Forma Balanced Pro Forma
Balanced Assets Combined Description Combined Balanced Assets Combined
------------ ------------ -------------------------------------------------------- --------- ---------- ---------- ----------
21,800 - 21,800 King Pharmaceuticals, Inc. + 888,350 - 888,350
9,600 106,900 116,500 Merck & Co., Inc. 728,640 8,113,710 8,842,350
17,800 142,200 160,000 Pfizer, Inc. 728,910 5,823,090 6,552,000
14,800 90,000 104,800 Pharmacia Corp. 745,476 4,533,300 5,278,776
- 90,000 90,000 Schering Plough Corp. - 3,287,700 3,287,700
10,800 - 10,800 Teva Pharmaceutical Industries Ltd. ADR 589,950 - 589,950
Retail Stores 4.5%
- 180,000 180,000 Gap, Inc. - 4,269,600 4,269,600
- 50,000 50,000 Home Depot, Inc. - 2,155,000 2,155,000
18,200 - 18,200 Radioshack Corp. 667,758 - 667,758
16,900 96,000 112,900 Target Corp. 609,752 3,463,680 4,073,432
12,400 185,000 197,400 Wal Mart Stores, Inc. 626,200 9,342,500 9,968,700
Telecommunications 1.9%
- 12,500 12,500 CIENA Corp. + - 521,875 521,875
32,600 64,500 97,100 General Motors Corp., Class H + 635,700 1,257,750 1,893,450
30,300 - 30,300 Nextel Communications, Inc., Class A + 435,563 - 435,563
- 70,000 70,000 QUALCOMM, Inc. + - 3,963,750 3,963,750
20,318 - 20,318 Qwest Communications International, Inc. + 712,146 - 712,146
15,000 - 15,000 SBC Communications, Inc. 669,450 - 669,450
11,900 - 11,900 Verizon Communications 586,670 - 586,670
Transportation 0.1%
28,100 - 28,100 Norfolk Southern Corp. 470,394 470,394
Utilities 1.7%
- 75,000 75,000 Calpine Corp. + - 4,130,250 4,130,250
16,800 - 16,800 Duke Energy Co. 718,032 - 718,032
12,553 - 12,553 El Paso Corp. 819,711 - 819,711
- 28,400 28,400 Exelon Corp. - 1,863,040 1,863,040
18,000 - 18,000 Unocal Corp. 622,260 - 622,260
Total Common Stock ---------- ----------- ----------
(cost $40,438,963; 233,690,565;
$274,129,528) 34,696,442 220,257,001 254,953,443
---------- ----------- -----------
BONDS & NOTES 10.1%
Aerospace & Military Technology 0.9%
- 4,000,000 4,000,000 Lockheed Martin Corp. 4,191,920 4,191,920
Automotive 1.0%
- 5,000,000 5,000,000 Daimler Chrysler Corp. 4,614,400 4,614,400
Electronics 0.6%
- 3,000,000 3,000,000 Texas Instruments, Inc. 3,013,830 3,013,830
Financial Services 4.2%
- 5,000,000 5,000,000 CS First Boston Mortgage Securities Corp. 5,082,423 5,082,423
- 5,000,000 5,000,000 Ford Motor Credit Co. 5,150,250 5,150,250
- 5,000,000 5,000,000 Goldman Sachs Group LP * 5,088,040 5,088,040
- 4,000,000 4,000,000 Morgan Stanley Group, Inc. 4,138,560 4,138,560
Food, Beverage & Tobacco 1.1%
- 5,000,000 5,000,000 Hershey Foods Corp. 5,173,000 5,173,000
Telecommunications 0.9%
B-11
SunAmerica Equity Funds Balanced Assets Fund
North American Funds Balanced Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
----------------------------------------------
North SunAmerica North SunAmerica
American Equity Funds American Equity Funds
Funds Balanced Funds Balanced
Balanced Assets Pro Forma Maturity Balanced Assets
Fund Fund Combined Description Coupon Date Fund Fund
------------ ------------ ---------------------------------------------------------- -------- -------- --------- --------
750,000 - 750,000 Esat Holdings 02/01/07
500,000 - 500,000 Esat Telecommunications Group PLC 11.88 12/01/08
1,500,000 - 1,500,000 Metronet Communications Corp. 10.75 06/15/08
250,000 - 250,000 Public Service Company 7.10 08/01/05
250,000 - 250,000 Rogers Cantel Mobile, Inc. 9.75 06/01/16
1,000,000 - 1,000,000 Worldcom, Inc 7.75 04/01/07
Utilities 12.2% 0.0%
1,250,000 - 1,250,000 Conmmonwealth Edison Co. 8.38 09/15/22
500,000 - 500,000 Consumers Energy Co. 7.38 09/15/23
600,000 - 600,000 El Paso Electric Co. 9.40 05/01/11
1,000,000 - 1,000,000 Indiana & Michigan Power Co. 8.50 12/15/22
250,000 - 250,000 Niagara Mohawk Power Corp. 8.50 07/01/23
500,000 - 500,000 NRG Northeast Generating LLC 9.29 12/15/24
1,000,000 - 1,000,000 Pennsylvania Power Co. 8.50 07/15/22
250,000 - 250,000 Texas Electric Utilities Co. 7.88 04/01/24
1,000,000 - 1,000,000 Texas Electric Utilities Co. 8.50 08/01/24
Total Bonds & Notes
(cost $10,608,602; $36,365,874; $46,947,476)
U.S. GOVERNMENT AND AGENCIES 11.3% 32.7%
200,000 - 200,000 Federal Home Loan Banks 5.13 09/15/03
500,000 - 500,000 Federal Home Loan Mortgage Corp. 6.65 03/10/04
1,000,000 - 1,000,000 Federal Home Loan Mortgage Corp. 6.88 01/15/05
- 5,000,000 5,000,000 Federal Home Loan Mortgage Corp. 7.00 07/15/05
- 3,620,000 3,620,000 Federal National Mortgage Association 5.75 04/15/03
- 1,000,000 1,000,000 Federal National Mortgage Association 5.75 02/15/08
400,000 - 400,000 Federal National Mortgage Association 6.00 05/15/08
- 1,488,585 1,488,585 Federal National Mortgage Association 6.50 09/01/10
1,000,000 - 1,000,000 Federal National Mortgage Association 7.25 01/15/10
230,173 - 230,173 Government National Mortgage Association 6.50 06/15/29
173,271 - 173,271 Government National Mortgage Association 7.00 12/15/22
431,926 - 431,926 Government National Mortgage Association 7.00 11/15/28
186,510 - 186,510 Government National Mortgage Association 8.00 04/15/30
- 9,720,797 9,720,797 Overseas Private Investment Corp. 6.99 01/15/09
1,000,000 - 1,000,000 Resolution Funding FBE Strips 0.00 04/15/09
- 4,351,953 4,351,953 Small Business Administration 6.30 06/01/18
- 37,000,000 37,000,000 United States Treasury Bonds 5.38 02/15/31
- 46,000,000 46,000,000 United States Treasury Bonds 6.25 05/15/30
- 22,000,000 22,000,000 United States Treasury Notes 5.00 02/15/11
1,000,000 - 1,000,000 United States Treasury Notes 7.25 05/15/04
Total U.S. Government and Agencies
(cost $5,703,580; $136,223,611;$ 141,927,191)
Total Investment Securities 95.4% 94.6%
(cost $56,751,145; $406,280,050; $463,031,195)
SHORT-TERM SECURITIES 0.0% 0.0%
1,000 - 1,000 SSGA Money Market Fund (cost $1,000; $0; $1,000) 5.00
Principal/Shares Market Value
---------------------------------------------- -----------------------------------
Balanced Pro Forma Pro Forma Balanced Pro Forma
Balanced Assets Combined Description Combined Balanced Assets Combined
------------ ------------ -------------------------------------------------------- --------- ---------- ---------- ----------
750,000 - 750,000 Esat Holdings 755,703 755,704
500,000 - 500,000 Esat Telecommunications Group PLC 576,630 576,630
1,500,000 - 1,500,000 Metronet Communications Corp. 1,287,825 1,287,825
250,000 - 250,000 Public Service Company 245,698 245,698
250,000 - 250,000 Rogers Cantel Mobile, Inc. 268,750 268,750
1,000,000 - 1,000,000 Worldcom, Inc 1,015,190 1,015,190
Utilities 1.4%
- 1,250,000 Conmmonwealth Edison Co. 1,303,055 1,303,055
500,000 - 500,000 Consumers Energy Co. 475,829 475,829
600,000 - 600,000 El Paso Electric Co. 662,070 662,070
- 1,000,000 Indiana & Michigan Power Co. 1,062,042 1,062,042
250,000 - 250,000 Niagara Mohawk Power Corp. 262,523 262,523
500,000 - 500,000 NRG Northeast Generating LLC 528,310 528,310
1,000,000 - 1,000,000 Pennsylvania Power Co. 1,018,310 1,018,310
250,000 - 250,000 Texas Electric Utilities Co. 244,375 244,375
1,000,000 - 1,000,000 Texas Electric Utilities Co. 1,058,510 1,058,510
Total Bonds & Notes ----------- ---------- ----------
(cost $10,608,602; $36,365,874;
$46,947,476) 10,764,819 36,452,423 47,217,243
----------- ---------- ----------
U.S. GOVERNMENT AND AGENCIES 30.2%
200,000 - 200,000 Federal Home Loan Banks 201,750 - 201,750
500,000 - 500,000 Federal Home Loan Mortgage Corp. 524,780 - 524,780
1,000,000 - 1,000,000 Federal Home Loan Mortgage Corp. 1,061,720 - 1,061,720
- 5,000,000 5,000,000 Federal Home Loan Mortgage Corp. - 5,345,300 5,345,300
- 3,620,000 3,620,000 Federal National Mortgage Association - 3,697,504 3,697,504
- 1,000,000 1,000,000 Federal National Mortgage Association - 1,014,370 1,014,370
400,000 - 400,000 Federal National Mortgage Association 411,188 - 411,188
- 1,488,585 1,488,585 Federal National Mortgage Association - 1,510,913 1,510,913
1,000,000 - 1,000,000 Federal National Mortgage Association 1,105,310 - 1,105,310
230,173 - 230,173 Government National Mortgage Association 230,100 - 230,100
173,271 - 173,271 Government National Mortgage Association 176,737 - 176,737
431,926 - 431,926 Government National Mortgage Association 438,811 - 438,811
186,510 - 186,510 Government National Mortgage Association 192,512 - 192,512
- 9,720,797 9,720,797 Overseas Private Investment Corp. - 10,212,854 10,212,854
1,000,000 - 1,000,000 Resolution Funding FBE Strips 657,330 - 657,330
- 4,351,953 4,351,953 Small Business Administration - 4,343,435 4,343,435
- 37,000,000 37,000,000 United States Treasury Bonds - 36,526,030 36,526,030
- 46,000,000 46,000,000 United States Treasury Bonds - 50,535,140 50,535,140
- 22,000,000 22,000,000 United States Treasury Notes - 22,113,520 22,113,520
1,000,000
- 1,000,000 United States Treasury Notes 1,079,840 - 1,079,840
----------- ---------- ----------
Total U.S. Government and Agencies
(cost $5,703,580; $136,223,611;
$141,927,191) 6,080,078 135,299,066 141,379,143
----------- ---------- ----------
Total U.S. Government Securities 94.8%
(cost $56,751,145; $406,280,050;
$463,031,195) 51,541,339 392,008,490 443,549,829
---------- ----------- -----------
SHORT-TERM SECURITIES 0.0%
1,000 - 1,000 SSGA Money Market Fund (cost $1,000;
$0; $1,000) 1,000 - 1,000
B-12
SunAmerica Equity Funds Balanced Assets Fund
North American Funds Balanced Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
----------------------------------------------
North SunAmerica North SunAmerica
American Equity Funds American Equity Funds
Funds Balanced Funds Balanced
Balanced Assets Pro Forma Maturity Balanced Assets
Fund Fund Combined Description Coupon Date Fund Fund
------------ ------------ ---------------------------------------------------------- -------- -------- --------- ------------
REPURCHASE AGREEMENTS 4.2% 3.1%
2,261,000 - 2,261,000 State Street Bank & Trust Co. Joint Repurchase
Agreement 5.25 04/02/01
- 12,796,000 12,796,000 State Street Bank & Trust Co. Joint Repurchase
Agreement 5.15 04/02/01
Total Repurchase Agreements
(cost $2,261,000; $12,796,000; $15,057,000)
TOTAL INVESTMENTS 99.6% 97.7%
(cost $59,013,145; $419,076,050; $478,089,195)
Other assets less liabilities (1) 0.4% 2.3%
--------- --------
Net Assets 100.0% 100.0%
========= ========
Principal/Shares Market Value
---------------------------------------------- -------------------------------------
Balanced Pro Forma Pro Forma Balanced Pro Forma
Balanced Assets Combined Description Combined Balanced Assets Combined
------------ ------------ ----------------------------------------------------- --------- ---------- ---------- ------------
REPURCHASE AGREEMENTS 3.2%
2,261,000 - 2,261,000 State Street Bank & Trust Co. Joint
Repurchase Agreement 2,261,000 - 2,261,000
- 12,796,000 12,796,000 State Street Bank & Trust Co. Joint
Repurchase Agreement - 12,796,000 12,796,000
----------- ------------ ------------
Total Repurchase Agreements 2,261,000 12,796,000 15,057,000
(cost $2,261,000; 12,796,000; ----------- ------------ ------------
$15,057,000)
TOTAL INVESTMENTS 98.0% 53,803,339 404,804,490 458,607,829
(cost $59,013,145; $419,076,050;
$478,089,195)
Other assets less liabilities (1) 2.0% 213,468 9,352,676 9,554,374
-------- ----------- ------------ ------------
Net Assets 100.0% $54,016,808 $414,157,167 $468,162,203
======== =========== ============= ============
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depository Receipt")
(1) To adjust ($11,772) for prepaid expenses on the North American Funds
Balanced Fund to be expensed prior to the reorganization
Management does not anticipate having to sell any securities as a result of the
reorganization, however, securities may be sold due to differing portfolio
management style.
See Notes to Pro Forma Financial Statements
B-13
SUNAMERICA EQUITY FUNDS BALANCED ASSETS FUND
NORTH AMERICAN FUNDS BALANCED FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
MARCH 31, 2001
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments at March 31, 2001, and related Statement of Operations
("Pro Forma Statements") for the twelve months ended March 31, 2001, reflect the
accounts of the Balanced Assets Fund ("Balanced Assets") a separately managed
portfolio of SunAmerica Equity Funds, and Balanced Fund ("Balanced") a
separately managed portfolio of North American Funds. The Pro Forma Combined
Statement of Assets and Liabilities has been restated to reflect a tax free
exchange of Balanced Class A, Class B, Class C, and Class I shares as of the
close of business on March 31, 2001. American International Group, Inc. will pay
the cost of the reorganization.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of Balanced in exchange for shares of Balanced Assets. In
conjunction with the reorganization, Balanced Assets is the surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of Balanced Assets and Balanced included in their
respective Statements of Additional Information.
2. VALUATION
Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed by the
Adviser to be over-the-counter, are valued at the quoted bid price provided by
principal market markers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sale price available before the time when the assets
are valued. If a security's price is available from more than one foreign
exchange, a Portfolio uses the exchange that is the primary market for the
security. Values of portfolio securities primarily traded on foreign exchanges
are already translated into U.S. dollars when received from a quotation service.
Options traded on national exchanges are valued as of the close of the exchange
on which they are traded. Futures and options traded on commodities exchanges
are valued at their last sale price as of the close of such exchange. The
Portfolios may make use of a pricing service in the determination of their net
asset
B-14
values. Securities for which market quotations are not readily available and
other assets are valued at fair value as determined pursuant to procedures
adopted in good faith by the Directors. Short-term securities which mature in
less than 60 days are valued at amortized cost, if their original maturity was
60 days or less, or by amortizing their value on the 61st day prior to maturity,
if their original term to maturity exceeded 60 days.
3. CAPITAL SHARES
The pro forma combined net asset value per share assumes the issuance of
additional shares of Balanced Assets which would have been issued at March 31,
2001 in connection with the proposed reorganization. The amount of additional
shares assumed to be issued was calculated based on the March 31, 2001 net asset
value of Balanced Assets Class A ($14.97), Class B ($14.92), and Class II
($14.94). Class I shares will be offered on Balanced Assets and will assume the
net asset value of Class A. The Class C shares of Balanced will receive Class II
shares of Balanced Assets.
The pro forma number of shares outstanding are determined as follows:
Class A Class B Class II Class I
----------------------------------- ---------------- ----------------- --------------- -------------
Shares of Balanced Assets 17,644,795 8,277,263 1,773,072 0
----------------------------------- ---------------- ----------------- --------------- -------------
Additional Shares to be issued to
Balanced 486,620 829,776 1,956,894 340,954
----------------------------------- ---------------- ----------------- --------------- -------------
Pro Forma
Shares outstanding 18,131,415 9,107,039 3,729,966 340,954
----------------------------------- ---------------- ----------------- --------------- -------------
These pro forma financial statements assume that all shares of Balanced
Class A, Class B, Class C, and Class I outstanding on March 31, 2001 were
exchanged, tax free, for Balanced Assets Class A, Class B, Class II, and Class I
shares, respectively.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of Balanced Assets, the surviving entity. Certain accounts have
been adjusted to reflect the expenses of the combined entity more closely. Pro
forma operating expenses include the expenses of Balanced Assets and Balanced
combined, adjusted for certain items which are factually supportable. Advisory
fees have been charged to the combined entity based upon the contract in effect
for Balanced Assets at the level of assets of the combined fund for the stated
period.
B-15
SUNAMERICA EQUITY FUNDS BLUE CHIP GROWTH FUND
NORTH AMERICAN FUNDS LARGE CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Large Cap Funds Blue Chip Pro Forma Combined
Growth Fund Growth Fund Adjustments (Note 1)
-------------- ---------------- ------------ ------------
ASSETS:
Investment securities, at value (identified cost $59,883,479,
$131,445,986, and $191,329,465, respectively) $ 51,473,796 $121,127,918 -- $172,601,714
Short-term securities (identified cost $1,000, $0, and
$1,000, respectively) 1,000 -- -- 1,000
Repurchase agreements (cost equals market) 3,520,000 28,757,000 -- 32,277,000
Cash 660 817 -- 1,477
Receivable for investments sold 2,032,129 5,727,420 -- 7,759,549
Receivable for shares of beneficial interest sold 13,752 265,425 -- 279,177
Interest and dividends receivable 43,345 133,202 -- 176,547
Prepaid expenses and other assets 324,708 2,462 (73,188) (A) 253,982
Receivable for foreign tax withholding reclaims 86 -- -- 86
------------ ------------ ------------ ------------
Total assets 57,409,476 156,014,244 (73,188) 213,350,532
------------ ------------ ------------ ------------
LIABILITIES:
Payable for investments purchased 285,413 -- -- 285,413
Payable for shares of beneficial interest redeemed 33,840 385,390 -- 419,230
Investment advisory and management
fees payable 4,914 103,903 -- 108,817
Distribution and service maintenance
fees payable 36,534 79,827 -- 116,361
Other accrued expenses 182,118 126,043 -- 308,161
------------ ------------ ------------ ------------
Total liabilities 542,819 695,163 0 1,237,982
------------ ------------ ------------ ------------
Net assets $ 56,866,657 $155,319,081 ($ 73,188) $212,112,550
============ ============ ============ ============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.01, and $.01, par value $ 4,903 $ 92,826 $ 29,749 (B) 127,478
Paid-in capital 86,938,453 167,956,596 (29,749) (B) 254,865,300
------------ ------------ ------------ ------------
86,943,356 168,049,422 0 254,992,778
Accumulated undistributed net
investment income (loss) (1,124,308) (287,831) (73,188) (A) (1,485,327)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (20,542,694) (2,124,442) -- (22,667,136)
Net unrealized appreciation (depreciation) on
investments (8,409,683) (10,318,068) -- (18,727,751)
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities (14) -- -- (14)
------------ ------------ ------------ ------------
Net assets $ 56,866,657 $ 155,319,081 ($ 73,188) $212,112,550
============ ============ ============ ============
B-16
SUNAMERICA EQUITY FUNDS BLUE CHIP GROWTH FUND
NORTH AMERICAN FUNDS LARGE CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Large Cap Funds Blue Chip Pro Forma Combined
Growth Fund Growth Fund Adjustments (Note 1)
------------- ----------------- ------------ ------------
Class A:
Net assets $ 6,870,643 $ 101,438,796 ($8,843) (A) $108,300,596
Shares outstanding 579,537 5,895,625 (180,827) (B) 6,294,335
Net asset value and redemption price per
share $ 11.86 $ 17.21 -- $ 17.21
Maximum sales charge (5.75% of offering
price) 0.72 1.05 -- 1.05
----------- --------------- ----------- ------------
Maximum offering price to public $ 12.58 $ 18.26 -- $ 18.26
=========== =============== =========== ============
Class B:
Net assets $22,463,736 $ 45,213,129 ($28,911) (A) $ 67,647,954
Shares outstanding 1,969,356 2,841,331 (559,248) (B) 4,251,439
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 11.41 $ 15.91 -- $ 15.91
=========== =============== =========== ============
Class II:
Net assets -- $ 8,667,156 $12,142,278 (D) $ 20,809,434
Shares outstanding -- 545,600 764,146 (B)(D) 1,309,746
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) -- $ 15.89 -- $ 15.89
Maximum sales charge (1.00% of offering
price) -- 0.16 -- 0.16
----------- --------------- ----------- ------------
Maximum offering price to public -- $ 16.05 -- $ 16.05
=========== =============== =========== ============
Class C:
Net assets $12,157,925 -- ($12,157,925) (A)(D) $ 0
Shares outstanding 1,066,645 -- (1,066,645) (B)(D) 0
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 11.40 -- -- --
=========== =============== =========== ============
Class I:
Net assets $15,374,353 -- ($19,787) (A) $ 15,354,566
Shares outstanding 1,287,367 -- (395,178) (B)(C) 892,189
Net asset value, offering and redemption
price per share $ 11.94 $ 17.21 -- $ 17.21
=========== =============== =========== ============
(A) To adjust for the remaining balances of any prepaid expenses on the North
American Funds Large Cap Growth Fund to be expensed prior to the
reorganization
(B) To adjust for a tax free exchange of North American Funds Large Cap Growth
shares for shares of SunAmerica Equity Funds Blue Chip Growth
(C) Class I shares will be offered on SunAmerica Equity Funds Blue Chip Growth
and will assume the net asset value of Class A
(D) Class C shares of North American Funds Large Cap Growth will receive Class
II shares of SunAmerica Equity Funds Blue Chip Growth
See Notes to Pro Forma Financial Statements
B-17
SUNAMERICA EQUITY FUNDS BLUE CHIP GROWTH FUND
NORTH AMERICAN FUNDS LARGE CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Large Cap Funds Blue Chip Pro Forma Combined
Growth Fund Growth Fund Adjustments (Note 1)
--------------- ---------------- --------------- -------------
INVESTMENT INCOME:
Income:
Interest $ 250,310 $ 1,382,543 $ 0 $ 1,632,853
Dividends* 368,094 1,086,818 0 1,454,912
------------- ------------- ---------------- -------------
Total investment income 618,404 2,469,361 0 3,087,765
------------- ------------- ---------------- -------------
Expenses:
Investment advisory and management fees 566,922 1,522,412 (88,753)(E) 2,000,581
Distribution and service maintenance fees
Class A 26,175 468,536 0 494,711
Class B 255,862 609,235 0 865,097
Class II 0 81,977 137,192 (D) 219,169
Class C 137,192 0 (137,192)(D) 0
Class I 42,429 0 0 42,429
Transfer agent fees and expenses 352,767 0 (352,767)(E) 0
Class A 0 335,300 18,696 (E) 353,996
Class B 0 158,921 66,524 (E) 225,445
Class II 0 19,909 38,414 (E) 58,323
Class I 0 0 49,218 (E) 49,218
Registration fees 44,335 0 (44,335)(E) 0
Class A 0 14,290 3,710 (E) 18,000
Class B 0 14,414 1,586 (E) 16,000
Class II 0 6,621 2,879 (E) 9,500
Class I 0 0 9,500 (E) 9,500
Accounting/administration 68,602 0 (68,602)(E) 0
Custodian fees and expenses 35,181 87,464 (15,947)(E) 106,698
Audit and legal fees 30,606 25,530 (23,636)(F) 32,500
Miscellaneous expenses 32,371 37,789 (31,160)(F) 39,000
------------- ------------- ---------------- -------------
Total expenses 1,592,442 3,382,398 (434,673) 4,540,167
Less: expenses waived/reimbursed by investment adviser (529,684) (2,846) 515,558 (G) (16,972)
Less: custody credits earned on cash balances 0 (166) 0 (166)
------------- ------------- ---------------- -------------
Net expenses 1,062,758 3,379,386 80,885 4,523,029
------------- ------------- ---------------- -------------
Net investment income (loss) (444,354) (910,025) (80,885) (1,435,264)
------------- ------------- ---------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (22,176,123) 12,802,098 0 (9,374,025)
Net change in unrealized appreciation/depreciation of
investments (3,114,284) (90,404,263) 0 (93,518,547)
------------- ------------- ---------------- -------------
Net realized and unrealized gain (loss) on investments,
foreign currency and other assets and liabilities (25,290,407) (77,602,165) 0 (102,892,572)
------------- ------------- ---------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS: ($ 25,734,761) ($ 78,512,190) ($80,885) ($104,327,836)
============= ============= ================ =============
*Net of foreign withholding taxes on dividends of $ -- $ 8,434 $ -- $ 8,434
============= ============= ================ =============
(D) Class C shares of North American Funds Large Cap Growth will receive Class
II shares of SunAmerica Equity Funds Blue Chip Growth
(E) Reflects adjustments to expenses based on surviving fund's fee schedules
and combined net assets
(F) Reflects the elimination of duplicate services or fees
(G) Reflects adjustments to expenses waived/reimbused by investment adviser
based on pro forma expenses
See Notes to Pro Forma Financial Statements
B-18
SunAmerica Equity Funds Blue Chip Growth Fund
North American Funds Large Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Large Cap Blue Chip Pro Forma Maturity Large Cap Blue Chip
Growth Growth Combined Description Coupon Date Growth Growth
---------- ----------- --------- ---------------------------------------- --------- -------- --------- ---------
COMMON STOCK 90.5% 78.0%
Aerospace & Military Technology 0.5% 0.0%
5,525 5,525 Boeing Co.
Apparel & Textiles 0.3% 0.7%
3,825 3,825 Nike, Inc.
58,600 58,600 Oakley, Inc. +
Automotive 0.3% 0.0%
4,406 4,406 Harley Davidson, Inc.
Banks 0.8% 4.1%
57,500 57,500 Bank of New York Co., Inc.
8,731 8,731 Fifth Third Bancorp
64,400 64,400 FleetBoston Financial Corp.
28,700 28,700 Mellon Financial Corp.
Broadcasting & Media 8.4% 5.7%
56,722 75,000 131,722 AOL Time Warner, Inc. +
15,275 70,200 85,475 AT&T Corp.-Liberty Media Corp., Class A +
6,475 6,475 Clear Channel Communications, Inc. +
13,725 58,600 72,325 Comcast Corp., Class A +
60,000 60,000 EchoStar Communications Corp., Class A +
2,400 2,400 Gannett Co., Inc.
5,300 5,300 Omnicom Group
29,200 29,200 Pegasus Communications Corp. +
17,025 17,025 Viacom, Inc. +
Business Services 1.4% 0.0%
5,875 5,875 Concord EFS , Inc. +
18,282 18,282 Devry, Inc.+
Chemicals 0.5% 0.0%
4,675 4,675 Dow Chemical Co.
3,375 3,375 du Pont (E.I.) de Nemours & Co.
Communication Equipment 3.5% 1.7%
64,293 103,900 168,193 Cisco Systems, Inc. +
8,425 8,425 Corning, Inc.
3,625 8,100 11,725 Juniper Networks, Inc. +
64,300 64,300 Lucent Technologies, Inc.
12,325 12,325 Motorola, Inc.
4,225 4,225 Tellabs, Inc. +
22,350 22,350 Tycom Ltd. +
Computer Software 5.1% 2.7%
12,300 12,300 Adobe Systems, Inc.
42,675 76,000 118,675 Microsoft Corp. +
22 22 Momentum Business Applications +
5,350 5,350 Siebel Systems, Inc. +
Computers & Business Equipment 6.3% 3.7%
41,200 60,000 101,200 Dell Computer Corp. +
Principal/Shares Market Value
----------------------------------- ------------------------------------
Large Cap Blue Chip Pro Forma Pro Forma Large Cap Blue Chip Pro Forma
Growth Growth Combined Description Combined Growth Growth Combined
---------- ----------- --------- ---------------------------------------- --------- ----------- ---------- -----------
COMMON STOCK 81.4%
Aerospace & Military Technology 0.1%
5,525 5,525 Boeing Co. 307,798 307,798
Apparel & Textiles 0.6%
3,825 3,825 Nike, Inc. 155,104 155,104
58,600 58,600 Oakley, Inc. + 1,041,322 1,041,322
Automotive 0.1%
4,406 4,406 Harley Davidson, Inc. 167,208 167,208
Banks 3.2%
57,500 57,500 Bank of New York Co., Inc. 2,831,300 2,831,300
8,731 8,731 Fifth Third Bancorp 466,563 466,563
64,400 64,400 FleetBoston Financial Corp. 2,431,100 2,431,100
28,700 28,700 Mellon Financial Corp. 1,162,924 1,162,924
Broadcasting & Media 6.4%
56,722 75,000 131,722 AOL Time Warner, Inc. + 2,277,388 3,011,250 5,288,638
15,275 70,200 85,475 AT&T Corp.-Liberty Media Corp., Class A + 213,850 982,800 1,196,650
6,475 6,475 Clear Channel Communications, Inc. + 352,564 352,564
13,725 58,600 72,325 Comcast Corp., Class A + 575,592 2,457,537 3,033,129
60,000 60,000 EchoStar Communications Corp., Class A + 1,661,250 1,661,250
2,400 2,400 Gannett Co., Inc. 143,328 143,328
5,300 5,300 Omnicom Group 439,264 439,264
29,200 29,200 Pegasus Communications Corp. + 671,600 671,600
17,025 17,025 Viacom, Inc. + 748,589 748,589
Business Services 0.4%
5,875 5,875 Concord EFS , Inc. + 237,570 237,570
18,282 18,282 Devry, Inc.+ 549,374 549,374
Chemicals 0.1%
4,675 4,675 Dow Chemical Co. 147,590 147,590
3,375 3,375 du Pont (E.I.) de Nemours & Co. 137,362 137,362
Communication Equipment 2.2%
64,293 103,900 168,193 Cisco Systems, Inc. + 1,016,633 1,642,919 2,659,552
8,425 8,425 Corning, Inc. 174,313 174,313
3,625 8,100 11,725 Juniper Networks, Inc. + 137,605 307,476 445,081
64,300 64,300 Lucent Technologies, Inc. 641,071 641,071
12,325 12,325 Motorola, Inc. 175,754 175,754
4,225 4,225 Tellabs, Inc. + 171,905 171,905
22,350 22,350 Tycom Ltd. + 293,902 293,902
Computer Software 3.3%
12,300 12,300 Adobe Systems, Inc. 430,131 430,131
42,675 76,000 118,675 Microsoft Corp. + 2,333,789 4,156,250 6,490,039
22 22 Momentum Business Applications + 297 297
5,350 5,350 Siebel Systems, Inc. + 145,520 145,520
Computers & Business Equipment 4.4%
41,200 60,000 101,200 Dell Computer Corp. + 1,058,325 1,541,250 2,599,575
B-19
SunAmerica Equity Funds Blue Chip Growth Fund
North American Funds Large Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Large Cap Blue Chip Pro Forma Maturity Large Cap Blue Chip
Growth Growth Combined Description Coupon Date Growth Growth
---------- ----------- --------- ---------------------------------------- --------- -------- --------- ---------
23,015 65,700 88,715 EMC Corp. +
8,900 8,900 Hewlett-Packard Co.
13,075 23,700 36,775 International Business Machines Corp.
14,472 14,472 Sun Microsystems, Inc. +
2,218 2,218 VERITAS Software Corp. +
Conglomerate 6.5% 8.0%
61,739 200,000 261,739 General Electric Co.
25,868 93,700 119,568 Tyco International Ltd.
Electronics 3.7% 6.7%
10,325 10,325 Advanced Micro Devices, Inc. +
7,475 7,475 Analog Devices, Inc. +
2,800 60,000 62,800 Applied Materials, Inc. +
19,900 19,900 Emerson Electric Co.
37,104 111,300 148,404 Intel Corp.
55,000 55,000 Micron Technology, Inc. +
7,275 42,800 50,075 Texas Instruments, Inc.
6,450 6,450 Xilinx, Inc. +
Energy Services 1.2% 2.2%
3,225 3,225 Dynegy, Inc., Class A
5,125 29,200 34,325 Nabors Industries, Inc. +
20,000 20,000 Noble Drilling Corp. +
30,000 30,000 Santa Fe International Corp.
3,275 3,275 Smith International, Inc.
Energy Sources 1.7% 3.0%
4,100 4,100 Anadarko Petroleum Corp.
23,400 23,400 Apache Corp.
17,600 17,600 Burlington Resources, Inc.
26,800 26,800 Devon Energy Corp.
6,426 6,426 El Paso Corp.
4,700 4,700 Enron Corp.
12,000 12,000 Exxon Mobil Corp.
Entertainment Products 0.5% 0.0%
15,000 15,000 Mattel, Inc.
Financial Services 7.1% 11.8%
14,250 43,900 58,150 American Express Co.
2,675 35,100 37,775 Capital One Financial Corp.
16,741 16,741 Charles Schwab Corp.
27,682 105,400 133,082 Citigroup, Inc.
6,500 6,500 Federal National Mortgage Association Corp.
3,650 3,650 Franklin Resources, Inc.
104,630 104,630 J.P. Morgan Chase & Co., Inc.
32,200 32,200 Lehman Brothers Holdings, Inc.
4,625 26,700 31,325 Morgan Stanley Dean Witter & Co.
3,000 35,300 38,300 Providian Financial Corp.
Principal/Shares Market Value
----------------------------------- --------------------------------
Large Cap Blue Chip Pro Forma Pro Forma Large Cap Blue Chip Pro Forma
Growth Growth Combined Description Combined Growth Growth Combined
---------- ----------- --------- ---------------------------------------- --------- ----------- ---------- -----------
23,015 65,700 88,715 EMC Corp. + 676,641 1,931,580 2,608,221
8,900 8,900 Hewlett-Packard Co. 278,303 278,303
13,075 23,700 36,775 International Business Machines Corp. 1,257,553 2,279,466 3,537,019
14,472 14,472 Sun Microsystems, Inc. + 222,435 222,435
2,218 2,218 VERITAS Software Corp. + 102,560 102,560
Conglomerate 7.6%
61,739 200,000 261,739 General Electric Co. 2,584,394 8,372,000 10,956,394
25,868 93,700 119,568 Tyco International Ltd. 1,118,274 4,050,651 5,168,925
Electronics 5.9%
10,325 10,325 Advanced Micro Devices, Inc. + 274,025 274,025
7,475 7,475 Analog Devices, Inc. + 270,894 270,894
2,800 60,000 62,800 Applied Materials, Inc. + 121,800 2,610,000 2,731,800
19,900 19,900 Emerson Electric Co. 1,233,004 1,233,004
37,104 111,300 148,404 Intel Corp. 976,299 2,928,581 3,904,880
55,000 55,000 Micron Technology, Inc. + 2,284,150 2,284,150
7,275 42,800 50,075 Texas Instruments, Inc. 225,379 1,325,944 1,551,323
6,450 6,450 Xilinx, Inc. + 226,556 226,556
Energy Services 1.9%
3,225 3,225 Dynegy, Inc., Class A 164,507 164,507
5,125 29,200 34,325 Nabors Industries, Inc. + 265,680 1,513,728 1,779,408
20,000 20,000 Noble Drilling Corp. + 923,200 923,200
30,000 30,000 Santa Fe International Corp. 975,000 975,000
3,275 3,275 Smith International, Inc. 229,905 229,905
Energy Sources 2.6%
4,100 4,100 Anadarko Petroleum Corp. 257,398 257,398
23,400 23,400 Apache Corp. 1,348,074 1,348,074
17,600 17,600 Burlington Resources, Inc. 787,600 787,600
26,800 26,800 Devon Energy Corp. 1,559,760 1,559,760
6,426 6,426 El Paso Corp. 419,618 419,618
4,700 4,700 Enron Corp. 273,070 273,070
12,000 12,000 Exxon Mobil Corp. 972,000 972,000
Entertainment Products 0.1%
15,000 15,000 Mattel, Inc. 266,100 266,100
Financial Services 10.6%
14,250 43,900 58,150 American Express Co. 588,525 1,813,070 2,401,595
2,675 35,100 37,775 Capital One Financial Corp. 148,462 1,948,050 2,096,512
16,741 16,741 Charles Schwab Corp. 258,146 258,146
27,682 105,400 133,082 Citigroup, Inc. 1,245,136 4,740,892 5,986,028
6,500 6,500 Federal National Mortgage Association Corp. 517,400 517,400
3,650 3,650 Franklin Resources, Inc. 142,751 142,751
104,630 104,630 J.P. Morgan Chase & Co., Inc. 4,697,887 4,697,887
32,200 32,200 Lehman Brothers Holdings, Inc. 2,018,940 2,018,940
4,625 26,700 31,325 Morgan Stanley Dean Witter & Co. 247,437 1,428,450 1,675,887
3,000 35,300 38,300 Providian Financial Corp. 147,150 1,731,465 1,878,615
B-20
SunAmerica Equity Funds Blue Chip Growth Fund
North American Funds Large Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Large Cap Blue Chip Pro Forma Maturity Large Cap Blue Chip
Growth Growth Combined Description Coupon Date Growth Growth
---------- ----------- --------- ---------------------------------------- --------- -------- --------- ---------
13,650 13,650 Washington Mutual, Inc.
Food, Beverage & Tobacco 2.9% 0.6%
8,700 8,700 The Coca-Cola Co.
10,125 10,125 PepsiCo, Inc.
16,850 20,000 36,850 Philip Morris Cos., Inc.
Forest Products 0.5% 1.0%
53,500 53,500 Georgia-Pacific Group
4,000 4,000 International Paper Co.
2,800 2,800 Weyerhaeuser Co.
Health Services 1.2% 0.0%
7,850 7,850 Medtronic, Inc.
8,075 8,075 Tenet Healthcare Corp. +
Household Products 0.4% 0.0%
7,375 7,375 Gillette Co.
Internet Content 0.4% 0.0%
5,337 5,337 Check Point Software Ltd. +
Internet Software 1.4% 0.0%
4,100 4,100 BEA Systems, Inc. +
44,475 44,475 Oracle Corp. +
Insurance 3.2% 0.0%
5,875 5,875 American International Group, Inc.
475 475 Berkshire Hathaway, Inc. +
1,525 1,525 Marsh & McLennan Cos., Inc.
3,325 3,325 St. Paul Cos. Inc.
Leisure & Tourism 0.5% 0.0%
11,550 11,550 The Walt Disney Co.
Machinery 0.7% 0.0%
3,500 3,500 Caterpillar, Inc.
3,550 3,550 Deere & Co.
4,975 4,975 Masco Corp.
Medical Products 5.0% 3.2%
14,811 44,900 59,711 Amgen, Inc. +
14,075 14,075 Baxter International, Inc.
7,100 25,800 32,900 Johnson & Johnson Co.
Metals & Mining 0.5% 0.0%
8,350 8,350 Alcoa, Inc.
Pharmaceuticals 13.9% 11.2%
18,125 18,125 Abbott Laboratories, Inc.
11,775 11,775 American Home Products Corp.
3,064 3,064 Applera Corp. Applied Biosystems Group
25,000 25,000 Biogen, Inc. +
9,500 48,200 57,700 Bristol-Myers Squibb Co.
4,125 4,125 Eli Lilly and Co.
6,275 18,000 24,275 Genentech, Inc. +
Principal/Shares Market Value
----------------------------------- -------------------------------------
Large Cap Blue Chip Pro Forma Pro Forma Large Cap Blue Chip Pro Forma
Growth Growth Combined Description Combined Growth Growth Combined
---------- ----------- --------- ---------------------------------------- --------- ----------- ---------- -----------
13,650 13,650 Washington Mutual, Inc. 747,337 747,337
Food, Beverage & Tobacco 1.2%
8,700 8,700 The Coca-Cola Co. 392,892 392,892
10,125 10,125 PepsiCo, Inc. 444,994 444,994
16,850 20,000 36,850 Philip Morris Cos., Inc. 799,532 949,000 1,748,532
Forest Products 0.9%
53,500 53,500 Georgia-Pacific Group 1,572,900 1,572,900
4,000 4,000 International Paper Co. 144,320 144,320
2,800 2,800 Weyerhaeuser Co. 142,212 142,212
Health Services 0.3%
7,850 7,850 Medtronic, Inc. 359,059 359,059
8,075 8,075 Tenet Healthcare Corp. + 355,300 355,300
Household Products 0.1%
7,375 7,375 Gillette Co. 229,879 229,879
Internet Content 0.1%
5,337 5,337 Check Point Software Ltd. + 253,507 253,507
Internet Software 0.4%
4,100 4,100 BEA Systems, Inc. + 120,438 120,438
44,475 44,475 Oracle Corp. + 666,236 666,236
Insurance 0.8%
5,875 5,875 American International Group, Inc. 472,938 472,938
475 475 Berkshire Hathaway, Inc. + 1,033,600 1,033,600
1,525 1,525 Marsh & McLennan Cos., Inc. 144,921 144,921
3,325 3,325 St. Paul Cos. Inc. 146,466 146,466
Leisure & Tourism 0.2%
11,550 11,550 The Walt Disney Co. 330,330 330,330
Machinery 0.2%
3,500 3,500 Caterpillar, Inc. 155,330 155,330
3,550 3,550 Deere & Co. 129,007 129,007
4,975 4,975 Masco Corp. 120,097 120,097
Medical Products 3.7%
14,811 44,900 59,711 Amgen, Inc. + 891,437 2,702,419 3,593,856
14,075 14,075 Baxter International, Inc. 1,325,021 1,325,021
7,100 25,800 32,900 Johnson & Johnson Co. 621,037 2,256,726 2,877,763
Metals & Mining 0.1%
8,350 8,350 Alcoa, Inc. 300,183 300,183
Pharmaceuticals 12.0%
18,125 18,125 Abbott Laboratories, Inc. 855,319 855,319
11,775 11,775 American Home Products Corp. 691,781 691,781
3,064 3,064 Applera Corp. Applied Biosystems Group 85,026 85,026
25,000 25,000 Biogen, Inc. + 1,582,812 1,582,812
9,500 48,200 57,700 Bristol-Myers Squibb Co. 564,300 2,863,080 3,427,380
4,125 4,125 Eli Lilly and Co. 316,223 316,223
6,275 18,000 24,275 Genentech, Inc. + 316,888 909,000 1,225,888
B-21
SunAmerica Equity Funds Blue Chip Growth Fund
North American Funds Large Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Large Cap Blue Chip Pro Forma Maturity Large Cap Blue Chip
Growth Growth Combined Description Coupon Date Growth Growth
---------- ----------- --------- ---------------------------------------- ------- -------- --------- ---------
1,850 1,850 Gilead Sciences, Inc. +
21,025 54,900 75,925 Merck & Co., Inc.
48,915 81,900 130,815 Pfizer, Inc.
22,875 48,200 71,075 Pharmacia Corp.
6,550 59,800 66,350 Schering-Plough Corp.
950 950 VERTEX Pharmaceuticals, Inc. +
Retail Stores 8.8% 5.5%
5,475 5,475 CVS CORP
7,675 7,675 Federated Department Stores, Inc. +
85,000 85,000 Gap, Inc
26,719 26,800 53,519 Home Depot, Inc.
9,925 9,925 Intimate Brands, Inc.
5,506 5,506 Kohls Corp. +
13,375 13,375 Kroger Co.
8,275 8,275 May Department Stores Co.
6,025 6,025 Safeway, Inc. +
49,300 49,300 Target Corp.
34,475 70,000 104,475 Wal-Mart Stores, Inc.
Telecommunications 2.7% 3.3%
14,520 50,000 64,520 AT&T Corp.
2,200 9,300 11,500 CIENA Corp. +
11,125 11,125 Comverse Technology, Inc. +
51,900 51,900 General Motors Corp., Class H +
47,500 47,500 QUALCOMM, Inc.+
4,025 4,025 Qwest Communications International, Inc. +
17,950 17,950 WorldCom, Inc. +
Utilities 0.6% 2.9%
6,325 40,000 46,325 Calpine Corp.+
35,100 35,100 Exelon Corp.
Total Investment Securities 90.5% 78.0%
(cost $59,883,479; $131,445,986; $191,329,465)
SHORT-TERM SECURITIES 0.0% 0.0%
1,000 1,000 SSGA Money Market Fund (cost $1,000; $0; $1,000)
REPURCHASE AGREEMENTS 6.2% 18.5%
28,757,000 28,757,000 State Street Bank & Trust Co. Repurchase Agreement 6.35 4/2/01
3,520,000 3,520,000 State Street Bank & Trust Co. Repurchase Agreement 5.15 4/2/01
Total Repurchase Agreements
(cost $3,520,000; $28,757,000; $32,277,000) 96.7% 96.5%
TOTAL INVESTMENTS
(cost $63,404,479; $160,202,986; $223,607,465) 3.3% 3.5%
Other assets less liabilities (1)
Principal/Shares Market Value
------------------------------- -----------------------------------
Large Cap Blue Chip Pro Forma Pro Forma Large Cap Blue Chip Pro Forma
Growth Growth Combined Description Combined Growth Growth Combined
---------- ---------- --------- ---------------------------------------- --------- ---------- ---------- -----------
1,850 1,850 Gilead Sciences, Inc. + 60,125 60,125
21,025 54,900 75,925 Merck & Co., Inc. 1,595,798 4,166,910 5,762,708
48,915 81,900 130,815 Pfizer, Inc. 2,003,069 3,353,805 5,356,874
22,875 48,200 71,075 Pharmacia Corp. 1,152,214 2,427,834 3,580,048
6,550 59,800 66,350 Schering-Plough Corp. 239,272 2,184,494 2,423,766
950 950 VERTEX Pharmaceuticals, Inc. + 34,794 34,794
Retail Stores 6.4%
5,475 5,475 CVS CORP 320,233 320,233
7,675 7,675 Federated Department Stores, Inc. + 318,896 318,896
85,000 85,000 Gap, Inc 2,016,200 2,016,200
26,719 26,800 53,519 Home Depot, Inc. 1,151,589 1,155,080 2,306,669
9,925 9,925 Intimate Brands, Inc. 145,898 145,898
5,506 5,506 Kohls Corp. + 339,665 339,665
13,375 13,375 Kroger Co. 344,941 344,941
8,275 8,275 May Department Stores Co. 293,597 293,597
6,025 6,025 Safeway, Inc. + 332,279 332,279
49,300 49,300 Target Corp. 1,778,744 1,778,744
34,475 70,000 104,475 Wal-Mart Stores, Inc. 1,740,988 3,535,000 5,275,988
Telecommunications 3.2%
14,520 50,000 64,520 AT&T Corp. 309,276 1,065,000 1,374,276
2,200 9,300 11,500 CIENA Corp. + 91,850 388,275 480,125
11,125 11,125 Comverse Technology, Inc. + 655,151 655,151
51,900 51,900 General Motors Corp., Class H + 1,012,050 1,012,050
47,500 47,500 QUALCOMM, Inc.+ 2,689,688 2,689,688
4,025 4,025 Qwest Communications International, Inc. + 141,076 141,076
17,950 17,950 WorldCom, Inc. + 335,441 335,441
Utilities 2.3%
6,325 40,000 46,325 Calpine Corp.+ 348,318 2,202,800 2,551,118
35,100 35,100 Exelon Corp. 2,302,560 2,302,560
---------- ----------- -----------
Total Investment Securities 81.4% 51,473,796 121,127,918 172,601,714
---------- ----------- -----------
(cost $59,883,479; $131,445,986;
$191,329,465)
SHORT-TERM SECURITIES 0.0%
1,000 1,000 SSGA Money Market Fund (cost $1,000; $0; $1,000) 1,000 1,000
---------- ----------- -----------
REPURCHASE AGREEMENTS 15.2%
28,757,000 28,757,000 State Street Bank & Trust Co. Repurchase Agreement 28,757,000 28,757,000
3,520,000 3,520,000 State Street Bank & Trust Co. Repurchase Agreement 3,520,000 3,520,000
---------- ----------- -----------
Total Repurchase Agreements 3,520,000 28,757,000 32,277,000
---------- ----------- -----------
(cost $3,520,000; $28,757,000; $32,277,000)
TOTAL INVESTMENTS
(cost $63,404,479; $160,202,986; $223,607,465)
96.6% 54,994,796 149,884,918 204,879,714
Other assets less liabilities (1) 3.4% 1,871,861 5,434,163 7,232,836
B-22
SunAmerica Equity Funds Blue Chip Growth Fund
North American Funds Large Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Large Cap Blue Chip Pro Forma Maturity Large Cap Blue Chip
Growth Growth Combined Description Coupon Date Growth Growth
---------- ----------- --------- ---------------------------------------- ------- -------- --------- ---------
Net Assets 100.0% 100.0%
========= =========
Principal/Shares Market Value
----------------------------------- -------------------------------------
Large Cap Blue Chip Pro Forma Pro Forma Large Cap Blue Chip Pro Forma
Growth Growth Combined Description Combined Growth Growth Combined
---------- ----------- --------- ---------------------------------------- --------- ----------- ------------ ------------
100.0% $56,866,657 $155,319,081 $212,112,550
===== =========== ============ ============
+ Non-income producing security
(1) To adjust ($73,188) for prepaid expenses on the North
American Funds Large Cap Growth Fund to be expensed prior to
the reorganization
Management does not anticipate having to sell any securities
as a result of the reorganization, however, securities may
be sold due to differing portfolio management style.
See Notes to Pro Forma Financial Statements
B-23
SUNAMERICA EQUITY FUNDS BLUE CHIP GROWTH FUND
NORTH AMERICAN FUNDS LARGE CAP GROWTH FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
MARCH 31, 2001
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments at March 31, 2001, and related Statement of Operations
("Pro Forma Statements") for the twelve months ended March 31, 2001, reflect the
accounts of the Blue Chip Growth Fund ("Blue Chip Growth") a separately managed
portfolio of SunAmerica Equity Funds, and Large Cap Growth Fund ("Large Cap
Growth") a separately managed portfolio of North American Funds. The Pro Forma
Combined Statement of Assets and Liabilities has been restated to reflect a tax
free exchange of Large Cap Growth Class A, Class B, Class C, and Class I shares
as of the close of business on March 31, 2001. American International Group,
Inc. will pay the cost of the reorganization.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of Large Cap Growth in exchange for shares of Blue Chip Growth.
In conjunction with the reorganization, Blue Chip Growth is the surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of Blue Chip Growth and Large Cap Growth included in their
respective Statements of Additional Information.
2. VALUATION
Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed by the
Adviser to be over-the-counter, are valued at the quoted bid price provided by
principal market markers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sale price available before the time when the assets
are valued. If a security's price is available from more than one foreign
exchange, a Portfolio uses the exchange that is the primary market for the
security. Values of portfolio securities primarily traded on foreign exchanges
are already translated into U.S. dollars when received from a quotation service.
Options traded on national exchanges are valued as of the close of the exchange
on which they are traded. Futures and options traded on commodities exchanges
are valued at their last sale price as of the close of such exchange. The
B-24
Portfolios may make use of a pricing service in the determination of their net
asset values. Securities for which market quotations are not readily available
and other assets are valued at fair value as determined pursuant to procedures
adopted in good faith by the Directors. Short-term securities which mature in
less than 60 days are valued at amortized cost, if their original maturity was
60 days or less, or by amortizing their value on the 61st day prior to maturity,
if their original term to maturity exceeded 60 days.
3. CAPITAL SHARES
The pro forma combined net asset value per share assumes the issuance of
additional shares of Blue Chip Growth which would have been issued at March 31,
2001 in connection with the proposed reorganization. The amount of additional
shares assumed to be issued was calculated based on the March 31, 2001 net asset
value of Blue Chip Growth Class A ($17.21), Class B ($15.91), and Class II
($15.89). Class I shares will be offered on Blue Chip Growth and will assume the
net asset value of Class A. The Class C shares of Large Cap Growth will receive
Class II shares of Blue Chip Growth.
The pro forma number of shares outstanding are determined as follows:
Class A Class B Class II Class I
----------------------------------- ---------------- --------------- -------------- ------------
Shares of Blue Chip Growth 5,895,625 2,841,331 545,600 0
----------------------------------- ---------------- --------------- -------------- ------------
Additional Shares to be issued to
Large Cap Growth 398,710 1,410,108 764,146 892,189
----------------------------------- ---------------- --------------- --------------- ------------
Pro Forma Shares outstanding 6,294,335 4,251,439 1,309,746 892,189
----------------------------------- ---------------- --------------- --------------- ------------
These pro forma financial statements assume that all shares of Large Cap
Growth Class A, Class B, Class C, and Class I outstanding on March 31, 2001 were
exchanged, tax free, for Blue Chip Growth Class A, Class B, Class II, and Class
I shares, respectively.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of Blue Chip Growth, the surviving entity. Certain accounts have
been adjusted to reflect the expenses of the combined entity more closely. Pro
forma operating expenses include the expenses of Blue Chip Growth and Large Cap
Growth combined, adjusted for certain items which are factually supportable.
Advisory fees have been charged to the combined entity based upon the contract
in effect for Blue Chip Growth at the level of assets of the combined fund for
the stated period.
B-25
SUNAMERICA EQUITY FUNDS GROWTH AND INCOME FUND
NORTH AMERICAN FUNDS GROWTH & INCOME FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity
Funds Funds Pro Forma
Growth & Income Growth and Income Pro Forma Combined
Fund Fund Adjustments (Note 1)
---------------- ------------------- ------------- ---------------
ASSETS:
Investment securities, at value (identified cost $223,943,517,
$233,341,530, and $457,285,047, respectively) $ 253,461,428 $ 224,178,735 -- $ 477,640,163
Repurchase agreements (cost equals market) 1,993,000 29,583,000 -- 31,576,000
Cash -- 913 -- 913
Receivable for investments sold 1,197,579 13,929,934 -- 15,127,513
Receivable for shares of beneficial interest sold 79,002 543,348 -- 622,350
Interest and dividends receivable 194,590 278,133 -- 472,723
Receivable from investment adviser -- 1,351 -- 1,351
Prepaid expenses and other assets 462,689 4,451 (227,322) (A) 239,818
-------------- -------------- ------------ --------------
Total assets 257,388,288 268,519,865 (227,322) 525,680,831
-------------- -------------- ------------ --------------
LIABILITIES:
Payable for investments purchased 1,216,260 4,236,733 -- 5,452,993
Payable for shares of beneficial interest redeemed 163,314 1,373,221 -- 1,536,535
Investment advisory and management
fees payable 105,664 176,071 -- 281,735
Distribution and service maintenance
fees payable 193,930 179,159 -- 373,089
Due to custodian bank 459,023 -- -- 459,023
Other accrued expenses 687,906 173,061 -- 860,967
-------------- -------------- ------------ --------------
Total liabilities 2,826,097 6,138,245 0 8,964,342
-------------- -------------- ------------ --------------
Net assets $ 254,562,191 $ 262,381,620 ($ 227,322) $ 516,716,489
============== ============== ============ ==============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.01, and $.01, par value $ 12,884 $ 198,746 180,937 (B) 392,567
Paid-in capital 228,720,716 277,951,775 (180,937)(B) 506,491,554
-------------- -------------- ------------ --------------
228,733,600 278,150,521 -- 506,884,121
Accumulated undistributed net
investment income (loss) (871,273) (934,643) (227,322)(A) (2,033,238)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (2,818,047) (5,671,463) -- (8,489,510)
Net unrealized appreciation (depreciation) on
investments 29,517,911 (9,162,795) -- 20,355,116
-------------- -------------- ------------ --------------
Net assets $ 254,562,191 $ 262,381,620 ($ 227,322) $ 516,716,489
============== ============== ============ ==============
B-26
SUNAMERICA EQUITY FUNDS GROWTH AND INCOME FUND
NORTH AMERICAN FUNDS GROWTH & INCOME FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2001
(unaudited)
North American Funds SunAmerica Equity Funds Pro Forma
Growth & Income Growth and Income Pro Forma Combined
Fund Fund Adjustments (Note 1)
-------------------- ----------------------- ------------- ---------------
Class A:
Net assets $ 41,401,558 $ 95,679,367 ($36,971) (A) $137,043,954
Shares outstanding 2,049,152 7,089,474 1,014,891 (B) 10,153,517
Net asset value and redemption price per
share $ 20.20 $ 13.50 -- $ 13.50
Maximum sales charge (5.75% of offering
price) 1.23 0.82 -- 0.82
------------ --------------- ------------- ------------
Maximum offering price to public $ 21.43 $ 14.32 -- $ 14.32
============ =============== ============= ============
Class B:
Net assets $ 77,404,149 $ 131,647,428 ($69,121) (A) $208,982,456
Shares outstanding 3,953,119 10,094,368 1,977,481 (B) 16,024,968
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 19.58 $ 13.04 -- $ 13.04
============ =============== ============= ============
Class II:
Net assets -- $ 34,648,188 $124,639,059 (D) $159,287,247
Shares outstanding -- 2,661,158 9,572,892 (B)(D) 12,234,050
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) -- $ 13.02 -- $ 13.02
Maximum sales charge (1.00% of offering
price) -- 0.13 -- 0.13
------------ --------------- ------------- ------------
Maximum offering price to public -- $ 13.15 -- $ 13.15
============ =============== ============= ============
Class Z:
Net assets -- $ 406,637 -- $ 406,637
Shares outstanding -- 29,613 -- 29,613
Net asset value, offering and redemption
price per share -- $ 13.73 -- $ 13.73
============ =============== ============= ============
Class C:
Net assets $124,750,461 -- ($124,750,461) (A)(D) $ 0
Shares outstanding 6,338,466 -- (6,338,466) (B)(D) 0
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $ 19.68 -- -- --
============ =============== ============= ============
Class I:
Net assets $ 11,006,023 -- ($9,828) (A) $ 10,996,195
Shares outstanding 543,089 -- 271,444 (B)(C) 814,533
Net asset value, offering and redemption
price per share $ 20.27 $ 13.50 -- $ 13.50
============ =============== ============= ============
(A) To adjust for the remaining balances of any prepaid expenses on the North
American Funds Growth & Income Fund to be expensed prior to the
reorganization
(B) To adjust for a tax free exchange of North American Funds Growth & Income
shares for shares of SunAmerica Equity Funds Growth and Income
(C) Class I shares will be offered on SunAmerica Equity Funds Growth and Income
and will assume the net asset value of Class A
(D) Class C shares of North American Funds Growth & Income will receive Class
II shares of SunAmerica Equity Funds Growth and Income
See Notes to Pro Forma Financial Statements
B-27
SUNAMERICA EQUITY FUNDS GROWTH AND INCOME FUND
NORTH AMERICAN FUNDS GROWTH & INCOME FUND
PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED
MARCH 31, 2001
(unaudited)
North American SunAmerica Equity Pro Forma
Funds Growth & Funds Growth Pro Forma Combined
Income Fund and Income Fund Adjustments (Note 1)
---------------- --------------- ------------ ---------------
INVESTMENT INCOME:
Income:
Interest $93,436 $1,355,871 $0 $1,449,307
Dividends* 3,422,614 2,241,269 0 5,663,883
---------------- -------------- ------------ ---------------
Total investment income 3,516,050 3,597,140 0 7,113,190
---------------- -------------- ------------ ---------------
Expenses:
Investment advisory and management fees 1,852,630 2,356,016 100,248 (E) 4,308,894
Distribution and service maintenance fees
Class A 155,354 405,971 0 561,325
Class B 852,775 1,619,558 0 2,472,333
Class II 0 357,511 1,352,788 (D) 1,710,299
Class C 1,352,788 0 (1,352,788) (D) 0
Class I 28,694 0 0 28,694
Transfer agent fees and expenses 629,455 0 (629,455) (E) 0
Class A 0 305,850 115,406 (E) 421,256
Class B 0 412,141 213,194 (E) 625,335
Class II 0 89,317 338,197 (E) 427,514
Class Z 0 19,651 0 19,651
Class I 0 0 33,285 (E) 33,285
Registration fees 181,103 0 (181,103) (E) 0
Class A 0 17,161 1,839 (E) 19,000
Class B 0 26,421 2,579 (E) 29,000
Class II 0 10,990 9,010 (E) 20,000
Class Z 0 3,970 0 3,970
Class I 0 0 7,500 (E) 7,500
Accounting/administration 294,396 0 (294,396) (E) 0
Custodian fees and expenses 152,697 126,080 (42,555) (E) 236,222
Audit and legal fees 131,921 25,160 (124,581) (F) 32,500
Miscellaneous expenses 131,388 51,500 (107,888) (F) 75,000
---------------- -------------- ------------ ---------------
Total expenses 5,763,201 5,827,297 (558,720) 11,031,778
Less: expenses waived/reimbursed by investment
adviser (307,814) (22,819) 291,034 (G) (39,599)
Less: custody credits earned on cash balances 0 (2,412) 0 (2,412)
---------------- -------------- ------------ ---------------
Net expenses 5,455,387 5,802,066 (267,686) 10,989,767
---------------- -------------- ------------ ---------------
Net investment income (loss) (1,939,337) (2,204,926) 267,686 (3,876,577)
---------------- -------------- ------------ ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments 7,111,581 6,716,979 0 13,828,560
Net change in unrealized appreciation/depreciation of
investments (41,527,211) (107,166,660) 0 (148,693,871)
Net change in unrealized appreciation/depreciation on
foreign currency and other assets and liabilities 12 0 0 12
---------------- -------------- ------------ ---------------
Net realized and unrealized gain (loss) on investments,
foreign currency and other assets and liabilities (34,415,618) (100,449,681) 0 (134,865,299)
---------------- -------------- ------------ ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS: ($36,354,955) ($102,654,607) $267,686 ($138,741,876)
============== ============== ============ ==============
*Net of foreign withholding taxes on dividends of $0 $11,574 $0 $11,574
============== ============== ============ ==============
(D) Class C shares of North American Funds Growth & Income will receive Class
II shares of SunAmerica Equity Funds Growth and Income
(E) Reflects adjustments to expenses based on surviving fund's fee schedules
and combined net assets
(F) Reflects the elimination of duplicate services or fees
(G) Reflects adjustments to expenses waived/reimbused by investment adviser
based on pro forma expenses
See Notes to Pro Forma Financial Statements
B-28
SunAmerica Equity Funds Growth and Income Fund
North American Funds Growth & Income Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Maturity Growth & Growth and
Income Income Combined Description Coupon Date Income Income
-------------- ---------- --------- --------------------------------------- --------- --------- ------------- -----------
COMMON STOCK 99.6% 85.4%
Aerospace & Military Technology 1.9% 1.5%
29,100 50,000 79,100 Boeing Co.
15,000 15,000 Northrop Grumman Corp.
42,700 42,700 United Technologies Corp.
Automotive 0.0% 1.1%
100,000 100,000 Ford Motor Co.
Banks 3.6% 4.5%
80,000 80,000 Bank of New York Co., Inc.
72,000 98,000 170,000 Bank One Corp.
80,000 80,000 FleetBoston Financial Corp.
30,000 30,000 Mellon Financial Corp.
166,293 166,293 U.S. Bancorp
43,000 43,000 Wachovia Corp.
Broadcasting & Media 4.8% 7.5%
75,000 75,000 Adelphia Communications Corp.+
119,700 130,000 249,700 AOL Time Warner, Inc. +
154,100 110,000 264,100 AT&T Corp.-Liberty Media Corp., Class A+
100,000 100,000 Comcast Corp., Class A+
115,000 115,000 EchoStar Communications Corp., Class A+
57,500 57,500 Gannett Co., Inc.
41,800 41,800 Pegasus Communications Corp.+
70,000 70,000 USA Networks, Inc.+
41,529 41,529 Viacom, Inc.
Business Services 3.1% 0.5%
62,500 62,500 Automatic Data Processing, Inc.
42,700 42,700 First Data Corp.
79,900 50,000 129,900 Waste Management, Inc.
Chemicals 1.6% 0.9%
50,400 50,400 Dow Chemical Co.
64,033 64,033 du Pont (E.I.) de Nemours & Co.
50,000 50,000 Eastman Chemical Co.
Communication Equipment 2.0% 1.3%
230,500 146,600 377,100 Cisco Systems, Inc.+
12,500 12,500 Juniper Networks, Inc.+
65,000 65,000 Lucent Technologies, Inc.
31,600 31,600 Tellabs, Inc.
Computer Software 3.8% 2.1%
162,600 100,000 262,600 Microsoft Corp.+
16,500 16,500 VERITAS Software Corp.+
Computers & Business Equipment 5.3% 4.0%
120,000 120,000 Compaq Computer Corp.
33,300 33,300 Computer Sciences Corp.+
Principal/Shares Market Value
--------------------------------------------- -----------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Pro Forma Growth & Growth and Pro Forma
Income Income Combined Description Combined Income Income Combined
-------------- ---------- --------- ----------------------------------------------- -------------- ----------- -----------
COMMON STOCK 92.4%
Aerospace & Military Technology 1.7%
29,100 50,000 79,100 Boeing Co. 1,621,161 2,785,500 4,406,661
15,000 15,000 Northrop Grumman Corp. 1,305,000 1,305,000
42,700 42,700 United Technologies Corp. 3,129,910 3,129,910
Automotive 0.6%
100,000 100,000 Ford Motor Co. 2,812,000 2,812,000
Banks 4.0%
80,000 80,000 Bank of New York Co., Inc. 3,939,200 3,939,200
72,000 98,000 170,000 Bank One Corp. 2,604,960 3,545,640 6,150,600
80,000 80,000 FleetBoston Financial Corp. 3,020,000 3,020,000
30,000 30,000 Mellon Financial Corp. 1,215,600 1,215,600
166,293 166,293 U.S. Bancorp 3,857,997 3,857,997
43,000 43,000 Wachovia Corp. 2,590,750 2,590,750
Broadcasting & Media 6.2%
75,000 75,000 Adelphia Communications Corp.+ 3,037,500 3,037,500
119,700 130,000 249,700 AOL Time Warner, Inc. + 4,805,954 5,219,500 10,025,454
154,100 110,000 264,100 AT&T Corp.-Liberty Media Corp., Class A 2,157,400 1,540,000 3,697,400
100,000 100,000 Comcast Corp., Class A+ 4,193,750 4,193,750
115,000 115,000 EchoStar Communications Corp., Class A+ 3,184,063 3,184,063
57,500 57,500 Gannett Co., Inc. 3,433,900 3,433,900
41,800 41,800 Pegasus Communications Corp.+ 961,400 961,400
70,000 70,000 USA Networks, Inc.+ 1,675,625 1,675,625
41,529 41,529 Viacom, Inc. 1,826,030 1,826,030
Business Services 1.8%
62,500 62,500 Automatic Data Processing, Inc. 3,398,750 3,398,750
42,700 42,700 First Data Corp. 2,549,616 2,549,616
79,900 50,000 129,900 Waste Management, Inc. 1,973,530 1,235,000 3,208,530
Chemicals 1.3%
50,400 50,400 Dow Chemical Co. 1,591,128 1,591,128
64,033 64,033 du Pont (E.I.) de Nemours & Co. 2,606,143 2,606,143
50,000 50,000 Eastman Chemical Co. 2,461,000 2,461,000
Communication Equipment 1.6%
230,500 146,600 377,100 Cisco Systems, Inc.+ 3,644,781 2,318,113 5,962,894
12,500 12,500 Juniper Networks, Inc.+ 474,500 474,500
65,000 65,000 Lucent Technologies, Inc. 648,050 648,050
31,600 31,600 Tellabs, Inc. 1,285,725 1,285,725
Computer Software 2.9%
162,600 100,000 262,600 Microsoft Corp.+ 8,892,188 5,468,750 14,360,938
16,500 16,500 VERITAS Software Corp.+ 762,960 762,960
Computers & Business Equipment 4.6%
120,000 120,000 Compaq Computer Corp. 2,184,000 2,184,000
33,300 33,300 Computer Sciences Corp.+ 1,077,255 1,077,255
B-29
SunAmerica Equity Funds Growth and Income Fund
North American Funds Growth & Income Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Maturity Growth & Growth and
Income Income Combined Description Coupon Date Income Income
-------------- ---------- --------- --------------------------------------- --------- --------- ------------- -----------
101,600 100,000 201,600 Dell Computer Corp.+
44,300 100,000 144,300 EMC Corp.+
90,200 90,200 Hewlett-Packard Co.
58,500 28,500 87,000 International Business Machines Corp.
1,369 1,369 McData Corp., Class A+
Conglomerate 4.0% 6.9%
171,600 270,000 441,600 General Electric Co.
67,000 155,000 222,000 Tyco International Ltd.
Electronics 4.4% 5.4%
60,000 60,000 Applied Materials, Inc.+
49,000 49,000 C-MAC Industries, Inc.+
32,300 35,000 67,300 Emerson Electric Co.
189,700 138,500 328,200 Intel Corp.
27,000 65,000 92,000 Micron Technology, Inc.+
74,600 74,600 Solectron Corp.+
70,000 70,000 Texas Instruments, Inc.
54,400 54,400 Teradyne, Inc.+
Energy Services 1.2% 2.9%
33,200 33,200 Nabors Industries, Inc.+
65,000 65,000 Noble Drilling Corp.+
90,000 90,000 Santa Fe International Corp.
51,600 51,600 Schlumberger Ltd.
Energy Sources 8.5% 4.1%
1,200 1,200 Amerada Hess Corp.
30,000 30,000 Apache Corp.
20,000 20,000 Burlington Resources, Inc.
41,500 41,500 Chevron Corp.
60,400 60,400 Conoco, Inc.
60,000 60,000 Devon Energy Corp.
33,700 49,200 82,900 El Paso Corp.
123,784 19,200 142,984 Exxon Mobil Corp.
20,000 20,000 Kerr-McGee Corp.
48,700 48,700 Royal Dutch Petroleum Co. GDR
Financial Services 7.5% 11.8%
45,000 45,000 American Express Co.
35,000 35,000 Capital One Financial Corp.
197,115 134,066 331,181 Citigroup, Inc.
32,500 32,500 Goldman Sachs Group, Inc.
57,350 150,000 207,350 J.P. Morgan Chase & Co., Inc.
55,000 55,000 Lehman Brothers Holdings, Inc.
86,700 86,700 Merrill Lynch & Co., Inc.
40,000 40,000 Morgan Stanley Dean Witter & Co.
55,000 55,000 Providian Financial Corp.
Principal/Shares Market Value
--------------------------------------------- -----------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Pro Forma Growth & Growth and Pro Forma
Income Income Combined Description Combined Income Income Combined
-------------- ---------- --------- ----------------------------------------------- -------------- ----------- -----------
101,600 100,000 201,600 Dell Computer Corp.+ 2,609,850 2,568,750 5,178,600
44,300 100,000 144,300 EMC Corp.+ 1,302,420 2,940,000 4,242,420
90,200 90,200 Hewlett-Packard Co. 2,820,554 2,820,554
58,500 28,500 87,000 International Business Machines Corp. 5,626,530 2,741,130 8,367,660
1,369 1,369 McData Corp., Class A+ 25,840 25,840
Conglomerate 5.4%
171,600 270,000 441,600 General Electric Co. 7,183,176 11,302,200 18,485,376
67,000 155,000 222,000 Tyco International Ltd. 2,896,410 6,700,650 9,597,060
Electronics 5.0%
60,000 60,000 Applied Materials, Inc.+ 2,610,000 2,610,000
49,000 49,000 C-MAC Industries, Inc.+ 992,250 992,250
32,300 35,000 67,300 Emerson Electric Co. 2,001,308 2,168,600 4,169,908
189,700 138,500 328,200 Intel Corp. 4,991,481 3,644,281 8,635,762
27,000 65,000 92,000 Micron Technology, Inc.+ 1,121,310 2,699,450 3,820,760
74,600 74,600 Solectron Corp.+ 1,418,146 1,418,146
70,000 70,000 Texas Instruments, Inc. 2,168,600 2,168,600
54,400 54,400 Teradyne, Inc.+ 1,795,200 1,795,200
Energy Services 2.1%
33,200 33,200 Nabors Industries, Inc.+ 1,721,088 1,721,088
65,000 65,000 Noble Drilling Corp.+ 3,000,400 3,000,400
90,000 90,000 Santa Fe International Corp. 2,925,000 2,925,000
51,600 51,600 Schlumberger Ltd. 2,972,676 2,972,676
Energy Sources 6.3%
1,200 1,200 Amerada Hess Corp. 93,744 93,744
30,000 30,000 Apache Corp. 1,728,300 1,728,300
20,000 20,000 Burlington Resources, Inc. 895,000 895,000
41,500 41,500 Chevron Corp. 3,643,700 3,643,700
60,400 60,400 Conoco, Inc. 1,706,300 1,706,300
60,000 60,000 Devon Energy Corp. 3,492,000 3,492,000
33,700 49,200 82,900 El Paso Corp. 2,200,610 3,212,760 5,413,370
123,784 19,200 142,984 Exxon Mobil Corp. 10,026,504 1,555,200 11,581,704
20,000 20,000 Kerr-McGee Corp. 1,298,000 1,298,000
48,700 48,700 Royal Dutch Petroleum Co. GDR 2,699,928 2,699,928
Financial Services 9.7%
45,000 45,000 American Express Co. 1,858,500 1,858,500
35,000 35,000 Capital One Financial Corp. 1,942,500 1,942,500
197,115 134,066 331,181 Citigroup, Inc. 8,866,233 6,030,289 14,896,522
32,500 32,500 Goldman Sachs Group, Inc. 2,765,750 2,765,750
57,350 150,000 207,350 J.P. Morgan Chase & Co., Inc. 2,575,015 6,735,000 9,310,015
55,000 55,000 Lehman Brothers Holdings, Inc. 3,448,500 3,448,500
86,700 86,700 Merrill Lynch & Co., Inc. 4,803,180 4,803,180
40,000 40,000 Morgan Stanley Dean Witter & Co. 2,140,000 2,140,000
55,000 55,000 Providian Financial Corp. 2,697,750 2,697,750
B-30
SunAmerica Equity Funds Growth and Income Fund
North American Funds Growth & Income Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Maturity Growth & Growth and
Income Income Combined Description Coupon Date Income Income
-------------- ---------- --------- --------------------------------------- --------- --------- ------------- -----------
110,000 110,000 Washington Mutual, Inc.
Food, Beverage & Tobacco 2.9% 3.1%
80,000 80,000 Anheuser-Busch Cos., Inc.
72,600 72,600 Coca-Cola Co.
95,000 60,000 155,000 PepsiCo, Inc.
37,500 37,500 Philip Morris Cos., Inc.
Forest Products 0.0% 1.6%
60,000 60,000 Georgia-Pacific Group
55,000 55,000 Temple-Inland, Inc.
Health Services 1.0% 0.0%
62,600 62,600 HCA, Inc
Household Products 3.2% 1.7%
60,050 65,000 125,050 Kimberly-Clark Corp.
66,300 66,300 Procter & Gamble Co.
Insurance 4.4% 0.0%
73,125 73,125 American International Group, Inc. (1)
55,200 55,200 Marsh & McLennan Cos., Inc.
Internet Content 0.4% 0.0%
28,355 28,355 VeriSign, Inc+
Internet Software 0.6% 0.0%
106,900 106,900 Oracle Corp.+
Leisure & Tourism 1.1% 0.0%
102,600 102,600 McDonald's Corp
Machinery 0.8% 0.0%
37,400 37,400 Illinois Tool Works, Inc.
Metals & Mining 2.6% 0.0%
104,400 104,400 Alcoa, Inc.
28,200 28,200 Minnesota Mining & Manufacturing Co.
Medical Products 3.5% 2.9%
60,000 60,000 Amgen, Inc.+
50,900 50,900 Baxter International, Inc.
46,700 45,000 91,700 Johnson & Johnson Co.
Pharmaceuticals 12.1% 8.1%
87,800 87,800 Abbott Laboratories, Inc.
90,200 90,200 American Home Products Corp.
66,800 65,000 131,800 Bristol-Myers Squibb Co.
25,000 25,000 Genentech, Inc.+
27,900 27,900 Immunex Corp.
65,000 75,000 140,000 Merck & Co., Inc.
133,150 110,000 243,150 Pfizer, Inc.
95,889 65,000 160,889 Pharmacia Corp.
52,000 76,000 128,000 Schering-Plough Corp.
Retail Stores 6.4% 5.2%
Principal/Shares Market Value
--------------------------------------------- -----------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Pro Forma Growth & Growth and Pro Forma
Income Income Combined Description Combined Income Income Combined
-------------- ---------- --------- ----------------------------------- ---------- -------------- ----------- -----------
110,000 110,000 Washington Mutual, Inc. 6,022,500 6,022,500
Food, Beverage & Tobacco 3.0%
80,000 80,000 Anheuser-Busch Cos., Inc. 3,674,400 3,674,400
72,600 72,600 Coca-Cola Co. 3,278,616 3,278,616
95,000 60,000 155,000 PepsiCo, Inc. 4,175,250 2,637,000 6,812,250
37,500 37,500 Philip Morris Cos., Inc. 1,779,375 1,779,375
Forest Products 0.8%
60,000 60,000 Georgia-Pacific Group 1,764,000 1,764,000
55,000 55,000 Temple-Inland, Inc. 2,433,750 2,433,750
Health Services 0.5%
62,600 62,600 HCA, Inc 2,520,902 2,520,902
Household Products 2.4%
60,050 65,000 125,050 Kimberly-Clark Corp. 4,073,192 4,408,950 8,482,142
66,300 66,300 Procter & Gamble Co. 4,150,380 4,150,380
Insurance 2.2%
73,125 73,125 American International Group, Inc. (1) 5,886,563 5,886,563
55,200 55,200 Marsh & McLennan Cos., Inc. 5,245,656 5,245,656
Internet Content 0.2%
28,355 28,355 VeriSign, Inc+ 1,004,830 1,004,830
Internet Software 0.3%
106,900 106,900 Oracle Corp.+ 1,601,362 1,601,362
Leisure & Tourism 0.5%
102,600 102,600 McDonald's Corp 2,724,030 2,724,030
Machinery 0.4%
37,400 37,400 Illinois Tool Works, Inc. 2,125,816 2,125,816
Metals & Mining 1.3%
104,400 104,400 Alcoa, Inc. 3,753,180 3,753,180
28,200 28,200 Minnesota Mining & Manufacturing Co. 2,929,980 2,929,980
Medical Products 3.2%
60,000 60,000 Amgen, Inc.+ 3,611,250 3,611,250
50,900 50,900 Baxter International, Inc. 4,791,726 4,791,726
46,700 45,000 91,700 Johnson & Johnson Co. 4,084,849 3,936,150 8,020,999
Pharmaceuticals 10.1%
87,800 87,800 Abbott Laboratories, Inc. 4,143,282 4,143,282
90,200 90,200 American Home Products Corp. 5,299,250 5,299,250
66,800 65,000 131,800 Bristol-Myers Squibb Co. 3,967,920 3,861,000 7,828,920
25,000 25,000 Genentech, Inc.+ 1,262,500 1,262,500
27,900 27,900 Immunex Corp. 399,319 399,319
65,000 75,000 140,000 Merck & Co., Inc. 4,933,500 5,692,500 10,626,000
133,150 110,000 243,150 Pfizer, Inc. 5,452,493 4,504,500 9,956,993
95,889 65,000 160,889 Pharmacia Corp. 4,829,929 3,274,050 8,103,979
52,000 76,000 128,000 Schering-Plough Corp. 1,899,560 2,776,280 4,675,840
Retail Stores 5.8%
B-31
SunAmerica Equity Funds Growth and Income Fund
North American Funds Growth & Income Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Maturity Growth & Growth and
Income Income Combined Description Coupon Date Income Income
-------------- ---------- --------- --------------------------------------- --------- --------- ------------- -----------
19,200 19,200 CVS Corp.
123,600 123,600 Gap, Inc.
68,500 40,000 108,500 Home Depot, Inc.
20,000 20,000 Safeway, Inc.
94,300 80,000 174,300 Target Corp.
153,900 120,000 273,900 Wal-Mart Stores, Inc.
Telecommunications 6.4% 5.3%
100,000 100,000 AT&T Corp.
10,000 10,000 CIENA Corp.+
96,800 72,000 168,800 General Motors Corp., Class H+
63,400 63,400 JDS Uniphase Corp.+
50,000 50,000 QUALCOMM, Inc.+
108,744 40,000 148,744 SBC Communications, Inc.
86,454 70,000 156,454 Verizon Communications
223,000 100,000 323,000 WorldCom, Inc.+
Utilities 2.5% 3.0%
65,000 65,000 Calpine Corp.+
50,000 50,000 Energy East Corp.
33,975 40,000 73,975 Exelon Corp.
65,500 65,500 FPL Group, Inc
23,000 23,000 NRG Energy, Inc.+
Total Investment Securities 99.6% 85.4%
(cost $223,943,517; $233,341,530; $457,285,047)
REPURCHASE AGREEMENTS 0.8% 11.3%
1,993,000 1,993,000 Paribas, Inc. Repurchase Agreement 5.27 4/2/01
19,583,000 19,583,000 State Street Bank & Trust Co. Repurchase
Agreement 5.15 4/2/01
10,000,000 10,000,000 UBS Warburg, Inc. Repurchase Agreement 5.28 4/2/01
Total Repurchase Agreements
(cost $1,993,000; $29,583,000; $31,576,000)
TOTAL INVESTMENTS 100.4% 96.7%
(cost $225,936,517; $262,924,530; $488,861,047)
Other assets less liabilities (2) -0.4% 3.3%
---------- -----------
NET ASSETS 100.0% 100.0%
========== ===========
Principal/Shares Market Value
--------------------------------------------- --------------------------------------------
North American SunAmerica North American SunAmerica
Growth & Growth and Pro Forma Pro Forma Growth & Growth and Pro Forma
Income Income Combined Description Combined Income Income Combined
-------------- ---------- --------- -------------------------------- ------------ -------------- ----------- -----------
19,200 19,200 CVS Corp. 1,123,008 1,123,008
123,600 123,600 Gap, Inc. 2,931,791 2,931,791
68,500 40,000 108,500 Home Depot, Inc. 2,952,350 1,724,000 4,676,350
20,000 20,000 Safeway, Inc. 1,103,000 1,103,000
94,300 80,000 174,300 Target Corp. 3,402,344 2,886,400 6,288,744
153,900 120,000 273,900 Wal-Mart Stores, Inc. 7,771,950 6,060,000 13,831,950
Telecommunications 5.8%
100,000 100,000 AT&T Corp. 2,130,000 2,130,000
10,000 10,000 CIENA Corp.+ 417,500 417,500
96,800 72,000 168,800 General Motors Corp., Class H+ 1,887,600 1,404,000 3,291,600
63,400 63,400 JDS Uniphase Corp.+ 1,168,938 1,168,938
50,000 50,000 QUALCOMM, Inc.+ 2,831,250 2,831,250
108,744 40,000 148,744 SBC Communications, Inc. 4,853,245 1,785,200 6,638,445
86,454 70,000 156,454 Verizon Communications 4,262,182 3,451,000 7,713,182
223,000 100,000 323,000 WorldCom, Inc.+ 4,167,313 1,868,750 6,036,063
Utilities 2.7%
65,000 65,000 Calpine Corp.+ 3,579,550 3,579,550
50,000 50,000 Energy East Corp. 867,500 867,500
33,975 40,000 73,975 Exelon Corp. 2,228,760 2,624,000 4,852,760
65,500 65,500 FPL Group, Inc 4,015,150 4,015,150
23,000 23,000 NRG Energy, Inc.+ 837,200 837,200
------------ ------------ ------------
Total Investment Securities 92.4% 253,461,428 224,178,735 477,640,163
------------ ------------ ------------
(cost $223,943,517; $233,341,530;
$457,285,047)
REPURCHASE AGREEMENTS 6.1%
1,993,000 1,993,000 Paribas, Inc. Repurchase Agreement
19,583,000 19,583,000 State Street Bank & Trust Co. Repurchase 1,993,000 1,993,000
Agreement 19,583,000 19,583,000
10,000,000 10,000,000 UBS Warburg, Inc. Repurchase Agreement 10,000,000 10,000,000
Total Repurchase Agreements
(cost $1,993,000; $29,583,000;
------------ ------------ ------------
$31,576,000) 1,993,000 29,583,000 31,576,000
------------ ------------ ------------
TOTAL INVESTMENTS 98.5% 255,454,428 253,761,735 509,216,163
(cost $225,936,517; $262,924,530;
$488,861,047)
Other assets less liabilities (2) 1.5% (892,237) 8,619,885 7,500,326
-------------------------------------------
NET ASSETS 100.0% $254,562,191 $262,381,620 $516,716,489
============================================
+ Non-income producing security GDR ("Global Depositary
Receipt")
(1) Security represents an investment in an affiliated
company
(2) To adjust ($227,322) for prepaid expenses on the North
American Funds Growth & Income to be expensed prior to the
reorganization
Management does not anticipate having to sell any securities
as a result of the reorganization, however, securities may
be sold due to differing portfolio management style.
See Notes to Pro Forma Financial Statements
B-32
SUNAMERICA EQUITY FUNDS GROWTH AND INCOME FUND
NORTH AMERICAN FUNDS GROWTH & INCOME FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
March 31, 2001
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including
the Portfolio of Investments at March 31, 2001, and related Statement of
Operations ("Pro Forma Statements") for the twelve months ended March 31, 2001,
reflect the accounts of the Growth and Income Fund ("SunAmerica Growth and
Income") a separately managed portfolio of SunAmerica Equity Funds, and Growth &
Income Fund ("Growth & Income") a separately managed portfolio of North American
Funds. The Pro Forma Combined Statement of Assets and Liabilities has been
restated to reflect a tax free exchange of the Growth & Income Fund Class A,
Class B, Class C, and Class I shares as of the close of business on March 31,
2001. American International Group, Inc. will pay the cost of the
reorganization.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of Growth & Income in exchange for shares of SunAmerica Growth
and Income. In conjunction with the reorganization, SunAmerica Growth and Income
is the surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of SunAmerica Growth and Income and Growth & Income
included in their respective Statements of Additional Information.
2. VALUATION
Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed by the
Adviser to be over-the-counter, are valued at the quoted bid price provided by
principal market markers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sale price available before the time when the assets
are valued. If a security's price is available from more than one foreign
exchange, a Portfolio uses the exchange that is the primary market for the
security. Values of portfolio securities primarily traded on foreign exchanges
are already translated into U.S. dollars when received from a quotation service.
Options traded on national exchanges are valued as of the close of the exchange
on which they are traded. Futures and options traded on commodities
B-33
exchanges are valued at their last sale price as of the close of such exchange.
The Portfolios may make use of a pricing service in the determination of their
net asset values. Securities for which market quotations are not readily
available and other assets are valued at fair value as determined pursuant to
procedures adopted in good faith by the Directors. Short-term securities which
mature in less than 60 days are valued at amortized cost, if their original
maturity was 60 days or less, or by amortizing their value on the 61st day prior
to maturity, if their original term to maturity exceeded 60 days.
3. CAPITAL SHARES
The pro forma combined net asset value per share assumes the issuance of
additional shares of SunAmerica Growth and Income which would have been issued
at March 31, 2001 in connection with the proposed reorganization. The amount of
additional shares assumed to be issued was calculated based on the March 31,
2001 net asset value of SunAmerica Growth and Income Class A ($13.50), Class B
($13.04), Class II, ($13.02), and Class Z ($13.73). Class I shares will be
offered on SunAmerica Growth and Income and will assume the net asset value of
Class A. The Class C shares of Growth & Income will receive Class II shares of
SunAmerica Growth and Income.
The pro forma number of shares outstanding are as follows:
Class A Class B Class II Class Z Class I
----------------------------------- ---------------- ----------------- --------------- ---------------- -----------------
Shares of SunAmerica
Growth and Income 7,089,474 10,094,368 2,661,158 29,613 0
----------------------------------- ---------------- ----------------- --------------- ---------------- -----------------
Additional Shares to be
issued to Growth &
Income 3,064,043 5,930,600 9,572,892 0 814,533
----------------------------------- ---------------- ----------------- --------------- ---------------- -----------------
Pro Forma Shares
outstanding 10,153,517 16,024,968 12,234,050 29,613 814,533
-------------------------------------------------------------------------------------------------------------------------
These pro forma financial statements assume that all shares of Growth &
Income Class A, Class B, Class C, and Class I outstanding on March 31, 2001 were
exchanged, tax free, for SunAmerica Growth and Income Class A, Class B, Class
II, and Class I shares, respectively. Class Z shares were not affected by the
combination.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of SunAmerica Growth and Income, the surviving entity. Certain
accounts have been adjusted to reflect the expenses of the combined entity more
closely. Pro forma operating expenses include the expenses of SunAmerica Growth
and Income and Growth & Income combined, adjusted for certain items which are
factually supportable. Advisory fees have been charged to the combined entity
based upon the
B-34
contract in effect for SunAmerica Growth and Income at the level of assets of
the combined fund for the stated period.
B-35
SUNAMERICA EQUITY GROWTH OPPORTUNITIES FUND
NORTH AMERICAN FUNDS MID CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
March 31, 2001
(unaudited)
North America SunAmerica Equity
Funds Funds Growth Pro Forma
Mid Cap Growth Opportunities Pro Forma Combined
Fund Fund Adjustments (Note 1)
-------------- ----------------- ----------- ------------
ASSETS:
Investment securities, at value (identified cost $65,430,986,
$264,728,084, and $330,159,070, respectively) $43,851,114 $223,072,593 - $266,923,707
Repurchase agreements (cost equals market) 597,000 18,709,000 - 19,306,000
Cash 206 204 - 410
Receivable for investments sold 235,938 5,296,178 - 5,532,116
Receivable for shares of beneficial interest sold 11,742 1,394,418 - 1,406,160
Interest and dividends receivable 11,591 41,586 - 53,177
Receivable from investment adviser 9,435 - - 9,435
Prepaid expenses and other assets 190,229 3,279 (61,551)(A) 131,957
------------ ------------- ---------- -------------
Total assets 44,907,255 248,517,258 (61,551) 293,362,962
------------ ------------- ---------- -------------
LIABILITIES:
Payable for investments purchased 130,378 2,735,478 - 2,865,856
Payable for shares of beneficial interest redeemed 64,012 435,043 - 499,055
Investment advisory and management
fees payable - 167,130 - 167,130
Distribution and service maintenance
fees payable 31,898 148,713 - 180,611
Other accrued expenses 87,124 80,536 - 167,660
------------ ------------- ---------- -------------
Total liabilities 313,412 3,566,900 0 3,880,312
------------ ------------- ---------- -------------
Net assets $44,593,843 $244,950,358 ($61,551) $289,482,650
============ ============= ========== =============
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.01, and $.01, par value $4,554 $125,421 $18,573 (B) 148,548
Paid-in capital 71,630,237 358,545,147 (18,573)(B) 430,156,811
------------ ------------- ---------- -------------
71,634,791 358,670,568 0 430,305,359
Accumulated undistributed net
investment income (loss) (1,524,365) (1,366,704) (61,551)(A) (2,952,620)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (3,936,680) (70,698,015) - (74,634,695)
Net unrealized appreciation (depreciation) on
investments (21,579,872) (41,655,491) - (63,235,363)
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities (31) - - (31)
------------ ------------- ---------- -------------
Net assets $44,593,843 $244,950,358 ($61,551) $289,482,650
============ ============= ========== =============
B-36
SUNAMERICA EQUITY GROWTH OPPORTUNITIES FUND
NORTH AMERICAN FUNDS MID CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
March 31, 2001
(unaudited)
North America Funds SunAmerica Equity Funds Pro Forma
Mid Cap Growth Growth Opportunities Pro Forma Combined
Fund Fund Adjustments (Note 1)
------------------- ----------------------- ------------- ------------
Class A:
Net assets $7,248,056 $124,773,186 ($10,003) (A) $132,011,239
Shares outstanding 715,655 6,131,576 (359,977) (B) 6,487,254
Net asset value and redemption price per share $10.13 $20.35 - $20.35
Maximum sales charge (5.75% of offering price) 0.62 1.24 - 1.24
-------------- -------------- ------------- --------------
Maximum offering price to public $10.75 $21.59 - $21.59
============== ============== ============= ==============
Class B:
Net assets $17,253,698 $75,131,892 ($23,815) (A) $92,361,775
Shares outstanding 1,795,035 4,006,776 (876,108) (B) 4,925,703
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $9.61 $18.75 - $18.75
============== ============== ============= ==============
Class II:
Net assets - $45,045,280 $12,343,407 (D) $57,388,687
Shares outstanding - 2,403,768 658,666 (B)(D) 3,062,434
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) - $18.74 - $18.74
Maximum sales charge (1.00% of offering price) - 0.19 - 0.19
-------------- -------------- ------------- --------------
Maximum offering price to public - $18.93 - $18.93
============== ============== ============= ==============
Class C:
Net assets $12,360,468 - ($12,360,468) (A)(D) $0
Shares outstanding 1,283,728 - (1,283,728) (B)(D) 0
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $9.63 - - -
============== ============== ============= ==============
Class I:
Net assets $7,731,621 - ($10,672) (A) $7,720,949
Shares outstanding 759,324 - (379,916) (B)(C) 379,408
Net asset value, offering and redemption
price per share $10.18 $20.35 - $20.35
============== ============== ============= ==============
(A) To adjust for the remaining balances of any prepaid expenses on the North
American Funds Mid Cap Growth Fund to be expensed prior to the
reorganization
(B) To adjust for a tax free exchange of North American Funds Mid Cap Growth
shares for shares of SunAmerica Equity Funds Growth Opportunities
(C) Class I shares will be offered on SunAmerica Equity Funds Growth
Opportunities and will assume the net asset value of Class A
(D) Class C shares of North American Funds Mid Cap Growth will receive Class II
shares of SunAmerica Equity Funds Growth Opportunities
See Notes to Pro Forma Financial Statements
B-37
SUNAMERICA EQUITY FUNDS GROWTH OPPORTUNITIES FUND
NORTH AMERICAN FUNDS MID CAP GROWTH FUND
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED MARCH 31, 2001
(unaudited)
SunAmerica
North America Equity
Funds Mid Funds Growth Pro Forma
Cap Growth Opportunities Pro Forma Combined
Fund Fund Adjustments (Note 1)
------------------------------ ----------- -------------
INVESTMENT INCOME:
Income:
Interest $67,430 $2,537,433 0 $2,604,863
Dividends* 120,760 501,959 0 622,719
------------- -------------- --------- -------------
Total investment income 188,190 3,039,392 0 3,227,582
------------- -------------- --------- -------------
Expenses:
Investment advisory and management fees 499,707 2,209,521 (91,957)(E) 2,617,271
Distribution and service maintenance fees
Class A 30,976 562,776 0 593,752
Class B 213,259 854,248 0 1,067,507
Class II 0 485,951 148,358 (D) 634,309
Class C 148,358 0 (148,358)(D) 0
Class I 22,861 0 0 22,861
Transfer agent fees and expenses 260,749 0 (260,749)(E) 0
Class A 0 378,115 21,241 (E) 399,356
Class B 0 205,567 51,182 (E) 256,749
Class II 0 109,733 37,090 (E) 146,823
Class I 0 0 27,433 (E) 27,433
Registration fees 38,240 0 (38,240)(E) 0
Class A 0 58,752 1,248 (E) 60,000
Class B 0 31,250 1,750 (E) 33,000
Class II 0 20,336 664 (E) 21,000
Class I 0 0 10,000 (E) 10,000
Accounting/administration 57,359 0 (57,359)(E) 0
Custodian fees and expenses 29,881 117,135 (7,428)(E) 139,588
Audit and legal fees 26,064 24,100 (17,664)(F) 32,500
Miscellaneous expenses 27,977 51,409 (9,350)(F) 70,036
------------- -------------- --------- -------------
Total expenses 1,355,431 5,108,893 (332,139) 6,132,185
Less: expenses waived/reimbursed by investment adviser (311,542) 0 290,568 (G) (20,974)
Less: custody credits earned on cash balances 0 (3,527) 0 (3,527)
------------- -------------- --------- -------------
Net expenses 1,043,889 5,105,366 (41,571) 6,107,684
------------- -------------- --------- -------------
Net investment income (loss) (855,699) (2,065,974) 41,571 (2,880,102)
------------- -------------- --------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments (5,223,434) (70,669,756) 0 (75,893,190)
Net realized gain (loss) loss on futures and options contracts 0 1,223,986 0 1,223,986
Net realized gain (loss) on foreign currency and other assets and
liabilities (4) 0 0 (4)
Net change in unrealized appreciation/depreciation of
investments (20,632,279) (102,910,609) 0 (123,542,888)
Net change in unrealized appreciation/depreciation on foreign
currency and other assets and liabilities 34 0 0 34
------------- -------------- --------- -------------
Net realized and unrealized gain (loss) on investments, foreign currency
and other assets and liabilities (25,855,683) (172,356,379) 0 (198,212,062)
------------- -------------- --------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS: ($26,711,382) ($174,422,353) $41,571 ($201,092,164)
============= ============== ========= =============
(D) Class C shares of North American Funds Mid Cap Growth will receive Class II
shares of SunAmerica Equity Funds Growth Opportunities
(E) Reflects adjustments to expenses based on surviving fund's fee schedules
and combined net assets
(F) Reflects the elimination of duplicate services or fees
(G) Reflects adjustments to expenses waived/reimbused by investment adviser
based on pro forma expenses
See Notes to Pro Forma Financial Statements
B-38
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-----------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- ------------- ---------- ---------------------------------------------- -------- --------- --------- -------------
COMMON STOCK 98.4% 91.1%
Apparel & Textiles 0.0% 1.0%
177,500 177,500 Venator Group, Inc.
Automotive 0.9% 0.0%
10,800 10,800 Harley Davidson, Inc.
Banks 2.9% 0.7%
10,200 10,200 Banknorth Group, Inc.
5,600 5,600 Golden West Financial Corp.
7,500 7,500 Northern Trust Corp.
77,700 77,700 Roslyn Bancorp, Inc.
9,200 9,200 Synvous Financial Corp.
Broadcasting & Media 9.0% 0.6%
7,500 7,500 Cablevision NY Group, CLASS A +
3,750 3,750 Cablevision Systems Corp. +
2,400 2,400 Cox Radio, Inc. +
17,950 50,000 67,950 EchoStar Communications Corp., Class A +
3,450 3,450 Gemstar-TV Guide International, Inc. +
3,400 3,400 Hispanic Broadcasting Corp. +
7,400 7,400 Interpublic Group Cos., Inc.
9,850 9,850 Lamar Advertising Co. +
7,200 7,200 Omnicom Corp.
10,060 10,060 TMP Worldwide, Inc. +
23,950 23,950 USA Networks, Inc. +
45,390 45,390 WPP Group PLC
900 900 WPP Group PLC ADR
Business Services 4.4% 0.0%
9,100 9,100 The BISYS Group, Inc. +
5,800 5,800 Diamondcluster International, Inc. +
14,100 14,100 KPMG Consulting, Inc. +
16,125 16,125 Paychex, Inc.
25,200 25,200 Robert Half International, Inc. +
11,200 11,200 Sapient Corp. +
Communication Equipment 3.3% 2.2%
233,000 233,000 Advanced Fibre Communications, Inc. +
10,500 10,500 Crown Castle International Corp. +
1,500 1,500 Digital Lightwave, Inc. +
5,900 5,900 Emulex Corp. +
11,100 11,100 Extreme Networks, Inc. +
13,000 13,000 Finisar, Inc. +
51,000 51,000 Juniper Networks, Inc. +
6,800 6,800 Mcdata Corp. +
13,800 13,800 Oni System Corp +
500 500 OPNET Technologies, Inc. +
12,900 12,900 Redback Networks, Inc. +
Principal/Shares Market Value
------------------------------------- ------------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- ------------ ---------------------------------------- ----------- -------- ------------- -----------
COMMON STOCK 92.2%
Apparel & Textiles 0.8%
177,500 177,500 Venator Group, Inc. 2,449,500 2,449,500
Automotive 0.2%
10,800 10,800 Harley Davidson, Inc. 409,860 409,860
Banks 1.0%
10,200 10,200 Banknorth Group, Inc. 202,725 202,725
5,600 5,600 Golden West Financial Corp. 363,440 363,440
7,500 7,500 Northern Trust Corp. 468,750 468,750
77,700 77,700 Roslyn Bancorp, Inc. 1,748,250 1,748,250
9,200 9,200 Synvous Financial Corp. 248,400 248,400
Broadcasting & Media 1.9%
7,500 7,500 Cablevision NY Group, CLASS A + 527,700 527,700
3,750 3,750 Cablevision Systems Corp. + 91,125 91,125
2,400 2,400 Cox Radio, Inc. + 50,424 50,424
17,950 50,000 67,950 EchoStar Communications Corp., Class A + 496,991 1,384,375 1,881,366
3,450 3,450 Gemstar-TV Guide International, Inc. + 99,188 99,188
3,400 3,400 Hispanic Broadcasting Corp. + 64,940 64,940
7,400 7,400 Interpublic Group Cos., Inc. 254,190 254,190
9,850 9,850 Lamar Advertising Co. + 361,988 361,988
7,200 7,200 Omnicom Corp. 596,736 596,736
10,060 10,060 TMP Worldwide, Inc. + 377,879 377,879
23,950 23,950 USA Networks, Inc. + 573,303 573,303
45,390 45,390 WPP Group PLC 481,165 481,165
900 900 WPP Group PLC ADR 48,319 48,319
Business Services 0.7%
9,100 9,100 The BISYS Group, Inc. + 486,281 486,281
5,800 5,800 Diamondcluster International, Inc. + 50,388 50,388
14,100 14,100 KPMG Consulting, Inc. + 183,300 183,300
16,125 16,125 Paychex, Inc. 597,633 597,633
25,200 25,200 Robert Half International, Inc. + 563,220 563,220
11,200 11,200 Sapient Corp. + 80,500 80,500
Communication Equipment 2.3%
233,000 233,000 Advanced Fibre Communications, Inc. + 3,334,813 3,334,813
10,500 10,500 Crown Castle International Corp. + 155,531 155,531
1,500 1,500 Digital Lightwave, Inc. + 26,437 26,437
5,900 5,900 Emulex Corp. + 110,994 110,994
11,100 11,100 Extreme Networks, Inc. + 168,831 168,831
13,000 13,000 Finisar, Inc. + 124,719 124,719
51,000 51,000 Juniper Networks, Inc. + 1,935,960 1,935,960
6,800 6,800 Mcdata Corp. + 154,169 154,169
13,800 13,800 Oni System Corp + 269,100 269,100
500 500 OPNET Technologies, Inc. + 7,875 7,875
12,900 12,900 Redback Networks, Inc. + 168,732 168,732
B-39
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-------------------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- ------------- ----------- --------------------------------------------- ---------- --------- --------- -------------
10,600 10,600 Research in Motion Ltd. +
5,700 5,700 Sycamore Networks, Inc +
Computer Software 7.2% 3.1%
11,200 11,200 Adobe Systems, Inc.
4,200 4,200 Aether Systems. Inc. +
20,000 20,000 Barra, Inc. +
32,400 32,400 Cerner Corp. +
170,900 170,900 Citrix Systems, Inc. +
9,000 9,000 Commerce One, Inc. +
82,000 82,000 Futurelink Corp. +
12,860 12,860 I2 Technologies, Inc. +
10,400 10,400 Inktomi Corp. +
7,100 7,100 Intuit, Inc. +
9,500 9,500 Liberate Technologies +
7,600 7,600 Macromedia, Inc. +
10,550 10,550 Mercury Interactive Corp. +
9,300 9,300 Micromuse, Inc. +
6,400 6,400 Nvidia Corp. +
10,850 10,850 Peregrine Systems, Inc. +
7,900 7,900 Quest Software, Inc. +
18,800 18,800 Rational Software Corp. +
4,100 66,600 70,700 Siebel Systems, Inc. +
Computers & Business Equipment 0.5% 1.9%
20,000 20,000 Adept Technology, Inc. +
10,300 10,300 Brocade Communications Systems, Inc. +
44,400 44,400 EMC Corp. +
1,472 1,472 McData Corp., Class A +
66,600 66,600 VERITAS Software Corp. +
Education 1.3% 0.0%
8,000 8,000 USA Education Inc.
Electrical Equipment 2.7% 0.0%
15,000 15,000 Applied Micro Circuits Corp. +
5,000 5,000 Analog Devices, Inc. +
8,900 8,900 Molex, Inc.
7,300 7,300 New Focus, Inc. +
4,700 4,700 Newport Corp.
8,600 8,600 Power One, Inc. +
5,600 5,600 Sanmina Corp. +
Electronics 8.5% 8.8%
3,200 3,200 Advanced Micro Devices, Inc. +
10,900 10,900 Altera Corp. +
33,300 33,300 American Superconductor Corp. +
6,000 6,000 ASM Lithography Holding NV +
208,600 208,600 Atmel Corp. +
Principal/Shares Market Value
----------------------------------- ----------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- --------- ------------------------------------------- ---------- --------- ------------- ----------
10,600 10,600 Research in Motion Ltd. + 232,882 232,882
5,700 5,700 Sycamore Networks, Inc + 57,000 57,000
Computer Software 3.7%
11,200 11,200 Adobe Systems, Inc. 391,664 391,664
4,200 4,200 Aether Systems. Inc. + 54,600 54,600
20,000 20,000 Barra, Inc. + 1,080,000 1,080,000
32,400 32,400 Cerner Corp. + 1,109,700 1,109,700
170,900 170,900 Citrix Systems, Inc. + 3,610,262 3,610,262
9,000 9,000 Commerce One, Inc. + 83,970 83,970
82,000 82,000 Futurelink Corp. + 23,063 23,063
12,860 12,860 I2 Technologies, Inc. + 186,470 186,470
10,400 10,400 Inktomi Corp. + 69,160 69,160
7,100 7,100 Intuit, Inc. + 197,025 197,025
9,500 9,500 Liberate Technologies + 78,969 78,969
7,600 7,600 Macromedia, Inc. + 122,075 122,075
10,550 10,550 Mercury Interactive Corp. + 441,781 441,781
9,300 9,300 Micromuse, Inc. + 351,447 351,447
6,400 6,400 Nvidia Corp. + 415,500 415,500
10,850 10,850 Peregrine Systems, Inc. + 211,575 211,575
7,900 7,900 Quest Software, Inc. + 140,225 140,225
18,800 18,800 Rational Software Corp. + 333,700 333,700
4,100 66,600 70,700 Siebel Systems, Inc. + 111,520 1,811,520 1,923,040
Computers & Business Equipment 1.7%
20,000 20,000 Adept Technology, Inc. + 280,000 280,000
10,300 10,300 Brocade Communications Systems, Inc. + 215,167 215,167
44,400 44,400 EMC Corp. + 1,305,360 1,305,360
1,472 1,472 McData Corp., Class A + 27,784 27,784
66,600 66,600 VERITAS Software Corp. + 3,079,584 3,079,584
Education 0.2%
8,000 8,000 USA Education Inc. 581,200 581,200
Electrical Equipment 0.4%
15,000 15,000 Applied Micro Circuits Corp. + 247,500 247,500
5,000 5,000 Analog Devices, Inc. + 181,200 181,200
8,900 8,900 Molex, Inc. 314,003 314,003
7,300 7,300 New Focus, Inc. + 91,323 91,323
4,700 4,700 Newport Corp. 137,522 137,522
8,600 8,600 Power One, Inc. + 124,614 124,614
5,600 5,600 Sanmina Corp. + 109,550 109,550
Electronics 8.8%
3,200 3,200 Advanced Micro Devices, Inc. + 84,928 84,928
10,900 10,900 Altera Corp. + 233,669 233,669
33,300 33,300 American Superconductor Corp. + 534,881 534,881
6,000 6,000 ASM Lithography Holding NV + 130,125 130,125
208,600 208,600 Atmel Corp. + 2,046,888 2,046,888
B-40
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-------------------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- ------------- ----------- ---------------------------------------------- ------ --------- -------- -------------
200,000 200,000 Edison International
6,700 88,800 95,500 Flextronics International Ltd. +
11,850 11,850 Globespan Semiconductor, Inc. +
3,600 3,600 Handspring, Inc. +
133,100 133,100 Integrated Device Technology, Inc. +
60,000 60,000 KLA-Tencor Corp. +
199,700 199,700 Lam Research Corp. +
9,100 9,100 Linear Technology Corp.
8,900 8,900 Maxim Intergrated Products, Inc. +
12,275 12,275 Microchip Technology, Inc. +
10,800 10,800 Micron Technology, Inc.
7,300 7,300 Novellus Systems, Inc. +
19,600 19,600 Palm, Inc. +
19,600 19,600 Transwitch Corp. +
127,600 127,600 Varian Semiconductor Equipment Associates, Inc. +
10,800 10,800 Vitesse Semiconductor Corp. +
12,950 12,950 Xilinx, Inc. +
Energy Services 4.9% 11.0%
83,200 83,200 Baker Hughes, Inc.
3,100 3,100 BJ Services Co. +
8,050 8,050 Cooper Cameron Corp. +
55,500 55,500 Diamond Offshore Drilling, Inc.
144,200 144,200 Energy Partners Ltd. +
110,900 110,900 Global Marine, Inc. +
221,900 221,900 Marine Drilling Cos., Inc. +
9,450 9,450 Nabors Industries, Inc. +
11,050 11,050 Noble Drilling Corp. +
77,700 77,700 Patterson Energy, Inc. +
83,200 83,200 Rowan Cos., Inc. +
1,100 1,100 Santa Fe International Corp.
7,150 33,300 40,450 Smith International, Inc.
41,600 41,600 Transocean Sedco Forex, Inc.
83,200 83,200 Veritas DGC, Inc. +
Energy Sources 2.2% 0.0%
7,850 7,850 Apache Corp.
6,500 6,500 Anadarko Petroleum Co.
8,800 8,800 Newmont Mining Corp.
Financial Services 8.4% 11.5%
5,900 5,900 Bear Stearns Cos., Inc.
3,200 88,800 92,000 Capital One Financial Corp.
7,700 7,700 Countrywide Credit Industries, Inc.
155,300 155,300 Eaton Vance Corp.
9,400 9,400 Edwards, A.G., Inc.
5,300 5,300 Federated Investors Inc., Class B
Principal/Shares Market Value
----------------------------------- ------------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- --------- -------------------------------------------- ---------- --------- ------------- ---------
200,000 200,000 Edison International 2,528,000 2,528,000
6,700 88,800 95,500 Flextronics International Ltd. + 100,500 1,332,000 1,432,500
11,850 11,850 Globespan Semiconductor, Inc. + 259,219 259,219
3,600 3,600 Handspring, Inc. + 41,850 41,850
133,100 133,100 Integrated Device Technology, Inc. + 3,941,091 3,941,091
60,000 60,000 KLA-Tencor Corp. + 2,362,500 2,362,500
199,700 199,700 Lam Research Corp. + 4,742,875 4,742,875
9,100 9,100 Linear Technology Corp. 373,669 373,669
8,900 8,900 Maxim Intergrated Products, Inc. + 370,151 370,151
12,275 12,275 Microchip Technology, Inc. + 310,711 310,711
10,800 10,800 Micron Technology, Inc. 448,524 448,524
7,300 7,300 Novellus Systems, Inc. + 296,106 296,106
19,600 19,600 Palm, Inc. + 164,762 164,762
19,600 19,600 Transwitch Corp. + 257,250 257,250
127,600 127,600 Varian Semiconductor Equipment
Associates, Inc. + 4,075,225 4,075,225
10,800 10,800 Vitesse Semiconductor Corp. + 257,175 257,175
12,950 12,950 Xilinx, Inc. + 454,869 454,869
Energy Services 10.0%
83,200 83,200 Baker Hughes, Inc. 3,020,992 3,020,992
3,100 3,100 BJ Services Co. + 220,720 220,720
8,050 8,050 Cooper Cameron Corp. + 434,700 434,700
55,500 55,500 Diamond Offshore Drilling, Inc. 2,183,925 2,183,925
144,200 144,200 Energy Partners Ltd. + 1,362,690 1,362,690
110,900 110,900 Global Marine, Inc. + 2,839,040 2,839,040
221,900 221,900 Marine Drilling Cos., Inc. + 5,913,635 5,913,635
9,450 9,450 Nabors Industries, Inc. + 489,888 489,888
11,050 11,050 Noble Drilling Corp. + 510,068 510,068
77,700 77,700 Patterson Energy, Inc. + 2,457,263 2,457,263
83,200 83,200 Rowan Cos., Inc. + 2,288,000 2,288,000
1,100 1,100 Santa Fe International Corp. 35,750 35,750
7,150 33,300 40,450 Smith International, Inc. 501,930 2,337,660 2,839,590
41,600 41,600 Transocean Sedco Forex, Inc. 1,803,360 1,803,360
83,200 83,200 Veritas DGC, Inc. + 2,658,240 2,658,240
Energy Sources 0.3%
7,850 7,850 Apache Corp. 452,238 452,238
6,500 6,500 Anadarko Petroleum Co. 408,070 408,070
8,800 8,800 Newmont Mining Corp. 141,856 141,856
Financial Services 11.0%
5,900 5,900 Bear Stearns Cos., Inc. 269,866 269,866
3,200 88,800 92,000 Capital One Financial Corp. 177,600 4,928,400 5,106,000
7,700 7,700 Countrywide Credit Industries, Inc. 379,995 379,995
155,300 155,300 Eaton Vance Corp. 4,822,065 4,822,065
9,400 9,400 Edwards, A.G., Inc. 347,800 347,800
5,300 5,300 Federated Investors Inc., Class B 150,255 150,255
B-41
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
------------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- -------------- ---------- --------------------------------------------- -------- --------- --------- -------------
8,600 8,600 Legg Mason, Inc.
5,320 77,700 83,020 Lehman Brothers Holdings, Inc.
66,600 66,600 Merrill Lynch & Co., Inc.
110,900 110,900 Nasdaq-100 Shares +
3,700 3,700 National Commercial Financial Corp.
4,600 110,900 115,500 Providian Financial Corp.
4,800 4,800 SEI Investments Co.
9,400 9,400 T. Rowe Price & Associates, Inc.
3,000 3,000 TCF Financial Corp.
21,442 21,442 Waddell & Reed Financial, Inc., Class A
8,029 8,029 Waddell & Reed Financial, Inc., Class B
Health Services 3.3% 5.7%
4,800 4,800 Amerisource Health Corp. +
21,700 21,700 Bergen Brunswig Corp.
3,000 3,000 Invitrogen Corp. +
1,900 1,900 Laboratory Corp. America Holdings +
4,700 4,700 First Health Group Corp. +
6,200 6,200 Protein Design Labs Inc. +
77,700 77,700 Tenet Healthcare Corp. +
55,500 55,500 Triad Hospitals, Inc. +
55,500 55,500 UnitedHealth Group, Inc.
33,300 33,300 Universal Health Services, Inc., Class B
30,000 30,000 Wellpoint Health Networks, Inc., Class A +
Insurance 4.0% 7.8%
135,400 135,400 ACE Ltd.
177,600 177,600 AFLAC, Inc.
10,750 10,750 Ambac Financial Group, Inc.
19,400 166,400 185,800 John Hancock Financial Services +
94,300 94,300 MetLife, Inc.
9,800 9,800 Sun Life Financial Services, Inc. (CAD) +
8,700 8,700 Sun Life Financial Services, Inc. +
Internet Content 1.1% 1.3%
7,700 66,600 74,300 Check Point Software Ltd. +
5,990 5,990 Openwave Systems, Inc. +
Internet Software 4.7% 0.8%
8,900 8,900 Art Technology Group, Inc. +
13,700 66,600 80,300 BEA Systems, Inc. +
13,800 13,800 Ebay, Inc. +
45,000 45,000 Entrade, Inc. +*(1)
35,000 35,000 Exodus Communications, Inc. +
10,900 10,900 Verisign Corp. +
11,450 11,450 Vignette Corp. +
11,000 11,000 Webmethods, Inc. +
Leisure & Tourism 2.8% 0.9%
Principal/Shares Market Value
------------------------------------ ------------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- ---------- ---------------------------------------- ----------- -------- ------------- ---------
8,600 8,600 Legg Mason, Inc. 362,060 362,060
5,320 77,700 83,020 Lehman Brothers Holdings, Inc. 333,564 4,871,790 5,205,354
66,600 66,600 Merrill Lynch & Co., Inc. 3,689,640 3,689,640
110,900 110,900 Nasdaq-100 Shares + 4,341,735 4,341,735
3,700 3,700 National Commercial Financial Corp. 91,806 91,806
4,600 110,900 115,500 Providian Financial Corp. 225,630 5,439,645 5,665,275
4,800 4,800 SEI Investments Co. 149,700 149,700
9,400 9,400 T. Rowe Price & Associates, Inc. 294,338 294,338
3,000 3,000 TCF Financial Corp. 113,370 113,370
21,442 21,442 Waddell & Reed Financial, Inc., Class A 607,881 607,881
8,029 8,029 Waddell & Reed Financial, Inc., Class B 228,184 228,184
Health Services 5.4%
4,800 4,800 Amerisource Health Corp. + 235,440 235,440
21,700 21,700 Bergen Brunswig Corp. 360,220 360,220
3,000 3,000 Invitrogen Corp. + 164,550 164,550
1,900 1,900 Laboratory Corp. America Holdings + 228,475 228,475
4,700 4,700 First Health Group Corp. + 206,213 206,213
6,200 6,200 Protein Design Labs Inc. + 275,900 275,900
77,700 77,700 Tenet Healthcare Corp. + 3,418,800 3,418,800
55,500 55,500 Triad Hospitals, Inc. + 1,567,875 1,567,875
55,500 55,500 UnitedHealth Group, Inc. 3,288,930 3,288,930
33,300 33,300 Universal Health Services, Inc., Class B 2,940,390 2,940,390
30,000 30,000 Wellpoint Health Networks, inc., Class A + 2,859,300 2,859,300
Insurance 7.2%
135,400 135,400 ACE Ltd. 4,977,304 4,977,304
177,600 177,600 AFLAC, Inc. 4,891,104 4,891,104
10,750 10,750 Ambac Financial Group, Inc. 681,872 681,872
19,400 166,400 185,800 John Hancock Financial Services + 745,930 6,398,080 7,144,010
94,300 94,300 MetLife, Inc. 2,833,715 2,833,715
9,800 9,800 Sun Life Financial Services, Inc. (CAD) + 190,022 190,022
8,700 8,700 Sun Life Financial Services, Inc. + 168,252 168,252
Internet Content 1.3%
7,700 66,600 74,300 Check Point Software Ltd. + 365,750 3,163,500 3,529,250
5,990 5,990 Openwave Systems, Inc. + 118,842 118,842
Internet Software 1.4%
8,900 8,900 Art Technology Group, Inc. + 106,800 106,800
13,700 66,600 80,300 BEA Systems, Inc. + 402,438 1,956,375 2,358,813
13,800 13,800 Ebay, Inc. + 499,388 499,388
45,000 45,000 Entrade, Inc. +*(1) 34,020 34,020
35,000 35,000 Exodus Communications, Inc. + 376,250 376,250
10,900 10,900 Verisign Corp. + 386,269 386,269
11,450 11,450 Vignette Corp. + 73,709 73,709
11,000 11,000 Webmethods, Inc. + 229,625 229,625
Leisure & Tourism 1.2%
B-42
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
-------------------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- ------------- ---------- ------------------------------------------------- ------ --------- --------- -------------
100,000 100,000 Callaway Golf Co.
26,450 26,450 Harrah's Entertainment, Inc. +
9,550 9,550 MGM Mirage, Inc.
5,800 5,800 Starbucks Corp. +
Machinery 0.0% 2.0%
177,500 177,500 Kulicke & Soffa Industries, Inc.
110,900 110,900 Thermo Electron Corp. +
Medical Products 6.9% 6.1%
4,700 62,100 66,800 Affymetrix, Inc. +
110,900 110,900 Biomet, Inc.
102,700 102,700 Biosource International, Inc. +
20,900 57,700 78,600 Forest Laboratories, Inc. +
7,300 44,400 51,700 Genzyme Corp. +
1,084 1,084 Genzyme Surgical Products +
5,500 5,500 MedImmune, Inc. +
8,680 27,700 36,380 Millennium Pharmaceuticals, Inc. +
6,000 6,000 St. Jude Medical, Inc.
4,500 4,500 Varian Medicap, Inc.
Pharmaceuticals 7.3% 11.9%
9,750 9,750 Allergan, Inc.
19,300 19,300 Alza Corp. +
8,200 8,200 Andrx Group +
83,200 83,200 Biogen, Inc. +
83,200 83,200 Charles River Laboratories International, Inc. +
164,200 164,200 Curagen Corp. +
94,300 94,300 Genvec, Inc. +
4,600 4,600 Human Genome Sciences, Inc. +
144,200 144,200 IMS Health, Inc.
16,175 16,175 King Pharmaceuticals, Inc. +
49,900 49,900 Merck & Co., Inc.
70,750 70,750 Pfizer, Inc.
72,100 72,100 Schering-Plough Corp.
221,900 221,900 Serono SA ADR+
9,100 9,100 Teva Pharmaceutical Industries Ltd. ADR
Retail Stores 2.7% 10.2%
255,200 255,200 Abercrombie & Fitch Co., Class A +
88,800 88,800 Bed Bath & Beyond, Inc. +
4,700 4,700 CDW Computer Centers, Inc. +
110,900 110,900 Gap, Inc.
10,500 10,500 Kohls Corp. +
83,200 83,200 Limited, Inc.
66,600 66,600 Payless Shoesource, Inc. +
10,780 10,780 Radioshack Corp.
110,900 110,900 Target Corp.
Principal/Shares Market Value
------------------------------------ ------------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- ---------- ------------------------------------------ ----------- ------- ------------- ----------
100,000 100,000 Callaway Golf Co. 2,221,000 2,221,000
26,450 26,450 Harrah's Entertainment, Inc. + 778,424 778,424
9,550 9,550 MGM Mirage, Inc. 239,705 239,705
5,800 5,800 Starbucks Corp. + 246,138 246,138
Machinery 1.7%
177,500 177,500 Kulicke & Soffa Industries, Inc. 2,407,344 2,407,344
110,900 110,900 Thermo Electron Corp. + 2,493,032 2,493,032
Medical Products 6.3%
4,700 62,100 66,800 Affymetrix, Inc. + 130,719 1,727,156 1,857,875
110,900 110,900 Biomet, Inc. 4,368,420 4,368,420
102,700 102,700 Biosource International, Inc. + 664,341 664,341
20,900 57,700 78,600 Forest Laboratories, Inc. + 1,238,116 3,418,148 4,656,264
7,300 44,400 51,700 Genzyme Corp. + 659,409 4,010,652 4,670,061
1,084 1,084 Genzyme Surgical Products + 5,962 5,962
5,500 5,500 MedImmune, Inc. + 197,313 197,313
8,680 27,700 36,380 Millennium Pharmaceuticals, Inc. + 264,393 843,742 1,108,135
6,000 6,000 St. Jude Medical, Inc. 323,100 323,100
4,500 4,500 Varian Medicap, Inc. 273,600 273,600
Pharmaceuticals 11.2%
9,750 9,750 Allergan, Inc. 722,962 722,962
19,300 19,300 Alza Corp. + 781,650 781,650
8,200 8,200 Andrx Group + 401,800 401,800
83,200 83,200 Biogen, Inc. + 5,267,600 5,267,600
83,200 83,200 Charles River Laboratories International, Inc. + 2,059,200 2,059,200
164,200 164,200 Curagen Corp. + 3,848,438 3,848,438
94,300 94,300 Genvec, Inc. + 495,075 495,075
4,600 4,600 Human Genome Sciences, Inc. + 211,600 211,600
144,200 144,200 IMS Health, Inc. 3,590,580 3,590,580
16,175 16,175 King Pharmaceuticals, Inc. + 659,131 659,131
49,900 49,900 Merck & Co., Inc. 3,787,410 3,787,410
70,750 70,750 Pfizer, Inc. 2,897,213 2,897,213
72,100 72,100 Schering-Plough Corp. 2,633,813 2,633,813
221,900 221,900 Serono SA ADR+ 4,482,380 4,482,380
9,100 9,100 Teva Pharmaceutical Industries Ltd. ADR 497,088 497,088
Retail Stores 9.0%
255,200 255,200 Abercrombie & Fitch Co., Class A + 8,345,040 8,345,040
88,800 88,800 Bed Bath & Beyond, Inc. + 2,181,150 2,181,150
4,700 4,700 CDW Computer Centers, Inc. + 145,700 145,700
110,900 110,900 Gap, Inc. 2,630,548 2,630,548
10,500 10,500 Kohls Corp. + 647,745 647,745
83,200 83,200 Limited, Inc. 1,307,904 1,307,904
66,600 66,600 Payless Shoesource, Inc. + 4,145,850 4,145,850
10,780 10,780 Radioshack Corp. 395,518 395,518
110,900 110,900 Target Corp. 4,001,271 4,001,271
B-43
SunAmerica Equity Funds Growth Opportunities Fund
North American Funds Mid Cap Growth Fund
Pro Forma Combined Portfolio of Investments
As of March 31, 2001
(unaudited)
Principal/Shares
------------------------------------
Mid Cap Growth Pro Forma Maturity Mid Cap Growth
Growth Opportunities Combined Description Coupon Date Growth Opportunities
-------- ------------- ---------- ----------------------------------------------- ------- --------- --------- -------------
72,100 72,100 TJX Cos, Inc.
Telecommunications 9.4% 1.8%
14,000 14,000 ADC Telecommunications, Inc. +
17,850 17,850 Allegiance Telecom, Inc. +
8,350 8,350 Amdocs Ltd. +
14,300 14,300 Asia Global Crossing Ltd.
9,500 44,400 53,900 CIENA Corp. +
3,150 3,150 Colt Telecommunications Group PLC +
7,100 44,400 51,500 Comverse Technology, Inc. +
10,750 10,750 Entercom Communications Corp. +
5,500 5,500 Level 3 Communications, Inc. +
41,550 41,550 McLeodUSA, Inc. +
25,900 25,900 Nextel Partners, Inc. +
11,800 11,800 Sonus Networks, Inc. +
14,170 14,170 Time Warner Telecomm, Inc. +
6,100 6,100 Western Wireless Corp. +
19,500 19,500 XO Communication, Inc. +
Utilities 0.0% 1.8%
33,300 33,300 ENRON CORP
200,000 200,000 PG&E Corp. +
Total Investment Securities 98.4% 91.1%
(cost $65,430,986; $264,728,084; $330,159,070)
REPURCHASE AGREEMENT 1.3% 7.6%
597,000 18,709,000 19,306,000 State Street Bank & Trust Co. Repurchase Agreement 5.15 4/2/01
(cost $597,000; $18,709,000; $19,306,000)
TOTAL INVESTMENTS 99.7% 98.7%
(cost $66,027,986; $283,437,084; $349,465,070)
Other assets less liabilities (2) 0.3% 1.3%
--------- -------------
Net Assets 100.0% 100.0%
========= =============
Principal/Shares Market Value
------------------------------------------- ------------------------------------
Mid Cap Growth Pro Forma Pro Forma Mid Cap Growth Pro Forma
Growth Opportunities Combined Description Combined Growth Opportunities Combined
-------- ------------- ---------- ---------------------------------------------- --------- --------- ------------- ---------
72,100 72,100 TJX Cos, Inc. 2,307,200 2,307,200
Telecommunications 3.0%
14,000 14,000 ADC Telecommunications, Inc. + 119,000 119,000
17,850 17,850 Allegiance Telecom, Inc. + 263,288 263,288
8,350 8,350 Amdocs Ltd. + 399,965 399,965
14,300 14,300 Asia Global Crossing Ltd. 72,394 72,394
9,500 44,400 53,900 CIENA Corp. + 396,625 1,853,700 2,250,325
3,150 3,150 Colt Telecommunications Group PLC + 133,677 133,677
7,100 44,400 51,500 Comverse Technology, Inc. + 418,118 2,614,715 3,032,833
10,750 10,750 Entercom Communications Corp. + 422,474 422,474
5,500 5,500 Level 3 Communications, Inc. + 95,563 95,563
41,550 41,550 McLeodUSA, Inc. + 359,666 359,666
25,900 25,900 Nextel Partners, Inc. + 355,720 355,720
11,800 11,800 Sonus Networks, Inc. + 235,446 235,446
14,170 14,170 Time Warner Telecomm, Inc. + 515,434 515,434
6,100 6,100 Western Wireless Corp. + 247,811 247,811
19,500 19,500 XO Communication, Inc. + 136,500 136,500
Utilities 1.5%
33,300 33,300 ENRON CORP 1,934,730 1,934,730
200,000 200,000 PG&E Corp. + 2,490,000 2,490,000
----------- ------------ ------------
Total Investment Securities 92.2% 43,851,114 223,072,593 266,923,707
----------- ------------ ------------
(cost $65,430,986; $264,728,084;
$330,159,070)
REPURCHASE AGREEMENT 6.7%
597,000 18,709,000 19,306,000 State Street Bank & Trust Co.
Repurchase Agreement 597,000 18,709,000 19,306,000
----------- ------------ ------------
(cost $597,000; $18,709,000;
$19,306,000)
TOTAL INVESTMENTS 98.9% 44,448,114 241,781,593 286,229,707
(cost $66,027,986; $283,437,084;
$349,465,070)
Other assets less liabilities (2) 1.1% 145,729 3,168,765 3,252,943
------ ----------- ------------ ------------
Net Assets 100.0% $44,593,843 $244,950,358 $289,482,650
====== =========== ============ ============
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("American Depository Receipt")
(1) Fair valued security; see Note 2
(2) To adjust ($61,551) for prepaid expenses on the
North American Funds Mid Cap Growth Fund to be expensed
prior to the reorganization
Management does not anticipate having to sell any
securities as a result of the reorganization, however,
securities may be sold due to differing portfolio
management style.
See Notes to Pro Forma Financial Statements
B-44
SUNAMERICA EQUITY FUNDS GROWTH OPPORTUNITIES FUND
NORTH AMERICAN FUNDS MID CAP GROWTH FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
MARCH 31, 2001
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments at March 31, 2001, and related Statement of Operations
("Pro Forma Statements") for the twelve months ended March 31, 2001, reflect the
accounts of the Growth Opportunities Fund ("Growth Opportunities") a separately
managed portfolio of SunAmerica Equity Funds, and Mid Cap Growth Fund ("Mid Cap
Growth") a separately managed portfolio of North American Funds. The Pro Forma
Combined Statement of Assets and Liabilities has been restated to reflect a tax
free exchange of Mid Cap Growth Class A, Class B, Class C, and Class I shares as
of the close of business on March 31, 2001. American International Group, Inc.
will pay the cost of the reorganization.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of Mid Cap Growth in exchange for shares of Growth
Opportunities. In conjunction with the reorganization, Growth Opportunities is
the surviving fund.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of Growth Opportunities and Mid Cap Growth included in
their respective Statements of Additional Information.
2. VALUATION
Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed by the
Adviser to be over-the-counter, are valued at the quoted bid price provided by
principal market markers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sale price available before the time when the assets
are valued. If a security's price is available from more than one foreign
exchange, a Portfolio uses the exchange that is the primary market for the
security. Values of portfolio securities primarily traded on foreign exchanges
are already translated into U.S. dollars when received from a quotation service.
Options traded on national exchanges are valued as of the close of the exchange
on which they are traded. Futures and options traded on commodities exchanges
are valued at their last sale price as of the close of such exchange. The
B-45
Portfolios may make use of a pricing service in the determination of their net
asset values. Securities for which market quotations are not readily available
and other assets are valued at fair value as determined pursuant to procedures
adopted in good faith by the Directors. Short-term securities which mature in
less than 60 days are valued at amortized cost, if their original maturity was
60 days or less, or by amortizing their value on the 61st day prior to maturity,
if their original term to maturity exceeded 60 days.
3. CAPITAL SHARES
The pro forma combined net asset value per share assumes the issuance of
additional shares of Growth Opportunities which would have been issued at March
31, 2001 in connection with the proposed reorganization. The amount of
additional shares assumed to be issued was calculated based on the March 31,
2001 net asset value of Growth Opportunities Class A ($20.35), Class B ($18.75),
and Class II ($18.74). Class I shares will be offered on Growth Opportunities
and will assume the net asset value of Class A. The Class C shares of Mid Cap
Growth will receive Class II shares of Growth Opportunities.
The pro forma number of shares outstanding are determined as follows:
Class A Class B Class II Class I
--------------------------------- -------------- ---------------- ------------ ----------
Shares of Growth
Opportunities 6,131,576 4,006,776 2,403,768 0
--------------------------------- -------------- ---------------- ------------ ----------
Additional Shares to be
issued to Mid Cap
Growth 355,678 918,927 658,666 379,408
--------------------------------- -------------- ---------------- ------------ ----------
Pro Forma
Shares outstanding 6,487,254 4,925,703 3,062,434 379,408
--------------------------------- -------------- ---------------- ------------ ----------
These pro forma financial statements assume that all shares of Mid Cap
Growth Class A, Class B, Class C, and Class I outstanding on March 31, 2001 were
exchanged, tax free, for Growth Opportunities Class A, Class B, Class II, and
Class I shares, respectively.
4. PRO FORMA OPERATING EXPENSES
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of Growth Opportunities, the surviving entity. Certain accounts
have been adjusted to reflect the expenses of the combined entity more closely.
Pro forma operating expenses include the expenses of Growth Opportunities and
Mid Cap Growth combined, adjusted for certain items which are factually
supportable. Advisory fees have been charged to the combined entity based upon
the contract in effect for Growth Opportunities at the level of assets of the
combined fund for the stated period.
B-46
SUNAMERICA STYLE SELECT SERIES, INC. INTERNATIONAL EQUITY PORTFOLIO
NORTH AMERICAN FUNDS GLOBAL EQUITY FUND
NORTH AMERICAN FUND INTERNATIONAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL SMALL CAP FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2001
(unaudited)
North American North American
Global Equity International Equity
Fund Fund
---------------------------- ----------------------------
ASSETS:
Investment securities, at value (identified cost $22,634,809,
$45,145,515, $16,525,141, $96,996,142, and $181,301,607, respectively) $21,737,584 $40,635,549
Short-term securities (identified cost $1,000, $1,000, $301,274,
$3,936,450, and $4,239,724, respectively) 1,000 1,000
Repurchase agreements (cost equals market) 2,828,000 5,528,000
Cash 909 191
Foreign cash - 87,738
Investment in State Street Bank & Trust Navigator Securities Lending
Trust held as collateral for securities on loan, at value 3,678,391 10,361,917
Receivable for investments sold 198,283 7,192
Receivable for shares sold 2,126 6,843
Interest and dividends receivable 36,525 131,823
Receivable from investment adviser - -
Prepaid expenses and other assets 14,190 185,910
Receivable for variation margin on futures
contracts - 123,092
Receivable for foreign tax withholding reclaims 15,768 32,811
Foreign currency contracts 386 252,679
Unrealized appreciation on forward
foreign currency contracts - -
---------------------------- ----------------------------
Total assets 28,513,162 57,354,745
---------------------------- ----------------------------
LIABILITIES:
Payable for investments purchased 201,317 5,559
Payable for shares redeemed 33,978 2,762
Investment advisory and management
fees payable 10,260 17,464
Distribution and service maintenance
fees payable 15,807 21,137
Other accrued expenses 3,207 7,203
Due to custodian bank 74,377 -
Securities Lending 3,678,391 10,361,917
Dividend and interest withholding tax 8,126 16,865
Foreign currency contracts - 42,279
Written call options at value (proceeds
$44,063 on International Equity Portfolio) - -
---------------------------- ----------------------------
Total liabilities 4,025,463 10,475,186
----------------------------- ----------------------------
Net assets $24,487,699 $46,879,559
============================= ============================
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.001, $.001, $.0001, and $.0001 par value
(1 billion shares authorized) $2,836 $5,648
Paid-in capital 34,320,210 52,708,749
---------------------------- ----------------------------
34,323,046 52,714,397
Accumulated undistributed net
investment income (loss) (222,152) (5,712)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (8,713,209) (1,472,363)
Net unrealized appreciation (depreciation) on
investments (897,225) (4,509,966)
Net unrealized appreciation (depreciation) on futures
contracts - (52,604)
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities (2,761) 205,807
Net unrealized appreciation (depreciation) on written
options contracts - -
------------------------------- ----------------------------
Net assets $24,487,699 $46,879,559
=============================== ============================
SunAmerica
North American Style Select Series, Inc.
International Small International Equity
Cap Fund Portfolio
---------------------------- -------------------------
ASSETS:
Investment securities, at value (identified cost $22,634,809,
$45,145,515, $16,525,141, $96,996,142, and $181,301,607, respectively) $17,108,111 $92,387,251
Short-term securities (identified cost $1,000, $1,000, $301,274,
$3,936,450, and $4,239,724, respectively) 301,274 3,936,450
Repurchase agreements (cost equals market) 1,090,000 1,717,000
Cash 860 181,973
Foreign cash 125,144 948,491
Investment in State Street Bank & Trust Navigator Securities Lending
Trust held as collateral for securities on loan, at value - -
Receivable for investments sold 1,147,898 764,417
Receivable for shares sold 176,844 2,213,214
Interest and dividends receivable 52,424 332,225
Receivable from investment adviser - 7,356
Prepaid expenses and other assets 366,833 6,189
Receivable for variation margin on futures
contracts - 44,991
Receivable for foreign tax withholding reclaims 8,784 0
Foreign currency contracts 6,641 736,154
Unrealized appreciation on forward
foreign currency contracts - 19,868
------------------------ -----------------------
Total assets 20,384,813 103,295,579
------------------------- -------------------------
LIABILITIES:
Payable for investments purchased 1,114,124 725,678
Payable for shares redeemed 3,357 7,758,780
Investment advisory and management
fees payable 900 84,746
Distribution and service maintenance
fees payable 12,674 56,569
Other accrued expenses 34,914 243,828
Due to custodian bank - -
Securities Lending - -
Dividend and interest withholding tax 3,977
Foreign currency contracts 7,878 737,210
Written call options at value (proceeds
$44,063 on International Equity Portfolio) - 59,750
---------------------------- --------------------------
Total liabilities 1,177,824 9,666,561
---------------------------- --------------------------
Net assets $19,206,989 $93,629,018
============================ ===========================
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.001, $.001, $.0001, and $.0001 par value
(1 billion shares authorized) $1,471 $835
Paid-in capital 25,746,125 104,722,135
---------------------------- ---------------------------
25,747,596 104,722,970
Accumulated undistributed net
investment income (loss) (97,437) (771,113)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities (7,022,058) (5,746,709)
Net unrealized appreciation (depreciation) on
investments 582,970 (4,608,891)
Net unrealized appreciation (depreciation) on futures
contracts - 44,991
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities (4,082) 3,457
Net unrealized appreciation (depreciation) on written
options contracts - (15,687)
-------------------------------- ------------------------
Net assets $19,206,989 $93,629,018
================================ ========================
Pro Forma
Pro Forma Combined
Adjustments (Note 1)
------------------------- -------------------------
ASSETS:
Investment securities, at value (identified cost $22,634,809,
$45,145,515, $16,525,141, $96,996,142, and $181,301,607, respectively) - $171,868,495
Short-term securities (identified cost $1,000, $1,000, $301,274,
$3,936,450, and $4,239,724, respectively) - 4,239,724
Repurchase agreements (cost equals market) - 11,163,000
Cash - 183,933
Foreign cash - 1,161,373
Investment in State Street Bank & Trust Navigator Securities Lending
Trust held as collateral for securities on loan, at value - 14,040,308
Receivable for investments sold - 2,117,790
Receivable for shares sold - 2,399,027
Interest and dividends receivable - 552,997
Receivable from investment adviser - 7,356
Prepaid expenses and other assets (125,892)(A) 447,230
Receivable for variation margin on futures
contracts - 168,083
Receivable for foreign tax withholding reclaims - 57,363
Foreign currency contracts - 995,860
Unrealized appreciation on forward -
foreign currency contracts - 19,868
--------------------------- ------------------------
Total assets (125,892) 209,422,407
--------------------------- ------------------------
LIABILITIES:
Payable for investments purchased - 2,046,678
Payable for shares redeemed - 7,798,877
Investment advisory and management
fees payable - 113,370
Distribution and service maintenance
fees payable - 106,187
Other accrued expenses - 289,152
Due to custodian bank - 74,377
Securities Lending - 14,040,308
Dividend and interest withholding tax - 28,968
Foreign currency contracts - 787,367
Written call options at value (proceeds
$44,063 on International Equity Portfolio) - 59,750
-------------------------- -----------------------
Total liabilities 0 25,345,034
-------------------------- -----------------------
Net assets ($125,892) $184,077,373
========================== =======================
NET ASSETS WERE COMPOSED OF:
Common Stock, $.001, $.001, $.001, $.0001, and $.0001 par value
(1 billion shares authorized) ($9,150)(B) $1,640
Paid-in capital 9,150 (B) 217,506,369
-------------------------- -----------------------
- 217,508,009
Accumulated undistributed net
investment income (loss) (125,892)(A) (1,222,306)
Accumulated undistributed net realized
gain (loss) on investments, foreign
currency, and other assets and liabilities - (22,954,339)
Net unrealized appreciation (depreciation) on
investments - (9,433,112)
Net unrealized appreciation (depreciation) on futures
contracts - (7,613)
Net unrealized appreciation (depreciation) of foreign
currency, and other assets and liabilities - 202,421
Net unrealized appreciation (depreciation) on written
options contracts - (15,687)
-------------------------- ------------------------
Net assets ($125,892) $184,077,373
========================== ========================
B-47
SUNAMERICA STYLE SELECT SERIES INC. INTERNATIONAL EQUITY PORTFOLIO
NORTH AMERICAN FUNDS GLOBAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL SMALL CAP FUND
PRO FORMA COMBINED STATEMENT OF ASSETS AND LIABILITES
APRIL 30, 2001
(unaudited)
North American North American
Global Equity International Equity
Fund Fund
---------------------------- ----------------------------
Class A:
Net assets $6,020,969 $9,488,858
Shares outstanding 683,465 1,133,053
Net asset value and redemption price per
share $8.81 $8.37
Maximum sales charge (5.75% of offering
price) 0.54 0.51
---------------------------- ---------------------------
Maximum offering price to public $9.35 $8.88
============================ ===========================
Class B:
Net assets $5,858,867 $14,225,983
Shares outstanding 684,919 1,734,548
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $8.55 $8.20
============================ ===========================
Class II:
Net assets - -
Shares outstanding - -
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) - -
Maximum sales charge (1.00% of offering
price) - -
---------------------------- ---------------------------
Maximum offering price to public - -
============================ ===========================
Class C:
Net assets $12,607,863 $3,772,697
Shares outstanding 1,467,680 461,350
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $8.59 $8.18
============================ ===========================
Class I:
Net assets - $19,392,021
Shares outstanding - 2,319,337
Net asset value, offering and redemption
price per share - $8.36
============================ ===========================
SunAmerica
North American Style Select Series, Inc.
International Small International Equity
Cap Fund Portfolio
---------------------------- ------------------------
Class A:
Net assets $4,974,607 $36,464,673
Shares outstanding 367,822 3,187,045
Net asset value and redemption price per
share $13.52 $11.44
Maximum sales charge (5.75% of offering
price) 0.82 0.70
---------------------------- ------------------------
Maximum offering price to public $14.34 $12.14
============================ ========================
Class B:
Net assets $8,182,070 $39,279,134
Shares outstanding 635,049 3,546,279
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $12.88 $11.08
============================ ========================
Class II:
Net assets - $17,885,211
Shares outstanding - 1,614,972
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) - $11.07
Maximum sales charge (1.00% of offering
price) - 0.11
---------------------------- ------------------------
Maximum offering price to public - $11.18
============================ ========================
Class C:
Net assets $6,050,312 -
Shares outstanding 467,502 -
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) $12.94 -
============================ ========================
Class I:
Net assets - -
Shares outstanding - -
Net asset value, offering and redemption
price per share - $11.44
============================ ========================
Pro Forma
Pro Forma Combined
Adjustments (Note 1)
--------------------- -------------------------
Class A:
Net assets ($29,041)(A) $56,920,066
Shares outstanding (396,282)(B) 4,975,103
Net asset value and redemption price per
share - $ 11.44
Maximum sales charge (5.75% of offering
price) - 0.70
---------------------- -------------------------
Maximum offering price to public - $12.14
====================== =========================
Class B:
Net assets ($40,356)(A) $67,505,698
Shares outstanding (506,992)(B) 6,093,803
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) - $11.08
====================== =========================
Class II:
Net assets $22,397,069 (D) $40,282,280
Shares outstanding 2,023,222 (B)(D) 3,638,194
Net asset value and redemption price per
share (excluding any applicable contingent
deferred sales charge) - $11.07
Maximum sales charge (1.00% of offering
price) - 0.11
---------------------- -------------------------
Maximum offering price to public - $11.18
====================== =========================
Class C:
Net assets ($22,430,872)(A)(D) $0
Shares outstanding (2,396,532)(B)(D) 0
Net asset value, offering and redemption
price per share (excluding any applicable
contingent deferred sales charge) - -
====================== =========================
Class I:
Net assets ($22,692)(A) $19,369,329
Shares outstanding (626,214)(B)(C) 1,693,123
Net asset value, offering and redemption
price per share - $11.44
====================== =========================
@ To be reorganized into the SunAmerica Equity Funds and renamed the
SunAmerica International Equity Fund
(A) To adjust for the remaining balances of any prepaid expenses on the North
American Funds Global Equity, International Equity and International Small
Cap Funds to be expensed prior to the reorganization
(B) To adjust for a tax free exchange of North American Global Equity,
International Equity and International Small Cap shares for shares of
SunAmerica Style Select Series, Inc. International Equity
(C) Class I shares will be offered on SunAmerica Style Select Series, Inc.
International Equity and will assume the net asset value of Class A
(D) Class C shares of the North American Funds will receive Class II shares of
SunAmerica Style Select Series, Inc. International Equity
See Notes to Pro Forma Financial Statements
B-48
SUNAMERICA STYLE SELECT SERIES, INC. INTERNATIONAL EQUITY PORTFOLIO
NORTH AMERICAN FUNDS GLOBAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL SMALL CAP FUND
PRO FORMA COMBINED STATEMENT OF OPERATIONS
APRIL 30, 2001
(unaudited)
North American North American
Global Equity International Equity
Fund Fund
--------------------------- ----------------------------
INVESTMENT INCOME:
Income:
Interest $40,230 $158,302
Dividends* 215,170 647,730
--------------------------- ----------------------------
Total investment income 255,400 806,032
--------------------------- ----------------------------
Expenses:
Investment advisory and management fees 227,390 405,474
Distribution and service maintenance fees
Class A 21,309 26,629
Class B 63,641 147,329
Class II 0 0
Class C 128,132 37,715
Class I 0 47,350
Transfer agent fees and expenses 154,299 212,058
Class A 0 0
Class B 0 0
Class II 0 0
Class Z 0 0
Class I 0 0
Registration fees 21,859 31,972
Class A 0 0
Class B 0 0
Class II 0 0
Class Z 0 0
Class I 0 0
Accounting/administration 26,803 47,342
Custodian fees and expenses 48,762 86,952
Audit and legal fees 14,176 20,551
Amortization of organizational expenses 0 0
Miscellaneous expenses 28,203 34,858
--------------------------- ----------------------------
Total expenses 734,574 1,098,230
Less: expenses waived/reimbursed by investment adviser (92,725) (261,659)
Less: custody credits earned on cash balances 0 0
--------------------------- ----------------------------
Net expenses 641,849 836,571
--------------------------- ----------------------------
Net investment income (loss) (386,449) (30,539)
--------------------------- ----------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments* (5,961,995) (1,254,057)
Net realized gain (loss) on written option contracts 0 0
Net realized gain (loss) on futures and options contracts 0 76,145
Net realized gain (loss) on foreign currency and other assets and
liabilities (11,331) 254,504
Net change in unrealized appreciation/depreciation of
investments (999,578) (2,343,994)
Net change in unrealized appreciation/depreciation on written
options contracts 0 0
Net change in unrealized appreciation/depreciation on futures
contracts 0 (9,864)
Net change in unrealized appreciation/depreciation on foreign
currency and other assets and liabilities 1,505 216,673
--------------------------- ----------------------------
Net realized and unrealized gain on investments, foreign currency
and other assets and liabilities (6,971,399) (3,060,593)
--------------------------- ----------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS: ($7,357,848) ($3,091,132)
=========================== ============================
*Net of foreign withholding taxes on dividends of $ - $ -
=========================== ============================
*Net of foreign withholding taxes on capital gains of $ - $ -
=========================== ============================
SunAmerica
North American Style Select Series, Inc.
International Small International Equity
Cap Fund Portfolio
--------------------------- -----------------------------
INVESTMENT INCOME:
Income:
Interest $45,756 $274,546
Dividends* 290,118 1,310,764
--------------------------- -----------------------------
Total investment income 335,874 1,585,310
--------------------------- -----------------------------
Expenses:
Investment advisory and management fees 204,553 1,183,710
Distribution and service maintenance fees
Class A 14,497 134,989
Class B 87,101 490,672
Class II 0 197,441
Class C 66,290 0
Class I 0 0
Transfer agent fees and expenses 118,110 0
Class A 0 109,271
Class B 0 147,228
Class II 0 57,769
Class Z 0 13,524
Class I 0 0
Registration fees 16,535 0
Class A 0 0
Class B 0 0
Class II 0 13,815
Class Z 0 3,985
Class I 0 0
Accounting/administration 20,716 0
Custodian fees and expenses 267,599 251,396
Audit and legal fees 9,893 35,687
Amortization of organizational expenses 0 8,980
Miscellaneous expenses 72,110 87,465
--------------------------- ----------------------------
Total expenses 877,404 2,735,932
Less: expenses waived/reimbursed by investment adviser (405,671) (99,218)
Less: custody credits earned on cash balances 0 (6,310)
--------------------------- ----------------------------
Net expenses 471,733 2,630,404
--------------------------- -----------------------------
Net investment income (loss) (135,859) (1,045,094)
--------------------------- ---------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments* 1,520,113 562,639
Net realized gain (loss) on written option contracts 0 235,052
Net realized gain (loss) on futures and options contracts 0 (1,894,510)
Net realized gain (loss) on foreign currency and other assets and
liabilities 0 461,086
Net change in unrealized appreciation/depreciation of
investments (444,343) (24,185,401)
Net change in unrealized appreciation/depreciation on written
options contracts 0 (13,901)
Net change in unrealized appreciation/depreciation on futures
contracts 0 44,991
Net change in unrealized appreciation/depreciation on foreign
currency and other assets and liabilities 0 (160,948)
--------------------------- ---------------------------
Net realized and unrealized gain on investments, foreign currency
and other assets and liabilities 1,075,770 (24,950,992)
--------------------------- ---------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS: $939,911 ($25,996,086)
=========================== ===========================
*Net of foreign withholding taxes on dividends of $ - $ 217,216
=========================== ===========================
*Net of foreign withholding taxes on capital gains of $ - $ (1,115)
=========================== ===========================
Pro Forma
Pro Forma Combined
Adjustments (Note 1)
-------------------------- -----------------------
INVESTMENT INCOME:
Income:
Interest $0 $518,834
Dividends* 0 2,463,782
-------------------------- -----------------------
Total investment income 0 2,982,616
-------------------------- -----------------------
Expenses:
Investment advisory and management fees (49,337) (E) 1,971,790
Distribution and service maintenance fees
Class A 0 197,424
Class B 0 788,743
Class II 232,137 (D) 429,578
Class C (232,137) (D) 0
Class I 0 47,350
Transfer agent fees and expenses (484,467) (E) 0
Class A 49,948 (E) 159,219
Class B 83,460 (E) 230,688
Class II 67,320 (E) 125,089
Class Z (13,524) (H) 0
Class I 56,820 (E) 56,820
Registration fees 0 70,366
Class A 15,000 (E) 15,000
Class B 17,000 (E) 17,000
Class II 185 (E) 14,000
Class Z (3,985) (H) 0
Class I 12,000 (E) 12,000
Accounting/administration (94,861) (E) 0
Custodian fees and expenses (205,754) (E) 448,955
Audit and legal fees (40,307) (F) 40,000
Amortization of organizational expenses 0 8,980
Miscellaneous expenses (132,636) (F) 90,000
-------------------------- -----------------------
Total expenses (723,138) 4,723,002
Less: expenses waived/reimbursed by investment adviser 784,460 (G) (74,813)
Less: custody credits earned on cash balances 0 (6,310)
-------------------------- -----------------------
Net expenses 61,322 4,641,879
-------------------------- -----------------------
Net investment income (loss) (61,322) (1,659,263)
-------------------------- -----------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) on investments* 0 (5,133,300)
Net realized gain (loss) on written option contracts 0 235,052
Net realized gain (loss) on futures and options contracts 0 (1,818,365)
Net realized gain (loss) on foreign currency and other assets and
liabilities 0 704,259
Net change in unrealized appreciation/depreciation of
investments 0 (27,973,316)
Net change in unrealized appreciation/depreciation on written
options contracts 0 (13,901)
Net change in unrealized appreciation/depreciation on futures
contracts 0 35,127
Net change in unrealized appreciation/depreciation on foreign
currency and other assets and liabilities 0 57,230
-------------------------- -----------------------
Net realized and unrealized gain on investments, foreign currency
and other assets and liabilities 0 (33,907,214)
-------------------------- -----------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS: ($61,322) ($35,566,477)
========================== =======================
*Net of foreign withholding taxes on dividends of $ - $ 217,216
========================== =======================
*Net of foreign withholding taxes on capital gains of $ - $ (1,115)
========================== =======================
(D) Class C shares of the North American Funds will receive Class II shares of
SunAmerica Style Select Series, Inc. International Equity
(E) Reflects adjustments to expenses based on surviving fund's fee schedules and
combined net assets
(F) Reflects the elimination of duplicate services or fees
(G) Reflects adjustments to expenses waived/reimbursed by investment adviser
based on pro forma expenses
(H) Class Z shares are no longer being offered for sale
See Notes to Pro Forma Financial Statements
B-49
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
--------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------ -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ --------
COMMON STOCK 86.3% 86.2%
Australia 0.0% 1.7%
- 3,567 - - 3,567 Amcor Ltd. (Materials)
- 2,061 - - 2,061 AMP Diversified Property Trust (Real Estate)
- 3,184 - - 3,184 AMP Ltd. (Finance)
- 540 - - 540 AMP Ltd.* (Finance)
- - - 49,690 49,690 Australia & New Zealand Banking Group Ltd. (Finance)
- 2,598 - - 2,598 Australia Gas & Light Co. (Energy)
- 7,201 - - 7,201 BHP Billiton Ltd. (Materials)
- 1,149 - 6,000 7,149 Brambles Industries Ltd. (Industrial & Commercial)
- - 5,900 - 5,900 Cabcharge Australia Ltd. (Finance)
- 3,366 - - 3,366 Coca Cola Amatil Ltd. (Consumer Staples)
- 5,964 - - 5,964 Coles Myer Ltd. * (Consumer Discretionary)
- 1,475 - - 1,475 Commonwealth Bank of Australia (Finance)
- 393 - - 393 CSL Ltd. (Healthcare)
- 2,228 - - 2,228 CSR Ltd. (Materials)
- 473 - - 473 FH Faulding & Co. (Healthcare)
- 9,305 - - 9,305 Fosters Group Ltd. (Consumer Staples)
- 7,840 - - 7,840 General Property Trust (Real Estate)
- 6,843 - - 6,843 Goodman Fielder Ltd. (Consumer Staples)
- 1,436 - - 1,436 Leighton Holdings Ltd. (Consumer Discretionary)
- 2,935 - - 2,935 Lend Lease Corp. (Real Estate)
- 1,984 - - 1,984 Mayne Nickless Ltd. (Industrial & Commercial)
- 4,072 - 200,392 204,464 MIM Holdings Ltd. (Materials)
- 5,884 - - 5,884 National Australian Bank (Finance)
- 6,637 - - 6,637 News Corp. (Information & Entertainment)
- 10,400 - - 10,400 Normandy Mining Ltd. (Materials)
- 959 - - 959 Onesteel Ltd. (Materials)
- 1,475 - - 1,475 Orica Ltd. (Industrial & Commercial)
- 2,599 - - 2,599 Pacific Dunlop Ltd. (Industrial & Commercial)
- 682 - - 682 PaperlinX Ltd. (Materials)
- - - 25,000 25,000 Publishing & Broadcasting Ltd. (Information & Entertainment)
- 1,367 - - 1,367 QBE Insurance Group Ltd. (Finance)
- 1,104 - - 1,104 Rio Tinto Ltd. (Materials)
- 4,985 - - 4,985 Santos Ltd. (Energy)
- 3,321 - - 3,321 Southcorp Ltd. (Consumer Staples)
- 1,728 - - 1,728 Stockland Trust Group (Real Estate)
- 1,664 - - 1,664 Suncorp-Metway Ltd. (Finance)
- 1,711 - - 1,711 TABCORP Holdings Ltd. (Information & Entertainment)
- 26,253 - 52,519 78,772 Telstra Corp. Ltd. (Information Technology)
- 978 - - 978 Wesfarmers Ltd. (Industrial & Commercial)
- 7,406 - - 7,406 Westfield Trust (Real Estate)
- 8,030 - - 8,030 Westpac Banking Corp. (Finance)
- 6,435 - - 6,435 WMC Ltd. (Materials)
- 6,118 - - 6,118 Wollworths Ltd. (Consumer Staples)
Austria 0.0% 0.0%
- - 3,450 - 3,450 Gericom AG (Information Technology)
- 93 - - 93 Austria Tabakwerke (Consumer Staples)
Belgium 0.0% 0.0%
- - - 974 974 Dexia (Finance)
- - - 7,980 7,980 Fortis (B) (Finance)
- - - 28,231 28,231 Interbrew+ (Consumer Staples)
- 276 - - 276 KBC Bancassurance Holding SA (Finance)
- 102 - - 102 Solvay SA (Materials)
- 158 - 670 828 UCB SA (Healthcare)
- 34 - - 34 Union Miniere SA (Materials)
Bermuda 1.6% 0.0%
7,456 - - 8,300 15,756 Tyco Intentional Ltd. (Industrial & Commercial)
Brazil 0.0% 0.0%
- - - 1,800 1,800 Compania Brasileira de Distribuicao Grupo Pao de Acucar ADR
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial & Commercial)
Principal/Shares
--------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
Australia 89.1% 96.3% 91.7%
- 3,567 - - 3,567 Amcor Ltd. (Materials) 0.0% 1.7% 0.1%
- 2,061 - - 2,061 AMP Diversified Property Trust (Real Estate)
- 3,184 - - 3,184 AMP Ltd. (Finance)
- 540 - - 540 AMP Ltd.* (Finance)
- - - 49,690 49,690 Australia & New Zealand Banking Group Ltd. (Finance)
- 2,598 - - 2,598 Australia Gas & Light Co. (Energy)
- 7,201 - - 7,201 BHP Billiton Ltd. (Materials)
- 1,149 - 6,000 7,149 Brambles Industries Ltd. (Industrial & Commercial)
- - 5,900 - 5,900 Cabcharge Australia Ltd. (Finance)
- 3,366 - - 3,366 Coca Cola Amatil Ltd. (Consumer Staples)
- 5,964 - - 5,964 Coles Myer Ltd. * (Consumer Discretionary)
- 1,475 - - 1,475 Commonwealth Bank of Australia (Finance)
- 393 - - 393 CSL Ltd. (Healthcare)
- 2,228 - - 2,228 CSR Ltd. (Materials)
- 473 - - 473 FH Faulding & Co. (Healthcare)
- 9,305 - - 9,305 Fosters Group Ltd. (Consumer Staples)
- 7,840 - - 7,840 General Property Trust (Real Estate)
- 6,843 - - 6,843 Goodman Fielder Ltd. (Consumer Staples)
- 1,436 - - 1,436 Leighton Holdings Ltd. (Consumer Discretionary)
- 2,935 - - 2,935 Lend Lease Corp. (Real Estate)
- 1,984 - - 1,984 Mayne Nickless Ltd. (Industrial & Commercial)
- 4,072 - 200,392 204,464 MIM Holdings Ltd. (Materials)
- 5,884 - - 5,884 National Australian Bank (Finance)
- 6,637 - - 6,637 News Corp. (Information & Entertainment)
- 10,400 - - 10,400 Normandy Mining Ltd. (Materials)
- 959 - - 959 Onesteel Ltd. (Materials)
- 1,475 - - 1,475 Orica Ltd. (Industrial & Commercial)
- 2,599 - - 2,599 Pacific Dunlop Ltd. (Industrial & Commercial)
- 682 - - 682 PaperlinX Ltd. (Materials)
- - - 25,000 25,000 Publishing & Broadcasting Ltd. (Information & Entertainment)
- 1,367 - - 1,367 QBE Insurance Group Ltd. (Finance)
- 1,104 - - 1,104 Rio Tinto Ltd. (Materials)
- 4,985 - - 4,985 Santos Ltd. (Energy)
- 3,321 - - 3,321 Southcorp Ltd. (Consumer Staples)
- 1,728 - - 1,728 Stockland Trust Group (Real Estate)
- 1,664 - - 1,664 Suncorp-Metway Ltd. (Finance)
- 1,711 - - 1,711 TABCORP Holdings Ltd. (Information & Entertainment)
- 26,253 - 52,519 78,772 Telstra Corp. Ltd. (Information Technology)
- 978 - - 978 Wesfarmers Ltd. (Industrial & Commercial)
- 7,406 - - 7,406 Westfield Trust (Real Estate)
- 8,030 - - 8,030 Westpac Banking Corp. (Finance)
- 6,435 - - 6,435 WMC Ltd. (Materials)
- 6,118 - - 6,118 Wollworths Ltd. (Consumer Staples)
Austria 0.5% 0.0% 0.1%
- - 3,450 - 3,450 Gericom AG (Information Technology)
- 93 - - 93 Austria Tabakwerke (Consumer Staples)
Belgium 0.0% 1.2% 0.6%
- - - 974 974 Dexia (Finance)
- - - 7,980 7,980 Fortis (B) (Finance)
- - - 28,231 28,231 Interbrew+ (Consumer Staples)
- 276 - - 276 KBC Bancassurance Holding SA (Finance)
- 102 - - 102 Solvay SA (Materials)
- 158 - 670 828 UCB SA (Healthcare)
- 34 - - 34 Union Miniere SA (Materials)
Bermuda 0.0% 0.5% 0.5%
7,456 - - 8,300 15,756 Tyco Intentional Ltd. (Industrial & Commercial)
Brazil 0.0% 0.6% 0.3%
- - - 1,800 1,800 Compania Brasileira de Distribuicao Grupo Pao de Acucar ADR
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial & Commercial)
Principal/Shares Market Value
-------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------ -------- -------- -------- --------- ------------------------------------------------------------ ------- --------- --------
COMMON STOCK
Australia
- 3,567 - - 3,567 Amcor Ltd. (Materials) - 11,100 -
- 2,061 - - 2,061 AMP Diversified Property Trust (Real Estate) - 2,555 -
- 3,184 - - 3,184 AMP Ltd. (Finance) - 32,486 -
- 540 - - 540 AMP Ltd.* (Finance) - - -
- - - 49,690 49,690 Australia & New Zealand Banking Group Ltd. (Finance) - - -
- 2,598 - - 2,598 Australia Gas & Light Co. (Energy) - 13,983 -
- 7,201 - - 7,201 BHP Billiton Ltd. (Materials) - 79,056 -
- 1,149 - 6,000 7,149 Brambles Industries Ltd. (Industrial & Commercial) - 29,244 -
- - 5,900 - 5,900 Cabcharge Australia Ltd. (Finance) - - 9,632
- 3,366 - - 3,366 Coca Cola Amatil Ltd. (Consumer Staples) - 7,985 -
- 5,964 - - 5,964 Coles Myer Ltd. * (Consumer Discretionary) - 21,054 -
- 1,475 - - 1,475 Commonwealth Bank of Australia (Finance) - 21,694 -
- 393 - - 393 CSL Ltd. (Healthcare) - 7,378 -
- 2,228 - - 2,228 CSR Ltd. (Materials) - 6,081 -
- 473 - - 473 FH Faulding & Co. (Healthcare) - 2,678 -
- 9,305 - - 9,305 Fosters Group Ltd. (Consumer Staples) - 23,402 -
- 7,840 - - 7,840 General Property Trust (Real Estate) - 10,559 -
- 6,843 - - 6,843 Goodman Fielder Ltd. (Consumer Staples) - 4,189 -
- 1,436 - - 1,436 Leighton Holdings Ltd. (Consumer Discretionary) - 5,349 -
- 2,935 - - 2,935 Lend Lease Corp. (Real Estate) - 20,977 -
- 1,984 - - 1,984 Mayne Nickless Ltd. (Industrial & Commercial) - 6,473 -
- 4,072 - 200,392 204,464 MIM Holdings Ltd. (Materials) - 2,701 -
- 5,884 - - 5,884 National Australian Bank (Finance) - 90,352 -
- 6,637 - - 6,637 News Corp. (Information & Entertainment) - 63,065 -
- 10,400 - - 10,400 Normandy Mining Ltd. (Materials) - 5,199 -
- 959 - - 959 Onesteel Ltd. (Materials) - 475 -
- 1,475 - - 1,475 Orica Ltd. (Industrial & Commercial) - 3,544 -
- 2,599 - - 2,599 Pacific Dunlop Ltd. (Industrial & Commercial) - 1,498 -
- 682 - - 682 PaperlinX Ltd. (Materials) - 1,343 -
- - - 25,000 25,000 Publishing & Broadcasting Ltd. (Information & Entertainment) - -
- 1,367 - - 1,367 QBE Insurance Group Ltd. (Finance) - 7,880 -
- 1,104 - - 1,104 Rio Tinto Ltd. (Materials) - 20,817 -
- 4,985 - - 4,985 Santos Ltd. (Energy) - 17,293 -
- 3,321 - - 3,321 Southcorp Ltd. (Consumer Staples) - 11,453 -
- 1,728 - - 1,728 Stockland Trust Group (Real Estate) - 3,526 -
- 1,664 - - 1,664 Suncorp-Metway Ltd. (Finance) - 10,611 -
- 1,711 - - 1,711 TABCORP Holdings Ltd. (Information & Entertainment) - 8,214 -
- 26,253 - 52,519 78,772 Telstra Corp. Ltd. (Information Technology) - 89,331 -
- 978 - - 978 Wesfarmers Ltd. (Industrial & Commercial) - 11,400 -
- 7,406 - - 7,406 Westfield Trust (Real Estate) - 11,712 -
- 8,030 - - 8,030 Westpac Banking Corp. (Finance) - 53,582 -
- 6,435 - - 6,435 WMC Ltd. (Materials) - 30,891 -
- 6,118 - - 6,118 Wollworths Ltd. (Consumer Staples) - 28,027 -
Austria
- - 3,450 - 3,450 Gericom AG (Information Technology) - - 90,912
- 93 - - 93 Austria Tabakwerke (Consumer Staples) - 6,040 -
Belgium
- - - 974 974 Dexia (Finance) - - -
- - - 7,980 7,980 Fortis (B) (Finance) - - -
- - - 28,231 28,231 Interbrew+ (Consumer Staples) - - -
- 276 - - 276 KBC Bancassurance Holding SA (Finance) - 10,229 -
- 102 - - 102 Solvay SA (Materials) - 5,249 -
- 158 - 670 828 UCB SA (Healthcare) - 5,187 -
- 34 - - 34 Union Miniere SA (Materials) - 1,418 -
Bermuda
7,456 - - 8,300 15,756 Tyco Intentional Ltd. (Industrial & Commercial) 397,927 - -
Brazil
- - - 1,800 1,800 Compania Brasileira de Distribuicao Grupo Pao de Acucar ADR - - -
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial - - -
& Commercial)
Principal/Shares
--------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------ -------- -------- -------- --------- ----------------------------------------------------------- ------------- ---------
COMMON STOCK
Australia
- 3,567 - - 3,567 Amcor Ltd. (Materials) - 11,100
- 2,061 - - 2,061 AMP Diversified Property Trust (Real Estate) - 2,555
- 3,184 - - 3,184 AMP Ltd. (Finance) - 32,486
- 540 - - 540 AMP Ltd.* (Finance) - -
- - - 49,690 49,690 Australia & New Zealand Banking Group Ltd. (Finance) 355,144 355,144
- 2,598 - - 2,598 Australia Gas & Light Co. (Energy) - 13,983
- 7,201 - - 7,201 BHP Billiton Ltd. (Materials) - 79,056
- 1,149 - 6,000 7,149 Brambles Industries Ltd. (Industrial & Commercial) 152,708 181,952
- - 5,900 - 5,900 Cabcharge Australia Ltd. (Finance) - 9,632
- 3,366 - - 3,366 Coca Cola Amatil Ltd. (Consumer Staples) - 7,985
- 5,964 - - 5,964 Coles Myer Ltd. * (Consumer Discretionary) - 21,054
- 1,475 - - 1,475 Commonwealth Bank of Australia (Finance) - 21,694
- 393 - - 393 CSL Ltd. (Healthcare) - 7,378
- 2,228 - - 2,228 CSR Ltd. (Materials) - 6,081
- 473 - - 473 FH Faulding & Co. (Healthcare) - 2,678
- 9,305 - - 9,305 Fosters Group Ltd. (Consumer Staples) - 23,402
- 7,840 - - 7,840 General Property Trust (Real Estate) - 10,559
- 6,843 - - 6,843 Goodman Fielder Ltd. (Consumer Staples) - 4,189
- 1,436 - - 1,436 Leighton Holdings Ltd. (Consumer Discretionary) - 5,349
- 2,935 - - 2,935 Lend Lease Corp. (Real Estate) - 20,977
- 1,984 - - 1,984 Mayne Nickless Ltd. (Industrial & Commercial) - 6,473
- 4,072 - 200,392 204,464 MIM Holdings Ltd. (Materials) 132,899 135,600
- 5,884 - - 5,884 National Australian Bank (Finance) - 90,352
- 6,637 - - 6,637 News Corp. (Information & Entertainment) - 63,065
- 10,400 - - 10,400 Normandy Mining Ltd. (Materials) - 5,199
- 959 - - 959 Onesteel Ltd. (Materials) - 475
- 1,475 - - 1,475 Orica Ltd. (Industrial & Commercial) - 3,544
- 2,599 - - 2,599 Pacific Dunlop Ltd. (Industrial & Commercial) - 1,498
- 682 - - 682 PaperlinX Ltd. (Materials) - 1,343
- - - 25,000 25,000 Publishing & Broadcasting Ltd. (Information & Entertainment) 133,914 133,914
- 1,367 - - 1,367 QBE Insurance Group Ltd. (Finance) - 7,880
- 1,104 - - 1,104 Rio Tinto Ltd. (Materials) - 20,817
- 4,985 - - 4,985 Santos Ltd. (Energy) - 17,293
- 3,321 - - 3,321 Southcorp Ltd. (Consumer Staples) - 11,453
- 1,728 - - 1,728 Stockland Trust Group (Real Estate) - 3,526
- 1,664 - - 1,664 Suncorp-Metway Ltd. (Finance) - 10,611
- 1,711 - - 1,711 TABCORP Holdings Ltd. (Information & Entertainment) - 8,214
- 26,253 - 52,519 78,772 Telstra Corp. Ltd. (Information Technology) 178,707 268,038
- 978 - - 978 Wesfarmers Ltd. (Industrial & Commercial) - 11,400
- 7,406 - - 7,406 Westfield Trust (Real Estate) - 11,712
- 8,030 - - 8,030 Westpac Banking Corp. (Finance) - 53,582
- 6,435 - - 6,435 WMC Ltd. (Materials) - 30,891
- 6,118 - - 6,118 Wollworths Ltd. (Consumer Staples) - 28,027
Austria
- - 3,450 - 3,450 Gericom AG (Information Technology) - 90,912
- 93 - - 93 Austria Tabakwerke (Consumer Staples) - 6,040
Belgium
- - - 974 974 Dexia (Finance) 153,738 153,738
- - - 7,980 7,980 Fortis (B) (Finance) 205,327 205,327
- - - 28,231 28,231 Interbrew+ (Consumer Staples) 751,439 751,439
- 276 - - 276 KBC Bancassurance Holding SA (Finance) - 10,229
- 102 - - 102 Solvay SA (Materials) - 5,249
- 158 - 670 828 UCB SA (Healthcare) 21,995 27,182
- 34 - - 34 Union Miniere SA (Materials) - 1,418
Bermuda
7,456 - - 8,300 15,756 Tyco Intentional Ltd. (Industrial & Commercial) 442,971 840,898
Brazil
- - - 1,800 1,800 Compania Brasileira de Distribuicao Grupo Pao de Acucar ADR 51,210 51,210
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial 138,328 138,328
& Commercial
B-50
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
--------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------ -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ --------
- - - 4,100 4,100 Petroleo Bsasilieros SA ADR (Energy)
- - - 9,699 9,699 Tele Norte Leste Participaceos SA ADR (Utilities)
- - - 2,000 2,000 Uniao De Bancos Brasilieros SA GDR (Finance)
Canada 1.4% 0.0%
- - - 1,760 1,760 Alcan, Inc. (Materials)
1,250 - - - 1,250 Ballard Power Systems, Inc. (Energy)
- - - 15,419 15,419 Bank of Montreal (Finance)
- - - 42,341 42,341 Bombardier Inc., Class B (Multi-Industry)
- - - 7,834 7,834 Canadian Imperial Bank of Commerse (Finance)
1,800 - - 6,254 8,054 Celestica, Inc.+ (Information Technology)
- - 75 - 75 Certicom Corp.+ (Information Technology)
- - 4,400 - 4,400 Cominco Ltd. (Materials)
- - 12,475 - 12,475 Descartes Systems Group, Inc.+ (Information Technology)
- - 2,400 - 2,400 Exfo Electro Optical Engineering, Inc.+ (Information
Technology)
- - - 12,844 12,844 Manulife Financial Corp. (Finance)
- - 8,950 - 8,950 Microcell Telecommunications (Information Technology)
- - 6,975 - 6,975 Onex Corp. (Multi-industry)
- - 4,950 - 4,950 Penn West Petroleum Ltd.+ (Energy)
- - 6,650 - 6,650 Pivotal Corp.+ (Information Technology)
- - 3,175 - 3,175 Research In Motion Ltd.+ (Information Technology)
- - - 14,867 14,867 Royal Bank of Canada (Finance)
- - - 16,532 16,532 Sun Life Financial Services of Canada, Inc. (Finance)
4,200 - - - 4,200 Talisman Energy, Inc. (Energy)
- 1,000 - - 1,000 Thomson Corp. (Information Technology)
- - 7,000 - 7,000 Westcoast Energy, Inc. (Energy)
China 0.0% 0.0%
- - 3,800 - 3,800 Asiainfo Holdings, Inc.+ (Information Technology)
- - 295,000 - 295,000 Travelsky Technology Ltd.+ (Information Technology)
- - - 500 500 China Unicom Ltd. ADR + (Information Technology)
- - 768,000 - 768,000 Guangshen Railway Co. (Industrial & Commercial)
- - 406,000 - 406,000 Zhejiang Expressway Co. Ltd. (Industrial & Commercial)
Denmark 2.0% 0.1%
- 200 - - 200 Dansco A/S (Consumer Staples)
- 100 - - 100 Carlsberg A/S (Consumer Staples)
- 100 - - 100 Carlsberg A/S (Consumer Staples)
- 700 - - 700 Danske Bank A/S (Finance)
- - 5,050 - 5,050 Sophus Berendsen (Industrial & Commercial)
- - 700 700 Tele Danmark A/S (Utilities)
- - 3,650 - 3,650 NEG Micon A/S (Information Technology)
4,100 - - - 4,100 ISS International A/S (Industrial & Commercial)
2,000 - - - 2,000 Vestas Wind Systems A/S (Industrial Commercial)
3,850 500 - 11,030 15,380 Novo Nordisk A/S (Healthcare)
Finland 1.3% 0.9%
- 7,269 - 34,793 42,062 Nokia Oyj (Information Technology)
9,000 - - - 9,000 Nokia Corp. ADR (Information technology)
- - 6,500 - 6,500 Instrumentarium Oyj (Healthcare)
- 1,571 - 1,571 Kesko Oyj (Consumer Staples)
- 606 5,100 - 5,706 Wartsila Oyj (Industrial Commercial)
- 782 - - 782 Outokumpo Oyj (Materials)
- 1,615 - - 1,615 UPM-Kymmene Oyj (Materials)
- 1,459 - - 1,459 Raisio Group PLC (Consumer Staples)
- 467 - - 467 Hartwall Oyj AB (Consumer Staples)
- 546 - - 546 Tietoenator Oyj (Information Technology)
- 3,315 - - 3,315 Sonera Oyj (Information Technology)
- 4,150 - 4,150 Perlos Oyj (Information Technology)
- 1,401 - - 1,401 Metso Oyj (Industrial & Commercial)
- 2,480 - - 2,480 SAMPO PLC
France 8.8% 10.9%
6,900 1,621 - - 8,521 Accor SA (Information Technology)
- 485 - - 485 Air Liquide (Chemicals)
2,250 - - - 2,250 Alcatel SA (Information Technology)
Principal/Shares
--------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- - - 4,100 4,100 Petroleo Bsasilieros SA ADR (Energy)
- - - 9,699 9,699 Tele Norte Leste Participaceos SA ADR (Utilities)
- - - 2,000 2,000 Uniao De Bancos Brasilieros SA GDR (Finance)
Canada 6.0% 2.9% 2.3%
- - - 1,760 1,760 Alcan, Inc. (Materials)
1,250 - - - 1,250 Ballard Power Systems, Inc. (Energy)
- - - 15,419 15,419 Bank of Montreal (Finance)
- - - 42,341 42,341 Bombardier Inc., Class B (Multi-Industry)
- - - 7,834 7,834 Canadian Imperial Bank of Commerse (Finance)
1,800 - - 6,254 8,054 Celestica, Inc.+ (Information Technology)
- - 75 - 75 Certicom Corp.+ (Information Technology)
- - 4,400 - 4,400 Cominco Ltd. (Materials)
- - 12,475 - 12,475 Descartes Systems Group, Inc.+ (Information Technology)
- - 2,400 - 2,400 Exfo Electro Optical Engineering, Inc.+ (Information
Technology)
- - - 12,844 12,844 Manulife Financial Corp. (Finance)
- - 8,950 - 8,950 Microcell Telecommunications (Information Technology)
- - 6,975 - 6,975 Onex Corp. (Multi-industry)
- - 4,950 - 4,950 Penn West Petroleum Ltd.+ (Energy)
- - 6,650 - 6,650 Pivotal Corp.+ (Information Technology)
- - 3,175 - 3,175 Research In Motion Ltd.+ (Information Technology)
- - - 14,867 14,867 Royal Bank of Canada (Finance)
- - - 16,532 16,532 Sun Life Financial Services of Canada, Inc. (Finance)
4,200 - - - 4,200 Talisman Energy, Inc. (Energy)
- 1,000 - - 1,000 Thomson Corp. (Information Technology)
- - 7,000 - 7,000 Westcoast Energy, Inc. (Energy)
China 2.3% 0.0% 0.2%
- - 3,800 - 3,800 Asiainfo Holdings, Inc.+ (Information Technology)
- - 295,000 - 295,000 Travelsky Technology Ltd.+ (Information Technology)
- - - 500 500 China Unicom Ltd. ADR + (Information Technology)
- - 768,000 - 768,000 Guangshen Railway Co. (Industrial & Commercial)
- - 406,000 - 406,000 Zhejiang Expressway Co. Ltd. (Industrial & Commercial)
Denmark 1.4% 0.5% 0.7%
- 200 - - 200 Dansco A/S (Consumer Staples)
- 100 - - 100 Carlsberg A/S (Consumer Staples)
- 100 - - 100 Carlsberg A/S (Consumer Staples)
- 700 - - 700 Danske Bank A/S (Finance)
- - 5,050 - 5,050 Sophus Berendsen (Industrial & Commercial)
- - 700 700 Tele Danmark A/S (Utilities)
- - 3,650 - 3,650 NEG Micon A/S (Information Technology)
4,100 - - - 4,100 ISS International A/S (Industrial & Commercial)
2,000 - - - 2,000 Vestas Wind Systems A/S (Industrial Commercial)
3,850 500 - 11,030 15,380 Novo Nordisk A/S (Healthcare)
Finland 1.9% 1.2% 1.2%
- 7,269 - 34,793 42,062 Nokia Oyj (Information Technology)
9,000 - - - 9,000 Nokia Corp. ADR (Information technology)
- - 6,500 - 6,500 Instrumentarium Oyj (Healthcare)
- 1,571 - 1,571 Kesko Oyj (Consumer Staples)
- 606 5,100 - 5,706 Wartsila Oyj (Industrial Commercial)
- 782 - - 782 Outokumpo Oyj (Materials)
- 1,615 - - 1,615 UPM-Kymmene Oyj (Materials)
- 1,459 - - 1,459 Raisio Group PLC (Consumer Staples)
- 467 - - 467 Hartwall Oyj AB (Consumer Staples)
- 546 - - 546 Tietoenator Oyj (Information Technology)
- 3,315 - - 3,315 Sonera Oyj (Information Technology)
- 4,150 - 4,150 Perlos Oyj (Information Technology)
- 1,401 - - 1,401 Metso Oyj (Industrial & Commercial)
- 2,480 - - 2,480 SAMPO PLC
France 6.1% 14.2% 11.8%
6,900 1,621 - - 8,521 Accor SA (Information Technology)
- 485 - - 485 Air Liquide (Chemicals)
2,250 - - - 2,250 Alcatel SA (Information Technology)
Principal/Shares Market Value
-------------------------------------------- -------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------ -------- -------- -------- --------- -------------------------------------------------------- ------- -------- --------
- - - 4,100 4,100 Petroleo Bsasilieros SA ADR (Energy) - - -
- - - 9,699 9,699 Tele Norte Leste Participaceos SA ADR (Utilities) - - -
- - - 2,000 2,000 Uniao De Bancos Brasilieros SA GDR (Finance) - - -
Canada
- - - 1,760 1,760 Alcan, Inc. (Materials) - - -
1,250 - - - 1,250 Ballard Power Systems, Inc. (Energy) 66,538 - -
- - - 15,419 15,419 Bank of Montreal (Finance) - - -
- - - 42,341 42,341 Bombardier Inc., Class B (Multi-Industry) - - -
- - - 7,834 7,834 Canadian Imperial Bank of Commerse (Finance) - - -
1,800 - - 6,254 8,054 Celestica, Inc.+ (Information Technology) 91,980 - -
- - 75 - 75 Certicom Corp.+ (Information Technology) - - 762
- - 4,400 - 4,400 Cominco Ltd. (Materials) - - 95,534
- - 12,475 - 12,475 Descartes Systems Group, Inc.+ (Information Technology) - - 243,651
- - 2,400 - 2,400 Exfo Electro Optical Engineering, Inc.+ (Information
Technology) - - 80,832
- - - 12,844 12,844 Manulife Financial Corp. (Finance) - - -
- - 8,950 - 8,950 Microcell Telecommunications (Information Technology) - - 78,313
- - 6,975 - 6,975 Onex Corp. (Multi-industry) - - 102,173
- - 4,950 - 4,950 Penn West Petroleum Ltd.+ (Energy) - - 136,157
- - 6,650 - 6,650 Pivotal Corp.+ (Information Technology) - - 166,915
- - 3,175 - 3,175 Research In Motion Ltd.+ (Information Technology) - - 107,696
- - - 14,867 14,867 Royal Bank of Canada (Finance) - - -
- - - 16,532 16,532 Sun Life Financial Services of Canada, Inc. (Finance) - - -
4,200 - - - 4,200 Talisman Energy, Inc. (Energy) 171,172 - -
- 1,000 - - 1,000 Thomson Corp. (Information Technology) - 33,529 -
- - 7,000 - 7,000 Westcoast Energy, Inc. (Energy) - - 145,833
China
- - 3,800 - 3,800 Asiainfo Holdings, Inc.+ (Information Technology) - - 47,500
- - 295,000 - 295,000 Travelsky Technology Ltd.+ (Information Technology) - - 196,692
- - - 500 500 China Unicom Ltd. ADR + (Information Technology) - - -
- - 768,000 - 768,000 Guangshen Railway Co. (Industrial & Commercial) - - 119,154
- - 406,000 - 406,000 Zhejiang Expressway Co. Ltd. (Industrial & Commercial) - - 84,854
Denmark - - -
- 200 - - 200 Dansco A/S (Consumer Staples) - 6,929 -
- 100 - - 100 Carlsberg A/S (Consumer Staples) - 4,267 -
- 100 - - 100 Carlsberg A/S (Consumer Staples) - 4,493 -
- 700 - - 700 Danske Bank A/S (Finance) - 11,273 -
- - 5,050 - 5,050 Sophus Berendsen (Industrial & Commercial) - - 124,245
- - 700 700 Tele Danmark A/S (Utilities) - - -
- - 3,650 - 3,650 NEG Micon A/S (Information Technology) - - 148,367
4,100 - - - 4,100 ISS International A/S (Industrial & Commercial) 238,780 - -
2,000 - - - 2,000 Vestas Wind Systems A/S (Industrial Commercial) 93,420 - -
3,850 500 - 11,030 15,380 Novo Nordisk A/S (Healthcare) 146,430 19,017 -
Finland
- 7,269 - 34,793 42,062 Nokia Oyj (Information Technology) - 240,563 -
9,000 - - - 9,000 Nokia Corp. ADR (Information technology) 307,710 - -
- - 6,500 - 6,500 Instrumentarium Oyj (Healthcare) - - 193,199
- 1,571 - 1,571 Kesko Oyj (Consumer Staples) - 13,242 -
- 606 5,100 - 5,706 Wartsila Oyj (Industrial Commercial) - 13,576 114,256
- 782 - - 782 Outokumpo Oyj (Materials) - 6,661 -
- 1,615 - - 1,615 UPM-Kymmene Oyj (Materials) - 50,653 -
- 1,459 - - 1,459 Raisio Group PLC (Consumer Staples) - 1,994 -
- 467 - - 467 Hartwall Oyj AB (Consumer Staples) - 7,375 -
- 546 - - 546 Tietoenator Oyj (Information Technology) - 16,810 -
- 3,315 - - 3,315 Sonera Oyj (Information Technology) - 36,677 -
- 4,150 - 4,150 Perlos Oyj (Information Technology) - 53,943
- 1,401 - - 1,401 Metso Oyj (Industrial & Commercial) - 14,171 -
- 2,480 - - 2,480 SAMPO PLC - 25,964 -
France - -
6,900 1,621 - - 8,521 Accor SA (Information Technology) 293,245 68,891 -
- 485 - - 485 Air Liquide (Chemicals) - 73,068 -
2,250 - - - 2,250 Alcatel SA (Information Technology) 63,702 - -
Principal/Shares
--------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- - - 4,100 4,100 Petroleo Bsasilieros SA ADR (Energy) 110,700 110,700
- - - 9,699 9,699 Tele Norte Leste Participaceos SA ADR (Utilities) 168,071 168,071
- - - 2,000 2,000 Uniao De Bancos Brasilieros SA GDR (Finance) 48,100 48,100
Canada
- - - 1,760 1,760 Alcan, Inc. (Materials) 78,318 78,318
1,250 - - - 1,250 Ballard Power Systems, Inc. (Energy) - 66,538
- - - 15,419 15,419 Bank of Montreal (Finance) 353,352 353,352
- - - 42,341 42,341 Bombardier Inc., Class B (Multi-Industry) 610,581 610,581
- - - 7,834 7,834 Canadian Imperial Bank of Commerse (Finance) 254,248 254,248
1,800 - - 6,254 8,054 Celestica, Inc.+ (Information Technology) 319,579 411,559
- - 75 - 75 Certicom Corp.+ (Information Technology) - 762
- - 4,400 - 4,400 Cominco Ltd. (Materials) - 95,534
- - 12,475 - 12,475 Descartes Systems Group, Inc.+ (Information Technology) - 243,651
- - 2,400 - 2,400 Exfo Electro Optical Engineering, Inc.+ (Information
Technology) - 80,832
- - - 12,844 12,844 Manulife Financial Corp. (Finance) 323,776 323,776
- - 8,950 - 8,950 Microcell Telecommunications (Information Technology) - 78,313
- - 6,975 - 6,975 Onex Corp. (Multi-industry) - 102,173
- - 4,950 - 4,950 Penn West Petroleum Ltd.+ (Energy) - 136,157
- - 6,650 - 6,650 Pivotal Corp.+ (Information Technology) - 166,915
- - 3,175 - 3,175 Research In Motion Ltd.+ (Information Technology) - 107,696
- - - 14,867 14,867 Royal Bank of Canada (Finance) 415,715 415,715
- - - 16,532 16,532 Sun Life Financial Services of Canada, Inc. (Finance) 322,891 322,891
4,200 - - - 4,200 Talisman Energy, Inc. (Energy) - 171,172
- 1,000 - - 1,000 Thomson Corp. (Information Technology) - 33,529
- - 7,000 - 7,000 Westcoast Energy, Inc. (Energy) - 145,833
China
- - 3,800 - 3,800 Asiainfo Holdings, Inc.+ (Information Technology) - 47,500
- - 295,000 - 295,000 Travelsky Technology Ltd.+ (Information Technology) - 196,692
- - - 500 500 China Unicom Ltd. ADR + (Information Technology) 7,225 7,225
- - 768,000 - 768,000 Guangshen Railway Co. (Industrial & Commercial) - 119,154
- - 406,000 - 406,000 Zhejiang Expressway Co. Ltd. (Industrial & Commercial) - 84,854
Denmark -
- 200 - - 200 Dansco A/S (Consumer Staples) - 6,929
- 100 - - 100 Carlsberg A/S (Consumer Staples) - 4,267
- 100 - - 100 Carlsberg A/S (Consumer Staples) - 4,493
- 700 - - 700 Danske Bank A/S (Finance) - 11,273
- - 5,050 - 5,050 Sophus Berendsen (Industrial & Commercial) - 124,245
- - 700 700 Tele Danmark A/S (Utilities) 26,624 26,624
- - 3,650 - 3,650 NEG Micon A/S (Information Technology) - 148,367
4,100 - - - 4,100 ISS International A/S (Industrial & Commercial) - 238,780
2,000 - - - 2,000 Vestas Wind Systems A/S (Industrial Commercial) - 93,420
3,850 500 - 11,030 15,380 Novo Nordisk A/S (Healthcare) 419,511 584,958
Finland
- 7,269 - 34,793 42,062 Nokia Oyj (Information Technology) 1,151,454 1,392,017
9,000 - - - 9,000 Nokia Corp. ADR (Information technology) - 307,710
- - 6,500 - 6,500 Instrumentarium Oyj (Healthcare) - 193,199
- 1,571 - 1,571 Kesko Oyj (Consumer Staples) - 13,242
- 606 5,100 - 5,706 Wartsila Oyj (Industrial Commercial) - 127,832
- 782 - - 782 Outokumpo Oyj (Materials) - 6,661
- 1,615 - - 1,615 UPM-Kymmene Oyj (Materials) - 50,653
- 1,459 - - 1,459 Raisio Group PLC (Consumer Staples) - 1,994
- 467 - - 467 Hartwall Oyj AB (Consumer Staples) - 7,375
- 546 - - 546 Tietoenator Oyj (Information Technology) - 16,810
- 3,315 - - 3,315 Sonera Oyj (Information Technology) - 36,677
- 4,150 - 4,150 Perlos Oyj (Information Technology) - 53,943
- 1,401 - - 1,401 Metso Oyj (Industrial & Commercial) - 14,171
- 2,480 - - 2,480 SAMPO PLC - 25,964
France -
6,900 1,621 - - 8,521 Accor SA (Information Technology) - 362,136
- 485 - - 485 Air Liquide (Chemicals) - 73,068
2,250 - - - 2,250 Alcatel SA (Information Technology) - 63,702
B-51
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
--------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------ -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ --------
5,750 3,009 - 5,302 14,061 Alcatel SA (Information Technology)
5,050 - - 750 5,800 Altran Technologies SA (Industrial & Commercial)
3,600 5,321 - 20,594 29,515 Aventis SA (Healthcare)
1,445 - 4,547 5,992 Axa (Finance)
1,163 - 7,621 8,784 BNP Paribas (Finance)
1,500 2,874 - 2,010 6,384 Bouygues (Industrial & Commercial)
3,887 - - - 3,887 Business Objects SA (Information Technology)
- - 4,000 - 4,000 Business Objects SA+ (Information Technology)
- - - 300 300 Canal Plus (Information & Entertainment)
- 425 - 1,024 1,449 Cap Gemini SA (Information Technology)
- 3,493 - 3,493 Carrefour SA (Consumer Staples)
- 150 - 150 Coflexip Stena Offshore (Energy)
- 600 - 1,560 2,160 Compagnie de Saint-Gobain (Materials)
- 128 - - 128 Dassault Systems SA (Information Technology)
- 328 - - 328 Eridania Beghin-Say+ (Materials)
1,600 549 - - 2,149 Etablissements Economiques du Casino Guichard Perrachon
(Information & Entertainment)
- 3,814 - - 3,814 France Telecom (Information & Entertainment)
- 120 - - 120 Gecina SA (Real Estate)
- 1,901 - 830 2,731 Groupe Danone (Consumer Staples)
- - - 660 660 Hermes International (Consumer Discretionary)
- 35 - - 35 Imerys SA (Industrial & Commercial)
- - 3,325 - 3,325 Infogrames Entertainment (Information Technology)
- 160 - - 160 Klepierre (Real Estate)
- 357 - 7,723 8,080 Lafarge SA (Materials)
- 718 - - 718 Lagardere S.C.A (Information & Entertainment)
- - - 1,030 1,030 Legrand SA (Information Technology)
- 4,089 - 1,040 5,129 L'Oreal SA (Consumer Staples)
- 2,900 - 885 3,785 LVMH Moet Hennessy Louis Vuitton (Multi-industry)
- - 375 - 375 Medidep SA (Healthcare)
- 960 - - 960 Michelin (C.G.D.E.) (Consumer Discretionary)
- - 3,550 - 3,550 Neopost SA (Industrial & Commercial)
- - 2,325 - 2,325 Oberthur Card Systems SA+ (Information Technology)
- - - 20,260 20,260 Orange SA (Information Technology)
- 490 - 2,391 2,881 Pechiney SA (Industrial & Commercial)
- 681 - - 681 Pernod-Ricard (Consumer Staples)
- 796 - 1,300 2,096 Pinault-Printemps-Redoute (Consumer Discretionary)
300 291 - 3,472 4,063 PSA Peugeot Citroen (Consumer Discretionary)
- - 300 - 300 Rigiflex International (Information & Entertainment)
- - 1,425 - 1,425 Rodriguez Group (Information & Entertainment)
- - 4,675 - 4,675 S.O.I.T.E.C. (Information Technology)
- 59 - - 59 Sagen SA (Industrial & Commercial)
- 4,990 - 8,228 13,218 Sanofi-Synthelabo SA (Healthcare)
- 1,067 - 7,151 8,218 Schneider Electric SA (Information Technology)
- - 1,075 - 1,075 Seche Environnement (Industrial Commercial)
- 50 - - 50 SILIC (Real Estate)
- 320 - - 320 Simco SA (Real Estate)
- 482 - - 482 Societe BIC SA (Consumer Staples)
- - 350 - 350 Societe du Louvre (Information & Entertainment)
- 480 - - 480 Societe Fonciere Lyonnaise (Real Estate)
- 1,252 - 12,378 13,630 Societe Generale (Finance)
- - - 8,155 8,155 Societe Television Francaise (Information & Entertainment)
- 816 - 2,788 3,604 Sodexho Alliance SA (Multi-industry)
- 495 - - 495 Sophia SA (Real Estate)
- 973 - 3,638 4,611 Suez SA (Utilities)
- - 700 - 700 Technip SA (Industrial & Commercial)
- 1,073 - - 1,073 Thales SA (Industrial & Commercial)
2,970 6,914 - 15,062 24,946 Total Fina Elf (SA Energy)
- - 225 - 225 UBI Soft Entertainment (Information Technology)
- 345 - - 345 Unibail SA
- 2,207 - 21,540 23,747 Usinor SA (Materials)
- 616 - - 616 Valeo SA (Consumer Discretionary)
Principal/Shares
--------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
5,750 3,009 - 5,302 14,061 Alcatel SA (Information Technology)
5,050 - - 750 5,800 Altran Technologies SA (Industrial & Commercial)
3,600 5,321 - 20,594 29,515 Aventis SA (Healthcare)
1,445 - 4,547 5,992 Axa (Finance)
1,163 - 7,621 8,784 BNP Paribas (Finance)
1,500 2,874 - 2,010 6,384 Bouygues (Industrial & Commercial)
3,887 - - - 3,887 Business Objects SA (Information Technology)
- - 4,000 - 4,000 Business Objects SA+ (Information Technology)
- - - 300 300 Canal Plus (Information & Entertainment)
- 425 - 1,024 1,449 Cap Gemini SA (Information Technology)
- 3,493 - 3,493 Carrefour SA (Consumer Staples)
- 150 - 150 Coflexip Stena Offshore (Energy)
- 600 - 1,560 2,160 Compagnie de Saint-Gobain (Materials)
- 128 - - 128 Dassault Systems SA (Information Technology)
- 328 - - 328 Eridania Beghin-Say+ (Materials)
1,600 549 - - 2,149 Etablissements Economiques du Casino Guichard Perrachon
(Information & Entertainment)
- 3,814 - - 3,814 France Telecom (Information & Entertainment)
- 120 - - 120 Gecina SA (Real Estate)
- 1,901 - 830 2,731 Groupe Danone (Consumer Staples)
- - - 660 660 Hermes International (Consumer Discretionary)
- 35 - - 35 Imerys SA (Industrial & Commercial)
- - 3,325 - 3,325 Infogrames Entertainment (Information Technology)
- 160 - - 160 Klepierre (Real Estate)
- 357 - 7,723 8,080 Lafarge SA (Materials)
- 718 - - 718 Lagardere S.C.A (Information & Entertainment)
- - - 1,030 1,030 Legrand SA (Information Technology)
- 4,089 - 1,040 5,129 L'Oreal SA (Consumer Staples)
- 2,900 - 885 3,785 LVMH Moet Hennessy Louis Vuitton (Multi-industry)
- - 375 - 375 Medidep SA (Healthcare)
- 960 - - 960 Michelin (C.G.D.E.) (Consumer Discretionary)
- - 3,550 - 3,550 Neopost SA (Industrial & Commercial)
- - 2,325 - 2,325 Oberthur Card Systems SA+ (Information Technology)
- - - 20,260 20,260 Orange SA (Information Technology)
- 490 - 2,391 2,881 Pechiney SA (Industrial & Commercial)
- 681 - - 681 Pernod-Ricard (Consumer Staples)
- 796 - 1,300 2,096 Pinault-Printemps-Redoute (Consumer Discretionary)
300 291 - 3,472 4,063 PSA Peugeot Citroen (Consumer Discretionary)
- - 300 - 300 Rigiflex International (Information & Entertainment)
- - 1,425 - 1,425 Rodriguez Group (Information & Entertainment)
- - 4,675 - 4,675 S.O.I.T.E.C. (Information Technology)
- 59 - - 59 Sagen SA (Industrial & Commercial)
- 4,990 - 8,228 13,218 Sanofi-Synthelabo SA (Healthcare)
- 1,067 - 7,151 8,218 Schneider Electric SA (Information Technology)
- - 1,075 - 1,075 Seche Environnement (Industrial Commercial)
- 50 - - 50 SILIC (Real Estate)
- 320 - - 320 Simco SA (Real Estate)
- 482 - - 482 Societe BIC SA (Consumer Staples)
- - 350 - 350 Societe du Louvre (Information & Entertainment)
- 480 - - 480 Societe Fonciere Lyonnaise (Real Estate)
- 1,252 - 12,378 13,630 Societe Generale (Finance)
- - - 8,155 8,155 Societe Television Francaise (Information & Entertainment)
- 816 - 2,788 3,604 Sodexho Alliance SA (Multi-industry)
- 495 - - 495 Sophia SA (Real Estate)
- 973 - 3,638 4,611 Suez SA (Utilities)
- - 700 - 700 Technip SA (Industrial & Commercial)
- 1,073 - - 1,073 Thales SA (Industrial & Commercial)
2,970 6,914 - 15,062 24,946 Total Fina Elf (SA Energy)
- - 225 - 225 UBI Soft Entertainment (Information Technology)
- 345 - - 345 Unibail SA
- 2,207 - 21,540 23,747 Usinor SA (Materials)
- 616 - - 616 Valeo SA (Consumer Discretionary)
Principal/Shares Market Value
-------------------------------------------- ---------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------ -------- -------- -------- --------- --------------------------------------------------------- ------- -------- --------
5,750 3,009 - 5,302 14,061 Alcatel SA (Information Technology) 187,232 97,979 -
5,050 - - 750 5,800 Altran Technologies SA (Industrial & Commercial) 327,085 - -
3,600 5,321 - 20,594 29,515 Aventis SA (Healthcare) 278,845 412,148 -
1,445 - 4,547 5,992 Axa (Finance) - 170,516 -
1,163 - 7,621 8,784 BNP Paribas (Finance) - 103,394 -
1,500 2,874 - 2,010 6,384 Bouygues (Industrial & Commercial) 64,175 122,959 -
3,887 - - - 3,887 Business Objects SA (Information Technology) 144,157 - -
- - 4,000 - 4,000 Business Objects SA+ (Information Technology) - - 144,800
- - - 300 300 Canal Plus (Information & Entertainment) - - -
- 425 - 1,024 1,449 Cap Gemini SA (Information Technology) - 61,427 -
- 3,493 - 3,493 Carrefour SA (Consumer Staples) - 201,601 -
- 150 - 150 Coflexip Stena Offshore (Energy) - 22,093 -
- 600 - 1,560 2,160 Compagnie de Saint-Gobain (Materials) - 90,500 -
- 128 - - 128 Dassault Systems SA (Information Technology) - 6,326 -
- 328 - - 328 Eridania Beghin-Say+ (Materials) - 27,196 -
1,600 549 - - 2,149 Etablissements Economiques du Casino Guichard Perrachon
(Information & Entertainment) 143,380 49,197 -
- 3,814 - - 3,814 France Telecom (Information & Entertainment) - 277,486 -
- 120 - - 120 Gecina SA (Real Estate) - 10,860 -
- 1,901 - 830 2,731 Groupe Danone (Consumer Staples) - 247,096 -
- - - 660 660 Hermes International (Consumer Discretionary) - - -
- 35 - - 35 Imerys SA (Industrial & Commercial) - 3,680 -
- - 3,325 - 3,325 Infogrames Entertainment (Information Technology) - - 69,298
- 160 - - 160 Klepierre (Real Estate) - 14,338 -
- 357 - 7,723 8,080 Lafarge SA (Materials) - 34,304 -
- 718 - - 718 Lagardere S.C.A (Information & Entertainment) - 41,726 -
- - - 1,030 1,030 Legrand SA (Information Technology) - - -
- 4,089 - 1,040 5,129 L'Oreal SA (Consumer Staples) - 297,675 -
- 2,900 - 885 3,785 LVMH Moet Hennessy Louis Vuitton (Multi-industry) - 179,083 -
- - 375 - 375 Medidep SA (Healthcare) - - 41,091
- 960 - - 960 Michelin (C.G.D.E.) (Consumer Discretionary) - 31,864 -
- - 3,550 - 3,550 Neopost SA (Industrial & Commercial) - - 85,043
- - 2,325 - 2,325 Oberthur Card Systems SA+ (Information Technology) - - 31,252
- - - 20,260 20,260 Orange SA (Information Technology) - - -
- 490 - 2,391 2,881 Pechiney SA (Industrial & Commercial) - 25,781 -
- 681 - - 681 Pernod-Ricard (Consumer Staples) - 47,220 -
- 796 - 1,300 2,096 Pinault-Printemps-Redoute (Consumer Discretionary) - 137,083 -
300 291 - 3,472 4,063 PSA Peugeot Citroen (Consumer Discretionary) 85,682 83,111 -
- - 300 - 300 Rigiflex International (Information & Entertainment) - - 43,360
- - 1,425 - 1,425 Rodriguez Group (Information & Entertainment) - - 78,389
- - 4,675 - 4,675 S.O.I.T.E.C. (Information Technology) - - 82,958
- 59 - - 59 Sagen SA (Industrial & Commercial) - 4,816 -
- 4,990 - 8,228 13,218 Sanofi-Synthelabo SA (Healthcare) - 299,291 -
- 1,067 - 7,151 8,218 Schneider Electric SA (Information Technology) - 72,848 -
- - 1,075 - 1,075 Seche Environnement (Industrial Commercial) - - 90,610
- 50 - - 50 SILIC (Real Estate) - 7,497 -
- 320 - - 320 Simco SA (Real Estate) - 21,663 -
- 482 - - 482 Societe BIC SA (Consumer Staples) - 18,466 -
- - 350 - 350 Societe du Louvre (Information & Entertainment) - - 25,775
- 480 - - 480 Societe Fonciere Lyonnaise (Real Estate) - 14,097 -
- 1,252 - 12,378 13,630 Societe Generale (Finance) - 80,758 -
- - - 8,155 8,155 Societe Television Francaise (Information & Entertainment) - - -
- 816 - 2,788 3,604 Sodexho Alliance SA (Multi-industry) - 40,182 -
- 495 - - 495 Sophia SA (Real Estate) - 14,296 -
- 973 - 3,638 4,611 Suez SA (Utilities) - 143,825 -
- - 700 - 700 Technip SA (Industrial & Commercial) - - 108,999
- 1,073 - - 1,073 Thales SA (Industrial & Commercial) - 44,697 -
2,970 6,914 - 15,062 24,946 Total Fina Elf (SA Energy) 442,702 1,030,587 -
- - 225 - 225 UBI Soft Entertainment (Information Technology) - - 9,143
- 345 - - 345 Unibail SA - 54,792 -
- 2,207 - 21,540 23,747 Usinor SA (Materials) - 28,844 -
- 616 - - 616 Valeo SA (Consumer Discretionary) - 28,420 -
Principal/Shares
--------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
5,750 3,009 - 5,302 14,061 Alcatel SA (Information Technology) 172,644 457,855
5,050 - - 750 5,800 Altran Technologies SA (Industrial & Commercial) 48,577 375,662
3,600 5,321 - 20,594 29,515 Aventis SA (Healthcare) 1,693,765 2,384,758
1,445 - 4,547 5,992 Axa (Finance) 536,565 707,081
1,163 - 7,621 8,784 BNP Paribas (Finance) 677,526 780,920
1,500 2,874 - 2,010 6,384 Bouygues (Industrial & Commercial) 85,994 273,128
3,887 - - - 3,887 Business Objects SA (Information Technology) - 144,157
- - 4,000 - 4,000 Business Objects SA+ (Information Technology) - 144,800
- - - 300 300 Canal Plus (Information & Entertainment) 1,073 1,073
- 425 - 1,024 1,449 Cap Gemini SA (Information Technology) 148,002 209,429
- 3,493 - 3,493 Carrefour SA (Consumer Staples) - 201,601
- 150 - 150 Coflexip Stena Offshore (Energy) - 22,093
- 600 - 1,560 2,160 Compagnie de Saint-Gobain (Materials) 235,299 325,799
- 128 - - 128 Dassault Systems SA (Information Technology) - 6,326
- 328 - - 328 Eridania Beghin-Say+ (Materials) - 27,196
1,600 549 - - 2,149 Etablissements Economiques du Casino Guichard Perrachon
(Information & Entertainment) - 192,577
- 3,814 - - 3,814 France Telecom (Information & Entertainment) - 277,486
- 120 - - 120 Gecina SA (Real Estate) - 10,860
- 1,901 - 830 2,731 Groupe Danone (Consumer Staples) 107,885 354,981
- - - 660 660 Hermes International (Consumer Discretionary) 94,865 94,865
- 35 - - 35 Imerys SA (Industrial & Commercial) - 3,680
- - 3,325 - 3,325 Infogrames Entertainment (Information Technology) - 69,298
- 160 - - 160 Klepierre (Real Estate) - 14,338
- 357 - 7,723 8,080 Lafarge SA (Materials) 742,097 776,401
- 718 - - 718 Lagardere S.C.A (Information & Entertainment) - 41,726
- - - 1,030 1,030 Legrand SA (Information Technology) 235,778 235,778
- 4,089 - 1,040 5,129 L'Oreal SA (Consumer Staples) 75,711 373,386
- 2,900 - 885 3,785 LVMH Moet Hennessy Louis Vuitton (Multi-industry) 54,651 233,734
- - 375 - 375 Medidep SA (Healthcare) - 41,091
- 960 - - 960 Michelin (C.G.D.E.) (Consumer Discretionary) - 31,864
- - 3,550 - 3,550 Neopost SA (Industrial & Commercial) - 85,043
- - 2,325 - 2,325 Oberthur Card Systems SA+ (Information Technology) - 31,252
- - - 20,260 20,260 Orange SA (Information Technology) 213,551 213,551
- 490 - 2,391 2,881 Pechiney SA (Industrial & Commercial) 125,800 151,581
- 681 - - 681 Pernod-Ricard (Consumer Staples) - 47,220
- 796 - 1,300 2,096 Pinault-Printemps-Redoute (Consumer Discretionary) 223,880 360,963
300 291 - 3,472 4,063 PSA Peugeot Citroen (Consumer Discretionary) 991,623 1,160,416
- - 300 - 300 Rigiflex International (Information & Entertainment) - 43,360
- - 1,425 - 1,425 Rodriguez Group (Information & Entertainment) - 78,389
- - 4,675 - 4,675 S.O.I.T.E.C. (Information Technology) - 82,958
- 59 - - 59 Sagen SA (Industrial & Commercial) - 4,816
- 4,990 - 8,228 13,218 Sanofi-Synthelabo SA (Healthcare) 493,500 792,791
- 1,067 - 7,151 8,218 Schneider Electric SA (Information Technology) 488,227 561,075
- - 1,075 - 1,075 Seche Environnement (Industrial Commercial) - 90,610
- 50 - - 50 SILIC (Real Estate) - 7,497
- 320 - - 320 Simco SA (Real Estate) - 21,663
- 482 - - 482 Societe BIC SA (Consumer Staples) - 18,466
- - 350 - 350 Societe du Louvre (Information & Entertainment) - 25,775
- 480 - - 480 Societe Fonciere Lyonnaise (Real Estate) - 14,097
- 1,252 - 12,378 13,630 Societe Generale (Finance) 798,419 879,177
- - - 8,155 8,155 Societe Television Francaise (Information & Entertainment) 342,240 342,240
- 816 - 2,788 3,604 Sodexho Alliance SA (Multi-industry) 137,288 177,470
- 495 - - 495 Sophia SA (Real Estate) - 14,296
- 973 - 3,638 4,611 Suez SA (Utilities) 537,754 681,579
- - 700 - 700 Technip SA (Industrial & Commercial) - 108,999
- 1,073 - - 1,073 Thales SA (Industrial & Commercial) - 44,697
2,970 6,914 - 15,062 24,946 Total Fina Elf (SA Energy) 2,245,111 3,718,400
- - 225 - 225 UBI Soft Entertainment (Information Technology) - 9,143
- 345 - - 345 Unibail SA - 54,792
- 2,207 - 21,540 23,747 Usinor SA (Materials) 281,510 310,354
- 616 - - 616 Valeo SA (Consumer Discretionary) - 28,420
B-52
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- - 3,925 - 3,925 Vallourec (Industrial & Commercial)
- - 750 - 750 Valtech (Industrial & Commercial)
- - - 4,001 4,001 Vinci SA (Industrial & Commercial)
3,000 - - - 3,000 Vivendi Environment (Industrial Commercial)
- 3,653 - 18,140 21,793 Vivendi Universal (Multi-industry)
- - 2,450 - 2,450 Wavecom SA (information Technology)
- - 150 - 150 Zodiac SA (Information & Entertainment)
Germany 0.9% 7.6%
- 200 - - 200 Adidas-Salomon AG (Consumer Discretionary)
- 1,250 - 1,714 2,964 Allianz AG (Finance)
- 2,025 - 2,025 Articon-Integralis AG (Information Technology)
- 3,400 - - 3,400 BASF AG (Materials)
- 4,000 - 12,163 16,163 Bayer AG (Healthcare)
- 1,700 - 4,416 6,116 Bayerische Hypo-und Vereinsbank AG (Finance)
- - - 8,468 8,468 Bayerische Motoren Werke AG (Consumer Discretionary)
- 1,150 - - 1,150 Beiersdorf AG (Consumer Discretionary)
- - 225 - 225 Beru AG (Consumer Discretionary)
- 150 - - 150 Bilfinger & Berger Bau AG (Industrial & Commercial)
- 100 2,200 - 2,300 Buderus AG (Industrial & Commercial)
- - 1,625 - 1,625 Ceyoniq AG (Information Technology)
- 550 - - 550 Continental AG (Consumer Discretionary)
- 4,550 - - 4,550 DaimlerChrysler AG (Consumer Discretionary)
- 2,000 - 2,531 4,531 Deutsche Bank AG (Finance)
350 - - - 350 Deutsche Boerse AG (Finance)
- 800 - - 800 Deutsche Lufthansa AG (Information & Entertainment)
- - - 12,916 12,916 Deutsche Post AG (Industrial & Commercial)
- 11,338 - 1,337 12,675 Deutsche Telekom AG (Information Technology)
- 450 - - 450 Douglas Holding AG (Consumer Discretionary)
- 1,600 - 12,143 13,743 Dresdner Bank AG (Finance)
- 250 - - 250 EM.TV & Merchandising AG (Information & Entertainment)
- - 1,100 - 1,100 Energiekontor AG (Energy)
1,700 - - - 1,700 Epcos AG (Information Technology)
- 350 - - 350 FAG Kugelfischer Georg Schaefer AG (Industrial &
Commercial)
- - 1,175 - 1,175 FJA AG (Information Technology)
- 200 - - 200 Fresenius Medical Care AG (Healthcare)
- - - 2,910 2,910 Gehe AG (Healthcare)
- 334 - - 334 Heidelberger Zement AG (Industrial & Commercial)
- - 1,950 - 1,950 IM Internationalmedia AG (Information & Entertainment)
- - - 11,876 11,876 Infineon Technologies AG (Information Technology)
- 1,363 - - 1,363 IVG Holding AG (Multi-industry)
- 300 - - 300 Kamps AG (Consumer Staples)
- 500 - - 500 KarstadtQuelle AG (Consumer Discretionary)
- - 1,325 - 1,325 Kontron Embedded Computers+ (Information Technology)
- - 2,450 - 2,450 Lambda Physik AG+ (Information Technology)
- 850 - - 850 Linde AG (Industrial & Commercial)
- 700 - - 700 MAN AG (Industrial & Commercial)
- 627 - - 627 Merck Kgaa (Healthcare)
- 1,850 - - 1,850 Metro AG (Consumer Discretionary)
- 850 - 2,185 3,035 Muenchener Ruckversicherungs-Gesellschaft AG (Finance)
- - 1,000 - 1,000 P&T Technology AG (Industrial & Commercial)
- 1,050 - - 1,050 Preussag AG (Multi-industry)
- - - 920 920 Rhoen-Klinikum AG (Healthcare)
- 4,550 - - 4,550 RWE AG (Utilities)
- 1,100 - 1,510 2,610 SAP AG (Information Technology)
- 800 - - 800 Schering AG (Healthcare)
- 50 - - 50 SGL Carbon (Materials)
- - - 913 913 Siemens AG (Multi-industry)
- 6,615 - - 6,615 Siemens AG (Multi-industry)
- - 5,400 - 5,400 Suess Microtec AG+ (Information technology)
- - 5,500 - 5,500 Techem AG+ (Information technology)
- 3,000 - - 3,000 ThyssenKrupp AG (Industrial & Commercial)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- - 3,925 - 3,925 Vallourec (Industrial & Commercial)
- - 750 - 750 Valtech (Industrial & Commercial)
- - - 4,001 4,001 Vinci SA (Industrial & Commercial)
3,000 - - - 3,000 Vivendi Environment (Industrial Commercial)
- 3,653 - 18,140 21,793 Vivendi Universal (Multi-industry)
- - 2,450 - 2,450 Wavecom SA (information Technology)
- - 150 - 150 Zodiac SA (Information & Entertainment)
Germany 4.9% 5.5% 5.4%
- 200 - - 200 Adidas-Salomon AG (Consumer Discretionary)
- 1,250 - 1,714 2,964 Allianz AG (Finance)
- 2,025 - 2,025 Articon-Integralis AG (Information Technology)
- 3,400 - - 3,400 BASF AG (Materials)
- 4,000 - 12,163 16,163 Bayer AG (Healthcare)
- 1,700 - 4,416 6,116 Bayerische Hypo-und Vereinsbank AG (Finance)
- - - 8,468 8,468 Bayerische Motoren Werke AG (Consumer Discretionary)
- 1,150 - - 1,150 Beiersdorf AG (Consumer Discretionary)
- - 225 - 225 Beru AG (Consumer Discretionary)
- 150 - - 150 Bilfinger & Berger Bau AG (Industrial & Commercial)
- 100 2,200 - 2,300 Buderus AG (Industrial & Commercial)
- - 1,625 - 1,625 Ceyoniq AG (Information Technology)
- 550 - - 550 Continental AG (Consumer Discretionary)
- 4,550 - - 4,550 DaimlerChrysler AG (Consumer Discretionary)
- 2,000 - 2,531 4,531 Deutsche Bank AG (Finance)
350 - - - 350 Deutsche Boerse AG (Finance)
- 800 - - 800 Deutsche Lufthansa AG (Information & Entertainment)
- - - 12,916 12,916 Deutsche Post AG (Industrial & Commercial)
- 11,338 - 1,337 12,675 Deutsche Telekom AG (Information Technology)
- 450 - - 450 Douglas Holding AG (Consumer Discretionary)
- 1,600 - 12,143 13,743 Dresdner Bank AG (Finance)
- 250 - - 250 EM.TV & Merchandising AG (Information & Entertainment)
- - 1,100 - 1,100 Energiekontor AG (Energy)
1,700 - - - 1,700 Epcos AG (Information Technology)
- 350 - - 350 FAG Kugelfischer Georg Schaefer AG (Industrial &
Commercial)
- - 1,175 - 1,175 FJA AG (Information Technology)
- 200 - - 200 Fresenius Medical Care AG (Healthcare)
- - - 2,910 2,910 Gehe AG (Healthcare)
- 334 - - 334 Heidelberger Zement AG (Industrial & Commercial)
- - 1,950 - 1,950 IM Internationalmedia AG (Information & Entertainment)
- - - 11,876 11,876 Infineon Technologies AG (Information Technology)
- 1,363 - - 1,363 IVG Holding AG (Multi-industry)
- 300 - - 300 Kamps AG (Consumer Staples)
- 500 - - 500 KarstadtQuelle AG (Consumer Discretionary)
- - 1,325 - 1,325 Kontron Embedded Computers+ (Information Technology)
- - 2,450 - 2,450 Lambda Physik AG+ (Information Technology)
- 850 - - 850 Linde AG (Industrial & Commercial)
- 700 - - 700 MAN AG (Industrial & Commercial)
- 627 - - 627 Merck Kgaa (Healthcare)
- 1,850 - - 1,850 Metro AG (Consumer Discretionary)
- 850 - 2,185 3,035 Muenchener Ruckversicherungs-Gesellschaft AG (Finance)
- - 1,000 - 1,000 P&T Technology AG (Industrial & Commercial)
- 1,050 - - 1,050 Preussag AG (Multi-industry)
- - - 920 920 Rhoen-Klinikum AG (Healthcare)
- 4,550 - - 4,550 RWE AG (Utilities)
- 1,100 - 1,510 2,610 SAP AG (Information Technology)
- 800 - - 800 Schering AG (Healthcare)
- 50 - - 50 SGL Carbon (Materials)
- - - 913 913 Siemens AG (Multi-industry)
- 6,615 - - 6,615 Siemens AG (Multi-industry)
- - 5,400 - 5,400 Suess Microtec AG+ (Information technology)
- - 5,500 - 5,500 Techem AG+ (Information technology)
- 3,000 - - 3,000 ThyssenKrupp AG (Industrial & Commercial)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- - 3,925 - 3,925 Vallourec (Industrial & Commercial) - - 236,806
- - 750 - 750 Valtech (Industrial & Commercial) - - 5,437
- - - 4,001 4,001 Vinci SA (Industrial & Commercial) - - -
3,000 - - - 3,000 Vivendi Environment (Industrial Commercial) 131,384 - -
- 3,653 - 18,140 21,793 Vivendi Universal (Multi-industry) - 252,970 -
- - 2,450 - 2,450 Wavecom SA (information Technology) - - 74,560
- - 150 - 150 Zodiac SA (Information & Entertainment) - - 35,667
Germany
- 200 - - 200 Adidas-Salomon AG (Consumer Discretionary) - 12,136 -
- 1,250 - 1,714 2,964 Allianz AG (Finance) - 359,891 -
- 2,025 - 2,025 Articon-Integralis AG (Information Technology) - - 76,898
- 3,400 - - 3,400 BASF AG (Materials) - 146,247 -
- 4,000 - 12,163 16,163 Bayer AG (Healthcare) - 168,578 -
- 1,700 - 4,416 6,116 Bayerische Hypo-und Vereinsbank AG (Finance) - 94,843 -
- - - 8,468 8,468 Bayerische Motoren Werke AG (Consumer Discretionary) - - -
- 1,150 - - 1,150 Beiersdorf AG (Consumer Discretionary) - 117,747 -
- - 225 - 225 Beru AG (Consumer Discretionary) - - 8,325
- 150 - - 150 Bilfinger & Berger Bau AG (Industrial & Commercial) - 2,409 -
- 100 2,200 - 2,300 Buderus AG (Industrial & Commercial) - 2,338 51,434
- - 1,625 - 1,625 Ceyoniq AG (Information Technology) - - 13,553
- 550 - - 550 Continental AG (Consumer Discretionary) - 7,905 -
- 4,550 - - 4,550 DaimlerChrysler AG (Consumer Discretionary) - 227,848 -
- 2,000 - 2,531 4,531 Deutsche Bank AG (Finance) - 163,254 -
350 - - - 350 Deutsche Boerse AG (Finance) 112,104 - -
- 800 - - 800 Deutsche Lufthansa AG (Information & Entertainment) - 15,332 -
- - - 12,916 12,916 Deutsche Post AG (Industrial & Commercial) - - -
- 11,338 - 1,337 12,675 Deutsche Telekom AG (Information Technology) - 293,742 -
- 450 - - 450 Douglas Holding AG (Consumer Discretionary) - 14,653 -
- 1,600 - 12,143 13,743 Dresdner Bank AG (Finance) - 72,854 -
- 250 - - 250 EM.TV & Merchandising AG (Information & Entertainment) - 1,238 -
- - 1,100 - 1,100 Energiekontor AG (Energy) - - 75,638
1,700 - - - 1,700 Epcos AG (Information Technology) 109,595 - -
- 350 - - 350 FAG Kugelfischer Georg Schaefer AG (Industrial &
Commercial) - 2,407 -
- - 1,175 - 1,175 FJA AG (Information Technology) - - 71,413
- 200 - - 200 Fresenius Medical Care AG (Healthcare) - 14,835 -
- - - 2,910 2,910 Gehe AG (Healthcare) - - -
- 334 - - 334 Heidelberger Zement AG (Industrial & Commercial) - 17,523 -
- - 1,950 - 1,950 IM Internationalmedia AG (Information & Entertainment) - - 50,174
- - - 11,876 11,876 Infineon Technologies AG (Information Technology) - -
- 1,363 - - 1,363 IVG Holding AG (Multi-industry) - 17,499
- 300 - - 300 Kamps AG (Consumer Staples) - 2,928
- 500 - - 500 KarstadtQuelle AG (Consumer Discretionary) - 15,509
- - 1,325 - 1,325 Kontron Embedded Computers+ (Information Technology) - - 76,179
- - 2,450 - 2,450 Lambda Physik AG+ (Information Technology) - - 156,511
- 850 - - 850 Linde AG (Industrial & Commercial) - 38,349 -
- 700 - - 700 MAN AG (Industrial & Commercial) - 19,228 -
- 627 - - 627 Merck Kgaa (Healthcare) - 21,918 -
- 1,850 - - 1,850 Metro AG (Consumer Discretionary) - 84,697 -
- 850 - 2,185 3,035 Muenchener Ruckversicherungs-Gesellschaft AG (Finance) - 242,373 -
- - 1,000 - 1,000 P&T Technology AG (Industrial & Commercial) - - 14,551
- 1,050 - - 1,050 Preussag AG (Multi-industry) - 35,252 -
- - - 920 920 Rhoen-Klinikum AG (Healthcare) - - -
- 4,550 - - 4,550 RWE AG (Utilities) - 177,627 -
- 1,100 - 1,510 2,610 SAP AG (Information Technology) - 174,797 -
- 800 - - 800 Schering AG (Healthcare) - 39,955 -
- 50 - - 50 SGL Carbon (Materials) - 1,763 -
- - - 913 913 Siemens AG (Multi-industry) - - -
- 6,615 - - 6,615 Siemens AG (Multi-industry) - 487,727 -
- - 5,400 - 5,400 Suess Microtec AG+ (Information technology) - - 173,919
- - 5,500 - 5,500 Techem AG+ (Information technology) - - 152,984
- 3,000 - - 3,000 ThyssenKrupp AG (Industrial & Commercial) - 46,660 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- - 3,925 - 3,925 Vallourec (Industrial & Commercial) - 236,806
- - 750 - 750 Valtech (Industrial & Commercial) - 5,437
- - - 4,001 4,001 Vinci SA (Industrial & Commercial) 234,292 234,292
3,000 - - - 3,000 Vivendi Environment (Industrial Commercial) 131,384
- 3,653 - 18,140 21,793 Vivendi Universal (Multi-industry) 1,256,192 1,509,162
- - 2,450 - 2,450 Wavecom SA (information Technology) - 74,560
- - 150 - 150 Zodiac SA (Information & Entertainment) - 35,667
Germany
- 200 - - 200 Adidas-Salomon AG (Consumer Discretionary) - 12,136
- 1,250 - 1,714 2,964 Allianz AG (Finance) 493,482 853,373
- 2,025 - 2,025 Articon-Integralis AG (Information Technology) - 76,898
- 3,400 - - 3,400 BASF AG (Materials) - 146,247
- 4,000 - 12,163 16,163 Bayer AG (Healthcare) 512,602 681,180
- 1,700 - 4,416 6,116 Bayerische Hypo-und Vereinsbank AG (Finance) 246,370 341,213
- - - 8,468 8,468 Bayerische Motoren Werke AG (Consumer Discretionary) 280,995 280,995
- 1,150 - - 1,150 Beiersdorf AG (Consumer Discretionary) - 117,747
- - 225 - 225 Beru AG (Consumer Discretionary) - 8,325
- 150 - - 150 Bilfinger & Berger Bau AG (Industrial & Commercial) - 2,409
- 100 2,200 - 2,300 Buderus AG (Industrial & Commercial) - 53,772
- - 1,625 - 1,625 Ceyoniq AG (Information Technology) - 13,553
- 550 - - 550 Continental AG (Consumer Discretionary) - 7,905
- 4,550 - - 4,550 DaimlerChrysler AG (Consumer Discretionary) - 227,848
- 2,000 - 2,531 4,531 Deutsche Bank AG (Finance) 206,598 369,852
350 - - - 350 Deutsche Boerse AG (Finance) - 112,104
- 800 - - 800 Deutsche Lufthansa AG (Information & Entertainment) - 15,332
- - - 12,916 12,916 Deutsche Post AG (Industrial & Commercial) 220,256 220,256
- 11,338 - 1,337 12,675 Deutsche Telekom AG (Information Technology) 34,639 328,381
- 450 - - 450 Douglas Holding AG (Consumer Discretionary) 14,653
- 1,600 - 12,143 13,743 Dresdner Bank AG (Finance) 552,915 625,769
- 250 - - 250 EM.TV & Merchandising AG (Information & Entertainment) - 1,238
- - 1,100 - 1,100 Energiekontor AG (Energy) - 75,638
1,700 - - - 1,700 Epcos AG (Information Technology) - 109,595
- 350 - - 350 FAG Kugelfischer Georg Schaefer AG (Industrial &
Commercial) - 2,407
- - 1,175 - 1,175 FJA AG (Information Technology) - 71,413
- 200 - - 200 Fresenius Medical Care AG (Healthcare) - 14,835
- - - 2,910 2,910 Gehe AG (Healthcare) 116,185 116,185
- 334 - - 334 Heidelberger Zement AG (Industrial & Commercial) - 17,523
- - 1,950 - 1,950 IM Internationalmedia AG (Information & Entertainment) - 50,174
- - - 11,876 11,876 Infineon Technologies AG (Information Technology) 516,312 516,312
- 1,363 - - 1,363 IVG Holding AG (Multi-industry) - 17,499
- 300 - - 300 Kamps AG (Consumer Staples) - 2,928
- 500 - - 500 KarstadtQuelle AG (Consumer Discretionary) - 15,509
- - 1,325 - 1,325 Kontron Embedded Computers+ (Information Technology) - 76,179
- - 2,450 - 2,450 Lambda Physik AG+ (Information Technology) - 156,511
- 850 - - 850 Linde AG (Industrial & Commercial) - 38,349
- 700 - - 700 MAN AG (Industrial & Commercial) - 19,228
- 627 - - 627 Merck Kgaa (Healthcare) - 21,918
- 1,850 - - 1,850 Metro AG (Consumer Discretionary) - 84,697
- 850 - 2,185 3,035 Muenchener Ruckversicherungs-Gesellschaft AG (Finance) 623,041 865,414
- - 1,000 - 1,000 P&T Technology AG (Industrial & Commercial) - 14,551
- 1,050 - - 1,050 Preussag AG (Multi-industry) - 35,252
- - - 920 920 Rhoen-Klinikum AG (Healthcare) 55,098 55,098
- 4,550 - - 4,550 RWE AG (Utilities) - 177,627
- 1,100 - 1,510 2,610 SAP AG (Information Technology) 239,949 414,746
- 800 - - 800 Schering AG (Healthcare) - 39,955
- 50 - - 50 SGL Carbon (Materials) - 1,763
- - - 913 913 Siemens AG (Multi-industry) 67,235 67,235
- 6,615 - - 6,615 Siemens AG (Multi-industry) - 487,727
- - 5,400 - 5,400 Suess Microtec AG+ (Information technology) - 173,919
- - 5,500 - 5,500 Techem AG+ (Information technology) - 152,984
- 3,000 - - 3,000 ThyssenKrupp AG (Industrial & Commercial) - 46,660
B-53
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 6,620 - 19,118 25,738 Veba AG (Utilities)
- 1,550 - - 1,550 Volkswagen AG (Consumer Discretionary)
- - 1,200 - 1,200 Vossloh AG (Information Technology)
- 250 - - 250 WCM Beteiligugs & Grudbesitz (Real Estate)
Greece 0.0% 0.0%
- - 1,775 - 1,775 Attica Enterprise Holding SA (Industrial & Commercial)
- - 4,325 - 4,325 Folli-Follie SA (Consumer Discretionary)
- - 4,075 - 4,075 Hyatt Regency SA (Information & Entertainment)
- - 14,300 - 14,300 JUMBO SA (Consumer Discretionary)
- - 6,740 - 6,740 Lambrakis Press SA (Information & Entertainment)
- - 3,550 - 3,550 Sarantis SA (Consumer Discretionary)
Hong Kong 2.0% 1.8%
40,000 - - 73,000 113,000 China Mobile Ltd.+ (Information Technology)
100,000 - - 194,000 294,000 CNOOC Ltd. (Energy)
116,500 - - 45,000 161,500 MTR Corp+* (Industrial & Commercial)
- 12,208 - - 12,208 Bank East of Asia (Finance)
- 17,000 - - 17,000 Cathay Pacific Airways Ltd.
- 12,000 - - 12,000 CLP Holdings Ltd (Energy)
- 1,012 - - 1,012 Esprit Holdings Ltd (Consumer Discretionary)
- 4,000 - - 4,000 Hang Lung Development Co. (Real Estate)
- 7,200 - - 7,200 Hang Seng Bank Ltd. (Finance)
- 6,000 - 10,000 16,000 Henderson Land Development Co. Ltd. (Real Estate)
- 27,170 - - 27,170 Hong Kong & China Gas (Energy)
- 500 - - 500 Hong Kong & Shanghai Hotel (Information & Entertainment)
- 1,000 - - 1,000 Hong Kong Exchanges and Clearing Ltd. (Finance)
- 19,100 - 35,300 54,400 Hutchison Whampoa Ltd. (Multi-industry)
- 3,021 - - 3,021 Hysan Development Co. (Real Estate)
- 18,000 - - 18,000 Johnson Electric Holdings Ltd. (Information technology)
- 56,000 - - 56,000 Li & Fung Ltd. (Consumer Discretionary)
- 13,203 - - 13,203 New World Development Co. (Industrial & Commercial)
- 65,815 - - 65,815 Pacific Century CyberWorks Ltd. (Information Technology)
- 12,000 - - 12,000 Shangri-La Asia Ltd. (Information & Entertainment)
- 15,329 - - 15,329 Sino Land Co. (Real Estate)
- 4,000 - - 4,000 South China Morning Post (Information & Entertainment)
- 11,000 - 23,000 34,000 Sun Hung Kai Properties Ltd. (Real Estate)
- 7,000 - - 7,000 Swire Pacific Ltd. (Multi-industry)
- 11,000 - - 11,000 Wharf Holdings Ltd. (Multi-industry)
- - 34,000 - 34,000 Convenience Retail Asia Ltd. (Consumer Discretionary)
- - 52,000 - 52,000 Henderson Land Development Co. Ltd. (Real Estate)
- - 114,000 - 114,000 Tingyi (Caymen Islands) Holding Corp. (Consumer Staples)
- - 148,000 - 148,000 Cosco Pacific Ltd. (Industrial & Commercial)
- - 208,000 - 208,000 China Everbright Ltd. (Finance)
- - 242,000 - 242,000 Greencool Technology Holdings Ltd. (Industrial &
Commercial)
- - 340,000 - 340,000 Texwinca Holdings Ltd. (Consumer Discretionary)
- - 420,000 - 420,000 China Insurance International Holdings Co. Ltd. (Finance)
- - 446,000 - 446,000 China Resources Beijing Land (Real Estate)
- - 532,000 - 532,000 Brilliance China Automotive (Industrial & Commercial)
- - 704,000 - 704,000 Denway Motors Ltd. (Consumer discretionary)
- 23,000 23,000 Cheung Kong (Holdings) Ltd. (Real Estate)
- 431,000 431,000 Legend Holdings Ltd. (Information Technology)
- 91,000 91,000 Peregrine Investments Holdings Ltd.+(1) (Finance)
India 0.5% 0.0%
- - - 8,008 8,008 ICICI Ltd. ADR (Finance)
1,500 - - - 1,500 Infosys Technologies Ltd. (Information Technology)
- - - 1,600 1,600 Reliance Industries Ltd. GDR* (Materials)
Ireland 0.0% 0.1%
- - - 11,629 11,629 Bank of Ireland (Finance)
- - - 59,198 59,198 Bank of Ireland (Finance)
- 435 - 53,541 53,976 CRH PLC (Materials)
- - 14,000 - 14,000 Datalex PLC (Information Technology)
- - - 22,047 22,047 Elan Corp. PLC ADR+ (healthcare)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 6,620 - 19,118 25,738 Veba AG (Utilities)
- 1,550 - - 1,550 Volkswagen AG (Consumer Discretionary)
- - 1,200 - 1,200 Vossloh AG (Information Technology)
- 250 - - 250 WCM Beteiligugs & Grudbesitz (Real Estate)
Greece 1.3% 0.0% 0.1%
- - 1,775 - 1,775 Attica Enterprise Holding SA (Industrial & Commercial)
- - 4,325 - 4,325 Folli-Follie SA (Consumer Discretionary)
- - 4,075 - 4,075 Hyatt Regency SA (Information & Entertainment)
- - 14,300 - 14,300 JUMBO SA (Consumer Discretionary)
- - 6,740 - 6,740 Lambrakis Press SA (Information & Entertainment)
- - 3,550 - 3,550 Sarantis SA (Consumer Discretionary)
Hong Kong 6.0% 2.0% 2.4%
40,000 - - 73,000 113,000 China Mobile Ltd.+ (Information Technology)
100,000 - - 194,000 294,000 CNOOC Ltd. (Energy)
116,500 - - 45,000 161,500 MTR Corp+* (Industrial & Commercial)
- 12,208 - - 12,208 Bank East of Asia (Finance)
- 17,000 - - 17,000 Cathay Pacific Airways Ltd.
- 12,000 - - 12,000 CLP Holdings Ltd (Energy)
- 1,012 - - 1,012 Esprit Holdings Ltd (Consumer Discretionary)
- 4,000 - - 4,000 Hang Lung Development Co. (Real Estate)
- 7,200 - - 7,200 Hang Seng Bank Ltd. (Finance)
- 6,000 - 10,000 16,000 Henderson Land Development Co. Ltd. (Real Estate)
- 27,170 - - 27,170 Hong Kong & China Gas (Energy)
- 500 - - 500 Hong Kong & Shanghai Hotel (Information & Entertainment)
- 1,000 - - 1,000 Hong Kong Exchanges and Clearing Ltd. (Finance)
- 19,100 - 35,300 54,400 Hutchison Whampoa Ltd. (Multi-industry)
- 3,021 - - 3,021 Hysan Development Co. (Real Estate)
- 18,000 - - 18,000 Johnson Electric Holdings Ltd. (Information technology)
- 56,000 - - 56,000 Li & Fung Ltd. (Consumer Discretionary)
- 13,203 - - 13,203 New World Development Co. (Industrial & Commercial)
- 65,815 - - 65,815 Pacific Century CyberWorks Ltd. (Information Technology)
- 12,000 - - 12,000 Shangri-La Asia Ltd. (Information & Entertainment)
- 15,329 - - 15,329 Sino Land Co. (Real Estate)
- 4,000 - - 4,000 South China Morning Post (Information & Entertainment)
- 11,000 - 23,000 34,000 Sun Hung Kai Properties Ltd. (Real Estate)
- 7,000 - - 7,000 Swire Pacific Ltd. (Multi-industry)
- 11,000 - - 11,000 Wharf Holdings Ltd. (Multi-industry)
- - 34,000 - 34,000 Convenience Retail Asia Ltd. (Consumer Discretionary)
- - 52,000 - 52,000 Henderson Land Development Co. Ltd. (Real Estate)
- - 114,000 - 114,000 Tingyi (Caymen Islands) Holding Corp. (Consumer Staples)
- - 148,000 - 148,000 Cosco Pacific Ltd. (Industrial & Commercial)
- - 208,000 - 208,000 China Everbright Ltd. (Finance)
- - 242,000 - 242,000 Greencool Technology Holdings Ltd. (Industrial &
Commercial)
- - 340,000 - 340,000 Texwinca Holdings Ltd. (Consumer Discretionary)
- - 420,000 - 420,000 China Insurance International Holdings Co. Ltd. (Finance)
- - 446,000 - 446,000 China Resources Beijing Land (Real Estate)
- - 532,000 - 532,000 Brilliance China Automotive (Industrial & Commercial)
- - 704,000 - 704,000 Denway Motors Ltd. (Consumer discretionary)
- 23,000 23,000 Cheung Kong (Holdings) Ltd. (Real Estate)
- 431,000 431,000 Legend Holdings Ltd. (Information Technology)
- 91,000 91,000 Peregrine Investments Holdings Ltd.+(1) (Finance)
India 0.0% 0.1% 0.1%
- - - 8,008 8,008 ICICI Ltd. ADR (Finance)
1,500 - - - 1,500 Infosys Technologies Ltd. (Information Technology)
- - - 1,600 1,600 Reliance Industries Ltd. GDR* (Materials)
Ireland 1.0% 3.0% 1.7%
- - - 11,629 11,629 Bank of Ireland (Finance)
- - - 59,198 59,198 Bank of Ireland (Finance)
- 435 - 53,541 53,976 CRH PLC (Materials)
- - 14,000 - 14,000 Datalex PLC (Information Technology)
- - - 22,047 22,047 Elan Corp. PLC ADR+ (healthcare)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 6,620 - 19,118 25,738 Veba AG (Utilities) - 333,327 -
- 1,550 - - 1,550 Volkswagen AG (Consumer Discretionary) - 77,013 -
- - 1,200 - 1,200 Vossloh AG (Information Technology) - 25,340
- 250 - - 250 WCM Beteiligugs & Grudbesitz (Real Estate) - 4,192 -
Greece
- - 1,775 - 1,775 Attica Enterprise Holding SA (Industrial & Commercial) - - 13,575
- - 4,325 - 4,325 Folli-Follie SA (Consumer Discretionary) - - 85,189
- - 4,075 - 4,075 Hyatt Regency SA (Information & Entertainment) - - 22,923
- - 14,300 - 14,300 JUMBO SA (Consumer Discretionary) - - 45,929
- - 6,740 - 6,740 Lambrakis Press SA (Information & Entertainment) - - 84,797
- - 3,550 - 3,550 Sarantis SA (Consumer Discretionary) - - 13,922
Hong Kong
40,000 - - 73,000 113,000 China Mobile Ltd.+ (Information Technology) 196,948 - -
100,000 - - 194,000 294,000 CNOOC Ltd. (Energy) 96,166 - -
116,500 - - 45,000 161,500 MTR Corp+* (Industrial & Commercial) 200,914 - -
- 12,208 - - 12,208 Bank East of Asia (Finance) - 27,785 -
- 17,000 - - 17,000 Cathay Pacific Airways Ltd. - 25,721 -
- 12,000 - - 12,000 CLP Holdings Ltd (Energy) - 50,468 -
- 1,012 - - 1,012 Esprit Holdings Ltd (Consumer Discretionary) - 1,148 -
- 4,000 - - 4,000 Hang Lung Development Co. (Real Estate) - 3,462 -
- 7,200 - - 7,200 Hang Seng Bank Ltd. (Finance) - 84,934 -
- 6,000 - 10,000 16,000 Henderson Land Development Co. Ltd. (Real Estate) - 27,542 -
- 27,170 - - 27,170 Hong Kong & China Gas (Energy) - 32,573 -
- 500 - - 500 Hong Kong & Shanghai Hotel (Information & Entertainment) - 276 -
- 1,000 - - 1,000 Hong Kong Exchanges and Clearing Ltd. (Finance) - 458 -
- 19,100 - 35,300 54,400 Hutchison Whampoa Ltd. (Multi-industry) - 205,106 -
- 3,021 - - 3,021 Hysan Development Co. (Real Estate) - 4,145 -
- 18,000 - - 18,000 Johnson Electric Holdings Ltd. (Information technology) - 33,812 -
- 56,000 - - 56,000 Li & Fung Ltd. (Consumer Discretionary) - 105,911 -
- 13,203 - - 13,203 New World Development Co. (Industrial & Commercial) - 16,337 -
- 65,815 - - 65,815 Pacific Century CyberWorks Ltd. (Information Technology) - 22,574 -
- 12,000 - - 12,000 Shangri-La Asia Ltd. (Information & Entertainment) - 11,771 -
- 15,329 - - 15,329 Sino Land Co. (Real Estate) - 6,879 -
- 4,000 - - 4,000 South China Morning Post (Information & Entertainment) - 2,552 -
- 11,000 - 23,000 34,000 Sun Hung Kai Properties Ltd. (Real Estate) - 102,962 -
- 7,000 - - 7,000 Swire Pacific Ltd. (Multi-industry) - 38,595 -
- 11,000 - - 11,000 Wharf Holdings Ltd. (Multi-industry) - 25,952 -
- - 34,000 - 34,000 Convenience Retail Asia Ltd. (Consumer Discretionary) - - 7,062
- - 52,000 - 52,000 Henderson Land Development Co. Ltd. (Real Estate) - - 93,345
- - 114,000 - 114,000 Tingyi (Caymen Islands) Holding Corp. (Consumer Staples) - - 18,272
- - 148,000 - 148,000 Cosco Pacific Ltd. (Industrial & Commercial) - - 91,563
- - 208,000 - 208,000 China Everbright Ltd. (Finance) - - 201,359
- - 242,000 - 242,000 Greencool Technology Holdings Ltd. (Industrial &
Commercial) - - 72,920
- - 340,000 - 340,000 Texwinca Holdings Ltd. (Consumer Discretionary) - - 106,809
- - 420,000 - 420,000 China Insurance International Holdings Co. Ltd. (Finance) - - 97,474
- - 446,000 - 446,000 China Resources Beijing Land (Real Estate) - - 113,802
- - 532,000 - 532,000 Brilliance China Automotive (Industrial & Commercial) - - 143,249
- - 704,000 - 704,000 Denway Motors Ltd. (Consumer discretionary) - - 209,872
- 23,000 23,000 Cheung Kong (Holdings) Ltd. (Real Estate) - - -
- 431,000 431,000 Legend Holdings Ltd. (Information Technology) - - -
- 91,000 91,000 Peregrine Investments Holdings Ltd.+(1) (Finance) - - -
India
- - - 8,008 8,008 ICICI Ltd. ADR (Finance) - - -
1,500 - - - 1,500 Infosys Technologies Ltd. (Information Technology) 110,250 - -
- - - 1,600 1,600 Reliance Industries Ltd. GDR* (Materials) - - -
Ireland
- - - 11,629 11,629 Bank of Ireland (Finance) - - -
- - - 59,198 59,198 Bank of Ireland (Finance) - - -
- 435 - 53,541 53,976 CRH PLC (Materials) - 7,325 -
- - 14,000 - 14,000 Datalex PLC (Information Technology) - - 60,200
- - - 22,047 22,047 Elan Corp. PLC ADR+ (healthcare) - - -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 6,620 - 19,118 25,738 Veba AG (Utilities) 962,619 1,295,946
- 1,550 - - 1,550 Volkswagen AG (Consumer Discretionary) - 77,013
- - 1,200 - 1,200 Vossloh AG (Information Technology) - 25,340
- 250 - - 250 WCM Beteiligugs & Grudbesitz (Real Estate) - 4,192
Greece
- - 1,775 - 1,775 Attica Enterprise Holding SA (Industrial & Commercial) - 13,575
- - 4,325 - 4,325 Folli-Follie SA (Consumer Discretionary) - 85,189
- - 4,075 - 4,075 Hyatt Regency SA (Information & Entertainment) - 22,923
- - 14,300 - 14,300 JUMBO SA (Consumer Discretionary) - 45,929
- - 6,740 - 6,740 Lambrakis Press SA (Information & Entertainment) - 84,797
- - 3,550 - 3,550 Sarantis SA (Consumer Discretionary) - 13,922
Hong Kong
40,000 - - 73,000 113,000 China Mobile Ltd.+ (Information Technology) 359,431 556,379
100,000 - - 194,000 294,000 CNOOC Ltd. (Energy) 186,562 282,728
116,500 - - 45,000 161,500 MTR Corp+* (Industrial & Commercial) 77,606 278,520
- 12,208 - - 12,208 Bank East of Asia (Finance) - 27,785
- 17,000 - - 17,000 Cathay Pacific Airways Ltd. - 25,721
- 12,000 - - 12,000 CLP Holdings Ltd (Energy) - 50,468
- 1,012 - - 1,012 Esprit Holdings Ltd (Consumer Discretionary) - 1,148
- 4,000 - - 4,000 Hang Lung Development Co. (Real Estate) - 3,462
- 7,200 - - 7,200 Hang Seng Bank Ltd. (Finance) - 84,934
- 6,000 - 10,000 16,000 Henderson Land Development Co. Ltd. (Real Estate) 45,903 73,445
- 27,170 - - 27,170 Hong Kong & China Gas (Energy) - 32,573
- 500 - - 500 Hong Kong & Shanghai Hotel (Information & Entertainment) - 276
- 1,000 - - 1,000 Hong Kong Exchanges and Clearing Ltd. (Finance) - 458
- 19,100 - 35,300 54,400 Hutchison Whampoa Ltd. (Multi-industry) 379,071 584,177
- 3,021 - - 3,021 Hysan Development Co. (Real Estate) - 4,145
- 18,000 - - 18,000 Johnson Electric Holdings Ltd. (Information technology) - 33,812
- 56,000 - - 56,000 Li & Fung Ltd. (Consumer Discretionary) - 105,911
- 13,203 - - 13,203 New World Development Co. (Industrial & Commercial) - 16,337
- 65,815 - - 65,815 Pacific Century CyberWorks Ltd. (Information Technology) - 22,574
- 12,000 - - 12,000 Shangri-La Asia Ltd. (Information & Entertainment) - 11,771
- 15,329 - - 15,329 Sino Land Co. (Real Estate) - 6,879
- 4,000 - - 4,000 South China Morning Post (Information & Entertainment) - 2,552
- 11,000 - 23,000 34,000 Sun Hung Kai Properties Ltd. (Real Estate) 215,284 318,246
- 7,000 - - 7,000 Swire Pacific Ltd. (Multi-industry) - 38,595
- 11,000 - - 11,000 Wharf Holdings Ltd. (Multi-industry) - 25,952
- - 34,000 - 34,000 Convenience Retail Asia Ltd. (Consumer Discretionary) - 7,062
- - 52,000 - 52,000 Henderson Land Development Co. Ltd. (Real Estate) - 93,345
- - 114,000 - 114,000 Tingyi (Caymen Islands) Holding Corp. (Consumer Staples) - 18,272
- - 148,000 - 148,000 Cosco Pacific Ltd. (Industrial & Commercial) - 91,563
- - 208,000 - 208,000 China Everbright Ltd. (Finance) - 201,359
- - 242,000 - 242,000 Greencool Technology Holdings Ltd. (Industrial &
Commercial) - 72,920
- - 340,000 - 340,000 Texwinca Holdings Ltd. (Consumer Discretionary) - 106,809
- - 420,000 - 420,000 China Insurance International Holdings Co. Ltd. (Finance) - 97,474
- - 446,000 - 446,000 China Resources Beijing Land (Real Estate) - 113,802
- - 532,000 - 532,000 Brilliance China Automotive (Industrial & Commercial) - 143,249
- - 704,000 - 704,000 Denway Motors Ltd. (Consumer discretionary) - 209,872
- 23,000 23,000 Cheung Kong (Holdings) Ltd. (Real Estate) 255,834 255,834
- 431,000 431,000 Legend Holdings Ltd. (Information Technology) 342,634 342,634
- 91,000 91,000 Peregrine Investments Holdings Ltd.+(1) (Finance) - -
India
- - - 8,008 8,008 ICICI Ltd. ADR (Finance) 95,295 95,295
1,500 - - - 1,500 Infosys Technologies Ltd. (Information Technology) - 110,250
- - - 1,600 1,600 Reliance Industries Ltd. GDR* (Materials) 26,000 26,000
Ireland
- - - 11,629 11,629 Bank of Ireland (Finance) 112,361 112,361
- - - 59,198 59,198 Bank of Ireland (Finance) 567,778 567,778
- 435 - 53,541 53,976 CRH PLC (Materials) 901,631 908,956
- - 14,000 - 14,000 Datalex PLC (Information Technology) - 60,200
- - - 22,047 22,047 Elan Corp. PLC ADR+ (healthcare) 1,105,657 1,105,657
B-54
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- - 5,100 - 5,100 Grafton Group PLC (Industrial & Commercial)
- 2,600 - - 2,600 Green Property PLC (Real Estate)
- 1,340 - - 1,340 Jefferson Smurfit Group PLC (Finance)
- 154 - - 154 Kerry Group PLC (Consumer Staples)
- - - 4,517 4,517 SmartForce PLC ADR+ (Information Technology)
Israel 0.5% 0.0%
- - 1,800 - 1,800 Card Guard Scientific Survival Ltd (Information
Technology)
1,762 - - 1,106 2,868 Check Point Software Technologies Ltd. (Information
Technology)
Italy 3.5% 3.3%
29,725 - - 20,680 50,405 Alleanza Assicurazioni SpA (Finance)
- 4,992 - 19,710 24,702 Assicurazioni Generali SpA (Finance)
- 962 - - 962 Autogrill SpA
- 14,596 - 272,144 286,740 Banca Intesa SpA (Finance)
- 725 - - 725 Banca Popolare di Milano SCRL (Finance)
- 8,862 - - 8,862 Banco di Roma (Finance)
- 7,898 - - 7,898 Benetton Group SpA (Consumer Discretionary)
- - - 15,560 15,560 Bipop-Carire SpA (Finance)
- 44,988 - - 44,988 ENEL Societa Per Azioni
- 60,283 - 205,097 265,380 ENI-Ente Nazionale Idrocarburi SpA (Energy)
- 1,107 - - 1,107 Fiat SpA (Consumer Discretionary)
- - 7,500 - 7,500 Gabetti Holding SPA (Real Estate)
- 1,043 - - 1,043 Impregilo SpA (Industrial & Commercial)
- 327 - - 327 Italcementi SpA (Industrial & Commercial)
- 2,021 - - 2,021 Italgas SpA (Energy)
- 4,197 - 5,000 9,197 Mediaset SpA (Information & Entertainment)
- 1,276 - - 1,276 Mediobanca SpA (Finance)
- - - 9,690 9,690 Mediolanum SpA (Finance)
- - - 126,379 126,379 Olivetti SpA (Utilities)
- 14,195 - - 14,195 Parmalat Finanzlaria (Finance)
- 10,365 - - 10,365 Pirelli SpA (Consumer Discretionary)
- 1,004 - - 1,004 Rinascente per L'Esercizio SPA (Retail)
- 2,335 - 43,903 46,238 Riunione Adriatica de Sicurta SpA (Finance)
- - 7,000 - 7,000 Saeco International Group SpA (Consumer Discretionary)
46,000 - - 42,575 88,575 Saipem SpA (Energy)
- 280 - - 280 Sai-Soc Assicuratrice Industriale (Finance)
12,150 4,159 - 2,405 18,714 San Paolo-IMI SpA (Finance)
- 2,038 58,000 - 60,038 SNIA SpA (Healthcare)
- - 675 - 675 Tecnodiffusione Italia Spa (Information Technology)
- 659 - - 659 Telecom Italia SpA (Information Technology)
- 13,659 - 79,969 93,628 Telecom Italia SpA (Information Technology)
- 34,554 - 51,510 86,064 TIM SpA (Information technology)
- 14,354 - 199,696 214,050 UniCredito Italiano SpA (Finance)
Japan 7.8% 18.1%
- 500 - - 500 Acom Co. Ltd. (Finance)
- 400 - - 400 Advantest Corp. (Information Technology)
13,000 7,000 - - 20,000 Ajinomoto Co., Inc. (Consumer Discretionary)
- 286 - - 286 Alps Electric Co. Ltd. (Information Technology)
- - 5,000 - 5,000 Amano Corp. (Industrial & Commercial)
- 3,000 - - 3,000 Asahi Bank Ltd. (Finance)
- 4,000 - - 4,000 Asahi Breweries Ltd. (Consumer Staples)
- 12,000 - - 12,000 Asahi Glass Co Ltd. (Industrial & Commercial)
- 5,000 - - 5,000 Asahi Kasei Corp. (Materials)
- 1,000 - - 1,000 The Bank of Yokohama Ltd. (Finance)
- 800 - - 800 Benesse Corp. (Industrial & Commercial)
- 7,000 - - 7,000 Bridgestone Corp. (Consumer Discretionary)
- 4,000 - 23,000 27,000 Canon Inc. (Information Technology)
- - - 8,000 8,000 Capcom Co. Ltd. (Information Technology)
- - 21,000 - 21,000 Central Glass Co. Ltd. (Industrial & Commercial)
- 9 - - 9 Central Japan Railway Co. (Industrial & Commercial)
- - 33,000 - 33,000 Chiyoda Corp. (Industrial & Commercial)
- 2,000 - 9,000 11,000 Chugai Pharmaceutical Co. Ltd. (Healthcare)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- - 5,100 - 5,100 Grafton Group PLC (Industrial & Commercial)
- 2,600 - - 2,600 Green Property PLC (Real Estate)
- 1,340 - - 1,340 Jefferson Smurfit Group PLC (Finance)
- 154 - - 154 Kerry Group PLC (Consumer Staples)
- - - 4,517 4,517 SmartForce PLC ADR+ (Information Technology)
Israel 0.5% 0.1% 0.1%
- - 1,800 - 1,800 Card Guard Scientific Survival Ltd (Information
Technology)
1,762 - - 1,106 2,868 Check Point Software Technologies Ltd. (Information
Technology)
Italy 1.0% 7.4% 5.2%
29,725 - - 20,680 50,405 Alleanza Assicurazioni SpA (Finance)
- 4,992 - 19,710 24,702 Assicurazioni Generali SpA (Finance)
- 962 - - 962 Autogrill SpA
- 14,596 - 272,144 286,740 Banca Intesa SpA (Finance)
- 725 - - 725 Banca Popolare di Milano SCRL (Finance)
- 8,862 - - 8,862 Banco di Roma (Finance)
- 7,898 - - 7,898 Benetton Group SpA (Consumer Discretionary)
- - - 15,560 15,560 Bipop-Carire SpA (Finance)
- 44,988 - - 44,988 ENEL Societa Per Azioni
- 60,283 - 205,097 265,380 ENI-Ente Nazionale Idrocarburi SpA (Energy)
- 1,107 - - 1,107 Fiat SpA (Consumer Discretionary)
- - 7,500 - 7,500 Gabetti Holding SPA (Real Estate)
- 1,043 - - 1,043 Impregilo SpA (Industrial & Commercial)
- 327 - - 327 Italcementi SpA (Industrial & Commercial)
- 2,021 - - 2,021 Italgas SpA (Energy)
- 4,197 - 5,000 9,197 Mediaset SpA (Information & Entertainment)
- 1,276 - - 1,276 Mediobanca SpA (Finance)
- - - 9,690 9,690 Mediolanum SpA (Finance)
- - - 126,379 126,379 Olivetti SpA (Utilities)
- 14,195 - - 14,195 Parmalat Finanzlaria (Finance)
- 10,365 - - 10,365 Pirelli SpA (Consumer Discretionary)
- 1,004 - - 1,004 Rinascente per L'Esercizio SPA (Retail)
- 2,335 - 43,903 46,238 Riunione Adriatica de Sicurta SpA (Finance)
- - 7,000 - 7,000 Saeco International Group SpA (Consumer Discretionary)
46,000 - - 42,575 88,575 Saipem SpA (Energy)
- 280 - - 280 Sai-Soc Assicuratrice Industriale (Finance)
12,150 4,159 - 2,405 18,714 San Paolo-IMI SpA (Finance)
- 2,038 58,000 - 60,038 SNIA SpA (Healthcare)
- - 675 - 675 Tecnodiffusione Italia Spa (Information Technology)
- 659 - - 659 Telecom Italia SpA (Information Technology)
- 13,659 - 79,969 93,628 Telecom Italia SpA (Information Technology)
- 34,554 - 51,510 86,064 TIM SpA (Information technology)
- 14,354 - 199,696 214,050 UniCredito Italiano SpA (Finance)
Japan 13.6% 15.2% 14.8%
- 500 - - 500 Acom Co. Ltd. (Finance)
- 400 - - 400 Advantest Corp. (Information Technology)
13,000 7,000 - - 20,000 Ajinomoto Co., Inc. (Consumer Discretionary)
- 286 - - 286 Alps Electric Co. Ltd. (Information Technology)
- - 5,000 - 5,000 Amano Corp. (Industrial & Commercial)
- 3,000 - - 3,000 Asahi Bank Ltd. (Finance)
- 4,000 - - 4,000 Asahi Breweries Ltd. (Consumer Staples)
- 12,000 - - 12,000 Asahi Glass Co Ltd. (Industrial & Commercial)
- 5,000 - - 5,000 Asahi Kasei Corp. (Materials)
- 1,000 - - 1,000 The Bank of Yokohama Ltd. (Finance)
- 800 - - 800 Benesse Corp. (Industrial & Commercial)
- 7,000 - - 7,000 Bridgestone Corp. (Consumer Discretionary)
- 4,000 - 23,000 27,000 Canon Inc. (Information Technology)
- - - 8,000 8,000 Capcom Co. Ltd. (Information Technology)
- - 21,000 - 21,000 Central Glass Co. Ltd. (Industrial & Commercial)
- 9 - - 9 Central Japan Railway Co. (Industrial & Commercial)
- - 33,000 - 33,000 Chiyoda Corp. (Industrial & Commercial)
- 2,000 - 9,000 11,000 Chugai Pharmaceutical Co. Ltd. (Healthcare)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- - 5,100 - 5,100 Grafton Group PLC (Industrial & Commercial) - - 144,799
- 2,600 - - 2,600 Green Property PLC (Real Estate) - 16,840 -
- 1,340 - - 1,340 Jefferson Smurfit Group PLC (Finance) - 2,497 -
- 154 - - 154 Kerry Group PLC (Consumer Staples) - 1,713 -
- - - 4,517 4,517 SmartForce PLC ADR+ (Information Technology) - - -
Israel
- - 1,800 - 1,800 Card Guard Scientific Survival Ltd (Information
Technology) - - 94,417
1,762 - - 1,106 2,868 Check Point Software Technologies Ltd. (Information
Technology) 110,530 - -
Italy
29,725 - - 20,680 50,405 Alleanza Assicurazioni SpA (Finance) 376,350 - -
- 4,992 - 19,710 24,702 Assicurazioni Generali SpA (Finance) - 161,221 -
- 962 - - 962 Autogrill SpA - 10,840 -
- 14,596 - 272,144 286,740 Banca Intesa SpA (Finance) - 54,780 -
- 725 - - 725 Banca Popolare di Milano SCRL (Finance) - 3,403 -
- 8,862 - - 8,862 Banco di Roma (Finance) - 9,553 -
- 7,898 - - 7,898 Benetton Group SpA (Consumer Discretionary) - 11,843 -
- - - 15,560 15,560 Bipop-Carire SpA (Finance) - - -
- 44,988 - - 44,988 ENEL Societa Per Azioni - 146,889 -
- 60,283 - 205,097 265,380 ENI-Ente Nazionale Idrocarburi SpA (Energy) - 412,913 -
- 1,107 - - 1,107 Fiat SpA (Consumer Discretionary) - 25,537 -
- - 7,500 - 7,500 Gabetti Holding SPA (Real Estate) - - 25,952
- 1,043 - - 1,043 Impregilo SpA (Industrial & Commercial) - 500 -
- 327 - - 327 Italcementi SpA (Industrial & Commercial) - 2,704 -
- 2,021 - - 2,021 Italgas SpA (Energy) - 18,756 -
- 4,197 - 5,000 9,197 Mediaset SpA (Information & Entertainment) - 48,931 -
- 1,276 - - 1,276 Mediobanca SpA (Finance) - 14,072 -
- - - 9,690 9,690 Mediolanum SpA (Finance) - - -
- - - 126,379 126,379 Olivetti SpA (Utilities) - - -
- 14,195 - - 14,195 Parmalat Finanzlaria (Finance) - 20,151 -
- 10,365 - - 10,365 Pirelli SpA (Consumer Discretionary) - 33,843 -
- 1,004 - - 1,004 Rinascente per L'Esercizio SPA (Retail) - 4,285 -
- 2,335 - 43,903 46,238 Riunione Adriatica de Sicurta SpA (Finance) - 30,765 -
- - 7,000 - 7,000 Saeco International Group SpA (Consumer Discretionary) - - 34,159
46,000 - - 42,575 88,575 Saipem SpA (Energy) 302,020 - -
- 280 - - 280 Sai-Soc Assicuratrice Industriale (Finance) - 4,184 -
12,150 4,159 - 2,405 18,714 San Paolo-IMI SpA (Finance) 169,786 58,119 -
- 2,038 58,000 - 60,038 SNIA SpA (Healthcare) - 4,068 115,786
- - 675 - 675 Tecnodiffusione Italia Spa (Information Technology) - - 22,968
- 659 - - 659 Telecom Italia SpA (Information Technology) - 4,110 -
- 13,659 - 79,969 93,628 Telecom Italia SpA (Information Technology) - 151,850 -
- 34,554 - 51,510 86,064 TIM SpA (Information technology) - 237,600 -
- 14,354 - 199,696 214,050 UniCredito Italiano SpA (Finance) - 67,753 -
Japan
- 500 - - 500 Acom Co. Ltd. (Finance) - 39,979 -
- 400 - - 400 Advantest Corp. (Information Technology) - 45,871 -
13,000 7,000 - - 20,000 Ajinomoto Co., Inc. (Consumer Discretionary) 132,562 71,379 -
- 286 - - 286 Alps Electric Co. Ltd. (Information Technology) - 3,407 -
- - 5,000 - 5,000 Amano Corp. (Industrial & Commercial) - - 40,424
- 3,000 - - 3,000 Asahi Bank Ltd. (Finance) - 8,352 -
- 4,000 - - 4,000 Asahi Breweries Ltd. (Consumer Staples) - 44,802 -
- 12,000 - - 12,000 Asahi Glass Co Ltd. (Industrial & Commercial) - 102,942 -
- 5,000 - - 5,000 Asahi Kasei Corp. (Materials) - 25,735 -
- 1,000 - - 1,000 The Bank of Yokohama Ltd. (Finance) - 3,763 -
- 800 - - 800 Benesse Corp. (Industrial & Commercial) - 34,314 -
- 7,000 - - 7,000 Bridgestone Corp. (Consumer Discretionary) - 80,613 -
- 4,000 - 23,000 27,000 Canon Inc. (Information Technology) - 157,002 -
- - - 8,000 8,000 Capcom Co. Ltd. (Information Technology) - - -
- - 21,000 - 21,000 Central Glass Co. Ltd. (Industrial & Commercial) - - 111,658
- 9 - - 9 Central Japan Railway Co. (Industrial & Commercial) - 56,594 -
- - 33,000 - 33,000 Chiyoda Corp. (Industrial & Commercial) - - 80,921
- 2,000 - 9,000 11,000 Chugai Pharmaceutical Co. Ltd. (Healthcare) - 29,701 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- - 5,100 - 5,100 Grafton Group PLC (Industrial & Commercial) - 144,799
- 2,600 - - 2,600 Green Property PLC (Real Estate) - 16,840
- 1,340 - - 1,340 Jefferson Smurfit Group PLC (Finance) - 2,497
- 154 - - 154 Kerry Group PLC (Consumer Staples) - 1,713
- - - 4,517 4,517 SmartForce PLC ADR+ (Information Technology) 162,567 162,567
Israel
- - 1,800 - 1,800 Card Guard Scientific Survival Ltd (Information
Technology) - 94,417
1,762 - - 1,106 2,868 Check Point Software Technologies Ltd. (Information
Technology) 69,379 179,909
Italy
29,725 - - 20,680 50,405 Alleanza Assicurazioni SpA (Finance) 261,831 638,181
- 4,992 - 19,710 24,702 Assicurazioni Generali SpA (Finance) 636,552 797,773
- 962 - - 962 Autogrill SpA - 10,840
- 14,596 - 272,144 286,740 Banca Intesa SpA (Finance) 1,021,375 1,076,155
- 725 - - 725 Banca Popolare di Milano SCRL (Finance) - 3,403
- 8,862 - - 8,862 Banco di Roma (Finance) - 9,553
- 7,898 - - 7,898 Benetton Group SpA (Consumer Discretionary) - 11,843
- - - 15,560 15,560 Bipop-Carire SpA (Finance) 78,830 78,830
- 44,988 - - 44,988 ENEL Societa Per Azioni - 146,889
- 60,283 - 205,097 265,380 ENI-Ente Nazionale Idrocarburi SpA (Energy) 1,404,827 1,817,740
- 1,107 - - 1,107 Fiat SpA (Consumer Discretionary) - 25,537
- - 7,500 - 7,500 Gabetti Holding SPA (Real Estate) - 25,952
- 1,043 - - 1,043 Impregilo SpA (Industrial & Commercial) - 500
- 327 - - 327 Italcementi SpA (Industrial & Commercial) - 2,704
- 2,021 - - 2,021 Italgas SpA (Energy) - 18,756
- 4,197 - 5,000 9,197 Mediaset SpA (Information & Entertainment) 58,292 107,223
- 1,276 - - 1,276 Mediobanca SpA (Finance) - 14,072
- - - 9,690 9,690 Mediolanum SpA (Finance) 124,749 124,749
- - - 126,379 126,379 Olivetti SpA (Utilities) 283,128 283,128
- 14,195 - - 14,195 Parmalat Finanzlaria (Finance) - 20,151
- 10,365 - - 10,365 Pirelli SpA (Consumer Discretionary) - 33,843
- 1,004 - - 1,004 Rinascente per L'Esercizio SPA (Retail) - 4,285
- 2,335 - 43,903 46,238 Riunione Adriatica de Sicurta SpA (Finance) 578,451 609,216
- - 7,000 - 7,000 Saeco International Group SpA (Consumer Discretionary) - 34,159
46,000 - - 42,575 88,575 Saipem SpA (Energy) 279,533 581,553
- 280 - - 280 Sai-Soc Assicuratrice Industriale (Finance) - 4,184
12,150 4,159 - 2,405 18,714 San Paolo-IMI SpA (Finance) 33,608 261,513
- 2,038 58,000 - 60,038 SNIA SpA (Healthcare) - 119,854
- - 675 - 675 Tecnodiffusione Italia Spa (Information Technology) - 22,968
- 659 - - 659 Telecom Italia SpA (Information Technology) - 4,110
- 13,659 - 79,969 93,628 Telecom Italia SpA (Information Technology) 889,035 1,040,885
- 34,554 - 51,510 86,064 TIM SpA (Information technology) 354,192 591,792
- 14,354 - 199,696 214,050 UniCredito Italiano SpA (Finance) 942,599 1,010,352
Japan
- 500 - - 500 Acom Co. Ltd. (Finance) - 39,979
- 400 - - 400 Advantest Corp. (Information Technology) - 45,871
13,000 7,000 - - 20,000 Ajinomoto Co., Inc. (Consumer Discretionary) - 203,941
- 286 - - 286 Alps Electric Co. Ltd. (Information Technology) - 3,407
- - 5,000 - 5,000 Amano Corp. (Industrial & Commercial) - 40,424
- 3,000 - - 3,000 Asahi Bank Ltd. (Finance) - 8,352
- 4,000 - - 4,000 Asahi Breweries Ltd. (Consumer Staples) - 44,802
- 12,000 - - 12,000 Asahi Glass Co Ltd. (Industrial & Commercial) - 102,942
- 5,000 - - 5,000 Asahi Kasei Corp. (Materials) - 25,735
- 1,000 - - 1,000 The Bank of Yokohama Ltd. (Finance) - 3,763
- 800 - - 800 Benesse Corp. (Industrial & Commercial) - 34,314
- 7,000 - - 7,000 Bridgestone Corp. (Consumer Discretionary) - 80,613
- 4,000 - 23,000 27,000 Canon Inc. (Information Technology) 902,764 1,059,766
- - - 8,000 8,000 Capcom Co. Ltd. (Information Technology) 247,967 247,967
- - 21,000 - 21,000 Central Glass Co. Ltd. (Industrial & Commercial) - 111,658
- 9 - - 9 Central Japan Railway Co. (Industrial & Commercial) - 56,594
- - 33,000 - 33,000 Chiyoda Corp. (Industrial & Commercial) - 80,921
- 2,000 - 9,000 11,000 Chugai Pharmaceutical Co. Ltd. (Healthcare) 133,654 163,355
B-55
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 3,000 - - 3,000 Chuo Mitsui Trust & Banking Co. Ltd. (Finance)
- 300 - - 300 Credit Saison Co. Ltd. (Finance)
- 7,000 - - 7,000 Dai Nippon Printing Co. Ltd. (Information &
Entertainment)
- 2,000 - - 2,000 Daiei, Inc. (Real Estate)
- 1,000 - - 1,000 Dainippon Ink & Chemical (Materials)
- 2,000 - - 2,000 Daiwa Bank Ltd. (Finance)
- 5,000 - - 5,000 Daiwa House Industry Co. Ltd. (Industrial & Commercial)
- 5,000 - - 5,000 Daiwa Securities Group, Inc. (Finance)
- 1,000 - - 1,000 Denki Kagaku Kogyo K K (Materials)
- 5,000 - - 5,000 Denso Corp. (Consumer Discretionary)
- - 500 - 500 Disco Corp. (Industrial & Commercial)
- 18 - - 18 East Japan Railway Co. (Industrial & Commercial)
- 1,000 - 6,000 7,000 Eisai Co. Ltd. (Healthcare)
- 2,300 - 3,000 5,300 Fanuc Ltd. (Information Technology)
800 - - 3,400 4,200 Fast Retailing Co. Ltd. (Consumer Discretionary0
- 5,000 - - 5,000 Fuji Photo Film Co. Ltd. (Information & Entertainment)
- - - 16 16 Fuji Television Network, Inc. (Information &
Entertainment)
- 9,000 - 8,000 17,000 Fujitsu Ltd. (Information Technology)
- 1,000 - - 1,000 Furukawa Electric Co. Ltd. (Information Technology)
15,000 1,000 - - 16,000 Furukawa Electric Co. Ltd. (Information Technology)
- - 70 - 70 Goodwill Group, Inc. (Industrial & Commercial)
- 13,000 - 7,000 20,000 Hitachi Ltd. (Information Technology)
- - 7,620 - 7,620 Hokuto Corp. (Materials)
- 3,000 - - 3,000 Honda Motor Co. Ltd. (Consumer Discretionary)
1,000 - - - 1,000 Hoya Corp. (Information & Entertainment)
- 1,000 - - 1,000 Ishikawajima-Harima Heavy Industries Co. Ltd.
(Industrial & Commercial)
- 1,000 - - 1,000 Itochu Corp. (Industrial & Commercial)
- 2,000 - 2,000 4,000 Ito-Yokado Co. Ltd. (Consumer Discretionary)
- 6,000 - - 6,000 Japan Airlines Co. Ltd. (Industrial & Commercial)
- - 7,000 - 7,000 Japan Airport Terminal (Industrial & Commercial)
- 3,000 - - 3,000 Japan Energy Corp. (Energy)
- 4 - - 4 Japan Tobacco Inc. (Consumer Staples)
- 1,000 - - 1,000 Joyo Bank Ltd. (Finance)
- 4,000 - - 4,000 Jusco Co. Ltd. (Consumer Discretionary)
- 19,000 - - 19,000 Kajima Corp. (Industrial & Commercial)
- 12,400 - - 12,400 Kansai Electric Power Co. (Energy)
7,000 7,000 - 4,000 18,000 Kao Corp. (Consumer Discretionary)
- 4,000 - - 4,000 Kawasaki Heavy Industries Ltd. (Industrial & Commercial)
- 10,000 - - 10,000 Kawasaki Steel Corp. (Materials)
- 1,000 - - 1,000 Keihin Electric Express Railway (Industrial &
Commercial)
- 23,690 - - 23,690 Kinki Nippon Railway Co. Ltd. (Industrial & Commercial)
- 16,000 - - 16,000 Kirin Brewery Co. Ltd. (Consumer Staples)
- - - 5,000 5,000 Kokuyo Co. Ltd. (Consumer Discretionary)
- 8,000 - - 8,000 Komatsu Ltd. (Industrial & Commercial)
- - - 5,100 5,100 Konami Co. (Information Technology)
- 3,000 - - 3,000 Kubota Corp. (Industrial & Commercial)
- 800 - 3,500 4,300 Kyocera Corp. (Information Technology)
- 1,000 - - 1,000 Kyowa Hakko Kogyo Co. Ltd. (Healthcare)
- 1,000 - - 1,000 Marubeni Corp. (Industrial & Commercial)
- - 9,600 - 9,600 Marubun Corp. (Information Technology)
- 2,000 - 14,000 16,000 Marui Co. Ltd. (Consumer Discretionary)
- - - 2,200 2,200 Matsushita Communication Industrial Co. (Information
Technology)
- 15,000 - 21,000 36,000 Matsushita Electric Industrial Co. Ltd. (Information
Technology)
- 8,000 - - 8,000 Mitsubishi Chemical Corp. (Materials)
- 3,000 - - 3,000 Mitsubishi Corp. (Industrial & Commercial)
- 21,000 - - 21,000 Mitsubishi Electric Corp. (Information technology)
- 8,000 - - 8,000 Mitsubishi Estate Co. Ltd. (Real Estate)
- - 30,000 - 30,000 Mitsubishi Gas Chemical Co. (Materials)
- 31,000 - - 31,000 Mitsubishi Heavy Industries Ltd. (Industrial &
Commercial)
- 1,000 - - 1,000 Mitsubishi Materials Corp. (Materials)
- 1,000 - - 1,000 Mitsubishi Rayon Co. Ltd. (Consumer Discretionary)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 3,000 - - 3,000 Chuo Mitsui Trust & Banking Co. Ltd. (Finance)
- 300 - - 300 Credit Saison Co. Ltd. (Finance)
- 7,000 - - 7,000 Dai Nippon Printing Co. Ltd. (Information &
Entertainment)
- 2,000 - - 2,000 Daiei, Inc. (Real Estate)
- 1,000 - - 1,000 Dainippon Ink & Chemical (Materials)
- 2,000 - - 2,000 Daiwa Bank Ltd. (Finance)
- 5,000 - - 5,000 Daiwa House Industry Co. Ltd. (Industrial & Commercial)
- 5,000 - - 5,000 Daiwa Securities Group, Inc. (Finance)
- 1,000 - - 1,000 Denki Kagaku Kogyo K K (Materials)
- 5,000 - - 5,000 Denso Corp. (Consumer Discretionary)
- - 500 - 500 Disco Corp. (Industrial & Commercial)
- 18 - - 18 East Japan Railway Co. (Industrial & Commercial)
- 1,000 - 6,000 7,000 Eisai Co. Ltd. (Healthcare)
- 2,300 - 3,000 5,300 Fanuc Ltd. (Information Technology)
800 - - 3,400 4,200 Fast Retailing Co. Ltd. (Consumer Discretionary0
- 5,000 - - 5,000 Fuji Photo Film Co. Ltd. (Information & Entertainment)
- - - 16 16 Fuji Television Network, Inc. (Information &
Entertainment)
- 9,000 - 8,000 17,000 Fujitsu Ltd. (Information Technology)
- 1,000 - - 1,000 Furukawa Electric Co. Ltd. (Information Technology)
15,000 1,000 - - 16,000 Furukawa Electric Co. Ltd. (Information Technology)
- - 70 - 70 Goodwill Group, Inc. (Industrial & Commercial)
- 13,000 - 7,000 20,000 Hitachi Ltd. (Information Technology)
- - 7,620 - 7,620 Hokuto Corp. (Materials)
- 3,000 - - 3,000 Honda Motor Co. Ltd. (Consumer Discretionary)
1,000 - - - 1,000 Hoya Corp. (Information & Entertainment)
- 1,000 - - 1,000 Ishikawajima-Harima Heavy Industries Co. Ltd.
(Industrial & Commercial)
- 1,000 - - 1,000 Itochu Corp. (Industrial & Commercial)
- 2,000 - 2,000 4,000 Ito-Yokado Co. Ltd. (Consumer Discretionary)
- 6,000 - - 6,000 Japan Airlines Co. Ltd. (Industrial & Commercial)
- - 7,000 - 7,000 Japan Airport Terminal (Industrial & Commercial)
- 3,000 - - 3,000 Japan Energy Corp. (Energy)
- 4 - - 4 Japan Tobacco Inc. (Consumer Staples)
- 1,000 - - 1,000 Joyo Bank Ltd. (Finance)
- 4,000 - - 4,000 Jusco Co. Ltd. (Consumer Discretionary)
- 19,000 - - 19,000 Kajima Corp. (Industrial & Commercial)
- 12,400 - - 12,400 Kansai Electric Power Co. (Energy)
7,000 7,000 - 4,000 18,000 Kao Corp. (Consumer Discretionary)
- 4,000 - - 4,000 Kawasaki Heavy Industries Ltd. (Industrial & Commercial)
- 10,000 - - 10,000 Kawasaki Steel Corp. (Materials)
- 1,000 - - 1,000 Keihin Electric Express Railway (Industrial &
Commercial)
- 23,690 - - 23,690 Kinki Nippon Railway Co. Ltd. (Industrial & Commercial)
- 16,000 - - 16,000 Kirin Brewery Co. Ltd. (Consumer Staples)
- - - 5,000 5,000 Kokuyo Co. Ltd. (Consumer Discretionary)
- 8,000 - - 8,000 Komatsu Ltd. (Industrial & Commercial)
- - - 5,100 5,100 Konami Co. (Information Technology)
- 3,000 - - 3,000 Kubota Corp. (Industrial & Commercial)
- 800 - 3,500 4,300 Kyocera Corp. (Information Technology)
- 1,000 - - 1,000 Kyowa Hakko Kogyo Co. Ltd. (Healthcare)
- 1,000 - - 1,000 Marubeni Corp. (Industrial & Commercial)
- - 9,600 - 9,600 Marubun Corp. (Information Technology)
- 2,000 - 14,000 16,000 Marui Co. Ltd. (Consumer Discretionary)
- - - 2,200 2,200 Matsushita Communication Industrial Co. (Information
Technology)
- 15,000 - 21,000 36,000 Matsushita Electric Industrial Co. Ltd. (Information
Technology)
- 8,000 - - 8,000 Mitsubishi Chemical Corp. (Materials)
- 3,000 - - 3,000 Mitsubishi Corp. (Industrial & Commercial)
- 21,000 - - 21,000 Mitsubishi Electric Corp. (Information technology)
- 8,000 - - 8,000 Mitsubishi Estate Co. Ltd. (Real Estate)
- - 30,000 - 30,000 Mitsubishi Gas Chemical Co. (Materials)
- 31,000 - - 31,000 Mitsubishi Heavy Industries Ltd. (Industrial &
Commercial)
- 1,000 - - 1,000 Mitsubishi Materials Corp. (Materials)
- 1,000 - - 1,000 Mitsubishi Rayon Co. Ltd. (Consumer Discretionary)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 3,000 - - 3,000 Chuo Mitsui Trust & Banking Co. Ltd. (Finance) - 5,900 -
- 300 - - 300 Credit Saison Co. Ltd. (Finance) - 6,349 -
- 7,000 - - 7,000 Dai Nippon Printing Co. Ltd. (Information &
Entertainment) - 95,116 -
- 2,000 - - 2,000 Daiei, Inc. (Real Estate) - 4,678 -
- 1,000 - - 1,000 Dainippon Ink & Chemical (Materials) - 2,913 -
- 2,000 - - 2,000 Daiwa Bank Ltd. (Finance) - 2,590 -
- 5,000 - - 5,000 Daiwa House Industry Co. Ltd. (Industrial & Commercial) - 40,222 -
- 5,000 - - 5,000 Daiwa Securities Group, Inc. (Finance) - 56,650 -
- 1,000 - - 1,000 Denki Kagaku Kogyo K K (Materials) - 3,698 -
- 5,000 - - 5,000 Denso Corp. (Consumer Discretionary) - 98,126 -
- - 500 - 500 Disco Corp. (Industrial & Commercial) - - 42,164
- 18 - - 18 East Japan Railway Co. (Industrial & Commercial) - 100,223 -
- 1,000 - 6,000 7,000 Eisai Co. Ltd. (Healthcare) - 25,655 -
- 2,300 - 3,000 5,300 Fanuc Ltd. (Information Technology) - 128,621 -
800 - - 3,400 4,200 Fast Retailing Co. Ltd. (Consumer Discretionary0 172,670 - -
- 5,000 - - 5,000 Fuji Photo Film Co. Ltd. (Information & Entertainment) - 201,513 -
- - - 16 16 Fuji Television Network, Inc. (Information &
Entertainment) - - -
- 9,000 - 8,000 17,000 Fujitsu Ltd. (Information Technology) - 123,821 -
- 1,000 - - 1,000 Furukawa Electric Co. Ltd. (Information Technology) - 4,338 -
15,000 1,000 - - 16,000 Furukawa Electric Co. Ltd. (Information Technology) 179,055 11,937 -
- - 70 - 70 Goodwill Group, Inc. (Industrial & Commercial) - - 232,266
- 13,000 - 7,000 20,000 Hitachi Ltd. (Information Technology) - 126,039 -
- - 7,620 - 7,620 Hokuto Corp. (Materials) - - 278,739
- 3,000 - - 3,000 Honda Motor Co. Ltd. (Consumer Discretionary) - 120,665 -
1,000 - - - 1,000 Hoya Corp. (Information & Entertainment) 65,553 - -
- 1,000 - - 1,000 Ishikawajima-Harima Heavy Industries Co. Ltd.
(Industrial & Commercial) - 2,485 -
- 1,000 - - 1,000 Itochu Corp. (Industrial & Commercial) - 4,055 -
- 2,000 - 2,000 4,000 Ito-Yokado Co. Ltd. (Consumer Discretionary) - 111,520 -
- 6,000 - - 6,000 Japan Airlines Co. Ltd. (Industrial & Commercial) - 23,793 -
- - 7,000 - 7,000 Japan Airport Terminal (Industrial & Commercial) - - 77,498
- 3,000 - - 3,000 Japan Energy Corp. (Energy) - 6,410 -
- 4 - - 4 Japan Tobacco Inc. (Consumer Staples) - 26,707 -
- 1,000 - - 1,000 Joyo Bank Ltd. (Finance) - 3,091 -
- 4,000 - - 4,000 Jusco Co. Ltd. (Consumer Discretionary) - 100,028 -
- 19,000 - - 19,000 Kajima Corp. (Industrial & Commercial) - 65,504 -
- 12,400 - - 12,400 Kansai Electric Power Co. (Energy) - 195,586 -
7,000 7,000 - 4,000 18,000 Kao Corp. (Consumer Discretionary) 177,882 177,882 -
- 4,000 - - 4,000 Kawasaki Heavy Industries Ltd. (Industrial & Commercial) - 6,571 -
- 10,000 - - 10,000 Kawasaki Steel Corp. (Materials) - 12,463 -
- 1,000 - - 1,000 Keihin Electric Express Railway (Industrial &
Commercial) - 4,200 -
- 23,690 - - 23,690 Kinki Nippon Railway Co. Ltd. (Industrial & Commercial) - 94,327 -
- 16,000 - - 16,000 Kirin Brewery Co. Ltd. (Consumer Staples) - 153,959 -
- - - 5,000 5,000 Kokuyo Co. Ltd. (Consumer Discretionary) - - -
- 8,000 - - 8,000 Komatsu Ltd. (Industrial & Commercial) - 45,320 -
- - - 5,100 5,100 Konami Co. (Information Technology) - - -
- 3,000 - - 3,000 Kubota Corp. (Industrial & Commercial) - 10,925 -
- 800 - 3,500 4,300 Kyocera Corp. (Information Technology) - 76,462 -
- 1,000 - - 1,000 Kyowa Hakko Kogyo Co. Ltd. (Healthcare) - 7,203 -
- 1,000 - - 1,000 Marubeni Corp. (Industrial & Commercial) - 2,088 -
- - 9,600 - 9,600 Marubun Corp. (Information Technology) - - 96,338
- 2,000 - 14,000 16,000 Marui Co. Ltd. (Consumer Discretionary) - 27,014 -
- - - 2,200 2,200 Matsushita Communication Industrial Co. (Information
Technology) - - -
- 15,000 - 21,000 36,000 Matsushita Electric Industrial Co. Ltd. (Information
Technology) - 250,071 -
- 8,000 - - 8,000 Mitsubishi Chemical Corp. (Materials) - 26,221 -
- 3,000 - - 3,000 Mitsubishi Corp. (Industrial & Commercial) - 22,579 -
- 21,000 - - 21,000 Mitsubishi Electric Corp. (Information technology) - 125,764 -
- 8,000 - - 8,000 Mitsubishi Estate Co. Ltd. (Real Estate) - 80,864 -
- - 30,000 - 30,000 Mitsubishi Gas Chemical Co. (Materials) - - 96,872
- 31,000 - - 31,000 Mitsubishi Heavy Industries Ltd. (Industrial &
Commercial) - 126,694 -
- 1,000 - - 1,000 Mitsubishi Materials Corp. (Materials) - 2,671 -
- 1,000 - - 1,000 Mitsubishi Rayon Co. Ltd. (Consumer Discretionary) - 3,294 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 3,000 - - 3,000 Chuo Mitsui Trust & Banking Co. Ltd. (Finance) - 5,900
- 300 - - 300 Credit Saison Co. Ltd. (Finance) - 6,349
- 7,000 - - 7,000 Dai Nippon Printing Co. Ltd. (Information &
Entertainment) - 95,116
- 2,000 - - 2,000 Daiei, Inc. (Real Estate) - 4,678
- 1,000 - - 1,000 Dainippon Ink & Chemical (Materials) - 2,913
- 2,000 - - 2,000 Daiwa Bank Ltd. (Finance) - 2,590
- 5,000 - - 5,000 Daiwa House Industry Co. Ltd. (Industrial & Commercial) - 40,222
- 5,000 - - 5,000 Daiwa Securities Group, Inc. (Finance) - 56,650
- 1,000 - - 1,000 Denki Kagaku Kogyo K K (Materials) - 3,698
- 5,000 - - 5,000 Denso Corp. (Consumer Discretionary) - 98,126
- - 500 - 500 Disco Corp. (Industrial & Commercial) - 42,164
- 18 - - 18 East Japan Railway Co. (Industrial & Commercial) - 100,223
- 1,000 - 6,000 7,000 Eisai Co. Ltd. (Healthcare) 153,927 179,582
- 2,300 - 3,000 5,300 Fanuc Ltd. (Information Technology) 167,766 296,387
800 - - 3,400 4,200 Fast Retailing Co. Ltd. (Consumer Discretionary0 733,849 906,519
- 5,000 - - 5,000 Fuji Photo Film Co. Ltd. (Information & Entertainment) - 201,513
- - - 16 16 Fuji Television Network, Inc. (Information &
Entertainment) 116,020 116,020
- 9,000 - 8,000 17,000 Fujitsu Ltd. (Information Technology) 110,064 233,885
- 1,000 - - 1,000 Furukawa Electric Co. Ltd. (Information Technology) - 4,338
15,000 1,000 - - 16,000 Furukawa Electric Co. Ltd. (Information Technology) - 190,992
- - 70 - 70 Goodwill Group, Inc. (Industrial & Commercial) - 232,266
- 13,000 - 7,000 20,000 Hitachi Ltd. (Information Technology) 67,867 193,906
- - 7,620 - 7,620 Hokuto Corp. (Materials) - 278,739
- 3,000 - - 3,000 Honda Motor Co. Ltd. (Consumer Discretionary) - 120,665
1,000 - - - 1,000 Hoya Corp. (Information & Entertainment) - 65,553
- 1,000 - - 1,000 Ishikawajima-Harima Heavy Industries Co. Ltd.
(Industrial & Commercial) - 2,485
- 1,000 - - 1,000 Itochu Corp. (Industrial & Commercial) - 4,055
- 2,000 - 2,000 4,000 Ito-Yokado Co. Ltd. (Consumer Discretionary) 111,520 223,040
- 6,000 - - 6,000 Japan Airlines Co. Ltd. (Industrial & Commercial) - 23,793
- - 7,000 - 7,000 Japan Airport Terminal (Industrial & Commercial) - 77,498
- 3,000 - - 3,000 Japan Energy Corp. (Energy) - 6,410
- 4 - - 4 Japan Tobacco Inc. (Consumer Staples) - 26,707
- 1,000 - - 1,000 Joyo Bank Ltd. (Finance) - 3,091
- 4,000 - - 4,000 Jusco Co. Ltd. (Consumer Discretionary) - 100,028
- 19,000 - - 19,000 Kajima Corp. (Industrial & Commercial) - 65,504
- 12,400 - - 12,400 Kansai Electric Power Co. (Energy) - 195,586
7,000 7,000 - 4,000 18,000 Kao Corp. (Consumer Discretionary) 101,647 457,411
- 4,000 - - 4,000 Kawasaki Heavy Industries Ltd. (Industrial & Commercial) - 6,571
- 10,000 - - 10,000 Kawasaki Steel Corp. (Materials) - 12,463
- 1,000 - - 1,000 Keihin Electric Express Railway (Industrial &
Commercial) - 4,200
- 23,690 - - 23,690 Kinki Nippon Railway Co. Ltd. (Industrial & Commercial) - 94,327
- 16,000 - - 16,000 Kirin Brewery Co. Ltd. (Consumer Staples) - 153,959
- - - 5,000 5,000 Kokuyo Co. Ltd. (Consumer Discretionary) 62,720 62,720
- 8,000 - - 8,000 Komatsu Ltd. (Industrial & Commercial) - 45,320
- - - 5,100 5,100 Konami Co. (Information Technology) 244,754 244,754
- 3,000 - - 3,000 Kubota Corp. (Industrial & Commercial) - 10,925
- 800 - 3,500 4,300 Kyocera Corp. (Information Technology) 334,520 410,982
- 1,000 - - 1,000 Kyowa Hakko Kogyo Co. Ltd. (Healthcare) - 7,203
- 1,000 - - 1,000 Marubeni Corp. (Industrial & Commercial) - 2,088
- - 9,600 - 9,600 Marubun Corp. (Information Technology) - 96,338
- 2,000 - 14,000 16,000 Marui Co. Ltd. (Consumer Discretionary) 189,099 216,113
- - - 2,200 2,200 Matsushita Communication Industrial Co. (Information
Technology) 121,070 121,070
- 15,000 - 21,000 36,000 Matsushita Electric Industrial Co. Ltd. (Information
Technology) 350,099 600,170
- 8,000 - - 8,000 Mitsubishi Chemical Corp. (Materials) - 26,221
- 3,000 - - 3,000 Mitsubishi Corp. (Industrial & Commercial) - 22,579
- 21,000 - - 21,000 Mitsubishi Electric Corp. (Information technology) - 125,764
- 8,000 - - 8,000 Mitsubishi Estate Co. Ltd. (Real Estate) - 80,864
- - 30,000 - 30,000 Mitsubishi Gas Chemical Co. (Materials) - 96,872
- 31,000 - - 31,000 Mitsubishi Heavy Industries Ltd. (Industrial &
Commercial) - 126,694
- 1,000 - - 1,000 Mitsubishi Materials Corp. (Materials) - 2,671
- 1,000 - - 1,000 Mitsubishi Rayon Co. Ltd. (Consumer Discretionary) - 3,294
B-56
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 8 - - 8 Mitsubishi Tokyo Finance Group, Inc. (Finance)
- 4,000 - - 4,000 Mitsui & Co. Ltd. (Industrial & Commercial)
- 1,800 - - 1,800 Mitsui Engineering & Shipbuilding (Industrial &
Commercial)
- 5,000 - 26,000 31,000 Mitsui Fudosan Co. Ltd. (Real Estate)
- 1,000 - - 1,000 Mitsui Marine & Fire Insurance (Finance)
- 1,000 - - 1,000 Mitsui Mining & Smelting Co. Ltd. (Materials)
- 1,000 - - 1,000 Mitsukoshi Ltd. (Consumer Discretionary)
- - - 82 82 Mizuho Holdings, Inc. (Finance)
1,200 700 - 5,300 7,200 Murata Manufacturing Co. Ltd. (Information Technology)
- 8,000 - 30,300 38,300 NEC Corp. (Information Technology)
- 300 - - 300 Nichiei Co. Ltd. Kyoto (Finance)
- 300 - - 300 Niece Corp. (Industrial & Commercial)
- 1,000 - - 1,000 Nikon Corp. (Information & Entertainment)
- 1,200 - 1,900 3,100 Nintendo Co. Ltd. (Information & Entertainment)
- 12,000 - - 12,000 Nippon Express Co. Ltd. (Industrial & Commercial)
- 23,000 - - 23,000 Nippon Mitsubishi Oil Corp. (Energy)
- 39,000 - - 39,000 Nippon Steel Corp. (Materials)
- 63 - 41 104 Nippon Telegraph & Telephone Corp. (Utilities)
- - 4,000 - 4,000 Nippon Thompson Co. Ltd. (Industrial & Commercial)
- 1 - - 1 Nippon Unipac Holding (Materials)
- 3,000 - - 3,000 Nippon Yusen Kabushiki Kaisha (Industrial & Commercial)
- 17,000 - 108,000 125,000 Nissan Motor Co. Ltd. (Consumer Discretionary)
- - 4,500 - 4,500 Nissin Co. Ltd. (Finance)
- 100 - - 100 Nissin Food Products Co. Ltd. (Consumer Staples)
- 8,000 - 20,000 28,000 Nomura Securities Co. Ltd. (Finance)
- 1,000 - - 1,000 NSK Ltd. (Materials)
9 - - 88 97 NTT Docomo, Inc. (Information Technology)
- 3,000 - - 3,000 Obayashi Corp. (Industrial & Commercial)
- 8,000 - - 8,000 OJI Paper Co. Ltd. (Materials)
- 1,000 - - 1,000 Omron Corp. (Information Technology)
- - 8,000 - 8,000 Onward Kashiyama Co. Ltd. (Consumer Discretionary)
- 400 - - 400 Oriental Land Co. Ltd. (Real Estate)
- 200 - - 200 Orix Corp. (Finance)
- 24,000 - - 24,000 Osaka Gas Co. Ltd. (Utilities)
- 1,800 - - 1,800 Penta-Ocean Construction (Industrial & Commercial)
7,000 - - - 7,000 Pioneer Corp. (Information Technology0
- 400 - - 400 Promise Co. Ltd. (Finance)
- - 6 - 6 Recrm Research Co. Ltd. (Real Estate)
- - 3,300 - 3,300 Ryohin Keikaku Co. Ltd. (Consumer Discretionary)
- 3,000 - 8,000 11,000 Sankyo Co. Ltd. (Healthcare)
- 19,000 - - 19,000 Sanyo Electric Co. Ltd. (Information Technology)
- - 2,300 - 2,300 Sanyo Shinpan Finance Co. Ltd. (Finance)
- - 1,700 - 1,700 Sazaby, Inc. (Consumer Discretionary)
- 1,000 - - 1,000 Sekisui Chemical Co. Ltd. (Materials)
- 8,000 - - 8,000 Sekisui House Ltd. (Consumer Discretionary)
- - - 4,000 4,000 Seven-Eleven Japan Co. Ltd. (Consumer Staples)
- 8,000 - - 8,000 Sharp Corp. (Information technology)
- 1,000 74,000 - 75,000 Shimizu Corp. (Industrial & Commercial)
- - - 6,000 6,000 Shin-Etsu Chemical Co. Ltd. (Materials)
- - 14,000 - 14,000 Shinko Securities Co. Ltd. (Finance)
- 1,000 - - 1,000 Shionogi & Co. Ltd. (Healthcare)
- 2,000 - 8,000 10,000 Shiseido Co. Ltd. (Consumer Discretionary)
- 1,000 - - 1,000 Shizuoka Bank Ltd. (Finance)
- 1,000 - - 1,000 Showa Denko K K (Materials)
- 2,000 - - 2,000 Showa Shell Sekiyu KK (Energy)
- 700 - - 700 SMC Corp. (Industrial & Commercial)
- 2,500 - - 2,500 Softbank Corp. (Finance)
- 5,400 - 25,200 30,600 Sony Corp. (Information Technology)
- 9,000 - - 9,000 Sumitomo Chemical Co. Ltd. (Materials)
- 3,000 - 14,000 17,000 Sumitomo Corp. (Industrial & Commercial)
- 3,000 - - 3,000 Sumitomo Electric Industries Ltd. (Information
Technology)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 8 - - 8 Mitsubishi Tokyo Finance Group, Inc. (Finance)
- 4,000 - - 4,000 Mitsui & Co. Ltd. (Industrial & Commercial)
- 1,800 - - 1,800 Mitsui Engineering & Shipbuilding (Industrial &
Commercial)
- 5,000 - 26,000 31,000 Mitsui Fudosan Co. Ltd. (Real Estate)
- 1,000 - - 1,000 Mitsui Marine & Fire Insurance (Finance)
- 1,000 - - 1,000 Mitsui Mining & Smelting Co. Ltd. (Materials)
- 1,000 - - 1,000 Mitsukoshi Ltd. (Consumer Discretionary)
- - - 82 82 Mizuho Holdings, Inc. (Finance)
1,200 700 - 5,300 7,200 Murata Manufacturing Co. Ltd. (Information Technology)
- 8,000 - 30,300 38,300 NEC Corp. (Information Technology)
- 300 - - 300 Nichiei Co. Ltd. Kyoto (Finance)
- 300 - - 300 Niece Corp. (Industrial & Commercial)
- 1,000 - - 1,000 Nikon Corp. (Information & Entertainment)
- 1,200 - 1,900 3,100 Nintendo Co. Ltd. (Information & Entertainment)
- 12,000 - - 12,000 Nippon Express Co. Ltd. (Industrial & Commercial)
- 23,000 - - 23,000 Nippon Mitsubishi Oil Corp. (Energy)
- 39,000 - - 39,000 Nippon Steel Corp. (Materials)
- 63 - 41 104 Nippon Telegraph & Telephone Corp. (Utilities)
- - 4,000 - 4,000 Nippon Thompson Co. Ltd. (Industrial & Commercial)
- 1 - - 1 Nippon Unipac Holding (Materials)
- 3,000 - - 3,000 Nippon Yusen Kabushiki Kaisha (Industrial & Commercial)
- 17,000 - 108,000 125,000 Nissan Motor Co. Ltd. (Consumer Discretionary)
- - 4,500 - 4,500 Nissin Co. Ltd. (Finance)
- 100 - - 100 Nissin Food Products Co. Ltd. (Consumer Staples)
- 8,000 - 20,000 28,000 Nomura Securities Co. Ltd. (Finance)
- 1,000 - - 1,000 NSK Ltd. (Materials)
9 - - 88 97 NTT Docomo, Inc. (Information Technology)
- 3,000 - - 3,000 Obayashi Corp. (Industrial & Commercial)
- 8,000 - - 8,000 OJI Paper Co. Ltd. (Materials)
- 1,000 - - 1,000 Omron Corp. (Information Technology)
- - 8,000 - 8,000 Onward Kashiyama Co. Ltd. (Consumer Discretionary)
- 400 - - 400 Oriental Land Co. Ltd. (Real Estate)
- 200 - - 200 Orix Corp. (Finance)
- 24,000 - - 24,000 Osaka Gas Co. Ltd. (Utilities)
- 1,800 - - 1,800 Penta-Ocean Construction (Industrial & Commercial)
7,000 - - - 7,000 Pioneer Corp. (Information Technology0
- 400 - - 400 Promise Co. Ltd. (Finance)
- - 6 - 6 Recrm Research Co. Ltd. (Real Estate)
- - 3,300 - 3,300 Ryohin Keikaku Co. Ltd. (Consumer Discretionary)
- 3,000 - 8,000 11,000 Sankyo Co. Ltd. (Healthcare)
- 19,000 - - 19,000 Sanyo Electric Co. Ltd. (Information Technology)
- - 2,300 - 2,300 Sanyo Shinpan Finance Co. Ltd. (Finance)
- - 1,700 - 1,700 Sazaby, Inc. (Consumer Discretionary)
- 1,000 - - 1,000 Sekisui Chemical Co. Ltd. (Materials)
- 8,000 - - 8,000 Sekisui House Ltd. (Consumer Discretionary)
- - - 4,000 4,000 Seven-Eleven Japan Co. Ltd. (Consumer Staples)
- 8,000 - - 8,000 Sharp Corp. (Information technology)
- 1,000 74,000 - 75,000 Shimizu Corp. (Industrial & Commercial)
- - - 6,000 6,000 Shin-Etsu Chemical Co. Ltd. (Materials)
- - 14,000 - 14,000 Shinko Securities Co. Ltd. (Finance)
- 1,000 - - 1,000 Shionogi & Co. Ltd. (Healthcare)
- 2,000 - 8,000 10,000 Shiseido Co. Ltd. (Consumer Discretionary)
- 1,000 - - 1,000 Shizuoka Bank Ltd. (Finance)
- 1,000 - - 1,000 Showa Denko K K (Materials)
- 2,000 - - 2,000 Showa Shell Sekiyu KK (Energy)
- 700 - - 700 SMC Corp. (Industrial & Commercial)
- 2,500 - - 2,500 Softbank Corp. (Finance)
- 5,400 - 25,200 30,600 Sony Corp. (Information Technology)
- 9,000 - - 9,000 Sumitomo Chemical Co. Ltd. (Materials)
- 3,000 - 14,000 17,000 Sumitomo Corp. (Industrial & Commercial)
- 3,000 - - 3,000 Sumitomo Electric Industries Ltd. (Information
Technology)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 8 - - 8 Mitsubishi Tokyo Finance Group, Inc. (Finance) - 76,478 -
- 4,000 - - 4,000 Mitsui & Co. Ltd. (Industrial & Commercial) - 22,854 -
- 1,800 - - 1,800 Mitsui Engineering & Shipbuilding (Industrial &
Commercial) - 2,666 -
- 5,000 - 26,000 31,000 Mitsui Fudosan Co. Ltd. (Real Estate) - 49,569 -
- 1,000 - - 1,000 Mitsui Marine & Fire Insurance (Finance) - 5,592 -
- 1,000 - - 1,000 Mitsui Mining & Smelting Co. Ltd. (Materials) - 5,867 -
- 1,000 - - 1,000 Mitsukoshi Ltd. (Consumer Discretionary) - 4,629 -
- - - 82 82 Mizuho Holdings, Inc. (Finance) - - -
1,200 700 - 5,300 7,200 Murata Manufacturing Co. Ltd. (Information Technology) 100,902 58,860 -
- 8,000 - 30,300 38,300 NEC Corp. (Information Technology) - 145,996 -
- 300 - - 300 Nichiei Co. Ltd. Kyoto (Finance) - 3,523 -
- 300 - - 300 Niece Corp. (Industrial & Commercial) - 15,563 -
- 1,000 - - 1,000 Nikon Corp. (Information & Entertainment) - 12,382 -
- 1,200 - 1,900 3,100 Nintendo Co. Ltd. (Information & Entertainment) - 193,259 -
- 12,000 - - 12,000 Nippon Express Co. Ltd. (Industrial & Commercial) - 60,211 -
- 23,000 - - 23,000 Nippon Mitsubishi Oil Corp. (Energy) - 133,832 -
- 39,000 - - 39,000 Nippon Steel Corp. (Materials) - 71,962 -
- 63 - 41 104 Nippon Telegraph & Telephone Corp. (Utilities) - 400,235 -
- - 4,000 - 4,000 Nippon Thompson Co. Ltd. (Industrial & Commercial) - - 33,116
- 1 - - 1 Nippon Unipac Holding (Materials) - 5,835 -
- 3,000 - - 3,000 Nippon Yusen Kabushiki Kaisha (Industrial & Commercial) - 13,256 -
- 17,000 - 108,000 125,000 Nissan Motor Co. Ltd. (Consumer Discretionary) - 116,530 -
- - 4,500 - 4,500 Nissin Co. Ltd. (Finance) - - 91,774
- 100 - - 100 Nissin Food Products Co. Ltd. (Consumer Staples) - 2,185 -
- 8,000 - 20,000 28,000 Nomura Securities Co. Ltd. (Finance) - 168,980 -
- 1,000 - - 1,000 NSK Ltd. (Materials) - 4,726 -
9 - - 88 97 NTT Docomo, Inc. (Information Technology) 185,004 - -
- 3,000 - - 3,000 Obayashi Corp. (Industrial & Commercial) - 15,538 -
- 8,000 - - 8,000 OJI Paper Co. Ltd. (Materials) - 39,170 -
- 1,000 - - 1,000 Omron Corp. (Information Technology) - 18,533 -
- - 8,000 - 8,000 Onward Kashiyama Co. Ltd. (Consumer Discretionary) - - 80,282
- 400 - - 400 Oriental Land Co. Ltd. (Real Estate) - 27,095 -
- 200 - - 200 Orix Corp. (Finance) - 17,464 -
- 24,000 - - 24,000 Osaka Gas Co. Ltd. (Utilities) - 71,477 -
- 1,800 - - 1,800 Penta-Ocean Construction (Industrial & Commercial) - 3,336 -
7,000 - - - 7,000 Pioneer Corp. (Information Technology0 209,040 - -
- 400 - - 400 Promise Co. Ltd. (Finance) - 32,695 -
- - 6 - 6 Recrm Research Co. Ltd. (Real Estate) - - 168,494
- - 3,300 - 3,300 Ryohin Keikaku Co. Ltd. (Consumer Discretionary) - - 89,200
- 3,000 - 8,000 11,000 Sankyo Co. Ltd. (Healthcare) - 62,639 -
- 19,000 - - 19,000 Sanyo Electric Co. Ltd. (Information Technology) - 117,477 -
- - 2,300 - 2,300 Sanyo Shinpan Finance Co. Ltd. (Finance) - - 91,207
- - 1,700 - 1,700 Sazaby, Inc. (Consumer Discretionary) - - 90,802
- 1,000 - - 1,000 Sekisui Chemical Co. Ltd. (Materials) - 3,828 -
- 8,000 - - 8,000 Sekisui House Ltd. (Consumer Discretionary) - 68,822 -
- - - 4,000 4,000 Seven-Eleven Japan Co. Ltd. (Consumer Staples) - - -
- 8,000 - - 8,000 Sharp Corp. (Information technology) - 109,999 -
- 1,000 74,000 - 75,000 Shimizu Corp. (Industrial & Commercial) - 4,742 350,941
- - - 6,000 6,000 Shin-Etsu Chemical Co. Ltd. (Materials) - - -
- - 14,000 - 14,000 Shinko Securities Co. Ltd. (Finance) - - 48,493
- 1,000 - - 1,000 Shionogi & Co. Ltd. (Healthcare) - 17,602 -
- 2,000 - 8,000 10,000 Shiseido Co. Ltd. (Consumer Discretionary) - 22,272 -
- 1,000 - - 1,000 Shizuoka Bank Ltd. (Finance) - 8,748 -
- 1,000 - - 1,000 Showa Denko K K (Materials) - 2,242 -
- 2,000 - - 2,000 Showa Shell Sekiyu KK (Energy) - 11,443 -
- 700 - - 700 SMC Corp. (Industrial & Commercial) - 82,993 -
- 2,500 - - 2,500 Softbank Corp. (Finance) - 95,092 -
- 5,400 - 25,200 30,600 Sony Corp. (Information Technology) - 403,804 -
- 9,000 - - 9,000 Sumitomo Chemical Co. Ltd. (Materials) - 48,072 -
- 3,000 - 14,000 17,000 Sumitomo Corp. (Industrial & Commercial) - 22,142 -
- 3,000 - - 3,000 Sumitomo Electric Industries Ltd. (Information
Technology) - 37,098 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 8 - - 8 Mitsubishi Tokyo Finance Group, Inc. (Finance) - 76,478
- 4,000 - - 4,000 Mitsui & Co. Ltd. (Industrial & Commercial) - 22,854
- 1,800 - - 1,800 Mitsui Engineering & Shipbuilding (Industrial &
Commercial) - 2,666
- 5,000 - 26,000 31,000 Mitsui Fudosan Co. Ltd. (Real Estate) 257,759 307,328
- 1,000 - - 1,000 Mitsui Marine & Fire Insurance (Finance) - 5,592
- 1,000 - - 1,000 Mitsui Mining & Smelting Co. Ltd. (Materials) - 5,867
- 1,000 - - 1,000 Mitsukoshi Ltd. (Consumer Discretionary) - 4,629
- - - 82 82 Mizuho Holdings, Inc. (Finance) 505,014 505,014
1,200 700 - 5,300 7,200 Murata Manufacturing Co. Ltd. (Information Technology) 445,652 605,414
- 8,000 - 30,300 38,300 NEC Corp. (Information Technology) 552,960 698,956
- 300 - - 300 Nichiei Co. Ltd. Kyoto (Finance) - 3,523
- 300 - - 300 Niece Corp. (Industrial & Commercial) - 15,563
- 1,000 - - 1,000 Nikon Corp. (Information & Entertainment) - 12,382
- 1,200 - 1,900 3,100 Nintendo Co. Ltd. (Information & Entertainment) 305,993 499,252
- 12,000 - - 12,000 Nippon Express Co. Ltd. (Industrial & Commercial) - 60,211
- 23,000 - - 23,000 Nippon Mitsubishi Oil Corp. (Energy) - 133,832
- 39,000 - - 39,000 Nippon Steel Corp. (Materials) - 71,962
- 63 - 41 104 Nippon Telegraph & Telephone Corp. (Utilities) 260,470 660,705
- - 4,000 - 4,000 Nippon Thompson Co. Ltd. (Industrial & Commercial) - 33,116
- 1 - - 1 Nippon Unipac Holding (Materials) - 5,835
- 3,000 - - 3,000 Nippon Yusen Kabushiki Kaisha (Industrial & Commercial) - 13,256
- 17,000 - 108,000 125,000 Nissan Motor Co. Ltd. (Consumer Discretionary) 740,307 856,837
- - 4,500 - 4,500 Nissin Co. Ltd. (Finance) - 91,774
- 100 - - 100 Nissin Food Products Co. Ltd. (Consumer Staples) - 2,185
- 8,000 - 20,000 28,000 Nomura Securities Co. Ltd. (Finance) 422,450 591,430
- 1,000 - - 1,000 NSK Ltd. (Materials) - 4,726
9 - - 88 97 NTT Docomo, Inc. (Information Technology) 1,808,926 1,993,930
- 3,000 - - 3,000 Obayashi Corp. (Industrial & Commercial) - 15,538
- 8,000 - - 8,000 OJI Paper Co. Ltd. (Materials) - 39,170
- 1,000 - - 1,000 Omron Corp. (Information Technology) - 18,533
- - 8,000 - 8,000 Onward Kashiyama Co. Ltd. (Consumer Discretionary) - 80,282
- 400 - - 400 Oriental Land Co. Ltd. (Real Estate) - 27,095
- 200 - - 200 Orix Corp. (Finance) - 17,464
- 24,000 - - 24,000 Osaka Gas Co. Ltd. (Utilities) - 71,477
- 1,800 - - 1,800 Penta-Ocean Construction (Industrial & Commercial) - 3,336
7,000 - - - 7,000 Pioneer Corp. (Information Technology0 - 209,040
- 400 - - 400 Promise Co. Ltd. (Finance) - 32,695
- - 6 - 6 Recrm Research Co. Ltd. (Real Estate) - 168,494
- - 3,300 - 3,300 Ryohin Keikaku Co. Ltd. (Consumer Discretionary) - 89,200
- 3,000 - 8,000 11,000 Sankyo Co. Ltd. (Healthcare) 167,038 229,677
- 19,000 - - 19,000 Sanyo Electric Co. Ltd. (Information Technology) - 117,477
- - 2,300 - 2,300 Sanyo Shinpan Finance Co. Ltd. (Finance) - 91,207
- - 1,700 - 1,700 Sazaby, Inc. (Consumer Discretionary) - 90,802
- 1,000 - - 1,000 Sekisui Chemical Co. Ltd. (Materials) - 3,828
- 8,000 - - 8,000 Sekisui House Ltd. (Consumer Discretionary) - 68,822
- - - 4,000 4,000 Seven-Eleven Japan Co. Ltd. (Consumer Staples) 194,553 194,553
- 8,000 - - 8,000 Sharp Corp. (Information technology) - 109,999
- 1,000 74,000 - 75,000 Shimizu Corp. (Industrial & Commercial) - 355,683
- - - 6,000 6,000 Shin-Etsu Chemical Co. Ltd. (Materials) 240,845 240,845
- - 14,000 - 14,000 Shinko Securities Co. Ltd. (Finance) - 48,493
- 1,000 - - 1,000 Shionogi & Co. Ltd. (Healthcare) - 17,602
- 2,000 - 8,000 10,000 Shiseido Co. Ltd. (Consumer Discretionary) 89,087 111,359
- 1,000 - - 1,000 Shizuoka Bank Ltd. (Finance) - 8,748
- 1,000 - - 1,000 Showa Denko K K (Materials) - 2,242
- 2,000 - - 2,000 Showa Shell Sekiyu KK (Energy) - 11,443
- 700 - - 700 SMC Corp. (Industrial & Commercial) - 82,993
- 2,500 - - 2,500 Softbank Corp. (Finance) - 95,092
- 5,400 - 25,200 30,600 Sony Corp. (Information Technology) 1,884,417 2,288,221
- 9,000 - - 9,000 Sumitomo Chemical Co. Ltd. (Materials) 48,072
- 3,000 - 14,000 17,000 Sumitomo Corp. (Industrial & Commercial) 103,330 125,472
- 3,000 - - 3,000 Sumitomo Electric Industries Ltd. (Information
Technology) - 37,098
B-57
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 1,000 - - 1,000 Sumitomo Marine & Fire (Finance)
- 6,000 - - 6,000 Sumitomo Metal Industries (Materials)
- 1,000 - - 1,000 Sumitomo Metal Mining Co. Ltd. (Materials)
- 5,400 - 40,000 45,400 Sumitomo Mitsui Banking Corp. (Finance)
- - 12,000 - 12,000 Sumitomo Realty & Development (Real Estate)
- 1,000 67,000 - 68,000 Taiheiyo Cement Corp. (Industrial & Commercial)
- 2,000 18,000 - 20,000 Taisei Corp. (Industrial 7 Commercial)
- 3,000 - - 3,000 Taisho Pharmaceutical Co. Ltd. (Healthcare)
5,000 4,000 - 10,700 19,700 Takeda Chemical Industries Ltd. (Healthcare)
1,800 500 - - 2,300 Takefuji Corp. (Finance)
- - - 1,700 1,700 TDK Corp. (Information & Entertainment)
- 3,000 - - 3,000 Teijin Ltd. (Consumer Discretionary)
- 1,900 - - 1,900 Terumo Corp. (Healthcare)
- 2,000 - - 2,000 Tobu Railway Co. Ltd. (Consumer Discretionary)
- - 10,000 - 10,000 Toei Co. Ltd. (Information & Entertainment)
- - 11,000 - 11,000 Toho Titanium Co. Ltd. (Materials)
- 6,600 - - 6,600 Tohoku Electric Power (Utilities)
- 8,000 - - 8,000 Tokio Marine & Fire Insurance (Finance)
- 1,000 - - 1,000 Tokyo Broadcasting System, Inc. (Information &
Entertainment)
- 14,700 - - 14,700 Tokyo Electric Power Co. (Utilities)
- 700 - 3,000 3,700 Tokyo Electron Ltd. (Industrial & Commercial)
113,000 9,000 - - 122,000 Tokyo Gas Co. Ltd. (Utilities)
- - 13,200 - 13,200 Tokyo Steel Manufacturing Co. Ltd. (Industrial &
Commercial)
- 1,000 - - 1,000 Tokyu Corp. (Industrial & Commercial)
- 4,000 - - 4,000 Toppan Printing Co. Ltd. (Information & Entertainment)
- 6,000 - - 6,000 Toray Industries, Inc. (Consumer Discretionary)
- 13,000 - 57,000 70,000 Toshiba Corp. (Information Technology)
- 1,000 - - 1,000 Tosoh Corp. (Materials)
- 2,800 - - 2,800 Toyobo Co. Ltd. (Consumer Discretionary)
- 19,200 - - 19,200 Toyota Motor Corp. (Consumer Discretionary)
- 1,000 - - 1,000 Ube Industries Ltd. (materials)
- - - 16 16 UFJ Holdings, Inc.+ (Information Technology)
- - 4,000 - 4,000 Wacoal Corp. (Consumer Discretionary)
- 2,000 - 15,000 17,000 Yamanouchi Pharmaceutical Co. Ltd. (Healthcare)
Korea 0.0% 0.0%
- - - 2,590 2,590 Samsung SDI Co. Ltd. (Information Technology)
- - - 4,300 4,300 Samsung Electronics (Information Technology)
- - - 3,481 3,481 Pohang Iron & Steel Co. Ltd. ADR (Materials)
- - - 2,296 2,296 Korea Telecom Corp. ADR (Information Technology)
- - - 10,320 10,320 Kookmin Bank (Finance)
Luxembourg 1.4% 0.0%
- - 7,025 - 7,025 Thiel Logistik AG+ (Information Technology)
2,275 - - 260 2,535 Societe Europeenne des Satellites (Information &
Entertainment)
Mexico 0.3% 0.0%
- - - 44,000 44,000 Fomento Economico Mexicano SA de CV (Multi-Industry)
- - - 154,844 154,844 Grupo Financiero Banamex Accival SA (Finance)
- - 51,425 - 51,425 Empressas ICA Sociedad Control SA (Finance)
3,600 - - 8,217 11,817 Cemex SA ADR (Industrial & Commercial)
- - - 4,000 4,000 Grupo Iusacell SA de CV ADR+ (Information Technology)
- - - 10,850 10,850 Grupo Televisa SA de CV ADR+ (Information &
Entertainment)
- - 8,950 - 8,950 Grupo Aeroportuario de Sureste SA (Industrial &
Commercial)
- - 36,950 - 36,950 Grupo Elektra SA (Consumer Discretionary)
- - - 1,128 1,128 Telefonos de Mexico SA ADR (Utilities)
- - 2,350 - 2,350 Tubos de Acero de Mexico SA (Materials)
Netherlands 4.4% 5.9%
9,000 4,506 - 2,588 16,094 ABN AMRO Holdings NV (Finance)
- 4,961 - - 4,961 Aegon NV (Finance)
- 842 - 720 1,562 Akzo Nobel NV (Materials)
- 1,656 - 11,160 12,816 ASM Lithography Holding NV+ (Information Technology)
- - 100 - 100 Boskalis Westminster (Industrial & Commercial)
- 558 - 45,037 45,595 Buhrmann NV (Industrial & Commercial)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 1,000 - - 1,000 Sumitomo Marine & Fire (Finance)
- 6,000 - - 6,000 Sumitomo Metal Industries (Materials)
- 1,000 - - 1,000 Sumitomo Metal Mining Co. Ltd. (Materials)
- 5,400 - 40,000 45,400 Sumitomo Mitsui Banking Corp. (Finance)
- - 12,000 - 12,000 Sumitomo Realty & Development (Real Estate)
- 1,000 67,000 - 68,000 Taiheiyo Cement Corp. (Industrial & Commercial)
- 2,000 18,000 - 20,000 Taisei Corp. (Industrial 7 Commercial)
- 3,000 - - 3,000 Taisho Pharmaceutical Co. Ltd. (Healthcare)
5,000 4,000 - 10,700 19,700 Takeda Chemical Industries Ltd. (Healthcare)
1,800 500 - - 2,300 Takefuji Corp. (Finance)
- - - 1,700 1,700 TDK Corp. (Information & Entertainment)
- 3,000 - - 3,000 Teijin Ltd. (Consumer Discretionary)
- 1,900 - - 1,900 Terumo Corp. (Healthcare)
- 2,000 - - 2,000 Tobu Railway Co. Ltd. (Consumer Discretionary)
- - 10,000 - 10,000 Toei Co. Ltd. (Information & Entertainment)
- - 11,000 - 11,000 Toho Titanium Co. Ltd. (Materials)
- 6,600 - - 6,600 Tohoku Electric Power (Utilities)
- 8,000 - - 8,000 Tokio Marine & Fire Insurance (Finance)
- 1,000 - - 1,000 Tokyo Broadcasting System, Inc. (Information &
Entertainment)
- 14,700 - - 14,700 Tokyo Electric Power Co. (Utilities)
- 700 - 3,000 3,700 Tokyo Electron Ltd. (Industrial & Commercial)
113,000 9,000 - - 122,000 Tokyo Gas Co. Ltd. (Utilities)
- - 13,200 - 13,200 Tokyo Steel Manufacturing Co. Ltd. (Industrial &
Commercial)
- 1,000 - - 1,000 Tokyu Corp. (Industrial & Commercial)
- 4,000 - - 4,000 Toppan Printing Co. Ltd. (Information & Entertainment)
- 6,000 - - 6,000 Toray Industries, Inc. (Consumer Discretionary)
- 13,000 - 57,000 70,000 Toshiba Corp. (Information Technology)
- 1,000 - - 1,000 Tosoh Corp. (Materials)
- 2,800 - - 2,800 Toyobo Co. Ltd. (Consumer Discretionary)
- 19,200 - - 19,200 Toyota Motor Corp. (Consumer Discretionary)
- 1,000 - - 1,000 Ube Industries Ltd. (materials)
- - - 16 16 UFJ Holdings, Inc.+ (Information Technology)
- - 4,000 - 4,000 Wacoal Corp. (Consumer Discretionary)
- 2,000 - 15,000 17,000 Yamanouchi Pharmaceutical Co. Ltd. (Healthcare)
Korea 0.0% 1.2% 0.6%
- - - 2,590 2,590 Samsung SDI Co. Ltd. (Information Technology)
- - - 4,300 4,300 Samsung Electronics (Information Technology)
- - - 3,481 3,481 Pohang Iron & Steel Co. Ltd. ADR (Materials)
- - - 2,296 2,296 Korea Telecom Corp. ADR (Information Technology)
- - - 10,320 10,320 Kookmin Bank (Finance)
Luxembourg 0.9% 0.0% 0.3%
- - 7,025 - 7,025 Thiel Logistik AG+ (Information Technology)
2,275 - - 260 2,535 Societe Europeenne des Satellites (Information &
Entertainment)
Mexico 1.3% 1.2% 0.8%
- - - 44,000 44,000 Fomento Economico Mexicano SA de CV (Multi-Industry)
- - - 154,844 154,844 Grupo Financiero Banamex Accival SA (Finance)
- - 51,425 - 51,425 Empressas ICA Sociedad Control SA (Finance)
3,600 - - 8,217 11,817 Cemex SA ADR (Industrial & Commercial)
- - - 4,000 4,000 Grupo Iusacell SA de CV ADR+ (Information Technology)
- - - 10,850 10,850 Grupo Televisa SA de CV ADR+ (Information &
Entertainment)
- - 8,950 - 8,950 Grupo Aeroportuario de Sureste SA (Industrial &
Commercial)
- - 36,950 - 36,950 Grupo Elektra SA (Consumer Discretionary)
- - - 1,128 1,128 Telefonos de Mexico SA ADR (Utilities)
- - 2,350 - 2,350 Tubos de Acero de Mexico SA (Materials)
Netherlands 1.8% 8.4% 6.6%
9,000 4,506 - 2,588 16,094 ABN AMRO Holdings NV (Finance)
- 4,961 - - 4,961 Aegon NV (Finance)
- 842 - 720 1,562 Akzo Nobel NV (Materials)
- 1,656 - 11,160 12,816 ASM Lithography Holding NV+ (Information Technology)
- - 100 - 100 Boskalis Westminster (Industrial & Commercial)
- 558 - 45,037 45,595 Buhrmann NV (Industrial & Commercial)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 1,000 - - 1,000 Sumitomo Marine & Fire (Finance) - 6,102 -
- 6,000 - - 6,000 Sumitomo Metal Industries (Materials) - 4,904 -
- 1,000 - - 1,000 Sumitomo Metal Mining Co. Ltd. (Materials) - 4,063 -
- 5,400 - 40,000 45,400 Sumitomo Mitsui Banking Corp. (Finance) - 50,432 -
- - 12,000 - 12,000 Sumitomo Realty & Development (Real Estate) - - 65,941
- 1,000 67,000 - 68,000 Taiheiyo Cement Corp. (Industrial & Commercial) - 2,331 156,161
- 2,000 18,000 - 20,000 Taisei Corp. (Industrial 7 Commercial) - 5,600 50,403
- 3,000 - - 3,000 Taisho Pharmaceutical Co. Ltd. (Healthcare) - 58,997 -
5,000 4,000 - 10,700 19,700 Takeda Chemical Industries Ltd. (Healthcare) 241,169 192,935 -
1,800 500 - - 2,300 Takefuji Corp. (Finance) 141,011 39,170 -
- - - 1,700 1,700 TDK Corp. (Information & Entertainment) - - -
- 3,000 - - 3,000 Teijin Ltd. (Consumer Discretionary) - 15,393 -
- 1,900 - - 1,900 Terumo Corp. (Healthcare) - 38,134 -
- 2,000 - - 2,000 Tobu Railway Co. Ltd. (Consumer Discretionary) - 6,167 -
- - 10,000 - 10,000 Toei Co. Ltd. (Information & Entertainment) - - 45,482
- - 11,000 - 11,000 Toho Titanium Co. Ltd. (Materials) - - 97,924
- 6,600 - - 6,600 Tohoku Electric Power (Utilities) - 92,565 -
- 8,000 - - 8,000 Tokio Marine & Fire Insurance (Finance) - 84,166 -
- 1,000 - - 1,000 Tokyo Broadcasting System, Inc. (Information &
Entertainment) - 22,417 -
- 14,700 - - 14,700 Tokyo Electric Power Co. (Utilities) - 350,949 -
- 700 - 3,000 3,700 Tokyo Electron Ltd. (Industrial & Commercial) - 50,985 -
113,000 9,000 - - 122,000 Tokyo Gas Co. Ltd. (Utilities) 317,331 25,274 -
- - 13,200 - 13,200 Tokyo Steel Manufacturing Co. Ltd. (Industrial &
Commercial) - - 49,674
- 1,000 - - 1,000 Tokyu Corp. (Industrial & Commercial) - 5,746 -
- 4,000 - - 4,000 Toppan Printing Co. Ltd. (Information & Entertainment) - 38,360 -
- 6,000 - - 6,000 Toray Industries, Inc. (Consumer Discretionary) - 26,949 -
- 13,000 - 57,000 70,000 Toshiba Corp. (Information Technology) - 85,324 -
- 1,000 - - 1,000 Tosoh Corp. (Materials) - 2,857 -
- 2,800 - - 2,800 Toyobo Co. Ltd. (Consumer Discretionary) - 6,413 -
- 19,200 - - 19,200 Toyota Motor Corp. (Consumer Discretionary) - 638,627 -
- 1,000 - - 1,000 Ube Industries Ltd. (materials) - 2,290 -
- - - 16 16 UFJ Holdings, Inc.+ (Information Technology) - - -
- - 4,000 - 4,000 Wacoal Corp. (Consumer Discretionary) - - 39,526
- 2,000 - 15,000 17,000 Yamanouchi Pharmaceutical Co. Ltd. (Healthcare) - 55,355 -
Korea
- - - 2,590 2,590 Samsung SDI Co. Ltd. (Information Technology) - - -
- - - 4,300 4,300 Samsung Electronics (Information Technology) - - -
- - - 3,481 3,481 Pohang Iron & Steel Co. Ltd. ADR (Materials) - - -
- - - 2,296 2,296 Korea Telecom Corp. ADR (Information Technology) - - -
- - - 10,320 10,320 Kookmin Bank (Finance) - - -
Luxembourg
- - 7,025 - 7,025 Thiel Logistik AG+ (Information Technology) - - 170,159
2,275 - - 260 2,535 Societe Europeenne des Satellites (Information &
Entertainment) 341,125 - -
Mexico
- - - 44,000 44,000 Fomento Economico Mexicano SA de CV (Multi-Industry) - - -
- - - 154,844 154,844 Grupo Financiero Banamex Accival SA (Finance) - - -
- - 51,425 - 51,425 Empressas ICA Sociedad Control SA (Finance) - - 18,049
3,600 - - 8,217 11,817 Cemex SA ADR (Industrial & Commercial) 83,412 - -
- - - 4,000 4,000 Grupo Iusacell SA de CV ADR+ (Information Technology) - - -
- - - 10,850 10,850 Grupo Televisa SA de CV ADR+ (Information &
Entertainment) - - -
- - 8,950 - 8,950 Grupo Aeroportuario de Sureste SA (Industrial &
Commercial) - - 162,443
- - 36,950 - 36,950 Grupo Elektra SA (Consumer Discretionary) - - 34,875
- - - 1,128 1,128 Telefonos de Mexico SA ADR (Utilities) - - -
- - 2,350 - 2,350 Tubos de Acero de Mexico SA (Materials) - - 31,514
Netherlands
9,000 4,506 - 2,588 16,094 ABN AMRO Holdings NV (Finance) 181,265 90,753 -
- 4,961 - - 4,961 Aegon NV (Finance) - 165,502 -
- 842 - 720 1,562 Akzo Nobel NV (Materials) - 35,075 -
- 1,656 - 11,160 12,816 ASM Lithography Holding NV+ (Information Technology) - 43,785 -
- - 100 - 100 Boskalis Westminster (Industrial & Commercial) - - 2,950
- 558 - 45,037 45,595 Buhrmann NV (Industrial & Commercial) - 9,253 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 1,000 - - 1,000 Sumitomo Marine & Fire (Finance) - 6,102
- 6,000 - - 6,000 Sumitomo Metal Industries (Materials) - 4,904
- 1,000 - - 1,000 Sumitomo Metal Mining Co. Ltd. (Materials) - 4,063
- 5,400 - 40,000 45,400 Sumitomo Mitsui Banking Corp. (Finance) 373,569 424,001
- - 12,000 - 12,000 Sumitomo Realty & Development (Real Estate) - 65,941
- 1,000 67,000 - 68,000 Taiheiyo Cement Corp. (Industrial & Commercial) - 158,492
- 2,000 18,000 - 20,000 Taisei Corp. (Industrial 7 Commercial) - 56,003
- 3,000 - - 3,000 Taisho Pharmaceutical Co. Ltd. (Healthcare) - 58,997
5,000 4,000 - 10,700 19,700 Takeda Chemical Industries Ltd. (Healthcare) 516,101 950,205
1,800 500 - - 2,300 Takefuji Corp. (Finance) - 180,181
- - - 1,700 1,700 TDK Corp. (Information & Entertainment) 98,782 98,782
- 3,000 - - 3,000 Teijin Ltd. (Consumer Discretionary) - 15,393
- 1,900 - - 1,900 Terumo Corp. (Healthcare) - 38,134
- 2,000 - - 2,000 Tobu Railway Co. Ltd. (Consumer Discretionary) - 6,167
- - 10,000 - 10,000 Toei Co. Ltd. (Information & Entertainment) - 45,482
- - 11,000 - 11,000 Toho Titanium Co. Ltd. (Materials) - 97,924
- 6,600 - - 6,600 Tohoku Electric Power (Utilities) - 92,565
- 8,000 - - 8,000 Tokio Marine & Fire Insurance (Finance) - 84,166
- 1,000 - - 1,000 Tokyo Broadcasting System, Inc. (Information &
Entertainment) - 22,417
- 14,700 - - 14,700 Tokyo Electric Power Co. (Utilities) - 350,949
- 700 - 3,000 3,700 Tokyo Electron Ltd. (Industrial & Commercial) 218,508 269,493
113,000 9,000 - - 122,000 Tokyo Gas Co. Ltd. (Utilities) - 342,605
- - 13,200 - 13,200 Tokyo Steel Manufacturing Co. Ltd. (Industrial &
Commercial) - 49,674
- 1,000 - - 1,000 Tokyu Corp. (Industrial & Commercial) - 5,746
- 4,000 - - 4,000 Toppan Printing Co. Ltd. (Information & Entertainment) - 38,360
- 6,000 - - 6,000 Toray Industries, Inc. (Consumer Discretionary) - 26,949
- 13,000 - 57,000 70,000 Toshiba Corp. (Information Technology) 374,111 459,435
- 1,000 - - 1,000 Tosoh Corp. (Materials) - 2,857
- 2,800 - - 2,800 Toyobo Co. Ltd. (Consumer Discretionary) - 6,413
- 19,200 - - 19,200 Toyota Motor Corp. (Consumer Discretionary) - 638,627
- 1,000 - - 1,000 Ube Industries Ltd. (materials) - 2,290
- - - 16 16 UFJ Holdings, Inc.+ (Information Technology) 115,114 115,114
- - 4,000 - 4,000 Wacoal Corp. (Consumer Discretionary) - 39,526
- 2,000 - 15,000 17,000 Yamanouchi Pharmaceutical Co. Ltd. (Healthcare) 415,166 470,521
Korea
- - - 2,590 2,590 Samsung SDI Co. Ltd. (Information Technology) 107,573 107,573
- - - 4,300 4,300 Samsung Electronics (Information Technology) 747,684 747,684
- - - 3,481 3,481 Pohang Iron & Steel Co. Ltd. ADR (Materials) 69,655 69,655
- - - 2,296 2,296 Korea Telecom Corp. ADR (Information Technology) 63,438 63,438
- - - 10,320 10,320 Kookmin Bank (Finance) 122,241 122,241
Luxembourg
- - 7,025 - 7,025 Thiel Logistik AG+ (Information Technology) - 170,159
2,275 - - 260 2,535 Societe Europeenne des Satellites (Information &
Entertainment) 38,986 380,111
Mexico
- - - 44,000 44,000 Fomento Economico Mexicano SA de CV (Multi-Industry) 166,782 166,782
- - - 154,844 154,844 Grupo Financiero Banamex Accival SA (Finance) 284,438 284,438
- - 51,425 - 51,425 Empressas ICA Sociedad Control SA (Finance) - 18,049
3,600 - - 8,217 11,817 Cemex SA ADR (Industrial & Commercial) 190,388 273,800
- - - 4,000 4,000 Grupo Iusacell SA de CV ADR+ (Information Technology) 32,600 32,600
- - - 10,850 10,850 Grupo Televisa SA de CV ADR+ (Information &
Entertainment) 412,626 412,626
- - 8,950 - 8,950 Grupo Aeroportuario de Sureste SA (Industrial &
Commercial) - 162,443
- - 36,950 - 36,950 Grupo Elektra SA (Consumer Discretionary) - 34,875
- - - 1,128 1,128 Telefonos de Mexico SA ADR (Utilities) 39,029 39,029
- - 2,350 - 2,350 Tubos de Acero de Mexico SA (Materials) - 31,514
Netherlands
9,000 4,506 - 2,588 16,094 ABN AMRO Holdings NV (Finance) 52,124 324,142
- 4,961 - - 4,961 Aegon NV (Finance) - 165,502
- 842 - 720 1,562 Akzo Nobel NV (Materials) 29,993 65,068
- 1,656 - 11,160 12,816 ASM Lithography Holding NV+ (Information Technology) 295,071 338,856
- - 100 - 100 Boskalis Westminster (Industrial & Commercial) - 2,950
- 558 - 45,037 45,595 Buhrmann NV (Industrial & Commercial) 746,835 756,088
B-58
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 2,932 - 6,270 9,202 Elsevier NV (Information & Entertainment)
- - - 900 900 Equant NV (Information Technology)
- - - 25,126 25,126 Fortis NV (Finance)
- - 925 - 925 Fugro NV (Industrial & Commercial)
- 1,852 - - 1,852 Getronics NV (Information Technology)
- 509 - 21,476 21,985 Hagemeyer NV (Multi-industry)
- - 4,175 - 4,175 Hagemeyer NV (Multi-industry)
3,675 3,945 - - 7,620 Heijmans NV (Industrial & Commercial)
1,700 3,417 - 25,468 30,585 ING Groep NV (Finance)
- 3,944 - 35,580 39,524 Koninklijke (Royal) Philips Electronics NV (Information
Technology)
- 3,701 - 24,759 28,460 Koninklijke Ahold NV (Consumer Discretionary)
- 2,019 - 1,243 3,262 Koninklijke KPN NV (Utilities)
- 117 - - 117 OCE NV (Information Technology)
- 330 - - 330 Rodamco Europe NV (Finance)
- 17,328 - 8,280 25,608 Royal Dutch Petroleum Co. (Energy)
5,325 2,625 - 5,384 13,334 STMicroelectronics NV (Information technology)
- 6,250 - 6,250 Teleplan International N.V. (Information Technology)
11,825 2,976 - 14,271 29,072 TNT Post Group NV (Industrial & Commercial)
- 7,298 - - 7,298 Unilever NV (Consumer Staples)
- - 1,110 1,110 United Pan Europe Communications NV, Class A+
(Information & Entertainment)
- 445 - - 445 Vedior NV (Industrial & Commercial)
- 500 - - 500 Corio NV/VIB NV (Real Estate)
2,600 - 16,890 19,490 VNU NV (Information & Entertainment)
- 1,293 - 7,397 8,690 Wolters Kluwer NV (Information & Entertainment)
New Zealand 0.0% 0.0%
- 3,731 - - 3,731 Carter Holt Harvey Ltd. (Materials)
Norway 0.0% 0.0%
- - - 27,550 27,550 DNB Holdings ASA (Finance)
- 100 - - 100 Elkem ASA (Materials)
- - 8,625 - 8,625 Farstad Shipping A/S (Energy)
- - 16,700 - 16,700 Fred. Olsen Energy ASA (Energy)
- - 10,125 - 10,125 Frontline Ltd. (Industrial & Commercial)
- 200 - - 200 Norske Skogindustrier A.S. (Materials)
- 800 - 5,720 6,520 Orkla ASA (Consumer Staples)
- - 10,650 - 10,650 Smedvig A/S (Energy)
- - 14,200 - 14,200 Tandberg ASA (Information Technology)
- - 7,600 - 7,600 TGS Nopec Geophysical Company ASA (Energy)
Poland 0.0% 0.0%
- - - 13,246 13,246 Bank Polska Kasa Opieki SA ADR+* (Finance)
- - - 64,998 64,998 Telekomunikacja Polska SA ADR* (Information Technology)
Portugal 0.7% 0.3%
- 4,084 - - 4,084 Banco Commercial Portugues (Finance)
- 393 - - 393 Banco Espirito Santo SA (Finance)
- 3,576 - - 3,576 BPI-SGPS SA (Finance)
18,500 2,155 - - 20,655 Brisa-Auto Estradas de Portugal SA (Industrial &
Commercial)
- 23,405 - - 23,405 Electricidade de Portugal SA (Utilities)
- 565 - 3,628 4,193 Jeronimo Martins SGPS SA (Consumer Staples)
- 3,300 - - 3,300 Portucel Empresa Produtore de Pasta e Papel SA
(Materials)
- 1,598 - 59,877 61,475 Portugal Telecom SGPS SA (Utilities)
- 246 - - 246 PT Multimedia.com (Information Technology)
- 1,660 - - 1,660 Sonae SGPS SA (Consumer Discretionary)
Russia 0.0% 0.0%
- - - 946 946 Lukoil Holdings ADR (Energy)
- - - 2,408 2,408 Lukoil Holdings ADR* (Energy)
Singapore 0.7% 0.7%
- 8,000 - - 8,000 Capital Land Ltd. (real Estate)
- 1,000 - - 1,000 Chartered Semiconductors Mfg. Ltd. (Information
technology)
- 4,000 - - 4,000 City Developments Ltd. (Real Estate)
- 100 - - 100 Creative Technology Ltd. (Information Technology)
- 2,000 - - 2,000 Cycle & Carriage Ltd. (Consumer Discretionary)
- 5,815 - 5,000 10,815 DBS Group Holdings Ltd. (Finance)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 2,932 - 6,270 9,202 Elsevier NV (Information & Entertainment)
- - - 900 900 Equant NV (Information Technology)
- - - 25,126 25,126 Fortis NV (Finance)
- - 925 - 925 Fugro NV (Industrial & Commercial)
- 1,852 - - 1,852 Getronics NV (Information Technology)
- 509 - 21,476 21,985 Hagemeyer NV (Multi-industry)
- - 4,175 - 4,175 Hagemeyer NV (Multi-industry)
3,675 3,945 - - 7,620 Heijmans NV (Industrial & Commercial)
1,700 3,417 - 25,468 30,585 ING Groep NV (Finance)
- 3,944 - 35,580 39,524 Koninklijke (Royal) Philips Electronics NV (Information
Technology)
- 3,701 - 24,759 28,460 Koninklijke Ahold NV (Consumer Discretionary)
- 2,019 - 1,243 3,262 Koninklijke KPN NV (Utilities)
- 117 - - 117 OCE NV (Information Technology)
- 330 - - 330 Rodamco Europe NV (Finance)
- 17,328 - 8,280 25,608 Royal Dutch Petroleum Co. (Energy)
5,325 2,625 - 5,384 13,334 STMicroelectronics NV (Information technology)
- 6,250 - 6,250 Teleplan International N.V. (Information Technology)
11,825 2,976 - 14,271 29,072 TNT Post Group NV (Industrial & Commercial)
- 7,298 - - 7,298 Unilever NV (Consumer Staples)
- - 1,110 1,110 United Pan Europe Communications NV, Class A+
(Information & Entertainment
- 445 - - 445 Vedior NV (Industrial & Commercial)
- 500 - - 500 Corio NV/VIB NV (Real Estate)
2,600 - 16,890 19,490 VNU NV (Information & Entertainment)
- 1,293 - 7,397 8,690 Wolters Kluwer NV (Information & Entertainment)
New Zealand 0.0% 0.0% 0.0%
- 3,731 - - 3,731 Carter Holt Harvey Ltd. (Materials)
Norway 4.2% 0.2% 0.6%
- - - 27,550 27,550 DNB Holdings ASA (Finance)
- 100 - - 100 Elkem ASA (Materials)
- - 8,625 - 8,625 Farstad Shipping A/S (Energy)
- - 16,700 - 16,700 Fred. Olsen Energy ASA (Energy)
- - 10,125 - 10,125 Frontline Ltd. (Industrial & Commercial)
- 200 - - 200 Norske Skogindustrier A.S. (Materials)
- 800 - 5,720 6,520 Orkla ASA (Consumer Staples)
- - 10,650 - 10,650 Smedvig A/S (Energy)
- - 14,200 - 14,200 Tandberg ASA (Information Technology)
- - 7,600 - 7,600 TGS Nopec Geophysical Company ASA (Energy)
Poland 0.0% 0.6% 0.3%
- - - 13,246 13,246 Bank Polska Kasa Opieki SA ADR+* (Finance)
- - - 64,998 64,998 Telekomunikacja Polska SA ADR* (Information Technology)
Portugal 0.0% 0.7% 0.5%
- 4,084 - - 4,084 Banco Commercial Portugues (Finance)
- 393 - - 393 Banco Espirito Santo SA (Finance)
- 3,576 - - 3,576 BPI-SGPS SA (Finance)
18,500 2,155 - - 20,655 Brisa-Auto Estradas de Portugal SA (Industrial &
Commercial)
- 23,405 - - 23,405 Electricidade de Portugal SA (Utilities)
- 565 - 3,628 4,193 Jeronimo Martins SGPS SA (Consumer Staples)
- 3,300 - - 3,300 Portucel Empresa Produtore de Pasta e Papel SA
(Materials)
- 1,598 - 59,877 61,475 Portugal Telecom SGPS SA (Utilities)
- 246 - - 246 PT Multimedia.com (Information Technology)
- 1,660 - - 1,660 Sonae SGPS SA (Consumer Discretionary)
Russia 0.0% 0.2% 0.1%
- - - 946 946 Lukoil Holdings ADR (Energy)
- - - 2,408 2,408 Lukoil Holdings ADR* (Energy)
Singapore 0.0% 0.5% 0.5%
- 8,000 - - 8,000 Capital Land Ltd. (real Estate)
- 1,000 - - 1,000 Chartered Semiconductors Mfg. Ltd. (Information
technology)
- 4,000 - - 4,000 City Developments Ltd. (Real Estate)
- 100 - - 100 Creative Technology Ltd. (Information Technology)
- 2,000 - - 2,000 Cycle & Carriage Ltd. Consumer Discretionary)
- 5,815 - 5,000 10,815 DBS Group Holdings Ltd. (Finance)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 2,932 - 6,270 9,202 Elsevier NV (Information & Entertainment) - 40,140 -
- - - 900 900 Equant NV (Information Technology) - - -
- - - 25,126 25,126 Fortis NV (Finance) - - -
- - 925 - 925 Fugro NV (Industrial & Commercial) - - 58,680
- 1,852 - - 1,852 Getronics NV (Information Technology) - 9,005 -
- 509 - 21,476 21,985 Hagemeyer NV (Multi-industry) - 10,184 -
- - 4,175 - 4,175 Hagemeyer NV (Multi-industry) - - 88,902
3,675 3,945 - - 7,620 Heijmans NV (Industrial & Commercial) 190,585 204,587 -
1,700 3,417 - 25,468 30,585 ING Groep NV (Finance) 116,096 233,353 -
- 3,944 - 35,580 39,524 Koninklijke (Royal) Philips Electronics NV (Information
Technology) - 115,862 -
- 3,701 - 24,759 28,460 Koninklijke Ahold NV (Consumer Discretionary) - 114,930 -
- 2,019 - 1,243 3,262 Koninklijke KPN NV (Utilities) - 24,685 -
- 117 - - 117 OCE NV (Information Technology) - 1,370 -
- 330 - - 330 Rodamco Europe NV (Finance) - 12,444 -
- 17,328 - 8,280 25,608 Royal Dutch Petroleum Co. (Energy) - 1,036,227 -
5,325 2,625 - 5,384 13,334 STMicroelectronics NV (Information technology) 214,732 105,854 -
- 6,250 - 6,250 Teleplan International N.V. (Information Technology) - - 198,522
11,825 2,976 - 14,271 29,072 TNT Post Group NV (Industrial & Commercial) 278,555 70,104 -
- 7,298 - - 7,298 Unilever NV (Consumer Staples) - 413,115 -
- - 1,110 1,110 United Pan Europe Communications NV, Class A+
(Information & Entertainment - - -
- 445 - - 445 Vedior NV (Industrial & Commercial) - 4,541 -
- 500 - - 500 Corio NV/VIB NV (Real Estate) - 11,778 -
2,600 - 16,890 19,490 VNU NV (Information & Entertainment) 108,076 - -
- 1,293 - 7,397 8,690 Wolters Kluwer NV (Information & Entertainment) - 35,770 -
New Zealand
- 3,731 - - 3,731 Carter Holt Harvey Ltd. (Materials) - 2,821 -
Norway
- - - 27,550 27,550 DNB Holdings ASA (Finance) - - -
- 100 - - 100 Elkem ASA (Materials) - 1,912 -
- - 8,625 - 8,625 Farstad Shipping A/S (Energy) - - 46,445
- - 16,700 - 16,700 Fred. Olsen Energy ASA (Energy) - - 149,574
- - 10,125 - 10,125 Frontline Ltd. (Industrial & Commercial) - - 200,286
- 200 - - 200 Norske Skogindustrier A.S. (Materials) - 3,253 -
- 800 - 5,720 6,520 Orkla ASA (Consumer Staples) - 14,726 -
- - 10,650 - 10,650 Smedvig A/S (Energy) - - 101,239
- - 14,200 - 14,200 Tandberg ASA (Information Technology) - - 174,779
- - 7,600 - 7,600 TGS Nopec Geophysical Company ASA (Energy) - - 127,787
Poland
- - - 13,246 13,246 Bank Polska Kasa Opieki SA ADR+* (Finance) - - -
- - - 64,998 64,998 Telekomunikacja Polska SA ADR* (Information Technology) - - -
Portugal
- 4,084 - - 4,084 Banco Commercial Portugues (Finance) - 17,538 -
- 393 - - 393 Banco Espirito Santo SA (Finance) - 5,335 -
- 3,576 - - 3,576 BPI-SGPS SA (Finance) - 10,280 -
18,500 2,155 - - 20,655 Brisa-Auto Estradas de Portugal SA (Industrial &
Commercial) 172,512 20,095 -
- 23,405 - - 23,405 Electricidade de Portugal SA (Utilities) - 63,544 -
- 565 - 3,628 4,193 Jeronimo Martins SGPS SA (Consumer Staples) - 3,910 -
- 3,300 - - 3,300 Portucel Empresa Produtore de Pasta e Papel SA
(Materials) - 3,514 -
- 1,598 - 59,877 61,475 Portugal Telecom SGPS SA (Utilities) - 15,511 -
- 246 - - 246 PT Multimedia.com (Information Technology) - 812 -
- 1,660 - - 1,660 Sonae SGPS SA (Consumer Discretionary) - 1,664 -
Russia
- - - 946 946 Lukoil Holdings ADR (Energy) - - -
- - - 2,408 2,408 Lukoil Holdings ADR* (Energy) - - -
Singapore
- 8,000 - - 8,000 Capital Land Ltd. (real Estate) - 10,104 -
- 1,000 - - 1,000 Chartered Semiconductors Mfg. Ltd. (Information
technology) - 3,075 -
- 4,000 - - 4,000 City Developments Ltd. (Real Estate) - 14,058 -
- 100 - - 100 Creative Technology Ltd. (Information Technology) - 923 -
- 2,000 - - 2,000 Cycle & Carriage Ltd. Consumer Discretionary) - 3,624 -
- 5,815 - 5,000 10,815 DBS Group Holdings Ltd. (Finance) - 50,773 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 2,932 - 6,270 9,202 Elsevier NV (Information & Entertainment) 85,838 125,978
- - - 900 900 Equant NV (Information Technology) 23,916 23,916
- - - 25,126 25,126 Fortis NV (Finance) 652,294 652,294
- - 925 - 925 Fugro NV (Industrial & Commercial) - 58,680
- 1,852 - - 1,852 Getronics NV (Information Technology) - 9,005
- 509 - 21,476 21,985 Hagemeyer NV (Multi-industry) 429,681 439,865
- - 4,175 - 4,175 Hagemeyer NV (Multi-industry) - 88,902
3,675 3,945 - - 7,620 Heijmans NV (Industrial & Commercial) - 395,172
1,700 3,417 - 25,468 30,585 ING Groep NV (Finance) 1,739,251 2,088,700
- 3,944 - 35,580 39,524 Koninklijke (Royal) Philips Electronics NV (Information
Technology) 1,045,228 1,161,090
- 3,701 - 24,759 28,460 Koninklijke Ahold NV (Consumer Discretionary) 768,860 883,790
- 2,019 - 1,243 3,262 Koninklijke KPN NV (Utilities) 15,197 39,882
- 117 - - 117 OCE NV (Information Technology) - 1,370
- 330 - - 330 Rodamco Europe NV (Finance) - 12,444
- 17,328 - 8,280 25,608 Royal Dutch Petroleum Co. (Energy) 495,149 1,531,376
5,325 2,625 - 5,384 13,334 STMicroelectronics NV (Information technology) 217,113 537,699
- 6,250 - 6,250 Teleplan International N.V. (Information Technology) - 198,522
11,825 2,976 - 14,271 29,072 TNT Post Group NV (Industrial & Commercial) 336,175 684,834
- 7,298 - - 7,298 Unilever NV (Consumer Staples) - 413,115
- - 1,110 1,110 United Pan Europe Communications NV, Class A+
(Information & Entertainment 6,894 6,894
- 445 - - 445 Vedior NV (Industrial & Commercial) - 4,541
- 500 - - 500 Corio NV/VIB NV (Real Estate) - 11,778
2,600 - 16,890 19,490 VNU NV (Information & Entertainment) 702,078 810,154
- 1,293 - 7,397 8,690 Wolters Kluwer NV (Information & Entertainment) 204,634 240,404
New Zealand
- 3,731 - - 3,731 Carter Holt Harvey Ltd. (Materials) - 2,821
Norway
- - - 27,550 27,550 DNB Holdings ASA (Finance) 121,106 121,106
- 100 - - 100 Elkem ASA (Materials) - 1,912
- - 8,625 - 8,625 Farstad Shipping A/S (Energy) - 46,445
- - 16,700 - 16,700 Fred. Olsen Energy ASA (Energy) - 149,574
- - 10,125 - 10,125 Frontline Ltd. (Industrial & Commercial) - 200,286
- 200 - - 200 Norske Skogindustrier A.S. (Materials) - 3,253
- 800 - 5,720 6,520 Orkla ASA (Consumer Staples) 105,291 120,017
- - 10,650 - 10,650 Smedvig A/S (Energy) - 101,239
- - 14,200 - 14,200 Tandberg ASA (Information Technology) - 174,779
- - 7,600 - 7,600 TGS Nopec Geophysical Company ASA (Energy) - 127,787
Poland
- - - 13,246 13,246 Bank Polska Kasa Opieki SA ADR+* (Finance) 225,182 225,182
- - - 64,998 64,998 Telekomunikacja Polska SA ADR* (Information Technology) 351,028 351,028
Portugal
- 4,084 - - 4,084 Banco Commercial Portugues (Finance) - 17,538
- 393 - - 393 Banco Espirito Santo SA (Finance) - 5,335
- 3,576 - - 3,576 BPI-SGPS SA (Finance) - 10,280
18,500 2,155 - - 20,655 Brisa-Auto Estradas de Portugal SA (Industrial &
Commercial) - 192,607
- 23,405 - - 23,405 Electricidade de Portugal SA (Utilities) - 63,544
- 565 - 3,628 4,193 Jeronimo Martins SGPS SA (Consumer Staples) 25,108 29,018
- 3,300 - - 3,300 Portucel Empresa Produtore de Pasta e Papel SA
(Materials) - 3,514
- 1,598 - 59,877 61,475 Portugal Telecom SGPS SA (Utilities) 581,197 596,708
- 246 - - 246 PT Multimedia.com (Information Technology) - 812
- 1,660 - - 1,660 Sonae SGPS SA (Consumer Discretionary) - 1,664
Russia
- - - 946 946 Lukoil Holdings ADR (Energy) 39,496 39,496
- - - 2,408 2,408 Lukoil Holdings ADR* (Energy) 100,534 100,534
Singapore
- 8,000 - - 8,000 Capital Land Ltd. (real Estate) - 10,104
- 1,000 - - 1,000 Chartered Semiconductors Mfg. Ltd. (Information
technology) - 3,075
- 4,000 - - 4,000 City Developments Ltd. (Real Estate) - 14,058
- 100 - - 100 Creative Technology Ltd. (Information Technology) - 923
- 2,000 - - 2,000 Cycle & Carriage Ltd. Consumer Discretionary) - 3,624
- 5,815 - 5,000 10,815 DBS Group Holdings Ltd. (Finance) 43,657 94,430
B-59
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 2,000 - - 2,000 First Capital Corp. (Singap) (Real Estate)
6,350 - - 3,400 9,750 Flextronics International Ltd. (Information Technology)
- 2,000 - - 2,000 Fraser & Neave Ltd. (Consumer Staples)
- 5,000 - - 5,000 Hotel Properties Ltd. (Information & Entertainment)
- 3,000 - - 3,000 Keppel Corp. (Multi-industry)
- 4,000 - - 4,000 Neptune Orient Lines (Industrial & Commercial)
- 5,400 - - 5,400 Oversea-Chinese Banking Corp (Finance)
- 6,000 - - 6,000 Parkway Holdings Ltd. (Healthcare)
- 11,000 - - 11,000 Sembcorp Industries Ltd. (Industrial & Commercial)
- 7,000 - - 7,000 Singapore Airlines Ltd. (Industrial & Commercial)
- 2,000 - - 2,000 Singapore Press Holdings (Information & Entertainment)
- 18,000 - - 18,000 Singapore Technologies Engineering Ltd. (Industrial &
Commercial)
- 16,900 - 39,000 55,900 Singapore Telecommunications (Information Technology)
- 9,000 - - 9,000 United Industrial Corp. Ltd. (Real Estate)
- 4,336 - 40,512 44,848 United Overseas Bank Ltd. (Finance)
- 4,000 - - 4,000 United Overseas Land Ltd. (Real Estate)
South Korea 0.0% 0.0%
- - 2,376 - 2,376 Duzon Digital Ware Co. Ltd. (Information Technology)
- - 29,530 - 29,530 Good Morning Securities Co. Ltd. (Finance)
- - 4,290 - 4,290 Humax Co. Ltd. (Information Technology)
- - 15,420 - 15,420 Hyundai Mobis (Consumer Discretionary)
- - 3,600 - 3,600 KorAm Bank (Finance)
- - 2,240 - 2,240 LG Home Shopping, Inc. (Consumer Discretionary)
- - 100 - 100 LG Household & Health Care Ltd. (Healthcare)
- - 2,180 - 2,180 NCSoft Corp. (Information Technology)
- - 38,300 - 38,300 Trigem Computer, Inc. (Information Technology)
Spain 1.1% 3.6%
- 256 - - 256 Acerinox SA (Materials)
- 674 6,400 - 7,074 ACS, Actividades Cons y Serv (Industrial & Commercial)
- 1,807 - - 1,807 Aguas de Barcelona (Gen De) (Utilities)
- 3,322 - - 3,322 Altadis SA (Consumer Staples)
- 2,910 - - 2,910 Autopistas Concesionaria Espanola SA (Industrial &
Commercial)
- 15,537 - 70,584 86,121 Banco Bilbao Vizcaya Argentaria SA (Finance)
- - - 15,043 15,043 Banco Popular Espanol (Finance)
27,825 15,621 - 28,875 72,321 Banco Santander Central Hispano SA (Finance)
- 524 - - 524 Corporacion Mapfre Compania Internacional DE Reaseguros
(Finance)
- 359 - - 359 Ebro Puleva SA (Consumer Staples)
- 12,237 - 9,895 22,132 Endesa SA (Utilities)
- 1,026 - - 1,026 Fomento de Construcciones Y Contratas SA (Industrial &
Commercial)
- 5,676 - - 5,676 Gas Natural SDG SA (Utilities)
- 1,931 6,825 - 8,756 Grupo Dragados SA (Industrial & Commercial)
- - 10,375 - 10,375 Grupo Ferrovial SA (Industrial & Commercial)
- 11,410 - 46,480 57,890 Iberdrola SA (Utilities)
- 1,641 - - 1,641 Inmobiliaria Colonial (Real Estate)
- 71 435 - 506 Metrovacesa SA (Real Estate)
- 1,928 - - 1,928 Metrovacesa SA (Real Estate)
- - 4,600 - 4,600 NH Hoteles S.A. (Information & Entertainment)
- 9,908 - 9,695 19,603 Repsol YPF SA (Energy)
- 1,076 - - 1,076 Sol Melia SA (Information & Entertainment)
- 17,829 - 51,769 69,598 Telefonica SA (Utilities)
- 9 - 2,302 2,311 Telefonica SA ADR+ (Utilities)
- 2,488 - - 2,488 Telepizza (Consumer Discretionary)
- 3,790 - - 3,790 Union Fenosa SA (Utilities)
- 6,399 - - 6,399 Vallehermoso SA (Real Estate)
- 539 - - 539 Zardoya-Otis SA (Industrial & Commercial)
Sweden 1.0% 2.2%
13,400 - - - 13,400 Assa Abloy AB (Materials)
- 159 3,700 - 3,859 Assidoman AB (Materials)
- 800 - - 800 Atlas Copco AB (Industrial & Commercial)
- 1,300 - - 1,300 Atlas Copco AB (Industrial & Commercial)
- - 2,600 - 2,600 Autoliv, Inc. (Consumer Discretionary)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 2,000 - - 2,000 First Capital Corp. (Singap) (Real Estate)
6,350 - - 3,400 9,750 Flextronics International Ltd. (Information Technology)
- 2,000 - - 2,000 Fraser & Neave Ltd. (Consumer Staples)
- 5,000 - - 5,000 Hotel Properties Ltd. (Information & Entertainment)
- 3,000 - - 3,000 Keppel Corp. (Multi-industry)
- 4,000 - - 4,000 Neptune Orient Lines (Industrial & Commercial)
- 5,400 - - 5,400 Oversea-Chinese Banking Corp (Finance)
- 6,000 - - 6,000 Parkway Holdings Ltd. (Healthcare)
- 11,000 - - 11,000 Sembcorp Industries Ltd. (Industrial & Commercial)
- 7,000 - - 7,000 Singapore Airlines Ltd. (Industrial & Commercial)
- 2,000 - - 2,000 Singapore Press Holdings (Information & Entertainment)
- 18,000 - - 18,000 Singapore Technologies Engineering Ltd. (Industrial &
Commercial)
- 16,900 - 39,000 55,900 Singapore Telecommunications (Information Technology)
- 9,000 - - 9,000 United Industrial Corp. Ltd. (Real Estate)
- 4,336 - 40,512 44,848 United Overseas Bank Ltd. (Finance)
- 4,000 - - 4,000 United Overseas Land Ltd. (Real Estate)
South Korea 4.6% 0.0% 0.5%
- - 2,376 - 2,376 Duzon Digital Ware Co. Ltd. (Information Technology)
- - 29,530 - 29,530 Good Morning Securities Co. Ltd. (Finance)
- - 4,290 - 4,290 Humax Co. Ltd. (Information Technology)
- - 15,420 - 15,420 Hyundai Mobis (Consumer Discretionary)
- - 3,600 - 3,600 KorAm Bank (Finance)
- - 2,240 - 2,240 LG Home Shopping, Inc. (Consumer Discretionary)
- - 100 - 100 LG Household & Health Care Ltd. (Healthcare)
- - 2,180 - 2,180 NCSoft Corp. (Information Technology)
- - 38,300 - 38,300 Trigem Computer, Inc. (Information Technology)
Spain 2.6% 4.1% 3.4%
- 256 - - 256 Acerinox SA (Materials)
- 674 6,400 - 7,074 ACS, Actividades Cons y Serv (Industrial & Commercial)
- 1,807 - - 1,807 Aguas de Barcelona (Gen De) (Utilities)
- 3,322 - - 3,322 Altadis SA (Consumer Staples)
- 2,910 - - 2,910 Autopistas Concesionaria Espanola SA (Industrial &
Commercial)
- 15,537 - 70,584 86,121 Banco Bilbao Vizcaya Argentaria SA (Finance)
- - - 15,043 15,043 Banco Popular Espanol (Finance)
27,825 15,621 - 28,875 72,321 Banco Santander Central Hispano SA (Finance)
- 524 - - 524 Corporacion Mapfre Compania Internacional DE Reaseguros
(Finance)
- 359 - - 359 Ebro Puleva SA (Consumer Staples)
- 12,237 - 9,895 22,132 Endesa SA (Utilities)
- 1,026 - - 1,026 Fomento de Construcciones Y Contratas SA (Industrial &
Commercial)
- 5,676 - - 5,676 Gas Natural SDG SA (Utilities)
- 1,931 6,825 - 8,756 Grupo Dragados SA (Industrial & Commercial)
- - 10,375 - 10,375 Grupo Ferrovial SA (Industrial & Commercial)
- 11,410 - 46,480 57,890 Iberdrola SA (Utilities)
- 1,641 - - 1,641 Inmobiliaria Colonial (Real Estate)
- 71 435 - 506 Metrovacesa SA (Real Estate)
- 1,928 - - 1,928 Metrovacesa SA (Real Estate)
- - 4,600 - 4,600 NH Hoteles S.A. (Information & Entertainment)
- 9,908 - 9,695 19,603 Repsol YPF SA (Energy)
- 1,076 - - 1,076 Sol Melia SA (Information & Entertainment)
- 17,829 - 51,769 69,598 Telefonica SA (Utilities)
- 9 - 2,302 2,311 Telefonica SA ADR+ (Utilities)
- 2,488 - - 2,488 Telepizza (Consumer Discretionary)
- 3,790 - - 3,790 Union Fenosa SA (Utilities)
- 6,399 - - 6,399 Vallehermoso SA (Real Estate)
- 539 - - 539 Zardoya-Otis SA (Industrial & Commercial)
Sweden 3.2% 1.6% 1.8%
13,400 - - - 13,400 Assa Abloy AB (Materials)
- 159 3,700 - 3,859 Assidoman AB (Materials)
- 800 - - 800 Atlas Copco AB (Industrial & Commercial)
- 1,300 - - 1,300 Atlas Copco AB (Industrial & Commercial)
- - 2,600 - 2,600 Autoliv, Inc. (Consumer Discretionary)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 2,000 - - 2,000 First Capital Corp. (Singap) (Real Estate) - 1,186 -
6,350 - - 3,400 9,750 Flextronics International Ltd. (Information Technology) 170,752 - -
- 2,000 - - 2,000 Fraser & Neave Ltd. (Consumer Staples) - 8,018 -
- 5,000 - - 5,000 Hotel Properties Ltd. (Information & Entertainment) - 4,119 -
- 3,000 - - 3,000 Keppel Corp. (Multi-industry) - 5,173 -
- 4,000 - - 4,000 Neptune Orient Lines (Industrial & Commercial) - 3,317 -
- 5,400 - - 5,400 Oversea-Chinese Banking Corp (Finance) - 32,619 -
- 6,000 - - 6,000 Parkway Holdings Ltd. (Healthcare) - 3,262 -
- 11,000 - - 11,000 Sembcorp Industries Ltd. (Industrial & Commercial) - 9,605 -
- 7,000 - - 7,000 Singapore Airlines Ltd. (Industrial & Commercial) - 55,739 -
- 2,000 - - 2,000 Singapore Press Holdings (Information & Entertainment) - 22,954 -
- 18,000 - - 18,000 Singapore Technologies Engineering Ltd. (Industrial &
Commercial) - 26,985 -
- 16,900 - 39,000 55,900 Singapore Telecommunications (Information Technology) - 16,891 -
- 9,000 - - 9,000 United Industrial Corp. Ltd. (Real Estate) - 4,250 -
- 4,336 - 40,512 44,848 United Overseas Bank Ltd. (Finance) - 28,811 -
- 4,000 - - 4,000 United Overseas Land Ltd. (Real Estate) - 3,712 -
South Korea
- - 2,376 - 2,376 Duzon Digital Ware Co. Ltd. (Information Technology) - - 48,440
- - 29,530 - 29,530 Good Morning Securities Co. Ltd. (Finance) - - 133,412
- - 4,290 - 4,290 Humax Co. Ltd. (Information Technology) - - 64,497
- - 15,420 - 15,420 Hyundai Mobis (Consumer Discretionary) - - 118,255
- - 3,600 - 3,600 KorAm Bank (Finance) - - 19,681
- - 2,240 - 2,240 LG Home Shopping, Inc. (Consumer Discretionary) - - 89,294
- - 100 - 100 LG Household & Health Care Ltd. (Healthcare) - - 1,367
- - 2,180 - 2,180 NCSoft Corp. (Information Technology) - - 198,633
- - 38,300 - 38,300 Trigem Computer, Inc. (Information Technology) - - 212,293
Spain
- 256 - - 256 Acerinox SA (Materials) - 7,541 -
- 674 6,400 - 7,074 ACS, Actividades Cons y Serv (Industrial & Commercial) - 18,837 178,870
- 1,807 - - 1,807 Aguas de Barcelona (Gen De) (Utilities) - 26,053 -
- 3,322 - - 3,322 Altadis SA (Consumer Staples) - 41,264 -
- 2,910 - - 2,910 Autopistas Concesionaria Espanola SA (Industrial &
Commercial) - 28,556 -
- 15,537 - 70,584 86,121 Banco Bilbao Vizcaya Argentaria SA (Finance) - 220,839 -
- - - 15,043 15,043 Banco Popular Espanol (Finance) - - -
27,825 15,621 - 28,875 72,321 Banco Santander Central Hispano SA (Finance) 276,502 155,229 -
- 524 - - 524 Corporacion Mapfre Compania Internacional DE Reaseguros
(Finance) - 10,372 -
- 359 - - 359 Ebro Puleva SA (Consumer Staples) - 3,886 -
- 12,237 - 9,895 22,132 Endesa SA (Utilities) - 206,180 -
- 1,026 - - 1,026 Fomento de Construcciones Y Contratas SA (Industrial &
Commercial) - 22,303 -
- 5,676 - - 5,676 Gas Natural SDG SA (Utilities) - 98,706 -
- 1,931 6,825 - 8,756 Grupo Dragados SA (Industrial & Commercial) - 23,866 84,353
- - 10,375 - 10,375 Grupo Ferrovial SA (Industrial & Commercial) - - 162,012
- 11,410 - 46,480 57,890 Iberdrola SA (Utilities) - 168,354 -
- 1,641 - - 1,641 Inmobiliaria Colonial (Real Estate) - 21,796 -
- 71 435 - 506 Metrovacesa SA (Real Estate) - 918 5,623
- 1,928 - - 1,928 Metrovacesa SA (Real Estate) - 30,962 -
- - 4,600 - 4,600 NH Hoteles S.A. (Information & Entertainment) - - 61,179
- 9,908 - 9,695 19,603 Repsol YPF SA (Energy) - 183,729 -
- 1,076 - - 1,076 Sol Melia SA (Information & Entertainment) - 10,139 -
- 17,829 - 51,769 69,598 Telefonica SA (Utilities) - 301,822 -
- 9 - 2,302 2,311 Telefonica SA ADR+ (Utilities) - - -
- 2,488 - - 2,488 Telepizza (Consumer Discretionary) - 5,651 -
- 3,790 - - 3,790 Union Fenosa SA (Utilities) - 71,659 -
- 6,399 - - 6,399 Vallehermoso SA (Real Estate) - 45,420 -
- 539 - - 539 Zardoya-Otis SA (Industrial & Commercial) - 5,122 -
Sweden
13,400 - - - 13,400 Assa Abloy AB (Materials) 233,220 - -
- 159 3,700 - 3,859 Assidoman AB (Materials) - 3,504 81,533
- 800 - - 800 Atlas Copco AB (Industrial & Commercial) - 17,161 -
- 1,300 - - 1,300 Atlas Copco AB (Industrial & Commercial) - 28,773 -
- - 2,600 - 2,600 Autoliv, Inc. (Consumer Discretionary) - - 51,970
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 2,000 - - 2,000 First Capital Corp. (Singap) (Real Estate) - 1,186
6,350 - - 3,400 9,750 Flextronics International Ltd. (Information Technology) 91,426 262,178
- 2,000 - - 2,000 Fraser & Neave Ltd. (Consumer Staples) - 8,018
- 5,000 - - 5,000 Hotel Properties Ltd. (Information & Entertainment) - 4,119
- 3,000 - - 3,000 Keppel Corp. (Multi-industry) - 5,173
- 4,000 - - 4,000 Neptune Orient Lines (Industrial & Commercial) - 3,317
- 5,400 - - 5,400 Oversea-Chinese Banking Corp (Finance) - 32,619
- 6,000 - - 6,000 Parkway Holdings Ltd. (Healthcare) - 3,262
- 11,000 - - 11,000 Sembcorp Industries Ltd. (Industrial & Commercial) - 9,605
- 7,000 - - 7,000 Singapore Airlines Ltd. (Industrial & Commercial) - 55,739
- 2,000 - - 2,000 Singapore Press Holdings (Information & Entertainment) - 22,954
- 18,000 - - 18,000 Singapore Technologies Engineering Ltd. (Industrial &
Commercial) - 26,985
- 16,900 - 39,000 55,900 Singapore Telecommunications (Information Technology) 38,979 55,870
- 9,000 - - 9,000 United Industrial Corp. Ltd. (Real Estate) - 4,250
- 4,336 - 40,512 44,848 United Overseas Bank Ltd. (Finance) 269,190 298,001
- 4,000 - - 4,000 United Overseas Land Ltd. (Real Estate) - 3,712
South Korea
- - 2,376 - 2,376 Duzon Digital Ware Co. Ltd. (Information Technology) - 48,440
- - 29,530 - 29,530 Good Morning Securities Co. Ltd. (Finance) - 133,412
- - 4,290 - 4,290 Humax Co. Ltd. (Information Technology) - 64,497
- - 15,420 - 15,420 Hyundai Mobis (Consumer Discretionary) - 118,255
- - 3,600 - 3,600 KorAm Bank (Finance) - 19,681
- - 2,240 - 2,240 LG Home Shopping, Inc. (Consumer Discretionary) - 89,294
- - 100 - 100 LG Household & Health Care Ltd. (Healthcare) - 1,367
- - 2,180 - 2,180 NCSoft Corp. (Information Technology) - 198,633
- - 38,300 - 38,300 Trigem Computer, Inc. (Information Technology) - 212,293
Spain
- 256 - - 256 Acerinox SA (Materials) - 7,541
- 674 6,400 - 7,074 ACS, Actividades Cons y Serv (Industrial & Commercial) - 197,707
- 1,807 - - 1,807 Aguas de Barcelona (Gen De) (Utilities) - 26,053
- 3,322 - - 3,322 Altadis SA (Consumer Staples) - 41,264
- 2,910 - - 2,910 Autopistas Concesionaria Espanola SA (Industrial &
Commercial) - 28,556
- 15,537 - 70,584 86,121 Banco Bilbao Vizcaya Argentaria SA (Finance) 1,003,263 1,224,102
- - - 15,043 15,043 Banco Popular Espanol (Finance) 537,079 537,079
27,825 15,621 - 28,875 72,321 Banco Santander Central Hispano SA (Finance) 286,937 718,668
- 524 - - 524 Corporacion Mapfre Compania Internacional DE Reaseguros
(Finance) - 10,372
- 359 - - 359 Ebro Puleva SA (Consumer Staples) - 3,886
- 12,237 - 9,895 22,132 Endesa SA (Utilities) 166,720 372,900
- 1,026 - - 1,026 Fomento de Construcciones Y Contratas SA (Industrial &
Commercial) - 22,303
- 5,676 - - 5,676 Gas Natural SDG SA (Utilities) - 98,706
- 1,931 6,825 - 8,756 Grupo Dragados SA (Industrial & Commercial) - 108,219
- - 10,375 - 10,375 Grupo Ferrovial SA (Industrial & Commercial) - 162,012
- 11,410 - 46,480 57,890 Iberdrola SA (Utilities) 685,811 854,165
- 1,641 - - 1,641 Inmobiliaria Colonial (Real Estate) - 21,796
- 71 435 - 506 Metrovacesa SA (Real Estate) - 6,541
- 1,928 - - 1,928 Metrovacesa SA (Real Estate) - 30,962
- - 4,600 - 4,600 NH Hoteles S.A. (Information & Entertainment) - 61,179
- 9,908 - 9,695 19,603 Repsol YPF SA (Energy) 179,779 363,508
- 1,076 - - 1,076 Sol Melia SA (Information & Entertainment) - 10,139
- 17,829 - 51,769 69,598 Telefonica SA (Utilities) 876,383 1,178,205
- 9 - 2,302 2,311 Telefonica SA ADR+ (Utilities) 115,699 115,699
- 2,488 - - 2,488 Telepizza (Consumer Discretionary) - 5,651
- 3,790 - - 3,790 Union Fenosa SA (Utilities) - 71,659
- 6,399 - - 6,399 Vallehermoso SA (Real Estate) - 45,420
- 539 - - 539 Zardoya-Otis SA (Industrial & Commercial) - 5,122
Sweden
13,400 - - - 13,400 Assa Abloy AB (Materials) - 233,220
- 159 3,700 - 3,859 Assidoman AB (Materials) - 85,037
- 800 - - 800 Atlas Copco AB (Industrial & Commercial) - 17,161
- 1,300 - - 1,300 Atlas Copco AB (Industrial & Commercial) - 28,773
- - 2,600 - 2,600 Autoliv, Inc. (Consumer Discretionary) - 51,970
B-60
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- 2,590 - - 2,590 Castellum AB (Real Estate)
- 2,530 - - 2,530 Drott AB (Real Estate)
- 3,300 - 6,830 10,130 Electrolux AB (Consumer Discretionary)
- - 7,000 - 7,000 Elekta AB (Healthcare)
- 30,250 - 45,140 75,390 Ericsson LM Telecommunications Co., Class B
(Information Technology)
- - 1,600 - 1,600 Getinge Industrier AB (Healthcare)
- - 16,200 - 16,200 Getinge Industrier AB (Healthcare)
- - 676 - 676 Haldex AB (Consumer Discretionary)
- 8,000 - 9,540 17,540 Hennes & Mauritz AB (Consumer Discretionary)
- 900 - - 900 JM AB (Industrial & Commercial)
- - 2,150 - 2,150 Modern Times Group AB (Information & Entertainment)
- - 5,150 - 5,150 Munters AB (Industrial & Commercial)
- 2,313 - - 2,313 Nordea AB (Finance)
- 2,700 - 69,023 71,723 Nordea AB (Finance)
- 800 - - 800 OM AB (Finance)
- 2,800 - 1,720 4,520 Sandvik AB (Industrial & Commercial)
- 4,000 - 26,094 30,094 Securitas AB (Information Technology)
- 5,400 - - 5,400 Skandia Forsakrings AB (Finance)
- 1,500 - - 1,500 Skandinaviska Enskilda Banken (SEB) (Finance)
- 1,300 - - 1,300 SKANSKA AB (Industrial & Commercial)
- 1,000 - - 1,000 SKF AB (Materials)
- 400 - - 400 Ssab Svenskt Stal AB (Materials)
- 1,523 - - 1,523 Svenska Cellulosa AB (Materials)
- 2,200 - - 2,200 Svenska Handelsbanken (Finance)
- 1,800 - - 1,800 Swedish Match AB (Consumer Staples)
- 300 - - 300 Tele2 AB (Information Technology)
- 3,150 - - 3,150 Telia AB (Information Technology)
- 1,500 - - 1,500 Trelleborg AB (Industrial & Commercial)
- 500 - - 500 Volvo AB (Consumer Discretionary)
- 1,800 - - 1,800 Volvo AB (Consumer Discretionary)
- 4,050 - - 4,050 Wihlborgs Fastigheter AB (Real Estate)
- 3,300 - - 3,300 Wm-Data AB (Information Technology)
Switzerland 3.0% 7.2%
- 1,367 - 2,329 3,696 ABB AG (Industrial & Commercial)
240 130 - 874 1,244 Adecco SA (Industrial & Commercial)
- 880 - 554 1,434 Credit Suisse Group (Finance)
- 45 - - 45 Givaudan AG (Consumer Discretionary)
- 11 - - 11 Holderbank Financire Glarus AG (Finance)
- 15 - - 15 Holderbank Financire Glarus AG (Finance)
- - 590 - 590 Kaba Holdings AG (Information Technology)
- - 400 - 400 Kuoni Reisen Holding (Information & Entertainment)
- - 325 - 325 Logitech International SA (Information Technology)
- 496 - 764 1,260 Nestle SA (Consumer Staples)
- 550 - - 550 Novartis AG (Healthcare)
- 18 - - 18 Roche Holdings AG (Healthcare)
- 58 - 31 89 Roche Holdings AG (Healthcare)
150 - - - 150 Serono SA (Healthcare)
- - 325 - 325 SEZ Holding AG (Information Technology)
- 10 - - 10 Sulzer AG (Industrial & Commercial)
220 29 - - 249 Swatch Group AG (Consumer Discretionary)
- 61 - - 61 Swiss Reinsurance AG (Finance)
- 274 - - 274 Swisscom AG (Utilities)
- 400 - 400 Swisslog Holding AG (Industrial & Commercial)
- 266 - - 266 Syngenta Novartis AG (Materials)
355 - - - 355 Synthes-Stratec, Inc.+* (Healthcare)
- 1,262 - 3,072 4,334 UBS AG (Finance)
- - 250 - 250 Unaxis Holding AG (Information Technology)
- 33 - - 33 Valora Holding AG (Consumer Discretionary)
- 333 - - 333 Zurich Financial Services AG (Finance)
- - - - Taiwan 0.0% 0.1%
- 9,582 - - 9,582 Asustek Computer, Inc. (Information Technology)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- 2,590 - - 2,590 Castellum AB (Real Estate)
- 2,530 - - 2,530 Drott AB (Real Estate)
- 3,300 - 6,830 10,130 Electrolux AB (Consumer Discretionary)
- - 7,000 - 7,000 Elekta AB (Healthcare)
- 30,250 - 45,140 75,390 Ericsson LM Telecommunications Co., Class B
(Information Technology)
- - 1,600 - 1,600 Getinge Industrier AB (Healthcare)
- - 16,200 - 16,200 Getinge Industrier AB (Healthcare)
- - 676 - 676 Haldex AB (Consumer Discretionary)
- 8,000 - 9,540 17,540 Hennes & Mauritz AB (Consumer Discretionary)
- 900 - - 900 JM AB (Industrial & Commercial)
- - 2,150 - 2,150 Modern Times Group AB (Information & Entertainment)
- - 5,150 - 5,150 Munters AB (Industrial & Commercial)
- 2,313 - - 2,313 Nordea AB (Finance)
- 2,700 - 69,023 71,723 Nordea AB (Finance)
- 800 - - 800 OM AB (Finance)
- 2,800 - 1,720 4,520 Sandvik AB (Industrial & Commercial)
- 4,000 - 26,094 30,094 Securitas AB (Information Technology)
- 5,400 - - 5,400 Skandia Forsakrings AB (Finance)
- 1,500 - - 1,500 Skandinaviska Enskilda Banken (SEB) (Finance)
- 1,300 - - 1,300 SKANSKA AB (Industrial & Commercial)
- 1,000 - - 1,000 SKF AB (Materials)
- 400 - - 400 Ssab Svenskt Stal AB (Materials)
- 1,523 - - 1,523 Svenska Cellulosa AB (Materials)
- 2,200 - - 2,200 Svenska Handelsbanken (Finance)
- 1,800 - - 1,800 Swedish Match AB (Consumer Staples)
- 300 - - 300 Tele2 AB (Information Technology)
- 3,150 - - 3,150 Telia AB (Information Technology)
- 1,500 - - 1,500 Trelleborg AB (Industrial & Commercial)
- 500 - - 500 Volvo AB (Consumer Discretionary)
- 1,800 - - 1,800 Volvo AB (Consumer Discretionary)
- 4,050 - - 4,050 Wihlborgs Fastigheter AB (Real Estate)
- 3,300 - - 3,300 Wm-Data AB (Information Technology)
Switzerland 4.1% 3.3% 4.3%
- 1,367 - 2,329 3,696 ABB AG (Industrial & Commercial)
240 130 - 874 1,244 Adecco SA (Industrial & Commercial)
- 880 - 554 1,434 Credit Suisse Group (Finance)
- 45 - - 45 Givaudan AG (Consumer Discretionary)
- 11 - - 11 Holderbank Financire Glarus AG (Finance)
- 15 - - 15 Holderbank Financire Glarus AG (Finance)
- - 590 - 590 Kaba Holdings AG (Information Technology)
- - 400 - 400 Kuoni Reisen Holding (Information & Entertainment)
- - 325 - 325 Logitech International SA (Information Technology)
- 496 - 764 1,260 Nestle SA (Consumer Staples)
- 550 - - 550 Novartis AG (Healthcare)
- 18 - - 18 Roche Holdings AG (Healthcare)
- 58 - 31 89 Roche Holdings AG (Healthcare)
150 - - - 150 Serono SA (Healthcare)
- - 325 - 325 SEZ Holding AG (Information Technology)
- 10 - - 10 Sulzer AG (Industrial & Commercial)
220 29 - - 249 Swatch Group AG (Consumer Discretionary)
- 61 - - 61 Swiss Reinsurance AG (Finance)
- 274 - - 274 Swisscom AG (Utilities)
- 400 - 400 Swisslog Holding AG (Industrial & Commercial)
- 266 - - 266 Syngenta Novartis AG (Materials)
355 - - - 355 Synthes-Stratec, Inc.+* (Healthcare)
- 1,262 - 3,072 4,334 UBS AG (Finance)
- - 250 - 250 Unaxis Holding AG (Information Technology)
- 33 - - 33 Valora Holding AG (Consumer Discretionary)
- 333 - - 333 Zurich Financial Services AG (Finance)
- - - - Taiwan 0.0% 0.1% 0.1%
- 9,582 - - 9,582 Asustek Computer, Inc. (Information Technology)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- 2,590 - - 2,590 Castellum AB (Real Estate) - 25,127 -
- 2,530 - - 2,530 Drott AB (Real Estate) - 26,395 -
- 3,300 - 6,830 10,130 Electrolux AB (Consumer Discretionary) - 54,539 -
- - 7,000 - 7,000 Elekta AB (Healthcare) - - 42,317
- 30,250 - 45,140 75,390 Ericsson LM Telecommunications Co., Class B
(Information Technology) - 194,667 -
- - 1,600 - 1,600 Getinge Industrier AB (Healthcare) - - 26,209
- - 16,200 - 16,200 Getinge Industrier AB (Healthcare) - - 265,367
- - 676 - 676 Haldex AB (Consumer Discretionary) - - 5,800
- 8,000 - 9,540 17,540 Hennes & Mauritz AB (Consumer Discretionary) - 134,945 -
- 900 - - 900 JM AB (Industrial & Commercial) - 20,096 -
- - 2,150 - 2,150 Modern Times Group AB (Information & Entertainment) - - 63,938
- - 5,150 - 5,150 Munters AB (Industrial & Commercial) - - 81,347
- 2,313 - - 2,313 Nordea AB (Finance) - 13,852 -
- 2,700 - 69,023 71,723 Nordea AB (Finance) - 16,322 -
- 800 - - 800 OM AB (Finance) - 15,328 -
- 2,800 - 1,720 4,520 Sandvik AB (Industrial & Commercial) - 64,977 -
- 4,000 - 26,094 30,094 Securitas AB (Information Technology) - 77,808 -
- 5,400 - - 5,400 Skandia Forsakrings AB (Finance) - 58,707 -
- 1,500 - - 1,500 Skandinaviska Enskilda Banken (SEB) (Finance) - 13,894 -
- 1,300 - - 1,300 SKANSKA AB (Industrial & Commercial) - 50,702 -
- 1,000 - - 1,000 SKF AB (Materials) - 17,794 -
- 400 - - 400 Ssab Svenskt Stal AB (Materials) - 3,705 -
- 1,523 - - 1,523 Svenska Cellulosa AB (Materials) - 32,818 -
- 2,200 - - 2,200 Svenska Handelsbanken (Finance) - 32,820 -
- 1,800 - - 1,800 Swedish Match AB (Consumer Staples) - 7,880 -
- 300 - - 300 Tele2 AB (Information Technology) - 11,700 -
- 3,150 - - 3,150 Telia AB (Information Technology) - 21,653 -
- 1,500 - - 1,500 Trelleborg AB (Industrial & Commercial) - 11,189 -
- 500 - - 500 Volvo AB (Consumer Discretionary) - 8,166 -
- 1,800 - - 1,800 Volvo AB (Consumer Discretionary) - 30,275 -
- 4,050 - - 4,050 Wihlborgs Fastigheter AB (Real Estate) - 5,410 -
- 3,300 - - 3,300 Wm-Data AB (Information Technology) - 13,868 -
Switzerland
- 1,367 - 2,329 3,696 ABB AG (Industrial & Commercial) - 98,496 -
240 130 - 874 1,244 Adecco SA (Industrial & Commercial) 145,258 78,681 -
- 880 - 554 1,434 Credit Suisse Group (Finance) - 164,095 -
- 45 - - 45 Givaudan AG (Consumer Discretionary) - 11,880 -
- 11 - - 11 Holderbank Financire Glarus AG (Finance) - 3,348 -
- 15 - - 15 Holderbank Financire Glarus AG (Finance) - 16,903 -
- - 590 - 590 Kaba Holdings AG (Information Technology) - - 147,598
- - 400 - 400 Kuoni Reisen Holding (Information & Entertainment) - - 175,001
- - 325 - 325 Logitech International SA (Information Technology) - - 99,288
- 496 - 764 1,260 Nestle SA (Consumer Staples) - 1,026,967 -
- 550 - - 550 Novartis AG (Healthcare) - 854,714 -
- 18 - - 18 Roche Holdings AG (Healthcare) - 143,182 -
- 58 - 31 89 Roche Holdings AG (Healthcare) - 416,566 -
150 - - - 150 Serono SA (Healthcare) 123,642 - -
- - 325 - 325 SEZ Holding AG (Information Technology) - - 204,196
- 10 - - 10 Sulzer AG (Industrial & Commercial) - 5,822 -
220 29 - - 249 Swatch Group AG (Consumer Discretionary) 243,606 32,112 -
- 61 - - 61 Swiss Reinsurance AG (Finance) - 120,077 -
- 274 - - 274 Swisscom AG (Utilities) - 71,230 -
- 400 - 400 Swisslog Holding AG (Industrial & Commercial) - - 107,214
- 266 - - 266 Syngenta Novartis AG (Materials) - 13,477 -
355 - - - 355 Synthes-Stratec, Inc.+* (Healthcare) 211,586 - -
- 1,262 - 3,072 4,334 UBS AG (Finance) - 192,044 -
- - 250 - 250 Unaxis Holding AG (Information Technology) - - 44,600
- 33 - - 33 Valora Holding AG (Consumer Discretionary) - 5,764 -
- 333 - - 333 Zurich Financial Services AG (Finance) - 118,432 -
- - - - Taiwan
- 9,582 - - 9,582 Asustek Computer, Inc. (Information Technology) - 43,981 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- 2,590 - - 2,590 Castellum AB (Real Estate) - 25,127
- 2,530 - - 2,530 Drott AB (Real Estate) - 26,395
- 3,300 - 6,830 10,130 Electrolux AB (Consumer Discretionary) 112,879 167,418
- - 7,000 - 7,000 Elekta AB (Healthcare) - 42,317
- 30,250 - 45,140 75,390 Ericsson LM Telecommunications Co., Class B
(Information Technology) 290,488 485,155
- - 1,600 - 1,600 Getinge Industrier AB (Healthcare) - 26,209
- - 16,200 - 16,200 Getinge Industrier AB (Healthcare) - 265,367
- - 676 - 676 Haldex AB (Consumer Discretionary) - 5,800
- 8,000 - 9,540 17,540 Hennes & Mauritz AB (Consumer Discretionary) 160,922 295,867
- 900 - - 900 JM AB (Industrial & Commercial) - 20,096
- - 2,150 - 2,150 Modern Times Group AB (Information & Entertainment) - 63,938
- - 5,150 - 5,150 Munters AB (Industrial & Commercial) - 81,347
- 2,313 - - 2,313 Nordea AB (Finance) - 13,852
- 2,700 - 69,023 71,723 Nordea AB (Finance) 417,261 433,583
- 800 - - 800 OM AB (Finance) - 15,328
- 2,800 - 1,720 4,520 Sandvik AB (Industrial & Commercial) 39,914 104,891
- 4,000 - 26,094 30,094 Securitas AB (Information Technology) 507,581 585,389
- 5,400 - - 5,400 Skandia Forsakrings AB (Finance) - 58,707
- 1,500 - - 1,500 Skandinaviska Enskilda Banken (SEB) (Finance) - 13,894
- 1,300 - - 1,300 SKANSKA AB (Industrial & Commercial) - 50,702
- 1,000 - - 1,000 SKF AB (Materials) - 17,794
- 400 - - 400 Ssab Svenskt Stal AB (Materials) - 3,705
- 1,523 - - 1,523 Svenska Cellulosa AB (Materials) - 32,818
- 2,200 - - 2,200 Svenska Handelsbanken (Finance) - 32,820
- 1,800 - - 1,800 Swedish Match AB (Consumer Staples) - 7,880
- 300 - - 300 Tele2 AB (Information Technology) - 11,700
- 3,150 - - 3,150 Telia AB (Information Technology) - 21,653
- 1,500 - - 1,500 Trelleborg AB (Industrial & Commercial) - 11,189
- 500 - - 500 Volvo AB (Consumer Discretionary) - 8,166
- 1,800 - - 1,800 Volvo AB (Consumer Discretionary) - 30,275
- 4,050 - - 4,050 Wihlborgs Fastigheter AB (Real Estate) - 5,410
- 3,300 - - 3,300 Wm-Data AB (Information Technology) - 13,868
Switzerland
- 1,367 - 2,329 3,696 ABB AG (Industrial & Commercial) 167,810 266,306
240 130 - 874 1,244 Adecco SA (Industrial & Commercial) 528,979 752,918
- 880 - 554 1,434 Credit Suisse Group (Finance) 103,305 267,400
- 45 - - 45 Givaudan AG (Consumer Discretionary) - 11,880
- 11 - - 11 Holderbank Financire Glarus AG (Finance) - 3,348
- 15 - - 15 Holderbank Financire Glarus AG (Finance) - 16,903
- - 590 - 590 Kaba Holdings AG (Information Technology) - 147,598
- - 400 - 400 Kuoni Reisen Holding (Information & Entertainment) - 175,001
- - 325 - 325 Logitech International SA (Information Technology) - 99,288
- 496 - 764 1,260 Nestle SA (Consumer Staples) 1,581,859 2,608,826
- 550 - - 550 Novartis AG (Healthcare) - 854,714
- 18 - - 18 Roche Holdings AG (Healthcare) - 143,182
- 58 - 31 89 Roche Holdings AG (Healthcare) 222,648 639,214
150 - - - 150 Serono SA (Healthcare) - 123,642
- - 325 - 325 SEZ Holding AG (Information Technology) - 204,196
- 10 - - 10 Sulzer AG (Industrial & Commercial) - 5,822
220 29 - - 249 Swatch Group AG (Consumer Discretionary) - 275,718
- 61 - - 61 Swiss Reinsurance AG (Finance) - 120,077
- 274 - - 274 Swisscom AG (Utilities) - 71,230
- 400 - 400 Swisslog Holding AG (Industrial & Commercial) - 107,214
- 266 - - 266 Syngenta Novartis AG (Materials) - 13,477
355 - - - 355 Synthes-Stratec, Inc.+* (Healthcare) - 211,586
- 1,262 - 3,072 4,334 UBS AG (Finance) 467,480 659,524
- - 250 - 250 Unaxis Holding AG (Information Technology) - 44,600
- 33 - - 33 Valora Holding AG (Consumer Discretionary) - 5,764
- 333 - - 333 Zurich Financial Services AG (Finance) - 118,432
- - - - Taiwan
- 9,582 - - 9,582 Asustek Computer, Inc. (Information Technology) - 43,981
B-61
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
---------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------- -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ -------
- - - 2,800 2,800 Sunplus Technology Co. Ltd. GDR + (Information
Technology)
- - - 10,800 10,800 Sunplus Technology Co. Ltd. GDR +* (Information
Technology)
- - - - United Kingdom 9.1% 21.7%
- 2,677 - - 2,677 3I Group PLC (Finance)
- 5,501 - 3,980 9,481 Abbey National PLC (Finance)
- - 24,125 - 24,125 Acambis PLC (Healthcare)
23,425 - - - 23,425 Aegis Group PLC (Information & Entertainment)
- - 22,050 - 22,050 Airtours PLC (Information & Entertainment)
- 4,233 - - 4,233 Amersham PLC (Healthcare)
- - 16,200 - 16,200 Amey PLC (Industrial & Commercial)
7,500 2,544 - - 10,044 Amvescap PLC (Finance)
18,000 4,089 - - 22,089 ARM Holdings PLC (Information Technology)
- 11,995 - 11,165 23,160 AstraZeneca PLC (Healthcare)
- - - 1,000 1,000 Autonomy Corp.+ (Information Technology)
- 7,043 - - 7,043 BAA PLC (Industrial & Commercial)
- 18,372 - 111,764 130,136 BAE Systems PLC (Industrial & Commercial)
- 7,109 - 19,361 26,470 Barclays PLC (Finance)
- 7,239 - - 7,239 Bass PLC (Multi-industry)
- 23,981 - 6,483 30,464 BG Group PLC (Utilities)
- - 8,625 - 8,625 Bloomsbury Publishing PLC (Information & Entertainment)
- 814 - - 814 Blue Circle Industries PLC (Industrial & Commercial)
- 3,500 - - 3,500 BOC Group PLC (Materials)
- 4,949 - - 4,949 Boots Co PLC (Consumer Discretionary)
- 178,879 - 33,000 211,879 BP Amoco PLC (Energy)
2,800 - - 10,899 13,699 BP Amoco PLC ADR (Energy)
- 20,704 - - 20,704 British Airways PLC (Industrial & Commercial)
- 9,634 - - 9,634 British American Tobacco PLC (Consumer Staples)
- - 51,950 - 51,950 British Energy PLC (Energy)
- 7,990 - - 7,990 British Land Company PLC (Real Estate)
- 8,546 - - 8,546 British SKY Broadcasting PLC (Information &
Entertainment)
- 50,193 - - 50,193 British Telecommunications PLC (Information Technology)
- 437 - - 437 Bunzl PLC (Materials)
21,000 - - 17,227 38,227 Cable & Wireless PLC (Information Technology)
- 17,928 - 28,525 46,453 Cadbury Schweppes PLC (Consumer Staples)
- 1,977 - - 1,977 Canary Wharf Group PLC (Real Estate)
- 5,904 - - 5,904 Capita Group PLC (Industrial & Commercial)
- 3,591 - - 3,591 Carlton Communications PLC (Information & Entertainment)
- - 84,475 - 84,475 Carphone Warehouse Group PLC (Information Technology)
- - 18,100 - 18,100 Cedar Group PLC (Information Technology)
- - - 29,507 29,507 Celltech Group PLC+ (Healthcare)
- 22,808 - 13,500 36,308 Centrica PLC (Utilities)
- 10,691 - - 10,691 CGNU PLC (Finance)
- 5,161 - - 5,161 Chelsfield PLC (Real Estate)
17,000 14,672 - 83,770 115,442 Compass Group PLC+ (Consumer Discretionary)
- 3,993 - - 3,993 Corus Group PLC (Materials)
- - - 10,000 10,000 David S. Smith Holdings PLC (Materials)
- - 27,650 - 27,650 Debenhams PLC (Consumer Discretionary)
- - 7,375 - 7,375 DFS Furniture PLC (Consumer Discretionary)
- 31,661 - 63,499 95,160 Diageo PLC (Consumer Staples)
12,000 - - 5,500 17,500 Dimension Data Holdings PLC (Information Technology)
- 11,032 - 30,523 41,555 Dixons Group PLC (Consumer Discretionary)
- - 5,700 - 5,700 easyJet PLC (Industrial & Commercial)
- - 29,750 - 29,750 Eidos PLC (Information & Entertainment)
- - - 14,420 14,420 Electrocomponents PLC (Information Technology)
- - 27,675 - 27,675 Electronics Boutique PLC (Consumer Discretionary)
- 3,902 - - 3,902 EMI Group PLC (Information & Entertainment)
27,875 - - - 27,875 Energis PLC (Information Technology)
- - 52,600 - 52,600 First Choice Holidays PLC (Information & Entertainment)
- - 11,000 - 11,000 Fitness First PLC (Information & Entertainment)
- - 4,650 - 4,650 Galen Holdings PLC (Healthcare)
- 8,995 - 2,000 10,995 GKN PLC (Consumer Discretionary)
Principal/Shares
---------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- - - 2,800 2,800 Sunplus Technology Co. Ltd. GDR + (Information
Technology)
- - - 10,800 10,800 Sunplus Technology Co. Ltd. GDR +* (Information
Technology)
- - - - United Kingdom 18.4% 18.4% 18.0%
- 2,677 - - 2,677 3I Group PLC (Finance)
- 5,501 - 3,980 9,481 Abbey National PLC (Finance)
- - 24,125 - 24,125 Acambis PLC (Healthcare)
23,425 - - - 23,425 Aegis Group PLC (Information & Entertainment)
- - 22,050 - 22,050 Airtours PLC (Information & Entertainment)
- 4,233 - - 4,233 Amersham PLC (Healthcare)
- - 16,200 - 16,200 Amey PLC (Industrial & Commercial)
7,500 2,544 - - 10,044 Amvescap PLC (Finance)
18,000 4,089 - - 22,089 ARM Holdings PLC (Information Technology)
- 11,995 - 11,165 23,160 AstraZeneca PLC (Healthcare)
- - - 1,000 1,000 Autonomy Corp.+ (Information Technology)
- 7,043 - - 7,043 BAA PLC (Industrial & Commercial)
- 18,372 - 111,764 130,136 BAE Systems PLC (Industrial & Commercial)
- 7,109 - 19,361 26,470 Barclays PLC (Finance)
- 7,239 - - 7,239 Bass PLC (Multi-industry)
- 23,981 - 6,483 30,464 BG Group PLC (Utilities)
- - 8,625 - 8,625 Bloomsbury Publishing PLC (Information & Entertainment)
- 814 - - 814 Blue Circle Industries PLC (Industrial & Commercial)
- 3,500 - - 3,500 BOC Group PLC (Materials)
- 4,949 - - 4,949 Boots Co PLC (Consumer Discretionary)
- 178,879 - 33,000 211,879 BP Amoco PLC (Energy)
2,800 - - 10,899 13,699 BP Amoco PLC ADR (Energy)
- 20,704 - - 20,704 British Airways PLC (Industrial & Commercial)
- 9,634 - - 9,634 British American Tobacco PLC (Consumer Staples)
- - 51,950 - 51,950 British Energy PLC (Energy)
- 7,990 - - 7,990 British Land Company PLC (Real Estate)
- 8,546 - - 8,546 British SKY Broadcasting PLC (Information &
Entertainment)
- 50,193 - - 50,193 British Telecommunications PLC (Information Technology)
- 437 - - 437 Bunzl PLC (Materials)
21,000 - - 17,227 38,227 Cable & Wireless PLC (Information Technology)
- 17,928 - 28,525 46,453 Cadbury Schweppes PLC (Consumer Staples)
- 1,977 - - 1,977 Canary Wharf Group PLC (Real Estate)
- 5,904 - - 5,904 Capita Group PLC (Industrial & Commercial)
- 3,591 - - 3,591 Carlton Communications PLC (Information & Entertainment)
- - 84,475 - 84,475 Carphone Warehouse Group PLC (Information Technology)
- - 18,100 - 18,100 Cedar Group PLC (Information Technology)
- - - 29,507 29,507 Celltech Group PLC+ (Healthcare)
- 22,808 - 13,500 36,308 Centrica PLC (Utilities)
- 10,691 - - 10,691 CGNU PLC (Finance)
- 5,161 - - 5,161 Chelsfield PLC (Real Estate)
17,000 14,672 - 83,770 115,442 Compass Group PLC+ (Consumer Discretionary)
- 3,993 - - 3,993 Corus Group PLC (Materials)
- - - 10,000 10,000 David S. Smith Holdings PLC (Materials)
- - 27,650 - 27,650 Debenhams PLC (Consumer Discretionary)
- - 7,375 - 7,375 DFS Furniture PLC (Consumer Discretionary)
- 31,661 - 63,499 95,160 Diageo PLC (Consumer Staples)
12,000 - - 5,500 17,500 Dimension Data Holdings PLC (Information Technology)
- 11,032 - 30,523 41,555 Dixons Group PLC (Consumer Discretionary)
- - 5,700 - 5,700 easyJet PLC (Industrial & Commercial)
- - 29,750 - 29,750 Eidos PLC (Information & Entertainment)
- - - 14,420 14,420 Electrocomponents PLC (Information Technology)
- - 27,675 - 27,675 Electronics Boutique PLC (Consumer Discretionary)
- 3,902 - - 3,902 EMI Group PLC (Information & Entertainment)
27,875 - - - 27,875 Energis PLC (Information Technology)
- - 52,600 - 52,600 First Choice Holidays PLC (Information & Entertainment)
- - 11,000 - 11,000 Fitness First PLC (Information & Entertainment)
- - 4,650 - 4,650 Galen Holdings PLC (Healthcare)
- 8,995 - 2,000 10,995 GKN PLC (Consumer Discretionary)
Principal/Shares Market Value
--------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------- -------- -------- -------- --------- -------------------------------------------------------- ------- --------- --------
- - - 2,800 2,800 Sunplus Technology Co. Ltd. GDR + (Information
Technology) - - -
- - - 10,800 10,800 Sunplus Technology Co. Ltd. GDR +* (Information
Technology) - - -
- - - - United Kingdom
- 2,677 - - 2,677 3I Group PLC (Finance) - 48,174 -
- 5,501 - 3,980 9,481 Abbey National PLC (Finance) - 97,578 -
- - 24,125 - 24,125 Acambis PLC (Healthcare) - - 42,793
23,425 - - - 23,425 Aegis Group PLC (Information & Entertainment) 45,908 - -
- - 22,050 - 22,050 Airtours PLC (Information & Entertainment) - - 100,305
- 4,233 - - 4,233 Amersham PLC (Healthcare) - 32,275 -
- - 16,200 - 16,200 Amey PLC (Industrial & Commercial) - - 93,206
7,500 2,544 - - 10,044 Amvescap PLC (Finance) 139,688 47,382 -
18,000 4,089 - - 22,089 ARM Holdings PLC (Information Technology) 98,876 22,461 -
- 11,995 - 11,165 23,160 AstraZeneca PLC (Healthcare) - 558,349 -
- - - 1,000 1,000 Autonomy Corp.+ (Information Technology) - - -
- 7,043 - - 7,043 BAA PLC (Industrial & Commercial) - 61,861 -
- 18,372 - 111,764 130,136 BAE Systems PLC (Industrial & Commercial) - 86,991 -
- 7,109 - 19,361 26,470 Barclays PLC (Finance) - 228,812 -
- 7,239 - - 7,239 Bass PLC (Multi-industry) - 79,633 -
- 23,981 - 6,483 30,464 BG Group PLC (Utilities) - 94,338 -
- - 8,625 - 8,625 Bloomsbury Publishing PLC (Information & Entertainment) - - 92,289
- 814 - - 814 Blue Circle Industries PLC (Industrial & Commercial) - 5,618 -
- 3,500 - - 3,500 BOC Group PLC (Materials) - 51,469 -
- 4,949 - - 4,949 Boots Co PLC (Consumer Discretionary) - 43,716 -
- 178,879 - 33,000 211,879 BP Amoco PLC (Energy) - 1,604,410 -
2,800 - - 10,899 13,699 BP Amoco PLC ADR (Energy) 151,424 - -
- 20,704 - - 20,704 British Airways PLC (Industrial & Commercial) - 167,929 -
- 9,634 - - 9,634 British American Tobacco PLC (Consumer Staples) - 48,580 -
- - 51,950 - 51,950 British Energy PLC (Energy) - - 228,146
- 7,990 - - 7,990 British Land Company PLC (Real Estate) - 53,262 -
- 8,546 - - 8,546 British SKY Broadcasting PLC (Information &
Entertainment) - 106,969 -
- 50,193 - - 50,193 British Telecommunications PLC (Information Technology) - 400,650 -
- 437 - - 437 Bunzl PLC (Materials) - 2,558 -
21,000 - - 17,227 38,227 Cable & Wireless PLC (Information Technology) 154,258 - -
- 17,928 - 28,525 46,453 Cadbury Schweppes PLC (Consumer Staples) - 110,534 -
- 1,977 - - 1,977 Canary Wharf Group PLC (Real Estate) - 15,272 -
- 5,904 - - 5,904 Capita Group PLC (Industrial & Commercial) - 41,764 -
- 3,591 - - 3,591 Carlton Communications PLC (Information & Entertainment) - 21,935 -
- - 84,475 - 84,475 Carphone Warehouse Group PLC (Information Technology) - - 160,718
- - 18,100 - 18,100 Cedar Group PLC (Information Technology) - - 72,109
- - - 29,507 29,507 Celltech Group PLC+ (Healthcare) - - -
- 22,808 - 13,500 36,308 Centrica PLC (Utilities) - 77,244 -
- 10,691 - - 10,691 CGNU PLC (Finance) - 148,347 -
- 5,161 - - 5,161 Chelsfield PLC (Real Estate) - 26,588 -
17,000 14,672 - 83,770 115,442 Compass Group PLC+ (Consumer Discretionary) 130,347 112,497 -
- 3,993 - - 3,993 Corus Group PLC (Materials) - 4,084 -
- - - 10,000 10,000 David S. Smith Holdings PLC (Materials) - - -
- - 27,650 - 27,650 Debenhams PLC (Consumer Discretionary) - - 174,035
- - 7,375 - 7,375 DFS Furniture PLC (Consumer Discretionary) - - 44,859
- 31,661 - 63,499 95,160 Diageo PLC (Consumer Staples) - 332,889 -
12,000 - - 5,500 17,500 Dimension Data Holdings PLC (Information Technology) 56,819 - -
- 11,032 - 30,523 41,555 Dixons Group PLC (Consumer Discretionary) - 38,506 -
- - 5,700 - 5,700 easyJet PLC (Industrial & Commercial) - - 32,534
- - 29,750 - 29,750 Eidos PLC (Information & Entertainment) - - 124,268
- - - 14,420 14,420 Electrocomponents PLC (Information Technology) - - -
- - 27,675 - 27,675 Electronics Boutique PLC (Consumer Discretionary) - - 32,067
- 3,902 - - 3,902 EMI Group PLC (Information & Entertainment) - 24,783 -
27,875 - - - 27,875 Energis PLC (Information Technology) 145,146 - -
- - 52,600 - 52,600 First Choice Holidays PLC (Information & Entertainment) - - 127,223
- - 11,000 - 11,000 Fitness First PLC. (Information & Entertainment) - - 85,444
- - 4,650 - 4,650 Galen Holdings PLC (Healthcare) - - 58,173
- 8,995 - 2,000 10,995 GKN PLC (Consumer Discretionary) - 97,084 -
Principal/Shares
---------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------- -------- -------- -------- --------- -------------------------------------------------------- ------------- ---------
- - - 2,800 2,800 Sunplus Technology Co. Ltd. GDR + (Information
Technology) 26,600 26,600
- - - 10,800 10,800 Sunplus Technology Co. Ltd. GDR +* (Information
Technology) 102,600 102,600
- - - - United Kingdom
- 2,677 - - 2,677 3I Group PLC (Finance) - 48,174
- 5,501 - 3,980 9,481 Abbey National PLC (Finance) 70,598 168,176
- - 24,125 - 24,125 Acambis PLC (Healthcare) - 42,793
23,425 - - - 23,425 Aegis Group PLC (Information & Entertainment) - 45,908
- - 22,050 - 22,050 Airtours PLC (Information & Entertainment) - 100,305
- 4,233 - - 4,233 Amersham PLC (Healthcare) - 32,275
- - 16,200 - 16,200 Amey PLC (Industrial & Commercial) - 93,206
7,500 2,544 - - 10,044 Amvescap PLC (Finance) - 187,070
18,000 4,089 - - 22,089 ARM Holdings PLC (Information Technology) - 121,337
- 11,995 - 11,165 23,160 AstraZeneca PLC (Healthcare) 519,714 1,078,063
- - - 1,000 1,000 Autonomy Corp.+ (Information Technology) 8,454 8,454
- 7,043 - - 7,043 BAA PLC (Industrial & Commercial) - 61,861
- 18,372 - 111,764 130,136 BAE Systems PLC (Industrial & Commercial) 529,198 616,189
- 7,109 - 19,361 26,470 Barclays PLC (Finance) 623,158 851,970
- 7,239 - - 7,239 Bass PLC (Multi-industry) 79,633
- 23,981 - 6,483 30,464 BG Group PLC (Utilities) 25,503 119,841
- - 8,625 - 8,625 Bloomsbury Publishing PLC (Information & Entertainment) - 92,289
- 814 - - 814 Blue Circle Industries PLC (Industrial & Commercial) - 5,618
- 3,500 - - 3,500 BOC Group PLC (Materials) - 51,469
- 4,949 - - 4,949 Boots Co PLC (Consumer Discretionary) - 43,716
- 178,879 - 33,000 211,879 BP Amoco PLC (Energy) 295,985 1,900,395
2,800 - - 10,899 13,699 BP Amoco PLC ADR (Energy) 589,418 740,842
- 20,704 - - 20,704 British Airways PLC (Industrial & Commercial) - 167,929
- 9,634 - - 9,634 British American Tobacco PLC (Consumer Staples) - 48,580
- - 51,950 - 51,950 British Energy PLC (Energy) - 228,146
- 7,990 - - 7,990 British Land Company PLC (Real Estate) - 53,262
- 8,546 - - 8,546 British SKY Broadcasting PLC (Information &
Entertainment) - 106,969
- 50,193 - - 50,193 British Telecommunications PLC (Information Technology) - 400,650
- 437 - - 437 Bunzl PLC (Materials) - 2,558
21,000 - - 17,227 38,227 Cable & Wireless PLC (Information Technology) 126,543 280,801
- 17,928 - 28,525 46,453 Cadbury Schweppes PLC (Consumer Staples) 175,870 286,404
- 1,977 - - 1,977 Canary Wharf Group PLC (Real Estate) - 15,272
- 5,904 - - 5,904 Capita Group PLC (Industrial & Commercial) - 41,764
- 3,591 - - 3,591 Carlton Communications PLC (Information & Entertainment) - 21,935
- - 84,475 - 84,475 Carphone Warehouse Group PLC (Information Technology) - 160,718
- - 18,100 - 18,100 Cedar Group PLC (Information Technology) - 72,109
- - - 29,507 29,507 Celltech Group PLC+ (Healthcare) 510,738 510,738
- 22,808 - 13,500 36,308 Centrica PLC (Utilities) 45,721 122,965
- 10,691 - - 10,691 CGNU PLC (Finance) - 148,347
- 5,161 - - 5,161 Chelsfield PLC (Real Estate) - 26,588
17,000 14,672 - 83,770 115,442 Compass Group PLC+ (Consumer Discretionary) 642,305 885,149
- 3,993 - - 3,993 Corus Group PLC (Materials) - 4,084
- - - 10,000 10,000 David S. Smith Holdings PLC (Materials) 21,672 21,672
- - 27,650 - 27,650 Debenhams PLC (Consumer Discretionary) - 174,035
- - 7,375 - 7,375 DFS Furniture PLC (Consumer Discretionary) - 44,859
- 31,661 - 63,499 95,160 Diageo PLC (Consumer Staples) 667,640 1,000,529
12,000 - - 5,500 17,500 Dimension Data Holdings PLC (Information Technology) 26,042 82,861
- 11,032 - 30,523 41,555 Dixons Group PLC (Consumer Discretionary) 106,538 145,044
- - 5,700 - 5,700 easyJet PLC (Industrial & Commercial) - 32,534
- - 29,750 - 29,750 Eidos PLC (Information & Entertainment) - 124,268
- - - 14,420 14,420 Electrocomponents PLC (Information Technology) 127,686 127,686
- - 27,675 - 27,675 Electronics Boutique PLC (Consumer Discretionary) - 32,067
- 3,902 - - 3,902 EMI Group PLC (Information & Entertainment) - 24,783
27,875 - - - 27,875 Energis PLC (Information Technology) - 145,146
- - 52,600 - 52,600 First Choice Holidays PLC (Information & Entertainment) - 127,223
- - 11,000 - 11,000 Fitness First PLC. (Information & Entertainment) - 85,444
- - 4,650 - 4,650 Galen Holdings PLC (Healthcare) - 58,173
- 8,995 - 2,000 10,995 GKN PLC (Consumer Discretionary) 21,586 118,670
B-62
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
--------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------ -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ --------
10,900 49,684 - 102,321 162,905 Glaxosmithkline PLC (Healthcare)
- - 14,750 - 14,750 Go-Ahead Group PLC (Industrial & Commercial)
- 14,672 - 87,939 102,611 Granada PLC (Information & Entertainment)
- 5,319 - - 5,319 Grantchester Holdings PLC (Real Estate)
- 3,642 - - 3,642 Great Portland Estates PLC (Real Estate)
- 7,108 - - 7,108 Great Universal Stores PLC (Consumer Discretionary)
- 8,987 - - 8,987 Halifax Group PLC (Finance)
- 2,910 - - 2,910 Hammerson PLC (Real Estate)
- 964 - - 964 Hanson PLC (Industrial & Commercial)
- 11,253 - 21,004 32,257 Hays PLC (Industrial & Commercial)
- 13,719 - 10,000 23,719 Hilton Group PLC (Information & Entertainment)
- - 38,250 - 38,250 HIT Entertainment PLC (Information & Entertainment)
- - 76,500 - 76,500 House Of Fraser PLC (Consumer Discretionary)
- - - 8,800 8,800 HSBC Holdings PLC (Finance)
- 36,205 - - 36,205 HSBC Holdings PLC (Finance)
- - 18,650 - 18,650 Imagination Technologies Group PLC (Information Technology)
- 7,165 - 7,165 Imperial Chemical Industries PLC (Materials)
- - 54,150 - 54,150 Innogy Holdings PLC (Utilities)
- 4,829 - 4,829 International Power PLC (Utilities)
- 27,067 - 27,067 Invensys PLC (Industrial & Commercial)
- - 325 - 325 IONA TECHNOLOGIES PLC
- - 14,225 - 14,225 IQE PLC (Information Technology)
- - 4,525 - 4,525 JJB Sports PLC (Consumer Discretionary)
- 196 - - 196 Johnson Matthey PLC (Consumer Discretionary)
- 8,493 - 24,480 32,973 Kingfisher PLC (Consumer Discretionary)
- 6,388 - - 6,388 Land Securities PLC (Real Estate)
- 23,981 - 21,483 45,464 Lattice Group PLC (Energy)
- 26,587 - - 26,587 Legal & General Group PLC (Healthcare)
- 20,571 - - 20,571 Lloyds TSB Group PLC (Finance)
- 1,823 - - 1,823 Logica PLC (Information Technology)
- 7,637 - - 7,637 Marconi PLC (Information Technology)
- 18,271 - - 18,271 Marks & Spencer PLC (Consumer Discretionary)
15,400 - 21,125 - 36,525 Matalan PLC (Consumer Discretionary)
- - 30,650 - 30,650 Meggitt Holdings PLC (Industrial Commercial)
- - 52,900 - 52,900 MFI Furniture PLC (Consumer Discretionary)
- 3,326 - - 3,326 Misys PLC (Information technology)
- 9,027 - - 9,027 National Grid Group PLC (Utilities)
- - 11,850 - 11,850 Nestor Healthcare Group PLC (Healthcare)
- - 19,350 - 19,350 Northgate Information Solutions PLC (Information Technology)
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment)
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment)
6,200 2,720 - - 8,920 Pearson PLC (Information & Entertainment)
- - 33,450 - 33,450 Pearson PLC (Information & Entertainment)
- - - 20,380 20,380 Powergen PLC (Utilities)
12,000 8,692 - - 20,692 Prudential PLC (Finance)
- 755 - - 755 Psion PLC (Information Technology)
- 2,932 - - 2,932 Railtrack Group PLC (Industrial & Commercial)
17,000 - - 63,179 80,179 Reckitt Benckiser PLC (Consumer Staples)
- 5,034 - 86,000 91,034 Reed International PLC (Information & Entertainment)
- 12,399 - - 12,399 Rentokil Initial PLC (Multi-industry)
- 7,061 - - 7,061 Reuters Group PLC (Information Technology)
- 539 - - 539 Rexam PLC (Materials)
- 6,322 - 23,959 30,281 Rio Tinto PLC (Materials)
- 297 - - 297 RMC Group PLC (Industrial & Commercial)
- 9,737 - 76,213 85,950 Royal Bank of Scotland Group PLC (Finance)
- 6,112 - - 6,112 Sage Group PLC (Information Technology)
- 11,579 - 8,280 19,859 Sainsbury (J) PLC (Consumer Discretionary)
- 1,369 - - 1,369 Schroders PLC/United Kingdom (Finance)
- 11,249 - - 11,249 Scottish Power PLC (Utilities)
- - 27,525 - 27,525 Selfridges PLC (Consumer Discretionary)
- - - 187,216 187,216 Shell Transport & Trading Co. PLC (Energy)
Principal/Shares
--------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
10,900 49,684 - 102,321 162,905 Glaxosmithkline PLC (Healthcare)
- - 14,750 - 14,750 Go-Ahead Group PLC (Industrial & Commercial)
- 14,672 - 87,939 102,611 Granada PLC (Information & Entertainment)
- 5,319 - - 5,319 Grantchester Holdings PLC (Real Estate)
- 3,642 - - 3,642 Great Portland Estates PLC (Real Estate)
- 7,108 - - 7,108 Great Universal Stores PLC (Consumer Discretionary)
- 8,987 - - 8,987 Halifax Group PLC (Finance)
- 2,910 - - 2,910 Hammerson PLC (Real Estate)
- 964 - - 964 Hanson PLC (Industrial & Commercial)
- 11,253 - 21,004 32,257 Hays PLC (Industrial & Commercial)
- 13,719 - 10,000 23,719 Hilton Group PLC (Information & Entertainment)
- - 38,250 - 38,250 HIT Entertainment PLC (Information & Entertainment)
- - 76,500 - 76,500 House Of Fraser PLC (Consumer Discretionary)
- - - 8,800 8,800 HSBC Holdings PLC (Finance)
- 36,205 - - 36,205 HSBC Holdings PLC (Finance)
- - 18,650 - 18,650 Imagination Technologies Group PLC (Information Technology)
- 7,165 - 7,165 Imperial Chemical Industries PLC (Materials)
- - 54,150 - 54,150 Innogy Holdings PLC (Utilities)
- 4,829 - 4,829 International Power PLC (Utilities)
- 27,067 - 27,067 Invensys PLC (Industrial & Commercial)
- - 325 - 325 IONA TECHNOLOGIES PLC
- - 14,225 - 14,225 IQE PLC (Information Technology)
- - 4,525 - 4,525 JJB Sports PLC (Consumer Discretionary)
- 196 - - 196 Johnson Matthey PLC (Consumer Discretionary)
- 8,493 - 24,480 32,973 Kingfisher PLC (Consumer Discretionary)
- 6,388 - - 6,388 Land Securities PLC (Real Estate)
- 23,981 - 21,483 45,464 Lattice Group PLC (Energy)
- 26,587 - - 26,587 Legal & General Group PLC (Healthcare)
- 20,571 - - 20,571 Lloyds TSB Group PLC (Finance)
- 1,823 - - 1,823 Logica PLC (Information Technology)
- 7,637 - - 7,637 Marconi PLC (Information Technology)
- 18,271 - - 18,271 Marks & Spencer PLC (Consumer Discretionary)
15,400 - 21,125 - 36,525 Matalan PLC (Consumer Discretionary)
- - 30,650 - 30,650 Meggitt Holdings PLC (Industrial Commercial)
- - 52,900 - 52,900 MFI Furniture PLC (Consumer Discretionary)
- 3,326 - - 3,326 Misys PLC (Information technology)
- 9,027 - - 9,027 National Grid Group PLC (Utilities)
- - 11,850 - 11,850 Nestor Healthcare Group PLC (Healthcare)
- - 19,350 - 19,350 Northgate Information Solutions PLC (Information Technology)
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment)
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment)
6,200 2,720 - - 8,920 Pearson PLC (Information & Entertainment)
- - 33,450 - 33,450 Pearson PLC (Information & Entertainment)
- - - 20,380 20,380 Powergen PLC (Utilities)
12,000 8,692 - - 20,692 Prudential PLC (Finance)
- 755 - - 755 Psion PLC (Information Technology)
- 2,932 - - 2,932 Railtrack Group PLC (Industrial & Commercial)
17,000 - - 63,179 80,179 Reckitt Benckiser PLC (Consumer Staples)
- 5,034 - 86,000 91,034 Reed International PLC (Information & Entertainment)
- 12,399 - - 12,399 Rentokil Initial PLC (Multi-industry)
- 7,061 - - 7,061 Reuters Group PLC (Information Technology)
- 539 - - 539 Rexam PLC (Materials)
- 6,322 - 23,959 30,281 Rio Tinto PLC (Materials)
- 297 - - 297 RMC Group PLC (Industrial & Commercial)
- 9,737 - 76,213 85,950 Royal Bank of Scotland Group PLC (Finance)
- 6,112 - - 6,112 Sage Group PLC (Information Technology)
- 11,579 - 8,280 19,859 Sainsbury (J) PLC (Consumer Discretionary)
- 1,369 - - 1,369 Schroders PLC/United Kingdom (Finance)
- 11,249 - - 11,249 Scottish Power PLC (Utilities)
- - 27,525 - 27,525 Selfridges PLC (Consumer Discretionary)
- - - 187,216 187,216 Shell Transport & Trading Co. PLC (Energy)
Principal/Shares Market Value
-------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------ -------- -------- -------- --------- ------------------------------------------------------------ ------- --------- --------
10,900 49,684 - 102,321 162,905 Glaxosmithkline PLC (Healthcare) 287,993 1,312,719 -
- - 14,750 - 14,750 Go-Ahead Group PLC (Industrial & Commercial) - - 179,348
- 14,672 - 87,939 102,611 Granada PLC (Information & Entertainment) - 39,458 -
- 5,319 - - 5,319 Grantchester Holdings PLC (Real Estate) - 16,511 -
- 3,642 - - 3,642 Great Portland Estates PLC (Real Estate) - 14,216 -
- 7,108 - - 7,108 Great Universal Stores PLC (Consumer Discretionary) - 54,856 -
- 8,987 - - 8,987 Halifax Group PLC (Finance) - 102,333 -
- 2,910 - - 2,910 Hammerson PLC (Real Estate) - 21,469 -
- 964 - - 964 Hanson PLC (Industrial & Commercial) - 6,530 -
- 11,253 - 21,004 32,257 Hays PLC (Industrial & Commercial) - 53,443 -
- 13,719 - 10,000 23,719 Hilton Group PLC (Information & Entertainment) - 43,617 -
- - 38,250 - 38,250 HIT Entertainment PLC (Information & Entertainment) - - 180,565
- - 76,500 - 76,500 House Of Fraser PLC (Consumer Discretionary) - - 98,490
- - - 8,800 8,800 HSBC Holdings PLC (Finance) - - -
- 36,205 - - 36,205 HSBC Holdings PLC (Finance) - 476,998 -
- - 18,650 - 18,650 Imagination Technologies Group PLC (Information Technology) - - 46,130
- 7,165 - 7,165 Imperial Chemical Industries PLC (Materials) - 42,433 -
- - 54,150 - 54,150 Innogy Holdings PLC (Utilities) - - 159,765
- 4,829 - 4,829 International Power PLC (Utilities) - 20,775 -
- 27,067 - 27,067 Invensys PLC (Industrial & Commercial) - 56,724 -
- - 325 - 325 IONA TECHNOLOGIES PLC - - 13,975
- - 14,225 - 14,225 IQE PLC (Information Technology) - - 51,076
- - 4,525 - 4,525 JJB Sports PLC (Consumer Discretionary) - - 51,137
- 196 - - 196 Johnson Matthey PLC (Consumer Discretionary) - 2,720
- 8,493 - 24,480 32,973 Kingfisher PLC (Consumer Discretionary) - 54,672 -
- 6,388 - - 6,388 Land Securities PLC (Real Estate) - 81,420 -
- 23,981 - 21,483 45,464 Lattice Group PLC (Energy) - 44,768 -
- 26,587 - - 26,587 Legal & General Group PLC (Healthcare) - 62,659 -
- 20,571 - - 20,571 Lloyds TSB Group PLC (Finance) - 213,786 -
- 1,823 - - 1,823 Logica PLC (Information Technology) - 26,078 -
- 7,637 - - 7,637 Marconi PLC (Information Technology) - 44,737 -
- 18,271 - - 18,271 Marks & Spencer PLC (Consumer Discretionary) - 70,046 -
15,400 - 21,125 - 36,525 Matalan PLC (Consumer Discretionary) 91,644 - 125,712
- - 30,650 - 30,650 Meggitt Holdings PLC (Industrial Commercial) - - 108,897
- - 52,900 - 52,900 MFI Furniture PLC (Consumer Discretionary) - - 83,869
- 3,326 - - 3,326 Misys PLC (Information technology) - 30,307 -
- 9,027 - - 9,027 National Grid Group PLC (Utilities) - 69,085 -
- - 11,850 - 11,850 Nestor Healthcare Group PLC (Healthcare) - - 99,335
- - 19,350 - 19,350 Northgate Information Solutions PLC (Information Technology) - - 15,778
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment) - 14,025 -
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment) - 18,116 -
6,200 2,720 - - 8,920 Pearson PLC (Information & Entertainment) 130,642 57,314 -
- - 33,450 - 33,450 Pearson PLC (Information & Entertainment) - - 173,127
- - - 20,380 20,380 Powergen PLC (Utilities) - - -
12,000 8,692 - - 20,692 Prudential PLC (Finance) 140,418 101,709 -
- 755 - - 755 Psion PLC (Information Technology) - 1,096 -
- 2,932 - - 2,932 Railtrack Group PLC (Industrial & Commercial) - 20,552 -
17,000 - - 63,179 80,179 Reckitt Benckiser PLC (Consumer Staples) 231,877 - -
- 5,034 - 86,000 91,034 Reed International PLC (Information & Entertainment) - 49,904 -
- 12,399 - - 12,399 Rentokil Initial PLC (Multi-industry) - 33,700 -
- 7,061 - - 7,061 Reuters Group PLC (Information Technology) - 103,533 -
- 539 - - 539 Rexam PLC (Materials) - 2,251 -
- 6,322 - 23,959 30,281 Rio Tinto PLC (Materials) - 128,058 -
- 297 - - 297 RMC Group PLC (Industrial & Commercial) - 3,140 -
- 9,737 - 76,213 85,950 Royal Bank of Scotland Group PLC (Finance) - 225,507 -
- 6,112 - - 6,112 Sage Group PLC (Information Technology) - 25,858 -
- 11,579 - 8,280 19,859 Sainsbury (J) PLC (Consumer Discretionary) - 65,800 -
- 1,369 - - 1,369 Schroders PLC/United Kingdom (Finance) - 19,564 -
- 11,249 - - 11,249 Scottish Power PLC (Utilities) - 71,608 -
- - 27,525 - 27,525 Selfridges PLC (Consumer Discretionary) - - 139,780
- - - 187,216 187,216 Shell Transport & Trading Co. PLC (Energy) - - -
Principal/Shares
--------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------ -------- -------- -------- --------- ----------------------------------------------------------- ------------- ---------
10,900 49,684 - 102,321 162,905 Glaxosmithkline PLC (Healthcare) 2,703,458 4,304,170
- - 14,750 - 14,750 Go-Ahead Group PLC (Industrial & Commercial) - 179,348
- 14,672 - 87,939 102,611 Granada PLC (Information & Entertainment) 236,498 275,956
- 5,319 - - 5,319 Grantchester Holdings PLC (Real Estate) - 16,511
- 3,642 - - 3,642 Great Portland Estates PLC (Real Estate) - 14,216
- 7,108 - - 7,108 Great Universal Stores PLC (Consumer Discretionary) - 54,856
- 8,987 - - 8,987 Halifax Group PLC (Finance) - 102,333
- 2,910 - - 2,910 Hammerson PLC (Real Estate) - 21,469
- 964 - - 964 Hanson PLC (Industrial & Commercial) - 6,530
- 11,253 - 21,004 32,257 Hays PLC (Industrial & Commercial) 99,754 153,197
- 13,719 - 10,000 23,719 Hilton Group PLC (Information & Entertainment) 31,793 75,410
- - 38,250 - 38,250 HIT Entertainment PLC (Information & Entertainment) - 180,565
- - 76,500 - 76,500 House Of Fraser PLC (Consumer Discretionary) - 98,490
- - - 8,800 8,800 HSBC Holdings PLC (Finance) 111,707 111,707
- 36,205 - - 36,205 HSBC Holdings PLC (Finance) - 476,998
- - 18,650 - 18,650 Imagination Technologies Group PLC (Information Technology) - 46,130
- 7,165 - 7,165 Imperial Chemical Industries PLC (Materials) - 42,433
- - 54,150 - 54,150 Innogy Holdings PLC (Utilities) - 159,765
- 4,829 - 4,829 International Power PLC (Utilities) - 20,775
- 27,067 - 27,067 Invensys PLC (Industrial & Commercial) - 56,724
- - 325 - 325 IONA TECHNOLOGIES PLC - 13,975
- - 14,225 - 14,225 IQE PLC (Information Technology) - 51,076
- - 4,525 - 4,525 JJB Sports PLC (Consumer Discretionary) - 51,137
- 196 - - 196 Johnson Matthey PLC (Consumer Discretionary) - 2,720
- 8,493 - 24,480 32,973 Kingfisher PLC (Consumer Discretionary) 157,584 212,256
- 6,388 - - 6,388 Land Securities PLC (Real Estate) - 81,420
- 23,981 - 21,483 45,464 Lattice Group PLC (Energy) 40,105 84,873
- 26,587 - - 26,587 Legal & General Group PLC (Healthcare) - 62,659
- 20,571 - - 20,571 Lloyds TSB Group PLC (Finance) - 213,786
- 1,823 - - 1,823 Logica PLC (Information Technology) - 26,078
- 7,637 - - 7,637 Marconi PLC (Information technology) - 44,737
- 18,271 - - 18,271 Marks & Spencer PLC (Consumer Discretionary) - 70,046
15,400 - 21,125 - 36,525 Matalan PLC (Consumer Discretionary) - 217,356
- - 30,650 - 30,650 Meggitt Holdings PLC (Industrial Commercial) - 108,897
- - 52,900 - 52,900 MFI Furniture PLC (Consumer Discretionary) - 83,869
- 3,326 - - 3,326 Misys PLC (Information technology) - 30,307
- 9,027 - - 9,027 National Grid Group PLC (Utilities) - 69,085
- - 11,850 - 11,850 Nestor Healthcare Group PLC (Healthcare) - 99,335
- - 19,350 - 19,350 Northgate Information Solutions PLC (Information Technology) - 15,778
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment) - 14,025
- 3,826 - - 3,826 P&O Princess Cruises PLC (Information & Entertainment) - 18,116
6,200 2,720 - - 8,920 Pearson PLC (Information & Entertainment) - 187,956
- - 33,450 - 33,450 Pearson PLC (Information & Entertainment) - 173,127
- - - 20,380 20,380 Powergen PLC (Utilities) 208,157 208,157
12,000 8,692 - - 20,692 Prudential PLC (Finance) - 242,127
- 755 - - 755 Psion PLC (Information Technology) - 1,096
- 2,932 - - 2,932 Railtrack Group PLC (Industrial & Commercial) - 20,552
17,000 - - 63,179 80,179 Reckitt Benckiser PLC (Consumer Staples) 861,751 1,093,628
- 5,034 - 86,000 91,034 Reed International PLC (Information & Entertainment) 852,550 902,454
- 12,399 - - 12,399 Rentokil Initial PLC (Multi-industry) - 33,700
- 7,061 - - 7,061 Reuters Group PLC (Information technology) - 103,533
- 539 - - 539 Rexam PLC (Materials) - 2,251
- 6,322 - 23,959 30,281 Rio Tinto PLC (Materials) 485,311 613,369
- 297 - - 297 RMC Group PLC (Industrial & Commercial) - 3,140
- 9,737 - 76,213 85,950 Royal Bank of Scotland Group PLC (Finance) 1,765,077 1,990,584
- 6,112 - - 6,112 Sage Group PLC (Information Technology) - 25,858
- 11,579 - 8,280 19,859 Sainsbury (J) PLC (Consumer Discretionary) 47,052 112,852
- 1,369 - - 1,369 Schroders PLC/United Kingdom (Finance) - 19,564
- 11,249 - - 11,249 Scottish Power PLC (Utilities) - 71,608
- - 27,525 - 27,525 Selfridges PLC (Consumer Discretionary) - 139,780
- - - 187,216 187,216 Shell Transport & Trading Co. PLC (Energy) 1,562,685 1,562,685
B-63
Principal/Shares
--------------------------------------------
North Style North
American Inter- Select American
Inter- national Inter- Matur- Inter-
Global national Small national Pro Forma ity Global national
Equity Equity Cap Equity Combined Description Coupon Date Equity Equity
------ -------- -------- -------- --------- -------------------------------------------------------- ------ ------ ------ --------
- - 182,150 - 182,150 Signet Group PLC (Consumer Discretionary)
- 4,470 - - 4,470 Slough Estates PLC (Real Estate)
- 2,652 - - 2,652 Smith & Nephew PLC (Healthcare)
27,700 - - - 27,700 Spirent PLC (Information Technology)
- - - 18,976 18,976 Standard Chartered PLC (Finance)
- 1,970 - - 1,970 Tate & Lyle PLC (Consumer Staples)
- - 35,050 35,050 TBI PLC (Industrial & Commercial)
56,000 - - - 56,000 Telewest Communications PLC (Information & Entertainment)
26,000 42,448 - 61,140 129,588 Tesco PLC (Consumer Discretionary)
- - - 50,544 50,544 Tomkins PLC (Multi-industry)
- - 17,675 - 17,675 Torex PLC (Information Technology)
- 26,664 - 23,214 49,878 Unilever PLC (Consumer Staples)
- - - 5,536 5,536 United Business Media PLC (Information & Entertainment)
- 4,613 - - 4,613 United Utilities PLC (Utilities)
- 288,115 - 500,367 788,482 Vodafone Group PLC (Information Technology)
- - 18,125 - 18,125 Wetherspoon (J.D.) PLC (Consumer Discretionary)
5,750 4,218 - 48,040 58,008 WPP Group PLC (Information & Entertainment)
United States 34.3% 0.0%
3,500 - - - 3,500 Abbott Laboratories, Inc. (Healthcare)
1,600 - - - 1,600 Alcoa, Inc. (Materials)
2,775 - - - 2,775 American Express Co. (Finance)
2,100 - - - 2,100 American International Group, Inc.# (Finance)
1,749 - - - 1,749 Amgen, Inc.+ (Healthcare)
1,250 - - - 1,250 Analog Devices, Inc.+ (Information Technology)
9,769 - - - 9,769 AOL Time Warner, Inc.+ (Information & Entertainment)
2,009 - - - 2,009 Bank of New York Co., Inc. (Finance)
1,182 - - - 1,182 Baxter International, Inc. (Healthcare)
50 - - - 50 Berkshire Hathaway Inc. (Finance)
775 - - - 775 Bristol-Myers Squibb Co. (Healthcare)
1,350 - - - 1,350 Caterpillar, Inc. (Industrial & Commercial)
8,248 - - - 8,248 Cisco Systems, Inc.+ (Information Technology)
12,486 - - - 12,486 Citigroup, Inc. (Finance)
1,200 - - - 1,200 Clear Channel Communications, Inc.+ (Information & Entertainment)
3,500 - - - 3,500 Coca-Cola Co. (Consumer Staples)
1,917 - - - 1,917 Comcast Corp., Class A+ (Information & Entertainment)
1,427 - - - 1,427 Comverse Technology, Inc.+ (Information Technology)
2,078 - - - 2,078 Corning, Inc. (Information Technology)
2,150 - - - 2,150 DISNEY WALT CO. (Information & Entertainment)
3,291 - - - 3,291 EMC Corp.+ (Information Technology)
1,275 - - - 1,275 Federal National Mortgage Association (Finance)
4,146 - - - 4,146 Fifth Third Bancorp (Finance)
1,575 - - - 1,575 FleetBoston Financial Corp. (Finance)
16,482 - - - 16,482 General Electric Co. (Information Technology)
6,276 - - - 6,276 Home Depot, Inc. (Consumer Discretionary)
8,243 - - - 8,243 Intel Corp. (Information Technology)
3,025 - - - 3,025 International Business Machines Corp. (Information Technology)
1,675 - - - 1,675 Johnson & Johnson Co. (Healthcare)
2,333 - - - 2,333 Juniper Networks, Inc.+ (Information Technology)
1,746 - - - 1,746 Kohl's Corp.+ (Consumer Discretionary)
1,946 - - - 1,946 Merck & Co., Inc. (Healthcare)
- - 5,900 - 5,900 Mettler Toledo International Inc. (Information Technology)
7,775 - - - 7,775 Microsoft Corp.+ (Information Technology)
1,775 - - - 1,775 Morgan Stanley Dean Witter & Co. (Finance)
1,045 - - - 1,045 Omnicom Group, Inc. (Information & Entertainment)
12,342 - - - 12,342 Oracle Corp.+ (Information Technology)
16,896 - - - 16,896 Pfizer, Inc. (Healthcare)
- - - 7,800 7,800 Pharmacia Corp. (Healthcare)
1,500 - - - 1,500 Philip Morris Cos., Inc. (Consumer Staples)
2,400 - - - 2,400 Solectron Corp. (Information Technology)
6,098 - - - 6,098 Sun Microsystems, Inc. (Information Technology)
3,598 - - - 3,598 Viacom, Inc. (Information & Entertainment)
Principal/Shares
--------------------------------------------
North Style Style
American Inter- Select Inter- Select
Inter- national Inter- national Inter-
Global national Small national Pro Forma Small national Pro Forma
Equity Equity Cap Equity Combined Description Cap Equity Combined
------ -------- -------- -------- --------- -------------------------------------------------------- -------- -------- ---------
- - 182,150 - 182,150 Signet Group PLC (Consumer Discretionary)
- 4,470 - - 4,470 Slough Estates PLC (Real Estate)
- 2,652 - - 2,652 Smith & Nephew PLC (Healthcare)
27,700 - - - 27,700 Spirent PLC (Information Technology)
- - - 18,976 18,976 Standard Chartered PLC (Finance)
- 1,970 - - 1,970 Tate & Lyle PLC (Consumer Staples)
- - 35,050 35,050 TBI PLC (Industrial & Commercial)
56,000 - - - 56,000 Telewest Communications PLC (Information & Entertainment)
26,000 42,448 - 61,140 129,588 Tesco PLC (Consumer Discretionary)
- - - 50,544 50,544 Tomkins PLC (Multi-industry)
- - 17,675 - 17,675 Torex PLC (Information Technology)
- 26,664 - 23,214 49,878 Unilever PLC (Consumer Staples)
- - - 5,536 5,536 United Business Media PLC (Information & Entertainment)
- 4,613 - - 4,613 United Utilities PLC (Utilities)
- 288,115 - 500,367 788,482 Vodafone Group PLC (Information Technology)
- - 18,125 - 18,125 Wetherspoon (J.D.) PLC (Consumer Discretionary)
5,750 4,218 - 48,040 58,008 WPP Group PLC (Information & Entertainment)
United States 1.4% 0.4% 4.9%
3,500 - - - 3,500 Abbott Laboratories, Inc. (Healthcare)
1,600 - - - 1,600 Alcoa, Inc. (Materials)
2,775 - - - 2,775 American Express Co. (Finance)
2,100 - - - 2,100 American International Group, Inc.# (Finance)
1,749 - - - 1,749 Amgen, Inc.+ (Healthcare)
1,250 - - - 1,250 Analog Devices, Inc.+ (Information Technology)
9,769 - - - 9,769 AOL Time Warner, Inc.+ (Information & Entertainment)
2,009 - - - 2,009 Bank of New York Co., Inc. (Finance)
1,182 - - - 1,182 Baxter International, Inc. (Healthcare)
50 - - - 50 Berkshire Hathaway Inc. (Finance)
775 - - - 775 Bristol-Myers Squibb Co. (Healthcare)
1,350 - - - 1,350 Caterpillar, Inc. (Industrial & Commercial)
8,248 - - - 8,248 Cisco Systems, Inc.+ (Information Technology)
12,486 - - - 12,486 Citigroup, Inc. (Finance)
1,200 - - - 1,200 Clear Channel Communications, Inc.+ (Information & Entertainment)
3,500 - - - 3,500 Coca-Cola Co. (Consumer Staples)
1,917 - - - 1,917 Comcast Corp., Class A+ (Information & Entertainment)
1,427 - - - 1,427 Comverse Technology, Inc.+ (Information Technology)
2,078 - - - 2,078 Corning, Inc. (Information Technology)
2,150 - - - 2,150 DISNEY WALT CO. (Information & Entertainment)
3,291 - - - 3,291 EMC Corp.+ (Information Technology)
1,275 - - - 1,275 Federal National Mortgage Association (Finance)
4,146 - - - 4,146 Fifth Third Bancorp (Finance)
1,575 - - - 1,575 FleetBoston Financial Corp. (Finance)
16,482 - - - 16,482 General Electric Co. (Information Technology)
6,276 - - - 6,276 Home Depot, Inc. (Consumer Discretionary)
8,243 - - - 8,243 Intel Corp. (Information Technology)
3,025 - - - 3,025 International Business Machines Corp. (Information Technology)
1,675 - - - 1,675 Johnson & Johnson Co. (Healthcare)
2,333 - - - 2,333 Juniper Networks, Inc.+ (Information Technology)
1,746 - - - 1,746 Kohl's Corp.+ (Consumer Discretionary)
1,946 - - - 1,946 Merck & Co., Inc. (Healthcare)
- - 5,900 - 5,900 Mettler Toledo International Inc. (Information Technology)
7,775 - - - 7,775 Microsoft Corp.+ (Information Technology)
1,775 - - - 1,775 Morgan Stanley Dean Witter & Co. (Finance)
1,045 - - - 1,045 Omnicom Group, Inc. (Information & Entertainment)
12,342 - - - 12,342 Oracle Corp.+ (Information Technology)
16,896 - - - 16,896 Pfizer, Inc. (Healthcare)
- - - 7,800 7,800 Pharmacia Corp. (Healthcare)
1,500 - - - 1,500 Philip Morris Cos., Inc. (Consumer Staples)
2,400 - - - 2,400 Solectron Corp. (Information Technology)
6,098 - - - 6,098 Sun Microsystems, Inc. (Information Technology)
3,598 - - - 3,598 Viacom, Inc. (Information & Entertainment)
Principal/Shares Market Value
-------------------------------------------- --------------------------
North Style North
American Inter- Select American Inter-
Inter- national Inter- Inter- national
Global national Small national Pro Forma Global national Small
Equity Equity Cap Equity Combined Description Equity Equity Cap
------ -------- -------- -------- --------- ------------------------------------------------------------ ------- --------- --------
- - 182,150 - 182,150 Signet Group PLC (Consumer Discretionary) - - 196,727
- 4,470 - - 4,470 Slough Estates PLC (Real Estate) - 23,903 -
- 2,652 - - 2,652 Smith & Nephew PLC (Healthcare) - 12,500 -
27,700 - - - 27,700 Spirent PLC (Information Technology) 163,254 - -
- - - 18,976 18,976 Standard Chartered PLC (Finance) - - -
- 1,970 - - 1,970 Tate & Lyle PLC (Consumer Staples) - 6,200 -
- - 35,050 35,050 TBI PLC (Industrial & Commercial) - - 40,613
56,000 - - - 56,000 Telewest Communications PLC (Information & Entertainment) 109,948 - -
26,000 42,448 - 61,140 129,588 Tesco PLC (Consumer Discretionary) 92,983 151,805 -
- - - 50,544 50,544 Tomkins PLC (Multi-industry) - - -
- - 17,675 - 17,675 Torex PLC (Information Technology) - - 195,952
- 26,664 - 23,214 49,878 Unilever PLC (Consumer Staples) - 201,394 -
- - - 5,536 5,536 United Business Media PLC (Information & Entertainment) - - -
- 4,613 - - 4,613 United Utilities PLC (Utilities) - 39,692 -
- 288,115 - 500,367 788,482 Vodafone Group PLC (Information Technology) - 874,785 -
- - 18,125 - 18,125 Wetherspoon (J.D.) PLC (Consumer Discretionary) - - 100,730
5,750 4,218 - 48,040 58,008 WPP Group PLC (Information & Entertainment) 68,888 50,534 -
United States
3,500 - - - 3,500 Abbott Laboratories, Inc. (Healthcare) 162,330 -
1,600 - - - 1,600 Alcoa, Inc. (Materials) 66,240 - -
2,775 - - - 2,775 American Express Co. (Finance) 117,771 - -
2,100 - - - 2,100 American International Group, Inc.# (Finance) 171,780 - -
1,749 - - - 1,749 Amgen, Inc.+ (Healthcare) 106,934 - -
1,250 - - - 1,250 Analog Devices, Inc.+ (Information Technology) 59,138 - -
9,769 - - - 9,769 AOL Time Warner, Inc.+ (Information & Entertainment) 493,335 - -
2,009 - - - 2,009 Bank of New York Co., Inc. (Finance) 100,852 - -
1,182 - - - 1,182 Baxter International, Inc. (Healthcare) 107,739 - -
50 - - - 50 Berkshire Hathaway Inc. (Finance) 113,750 - -
775 - - - 775 Bristol-Myers Squibb Co. (Healthcare) 43,400 - -
1,350 - - - 1,350 Caterpillar, Inc. (Industrial & Commercial) 67,770 - -
8,248 - - - 8,248 Cisco Systems, Inc.+ (Information Technology) 140,051 - -
12,486 - - - 12,486 Citigroup, Inc. (Finance) 613,686 - -
1,200 - - - 1,200 Clear Channel Communications, Inc.+ (Information &
Entertainment) 66,960 - -
3,500 - - - 3,500 Coca-Cola Co. (Consumer Staples) 161,665 - -
1,917 - - - 1,917 Comcast Corp., Class A+ (Information & Entertainment) 84,175 - -
1,427 - - - 1,427 Comverse Technology, Inc.+ (Information Technology) 97,750 - -
2,078 - - - 2,078 Corning, Inc. (Information Technology) 45,654 - -
2,150 - - - 2,150 DISNEY WALT CO. (Information & Entertainment) 65,038 - -
3,291 - - - 3,291 EMC Corp.+ (Information Technology) 130,324 - -
1,275 - - - 1,275 Federal National Mortgage Association (Finance) 102,332 - -
4,146 - - - 4,146 Fifth Third Bancorp (Finance) 222,889 - -
1,575 - - - 1,575 FleetBoston Financial Corp. (Finance) 60,433 - -
16,482 - - - 16,482 General Electric Co. (Information Technology) 799,871 - -
6,276 - - - 6,276 Home Depot, Inc. (Consumer Discretionary) 295,600 - -
8,243 - - - 8,243 Intel Corp. (Information Technology) 254,791 - -
3,025 - - - 3,025 International Business Machines Corp. (Information
Technology) 348,299 - -
1,675 - - - 1,675 Johnson & Johnson Co. (Healthcare) 161,604 - -
2,333 - - - 2,333 Juniper Networks, Inc.+ (Information Technology) 137,717 - -
1,746 - - - 1,746 Kohl's Corp.+ (Consumer Discretionary) 106,611 - -
1,946 - - - 1,946 Merck & Co., Inc. (Healthcare) 147,838 - -
- - 5,900 - 5,900 Mettler Toledo International Inc. (Information Technology) - - 261,075
7,775 - - - 7,775 Microsoft Corp.+ (Information Technology) 526,755 - -
1,775 - - - 1,775 Morgan Stanley Dean Witter & Co. (Finance) 111,452 - -
1,045 - - - 1,045 Omnicom Group, Inc. (Information & Entertainment) 91,803 - -
12,342 - - - 12,342 Oracle Corp.+ (Information Technology) 199,446 - -
16,896 - - - 16,896 Pfizer, Inc. (Healthcare) 731,596 - -
- - - 7,800 7,800 Pharmacia Corp. (Healthcare) - - -
1,500 - - - 1,500 Philip Morris Cos., Inc. (Consumer Staples) 75,165 - -
2,400 - - - 2,400 Solectron Corp. (Information Technology) 61,080 - -
6,098 - - - 6,098 Sun Microsystems, Inc. (Information Technology) 104,398 - -
3,598 - - - 3,598 Viacom, Inc. (Information & Entertainment) 187,312 - -
Principal/Shares
--------------------------------------------
North Style Market Value
American Inter- Select --------------------------
Inter- national Inter- Style Select
Global national Small national Pro Forma International Pro Forma
Equity Equity Cap Equity Combined Description Equity Combined
------ -------- -------- -------- --------- ----------------------------------------------------------- ------------- ---------
- - 182,150 - 182,150 Signet Group PLC (Consumer Discretionary) - 196,727
- 4,470 - - 4,470 Slough Estates PLC (Real Estate) - 23,903
- 2,652 - - 2,652 Smith & Nephew PLC (Healthcare) - 12,500
27,700 - - - 27,700 Spirent PLC (Information Technology) - 163,254
- - - 18,976 18,976 Standard Chartered PLC (Finance) 268,737 268,737
- 1,970 - - 1,970 Tate & Lyle PLC (Consumer Staples) - 6,200
- - 35,050 35,050 TBI PLC (Industrial & Commercial) - 40,613
56,000 - - - 56,000 Telewest Communications PLC (Information & Entertainment) - 109,948
26,000 42,448 - 61,140 129,588 Tesco PLC (Consumer Discretionary) 218,652 463,440
- - - 50,544 50,544 Tomkins PLC (Multi-industry) 113,155 113,155
- - 17,675 - 17,675 Torex PLC (Information Technology) - 195,952
- 26,664 - 23,214 49,878 Unilever PLC (Consumer Staples) 175,336 376,730
- - - 5,536 5,536 United Business Media PLC (Information & Entertainment) 57,573 57,573
- 4,613 - - 4,613 United Utilities PLC (Utilities) 39,692
- 288,115 - 500,367 788,482 Vodafone Group PLC (Information Technology) 1,519,233 2,394,018
- - 18,125 - 18,125 Wetherspoon (J.D.) PLC (Consumer Discretionary) 100,730
5,750 4,218 - 48,040 58,008 WPP Group PLC (Information & Entertainment) 575,540 694,962
United States
3,500 - - - 3,500 Abbott Laboratories, Inc. (Healthcare) - 162,330
1,600 - - - 1,600 Alcoa, Inc. (Materials) - 66,240
2,775 - - - 2,775 American Express Co. (Finance) - 117,771
2,100 - - - 2,100 American International Group, Inc.# (Finance) - 171,780
1,749 - - - 1,749 Amgen, Inc.+ (Healthcare) - 106,934
1,250 - - - 1,250 Analog Devices, Inc.+ (Information Technology) - 59,138
9,769 - - - 9,769 AOL Time Warner, Inc.+ (Information & Entertainment) - 493,335
2,009 - - - 2,009 Bank of New York Co., Inc. (Finance) - 100,852
1,182 - - - 1,182 Baxter International, Inc. (Healthcare) - 107,739
50 - - - 50 Berkshire Hathaway Inc. (Finance) - 113,750
775 - - - 775 Bristol-Myers Squibb Co. (Healthcare) - 43,400
1,350 - - - 1,350 Caterpillar, Inc. (Industrial & Commercial) - 67,770
8,248 - - - 8,248 Cisco Systems, Inc.+ (Information Technology) - 140,051
12,486 - - - 12,486 Citigroup, Inc. (Finance) - 613,686
1,200 - - - 1,200 Clear Channel Communications, Inc.+ (Information &
Entertainment) - 66,960
3,500 - - - 3,500 Coca-Cola Co. (Consumer Staples) - 161,665
1,917 - - - 1,917 Comcast Corp., Class A+ (Information & Entertainment) - 84,175
1,427 - - - 1,427 Comverse Technology, Inc.+ (Information Technology) - 97,750
2,078 - - - 2,078 Corning, Inc. (Information Technology) - 45,654
2,150 - - - 2,150 DISNEY WALT CO. (Information & Entertainment) - 65,038
3,291 - - - 3,291 EMC Corp.+ (Information Technology) - 130,324
1,275 - - - 1,275 Federal National Mortgage Association (Finance) - 102,332
4,146 - - - 4,146 Fifth Third Bancorp (Finance) - 222,889
1,575 - - - 1,575 FleetBoston Financial Corp. (Finance) - 60,433
16,482 - - - 16,482 General Electric Co. (Information Technology) - 799,871
6,276 - - - 6,276 Home Depot, Inc. (Consumer Discretionary) - 295,600
8,243 - - - 8,243 Intel Corp. (Information Technology) - 254,791
3,025 - - - 3,025 International Business Machines Corp. (Information
Technology) - 348,299
1,675 - - - 1,675 Johnson & Johnson Co. (Healthcare) - 161,604
2,333 - - - 2,333 Juniper Networks, Inc.+ (Information Technology) - 137,717
1,746 - - - 1,746 Kohl's Corp.+ (Consumer Discretionary) - 106,611
1,946 - - - 1,946 Merck & Co., Inc. (Healthcare) - 147,838
- - 5,900 - 5,900 Mettler Toledo International Inc. (Information Technology) - 261,075
7,775 - - - 7,775 Microsoft Corp.+ (Information Technology) - 526,755
1,775 - - - 1,775 Morgan Stanley Dean Witter & Co. (Finance) - 111,452
1,045 - - - 1,045 Omnicom Group, Inc. (Information & Entertainment) - 91,803
12,342 - - - 12,342 Oracle Corp.+ (Information Technology) - 199,446
16,896 - - - 16,896 Pfizer, Inc. (Healthcare) - 731,596
- - - 7,800 7,800 Pharmacia Corp. (Healthcare) 407,628 407,628
1,500 - - - 1,500 Philip Morris Cos., Inc. (Consumer Staples) - 75,165
2,400 - - - 2,400 Solectron Corp. (Information Technology) - 61,080
6,098 - - - 6,098 Sun Microsystems, Inc. (Information Technology) - 104,398
3,598 - - - 3,598 Viacom, Inc. (Information & Entertainment) - 187,312
B-64
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Portfolio of Investments
As of April 30, 2001
(unaudited)
Principal/Shares
------------------------------------------------
North Style
American Select
Inter- Inter- Inter-
Global national national national Pro Forma Maturity
Equity Equity Small Cap Equity Combined Description Coupon Date
------ --------- --------- ---------- ---------- ------------------------------------------------------------ ------ --------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary)
3,125 - - - 3,125 Washington Mutual, Inc. (Finance)
3,375 - - - 3,375 Wells Fargo & Co (Finance)
Total Common Stock
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance)
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples)
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial)
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy)
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology)
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial)
- - - 1,580 1,580 Porsche AG (Consumer Discretionary)
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary)
- 650 - - 650 SAP AG (Information Technology)
- 100 - - 100 RWE AG (Utilities)
- 300 - - 300 Volkswagen AG (Consumer Discretionary)
Hungary
- - - 5,961 5,961 OTP Bank (Finance)
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary)
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities)
Total Preferred Stock
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable 1/28/02
- - - 165 165 Nikkei 225 Index 9/14/01
- - - 8,480 8,480 Nikkei 225 Index 11/9/01
- - - 12,783 12,783 Nikkei 225 Index 11/9/01
Total Put Options
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419)
Total Investment Securities
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 3.25 5/1/01
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. 4.75 5/1/01
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. 3.25 5/1/01
1,000 1,000 1,000 - 3,000 SSGA FDS
Total Short-term securities
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options
Other assets less liabilities(3)
NET ASSETS
Principal/Shares
------------------------------------------------
North Style North
American Select American
Inter- Inter- Inter- Inter-
Global national national national Pro Forma Global national
Equity Equity Small Cap Equity Combined Description Equity Equity
------ --------- --------- ---------- ---------- ------------------------------------------------------------ ------ --------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary)
3,125 - - - 3,125 Washington Mutual, Inc. (Finance)
3,375 - - - 3,375 Wells Fargo & Co (Finance)
Total Common Stock
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK 2.5% 0.5%
Australia 0.0% 0.1%
- 5,887 - 42,188 48,075 News Corp. Ltd.+
Brazil 1.5% 0.0%
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance)
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples)
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial)
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy)
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology)
Germany 1.0% 0.3%
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial)
- - - 1,580 1,580 Porsche AG (Consumer Discretionary)
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary)
- 650 - - 650 SAP AG (Information Technology)
- 100 - - 100 RWE AG (Utilities)
- 300 - - 300 Volkswagen AG (Consumer Discretionary)
Hungary 0.0% 0.0%
- - - 5,961 5,961 OTP Bank (Finance)
Italy 0.0% 0.1%
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary)
Spain 0.0% 0.0%
- 9 - 2,302 2,311 Telefonica SA (Utilities)
Total Preferred Stock
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2) 0.0% 0.0%
United States 0.0% 0.0%
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable
- - - 165 165 Nikkei 225 Index
- - - 8,480 8,480 Nikkei 225 Index
- - - 12,783 12,783 Nikkei 225 Index
Total Put Options
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS 0.0% 0.0%
France 0.0% 0.0%
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419)
Total Investment Securities
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS 11.5% 11.8%
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES 0.0% 0.0%
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co.
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co.
1,000 1,000 1,000 - 3,000 SSGA FDS
Total Short-term securities
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 100.3% 98.5%
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options 0.0% 0.0%
Other assets less liabilities(3) -0.3% 1.5%
------ --------
NET ASSETS 100.0% 100.0%
====== ========
Principal/Shares
------------------------------------------------
North Style Style
American Select Inter- Select
Inter- Inter- Inter- national Inter-
Global national national national Pro Forma Small national
Equity Equity Small Cap Equity Combined Description Cap Equity
------ --------- --------- ---------- ---------- ------------------------------------------------------------ -------- --------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary)
3,125 - - - 3,125 Washington Mutual, Inc. (Finance)
3,375 - - - 3,375 Wells Fargo & Co (Finance)
Total Common Stock
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK 0.0% 1.9%
Australia 0.0% 0.4%
- 5,887 - 42,188 48,075 News Corp. Ltd.+
Brazil 0.0% 0.7%
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance)
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples)
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial)
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy)
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology)
Germany 0.0% 0.5%
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial)
- - - 1,580 1,580 Porsche AG (Consumer Discretionary)
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary)
- 650 - - 650 SAP AG (Information Technology)
- 100 - - 100 RWE AG (Utilities)
- 300 - - 300 Volkswagen AG (Consumer Discretionary)
Hungary 0.0% 0.3%
- - - 5,961 5,961 OTP Bank (Finance)
Italy 0.0% 0.0%
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary)
Spain 0.0% 0.0%
- 9 - 2,302 2,311 Telefonica SA (Utilities)
Total Preferred Stock
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2) 0.0% 0.5%
United States 0.0% 0.5%
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable
- - - 165 165 Nikkei 225 Index
- - - 8,480 8,480 Nikkei 225 Index
- - - 12,783 12,783 Nikkei 225 Index
Total Put Options
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS 0.0% 0.0%
France 0.0% 0.0%
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419)
Total Investment Securities
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS 5.7% 1.8%
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES 1.5% 4.2%
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co.
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co.
1,000 1,000 1,000 - 3,000 SSGA FDS
Total Short-term securities
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 96.3% 104.7%
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options 0.0% -0.1%
Other assets less liabilities(3) 3.7% -4.6%
-------- --------
NET ASSETS 100.0% 100.0%
======== ========
Principal/Shares
------------------------------------------------
North Style
American Select
Inter- Inter- Inter-
Global national national national Pro Forma Pro Forma
Equity Equity Small Cap Equity Combined Description Combined
------ --------- --------- ---------- ---------- ------------------------------------------------------------ ---------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary)
3,125 - - - 3,125 Washington Mutual, Inc. (Finance)
3,375 - - - 3,375 Wells Fargo & Co (Finance)
Total Common Stock
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK 1.4%
Australia 0.2%
- 5,887 - 42,188 48,075 News Corp. Ltd.+
Brazil 0.5%
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance)
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples)
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial)
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy)
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology)
Germany 0.5%
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial)
- - - 1,580 1,580 Porsche AG (Consumer Discretionary)
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary)
- 650 - - 650 SAP AG (Information Technology)
- 100 - - 100 RWE AG (Utilities)
- 300 - - 300 Volkswagen AG (Consumer Discretionary)
Hungary 0.2%
- - - 5,961 5,961 OTP Bank (Finance)
Italy 0.0%
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary)
Spain 0.0%
- 9 - 2,302 2,311 Telefonica SA (Utilities)
Total Preferred Stock
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2) 0.3%
United States 0.3%
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable
- - - 165 165 Nikkei 225 Index
- - - 8,480 8,480 Nikkei 225 Index
- - - 12,783 12,783 Nikkei 225 Index
Total Put Options
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS 0.0%
France 0.0%
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419)
Total Investment Securities
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS 6.0%
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES 2.3%
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co.
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co.
1,000 1,000 1,000 - 3,000 SSGA FDS
Total Short-term securities
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 101.7%
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options 0.0%
Other assets less liabilities(3) -1.7%
-------
NET ASSETS 100.0%
=======
Principal/Shares Market Value
------------------------------------------------ --------------
North Style
American Select
Inter- Inter- Inter-
Global national national national Pro Forma Global
Equity Equity Small Cap Equity Combined Description Equity
------ --------- --------- ---------- ---------- ------------------------------------------------------------ --------------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary) 349,504
3,125 - - - 3,125 Washington Mutual, Inc. (Finance) 156,031
3,375 - - - 3,375 Wells Fargo & Co (Finance) 158,524
--------------
Total Common Stock 21,120,818
--------------
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+ -
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance) -
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples) 80,520
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial) 296,866
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy) -
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology) -
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial) -
- - - 1,580 1,580 Porsche AG (Consumer Discretionary) -
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary) 239,380
- 650 - - 650 SAP AG (Information Technology) -
- 100 - - 100 RWE AG (Utilities) -
- 300 - - 300 Volkswagen AG (Consumer Discretionary) -
Hungary
- - - 5,961 5,961 OTP Bank (Finance) -
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary) -
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities) -
--------------
Total Preferred Stock 616,766
--------------
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable -
- - - 165 165 Nikkei 225 Index -
- - - 8,480 8,480 Nikkei 225 Index -
- - - 12,783 12,783 Nikkei 225 Index -
Total Put Options -
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419) -
--------------
Total Investment Securities 21,737,584
--------------
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
-------------
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 2,828,000
-------------
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. -
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. -
1,000 1,000 1,000 - 3,000 SSGA FDS 1,000
-------------
Total Short-term securities 1,000
-------------
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 24,566,584
-------------
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options -
Other assets less liabilities(3) (78,885)
-------------
NET ASSETS $24,487,699
=============
Principal/Shares
------------------------------------------------
North Style Market Value
American Select --------------
Inter- Inter- Inter- North American
Global national national national Pro Forma International
Equity Equity Small Cap Equity Combined Description Equity
------ --------- --------- ---------- ---------- ------------------------------------------------------------ --------------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary) -
3,125 - - - 3,125 Washington Mutual, Inc. (Finance) -
3,375 - - - 3,375 Wells Fargo & Co (Finance) -
--------------
Total Common Stock 40,419,734
--------------
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+ 47,451
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance) -
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples) -
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial) -
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy) -
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology) -
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial) 1,800
- - - 1,580 1,580 Porsche AG (Consumer Discretionary) -
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary) -
- 650 - - 650 SAP AG (Information Technology) 103,520
- 100 - - 100 RWE AG (Utilities) 2,972
- 300 - - 300 Volkswagen AG (Consumer Discretionary) 9,170
Hungary
- - - 5,961 5,961 OTP Bank (Finance) -
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary) 50,030
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities) 452
--------------
Total Preferred Stock 215,396
--------------
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable -
- - - 165 165 Nikkei 225 Index -
- - - 8,480 8,480 Nikkei 225 Index -
- - - 12,783 12,783 Nikkei 225 Index -
Total Put Options -
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419) 419
--------------
Total Investment Securities 40,635,549
--------------
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
--------------
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 5,528,000
--------------
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. -
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. -
1,000 1,000 1,000 - 3,000 SSGA FDS 1,000
--------------
Total Short-term securities 1,000
--------------
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 46,164,549
--------------
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options -
Other assets less liabilities(3) 715,010
--------------
NET ASSETS $46,879,559
==============
Principal/Shares
------------------------------------------------
North Style
American Select Market Value
Inter- Inter- Inter- --------------
Global national national national Pro Forma International
Equity Equity Small Cap Equity Combined Description Small Cap
------ --------- --------- ---------- ---------- ------------------------------------------------------------ --------------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary) -
3,125 - - - 3,125 Washington Mutual, Inc. (Finance) -
3,375 - - - 3,375 Wells Fargo & Co (Finance) -
--------------
Total Common Stock 17,108,111
--------------
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+ -
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance) -
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples) -
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial) -
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy) -
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology) -
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial) -
- - - 1,580 1,580 Porsche AG (Consumer Discretionary) -
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary) -
- 650 - - 650 SAP AG (Information Technology) -
- 100 - - 100 RWE AG (Utilities) -
- 300 - - 300 Volkswagen AG (Consumer Discretionary) -
Hungary
- - - 5,961 5,961 OTP Bank (Finance) -
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary) -
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities) -
--------------
Total Preferred Stock -
--------------
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable -
- - - 165 165 Nikkei 225 Index -
- - - 8,480 8,480 Nikkei 225 Index -
- - - 12,783 12,783 Nikkei 225 Index -
Total Put Options -
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419) -
--------------
Total Investment Securities 17,108,111
--------------
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
--------------
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 1,090,000
--------------
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. -
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. -
1,000 1,000 1,000 - 3,000 SSGA FDS 301,274
--------------
Total Short-term securities 301,274
--------------
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 18,499,385
--------------
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options -
Other assets less liabilities(3) 707,604
--------------
NET ASSETS $19,206,989
==============
Principal/Shares
------------------------------------------------
North Style Market Value
American Select ----------------
Inter- Inter- Inter- Style Select
Global national national national Pro Forma International
Equity Equity Small Cap Equity Combined Description Equity
------ --------- --------- ---------- ---------- ------------------------------------------------------------ ----------------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary) -
3,125 - - - 3,125 Washington Mutual, Inc. (Finance) -
3,375 - - - 3,375 Wells Fargo & Co (Finance) -
----------------
Total Common Stock 90,155,761
----------------
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+ 340,051
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance) 126,879
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples) -
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial) -
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy) 385,280
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology) 100,379
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial) -
- - - 1,580 1,580 Porsche AG (Consumer Discretionary) 517,284
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary) -
- 650 - - 650 SAP AG (Information Technology) -
- 100 - - 100 RWE AG (Utilities) -
- 300 - - 300 Volkswagen AG (Consumer Discretionary) -
Hungary
- - - 5,961 5,961 OTP Bank (Finance) 281,002
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary) -
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities) -
----------------
Total Preferred Stock 1,750,875
----------------
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable 58,325
- - - 165 165 Nikkei 225 Index 252,618
- - - 8,480 8,480 Nikkei 225 Index 68,237
- - - 12,783 12,783 Nikkei 225 Index 101,435
Total Put Options 480,615
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419) -
----------------
Total Investment Securities 92,387,251
----------------
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
----------------
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 1,717,000
----------------
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. 177,450
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. 3,759,000
1,000 1,000 1,000 - 3,000 SSGA FDS -
----------------
Total Short-term securities 3,936,450
----------------
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 98,040,701
----------------
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options (59,750)
Other assets less liabilities(3) (4,351,933)
----------------
NET ASSETS $93,629,018
================
Principal/Shares
------------------------------------------------
North Style
American Select Market Value
Inter- Inter- Inter- ---------------
Global national national national Pro Forma Pro Forma
Equity Equity Small Cap Equity Combined Description Combined
------ --------- --------- ---------- ---------- ------------------------------------------------------------ ---------------
6,755 - - - 6,755 Wal-Mart Stores, Inc. (Consumer Discretionary) 349,504
3,125 - - - 3,125 Washington Mutual, Inc. (Finance) 156,031
3,375 - - - 3,375 Wells Fargo & Co (Finance) 158,524
---------------
Total Common Stock 168,804,424
---------------
(cost $22,143,615; $44,913,607; $16,525,141;
$94,718,748; $178.301.111)
PREFERRED STOCK
Australia
- 5,887 - 42,188 48,075 News Corp. Ltd.+ 387,502
Brazil
- - - 22,196,195 22,196,195 Banco Bradesco SA (Finance) 126,879
3,300 - - - 3,300 Conpanhia de Bedidas das Americas (Consumer Staples) 80,520
6,625 - - 3,087 9,712 Embraer-Empresa Brasileira de Aeronautica SA ADR (Industrial
& Commercial) 296,866
- - - 15,790 15,790 Petroleo Brasileiros SA ADR (Energy) 385,280
- - - 1,959 1,959 Telecommunicacoes Brasilieras SA ADR (Information
Technology) 100,379
Germany
- 100 - - 100 Dyckerhoff AG (Industrial & Commercial) 1,800
- - - 1,580 1,580 Porsche AG (Consumer Discretionary) 517,284
3,800 - - - 3,800 Henkel KGaA (Consumer Discretionary) 239,380
- 650 - - 650 SAP AG (Information Technology) 103,520
- 100 - - 100 RWE AG (Utilities) 2,972
- 300 - - 300 Volkswagen AG (Consumer Discretionary) 9,170
Hungary
- - - 5,961 5,961 OTP Bank (Finance) 281,002
Italy
- 3,453 - - 3,453 Fiat SpA (Consumer Discretionary) 50,030
Spain
- 9 - 2,302 2,311 Telefonica SA (Utilities) 452
---------------
Total Preferred Stock 2,583,037
---------------
(cost $491,194; $231,908; $0; $1,978,039; $2,701,141)
PUT OPTIONS (2)
United States
- - - 1,250,000 1,250,000 Jpy Put / Usd Callable 58,325
- - - 165 165 Nikkei 225 Index 252,618
- - - 8,480 8,480 Nikkei 225 Index 68,237
- - - 12,783 12,783 Nikkei 225 Index 101,435
Total Put Options 480,615
(cost $0; $0; $0; $299,355; $299,355)
WARRANTS
France
- 80 - - 80 Simco SA (Real Estate) (cost $0; $419; $0; $0; $419) 419
---------------
Total Investment Securities 171,868,495
---------------
(cost $22,634,809; $45,145,515; $16,525,141;
$96,996,142; $181,301,607)
REPURCHASE AGREEMENTS
---------------
2,828,000 5,528,000 1,090,000 1,717,000 11,163,000 State Street Bank & Trust Co. Repurchase Agreement 11,163,000
---------------
(cost $2,828,000; $5,528,000; $1,090,000; $1,717,000;
$11,163,000)
SHORT-TERM SECURITIES
- - - 200,000 200,000 Euro Time Deposit with State Street Bank & Trust Co. 177,450
- - - 3,759,000 3,759,000 Cayman Island Time Deposit with State Street Bank & Trust
Co. 3,759,000
1,000 1,000 1,000 - 3,000 SSGA FDS 303,274
---------------
Total Short-term securities 4,239,724
---------------
(cost $1,000; $1,000; $301,274; $3,936,450; $0)
TOTAL INVESTMENTS 187,271,219
---------------
(cost $25,463,809; $50,674,515; $17,916,415;
$102,649,592; $196,704,331)
Total written options -
Other assets less liabilities(3) (3,193,846)
---------------
NET ASSETS $184,077,373
===============
+ Non-income producing security
* Resale restricted to qualified institutional buyers
ADR ("America Depository Receipt")
GDR ("Global Depositary Receipt")
(1) Fair valued security; see Note 2
(2) 1 option contract equals 100 shares
(3) To adjust ($125,892) for prepaid expenses on the North American Funds Global
Equity, International Equity and International Small Cap Funds to be
expensed prior to the reorganization
Management does not anticipate having to sell any securities as a result of the
reorganization, however, securities may be sold due to differing portfolio
management style.
See Notes to Pro Forma Financial Statements
B-65
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Written Options Contracts
As of April 30, 2001
(unaudited)
SunAmerica Style Select Series International Equity Portfolio
-------------------------------------------------------------
Strike
Call Options Contracts Expiration Date Price Value
-------------------------------------------------------------------------------------------------------------
JPY Put/USD Call 1,250 Jan 2002 $118 $(59,750)
============
(proceeds $44,063)
B-66
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity
North American Funds International Small Cap Fund
Pro Forma Combined Futures Contracts
As of April 30, 2001
(unaudited)
North American Funds International Equity Fund
----------------------------------------------
Number of Value at Value as of Unrealized
Contracts Description Expiration Date Trade Date April 30, 2001 Appreciation
---------------------------------------------------------------------------------------------------------------------------------
Long Hang Seng Stock Index Futures May 2001 $253,398 $257,341 $3,943
Short Dax Index Futures June 2001 667,379 696,491 (29,112)
Short Topix Index Futures June 2001 416,380 443,815 (27,435)
--------------
($52,604)
==============
SunAmerica Style Select Series, Inc. International Equity Portfolio
-------------------------------------------------------------------
Number of Value at Value as of Unrealized
Contracts Description Expiration Date Trade Date April 30, 2001 Appreciation
---------------------------------------------------------------------------------------------------------------------------------
4 Long Topix Index Futures June 2001 $398,932 $443,923 $44,991
==============
Pro Forma Combined
------------------
Number of Value at Value as of Unrealized
Contracts Description Expiration Date Trade Date April 30, 2001 Appreciation
---------------------------------------------------------------------------------------------------------------------------------
4 Long Topix Index Futures June 2001 $398,932 $443,923 $44,991
Long Hang Seng Stock Index Futures May 2001 253,398 257,341 3,943
Short Dax Index Futures June 2001 667,379 696,491 (29,112)
Short Topix Index Futures June 2001 416,380 443,815 (27,435)
--------------
($7,613)
==============
B-67
SunAmerica Style Select Series International Equity Portfolio
North American Funds Global Equity Fund
North American Funds International Equity Fund
North American Funds International Small Cap Fund
Pro Forma Combined Forward Foreign Currency Contracts
As of April 30, 2001
(unaudited)
North American Funds Global Equity Fund
----------------------------------------
Gross
Contract In Delivery Unrealized
To Deliver Exchange For Date Appreciation
----------------------- --------------------- ------------ -----------------
GBP 44,315 USD $63,778 05/02/01 $386
North American Funds International Equity Fund
----------------------------------------------
Gross
Contract In Delivery Unrealized
To Deliver Exchange For Date Appreciation
----------------------- --------------------- ------------ -----------------
JPY 473,838,363 USD 3,940,387 06/15/01 $84,125
USD 247,333 HKD 1,929,000 06/15/01 $59
USD 4,140,021 JPY 510,399,894 06/15/01 13,793
JPY 318,680,809 USD 2,716,028 06/01/01 126,425
EUR 1,137,846 USD 1,037,233 05/15/01 28,277
-----------------
$252,679
-----------------
Gross
Unrealized
Depreciation
----------------------- --------------------- ------------ -----------------
USD 351,947 EUR 393,691 06/15/01 ($2,851)
USD 2,371,395 JPY 288,951,771 06/01/01 (23,371)
USD $1,128,000 EUR 1,253,779 06/01/01 (16,038)
JPY 888,733 USD 7,173 05/07/01 (19)
-----------------
(42,279)
-----------------
Net Unrealized Appreciation $210,400
=================
B-68
North American Funds International Small Cap Fund
-------------------------------------------------
Gross
Contract In Delivery Unrealized
To Deliver Exchange For Date Appreciation
----------------------- --------------------- ------------ -----------------
EUR 114,535 USD 102,946 05/03/01 $1,325
JPY 35,207,256 USD 285,310 05/02/01 380
USD $149,049 CAD 229,566 05/02/01 $408
GBP 84,885 USD 122,002 05/02/01 574
EUR 186,869 USD 168,124 05/02/01 2,326
GBP 40,138 USD 57,687 05/01/01 269
DKN 318,044 USD 38,307 05/01/01 518
JPY 20,795,234 USD 169,135 05/01/01 841
-----------------
$6,641
-----------------
Gross
Unrealized
Depreciation
----------------------- ------------------------------------- -----------------
USD 128,295 SEK 1,299,246 05/03/01 ($1,622)
USD 129,492 EUR 144,597 05/03/01 (1,199)
USD 115,373 EUR 128,104 05/02/01 (1,714)
USD 251,209 GBP 174,693 05/02/01 (1,310)
USD 53,365 SEK 539,548 05/02/01 (757)
USD 98,816 JPY 12,193,883 05/02/01 (132)
MXN 122,155 USD 13,153 05/02/01 (39)
HKD 536,921 USD 68,836 05/02/01 (9)
NZD 273,917 USD 112,088 05/01/01 (1,096)
-----------------
(7,878)
-----------------
-----------------
Net Unrealized Depreciation ($1,237)
=================
SunAmerica Style Select Series, Inc. Internationa Equity Portfolio
------------------------------------------------------------------
Gross
Contract In Delivery Unrealized
To Deliver Exchange For Date Appreciation
----------------------- --------------------- ------------ -----------------
SGD 451,250 USD 250,000 05/17/01 $ 1,958
EUR 1,250,000 JPY 138,000,000 05/07/01 7,857
EUR 1,250,000 JPY 138,000,000 05/07/01 1,001
USD 750,000 JPY 93,261,000 05/01/01 4,849
JPY 93,261,000 USD 759,053 05/01/01 4,203
-----------------
19,868
-----------------
B-69
Pro Forma Combined
------------------
Gross
Contract In Delivery Unrealized
To Deliver Exchange For Date Appreciation
----------------------- --------------------- ------------ -----------------
JPY 473,838,363 USD 3,940,387 06/15/01 $84,125
USD 247,333 HKD 1,929,000 06/15/01 $59
USD 4,140,021 JPY 510,399,894 06/15/01 13,793
JPY 318,680,809 USD 2,716,028 06/01/01 126,425
SGD 451,250 USD 250,000 05/17/01 1,958
EUR 1,137,846 USD 1,037,233 05/15/01 28,277
EUR 1,250,000 JPY 138,000,000 05/07/01 7,857
EUR 1,250,000 JPY 138,000,000 05/07/01 1,001
EUR 114,535 USD 102,946 05/03/01 1,325
JPY 35,207,256 USD 285,310 05/02/01 380
USD $149,049 CAD 229,566 05/02/01 $408
GBP 84,885 USD 122,002 05/02/01 574
EUR 186,869 USD 168,124 05/02/01 2,326
GBP 44,315 USD $63,778 05/02/01 $386
USD 750,000 JPY 93,261,000 05/01/01 4,849
JPY 93,261,000 USD 759,053 05/01/01 4,203
GBP 40,138 USD 57,687 05/01/01 269
DKN 318,044 USD 38,307 05/01/01 518
JPY 20,795,234 USD 169,135 05/01/01 841
-----------------
279,574
-----------------
Gross
Unrealized
Depreciation
----------------------- --------------------- ------------ -----------------
USD 351,947 EUR 393,691 06/15/01 ($2,851)
USD 2,371,395 JPY 288,951,771 06/01/01 (23,371)
USD $1,128,000 EUR 1,253,779 06/01/01 (16,038)
JPY 888,733 USD 7,173 05/07/01 (19)
USD 128,295 SEK 1,299,246 05/03/01 (1,622)
USD 129,492 EUR 144,597 05/03/01 (1,199)
USD 115,373 EUR 128,104 05/02/01 (1,714)
USD 251,209 GBP 174,693 05/02/01 (1,310)
USD 53,365 SEK 539,548 05/02/01 (757)
USD 98,816 JPY 12,193,883 05/02/01 (132)
MXN 122,155 USD 13,153 05/02/01 (39)
HKD 536,921 USD 68,836 05/02/01 (9)
NZD 273,917 USD 112,088 05/01/01 (1,096)
-----------------
(50,157)
-----------------
-----------------
Net Unrealized Appreciation $229,417
=================
B-70
SUNAMERICA STYLE SELECT SERIES, INC.
INTERNATIONAL EQUITY PORTFOLIO
NORTH AMERICAN FUNDS GLOBAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL EQUITY FUND
NORTH AMERICAN FUNDS INTERNATIONAL SMALL CAP FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
APRIL 30, 2001
(unaudited)
1. BASIS OF COMBINATION
The Pro Forma Combined Statement of Assets and Liabilities, including the
Portfolio of Investments at April 30, 2001, and related Statement of Operations
("Pro Forma Statements") for the twelve months ended April 30, 2001, reflect the
accounts of the International Equity Portfolio ("International Equity") (to be
reorganized into the SunAmerica Equity Funds and renamed the SunAmerica
International Equity Fund) a separately managed portfolio of SunAmerica Style
Select Series, Inc., and Global Equity Fund, International Equity Fund, and
International Small Cap Fund (collectively "North American Funds") all
separately managed portfolios of North American Funds. The Pro Forma Combined
Statement of Assets and Liabilities has been restated to reflect a tax free
exchange of the North American Funds Class A, Class B, Class C, and Class I
shares as of the close of business on April 30, 2001. American International
Group, Inc. will pay the cost of the reorganization.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of North American Funds in exchange for shares of International
Equity. In conjunction with the reorganization, International Equity is the
surviving portfolio.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of International Equity and North American Funds included
in their respective Statements of Additional Information.
2. VALUATION
Securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed by the
Adviser to be over-the-counter, are valued at the quoted bid price provided by
principal market markers. Securities listed on the New York Stock Exchange
("NYSE") or other national securities exchanges, are valued on the basis of the
last sale price on the exchange on which they are primarily traded. If there is
no sale on that day, then securities are valued at the closing bid price on the
NYSE or other primary exchange for that day. However, if the last sale price on
the NYSE is different than the last sale price on any other exchange, the NYSE
price is used. Securities that are traded on foreign exchanges are ordinarily
valued at the last quoted sale price available before the time
B-71
when the assets are valued. If a security's price is available from more than
one foreign exchange, a Portfolio uses the exchange that is the primary market
for the security. Values of portfolio securities primarily traded on foreign
exchanges are already translated into U.S. dollars when received from a
quotation service. Options traded on national exchanges are valued as of the
close of the exchange on which they are traded. Futures and options traded on
commodities exchanges are valued at their last sale price as of the close of
such exchange. The Portfolios may make use of a pricing service in the
determination of their net asset values. Securities for which market quotations
are not readily available and other assets are valued at fair value as
determined pursuant to procedures adopted in good faith by the Directors. Short-
term securities which mature in less than 60 days are valued at amortized cost,
if their original maturity was 60 days or less, or by amortizing their value on
the 61st day prior to maturity, if their original term to maturity exceeded 60
days.
3. CAPITAL SHARES
The pro forma combined net asset value per share assumes the issuance of
additional shares of International Equity which would have been issued at April
30, 2001 in connection with the proposed reorganization. The amount of
additional shares assumed to be issued was calculated based on the April 30,
2001 net asset value of International Equity Class A ($11.44), Class B ($11.08),
and Class II, ($11.07). Class I shares will be offered on International Equity
and will assume the net asset value of Class A. The Class C shares of North
American Funds will receive Class II shares of International Equity.
The pro forma number of shares outstanding are as follows:
Class A Class B Class II Class I
----------------------------------------------------------------------------------------
Shares of
International Equity 3,187,045 3,546,279 1,614,972 0
----------------------------------------------------------------------------------------
Additional Shares to be
issued to North American
Funds 1,788,058 2,547,524 2,023,222 1,693,123
----------------------------------------------------------------------------------------
Pro Forma
Shares outstanding 4,975,103 6,093,803 3,638,194 1,693,123
----------------------------------------------------------------------------------------
These pro forma financial statements assume that all shares of North
American Funds Class A, Class B, Class C and Class I outstanding on April 30,
2001 were exchanged, tax free, for International Equity Class A, Class B, Class
II and Class I shares, respectively.
4. PRO FORMA OPERATING EXPENSES
B-72
The Pro Forma Statement of Operations assumes expense adjustments based on
the agreements of International Equity, the surviving entity. Certain accounts
have been adjusted to reflect the expenses of the combined entity more closely.
Pro forma operating expenses include the expenses of International Equity and
North American Funds combined, adjusted for certain items which are factually
supportable. Advisory fees have been charged to the combined entity based upon
the contract in effect for International Equity at the level of assets of the
combined fund for the stated period.
5. PRO FORMA EXPENSE RATIOS
The pro forma expense ratio presented in the fee table in the prospectus is
shown, as is all pro forma financial information, assuming that all of the
proposed reorganizations are approved and completed. If only some of the
proposed reorganizations are approved, the Total Annual Fund Operating Expenses
Before Expense Reimbursement will vary depending on which ones are approved.
However, because the Acquiring Fund's Net Expense Ratio is set by a contractual
requirement with the Board of Directors and continues indefinitely, the Net
Expense Ratio will be the same in all cases.
B-73
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Reference is made to Section 5.1 of the Registrant's By-Laws which is set
forth below.
5.1 Indemnification of Trustees, Officers, Employees And Agents
a) The Registrant shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Registrant or any of its
shareholders) by reason of the fact that he is or was a Trustee, officer,
employee or agent of the Registrant. The indemnification shall be against
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with the
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceedings, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Registrant, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
b) The Registrant shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or on behalf of the Registrant or any of its shareholders to obtain a
judgment or decree in its favor by reason of the fact that he is or was a
Trustee, officer, employee or agent of the Registrant. The indemnification
shall be against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense or settlement of the action or
suit, if acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the Registrant; except that such
indemnification shall preclude payment upon any liability, whether or not there
is an adjudication of liability, arising by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of duties as described in
Section 17(h) and (i) of the Investment Company Act of 1940 (the "Investment
Company Act").
c) To the extent that a Trustee, officer, employee or agent of the
Registrant has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (a) or (b) or in defense
of any claim, issue or matter therein, he shall be indemnified against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection therewith.
d)(1) Unless a court orders otherwise, any indemnification under subsections
(a) or (b) above may be made by the Registrant only as authorized in the
specific case after a determination that indemnification of the Trustee,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (a) or (b).
(2) The determination shall be made:
(i) by the Trustees, by a majority vote of a quorum which consists
of Trustees who were not parties to the action, suit or proceeding; or
(ii) if the required quorum is not obtainable, or if a quorum of
disinterested Trustees so directs, by independent legal counsel in a
written opinion; or
(iii) by the Shareholders.
C-1
(3) Notwithstanding the provisions of Section 5.1 of the Registrant's
By-Laws, no person shall be entitled to indemnification for any liability,
whether or not there is an adjudication of liability, arising by reason of
willful malfeasance, bad faith, gross negligence or reckless disregard of
duties as described in Section 17(h) and (i) of the Investment Company Act
("Disabling Conduct"). A person shall be deemed not liable by reason of
Disabling Conduct if, either:
(i) a final decision on the merits is made by a court or other body
before whom the proceeding was brought that the person to be
indemnified ("Indemnitee") was not liable by reason of Disabling
Conduct; or
(ii) in the absence of such a decision, a reasonable determination,
based upon a review of the facts, that the Indemnitee was not liable by
reason of Disabling Conduct, is made by either:
(A) a majority of a quorum of Trustees who are neither
"interested persons" of the Registrant, as defined in section
2(a)(19) of the Investment Company Act, nor parties to the action,
suit or proceeding;
(B) an independent legal counsel in a written opinion.
e) Expenses, including attorneys' fees, incurred by a Trustee, officer,
employee or agent of the Registrant in defending a civil or criminal action,
suit or proceeding may be paid by the Registrant in advance of the final
disposition thereof if:
(1) authorized in the specific case by the Trustees; and
(2) the Registrant receives an undertaking by or on behalf of the
Trustee, officer, employee or agent of the Registrant to repay the advance
if it is not ultimately determined that such person is entitled to be
indemnified by the Registrant; and
(3) either,
(i) such person provides a security for his undertaking; or
(ii) the Registrant is insured against losses by reason of any
lawful advances; or
(iii) a determination, based on a review or readily available facts,
that there is reason to believe that such person ultimately will be
found entitled to indemnification, is made by either
(A) a majority of a quorum which consists of Trustees who are
neither "interested persons" of the Registrant, as defined in
section 2(a)(19) of the Investment Company Act, nor parties to the
action, suit or proceeding; or
(B) an independent legal counsel in a written opinion.
f) The indemnification provided by Section 5.1 of the Registrant's By-Laws
shall not be deemed exclusive of any other rights to which a person may be
entitled under any by-law, agreement, vote of Shareholders or disinterested
Trustees or otherwise, both as to action in his official capacity and as to
action in another application while holding office, and shall continue as to a
person who has ceased to be a Trustee, officer, employee or agent and inure to
the benefit of the heirs, executors and administrators of such person; provided
that no person may satisfy any right of indemnity or reimbursement granted
herein or to which he may be otherwise entitled except out of the property of
the Registrant, and no Shareholder, as such, shall be personally liable with
respect to any claim for indemnity or reimbursement or otherwise.
g) The Registrant may purchase and maintain insurance on behalf of any
person who is or was a Trustee, officer, employee or agent of the Registrant,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such. However, in no event will the
Registrant pay that portion of insurance premiums, if any, attributable to
coverage which would indemnify any officer or Trustee against liability for
Disabling Conduct.
C-2
h) Nothing contained in Section 5.1 of the Registrant's By-laws shall be
construed to protect any Trustee or officer of the Registrant against any
liability to the Registrant or to its security holders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
Reference is made to Section 5.3 of the Registrant's Declaration of Trust
which provides that Trustees shall provide for indemnification by the
Registrant of any person who is, or has been a Trustee, officer, employee or
agent of the Registrant against all liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action, suit
or proceeding in which he becomes involved as a party or otherwise by virtue of
his being or having been a Trustee, officer, employee or agent and against
amounts paid or incurred by him in the settlement thereof, in such manner as
the Trustees may provide from time to time in the By-Laws of the Registrant.
The words "claim," "action," "suit" or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened; and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
Reference is made to Section 5 of the Distribution Agreement (the
"Distribution Agreement") between SunAmerica Capital Services, Inc. (the
"Distributor") and the Registrant which is set forth below:
(a) The Registrant will indemnify and hold harmless the Distributor and
each person, if any, who controls the Distributor within the meaning of the
Investment Company Act against any losses, claims, damages or liabilities
to which the Distributor or such controlling person may become subject,
under the Investment Company Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registrant's Registration Statement,
Prospectus or Statement Additional Information or any other written sales
material prepared by the Registrant or the separate investment portfolios
of the Registrant (the "Funds") which is utilized by the Distributor in
connection with the sale of shares of beneficial interest of a Fund (the
"Shares") or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
(in the case of the Registrant's Registration Statement, Prospectus and
Statement of Additional Information) necessary to make the statement
therein not misleading or (in the case of such other sales material)
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse the
Distributor and each such controlling person for any legal or other
expenses reasonably incurred by the Distributor or such controlling person
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Registrant or the Funds
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in such Registration Statement, Prospectus or Statement of Additional
Information in conformity with written information furnished to the
Registrant by the Distributor specifically for use therein; and provided,
further, that nothing in the Distribution Agreement shall be so construed
as to protect the Distributor against any liability to the Registrant or
the Funds, or the security holders of the Funds to which the Distributor
would otherwise be subject by reason of Disabling Conduct. This indemnity
provision will be in addition to any liability which the Registrant may
otherwise have.
(b) The Distributor will indemnify and hold harmless the Registrant,
each of its Trustees and officers and each person, if any, who controls the
Registrant within the meaning of the Investment Company Act, against any
losses, claims, damages or liabilities to which the Registrant or any such
Trustee, officer or controlling person may become subject under the
Investment Company Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registrant's Registration Statement, Prospectus or
Statement of Additional Information or any sales
C-3
material not prepared by the Registrant or the Funds which is utilized in
connection with the sale of the Shares or arise out of or are based upon
the omissions or the alleged omission to state therein a material fact
required to be stated therein or (in the case of the Registrant's
Registration Statement, Prospectus and Statement of Additional Information)
necessary to make the statement therein not misleading or (in the case of
such other sales material) necessary to make the statement therein not
misleading in the light of the circumstances under which they were made, in
the case of the Registrant's Registration Statement, Prospectus and
Statement of Additional Information to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or
alleged omission was made in conformity with written information furnished
to the Registrant by the Distributor specifically for use therein; and the
Distributor will reimburse any legal or other expenses reasonably incurred
by the Registrant or any such Trustee, officer or controlling person in
connection with investigating or defending any such loss, claim, damage,
liability or action. This indemnity provision will be in addition to any
liability which the Distributor may otherwise have.
Reference is made to Section 7 of the Investment Advisory and Management
Agreement (the "Advisory Agreement") between the Registrant and SunAmerica
Asset Management Corp. ("SAAMCo") which is set forth below.
7. Liability of Adviser. In the absence of Disabling Conduct on the part of
SAAMCo (and its officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with SAAMCo), SAAMCo
shall not be subject to liability to the Registrant or to any shareholder of
the Registrant for any act or omission in the course of, or connected with,
rendering services under the Advisory Agreement, including without limitation,
any error of judgment or mistake of law or for any loss suffered by any of them
in connection with the matters to which the Advisory Agreement relates, except
to the extent specified in Section 36(b) of the Investment Company Act
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services. Except for such Disabling Conduct, the
Registrant shall indemnify SAAMCo (and its officers, directors, partners,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with SAAMCo) (collectively, the "Indemnified Parties") from
any liability arising from SAAMCo's conduct under the Advisory Agreement.
Indemnification to SAAMCo or any of its personnel or affiliates shall be
made when (i) a final decision on the merits rendered, by a court or other body
before whom the proceeding was brought, that the person to be indemnified was
not liable by reason of Disabling Conduct or, (ii) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that
the person to be indemnified was not liable by reason of Disabling Conduct, by
(a) the vote of a majority of a quorum of the Trustees who are neither
"interested persons" of the Registrant as defined in section 2(a)(19) of the
Investment Company Act nor parties to the proceeding ("disinterested, non-party
Trustees") or (b) an independent legal counsel in a written opinion. The
Registrant may, by vote of a majority of the disinterested, non-party Trustees
advance attorneys' fees or other expenses incurred by an Indemnified Party in
defending a proceeding upon the undertaking by or on behalf of the Indemnified
Party to repay the advance unless it is ultimately determined that he is
entitled to indemnification. Such advance shall be subject to at least one of
the following: (1) the person to be indemnified shall provide a security for
his undertaking, (2) the Registrant shall be insured against losses arising by
reason of any lawful advances, or (3) a majority of a quorum of the
disinterested, non-party Trustees or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts, that
there is reason to believe that the person to be indemnified ultimately will be
found entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act") may be permitted to Trustees,
officers and controlling persons of the Registrant and the principal
underwriter pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee,
C-4
officer, or controlling person of the Registrant and the principal underwriter
in connection with the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person or the principal
underwriter in connection with the shares being registered, the Registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
C-5
ITEM 16. EXHIBITS
Exhibit No.
-----------
1. (a)Declaration of Trust of the Registrant. (1)
(b)Amendment to Declaration of Trust of the Registrant. (1)
(c)Amendment to Declaration of Trust of Registrant. *
2. By-laws of the Registrant. (1)
3. Not applicable.
4. Form of Agreement and Plan of Reorganization (filed herewith as
Exhibit II to each Proxy Statement and Prospectus contained in
this Registration Statement).
5. Instruments defining rights of shareholders (incorporated by
reference to Exhibits 1 and 2 above).
6. Investment Advisory and Management Agreement between the
Registrant and SunAmerica Asset Management Corp. (2)
7. (a)Distribution Agreement between the Registrant and SunAmerica
Capital Services, Inc. (2)
(b)Form of Dealer Agreement. (3)
8. Directors'/Trustees' Retirement Plan. (3)
9. Custody Agreement between the Registrant and State Street Bank and
Trust Company. (3)
10. (a)Form of Distribution Plan pursuant to Rule 12b-1 (Class A
shares). (2)
(b)Form of Distribution Plan pursuant to Rule 12b-1 (Class B
shares). (2)
(c)Form of Distribution Plan pursuant to Rule 12b-1 (Class II
shares). (2)
(d)Plan pursuant to Rule 18f-3. (3)
11. Opinions and consents of Robert M. Zakem, Esq.*
12. (a) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the Balanced Fund of North American
Funds and the SunAmerica Balanced Assets Fund of SunAmerica
Equity Funds. (4)
(b) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the Large Cap Growth Fund of North
American Funds and the SunAmerica Blue Chip Growth Fund of
SunAmerica Equity Funds. (4)
(c) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the Growth & Income Fund of North
American Funds and the SunAmerica Growth and Income Fund of
SunAmerica Equity Funds. (4)
(d) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the Mid Cap Growth Fund of North
American Funds and the SunAmerica Growth Opportunities Fund of
SunAmerica Equity Funds. (4)
(e) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the Global Equity Fund of North
American Funds and the SunAmerica International Equity Fund of
SunAmerica Equity Funds. (4)
C-6
Exhibit No.
-----------
(f) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the International Equity Fund of North
American Funds and the SunAmerica International Equity Fund of
SunAmerica Equity Funds. (4)
(g) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the International Small Cap Fund of
North American Funds and the SunAmerica International Equity
Fund of SunAmerica Equity Funds. (4)
(h) Opinion and consent of Shearman & Sterling, counsel to the
Registrant, regarding certain tax matters relating to the
Reorganization between the SunAmerica International Equity
Portfolio of SunAmerica Style Select Series, Inc. and the
SunAmerica International Equity Fund of SunAmerica Equity
Funds. (4)
13. (a) Transfer Agency and Service Agreement between the Registrant
and State Street Bank and Trust Company. (3)
(b) Service Agreement, as amended, between the Registrant and
SunAmerica Fund Services, Inc. (3)
14. (a) Consents of PricewaterhouseCoopers LLP.*
(b) Consents of Ernst & Young LLP.*
15. Not applicable.
16. Power of Attorney.*
17. (a) Prospectus, dated January 29, 2001 of SunAmerica Equity Funds,
as supplemented. (5)
(b) Prospectus dated March 1, 2001 of North American Funds (Class
A shares, Class B shares and Class C shares). (6)
(c) Prospectus dated March 1, 2001 of North American Funds
(Institutional Class I shares). (6)
(d) Prospectus dated February 28, 2001 of SunAmerica Style Select
Series, Inc. (Class A shares, Class B shares and Class II
shares). (7)
(e) Statement of Additional Information, dated January 29, 2001 of
SunAmerica Equity Funds, as supplemented. (5)
(f) Statement of Additional Information dated March 1, 2001 of
North American Funds. (6)
(g) Statement of Additional Information dated February 28, 2001 of
SunAmerica Style Select Series, Inc. (7)
(h) Combined Semi-Annual Report to Shareholders of SunAmerica
Equity Funds for the six-month period ended March 31, 2001.
(8)
(i) Combined Semi-Annual Report to Shareholders of North American
Funds for the six-month period ended April 30, 2001. (9)
(j) Combined Semi-Annual Report to Shareholders of SunAmerica
Style Select Series, Inc. for the six-month period ended April
30, 2001. (10)
(k) Combined Annual Report to Shareholders of SunAmerica Equity
Funds for the year ended September 30, 2000. (11)
(l) Combined Annual Report to Shareholders of North American Funds
for the year ended October 31, 2000. (12)
C-7
Exhibit No.
-----------
(m) Combined Annual Report to Shareholders of SunAmerica Style
Select Series, Inc. for the year ended October 31, 2000. (13)
(n) Presidents' Letters.*
(o) Q&As*
(p) Forms of Proxy Cards.*
(q) Form of Investment Advisory Agreement between North American
Funds and American General Asset Management Corp. (filed
herewith as Exhibit I to each Proxy Statement and Prospectus
contained in this Registration Statement).
--------
* Filed herewith.
(1) Previously filed with Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on Form N-1A (File No. 33-8021) on
January 12, 1996, and incorporated herein by this reference.
(2) Previously filed with Post-Effective Amendment No. 25 to the
Registrant's Registration Statement on Form N-1A (File No. 33-8021) on
January 29, 1999, and incorporated herein by this reference.
(3) Previously filed with Post-Effective Amendment No. 19 to the
Registrant's Registration Statement on Form N-1A (File No. 33-8021) on
January 27, 1997, and incorporated herein by this reference.
(4) To be filed by amendment.
(5) Previously filed with Post-Effective Amendment No. 27 to the
Registrant's Registration Statement on Form N-1A (File No. 33-8021) on
January 31, 2001, and incorporated herein by this reference.
(6) Previously filed with Post-Effective Amendment No. 35 to North American
Funds' Registration Statement on Form N-1A (File No. 33-27958) on March
1, 2001, and incorporated herein by this reference.
(7) Previously filed with Post-Effective Amendment No. 28 to SunAmerica
Style Select Series, Inc.'s Registration Statement on Form N-1A (File
No. 333-11283) on February 28, 2001, and incorporated herein by this
reference.
(8) Previously filed on Form N-30D of SunAmerica Equity Funds (File No. 811-
04801) on May 30, 2001, and incorporated herein by this reference.
(9) Previously filed on Form N-30D of North American Funds (File No. 811-
05797) on July 3, 2001, and incorporated herein by this reference.
(10) Previously filed on Form N-30D of SunAmerica Style Select Series, Inc.
(File No. 811-07797) on July 2, 2001, and incorporated herein by this
reference.
(11) Previously filed on Form N-30D of SunAmerica Equity Funds (File No. 811-
04801) on November 30, 2000, and incorporated herein by this reference.
(12) Previously filed on Form N-30D of North American Funds (File No. 811-
05797) on January 17, 2001, and incorporated herein by this reference.
(13) Previously filed on Form N-30D of SunAmerica Style Select Series, Inc.
(File No. 811-07797) on January 8, 2001, and incorporated herein by this
reference.
C-8
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant agrees to prior to any public reoffering of
the securities registered through the use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(b) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (a) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act, each post-
effective amendment shall be deemed to be a new registration statement for the
securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
(c) The undersigned Registrant undertakes to file, by post-effective
amendment, the opinions of counsel received as to certain tax matters, within a
reasonable time after receipt of such opinion.
C-9
SIGNATURES
As required by the Securities Act of 1933, this Pre-Effective Amendment No.
1 to the Registration Statement has been signed on behalf of the Registrant, in
the city of New York, and State of New York, on the 28th day of September,
2001.
SunAmerica Equity Funds
(Registrant)
By: /s/ Peter A. Harbeck
---------------------------------
Peter A. Harbeck, President and
Trustee
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
--------- ----- ----
/s/ Peter A. Harbeck President and Trustee September 28, 2001
______________________________________ (Principal Executive
Peter A. Harbeck Officer)
* Treasurer (Principal
______________________________________ Financial and Accounting
Peter C. Sutton Officer)
* Trustee
______________________________________
S. James Coppersmith
* Trustee
______________________________________
Samuel M. Eisenstat
* Trustee
______________________________________
Stephen J. Gutman
* Trustee
______________________________________
Sebastiano Sterpa
*By: /s/ Peter A. Harbeck September 28, 2001
---------------------------------
(Peter A. Harbeck, Attorney-
in-Fact)
C-10
EXHIBIT INDEX
Exhibit No.
-----------
1. (c)Amendment to Declaration of Trust of Registrant.
11. Opinions and consents of Robert M. Zakem, Esq.
14. (a)Consents of PricewaterhouseCoopers LLP.
(b)Consents of Ernst & Young LLP.
16. Power of Attorney.
17. (n)Presidents' Letters.
(o)Q&As.
(p)Forms of Proxy Cards.