Exhibit 17(l)
NORTH AMERICAN FUNDS
Core Bond Fund
High Yield Bond Fund
Municipal Bond Fund
Strategic Income Fund
U.S. Government Securities Fund
----------------
IMPORTANT NEWS FOR SHAREHOLDERS
----------------
While we encourage you to read the full text of the enclosed Proxy Statement
and Prospectus, here is a brief overview of some matters affecting your Fund
that require a shareholder vote.
Q&A: QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. American International Group, Inc. ("AIG") acquired American General
Corporation on August 29, 2001 in a transaction we call the "AIG Merger."
AIG is a leading U.S.-based international insurance and financial services
organization.
As a result of the AIG Merger, American General Asset Management Corp.
("AGAM") and American General Investment Management, L.P. ("AGIM") became
part of AIG. AGAM serves as investment adviser to your Fund and AGIM serves
as subadviser. SunAmerica Asset Management Corp. ("SAAMCo") is also part of
AIG and serves as investment adviser to the SunAmerica Mutual Funds, a
$7 billion mutual fund complex.
You are being presented with several important matters to vote on as a
result of the AIG Merger:
. The continuation of your Fund's investment advisory agreement with
AGAM following the AIG Merger;
. The continuation of your Fund's subadvisory agreement with AGIM, or
an affiliate, following the AIG Merger; and
. A proposal to reorganize your Fund with a SunAmerica Mutual Fund. As
described in more detail below, there is a proposal to combine each
series of North American Funds with a single corresponding
SunAmerica Mutual Fund. We refer to each series of North American
Funds as a "North American Fund," each series of the SunAmerica
Mutual Funds as a "SunAmerica Fund," and each proposed transaction
between them as a "Reorganization."
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT ADVISORY
AGREEMENT WITH AGAM IN PROPOSAL NO. 1(a)?
A. Applicable securities laws require a shareholder vote on a new investment
advisory agreement whenever there is a change in control of a fund's
investment adviser, because upon such a change in control, the agreement
between the investment adviser and the fund terminates automatically.
Accordingly, because the AIG Merger resulted in a change in control of
AGAM, and therefore the termination of North American Funds' investment
advisory agreement with AGAM, shareholder approval of the new investment
advisory agreement with AGAM is required. The new investment advisory
agreement that shareholders are being asked to approve is the same in all
material respects as the North American Funds' previous investment advisory
agreement with AGAM. The new investment advisory agreement, as approved by
shareholders, will take effect immediately. If you approve the
Reorganization applicable to your Fund, the agreement with AGAM will
terminate when the Reorganization is completed.
The Board of Trustees of North American Funds, including all of the
Independent Trustees, unanimously recommends that you vote FOR the proposal
to approve the new investment advisory agreement with AGAM.
Q. WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW SUBADVISORY AGREEMENT IN
PROPOSAL NO. 1(b)?
A. The relevant provisions of the securities laws relating to the change in
control of an investment adviser also apply to a subadviser. Because the
AIG Merger resulted in the change in control of AGIM, and therefore the
termination of the subadvisory agreement between AGAM and AGIM, shareholder
approval of the new subadvisory agreement between AGAM and AGIM, or an
affiliate, is required. The new subadvisory agreement that the shareholders
are being asked to approve is the same in all material respects as the
previous subadvisory agreement with AGIM. The new subadvisory agreement, as
approved by shareholders, will take effect immediately. If you approve the
Reorganization applicable to your Fund, the subadvisory agreement between
AGAM and AGIM, or an affiliate, will terminate when the Reorganization is
completed.
The Board of Trustees of North American Funds, including all of the
Independent Trustees, unanimously recommends that you vote FOR the proposal
to approve the new subadvisory agreement with AGIM, or an affiliate.
Q. WHAT ARE THE REORGANIZATIONS?
A. In anticipation of completion of the AIG Merger, AGAM and SAAMCo presented
to the Board of Trustees of North American Funds a proposal to reorganize
your Fund with a single comparable SunAmerica Fund. Under each relevant
proposal, your Fund would be combined with the SunAmerica Fund, and you
would become a shareholder of the corresponding SunAmerica Fund. The Board
of Trustees of North American Funds unanimously approved each
Reorganization.
North American Fund shareholders are asked to approve the Reorganization.
The attached Proxy Statement and Prospectus describes each proposed
Reorganization. Specifically, you will find information relating to the
following Reorganizations:
North American Fund: SunAmerica Fund:
-------------------- ----------------
Core Bond Fund SunAmerica Core Bond Fund
High Yield Bond Fund SunAmerica High Income Fund (to be
renamed the SunAmerica High Yield Bond
Fund)
Municipal Bond Fund SunAmerica Tax Exempt Insured Fund
Strategic Income Fund SunAmerica Diversified Income Fund (to
be renamed the SunAmerica Strategic
Income Fund)
U.S. Government Securities Fund SunAmerica U.S. Government Securities
Fund
The Board of Trustees of North American Funds, including all of the
Independent Trustees, unanimously recommends that you vote FOR the
Reorganization.
Q. HOW WILL THE REORGANIZATIONS AFFECT MY ACCOUNT?
A. If shareholders approve a Reorganization, your North American Fund shares
will be exchanged, on a tax-free basis, for an equal aggregate dollar value
of shares of the SunAmerica Fund. This means that you may end up with a
different number of shares compared to what you originally held, but the
total dollar value of your shares will be the same.
You will receive the same class of SunAmerica Fund shares as the North
American Fund shares you hold immediately prior to the Reorganization.
(However, if you own Class C or Institutional Class II shares of a North
American Fund, you will receive Class II and Class Z shares, respectively,
of the SunAmerica Fund since these are the classes of SunAmerica Fund
shares that correspond to North American Fund Class C and Institutional
Class II shares, respectively.)
2
Q. WHY DOES THE BOARD RECOMMEND THE REORGANIZATIONS?
A. Your Board 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 North
American Fund would remain invested in a mutual fund having substantially
the same or similar investment objective and similar, though not identical,
investment techniques; the fees and expenses of each Fund; potential
benefits to shareholders, such as the potential for reduced operating
expenses over time due to economies of scale; and the fact that no
Reorganization will adversely affect the interests of the corrresponding
North American Fund shareholders. After each Reorganization, shareholders
of a North American Fund will hold shares of the same aggregate net asset
value in the corresponding SunAmerica Fund.
Q. WHO WILL MANAGE MY FUND AFTER THE REORGANIZATION?
A. AGAM currently manages the assets of each North American Fund. AGIM is
currently the subadviser to your Fund. After completion of the
Reorganizations, SAAMCo will be the manager of each North American Fund as
part of the corresponding SunAmerica Fund AGIM (or an affiliate) will be
the subadviser responsible for the day-to-day portfolio management of each
SunAmerica Fund except the SunAmerica U.S. Government Securities Fund.
Q. WILL THE REORGANIZATIONS BE TAX-FREE?
A. The Reorganizations will be accomplished on a tax-free basis. This means
that you should not realize any federal capital gains (or losses) when your
North American Fund shares are exchanged for SunAmerican Fund shares.
Q. HOW DOES THE BOARD OF TRUSTEES OF NORTH AMERICAN FUNDS RECOMMEND THAT I
VOTE?
A. After careful consideration, based upon their evaluation of all relevant
information, and after meeting with counsel to the Independent Trustees
regarding the legal issues involved, the Board, including the Independent
Trustees, recommends that you vote FOR all of the proposals on the enclosed
proxy card.
Q. WHO GETS TO VOTE?
A. If you owned shares of a North American Fund on September 17, 2001, you are
entitled to vote with respect to your Fund, even if you later sold the
shares. Each share of a North American Fund is entitled to one vote, with
fractional shares voting proportionally.
Q. WHY ARE MULTIPLE PROXY CARDS ENCLOSED?
A. If you are a shareholder of more than one of the North American Funds, you
will receive a proxy card for each North American Fund in which you own
shares.
Q. I'M A SMALL INVESTOR. WHY SHOULD I VOTE?
A. Your vote makes a difference. If many small shareholders just like you fail
to vote their proxies, your Fund may not receive enough votes to go forward
with the Special Meeting of Shareholders and additional costs will be
incurred through further proxy solicitations.
Q. HOW DO I VOTE?
A. You have several different ways to vote. They include mail, speaking with a
representative on the telephone, and voting on-line over the Internet. If
you need more information or have any questions on how to vote call 1-888-
221-0697. If you have any questions on a proposal, please call North
American Funds' information agent, Georgeson Shareholder, at 1-888-850-
2811.
Your vote is important. Please vote promptly to avoid the additional
expense of another solicitation.
3