DEF 14A
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive Proxy
Statement
o Definitive
Additional Materials
o Soliciting
Material Pursuant to
Rule 14a-12
TRANSAMERICA FUNDS
(Name of Registrant as Specified in
its Charter)
N/A
(Name of Person(s) Filing Proxy
Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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Per unit price or other underlying value of transaction computed
pursuant to
Rule 0-11
(set forth the amount on which the filing fee is calculated and
state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Form, Schedule or Registration Statement No.:
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TRANSAMERICA ASSET MANAGEMENT GROUP
Transamerica Funds
Transamerica Series Trust
570 Carillon Parkway
St. Petersburg, Florida 33716
September 14, 2009
Dear Shareholder or Contract Holder:
You are being asked to vote on a proposal to approve a new investment sub-advisory agreement
with a new sub-adviser for your Transamerica Fund (with respect to each Fund, the Proposal).
Detailed information about the Proposal is contained in the enclosed joint proxy statement.
The Board of your Transamerica Fund has called a Special Meeting of Shareholders for your Fund
to be held on October 23, 2009, at the offices of Transamerica Asset Management, Inc., 570
Carillon Parkway, St. Petersburg, Florida 33716, at 11:00 a.m., Eastern time, in order to
vote on the Proposal. The enclosed joint proxy statement asks for your approval of the Proposal
with respect to your Fund. After careful consideration, the Board of your Fund recommends that you
vote FOR the Proposal.
The Proposal is one of a number of initiatives recently approved by the Boards of the
Transamerica funds. The initiatives are designed to streamline the Transamerica fund complex, to
promote operating efficiencies, and to result in a more cohesive and rational operating platform.
It is anticipated that all of the initiatives will be accomplished by mid-2010.
In connection with the proposed change in sub-adviser, there will be changes to each Funds
investment objective, strategies and principal risks, as well as the Funds name, as explained in
the enclosed joint proxy statement. These changes do not require shareholder approval.
The Board of your Fund has unanimously approved the new investment sub-advisory agreement with
a new sub-adviser and believes the Proposal is in the best interests of your Fund and its
shareholders.
If you have any questions, please call
866-436-5968 between 8 a.m. and 5 p.m., Eastern time,
Monday through Friday. Thank you for your investment in the Transamerica funds.
Sincerely,
John K. Carter
Chairman of the Board
Transamerica Asset Management Group
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IMPORTANT NEWS FOR FUND SHAREHOLDERS
While we encourage you to read the full text of the enclosed joint proxy statement, for your
convenience, we have provided a brief overview of the matter to be voted on.
Questions and Answers
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Why am I receiving the joint proxy statement? |
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As a shareholder of Transamerica Legg Mason Partners All Cap or a contract holder that
invests in Transamerica Legg Mason Partners All Cap VP through a variable life insurance
policy or variable annuity contract, you are being asked to vote on a new sub-advisory
agreement with a new sub-adviser, Transamerica Investment Management, LLC (TIM). TIM is an affiliate of your Funds adviser,
Transamerica Asset Management, Inc. (TAM). TAM believes your Fund will be better positioned to
attract assets and perform with the proposed new sub-adviser. |
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Will my vote make a difference? |
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Your vote is very important, no
matter how many shares you own. Your vote can help ensure that the proposal recommended by
the Board of your Fund can be implemented. We encourage all shareholders to participate in the governance
of their Funds. |
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Are the Funds paying for preparation, printing and mailing of this joint proxy statement? |
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Costs attributable to the joint proxy statement, including mailing service, proxy
solicitation, postage and printing costs, which are estimated at
approximately $126,000,
will be split, with Transamerica paying approximately half and the Funds paying approximately
half. Costs that are borne by the Funds will be allocated among the Funds on the basis of
their respective net assets, except when direct costs can reasonably be attributed to a
particular Fund. |
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Who do I call if I have questions? |
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If you need more information, or have any questions on how to cast your vote, please
call Computershare, the Funds proxy solicitor, at 866-436-5968. |
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How do I vote my shares? |
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You can provide voting instructions by telephone by calling the toll-free number on the
enclosed proxy cards or by computer by going to the Internet address provided on the proxy
cards and following the instructions, using your proxy card as a guide. Alternatively, you can
vote your shares by signing and dating the enclosed proxy card, and mailing it in the enclosed
postage-paid envelope. |
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You may also attend the meeting and vote in person. However, even if you intend to do so, we
encourage you to provide voting instructions by one of the methods described above. |
It is important that you vote promptly.
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TRANSAMERICA ASSET MANAGEMENT GROUP
Transamerica Funds
Transamerica Series Trust
570 Carillon Parkway
St. Petersburg, Florida 33716
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
To Be Held On October 23, 2009
A special meeting of the shareholders (the Meeting) of Transamerica Legg Mason Partners All
Cap and Transamerica Legg Mason Partners All Cap VP (each a Fund and collectively the Funds)
will be held on October 23, 2009, at the offices of Transamerica Asset Management, Inc., 570
Carillon Parkway, St. Petersburg, Florida 33716, at 11:00 a.m., Eastern time to consider
and vote on the following proposals, as more fully described in the accompanying Joint Proxy
Statement:
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PROPOSAL 1. |
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To approve a new sub-advisory agreement with a new sub-adviser. |
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PROPOSAL 2. |
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To transact such other business as may properly come before the Meeting and any adjournments thereof. |
Your Board recommends that you vote FOR the Proposal upon which you are being asked to vote.
In connection with Proposal 1, there will be changes to each Funds investment objective,
strategies and principal risks, as well as the Funds name, as explained in the accompanying Joint
Proxy Statement. These changes do not require shareholder approval.
Shareholders of record at the close of business on August 14, 2009 are entitled to vote at the
Meetings and at any adjournments or postponements thereof.
If you own shares in more than one Fund as of August 14, 2009, you may receive more than one
proxy card. Please be certain to sign, date and return each proxy card you receive.
By Order of the Boards of Trustees,
Dennis P. Gallagher
Vice President, General Counsel and Secretary
September 14, 2009
TRANSAMERICA ASSET MANAGEMENT GROUP
Transamerica Funds
Transamerica Series Trust
570 Carillon Parkway
St. Petersburg, Florida 33716
JOINT PROXY STATEMENT
This Joint Proxy Statement is furnished in connection with the solicitation by the Board of
Trustees (each, a Board) of Transamerica Funds, on behalf of Transamerica Legg Mason Partners All
Cap (All Cap Fund), and Transamerica Series Trust, on behalf of Transamerica Legg Mason Partners
All Cap VP (All Cap VP Fund), of proxies to be voted at a special meeting of shareholders of each
Fund to be held on October 23, 2009, at the offices of Transamerica Asset Management, Inc., 570
Carillon Parkway, St. Petersburg, Florida 33716, at 11:00 a.m., Eastern time (for each
Fund, a Meeting), and at any and all adjournments or postponements thereof. Each Meeting will be
held for the purpose of approving a new investment sub-advisory agreement with a new sub-adviser
for your Transamerica fund (the Proposal).
The Board of each Fund has determined that the use of this Joint Proxy Statement for such
Funds Meeting is in the best interests of the Fund and its shareholders in light of the similar
matters being considered and voted on by the shareholders of each of the Funds. This Joint Proxy
Statement and the accompanying materials are being mailed by the Boards on or about September 14,
2009.
Each of Transamerica Funds and Transamerica Series Trust (each, a Trust) is organized as a
Delaware statutory trust. The Trusts are registered investment companies.
Shares of All Cap VP Fund are offered to variable annuity and variable life insurance separate
accounts established by insurance companies to fund variable annuity contracts and variable life
insurance policies. For purposes of this Joint Proxy Statement, the term shareholder (when used
to refer to the beneficial holder of ownership interests in a Fund) shall also be deemed to include
holders of variable annuity contracts and variable life insurance policies.
Shareholders of record at the close of business on August 14, 2009 (the Record Date) are
entitled to vote at the Meetings. Shareholders of each Fund are entitled to one vote for each
dollar of net asset value of the Fund represented by the shareholders shares of that Fund. The
manner in which shareholders of each Fund are entitled to vote is shown below. The number of shares
of each Fund outstanding at the close of business on August 14, 2009 and the net assets of each
Fund as of that date are shown in Appendix A.
The Fund of which you are a shareholder is named on the proxy card included with this Joint
Proxy Statement. If you own shares in more than one Fund as of August 14, 2009, you may receive
more than one proxy card. Even if you plan to attend the Meeting, please sign, date and return EACH
proxy card you receive, or if you provide voting instructions by telephone or over
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the Internet, please vote on the proposal affecting EACH Fund you own. If you vote by telephone or
over the Internet, you will be asked to enter a unique code that has been assigned to you, which is
printed on your proxy card(s). This code is designed to confirm your identity, provide access into
the voting sites and confirm that your instructions are properly recorded.
All properly executed proxies received prior to a Funds Meeting will be voted at that
Meeting. On the matters coming before each Meeting as to which a shareholder has specified a choice
on that shareholders proxy, the shares will be voted accordingly. If a proxy is properly executed
and returned and no choice is specified with respect to one or more proposals, the shares will be
voted FOR each such proposal. Shareholders who execute proxies or provide voting instructions by
telephone or the Internet may revoke them with respect to the Proposal at any time before a vote is
taken on the Proposal by filing with the applicable Fund a written notice of revocation (addressed
to the Secretary of the Fund at the principal executive offices of the Fund at the address above),
by delivering a duly executed proxy bearing a later date,
by voting by telephone or over the Internet at a later date
or by attending the Meeting and voting in
person, in all cases prior to the exercise of the authority granted in the proxy card. Merely
attending the Meeting, however, will not revoke any previously executed proxy. If you hold shares
through a bank or other intermediary or if you are the holder of a variable annuity contract or
variable life insurance policy (as discussed below), please consult your bank or intermediary or
your participating insurance company regarding your ability to revoke voting instructions after
such instructions have been provided.
Photographic identification will be required for admission to the Meeting.
Annual reports are sent to shareholders of record of each Fund following the Funds fiscal
year end. All Cap Funds fiscal year end is October 31. All Cap VP Funds fiscal year end is
December 31. Each Fund will furnish, without charge, a copy of its annual report and most recent
semi-annual report succeeding the annual report, if any, to a shareholder upon request. Such
requests should be directed to the Funds by calling toll free at (888) 233-4339, with respect to All Cap Fund, or
(800) 851-9777, with respect to All Cap VP Fund. Copies of annual
and semi-annual reports of each Fund also are available on the EDGAR Database on the Securities and
Exchange Commissions Internet site at www.sec.gov.
Please note that only one annual or semi-annual report or Joint Proxy Statement may be
delivered to two or more shareholders of a Fund who share an address, unless the Fund has received
instructions to the contrary. To request a separate copy of an annual or semi-annual report or the Joint Proxy
Statement, or for instructions as to how to request a separate copy of these documents or as to how
to request a single copy if multiple copies of these documents are received, shareholders should
contact the applicable Fund at the address and phone number set forth above.
VOTE REQUIRED AND MANNER OF VOTING PROXIES
A quorum of shareholders is required to take action at each Meeting. The quorum requirement
for each Fund is 30% of the voting power of the Fund.
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Votes cast by proxy or in person at each Meeting will be tabulated by the inspectors of
election appointed for that Meeting. The inspectors of election, who are employees of the proxy
solicitor engaged by Transamerica, on behalf of the Funds, will determine whether or not a quorum
is present at the Meeting. The inspectors of election will treat abstentions and broker non-votes
(i.e., shares held by brokers or nominees, typically in street name, as to which proxies have
been returned but (a) instructions have not been received from the beneficial owners or persons
entitled to vote and (b) the broker or nominee does not have discretionary voting power on a
particular matter) as present for purposes of determining a quorum.
If you hold your shares directly (not through a broker-dealer, bank or other financial
institution, or variable annuity contract or variable life insurance policy) and if you return a
signed proxy card that does not specify how you wish to vote on a proposal, your shares will be
voted FOR the Proposal.
Broker-dealer firms holding shares of a Fund 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 on each Proposal before the Meetings. The New York Stock Exchange (the NYSE) may
take the position that a broker-dealer that is a member of the NYSE and that has not received
instructions from a customer or client prior to the date specified in the broker-dealer firms
request for voting instructions may not vote such customer or clients shares with respect to the
Proposal. A signed proxy card or other authorization by a beneficial owner of Fund shares that does
not specify how the beneficial owners shares should be voted on a proposal will have the effect of
a vote AGAINST the Proposal.
If you hold shares of a Fund through a bank or other financial institution or intermediary
(called a service agent) that has entered into a service agreement with the Fund or a distributor
of the Fund, the service agent may be the record holder of your shares. At the Meetings, a service
agent will vote shares for which it receives instructions from its customers in accordance with
those instructions. A signed proxy card or other authorization by a shareholder that does not
specify how the shareholders shares should be voted on a proposal may be deemed to authorize a
service provider to vote such shares in favor of the applicable proposal. Depending on its
policies, applicable law or contractual or other restrictions, a service agent may be permitted to
vote shares with respect to which it has not received specific voting instructions from its
customers. In those cases, the service agent may, but may not be required to, vote such shares in
the same proportion as those shares for which the service agent has received voting instructions.
This practice is commonly referred to as echo voting.
Shares of All Cap VP Fund are held by the variable annuity contracts and variable life
insurance products offered by the separate accounts of participating life insurance companies.
However, in accordance with current law and interpretations thereof, participating insurance
companies will vote shares held in the separate accounts in a manner consistent with voting
instructions timely received from the holders of variable annuity contracts and variable life
insurance policies. A signed proxy card or other authorization by a holder that does not specify
how the holders shares should be voted on a proposal may be deemed an instruction to vote such
shares in favor of the applicable proposal. Those persons who have a voting interest at the close
of business on August 14, 2009 will be entitled to submit instructions to their participating
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insurance company. Each participating insurance company will vote All Cap VP Fund shares held in
separate accounts for which no timely instructions are received from the holders of variable
annuity contracts and variable life insurance policies, as well as shares it owns, in the same
proportion as those shares for which such insurance company receives voting instructions.
If you beneficially own shares that are held in street name through a broker-dealer or that
are held of record by a service agent, or if you hold shares through a variable annuity contract or
a variable life insurance policy, and if you do not give specific voting instructions for your
shares, they may not be voted at all or, as described above, they may be voted in a manner that you
may not intend. Therefore, you are strongly encouraged to give your broker-dealer, service agent or
participating insurance company specific instructions as to how you want your shares to be voted.
The Proposal requires the approval of the holders of a majority of the outstanding voting securities of the
applicable Fund present or represented by proxy and entitled to vote at the Meeting. The vote of a majority of the outstanding voting securities is defined in the Investment Company Act of 1940 (the 1940 Act) as the
lesser of the vote of (a) 67% or more of the voting power of the voting securities of the Fund that
are present at the Meeting or represented by proxy if holders of shares representing more than 50%
of the voting power of the outstanding voting securities of the Fund are present or represented by
proxy or (b) more than 50% of the voting power of the outstanding voting securities of the Fund. Approval of
the Proposal for each Fund will occur only if a sufficient number of votes at the Meeting are cast
FOR that Proposal. Any abstentions or broker non-votes would
effectively be treated as a vote AGAINST the Proposal.
CHANGES IN THE FUNDS INVESTMENT OBJECTIVE, STRATEGIES AND PRINCIPAL RISKS
In connection with the proposed change in sub-adviser to Transamerica Investment Management,
LLC (TIM or the Sub-Adviser), there will be changes to each Funds investment objective,
strategies and principal risks, as well as the Funds name, in order to align the Fund with TIMs
particular portfolio management approach. The Funds subclassification as a non-diversified company
and fundamental investment restrictions will remain unchanged.
Each Fund currently seeks capital appreciation. The Funds seek to achieve their objective by
investing portfolio assets principally in common stocks and common stock equivalents, such as
preferred stocks and securities convertible into common stocks, of companies ClearBridge Advisors,
LLC, the Funds current sub-adviser (ClearBridge), believes are undervalued in the marketplace.
While ClearBridge selects investments primarily for their capital appreciation potential, secondary
consideration is given to a companys dividend record and the potential for an improved dividend
return.
Assuming the Proposal is approved, All Cap Fund will be renamed Transamerica Focus and All
Cap VP Fund will be renamed Transamerica Focus VP, and each Fund will seek to maximize long-term
growth. The Funds will seek to achieve their objective by investing primarily in domestic equity
securities that, in TIMs opinion, are trading at a material discount to intrinsic value. TIM
assesses intrinsic value primarily through discounted cash flow analysis, though acquisition and
comparable company valuation analyses may be used to a lesser extent. Each Fund will generally
invest in domestic equity securities of any size. Each Fund may also invest up to 10% of its assets
in short sale positions.
TIM will use a bottom-up approach to investing. It studies industry and economic trends, but
focuses on researching individual companies. The portfolio will be constructed one company at a time.
Each company passes through a research process and stands on its own merits as a viable investment
in TIMs opinion.
TIMs equity management team selects U.S. companies showing:
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strong potential for shareholder value creation |
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high barriers to competition |
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solid free cash flow generating ability |
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excellent capital allocation discipline |
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experienced management aligned with shareholder interests |
TIM seeks out dominant business franchises where the long-term, value-creating potential has
not fully been recognized by the market.
Consistent with each Funds objective and other policies, TIM may, but need not, invest in
derivatives, including futures, forwards, options and swaps, and also in foreign securities.
In the event TIM is unable to identify sufficient investments that meet the Funds criteria,
the Funds may maintain a balance in cash and cash equivalents that may range up to 40% of total
assets.
In addition to the principal risks to which each Fund is currently subject, the Funds revised
investment objective and strategies may also subject the Fund to Short Sales risk, Fixed-Income
Securities risk and Focused Investing risk, as described below. Each Fund will no longer consider
Preferred Stock risk or Convertible Securities risk to be principal risks.
Short Sales. A short sale may be effected by selling a security that the Fund does not own. In
order to deliver the security to the purchaser, the Fund borrows the security, typically from a
broker-dealer or an institutional investor. The Fund later closes out the position by returning the
security to the lender. If the price of the security sold short increases, the Fund would incur a
loss; conversely, if the price declines, the Fund will realize a gain. Although the gain is limited
by the price at which the security was sold short, the loss is potentially unlimited. The Funds
use of short sales in an attempt to improve performance or to reduce overall portfolio risk may not
be successful and may result in greater losses or lower positive returns than if the Fund held only
long positions. The Fund may be unable to close out a short position at an acceptable price, and
may have to sell related long positions at disadvantageous times to produce cash to unwind a short
position. Short selling involves higher transaction costs than typical long-only investing.
A short sale may also be effected against the box if, at all times when the short position
is open, the Fund contemporaneously owns or has the right to obtain at no additional cost
securities identical to those sold short. In the event that the Fund were to sell securities short
against the box and the price of such securities were to then increase rather than decrease, the
Fund would forego the potential realization of the increased value of the shares sold short.
Fixed-Income Securities. The value of fixed-income securities may change daily based on
changes in interest rates, and other market conditions and factors. Risks include, without
limitation:
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market risk: fluctuations in market value |
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interest rate risk: the value of a fixed-income security generally decreases as interest
rates rise. This may also be the case for dividend paying stocks. Increases in interest
rates may |
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cause the value of your investment to go down. The longer the maturity or duration, the more
sensitive the value of a fixed-income security is to fluctuations in interest rates |
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prepayment or call risk: declining interest rates may cause issuers of securities held
by the Fund to pay principal earlier than scheduled or to exercise a right to call the
securities, forcing the Fund to reinvest in lower yielding securities |
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extension risk: rising interest rates may result in slower than expected principal
prepayments, which effectively lengthens the maturity of affected securities, making them
more sensitive to interest rate changes |
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default or credit risk: issuers (or guarantors) defaulting on their obligations to pay
interest or return principal, being perceived as being less creditworthy or having a credit
rating downgraded, or the credit quality or value of any underlying asset declines. The
Fund may incur expenses to protect the Funds interest in securities experiencing these
events. If the Fund invests in securities that are subordinated to other securities, or
which represent interests in pools of such subordinated securities, those investments may
be disproportionately affected by a default or even a perceived decline in creditworthiness
of the issuer. |
If, after purchase, the credit rating on a security is downgraded or the credit quality
deteriorates, or if the maturity is extended, the Funds sub-adviser will decide whether the
security should be held or sold. Upon the occurrence of certain triggering events or defaults on a
security held by the Fund, or if an issuer of such a security has difficulty meeting its
obligations, the Fund may become the holder of a restructured security or of underlying assets. In
that case, the Fund may become the holder of securities or other assets that it could not otherwise
purchase at a time when those assets may be difficult to sell or can be sold only at a loss.
Focused Investing. To the extent the Fund invests in a limited number of issuers, its
performance may be more volatile than funds that hold a greater variety of securities.
Fund Reorganization. TAM and TIM currently serve as investment adviser and sub-adviser,
respectively, to the Transamerica Premier Focus Fund, another mutual fund with an investment
program (investment objective, strategies and risks) similar to the investment program that would
be implemented for each Fund if TIM is appointed as sub-adviser to the Funds. As part of a broad
plan to rationalize the Transamerica Asset Management group of funds, All Cap Funds Board also has approved a reorganization pursuant to which the
Transamerica Premier Focus Funds assets would be acquired, and its liabilities would be assumed,
by All Cap Fund in exchange for shares of All Cap Fund. The reorganization is subject to the
satisfaction of certain conditions. If the closing conditions are satisfied, the reorganization is
expected to occur during the fourth quarter of 2009.
PROPOSAL TO APPROVE A NEW SUB-ADVISORY AGREEMENT
At the Meeting, you will be asked to approve a new sub-advisory agreement (each, a New
Sub-Advisory Agreement) between Transamerica Asset Management, Inc. (TAM or the Manager), your
Funds investment adviser, and Transamerica Investment Management, LLC (TIM or the
Sub-Adviser), your Funds proposed new sub-adviser. A general description of the proposed New
Sub-Advisory Agreements is included below. The terms of each New Sub-Advisory Agreement are similar
to those of the Current Sub-Advisory Agreement it replaces, except that the dates of effectiveness
and termination differ. The form of the New Sub-Advisory Agreement is included in Appendix B.
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Currently, ClearBridge, a wholly-owned subsidiary of Legg Mason, Inc., is a party to an investment sub-advisory agreement with
respect to each Fund (each, a Current Sub-Advisory Agreement). The date of each Funds Current
Sub-Advisory Agreement and the date on which it was approved by the Board are provided in Appendix
C.
Under the Current Sub-Advisory Agreement for each Fund, ClearBridge provides investment
research, advice, management and supervision, subject to the supervision of the Funds Board
Members and of TAM, the investment adviser of each Fund.
The Current Sub-Advisory Agreements for the Funds were approved at June 4, 2009 in-person
meetings by the Boards of the Funds. Shareholder approval of the Current Sub-Advisory Agreements
was not required under the 1940 Act pursuant to the terms of an exemptive order that the Funds have
received from the Securities and Exchange Commission, which permits the appointment of investment sub-advisers that are not affiliated with
TAM (such as ClearBridge) without shareholder approval. TIM, however, is affiliated
with TAM, so the New Sub-Advisory Agreement pursuant to which TIM would be appointed as investment
sub-adviser to the Funds is subject to shareholder approval.
Under each New Sub-Advisory Agreement, the Sub-Adviser will provide investment research,
advice, management and supervision, subject to the supervision of the Funds Board Members and of
the Funds Manager. The appointment of each new Sub-Adviser is not expected to result in any material changes
in the nature or the level of investment advisory services provided to any Fund by TAM.
The
Sub-Adviser has a strong track record managing mandates in the style of each Fund it will advise.
General Description of Sub-Advisory Agreement
Set forth below is a general description of the terms of the New Sub-Advisory Agreements and a
general comparison with the terms of the Current Sub-Advisory Agreements. A copy of the form of New
Sub-Advisory Agreement is attached to this Joint Proxy Statement as Appendix B, and you should
refer to Appendix B for the complete terms of the New Sub-Advisory Agreement.
Investment Management Services. Each of the New Sub-Advisory Agreements and the Current
Sub-Advisory Agreements provides that, subject to the supervision of the Funds Board Members and
of TAM, the sub-adviser will regularly provide the Fund, with respect to that portion of a Funds
assets allocated to the sub-adviser by TAM, with investment research, advice, management and
supervision, will furnish a continuous investment program for the allocated assets consistent with
the Funds investment objectives, policies and restrictions, will determine from time to time what
securities and other investments and instruments will be purchased, retained, sold or exchanged by
the Fund, and will implement those decisions, all subject to the provisions of the Funds governing
documents, the 1940 Act, the applicable rules and
regulations of the Securities and Exchange Commission (the SEC), and other applicable federal and
state law, as well as any other specific policies adopted by the Funds Board and disclosed to the
sub-adviser.
7
Under each Funds New Sub-Advisory Agreement, the Sub-Adviser is authorized to place orders
pursuant to its investment determinations with respect to the allocated assets either directly with
the issuer or with any broker or dealer, foreign currency dealer, futures commission merchant or
others selected by it. Subject to any policies and procedures of the Funds Board that may modify
or restrict the Sub-Advisers authority regarding the execution of the Funds portfolio
transactions provided in the Agreement and described below, the Sub-Adviser may select brokers or
dealers who also provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934 (the Exchange Act)) to the Funds and/or the other
accounts over which the Sub-Adviser or its affiliates exercise investment discretion, a practice
commonly referred to as soft dollars. The Sub-Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a portfolio transaction
for a Fund which is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Sub-Adviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities that the Sub-Adviser and its affiliates have
with respect to accounts over which they exercise investment discretion. Each Current Sub-Advisory
Agreement contains similar provisions.
Each New Sub-Advisory Agreement further provides that, unless TAM advises the Sub-Adviser in
writing that the right to vote proxies has been expressly reserved to TAM or Transamerica Funds or
otherwise delegated to another party, the Sub-Adviser will exercise voting rights pertaining to its
allocated portion of a Funds assets in accordance with the Sub-Advisers proxy voting policies and
procedures without consultation with TAM or the Fund. Each New Sub-Advisory Agreement further
provides that the Sub-Adviser will furnish a copy of its proxy voting policies and procedures, and
any amendments thereto, to TAM. The current sub-advisers are not responsible for voting proxies
under the Current Sub-Advisory Agreements.
Fees. Under both the Current Sub-Advisory Agreements and the New Sub-Advisory Agreements, the
Manager pays the sub-adviser a fee out of the investment management fee the Manager receives from
the Fund. The sub-advisory fees payable by the Manager to TIM are identical to the sub-advisory
fees paid under the Current Sub-Advisory Agreements. Fees paid to the current sub-advisers during
each Funds most recent fiscal year are shown below under
Information about the Sub-Adviser.
Payment of Expenses. Each New Sub-Advisory Agreement requires the Sub-Adviser to pay all
expenses incurred by it in the performance of its duties under the Agreement and requires TAM to
pay all expenses incurred by it in the performance of TAMs duties under the Agreement. Under each
Sub-Advisory Agreement, the Fund will bear all expenses not expressly assumed by TAM or the
Sub-Adviser incurred in the operation of the Fund and the offering of its shares. Each Current
Sub-Advisory Agreement also requires that the Manager bear all expenses in connection with the
performance of its services under the Agreement.
Conflicts of Interest. The New Sub-Advisory Agreement provides that the Sub-Adviser will not
deal with itself, or with members of a Funds Board or any principal underwriter of the Fund, as
principals or agents in making purchases or sales of securities or other property for the account
of the Fund, nor will it purchase any securities from an underwriting or selling group in
8
which the Sub-Adviser or its affiliates is participating, or arrange for purchases and sales of
securities between a Fund and another account advised by the Sub-Adviser or its affiliates, except
in each case as permitted by the 1940 Act and in accordance with such policies and procedures as
may be adopted by a Fund from time to time. The New Sub-Advisory Agreement specifically provides
that personnel of the Sub-Adviser may nonetheless engage in any other business or devote his or her
time and attention in part to the management or other aspects of any other business, whether of a
similar nature or a dissimilar nature. In addition, the Sub-Adviser may engage in any other
business or render services of any kind, including investment advisory and management services, to
any other fund, firm, individual or association. The Current Sub-Advisory Agreements address these
same potential conflicts in a similar manner.
However, the New Sub-Advisory Agreement also provides that if the purchase or sale of
securities consistent with the investment policies of a Fund or one or more other accounts of the
Sub-Adviser are considered at or about the same time, transactions in such securities must be
allocated among the accounts in a manner deemed equitable by the Sub-Adviser. In addition, if
transactions of a Fund and another client are combined, as permitted by applicable laws and
regulations, such transactions must be consistent with the Sub-Advisers policies and procedures as
presented to the Board from time to time.
The Sub-Adviser has developed trade allocation policies to ensure that no one client, regardless of
type, is intentionally favored at the expense of another. These policies are designed to address
potential conflicts in situations where two or more funds or accounts participate in investment
decisions involving the same securities.
The Current Sub-Advisory Agreements do not address trade
allocation.
Limitation on Liability. Under each New Sub-Advisory Agreement, the Sub-Adviser assumes no
responsibility other than to render the services called for by the agreement in good faith, and the
Sub-Adviser is not liable for any error of judgment or mistake of law, or for any loss arising out
of any investment or for any act or omission in the execution of securities transactions for a
Fund. The Sub-Adviser is not protected, however, from willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless disregard of its
obligations and duties under the agreement. This same limitation of liability applies to affiliates
of the Sub-Adviser who may provide services to the Fund as contemplated by the New Sub-Advisory
Agreement. Each Current Sub-Advisory Agreement addresses limitation on liability in a similar
manner.
Term and Continuance.
The Current Sub-Advisory Agreement of each Fund was in effect for an initial two-year term and was
eligible to be continued thereafter for successive one-year periods if such continuance was
specifically approved at least annually (a) by the Board or (b) by a vote of a majority of the
outstanding voting securities of the Fund, provided that in either event the continuance is also
approved by a majority of the Board Members who are not interested persons of any party to the
agreement. If approved by shareholders of a Fund, the New Sub-Advisory Agreement for the Fund will
terminate, unless sooner terminated as set forth therein, after an initial two-year term.
Thereafter, if not terminated, each New Sub-Advisory Agreement will continue in effect from year to
year if such continuance is specifically approved at least annually as discussed above with respect
to the Current Sub-Advisory Agreement.
Termination. The New Sub-Advisory Agreement for each Fund provides that the agreement may be
terminated at any time without the payment of any penalty by the Fund or by the Sub-Adviser upon
not less than ninety days written notice to the Fund. A Fund may effect termination by action of
the Board or by vote of a majority of the outstanding voting securities of
9
the Fund, accompanied by appropriate notice. The New Sub-Advisory Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act). The Current
Sub-Advisory Agreements contain similar termination provisions, except that they require sixty
days written notice.
Board Considerations
At meetings held on July 24, 2009, the Board of each Fund, including the independent Board
Members, approved the New Sub-Advisory Agreement for the Fund between TAM and TIM, the Funds new
Sub-Adviser, subject to shareholder approval.
To assist the Board Members in their consideration of the New Sub-Advisory Agreements, the Board Members
received in advance of their meetings certain materials and information. In addition, the
independent Board Members consulted with their independent legal counsel, discussing, among other
things, the legal standards and certain other considerations relevant to the Board Members
deliberations.
Among other things, the Board Members of each Fund considered:
(a) that TAM has advised the Board Members that the appointment of TIM is not expected to
result in any diminution in the nature, quality and extent of services provided to the Funds
and their shareholders, including compliance services;
(b) that TIM is an experienced and respected asset management firm and that TIM has the
capabilities, resources and personnel necessary to provide advisory services to the
applicable Fund based on an assessment of the services that TIM provides to other funds
within the Transamerica fund complex, including the Transamerica Premier Focus Fund, which
uses a similar investment program to the program that TIM, if appointed as sub-adviser,
intends to implement for the Funds;
(c) that in June 2009 the Board had performed a full annual review of a number of
sub-advisory agreements with TIM and had determined that TIM has the capabilities, resources
and personnel necessary to provide the sub-advisory services to the applicable Transamerica
funds;
(d) the proposed responsibilities of TIM for the Funds and the services expected to be
provided by it;
(e) the fact that the sub-advisory fees payable to TIM would be paid by TAM and not the
Funds, and, consequently, advisory fees paid by the Fund will not increase; and that the
advisory fees paid by the Manager to TIM represent reasonable compensation to TIM in light
of the services expected to be provided;
(f) that TAM recommended to the Board that TIM be appointed as Sub-Adviser to the Funds
based on its desire to engage a sub-adviser with a proven performance record for the
particular investment strategy that is contemplated for the Fund;
(g) that the Proposal is one of a number of initiatives recently approved by the Board
Members of the Transamerica funds that are designed to streamline the Transamerica fund
complex, to promote operating efficiencies, and to result in a more cohesive fund platform;
(h) that
the change in sub-adviser to TIM does not involve a conflict of
interest from which TAM or TIM derives an inappropriate advantage; and
(i) that each Fund would bear a portion of the costs of obtaining shareholder approval of
the New Sub-Advisory Agreements.
10
Certain of these considerations are discussed in more detail below.
In their deliberations, the Board Members did not identify any particular information that was
all-important or controlling, and each Board Member may have attributed different weights to the
various factors. The Board Members evaluated all information available to them on a fund-by-fund
basis, and their determinations were made separately in respect of each Fund. The Board Members of
each applicable Fund, including a majority of the independent Board Members, concluded that the applicable New Sub-Advisory Agreement should be approved and that the fees payable thereunder are fair and reasonable
in light of the services expected to be provided to the Fund, and, in each case, that
the New Sub-Advisory Agreement should be recommended to Fund shareholders for approval.
Nature, Quality and Extent of Services Provided. In evaluating the nature, quality and extent
of the services to be provided by TIM under each New Sub-Advisory Agreement, the Board Members
considered, among other things, information and assurances provided by TAM as to the operations,
facilities, organization and personnel of TIM, the ability of TIM to perform its duties under its
New Sub-Advisory Agreement, and any anticipated changes to the current investment and other
practices of the Funds.
The Board Members considered the changes to each Funds investment strategies and principal risks,
as well as the changes to each Funds name, that were proposed in order to align the Fund with
TIMs particular portfolio management approach.
The Board Members considered that TAM has advised the Board Members that
the appointment of TIM is not expected to result in any diminution in the nature, quality and
extent of services provided to the Funds and their shareholders, including compliance services.
The Board considered the differences between the portfolio management approaches and styles of TIM
and ClearBridge, the current sub-adviser to each Fund.
The Board Members considered that TIM is an experienced and respected asset management firm and
that TIM has the capabilities, resources and personnel necessary to provide advisory services to
the applicable Fund based on the assessment of the services that TIM provides to other funds within
the Transamerica fund complex, including the Transamerica Premier Focus Fund, which serves as a
model for the investment program that TIM intends to implement for the Funds if TIM is appointed as
sub-adviser. The Board Members also considered that they recently had performed a full annual
review of a number of sub-advisory agreements with TIM and had determined that TIM has the
capabilities, resources and personnel necessary to provide the sub-advisory services to the
applicable Transamerica funds.
Based on their review of the materials provided and the assurances they had received from TAM,
the Board Members of each Fund determined that TIM can provide sub-advisory services that are
appropriate in scope and extent in light of the proposed investment program for the Fund and that
TIMs appointment is not expected to adversely affect the nature, quality and extent of services
provided to the Fund.
Fees and Costs of Services Provided. The Board Members considered the sub-advisory fee rate
under the New Sub-Advisory Agreements as well as the overall management fee structure of the Funds
and noted that they would remain unchanged. The Board Members noted that the Funds do not pay the
sub-advisory fee. The Board Members took into consideration that they had recently reviewed the
Managers profitability with respect to the Funds and that advisory fees would remain unchanged.
The Board of All Cap Fund also reviewed estimated profitability information if TIM is appointed as
sub-adviser to the Fund and the Transamerica Premier Focus Fund is reorganized into All Cap Fund.
The Board Members also considered arrangements between TIM and TAM, which are affiliated entities.
The Board Members of each Fund determined that the advisory fees paid by TAM to TIM represent
reasonable compensation in light of the services expected to be provided.
Economies of Scale. The Board Members noted that the advisory fee schedule of the Funds,
which contains breakpoints, would remain unchanged. The Board Members determined that the breakpoints permit
certain economies of scale for
the benefit of shareholders as the Funds grow. The Board Members noted that TAM believes that the
appointment of TIM as sub-adviser has the potential to attract additional assets.
Fall-Out Benefits. The Board Members took into consideration the character of other incidental
benefits received by TIM, including the use of portfolio brokerage transactions to pay
for research services that TIM typically enters into with regard to other funds that it sub-advises
within the complex and noted that they had recently determined that such benefits are expected to be consistent with
industry practice and the best interests of the Funds and their shareholders. The Board Members also considered the potential for increased visibility in
the marketplace as a result of the TIMs relationship with the Funds.
Investment Performance. The Board Members noted TIMs investment management experience,
capabilities and resources, with respect to Transamerica Premier Focus Fund, which is subadvised by
TIM and serves as a model for the investment program to be implemented for the Fund if TIM is
appointed. The Board Members noted that the performance for that fund for the past 1-, 3- and
5-year periods was stronger than that of each of the Funds over the same periods and that, based on
comparative data provided by Strategic Insight, the Transamerica Premier Focus Fund has ranked
higher in its peer group of funds, based on Lipper categories, than the Funds have ranked in
theirs. The Board Members noted that TAM believes that the appointment of TIM could benefit
shareholders by offering them the potential for superior performance based on the historical
comparisons, but were unable to predict what effect execution of the New Sub-Advisory Agreements
would actually have on the future performance of the Funds. Based on this information, the Board Members determined that TIM is capable of generating a level
of investment performance that is appropriate in light of each Funds intended investment
objectives, policies and strategies.
Other Considerations. The Board Members considered that the Proposal is one of a number of
initiatives recently approved by the Board Members of the Transamerica funds that are designed to
streamline the Transamerica fund complex, to promote operating efficiencies, and to result in a
more cohesive fund platform.
11
Information about the Sub-Adviser
TIM is located at 11111 Santa Monica Blvd., Suite 820, Los Angeles, California 90025. TIM is
controlled by Transamerica Investment Services, Inc. (TISI). TISI is a subsidiary of Transamerica
Corporation, 600 Montgomery Street, San Francisco, California 94111. Transamerica Corporation is a
subsidiary of AEGON NV, an international insurance group. Both TIM and TISI are affiliates of TAM.
During each Funds most recent fiscal year, the current sub-adviser received $521,707 and $940,817 with respect to All Cap Fund and All Cap VP Fund, respectively. There were no other material
payments by the Funds to the Sub-Adviser or any of their affiliates during that period. The name
and principal occupation of the directors and principal executive officers (or persons performing
similar functions) of the Sub-Adviser are set forth in
Appendix D. The principal address of each
individual as it relates to his or her duties at the Sub-Adviser is the same as that of the
Sub-Adviser.
The Sub-Adviser may provide investment advisory services to other funds which may have
investment objectives and policies similar to those of the Funds. The
table set forth in Appendix E
lists other funds advised by the Sub-Adviser, the net assets of those funds, and the management fee
the Sub-Adviser received from those funds during the fiscal years ended on the dates noted.
Shareholder Approval
To become effective with respect to a particular Fund, each New Sub-Advisory Agreement must be
approved by a vote of a majority of the outstanding voting securities of the Fund. The vote of a
majority of the outstanding voting securities is defined in the 1940 Act as the lesser of the vote
of (a) 67% or more of the voting power of the voting securities of the Fund that are present at the
Meeting or represented by proxy if holders of shares representing more than 50% of the voting power
of the outstanding voting securities of the Fund are present or represented by proxy or (b) more
than 50% of the voting power of the outstanding voting securities of the Fund. Each New
Sub-Advisory Agreement was approved by the independent Board Members, separately, and by the Board
of the applicable Fund, as a whole, after consideration of all factors which it determined to be
relevant to its deliberations, including those
12
discussed above.
Your Board recommends that you vote FOR the approval of the New Sub-Advisory Agreement.
ADDITIONAL INFORMATION
Information about the Manager
TAM,
located at 570 Carillon Parkway, St. Petersburg, Florida 33716, serves as the Funds investment
adviser. TAM is directly owned by Western Reserve Life Assurance Co. of Ohio (77%)
(Western Reserve) and AUSA Holding Company (23%) (AUSA), both of which are indirect, wholly
owned subsidiaries of AEGON NV. AUSA is wholly owned by AEGON USA, LLC (AEGON USA), a financial
services holding company whose primary emphasis is on life and health insurance, and annuity and
investment products. AEGON USA is owned by AEGON US Holding Corporation, which is owned by
Transamerica Corporation (DE). Transamerica Corporation (DE) is owned by The AEGON Trust, which is
owned by AEGON International B.V., which is owned by AEGON NV, a Netherlands corporation, and a
publicly traded international insurance group.
Information about Other Service Providers
Transamerica Capital, Inc. (TCI), an affiliate of TAM and TIM, serves as the
distributor for each Fund pursuant to a written agreement. TCI is located at 4600 South Syracuse
Street, Suite 1100, Denver, Colorado 80237.
Transamerica
Fund Services, Inc. (TFS), 570 Carillon Parkway, St.
Petersburg, Florida 33716, also an affiliate of TAM and TIM,
serves as transfer agent and administrator for the Funds.
Beneficial Ownership
13
As of August 14, 2009, the Trustees and officers, individually and as a group, beneficially owned less than 1% of the outstanding Shares of each Fund.
As
of August 14, 2009, the persons listed in Appendix F owned of record or had the right to
vote 5% or more of the outstanding interests in the Funds.
Shareholder Proposals
As a general matter, neither Transamerica Funds nor Transamerica Series Trust holds annual
shareholder meetings. Shareholders wishing to submit proposals for inclusion in a proxy statement
for a subsequent meeting (if any) should send their written proposals to Dennis P. Gallagher,
Secretary, 570 Carillon Parkway, St. Petersburg, Florida 33716.
Proposals relating to the Funds must be received a reasonable time prior to the date of a
meeting of shareholders of the applicable Fund to be considered for inclusion in the proxy
materials for the meeting. Timely submission of a proposal does not, however, necessarily mean that
the proposal will be included. Persons named as proxies for any subsequent shareholder meeting will
vote in their discretion with respect to proposals submitted on an untimely basis.
Shareholder Communications
Shareholders of a Fund may mail written communications to the Funds Board, addressed to the
care of the Secretary of the Fund, at the Funds address. Each shareholder communication must (i)
be in writing and be signed by the shareholder, and (ii) identify the full name of the Fund. The
Secretary is responsible for collecting, reviewing and organizing all properly
14
submitted shareholder communications. Except as provided below, with respect to each properly
submitted shareholder communication, the Secretary will either (i) provide a copy of the
communication to the Board at the next regularly scheduled Board meeting, or (ii) if the Secretary
determines that the communication requires more immediate attention, forward the communication to
the Board promptly after receipt. The Secretary may, in good faith, determine that a shareholder
communication should not be provided to the Board because the communication, among other things,
(i) does not reasonably relate to the Fund or its operations, management, activities, policies,
service providers, Board, officers, shareholders or other matters relating to an investment in the
Fund, or (ii) is ministerial in nature (such as a request for Fund literature, share data or
financial information).
Shareholders Sharing the Same Address
As permitted by law, each Fund will deliver only one copy of this Joint Proxy Statement to
shareholders or owners of variable annuity contracts and variable life policies, as applicable,
(for purposes of this paragraph, collectively, shareholders) residing at the same address, unless
such shareholders have notified the Fund of their desire to receive multiple copies of the
shareholder reports and proxy statements the Fund sends. If you would like to receive an additional
copy, please contact your Fund by writing to the address shown on the front page of this Joint
Proxy Statement or by calling the Funds at 866-436-5968. The Fund will then promptly deliver,
upon request, a separate copy of this Joint Proxy Statement to any shareholder residing at an
address to which only one copy was mailed. Shareholders wishing to receive separate copies of each
Funds shareholder reports and proxy statements in the future, and shareholders sharing an address
that wish to receive a single copy if they are receiving multiple copies, should also send a
request as indicated.
Fiscal Year
The fiscal year end for All Cap Fund is October 31. The fiscal year end for All Cap VP Fund is
December 31.
General
Management does not intend to present and does not have reason to believe that any other items
of business will be presented at the Meetings. However, if other matters are properly presented to
a Meeting for a vote, the proxies will be voted by the persons acting under the proxies upon such
matters in accordance with their judgment of the best interests of the applicable Fund.
A list of shareholders entitled to be present and to vote at the Meetings will be available at
the offices of the Funds, 570 Carillon Parkway, St. Petersburg, Florida 33716, for inspection by
any shareholder during regular business hours beginning ten days prior to the date of the Meetings.
Failure of a quorum to be present at a Meeting will necessitate adjournment. The persons named
in the enclosed proxy may also move for an adjournment of a Meeting to permit further
15
solicitation of proxies with respect to any of the proposals if they determine that adjournment and
further solicitation are reasonable and in the best interests of shareholders. Under each Funds
By-Laws, a meeting may be adjourned by action of the person presiding over such meeting if a quorum
is not present with respect to any matter or, even if a quorum is present with respect to a matter,
a meeting may be adjourned by the affirmative vote of a majority of the shares present in person or
represented by proxy at the meeting.
Information About the Funds
Each of the Funds is subject to the informational requirements of the Securities Exchange Act
of 1934, as amended, and certain other federal securities statutes, and files reports and other
information with the SEC. Proxy materials, reports and other information filed by the Funds can be
inspected and copied at the Public Reference Facilities maintained by the SEC at 100 F Street, NE,
Washington, DC 20549. The SEC maintains an Internet web site (at http://www.sec.gov), which
contains other information about the Funds.
Please submit your voting instructions promptly by signing and dating each enclosed proxy card
and returning it in the accompanying postage-paid return envelope OR by following the enclosed
instructions to similarly providing voting instructions by telephone or by the Internet.
To ensure the presence of a quorum at the Meetings, we request prompt execution and return of
the enclosed proxy. A self-addressed, postage-paid envelope is enclosed for your convenience.
By Order of the Boards of Trustees,
Dennis P. Gallagher
Vice President, General Counsel and Secretary
September 14, 2009
16
Appendix A
Number of Shares Outstanding
The following table lists, with respect to each Fund, the total number of shares outstanding
and the net assets of the Fund on August 14, 2009.
|
|
|
|
|
Fund |
|
Number of Shares Outstanding |
|
Net Assets |
|
All Cap Fund
|
|
6,741,913
|
|
$ 70,590,519.34 |
All Cap VP Fund
|
|
17,993,142
|
|
$155,975,215.46 |
A-1
Appendix B
Form of Investment Sub-Advisory Agreement
Transamerica Investment Management, LLC
This
Agreement, entered into as of [ ], 2009 by and between Transamerica Asset Management,
Inc., a Florida corporation (referred to herein as TAM) and Transamerica Investment Management,
LLC, a limited liability company organized and existing under the laws of the State of Delaware
(referred to herein as the Subadviser).
TAM is the investment adviser to [Transamerica Funds/Transamerica Series Trust] (the Trust),
an open-end investment company registered under the Investment Company Act of 1940 (collectively
with the rules and regulations promulgated thereunder and any exemptive orders thereunder, the
1940 Act). TAM wishes to engage the Subadviser to provide certain investment advisory services
to each series of the Trust listed on Schedule A hereto (the Fund). The Subadviser
desires to furnish services for the Trust and to perform the functions assigned to it under this
Agreement for the considerations provided. Accordingly, the parties have agreed as follows:
1. Appointment. In accordance with the Investment Advisory Agreement between the Trust and
TAM (the Advisory Agreement), TAM hereby appoints the Subadviser to act as subadviser with
respect to the Fund for the period and on the terms set forth in this Agreement. The Subadviser
accepts such appointment and agrees to render or cause to be rendered the services set forth for
the compensation herein specified.
2. Subadvisory Services. In its capacity as subadviser to the Fund, the Subadviser shall have
the following responsibilities:
|
(a) |
|
Subject to the supervision of the Trusts Board of Trustees (the Board) and
TAM, the Subadviser shall regularly provide the Fund with respect to such portion of
the Funds assets as shall be allocated to the Subadviser by TAM from time to time (the
Allocated Assets) with investment research, advice, management and supervision and
shall furnish a continuous investment program for the Allocated Assets consistent with
the Funds investment objectives, policies and restrictions, as stated in the Funds
current Prospectus and Statement of Additional Information. The Subadviser shall, with
respect to the Allocated Assets, determine from time to time what securities and other
investments and instruments will be purchased, retained, sold or exchanged by the Fund
and what portion of the Allocated Assets will be held in the various securities and
other investments in which the Fund invests, and shall implement those decisions
(including the execution of investment documentation and agreements), all subject to
the provisions of the Trusts Declaration of Trust and By-Laws (collectively, the
Governing Documents), the 1940 Act and the applicable rules and regulations
promulgated thereunder by the Securities and Exchange Commission (the SEC) and
interpretive guidance issued thereunder by the SEC staff and any other applicable
federal and state law, as well as the investment |
B-1
|
|
|
objectives, policies and restrictions of the Fund referred to above, and any other
specific policies adopted by the Board and disclosed to the Subadviser. The
Subadvisers responsibility for providing investment research, advice, management
and supervision to the Funds is limited to that discrete portion of the Funds
represented by the Allocated Assets and the Subadviser is prohibited from directly
or indirectly consulting with any other Subadviser for a portion of the Funds
assets concerning Funds transactions in securities or other assets. The Subadviser
is authorized as the agent of the Trust to give instructions with respect to the
Allocated Assets to the custodian of the Funds as to deliveries of securities and
other investments and payments of cash for the account of the Funds. Subject to
applicable provisions of the 1940 Act, the investment program to be provided
hereunder may entail the investment of all or substantially all of the assets of the
Funds in one or more investment companies. |
|
|
(b) |
|
The Subadviser will place orders pursuant to its investment determinations
for the Fund either directly with the issuer or with any broker or dealer, foreign
currency dealer, futures commission merchant or others selected by it. In connection
with the selection of such brokers or dealers and the placing of such orders, subject
to applicable law, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended (the Exchange Act)) to the Fund and/or the other
accounts over which the Subadviser or its affiliates exercise investment discretion.
The Subadviser is authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the Fund
which is in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Subadviser determines in good faith that
such amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination may be viewed
in terms of either that particular transaction or the overall responsibilities which
the Subadviser and its affiliates have with respect to accounts over which they
exercise investment discretion. The Board may adopt policies and procedures that
modify and restrict the Subadvisers authority regarding the execution of the Funds
portfolio transactions provided herein. |
|
|
(c) |
|
The Fund hereby authorizes any entity or person associated with the Subadviser
which is a member of a national securities exchange to effect any transaction on the
exchange for the account of the Fund which is permitted by Section 11(a) of the
Exchange Act and Rule 11a2-2(T) thereunder, and the Fund hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing, the Subadviser agrees that it will
not deal with itself, or with Trustees of the Trust or any principal underwriter of the
Fund, as principals or agents in making purchases or sales of securities or other
property for the account of the Fund, nor will it purchase any securities from an
underwriting or selling group in which the Subadviser or its affiliates is
participating, or arrange for purchases and sales of securities between the Fund and
another account advised by the Subadviser or its affiliates, except in each case |
B-2
|
|
|
as permitted by the 1940 Act and in accordance with such policies and procedures as
may be adopted by the Fund from time to time, and will comply with all other
provisions of the Governing Documents and the Funds then-current Prospectus and
Statement of Additional Information relative to the Subadviser and its directors and
officers. |
|
|
|
(d) |
|
Unless TAM advises the Subadviser in writing that the right to vote proxies has
been expressly reserved to TAM or [Transamerica Funds] [Transamerica Series Trust] or otherwise delegated to another
party, the Subadviser shall exercise voting rights incident to any security purchased
with, or comprising a portion of, the Allocated Assets, in accordance with the
Subadvisers proxy voting policies and procedures without consultation with TAM or the
Fund. The Subadviser agrees to furnish a copy of its proxy voting policies and
procedures, and any amendments thereto, to TAM. |
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(e) |
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The Subadviser will review the security valuations of the Allocated Assets on a
daily basis. If the Subadviser believes that the Funds carrying value for a security
does not fairly represent the price that could be obtained for the security in a
current market transaction, the Subadviser will notify TAM promptly. In addition, the
Subadviser will be available to consult with TAM in the event of a pricing problem and
to participate in the Trusts Valuation Committee meetings. |
3. Activities of the Subadviser. Nothing in this Agreement shall limit or restrict the right
of any director, officer, or employee of the Subadviser to engage in any other business or to
devote his or her time and attention in part to the management or other aspects of any other
business, whether of a similar nature or a dissimilar nature, nor to limit or restrict the right of
the Subadviser to engage in any other business or to render services of any kind, including
investment advisory and management services, to any other fund, firm, individual or association.
If the purchase or sale of securities for the Fund and one or more other accounts of the Subadviser
is considered at or about the same time, transactions in such securities will be allocated among
the accounts in a manner deemed equitable by the Subadviser. Such transactions may be combined, in
accordance with applicable laws and regulations, and consistent with the Subadvisers policies and
procedures as presented to the Board from time to time.
4. Allocation of Charges and Expenses. During the term of this Agreement, the Fund will bear
all expenses not expressly assumed by TAM or the Subadviser incurred in the operation of the Fund
and the offering of its shares. Without limiting the generality of the foregoing:
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(a) |
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The Fund shall pay its allocable share of (i) fees payable to TAM pursuant to
the Advisory Agreement; (ii) the cost (including brokerage commissions, if any)
incurred in connection with purchases and sales of the Funds portfolio securities;
(iii) expenses of organizing the Fund; (iv) filing fees and expenses relating to
registering and qualifying and maintaining the registration and qualification of the
Funds shares for sale under federal and state securities laws; (v) the compensation,
fees and reimbursements paid to the Trusts non-interested Trustees; (vi) custodian and
transfer agent fees; (vii) legal and accounting |
B-3
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expenses allocable to the Fund, including costs for local representation in the
Trusts jurisdiction of organization and fees and expenses of special counsel, if
any, for the independent Trustees; (viii) all federal, state and local tax
(including stamp, excise, income and franchise taxes) and the preparation and filing
of all returns and reports in connection therewith; (ix) cost of certificates, if
any, and delivery to purchasers; (x) expenses of preparing and filing reports with
federal and state regulatory authorities; (xi) expenses of shareholders meetings
and of preparing, printing and distributing proxy statements (unless otherwise
agreed to by the Trust and TAM); (xii) costs of any liability, uncollectible items
of deposit and other insurance or fidelity bonds; (xiii) any costs, expenses or
losses arising out of any liability of, or claim for damage or other relief asserted
against, the Trust for violation of any law; (xiv) expenses of preparing,
typesetting and printing prospectuses and supplements thereto for existing
shareholders and of reports and statements to shareholders; (xv) fees and expenses
in connection with membership in investment company organizations and 12b-1 fees;
and (xvi) any extraordinary expenses incurred by the Trust on behalf of the Fund. |
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(b) |
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TAM shall pay all expenses incurred by it in the performance of its duties
under this Agreement. TAM shall also pay all fees payable to the Subadviser pursuant
to this Agreement. |
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(c) |
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The Subadviser shall pay all expenses incurred by it in the performance of its
duties under this Agreement. The Subadviser shall authorize and permit any of its
directors, officers and employees, who may be elected as Trustees or officers of the
Trust, to serve in the capacities in which they are elected, and shall pay all
compensation, fees and expenses of such Trustees and officers. |
5. Obligation to Provide Information. Each partys obligation to provide information shall be
as follows:
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(a) |
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TAM shall cause the Subadviser to be kept fully informed at all times with
regard to the securities owned by the Fund, its funds available, or to become
available, for investment, and generally as to the condition of the Funds affairs.
TAM shall furnish the Subadviser with such other documents and information with regard
to the Funds affairs as the Subadviser may from time to time reasonably request. |
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(b) |
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The Subadviser, at its expense, shall supply the Board, the officers of the
Trust and TAM with all information and reports reasonably required by them and
reasonably available to the Subadviser relating to the services provided by the
Subadviser hereunder, including such information the Funds Chief Compliance Officer
reasonably believes necessary for compliance with Rule 38a-1 under the 1940 Act. |
6. Compensation of the Subadviser. As compensation for the services performed by the
Subadviser, TAM shall pay the Subadviser out of the advisory fee it receives with respect to the
Fund, and only to the extent thereof, as promptly as possible after the last day of each month, a
fee, computed daily at an annual rate set forth opposite the Funds name on Schedule A
B-4
annexed hereto. The first payment of the fee shall be made as promptly as possible at the end
of the month succeeding the effective date of this Agreement, and shall constitute a full payment
of the fee due the Subadviser for all services prior to that date. If this Agreement is terminated
as of any date not the last day of a month, such fee shall be paid as promptly as possible after
such date of termination, shall be based on the average daily net assets of the Fund or, if less,
the portion thereof comprising the Allocated Assets, in that period from the beginning of such
month to such date of termination, and shall be that proportion of such average daily net assets as
the number of business days in such period bears to the number of business days in such month. The
average daily net assets of the Fund, or portion thereof comprising the Allocated Assets, shall in
all cases be based only on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as stated in the Funds then-current
Prospectus or as may be determined by the Board.
7. Compensation of Trustees, Officers and Employees. No Trustee, officer or employee of the
Trust or the Fund shall receive from the Trust or the Fund any salary or other compensation as such
Trustee, officer or employee while he is at the same time a director, officer, or employee of the
Subadviser or any affiliated company of the Subadviser, except as the Board may decide. This
paragraph shall not apply to Trustees, executive committee members, consultants and other persons
who are not regular members of the Subadvisers or any affiliated companys staff.
8. Term. This Agreement shall continue in effect with respect to the Fund, unless sooner
terminated in accordance with its terms, for two years from its effective date, and shall continue
in effect from year to year thereafter, provided such continuance is specifically approved at least
annually by the vote of a majority of the Trustees who are not parties hereto or interested persons
of any such party, cast in person at a meeting called for the purpose of voting on the approval of
the terms of such renewal, and by either the Board or the affirmative vote of a majority of
outstanding voting securities of that Fund.
9. Termination. This Agreement may be terminated with respect to the Fund at any time,
without penalty, by the Board or by the shareholders of the Fund acting by vote of at least a
majority of its outstanding voting securities. The Subadviser may terminate the Agreements only
upon giving 90 days advance written notice to TAM. This Agreement shall terminate automatically
in the event of its assignment by the Subadviser and shall not be assignable by TAM without the
consent of the Subadviser. For the avoidance of doubt, it is understood that this Agreement may be
amended, terminated or not renewed as to one or more Funds without affecting the other Funds
hereunder.
10. Use of Name. If this Agreement is terminated with respect to the Fund and the Subadviser
no longer serves as subadviser to the Fund, the Subadviser reserves the right to withdraw from the
Trust the right to the use of its name with respect to that Fund or any name misleadingly implying
a continuing relationship between the Fund and the Subadviser or any of its affiliates.
11. Liability of the Subadviser. The Subadviser may rely on information reasonably believed
by it to be accurate and reliable. the Subadviser assumes no responsibility under this Agreement
other than to render the services called for hereunder, in good faith, and shall not be
B-5
liable for any error of judgment or mistake of law, or for any loss arising out of any
investment or for any act or omission in the execution of securities transactions for the Fund,
provided that nothing in this Agreement shall protect the Subadviser against any liability to TAM
or the Fund to which the Subadviser would otherwise be subject by reason of willful misfeasance,
bad faith, or gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder. As used in this Section 11, the term the
Subadviser shall include any affiliates of the Subadviser performing services for the Trust or
the Fund contemplated hereby and the partners, shareholders, directors, officers and employees of
the Subadviser and such affiliates.
12. Meanings of Certain Terms. For the purposes of this Agreement, the Funds net assets
shall be determined as provided in the Funds then-current Prospectus and Statement of Additional
Information and the terms assignment, interested person, and majority of the outstanding
voting securities shall have the meanings given to them by Section 2(a) of the 1940 Act, subject
to such exemptions as may be granted by the SEC by any rule, regulation or order.
13. Amendments. No provision of this Agreement may be changed, waived, discharged or
terminated orally with respect to the Fund, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or termination is sought. No
material amendment of the Agreement shall be effective with respect to the Fund until approved, if
so required by the 1940 Act, by vote of the holders of a majority outstanding voting securities of
that Fund. Schedule A hereto may be amended at any time to add additional series of the Trust as
agreed by the Trust, TAM and the Subadviser.
14. Books and Records. The Subadviser agrees that it will keep records relating to its
services hereunder in accordance with all applicable laws, and in compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Subadviser hereby agrees that any records that it maintains
for the Fund are the property of the Fund, and further agrees to surrender promptly to the Fund any
of such records upon the Funds request. The Subadviser further agrees to arrange for the
preservation of the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the 1940 Act.
15. Miscellaneous. This Agreement embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings relating to the subject
matter hereof. Should any part of this Agreement be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding on and shall inure to the benefit of the parties hereto and their
respective successors.
16. Governing Law. This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of the State of Florida and the applicable provisions of the
1940 Act.
[signature page to follow]
B-6
The parties hereto have caused this Agreement to be executed by their duly authorized
signatories as of the date and year first above written.
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TRANSAMERICA ASSET MANAGEMENT, INC. |
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By: |
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Name:
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Christopher A. Staples
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Title: |
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Senior Vice President and
Chief Investment Officer |
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TRANSAMERICA INVESTMENT MANAGEMENT, LLC |
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By: |
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Name:
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Gary U. Rollé
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Title: |
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Chief Executive Officer,
Chief Investment Officer and Board Member |
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B-7
Schedule A
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Fund |
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Investment Subadvisory Fee |
[Transamerica Legg Mason Partners All Cap]
[Transamerica Legg Mason Partners All Cap VP]
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0.425% of the first $100
million of average daily net
assets; 0.40% of average
daily net assets over $100
million up to $500 million;
and 0.35% of average daily
net assets in excess of $500
million |
B-8
Appendix C
Sub-Advisory Agreements
(Dates, Approvals and Fees)
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Date of |
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Date Current |
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Date New |
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Current Sub- |
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New Sub- |
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Current |
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Sub-Advisory |
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Sub-Advisory |
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Advisory Fee (as |
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Advisory Fee |
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Sub- |
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Agreement Last |
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Agreement |
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a percentage of |
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(as a percentage |
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Advisory |
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Approved by |
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Approved by |
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average daily net |
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of average daily |
Fund |
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Agreement |
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Trustees |
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Trustees |
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assets) 1 |
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net assets) 1 |
All Cap Fund
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December 1, 2005
(as amended)
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June 4, 2009
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July 24, 2009
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0.425% of the first
$100 million of
average daily net
assets; 0.40% of
average daily net
assets over $100
million up to $500
million; and 0.35%
of average daily
net assets in
excess of $500
million
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|
0.425% of the first
$100 million of average
daily net assets; 0.40%
of average daily net
assets over $100
million up to $500
million; and 0.35% of
average daily net
assets in excess of
$500 million |
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All Cap VP Fund
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December 1, 2005
(as amended)
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June 4, 2009
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July 24, 2009
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0.425% of the first
$100 million of
average daily net
assets; 0.40% of
average daily net
assets over $100
million up to $500
million; and 0.35%
of average daily
net assets in
excess of $500
million
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0.425% of the first
$100 million of average
daily net assets; 0.40%
of average daily net
assets over $100
million up to $500
million; and 0.35% of
average daily net
assets in excess of
$500 million |
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1
Sub-advisory fees are paid by the Manager and not by the Fund. |
C-1
Appendix D
Directors and Principal Officers of the New Sub-Adviser
Transamerica Investment Management, LLC (TIM)
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Name |
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Position with TIM |
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Gary U. Rollé
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Chief Executive Officer, Chief Investment Officer
and Board Member |
Peter O. Lopez
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Principal, Special Representative Board Member |
John J. Huber |
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Additional Board Member |
Travis S. Weimer
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Vice President and Chief Financial Officer |
Ann Marie Swanson
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Vice President, Secretary, and General Counsel and
Acting Chief Compliance Officer |
Todd M. Bergen
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Board Member |
John K. Carter
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Board Member |
Jeffrey A. McCroy
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Board Member |
Erik Van Houwelingen |
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Board Member |
D-1
Appendix E
Other Funds Advised by New Sub-Adviser
The following table lists certain information regarding funds for which the New Sub-Adviser
provides investment advisory or sub-advisory services, other than the Funds that are addressed by
this Joint Proxy Statement. All of the information below is given as of the end of the last fiscal
year of each fund.
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Management Fee (as a |
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percentage of average |
Fund |
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Net Assets |
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daily net assets) (%) |
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Transamerica Premier Focus Fund |
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$50.834 million |
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0.80% |
E-1
Appendix F
5% Share Ownership
As of August 14, 2009, the following persons owned of record the amounts indicated of the
shares of the class of the Funds indicated:
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Fund |
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Class |
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Percent |
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Name |
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Address |
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All Cap Fund
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C
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7.28 |
% |
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CITIGROUP GLOBAL MARKETS INC
00109801250 HOUSE ACCOUNT
ATTN: PETER BOOTH
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333 W 34TH ST FL 7
NEW YORK NY 10001-2402 |
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C
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5.60 |
% |
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MERRILL LYNCH FENNER &
SMITH INC
FBO ITS CUSTOMERS
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4800 DEER LAKE DR E FL 2
JACKSONVILLE FL 32246-6484 |
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All Cap VP Fund
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Initial
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38.49 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
COMPANY
TRANSAMERICA LANDMARK VA
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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Initial
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16.50 |
% |
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AEGON FINANCIAL PARTNERS -
FLORIDA
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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WESTERN RESERVE LIFE
ASSURANCE CO
LIFE WRL ACCT A - CLASS A |
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Initial
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12.98 |
% |
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AEGON FINANCIAL PARTNERS -
FLORIDA
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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WESTERN RESERVE LIFE
ASSURANCE CO
ANN ACCT A - CLASS B |
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Initial
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12.38 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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COMPANY
TRANSAMERICA EXTRA VA |
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Initial
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6.02 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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COMPANY
TRANSAMERICA LANDMARK ML VA |
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Initial
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5.56 |
% |
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TCM DIVISION
WESTERN RESERVE LIFE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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ASSURANCE CO
ANN ACCT A - CLASS A |
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Service
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41.20 |
% |
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TCM DIVISION
WESTERN RESERVE LIFE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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ASSURANCE CO
WRL FREEDOM PREMIER III |
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Service
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15.51 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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COMPANY
TRANSAMERICA LANDMARK VA |
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F-1
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Fund |
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Class |
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Percent |
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Name |
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Address |
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Service
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12.05 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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COMPANY
TRANSAMERICA FREEDOM VA |
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Service
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7.74 |
% |
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TCM DIVISION
WESTERN RESERVE LIFE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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ASSURANCE CO
WRL FREEDOM MULTIPLE |
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Service
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5.86 |
% |
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TCM DIVISION
TRANSAMERICA LIFE INSURANCE
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570 CARILLON PARKWAY
ST PETERSBURG FL 33716-1294 |
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COMPANY
TRANSAMERICA LANDMARK ML VA |
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F-2
VOTING OPTIONS:
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VOTE ON THE INTERNET
Log on to:
www.proxy-direct.com
Follow the on-screen instructions
available 24 hours |
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VOTE BY PHONE
Call 1-866-241-6192
Follow the recorded instructions
available 24 hours |
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VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope |
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VOTE IN PERSON
Attend Shareholder Meeting
570 Carillon Parkway
St. Petersburg, FL 33716
on October 23, 2009 |
Please detach at perforation before mailing.
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PROXY CARD
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TRANSAMERICA LEGG MASON PARTNERS ALL CAP (the FUND)
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PROXY CARD |
PROXY FOR A SPECIAL MEETING OF SHAREHOLDERS ON OCTOBER 23, 2009
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoint(s) John K. Carter and Dennis P. Gallagher, and each of them, as attorneys and proxies
of the undersigned with full power of substitution, to vote for the undersigned all shares of
beneficial interest of the Fund with respect to which the undersigned is entitled to vote at
the Special Meeting of Shareholders of the Fund to be held at the offices of Transamerica Asset
Management, Inc. at 570 Carillon Parkway, St. Petersburg, Florida 33716, on October 23, 2009, at
11:00 a.m. (Eastern time), and at any and all adjournments or postponements thereof, with all the
power the undersigned would possess if personally present.
The undersigned acknowledges receipt of the accompanying Notice of Special Meeting of
Shareholders and combined Proxy Statement and Prospectus and revokes any proxy previously given
with respect to the Special Meeting.
The shares represented by this proxy will be voted as instructed. The proxies are authorized in
their discretion to vote upon such other matters as may come before the meeting or any
adjournment or postponement thereof. The proxies intend to vote with management on any such
other business properly brought before the meeting or any adjournment or postponement thereof.
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VOTE VIA THE INTERNET: www.proxy-direct.com |
VOTE VIA THE TELEPHONE: 1-866-241-6192 |
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Note: Signature(s) should be exactly as name or names appearing on this proxy. If shares are
held jointly, EITHER holder should sign. If signing is by attorney, executor, administrator,
trustee or guardian, please sign in full corporate or partnership name by an authorized
officer.
Signature(s)
Important Notice Regarding the Availability of Proxy Materials for Transamerica Legg Mason Partners All Cap
Special Meeting of Shareholders to Be Held on October 23, 2009.
The Proxy Statement for this meeting is available at: https://www.proxy-direct.com/aeg20623
Please detach at perforation before mailing.
THE BOARD RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK. Example:
n
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FOR |
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AGAINST |
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ABSTAIN |
1.
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To approve a new sub-advisory agreement with a new sub-adviser.
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o
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o
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o
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2.
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To transact such other business as may properly come before the meeting and any
adjournments thereof. |
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AEG_20623_090209