As filed with the Securities and Exchange Commission on March 1, 2001
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. 1)
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
FTI FUNDS
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
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2. Aggregate number of securities to which transaction applies:
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3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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4. Proposed maximum aggregate value transaction:
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5. Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration number, or
the Form or Schedule and the date of its filing.
1. Amount previously paid:
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2. Form, Schedule or Registration Statement No.:
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3. Filing Party:
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4. Date Filed:
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FTI FUNDS
FTI Municipal Bond Fund
FTI Bond Fund
FTI Large Capitalization Growth Fund
FTI Large Capitalization Growth and Income Fund
FTI Small Capitalization Equity Fund
FTI International Equity Fund
FTI European Smaller Companies Fund
Investment Adviser
FIDUCIARY INTERNATIONAL, INC.
Two World Trade Center
New York, New York 10048-0772
Distributor
EDGEWOOD SERVICES, INC.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
Transfer Agent and Dividend Disbursing Agent
FEDERATED SERVICES COMPANY
P.O. Box 8600
Boston, MA 02116-5072
Administrator
FEDERATED ADMINISTRATIVE SERVICES
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
FTI FUNDS
FTI Municipal Bond Fund
FTI Bond Fund
FTI Large Capitalization Growth Fund
FTI Large Capitalization Growth and Income Fund
FTI Small Capitalization Equity Fund
FTI International Equity Fund
FTI European Smaller Companies Fund
Proxy Statement - Please Vote!
TIME IS OF THE ESSENCE...VOTING ONLY TAKES A FEW MINUTES AND YOUR PARTICIPATION
IS IMPORTANT!
FTI FUNDS (the "Trust") will hold a special meeting of shareholders of FTI
Municipal Bond Fund, FTI Bond Fund, FTI Large Capitalization Growth Fund, FTI
Large Capitalization Growth and Income Fund, FTI Small Capitalization Equity
Fund, FTI International Equity Fund and FTI European Smaller Companies Fund
(the "Funds") on March 30, 2001. It is important for you to vote on the issues
described in this Proxy Statement. We recommend that you read the Proxy
Statement in its entirety; the explanations will help you to decide on the
issues.
Following is an introduction to the process and the proposal.
Why am I being asked to vote?
Mutual funds are required to obtain shareholders' votes for certain types of
changes, like the proposal included in this Proxy Statement. You have a right
to vote on such a proposal.
How do I vote my shares?
You may vote by telephone at 1-800-690-6903, or through the Internet at
www.proxyvote.com. You may also vote in person at the meeting or complete and
return the enclosed Proxy Card. If you:
1. choose to help save the Funds time by voting through the Internet or
by telephone, please don't return your Proxy Card.
2. do not respond at all, we may contact you by telephone to request that
you cast your vote.
3. sign and return the Proxy Card without indicating a preference, your
vote will be cast "for" the proposal.
What are the issues?
You are being asked to approve a new investment advisory agreement between the
Trust and Fiduciary International, Inc. ("FII"), its investment adviser.
Why must the Trust enter into a new Investment Advisory Agreement?
FII acts as investment adviser to the Funds pursuant to a contract with the
Trust dated December 20, 1995 (the "Current Investment Advisory Agreement").
On October 25, 2000, Fiduciary Trust Company International ("FTCI"), the
parent of FII, and Franklin Resources, Inc. (operating as Franklin Templeton
Investments) ("Franklin Resources") announced an agreement whereby Franklin
Resources will acquire FTCI, subject to obtaining required approvals, in the
second quarter of calendar 2001. Due to the change in ultimate ownership of
FII, the Trust must enter into a new investment advisory agreement with FII
(the "New Investment Advisory Agreement").
Why am I being asked to approve the New Investment Advisory Agreement?
The New Investment Advisory Agreement is in substance identical to the Current
Investment Advisory Agreement, and the changes in the ownership structure of
FII are not expected to affect the portfolio management of the Funds. These
changes, however, constitute an "assignment" of FII's investment advisory
agreement with the Trust under the Investment Company Act of 1940. Such an
assignment would result in the termination of the existing investment advisory
agreement. Accordingly, in order to ensure continuity of investment advisory
services provided to the Funds by FII, a new investment advisory agreement
between the Trust and FII must be approved by a majority of each Fund's
shareholders.
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After careful consideration, the Board of Trustees has unanimously approved
the proposal. The Board recommends that you read the enclosed materials
carefully and vote FOR the proposal.
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FTI FUNDS
FTI Municipal Bond Fund
FTI Bond Fund
FTI Large Capitalization Growth Fund
FTI Large Capitalization Growth and Income Fund
FTI Small Capitalization Equity Fund
FTI International Equity Fund
FTI European Smaller Companies Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 30, 2001
A special meeting of the shareholders of FTI Funds (the "Trust") will
be held at the offices of Fiduciary International, Inc., the Funds' investment
adviser, located at Two World Trade Center, 94th Floor, New York, New York, at
10:00 a.m. (Eastern time), on March 30, 2001. The Trust presently consists of
seven portfolios or series: FTI Municipal Bond Fund, FTI Bond Fund, FTI Large
Capitalization Growth Fund, FTI Large Capitalization Growth and Income Fund,
FTI Small Capitalization Equity Fund, FTI International Equity Fund and FTI
European Smaller Companies Fund (individually a "Fund," and collectively the
"Funds"). At the meeting, shareholders will be asked:
(1) To consider and act upon a proposal to approve a new Investment
Advisory Agreement between the Trust and Fiduciary International,
Inc.; and
(2) To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Trustees has fixed February 16, 2001, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Board of Trustees,
Gail C. Jones
Secretary
March 5, 2001
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YOU CAN HELP THE TRUST AVOID THE NECESSITY OF SENDING FOLLOW-UP LETTERS TO
ENSURE A QUORUM BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE
UNITED STATES.
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PROXY STATEMENT
FTI FUNDS
FTI Municipal Bond Fund
FTI Bond Fund
FTI Large Capitalization Growth Fund
FTI Large Capitalization Growth and Income Fund
FTI Small Capitalization Equity Fund
FTI International Equity Fund
FTI European Smaller Companies Fund
5800 Corporate Drive
Pittsburgh, PA 15237-7010
About the Proxy Solicitation and the Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of
the Trust (the "Board" or "Trustees") of FTI Funds (the "Trust"), which
presently consists of seven portfolios or series: FTI Municipal Bond Fund (the
"Municipal Bond Fund"), FTI Bond Fund (the "Bond Fund"), FTI Large
Capitalization Growth Fund (the "Large Cap Growth Fund"), FTI Large
Capitalization Growth and Income Fund (the "Large Cap Growth and Income
Fund"), FTI Small Capitalization Equity Fund (the "Small Cap Equity Fund"),
FTI International Equity Fund (the "International Equity Fund") and FTI
European Smaller Companies Fund (the "European Fund") (individually a "Fund,"
and collectively the "Funds"). The proxies will be voted at the special
meeting of shareholders of the Trust to be held on March 30, 2001, at the
offices of Fiduciary International, Inc., the Funds' investment adviser ("FII"
or the "Investment Adviser"), located at Two World Trade Center, 94th Floor,
New York, New York, at 10:00 a.m. (such special meeting and any adjournment or
postponement thereof are referred to as the "Meeting"). This Proxy Statement
and the enclosed proxy card are expected to be mailed on or about March 5,
2001, to shareholders of record at the close of business on February 16, 2001
(the "Record Date").
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Investment Adviser. In addition to
solicitations through the mails, proxies may be solicited by officers,
employees and agents of the Trust or, if necessary, a communications firm
retained for this purpose. Such solicitations may be by telephone, through the
Internet or otherwise. Any telephonic or Internet solicitations will follow
procedures designed to ensure accuracy and prevent fraud, including requiring
identifying shareholder information, recording the shareholder's instructions,
and confirming to the shareholder after the fact. Shareholders who communicate
proxies by telephone or by other electronic means have the same power and
authority to issue, revoke, or otherwise change their voting instruction as
shareholders submitting proxies in written form. The Investment Adviser may
reimburse custodians, nominees, and fiduciaries for the reasonable costs
incurred by them in connection with forwarding solicitation materials to the
beneficial owners of shares held of record by such persons.
The Board has reviewed and approved the proposed investment advisory
agreement with the Trust and recommends that the shareholders approve the
proposed investment advisory agreement. The purpose of the Meeting is set
forth in the accompanying Notice. The Trustees know of no business other than
that mentioned in the Notice that will be presented for consideration at the
Meeting. Should other business properly be brought before the Meeting, proxies
will be voted in accordance with the best judgment of the persons named as
proxies.
The following table sets forth the number of shares of beneficial
interest outstanding on the Record Date and the aggregate dollar value of
those shares:
Fund Number of Shares Dollar Value of Shares
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Municipal Bond Fund 8,013,659 $ 79,655,770
Bond Fund 13,157,040 $ 128,281,140
Large Cap Growth Fund 3,448,568 $ 32,554,482
Large Cap Growth and Income Fund 10,898,838 $ 85,119,925
Small Cap Equity Fund 4,997,350 $ 110,191,568
International Equity Fund 6,694,186 $ 90,103,744
European Fund 1,538,214 $ 14,782,237
The Trust's annual report, which was previously mailed to
shareholders, includes audited financial statements for each Fund for the
fiscal year ended November 30, 2000 (except the European Fund, which commenced
operations on January 2, 2001). The Trust will promptly provide, without
charge and upon request, to each person to whom this Proxy Statement is
delivered, a copy of the Funds' annual report. Requests for an annual report
for the Funds may be made by writing to the Trust's principal executive
offices or by calling the Trust. The Trust's principal administrative offices
are located at FTI Funds, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7010. The Trust's toll-free telephone number is 1-888-FIDUCIARY
(888-343-8242).
PROPOSAL #1: APPROVAL OR DISAPPROVAL
OF THE INVESTMENT ADVISORY AGREEMENT
FII, located at Two World Trade Center, New York, New York, has
served as the investment adviser to the Funds since December 20, 1995. FII is
a wholly-owned subsidiary of Fiduciary Investment Corporation ("FIC"), which
in turn is a wholly-owned subsidiary of Fiduciary Trust Company International
("FTCI"), a New York state-chartered bank located at Two World Trade Center,
New York, New York, and specializing in investment management activities. FII
conducts investment research and makes investment decisions for the Funds
pursuant to its existing investment advisory agreement with the Trust dated
December 20, 1995 (the "Current Investment Advisory Agreement").
On October 25, 2000, Franklin Resources, Inc. (operating as Franklin
Templeton Investments) ("Franklin Resources") and FTCI announced the signing
of a definitive agreement under which Franklin Resources will acquire FTCI in
an all-stock transaction valued at approximately $825 million. The
transaction, which is subject to shareholder and regulatory approvals and
other customary closing conditions, is expected to be completed in the second
quarter of calendar 2001. Both FTCI and Franklin Resources have structured
this transaction to ensure continuity of client relationships and of each
firm's distinct investment processes in order to establish a combined
enterprise with a solid global platform.
FII has advised the Board of Trustees and the Funds that the changes
in the ownership structure of FTCI, FIC and FII are not expected to affect the
portfolio management of the Funds. However, these changes constitute an
"assignment" of the Current Investment Advisory Agreement under the Investment
Company Act of 1940, as amended (the "Investment Company Act"), which will
result in a termination of the Current Investment Advisory Agreement.
Accordingly, to ensure the continuity of investment advisory services provided
to each Fund, a new investment advisory agreement between FII and the Trust
(the "New Investment Advisory Agreement") is proposed to be approved by a
majority of each Fund's shareholders.
The New Investment Advisory Agreement under which the Funds will
operate after the ownership change is in substance identical to the Current
Investment Advisory Agreement under which the Funds currently operate. The
services provided by FII after the ownership change will be identical to the
services currently provided by FII. FII has further advised the Board of
Trustees that it believes that there will be no reduction in the quality of
any of the services presently furnished by FII. As described below, the
proposed New Investment Advisory Agreement does not alter the rate of
investment advisory compensation presently payable to FII by the Trust.
Trustees Consideration and Recommendation
On October 25, 2000, the Trustees who are not "interested persons" as
defined in the Investment Company Act (the "Independent Trustees") were
notified that FTCI had entered into a definitive agreement with Franklin
Resources. Subsequently at a Board meeting held on November 14, 2000, the
Trustees received a presentation by the Investment Adviser on the proposed
transaction. At that meeting the Independent Trustees met in executive session
with their independent counsel to review the implications of the proposed
transaction for the Funds, the Trust and the Investment Adviser. In addition,
the Independent Trustees met with FTCI's Chief Investment Officer and a
representative of FTCI's Human Resources Department to discuss staffing levels
and retention of the Investment Adviser's staff during the period before and
after the FTCI/Franklin Resources transaction. The Independent Trustees
requested their counsel to obtain additional information about the
transaction, and pursuant to that request, counsel sent a request for
information to the Investment Adviser and Franklin Resources.
On January 30, 2001, Franklin Resources and FTCI responded with a
detailed letter discussing the proposed acquisition and its impact on the
Funds and the Investment Adviser. On February 14, 2001, the Board of Trustees
met to consider this response and consider the approval of the New Investment
Advisory Agreement between the Fund and the Investment Adviser. At that
meeting, the Independent Trustees also met in executive session with their
counsel to consider the New Investment Advisory Agreement.
In its consideration of the New Investment Advisory Agreement, the
Board of Trustees received information both at the November and the February
meetings relating to, among other things: (a) the nature, quality and extent
of the advisory and other services to be provided to the Funds by the
Investment Adviser, (b) comparative data with respect to the advisory fees
paid by other funds with similar investment objectives, (c) the operating
expenses and expense ratio of each of the Funds as compared to funds with
similar investment objectives, (d) the performance of each Fund as compared to
such comparable funds, (e) the relative profitability of the present
arrangements to the Investment Adviser, and (f) information about the services
to be performed and the personnel performing such services under the Current
and the New Investment Advisory Agreement.
The Board also considered the statements by Franklin Resources
and FTCI that: (a) there will be no change in the investment advisory services
provided to the Funds after the ownership change; (b) the cost of the
shareholder meeting and solicitation will be borne by the Investment Adviser;
(c) there will be no change in the organizational structure of the Investment
Adviser for at least three years; (d) Franklin Resources has no plans to
change the Investment Adviser's investment staff after the acquisition and
will put in place various steps to retain and motivate the Investment
Adviser's staff; (e) FTCI will operate as an independent subsidiary of
Franklin Resources for at least three years; (f) Franklin Resources does not
anticipate that the cash available to support the operations of the Investment
Adviser and the Funds will be reduced as a result of the acquisition; (g)
Franklin Resources believes that the combined organization will have a deeper
pool of capital and resources; and (h) mutual funds are at the core of
Franklin Resources' business. The Board also modified the terms of the Current
Investment Advisory Agreement to tighten the standard of care for the
Investment Adviser to a negligence standard rather than a gross negligence
standard.
The Independent Trustees were advised by separate counsel in
connection with their review of the New Investment Advisory Agreement for the
Funds. After considering the factors stated above, the Board of Trustees,
including the Independent Trustees by unanimous vote, approved the New
Investment Advisory Agreement and recommend that the shareholders of each Fund
vote to approve the New Investment Advisory Agreement.
Interim Investment Advisory Agreement
As an interim measure to avoid any lapse in investment advisory
services to the Funds as a consequence of the FTCI/Franklin Resources
transaction, the Board also has approved an interim investment advisory
agreement (the "Interim Investment Advisory Agreement") between the Funds and
the Investment Adviser.
If the proposed transaction closes prior to each of the Funds'
respective shareholders approving the New Investment Advisory Agreement, the
Investment Adviser will continue to provide investment advisory services to
the Funds, and all compensation earned by the Investment Adviser under the
Interim Investment Advisory Agreement will be held in interest-bearing escrow
accounts. If the shareholders of each Fund thereafter approve the New
Investment Advisory Agreement, the amount held in the escrow accounts, plus
interest, will be paid to the Investment Adviser. If shareholders of each Fund
do not approve the New Investment Advisory Agreement, the Investment Adviser
will receive the lesser of the costs incurred in performing its services under
the New Investment Advisory Agreement or the total amount in the escrow
account, plus interest earned. The Interim Investment Advisory Agreement is
not being voted upon by shareholders.
If approved by each Fund's shareholders at the Meeting, the New
Investment Advisory Agreement will remain in effect until March 1, 2003,
unless terminated as described below. The Current Investment Advisory
Agreement has not been approved by each Fund's shareholders since the
agreement was approved by the initial shareholder on December 22, 1995 in
connection with the organization of the Trust.
FTCI, the parent company of FIC and FII, acts as custodian for the
securities and cash of the Funds. Pursuant to an agreement with the Trust, as
compensation for FTCI's services, each Fund pays FTCI monthly fees at the
annual rate of 0.02% of each Fund's net assets not in excess of $50,000,000,
0.01% of each Fund's net assets not in excess of $250,000,000, and 0.005% of
each Fund's net assets in excess of $250,000,000. For the fiscal year ended
November 30, 2000, Small Cap Equity Fund paid FTCI $27,686 and International
Equity Fund paid FTCI $102,416 for custodial services. FTCI agreed to waive
its fee with respect to custodial services provided to the Municipal Bond
Fund, the Bond Fund, the Large Cap Growth Fund and the Large Cap Growth and
Income Fund for the fiscal year ended November 30, 2000. FTCI will remain
custodian for the securities and cash of the Funds after the New Investment
Advisory Agreement has been approved.
Information Concerning FII
FII provides investment advisory services for U.S. and international
clients. In addition to the Funds, FII acts as an investment adviser with
respect to the following registered investment companies: Franklin Global
Trust, Van Eck Global Leaders Fund (Class A and Class B) and Davis
International Total Return Fund.
The following table sets forth the name, title and principal
occupation of the principal executive officers and each director of FII.
Name* Title with FII Present Principal Occupation
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James C. Goodfellow President Vice Chairman of FTCI
Anne M. Tatlock Chairman and Director Chairman and Chief Executive Officer
of FTCI
Christine M. Ferrante Treasurer Senior Vice President and Comptroller
of FTCI
Carol K. Demitz Director Senior Vice President, Chief
Corporate Counsel and Secretary of
FTCI
William Y. Yun Director Director and President of FTCI
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*The address of the principal executive officer and each director is Two
World Trade Center, New York, New York 10048-0772.
Mr. Goodfellow, President of FII, and Mr. Joseph Cajigal, a Vice
President of FII, presently serve as Trustees of the Trust. In connection with
the acquisition of FTCI by Franklin Resources, however, Mr. Cajigal will
resign as a Trustee of the Trust effective upon completion of the transaction
in order that the Trust may comply with applicable provisions under the
Investment Company Act.
Terms of the New Investment Advisory Agreement
A copy of the form of the New Investment Advisory Agreement is set
forth as Exhibit A. Set forth below is a summary of the terms of that
agreement. As discussed above, the proposed New Investment Advisory Agreement
is in substance identical to the Current Investment Advisory Agreement under
which the Funds currently operate. The fee rate under the New Investment
Advisory Agreement is identical to the fee rate under the Current Investment
Advisory Agreement. The investment advisory agreement provides for the
voluntary waiver of investment advisory fees and/or the reimbursement of
certain operating expenses by the Investment Adviser from time to time. Any
such voluntary waivers and/or reimbursements can be terminated by the
Investment Adviser in its sole discretion at any time.
Pursuant to the New Investment Advisory Agreement between FII and the
Trust, FII agrees to furnish the Funds with investment research and makes
investment decisions for the Funds.
Compensation and Expenses
As described above, the investment advisory compensation presently
payable by the Trust to FII will remain the same under the proposed New
Investment Advisory Agreement.
The following table sets forth information relating to the investment
advisory fees:
Investment Advisory Fee Fee paid to FII
Rate (as a percentage of for the fiscal year ended
Fund average daily net assets) November 30, 2000
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Municipal Bond Fund 0.50% $358,797
Bond Fund 0.50% $543,064
Large Cap Growth Fund 0.75% $278,533*
Large Cap Growth and Income Fund 0.75% $713,281
Small Cap Equity Fund 1.00% $1,134,203
International Equity Fund 1.00% $1,057,302*
European Fund 1.00% **
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* For the fiscal year ended November 30, 2000, the Investment Adviser
voluntarily reimbursed the Large Cap Growth Fund in the amount of $49,324
and voluntarily reimbursed the International Equity Fund in the amount of
$174,217.
** This Fund commenced operations on January 2, 2001; accordingly, no
information is presented.
The following table sets forth information relating to the registered
investment companies for which FII acts as investment adviser that have
similar investment objectives as the Funds:
Approximate Net Assets
Investment Company Annual Advisory Fees(1) at February 16, 2001
------------------ --------------------- --------------------
Franklin Global Trust(2)
Franklin Global Aggressive Growth Fund 0.60% of net assets not in $2,477,976
excess of $100 million, 0.50% of
net assets in excess of $100
million but not exceeding $250
million, 0.45% of net assets in
excess of $250 million but not
exceeding $500 million and 0.40%
of net assets in excess of $500
million
Franklin Global Growth Fund 0.55% of net assets not in $4,204,312
excess of $100 million, 0.50% of
net assets in excess of $100
million but not exceeding $250
million, 0.45% of net assets in
excess of $250 million but not
exceeding $500 million and 0.40%
of net assets in excess of $500
million
Van Eck Global Leaders Fund(3) 0.50% of net assets $26,670,925
Davis International Total Return Fund(4) 0.50% of net assets not in $27,945,000
excess of $250 million, 0.45% of
net assets in excess of $250
million but not exceeding $500
million and 0.40% of net assets
in excess of $500 million
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(1) For purposes of calculating the annual advisory fees, net assets shall mean
average daily net assets of the respective fund.
(2) The Franklin Global Trust is a registered investment company with two
portfolios, each managed by FII.
(3) With respect to its Class A and Class B shares, FII advises the fund
pursuant to a sub-investment advisory agreement with Van Eck Associates
Corporation, the investment adviser of the fund, which appoints FII as
portfolio manager.
(4) FII advises the fund pursuant to a sub-advisory agreement with Davis
Selected Advisers, L.P., the investment adviser of the fund, which appoints
FII as portfolio manager.
Duration and Termination
As indicated above, the New Investment Advisory Agreement will remain
in effect until March 1, 2003, and from year to year thereafter if approved
annually (a) by the Board of Trustees, including a majority of Trustees who
are not parties to such contract or interested persons (as defined in the
Investment Company Act) of any such party or (b) by a majority of outstanding
shares of each Fund. Such contracts are not assignable and may be terminated
without penalty with respect to any Fund on 60 days' written notice by the
Fund, on 180 days' written notice by the Investment Adviser or by the vote of
the shareholders of such Fund.
The Board of Trustees Recommends that Shareholders Vote for the Proposal
INFORMATION ABOUT THE TRUST
Proxies, Quorum and Voting at the Meeting
Only shareholders of record on the Record Date will be entitled to
vote at the Meeting. Each share of the Trust is currently entitled to one vote
for each dollar (and a fractional vote for each fractional dollar thereof) of
net asset value (computed as the number of shares owned times net asset value
per share) of shares, irrespective of the portfolio or class of such shares.
Under both the Investment Company Act and the Declaration of Trust, the term
"Majority Shareholder Vote" of a Fund means favorable vote of: (a) 67% or more
of the outstanding votes of such Fund present at the Meeting, if 50% or more
of the outstanding votes of the Fund are present or represented by proxy; or
(b) the vote of more than 50% of the outstanding votes of the Fund, whichever
is less. A Majority Shareholder Vote of each Fund is required to approve
Proposal 1.
Any person giving a proxy has the power to revoke it any time prior
to its exercise by executing a superseding proxy or by submitting a written
notice of revocation to the Secretary of the Trust. In addition, although mere
attendance at the Meeting will not revoke a proxy, a shareholder present at
the Meeting may withdraw his or her proxy and vote in person. All properly
executed and unrevoked proxies received in time for the Meeting will be voted
in accordance with the instructions contained in the proxies. If no
instruction is given on the proxy, the persons named as proxies will vote the
shares represented thereby in favor of the matters set forth in the attached
Notice.
In order to hold the Meeting, a "quorum" must be present. A quorum is
present if the holders of at least one-half of the votes entitled to be cast
are represented at the meeting, either in person or by proxy.
For purposes of determining a quorum for transacting business at the
Meeting, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular
matter with respect to which the brokers or nominees do not have discretionary
power) will be treated as shares that are present but which have not been
voted. For this reason, abstentions and broker non-votes will have the effect
of a "no" vote for purposes of obtaining the requisite approval of Proposal 1.
If a quorum is not present, the persons named as proxies may vote
those proxies which have been received to adjourn the Meeting to a later date.
In the event that a quorum is present but sufficient votes in favor of one or
more of the proposals have not been received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further
solicitations of proxies with respect to such proposal(s). All such
adjournments will require the affirmative vote of a majority of the votes
entitled to be cast present in person or by proxy at the session of the
Meeting to be adjourned. The persons named as proxies will vote AGAINST any
such adjournment those proxies which they are required to vote against the
proposal and will vote in FAVOR of the adjournment other proxies which they
are authorized to vote. A shareholder vote may be taken on other proposals in
this Proxy Statement prior to any such adjournment if sufficient votes have
been received for approval.
Share Ownership of the Trustees
At the close of business on the Record Date, Officers and Trustees of
the Trust owned less than 1% of each Fund's outstanding shares.
As of the close of business on the Record Date, the persons named in
the following table owned, to the knowledge of management, more than 5% of the
outstanding shares of the Funds in the amounts indicated:
Approximate Approximate
Number of Dollar Value of Percentage of
Fund Name and Address Shares Owned Shares Owned Fund Owned
---- ---------------- ------------ ------------ ----------
Municipal Bond Fund Ellard & Co. 8,013,560 $79,654,786 100%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Bond Fund Ellard & Co. 12,041,191 $117,401,612 91.52%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Bank of New York as Custodian 1,048,837 $10,226,161 7.97%
for Josiah Macy Jr. Foundation
One Wall Street 12th Floor
Attn: Glosim Morgan
New York, NY 10005
Large Cap Growth Fund Ellard & Co. 3,409,227 $32,183,103 98.86%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Large Cap Growth and Income Ellard & Co. 10,350,692 $80,838,905 94.97%
Fund c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Small Cap Equity Fund Ellard & Co. 3,541,652 $78,093,427 70.87%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Small Cap Equity Fund (cont.) Wolverhampton Borough Council 596,184 $13,145,857 11.93%
A/C SF
Finance Department Civic Centre
St. Peters Square Wolverhampton
WV1 1RL England
International Equity Fund Ellard & Co. 4,854,518 $65,341,812 72.52%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
Key Trust Company 670,294 $9,022,157 10.01%
Caring for Colorado
DTD 03-16-00
P.O. Box 94871
Cleveland, OH 44101
European Fund Wendel & Co. A/C 114750 302,725 $2,909,187 19.68%
c/o The Bank of New York
Attn: Mutual Funds/Reorg Dept.
P.O. Box 1066 Wall Street Station
New York, NY 10286
Ellard & Co. 1,093,796 $10,511,380 71.11%
c/o Fiduciary Trust
Company International
Attn: Securities Service
P.O. Box 3199
Church Street Station
New York, NY 10008
- ------------------
FII acts as trustee for trust accounts that hold shares of one or more of
the Funds. FII has discretionary authority, as trustee of these accounts, to
vote the Fund shares held in these trust accounts, without instruction from
the beneficiaries thereof.
FII intends to vote all shares over which it has discretionary voting
authority IN FAVOR of Proposal 1.
Officers of the Trust
The executive officers of the Trust are elected annually by the Board
of Trustees. Each officer holds the office until qualification of his
successor. The names and birth dates of the executive officers of the Trust,
and their principal occupations during the last five years, are set forth
below:
Name Birth date Principal Occupations
---- ----------- ---------------------
Peter J. Germain September 3, 1959 Senior Vice President and Director of Proprietary Funds
President and Treasurer Services, Federated Services Company; formerly, Senior
Corporate Counsel, Federated Services Company.
Jeffrey W. Sterling February 3, 1947 Vice President and Assistant Treasurer of certain funds
Vice President distributed by Edgewood Services, Inc. or its affiliates.
and Assistant Treasurer
George Polatas March 3, 1962 Assistant Vice President of Federated Services Company.
Vice President
Gail C. Jones October 26, 1953 Corporate Counsel, Federated Services Company.
Secretary
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
The Trust is not required, and does not intend, to hold regular
annual meetings of shareholders. Shareholders wishing to submit proposals for
consideration for inclusion in a proxy statement for the next meeting of
shareholders should send their written proposals to FTI Funds, 5800 Corporate
Drive, Pittsburgh, Pennsylvania 15237-7010, so that they are received within a
reasonable time before any such meeting.
No business other than the matters described above is expected to
come before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or
postponement of the Meeting, the persons named on the enclosed proxy card will
vote on such matters according to their best judgment in the interests of the
Funds and the Trust.
- ------------------------------------------------------------------------------
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED
IN THE UNITED STATES.
- ------------------------------------------------------------------------------
By Order of the Board of Trustees,
Gail C. Jones
Secretary
March 5, 2001
- ------------------------------------------------------------------------------
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE
ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH
NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES.
- ------------------------------------------------------------------------------
By Order of the Board of Trustees,
Gail C. Jones
Secretary
March 5, 2001
FTI FUNDS
FTI MUNICIPAL BOND FUND
FTI BOND FUND
FTI LARGE CAPITALIZATION GROWTH FUND
FTI LARGE CAPITALIZATION GROWTH AND INCOME FUND
FTI SMALL CAPITALIZATION EQUITY FUND
FTI INTERNATIONAL EQUITY FUND
FTI EUROPEAN SMALLER COMPANIES FUND
INVESTMENT ADVISER
FIDUCIARY INTERNATIONAL, INC.
Two World Trade Center
New York, New York 10048-0772
DISTRIBUTOR
EDGEWOOD SERVICES, INC.
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT
FEDERATED SERVICES COMPANY
P.O. Box 8600
Boston, MA 02116-5072
ADMINISTRATOR
FEDERATED ADMINISTRATIVE SERVICES
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
25888 (03/01)
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders
of the above-referenced funds (the "Funds") of FTI Funds (the "Trust"), hereby
appoint Ruta M. Dragunas, Anna Laverty, Mary P. Melendez, Kathleen Morrisey,
or any one of them, true and lawful attorneys, with the power of substitution
of each, to vote all shares of the Funds which the undersigned is entitled to
vote at the Special Meeting of Shareholders (the "Meeting") to be held on
March 30, 2001, at 10:00 a.m. and at any adjournment thereof, at the offices
of Fiduciary International, Inc., the Funds' investment adviser, located at
Two World Trade Center, 94th floor, New York, New York.
The attorneys named will vote the shares represented by this proxy in
accordance with the choices made on this ballot. If no choice is indicated as
to the item, this proxy will be voted affirmatively on the matters.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF FTI
FUNDS. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSAL.
PROPOSAL: TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT
BETWEEN THE TRUST AND FIDUCIARY INTERNATIONAL, INC.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT
Please complete, sign and return this card as soon as possible.
Dated:
Signature
Signature (Joint Owners)
Please sign this proxy exactly as your name appears on the books of the Trust.
Joint owners should each sign personally. Trustees and other fiduciaries
should indicate the capacity in which they sign, and where more than one name
appears, a majority must sign. If a corporation, this signature should be that
of an authorized officer who should state his or her title.
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE PHONE BY CALLING
1-800-690-6903 OR THROUGH THE INTERNET AT WWW.PROXYVOTE.COM
APPENDIX A
FTI Funds
INVESTMENT ADVISORY CONTRACT
----------------------------
This Contract is made this [_____] day of [____________], 2001,
between Fiduciary International, Inc., a registered investment adviser having
its principal place of business in New York City (the "Adviser"), and FTI
Funds, a Massachusetts business trust having its principal place of business
in Pittsburgh, Pennsylvania (the "Trust").
WHEREAS the Trust is an open-end management investment company as
that term is defined in the Investment Company Act of 1940, as
amended (the "1940 Act"), and is registered as such with the
Securities and Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for each
of the portfolios ("Funds") of the Trust which executes an exhibit to this
Contract, and Adviser accepts the appointments. Subject to the direction of
the Trustees of the Trust, Adviser shall provide investment research and
supervision of the investments of the Funds and conduct a continuous program
of investment evaluation and of appropriate sale or other disposition and
reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each of the
Funds will be guided by each of the Fund's investment objective and policies
and the provisions and restrictions contained in the Declaration of Trust and
By-Laws of the Trust and as set forth in the Registration Statement and
exhibits as may be on file with the Securities and Exchange Commission.
3. Each Fund shall pay or cause to be paid all of its own expenses
and its allocable share of Trust expenses, including, without limitation, the
expenses of organizing the Trust and continuing its existence; fees and
expenses of Trustees and officers of the Trust; fees for investment advisory
services and administrative personnel and services; expenses incurred in the
distribution of its shares ("Shares"), including expenses of administrative
support services; fees and expenses of preparing and printing its Registration
Statement under the Securities Act of 1933 and the1940 Act, and any amendments
thereto; expenses of registering and qualifying the Trust, the Funds, and
Shares of the Funds under federal and state laws and regulations; expenses of
preparing, printing, and distributing prospectuses (and any amendments
thereto) to shareholders; interest expense, taxes, fees, and commissions of
every kind; expenses of issue (including cost of Share certificates),
purchase, repurchase, and redemption of Shares, including expenses
attributable to a program of periodic issue; charges and expenses of
custodians, transfer agents, dividend disbursing agents, shareholder servicing
agents, and registrars; printing and mailing costs, auditing, accounting, and
legal expenses; reports to shareholders and governmental officers and
commissions; expenses of meetings of Trustees and shareholders and proxy
solicitations therefor; insurance expenses; association membership dues and
such nonrecurring items as may arise, including all losses and liabilities
incurred in administering the Trust and the Funds. Each Fund will also pay its
allocable share of such extraordinary expenses as may arise including expenses
incurred in connection with litigation, proceedings, and claims and the legal
obligations of the Trust to indemnify its officers and Trustees and agents
with respect thereto. Subject to the requirements of the 1940 Act, Adviser may
employ or contract with such other person, persons, corporation, or
corporations at its own cost and expense as it shall determine in order to
assist it in carrying out this Contract.
4. Each of the Funds shall pay to Adviser, for all services rendered
to each Fund by Adviser hereunder, the fees set forth in the exhibits attached
hereto. For purposes of calculating such fees, the value of each Fund's net
assets shall be determined pursuant to the applicable provisions of the
portfolio's prospectus and statement of additional information.
5. The net asset value of each Fund's Shares as used herein will be
calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of
one or more of the Funds) to the extent that any Fund's expenses exceed such
lower expense limitation as the Adviser may, by notice to the Fund,
voluntarily declare to be effective.
7. This Contract shall begin for each Fund as of the date of
execution of the applicable exhibit and shall continue in effect with respect
to each Fund presently set forth on an exhibit (and any subsequent Funds added
pursuant to an exhibit during the initial term of this Contract) for two years
from the date of this Contract set forth above and thereafter for successive
periods of one year, subject to the provisions for termination and all of the
other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not
parties to this Contract or interested persons of any such party cast in
person at a meeting called for that purpose; and (b) Adviser shall not have
notified a Fund in writing at least sixty (60) days prior to the anniversary
date of this Contract in any year thereafter that it does not desire such
continuation with respect to that Fund. If a Fund is added after the first
approval by the Trustees as described above, this Contract will be effective
as to that Fund upon execution of the applicable exhibit and will continue in
effect until the next annual approval of this Contract by the Trustees and
thereafter for successive periods of one year, subject to approval as
described above.
8. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by: (a) the Trustees of the Trust or by a vote of the shareholders of
that Fund on sixty (60) days' written notice to Adviser; or (b) the Adviser on
one hundred eighty (180) days' written notice to the Trust. Termination of
this Contract with respect to any given Fund shall in no way affect the
continued validity of this Contract of the performance thereunder with respect
to any other Fund.
9. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment, as defined in the 1940
Act.
10. In the absence of willful misfeasance, bad faith, negligence, or
reckless disregard of the obligations or duties under this Contract on the
part of Adviser, Adviser shall not be liable to the Trust or to any of the
Funds or to any shareholder for any act or omission in the course of or
connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.
11. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees
who are not parties to this Contract or interested persons of any such party
to this Contract (other than as Trustees of the Trust) cast in person at a
meeting called for that purpose, and, where required by Section 15(a)(2) of
the Act, on behalf of a Fund by a majority of the outstanding voting
securities of such Fund as defined in Section 2(a)(42) of the Act.
12. The Adviser acknowledges that all sales literature for investment
companies (such as the Trust) are subject to strict regulatory oversight. The
Adviser agrees to submit any proposed sales literature for the Trust (or any
Fund) or for itself or its affiliates which mentions the Trust (or any Fund)
to the Trust's distributor for review and filing with the appropriate
regulatory authorities prior to the public release of any such sales
literature, provided, however, that nothing herein shall be construed so as to
create any obligation or duty on the part of the Adviser to produce sales
literature for the Trust (or any Fund). The Trust agrees to cause its
distributor to promptly review all such sales literature to ensure compliance
with relevant requirements, to promptly advise Adviser of any deficiencies
contained in such sales literature, to promptly file complying sales
literature with the relevant authorities, and to cause such sales literature
to be distributed to prospective investors in the Trust.
13. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that the obligations pursuant to this Contract of a particular Fund and of the
Trust with respect to that particular Fund be limited solely to the assets of
that particular Fund, and Adviser shall not seek satisfaction of any such
obligation from any other Fund, the shareholders of any Fund, the Trustees,
officers, employees or agents of the Trust, or any of them.
14. The Trust understands that Adviser now acts, and that from time
to time hereafter Adviser may act, as investment adviser to one or more other
investment companies and fiduciary or other managed accounts, and the Trust
has no objection to Adviser so acting, provided that when the purchase or sale
of securities of the same issuer is suitable for the investment objectives of
two or more companies or accounts managed by Adviser which have available
funds for investment, the available securities will be allocated in a manner
believed by Adviser to be equitable to each company or account. It is
recognized that in some cases this procedure may adversely affect the price
paid or received by one or more Funds or the size of the position obtainable
for or disposed of by one or more Funds.
In addition, it is understood that the persons employed by Adviser to
assist in the performance of Adviser's duties hereunder will not devote their
full time to such service and nothing contained herein shall be deemed to
limit or restrict Adviser's right or the right of any of Adviser's affiliates
to engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
15. This Contract shall be construed in accordance with and governed
by the laws of the State of New York.
16. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
EXHIBIT A
to the
Investment Advisory Contract
FTI International Equity Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 1.00% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 1.00% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [__________],
2001.
Attest: Fiduciary International, Inc.
By: By:
--------------------------------- ---------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
--------------------------------- ---------------------------
Name: Name:
Title: Title:
EXHIBIT B
to the
Investment Advisory Contract
FTI Small Capitalization Equity Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 1.00% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 1.00% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
------------------------------------ -------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
------------------------------------ --------------------------
Name: Name:
Title: Title:
EXHIBIT C
to the
Investment Advisory Contract
FTI Bond Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.50% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.50% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
----------------------------------- -------------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
----------------------------------- -------------------------------
Name: Name:
Title: Title:
EXHIBIT D
to the
Investment Advisory Contract
FTI Municipal Bond Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.50% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.50% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
----------------------------------- ---------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
------------------------------------ ----------------------------
Name: Name:
Title: Title:
EXHIBIT E
to the
Investment Advisory Contract
FTI Large Capitalization Growth Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.75% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.75% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
---------------------------------- ----------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
------------------------------- -----------------------------
Name: Name:
Title: Title:
EXHIBIT F
to the
Investment Advisory Contract
FTI Large Capitalization Growth and Income Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 0.75% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 0.75% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
--------------------------------------- --------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
---------------------------------------- ---------------------------
Name: Name:
Title: Title:
EXHIBIT G
to the
Investment Advisory Contract
FTI European Smaller Companies Fund
For all services rendered by Adviser hereunder, the above-named Fund
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment
advisory fee equal to 1.00% of the average daily net assets of the Fund.
The portion of the fee based upon the average daily net assets of the
Fund shall be accrued daily at the rate of 1/365th of 1.00% applied to the
daily net assets of the Fund.
The advisory fee so accrued shall be paid to Adviser monthly.
Witness the due execution hereof this [____] day of [___________],
2001.
Attest: Fiduciary International, Inc.
By: By:
------------------------------------ --------------------------
Name: Name:
Title: Title:
Attest: FTI Funds
By: By:
------------------------------------ ----------------------------
Name: Name:
Title: Title:
March 5, 2001
Shareholders of the FTI Funds
Dear Shareholders:
Attached is a Proxy Card and Proxy Statement for an upcoming Special
Shareholder Meeting for the FTI Funds. The Meeting is to be held at 10:00 a.m.
on March 30, 2001 at the offices of Fiduciary International, Inc., the FTI
Fund's investment adviser, located at Two World Trade Center, 94th Floor, New
York City. We are writing you to invite you to attend the Meeting and to vote
and return your proxy promptly.
The Board of Trustees of the FTI Funds requests your vote in favor of the
proposal to approve a new Investment Advisory Agreement between the Trust and
the Adviser. We are asking you to approve the new Investment Advisory
Agreement because Fiduciary Trust Company International, the parent of the
Investment Adviser, has entered into an agreement whereby Franklin Resources,
Inc. will acquire Fiduciary Trust Company. Such acquisition will terminate the
current Investment Advisory Agreement.
In approving this new Investment Advisory Agreement, the Trustees considered
among other things Franklin Resources' and the Investment Adviser's statements
that: (a) there will be no change in the investment advisory services provided
to and investment advisory fee paid by the Fund; (b) the terms and provisions
of the new Investment Advisory Agreement are substantially the same as in the
current Investment Advisory Agreement; (c) the cost of the shareholder meeting
and solicitation will be borne by the Investment Adviser; (d) Franklin
Resources has no plans to change the Investment Adviser's investment staff
after the acquisition and will put in place various steps to retain and
motivate the Investment Adviser's staff; and (e) the Investment Adviser and
its parent, Fiduciary Trust Company International will operate as independent
subsidiaries of Franklin Resources for at least three years. We urge you to
read the proxy statement for a more complete description of the proposal and
the recommendation.
Your Board of Trustees, including all the independent Trustees, unanimously
recommends that you vote FOR the proposal to approve the new Investment
Advisory Agreement. Whether or not you intend to attend the Special
Shareholders meeting in person, we request that you return your proxy card
promptly to avoid additional expense for the FTI Funds.
- --------------------------------- -------------------------------
Burton J. Greenwald James C. Goodfellow
Chairman of the Board of Trustees Trustee of the FTI Funds
The FTI Funds President of Fiduciary International,
Inc. the Investment Adviser to
the FTI Funds