SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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
UAM Funds, Inc. - SEC File Nos. 33-25355, 811-5683
(Name of Registrant as Specified In Its Charter)
............................................................
(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)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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previously. Identify the previous filing by registration statement number,
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1) Amount Previously Paid:
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SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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
UAM Funds, Inc. II - SEC File Nos. 333-44193, 811-08605
(Name of Registrant as Specified In Its Charter)
............................................................
(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)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
2
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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
UAM Funds Trust - SEC File Nos. 33-79858, 811-8544
(Name of Registrant as Specified In Its Charter)
............................................................
(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
3
UAM(R) Funds
Funds for the Informed Investor sm
September 15, 2000
Dear Shareholder:
I am writing to all shareholders of the UAM Funds to inform you of a meeting
of shareholders to be held October 27, 2000. Before that joint meeting, I
would like your vote on the important issues affecting your fund as described
in the attached proxy statement. This is a very important meeting that has
been called to consider six proposals requiring your vote as a shareholder.
The proxy statement includes proposals relating to the election of
directors/trustees, the reclassification of the investment objectives of
certain of the UAM Funds, the adoption of standardized fundamental investment
restrictions for each of the funds and the approval of investment advisory
agreements for each fund. More specific information about all the proposals is
contained in the proxy statement, which you should consider carefully.
The respective Board of Directors/Trustees of your fund have unanimously
approved the proposals and recommend that you vote FOR all of the proposals
described within this document.
I realize that this proxy statement will take time to review, but your vote is
very important. Please familiarize yourself with the proposals presented and
vote by either signing and returning your proxy card(s) in the enclosed
postage-paid envelope today, using the internet and telephone voting options
as described in the proxy card. You may receive more than one proxy card if
you own shares in more than one UAM Fund. Please sign and return each card you
receive.
If we do not receive your completed proxy card(s) after several weeks, you may
be contacted by the UAM Funds' proxy solicitor, Shareholder Communications
Corporation, who will remind you to vote your shares or will record your vote
over the phone if you choose to vote in that manner.
We thank you for taking this matter seriously and participating in this
important process.
Sincerely,
/s/ Norton H. Reamer
Norton H. Reamer
Chairman
IMPORTANT NEWS FOR SHAREHOLDERS OF UAM FUNDS
While we encourage you to read the full text of the enclosed Proxy Statement,
here is a brief overview of some matters affecting your UAM Funds that require
a shareholder vote.
Q & A: QUESTIONS AND ANSWERS
Q. What Is Happening?
A. United Asset Management Corporation ("UAM"), the parent company of your UAM
Fund's adviser, has entered into an agreement with Old Mutual plc ("Old
Mutual") and OM Acquisition Corp. ("OMAC"), a wholly owned subsidiary of
Old Mutual, pursuant to which Old Mutual will make a tender offer for the
outstanding shares of UAM, and OMAC will merge with UAM. Old Mutual is a
United Kingdom-based financial services group with a substantial life
assurance business in South Africa and an integrated, international
portfolio of activities in asset management, banking and general insurance.
As a result of the proposed Transaction, there will be a change in
ownership of UAM, and indirectly the adviser to your Fund. The following
pages give you additional information about Old Mutual, the proposed
acquisition and the matters on which you are being asked to vote. The
Directors/Trustees of your UAM Funds, including those who are not
affiliated with UAM or its affiliates, Old Mutual or its affiliates or the
UAM Funds, unanimously recommend that you vote FOR these proposals.
Q. Why Did You Send Me This Booklet?
A. You are receiving these proxy materials--a booklet that includes the Proxy
Statement and one or more proxy cards--because you have the right to vote
on the important proposals concerning your investment in one or more of the
UAM Funds, i.e., a portfolio of UAM Funds, Inc., UAM Funds Trust or UAM
Funds, Inc. II.
Q. Why Are Multiple Cards Enclosed?
A. If you own shares of more than one of the UAM Funds, you will receive a
proxy card for each fund you own.
Q. Why Am I Being Asked To Vote On Interim and Proposed New Advisory
Agreements In Proposal Nos. 5 and 6?
A. The Investment Company Act of 1940, which regulates investment companies
such as your UAM Funds, requires a vote whenever there is a change in
control of an investment company's adviser. Upon a change of control, the
advisory agreement between the investment adviser and the investment
company terminates. UAM's Transaction with Old Mutual will result in a
change of control of UAM and its affiliated advisers and therefore requires
shareholder approval of interim advisory agreements to operate from the
date of the change in control until the date of the Meeting and new
advisory agreements between your UAM Funds and UAM affiliated advisers
effective upon the date of the Meeting. The new advisory agreements are
identical in all material respects to the existing advisory agreements and
each Fund's advisory fee rate will remain unchanged.
Q.What Happens If An Advisory Agreement Is Not Approved?
A. If the shareholders of any Fund do not approve an interim or a new
investment advisory agreement, the respective agreement will continue in
effect and the Board of Directors/Trustees will take such further action as
they deem to be in the best interests of the shareholders of that Fund.
Q. What Else Am I Being Asked To Vote On?
A. In addition to voting on interim and proposed new advisory agreements,
shareholders of the UAM Funds are being asked to consider the following
items:
. to elect a Board of Directors/Trustees. Each of the nominees, with the
exception of James F. Orr III, the new president of UAM, currently
serves on the Board of Directors/Trustees.
. to reclassify the investment objectives of certain UAM Funds to non-
fundamental.
. to adopt standardized fundamental investment restrictions by revising or
eliminating a fund's current fundamental investment restrictions.
.to ratify the Board's selection of your funds' independent accountants.
Q. How Will The UAM/Old Mutual Transaction Affect Me?
A. UAM has assured the Board that there will be no reduction in the nature or
quality of its services to the UAM Funds as a result of the Transaction,
and in fact anticipates that resources devoted to the UAM Funds may be
enhanced by Old Mutual's global operations, distribution, and technology
that would be available to the UAM Funds as a result of the Transaction.
Q. How Does The Respective UAM Funds' Board Of Trustees/Directors Recommend
That I Vote?
A. After careful consideration, each Board of the UAM Funds, including those
Directors/Trustees who are not affiliated with the UAM Funds, UAM or its
affiliated companies and Old Mutual and its affiliated companies, recommend
that you vote FOR all of the proposals on the enclosed proxy card.
Q. Whom Do I Call For More Information Or To Place My Vote?
A. You may provide the UAM Funds with your vote via mail. If you need more
information on how to vote, or if you have any questions, please call your
funds' information agent at 1-877-826-5465.
Your Vote Is Important And Will Help Avoid The Additional Expense Of Another
Solicitation.
Thank You For Promptly Recording Your Vote.
UAM Funds
211 Congress Street, 4th Floor
Boston, MA 02110
1-877-826-5465
NOTICE OF JOINT MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 27, 2000
NOTICE IS HEREBY GIVEN that a joint meeting (the "Meeting") of shareholders of
each series of UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds Trust will be
held at the Wyndham Boston Hotel, Liberty Square Room, 89 Broad Street,
Boston, MA 02110, at 9:00 a.m. Eastern time for the following purposes:
1. To elect a Board of Directors/Trustees.
2. To approve the proposed reclassification of the investment objective of
each Fund other than Analytic International Fund, Clipper Focus Portfolio,
IRA Capital Preservation Portfolio, Pell Rudman Mid-Cap Growth Portfolio
and PIC Twenty Portfolio from fundamental to non-fundamental.
3. To approve the adoption of standardized fundamental investment restrictions
by revising or eliminating some or all of the current fundamental
investment restrictions of each Fund.
4. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Funds.
5. To approve an interim investment advisory agreement for each Fund.
6. To approve a new investment advisory agreement for each Fund.
7. To transact any other business that may properly come before the Meeting or
any adjournments thereof.
Shareholders of record at the close of business on August 21, 2000, are
entitled to notice of, and to vote at the Meeting or any adjournments thereof.
You are invited to attend the Meeting, but if you cannot do so, please
complete and sign the enclosed proxy and return it in the accompanying
envelope as promptly as possible. Your vote is important no matter how many
shares you own. You can vote easily and quickly by internet, by toll-free
telephone, by mail, by facsimile or in person. You may change your vote even
though a proxy has already been returned by written notice to the Company, by
submitting a subsequent proxy using the mail, internet or telephone, or by
voting in person at the meeting.
By Order of the Board of Directors of UAM Funds, Inc. and UAM Funds, Inc. II,
and the Board of Trustees of UAM Funds Trust
/s/ Linda T. Gibson
Linda T. Gibson
Secretary
Boston, Massachusetts
September 15, 2000
UAM Funds
211 Congress Street, 4th Floor
Boston, MA 02110
1-877-826-5465
PROXY STATEMENT
JOINT MEETING OF SHAREHOLDERS OF
UAM FUNDS, INC.
UAM FUNDS, INC. II
UAM FUND TRUST
TO BE HELD ON OCTOBER 27, 2000
This proxy statement is furnished in connection with the solicitation by
the respective Board of UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds
Trust (each a "Company," and collectively the "Companies") for the joint
meeting of shareholders of Acadian Emerging Markets Portfolio, Analytic
Defensive Equity Fund, Analytic Enhanced Equity Fund, Analytic
International Fund, Analytic Master Fixed Income Fund, Analytic Short-Term
Government Fund, C&B Balanced Portfolio, C&B Equity Portfolio, C&B Equity
Portfolio for Taxable Investors, C&B Mid Cap Equity Portfolio, Cambiar
Opportunity Portfolio, Clipper Focus Portfolio, FMA Small Company
Portfolio, FPA Crescent Portfolio, Heitman Real Estate Portfolio, ICM Small
Company Portfolio, IRA Capital Preservation Portfolio, McKee Domestic
Equity Portfolio, McKee International Equity Portfolio, McKee Small Cap
Equity Portfolio, McKee U. S. Government Portfolio, MJI International
Equity Portfolio, NWQ Special Equity Portfolio, Pell Rudman Mid-Cap Growth
Portfolio, PIC Twenty Portfolio, Rice, Hall James Small Cap Portfolio,
Rice, Hall James Small/Mid Cap Portfolio, Sirach Bond Portfolio, Sirach
Equity Portfolio, Sirach Growth Portfolio, Sirach Growth II Portfolio
(Hanson Equity Portfolio), Sirach Special Equity Portfolio, Sirach
Strategic Balanced Portfolio, Sterling Partners' Balanced Portfolio,
Sterling Partners' Equity Portfolio, Sterling Partners' Small Cap Value
Portfolio, TJ Core Equity Portfolio, TS&W Equity Portfolio, TS&W Fixed
Income Portfolio, TS&W International Octagon Portfolio (formerly Jacobs
International Octagon Portfolio), and TS&W International Equity Portfolio
(each a "Fund") to be held at the Wyndham Boston Hotel, Liberty Square
Room, 89 Broad Street, Boston, MA 02110 on Friday, October 27, 2000 at 9:00
a.m. Eastern time, and all adjournments thereof (the "Meeting").
Shareholders of record at the close of business on Monday, August 21, 2000
(the "Record Date"), are entitled to notice of, and to vote at, the
Meeting. This proxy statement and the accompanying notice of meeting and
proxy card(s) are first being mailed to shareholders on or about September
15, 2000.
As used in this proxy statement, each Company's board of directors or
trustees is referred to as a "Board," and the term "Director" includes each
trustee of UAM Funds Trust. A Director that is an interested person of the
Company is referred to in this proxy statement as an "Interested Director."
A Director may by an interested person of the Company because they are
affiliated with one of the Company's investment advisers, United Asset
Management Corporation or the Company's principal underwriter. Directors
that are not interested persons of a Company are referred to in this proxy
statement as "Independent Directors."
SUMMARY OF PROPOSALS REQUIRING SHAREHOLDER VOTE
- -------------------------------------------------------------------------------
The Board intends to bring before the Meeting the matters set forth in the
foregoing notice. If you wish to participate in the Meeting you may submit
the proxy card(s) included with this proxy statement or attend in person.
Your vote is important no matter how many shares you own. You can vote
easily and quickly at the proxy solicitors' web site, by toll-free
telephone, by mail, by facsimile or in person. At anytime before the
Meeting, you may change your vote even though a proxy has already been
returned by written notice to the Company, by mail, submitting a subsequent
proxy, or by voting in person at the meeting. Should shareholders require
additional information regarding the Proxy or replacement proxy cards, they
may contact the Funds at 1-877-826-5465.
The Funds expect that the solicitation of proxies from shareholders will be
made by mail, but solicitation also may be made by telephone communications
from officers or employees of UAM or it affiliates, who will not receive
any compensation therefore from the Funds. In addition, the Funds have
engaged Shareholder Communications Corporation, a professional proxy
solicitation firm, to assist in the solicitation of proxies. The costs of
retaining Shareholder Communications Corporation and other expenses
incurred with the solicitation of proxies and the costs of holding the
Meeting will be borne by United Asset Management Corporation and/or Old
Mutual plc--not the UAM Funds. Such costs are estimated to be approximately
$650,000.
As the Meeting date approaches, certain shareholders of a Fund may receive
a telephone call from representatives of Shareholder Communications
Corporation if their vote has not yet been received. Authorization to
permit a telephone solicitor to execute proxies may be obtained by
telephonically transmitted instructions from shareholders of a Fund.
Proxies that are obtained telephonically will be recorded in accordance
with the procedures set forth below. The Directors believe that these
procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the telephone solicitor
will ask for each shareholder's full name, address, social security or
taxpayer identification number, title (if the shareholder is authorized to
act on behalf of an entity, such as a corporation), and the number of
shares owned. The telephone solicitor will also confirm that the
shareholder has received the Proxy Statement and proxy card in the mail. If
the information provided by the shareholder agrees with the record
information, the telephone solicitor will explain the process, read the
proposals listed on the proxy card, and ask for the shareholder's
instructions on each proposal. The telephone solicitor, although permitted
to answer questions about the process, is not permitted to recommend to the
shareholder how to vote, other than to read any recommendation set forth in
the Proxy Statement. The telephone solicitor will record the shareholder's
instructions on the card. Within 72 hours, the telephone solicitor will
send the shareholder a letter or mailgram to confirm his or her vote and
ask the shareholder to call the telephone solicitor immediately if his or
her instructions are not correctly reflected in the confirmation.
All proxy cards solicited that are properly executed and received in time
to be voted at the Meeting will be voted at the Meeting or any adjournment
thereof according to the instructions on the proxy card. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. For purposes of determining the presence of a
quorum, abstentions, broker non-votes or withheld votes will be counted as
present; however, they will have no effect on the outcome of the vote to
approve any Proposal requiring a vote based on the percentage of shares
actually voted. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any Proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the Proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the Proposal is approved.
Unmarked voting instructions will be voted in favor of the proposals.
2
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve one or more of the proposed items
are not received, or if other matters arise requiring shareholder
attention, the persons named as proxy agents may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any
such adjournment will require the affirmative vote of a majority of those
shares present at the Meeting or represented by proxy. A shareholder vote
may be taken on one or more of the items in this Proxy Statement prior to
such adjournment if sufficient votes have been received and it is otherwise
appropriate. The persons named as proxies will vote those proxies that they
are entitled to vote FOR any such proposal in favor of such an adjournment,
and will vote those proxies required to be voted AGAINST any such proposal,
against any such adjournment.
Required Vote
The following table summarizes those proposals, the shareholders eligible
to vote on the proposals and the vote required to approve each proposal.
Proposal Shareholders
Number Proposal Description Entitled to Vote Vote Required for Approval
-------------------------------------------------------------------------------------------
1. To elect Directors for Shareholders of each For UAM Funds Trust, each
each Company Company vote together nominee must be elected by a
(if a Company has plurality of the shares voting
several Funds, at the meeting. For UAM Funds,
shareholders of all Inc., and UAM Funds, Inc. II,
Funds vote together as a each nominee must be elected
single class) by a majority of the shares
voting at the meeting.
-------------------------------------------------------------------------------------------
2. To reclassify the Shareholders of each Approval of this proposal
investment objective Fund (except Analytic requires the affirmative vote
of certain Funds from International Fund, of a "majority of the
fundamental to non- Clipper Focus, IRA outstanding voting securities"
fundamental Capital Preservation, of the Fund.*
Pell Rudman Mid-Cap
Growth and PIC Twenty
Portfolios) will vote
separately
-------------------------------------------------------------------------------------------
3. To adopt standardized Shareholders of each Approval of this proposal
fundamental investment Fund will vote requires the affirmative vote
restrictions for each separately of a "majority of the
Fund by revising or outstanding voting securities"
eliminating some or of the Fund.*
all of the Fund's
current fundamental
investment
restrictions.
-------------------------------------------------------------------------------------------
4. To ratify selection of Shareholders of each Approval of this proposal
PricewaterhouseCoopers Fund will vote requires a majority of all
LLP as independent separately votes of a Fund cast at the
auditors of the Funds meeting.
- ---------------------------------------------------------------------------------------------
3
Proposal
Number Proposal Description Shareholders Entitled to Vote Vote Required for Approval
- ------------------------------------------------------------------------------------------------
5. To approve an interim Shareholders of each Approval of this proposal
investment advisory Fund will vote requires the affirmative vote
agreement separately of a "majority of the
outstanding voting securities"
of the Fund.*
- ------------------------------------------------------------------------------------------------
6. To approve a new Shareholders of each Approval of this proposal
investment advisory Fund will vote requires the affirmative vote
agreement separately of a "majority of the
outstanding voting securities"
of the Fund.*
* Under the Investment Company Act of 1940 (the "1940 Act"), the vote of a
"majority of the outstanding voting securities" means the affirmative vote
of the lesser of (a) 67% or more of the voting securities present at the
meeting or represented by proxy if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy or (b)
more than 50% of the outstanding voting securities.
PROPOSAL 1: ELECTION OF DIRECTORS
- -------------------------------------------------------------------------------
The purpose of this Proposal is to elect Directors for the Company. Except
for James F. Orr, III, all nominees named below are currently Directors and
have served in that capacity since originally elected or appointed. None of
the nominees are related to any other nominee. The term of office for a
Director will be until the next meeting of shareholders, if any, called for
the purpose of electing Directors and until the election and qualification
of a successor or until such Director sooner dies, resigns or is removed as
provided in the governing documents of the Company. In case of a vacancy,
the remaining Directors will appoint another Director. The Company will not
hold a shareholder meeting for the purpose of electing Directors unless
required to do so by applicable law.
Each of the nominees has indicated that he or she is willing to serve as a
Director. It is intended that the voting instructions/proxies will be voted
for the election of the nominees as Directors described in the table below.
However, if any or all of the nominees should unexpectedly become
unavailable for election, the persons named as proxies will vote for such
other nominee or nominees as the current Directors may recommend.
Nominees for the Company's Board
The following table lists the nominees for Director and provides
information regarding their age, address and business experience during the
past five years. Those nominees with an asterisk (*) by their names are
Interested Directors. Mr. English has a personal investment advisory
relationship with Investment Counselors of Maryland, an investment adviser
to one of the Funds in the UAM Funds. However, the Company does not believe
that the relationship is a material business relationship, and, therefore,
does not consider Mr. English to be an Interested Director, as defined in
the 1940 Act. If these circumstances change, the Board will determine
whether any action is required to change the composition of the Board.
4
Business Experience for Year of Election or
Name and Age Past Five Years Appointment
- ------------------------------------------------------------------------------
John T. Bennett, Jr. Mr. Bennett is President Elected by shareholders
RR2 Box 700 of Squam Investment in 1986
Center Harbor, NH 03226 Management Company, Inc.
71 and Great Island
Investment Company, Inc.
(investment management).
From 1988 to 1993, Mr.
Bennett was President of
Bennett Management
Company. Mr. Bennett
serves on the Board of
each Company in the UAM
Funds Complex.
- ------------------------------------------------------------------------------
Nancy J. Dunn Ms. Dunn has been Appointed by Directors
1250 24th St., NW Financial Officer of in 1997
Washington, DC 20037 World Wildlife Fund
49 (nonprofit), since
January 1999. From 1991
to 1999, Ms. Dunn was
Vice President for
Finance and
Administration and
Treasurer of Radcliffe
College (Education). Ms.
Dunn serves on the Board
of each Company in the
UAM Funds Complex.
- ------------------------------------------------------------------------------
William A. Humenuk Mr. Humenuk has been Elected by shareholders
10401 N. Meridian Street, Senior Vice President in 1986
Suite 400 Administration, General
Indianapolis, IN 46209 Counsel and Secretary of
58 Lone Star Industries Inc.
(cement and ready-mix
concrete) since March
2000. From June 1998 to
March 2000 he was
Executive Vice President
and Chief Administrative
Officer of Philip
Services Corp. (ferrous
scrap processing,
brokerage and industrial
outsourcing services).
Mr. Humenuk was a Partner
in the Philadelphia
office of the law firm
Dechert Price & Rhoads
from July 1976 to June
1998. He was also
formerly a Director of
Hofler Corp.
(manufacturer of gear
grinding machines). Mr.
Humenuk serves on the
Board of each Company in
the UAM Funds Complex.
- ------------------------------------------------------------------------------
Philip D. English Mr. English is President Elected by shareholders
16 West Madison Street and Chief Executive in 1986
Baltimore, MD 21201 Officer of Broventure
52 Company, Inc.,
(investment management).
He is also Chairman of
the Board of Chektec
Corporation (Drugs) and
Cyber Scientific, Inc.
(computer mouse company).
Mr. English serves on the
Board of each Company in
the UAM Funds Complex.
- ------------------------------------------------------------------------------
5
Business Experience for Past Year of Election or
Name and Age Five Years Appointment
- ------------------------------------------------------------------------------
James F. Orr, III* Mr. Orr has been President, Nominated by Directors
One International Place Chief Executive Officer and in 2000
Boston, MA 02110 Director of UAM since May
57 2000. From 1988-1999, he was
Chairman and Chief Executive
Officer and from 1986-1988,
President and Chief
Executive Officer of UNUM
Corporation (Insurance);
prior to that, Executive
Vice President of
Connecticut Bank & Trust
Company (Banking). He is a
past Chairman of the
American Council of Life
Insurers. He is currently a
trustee of Bates College and
the Committee for Economic
Development. He is Chairman-
elect of the Board of
Trustees of the Rockefeller
Foundation. Mr. Orr is a
member of The Business
Roundtable, the Harvard
Center for Society, and the
Health Advisory Council at
the Harvard School of Public
Health. He is a director of
the Nashua Corporation and a
director of the National
Alliance of Business, and
past Chair.
- --------
* Interested Director
Responsibilities of the Board
The Board manages the business of the Company and elects officers to manage
the day-to-day operations of the Company and to execute policies the Board
has formulated. The Board that is proposed for shareholder voting at the
Meeting is comprised of one Interested Director and four Independent
Directors. The Securities and Exchange Commission (the "SEC") has recently
proposed a rule that would require a majority of the Board to be
Independent Directors in order for a Fund to take advantage of certain
exemptive rules under the 1940 Act. On the Company's proposed board, if
approved by shareholders, 80% of the Board will be Independent Directors.
The Independent Directors review the fees paid to the each investment
adviser and its affiliates for investment advisory services and other
administrative and shareholder services, and, in general, have primary
responsibility for assuring that the Company is managed in the best
interests of its shareholders. The Independent Directors have been
nominated solely by the current Independent Directors, a practice also
favored by the SEC.
The Directors meet several times during the year to review the investment
performance of each Fund and other operational matters, including policies
and procedures designed to assure compliance with regulatory and other
requirements. During the fiscal year ended October 31, 1999, the Directors
of UAM Funds, Inc. held four regular meetings and two special meetings
(including meetings of the Independent Directors of the Board). During the
fiscal year ended December 31, 1999, UAM Funds, Inc. II held four regular
meetings of the Board and one special meeting (including meetings of the
Independent Directors of the Board). During the fiscal year ended April 30,
2000, the Directors of UAM Funds Trust held four regular meetings of the
Board and two special meetings (including meetings of the Independent
Directors of the Board). No member of the Board attended fewer than
seventy-five percent of the Board meetings held during each Company's most
recent fiscal year.
Committees
The Board has an Audit Committee, a Fund Governance Committee and a
Valuation Committee. The Board's Audit Committee is composed of all the
Company's Independent Directors (Messrs. Bennett, Humenuk and English, and
Ms. Dunn). The Audit Committee oversees and monitors the Company's
6
internal control structure, its auditing function and its financial
reporting process, including the resolution of any material reporting
issues. The Audit Committee meets privately with each Company's independent
auditors and receives annual representations from the auditors as to their
independence. The Audit Committee also recommends the appointment of
auditors for the Company and reviews audit plans, fees and other material
arrangements concerning the appointment of auditors. The Audit Committee
normally meets twice a year and met twice during each Company's most recent
fiscal year.
The Board's Fund Governance Committee is composed of all the Company's
Independent Directors (Messrs. Bennett, Humenuk and English, and Ms. Dunn).
The Fund Governance Committee makes nominations for independent Board
membership to the full Board and Company shareholders, when necessary. The
Fund Governance Committee also monitors and oversees all matters affecting
governance of the Company, including review of Company policies and
procedures, the composition of Board members, compensation paid to the
Board members, and appropriate committees delegated by the Board. The Fund
Governance Committee has been given appropriate authority and resources
necessary to discharge its responsibilities, including authority to retain
special counsel and other experts or consultants at the expense of the
Company. The Fund Governance Committee is expected to meet once a year;
however, since it was newly formed in June 2000, the Fund Governance
Committee has held no meetings to date.
Compensation of Directors and Officers
The Company pays each Independent Director the following fees:
. A $200 quarterly retainer fee per active Fund;
. $3,000 for each meeting of the Board other than a private meeting or
telephonic meeting;
. $1,500 for each special meeting of the Independent Directors;
. $1,000 for each telephonic meeting of the Board; and
. $1,000 per day for attending seminars, up to a maximum of three events
per year.
In addition, the Company reimburses each Independent Director for travel
and other expenses incurred while attending board meetings. The $3,000
meeting fee and expense reimbursements are aggregated for all of the
Directors and allocated proportionately among all Funds. The Company does
not pay its Interested Directors or officers for their services as
Directors or officers.
The following table provides information on all Directors who received
compensation from the Companies and the aggregate compensation received by
each Director during calendar year 1999 from the UAM Funds Complex. The UAM
Funds Complex is currently comprised of 49 Funds.
Total Compensation
Aggregate Compensation from the UAM Funds
Aggregate Compensation from UAM Funds, Inc. Aggregate Compensation Complex for
from UAM Funds, Inc. II for Fiscal Year from UAM Funds Trust Calendar Year
for Fiscal Year Ended Ended December 31, for Fiscal Year Ended Ended
Trustee October 31, 1999 1999 April 30, 2000 December 31, 1999
- ----------------------------------------------------------------------------------------------------------------
John T. Bennett, Jr. $ 7,137 $ 4,309 $ 9,380 $ 40,500
- ----------------------------------------------------------------------------------------------------------------
Nancy J. Dunn $ 7,137 $ 4,309 $ 9,380 $ 40,500
- ----------------------------------------------------------------------------------------------------------------
William A. Humenuk $ 7,137 $ 4,309 $ 9,380 $ 40,500
- ----------------------------------------------------------------------------------------------------------------
Philip D. English $ 7,137 $ 4,309 $ 9,380 $ 40,500
- ----------------------------------------------------------------------------------------------------------------
James F. Orr, III* $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------------
Total Compensation paid
by the Fund $28,548 $17,236 $37,520 $162,000
* Interested Director
7
Officers of the Company
Position
with
Name and Age Company Principal Occupation Year of Appointment
------------------------------------------------------------------------------
James F. Orr, III* President Mr. Orr is President and 2000*
57 Chief Executive Officer
of United Asset
Management Corporation,
the parent company to
each investment adviser
of the Funds and the
administrator,
distributor and sub-
shareholder servicing
agent of the Funds.
------------------------------------------------------------------------------
Linda T. Gibson Secretary Ms. Gibson is Senior 2000
35 Vice President and
General Counsel of UAM
Fund Services, Inc.,
administrator to the
Funds, and UAM Fund
Distributors, Inc.,
distributor for the
Funds. Ms. Gibson is
also Managing Director
and General Counsel of
UAM Investment Services,
Inc.
------------------------------------------------------------------------------
Gary L. French Treasurer Mr. French is President 1995 UAM Funds, Inc.
49 of UAM Fund Services, and UAM Funds Trust;
Inc., administrator to 1999 UAM Funds,
the Funds and President Inc. II
of UAM Fund
Distributors, Inc.,
distributor for the
Funds, and UAM
Shareholder Services
Center, Inc., each
Fund's sub-shareholder
servicing agent.
------------------------------------------------------------------------------
Theresa DelVecchio Assistant Ms. DelVecchio is 2000
36 Secretary Secretary of UAM Fund
Services, Inc.,
administrator to the
Funds, and Secretary and
Compliance Officer of
UAM Fund Distributors,
Inc., distributor for
the Funds.
------------------------------------------------------------------------------
Martin J. Wolin Assistant Mr. Wolin is Vice 2000
32 Secretary President and Associate
General Counsel of UAM
Fund Services, Inc.,
administrator to the
Funds.
------------------------------------------------------------------------------
Robert J. Assistant Mr. DellaCroce is 1999
DellaCroce Treasurer Director of Mutual Fund
36 Operations of SEI
Investments, the sub-
administrator for the
Funds.
- --------
* Mr. Orr's election as President is contingent upon his election as a
Director.
The Directors Unanimously Recommend That The Shareholders Of
Each Fund Vote For Each Nominee.
8
PROPOSAL 2 -- RECLASSIFICATION AS NON-FUNDAMENTAL OF THE INVESTMENT OBJECTIVE
OF THOSE FUNDS WHOSE INVESTMENT OBJECTIVE IS CURRENTLY CLASSIFIED AS
FUNDAMENTAL
- -------------------------------------------------------------------------------
Reclassification Of Fundamental Investment Objectives As Non-fundamental (each
Fund except Analytic International Fund, Clipper Focus Portfolio, IRA Capital
Preservation Portfolio, Pell Rudman Mid-Cap Growth Portfolio and PIC Twenty
Portfolio)
The 1940 Act does not require a Fund's investment objective to be
classified as "fundamental." A fundamental investment objective may be
changed only by vote of a Fund's shareholders. In order to provide each
Fund's investment adviser with enhanced investment management flexibility
to respond to market, industry or regulatory changes, the Directors have
approved the reclassification from fundamental to non-fundamental of each
Fund's investment objective (except for the five Funds named above whose
objective is already considered non-fundamental). If the reclassification
of investment objectives is approved by shareholders, shareholders will
forego the right to approve future revisions to a Fund's investment
objective, and the Directors will have authority to change a non-
fundamental investment objective at any time, with proper notice to
shareholders.
Exhibit A to this Proxy Statement lists each Fund's (except for the five
Funds named above) current fundamental investment objective. The
reclassification from fundamental to non-fundamental will not alter any
Fund's investment objective. If, at any time in the future, the Directors
approve a change in a Fund's non-fundamental investment objective,
shareholders of such Fund will be given notice of such change prior to its
implementation; however, if such a change were to occur, shareholders would
not be asked to approve such change.
If the reclassification of any Fund's investment objective from fundamental
to non-fundamental is not approved by shareholders of a particular Fund,
such Fund's investment objective will remain fundamental and shareholder
approval (and its attendant costs and delays) will continue to be required
prior to any change in investment objective.
Recommendation of Directors
The Directors have reviewed and considered the proposed reclassification of
the Funds' investment objectives from fundamental to non-fundamental, and
believe that the Funds will benefit in the current regulatory environment
by allowing the Directors to revise a Fund's objective without shareholder
approval and oversight. The Directors believe they can discharge their
responsibilities to shareholders by closely overseeing management's
investment activities and ability to respond to market, industry or
regulatory changes as these changes affect the Fund and its investment
objective. At a meeting of the Directors held on August 4, 2000, the
Directors voted to approve the reclassification of the investment objective
of each Fund currently classified as fundamental to non-fundamental.
The Directors Recommend That Shareholders Vote To Approve Proposal 2.
PROPOSAL 3 -- CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
- -------------------------------------------------------------------------------
Adoption of Standardized Investment Restrictions (Proposals 3A-3H)
The 1940 Act requires an investment company to have adopted certain
specified investment policies ("Restrictions"), which can be changed only
by a shareholder vote. Those policies are often referred to as
"fundamental" policies. In the past, fundamental policies were adopted by
the UAM Funds to reflect regulatory, business or industry conditions that
were in effect at the time the particular action was taken. However, over
time many fundamental policies with respect to particular matters differ
from one Fund to the next. Because of the opportunity afforded by this
Meeting, the Directors have
9
reviewed each Fund's fundamental policies with the goal of simplifying,
modernizing and making consistent as far as possible the fundamental
policies of all of the Funds.
The text and a summary description of each proposed change to each Fund's
fundamental restrictions are set forth below. The Fund's current
fundamental investment policies are set forth in Exhibit B. If approved by
the Funds' shareholders at the Meeting, the proposed changes to the Funds'
fundamental restrictions will be adopted by each Fund. If the elimination
of a fundamental policy is approved by shareholders, shareholders will
forego the right to approve future revisions to such policy. The Funds'
Statement of Additional Information will be revised to reflect those
changes as soon as practicable following the Meeting. If the shareholders
of a Fund fail to approve any proposed fundamental policy, the current
policy (if any) will remain in effect.
Proposal 3A. Diversification of Investments (Each Fund other than the
following funds: Acadian Emerging Markets Portfolio, Clipper Focus
Portfolio, McKee Domestic Equity Portfolio, McKee International Equity
Portfolio, McKee U.S. Government Portfolio and PIC Twenty Portfolio). Under
the current diversification policy, each Fund is currently limited, with
respect to 75% of the value of its total assets, in the amount of voting
securities of any one issuer it may purchase and in the amount of its
assets it may invest in the securities of any one issuer. The Board
recommends that the Funds' current fundamental policy on diversification be
replaced with the following fundamental investment restriction:
The Fund may not make any investment inconsistent with the Fund's
classification as a diversified series of an open-end investment
company under the Investment Company Act of 1940 (the "1940 Act"). This
restriction does not, however, apply to any Fund classified as non-
diversified series of an open-end investment company under the 1940
Act.
The proposed diversification policy does not differ in substance from the
current diversification policies, but serves to simplify the current
fundamental policy. The 1940 Act currently prohibits a diversified
investment company from investing more than 5% of the value of its total
assets, determined at market or other fair value at the time of purchase.
The 1940 Act also currently prohibits a diversified investment company from
investing in more than 10% of the outstanding voting securities of any one
issuer, determined at the time of purchase. These limitations only apply to
75% of the investment company's assets and do not apply to investments in
securities issued or guaranteed by the U.S. Government or its agencies or
instrumentalities. The 1940 Act does not impose any investment limitations
on a non-diversified investment company. However, a non-diversified
investment company must comply with the diversification requirements of the
Internal Revenue Code. Currently the Internal Revenue Code permits an
investment company to invest 50% of its total assets in two issuers (i.e.,
25% each) and, with respect to 50% of its total assets, requires the
investment company to be diversified under the 5% of assets and 10% of
voting securities tests described above.
Proposal 3B. Borrowing (Each Fund). Under its current fundamental policy on
borrowing, each Fund is limited in the amount of money it may borrow and
the degree to which it may engage in certain investments that may be deemed
to be borrowing. To simplify and modernize each Fund's current fundamental
policy on borrowing and the issuance of senior securities, the Board
recommends that shareholders vote to approve the following fundamental
policy:
The Fund may not borrow money, except to the extent permitted by
applicable law, as amended and interpreted or modified from time to
time by any regulatory authority having jurisdiction and the guidelines
set forth in the Fund's prospectus and statement of additional
information as they may be amended from time to time.
The primary purpose of the proposed change is to standardize each Fund's
current restriction and conform it to the current regulatory requirements
and the evolving market environment. Under the
10
1940 Act, an investment company may borrow from banks (as defined in the
1940 Act) or enter into reverse repurchase agreements, in amounts up to 33
1/3% of its total assets (including the amount borrowed). An investment
company may also borrow up to an additional 5% of its total assets for
temporary purposes. The 1940 Act prohibits an investment company from
purchasing securities on margin, participating in a joint trading account
or effecting a short sale of any security in contravention of SEC rules,
regulations or orders. The SEC has issued no rules, regulations or orders.
The SEC staff, however, has taken the position that opening a margin
account, which is required to effect the short sales, is a borrowing by an
investment company and not from a bank, as is required by the 1940 Act.
Therefore, it is proposed that each Fund preserve the right to margin,
participate in joint trading accounts and engage in short sales to the
extent permitted by SEC staff interpretations and subject to any guidelines
adopted by the Board.
Adoption of the proposed policy is not expected to affect materially the
operation of a Fund, and the Board does not anticipate that the proposed
fundamental policy will change the level of investment risk associated with
an investment in the Fund. However, adoption of the proposed policies will
allow the Fund to respond to legal, regulatory and market developments that
may make the use of permissible borrowings and the issuance of senior
securities advantageous to the Funds and their shareholders.
Proposal 3C. Issuing of Senior Securities (Each Fund). Under its current
fundamental policy on senior securities, each Fund may not issue senior
securities, except to the extent that it may make permitted borrowings,
mortgages or pledges or enter into options, futures or repurchase
agreements. To simplify and modernize each Fund's current fundamental
policy on the issuance of senior securities, the Board recommends that
shareholders vote to approve the following fundamental policy:
The Fund may not issue senior securities, except to the extent
permitted by applicable law, as amended and interpreted or modified
from time to time by any regulatory authority having jurisdiction.
The proposed policy will also allow each Fund to issue senior securities to
the full extent permitted under the 1940 Act. Although the definition of a
"senior security" involves complex statutory and regulatory concepts, a
senior security is generally considered to be an obligation of an
investment company that has a claim to the investment company's assets or
earnings that takes precedence over the claims of the investment company's
shareholders. The 1940 Act generally prohibits mutual funds from issuing
any senior securities with limited exceptions; however, under current SEC
staff interpretations, investment companies are permitted to engage in
certain types of transactions that might be considered to involve the
issuance of "senior securities" as long as certain conditions are
satisfied. The Funds currently engage, and would engage, in transactions
that could be considered to involve the issuance of "senior securities"
only in accordance with applicable regulatory requirements under the 1940
Act.
Adoption of the proposed policy is not expected to affect materially the
operation of a Fund, and the Board does not anticipate that the proposed
fundamental policy will change the level of investment risk associated with
an investment in the Fund. However, adoption of the proposed policies will
allow each Fund to respond to legal, regulatory and market developments
that may make the use of permissible borrowings and the issuance of senior
securities advantageous to the Funds and their shareholders.
Proposal 3D. Underwriting (Each Fund). Under its current fundamental policy
on underwriting, a Fund may not underwrite securities issued by other
persons. The Board recommends that
11
shareholders vote to replace the current fundamental policy on
concentration with the following fundamental policy:
The Fund may not underwrite securities of other issuers, except insofar
as the Fund may technically be deemed to be an underwriter under the
Securities Act of 1933 in connection with the purchase or sale of its
portfolio securities.
The primary purpose of the Proposal is to eliminate minor differences in
the wording of each Fund's current fundamental policy on underwriting to
achieve uniformity with the fundamental policy of other Funds and to avoid
unintended limitations or interpretations. Adoption of the proposed policy
is not expected to affect materially the operation of each Fund, and the
Board does not anticipate that the proposed fundamental policy will change
the level of investment risk associated with an investment in the Fund.
Proposal 3E. Industry Concentration (Each Fund other than Heitman Real
Estate Portfolio). Each Funds' current policy on industry concentration
prohibits the purchase of securities if it would result in more than 25% of
the market value of a Fund's total assets being invested in securities of
one or more issuers having their principal business activities in the same
industry. The current policy does not apply to investments in U.S.
Government securities. The Board recommends that current fundamental policy
on investments in commodities to achieve greater uniformity among all
shareholders vote to replace each Fund's current fundamental policy on
industry concentration with the following fundamental policy:
The Fund may not concentrate its investments in the securities of one
or more issuers conducting their principal business activities in the
same industry (other than securities issued or guaranteed by the U.S.
government or its agencies or instrumentalities).
While the 1940 Act does not define what constitutes "concentration" in an
industry, the staff of the SEC takes the position that investment of more
than 25% of an investment company's assets in an industry constitutes
concentration. If a Fund's fundamental policy prohibits the Fund from
concentrating in an industry, the Fund may not invest more than 25% of its
assets in the applicable industry unless it discloses the specific
conditions under which it will change its concentration policy. Each Fund
is permitted to adopt reasonable definitions of what constitutes an
industry, or it may use standard classifications promulgated by the SEC, or
some combination thereof. Because each Fund may create its own reasonable
industry classifications, the Board believes that it is not necessary to
include such matters in the fundamental policy of a Fund. Adoption of the
proposed policy is not expected to affect materially the operation of each
Fund, and the Board does not anticipate that the proposed fundamental
policy will change the level of investment risk associated with an
investment in the Fund.
Proposal 3F. Investment in Real Estate (Each Fund). Under its current
fundamental investment policy regarding investments in real estate, each
Fund is limited in the extent to which it may not purchase or sell real
estate. The Board recommends that the current fundamental policy of each
Fund be replaced with the following fundamental investment policy:
The Fund may not purchase or sell real estate, except (1) to the extent
permitted by applicable law, as amended and interpreted or modified
from time to time by any regulatory authority having jurisdiction (2)
that the Fund may invest in, securities of issuers that deal or invest
in real estate, and (3) that the Fund may purchase securities secured
by real estate or interests therein.
The proposed fundamental policy regarding investments in real estate is not
materially different from the current comparable policy except that the
policy has been reworded and clarified. The primary
12
purpose of the Proposal is to eliminate minor differences in the wording of
each Fund's current fundamental policy on investments in real estate to
achieve greater uniformity among all of the Funds' fundamental policies
with respect to investments in real estate, and to avoid unintended
limitations resulting from different interpretations of a Fund's policy.
Adoption of the proposed policy is not expected to affect materially the
operation of each Fund, and the Board does not anticipate that the proposed
fundamental policy will change the level of investment risk associated with
an investment in the Fund.
Proposal 3G. Commodities (Each Fund). Each Fund has current fundamental
investment policy limiting the extent that it may invest in commodities.
The Board recommends that the current fundamental policy of each Fund be
replaced with the following fundamental investment policy:
The Fund may not purchase or sell commodities or contracts on
commodities except that the Fund may engage in financial futures
contracts and related options and currency contracts and related
options and may otherwise do so in accordance with applicable law and
without registering as a commodity pool operator under the Commodity
Exchange Act.
The proposed fundamental policy regarding investments in commodities is not
materially different from the current comparable policy except that the
policy has been reworded and clarified. The primary purpose of the Proposal
is to eliminate minor differences in the wording of each Fund's current
fundamental policy on investments in commodities to achieve greater
uniformity among all of the Funds' fundamental policies with respect to
investments in commodities, and to avoid unintended limitations resulting
from different interpretations of a Fund's policy. Adoption of the proposed
policy is not expected to affect materially the operation of each Fund, and
the Board does not anticipate that the proposed fundamental policy will
change the level of investment risk associated with an investment in the
Fund.
Proposal 3H. Lending (Each Fund). The current fundamental policy on loans
for each Fund prohibits the making of loans, except under certain
circumstances. The Board recommends that the shareholders vote to replace
the Funds' current fundamental policies on loans with the following
fundamental investment policy:
The Fund may not make loans to other persons, except that the Fund may
lend its portfolio securities in accordance with applicable law, as
amended and interpreted or modified from time to time by any regulatory
authority having jurisdiction and the guidelines set forth in the
Fund's prospectus and statement of additional information as they may
be amended from time to time. The acquisition of investment securities
or other investment instruments shall not be deemed to be the making of
a loan.
The proposed policy, unlike a Fund's the current policy, does not specify
the particular types of lending in which each Fund is permitted to engage;
instead, the proposed policy permits each Fund to lend only in a manner and
to an extent in accordance with applicable law. Subject to the receipt of
any necessary regulatory approval and Board authorization, each Fund may
enter into certain lending arrangements that would benefit the Fund and its
shareholders. The proposed policy would provide the Funds with greater
flexibility and maximize each Fund's lending capabilities, thereby allowing
the Funds to respond more effectively to regulatory, industry and market
developments. Adoption of the proposed policy is not expected to affect
materially the operation of each Fund, and the Board does not anticipate
that the proposed fundamental policy will change the level of investment
risk associated with an investment in the Fund.
Elimination of Certain Fundamental Restrictions (Proposals 3I through 3Q)
In addition to standardizing the restrictions described above, shareholders
of certain Funds are being asked to eliminate certain fundamental
Restrictions. Unlike a fundamental Restriction, a non-
13
fundamental Restriction may be changed without the approval of
shareholders. The majority of these fundamental policies came from state
law, which, until recently, had required the Funds to adopt fundamental
policies with respect to certain activities in addition to those specified
in the 1940 Act. Since the blue-sky regulations have been eliminated by
federal statute, the Directors propose that these policies be eliminated.
The elimination of certain of the Funds' current fundamental Restrictions
will enhance the Funds' ability to achieve their objectives by offering
greater flexibility to respond to changed market, industry or regulatory
conditions without the delay and expense of the solicitation of shareholder
approval. The elimination of these policies will not materially change the
manner in which the Fund is currently managed.
Proposal 3I. Illiquid Securities (C&B Balanced Portfolio, C&B Equity
Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap Equity
Portfolio, FMA Small Company Portfolio, Heitman Real Estate Portfolio, ICM
Small Company Portfolio, The McKee Domestic Equity Portfolio, The McKee
International Equity Portfolio, The McKee Small Cap Equity Portfolio, The
McKee U. S. Government Portfolio, NWQ Special Equity Portfolio, Sirach
Special Equity Portfolio, The Sterling Partners' Balanced Portfolio, The
Sterling Partners Equity Portfolio and The Sterling Partners' Small Cap
Value Portfolio only). Under its current fundamental policy, each Fund is
limited with respect to the amount it may invest in securities subject to
legal or contractual restrictions on resale or securities for which there
are no readily available markets, including repurchase agreements having
maturities of more than seven days. If the elimination of this restriction
is approved by shareholders, the Board will adopt the following non-
fundamental restriction: The Fund will not invest more than 15% of its net
assets in illiquid securities. The Board recommends that shareholders vote
to eliminate this fundamental policy because, under the 1940 Act, a fund is
not required to adopt restrictions concerning illiquid securities as a
fundamental policy. The Board does not anticipate that the elimination of
the current fundamental policy will materially change the level of
investment risk associated with an investment in these Funds. The Board
also believes that elimination of this fundamental restriction and the
adoption of a non-fundamental restriction will provide each Fund with
greater investment flexibility and the ability to respond more effectively
to legal, regulatory and market developments.
Proposal 3J. Control or Management (C&B Balanced Portfolio, C&B Equity
Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap Equity
Portfolio, FMA Small Company Portfolio, ICM Small Company Portfolio, The
McKee Domestic Equity Portfolio, The McKee International Equity Portfolio,
The McKee Small Cap Equity Portfolio, The McKee U. S. Government Portfolio,
NWQ Special Equity Portfolio, Sirach Special Equity Portfolio, The Sterling
Partners' Balanced Portfolio, The Sterling Partners' Equity Portfolio, The
Sterling Partners' Small Cap Value Portfolio only). Under its current
fundamental policy, a Fund will not invest for the purpose of exercising
control over management of any company. The Board recommends that
shareholders vote to eliminate this fundamental policy because, under the
1940 Act, a fund is not required to adopt restrictions investing for
purposes of exercising control over management of a company as a
fundamental policy. If the elimination of this restriction is approved by
shareholders, the Funds will be permitted to invest for purposes of
exercising control over management of a company to the extent permitted by
applicable law. The Board does not anticipate that the elimination of the
current fundamental policy will materially change the manner in which the
Fund is currently managed or the level of investment risk associated with
an investment in these Funds. The Board also believes that elimination of
this fundamental restriction will provide each Fund with greater investment
flexibility and the ability to respond more effectively to legal,
regulatory and market developments.
Proposal 3K. Unseasoned Issuers (C&B Balanced Portfolio, C&B Equity
Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap Equity
Portfolio, FMA Small Company Portfolio, ICM Small Company Portfolio, Sirach
Special Equity Portfolio, The Sterling
14
Partners' Balanced Portfolio, The Sterling Partners' Equity Portfolio, The
Sterling Partners' Small Cap Value Portfolio, TS&W Equity Portfolio, TS&W
Fixed Income Portfolio and TS&W International Equity Portfolio only). Under
its current fundamental policy, a Fund will not invest more than 5% of its
assets at the time of purchase in the securities of companies that have
(with predecessors) a continuous operating history of less than 3 years.
The Board recommends that shareholders vote to eliminate this fundamental
policy because, under the 1940 Act, a fund is not required to adopt
restrictions on investments in unseasoned issuers. If the elimination of
this restriction is approved by shareholders, the Funds will be permitted
to invest in unseasoned issuers to the extent permitted by applicable law.
The Board does not anticipate that the elimination of the current
fundamental policy will materially change the manner in which the Fund is
currently managed or the level of investment risk associated with an
investment in these funds. The Board also believes that elimination of this
fundamental restriction will provide each Fund with greater investment
flexibility and the ability to respond more effectively to legal,
regulatory and market developments.
Proposal 3L. Borrowings Exceeding 5% (C&B Balanced Portfolio, C&B Equity
Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap Equity
Portfolio, FMA Small Company Portfolio, FPA Crescent Portfolio, ICM Small
Company Portfolio, Sirach Special Equity Portfolio, The Sterling Partners'
Balanced Portfolio, The Sterling Partners' Equity Portfolio, The Sterling
Partners' Small Cap Value Portfolio, TS&W Equity Portfolio, TS&W Fixed
Income Portfolio and TS&W International Equity Portfolio only). Under its
current fundamental policy, a Fund will not purchase additional securities
when borrowings exceed 5% of total assets. The Board recommends that
shareholders vote to eliminate this fundamental policy because, under the
1940 Act, an investment company is not required to adopt restrictions on
borrowings other than what is described above. If the elimination of this
restriction is approved by shareholders, Funds will comply with the
borrowing restriction outlined in Proposal 3B. The Board does not
anticipate that the elimination of the current fundamental policy will
materially change the manner in which the Fund is currently managed or the
level of investment risk associated with an investment in these Funds. The
Board also believes that elimination of this fundamental restriction will
provide each Fund with greater investment flexibility and the ability to
respond more effectively to legal, regulatory and market developments.
Proposal 3M. Pledging (C&B Balanced Portfolio, C&B Equity Portfolio, C&B
Equity Portfolio for Taxable Investors, C&B Mid Cap Equity Portfolio, FMA
Small Company Portfolio, FPA Crescent Portfolio, ICM Small Company
Portfolio, Sirach Special Equity Portfolio, The Sterling Partners' Balanced
Portfolio, The Sterling Partners' Equity Portfolio, The Sterling Partners'
Small Cap Value Portfolio, TS&W Equity Portfolio, TS&W Fixed Income
Portfolio and TS&W International Equity Portfolio only). Under its current
fundamental policy, a Fund will not pledge, mortgage, or hypothecate any of
its assets to an extent greater than 10% of its total assets at fair market
value. The Board recommends that shareholders vote to eliminate this
fundamental policy because, under the 1940 Act, an investment company is
not required to adopt restrictions on pledging, other than what is
described in Proposal 3B concerning borrowing. If the elimination of this
restriction is approved by shareholders, each Fund will comply with the
borrowing restrictions outlined in Proposal 3B. The Board does not
anticipate that the elimination of the current fundamental policy will
materially change manner in which the Fund is currently managed or the
level of investment risk associated with an investment in these Funds. The
Board also believes that elimination of this fundamental restriction will
provide each Fund with greater investment flexibility and the ability to
respond more effectively to legal, regulatory and market developments.
Proposal 3N. Margin Purchases and Short Sales (C&B Balanced Portfolio, C&B
Equity Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap
Equity Portfolio, FMA Small Company Portfolio, FPA Crescent Portfolio, ICM
Small Company Portfolio, The McKee
15
Domestic Equity Portfolio, The McKee International Equity Portfolio, The
McKee Small Cap Equity Portfolio, The McKee U. S. Government Portfolio, NWQ
Special Equity Portfolio, Sirach Special Equity Portfolio, The Sterling
Partners' Balanced Portfolio, The Sterling Partners' Equity Portfolio, and
The Sterling Partners' Small Cap Value Portfolio only). Under its current
fundamental policy, a Fund will not purchase on margin or sell short,
except as specified above. Margin purchases involve the purchase of
securities with money borrowed from a broker. "Margin" is the cash or
eligible securities that the borrower places with a broker as collateral
against the loan. Selling a security short involves an investor sale of a
security it does not own. To sell a security short an investor must borrow
the security from someone else to deliver to the buyer. The investor then
replaces the security it borrowed by purchasing it at the market price at
or before the time of replacement. Until it replaces the security, the
investor repays the person that lent it the security for any interest or
dividends that may have accrued during the period of the loan. The Board
recommends that shareholders vote to eliminate this fundamental policy
because, under the 1940 Act, an investment company is not required to adopt
restrictions on margin as a fundamental policy. If the elimination of this
restriction is approved by shareholders, each Fund will be permitted to
engage in margin purchases and short sales to the extent permitted by SEC
staff interpretations and subject to guidelines adopted by the Board. The
Board does not anticipate that the elimination of the current fundamental
policy will materially change manner in which the Fund is currently managed
or the level of investment risk associated with an investment in these
Funds. The Board also believes that elimination of this fundamental
restriction will provide each Fund with greater investment flexibility and
the ability to respond more effectively to legal, regulatory and market
developments.
Proposal 3O. Directors' Ownership of Shares (C&B Balanced Portfolio, C&B
Equity Portfolio, C&B Equity Portfolio for Taxable Investors, C&B Mid Cap
Equity Portfolio, FMA Small Company Portfolio, ICM Small Company Portfolio,
The McKee Domestic Equity Portfolio, The McKee International Equity
Portfolio, The McKee Small Cap Equity Portfolio, The McKee U. S. Government
Portfolio, NWQ Special Equity Portfolio, Sirach Special Equity Portfolio,
The Sterling Partners' Balanced Portfolio, The Sterling Partners' Equity
Portfolio, and The Sterling Partners' Small Cap Value Portfolio only).
Under its current fundamental policy, a Fund will not purchase or retain
securities of an issuer if those officers and Directors or its investment
adviser owning more than 1/2 of 1% of such securities together own more
than 5% of such securities. The Board recommends that shareholders vote to
eliminate this fundamental policy because, under the 1940 Act, an
investment company is not required to adopt restrictions on the amount of
securities a Director may own of an issuer. If the elimination of this
restriction is approved by shareholders, the Directors will be permitted to
own shares of issuers to the extent permitted by applicable law. The Board
does not anticipate that the elimination of the current fundamental policy
will materially change manner in which the Fund is currently managed or the
level of investment risk associated with an investment in these Funds. The
Board also believes that elimination of this fundamental restriction will
provide each Fund with greater investment flexibility and the ability to
respond more effectively to legal, regulatory and market developments.
Proposal 3P. Interests In Oil, Gas or Other Mineral Exploration or
Development Programs (C&B Balanced Portfolio, C&B Equity Portfolio, C&B
Equity Portfolio for Taxable Investors, C&B Mid Cap Equity Portfolio, FMA
Small Company Portfolio, ICM Small Company Portfolio, The McKee Domestic
Equity Portfolio, The McKee International Equity Portfolio, The McKee Small
Cap Equity Portfolio, The McKee U. S. Government Portfolio, NWQ Special
Equity Portfolio, The Sterling Partners' Balanced Portfolio, The Sterling
Partners' Equity Portfolio and The Sterling Partners' Small Cap Value
Portfolio only). Under its current fundamental policy, a Fund will not
write or acquire options or interests in oil, gas or other mineral
exploration or development programs. The Board recommends that shareholders
vote to eliminate this fundamental policy because, under the 1940 Act, an
investment company is not required to adopt restrictions on the degree to
which an investment company can purchase interests in oil, gas or
16
other mineral exploration or development programs. If the elimination of
this restriction is approved by shareholders, the Funds will be permitted
to write or acquire options or interests in oil, gas or other mineral
exploration or development programs to the extent permitted by applicable
law. The Board does not anticipate that the elimination of the current
fundamental policy will materially change the manner in which the Fund is
currently managed or the level of investment risk associated with an
investment in these Funds. The Board also believes that elimination of this
fundamental restriction will provide each Fund with greater investment
flexibility and the ability to respond more effectively to legal,
regulatory and market developments.
Proposal 3Q. Futures and Options (C&B Balanced Portfolio, C&B Equity
Portfolio, C&B Equity Portfolio for Taxable Investors and C&B Mid Cap
Equity Portfolio only). Under its current fundamental policy, a Fund will
not invest in stock or bond futures and/or options on futures unless not
more than 20% of the Fund's assets are invested in stock or bond futures
and options. The Board recommends that shareholders vote to eliminate this
fundamental policy because, under the 1940 Act, an investment company is
not required to adopt restrictions on the degree to which an investment
company can invest in futures and options. If the elimination of this
restriction is approved by shareholders, the Funds will be permitted to
invest in futures and options on futures to the extent permitted by
applicable law. The Board does not anticipate that the elimination of the
current fundamental policy will materially change the manner in which the
Fund is currently managed or the level of investment risk associated with
an investment in these Funds. The Board also believes that elimination of
this fundamental restriction will provide each Fund with greater investment
flexibility and the ability to respond more effectively to legal,
regulatory and market developments.
Recommendation of Directors
The Directors have reviewed the potential benefits associated with the
proposals to (i) standardize the Funds' fundamental Restrictions (Proposals
3A through 3H) and (ii) eliminate certain of the Funds' fundamental
Restrictions (Proposals 3I through 3Q). The Board had concurred with
management and believes that simplifying the Funds' fundamental
restrictions will enhance management's ability to manage the Funds' assets
more efficiently in changing regulatory and investment environments, and
permit management and the Board to review and monitor investment policies
more easily. In addition, the proposed changes to the fundamental
investment restrictions of the Funds will assist the Funds in making
required regulatory filings in a more efficient and cost-effective manner.
The proposed changes in fundamental restrictions will allow each Fund
greater investment flexibility to respond to future investment
opportunities. The Board does not anticipate that the changes, individually
or in the aggregate, will result in a material change in the level of
investment risk associated with an investment in each Fund.
The Directors voted to approve each of these Proposals at a meeting held
for that purpose on August 4, 2000.
The Directors Unanimously Recommend that Shareholders of Each Fund Vote to
Approve Proposals 3A-3Q.
17
PROPOSAL 4: RATIFICATION INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
The Directors, including a majority of the Independent Directors, have
selected PricewaterhouseCoopers LLP to act as independent auditors for each
of the Funds for each Fund's current fiscal year. In its capacity as
independent auditors, PricewaterhouseCoopers LLP currently performs a
variety of functions, including signing or certifying any financial
statements to be filed with the SEC or any state. PricewaterhouseCoopers
LLP are independent auditors and have advised the Funds that they have no
direct financial interest or material indirect financial interest in the
Funds. Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Meeting and will have an opportunity to make a statement if
they so desire.
The Directors including a majority of the Independent Directors, recommend
to Shareholders of the UAM Funds that they ratify the Boards selection of
PricewaterhouseCoopers as the Funds' independent auditors.
The Directors Unanimously Recommend that Shareholders of Each Fund Vote to
Approve Proposal 4.
PROPOSAL 5 AND PROPOSAL 6: APPROVAL OF INTERIM INVESTMENT ADVISORY AGREEMENT
AND NEW INVESTMENT ADVISORY AGREEMENT
- -------------------------------------------------------------------------------
Introduction
On June 16, 2000, Old Mutual plc, a public limited company based in the
United Kingdom, ("Old Mutual"), OM Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Old Mutual ("OMAC") and United
Asset Management Corporation, the parent company of each investment adviser
to the Funds, the distributor and the administrator to the Funds, ("UAM")
entered into an Agreement and Plan of Merger (the "Agreement") for Old
Mutual to acquire UAM for $25 per share ("Offer Price") in cash (subject to
possible downward adjustment, as described below) through a tender offer
and merger (the "Transaction"). The transaction values the equity of UAM at
approximately $1.46 billion.
The price to be paid in the Transaction is subject to downward adjustment
in the event that UAM's revenues from assets under management, excluding
the effects of market movements, decline below a specified level prior to
the consummation of the offer. The Transaction is subject to a number of
conditions, including (but not limited to): (i) tender by holders of a
majority of UAM's outstanding shares; (ii) the absence of any legal
restraint or prohibition preventing the Transaction; (iii) expiration of
any waiting period required by antitrust laws; and (iv) approval of the
Transaction by fund and non-fund clients representing specified percentages
of UAM. The Agreement provides that, subject to the satisfaction or waiver
of certain conditions, following completion of the tender offer, OMAC will
be merged with and into UAM and each UAM share outstanding (other than
certain dissenting shareholders) will be converted into the right to
receive the tender offer price, as adjusted, or any greater amount per
share paid pursuant to the tender offer. Each of the conditions may be
waived in whole or in part in connection with the consummation of the
Transaction. The Transaction is expected to close prior to the end of 2000,
although there is no assurance that it will be consummated. As of the
Record Date, Mr. Norton Reamer, President and a Director of the Company,
indirectly or directly owned 2,108,735 shares of UAM valued at
$51,790,531.60.
Old Mutual plc is a United Kingdom-based financial services group with a
substantial life assurance business in South Africa and other southern
African countries and an integrated, international portfolio of activities
in asset management, banking and general insurance. UAM has approximately
$188 billion in assets under management in institutional and individual
private accounts and mutual
18
funds. The acquisition of UAM will increase Old Mutual's assets under
management to approximately $275 billion.
Upon approval of the Agreement by UAM's Board of Directors, all options to
purchase Shares granted to employees and directors of UAM vested. The
Agreement provides that, except as otherwise agreed by Old Mutual and the
option holder, all such options that are outstanding immediately before the
effective time of the transaction will be canceled in exchange for a cash
payment by UAM equal to the number of Shares subject to the option times
the excess, if any, of the Offer Price over the exercise price per-Share of
the option, less applicable withholding taxes. Currently, Mr. Orr, a
nominee for election as a Director of the Company, holds options (with an
exercise price of $18.56 per share) representing 1,000,000 shares of UAM,
which will result in payments of approximately $6.44 million at the closing
of the Transaction.
The Transaction will constitute a "change of control" for purposes of the
change-of-control employment agreements that UAM has entered into with
certain senior officers of UAM, including Mr. Orr. The agreements provide
generally that the officer's terms and conditions of employment (including
position, location, compensation and benefits) will not be adversely
changed during the two-year period after the change of control. If UAM
terminates the executive's employment (other than for cause, death or
disability), or (in certain circumstances) the officer terminates his or
her employment for any reason during the 30-day period following the first
anniversary of the change of control, the officer is generally entitled to
receive a multiple of the officer's annual base salary and annual bonus and
UAM contributions made to the officer's defined contribution plan accounts
for the most recent plan year, and continued welfare benefits for a number
of years equal to the same multiple. The multiple for Mr. Orr is three. In
addition, the agreements provide that certain officers are entitled to
receive payment in an amount sufficient to make the officers whole for any
excise tax excess parachute payments imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended, provided such parachute payments
exceed 110% of the maximum amount that could be paid without incurring any
excise tax on the excess parachute payment, in which case the parachute
payments would be reduced to prevent the imposition of the excise tax.
Certain agreements provide for a reduction in payments if necessary to
prevent imposition of the excise tax. All amounts payable to Mr. Orr
pursuant to the agreements described above are expected to be paid in full
upon the change in control. In addition, under the deferred compensation
plan and the stock option deferral plan, all benefits became immediately
payable upon approval of the Agreement by UAM's Board of Directors.
Consummation of the Transaction would constitute an "assignment," as that
term is defined in the 1940 Act, of each Fund's current Investment Advisory
Agreement. As required by the 1940 Act, each Fund's current Investment
Advisory Agreement automatically terminates in the event of its assignment.
In anticipation of the Transaction, the Board has proposed continuation of
the advisory services under a new investment advisory agreement between
each Fund and its current investment adviser for approval by shareholders
of each Fund. The Board has also approved continuation of the advisory
services until the closing of the Transaction under an interim advisory
agreement between each Fund and its current investment adviser for approval
by shareholders of each Fund. Compensation earned by an investment adviser
under an interim investment advisory agreement is held in an interest-
bearing escrow account pending shareholder approval of a new investment
advisory agreement for a period of up to 150 days from the termination of
the current investment advisory agreement. If shareholders approve the
proposed investment advisory agreements, the amount held in the escrow
account, plus interest, will be paid to the investment adviser. If
shareholders do not approve the proposed investment advisory agreement, the
investment adviser will be paid the lesser of the costs incurred in
performing its services under the interim agreement or the total amount in
the escrow account, plus interest earned. Forms of the interim investment
advisory agreement and new investment advisory agreement are attached to
this proxy statement as
19
Exhibits C and D, respectively. The new investment advisory agreement will
be identical in all material respects to the Fund's the current investment
advisory agreement. In addition, each Fund's advisory fee rate will remain
unchanged.
Special Information for Shareholders of Sirach Growth II Portfolio
On August 4, 2000, the Directors, including a majority of the Independent
Directors, approved a change in adviser for the Sirach Growth II Portfolio
from Hanson Investment Management Company ("Hanson") to Sirach Capital
Management Company, Inc. ("Sirach"). Since that meeting, Sirach has been
serving as the Fund's investment adviser on the same terms as Hanson was
serving pursuant to an interim investment advisory agreement. At the
Meeting, shareholders of the Fund will be asked to approve the interim
investment advisory agreement with Sirach and a new advisory agreement with
Sirach. Hanson and Sirach are both affiliates of UAM. In addition, all of
the investment professionals currently employed by Hanson, including those
responsible for the day-to-day management of the Sirach Growth II
Portfolio, are also currently employees of Sirach. Consequently, the change
in adviser is not expected to result in any change in the actual investment
management services, administrative functions, supervisory responsibilities
or fee arrangements for the Fund. UAM proposed this change to the Board as
part of its effort to consolidate the investment advisory operations of
Hanson into those of Sirach. Sirach has provided investment management
services to corporations, pension and profit sharing plans, 401(k) and
thrift plans, trusts, estates and other institutions and individuals since
1970.
Special Information for Shareholders of MJI International Equity Portfolio
On August 1, 2000 it was reported in the news media that Old Mutual plans
to sell Murray Johnstone International, Ltd., the investment adviser for
the MJI International Equity Portfolio, upon consummation of the
Transaction. While the press release indicates that a number of parties
have expressed an interest in buying Murray Johnstone, the Company is
currently not aware of any agreement between Old Mutual and a third party
to sell to Murray Johnstone. The Fund will, however, notify its
shareholders should such an agreement be reached.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that a manager or investment adviser
(such as the investment advisers to the Funds) to a registered investment
company, and the affiliates of such adviser (such as UAM), may receive any
amount or benefit in connection with a sale of any interest in such manager
or investment adviser which results in an assignment of an investment
advisory contract if the following two conditions are satisfied: (1) for a
period of three years after such assignment, at least 75% of the board of
directors or trustees of the investment company cannot be "interested
persons" (within the meaning of Section 2(a)(19) of the 1940 Act) of the
new investment adviser or its predecessor, and (2) no "unfair burden" (as
defined in the 1940 Act) may be imposed on the investment company as a
result of the assignment or any express or implied terms, conditions or
understandings applicable thereto.
Consistent with the first condition of Section 15(f), Old Mutual and UAM
have agreed in the Agreement that, for a period of three years after the
Closing, they will not take or recommend any action that would cause more
than 25% of the Directors to be interested persons of the entity acting as
each Fund's investment adviser.
With respect to the second condition of Section 15(f), an unfair burden on
an investment company is defined in the 1940 Act to include any arrangement
during the two-year period after any such transaction occurs whereby the
manager or investment adviser or its predecessor or successor, or any
20
interested person of such adviser, predecessor or successor, receives or is
entitled to receive any compensation of two types, either directly or
indirectly. The first type is compensation from any person in connection
with the purchase or sale of securities or other property to, from or on
behalf of the investment company, other than bona fide ordinary
compensation as principal underwriter for such company. The second type is
compensation from the investment company or its security holders for other
than bona fide investment advisory or other services.
In the Agreement, Old Mutual and UAM have agreed not to take or recommend
any action that would constitute an unfair burden on any Fund within the
meaning of Section 15(f). In this regard, UAM and its affiliates have
agreed to maintain the maximum expense ratio disclosed in the current
prospectus of each Fund for a period of two years from the date of the
consummation of the Transaction, consistent with and subject to the
existing conditions of any voluntary fee waivers unrelated to the
Transaction.
Description of the Investment Advisory Agreements
Pursuant to each Fund's proposed investment advisory agreement, each Fund's
current investment adviser will continue to act as its investment adviser.
Each Fund's current and proposed investment advisory agreement requires the
investment adviser to
. Manage the investment and reinvestment of the Fund's assets;
. Continuously review, supervise and administer the investment program of
the Fund; and
. Determine what portion of the Fund's assets will be invested in
securities and what portion will consist of cash.
Each investment adviser is also required to render regular reports to the
Fund's officers and Board concerning the adviser's discharge of its
responsibilities.
The current and proposed investment advisory agreements also authorize the
investment adviser to select the brokers or dealers that will execute the
purchases and sales of securities of the Fund and directs the adviser to
use its best efforts to obtain the best available price and most favorable
execution. Subject to policies established by the Board, the adviser may
also effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if the adviser determines
in good faith that such amount of commission is reasonable in relation to
the value of the brokerage or research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
adviser's overall responsibilities with respect to the Fund.
The current and the proposed investment advisory agreement of each Fund
obligates the adviser to discharge its responsibilities subject to the
control of the officers and the Board, and in compliance with the
objectives, policies and limitations set forth in the Fund's prospectus and
applicable laws and regulations. Under the terms of the current investment
advisory agreements, each adviser has agreed to render its services and to
provide, at its own expense, the office space, furnishings and equipment
and the personnel required by it to perform the services on the terms and
for the compensation provided herein.
Each Fund's current and proposed investment advisory agreement, except as
stated below, provides that the Fund's investment adviser shall have no
liabilities in connection with rendering services thereunder, other than
liabilities resulting from the adviser's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties. Each current
investment advisory agreement also provides that each Fund will indemnify
its investment adviser against liabilities, losses and expenses
21
incurred in connection with all liabilities, except those stated above and
liabilities involving breach of the adviser's fiduciary duties in respect
of receipt of compensation for its services.
Each current investment advisory agreement was approved at the Fund's
inception by the Fund's initial shareholders. Exhibit E lists the following
information for each Fund's investment adviser:
. The date of the contract and the date on which it was last approved by
Directors;
. The rate of compensation of the investment adviser;
. Information on other similar investment companies advised by the
adviser; and
. The name, address and principal occupation of the principal executive
officer and each director or general partner of the investment adviser.
Recommendation of Directors
On August 4, 2000, representatives of UAM advised the Independent Directors
that UAM had entered into the Transaction Agreement. At that time,
representatives of UAM described the general terms of the proposed
Transaction and the perceived benefits for the UAM organization and for its
investment advisory clients. The Independent Directors discussed the
transaction with representatives of UAM. They were assisted in their review
of this information by their independent legal counsel. UAM has advised the
Independent Directors that that it did not expect that the proposed
Transactions to have an immediate material effect on the operations of the
Funds or their shareholders. UAM has also advised the Independent Directors
that the Transaction Agreement, by its terms, does not contemplate any
changes in the structure or operations of the Funds.
On August 4, 2000, the Board, including a majority of the Independent
Directors, voted to approve the Interim Investment Advisory Agreements and
the New Investment Advisory Agreements and to recommend their approval to
shareholders.
The Directors Unanimously Recommend That Shareholders Of Each Fund Vote To
Approve Proposal 5 And Proposal 6.
ADDITIONAL INFORMATION
- -------------------------------------------------------------------------------
UAM Fund Services, Inc. is each Fund's administrator, UAM Shareholder
Services Center, Inc. is each Fund's sub-shareholder servicing agent and
UAM Fund Distributors, Inc. is each Fund's principal underwriter. UAM Fund
Services, Inc., UAM Shareholder Services Center, Inc. and UAM Fund
Distributors, Inc. are affiliates of United Asset Management Corporation.
UAM Fund Services, Inc. and UAM Fund Distributors, Inc. are located at 211
Congress Street, 4th Floor, Boston, Massachusetts 02110 and UAM Shareholder
Services, Inc. is located at 825 Duportail Road, Wayne, Pennsylvania 19087.
Exhibit F lists the following information:
. Fees paid to UAM Funds Services, Inc. during each Fund's last fiscal
year for services rendered as administrator;
. Fees paid to UAM Shareholder Services Center, Inc. during each Fund's
last fiscal year for services rendered as sub-shareholder servicing
agent;
. Fees paid to each Fund's investment adviser without waivers during the
Fund's last fiscal year;
22
. Fees paid to each Fund's investment adviser with waivers during the
Fund's last fiscal year; and
. Each Fund's net assets on August 21, 2000.
The Funds do not pay UAM Fund Distributors, Inc. for its services as
principal underwriter to the Funds.
Payment of Expenses
United Asset Management Corporation or its affiliated companies will pay
the expenses of the preparation, printing and mailing of this proxy
statement and its enclosures and of all solicitations, including telephone
or internet voting.
Beneficial Ownership of Shares
Exhibit G contains information about the beneficial ownership by
shareholders of five percent or more of each Fund's outstanding Shares as
of August 21, 2000. On that date, the existing nominees and officers of the
Funds, together as a group, "beneficially owned" less than one percent of
each Fund's outstanding Shares.
Exhibit H contains information on the total number of outstanding shares of
each Fund as of August 21, 2000.
The term "beneficial ownership" is as defined under Section 13(d) of the
Securities and Exchange Act of 1934. The information as to beneficial
ownership is based on statements furnished to each Fund by the existing
Directors and officers of the Company, and/or on the records of Company's
transfer agent.
Annual and Semi-Annual Reports to Shareholders
For a free copy of each Fund's most recent annual report (and most recent
semi-annual report succeeding the annual report, if any) shareholders of
the Fund may call 1-877-826-5465 or write to the UAM Funds at PO Box
219081, Kansas City, MO 64121.
Other Business
The Board does not intend to present any other business at the Meeting.
Other matters will be considered if notice is given within a reasonable
amount of time prior to the meeting. If any other matter may properly come
before the meeting, or any adjournment thereof, the persons named in the
accompanying proxy card(s) intend to vote, act, or consent thereunder in
accordance with their best judgment at that time with respect to such
matters. Any shareholder wishing to present a proposal at a future meeting
of shareholders of a Fund will be required to submit such proposal in
writing so that it is received by the Fund at least 120 days before the
date of the meeting. No annual or other special meeting is currently
scheduled for a Fund. Mere submission of a shareholder proposal does not
guarantee the inclusion of the proposal in the proxy statement or
presentation of the proposal at the meeting since inclusion and
presentation are subject to compliance with certain federal regulations.
The Directors, Including the Independent Directors, Recommend Approval of each
Proposal. Any Unmarked Proxies without Instructions to the Contrary will be
Voted in Favor of Approval of the Proposals.
23
EXHIBIT A -- FUNDAMENTAL INVESTMENT OBJECTIVES OF CERTAIN OF THE UAM FUNDS
PROPOSED TO BE RECLASSIFIED AS NON-FUNDAMENTAL
Name of Fund Investment Objective
- -------------------------------------------------------------------------------
Acadian Emerging Markets Portfolio Seeks long term capital appreciation by
investing primarily in common stocks of
emerging country issuers.
- -------------------------------------------------------------------------------
Analytic Enhanced Equity Fund Seeks above average-average total
returns through investments in equity
securities.
- -------------------------------------------------------------------------------
Analytic Defensive Equity Fund Seeks to obtain a greater long-term
total return and smaller fluctuations in
quarterly total return from a
diversified, hedged common stock fund
than would be realized from the same
fund unhedged.
- -------------------------------------------------------------------------------
Analytic Master Fixed Income Fund Seeks above average total returns
through investments in a diversified
bond fund consisting primarily of U.S.
government, corporate, and mortgage-
related fixed income securities.
- -------------------------------------------------------------------------------
Analytic Short-Term Government Fund Seeks to provide a high level of income
consistent with both low fluctuations in
market value and low credit risk.
- -------------------------------------------------------------------------------
C&B Balanced Portfolio Seeks maximum long-term total return
with minimal risk to principal by
investing in a combined portfolio of
common stocks which have a consistency
and predictability in their earnings
growth and investment grade debt
securities.
- -------------------------------------------------------------------------------
C&B Equity Portfolio Seeks maximum long-term total return
with minimal risk to principal by
investing in common stocks which have a
consistency and predictability in their
earnings growth.
- -------------------------------------------------------------------------------
C&B Equity Portfolio for Taxable Seeks maximum long-term, after-tax total
Investors return, consistent with minimizing risk
to principal.
- -------------------------------------------------------------------------------
C&B Mid Cap Equity Portfolio Seeks maximum long-term total return,
consistent with minimizing risk to
principal.
- -------------------------------------------------------------------------------
Cambiar Opportunity Portfolio Seeks capital growth and preservation by
investing primarily in common stocks.
The portfolio seeks to provide above-
average performance in both rising and
falling market periods by investing in
stocks that have limited downside and
with positive upside potential.
- -------------------------------------------------------------------------------
FMA Small Company Portfolio Seeks maximum, long-term total return,
consistent with reasonable risk to
principal, by investing in common stocks
of smaller companies in terms of
revenues and/or market capitalization.
- -------------------------------------------------------------------------------
FPA Crescent Portfolio Seeks to provide, through a combination
of income and capital appreciation, a
total return consistent with reasonable
investment risk.
- -------------------------------------------------------------------------------
Heitman Real Estate Portfolio Seeks high total return consistent with
reasonable risk by investing primarily
in equity securities of public companies
principally engaged in the real estate
business.
A-1
Name of Fund Investment Objective
- -------------------------------------------------------------------------------
ICM Small Company Portfolio Seeks maximum, long-term total return
consistent with reasonable risk to
principal, by investing primarily in
common stocks of smaller companies
measured in terms of revenues and assets
and, more importantly, in terms of
market capitalization.
- -------------------------------------------------------------------------------
McKee Domestic Equity Portfolio Seeks a superior long-term total return
over a market cycle by investing
primarily in equity securities of U.S.
issuers.
- -------------------------------------------------------------------------------
McKee International Equity Portfolio Seeks a superior long-term total return
over a market cycle by investing
primarily in the equity securities of
non-U.S. issuers.
- -------------------------------------------------------------------------------
McKee Small Cap Equity Portfolio Seeks a superior long-term total return
by investing primarily in the equity
securities of small companies.
- -------------------------------------------------------------------------------
McKee U.S. Government Portfolio Seeks a high level of current income
consistent with preservation of capital
by investing primarily in U.S. Treasury
and Government agency securities.
- -------------------------------------------------------------------------------
MJI International Equity Portfolio Seeks to maximize total return,
including both capital appreciation and
current income, by investing primarily
in the common stocks of companies based
outside of the United States.
- -------------------------------------------------------------------------------
NWQ Special Equity Portfolio Seeks long-term capital appreciation by
investing primarily in the common stock
and other equity securities of
companies, which in the adviser's
opinion, are undervalued at the time of
purchase and offer the potential for
above-average appreciation.
- -------------------------------------------------------------------------------
RHJ Small Cap Portfolio Seeks maximum capital appreciation,
consistent with reasonable risk to
principal by investing primarily in
small market capitalization companies.
- -------------------------------------------------------------------------------
RHJ Small/Mid Cap Portfolio Seeks maximum capital appreciation,
consistent with reasonable risk to
principal by investing primarily in
small/mid market capitalization
(small/mid cap) companies.
- -------------------------------------------------------------------------------
Sirach Bond Portfolio Seeks to achieve above-average total
return, consistent with reasonable risk
to principal, by investing primarily in
dollar-denominated, investment-grade
fixed-income securities.
- -------------------------------------------------------------------------------
Sirach Equity Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing, under normal
circumstances, at least 90% of its total
assets in common stocks of companies
that offer long-term growth potential.
- -------------------------------------------------------------------------------
Sirach Growth Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing primarily in
common stocks of companies that offer
long-term growth potential.
A-2
Name of Fund Investment Objective
- -------------------------------------------------------------------------------
Sirach Growth II Portfolio Seeks maximum long-term total return,
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of equity securities,
primarily the common stocks of large,
United States--based companies with
outstanding financial characteristics
and strong growth prospects that can be
purchased at reasonable valuations.
- -------------------------------------------------------------------------------
Sirach Special Equity Portfolio Seeks to provide maximum long-term
growth of capital, consistent with
reasonable risk to principal, by
investing in small to medium capitalized
companies with particularly attractive
financial characteristics.
- -------------------------------------------------------------------------------
Sirach Strategic Balanced Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing in a
diversified portfolio of common stocks
and fixed income securities.
- -------------------------------------------------------------------------------
Sterling Partners' Balanced Seeks to provide maximum long-term
Portfolio return consistent with reasonable risk
to principal, by investing in a balanced
portfolio of common stocks and fixed-
income securities.
- -------------------------------------------------------------------------------
Sterling Partners' Equity Portfolio Seeks to provide maximum long-term total
return consistent with reasonable risk
to principal, by investing primarily in
common stocks.
- -------------------------------------------------------------------------------
Sterling Partners' Small Cap Value Seeks to provide maximum long-term total
Portfolio return consistent with reasonable risk
to principal by investing primarily in
equity securities of smaller companies,
in terms of market capitalization.
- -------------------------------------------------------------------------------
TJ Core Equity Portfolio Seeks maximum total return consistent
with reasonable risk to principal by
investing in the common stock of quality
companies with lower valuations in
sectors of the economy exhibiting
strong, or improving, relative
performance.
- -------------------------------------------------------------------------------
TS&W Equity Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of common stocks of relatively
large companies.
- -------------------------------------------------------------------------------
TS&W Fixed Income Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing primarily in
investment grade debt securities of
varying maturities.
- -------------------------------------------------------------------------------
TS&W International Equity Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of common stocks of primarily
non-United States (U.S.) issuers on a
worldwide basis.
- -------------------------------------------------------------------------------
TS&W International Octagon Portfolio Seeks to provide long-term capital
(formerly, Jacobs International appreciation by investing in equity
Octagon Portfolio) securities of companies in developed and
emerging markets.
A-3
EXHIBIT B--CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
INDEX
UAM FUND PAGE B-
- -------- -------
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund.......................................... 5
Analytic Enhanced Equity Fund........................................... 8
Analytic International Fund............................................. 11
Analytic Master Fixed Income Fund....................................... 8
Analytic Short-Term Government Fund..................................... 8
Cambiar Opportunity Portfolio........................................... 14
C&B Balanced Portfolio.................................................. 17
C&B Equity Portfolio.................................................... 17
C&B Equity Portfolio for Taxable Investors.............................. 17
C&B Mid Cap Equity Portfolio............................................ 17
Clipper Focus Portfolio................................................. 21
FMA Small Company Portfolio............................................. 23
FPA Crescent Portfolio.................................................. 27
Heitman Real Estate Portfolio........................................... 31
ICM Small Company Portfolio............................................. 35
IRA Capital Preservation Portfolio...................................... 11
MJI International Equity Portfolio...................................... 39
McKee Domestic Equity Portfolio......................................... 42
McKee International Equity Portfolio.................................... 42
McKee Small Cap Equity Portfolio........................................ 46
McKee U. S. Government Portfolio........................................ 42
NWQ Special Equity Portfolio............................................ 46
Pell Rudman Mid-Cap Growth Portfolio.................................... 50
PIC Twenty Portfolio.................................................... 53
Rice, Hall James Small Cap Portfolio.................................... 56
Rice, Hall James Small/Mid Cap Portfolio................................ 56
Sirach Bond Portfolio................................................... 59
Sirach Equity Portfolio................................................. 59
Sirach Growth Portfolio................................................. 59
Sirach Growth II Portfolio.............................................. 62
Sirach Special Equity Portfolio......................................... 65
Sirach Strategic Balanced Portfolio..................................... 59
Sterling Partners' Balanced Portfolio................................... 69
Sterling Partners' Equity Portfolio..................................... 69
Sterling Partners' Small Cap Value Portfolio............................ 73
TJ Core Equity Portfolio................................................ 77
TS&W Equity Portfolio................................................... 80
TS&W Fixed Income Portfolio............................................. 80
TS&W International Equity Portfolio..................................... 84
TS&W International Octagon Portfolio.................................... 88
B-1
The tables below describe each Fund's current fundamental investment
Restrictions and their proposed replacements or elimination.
ACADIAN EMERGING MARKETS PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund is a non-diversified None
Investments investment company and, therefore,
does not have a fundamental
Restriction concerning
diversification.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- --------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted
B-2
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- -------------------------------------------------------------------------------------------------
Issuing of Senior Section 18 also to include any
Securities--(continued) instrument that creates a risk of
leverage. Under current SEC
interpretations, however, a fund
may engage in certain leveraged
transactions if it covers the
transaction by segregating an
appropriate amount of liquid
assets. The following is a list of
permissible transactions for which
the SEC requires the establishment
of a segregated account:
purchasing securities on a when-
issued basis (also known as firm
commitments); selling (writing) of
put and call options; futures
contracts; buying and selling
options on future contracts;
forward foreign currency exchange
transactions; reverse repurchase
agreements; short sales, except
short sales against the box.
- -------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- -------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its total assets in investments in the securities of
companies within a single one or more issuers conducting
industry; however, there are no their principal business
limitations on investments made in activities in the same industry
instruments issued or guaranteed (other than securities issued or
by the U.S. government and its guaranteed by the U.S. government
agencies when the Fund adopts a or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. Government or its
agencies or instrumentalities.
- -------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- -------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and
B-3
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Commodities--(continued) may otherwise do so in accordance
with applicable law and without
registering as a commodity pool
operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- --------------------------------------------------------------------------------------------------
B-4
ANALYTIC DEFENSIVE EQUITY FUND
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund may not purchase more The Fund may not make any
Investments than 10% of the voting securities investment inconsistent with the
of any one issuer or purchase Fund's classification as a
securities of any one issuer if, diversified series of an open-end
at the time of purchase, more than investment company under the
5% of its total assets will be Investment Company Act of 1940
invested in that issuer except up (the "1940 Act"). This restriction
to 25% of its assets may be does not, however, apply to any
invested without regard to these Fund classified as non-diversified
limits. For purposes of this series of an open-end investment
investment limitation, the term company under the 1940
"issuer" does not include Act.
obligations issued or guaranteed
by the U.S. government, its Note: The 1940 Act currently
agencies or instrumentalities and prohibits a diversified fund from
repurchase agreements investing more than 5% of the
collateralized by such value of its total assets,
obligations. determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund may not borrow money The Fund may not borrow money,
(other than pursuant to reverse except to the extent permitted by
repurchase agreements) except for applicable law, as amended and
temporary or emergency purposes interpreted or modified from time
and then only in amounts up to 10% to time by any regulatory
of its total assets. The temporary authority having jurisdiction and
borrowing will include, for the guidelines set forth in the
example, borrowing to facilitate Fund's prospectus and statement of
the orderly sale of portfolio additional information as they may
securities to accommodate be amended from time to
substantial redemption requests if time. .
they should occur, to facilitate
the settlement of securities Note: Under the 1940 Act, a fund
transactions, and is not for may borrow from banks (as defined
investment purposes. All in the 1940 Act) or enter into
borrowings in excess of 5% of the reverse repurchase agreements, in
Fund's total assets will be repaid amounts up to 33 1/3 % of its
before making additional total assets (including the amount
investments. The foregoing borrowed). The fund may also
percentages will apply at the time borrow up to an additional 5% of
of each purchase of a security. its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
B-5
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund may not issue senior The Fund may not issue senior
Securities securities (as defined in the 1940 securities, except to the extent
Act) except as permitted in permitted by applicable law, as
connection with the Fund's amended and interpreted or
policies on borrowing and modified from time to time by any
pledging, or as permitted by rule, regulatory authority having
regulation or order of the SEC. jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund may not Act as an The Fund may not underwrite
underwriter of securities of other securities of other issuers,
issuers, except as it may be except insofar as the Fund may
deemed to be an underwriter under technically be deemed to be an
the 1933 Act in connection with underwriter under the Securities
the purchase and sale of portfolio Act of 1933 in connection with the
securities. purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund may not invest 25% or The Fund may not concentrate its
more of its total assets at the investments in the securities of
time of purchase in securities of one or more issuers conducting
issuers (other than obligations their principal business
B-6
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- issued or guaranteed by the U.S. activities in the same industry
(continued) government, its agencies or (other than securities issued or
instrumentalities and repurchase guaranteed by the U.S. government
agreements collateralized by such or its agencies or
obligations) whose principal instrumentalities).
business activities are in the
same industry. For purposes of Note: The 1940 Act currently
this investment limitation, state defines concentration as investing
and municipal governments and more than 25% of a fund's total
their agencies and authorities are assets, taken at market value, in
not deemed to be industries; the securities of issuers
utility companies will be divided primarily engaged in any
according to their services (e.g., particular industry (other than
gas, gas transmission, electric, securities issued or guaranteed by
electric and gas, and telephone), the U. S. Government or its
and financial service companies agencies or instrumentalities.
will be classified according to
end use of their service (e.g.,
automobile finance, bank finance,
and diversified finance).
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund may not purchase or sell The Fund may not purchase or sell
Estate real estate, or real estate real estate, except (1) to the
partnership interests, except that extent permitted by applicable
this limitation shall not prevent law, as amended and interpreted or
the Fund from investing directly modified from time to time by any
or indirectly in readily regulatory authority having
marketable securities of issuers jurisdiction (2) that the Fund may
which can invest in real estate, invest in, securities of issuers
institutions that issue mortgages, that deal or invest in real
or real estate investment trusts estate, and (3) that the Fund may
which deal with real estate or purchase securities secured by
interests therein. real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund may not purchase or sell The Fund may not purchase or sell
commodities or commodity commodities or contracts on
contracts, except that the Fund, commodities except that the Fund
in accordance with its investment may engage in financial futures
objective and policies, may: (i) contracts and related options and
invest in readily marketable currency contracts and related
securities of issuers which invest options and may otherwise do so in
or engage in such activities; and accordance with applicable law and
(ii) enter into forward contracts, without registering as a commodity
futures contracts and options pool operator under the Commodity
thereon. Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund may not make loans except The Fund may not make loans to
that the Fund, in accordance with other persons, except that the
its investment objective and Fund may lend its portfolio
policies, may (i) purchase debt securities in accordance with
obligations, (ii) enter into applicable law, as amended and
repurchase agreements and (iii) interpreted or modified from time
lend its portfolio securities. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- --------------------------------------------------------------------------------------------------
B-7
ANALYTIC ENHANCED EQUITY FUND
ANALYTIC MASTER FIXED INCOME FUND
ANALYTIC SHORT-TERM GOVERNMENT FUND
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not purchase more The Fund may not make any
Investments than 10% of the voting securities investment inconsistent with the
of any one issuer or purchase Fund's classification as a
securities of any one issuer if, diversified series of an open-end
at the time of purchase, more than investment company under the
5% of its total assets will be Investment Company Act of 1940
invested in that issuer except up (the "1940 Act"). This restriction
to 25% of its assets may be does not, however, apply to any
invested without regard to these Fund classified as non-diversified
limits. For purposes of this series of an open-end investment
investment limitation, the term company under the 1940 Act.
"issuer" does not include
obligations
issued or guaranteed by the U.S.
government, its agencies or Note: The 1940 Act currently
instrumentalities and repurchase prohibits a diversified fund from
agreements collateralized by such investing more than 5% of the
obligations. value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund may not borrow money The Fund may not borrow money,
(other than pursuant to reverse except to the extent permitted by
repurchase agreements) except for applicable law, as amended and
temporary or emergency purposes interpreted or modified from time
and then only in amounts up to 15% to time by any regulatory
of its total assets. The temporary authority having jurisdiction and
borrowing will include, for the guidelines set forth in the
example, borrowing to facilitate Fund's prospectus and statement of
the orderly sale of portfolio additional information as they may
securities to accommodate be amended from time to
substantial redemption requests if time.
they should occur, to facilitate
the settlement of securities Note: Under the 1940 Act, a fund
transactions, and is not for may borrow from banks (as defined
investment purposes. All in the 1940 Act) or enter into
borrowings in excess of 5% of the reverse repurchase agreements, in
Fund's total assets will be repaid amounts up to 331/3 % of its total
before making additional assets (including the amount
investments. The foregoing borrowed). The fund may also
percentages will apply at the time borrow up to an additional
of each purchase of a security.
B-8
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) 5% of its total assets for
temporary purposes. The 1940 Act
prohibits an investment company
from purchasing securities on
margin, participating in a joint
trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund may not issue senior The Fund may not issue senior
Securities securities (as defined in the 1940 securities, except to the extent
Act) except as permitted in permitted by applicable law, as
connection with the Fund's amended and interpreted or
policies on borrowing and modified from time to time by any
pledging, or as permitted by rule, regulatory authority having
regulation or order of the SEC. jurisdiction
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund may not act as an The Fund may not underwrite
underwriter of securities of other securities of other issuers,
issuers, except as it may be except insofar as the Fund may
deemed to be an underwriter under technically be deemed to be an
the 1933 Act in connection with underwriter under the Securities
the purchase and sale of portfolio Act of 1933 in connection with the
securities. purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
B-9
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund may not invest 25% or The Fund may not concentrate its
more of its total assets at the investments in the securities of
time of purchase in securities of one or more issuers conducting
issuers (other than obligations their principal business
issued or guaranteed by the U.S. activities in the same industry
government, its agencies or (other than securities issued or
instrumentalities and repurchase guaranteed by the U.S. government
agreements collateralized by such or its agencies or
obligations) whose principal instrumentalities).
business activities are in the
same industry. For purposes of Note: The 1940 Act currently
this investment limitation, state defines concentration as investing
and municipal governments and more than 25% of a fund's total
their agencies and authorities are assets, taken at market value, in
not deemed to be industries; the securities of issuers
utility companies will be divided primarily engaged in any
according to their services (e.g., particular industry (other than
gas, gas transmission, electric, securities issued or guaranteed by
electric and gas, and telephone), the U. S. Government or its
and financial service companies agencies or instrumentalities.
will be classified according to
end use of their service (e.g.,
automobile finance, bank finance,
and diversified finance).
- ------------------------------------------------------------------------------------------------
Investment in Real The Fund may not purchase or sell The Fund may not purchase or sell
Estate real estate, or real estate real estate, except (1) to the
partnership interests, except that extent permitted by applicable
this limitation shall not prevent law, as amended and interpreted or
the Fund from investing directly modified from time to time by any
or indirectly in readily regulatory authority having
marketable securities of issuers jurisdiction (2) that the Fund may
which can invest in real estate, invest in, securities of issuers
institutions that issue mortgages, that deal or invest in real
or real estate investment trusts estate, and (3) that the Fund may
which deal with real estate or purchase securities secured by
interests therein. real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund may not purchase or sell The Fund may not purchase or sell
commodities or commodity commodities or contracts on
contracts, except that the commodities except that the Fund
portfolio, in accordance with its may engage in financial futures
investment objective and policies, contracts and related options and
may: (i) invest in readily currency contracts and related
marketable securities of issuers options and may otherwise do so in
which invest or engage in such accordance with applicable law and
activities; and (ii) enter into without registering as a commodity
forward contracts, futures pool operator under the Commodity
contracts and options thereon. Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund may not make loans except The Fund may not make loans to
that the Fund, in accordance with other persons, except that the
its investment objective and Fund may lend its portfolio
policies, may (i) purchase debt securities in accordance with
obligations, (ii) enter into applicable law, as amended and
repurchase agreements and (iii) interpreted or modified from time
lend its portfolio securities. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- ------------------------------------------------------------------------------------------------
B-10
ANALYTIC INTERNATIONAL FUND
IRA CAPITAL PRESERVATION PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not make any The Fund may not make any
Investments investment that is inconsistent investment inconsistent with the
with its classification as a Fund's classification as a
diversified investment management diversified series of an open-end
company under the 1940 Act. investment company under the
Investment Company Act of 1940
(the "1940 Act"). This restriction
does not, however, apply to any
Fund classified as non-diversified
series of an open-end investment
company under the 1940
Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except to the extent permitted by except to the extent permitted by
applicable law and the guidelines applicable law, as amended and
set forth in the Fund's prospectus interpreted or modified from time
and statement of additional to time by any regulatory
information, as they may be authority having jurisdiction and
amended from time to time. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
B-11
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, except as permitted by securities, except to the extent
the 1940 Act. permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not concentrate its The Fund may not concentrate its
investments in securities of investments in the securities of
issuers primarily engaged in any one or more issuers conducting
particular industry (other their principal business
B-12
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- than securities issued or activities in the same industry
(continued) guaranteed by the United States (other than securities issued or
government or its agencies or guaranteed by the U.S. government
instrumentalities or when the Fund or its agencies or
adopts a temporary defensive instrumentalities).
position).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (i) by that the acquisition other persons, except that the
of investment securities or other Fund may lend its portfolio
investment instruments in securities in accordance with
accordance with the portfolio's applicable law, as amended and
prospectus and statement of interpreted or modified from time
additional information shall not to time by any regulatory
be deemed to be the making of a authority having jurisdiction and
loan; and (ii) that the Fund may the guidelines set forth in the
lend its portfolio securities in Fund's prospectus and statement of
accordance with applicable law and additional information as they may
the guidelines set forth in the be amended from time to time. The
Fund's prospectus and statement of acquisition of investment
additional information, as they securities or other investment
may be amended from time to time. instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- --------------------------------------------------------------------------------------------------
B-13
CAMBIAR OPPORTUNITY PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940
securities of any issuer. Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in two issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
B-14
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
B-15
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than he Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies. guaranteed by the U.S. government
or its agencies or
instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective, entering securities in accordance with
into repurchase agreements, or by applicable law, as amended and
lending its portfolio securities interpreted or modified from time
to banks, brokers, dealers and to time by any regulatory
other financial institutions so authority having jurisdiction and
long as the loans are made in the guidelines set forth in the
compliance with the 1940 Act or Fund's prospectus and statement of
the rules and regulations or additional information as they may
interpretations of the SEC. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- ------------------------------------------------------------------------------------------------
B-16
C&B BALANCED PORTFOLIO
C&B EQUITY PORTFOLIO
C&B EQUITY PORTFOLIO FOR TAXABLE INVESTORS
C&B MID CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940
securities of any issuer. Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for
B-17
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) temporary purposes. The 1940 Act
prohibits an investment company
from purchasing securities on
margin, participating in a joint
trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
B-18
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities except that the Fund commodities or contracts on
may invest in futures contracts commodities except that the Fund
and options to the extent that not may engage in financial futures
more than 5% of the Fund's assets contracts and related options and
are required as a deposit to currency contracts and related
secure obligations under futures options and may otherwise do so in
contracts. accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- ------------------------------------------------------------------------------------------------
B-19
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, in fundamental investment limitation:
securities subject to legal or The Fund will not invest more than
contractual restrictions on resale 15% of its net assets in illiquid
or securities for which there are securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- --------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short, except as eliminated.
specified above.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
Futures and Options The Fund will not invest in stock This investment limitation will be
or bond futures and/or options on eliminated.
futures unless not more than 20%
of the Fund's assets are invested
in stock or bond futures and
options
- --------------------------------------------------------------------------------------------------
B-20
CLIPPER FOCUS PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- -------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- -------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
B-21
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- -------------------------------------------------------------------------------------------------
Issuing of Senior establishment of a segregated
Securities--(continued) account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- -------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- -------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- -------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- -------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- -------------------------------------------------------------------------------------------------
B-22
FMA SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (except investment company under the
obligations issued by the U.S. Investment Company Act of 1940
government or its (the "1940 Act"). This restriction
instrumentalities) or (2) purchase does not, however, apply to any
more than 10% of any class of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any issuer. company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules,
B-23
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
short sales; reverse repurchase
agreement, short sales
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
B-24
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and securities in accordance with
policies, or entering into applicable law, as amended and
repurchase agreements or (2) by interpreted or modified from time
lending its portfolio securities to time by any regulatory
to banks, brokers, dealers and authority having jurisdiction and
other financial institutions so the guidelines set forth in the
long as these loans are not Fund's prospectus and statement of
inconsistent with the 1940 Act or additional information as they may
the rules and regulations or be amended from time to time. The
interpretations of the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, in fundamental investment limitation:
securities subject to legal or The Fund will not invest more than
contractual restrictions on resale 15% of its net assets in illiquid
or securities for which there are securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
B-25
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- --------------------------------------------------------------------------------------------------
Buying The Fund will not purchase This investment limitation will be
Securities When additional securities when eliminated.
Borrowings Exceed 5% borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- --------------------------------------------------------------------------------------------------
Margin The Fund will not purchase on This investment limitation will be
Purchases and Short margin or sell short. eliminated.
Sales
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 1/2 of 1% of such
securities together own more than
5% of such securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-26
FPA CRESCENT PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) own more investment inconsistent with the
than 5% of the securities of any Fund's classification as a
single issuer (other than diversified series of an open-end
investments issued or guaranteed investment company under the
by the U.S. government or any of Investment Company Act of 1940
its agencies or instrumentalities) (the "1940 Act"). This restriction
or (2) own more than 10% of the does not, however, apply to any
outstanding voting securities of Fund classified as non-diversified
any one issuer. The Fund will not series of an open-end investment
purchase the securities of any company under the 1940 Act.
issuer, if as a result more than
5% of the total assets of the Fund Note: The 1940 Act currently
would be invested in the prohibits a diversified fund from
securities of that issuer, other investing more than 5% of the
than obligations of the U.S. value of its total assets,
government, its agencies or determined at market or other fair
instrumentalities, provided that value at the time of purchase. The
up to 25% of the value of the 1940 Act also currently prohibits
Fund's assets may be invested diversified funds from investing
without regard to this limitation. in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not (1) borrow The Fund may not borrow money,
money, except as stated in the except to the extent permitted by
prospectus and the SAI (any such applicable law, as amended and
borrowing will be made only if interpreted or modified from time
immediately thereafter there is an to time by any regulatory
asset coverage of at least 300% of authority having jurisdiction and
all borrowings. The portfolio may statement of additional
not borrow except from banks for information as they may be amended
temporary or emergency purposes from time to time.
and in connection with short sales
of securities. In these Note: Under the 1940 Act, a fund
situations, the Fund will limit may borrow from banks (as defined
borrowings to no more than 33 1/3% in the 1940 Act) or enter into
of the portfolio's assets. reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-27
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite The Fund may not underwrite
securities (does not preclude the securities of other issuers,
Fund from obtaining such short- except insofar as the Fund may
term credit as may be necessary technically be deemed to be an
for the clearance of purchases and underwriter under the Securities
sales of its portfolio Act of 1933 in connection with the
securities). purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of the market value of its investments in the securities of
assets in the securities of one or more issuers conducting
companies engaged in any one their principal business
industry activities in
B-28
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- (does not apply to investment in the same industry (other than
(continued) the securities of the U.S. securities issued or guaranteed by
government, its agencies or the U.S. government or its
instrumentalities). agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate; however, the real estate, except (1) to the
portfolio may invest in debt extent permitted by applicable
securities secured by real estate law, as amended and interpreted or
or interests therein or issued by modified from time to time by any
companies which invest in real regulatory authority having
estate or interests therein, jurisdiction (2) that the Fund may
including real estate investment invest in securities of issuers
trusts. that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities Purchase or sell commodities or The Fund may not purchase or sell
commodity contracts (other than commodities or contracts on
futures transactions for the commodities except that the Fund
purposes and under the conditions may engage in financial futures
described in the prospectuses and contracts and related options and
in the SAI). currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending Make loans to others, except (1) The Fund may not make loans to
through the purchase of debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
and (2) to the extent the entry applicable law, as amended and
into a repurchase agreement is interpreted or modified from time
deemed to be a loan. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
B-29
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ----------------------------------------------------------------------------------------------
Pledging The Fund will not mortgage, This investment limitation will be
pledge, or hypothecate any of its eliminated.
assets except in connection with
any borrowings.
- ----------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase This investment limitation will be
Short Sales securities on margin, or eliminated.
participate on a joint or joint
and several basis in any
securities trading account.
- ----------------------------------------------------------------------------------------------
B-30
HEITMAN REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not as to 75% of the The Fund may not make any
Investments total assets of the portfolio, investment inconsistent with the
purchase securities for the Fund Fund's classification as a
of any issuer, if immediately diversified series of an open-end
thereafter (1) more than 5% of the investment company under the
Fund's total assets (taken at Investment Company Act of 1940
market value) would be invested in (the "1940 Act"). This restriction
the securities of such issuer, or does not, however, apply to any
(2) more than 10% of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any class of such issuer would be company under the 1940 Act.
held by the Fund, provided that
this limitation does not apply to Note: The 1940 Act currently
U.S. government securities. prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
that (1) the Fund may borrow money except to the extent permitted by
for temporary administrative applicable law, as amended and
purposes provided that the interpreted or modified from time
aggregate of all such borrowings to time by any regulatory
does not exceed 33 1/3% of the authority having jurisdiction and
value of the Fund's total assets statement of additional
and is not for more than 60 days, information as they may be amended
and (2) the Fund may enter into from time to time.
interest-rate futures contracts.
The fund may not borrow for the Note: Under the 1940 Act, a fund
purpose of leveraging its may borrow from banks (as defined
investment portfolio. The fund may in the 1940 Act) or enter into
not purchase additional securities reverse repurchase agreements, in
while outstanding borrowings amounts up to 33 1/3% of its total
exceed 5% of the value of its assets (including the amount
assets. borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-31
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ---------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ---------------------------------------------------------------------------------------------
Issuing of Senior None The Fund may not issue senior
Securities securities, except to the extent
permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except shart sales
against the box.
- ---------------------------------------------------------------------------------------------
Underwriting The Fund will not act as a The Fund may not underwrite
securities underwriter. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ---------------------------------------------------------------------------------------------
Industry Concentration None The Fund will concentrate its
investments in the real estate
industry.
B-32
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The fund may not make investments The Fund may not purchase or sell
Estate in real estate (including real real estate, except (1) to the
estate limited partnership extent permitted by applicable
interests, but excluding readily law, as amended and interpreted or
marketable interest in real estate modified from time to time by any
investment trusts ("REITs") or regulatory authority having
readily marketable securities of jurisdiction (2) that the Fund may
companies which invest in real invest in, securities of issuers
estate) or commodities or that deal or invest in real
commodity contracts, although the estate, and (3) that the Fund may
Fund may purchase securities of purchase securities secured by
issuers which deal in real estate real estate or interests therein.
and may purchase securities which
are secured by interests in real
estate, and the Fund may invest in
futures contracts and related
options.
- --------------------------------------------------------------------------------------------------
Commodities None The Fund may not purchase or sell
commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans, The Fund may not make loans to
except that the Fund may (1) other persons, except that the
purchase bonds, debentures and Fund may lend its portfolio
other publicly-distributed securities in accordance with
securities of a like nature, (2) applicable law, as amended and
make loans in the form of call interpreted or modified from time
loans or loans maturing in not to time by any regulatory
more than one year which are authority having jurisdiction and
secured by marketable collateral the guidelines set forth in the
and are in amounts and on terms Fund's prospectus and statement of
similar to those currently in additional information as they may
effect in the case of loans made be amended from time to time. The
by national banks, (3) enter into acquisition of investment
repurchase agreements with respect securities or other investment
to portfolio securities, and (4) instruments shall not be deemed to
lend the portfolio securities of be the making of a loan.
the Fund. The fund may not lend
the portfolio securities of the Note: Under SEC policy, a Fund may
Fund in an amount in excess of 33% lend its portfolio securities to
of the total assets of the Fund, registered broker-dealers or other
taken at market value. Any loans institutional investors. However,
of portfolio securities will be these loans may not exceed 33 1/3%
made according to guidelines of the Fund's total assets taken
established by the SEC and the at market value. In addition, the
Directors, including the Fund must receive at least 100%
borrower's maintaining collateral collateral.
equal at all times to the value of
the securities loaned.
- --------------------------------------------------------------------------------------------------
Pledging While the Fund has the power to This investment limitation will be
pledge its assets to secure eliminated.
borrowings, the Fund has no
intention of pledging the assets
of the
B-33
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ----------------------------------------------------------------------------------------------
Pledging--(continued) portfolio taken at market value in
any amount in excess of 33 1/3 of
the Fund's total assets taken at
market value. The deposit of
assets in escrow in connection
with the writing of covered put or
call options and the purchase of
securities on a when-issued or
delayed-delivery basis, and
collateral arrangements with
respect to the purchase and sale
of stock options and stock index
options and initial and variation
margin for futures contracts, are
not deemed to be pledges of assets
of the portfolio. Also, although
the Fund has the power to make
call loans, it has no intention to
do so.
- ----------------------------------------------------------------------------------------------
B-34
ICM SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 10% of the Fund's gross authority having jurisdiction and
assets valued at the lower of statement of additional
market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-35
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
B-36
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities.
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities except that the Fund commodities or contracts on
may invest in futures contracts commodities except that the Fund
and options to the extent that not may engage in financial futures
more than 5% of the Fund's assets contracts and related options and
are required as deposit to secure currency contracts and related
obligations under futures options and may otherwise do so in
contracts. accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and securities in accordance with
policies, or entering into applicable law, as amended and
repurchase agreements or (2) by interpreted or modified from time
lending its portfolio securities to time by any regulatory
to banks, brokers, dealers and authority having jurisdiction and
other financial institutions so the guidelines set forth in the
long as these loans are made in Fund's prospectus and statement of
compliance with the 1940 Act or additional information as they may
the rules and regulations or be amended from time to time. The
interpretations of the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, fundamental investment
B-37
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted in securities subject to legal or limitation: The Fund will not
Securities--(continued) contractual restrictions on resale invest more than 15% of its net
or securities for which there are assets in illiquid securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than
3 years.
- --------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short except as eliminated.
provided herein.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-38
MJI INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
B-39
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
B-40
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not invest, purchase The Fund may not purchase or sell
Estate or sell real estate or real estate real estate, except (1) to the
limited partnerships, although it extent permitted by applicable
may purchase and sell securities law, as amended and interpreted or
of companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-41
MCKEE DOMESTIC EQUITY PORTFOLIO
MCKEE INTERNATIONAL EQUITY PORTFOLIO
MCKEE U.S. GOVERNMENT PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investment 50% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes.
B-42
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) The 1940 Act prohibits an
investment company from purchasing
securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
B-43
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-44
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 15% of the assets eliminated. However, the Board
of the Fund, determined at the will adopt the following non-
time of investment, in securities fundamental investment limitation:
subject to legal or contractual The Fund will not invest more than
restrictions on resale or 15% of its net assets in illiquid
securities for which there are no securities.
readily available markets.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-45
MCKEE SMALL CAP EQUITY PORTFOLIO
NWQ SPECIAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment
B-46
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) company from purchasing securities
on margin, participating in a
joint trading account or effecting
a short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
B-47
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-48
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 15% of the assets eliminated: However, the Board
of the Fund, determined at the will adopt the following non-
time of investment, in securities fundamental investment limitation.
subject to legal or contractual The Fund will not invest more than
restrictions on resale or 15% of its net assets in illiquid
securities for which there are no securities.
readily available markets.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-49
PELL RUDMAN MID-CAP GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets Fund's classification as a
securities of any single issuer diversified series of an open-end
(other than obligations issued or investment company under the
guaranteed by the U.S. government Investment Company Act of 1940
or any of its agencies or (the "1940 Act"). This restriction
instrumentalities) or (2) own more does not, however, apply to any
than 10% of any class of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any one issuer. company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of
B-50
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) any security in contravention of
SEC rules, regulations or orders.
The SEC has issued no rules,
regulations or orders. The SEC
staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued (other than securities issued
B-51
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- or guaranteed by the U.S. or guaranteed by the U.S.
(continued) government and its agencies when government or its agencies or
the Fund adopts a temporary instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or other similar Fund may lend its portfolio
obligations which are publicly securities in accordance with
distributed (including repurchase applicable law, as amended and
agreements provided however, that interpreted or modified from time
repurchase agreements maturing in to time by any regulatory
more than seven days, together authority having jurisdiction and
with securities which are not the guidelines set forth in the
readily marketable, will not Fund's prospectus and statement of
exceed 15% of the Fund's total additional information as they may
assets) and (2) by lending its be amended from time to time. The
portfolio securities to banks, acquisition of investment
brokers, dealers and other securities or other investment
financial institutions so long as instruments shall not be deemed to
such loans are not inconsistent be the making of a loan.
with the 1940 Act or the rules and
regulations or interpretations of Note: Under SEC policy, a Fund may
the SEC thereunder. lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-52
PIC TWENTY PORTFOLIO
- --------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not make any The Fund may not make any
Investments investment that is inconsistent investment inconsistent with the
with its classification as a non- Fund's classification as a
diversified investment management diversified series of an open-end
company under the 1940 Act. investment company under the
Investment Company Act of 1940
(the "1940 Act"). This restriction
does not, however, apply to any
Fund classified as non-diversified
series of an open-end investment
company under the 1940
Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except to the extent permitted by except to the extent permitted by
applicable law and the guidelines applicable law, as amended and
set forth in the Fund's prospectus interpreted or modified from time
and statement of additional to time by any regulatory
information, as they may be authority having jurisdiction and
amended from time to time. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-53
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, except as permitted by securities, except to the extent
the 1940 Act. permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not concentrate its The Fund may not concentrate its
investments in securities of investments in the securities of
issuers primarily engaged in any one or more issuers conducting
particular industry (other than their principal business
securities issued or guaranteed by activities in the same industry
the (other than
B-54
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- United States government or its securities issued or guaranteed by
(continued) agencies or instrumentalities or the U.S. government or its
when the Fund adopts a temporary agencies or
defensive position). instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (i) by that the acquisition other persons, except that the
of investment securities or other Fund may lend its portfolio
investment instruments in securities in accordance with
accordance with the portfolio's applicable law, as amended and
prospectus and statement of interpreted or modified from time
additional information shall not to time by any regulatory
be deemed to be the making of a authority having jurisdiction and
loan; and (ii) that the Fund may the guidelines set forth in the
lend its portfolio securities in Fund's prospectus and statement of
accordance with applicable law and additional information as they may
the guidelines set forth in the be amended from time to time. The
Fund's prospectus and statement of acquisition of investment
additional information, as they securities or other investment
may be amended from time to time. instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
- --------------------------------------------------------------------------------------------------
B-55
RICE, HALL JAMES SMALL CAP PORTFOLIO
RICE, HALL JAMES SMALL/MID CAP PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
B-56
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
B-57
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-58
SIRACH BOND PORTFOLIO
SIRACH EQUITY PORTFOLIO
SIRACH GROWTH PORTFOLIO
SIRACH STRATEGIC BALANCED PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes.
B-59
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) The 1940 Act prohibits an
investment company from purchasing
securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
B-60
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- ------------------------------------------------------------------------------------------------
B-61
SIRACH GROWTH II PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-62
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
B-63
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies. the U.S. government or its
agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives (2) entering securities in accordance with
nto repurchase agreements and (3) applicable law, as amended and
by lending its portfolio interpreted or modified from time
securities to banks, brokers, to time by any regulatory
dealers and other financial authority having jurisdiction and
institutions so long as the loans the guidelines set forth in the
are not inconsistent with the 1940 Fund's prospectus and statement of
Act or the rules and regulations additional information as they may
or interpretations of the SEC be amended from time to time. The
thereunder. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-64
SIRACH SPECIAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
B-65
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
B-66
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities or contracts on commodities or contracts on
physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC thereunder. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, in fundamental investment limitation:
securities subject to legal or The Fund will not invest more than
contractual restrictions on resale 15% of its net assets in illiquid
or securities for which there are securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
B-67
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- -------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- -------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- -------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- -------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- -------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
- -------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- -------------------------------------------------------------------------------------------------
B-68
STERLING PARTNERS' BALANCED PORTFOLIO
STERLING PARTNERS' EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
B-69
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
B-70
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- ------------------------------------------------------------------------------------------------
B-71
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, in fundamental investment limitation:
securities subject to legal or The Fund will not invest more than
contractual restrictions on resale 15% of its net assets in illiquid
or securities for which there are securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- --------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-72
STERLING PARTNERS' SMALL CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of
B-73
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) any security in contravention of
SEC rules, regulations or orders.
The SEC has issued no rules,
regulations or orders. The SEC
staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
B-74
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than This investment limitation will be
Securities an aggregate of 10% of the net eliminated. However, the Board
assets of the Fund, determined at will adopt the following non-
the time of investment, fundamental investment
B-75
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Illiquid or Restricted in securities subject to legal or limitation: The Fund will not
Securities--(continued) contractual restrictions on resale invest more than 15% of its net
or securities for which there are assets in illiquid securities.
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- --------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
- --------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- --------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- --------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 33 1/3% of its total assets
at fair market value.
- --------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
- --------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
- --------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
- --------------------------------------------------------------------------------------------------
B-76
TJ CORE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) own more investment inconsistent with the
than 5% of the securities of any Fund's classification as a
single issuer (other than diversified series of an open-end
investments issued or guaranteed investment company under the
by the U.S. government or any of Investment Company Act of 1940
its agencies or instrumentalities) (the "1940 Act"). This restriction
or (2) own more than 10% of the does not, however, apply to any
outstanding voting securities of Fund classified as non-diversified
any one issuer. series of an open-end investment
company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the authority having jurisdiction and
portfolio's gross assets valued at statement of additional
the lower of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-77
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the portfolio from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
B-78
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies. the U.S. government or its
agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-79
TS&W EQUITY PORTFOLIO
TS&W FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
B-80
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund currently has the The Fund may not underwrite
following non-fundamental securities of other issuers,
Restriction: The Fund will not except insofar as the Fund may
underwrite the securities of other technically be deemed to be an
issuers or invest more than an underwriter under the Securities
aggregate of 10% of the net assets Act of 1933 in connection with the
of the portfolio, determined at purchase or sale of its portfolio
the time of investment, in securities.
securities subject to legal or
contractual restrictions on resale
or securities for which there are
no readily
B-81
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Underwriting-- available markets, including
(continued) repurchase agreements having
maturities of more than seven
days.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real None The Fund may not purchase or sell
Estate real estate, except (1) to the
extent permitted by applicable
law, as amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund currently has the The Fund may not purchase or sell
following non-fundamental commodities or contracts on
Restriction: The Fund will not commodities except that the Fund
invest in commodities. may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or similar obligations Fund may lend its portfolio
which are publicly distributed, securities in accordance with
including repurchase agreements; applicable law, as amended and
provided however, that repurchase interpreted or modified from time
agreements maturing in more than to time by any regulatory
seven days, together with authority having jurisdiction and
securities which are not readily the guidelines set forth in the
marketable, will not exceed 10% of Fund's prospectus and statement of
the Fund's total assets, or (2) by additional information as they may
lending its portfolio securities be amended from time to time. The
to banks, brokers, dealers and acquisition of investment
other financial institutions so securities or other investment
long as such loans are not instruments shall not be deemed to
inconsistent with the 1940 Act, be the making of a loan.
and the Rules and Regulations or
interpretations of the SEC. Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
B-82
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Lending--(continued) of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- ------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- ------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
gross assets.
- ------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- ------------------------------------------------------------------------------------------------
B-83
TS&W INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-84
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options and futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund currently has the The Fund may not underwrite
following non-fundamental securities of other issuers,
Restriction: The Fund will not except insofar as the Fund may
underwrite the securities of other technically be deemed to be an
issuers or invest more than an underwriter under the Securities
aggregate of 10% of the net assets Act of 1933 in connection with the
of the portfolio, determined at purchase or sale of its portfolio
the time of investment, in securities.
securities subject to legal or
contractual restrictions on resale
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
- ------------------------------------------------------------------------------------------------
B-85
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
- ------------------------------------------------------------------------------------------------
Investment in Real None The Fund may not purchase or sell
Estate real estate, except (1) to the
extent permitted by applicable
law, as amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- ------------------------------------------------------------------------------------------------
Commodities The Fund currently has the The Fund may not purchase or sell
following non-fundamental commodities or contracts on
Restriction: The Fund will not commodities except that the Fund
invest in commodities except that may engage in financial futures
the Fund may invest in futures contracts and related options and
contracts and options to the currency contracts and related
extent that not more than 5% of options and may otherwise do so in
the Fund's assets is required as accordance with applicable law and
deposit to secure obligations without registering as a commodity
under futures contracts and the pool operator under the Commodity
entry into forward foreign Exchange Act.
currency exchange contracts is not
and shall not be deemed to involve
investing in commodities.
- ------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or similar obligations Fund may lend its portfolio
which are publicly distributed, securities in accordance with
including repurchase agreements; applicable law, as amended and
provided however, that repurchase interpreted or modified from time
agreements maturing in more than to time by any regulatory
seven days, together with authority having jurisdiction and
securities which are not readily the guidelines set forth in the
marketable, will not exceed 10% of Fund's prospectus and statement of
the Fund's total assets, or (2) by additional information as they may
lending its portfolio securities be amended from time to time. The
to banks, brokers, dealers and acquisition of investment
other financial institutions so securities or other investment
long as such loans are not instruments shall not be deemed to
inconsistent with the 1940 Act, be the making of a loan.
and the Rules and Regulations or
interpretations of the SEC. Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- ------------------------------------------------------------------------------------------------
B-86
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
- ------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
- ------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
- ------------------------------------------------------------------------------------------------
B-87
TS&W INTERNATIONAL OCTAGON PORTFOLIO
- --------------------------------------------------------------------------------------------
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
- --------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
B-88
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- ------------------------------------------------------------------------------------------------
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
- ------------------------------------------------------------------------------------------------
Issuing of Senior None The Fund may not issue senior
Securities securities, except to the extent
permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
- ------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
- ------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
B-89
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
- --------------------------------------------------------------------------------------------------
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
- --------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
- --------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
- --------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
- --------------------------------------------------------------------------------------------------
B-90
Exhibit C -- Interim Investment Advisory Agreement
INTERIM INVESTMENT ADVISORY AGREEMENT
UAM FUNDS [, INC./, INC. II/ TRUST]
[NAME OF PORTFOLIO]
INTERIM ADVISORY AGREEMENT by and between UAM Funds [,Inc./, Inc. II/
Trust], a [state and form of organization] (the "Fund"), and [investment
adviser], a [state and form of organization] (the "Adviser"). Pursuant to an
Agreement and Plan of Merger Old Mutual plc, an English public limited company
has agreed to acquire United Asset Management Corporation ("UAM"), the parent
company of the Adviser (the "Acquisition"). The Fund and the Adviser desire to
enter into this interim advisory agreement pursuant to the terms of Rule 15a-4
under the Investment Company Act of 1940, as amended (the "1940 Act"), pending
approval of a final investment advisory agreement by a majority of the
Portfolio's outstanding shares, as that term is defined in the 1940 Act. This
agreement shall take effect on a change in control of the Adviser in
connection with the Acquisition and, unless sooner terminated as provided
herein, shall continue for a period of not more than 150 days thereafter.
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's [Portfolio Name] (the "Portfolio") for the
period and on such terms as set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets of the
Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular
reports to the Fund's officers and Board concerning the Adviser's discharge of
the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of the
Fund, and in compliance with the objectives, policies and limitations set
forth in the Portfolio's prospectus and applicable laws and regulations. The
Adviser accepts such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings and equipment and
the personnel required by it to perform the services on the terms and for the
compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities of the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of the Fund, the Adviser may also be
authorized to effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage or research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund. The execution of such transactions
shall not be deemed to represent an unlawful act or breach of any duty created
by this Agreement or otherwise. The Adviser will promptly communicate to the
officers and Trustees of the Fund such information relating to portfolio
transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets
for the month: %.
The compensation earned under this Agreement will be held in an interest-
bearing escrow account with the Fund's custodian or a bank mutually agreed
upon by the Adviser and the Fund. If a majority of the Portfolio's outstanding
voting securities approves the agreement before the end of the Agreement's
C-1
150-day term, the amount in the escrow account (including interest earned)
will be paid to the Adviser. If a majority of the Portfolio's outstanding
voting securities do not approve this Agreement, the Adviser will be paid, out
of the escrow account, the lesser of (1) any costs incurred in performing the
interim contract (plus interest earned on that amount while in escrow); or (2)
the total amount in the escrow account (plus interest earned).
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal month as
a percentage of the total number of days in such month.
4. Other Services. At the request of the Fund, the Adviser in its discretion
may make available to the Fund office facilities, equipment, personnel and
other services. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Adviser and billed to the Fund at the
Adviser's cost.
5. Reports. The Fund and the Adviser agree to furnish to each other current
prospectuses, proxy statements, reports to shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of
its obligations and duties hereunder, or (iii) a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as
amended ("1940 Act"), the Adviser shall not be subject to any liability
whatsoever to the Fund, or to any shareholder of the Fund, for any error or
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Portfolio.
8. Permissible Interests. Subject to and in accordance with the Declaration
of Trust of the Fund and the Articles of Incorporation of the Adviser,
Trustees, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and
shareholders of the Adviser are or may be interested in the Fund as Trustees,
officers, agents, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Fund as a shareholder or otherwise;
and the effect of any such interrelationships shall be governed by said
Declaration of Trust or Articles of Incorporation and the provisions of the
1940 Act.
9. Termination. The Fund's board of directors or a majority of the
Portfolio's outstanding voting securities may terminate this Agreement at any
time, without the payment of any penalty, on 10 calendar days' written notice
to the Adviser. This Agreement will automatically and immediately terminate in
the event of its assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed postpaid, to the other party at the
principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
C-2
10. Amendment of Agreement. This Agreement may be amended by mutual consent,
but the consent of the Fund must be approved (a) by vote of a majority of
those members of the Board of the Fund who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such amendment, and (b) for changes or amendments
requiring shareholder approval pursuant to the 1940 Act or other applicable
law, by vote of a majority of the outstanding voting securities of the
Portfolio.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this day of , 200 .
[INVESTMENT ADVISER] UAM FUNDS [, INC./, INC. II/ TRUST]
By ____________________ By ____________________
Name: Name:
Title: Title:
C-3
Exhibit D -- New Investment Advisory Agreement
INVESTMENT ADVISORY AGREEMENT
UAM FUNDS [, INC./, INC. II/ TRUST]
[NAME OF PORTFOLIO]
AGREEMENT made this day of , 200 by and UAM Funds [,Inc./, Inc. II/
Trust], a [state and form of organization] (the "Fund"), and [investment
adviser], a [state and form of organization] (the "Adviser").
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's [Portfolio Name] (the "Portfolio") for the
period and on such terms as set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets of the
Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular
reports to the Fund's officers and Board of Trustees concerning the Adviser's
discharge of the foregoing responsibilities. The Adviser shall discharge the
foregoing responsibilities subject to the control of the officers and the
Board of Trustees of the Fund, and in compliance with the objectives, policies
and limitations set forth in the Portfolio's prospectus and applicable laws
and regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the
terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities of the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of Trustees of the Fund, the Adviser may
also be authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund. The execution of
such transactions shall not be deemed to represent an unlawful act or breach
of any duty created by this Agreement or otherwise. The Adviser will promptly
communicate to the officers and Trustees of the Fund such information relating
to portfolio transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets
for the month: %.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal month as
a percentage of the total number of days in such month.
4. Other Services. At the request of the Fund, the Adviser in its discretion
may make available to the Fund office facilities, equipment, personnel and
other services. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Adviser and billed to the Fund at the
Adviser's cost.
D-1
5. Reports. The Fund and the Adviser agree to furnish to each other current
prospectuses, proxy statements, reports to shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of
its obligations and duties hereunder, or (iii) a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as
amended ("1940 Act"), the Adviser shall not be subject to any liability
whatsoever to the Fund, or to any shareholder of the Fund, for any error or
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Portfolio.
8. Permissible Interests. Subject to and in accordance with the Declaration
of Trust of the Fund and the Articles of Incorporation of the Adviser,
Trustees, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and
shareholders of the Adviser are or may be interested in the Fund as Trustees,
officers, agents, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Fund as a shareholder or otherwise;
and the effect of any such interrelationships shall be governed by said
Declaration of Trust or Articles of Incorporation and the provisions of the
1940 Act.
9. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of December 29, 2001 or the
date of the first annual or special meeting of the shareholders of the
Portfolio and, if approved by a majority of the outstanding voting securities
of the Portfolio, thereafter shall continue for periods of one year so long as
such continuance is specifically approved at least annually (a) by the vote of
a majority of those members of the Board of Trustees of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Trustees of the Fund or (c) by vote of a majority of the
outstanding voting securities of the Portfolio; provided however, that if the
shareholders of the Portfolio fail to approve the Agreement as provided
herein, the Adviser may continue to serve in such capacity in the manner and
to the extent permitted by the 1940 Act and rules thereunder. This Agreement
may be terminated by the Portfolio at any time, without the payment of any
penalty, by vote of a majority of the entire Board of Trustees of the Fund or
by vote of a majority of the outstanding voting securities of the Portfolio on
60 days' written notice to the Adviser. This Agreement may be terminated by
the Adviser at any time, without the payment of any penalty, upon 90 days'
written notice to the Fund. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this Agreement
shall be given in writing, addressed and delivered or mailed postpaid, to the
other party at the principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. Amendment of Agreement. This Agreement may be amended by mutual consent,
but the consent of the Fund must be approved (a) by vote of a majority of
those members of the Board of Trustees of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person
D-2
at a meeting called for the purpose of voting on such amendment, and (b) for
changes or amendments requiring shareholder approval pursuant to the 1940 Act
or other applicable law, by vote of a majority of the outstanding voting
securities of the Portfolio.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this day of , 200 .
[INVESTMENT ADVISER] UAM FUNDS [, INC./, INC. II/ TRUST]
By ____________________ By ____________________
Name: Name:
Title: Title:
D-3
EXHIBIT E--INFORMATION ON INVESTMENT ADVISERS
INDEX
PAGE E-
UAM FUND -------
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund.......................................... 2
Analytic Enhanced Equity Fund........................................... 2
Analytic International Fund............................................. 2
Analytic Master Fixed Income Fund....................................... 2
Analytic Short-Term Government Fund..................................... 2
C&B Balanced Portfolio.................................................. 3
C&B Equity Portfolio.................................................... 3
C&B Equity Portfolio for Taxable Investors.............................. 3
C&B Mid Cap Equity Portfolio............................................ 3
Cambiar Opportunity Portfolio........................................... 4
Clipper Focus Portfolio................................................. 5
FMA Small Company Portfolio............................................. 6
FPA Crescent Portfolio.................................................. 7
Heitman Real Estate Portfolio........................................... 7
ICM Small Company Portfolio............................................. 8
IRA Capital Preservation Portfolio...................................... 9
McKee Domestic Equity Portfolio......................................... 10
McKee International Equity Portfolio.................................... 10
McKee Small Cap Equity Portfolio........................................ 10
McKee U.S. Government Portfolio......................................... 10
MJI International Equity Portfolio...................................... 12
NWQ Special Equity Portfolio............................................ 12
Pell Rudman Mid-Cap Growth Portfolio.................................... 13
PIC Twenty Portfolio.................................................... 14
Rice, Hall James Small Cap Portfolio.................................... 16
Rice, Hall James Small/Mid-Cap Portfolio................................ 16
Sirach Bond Portfolio................................................... 17
Sirach Equity Portfolio................................................. 17
Sirach Growth Portfolio................................................. 17
Sirach Growth II Portfolio.............................................. 17
Sirach Special Equity Portfolio......................................... 17
Sirach Strategic Balanced Portfolio..................................... 17
Sterling Partners' Balanced Portfolio................................... 18
Sterling Partners' Equity Portfolio..................................... 18
Sterling Partners' Small Cap Value Portfolio............................ 18
TJ Core Equity Portfolio................................................ 19
TS&W Equity Portfolio................................................... 20
TS&W Fixed Income Portfolio............................................. 20
TS&W International Equity Portfolio..................................... 20
TS&W International Octagon Portfolio.................................... 20
E-1
ACADIAN EMERGING MARKETS PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Acadian Asset Management, Inc.
Two International Place--26th Floor
Boston, MA 02110
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 2.50%
Date of Current Investment Advisory Agreement: February 19, 1993
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Gary L. Bergstrom, Chairman Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
Directors
Gary L. Bergstrom, Chairman Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
Ronald D. Frashure, President Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
ANALYTIC DEFENSIVE EQUITY FUND, ANALYTIC ENHANCED EQUITY FUND, ANALYTIC
INTERNATIONAL EQUITY FUND, ANALYTIC MASTER FIXED INCOME FUND AND ANALYTIC
SHORT-TERM GOVERNMENT FUND
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Analytic Investors, Inc.
700 South Flower Street, Suite 2400
Los Angeles, CA 90017
E-2
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
-----------------------------------------------------------------------------
Analytic Defensive Equity
Fund 0.60% 0.99% April 6, 1999
-----------------------------------------------------------------------------
Analytic Enhanced Equity
Fund 0.60% 0.99% April 6, 1999
-----------------------------------------------------------------------------
Analytic International
Equity Fund 1.00% 1.30% September 15, 1999
-----------------------------------------------------------------------------
Analytic Master Fixed Income
Fund 0.45% 0.80% April 6, 1999
-----------------------------------------------------------------------------
Analytic Short-Term
Government Fund 0.30% 0.60% April 6, 1999
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the Fulcrum Fund--Growth
Portfolio (a variable annuity product) which has a similar investment
objective as the Analytic Enhanced Equity Portfolio it currently advises.
The Fulcrum Fund--Growth Portfolio has net assets of $4 million, and the
adviser receives a performance based annual advisory fee that varies
between 0% and 4% of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Harindra de Silva, CPA, President Analytic Investors, Inc. 700 South Flower
Street, Suite 2400 Los Angeles, CA 90017
Directors
Harindra de Silva, CPA, President Analytic Investors, Inc. 700 South Flower
Street, Suite 2400 Los Angeles, CA 90017
Roger Clark, Chairman Analytic Investors, Inc. 700 South Flower Street,
Suite 2400 Los Angeles, CA 90017
Susan B. Hunter, Vice President United Asset Management Corporation One
International Place - 44th Floor Boston, MA 02110
Franklin H. Kettle, Executive Vice President United Asset Management
Corporation One International Place - 44th Floor Boston, MA 02110
C&B BALANCED PORTFOLIO, C&B EQUITY PORTFOLIO, C&B EQUITY PORTFOLIO FOR TAXABLE
INVESTORS AND C&B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
E-3
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
-----------------------------------------------------------------------------
C&B Balanced Portfolio 0.625% 1.00% July 3, 1989
-----------------------------------------------------------------------------
C&B Equity Portfolio 0.625% 1.00% July 3, 1989
-----------------------------------------------------------------------------
C&B Equity Portfolio for
Taxable Investors 0.625% 1.00% September 30, 1996
-----------------------------------------------------------------------------
C&B Mid-Cap Equity Portfolio 0.625% 1.00% September 30, 1996
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the Finance Company of
Pennsylvania, which has a similar investment objective as the C&B Equity
Portfolio it currently advises. The Finance Company of Pennsylvania has net
assets of $19,465,771.00 and the adviser receives an annual advisory fee at
a rate of .5 of 1% of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert B. Arthur, Partner & Director
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Directors
Robert B. Arthur, Partner & Director
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
John J. Medveckis, Partner & Director Cooke & Bieler, Inc.
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
CAMBIAR OPPORTUNITY PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.30%
Date of Current Investment Advisory Agreement: June 18, 1998
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for both the America Hospital
Association--Diversified and Balanced and the Alpha Analytics Value Fund,
each of which has a similar investment objectives to
E-4
the Cambiar Opportunity Portfolio it currently advises. The America
Hospital Association--Diversified and Balanced has net assets of $89
million and the adviser receives an annual advisory fee at a rate of 0.25%
of the net assets managed by the adviser. The Alpha Analytics Value Fund
has net assets of $4.3 million and the adviser receives an annual advisory
fee at a rate of 0.50% of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Brian M. Barish, President
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
Directors
Michael S. Barish, Chairman
Cambiar Investors, Inc.
2401 East Second Avenue,
Suite 400
Denver, CO 80206
Brian M. Barish, President
Cambiar Investors, Inc.
2401 East Second Avenue,
Suite 400
Denver, CO 80206
Terrell J. Butz, Executive Vice President
Cambiar Investors, Inc.
2401 East Second Avenue,
Suite 400
Denver, CO 80206
CLIPPER FOCUS PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00% on the first $500 million, 0.95% of the next $500
million and 0.90% on the excess of $1 billion
Expense Limit: 1.40%
Date of Current Investment Advisory Agreement: August 31, 1998
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the Clipper Fund, Inc., which
has a similar investment objective as the Clipper Focus Portfolio, which it
currently advises. The Clipper Fund, Inc. has net assets of $813.5 million
(as of March 31, 2000) and the adviser receives an annual advisory fee at a
rate of 1.00% of the net assets managed by the adviser.
E-5
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
James H. Gipson, President, Chief Executive Officer
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Directors
James H. Gipson, President, Chief Executive Officer
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Michael C. Sandler, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Douglas W. Crey, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Bruce C. Veuco, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Peter J. Quinn, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.20% for the Institutional Class Shares and 1.60% for the
Institutional Service Class Shares.
Date of Current Investment Advisory Agreement: October 8, 1990
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert F. Carr, III, Chairman, President, Chief Executive Officer
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
E-6
Directors
Robert F. Carr, III, Chairman, President, Chief Executive Officer
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Robert W. Thornburgh, Jr., Executive Vice President
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Kevin P. O'Brien, Senior Vice President
United Asset Management Corporation
One International Place--44th Floor
Boston, MA 02110
FPA CRESCENT PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: None
Date of Current Investment Advisory Agreement: September 30, 1996
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Julio J. de Puzo, Jr., Chief Executive Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
Directors
Julio J. de Puzo, Jr., Chief Executive Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
William M. Sams, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
E-7
Robert L. Rodriguez, Chief Investment Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
HEITMAN REAL ESTATE PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75% on the first $100 million and 0.65% on the excess of
$100 million
Expense Limit: None
Date of Current Investment Advisory Agreement: March 2, 1998
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
William L. Ramseyer, Chairman, Chief Executive Officer
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Directors
Maury R. Toguarelli, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Jerome J. Claeys, II, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Roger E. Smith, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
ICM SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
E-8
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.70%
Expense Limit: None
Date of Current Investment Advisory Agreement: March 20, 1989
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert D. McDorman, Jr., Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Directors
Robert D. McDorman, Jr., Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Stephen T. Scott, President, Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Andrew L. Gilchrist, Treasurer, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Paul L. Borssuck, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Robert F. Boyd, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Stuart M. Christhilf, III, Chief Executive Officer, Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
IRA CAPITAL PRESERVATION PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
E-9
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.50%
Expense Limit: 1.00%
Date of Current Investment Advisory Agreement: February 1, 1999
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
John K. Dwight, President, Chief Executive Officer
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
Directors
John K. Dwight, President, Chief Executive Officer
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
Laura Dagan, Managing Director
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
David W. Richardson, Managing Director
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
MCKEE DOMESTIC EQUITY PORTFOLIO, MCKEE INTERNATIONAL EQUITY PORTFOLIO, MCKEE
SMALL CAP EQUITY PORTFOLIO AND MCKEE U. S. GOVERNMENT PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
E-10
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
---------------------------------------------------------------------------
McKee Domestic Equity
Portfolio 0.65% None January 24, 1994
---------------------------------------------------------------------------
McKee International Equity
Portfolio 0.70% None January 24, 1994
---------------------------------------------------------------------------
McKee Small Cap Equity
Portfolio 1.00% None April 9, 1997
---------------------------------------------------------------------------
McKee U. S. Government
Portfolio 0.45% None January 24, 1994
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
James H. Hanes, Chairman
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Directors
Eugene Natali, President, Chief Executive Officer
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Norman S. Allen, Senior Vice President
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
James H. Hanes, Chairman
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Walter C. Bean, Executive Vice President, Chief Compliance Officer
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Joseph F. Bunomo, Jr., Director of Fixed Income
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
E-11
MJI INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Murray Johnstone International Limited
John Hancock Center
875 N. Michigan Avenue, Suite 3640
Chicago, IL 60611
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75%
Expense Limit: 1.50%
Date of Current Investment Advisory Agreement: August 26, 1995
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the PBHG International Fund
which has a similar investment objective as the MJI International Equity
Portfolio it currently advises. The PBHG International Fund has net assets
of $11,382,000 (as of March 31, 2000) and the adviser receives an annual
advisory fee at a rate 1.00% of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
C. Giles H. Weaver, Executive Chairman
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
Directors
C. Giles H. Weaver, Executive Chairman
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
A. David MacLellan, Managing Director
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
NWQ SPECIAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
E-12
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.85%
Expense Limit: 1.25% for the Institutional Class Shares and 1.65% for the
Institutional Service Class Shares.
Date of Current Investment Advisory Agreement: August 18, 1997
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Michael C. Mendez, President
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Directors
Michael C. Mendez, President
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
David A. Polak, Chief Executive Officer
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Edward C. Friedel, Managing Director
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Kevin P. O'Brien, Senior Vice President
United Asset Management Corporation
One International Place--44th Floor
Boston, MA 02110
PELL RUDMAN MID-CAP GROWTH PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Pell Rudman Trust Company
100 Federal Street
Boston, Ma 02110
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.30%
Date of Current Investment Advisory Agreement: August 31, 1998
E-13
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Edward I. Rudman, Chairman
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
Directors
Edward I. Rudman, Chairman
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
James S. McDonald, Chief Executive Officer, President
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
Jeffrey S. Thoman, Chief Investment Officer
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
PIC TWENTY PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasedena, CA 91101
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.90%
Annual Expense Limitation, if any, as a Percentage of Average Daily Net
Assets: 1.30%
Date of Current Investment Advisory Agreement: December 29, 1999
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
E-14
Directors
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Thomas J. Condon, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Jeffrey J. Miller, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Larry D. Tashjian, Executive Managing Director, Chief Executive Officer
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
George E. Handtmann, III, Executive Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Harlan H. Thompson, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Andrew J. Pearl, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
F. Brown Windle, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Thomas M. Mitchell, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
E-15
RICE, HALL JAMES SMALL CAP PORTFOLIO AND RICE, HALL JAMES SMALL/MID CAP
PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
-----------------------------------------------------------------------------
Rice, Hall James Small Cap Portfolio.. 0.75% None January 24, 1994
-----------------------------------------------------------------------------
Rice, Hall James Small/Mid Cap
Portfolio............................ 0.85% 1.25% September 16, 1996
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Thomas W. McDowell, Jr., President, Chief Executive Officer,
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Directors
Thomas W. McDowell, Jr., President, Chief Executive Officer,
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Charles C. King, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, Ca 92101
David P. Tesstner, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Timothy A. Todaro, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Patricia A. Urbonya, Partner, Chief Operating Officer
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
E-16
SIRACH BOND PORTFOLIO, SIRACH EQUITY PORTFOLIO, SIRACH GROWTH PORTFOLIO,
SIRACH GROWTH II PORTFOLIO, SIRACH SPECIAL EQUITY PORTFOLIO AND SIRACH
STRATEGIC BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Advisory Investment Advisory
Fund Fee Expense Limit Agreement
----------------------------------------------------------------------------------
0.50% for the Institutional
Class and 0.75% for the
Sirach Bond Portfolio... 0.35% Institutional Service Class November 3, 1997
----------------------------------------------------------------------------------
Sirach Equity
Portfolio.............. 0.65% None June 26, 1996
----------------------------------------------------------------------------------
Sirach Growth
Portfolio.............. 0.65% None October 29, 1993
----------------------------------------------------------------------------------
Sirach Growth Portfolio
II..................... 0.70% None August 4, 2000
----------------------------------------------------------------------------------
Sirach Special Equity
Portfolio.............. 0.70% 0.90% September 27, 1989
----------------------------------------------------------------------------------
Sirach Strategic
Balanced Portfolio..... 0.65% None October 29, 1993
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the Aquinas Equity Growth Fund,
which has a similar investment objective as the Sirach Growth Portfolio it
currently advises. The Aquinas Equity Growth Fund has net assets of $66.5
million and the adviser receives an annual advisory fee at a rate of .50%
on the first $30 million, .35% on the next $20 million, and .25% on balance
of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Harvey C. Bateman, Principal, Director of Equities
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Directors
Harvey C. Bateman, Principal, Director of Equities
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Craig F. Hintze Principal, Director of Fixed Income
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
E-17
Barry Fetterman Principal
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
David A. Anderson, Principal
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
STERLING PARTNERS' BALANCED PORTFOLIO, STERLING PARTNERS' EQUITY PORTFOLIO AND
STERLING PARTNERS' SMALL CAP VALUE PORTFOLIO
- -------------------------------------------------------------------------------
Name and Address of Investment Adviser
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
----------------------------------------------------------------------------
Sterling Partners' Balanced
Portfolio............................ 0.75% 1.11% March 8, 1991
----------------------------------------------------------------------------
Sterling Partners' Equity Portfolio... 0.75% 0.99% March 8, 1991
----------------------------------------------------------------------------
Sterling Partners' Small Cap Value
Portfolio............................ 1.00% 1.25% January 7, 1997
Information on Other Similar Investment Companies Advised by the Adviser
The adviser acts as investment adviser for the Market Street Fund-All Pro
Small Cap Value Portfolio, which has a similar investment objective as the
Sterling Partners' Small Cap Value Portfolio it currently advises. The
Market Street Fund-All Pro Small Cap Value Portfolio has net assets of
$8,828,216 and the adviser receives an annual advisory fee at a rate of
.70% of the net assets managed by the adviser.
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Mark W. Whalen, President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Directors
W. Olin Nisbet, III, Chairman
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
David M. Ralston, Executive Vice President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
E-18
J. Calvin Rivers, Jr., Executive Vice President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Mark W. Whalen, President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
TJ CORE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75%
Expense Limit: 1.25%
Date of Current Investment Advisory Agreement: January 29, 1995
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Thomas E. Johnson, CFA, Chairman, Chief Investment Officer
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Directors
Thomas E. Johnson, CFA, Chairman, Chief Investment Officer
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Jerry I. Wise, President
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
E-19
TS&W EQUITY PORTFOLIO, TS&W FIXED INCOME PORTFOLIO, TS&W INTERNATIONAL EQUITY
PORTFOLIO AND TS&W INTERNATIONAL OCTAGON PORTFOLIO (FORMERLY, JACOBS
INTERNATIONAL OCTAGON PORTFOLIO)
- --------------------------------------------------------------------------------
Name and Address of Investment Adviser
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
------------------------------------------------------------------------------
TS&W Equity Portfolio................ 0.75% None November 25, 1991
------------------------------------------------------------------------------
TS&W Fixed Income Portfolio.......... 0.45% None November 25, 1991
------------------------------------------------------------------------------
TS&W International Equity Portfolio.. 1.00% None November 3, 1992
------------------------------------------------------------------------------
TS&W International Octagon Portfolio
(Formerly Jacobs International December 2, 1996, as
Octagon Portfolio).................. 1.00% None amended June 27, 2000
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
John T. Siegel, President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Directors
Matthew G. Thompson, Senior Vice President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Sylvester P. Walmsley, IV, Director
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
John T. Siegel, President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Horace P. Whitworth, Secretary
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
E-20
Exhibit F --Fees Paid to Investment Advisers and their Affiliated Companies
Fiscal Net Assets Advisory Fees without Administration Fees Paid
Year as of 8/21/00 Expense Limitation Net Advisory Fee to UAM Fund Services, Inc.
Fund Name Ended (Thousands) for Last Fiscal Year for Last Fiscal Year for Last Fiscal Year
- --------------------------------------------------------------------------------------------------------------
Acadian Emerging
Markets Fund 12/31/99 $ 31,689,007 $1,274,940 $1,274,940 $ 89,112
- --------------------------------------------------------------------------------------------------------------
Analytic
Defensive Equity
Fund 12/31/99 $ 56,494,072 $ 396,366 $ 302,138 $ 55,449
- --------------------------------------------------------------------------------------------------------------
Analytic
Enhanced Equity
Fund 12/31/99 $153,398,951 $ 359,313 $ 289,086 $ 41,853
- --------------------------------------------------------------------------------------------------------------
Analytic
International
Equity Fund 12/31/99 $ 8,005,542 $ 3,652 $ 0 $ 5,145
- --------------------------------------------------------------------------------------------------------------
Analytic Master
Fixed Income
Fund 12/31/99 $ 4,916,773 $ 23,789 $ 0 $ 16,555
- --------------------------------------------------------------------------------------------------------------
Analytic Short-
Term Government
Fund 12/31/99 $ 3,498,104 $ 13,250 $ 0 $ 15,744
- --------------------------------------------------------------------------------------------------------------
C&B Balanced
Portfolio 4/30/00 $ 3,427,944 $ 22,155 $ 0 $ 11,341
- --------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio 10/31/99 $ 40,498,705 $ 677,029 $ 677,029 $ 54,969
- --------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio for
Taxable
Investors 10/31/99 $ 2,200,657 $ 23,723 $ 0 $ 6,592
- --------------------------------------------------------------------------------------------------------------
C&B Mid Cap
Equity Portfolio 10/31/99 $ 1,493,909 $ 8,217 $ 0 $ 8,500
- --------------------------------------------------------------------------------------------------------------
Cambiar
Opportunity
Portfolio 4/30/00 $ 4,715,878 $ 31,375 $ 0 $ 18,251
- --------------------------------------------------------------------------------------------------------------
Clipper Focus
Portfolio 4/30/00 $100,627,283 $ 851,713 $ 797,126 $ 52,328
- --------------------------------------------------------------------------------------------------------------
FMA Small
Company
Portfolio 10/31/99 $113,558,173 $1,340,556 $1,029,996 $ 87,089
- --------------------------------------------------------------------------------------------------------------
FPA Crescent
Portfolio 3/31/00 $ 40,049,125 $1,202,114 $1,202,114 $227,406
- --------------------------------------------------------------------------------------------------------------
Heitman Real
Estate Portfolio 12/31/99 $101,943,764 $ 858,702 $ 858,702 $ 86,942
- --------------------------------------------------------------------------------------------------------------
ICM Small
Company
Portfolio 10/31/99 $531,534,639 $4,391,761 $4,391,761 $251,348
- --------------------------------------------------------------------------------------------------------------
IRA Capital
Preservation
Portfolio 10/31/99 $ 21,758,630 $ 410 $ 0 $ 2,472
- --------------------------------------------------------------------------------------------------------------
McKee Domestic
Equity Portfolio 10/31/99 $ 34,379,223 $ 302,449 $ 302,449 $ 27,987
- --------------------------------------------------------------------------------------------------------------
McKee
International
Equity Portfolio 10/31/99 $181,070,148 $1,051,174 $1,051,174 $104,039
- --------------------------------------------------------------------------------------------------------------
McKee Small Cap
Equity Portfolio 10/31/99 $ 37,076,592 $ 824,282 $ 824,282 $ 43,277
- --------------------------------------------------------------------------------------------------------------
McKee U. S.
Government
Portfolio 10/31/99 $ 13,587,922 $ 104,458 $ 104,458 $ 18,087
- --------------------------------------------------------------------------------------------------------------
MJI
International
Equity Portfolio 4/30/00 $ 39,125,879 $ 253,648 $ 205,888 $ 41,178
- --------------------------------------------------------------------------------------------------------------
NWQ Special
Equity Portfolio 10/31/99 37,159,167 $ 185,627 $ 80,890 $ 16,236
- --------------------------------------------------------------------------------------------------------------
Pell Rudman Mid-
Cap Growth
Portfolio 4/30/00 21,124,489 $ 113,575 $ 0 $ 57,727
- --------------------------------------------------------------------------------------------------------------
PIC Twenty
Portfolio 4/30/00 33,098,634 $ 86,370 $ 29,137 $ 10,578
- --------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small Cap
Portfolio 10/31/99 62,744,232 $ 344,628 $ 0 $ 27,603
- --------------------------------------------------------------------------------------------------------------
Fees Paid to UAM
Shareholder
Services Center, Inc.
Fund Name for Last Fiscal Year
- --------------------------------------------------------------------------------------------------------------
Acadian Emerging
Markets Fund $ 9,649
- --------------------------------------------------------------------------------------------------------------
Analytic
Defensive Equity
Fund $28,920
- --------------------------------------------------------------------------------------------------------------
Analytic
Enhanced Equity
Fund $12,554
- --------------------------------------------------------------------------------------------------------------
Analytic
International
Equity Fund $ 2,647
- --------------------------------------------------------------------------------------------------------------
Analytic Master
Fixed Income
Fund $ 6,531
- --------------------------------------------------------------------------------------------------------------
Analytic Short-
Term Government
Fund $ 6,102
- --------------------------------------------------------------------------------------------------------------
C&B Balanced
Portfolio $ 4,486
- --------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio $11,968
- --------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio for
Taxable
Investors $ 8,794
- --------------------------------------------------------------------------------------------------------------
C&B Mid Cap
Equity Portfolio $ 8,057
- --------------------------------------------------------------------------------------------------------------
Cambiar
Opportunity
Portfolio $ 9,455
- --------------------------------------------------------------------------------------------------------------
Clipper Focus
Portfolio $20,970
- --------------------------------------------------------------------------------------------------------------
FMA Small
Company
Portfolio $80,734
- --------------------------------------------------------------------------------------------------------------
FPA Crescent
Portfolio $56,704
- --------------------------------------------------------------------------------------------------------------
Heitman Real
Estate Portfolio $93,767
- --------------------------------------------------------------------------------------------------------------
ICM Small
Company
Portfolio $16,153
- --------------------------------------------------------------------------------------------------------------
IRA Capital
Preservation
Portfolio $ 1,454
- --------------------------------------------------------------------------------------------------------------
McKee Domestic
Equity Portfolio $13,408
- --------------------------------------------------------------------------------------------------------------
McKee
International
Equity Portfolio $14,850
- --------------------------------------------------------------------------------------------------------------
McKee Small Cap
Equity Portfolio $13,780
- --------------------------------------------------------------------------------------------------------------
McKee U. S.
Government
Portfolio $13,295
- --------------------------------------------------------------------------------------------------------------
MJI
International
Equity Portfolio $13,982
- --------------------------------------------------------------------------------------------------------------
NWQ Special
Equity Portfolio $11,647
- --------------------------------------------------------------------------------------------------------------
Pell Rudman Mid-
Cap Growth
Portfolio $ 9,407
- --------------------------------------------------------------------------------------------------------------
PIC Twenty
Portfolio $ 2,840
- --------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small Cap
Portfolio $16,292
- --------------------------------------------------------------------------------------------------------------
F-1
Fiscal Net Assets Advisory Fees without Administration Fees Paid
Year as of 8/21/00 Expense Limitation Net Advisory Fee to UAM Fund Services, Inc.
Fund Name Ended (Thousands) for Last Fiscal Year for Last Fiscal Year for Last Fiscal Year
- ---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small/Mid Cap
Portfolio 10/31/99 $ 24,299,535 $ 176,486 $ 105,299 $17,445
- ---------------------------------------------------------------------------------------------------------------
Sirach Bond
Portfolio 10/31/99 $ 84,303,835 $ 243,816 $ 0 $39,507
- ---------------------------------------------------------------------------------------------------------------
Sirach Equity
Portfolio 10/31/99 $ 79,876,735 $ 294,707 $ 139,131 $27,368
- ---------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio 10/31/99 $ 70,597,316 $ 571,110 $ 571,110 $47,716
- ---------------------------------------------------------------------------------------------------------------
Sirach Growth II
Portfolio(1) 4/30/00 $ 30,092,259 $ 171,247 $ 171,247 $64,083
- ---------------------------------------------------------------------------------------------------------------
Sirach Special
Equity Portfolio 10/31/99 $226,701,746 $1,177,517 $1,177,517 $81,073
- ---------------------------------------------------------------------------------------------------------------
Sirach Strategic
Balanced
Portfolio 10/31/99 $ 71,547,521 $ 508,834 $ 508,834 $58,484
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners'
Balanced
Portfolio 10/31/99 $ 49,552,329 $ 558,088 $ 493,540 $56,040
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Equity
Portfolio 5/15/91 $ 22,406,135 $ 361,802 $ 250,671 $39,049
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Small
Cap Value
Portfolio 10/31/99 $ 54,140,036 $ 411,436 $ 306,848 $25,532
- ---------------------------------------------------------------------------------------------------------------
TJ Core Equity
Portfolio 4/30/00 $ 19,162,323 $ 265,424 $ 127,887 $31,764
- ---------------------------------------------------------------------------------------------------------------
TS&W Equity
Portfolio 10/31/99 $ 72,010,571 $ 682,600 $ 682,600 $66,475
- ---------------------------------------------------------------------------------------------------------------
TS&W Fixed
Income Portfolio 10/31/99 $ 52,698,082 $ 312,298 $ 312,298 $36,892
- ---------------------------------------------------------------------------------------------------------------
TS&W
International
Equity Portfolio 10/31/99 $128,970,357 $1,145,893 $1,145,893 $81,536
- ---------------------------------------------------------------------------------------------------------------
TS&W
International
Octagon
Portfolio(2) 4/30/00 $ 29,579,285 $ 677,348 $ 677,348 $49,824
- ---------------------------------------------------------------------------------------------------------------
Fees Paid to UAM
Shareholder
Services Center, Inc.
Fund Name for Last Fiscal Year
- ---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small/Mid Cap
Portfolio $12,701
- ---------------------------------------------------------------------------------------------------------------
Sirach Bond
Portfolio $12,187
- ---------------------------------------------------------------------------------------------------------------
Sirach Equity
Portfolio $ 9,576
- ---------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio $14,622
- ---------------------------------------------------------------------------------------------------------------
Sirach Growth II
Portfolio(1) $10,454
- ---------------------------------------------------------------------------------------------------------------
Sirach Special
Equity Portfolio $14,767
- ---------------------------------------------------------------------------------------------------------------
Sirach Strategic
Balanced
Portfolio $11,213
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners'
Balanced
Portfolio $11,834
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Equity
Portfolio $12,077
- ---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Small
Cap Value
Portfolio $15,263
- ---------------------------------------------------------------------------------------------------------------
TJ Core Equity
Portfolio $15,011
- ---------------------------------------------------------------------------------------------------------------
TS&W Equity
Portfolio $16,765
- ---------------------------------------------------------------------------------------------------------------
TS&W Fixed
Income Portfolio $13,939
- ---------------------------------------------------------------------------------------------------------------
TS&W
International
Equity Portfolio $20,036
- ---------------------------------------------------------------------------------------------------------------
TS&W
International
Octagon
Portfolio(2) $29,982
- ---------------------------------------------------------------------------------------------------------------
(1) Investment Advisory fees paid during the most recent fiscal year, were
paid to Hanson Investment Management Company, the Fund's previous
investment Adviser.
(2) Investment Advisory fees paid during the most recent fiscal year, were
paid to Jacobs Asset Management, the Fund's previous investment Adviser.
F-2
EXHIBIT G--INFORMATION ON BENEFICIAL OWNERSHIP BY SHAREHOLDERS
AS OF AUGUST 21, 2000
INDEX
UAM FUND PAGE G-
- -------- -------
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund.......................................... 2
Analytic Enhanced Equity Fund........................................... 2
Analytic International Fund............................................. 2
Analytic Master Fixed Income Fund....................................... 3
Analytic Short-Term Government Fund..................................... 3
C&B Balanced Portfolio.................................................. 3
C&B Equity Portfolio.................................................... 4
C&B Equity Portfolio for Taxable Investors.............................. 4
C&B Mid Cap Equity Portfolio............................................ 5
Cambiar Opportunity Portfolio........................................... 5
Clipper Focus Portfolio................................................. 5
FMA Small Company Portfolio............................................. 6
FPA Crescent Portfolio.................................................. 6
Heitman Real Estate Portfolio........................................... 7
ICM Small Company Portfolio............................................. 7
IRA Capital Preservation Portfolio...................................... 8
McKee Domestic Equity Portfolio......................................... 8
McKee International Equity Portfolio.................................... 9
McKee Small Cap Equity Portfolio........................................ 9
McKee U. S. Government Portfolio........................................ 9
MJI International Equity Portfolio...................................... 10
NWQ Special Equity Portfolio............................................ 11
Pell Rudman Mid-Cap Growth Portfolio.................................... 11
PIC Twenty Portfolio.................................................... 12
Rice, Hall James Small Cap Portfolio.................................... 12
Rice, Hall James Small/Mid Cap Portfolio................................ 12
Sirach Bond Portfolio................................................... 13
Sirach Equity Portfolio................................................. 13
Sirach Growth Portfolio................................................. 13
Sirach Growth II Portfolio.............................................. 14
Sirach Special Equity Portfolio......................................... 14
Sirach Strategic Balanced Portfolio..................................... 14
Sterling Partners' Balanced Portfolio................................... 15
Sterling Partners' Equity Portfolio..................................... 15
Sterling Partners' Small Cap Value Portfolio............................ 16
TJ Core Equity Portfolio................................................ 16
TS&W Equity Portfolio................................................... 17
TS&W Fixed Income Portfolio............................................. 17
TS&W International Equity Portfolio..................................... 17
TS&W International Octagon Portfolio.................................... 17
G-1
Exhibit G--Beneficial Ownership by Shareholders of 5% or more of the Funds
as of August 21, 2000
Acadian Emerging Markets Portfolio
Percentage of
Name and Address of Shareholder Shares Owned
-----------------------------------------------------------------------------
Stanford Management Company 44.09%
2770 Sandhill Road
Menlo Park, CA 94025-7070
-----------------------------------------------------------------------------
Charles Schwab & CO INC 31.04%
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4323
-----------------------------------------------------------------------------
University of Guelph 12.72%
FBO Dale Lockie
Pension Investments
University Centre LVL 5
Guelph, Ontario
Canada, NIG 2WI
-----------------------------------------------------------------------------
The Analytic Funds
Name and Address of Percentage of
Shareholder Shares Owned Portfolio
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 18.92% Analytic Defensive Equity Fund
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
National Financial Services 7.27% Analytic Defensive Equity Fund
Corp.
FBO Exclusive Benefit of Our
Customer
Attn: Mutual Funds
200 Liberty Street
New York, NY 10281-1003
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 40.73% Analytic Enhanced Equity Fund
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
UMB Bank NA CUST 19.49% Analytic Enhanced Equity Fund
FBO IBC Retirement Income
Plan
928 Grand Boulevard
Kansas City, MO 64106-2008
-----------------------------------------------------------------------------
National Financial Services 11.94% Analytic Enhanced Equity Fund
Corp.
FBO Exclusive Benefit of Our
Customers
Attn: Mutual Funds
200 Liberty Street
New York, NY 10281-1003
-----------------------------------------------------------------------------
Resources Trust Company 60.36% Analytic International Fund
P. O. Box 3865
Englewood, CO 80155-3865
-----------------------------------------------------------------------------
Analytic TSA Global Asset 17.43% Analytic International Fund
Management Inc.
Investment Manager for Prison
Law Office
700 S. Flower Street, Suite
2400
Los Angeles, CA 90017-4211
-----------------------------------------------------------------------------
G-2
Percentage
Name and Address of of Shares
Shareholder Owned Portfolio
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 15.38% Analytic International Fund
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco,
CA 94104-4122
-----------------------------------------------------------------------------
Analytic TSA Global Asset 25.79% Analytic Master Fixed Income Fund
Management, Inc.
FBO Mountain Grove Cemetery
Assn.
700 S. Flower Street, Ste
2400
Los Angeles, CA 90017-4211
-----------------------------------------------------------------------------
Wexford Clearing Services 11.76% Analytic Master Fixed Income Fund
Corp. FBO
Nursing & Home Care of
Wilton
INC Pension Fund Trust
P. O. Box 489
Wilton, CT 06897-0489
-----------------------------------------------------------------------------
Resources Trust Company 9.55% Analytic Master Fixed Income Fund
P. O. Box 3865
Englewood, CO 80155-3865
-----------------------------------------------------------------------------
UAM Trust Company CUST 7.23% Analytic Master Fixed Income Fund
IRA R/O Greg McMurran
2116 Westwood Avenue
Santa Ana, CA 92706-1924
-----------------------------------------------------------------------------
UAM Trust Company CUST 5.99% Analytic Master Fixed Income Fund
IRA R/O R. Borzilleri
4 Landmark Square
Stamford, CT 06901-2502
-----------------------------------------------------------------------------
Kenneburt & Co. 65.27% Analytic Short-Term Government Fund
FBO Southern Baptist
P.O. Box 12365
Birmingham, AL 35202-2365
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 9.64% Analytic Short-Term Government Fund
Special Custody Account
For Benefit of Customers
101 Montgomery Street
San Francisco, CA 94104-
4122
-----------------------------------------------------------------------------
The C&B Portfolios
Percentage
of Shares
Name and Address of Shareholder Owned Portfolio
----------------------------------------------------------------------
St. Andrews Church 41.44% C&B Balanced Portfolio
Memorial Endowment Fund
PO Box 1287
Edgartown, MA 02539-1287
----------------------------------------------------------------------
Mr. Roger G. Hall 13.94% C&B Balanced Portfolio
Executive Director
Old Christ Church Preservation Tr
Christ Church
20 North America Street
Philadelphia, PA 19106-4509
----------------------------------------------------------------------
Carole A. Bonner 10.92% C&B Balanced Portfolio
1550 North 123rd Street
Wauwatosa, WI 53226-3132
----------------------------------------------------------------------
G-3
Percentage
of Shares
Name and Address of Shareholder Owned Portfolio
----------------------------------------------------------------------------
Joanna H. Schoff 6.95% C&B Balanced Portfolio
226 North Street
Rye, NY 10580-1520
----------------------------------------------------------------------------
UAM Trust Co Cust 6.10% C&B Balanced Portfolio
William W. Beible Jr
611 Saint Lawrence Lane
Gibsonia, PA 15044-8025
----------------------------------------------------------------------------
UAM Trust Co Cust 5.94% C&B Balanced Portfolio
IRA A/C Douglas Wharton Mellor
1020 Mt. Pleasant Road
Bryn Mawr, PA 19010-1826
----------------------------------------------------------------------------
First Union National Bank 26.20% C&B Equity Portfolio
FBO Cadmus Comm Corp
1525 West WT Harris Blvd
Charlotte, NC 28262-8522
----------------------------------------------------------------------------
Ironworkers Local 397 Pension Fund 15.20% C&B Equity Portfolio
c/o Administrative Services Inc.
Attn: Fund Accounting
PO Box 83900
Miami, FL 33283-9000
----------------------------------------------------------------------------
Central New York Community Foundation 15.15% C&B Equity Portfolio
Inc.
500 S. Salina St. Ste 428
Syracuse, NY 13202-3314
----------------------------------------------------------------------------
Bruce J. Oliveira Administrator/TTEE 13.59% C&B Equity Portfolio
FBO IBEW Local 223 Pension Trst Fnd
PO Box 1238
Lakeville, MA 02347-7238
----------------------------------------------------------------------------
A Cirillo D Gaicco R Samuels & Joseph 7.94% C&B Equity Portfolio
Gurrera & David Smith Tr
Fulton fish Market PFA & DEC Tr
Part Fulton Fish Mkt Pen
140 Beekman Street
New York, NY 10038-2010
----------------------------------------------------------------------------
Patricia Schlitt 45.40% C&B Equity Portfolio for
S. Sanford Schlitt Taxable Investors
Subject to DST TOD Rules
491 Meadow Lark Drive
Sarasota, FL 34236-1901
----------------------------------------------------------------------------
Ann Hauptman & Cynthia Jacobs TR FBO 17.01% C&B Equity Portfolio for
Gunther A. Hauptman TR Taxable Investors
4 Briga Ln
White Plains, NY 10605-4647
----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 13.57% C&B Equity Portfolio for
Reinvest Account Taxable Investors
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
Anne Y. Stratton 6.54% C&B Equity Portfolio for
9608 N Juniper Circle Taxable Investors
Mequon, WI 53092-6216
----------------------------------------------------------------------------
Robert B. Arthur 5.91% C&B Equity Portfolio for
101 Cheswold Lane, Apt. 4B Taxable Investors
Haverford, PA 19041-1866
----------------------------------------------------------------------------
G-4
Percentage
of Shares
Name and Address of Shareholder Owned Portfolio
----------------------------------------------------------------------------
Vanguard Fiduciary Trust Co. 79.35% C&B Mid Cap Equity
Plan 91718 FBO UAM Corp Profit Sharing 401K Portfolio
Plan
Vanguard Fiduciary Trust Group Sp. Servies
PO Box 2600 VM 421
Valley Forge, PA 19482-2600
----------------------------------------------------------------------------
UAM Trust Co Cust. 5.98% C&B Mid Cap Equity
FBO John J. Medveckis R/O IRA Portfolio
C/o Cooke & Bieler Inc.
1700 Market St., STE 3222
Philadelphia, PA 19103-3912
----------------------------------------------------------------------------
Cambiar Opportunity Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 25.09%
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
Wells Fargo Bank West Cust 18.19%
FBO Michael Barish Custody
1740 Broadway
Denver, CO 80274
----------------------------------------------------------------------------
Wells Fargo Bank West Cust 15.85%
FBO Waco EMP P/S-M Trotsky
1740 Broadway Denver, CO 80274-0001
----------------------------------------------------------------------------
Leo L. Block 6.82%
1814 La Sombra Dr
San Antonio, TX 78209-3350
----------------------------------------------------------------------------
Clipper Focus Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
----------------------------------------------------------------------------
Charles Schwab & Co., 61.97%
Inc.
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
----------------------------------------------------------------------------
Resources Trust Co. 11.13%
P.O.Box 3865
Englewood, CO 80155-3865
----------------------------------------------------------------------------
G-5
FMA Small Company Portfolio
Percentage
Name and Address of of Shares
Shareholder Owned Class
-----------------------------------------------------------------------------
Fidelity Invest Inst 27.04% Institutional Class Shares
Operations Co Inc.
For Certain Employee Benefit
Plans
100 Magellan Way KWIC
Covington, KY 41015-1999
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 18.29% Institutional Class Shares
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
Dingle & Co. 5.80% Institutional Service Class Shares
C/o Comerica Bank
P.O.Box 75000
Detroit, MI 48275-0001
-----------------------------------------------------------------------------
FPA Crescent Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 29.25%
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
David I. Sofro Trustee 10.59%
U/A 00/00/90
FBO Trust
2307 Blanchard Drive
Glenndale, CA 91208-1912
----------------------------------------------------------------------------
NFSC FEBO 7.63%
Thomas A. Jermoluk TTEE
Thomas A. Jermoluk Trust
U/A 3/24/98
52 Monte Vista Ave.
Atherton, CA 94027-5431
----------------------------------------------------------------------------
FPA Multi-Advisors Fund LP 6.87%
C/O First Pacific Advisors, Inc.
11400 W. Olympic Blvd., Suite 1200
Los Angeles, CA 90064-1568
----------------------------------------------------------------------------
G-6
Heitman Real Estate Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned Class of the Portfolio
----------------------------------------------------------------------------
Charles Schwab & Company Inc. 41.08% Advisor Class Shares
Special Custody Acct FBO CUST REINV
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
United Nations Joint Staff Pension 38.59% Institutional Class Shares
Plan
Investment Management Service
United Nations Room S-0702
New York, NY 10017
----------------------------------------------------------------------------
Charles Schwab & Company Inc. 18.59% Institutional Class Shares
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
----------------------------------------------------------------------------
National Financial Securities Corp. 8.67% Institutional Class Shares
FBO LCM
200 Liberty Street LBBY 5
New York, NY 10281-5500
----------------------------------------------------------------------------
HAWCO 7.15% Institutional Class Shares
c/o Hawaiian Trust Co
Client Mutual Funds 769
PO Box 1930
Honolulu HI 96805-1930
----------------------------------------------------------------------------
Northern Trust CO FBO ARTCL 9 TR 5.46% Institutional Class Shares
For Joyce U/W of Harold Martin
A/C 26-48795
PO Box 92956
Chicago, IL 60675-2956
----------------------------------------------------------------------------
ICM Small Company Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
----------------------------------------------------------------------------
Washington Suburban Sanitary Commission 11.23%
14501 Sweitzer Lane
Laurel, MD 20707-5902
----------------------------------------------------------------------------
Major League Baseball Players Benefit Plan 9.92%
c/o Investment Counselors of MD
Attn: Anne D. Benson
803 Cathedral Street
Baltimore, MD 32302-5237
----------------------------------------------------------------------------
Strafe & CO 6.39%
FAO Riverside Methodist Hospital Foundation
PO Box 160
Westerville, OH 43086-0160
----------------------------------------------------------------------------
Marshal Ilsey Trust 5.44%
FBO Alliant Energy Master Ret
100 N Water Street
Milwaukee, WI 53202-6025
----------------------------------------------------------------------------
G-7
IRA Capital Preservation Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
----------------------------------------------------------------------------
Charles Schwab & CO INC 73.48%
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
----------------------------------------------------------------------------
Donaldson Lufkin 7.68%
Jenrette
Securities Corporation
Inc.
PO Box 2052
Jersey City, NJ 07303--
2052
----------------------------------------------------------------------------
The McKee Portfolios
Percentage
Name and Address of of Shares
Shareholder Owned Portfolio
-----------------------------------------------------------------------------
Wesbanco Bank Wheeling 22.83% McKee Domestic Equity Portfolio
Agnt City of Wheeling
Municipal Employees
Retirement & Benefit Fund
1 Bank Plaza
Wheeling, WV 26003-3565
-----------------------------------------------------------------------------
Carey & CO 11.15% McKee Domestic Equity Portfolio
PO Box 1558
Columbus, OH 43260-0002
-----------------------------------------------------------------------------
One Valley Bank NA CUST 9.11% McKee Domestic Equity Portfolio
FBO Morgantown Utility
Attn: Security Cage
Mail Street 1510
PO Box 1793
Charleston, WV 25326-1793
-----------------------------------------------------------------------------
Wilmington Trust Co 8.47% McKee Domestic Equity Portfolio
FBO Iron Workers Local 549
Security Plan
c/o Mutual Funds
PO Box 8971
Wilmington, DE 19899-8971
-----------------------------------------------------------------------------
Saxon & CO 6.81% McKee Domestic Equity Portfolio
Borough of Canonsburg
68 E. Pike Street
Canonsburg, PA 15317-1312
-----------------------------------------------------------------------------
Zoar Home 5.78% McKee Domestic Equity Portfolio
801 Union Ave
Pittsburgh, PA 15212-5523
-----------------------------------------------------------------------------
City of St. Marys Police 5.53% McKee Domestic Equity Portfolio
Pen Fund
808 S Michael Road
P.O.Box 1994
Saint Marys, PA 15857-5994
-----------------------------------------------------------------------------
Saxon & CO FBO 14.35% McKee International Equity Portfolio
Westmoreland County
Employees Retirement Fund
PO Box 7780
Philadelphia, PA 19182-
0001
-----------------------------------------------------------------------------
MAC & CO 13.16% McKee International Equity Portfolio
Mutual Funds Operations
PO Box 3198
Pittsburgh, PA 15230-3198
-----------------------------------------------------------------------------
G-8
Percentage
Name and Address of of Shares
Shareholder Owned Portfolio
-----------------------------------------------------------------------------
AllFirst Trust CO NA 9.00% McKee International Equity Portfolio
FBO County of Dauphin
Retirement Plan
Security Processing 109-
911
PO Box 1596
Baltimore, MD 21203-1596
-----------------------------------------------------------------------------
Fulvest & CO 8.75% McKee International Equity Portfolio
FBO Lancaster County Era
PO Box 3215
Lancaster, PA 17604-3215
-----------------------------------------------------------------------------
Saxon & CO 5.36% McKee International Equity Portfolio
FBO Butler City Retirement
PO Box 7780-1888
Philadelphia, PA 19182-
0001
-----------------------------------------------------------------------------
Mac & Co. 5.43% McKee International Equity Portfolio
P.O.Box 3198
Pittsburgh, PA 15230-3198
-----------------------------------------------------------------------------
Saxon & Co. 5.29% McKee International Equity Portfolio
FBO Cumberland County City
Employees Retirement CUST
PO Box 7780-1888
Philadelphia, PA 19182-
0001
-----------------------------------------------------------------------------
Keystone Financial Inc. 5.19% McKee International Equity Portfolio
c/o Keystone Financial
Trust OPS
P.O.Box 2450
Altoona, PA 16603-2450
-----------------------------------------------------------------------------
Light & CO 29.00% McKee Small Cap Equity Portfolio
c/o AllFirst Trust CO NA
Security Processing 109-
911
PO Box 1596
Baltimore, MD 21203-1596
-----------------------------------------------------------------------------
MAC & CO 15.97% McKee Small Cap Equity Portfolio
Mutual Funds Operations
PO Box 3198
Pittsburgh, PA 15230-3198
-----------------------------------------------------------------------------
MAC & CO 12.03% McKee Small Cap Equity Portfolio
PO Box 3198
Pittsburgh, PA 15230-3198
-----------------------------------------------------------------------------
First Union National Bank 7.39% McKee Small Cap Equity Portfolio
FBO Lackawanna City
Employees Retirement Fund
1525 West WT Harris Blvd
CMG NC 1151
Charlotte, NC 28288-8522
-----------------------------------------------------------------------------
Dickey & CO 5.13% McKee Small Cap Equity Portfolio
FBD Somerset County
Retirement Plan
PO Box 777
Somerset, PA 15501-0777
-----------------------------------------------------------------------------
Wilmington Trust Co 32.30% McKee U.S. Government Portfolio
FBO Iron Workers Local 549
Security Plan
c/o Mutual Funds
PO Box 8971
Wilmington, DE 19899-8971
-----------------------------------------------------------------------------
City of St. Mary's Police 9.23% McKee U.S. Government Portfolio
Pension Fund
808 S. Michael Road
PO Box 1994
Saint Mary's, PA 15857-
5994
-----------------------------------------------------------------------------
Saxon & CO 8.66% McKee U.S. Government Portfolio
Borough of Canonsburg
68 E. Pike Street
Canonsburg, PA 15317-1312
-----------------------------------------------------------------------------
G-9
Name and Address of Percentage of
Shareholder Shares Owned Portfolio
-----------------------------------------------------------------------------
Teamsters Local 211 Reserve 7.02% McKee U.S. Government Portfolio
Account
625 Stanwix Street 1903
Pittsburgh, PA 15222-1406
-----------------------------------------------------------------------------
Greene County Employees 7.00% McKee U.S. Government Portfolio
Retirement Fund
New County Office Bldg.
93 East High Street
Waynesburg, PA 15370-1839
-----------------------------------------------------------------------------
Zoar Home 6.33% McKee Small Cap Equity Portfolio
801 Union Ave
Pittsburgh, PA 15212-2306
-----------------------------------------------------------------------------
Econony Borough Employees 5.90% McKee U.S. Government Portfolio
Fund
c/o Controllers Office
2856 Conway Wallrose Road
Baden, PA 15005-2306
-----------------------------------------------------------------------------
MJI International Equity Portfolio
Percentage
Name and Address of of
Shareholder Shares Owned Class of Portfolio
--------------------------------------------------------------------------
Freya Fanning & Compny 31.14% Institutional Class
400 Essex St Box 5600
Beverly Farms, MA 01915-1957
--------------------------------------------------------------------------
UMBSC & Co 29.05% Institutional Class
FBO Interstate Brands
Aggressive Growth
PO Box 419175
Kansas City, MO 64141-6175
--------------------------------------------------------------------------
UMBSC & Co. 9.14% Institutional Class
FBO IBC Savings Invest- AGG GR
P.O. Box 419692
Kansas City, MO 64141-6692
--------------------------------------------------------------------------
UMBSC & Co 8.89% Institutional Class
FBO Interstate Brands
Moderate Growth
PO Box 419175
Kansas City, MO 64141-6175
--------------------------------------------------------------------------
Wilmington Trust Co. Tr 6.15% Institutional Class
FBO IBT 401k
Profit Sharing Plan
c/o Mutual Funds UAM
P.O Box 8971
Wilmington, DE 19899-8971
--------------------------------------------------------------------------
UMBSC & Co 58.43% Institutional Service Class
FBO Lillick & Charles MJI
c/o Trust Department
PO Box 419175
Kansas City, MO 64141-6175
--------------------------------------------------------------------------
Wilmington Trust Company 25.28% Institutional Service Class
FBO Catholic Healthcare West
Deferred Compensation
c/o Mutual Funds/UAM
PO Box 8971
Wilmington, DE 19899-8971
--------------------------------------------------------------------------
G-10
Percentage of
Name and Address of Shareholder Shares Owned Class of Portfolio
-----------------------------------------------------------------------------
Chicago Trust Co Tr 16.29% Institutional Service Class
FBO Loews Cineplex
P/S & 401K Ret Plan
c/o Marshall & Ilsley Trust
Company
1000 N Water Street
Milwaukee, WI 53202-6648
-----------------------------------------------------------------------------
NWQ Special Equity Portfolio
Percentage
Name and Address of of Shares
Shareholder Owned Class of the Portfolio
-----------------------------------------------------------------------------
Engineers Joint Pension Fund 71.68% Institutional Class Shares
PO Box 100
Syracuse, NY 13205-0100
-----------------------------------------------------------------------------
Wilmington Trust CO TR 9.63% Institutional Class Shares
U/A 4/01/1998 FBO IBT 401K
Profit Sharing Plan c/o
Mutual Funds UAM
PO Box 8971
Wilmington, DE 19899-8971
-----------------------------------------------------------------------------
Charles Schwab & CO INC 7.57% Institutional Class Shares
Reinvest Account
Attn: Mutual Funds
101 Montgomery St
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
Wilmington Trust Co 66.12% Institutional Service Class Shares
FBO Mustang Employees 401K
PSP
c/o Mutual Funds
PO Box 8971
Wilmington, DE 19899-8971
-----------------------------------------------------------------------------
CIBC World Markets Corp 16.28% Institutional Service Class Shares
FBO 0333-83066-16
PO Box 3484
Church Street Station
New York, NY 10008-3484
-----------------------------------------------------------------------------
Linn Family Partnership 14.73% Institutional Service Class Shares
95 Broad Cove Drive
Montgomery, TX 77356-8311
-----------------------------------------------------------------------------
Pell Rudman Mid-Cap Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 36.24%
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
Pell Rudman Trust Company N.A. 24.07%
100 Federal Street FL 37
Boston, MA 02110-1802
-----------------------------------------------------------------------------
United Asset Management 9.40%
1 International Place
Boston, MA 02110-2602
-----------------------------------------------------------------------------
G-11
Percentage
of Shares
Name and Address of Shareholder Owned
-------------------------------------------------------------------------------
Fox & Co. 9.37%
P.O. Box 976
New York, NY 10268-0976
-------------------------------------------------------------------------------
Southtrust Bank NA TTEE 8.51%
FBO Goodwin Investments LP
PO Box 830804
Birmingham, AL 35283-0804
-------------------------------------------------------------------------------
Hunter & Co. 5.83%
FBO William S. Edgerly
C/o State Street Bank & Trust
P.O. Box 9242
Boston, MA 02209-9242
-------------------------------------------------------------------------------
PIC Twenty Portfolio
Percentage
of Shares
Name and Address of Shareholder Owned
-------------------------------------------------------------------------------
UMBSC & Co FBO Interstate Brands 90.99%
Retirement Income Plan 340419126
P.O .Box 419692
Kansas City, MO 64141-6692
-------------------------------------------------------------------------------
UMBSC & Co. 5.62%
FBO IBC Savings Invest -- Equity
P.O. Box 419692
Kansas City, MO 64141-6692
-------------------------------------------------------------------------------
The Rice, Hall, James Portfolios
Name and Address of Percentage of
Shareholder Shares Owned Portfolio
---------------------------------------------------------------------------------
Charles Schwab & Co Inc 45.54% Rice Hall James Small Cap Portfolio
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
---------------------------------------------------------------------------------
Charles Schwab & Co Inc 11.25% Rice Hall James Small/Mid Cap Portfolio
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
---------------------------------------------------------------------------------
City National Bank 7.91% Rice Hall James Small/Mid Cap Portfolio
FBO Johnson Machinert
PSP
PO Box 60520
Los Angeles, CA 90060-
0520
---------------------------------------------------------------------------------
California Lutheran 7.87% Rice Hall James Small/Mid Cap
University
60 West Olsen Road #1200
Thousand Oaks, CA 93360-
2787
---------------------------------------------------------------------------------
DB Alex Brown LLC 6.40% Rice Hall James Small/Mid Cap
FBO 235-30094-14
PO Box 1346
Baltimore, MD 21203-1346
---------------------------------------------------------------------------------
G-12
The Sirach Portfolios
Name and Address of Percentage of
Shareholder Shares Owned Portfolio
-----------------------------------------------------------------------
UMBSC & CO. 24.03% Sirach Bond Portfolio
FBO Interstate Brands
Conservative Growth
PO Box 419260
Kansas City, MO 64141-6260
-----------------------------------------------------------------------
Charles Schwab & CO INC. 9.53% Sirach Bond Portfolio
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94101-4122
-----------------------------------------------------------------------
UMBSC & CO. 9.16% Sirach Bond Portfolio
FBO IBC Savings Invest-Cons GR
PO Box 419692
Kansas City, MO 64141-6692
-----------------------------------------------------------------------
Wendel & Co. 8.76% Sirach Bond Portfolio
FBO AAA
PO Box 1006
New York, NY 10286-0001
-----------------------------------------------------------------------
UMBSC & Co. 6.56% Sirach Bond Portfolio
FBO Interstate Brands
Moderate Growth
PO Box 419260
Kansas City, MO 64141-6260
-----------------------------------------------------------------------
Northwestern Trust Co. 5.24% Sirach Bond Portfolio
1201 3rd Avenue, Suite 2010
Seattle, WA 98101-3026
-----------------------------------------------------------------------
UMBSC & Co. 14.18% Sirach Equity Portfolio
FBO Interstate Brands
Aggressive Growth
PO Box 419175
Kansas City, MO 64141-6175
-----------------------------------------------------------------------
Lutsey Family Foundation, Inc. 8.24% Sirach Equity Portfolio
PO Box 22074
Green Bay, WI 54305-2074
-----------------------------------------------------------------------
Key Trust Company--PRISM 6.81% Sirach Equity Portfolio
Lane Powell, LLP PSP
4900 Tiedeman Road
Brooklyn, OH 44144-23338
-----------------------------------------------------------------------
UMBSC & Co. 6.79% Sirach Equity Portfolio
FBO Interstate Brands
Conservative Growth
PO Box 419175
Kansas City, MO 64141-6175
-----------------------------------------------------------------------
UMBSC & Co. 6.51% Sirach Equity Portfolio
FBO Interstate Brands
Moderate Growth
P.O. Box 419175
Kansas City, MO 64141-6175
-----------------------------------------------------------------------
SO Alaska Defined 25.77% Sirach Growth Portfolio
Contribution Pension Plan
Attn: Carol Patton
PO Box 241266
Anchorage, AK 99524-1266
-----------------------------------------------------------------------
G-13
Name and Address of Percentage of
Shareholder Shares Owned Portfolio
-----------------------------------------------------------------------------
NFSC FEBO 22.50% Sirach Growth Portfolio
First Interstate Bank
Financial Svcs. D
Cash Account
PO Box 30918
Billings, MT 59116-0918
-----------------------------------------------------------------------------
Wilmington Trust Co. TR 11.92% Sirach Growth Portfolio
FBO IBT 401K
Profit Sharing Plan
c/o Mutual Funds UAM
P.O. Box 8971
Wilmington, DE 19899-
8971
-----------------------------------------------------------------------------
Wilmington Trust Co. TR 6.35% Sirach Growth Portfolio
FBO Cherokee Nation 401K
Plan
c/o Mutual Funds UAM
PO Box 8971
Wilmington, DE 19899-
8971
-----------------------------------------------------------------------------
William M. Connor CUST 5.92% Sirach Growth Portfolio
Connor Development CO
Profit Sharing Plan
846 108th Ave NW
Bellevue, WA 98004-4304
-----------------------------------------------------------------------------
Charles Schwab & Co., 100.00% Sirach Growth II Portfolio
Inc. (formerly, Hanson Equity Portfolio)
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
-----------------------------------------------------------------------------
Bank of New York CUST 16.49% Sirach Special Equity Portfolio
Two Union Square
Automotive Machinists
601 Union Street, Suite
520
Seattle, WA 98101-2328
-----------------------------------------------------------------------------
Northern Trust Company 6.32% Sirach Special Equity Portfolio
CUST
FBO Navajo Nation
PO Box 92956
Chicago, IL 60675-2956
-----------------------------------------------------------------------------
Wells Fargo Bank NA 5.82% Sirach Special Equity Portfolio
FBO Hanford Oper. &
Engineering
Pension Plan
PO Box 9800
Calabasas, CA 91372-0800
-----------------------------------------------------------------------------
Dingle & CO 5.05% Sirach Special Equity Portfolio
c/o Comerica Bank Mutual
Funds
Operating Engineers 324
Pension Fund
PO Box 75000
Detroit, MI 48275-0001
-----------------------------------------------------------------------------
South Bay Hotel Employee 14.84% Sirach Strategic Balanced Portfolio
& Restaurant EE Pension
Plan
c/o United Admin
Services
PO Box 5057
San Jose, CA 95150-5057
-----------------------------------------------------------------------------
Alaska Bricklayers 14.11% Sirach Strategic Balanced Portfolio
Retirement Plan
407 Denali Street
Anchorage, AK 99501-2615
-----------------------------------------------------------------------------
SO Alaska Defined 8.68% Sirach Strategic Balanced Portfolio
Contribution Pension
Plan
P.O. Box 241266
Anchorage, AK 99524-1266
-----------------------------------------------------------------------------
G-14
Percentage
Name and Address of of
Shareholder Shares Owned Portfolio
------------------------------------------------------------------------------
Wells Fargo Bank West 8.19% Sirach Strategic Balanced Portfolio
Cust
FBO Agrium US Retirement
Plan
1740 Broadway
MAC: C7300-077
Denver, CO 80274
------------------------------------------------------------------------------
NANA Regional 5.69% Sirach Strategic Balanced Portfolio
Corporation Inc.
Employees Pension Plan
1001 E. Benson Blvd.
Anchorage, AK 99508-4256
------------------------------------------------------------------------------
Wendel & Co. 5.25% Sirach Strategic Balanced Portfolio
FBO San Diego Butchers
C/O Bank Of New York
Wall Street Station
PO Box 1066
New York, NY 10268-1066
------------------------------------------------------------------------------
The Sterling Partners' Portfolios
Percentage
Name and Address of of
Shareholder Shares Owned Portfolio
------------------------------------------------------------------------------
UMBSC & Co. 23.28% Sterling Partners' Balanced Portfolio
FBO Interstate Brands
Conservative Growth
P.O. Box 419175
Kansas City, MO 64141-
6175
------------------------------------------------------------------------------
UMBSC & Co. 14.82% Sterling Partners' Balanced Portfolio
FBO Interstate Brands
Moderate Growth
P.O. Box 419175
Kansas City, MO 64141-
6175
------------------------------------------------------------------------------
Centura Bank 10.93% Sterling Partners' Balanced Portfolio
P.O. Box 1220
Attn: Roxanne Moore
131 N. Church Street
Rocky Mount, NC 27804-
5433
------------------------------------------------------------------------------
UMBSC & CO 8.95% Sterling Partners' Balanced Portfolio
FBO IBC Savings Invest-
Cons GR
PO Box 419692
Kansas City, MO
------------------------------------------------------------------------------
Charles Schwab & Co., 6.00% Sterling Partners' Balanced Portfolio
Inc.
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
------------------------------------------------------------------------------
Charles Schwab & Co., 23.15% Sterling Partners' Equity Portfolio
Inc.
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
------------------------------------------------------------------------------
ENJAYCO 11.90% Sterling Partners' Equity Portfolio
FBO Smith Anderson 401K
Plan 90483
P.O. Box 17909
Milwaukee, WI 53217-0909
------------------------------------------------------------------------------
G-15
Percentage
Name and Address of of
Shareholder Shares Owned Portfolio
-------------------------------------------------------------------------------------
LaSalle Bank Cust EX 10.68% Sterling Partners' Equity Portfolio
FBO Baptist Hospital
PO Box 1443
Chicago, IL 60690-1443
-------------------------------------------------------------------------------------
Centura Bank 6.76% Sterling Partners' Equity Portfolio
P.O. Box 1220
131 N. Church Street
Rocky Mount, NC 27804-
5433
-------------------------------------------------------------------------------------
Rock Hill Telephone 6.74% Sterling Partners' Equity Portfolio
Company
Employees Retirement
Plan
C/O Rock Hill Telephone
Co.
P.O. Box 470
Rock Hill, SC 29731-6470
-------------------------------------------------------------------------------------
Charles Schwab & Co., 27.94% Sterling Partners' Small Cap Value Portfolio
Inc.
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-
4122
-------------------------------------------------------------------------------------
Northern Trust Company 9.32% Sterling Partners' Small Cap Value Portfolio
CUST
FBO Holly Cross Employee
Retirement Trust HLT
Plan
P.O. Box 92956
Chicago, IL 60675-2956
-------------------------------------------------------------------------------------
Horizon Benefits Inc. 7.04% Sterling Partners' Small Cap Value Portfolio
5925 Carnegie Blvd Sutie
104
Charlotte, NC 28209-4656
-------------------------------------------------------------------------------------
TJ Core Equity Portfolio
Percentage of
Name and Address of Shareholder Shares Owned
------------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 25.37%
Reinvest Account
Attn Mutual Funds
101 Montgomery Street
San Francisco, CA 94104-4122
------------------------------------------------------------------------------------
UMBSC & Co 20.59%
FBO Lillick & Charles TJ Core
C/O Trust Department
PO Box 419175
Kansas City, MO 64141-6175
------------------------------------------------------------------------------------
Wilmington Trust Co Tr 7.05%
FBO Catholic Healthcare West
Deferred Company TR
C/O Mutual Funds/UAM
P.O. Box 8971
Wilmington, DE 19899-8971
------------------------------------------------------------------------------------
UMBSC & Co. FBO UTD Meth Fdn Chr Rtr 6.76%
P.O. Box 419260
Kansas City, MO 64141-6260
------------------------------------------------------------------------------------
Fire Co. 5.90%
P.O.Box 26883
Oklahoma City, OK 73126-0883
------------------------------------------------------------------------------------
G-16
The TS&W Portfolios
Percentage
of Shares
Name and Address of Shareholder Owned Portfolio
-----------------------------------------------------------------------------
New York Life Trust Company 10.36% TS&W Equity Portfolio
51 Madison Ave, RM 117A
New York, NY 10010-1603
-----------------------------------------------------------------------------
Lewis Gale Clinic, Inc. 7.72% TS&W Equity Portfolio
c/o Gil Coblintz
1802 Braeburn Drive
Salem, VA 24153-7306
-----------------------------------------------------------------------------
Charles Schwab & C., Inc. 5.90% TS&W Equity Portfolio
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, Ca 94104-4122
-----------------------------------------------------------------------------
Crestar Bank 13.43% TS&W Fixed Income Portfolio
FBO C B Fleet DEF Benefit PP TRSTE
Attn: Jan Rittenhouse
P.O. Box 105870
Center 3144
Atlanta, GA 30348-5870
-----------------------------------------------------------------------------
Lewis Gale Clinic, Inc. 6.38% TS&W Fixed Income Portfolio
c/o Gil Coblentz
1802 Braeburn Drive
Salem, VA 24153-7399
-----------------------------------------------------------------------------
Charles Schwab & C., Inc. 6.20% TS&W Fixed Income Portfolio
Reinvest Account
Attn: Mutual Funds
101 Montgomery Street
San Francisco, Ca 94104-4122
-----------------------------------------------------------------------------
Riverside Health Care Foundation 12.80% TS&W International Equity
606 Denbigh Blvd. Suite 601 Portfolio
Newport News, VA 23608-4442
-----------------------------------------------------------------------------
American Safety Razor Company 5.21% TS&W International Equity
Attn: Mutual Funds Razor Blade Lane Portfolio
Verona, VA 24402
-----------------------------------------------------------------------------
54.54% TS&W International Octagon
Michigan State Univ Foundation Portfolio (formerly, Jacobs
4700 S Hagadorn Road Ste 220 International Octagon
East Lansing, MI 48823-5354 Portfolio)
-----------------------------------------------------------------------------
Charles Schwab & Co., Inc. 9.00% TS&W International Octagon
Reinvest Account Portfolio (formerly, Jacobs
Attn Mutual Funds International Octagon
101 Montgomery Street Portfolio)
San Francisco, CA 94104-4122
-----------------------------------------------------------------------------
G-17
Corrected Exhibit H -- Outstanding Shares of the Funds as of August 21, 2000
No. of Shares
Fund Name Outstanding
- -------------------------------------------------------------------------------
Acadian Emerging Markets Portfolio 2,951,006,549
- -------------------------------------------------------------------------------
Analytic Defensive Equity Portfolio 4,759,923,313
- -------------------------------------------------------------------------------
Analytic Enhanced Equity Portfolio 12,329,750,836
- -------------------------------------------------------------------------------
Analytic International Equity Portfolio 726,108,563
- -------------------------------------------------------------------------------
Analytic Master Fixed Income Portfolio 518,839,471
- -------------------------------------------------------------------------------
Analytic Short-Term Government Portfolio 354,978,280
- -------------------------------------------------------------------------------
C&B Balanced Portfolio 351,374,557
- -------------------------------------------------------------------------------
C&B Equity Portfolio 4,763,352,026
- -------------------------------------------------------------------------------
C&B Equity for Taxable Investors Portfolio 148,168,298
- -------------------------------------------------------------------------------
C&B Mid Cap Equity Portfolio 120,930,211
- -------------------------------------------------------------------------------
Cambiar Opportunity Portfolio 296,100,006
- -------------------------------------------------------------------------------
Clipper Focus Portfolio 7,902,131,890
- -------------------------------------------------------------------------------
FMA Small Company Portfolio 7,096,949,807
- -------------------------------------------------------------------------------
FPA Crescent Portfolio 3,070,862,621
- -------------------------------------------------------------------------------
Heitman Real Estate Portfolio 10,983,631,354
- -------------------------------------------------------------------------------
ICM Small Company Portfolio 22,575,433,219
- -------------------------------------------------------------------------------
IRA Capital Preservation Portfolio 2,175,729,379
- -------------------------------------------------------------------------------
McKee Domestic Equity Portfolio 3,049,492,635
- -------------------------------------------------------------------------------
McKee International Equity Portfolio 13,354,690,208
- -------------------------------------------------------------------------------
McKee Small Cap Equity Portfolio 4,521,657,549
- -------------------------------------------------------------------------------
McKee U.S. Government Portfolio 1,391,096,763
- -------------------------------------------------------------------------------
MJI International Equity Portfolio 2,886,249,425
- -------------------------------------------------------------------------------
NWQ Special Equity Portfolio 2,852,785,761
- -------------------------------------------------------------------------------
Pell Rudman Mid-Cap Portfolio 1,001,621,842
- -------------------------------------------------------------------------------
PIC Twenty Portfolio 3,237,526,829
- -------------------------------------------------------------------------------
RHJ Small Cap Portfolio 3,563,650,748
- -------------------------------------------------------------------------------
RHJ Small/Mid Cap Portfolio 1,300,271,519
- -------------------------------------------------------------------------------
Sirach Bond Portfolio 8,717,940,084
- -------------------------------------------------------------------------------
Sirach Equity Portfolio 4,279,463,294
- -------------------------------------------------------------------------------
Sirach Growth Portfolio 6,037,185,793
- -------------------------------------------------------------------------------
Sirach Growth II Portfolio (formerly, Hanson Equity Portfolio) 2,329,972,979
- -------------------------------------------------------------------------------
Sirach Special Equity Portfolio 16,799,814,822
- -------------------------------------------------------------------------------
Sirach Strategic Equity Portfolio 5,991,226,929
- -------------------------------------------------------------------------------
Sterling Partners' Balanced Portfolio 4,514,337,058
- -------------------------------------------------------------------------------
Sterling Partners' Equity Portfolio 1,559,930,657
- -------------------------------------------------------------------------------
Sterling Partners' Small Cap Value Portfolio 3,716,314,032
- -------------------------------------------------------------------------------
TJ Core Equity Portfolio 1,025,148,086
- -------------------------------------------------------------------------------
TS&W Equity Portfolio 5,115,620,404
- -------------------------------------------------------------------------------
TS&W Fixed Income Portfolio 5,242,753,377
- -------------------------------------------------------------------------------
TS&W International Equity Portfolio 5,785,032,549
- -------------------------------------------------------------------------------
TS&W International Octagon Portfolio (formerly, Jacobs
International Octagon Portfolio) 2,431,972,405
- -------------------------------------------------------------------------------
TOTAL 194,246,111,787
- -------------------------------------------------------------------------------
H-1
UAM FUNDS
530 EAST SWEDESFORD ROAD
WAYNE, PA 19087-1693
UAM FUNDS
FUND NAME HERE
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD JOINT
MEETING OF SHAREHOLDERS TO BE HELD ON
OCTOBER 27, 2000
The undersigned hereby appoints Gary L. French, Linda T. Gibson and Martin J.
Wolin and each of them, attorneys and proxies for the undersigned with full
powers of substitution and revocation, to represent the undersigned and to vote
on behalf of the undersigned all shares of the Fund referenced hereon (the
"Fund"), which the undersigned is entitled to vote at a Joint Meeting of
Shareholders of the Fund to be held at Wyndham Boston Hotel, Liberty Square
Room, 89 Broad Street, Boston, MA 02110 on October 27, 2000, at 9:00 a.m.
Eastern time and any adjournment thereof (the "Meeting"). The undersigned hereby
acknowledges receipt of the Notice of Meeting and Proxy Statement, and hereby
instructs said attorneys and proxies to vote said shares as indicated hereon.
Unless indicated to the contrary, this proxy shall be voted "For" all proposals
relating to the Fund. The proxies are hereby authorized to vote in their
discretion on any matter that may properly come before the meeting or any
adjournment thereof. The undersigned hereby revokes any proxy previously given.
- -To vote by mail, sign below exactly as your name appears above and return the
proxy card in the envelope provided
- -To vote by touch-tone phone, call1-800-690-6903
- -To vote by Internet, use websitewww.proxyvote.com
NOTE: If you wish to vote on individual Investment restrictions on Proposal 3,
you must mail in your proxy card.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
UAMFN1
FUND NAME HERE
This proxy will be voted as specified below with respect to the action to be
taken on the following proposals. In the absence of any specification, this
proxy will be voted IN FAVOR of the proposals. Please mark your vote below in
blue or black ink. Do not use red ink.
THE BOARD, INCLUDING THOSE WHO ARE NOT AFFILIATED WITH THE FUND OR UNITED ASSET
MANAGEMENT CORPORATION, RECOMMENDS A VOTE "FOR" EACH PROPOSAL.
For Withhold For All
Vote for Trustees/Directors All All Except
1. To elect the Trustees/Directors.
(see pages 4 to 8 of the proxy
statement) Nominees:
01) John T. Bennett, Jr., [_] [_] [_]
02) Nancy J. Dunn,
03) William A. Humenuk,
04) Philip D. English and
05) James F. Orr, III
To withhold authority to vote for any individual nominee, mark "For All Except"
and write the nominee's number on the line below.
________________________________________________
Vote On Proposals For Against Abstain
2. To approve the proposed change of the investment [_] [_] [_]
objective of the Fund from fundamental to
non-fundamental (see page 9 of the proxy
statement)
3. To approve the proposed changes to the Fund's
fundamental investment restrictions (see pages
9 to 17 of the proxy statement)
(A) Diversification of investments; (J) Control or Management;
(B) Borrowing; (K) Unseasoned Issuers;
(C) Issuing of senior securities; (L) Borrowings Exceeding 5%;
(D) Underwriting; (M) Pledging;
(E) Industry concentration; (N) Margin Purchases and Short Sales; For For All Abstain
(F) Investment in real estate; (O) Directors' Ownership of Shares; All Except All
(G) Commodities; (P) Interest in Oil, Gas or Other
(H) Lending; Mineral Exploration or Development [_] [_] [_]
(I) Illiquid Securities; Programs;
(Q) Futures and Options
______________________________________________________________
If you do not wish to approve a particular investment policy change applicable
to your Fund, mark "For All Except" and write the policy's letter(s) of the
sub-proposal on the line above.
4. To ratify the selection of PricewaterhouseCoopers For Against Abstain
LLP as the independent auditors (see page 18 of
the proxy statement) [_] [_] [_]
5. To approve an Interim Investment Advisory
Agreement between each Fund and its investment
adviser, substantially as described in the Proxy
Statement (Advisory fee rates will not change.)
(see pages 18 to 22 of the proxy statement) [_] [_] [_]
6. To approve an Investment Advisory Agreement
between the Fund and its investment adviser, subject
to completion of the merger between United
Asset Management Corporation and Old Mutual
Plc, substantially as described in the Proxy
Statement (Advisory fee rates willnot change
from those under the current agreement.) (see pages
18 to 22 of the proxy statement) Note: Please sign
exactly as your name appears in this proxy. If
joint owners, both should sign this proxy. An
authorized individual should sign corporate
or partnership proxies in full corporate or
partnership name. When signing as attorney,
executor, administrator, trustee, guardian, or
corporate officer, please give your full title. [_] [_] [_]
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE, SIGN, DATE AND PROMPTLY
RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE TODAY!
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date