1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /x/
Filed by a party other than the registrant / /
Check the appropriate box:
/x/ Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
WASATCH ADVISORS FUNDS
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(Name of Registrant as Specified in Its Charter)
Payment of filing fee (Check the appropriate box):
/x/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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May , 1996
Dear Shareholder:
We are very excited to present the enclosed proxy to you requesting your
approval on amendments that we believe will enhance the Income Fund as an
investment vehicle.
The Board of Directors of Wasatch Funds has unanimously and enthusiastically
approved, and asks that you approve, the changes detailed in the enclosed Proxy
Statement, including:
1. that Wasatch Advisors (the Adviser) be authorized to hire Hoisington
Investment Management Company (Hoisington) as Sub-Adviser to the Fund; and
2. that the investment objectives of the Fund be modified. The Fund's
Prospectus currently provides that the "Income Fund's primary investment
objective is to receive current income at low risk by investing in fixed
income securities. The secondary objective is capital appreciation." It
is proposed that the language be modified to provide that "The primary
investment objective of the Fund is to provide a real rate of return over a
market cycle by investing in U.S. treasury securities with an emphasis on
both income and capital appreciation."
The Board of Directors feels strongly that adopting the proposed changes will
make the Fund a better vehicle for investors desiring income and capital
appreciation. At the time of inception, the Income Fund was the only Wasatch
investment choice offering current income. Now, the Wasatch family of funds
provides for investments in a money market fund (the Northern U.S. Government
Money Market Fund) for investors desiring only current income at low risk.
Upon your approval of the sub-advisory agreement, Hoisington will take over the
day-to-day investment decisions for the Income Fund while Wasatch will retain
responsibility for monitoring compliance with the investment policies and
restrictions of the Fund.
We feel strongly that the association between Wasatch and Hoisington will be
advantageous for shareholders. First, Hoisington is an experienced money
manager specializing in investments in high-quality fixed income securities.
The firm manages $2.8 billion in assets for a distinguished list of
institutional clients and requires a minimum account size of $10 million. The
sub-advisory agreement between Wasatch and Hoisington will create an
opportunity for mutual fund investors to access the expertise of this premier
fixed income manager. Second, just as Wasatch's research analysts follow a
strict discipline for investing in companies, Hoisington's investment
professionals have a focused strategy for investing in fixed income securities.
Also similar to Wasatch, Hoisington takes a long-term approach to investing and
is committed to building lasting relationships with clients. Finally, upon
approval of the proposals, the total annual expense ratio for the Fund will be
lowered from 1% to 0.75%.
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If approved, the Income Fund will be renamed "Wasatch-Hoisington U.S. Treasury
Fund." As the name implies, the Fund will invest primarily in high-quality U.S.
treasury securities. This strategy means that Fund shareholders will be exposed
to minimal credit risk. The Fund may take full advantage of the entire range
of maturities offered, from less than a year to a maximum of 30 years.
Hoisington believes the decision regarding the maturity of the portfolio is the
key to getting favorable returns for investors. Please read Exhibit C of the
proxy statement, the proposed prospectus language, for a discussion of
investment objectives and risks.
We ask that you please review the enclosed Proxy Statement and complete and
mail your proxy as soon as possible. If you have any questions about the
proposed changes, please call us at (800) 381-1065. We appreciate the
association we enjoy with Fund shareholders and look forward to strengthening
our relationship with you.
Sincerely,
Samuel S. Stewart, Jr.
President
4
20/96
[PRELIMINARY COPY]
WASATCH INCOME FUND
a Series of Wasatch Funds, Inc.
68 South Main Street, Suite 400
Salt Lake City, Utah 84101
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 21, 1996
NOTICE IS HEREBY GIVEN that the special meeting of shareholders of the
Wasatch Income Fund, (the "Fund"), a series of Wasatch Funds, Inc. (the
"Company"), will be held at ___________ 3:00 p.m., Mountain Time, on
Friday, June 21, 1996, at 68 South Main Street, Suite 400, Salt Lake City,
Utah. The purposes of the meeting are as follows:
1. To vote on an amendment to the Advisory and Service Contract between
the Fund and Wasatch Advisors, Inc. (the "Adviser")
authorizing the Adviser to retain a sub-adviser or
sub-advisers to assist the Adviser in furnishing investment
advice to the Fund.
2. To vote on a sub-advisory agreement between the Adviser
and Hoisington Investment Management Company ("Hoisington")
pursuant to which Hoisington would direct the investment of
the Fund's assets and be responsible for the formulation and
implementation of a continuing program for the management of
the Fund's assets.
3. To vote on a proposed modification to the investment
objectives of the Fund.
4. To vote on a proposed amendment to the Fund's fundamental investment
restrictions to allow it to lend portfolio securities.
5. To vote on such other business as may properly come before the
meeting or any adjournments or postponements thereof.
Shareholders of record on May 15, 1996, are the only persons entitled to
notice of and to vote at the meeting.
Your attention is directed to the attached Proxy Statement. WHETHER OR NOT
YOU EXPECT TO BE PRESENT AT THE UPCOMING MEETING, PLEASE FILL IN, SIGN, DATE,
AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE. No postage necessary if mailed in the United
States.
Samuel S. Stewart, Jr., President
Dated: May , 1996
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[PRELIMINARY COPY]
PROXY STATEMENT
WASATCH INCOME FUND
a Series of Wasatch Funds, Inc.
68 South Main Street, Suite 400
Salt Lake City, Utah 84101
SPECIAL MEETING OF SHAREHOLDERS -- JUNE 21, 1996
The enclosed proxy is solicited by the Board of Directors of Wasatch Funds,
Inc. (the "Company") in connection with a special meeting of shareholders of
the Wasatch Income Fund (the "Fund"), a series of the Company, to be held June
21, 1996, and any adjournments or postponements thereof. The costs of
solicitation, including the cost of preparing and mailing the Notice of Meeting
and this Proxy Statement, will be paid by the Adviser, and it is expected that
such mailing will take place on or about June ______ , 1996. In addition to
solicitations by mail, representatives of Wasatch Advisors, Inc. (the
"Adviser"), the investment adviser and manager of the Fund, and the Company
may, without extra remuneration, solicit proxies on behalf of the management of
the Fund by means of mail, telephone or personal interviews.
A proxy may be revoked before the meeting by giving written notice of
revocation to the Secretary of the Company, or at the meeting prior to the
voting. In instances where choices are specified by the shareholders in the
proxy, those proxies will be voted or the vote will be withheld in accordance
with the shareholder's choice. Unless revoked, properly executed proxies in
which choices are not specified by the shareholders will be voted "for" each
item for which no choice is specified, in accordance with the recommendation of
the Board of Directors. Abstentions may be specified on all proposals and
abstentions (including broker non-votes, if any) will be counted as present for
purposes of determining whether a quorum of shares is present at the meeting
with respect to the item on which the abstention is noted but will not be
counted as a vote "for" or "against" such item. Under the Rules of the New
York Stock Exchange, if a proposal is considered "discretionary," then brokers
who hold Fund shares in street name for customers are authorized to vote on
such proposal on behalf of their customers with or without specific voting
instructions from such customers. If a broker returns a "non-vote" proxy,
indicating a lack of authority to vote on a proposal, then the shares covered
by such non-vote shall not be counted as present for purposes of calculating
the vote with respect to such proposal. So far as the Board of Directors is
aware, no matters other than those described in this Proxy Statement will be
acted upon at the meeting. Should any other matters come before the meeting
calling for a vote of shareholders, it is the intention of the persons named as
proxies in the enclosed proxy to vote upon such matters according to their best
judgment.
If a quorum is not present at a meeting, or if a quorum is present but
sufficient votes to approve any of the proposals are not received, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies. In determining whether to adjourn the
meeting, the following factors may be considered: the nature of the proposals
that are the subject of the meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the meeting in person or by
proxy.
Only shareholders of record on May 15, 1996 may vote at the meeting or
any adjournments thereof. As of that date, there were issued and outstanding
________________________________________ common shares, $.001
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par value, of the Fund. Common shares represent the only class of securities
of the Fund. Each shareholder of the Fund is entitled to one vote for each
share held. None of the matters to be presented at the meeting will entitle
any shareholder to appraisal rights.
The Fund's annual report for the fiscal year ended September 30, 1995
and semi-annual report for the fiscal period ended March 31, 1996, including
financial statements, were previously mailed to shareholders. If you have not
received these reports or would like to receive another copy, please contact
the Fund at P.O. Box 2172, Milwaukee, Wisconsin 53201-2172, or call
800-551-1700 and one will be sent, without charge, by first-class mail within
three business days of your request.
To the knowledge of Fund management, the following were the owners
(beneficially or of record) of more than 5% of the outstanding shares of the
Fund as of May 15, 1996:
Percentage Number
Name Ownership of Shares
----- ---------- ---------
Charles Schwab & Company 27.39%156,660.598
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94104-4122
UMB Bank, n.a., Trustee 12.39%70,833.426
Ray R. Christensen IRA Rollover
175 South West Temple, Suite 510
Salt Lake City, UT 84101-1422
UMB Bank, n.a., Trustee 6.20%35,465.094
Dr. Jaime Mosquera IRA
Box 1504, HCR-3
Rocky Mount, MO 65072
PROPOSAL ONE
APPROVAL OF AN AMENDMENT TO THE ADVISORY AND
SERVICE CONTRACT BETWEEN THE FUND AND
WASATCH ADVISORS, INC.
The Proposed Amendment
The Company's Board of Directors has approved, and recommends that
shareholders approve, an amendment (the "Amendment") to the Advisory and
Service Contract dated December 4, 1986 (the "Advisory Contract") between the
Company, on behalf of the Fund, and Wasatch Advisors, Inc. (the "Adviser").
The Amendment authorizes the Adviser, at its option and expense, to retain a
sub-adviser or sub-advisers to assist the Adviser in furnishing investment
advice to the Fund. The Amendment is being proposed because the Adviser and
the Company's Board of Directors believe that the Fund's investment performance
would likely be enhanced if a sub-adviser specializing in fixed income
management could be engaged and that Fund marketing might also be enhanced if a
sub-adviser with an excellent reputation for fixed income management were
retained. A copy of the Amendment is attached as Exhibit A to the Proxy
Statement. The Amendment provides that the Adviser shall be responsible for
monitoring compliance by any sub-adviser it retains with the investment
policies and restrictions of the Fund and with any other limitations or
directions prescribed by the Board of Directors. The Amendment further
provides that any appointment of a sub-adviser will in no way limit or diminish
the Adviser's obligations and responsibilities under the Advisory Agreement.
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The Amendment does not change the rate of the advisory fee payable by
the Fund. The Adviser would continue to receive compensation (paid monthly) at
the current annual rate of 0.50% of the Fund's average daily net assets. A
sub-advisory agreement (the "Sub-Advisory Agreement") between the Adviser and
Hoisington Investment Management Company ("Hoisington") is also being presented
for shareholder approval. See "Proposal Two -- Approval of a Sub-Advisory
Agreement Between Wasatch Advisors, Inc. and Hoisington Investment Management
Company." If the proposed Sub-Advisory Agreement is approved by shareholders,
the Adviser will pay the Sub-Adviser a monthly management fee computed at the
annual rate of .02% of the Fund's average daily net assets as long as and
whenever the Fund has net assets less than $20 million and one-half (1/2) of
the monthly fee the Adviser receives from the Fund under the Advisory Contract
as long as and whenever the Fund has net assets of $20 million or more. The
Adviser will retain the remainder of the advisory fee paid under the Advisory
Contract.
The Adviser has voluntarily agreed to limit the total expenses of the
Fund to .75% of the Funds' average net assets computed on a daily basis
following the approval and effectiveness of proposals one, two and three as set
forth in this Proxy Statement. The Adviser will maintain such expense
limitation at least through _____________, 19__.
The Amendment was approved by the Board of Directors at a meeting held
May 17, 1996, subject to the approval of the shareholders of the Fund. A
discussion of the factors considered by the Company's Board of Directors in
approving the Amendment and the Sub-Advisory Agreement is set forth below under
"Proposal Two -- Approval of a Sub-Advisory Agreement Between Wasatch Advisors,
Inc. and Hoisington Investment Management Company."
GENERAL INFORMATION CONCERNING THE ADVISORY CONTRACT
The Advisory Contract was approved by the Fund's initial shareholders
at inception in 1986 and has not been submitted to shareholders since that
time. The contract was last approved by the Company's Board of Directors,
including the disinterested directors, on December 8, 1995. Pursuant to the
Advisory Contract, the Adviser furnishes the Fund with investment advice and,
in general, supervises the management and investment program of the Fund. The
Adviser furnishes at its own expense office facilities and simple business
equipment. In addition, the Adviser pays the salaries and fees of any officers
of the Adviser serving as officers or directors of the Fund. Under the
Advisory Contract, the Fund pays the Adviser an advisory fee calculated and
paid monthly at the per annum rate of 0.50% of the Fund's average daily net
assets. For the fiscal year ended September 30, 1995, the Fund paid $16,871 in
advisory fees to the Adviser and the Adviser waived an additional $19,946 in
advisory fees which would otherwise have been payable.
The Advisory Contract will terminate automatically in the event of its
assignment. In addition, the Advisory Contract is terminable at any time,
without penalty, by the Board of Directors or by a vote of a majority of the
Fund's outstanding voting securities on 60 days' written notice to the Adviser,
and by the Adviser on 60 days' written notice to the Fund. The Advisory
Contract shall continue in effect only so long as such continuance is
specifically approved at least annually by either the Board of Directors of the
Company, or by a vote of a majority, as defined in the Investment Company Act
of 1940, as amended (the "1940 Act"), of the outstanding voting securities of
the Fund, provided that, in either event, such continuance is also approved by
a vote of a majority of the directors who are not parties to such Contract, or
interested persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval.
VOTE REQUIRED
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
OF THE FUND VOTE TO APPROVE THE PROPOSED AMENDMENT TO THE ADVISORY CONTRACT.
Adoption of the proposal requires the
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favorable vote of a majority of the outstanding shares of the Fund, as defined
in the 1940 Act, which means the lesser of the vote of (a) 67% of the shares of
the Fund present at a meeting where more than 50% of the outstanding shares are
present in person or by proxy, or (b) more than 50% of the outstanding shares
of the Fund (i.e., a "supra-majority" vote). Unless otherwise instructed, the
proxies will vote for the approval of the proposed Amendment.
PROPOSAL TWO
APPROVAL OF A SUB-ADVISORY AGREEMENT
BETWEEN WASATCH ADVISORS, INC. AND
HOISINGTON INVESTMENT MANAGEMENT COMPANY
THE PROPOSED SUB-ADVISORY AGREEMENT
Following the Adviser's decision to recommend hiring a sub-adviser,
the Adviser presented the Sub-Advisory Agreement to the Company's Board of
Directors for its approval. The Board has approved, and recommends that
shareholders of the Fund approve, the Sub-Advisory Agreement. A copy of the
Sub-Advisory Agreement is attached as Exhibit B to this Proxy Statement. The
following discussion is qualified in its entirety by reference to the text of
the Sub-Advisory Agreement.
Under the terms of the Sub-Advisory Agreement, and subject to the
supervision of the Adviser, Hoisington will direct the investment of the Fund's
assets and will be responsible for the formulation and implementation of a
continuing program for the management of the Fund's assets and resources.
Hoisington will make all determinations with respect to the investment of the
assets of the Fund and will take all steps as may be necessary to implement the
determinations, including the placement of purchase and sale orders on behalf
of the Fund.
The Sub-Advisory Agreement provides that the Adviser shall pay
Hoisington a monthly management fee computed at the annual rate of .02% of the
Fund's average daily net assets as long as and whenever the Fund has net assets
less than $20 million and one-half (1/2) of the monthly fee the Adviser
receives from the Fund under the Advisory Contract as long as and whenever the
Fund has net assets of $20 million or more. The Adviser will retain the
remainder of the advisory fee paid under the Advisory Contract. See "Proposal
One -- Approval of an Amendment to the Advisory and Service Contract Between the
Fund and Wasatch Advisors, Inc."
The Board of Directors of the Company has adopted a resolution
changing the name of the Fund to "Wasatch-Hoisington U.S. Treasury Fund"
effective on the date the Sub-Advisory Agreement becomes effective, which is
expected to be July 1, 1996.
The Sub-Advisory Agreement will terminate automatically in the event
of its assignment. In addition, the Sub-Advisory Agreement is terminable at
any time, without penalty, by the Board of Directors or by a vote of a majority
of the Fund's outstanding voting securities on 60 days' written notice to the
Adviser and Hoisington, by the Adviser on 60 days' written notice to the
Sub-Adviser, or by the Sub-Adviser on 60 days' written notice to the Adviser.
The Sub-Advisory Agreement shall continue in effect only so long as such
continuance is specifically approved at least annually by either the Board of
Directors of the Company, or by a vote of a majority (as defined in the 1940
Act) of the outstanding voting securities of the Fund, provided that, in either
event, such continuance is also approved by a vote of a majority of the
directors who are not parties to such Agreement, or interested persons of such
parties, cast in person at a meeting called for the purpose of voting on such
approval.
BOARD DELIBERATIONS
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The Sub-Advisory Agreement was approved by the Company's Board of
Directors, subject to shareholder approval, at a meeting held May 17, 1996.
Prior to approving the Sub-Advisory Agreement, the Board considered a variety
of factors, including (a) the historical performance of the Fund and the types
of portfolio securities purchased by the Fund to achieve its investment
objectives; (b) the nature, quality and extent of the services proposed to be
provided by the Adviser and Hoisington relative to those currently provided by
the Adviser alone; (c) the organizational depth, reputation and experience of
Hoisington in managing fixed income portfolios; (d) the financial condition of
Hoisington; and (e) the performance of accounts advised by Hoisington that are
similar in portfolio composition to the Fund. The Board also considered the
reasonableness of the proposed fee allocation between the Adviser and
Hoisington in light of the Adviser's reduced investment role but continued
overall responsibility.
VOTE REQUIRED
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT THE SHAREHOLDERS
OF THE FUND VOTE TO APPROVE THE PROPOSED SUB-ADVISORY AGREEMENT. Adoption of
the proposal requires a "supra-majority" vote. Unless otherwise instructed,
the proxies will vote for the approval of the proposed Sub-Advisory Agreement.
PROPOSAL THREE
APPROVAL OF A MODIFICATION
TO THE FUND'S INVESTMENT OBJECTIVES
The Fund's Prospectus currently provides that the
"Income Fund's primary investment objective is to
receive current income at low risk by investing in fixed
income securities. The secondary objective is capital
appreciation."
It is proposed that the Prospectus language be modified to provide:
"The primary investment objective of the Fund is to
provide a real rate of return over a market cycle by investing
in U.S. Treasury Securities with an emphasis on both income
and capital appreciation."
If this change is approved the Fund will not emphasize current income,
but instead will emphasize both income and capital appreciation. With the
reduced emphasis on current income the Board of Directors of the Fund has
adopted a resolution providing that following the payment of the monthly
dividend for the month ended July 31, 1996, the Fund will pay dividends
annually, rather than monthly.
A description of the Fund, following the approval of items #1 through
#4 of this Proxy Statement, is set forth in Exhibit C hereto.
VOTE REQUIRED
The Board of Directors of the Company recommends that shareholders of
the Fund vote to approve the proposed modification to the Fund's investment
objectives. Adoption of the proposal requires a "supra-majority" vote. Unless
otherwise instructed, the proxies will vote for the approval of the modified
investment objectives.
PROPOSAL FOUR
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APPROVAL OF THE PROPOSAL
TO ALLOW THE FUND
TO LEND PORTFOLIO SECURITIES
Currently the Fund has a fundamental policy which states that it may
not "make loans to other persons." The Board of Directors of the Company has
adopted a resolution to modify this restriction as follows:
"The Income Fund may not make loans to other persons,
except that it may lend portfolio securities representing up
to one-third of the value of its total assets. (The Income
Fund however, may purchase and hold debt instruments and enter
into repurchase agreements in accordance with its investment
objectives and policies, as in the opinion of the Income Fund
manager, these investments do not constitute the making of
loans.)"
The lending of portfolio securities to broker-dealers, banks and
certain other institutions may increase Fund income, but also may involve
certain risks. For further information on securities lending, including
limitations and measures to be taken to mitigate such risks, see the "Lending
of Portfolio Securities" section of Exhibit C hereto.
VOTE REQUIRED
The Board of Directors of the Company recommends that shareholders of
the Fund vote to approve the proposal to allow securities lending. Adoption of
the proposal requires a "supra-majority" vote. Unless otherwise instructed,
the proxies will vote for the approval of the proposal to allow securities
lending.
OTHER MATTERS
Management does not intend to present any business to the meeting not
mentioned in this Proxy Statement and currently knows of no other business to
be presented. If any other matters are brought before the meeting, the persons
named as proxies will vote on such matters in accordance with their judgment of
the best interests of the Fund.
SUPPLEMENTAL INFORMATION ABOUT THE ADVISER, THE FUND AND THE COMPANY
No officers or Directors of the Company have family relationships with
other officers or Directors of the Company. The Adviser does not currently
serve as investment adviser for any other investment companies that have an
investment objective similar to that of the Fund. The name and principal
occupation of the principal executive officer and each director of the Adviser
are set forth below. The address of each person is 68 South Main Street, Suite
400, Salt Lake City, Utah 84101.
Name and Address Principal Occupation
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Samuel S. Stewart, Jr. Chairman of the Board of Directors and President of the Adviser; President and Director of
Wasatch Funds, Inc. (the
"Company"); Director of
Research for the Adviser;
Professor of Finance at the
University of Utah.
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Roy S. Jespersen Director, Vice President and Portfolio Manager of the Adviser; Director and Vice
President of the Company.
Mark E. Bailey Director, Vice President and Portfolio Manager of the Adviser.
Jeffrey S. Cardon Director, Vice President and Security Analyst of the Adviser; Director and Vice President of
the Company.
Karolyn Barker Director and Security Analyst of the Adviser.
Robert Gardiner Director and Security Analyst of the Adviser.
James Milligan Director and Marketing Director of the Adviser.
Venice F. Edwards is Secretary/Treasurer of the Company and Compliance Officer of the Adviser. No officer or
Director of the Company owns any voting securities of the Adviser except for Messrs. Stewart (25%), Jespersen (13%) and
Cardon (13%).
SUPPLEMENTAL INFORMATION ABOUT THE SUB-ADVISER
Hoisington is a registered investment adviser that was incorporated in
1980. Hoisington is wholly-owned by Van Robert Hoisington and provides
investment management services for individuals, pension and profit sharing
plans, trusts and estates, charitable organizations and corporations and other
business entities. As of December 31, 1995, Hoisington provided investment
advice to 43 separately managed accounts and had approximately $2.8 billion of
assets under management. Hoisington provides investment management for fixed
income securities, including U.S. government securities.
The address of Hoisington and each of its directors is 1250 Capital of
Texas Highway South, Building 3, #600, Austin, Texas 78746. The names and
principal occupations of the principal executive officer and each director of
Hoisington are set forth below.
Name Principal Occupation
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Van Robert Hoisington President and Director of Hoisington.
Ethel Jeanne Hoisington Director of Hoisington.
David M. Hoisington Director and Vice President of Hoisington.
Van Robert Hoisington, Jr. Director and Vice President of Hoisington.
.
Janice Teague Green Senior Vice President of Hoisington.
SHAREHOLDER PROPOSALS
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Any proposal by a shareholder to be considered for presentation at
the next Annual Meeting must be received at the Fund's offices, 68 South Main
Street, Suite 400, Salt Lake City, Utah 84101-, no later than August 15, 1996.
Samuel S. Stewart, Jr., President
Dated: May __________ , 1996
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WASATCH INCOME FUND
a series of Wasatch Funds, Inc.
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned appoints Samuel S. Stewart, Jr. and Venice Edwards,
and each of them, with power to act without the other and with the right of
substitution in each, the proxies of the undersigned to vote all shares of the
Wasatch Income Fund, a series of Wasatch Funds, Inc. (the "Company") held by
the undersigned at a special meeting of shareholders to be held June 21, 1996,
and at any adjournments thereof, with all the powers the undersigned would
possess if present in person. All previous proxies given with respect to the
meeting are revoked.
THE PROXIES ARE INSTRUCTED:
1. To vote: FOR AGAINST ABSTAIN approval of an amendment to
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the Advisory and Service Contract between the Fund and Wasatch Advisors, Inc. (the "Adviser") authorizing the Adviser
to retain a sub-adviser or sub-advisers to assist the Adviser in furnishing investment advice to the Fund.
2. To vote: FOR AGAINST ABSTAIN approval of a sub-advisory agreement
---------- ---------- -----------
between the Adviser and Hoisington Investment Management Company ("Hoisington") pursuant to which Hoisington would
direct the investment of the Fund's assets and be responsible for the formulation and implementation of a continuing
program for the management of the Fund's assets.
3. To vote: FOR AGAINST ABSTAIN approval of a
------------ ----------------- --------------------
proposed modification to the investment objectives of the Fund.
4. To vote: FOR AGAINST ABSTAIN approval of a
------------ ----------------- --------------------
proposed modification to the Fund's fundamental investment restrictions to allow it to lend portfolio securities.
In their discretion, the proxies are authorized to vote upon such other business as may properly come before
the special meeting or any adjournments or postponements thereof.
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE ABOVE MATTERS. IT IS UNDERSTOOD THAT, IF NO CHOICE IS SPECIFIED,
THIS PROXY WILL BE VOTED "FOR" ALL ITEMS. UPON ALL OTHER MATTERS THE PROXIES SHALL VOTE AS THEY DEEM IN THE BEST
INTERESTS OF THE FUND. RECEIPT OF NOTICE OF MEETING AND PROXY STATEMENT IS ACKNOWLEDGED BY YOUR EXECUTION OF THIS
PROXY. SIGN, DATE, AND RETURN IN THE ADDRESSED ENVELOPE-NO POSTAGE REQUIRED. PLEASE MAIL PROMPTLY TO SAVE THE FUND
FURTHER SOLICITATION EXPENSE.
Dated:_______________________________________________________________________________
_____________________________________________________________________________________
_____________________________________________________________________________________
IMPORTANT: Please date and sign this proxy.
If the stock is held jointly, signature should
include both names. Executors, administrators,
trustees, guardians, and others signing in a
representative capacity should give their full
title as such.