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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No.__ / / Post-Effective Amendment No.__
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
(Exact Name of Registrant as Specified in Charter)
600 West Broadway
San Diego, California 92101
(Address of Principal Executive Offices)
(619) 652-5422
(Registrant's Area Code and Telephone Number)
Charles H. Field, Jr.
C/O Nicholas-Applegate Capital Management
600 West Broadway, 32nd Floor
San Diego, California 92101
(Name and Address Of Agent For Service)
Copy To:
Deborah A. Wussow
C/O Nicholas-Applegate Capital Management
600 West Broadway, 32nd Floor
San Diego, California 92101
Approximate Date of Proposed Public Offering: as soon as practicable after
this Registration Statement becomes effective under the Securities Act of 1933.
The title of securities being registered is common stock, par value $0.01 per
share.
It is proposed that this filing will go effective on October 17, 2005
pursuant to Rule 488(a) under the Securities Act of 1933 as amended.
No filing fee is required because of Registrant's reliance on Section 24(f)
under the Investment Company Act of 1940, as amended.
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NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
Form N-14
Cross Reference Sheet
Pursuant to Rule 481(a) Under the Securities Act of 1933
The Registration Statement consists of the following papers and documents:
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FORM N-14
ITEM NO. PROSPECTUS/PROXY STATEMENT CAPTION
- ----------- ---------------------------------------------------
PART A
Item 1. Beginning of Registration Cover Page of Registration Statement; Cross
Statement and Outside Front Reference Sheet; Front Cover Page of Proxy
Cover Page of Prospectus Statement/Prospectus
Item 2. Beginning and Outside Back Cover Cover Page
Page of Prospectus
Item 3. Fee Table, Synopsis Information Synopsis
and Risk Factors
Item 4. Information About the Transaction Letter to Shareholders; Questions and Answers;
Synopsis; Proposed Reorganization; Reasons for the
Reorganization
Item 5. Information About the Registrant Letter to Shareholders; Questions and Answers;
Synopsis; Proposed Reorganization; Reasons for
the Reorganization; Additional Information About
the Acquiring Fund
Item 6. Information About the Fund Being Letter to Shareholders; Questions and Answers;
Acquired Synopsis; Proposed Reorganization; Reasons for the
Reorganization; Additional Information
Item 7. Voting Information Letter to Shareholders; Questions and Answers;
Cover Page; Voting Information
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Item 8. Interest of Certain Persons and Not Applicable
Experts
Item 9. Additional Information Required Not Applicable
for Reoffering By Persons Deemed
to be Underwriters
PART B
Item 10. Cover Page Cover Page
Item 11. Table of Contents Table of Contents
Item 12. Additional Information About Statement of Additional Information of
Registrant Nicholas-Applegate Institutional Funds dated July
30, 2004 (1); preliminary Statement of Additional
Information of Nicholas-Applegate International
All-Cap Growth Fund (SEC Accession No. 0001047469-05-022381)
incorporated herein by reference
Item 13. Additional Information About the Statement of Additional Information of
Fund Being Acquired Nicholas-Applegate International All-Cap Growth
Fund dated July 30, 2004 (SEC Accession
No. 0001047469-05-022381) incorporated herein by
reference (1); Statement of Additional Information
Item 14. Financial Statements Annual Report of Nicholas-Applegate International
All-Cap Growth Fund dated March 31, 2005
incorporated herein by reference and Pro Forma
Financial Statement dated March 31, 2005
PART C
Item 15. Indemnification
Item 16. Exhibits
Item 17. Undertakings
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Dear Shareholder:
I invite you to attend a Special Meeting of Shareholders of The
Nicholas-Applegate International All-Cap Growth Fund (the "Fund") to be held on
Friday, November 18, 2005, at 10:00 a.m. The meeting will be held at the offices
of the Fund, 615 East Michigan Street, 3rd Floor, Milwaukee, Wisconsin.
The accompanying Combined Proxy Statement/Prospectus contains an important
proposal for your consideration as a shareholder of the Fund. Your Board of
Trustees has proposed that the Fund, formerly the Duncan-Hurst International
Fund, be merged into a newly created portfolio of Nicholas-Applegate
Institutional Funds using the same name, the Nicholas-Applegate International
All-Cap Growth Fund (the "Acquiring Fund"). If approved by the shareholders,
substantially all of the assets and liabilities of the Fund will be exchanged
for shares of the Acquiring Fund as more fully described in the accompanying
Notice and Combined Proxy Statement/Prospectus.
THE BOARD OF TRUSTEES OF THE FUND BELIEVES THE PROPOSED REORGANIZATION WILL
BE IN THE BEST INTERESTS OF SHAREHOLDERS OF THE FUND. ACCORDINGLY, THE BOARD OF
TRUSTEES STRONGLY URGES YOU TO VOTE FOR THE PROPOSED REORGANIZATION. THE
REORGANZATION WILL BE EFFECTED ONLY IF APPROVED BY A MAJORITY OF THE FUND'S
OUTSTANDING SHARES VOTED IN PERSON OR REPRESENTED BY PROXY.
The enclosed materials provide more information about the proposed
reorganization.
Your vote is important. We urge you to complete, SIGN AND RETURN THE
ENCLOSED PROXY VOTING CARD so that your shares will be represented. EVERYTHING
YOU NEED IS ENCLOSED. By promptly returning the proxy card, you help avoid the
necessity and expense of follow-up mailings and telephone solicitations to
assure a quorum. If you later decide to attend the meeting, you may revoke your
proxy and vote your shares in person. If you have any questions, please call us
at 1-800-558-9105.
Sincerely,
Robert M. Slotky
President
The Nicholas-Applegate International All-Cap Growth Fund
Dated October 18, 2005
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WHAT YOU SHOULD KNOW ABOUT THE PROPOSED REORGANIZATION
Nicholas-Applegate Capital Management LLC ("Nicholas-Applegate") and the
Board of Trustees of the Professionally Managed Portfolios encourage you to read
the enclosed Prospectus/Proxy Statement carefully. The following is designed to
provide a brief overview of the proposal and answer some questions you may have
about this shareholder vote.
WHAT IS THE PURPOSE OF THE SHAREHOLDER VOTE?
The vote is to determine whether the Nicholas-Applegate International
All-Cap Growth Fund, a series of the Professionally Managed Portfolios (the
"Acquired Fund") should be reorganized and merged into a newly created portfolio
of the Nicholas-Applegate Institutional Funds using the same name (the
"Acquiring Fund"). If the Acquired Fund's shareholders decide in favor of the
proposal, you will become a shareholder of the Acquiring Fund, and the Acquired
Fund will cease to exist.
WHAT IS THE RATIONALE FOR MERGING THE ACQUIRED FUND AND THE ACQUIRING FUND?
On June 30, 2005, Nicholas-Applegate and Duncan-Hurst Capital Management
entered into a purchase agreement pursuant to which Nicholas-Applegate acquired
the rights to manage the international assets previously managed by Duncan-Hurst
Capital Management, which included the assets of the Acquired Fund. The
acquisition by Nicholas-Applegate of the rights to manage Duncan-Hurst Capital
management's international assets was mutually agreed upon by each company to
enhance Nicholas-Applegate's international equity capabilities while
Duncan-Hurst Capital Management will continue to focus on its core strength in
the management of U.S. growth equities. Nicholas-Applegate and Duncan-Hurst
Capital Management each share a similar heritage of growth stock investing and
trace their roots back to pacific Century Advisers, a subsidiary of Security
Pacific Bank. Both companies received financial benefits from this agreement. In
connection with the acquisition, the Board named Nicholas-Applegate as interim
adviser to the Acquired Fund effective July 1, 2005 through November 28, 2005.
Nicholas-Applegate also manages the Nicholas-Applegate Institutional Funds, an
investment company with 13 separate portfolios registered under the Investment
Company Act of 1940. Nicholas-Applegate seeks to bring the Acquired Fund into
Nicholas-Applegate Institutional Funds to be marketed under its brand name and
to its institutional clients through an affiliated distributor,
Nicholas-Applegate Securities, LLC.
WHAT ARE THE ADVANTAGES OF MERGING THESE FUNDS?
There are several key potential advantages:
- It is anticipated that the Acquiring Fund will likely have a better
opportunity to raise asset levels if it can be marketed under the
Nicholas-Applegate name to its institutional clients.
- Higher asset levels may lead to lower expense ratios over time. It is
anticipated that merging the Acquired Fund into the Acquiring Fund
will lower annual operating expenses.
- These lower costs may lead to stronger performance, since total return
to a Fund's shareholders is net of Fund expenses for the Acquired Fund
shareholders.
The potential benefits and possible disadvantages of merging the Funds are
explained in more detail in the enclosed proxy statement.
HOW ARE THESE FUNDS ALIKE?
The two Funds are substantially similar in terms of investment objectives,
policies, and strategies. Each Fund seeks long-term capital appreciation by
investing primarily in equity securities of issuers located in at least three
countries but typically in as many as fifteen to twenty-five countries outside
the United States. The Acquiring Fund will be managed by the same portfolio
management team of Vincent Willyard, CFA, Joseph Devine, and Barry Kendall.
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WHAT HAPPENS IF SHAREHOLDERS DECIDE IN FAVOR OF A REORGANIZATION?
Acquired Fund shareholders will receive full and fractional Class I shares
of the Acquiring Fund equal in value to their shares that they owned on the
effective date of the reorganization.
IF THE FUNDS MERGE, WILL THERE BE TAX CONSEQUENCES FOR YOU?
Unlike a transaction in which you direct Nicholas-Applegate to sell shares
of one fund to buy shares of another, an exchange of shares pursuant to a
reorganization is not considered a taxable event. The Funds themselves also will
recognize no gains or losses as a result of a reorganization, except with
respect to the Acquired Fund's assets that are sold in connection with its
reorganization. Accordingly, you will not have to report any capital gains due
to a reorganization, although you may receive a distribution of ordinary income
and/or capital gains immediately before its reorganization to the extent that
the Acquired Fund has undistributed income and/or gains.
You should consult your tax advisor regarding any possible effect a
reorganization might have on your tax situation, given your personal
circumstances -- particularly regarding state and local taxes.
WHO WILL PAY FOR THE REORGANIZATION?
The expenses of the reorganization, including legal expenses, printing,
packaging, and postage, plus the costs of any supplementary solicitation, will
be borne by Nicholas-Applegate.
WHAT DOES THE BOARD RECOMMEND?
The Board believes you should vote in favor of the reorganization. More
importantly, however, the Board recommends that you study the issues involved,
call us with any questions, and vote promptly to ensure that a quorum will be
represented at the Meeting.
WHERE CAN I GET MORE INFORMATION ABOUT THE ACQUIRING FUND?
We hope this Q&A has helped you better understand why we are making this
proposal. If you have any questions, we encourage you to call us at
1-800-558-9105.
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PROFESSIONALLY MANAGED PORTFOLIOS
ON BEHALF OF
THE NICHOLAS-APPLEGATE INTERNATIONAL ALL-CAP GROWTH FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the
Nicholas-Applegate International All-Cap Growth Fund (the "Fund"), formerly the
Duncan-Hurst International Fund, will be held at 615 East Michigan Street, 3rd
Floor, Milwaukee, Wisconsin on Friday, November 18, 2005, at 10:00 a.m., Eastern
time to consider and act on the proposal noted below and to transact such other
business as may properly come before the Special Meeting or any adjournments of
the Special Meeting.
ITEM 1. To approve or disapprove an Agreement and Plan of
Reorganization by and between the Professionally Managed Portfolios on
behalf of the Fund and the Nicholas-Applegate Institutional Funds on
behalf of the Nicholas-Applegate International All-Cap Growth Fund
(which has the same name as the Fund, but is a different entity), and
the transactions contemplated thereby.
ITEM 2. To transact other business that properly comes before the
Meeting or any adjournment thereof.
The reorganization proposal is described in the accompanying
Prospectus/Proxy Statement.
Only shareholders of record at the close of business on October 12, 2005,
the record date for this Special Meeting, shall be entitled to vote at the
Special Meeting or any adjournments of the Special Meeting.
YOUR VOTE IS IMPORTANT.
PLEASE RETURN YOUR PROXY CARD PROMPTLY.
AS A SHAREHOLDER OF THE FUND, YOU ARE ASKED TO ATTEND THE SPECIAL MEETING
EITHER IN PERSON OR BY PROXY. IF YOU ARE UNABLE TO ATTEND THE SPECIAL MEETING IN
PERSON, WE URGE YOU TO COMPLETE, SIGN, DATE, AND RETURN THE ENCLOSED PROXY CARD
IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. YOUR PROMPT RETURN OF THE PROXY CARD
WILL HELP ASSURE A QUORUM AT THE SPECIAL MEETING AND AVOID ADDITIONAL EXPENSES
ASSOCIATED WITH FURTHER SOLICITATION. SENDING IN YOUR PROXY WILL NOT PREVENT YOU
FROM VOTING YOUR SHARES IN PERSON AT THE SPECIAL MEETING AND YOU MAY REVOKE YOUR
PROXY BY ADVISING THE SECRETARY OF THE PROFESSIONALLY MANAGED PORTFOLIOS IN
WRITING (BY SUBSEQUENT PROXY OR OTHERWISE) OF SUCH REVOCATION AT ANY TIME BEFORE
IT IS VOTED.
By Order of the Board of Trustees,
Chad E. Fickett
SECRETARY
Professionally Managed Portfolios
Milwaukee, Wisconsin
October 18, 2005
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TRANSFER OF ASSETS OF
NICHOLAS-APPLEGATE INTERNATIONAL ALL-CAP GROWTH FUND
(FORMERLY THE DUNCAN-HURST INTERNATIONAL FUND)
(A SERIES OF THE PROFESSIONALLY MANAGED PORTFOLIOS)
TO AND IN EXCHANGE FOR SHARES OF
NICHOLAS-APPLEGATE INTERNATIONAL ALL-CAP GROWTH FUND
(A SERIES OF THE NICHOLAS-APPLEGATE INSTITUTIOAL FUNDS)
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COMBINED PROXY STATEMENT AND PROSPECTUS
DATED OCTOBER 18, 2005
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SPECIAL MEETING OF SHAREHOLDERS TO BE HELD FRIDAY, NOVEMBER 18, 2005
This Combined Proxy Statement and Prospectus ("Statement") is furnished in
connection with the solicitation of proxies by the Board of Trustees of the
Professionally Managed Portfolios for the Special Meeting of Shareholders (the
"Special Meeting") of the Nicholas-Applegate International All-Cap Fund
(formerly the Duncan Hurst International Fund) (the "Fund") to be held on
Friday, November 18, 2005, at 10:00 a.m., Eastern time. The meeting will be held
at the offices of Fund, 615 East Michigan Street, 3rd Floor, Milwaukee,
Wisconsin 53202.
As more fully described in this Statement, the purpose of the Special
Meeting is to vote on a proposed Agreement and Plan of Reorganization (the
"Reorganization"). In the Reorganization, the Nicholas-Applegate International
All-Cap Growth Fund, a newly created portfolio of the Nicholas-Applegate
Institutional Funds (the "Acquiring Fund") will acquire substantially all of the
assets of the Nicholas-Applegate International All-Cap Growth Fund, a portfolio
of the Professionally Managed Portfolios (the "Acquired Fund"), in exchange
solely for its shares and the assumption of all of the Acquired Fund's
liabilities, followed by the distribution of those shares to the Acquired Fund's
shareholders. As a result, each of the Acquired Fund's shareholders will receive
a number of full and fractional Class I shares of the Acquiring Fund having an
aggregate value that on effective date of the Reorganization is equal to the
aggregate value of the shareholder's Acquired Fund's shares. As soon as
practicable following the distribution of the Acquiring Fund's Class I shares,
the Acquired Fund will be terminated.
This Statement sets forth concisely the information that shareholders of
the Acquired Fund should know before voting on the Reorganization. This
Statement should be retained for future reference. A copy of the Agreement and
Plan of Reorganization is attached to this Statement as Exhibit A and is
incorporated herein by reference.
A Preliminary Prospectus for the Acquiring Fund (SEC File #811-07384),
which describes the investment objectives, program, policies and risks of the
Acquiring Fund, accompanies this Statement. A Prospectus for the Acquired Fund
(SEC File #811-05037), dated July 29, 2005, was previously provided to
shareholders. Additional information concerning the Acquiring Fund is set forth
in the preliminary Statement of Additional Information which accompanies this
Statement, and additional information concerning the Acquired Fund is set forth
in the Statement of Additional Information (SEC File #811-05037) dated July 29,
2005. Each of these documents is on file with the Securities and Exchange
Commission, and is available without charge upon oral or written request by
writing or calling The Professionally Managed Portfolios or Nicholas-Applegate
Institutional Funds at the address and telephone numbers listed under the
section "Additional Information About Each Fund". The Prospectus for the
Nicholas-Applegate Institutional Funds is also available on its website at
http:\\www.nacm.com. The Securities and Exchange Commission maintains a website
at http:\\www.sec.gov that contains the Prospectuses, Statements of Additional
Information, material incorporated by reference and other information regarding
The Professionally Managed Portfolios, the Nicholas-Applegate Institutional
Funds, and other registrants that file electronically with the Securities and
Exchange Commission. The information contained in each of these Prospectuses and
Statements of Additional Information is incorporated into this Statement by
reference.
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The Statement constitutes (i) the proxy statement of the Acquired Funds for
the Special Meeting and (ii) the Preliminary Prospectus for the Acquiring Fund
shares, which has been filed with the Securities and Exchange Commission and is
to be issued in connection with the Reorganization.
The Notice, this Statement, and the accompanying proxy card are expected to
first be sent to shareholders of the Acquired Funds on or about October 18,
2005.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR
OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARNATEED BY ANY BANK, AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED ON THE ACCURACY OR ADEQUACY OF THIS STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS STATEMENT AND IN THE
MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED ON AS HAVING BEEN
AUTHORIZED BY THE PROFESSIONALLY MANAGED PORTFOLIOS OR NICHOLAS-APPLEGATE
INSTITUTIONAL FUNDS, OR THEIR RESPECTIVE INVESTMENT ADVISERS OR DISTRIBUTORS.
VOTE REQUIRED: EACH PROPOSAL MUST BE APPROVED BY THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES OF THE ACQUIRED FUND.
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TABLE OF CONTENTS
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PAGE
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SYNOPSIS 5
Proposed Reorganization 5
Reasons for Reorganization 6
Investment Adviser 6
Federal Income Tax Consequences 6
COMPARISON OF THE ACQUIRED FUNDS AND THE ACQUIRING FUNDS 6
Principal Investments 6
Principal Risk Considerations 7
Comparative Fee Table 8
Purchase and Redemption Information, Exchange Privileges
Distributions and Pricing
VOTING ITEMS -- THE AGREEMENT AND PLAN OF REORGANIZATION 10
Description of the Reorganization Agreement 10
Reasons for the Reorganization 11
Securities to Be Issued 12
Federal Income Tax Consequences 12
CAPITALIZATION 12
GENERAL INFORMATION 13
Information Relating to Voting Matters 13
Outstanding Shares 13
Shareholder and Board Approvals 14
Quorum 14
ADDITIONAL INFORMATION ABOUT EACH FUND 14
The Trusts: Massachusetts Business Trust versus Delaware Business Trust 14
Liability of Shareholders 14
Election of Trustees; Shareholder Meetings 15
Voting Rights of Shareholders 15
Principal Underwriters 16
For More Information 16
OTHER BUSINESS 16
SHAREHOLDER INQUIRIES 17
EXHIBIT A: Agreement and Plan of Reorganization A-1
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SYNOPSIS
The following is a summary of certain background information relating to
the proposed Reorganization, the parties thereto and the transactions
contemplated thereby, and is qualified by reference to the more complete
information contained elsewhere in this Statement, the Prospectus, Statement of
Additional Information, Annual and Semi-Annual Reports of the Acquired Fund, the
Preliminary Prospectus and Statement of Additional Information of the Acquiring
Fund, and the Agreement and Plan of Reorganization.
At a meeting held on June 13, 2005, the Board of Trustees of the Acquired
Fund (the "Board") approved Nicholas-Applegate Capital Management
("Nicholas-Applegate") as the interim adviser to the Acquired Fund, effective
from July 1, 2005 through November 28, 2005, to replace Duncan Hurst Capital
Management ("Duncan Hurst"), who had resigned as investment adviser of the
Acquired Fund following the transfer of its international assets to
Nicholas-Applegate. Nicholas-Applegate is also the investment adviser of the
Nicholas-Applegate Institutional Funds, a registered investment company whose
thirteen portfolios Nicholas-Applegate markets primarily to institutional
investors. The Acquiring Fund is a portfolio of the Nicholas-Applegate
Institutional Funds. At a meeting held on August 12, 2005 of the Board,
Nicholas-Applegate asked the Board to approve an Agreement and Plan of
Reorganization ("Reorganization"), subject to shareholder ratification, whereby
the Acquired Fund and the Acquiring Fund would merge. At that meeting, the Board
unanimously approved the Reorganization.
The investment objectives, investment policies and restrictions of the
Acquired Fund and the Acquiring Fund (collectively, the "Funds") are
substantially similar. Both Funds seek long-term capital appreciation by
investing primarily in a diversified portfolio of equity and equity-related
securities of companies located in developed non-U.S. markets. Under normal
market conditions the Acquiring Fund will invest 80% of its total net assets in
equity and equity-related securities of issuers located in a number of different
countries, typically as many as fifteen to twenty-five countries outside the
United States. The Acquiring Fund will invest in companies of any size, from
larger, well-established companies to smaller emerging growth companies. The
investment objectives of the Acquiring Fund may not be changed without a vote of
the holders of a majority of the outstanding shares of the Acquiring Fund.
Shares of the Acquired Fund are sold on a 100% no-load basis, meaning that
such shares may be purchased, redeemed, or exchanged at their net asset value
without payment of a sales charge. In addition, the Acquired Fund does not
charge Rule 12b-1 fees but does impose a redemption fee of 2.00% on shares held
less than four months. Acquiring Fund shares will be soled on a 100% no-load
basis and do not charge Rule 12b-1 fees. The Acquiring Fund will not impose a
redemption fee. The purchase price for shares of the Acquiring Fund will be the
net asset value next determined after the Acquiring Fund receives the
shareholder's request in proper form. Please note that Acquiring Fund shares may
be exchanged for shares in any of the other portfolios of the Nicholas-Applegate
Institutional Funds
PROPOSED REORGANIZATION
Based on their evaluation of the relevant information presented to them,
and in light of their fiduciary duties under federal and state law, the Board,
including all of Trustees who are not "interested persons" of the Acquired Fund,
as that term is defined in the Investment Company Act of 1940, as amended ("1940
Act") ("Independent Trustees"), have determined that the proposed Reorganization
is in the best interests of the shareholders of the Acquired Fund. The Board
recommends the approval of the Reorganization Agreement and related transactions
by the shareholders of the Acquired Fund at the Special Meeting.
Subject to shareholder approval, the Reorganization provides for: (a) the
transfer to the Acquiring Fund of substantially all of the property, assets,
liabilities and goodwill of the Acquired Fund (the "Acquired Fund Net Assets")
in exchange for Class I shares of the Acquiring Fund equal in value ("Acquiring
Fund Shares") to the Acquired Fund Net Assets; (b) the distribution of Acquiring
Fund Shares to the shareholders of the Acquired Fund in liquidation of the
Acquired Fund; and (c) the cancellation of all outstanding Acquired Fund Shares.
As a result of the proposed Reorganization, each shareholder of the
Acquired Fund will become a shareholder of the Acquiring Fund and will hold,
upon consummation of the Reorganization, Acquiring Fund Shares having a net
asset value equal to the net asset value of the Acquired Fund Shares held by the
shareholder immediately before consummation of the Reorganization. Acquiring
Fund offers shares in Class I, Class II, Class III and Class IV; however, only
Class I is involved in this Reorganization.
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For further information, see the discussion below on whether to approve or
disapprove the Reorganization, which includes a description of the Agreement and
Plan of Reorganization Agreement.
REASONS FOR THE REORGANIZATION
In light of certain potential benefits and other factors, the Board
including the Independent Trustees, determined that it is in the best interests
of the Acquired Fund and its shareholders to reorganize into the Acquiring Fund.
In making that determination, the Board of Trustees considered various issues,
as described more fully under "Reasons for the Reorganization."
The Board believes that the Reorganization with respect to the Acquired
Fund in most cases will: (a) provide Acquired Fund shareholders with an
investment fund that has the same investment adviser and investment objective,
and substantially similar investment policies, restrictions, and investment
strategies as the Acquired Fund; (b) provide Acquired Fund shareholders with
overall expense ratios that are more favorable than those of the Acquired Fund;
(c) provide Acquired Fund shareholders with an opportunity to be invest in a
fund that has the potential to achieve better economies of scale by being
marketed under the Nicholas-Applegate name and to the institutional clients of
Nicholas-Applegate and (d) provide Acquired Fund shareholders with a fund that
affords greater investment opportunities by allowing no-load exchange privileges
with other funds of the Nicholas-Applegate Institutional Funds.
The Board also considered the reasonably likely risks and disadvantages of
the Reorganization and determined that the Reorganization is likely to provide
benefits to the Acquired Fund and their shareholders that outweigh any possible
risks and disadvantages of the Reorganization. Finally, the Board concluded that
there are no reasonably significant risks or disadvantages to the Acquired Fund
or its shareholders from the Reorganization and that the interests of the
Acquired Fund's shareholders would not be diluted.
Similarly, the Board of Trustees of Nicholas-Applegate Institutional Funds,
in approving the Reorganization, determined that it would be advantageous for
its current shareholders to acquire the Acquired Fund Net Assets in exchange for
the Acquiring Fund Shares and that the interests of the Acquiring Fund's
existing shareholders would not be diluted.
INVESTMENT ADVISER
Nicholas-Applegate, 600 West Broadway, San Diego, California 92101 is the
investment adviser to the Acquiring Fund and the interim investment manager to
the Acquired Fund. After consummation of the Reorganization, Nicholas-Applegate
would continue to manage the Acquiring Fund, which would include assets from the
Acquired Fund. As of June 30, 2005 Nicholas-Applegate had approximately $14
billion under management.
FEDERAL INCOME TAX CONSEQUENCES
Counsel for this transaction will issue an opinion as of the Closing Date
to the effect that the Reorganization will not give rise to the recognition of
income, gain, or loss for federal income tax purposes to the Acquired Fund, the
Acquiring Fund, or their respective shareholders. See the discussion below on
whether to approve or disapprove the Reorganization, which includes a
description of the Reorganization Agreement.
COMPARISON OF THE ACQUIRED FUND AND THE ACQUIRING FUND
PRINCIPAL INVESTMENTS
The Acquired Fund is a series of the Professionally Managed Portfolios, a
Massachusetts business trust. The Acquiring Fund is a newly created series of
Nicholas-Applegate Institutional Funds, which is a Delaware business trust. The
Acquiring Fund has no performance history.
Nicholas-Applegate intends to manage the Acquiring Fund in a substantially
similar investment style to that of the Acquired Fund. The objective of both
Funds is to seek long-term capital growth by investing in a diversified
portfolio of equity securities of companies located in developed markets outside
the United States. This objective for the Acquiring Fund cannot be changed
without shareholder approval. The Acquiring Fund will invest at least 80% of its
total net assets in equity securities of companies in a number of different
countries, typically as many as fifteen to
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twenty five outside the United States. Under normal circumstances, the Acquired
Fund may invest a minimum of 65% of its total net assets in equity securities of
companies in as few as three, but typically invests in as many as fifteen to
twenty five countries outside the United States. Both the Acquired Fund and the
Acquiring Funds will invest in companies of any size from larger,
well-established companies to smaller, emerging growth companies.
Nicholas-Applegate will continue to conduct individual company analysis on
a group of companies that meet its standards of positive change, sustainability
and timeliness. It will continue to identify companies experiencing accelerating
earnings, rising relative price strength and positive company fundamentals.
Nicholas-Applegate will continue to focus on a "bottom-up" analysis of
individual companies worldwide as well as a "top down" analysis to identify the
most attractive sectors and countries for investment.
The Acquiring Fund may invest in companies in lesser-developed countries,
in various depositary receipts traded on domestic and foreign exchanges, as well
as foreign securities traded in the U.S. markets. The Acquiring Fund may also
lend portfolio securities on a short-term or long-term basis, up to 30% of its
total assets.
Vincent Willyard, CFA, will continue to be the lead portfolio manager for
the Acquiring Fund. Mr. Willyard has served as the portfolio manager of the
Acquired Fund since its inception and was employed by Duncan-Hurst Capital
Management as an investment professional since 1994.
PRINCIPAL RISK CONSIDERATIONS
The permitted investments of the Acquired Fund and the Acquiring Fund are
substantially similar. The following is an overview of the principal risks
involved in investing in the Acquiring Fund. A detailed description of the risks
involved in investing in the Acquiring Fund is contained in the Acquiring Fund's
Preliminary Prospectus and Statement of Additional Information.
- STOCK MARKET VOLATILITY -- The prices of equity securities change in
response to many factors, including the historical and prospective
earnings of the issuer, the value of its assets, general economic
conditions, interest rates, investor perceptions, domestic and worldwide
political events and market liquidity. Stock prices are unpredictable,
may fall suddenly and continue to fall for extended periods.
- NON-U.S. SECURITIES RISKS -- The prices of non-U.S. securities may be
further affected by other factors, including
CURRENCY EXCHANGE RATES -- The dollar value of the Acquiring
Fund's non-U.S. investments will be affected by changes in the
exchange rates between the U.S. dollar and the currencies in
which those investments are traded.
POLITICAL AND ECONOMIC CONDITIONS -- The value of the Acquiring
Fund's non-U.S. investments may be adversely affected by
political and social instability in their home countries and by
changes in economic and taxation policies in those countries.
REGULATIONS -- Non U.S. companies generally are subject to less
stringent regulations, including financial and accounting
controls, than are U.S. companies. As a result, there generally
is less publicly available information about non-U.S. companies
than about U.S. companies.
MARKETS -- The securities markets of other countries are smaller
than U.S. securities markets. As a result, many non U.S.
securities may be less liquid and their prices may be more
volatile than U.S. securities.
EMERGING SECURITIES MARKETS -- To the extent that the Acquiring
Fund invests in countries with emerging markets, the non-U.S.
securities risks are magnified since these countries may have
unstable governments and less established markets.
- SECURITIES LENDING -- There is the risk that when lending portfolio
securities, the securities may not be available to the Acquiring Fund on
a timely basis and the Acquiring Fund may, therefore, lose the
opportunity to sell the securities at a desirable price.
7
<Page>
COMPARATIVE FEE TABLE
The following table sets forth the current fees and expenses of the
Acquired Fund as of March 31, 2005, and the projected expenses of the Acquiring
Fund. Excluding extraordinary expenses, the current fees and expenses of the
Acquiring Fund are expected to remain unchanged as a result of the
Reorganization.
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
FEES AND EXPENSES
The following table describes the fees and expenses that you may pay if you
buy and hold Class I shares of the Fund.
<Table>
<Caption>
SHAREHOLDER FEE ACQUIRED FUND ACQUIRING FUND
- --------------- ------------- --------------
Maximum sales charge imposed on Purchases None None
Maximum deferred sales load None None
Redemption Fee (as a percentage of the amount redeemed) 2.00%* None
</Table>
* The redemption fee applies only to those shares that an investor held for
four months or less. The fee is payable to the Acquired Fund and is
intended to benefit the remaining shareholders by reducing the costs of
short-term trading. The Acquired Fund's transfer agent also charges a $15
redemption fee.
<Table>
<Caption>
ANNUAL FUND OPERATING EXPENSES
- ------------------------------
Investment Advisory Fee 1.25% 0.95%
Administrative Services None 0.15%
Shareholder Service Fees None 0.15%
Other Expenses 0.77% 0.56%
Total Annual Fund Operating Expenses 2.02% 1.81%
Less Waiver/Reimbursement - 0.54% - 0.56%
NET ANNUAL FUND OPERATING EXPENSES 1.48%* 1.25%**
</Table>
The Acquiring Fund has arrangements with its brokers, custodians, and third
party service providers whereby commissions paid by the Acquiring Fund, interest
earned on cash maintained with its custodian and income from securities lending
arrangements are used to reduce Acquiring Fund expenses and offset fees. These
arrangements will have no effect on the amount of fees that Nicholas-Applegate
must waive or expenses that it must otherwise reimburse under the Expense
Limitation Agreement through November 2006. If these expense reductions and fee
offsets are taken into account, "Total Annual Fund Operating Expenses" and "Net
Expenses" would be as follows:
<Table>
<Caption>
TOTAL ANNUAL FUND OPERATING EXPENSES NET EXPENSES
------------------------------------ ------------
1.56% 1.00%
</Table>
* Duncan-Hurst Capital Management has contractually agreed to reduce it fees
and/or pay expenses of the Acquired Fund for at least the period show in
the Example below and for an indefinite period thereafter to ensure the
Total Annual Fund Operating Expenses will not exceed the net annual
operating expenses amount shown. Duncan-Hurst Capital Management reserves
the right under circumstances to be reimbursed for any waiver of its fees
or expenses paid on behalf of the Acquired Fund if the Acquired Fund's
expenses are less than the limit agreed to by the Acquired Fund. This
contract may be terminated by the Board at any time.
** Nicholas-Applegate has contractually agreed to waive or defer its
management fees and to absorb other operating expenses otherwise payable
through November 30, 2006 by the Acquiring Fund so that Total Annual
Operating Expenses of the Acquiring Fund do not exceed 1.25%.
Nicholas-Applegate reserves the right under certain circumstances to be
reimbursed for any waiver of its fees or expenses paid on behalf of the
Acquiring Fund if the Acquiring Fund's expenses are less than 1.25%.
Nicholas-Applegate may not amend the fee waiver agreement without the
consent of the Acquired Fund Board of Trustees.
8
<Page>
EXAMPLE OF EFFECT OF FUND EXPENSES
The following Example is intended to help you compare the cost of investing
the Acquiring Fund assuming Acquired Fund shareholders approve the
Reorganization.
An investor in the Acquired Fund or the Acquiring Fund would pay the
following expenses on a $10,000 investment, assuming (1) 5% annual return, (2)
investment for the time periods indicated (3) reinvestment of all dividends and
other distributions, (4) the Fund's operating expenses are the same and (5)
redemption of all shares at the end of the following periods. Although your
actual costs may be higher or lower, based on these assumptions, your costs
would be:
<Table>
<Caption>
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ---------- ---------
ACQUIRED FUND:
Professionally Managed Portfolios
International All-Cap Growth Fund $ 155 $ 612 $ 1,115 $ 2,611
ACQUIRING FUND:
Nicholas-Applegate Institutional Funds
International All-Cap Growth Fund $ 131 $ 540 $ 991 $ 2,332
</Table>
The example above does not take into account any offset arrangements that
the Acquiring Fund will enter into with its brokers, custodians, and third party
service providers. If these offset credits described were applied to the above
example, your cost for the 1, 3, 5 and 10-year periods would be as follows:
<Table>
ACQUIRING FUND:
Nicholas-Applegate Institutional Funds
International All-Cap Growth Fund $ 105 $ 458 $ 846 $ 2,001
</Table>
PURCHASES
The purchase, redemption, and exchange privileges for the Acquiring Fund
and the Acquired Fund are similar in many respects but there are some
differences. Shares of the Acquired Fund and the Acquiring Fund are sold on a
continuous basis at the net asset value per share ("NAV") next computed after
receipt of a purchase order in good form. The NAV of both Funds is determined
each day that the New York Stock Exchange is open as of the close of regular
trading. Shares of both Funds may be purchased by wire transfer, telephone
exchange, or check by mail. The minimum initial investment in the Acquiring Fund
is $250,000 and the minimum subsequent investment is $10,000; the minimum
initial investment in the Acquired Fund is $25,000 and the minimum subsequent
investment is $1,000. However, the minimum investment requirements for the
Acquiring Fund will be waived for existing shareholders of the Acquired Fund who
transfer their accounts(s) to the Acquiring Fund as a part of the
Reorganization. Moreover, the minimum investment requirements for the Acquiring
Fund may be waived for purchases of shares made by current or retired trustees,
members, officers, and employees of the Nicholas-Applegate Institutional Funds,
Nicholas-Applegate Securities, LLC, Nicholas-Applegate, and its affiliates,
certain family members of the above persons, and trusts or plans primarily for
such persons or former employees thereof.
REDEMPTIONS
Shares of both Funds may be redeemed at the option of shareholders by wire
transfer, telephone exchange, or check by mail. Redemptions are made at the NAV
per share next determined after a request in proper form is received at the
offices of each Fund. However, the Acquired Fund imposes a 2% redemption fee on
shares redeemed within four months of purchase. If shares of the Acquiring Fund
are purchased with a check that has not yet cleared, payment will be delayed
until after the check has cleared. The maximum amount that may be redeemed by
phone from the Acquiring Fund is $50,000. Both Funds reserve the right to make
payment wholly or partly in securities with a market value equal to the
redemption price.
9
<Page>
EXCHANGES
Shares of the Acquiring Fund may be exchanged on any business day for
shares of any other available fund within the Nicholas-Applegate Institutional
Funds at the NAV next determined after a request in proper form is received at
the offices of the Acquiring Fund. Shares of the Acquired Fund have no exchange
privileges with any other fund managed by Nicholas-Applegate.
DIVIDENDS AND OTHER DISTRIBUTIONS
Each Fund earns investment income in the form of dividends and interest on
investments. Each Fund pays dividends based solely on its investment income.
Each Fund's policy is to annually distribute most or all of its net earnings in
the form of dividends to its shareholders, at the discretion of each Fund's
respective Board. Dividends are automatically reinvested in additional shares of
the distributing Fund at the NAV per share on the payable date unless otherwise
requested.
Each Fund also realizes capital gains and losses when it sells securities
for more or less than it paid. If a Fund's total gains on these sales exceed
total losses thereon (including losses carried forward from previous years), the
Fund has net capital gains. Net realized capital gains, if any, are distributed
to each Fund's shareholders at least annually, usually in November or December.
Capital gain distributions are automatically reinvested in additional shares of
the distributing Fund on the payable date unless otherwise requested.
VOTING ITEMS: AGREEMENT AND PLAN OF REORGANIZATION
DESCRIPTION OF THE REORGANIZATION AGREEMENT
The terms and conditions under which the Reorganization will be consummated
are set forth in the Agreement and Plan of Reorganization which is attached as
Exhibit A (the "Reorganization Agreement"). Significant provisions of the
Reorganization Agreement are summarized below; however, this summary is
qualified in its entirety by reference to the Reorganization Agreement.
The Reorganization Agreement provides that at the Closing Date the
Acquiring Fund will acquire substantially all of the property and assets of the
Acquired Fund in exchange solely for Class I shares of the Acquiring Fund and
the Acquiring Fund's assumption of all liabilities of the Acquired Fund.
In exchange for the transfer to the Acquiring Fund of the Acquired Fund's
assets, the Acquiring Fund will simultaneously issue at the Closing Date full
and fractional Acquiring Fund Class I shares to the Acquired Fund for
distribution PRO RATA by the Acquired Fund to its shareholders. The number of
Acquiring Fund Class I shares so issued by the Acquiring Fund will have an
aggregate net asset value equal to the value of the net assets of the Acquired
Fund on the Closing Date.
Following the close of business on the Closing Date, the Acquired Fund will
distribute PRO RATA to its shareholders the Acquiring Fund Class I shares
received by the Acquired Fund in liquidation thereof. Each shareholder owning
Acquired Fund Shares at the Closing Date will receive an amount of the
corresponding Acquiring Fund Class I shares equal to the value of their Acquired
Fund Shares.
The Reorganization is subject to a number of conditions, including, among
other things: (a) approval of the Reorganization Agreement and the transactions
contemplated thereby, as described in this Statement, by the Acquired Fund's
shareholders; (b) the receipt of certain legal opinions of the Reorganization
Agreement (which include a legal opinion that the Acquiring Fund shares issued
to Acquired Fund shareholders in accordance with the terms of the Reorganization
Agreement will be validly issued, fully paid, and non-assessable and a legal
opinion that the Reorganization will not give rise to the recognition of income,
gain, or loss for federal income tax purposes to any Acquired Fund of Acquiring
Fund; (c) the receipt of certain certificates from the parties concerning the
continuing accuracy of the representations and warranties in the Reorganization
Agreement and other matters; and (d) the parties' performance of their
respective agreements and undertakings in the Reorganization Agreement. Assuming
satisfaction of the conditions in the Reorganization Agreement, the Closing Date
will be on November 18, 2005, or such other date as is agreed to by the parties.
10
<Page>
The Reorganization Agreement provides that Nicholas-Applegate shall be
responsible for the payment of all reasonable expenses incurred in connection
with entering into and carrying out the Reorganization (which expenses include
the fees and disbursements of attorneys and auditors and proxy printing and
solicitation expenses).
The Reorganization Agreement and the Reorganization described herein may be
abandoned at any time prior to the Closing Date by the mutual consent of the
parties to the Reorganization Agreement. In such event, there shall be no
liability for damages on the part of any Fund, or its respective Board of
Trustees or officers, but Nicholas-Applegate shall bear all expenses incidental
to the preparation and carrying out of the Reorganization Agreement. The
Reorganization Agreement provides further that at any time prior to or after
approval of the Reorganization Agreement by the Acquired Fund's shareholders,
the Acquired Fund and Acquiring Fund, by written agreement, may amend, modify,
or supplement the Reorganization Agreement. The Reorganization Agreement further
provides that no such amendment, modification, or supplement may have the effect
of changing the provisions for determining the number of Acquiring Fund Shares
to be distributed to Acquired Fund shareholders under the Reorganization
Agreement to the detriment of the Acquired Fund shareholders, unless the
Acquired Fund shareholders approve such change or unless the amendment merely
changes the Closing Date.
REASONS FOR THE REORGANIZATION
The predecessor investment adviser to the Acquired Funds, Duncan-Hurst
Capital Management ("Duncan-Hurst") and the investment adviser to the Acquiring
Funds, Nicholas-Applegate Capital Management ("Nicholas-Applegate"), had entered
into an Asset Purchase Agreement, dated June 30, 2005 that, in addition to the
duties and responsibilities described in the Reorganization Agreement also
memorializes the proposed remuneration to be received by Duncan-Hurst in
connection with the proposed transaction. The acquisition by Nicholas-Applegate
of the rights to manage Duncan-Hurst Capital management's international assets
was mutually agreed upon by each company to enhance Nicholas-Applegate's
international equity capabilities while Duncan-Hurst Capital Management will
continue to focus on its core strength in the management of U.S. growth
equities. Nicholas-Applegate and Duncan-Hurst Capital Management each share a
similar heritage of growth stock investing and trace their roots back to pacific
Century Advisers, a subsidiary of Security Pacific Bank. Both companies received
financial benefits from this agreement. As consideration for the assets to be
acquired, Nicholas-Applegate has agreed to pay a portion of its investment
management fees to Duncan-Hurst earned on assets invested in international
all-cap growth and international small cap growth strategies until June 30,
2010. This transaction enabled Duncan-Hurst to exit the business of managing
international growth assets and concentrate its resources on managing US assets.
Based on their evaluation of the relevant information presented to them,
and in light of their fiduciary duties under federal and state law, the Board
has unanimously determined that the proposed Reorganization is in the best
interest of the shareholders, that the terms are fair and reasonable, and the
interests of the Acquired Fund's shareholders will not be diluted as a result of
the Reorganization. Accordingly, the Board recommends the approval of the
Reorganization Agreement by such shareholders at the Special Meeting. In
approving the Reorganization, the Board, including a majority of the Independent
Trustees, considered a number of factors, including the following:
(1) there would be no change in the investment adviser,
Nicholas-Applegate, and the portfolio management team;
(2) the similarity of the Acquiring Fund's investment objectives,
policies, risks and restrictions with those of the Acquired Fund and
the fact that the two Funds are duplicative;
(3) expense ratios and information regarding fees and expenses of the
Acquired Fund and the Acquiring Fund, including the planned expense
limitation arrangements offered by Nicholas-Applegate and the fact
that existing shareholders would experience a significant reduction in
Acquired Fund operating expenses;
(4) the effect of the Reorganization on the Acquired Fund's ability to
attract new investment;
(5) the terms and conditions of the Reorganization, whether it is in the
best interests of the Acquired Fund shareholders and whether it would
result in a dilution of the interest of current shareholders;
11
<Page>
(6) the fact that Duncan-Hurst Capital Management has determine that it
does not want to continue to engage in the management of international
assets and wants to focus on U.S. equity management for institutional
clients, so that in any event Duncan-Hurst Capital Management would no
longer be available to manage the Acquired Fund and that in
furtherance of this goal Duncan-Hurst Capital Management has entered
into an Asset Purchase Agreement with Nicholas-Applegate to sell
certain assets related to the management of the Acquired Fund;
(7) Nicholas-Applegate's commitment to pay for the expenses of the
Reorganization;
(8) the tax free-free nature of the Reorganization to Acquired Fund and
its shareholders.
Similarly, at meetings of the Board of Trustees of Nicholas-Applegate
Institutional Funds held on August 12, 2005, the Board of Trustees of the
Acquiring Fund considered the proposed Reorganization with respect to the
Acquiring Funds. Based on their evaluation of the relevant information provided
to them, and in light of their fiduciary duties under federal and state law, the
Board of Trustees unanimously determined that (a) the proposed Reorganization
would be in the best interests of the Nicholas-Applegate Institutional Funds and
their shareholders, and (b) the interests of the existing shareholders will not
be diluted as a result of the proposed Reorganization.
DESCRIPTION OF THE SECURITIES TO BE ISSUED
The Nicholas-Applegate Institutional Funds are registered with the
Securities and Exchange Commission as an open-end management investment company.
The Acquiring Fund is a series of the Nicholas-Applegate Institutional Funds.
Shares of the Acquiring Fund entitle their holders to one vote per full and
fractional votes for fractional shares held. If shareholders approve the
Reorganization, each shareholder of the Acquired Fund will receive Class I
Shares of the Acquiring Fund equal in value.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that the
Funds receive an opinion from counsel, substantially to the effect that, based
upon certain facts, assumptions and representations, the transactions
contemplated by the Reorganization Agreement with respect to the Acquired Fund
and the Acquiring Fund constitute a tax-free reorganization for federal income
tax purposes. The delivery of such opinion is conditioned upon receipt by
counsel of representations it shall request of the Professionally Managed
Portfolios and the Nicholas-Applegate Institutional Funds.
The Funds have not sought a tax ruling from the Internal Revenue Service
("IRS"). The opinion of counsel is not binding on the IRS and does not preclude
the IRS from adopting a contrary position. Shareholders should consult their own
tax advisers concerning the potential tax consequences to them, including state
and local income tax consequences.
As of March 31, 2005, the Acquired Fund had accumulated capital loss
carryforwards in the amount of approximately $11,807,324. After the
Reorganization, these losses will be available to the Acquiring Fund to offset
capital gains, although the amount of these losses which might offset the
Acquiring Fund's capital gains may be limited. As a result, of this limitation,
it is possible that the Acquiring Fund may not be able to use these losses as
rapidly or to the same extent as the Acquired Fund might have. In addition, the
benefits of any capital loss carryforwards currently are available only to
shareholders of the Acquired Fund. After the Reorganization, however, these
benefits will inure to benefit of all shareholders of the Acquiring Fund.
CAPITALIZATION
Because the Acquired Fund will be combined in the Reorganization with the
Acquiring Fund, the total capitalization of the Acquiring Fund after the
Reorganization is expected to be negligibly higher than the current
12
<Page>
capitalization of the Acquired Fund. The following table sets forth as of
September 30, 2005 (unaudited): (i) the capitalization of the Acquired Fund;
(ii) the capitalization of the Acquiring Fund; and (iii) the pro forma
capitalization of the Acquiring Fund as adjusted to give effect to the
Reorganization. If the Reorganization is consummated, the capitalization of the
Acquiring Fund is likely to be different at the Closing Date as a result of
daily share purchase and redemption activity in the Acquired Fund and the
Acquiring Fund.
<Table>
<Caption>
ACQUIRED ACQUIRING
FUND FUND PRO FORMA
NET ASSETS
NET ASSET VALUE PER SHARE
SHARES OUTSTANDING
</Table>
GENERAL INFORMATION
INFORMATION RELATING TO VOTING MATTERS
This Statement is being furnished in connection with the solicitation of
proxies by the Board in connection with the Special Meeting. It is expected that
the solicitation of proxies will be primarily by mail. Officers and service
providers of the Professionally Managed Portfolios and Nicholas-Applegate may
also solicit proxies by telephone, fax, or personal interview. Any shareholder
giving a proxy may revoke it at any time before it is exercised by submitting to
the Acquired Fund a written notice of revocation or a subsequently executed
proxy or by attending the Special Meeting and voting in person.
Only shareholders of record at the close of business on October 12, 2005,
will be entitled to vote at the Special Meeting. On that date there were
outstanding and entitled to vote shares. Each share or fraction thereof is
entitled to one vote or fraction thereof.
If the accompanying proxy is executed and returned in time for the Special
Meeting, the shares covered thereby will be voted in accordance with the proxy
on all matters that may properly come before the Special Meeting or any
adjournment of the Special Meeting. For information on adjournment of the
Special Meeting, see "Quorum" below.
OUTSTANDING SHARES
As of Record Date, the name, address, and share ownership of the persons
who beneficially owned 5% or more of the Acquired Fund's outstanding shares, and
the percentage of shares that would be owned by such persons upon consummation
of the Reorganization based upon their holdings and outstanding shares at Record
Date are as follows:
<Table>
<Caption>
SHAREHOLDER NAME SHARES OWNED PERCENTAGE OF FUND
- ---------------- ------------ ------------------
NORTHERN TRUST COMPANY,
CUSTODIAN FBO MATHER FOUNDATION
1603 ORRINGTON AVE, STE 1800
EVANSTON, IL 60103-4046 2074720.27 50.76%
COVENANT MINISTRIES OF BENEVOLENCE
ATTN: PHIL MELCHERT, TRUSTEE
5145 NO. CALIFORNIA AVE
CHICAGO, IL 60625-3661 733988.90 19.73%
EVANGELICAL COVENANT CHURCH
ATTN: PHIL MELCHERT, TRUSTEE
5145 NO. CALIFORNIA AVE
CHICAGO, IL 60625-3661 601298.22 16.16%
</Table>
13
<Page>
SHAREHOLDER AND BOARD APPROVALS
The Reorganization Agreement (and the transactions contemplated thereby) is
being submitted at the Special Meeting for approval by the shareholders of the
Acquired Fund. The approval of the holders of a "majority" of the outstanding
Acquired Fund Shares is required for the approval of the Reorganization with
respect to the Acquired Fund, in accordance with the provisions of the
Declaration of Trust of the Professionally Managed Portfolios. Under the 1940
Act, a "majority" is the lesser of (i) 67% or more of the Acquired Fund Shares
present or represented by proxy at the Special Meeting, if more than 50% of the
Acquired Fund Shares are present or represented by proxy; or (ii) more than 50%
of the total outstanding Acquired Fund Shares. Abstentions will have the same
effect as casting a vote against the relevant Proposal.
The vote of the shareholders of the Acquiring Fund is not being solicited
because their approval or consent is not required for the Reorganization to be
consummated.
QUORUM
A quorum is constituted by the presence in person or by proxy of the
holders of more than 40% of the outstanding shares of the Acquired Fund. In the
event that a quorum is not present at the Special Meeting, or in the event that
a quorum is present at the Special Meeting but sufficient votes to approve the
Reorganization Agreement and the transactions contemplated thereby are not
received, the persons named as proxies may propose one or more adjournments of
the Special Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of those shares
affected by the adjournment that are represented at the Special Meeting in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies that they are entitled to vote FOR the Reorganization
Agreement in favor of such adjournments, and will vote those proxies required to
be voted AGAINST such proposal against any adjournment. Proxies properly
executed and marked with a negative vote or an abstention, or broker non-votes,
will be considered to be present at the Special Meeting for the purposes of
determining the existence of a quorum for the transaction of business. Broker
non-votes exist where a broker proxy indicates that the broker is not authorized
to vote on a particular proposal.
ADDITIONAL INFORMATION ABOUT EACH FUND
THE TRUSTS: MASSACHUSETTS BUSINESS TRUST VERSUS DELAWARE BUSINESS TRUST
The Professionally Managed Portfolios is a Massachusetts business trust,
and Nicholas-Applegate Institutional Funds is organized as a Delaware business
trust. The two forms of organization are very similar. For example, the
responsibilities, powers and fiduciary duties of the Board of Trustees of
Nicholas-Applegate Institutional Funds are substantially the same as those of
the Board. However, the Delaware Business Trust Act ("DBTA") affords business
trusts definable rights and protections by virtue of its terms having been set
forth in the statute, and in some important respects is deemed to have expanded
the protections afforded by the business trust. If the Reorganization is
approved and the transfer of assets takes place, shareholders of the Acquired
Fund will have the benefit of various provisions that either do not exist or are
not explicit under the laws governing entities organized as Massachusetts
business trusts. For example, while the risk of shareholder liability is not
great, the DBTA appears to provide shareholders with greater protection from
liabilities incurred by a business trust organized under the DBTA.
The specific differences between the Professionally Managed Portfolios and
Nicholas-Applegate Institutional Funds are discussed below. The operations of
the Professionally Managed Portfolios, as a Massachusetts business, are governed
by its Declaration of Trust and Bylaws ("Professionally Managed Portfolios'
Declaration of Trust") and Massachusetts law, while the operations of
Nicholas-Applegate Institutional Funds are governed by its Amended and Restated
Declaration of Trust and Bylaws ("NA Funds' Declaration of Trust") and Delaware
law.
LIABILITY OF SHAREHOLDERS
Under Massachusetts law, shareholders of the Professionally Managed
Portfolios may, under certain circumstances, be held personally liable as
partners for the Professionally Managed Portfolios' obligations.
14
<Page>
However, the risk of a shareholder incurring financial loss as a result of
shareholder liability is limited to circumstances in which both inadequate
insurance exists and the Professionally Managed Portfolios, itself, is unable to
meet its obligations. The Professionally Managed Portfolios' Declaration of
Trust specifically states that no shareholder shall be personally liable to any
person in connection with the Professionally Managed Portfolios' property or the
acts, obligations or affairs of the Professionally Managed Portfolios. The
Professionally Managed Portfolios' Declaration of Trust further states that the
Professionally Managed Portfolios shall indemnify and hold each shareholder
harmless from and against all loss and expense to which the shareholder may
become subject by reason of his being or having been a shareholder.
Under the DBTA, on the other hand, shareholders of a Delaware business
trust are entitled to the same limitations of liability extended to shareholders
of private for-profit corporations. As such, there is a possibility, albeit
remote, that under certain circumstances shareholders of a Delaware business
trust may be held personally liable for a Delaware business trust's obligations.
This might occur if the courts of another state not recognizing the limitation
on liability were to apply the laws of the state to a controversy involving the
Delaware business trust's obligations. To protect against such an occurrence,
the NA Funds' Declaration of Trust provides that Nicholas-Applegate
Institutional Funds shall indemnify and hold each of Nicholas-Applegate
Institutional Funds' shareholders harmless from and against any claim or
liability to which the shareholder may become subject solely by reason of his or
her being or having been a shareholder, and that was not due to the
shareholder's acts or omissions or for some other reason. In such an instance,
Nicholas-Applegate Institutional Funds will reimburse the shareholder for all
legal and other expenses reasonably incurred by him or her in connection with
any such claim or liability. Thus, the risk of a shareholder incurring financial
loss beyond his or her investment due to shareholder liability is limited to
circumstances in which Nicholas-Applegate Institutional Funds itself is unable
to meet its obligations.
ELECTION OF TRUSTEES; SHAREHOLDER MEETINGS
Neither Massachusetts business trust law nor the DBTA require investment
companies to hold annual meetings of shareholders. The shareholders of both the
Acquired Funds and the Acquiring Funds may, from time to time, be entitled to
vote for the election of trustees in elections that are held as required by the
1940 Act, the Declaration of Trust or the Bylaws. The NA Funds' Declaration of
Trust provides that shareholders' meetings may be called at any time by a
majority of the trustees and shall be called by any trustee upon written request
of shareholders holding, in the aggregate, not less than 10% of the issued and
outstanding shares of beneficial interest. Shareholder requests for a meeting
must specify the purpose or purposes for which the meeting is to be called.
VOTING RIGHTS OF SHAREHOLDERS
The Professionally Managed Portfolios' Declaration of Trust grants
shareholders the power to vote only with respect to: (i) the election of
trustees; (ii) approval of any investment advisory contract; (iii) the
termination of the Professionally Managed Portfolios or any series of the
Professionally Managed Portfolios; (iv) any amendment of the Professionally
Managed Portfolios' Declaration of Trust, (v) approval of any merger,
consolidation or sale of assets, (vi) the incorporation of the Professionally
Managed Portfolios; (vii) whether or not a court action, proceeding or claim
should or should not be brought or maintained derivatively or as a class action
on behalf of the Professionally Managed Portfolios or a series of the
Professionally Managed Portfolios or the shareholders of either to the same
extent as such action would require shareholder approval by a Massachusetts
business corporation; (viii) any plan adopted pursuant to Rule 12b-1 (or any
successor rule) under the 1940 Act, and related matters; and (ix) additional
matters relating to the Professionally Managed Portfolios as may be required by
the Professionally Managed Portfolios' Declaration of Trust or any registration
of the Professionally Managed Portfolios as an investment company under the 1940
Act with the SEC (or any successor agency) or as the trustees may consider
necessary or desirable.
The NA Funds' Declaration of Trust grants shareholders the power to vote
only with respect to: (i) the election of trustees; (ii) approval of any
investment advisory contract; (iii) the termination of Nicholas-Applegate
Institutional Funds; (iv) any merger, consolidation or sale of assets; (v) the
incorporation of Nicholas-Applegate Institutional Funds; and (vi) additional
matters relating to Nicholas-Applegate Institutional Funds as may be
15
<Page>
required by the 1940 Act, the DBTA or any other applicable law, the NA Funds'
Declaration of Trust or any registration of Nicholas-Applegate Institutional
Funds with the SEC (or any successor agency) or any state, or as and when the
trustees may consider necessary or desirable.
PRINCIPAL UNDERWRITERS
Nicholas-Applegate Securities, LLC, whose address is 600 West Broadway, San
Diego, California 92101, is the distributor of the Acquiring Fund. Quasar
Distributors, LLC, whose address is 615 East Michigan Street, Milwaukee,
Wisconsin 53202, is the distributor of the Acquired Fund.
FOR MORE INFORMATION
Information about the Acquiring Fund is included in the accompanied
Preliminary Prospectus and Statement of Additional of Information which is
incorporated herein by reference. Copies of the Preliminary Prospectus and
Statement of Additional Information which have been filed with the Securities
and Exchange Commission, may be obtained upon request and without charge by
contacting the Acquiring Fund by calling toll free (800) 551-8043 or by writing
Nicholas-Applegate Institutional Funds, Attn: Mutual Fund Operations, 600 West
Broadway, Suite 3200, San Diego, California 92101.
Information about the Acquired Fund is included in its most recent
Prospectus, Statement of Additional Information, Annual Report and Semi-Annual
Report, which are incorporated by reference herein. Copies may be obtained upon
request without charge by contacting the Acquired Fund by calling toll free
(800) 558-9105 or by writing the Fund c/o U.S. Bancorp Fund Services, LLC, P.O.
Box 701, Milwaukee, Wisconsin 53201.
This Prospectus/Proxy Statement and the related Statement of Additional
Information do not contain all of the information set forth in the registration
statements and exhibits relating thereto that the Nicholas-Applegate
Institutional Funds has filed with the Securities and Exchange Commission under
the Securities Act of 1933, and the 1940 Act, to which reference is made.
The Acquired Fund and the Acquiring Fund are each subject to the
informational requirements of the Securities Exchange Act of 1934, as amended,
and the 1940 Act, as applicable, and, in accordance with such requirements,
files proxy materials, reports, and other information with the SEC. These
materials can be inspected and copied at the Public Reference Facilities
maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the offices of the Acquired Fund and the Acquiring Fund listed on the first page
of this Statement. Copies of such materials can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
or at no charge from the EDGAR database on the SEC's website at "www.sec.gov."
OTHER BUSINESS
The Board knows of no other business to be brought before the Special
Meeting. However, if any other matters come before the Special Meeting, it is
the intention that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
16
<Page>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Acquired Fund in writing c/o
U.S. Bancorp Fund Services, LLC, P.O. Box 701 Milwaukee, Wisconsin 53201, or by
telephoning 1-800-558-9105.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING ARE
URGED TO DATE AND SIGN THE ENCLOSED PROXY AND PROMPTLY RETURN IT IN THE ENCLOSED
ENVELOPE WHICH IS ADDRESSED FOR YOUR CONVENIENCE AND NEEDS NO POSTAGE IF MAILED
IN THE UNITED STATES. IN ORDER TO AVOID THE EXPENSE OF FURTHER SOLICITATION, WE
ASK YOUR COOPERATION IN COMPLETING AND RETURNING YOUR PROXY PROMPTLY.
By Order of the Board of Trustees
Chad E. Fickett Secretary
Milwaukee, Wisconsin
October 18, 2005
17
<Page>
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE TRUST
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION
PROSPECTUS
INTERNATIONAL ALL CAP GROWTH FUND
CLASS I
[NICHOLAS APPLEGATE(R) INSTITUTIONAL FUNDS LOGO]
AS WITH ALL MUTUAL FUNDS, THE SECURITIES AND EXCHANGE COMMISSION HAS NOT
DETERMINED THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE OR COMPLETE, NOR
HAS IT APPROVED OR DISAPPROVED THESE SECURITIES. IT IS A CRIMINAL OFFENSE TO
STATE OTHERWISE.
NOVEMBER , 2005
<Page>
TABLE OF CONTENTS
<Table>
A LOOK AT FUND GOALS, STRATEGIES, INTERNATIONAL
RISKS AND HISTORICAL PERFORMANCE. ALL CAP GROWTH FUND 1
POLICIES AND INSTRUCTIONS FOR SIMPLIFIED ACCOUNT
OPENING, MAINTAINING, AND REDEEMING INFORMATION
SHARES FROM AN ACCOUNT IN THE
FUND. Opening an Account 3
Buying Shares 3
Exchanging Shares 4
Selling or Redeeming Shares 4
Signature Guarantees 5
YOUR ACCOUNT
Transaction Policies 6
Features and Account Policies 8
FURTHER INFORMATION THAT APPLIES ORGANIZATION AND
TO THE FUND. MANAGEMENT
Investment Adviser 10
Investment Adviser Compensation 10
Administrative Services 10
Shareholder Services 10
Expense Waivers 10
Multi Class Structure 10
Portfolio Trades 10
Portfolio Turnover 10
Portfolio Holdings 10
Portfolio Management 11
PRINCIPAL STRATEGIES,
RISKS AND OTHER
INFORMATION 12
FOR MORE
INFORMATION Back Cover
</Table>
<Page>
INTERNATIONAL ALL CAP GROWTH FUND
[GRAPHIC]
GOAL AND PRINCIPAL STRATEGY
The Fund seeks maximum long-term capital appreciation. In pursuing this goal,
the Fund invests in a diversified portfolio of equity securities of companies
primarily located in developed non-U.S. markets.
The Investment Adviser conducts "bottom-up" individual company analysis on a
group of companies that meet the Investment Adviser's standards. It identifies
companies experiencing accelerating earnings, rising relative price strength and
positive company fundamentals. A "top-down" analysis is conducted to confirm the
results of "bottom-up" scrutiny, and help identify the most attractive sectors
and countries for investment. The resulting portfolio is invested in companies
with above average earnings growth and positioned in strong growth areas,
typically in as many as fifteen to twenty-five countries outside of the U.S. The
Fund will invest in companies of any size from larger, well-established
companies to smaller, emerging growth companies, and may invest in companies in
lesser-developed countries.
The Fund may also lend portfolio securities on a short-term basis, up to 30% of
its total assets.
The Fund may invest in various Depositary Receipts traded on domestic and
foreign exchanges, as well as foreign securities traded on the U.S. securities
market. The Fund may also invest up to 15% of its net assets in equity-linked
securities.
[GRAPHIC]
PRINCIPAL INVESTMENTS
The Fund normally invests at least 75% of its net assets in common stocks. Under
normal conditions, the Fund invests at least 80% of its net assets in the
securities of companies that are tied economically to a number of different
countries throughout the world. The Fund's investments are not limited with
respect to the capitalization size of issuers. The Fund will provide
shareholders with at least 60 days' prior notice of any change in this
investment policy. The Fund may invest up to 20% of its assets in U.S.
companies.
[GRAPHIC]
PRIMARY RISKS
Because you could lose money by investing in the Fund, be sure to read all risk
disclosures carefully before investing. The Fund is primarily subject to the
following risks:
- - Stock Market Volatility--The prices of equity securities change in response
to many factors, including the historical and prospective earnings of the
issuer, its market capitalization, the value of its assets, general economic
conditions, interest rates, investor perceptions, domestic and worldwide
political events, and market liquidity. Stock prices are unpredictable, may
fall suddenly and may continue to fall for extended periods.
- - NON-U.S. SECURITIES RISKS--The prices of non-U.S. securities may be further
affected by other factors, including:
CURRENCY EXCHANGE RATES--The dollar value of the Fund's non-U.S.
investments will be affected by changes in the exchange rates between the
dollar and the currencies in which those investments are traded.
POLITICAL AND ECONOMIC CONDITIONS--The value of the Fund's non-U.S.
investments may be adversely affected by political and social instability
in their home countries and by changes in economic or taxation policies in
those countries.
REGULATIONS--Non-U.S. companies generally are subject to less stringent
regulations, including financial and accounting controls, than are U.S.
companies. As a result, there generally is less publicly available
information about non-U.S. companies than about U.S. companies.
MARKETS--The securities markets of other countries are smaller than U.S.
securities markets. As a result, many non-U.S. securities may be less
liquid and their prices may be more volatile than U.S. securities.
- - SECURITIES LENDING--There is the risk that when lending portfolio
securities, the securities may not be available to the Fund on a timely
basis and the Fund may, therefore, lose the opportunity to sell the
securities at a desirable price.
- - ACTIVE PORTFOLIO TRADING--A high portfolio turnover rate has the potential
to generate more taxable short-term gains that may be taxed as ordinary
income and may have an adverse effect on the Fund's after tax performance.
See "Principal Strategies, Risks and Other Information" starting on page
(update).
[GRAPHIC]
PAST PERFORMANCE
The Fund is a new fund and does not yet have a full calendar year of
performance.
1
<Page>
[GRAPHIC]
INVESTOR FEES AND EXPENSES
As an investor, you pay certain fees and expenses in connection with the Fund,
which are described in the table below. Annual Fund Operating Expense are paid
out of the Fund assets, so their effect is included in the share price. The Fund
has no sales charge (load) or 12b-1 distribution fees.
<Table>
<Caption>
CLASS I
Management fee 0.95%
Distribution fee (12b-1 fee) None
Other expenses+ __%
Administrative Services Fee 0.15%
Shareholder Services Fee 0.15%
Total Annual Fund Operating Expenses 1.81%
Waiver of Fund Expenses (0.56)%
NET EXPENSES 1.25%
</Table>
+ THE FUND'S "OTHER EXPENSES" ARE ESTIMATED AMOUNTS FOR THE CURRENT FISCAL YEAR.
THE FUND REDUCES EXPENSES BY A PORTION OF THE BROKERAGE COMMISSIONS PAID BY IT
AND BY OFFSETS TO CUSTODIAL AND OTHER FEES BASED UPON THE AMOUNT OF SECURITIES
LENT TO THIRD PARTIES AND CASH MAINTAINED WITH ITS CUSTODIAN. IF THESE EXPENSE
REDUCTIONS AND FEE OFFSETS ARE TAKEN INTO ACCOUNT, "TOTAL ANNUAL FUND OPERATING
EXPENSES" AND "NET EXPENSES" WOULD BE 1.56% AND 1.00%, RESPECTIVELY.
THE INVESTMENT ADVISER HAS CONTRACTUALLY AGREED TO WAIVE ITS MANAGEMENT FEES AND
TO REIMBURSE OTHER OPERATING EXPENSES OTHERWISE PAYABLE BY THE FUND THROUGH
3/31/06. THE INVESTMENT ADVISER MAY NOT AMEND THE FEE WAIVER AGREEMENT WITHOUT
THE CONSENT OF THE FUND. SEE "EXPENSE WAIVERS" ON PAGE (UPDATE).
THE FOLLOWING EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN
THE FUND WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES
THAT YOU INVEST $10,000 IN THE FUND'S SHARES FOR THE TIME PERIODS INDICATED AND
REDEEM ALL OF YOUR SHARES AT THE END OF THOSE PERIODS. THE EXAMPLE ALSO ASSUMES
THAT YOUR INVESTMENT HAS A 5% RETURN EACH YEAR AND THAT THE FUND'S OPERATING
EXPENSES ARE AFTER WAIVERS, IF ANY, FOR THE 1 YEAR PERIOD AND BEFORE WAIVERS, IF
ANY, FOR THE OTHER PERIODS SHOWN. ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR
LOWER, BASED ON THESE ASSUMPTIONS YOUR COSTS WOULD BE:
<Table>
<Caption>
YEAR 1 YEAR 3
---------------------------------------------------------
Class I $131 $540
</Table>
THE EXAMPLE ABOVE DOES NOT TAKE INTO ACCOUNT ANY OFFSET ARRANGEMENTS THAT THE
FUND WILL ENTER INTO WITH ITS BROKERS, CUSTODIANS AND THIRD PARTY SERVICE
PROVIDERS. IF THE OFFSET CREDITS DESCRIBED WERE APPLIED TO THE ABOVE EXAMPLE,
YOUR COST FOR THE 1 AND 3 YEAR PERIODS WOULD BE $105 AND $458, RESPECTIVELY.
2
<Page>
SIMPLIFIED ACCOUNT INFORMATION
<Table>
<Caption>
OPENING AN ACCOUNT
Class I $ 250,000
This is the minimum initial
investment
Use this type of New Account Form or IRA Application
application
Before completing the The Fund offers a variety of features, which are described
application in the "Your Account" section of this prospectus. Please
read this section before completing the application.
Completing the If you need assistance, contact your financial
application representative, or call us at (800) 551-8043.
If you are sending money by CHECK Mail application and check, payable to: Nicholas-Applegate
Institutional Funds, PO Box 480, Milwaukee, WI 53201-0480
Express mail to: UMBFS, 803 West Michigan Street, Milwaukee,
WI 53233-2301 c/o Nicholas-Applegate. The Trust will not
accept third-party checks.
If you are sending money by BANK Please read the bank wire or ACH section under the "Buying
WIRE or ACH Shares" section below. You will need to obtain an account
number by sending a completed application to:
Nicholas-Applegate Institutional Funds, PO Box 480,
Milwaukee, WI 53201-0480 Express mail to: UMBFS, 803 West
Michigan Street, Milwaukee, WI 53233-2301. To receive your
account number, contact your financial representative or
call us at (800) 551-8043.
</Table>
<Table>
<Caption>
BUYING SHARES
The price you will receive The Fund is generally open on days that the New York Stock
Exchange is open. All transactions received in good order
before the market closes (normally 4:00 p.m. Eastern time)
receive that day's NAV.
Instruct your bank to wire the amount you wish to invest to:
UMB Bank, N.A.
Kansas City, MO
ABA# 101000695
For credit to: Nicholas-Applegate Institutional Funds
If you are sending money Account# 9871062937
by BANK WIRE For further credit to:
Investor Account #
Name or Account Registration
SSN or TIN
Identify International All Cap Growth Fund
Call your bank to ensure (1) that your bank supports ACH,
and (2) this feature is active on your bank account. To
If you are sending money establish this option, either complete the appropriate
by ACH sections when opening an account, contact your financial
representative, or call us at (800) 551-8043 for further
information. To initiate an ACH purchase, call the Trust -
at (800) 551-8043.
As part of a Fund's responsibility for the prevention of
Anti-Money Laundering money laundering, each Fund may require a detailed
Regulations verification of a shareholder's identity, any beneficial
owner underlying the account and the source of the payment.
</Table>
3
<Page>
<Table>
<Caption>
EXCHANGING SHARES
Class I $ 250,000
This is the minimum
exchange amount to open
a new account
The Fund is open on days that the New York Stock Exchange is
open. All transactions received in good order before the
The price you will receive market closes (normally 4:00 p.m. Eastern time) receive that
day's NAV. Redemption proceeds normally are wired or mailed
within one business day after receiving a request in proper
form. Payment may be delayed up to seven days.
The exchange must be to an account with the same
registration. If you intend to keep money in the Fund you
are exchanging from, make sure that you leave an amount
Things you should know equal to or greater than the Fund's minimum account size
(see the "Opening an Account" section). To protect other
investors, the Trust may limit the number of exchanges you
can make.
Contact your financial representative, or call us at (800)
How to request an 551-8043. The Fund will accept a request by phone if this
exchange by PHONE feature was previously established on your account. See the
"Your Account" section for further information.
Please put your exchange request in writing, including: the
name on the account, the name of the Fund and the account
How to request an number you are exchanging from, the shares or dollar amount
exchange by MAIL you wish to exchange, and the Fund you wish to exchange to.
Mail this request to: Nicholas-Applegate Institutional
Funds, PO Box 480, Milwaukee, WI 53201-0480 Express mail to:
UMBFS, 803 West Michigan Street, Milwaukee, WI 53233-2301.
</Table>
<Table>
<Caption>
SELLING OR REDEEMING SHARES
IN WRITING BY PHONE
Selling shares by phone is a
service option which must be
established on your account
prior to making a request. See
the "Your Account" section, or
Certain requests may require contact your financial
a signature guarantee. See representative, or call the
Things you should know the next section for further Trust at (800) 551-8043 for
information. You may sell up further information. The
to the full account value. maximum amount which may be
requested by phone, regardless
of account size, is $50,000.
Amounts greater than that must
be requested in writing. If
you wish to receive your
monies by bank wire, the
minimum request is $5,000.
If you purchased shares through a financial representative
or plan administrator/sponsor, you should call them
regarding the most efficient way to sell shares. If you
bought shares recently by check, payment may be delayed
until the check clears, which may take up to 15 calendar
days from the date of purchase. Sales by a corporation,
trust or fiduciary may have special requirements. Please
contact your financial representative, a plan
administrator/sponsor or us for further information.
</Table>
4
<Page>
<Table>
<Caption>
SELLING OR REDEEMING SHARES
IN WRITING BY PHONE
The Fund is open on days that the New York Stock Exchange is
The price you will receive open. All transactions received in good order before the
market closes (normally 4:00 p.m. Eastern time) receive that
day's NAV.
Please put your request in
writing, including: the name
of the account owners,
account number and Fund you
are redeeming from, and the
share or dollar amount you
wish to sell, signed by all
account owners. Mail this Contact your financial
If you want to receive request to: representative, or call us at
your monies by BANK WIRE NICHOLAS-APPLEGATE (800) 551-8043. The proceeds
INSTITUTIONAL FUNDS, will be sent to the existing
PO BOX 480, MILWAUKEE, bank wire address listed on
WI 53201-0480. the account.
Express mail to: UMBFS,
803 West Michigan Street,
Milwaukee, WI 53233-2301.
The proceeds will be sent to
the existing bank wire
address listed on the
account.
Contact your financial
representative, or call us at
(800) 551-8043. The proceeds
will be sent in accordance
If you want to receive Please call us at with the existing ACH
your monies by ACH (800) 551-8043. instructions on the account
and will generally be received
at your bank two business days
after your request is received
in good order.
The Fund intends to pay in cash for all shares redeemed, but
the Fund reserves the right to make payment wholly or partly
in shares of readily marketable investment securities. When
the Fund makes a redemption in kind, a shareholder may incur
brokerage costs in converting such securities to cash and
assumes the market risk during the time required to convert
Redemption in Kind the securities to cash. The Fund has elected to be governed
by the provisions of Rule 18f-1 under the Investment Company
Act, pursuant to which it is obligated to pay in cash all
requests for redemptions by any shareholder of record,
limited in amount with respect to each shareholder during
any 90-day period to the lesser of $250,000 or 1% of the net
asset value of the Fund at the beginning of such period.
</Table>
<Table>
<Caption>
SIGNATURE GUARANTEES
A signature guarantee from a financial institution is
required to verify the authenticity of an individual's
A definition signature. Signature guarantees must be issued by a
participant in a medallion program endorsed by the
Securities Transfer Association. Approved programs currently
include STAMP, SEMP and MSP.
A signature guarantee is needed when making a written
request for the following reasons:
1. When selling more than $50,000 worth of shares;
When you need one 2. When you want a check or bank wire sent to a name or
address that is not currently listed on the account;
3. To sell shares from an account controlled by a
corporation, partnership, trust or fiduciary; or
4. If your address was changed within the last 60 days.
</Table>
5
<Page>
YOUR ACCOUNT
TRANSACTION POLICIES
PURCHASE OF SHARES. Shares are offered at net asset value without a sales
charge. The minimum initial investments for opening an individual account is
$250,000.
Certain omnibus accounts may not combine the assets of the underlying investor
in order to satisfy the investment minimum. In addition, the Investment Adviser
may take into account the aggregate assets that the shareholder has under
management with the Investment Adviser. The minimum investment may be waived for
purchases of shares made by current or retired directors, trustees, partners,
officers and employees of Nicholas-Applegate Institutional Funds (the "Trust"),
the Distributor, the Investment Adviser and its affiliates, certain family
members of the above persons, and trusts or plans primarily for such persons or
former employees employed by one of its affiliates, or, at the discretion of the
Distributor. Eligibility for different classes of the Fund depends upon the
shareholder meeting either (i) the investment minimums set forth above, (ii) the
total market value of all the shareholder's assets managed by the Investment
Adviser and its affiliates or (iii) what the Investment Adviser and shareholder
may negotiate at arm's length. The Fund may only accept orders for shares in
states where it is legally able to offer shares.
The Fund may discontinue sales of its shares if the Investment Adviser and the
Trustees believe that continued sales may adversely affect the Fund's ability to
achieve its investment objective. If sales of a Fund's shares are discontinued,
it is expected that existing shareholders invested in the Fund would be
permitted to continue to authorize investment in the Fund and to reinvest any
dividends or capital gains and distributions, absent highly unusual
circumstances.
ANTI-MONEY LAUNDERING PROGRAM. The Fund is required to comply with various
federal anti-money laundering laws and regulations. Consequently, the Fund may
be required to "freeze" the account of a shareholder if the shareholder appears
to be involved in suspicious activity or if certain account information matches
information on government lists of known terrorists or other suspicious persons,
or the Fund may be required to transfer the account or proceeds of the account
to a government agency. The Fund may also be required to reject a purchase
payment, block a shareholder's account and consequently refuse to implement
requests for transfers and withdrawals.
Federal law requires the Fund to obtain, verify and record identifying
information, which may include the name, street address, taxpayer identification
number or other identifying information from shareholders who open an account
with the Fund. The Fund may also ask to see a shareholder's driver's license or
other identifying documents. Applications without this information may be
rejected and orders may not be processed. The Fund reserves the right to place
limits on transactions in any account until the identity of the shareholder is
verified; to refuse an investment in the Fund or involuntarily redeem a
shareholder's shares and close an account in the event that a shareholder's
identity is not verified within 5 days of the purchase; or suspend the payment
of withdrawal proceeds if it is deemed necessary to comply with anti-money
laundering regulations. An involuntary redemption may result in an unfavorable
tax consequence or loss of principal. The Fund and its agents will not be
responsible for any loss resulting from the shareholder's delay in providing all
required identifying information or from closing an account and redeeming a
shareholders share when a shareholder's identity cannot be verified.
PRICING OF SHARES. The net asset value per share ("NAV") of the Fund is
determined each business day at the close of regular trading on the New York
Stock Exchange (usually 4 p.m. Eastern time) by dividing the value of the Fund's
net assets by the number of its shares outstanding.
Securities traded in non-U.S. countries may not take place on all business days
of the New York Stock Exchange, and may occur in various non-U.S. markets on
days which are not business days of the New York Stock Exchange. Accordingly,
the Fund's NAV may change on days when the U.S. markets are closed whereby a
shareholder of the Fund will not be able to sell their shares.
NAV is based on the market value of the securities in the Fund's portfolio,
equity holdings are valued on the basis of market quotations or official
closing prices. If market quotations, official closing prices are not readily
available, or are determined not to reflect accurately fair value (such that
when the value of a security has been materially affected by events occurring
after the close of the exchange or market on which the security is
principally traded (for example a foreign exchange or market), but before the
Fund calculates its NAV), the Investment Adviser will value the security at
fair value in accordance with procedures approved by the Fund's Board of
Trustees. Under such procedures, the Investment Adviser will fair value when,
in its opinion, publicly available prices are no longer readily available, or
are no longer reliable. Such circumstances would include when trading in the
security is halted, when an entire market is closed, or when the movement of
the markets in the U.S. reach certain trigger points. Fair value of
securities will be determined by the Investment Adviser's pricing committee
in good faith using such information as it deems appropriate under the
6
<Page>
circumstances. Fair value of foreign equity securities may be determined with
the assistance of a pricing service using correlations between the movement
of prices of foreign securities and indexes of domestic securities and other
appropriate indicators, such as closing market prices of relevant ADRs and
futures contracts. Using fair value to price securities may result in a value
that is different from a security's most recent closing price and from the
prices used by other mutual funds to calculate their net asset values.
Foreign securities may trade on days when the Fund does not calculate its NAV
and thus may affect the Fund's NAV on days when shareholders will not be able
to purchase or redeem Fund shares.
BUY AND SELL PRICES. When you buy shares, you pay the NAV, as described earlier.
When you sell shares, you receive the NAV. Your financial institution may charge
you a fee to execute orders on your behalf.
EXECUTION OF REQUESTS. The Fund is open on the days the New York Stock Exchange
is open, usually Monday-Friday. Buy and sell requests are executed at the NAV
next calculated after your request is received in good order by the transfer
agent or another agent designated by the Fund. The Fund reserves the right to
refuse any purchase order.
The Fund reserves the right to reject any purchase or to suspend or modify the
continuous offering of its shares. Your financial representative is responsible
for forwarding payment promptly to the transfer agent. The Fund reserves the
right to cancel any buy request if payment is not received within three days.
In unusual circumstances, the Fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to seven days or
longer, as allowed by federal securities laws.
PURCHASE OF SHARES JUST BEFORE RECORD DATE. If you buy shares of the Fund just
before the record date for a distribution (the date that determines who receives
the distribution), the Fund will pay that distribution to you. When a
distribution is paid, the value of each share of the Fund decreases by the
amount of the distribution to reflect the payout. The distribution you receive
makes up the decrease in share value. As explained under the Taxability of
Dividends section, the distribution may be subject to income or capital gains
taxes. The timing of your purchase means that part of your investment came back
to you as taxable income.
EXCHANGES. On any business day you may exchange all or a portion of your shares
for shares of any other available Fund of the same share class only if you are
eligible to purchase shares of such class.
MARKET TIMING. The Fund does not permit market timing or other excessive trading
practices which may disrupt portfolio management strategies and harm Fund
performance by diluting the value of portfolio shares and increasing brokerage
and administrative costs. To protect the interests of other shareholders in the
Fund, the Investment Adviser monitors trading activity and the Trust may cancel
the exchange privileges (or reject any exchange or purchase orders) of any
parties who, in the opinion of the Investment Adviser, are engaging in market
timing. For these purposes, the Trust may consider a shareholder's trading
history in the Funds. The Trust may change or cancel its exchange policies at
any time, upon 60 days' notice to its shareholders.
Because the Fund invests in markets throughout the world, it may be especially
susceptible to market timing if it allowed excessive trades that can take
advantage of the different times that overseas markets are open. The Board has
delegated responsibility for pricing securities and reviewing trading practices
to the Investment Adviser. These policies and procedures are applied
consistently to all shareholders. Although the Fund makes an effort to monitor
for market-timing activities, the ability of the Fund to monitor trades that are
placed by the underlying shareholders of omnibus accounts maintained by brokers,
retirement plan accounts and other approved intermediaries may be limited in
those instances in which the investment intermediary maintains the underlying
shareholder accounts. Accordingly, there can be no assurance that the Fund will
be able to eliminate all market-timing activities.
REDEMPTIONS IN KIND. When the Fund elects to satisfy a redemption request with
securities, the shareholder assumes the responsibility of selling the securities
as well as a market risk of an unfavorable market movement during the time
required to convert the securities to cash.
TELEPHONE TRANSACTIONS. For your protection, telephone requests may be recorded
in order to verify their accuracy. In addition the Fund will take measures to
verify the identity of the caller, such as asking for name, account number,
Social Security or taxpayer ID number and other relevant information. If these
measures are not taken, the Fund may be responsible for any losses that may
occur in your account due to an unauthorized telephone call.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider sending your request in writing.
CERTIFICATED SHARES. Shares of the Fund are electronically recorded. The Fund
does not normally issue certificated shares.
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SALES IN ADVANCE OF PURCHASE PAYMENTS. When you place a request to sell shares
for which the purchase money has not yet been collected, the request will be
executed in a timely fashion, but the Fund will not release the proceeds to you
until your purchase payment clears. This may take up to fifteen calendar days
after the purchase.
FEATURES AND ACCOUNT POLICIES
The services referred to in this section may be terminated or modified at any
time upon 60 days' written notice to shareholders. Shareholders seeking to add
to, change or cancel their selection of available services should contact the
transfer agent.
RETIREMENT PLANS. You may invest in the Fund through various retirement plans,
including IRAs, Roth IRAs, Simplified Employee Plan (SEP) IRAs, 403(b) plans,
457 plans, and all qualified retirement plans. For further information about any
of the plans, agreements, applications and annual fees, contact the Distributor,
your financial representative or plan sponsor. To determine which retirement
plan is appropriate for you, consult your tax adviser.
ACCOUNT STATEMENTS. Shareholders will receive periodic statements reporting all
account activity, including systematic transactions, dividends and capital gains
paid.
ELECTRONIC DELIVERY. The Fund can deliver prospectuses, account statements,
transaction confirmations, and fund financial reports electronically. If you are
a registered user of NACM.com, you can consent to the electronic delivery of
these documents by logging on and changing your mailing preference under "My
Profile." You can revoke your electronic consent at any time, and the Fund will
begin to send paper copies of these documents within 30 days of receiving your
notice.
SEMI-ANNUAL REPORTS AND PROSPECTUSES. The Fund produces financial reports every
six months and updates its prospectus annually. To avoid sending duplicate
copies of materials to households, only one copy of the Trust's annual and
semi-annual report and prospectus will be mailed to shareholders having the same
residential address on the Trust's records. However, any shareholder may contact
the Distributor(see back cover for address and phone number) to request that
copies of these reports and prospectuses be sent personally to that shareholder.
DIVIDENDS. The Fund generally distribute most or all of its net earnings in the
form of dividends. The Fund pays dividends of net investment income annually.
Any net capital gains are distributed annually. Annual dividends and net capital
gains are normally distributed in the last calendar quarter.
DIVIDEND REINVESTMENTS. If you choose this option, or if you do not indicate any
choice, your dividends will be reinvested on the ex-dividend date.
Alternatively, you can choose to have a check for your dividends mailed to you.
Interest will not accrue or be paid on uncashed dividend checks.
TAXABILITY OF DIVIDENDS. Dividends you receive from the Fund, whether reinvested
or taken as cash, are generally taxable. Dividends from the Fund's long-term
capital gains are taxable as capital gains; dividends from other sources are
generally taxable as ordinary income.
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive.
The tax information statement that is mailed to you details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS. Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
Federal tax law requires you to provide the Fund with your taxpayer
identification number and certifications as to your tax status. If you fail to
do this, or if you are otherwise subject to backup withholding, the Fund will
withhold and pay to the U.S. Treasury 31% of your distributions and sale
proceeds. Dividends of net investment income and short-term capital gains paid
to a nonresident non-U.S. shareholder generally will be subject to a U.S.
withholding tax of up to 30%. This rate may be lower, depending on any tax
treaty the U.S. may have with the shareholder's country.
SMALL ACCOUNTS. If you draw down a non-retirement account so that its total
value is less than the minimum investment, you may be asked to purchase more
shares within 60 days. If you do not take action, the Fund may close out your
account and mail you the proceeds. Your account will not be closed if its
drop in value is due to Fund performance. See "Automatic Share Conversion"
below.
AUTOMATIC INVESTMENT PLAN. You may make regular monthly or quarterly investments
in the Fund through automatic withdrawals of specified amounts from your
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bank account once an automatic investment plan is established. See the
account application for further details about this service or call the Fund
at 1-800-551-8043.
AUTOMATIC SHARE CONVERSION. The account of any shareholder in any class shall be
automatically converted into the shares of a class of the Fund with a higher
shareholder account minimum if the shares in such account have a value equal to
or higher than such minimum as of the end of each calendar quarter. The account
of any shareholder in any class shall be automatically converted into the shares
of a class with lower shareholder account minimum if, by reason of the
redemption of shares, the value of the shares in such account is less than the
shareholder account minimum for the account's class as determined at the end of
each calendar quarter. All conversions pursuant to this paragraph shall be made
at the respective net asset values determined as of the end of the day in which
the account is converted.
The automatic conversion does not apply to omnibus accounts maintained by
intermediaries (e.g. sub transfer agents, record keepers, etc.) that have
revenue sharing arrangements with the Distributor or the Investment Adviser.
CROSS-REINVESTMENT. You may cross-reinvest dividends or dividends and capital
gains distributions paid by one Fund into another Fund,subject to conditions
outlined in the Statement of Additional Information and the applicable
provisions of the qualified retirement plan.
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ORGANIZATION AND MANAGEMENT
THE INVESTMENT ADVISER
Investment decisions for the Fund are made by the Fund's Investment Adviser,
Nicholas-Applegate Capital Management (the "Investment Adviser"), subject to
direction by the Trustees. The Investment Adviser continually conducts
investment research and supervision for the Fund and is responsible for the
purchase or sale of portfolio instruments, for which it receives an annual fee
from the Fund. A discussion regarding the basis for the Board of Trustees
approving the Investment Advisory Agreement is available in the Funds' annual
report to shareholders dated March 31, 2005.
Founded in 1984, the Investment Adviser currently manages approximately $15
billion in discretionary assets for numerous clients, including employee benefit
plans, corporations, public retirement systems and unions, university
endowments, foundations, and other institutional investors and individuals. The
Investment Adviser's address is 600 West Broadway, Suite 2900, San Diego,
California 92101.
INVESTMENT ADVISER COMPENSATION
The Fund pays the Investment Adviser a monthly fee pursuant to an investment
advisory agreement. The Fund pays an advisory fee monthly at the annual rate of
___% its average net assets.
ADMINISTRATIVE SERVICES
The Investment Adviser provides the Fund with certain financial, legal,
compliance, shareholder communications and other administrative services
pursuant to an Administrative Services Agreement. Under this Agreement, the Fund
pays the Investment Adviser an Administrative fee of up to __% per annum of the
Fund's average daily net assets.
SHAREHOLDER SERVICES
The Fund has entered into a Shareholder Services Agreement with the Distributor
under which the Fund will pay the Distributor up to __% of the average daily
assets of the Fund to pay financial institutions, including the Investment
Adviser, for certain personal services for shareholders and for the maintenance
of shareholder accounts. The Investment Adviser may make additional payments
from its own resources to intermediaries for providing certain services for
shareholders and for the maintenance of shareholder accounts. This in no way
affects the advisory fee paid by the Fund. Contact the Investment Adviser for
more information.
EXPENSE WAIVERS
The Investment Adviser has agreed to waive its fees and absorb other operating
expenses of the Fund so that total operating expenses (excluding taxes,
interest, brokerage and extraordinary expenses of the Class I, II, III and IV)
do not exceed ___%, respectively, as an average of the Fund's daily net assets
through March 31, 2006.
The Fund reduces expenses by offsets to custodial and other fees based upon the
amount of securities lent to third parties and cash maintained with its
custodian. These offset arrangements will have no effect on the amount of fees
that the Investment Adviser must waive or expenses that it must otherwise
reimburse under the Expense Limitation Agreement.
MULTI CLASS STRUCTURE
The Fund offers multiple classes of shares. The sole economic difference among
the various classes of shares is the level of shareholder service and
administrative service fees that the classes bear for the client and shareholder
service, administrative services, reporting and other support, reflecting the
fact that, as the size of the client relationship increases, the cost to service
that client decreases as a percentage of the assets in that account. Thus, the
shareholder service and administrative service fees are lower for classes where
the eligibility criteria require greater total assets under the Investment
Adviser's management.
PORTFOLIO TRADES
The Investment Adviser is responsible for the Fund's portfolio transactions. In
placing portfolio trades, the Investment Adviser may use brokerage firms that
provide research services to the Fund but only when the Investment Adviser
believes no other firm offers a better combination of quality execution (e.g.,
timeliness and completeness) and favorable price.
The Investment Adviser may allocate brokerage transactions to brokers who have
entered into expense offset arrangements with the Investment Adviser under which
a broker allocates a portion of the commissions paid by a Fund toward the
reduction of the Fund's expenses.
PORTFOLIO TURNOVER
To the extent that the Investment Adviser actively trades the Fund's portfolio
securities in an attempt to achieve the Fund's investment goal, such trading may
cause the Fund to have an increased portfolio turnover rate of 150% or more,
which has the potential to generate shorter-term gains (losses) for its
shareholders, which are taxed as ordinary income with rates that are higher than
longer-term gains (losses). Actively trading portfolio securities may have an
adverse impact on the Fund's performance.
PORTFOLIO HOLDINGS
A description of the Fund's policies and procedures with respect to the
disclosure of the Funds' portfolio securities is available in the Fund's
SAI.
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PORTFOLIO MANAGEMENT
The Investment Adviser applies a team approach to portfolio management and
investment research, with ultimate buy and sell decision-making authority vested
in a lead portfolio manager accountable for each investment team's results. All
portfolio management activities are overseen by Nicholas-Applegate's Chief
Investment Officer, Horacio A. Valeiras, CFA. Day-to-day management of the
Fund's portfolio is performed by Vincent Willyard, CFA Lead Portfolio Manager.
Mr. Willyard is primarily assisted by Joseph Devine and Barry Kendall.
Information regarding the portfolio management team is listed below.
The portfolio management team is assisted by the entirety of
Nicholas-Applegate's Investments Team. Team members provide research reports and
make securities recommendations with respect to the Fund's portfolio, but do not
have primary responsibility for day-to-day portfolio management.
HORACIO A. VALEIRAS, CFA
MANAGING DIRECTOR AND CHIEF INVESTMENT OFFICER, NICHOLAS-APPLEGATE CAPITAL
MANAGEMENT
Responsible for overseeing all investment and trading functions within the firm
Joined firm in August 2002, previously Managing Director at Morgan Stanley
Investment management; 15 years prior experience with Morgan Stanley
Investment Management; Miller, Anderson & Sherrerd; and Credit Suisse First
Boston
M.B.A.--University of California, Berkeley
S.M.--Mssachusetts Institute of Technology
B.S.--Virginia Tech
VINCENT WILLYARD, CFA
MANAGING DIRECTOR, PORTFOLIO MANAGER, INTERNATIONAL ALL CAP AND INTERNATIONAL
SMALL CAP
Joined firm in 2005, previously portfolio manager of Duncan-Hurst Capital
Management's International Growth Equity and International Small-Cap Growth
Equity strategies; over 10 years prior experience with Duncan-Hurst Capital
Management and Fidelity Investment Advisors Group
M.B.A.--Northeastern University
B.A.--UCLA
JOSEPH DEVINE
SENIOR VICE PRESIDENT, PORTFOLIO MANAGER, PACIFIC RIM AND EMERGING MARKETS
OPPORTUNITIES
Joined firm in 2005, previously portfolio manager and research analyst at
Duncan-Hurst Capital Management; over 10 years prior experience with
Duncan-Hurst Capital Management; Peregrine Investment Holdings; C.S. First
Boston; and Merrill Lynch
B.S.--University of Southern California
BARRY KENDALL
VICE PRESIDENT, INVESTMENT ANALYST
Joined firm in 2005, 7 years previous experience as a research analyst and
equity trader at Duncan-Hurst Capital Management
B.A.--Tulane University
M.H.A.--Duke University
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PRINCIPAL STRATEGIES, RISKS AND OTHER INFORMATION
MORE ABOUT THE FUND
The Fund's goal and principal investment strategies, and the main risks of
investing in the Fund, are summarized at the beginning of this prospectus. More
information on investment strategies, investments and risks appears in this
section. Except as noted below, the Fund's investment policy may be changed
without shareholder approval. The Fund will provide shareholders with at least
60 days prior notice of a change in the Fund's investment policy. There can, of
course, be no assurance that the Fund will achieve its investment goal.
The Fund may also use strategies and invest in securities that are not described
in the Statement of Additional Information. Of course, the Investment Adviser
may decide, as a matter of investment strategy, not to use the investments and
investment techniques described below and in the Statement of Additional
Information at any particular time.
MARKET DISRUPTION
As a result of the terrorist attack on the World Trade Center and Pentagon on
September 11, 2001, some of the U.S. securities markets were closed for a
four-day period. These terrorist attacks have led to unusual short-term market
volatility and may have long-term effects on the U.S. and world economies and
markets. A similar disruption of the financial markets could impact the market
risk, liquidity risk and interest rate risk relating to your investment.
INTERNATIONAL INVESTMENT RISKS AND CONSIDERATIONS
CURRENCY FLUCTUATION. When the Fund invests in instruments issued by non-U.S.
companies, the principal, income and sales proceeds must be paid to the Fund in
local non-U.S. currencies. A reduction in the value of local currencies relative
to the U.S. dollar could mean a corresponding reduction in the value of the
Fund's investments. Also, the Fund may incur costs when converting from one
currency to another.
SOCIAL, POLITICAL AND ECONOMIC FACTORS. The economies of many of the countries
where the Funds may invest may be subject to a substantially greater degree of
social, political and economic instability than the United States. This
instability might impair the financial conditions of issuers or disrupt the
financial markets in which the Funds invest.
The economies of non-U.S. countries may differ significantly from the economy of
the United States as to, for example, the rate of growth of gross domestic
product or rate of inflation. Governments of many non-U.S. countries continue to
exercise substantial control over private enterprise and own or control many
companies. Government actions such as imposition of exchange control regulation,
withholding taxes, limitations on the removal of funds or other assets,
expropriation of assets and confiscatory taxation could have a significant
impact on economic conditions in certain countries which could affect the value
of the securities in the Fund.
INFLATION. Certain countries, especially many emerging market countries, have
experienced substantial, and in some periods extremely high and volatile, rates
of inflation. Rapid fluctuations in inflation rates and wage and price controls
may continue to have unpredictable effects on the economies, companies and
securities markets of these countries.
DIFFERENCE IN SECURITIES MARKETS. The securities markets in non-U.S. countries
have substantially less trading volume than the markets in the United States and
debt and equity securities of many companies listed on such markets may be less
liquid and more volatile than comparable securities in the United States. Some
of the stock exchanges in non-U.S. countries, to the extent that established
markets exist, are in the earlier states of their development. The limited
liquidity of certain securities markets may affect the ability of the Fund to
buy and sell securities at the desired price and time.
Trading practices in certain non-U.S. countries are also significantly different
from those in the United States. Although brokerage commissions are generally
higher than those in the U.S., the Investment Adviser will seek to achieve the
most favorable net results. In addition, securities settlements and clearance
procedures may be less developed and less reliable than those in the United
States. Delays in settlement could result in temporary periods in which the
assets of the Fund are not fully invested, or could result in the Fund being
unable to sell a security in a falling market.
CUSTODIAL AND REGISTRATION PROCEDURES. Systems for the registration and transfer
of securities in non-U.S. markets can be less developed than similar systems in
the United States. There may be no standardized process for registration of
securities or a central registration system to track share ownership. The
process for transferring shares may be cumbersome, costly, time-consuming and
uncertain.
GOVERNMENT SUPERVISION OF SECURITIES MARKETS. Disclosure and regulatory
standards in many non-U.S. countries are, in many respects, less stringent than
those in the United States. There may be less government supervision and
regulation of securities exchanges, listed companies, investors, and brokers in
non-U.S. countries than in the United States, and enforcement of existing
regulations may be extremely limited.
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FINANCIAL INFORMATION AND REPORTING STANDARDS. Issuers in non-U.S. countries are
generally subject to accounting, auditing, and financial standards and
requirements that differ, in some cases materially, from those in the United
States. In particular, the assets and profits appearing in financial statements
may not reflect their financial position or results in the way they would be
reflected had the statements been prepared in accordance with U.S. generally
accepted accounting principles. Consequently, financial data may not reflect the
true condition of those issuers and securities markets.
EQUITY-LINKED SECURITIES AND RISKS
The Fund may purchase Equity-Linked Securities, also known as participation
notes, equity swaps, and zero strike calls and warrants. Equity-linked
securities are primarily used by a Fund as an alternative means to more
efficiently and effectively access the securities market of what is generally an
emerging country. The Fund deposits an amount of cash with its custodian (or
broker, if legally permitted) in an amount near or equal to the selling price of
the underlying security in exchange for an equity linked security. Upon sale,
the Fund receives cash from the broker or custodian equal to the value of the
underlying security. Aside from market risk there is of the underlying security,
there is the risk of default by the other party to the transaction. In the event
of insolvency of the other party, the Fund might be unable to obtain its
expected benefit. In addition, while the Fund will seek to enter into such
transactions only with parties which are capable of entering into closing
transactions with the Fund, there can be no assurance that the Fund will be able
to close out such a transaction with the other party or obtain an offsetting
position with any other party, at any time prior to the end of the term of the
underlying agreement. This may impair the Fund's ability to enter into other
transactions at a time when doing so might be advantageous.
TEMPORARY INVESTMENTS AND RISKS
The Fund may, from time to time, invest all of its assets in short-term
instruments when the Investment Adviser determines that adverse market,
economic, political or other conditions call for a temporary defensive posture.
Such a defensive position may result in the Fund failing to achieve its
investment objective.
LENDING OF PORTFOLIO SECURITIES AND RISK
In order to generate expense offset credits, the Fund may lend portfolio
securities, on a short-term or a long-term basis, up to 30% of its total assets
to broker/dealers, banks, or other institutional borrowers of securities. The
Fund will only enter into loan arrangements with broker/dealers, banks, or other
institutions which the Investment Adviser has determined are creditworthy and
under guidelines established by the Board of Trustees and will receive
collateral in the form of cash or U.S. government securities equal to least 102%
of the value of the securities loaned on U.S. securities.
There is the risk that when lending portfolio securities, the securities may not
be available to the Fund on a timely basis and the Fund may, therefore, lose the
opportunity to sell the securities at a desirable price. In addition, in the
event that a borrower of securities would file for bankruptcy or become
insolvent, disposition of the securities may be delayed pending court action.
NON PRINCIPAL STRATEGIES
HEDGING TRANSACTION AND RISKS
The Fund may trade in derivative contracts to hedge portfolio holdings or an
underweighting relative to the Fund's index. Hedging activities are intended to
reduce various kinds of risks. For example, in order to protect against certain
events that might cause the value of its portfolio securities to decline, the
Fund can buy or sell a derivative contract (or a combination of derivative
contracts) intended to rise in value under the same circumstances. Hedging
activities will not eliminate risk, even if they work as they are intended to.
In addition, these strategies are not always successful, and could result in
increased expenses and losses to the Fund. The Fund may trade in the following
types of derivative contracts.
FUTURES CONTRACTS provide for the future sale by one party and purchase by
another party of a specified amount of an underlying asset at a price, date, and
time specified when the contract is made. Futures contracts traded OTC are
frequently referred to as forward contracts. Entering into a contract to buy is
commonly referred to as buying or purchasing a contract or holding a long
position. Entering into a contract to sell is commonly referred to as selling a
contract or holding a short position. Futures are considered to be commodity
contracts. The Fund can buy or sell futures contracts on portfolio securities or
indexes and engage in non-U.S. currency forward contracts.
OPTIONS are rights to buy or sell an underlying asset for a specified price (the
exercise price) during, or at the end of, a specified period of time. A call
option gives the holder (buyer) the right to purchase the underlying asset from
the seller (writer) of the option. A put option gives the holder the right to
sell the underlying asset to the writer of the option. The writer of the
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option receives a payment, or "premium," from the buyer, which the writer keeps
regardless of whether the buyer uses (or exercises) the option.
When the Fund uses financial futures and options on financial futures as hedging
devices, much depends on the ability of the portfolio manager to predict market
conditions based upon certain economic analysis and factors. There is a risk
that the prices of the securities subject to the futures contracts may not
correlate perfectly with the prices of the securities in the Fund's portfolio.
This may cause the futures contract and any related options to react differently
than the portfolio securities to market changes. In addition, the portfolio
managers could be incorrect in their expectations about the direction or extent
of market factors such as interest rate movements. In these events, the Fund may
lose money on the futures contracts or options.
It is not certain that a secondary market for positions in futures contracts or
for options will exist at all times. Although the Investment Adviser will
consider liquidity before entering into options transactions, there is no
assurance that a liquid secondary market on an exchange or otherwise will exist
for any particular futures contract or option at any particular time. The Fund's
ability to establish and close out futures and options positions depends on this
secondary market.
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FOR MORE INFORMATION
More information on the Fund is available free upon request, including the
following:
ANNUAL/SEMI-ANNUAL REPORT
Describes the Fund's performance, lists portfolio holdings and contains a letter
from the Fund's Investment Adviser discussing recent market conditions and
investment strategies that significantly affected the Fund's performance during
the last fiscal year.
STATEMENT OF ADDITIONAL
INFORMATION (SAI)
Provides more details about the Fund and its policies. A current SAI is on file
with the Securities and Exchange Commission (SEC) and is incorporated by
reference (is legally considered part of this prospectus).
TO OBTAIN INFORMATION:
BY TELEPHONE
Call 1-800-551-8043
BY MAIL Write to:
Nicholas-Applegate Institutional Funds
Attn: Mutual Fund Operations
600 West Broadway, Suite 3200
San Diego, CA 92101
BY E-MAIL Send your request to www.nacm.com
ON THE INTERNET Text versions of the Fund's documents can be viewed online or
downloaded from the EDGAR Data Base on the SEC's Internet site at:
SEC
http://www.sec.gov
You can also obtain copies by visiting the SEC's Public Reference Room in
Washington, DC (phone 1-202-942-8090) or sending your request and a duplicating
fee to the SEC's Public Reference Section, Washington, DC 20549-0102 or by
electronic request at www.publicinfo@sec.gov
[NICHOLAS APPLEGATE(R) LOGO]
600 West Broadway
San Diego, CA 92101
800-551-8043
Nicholas-Applegate Securities, Distributor
Visit us at www.nacm.com
Nicholas-Applegate Institutional Funds
SEC file number: 811-07384
MFALLCAPMulti 1105
<Page>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Plan" or "Agreement") is
made as of this ___ day ____________________, 2005, by and between
Nicholas-Applegate Institutional Funds (the "Institutional Funds") on behalf of
the Nicholas-Applegate International All-Cap Growth Fund (the "Acquiring Fund")
and the Professionally Managed Portfolios, on behalf of the Nicholas-Applegate
International All-Cap Growth Fund (the "Acquired Fund").
BACKGROUND
WHEREAS, the Acquired Fund and the Acquiring Fund are series of registered
open-end management investment companies with identical investment objectives,
policies and risks;
WHEREAS, both the Acquired Fund and the Acquiring Fund are authorized to
issue shares of common stock;
WHEREAS, the Boards of Trustees of both the Institutional Funds and the
Acquired Fund, including a majority of the Trustees who are not "interested
persons" as defined in the Investment Company Act of 1940, as amended (the "1940
Act") have determined that the Plan is in the best interests of the respective
shareholders of the Institutional Funds and the Acquired Fund and that their
interests would not be diluted as a result of the transactions;
WHEREAS, for Federal income tax purposes, it is intended that the Plan will
qualify as a reorganization within the meaning of Section 368(a)(1)(f) of the
United States Internal Revenue Code of 1986, as amended.
AGREEMENT
In consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
THE PLAN
SECTION 1.1 Creation of Acquiring Fund. Prior to the "Closing Date",
as defined in Section 5.1, the Board of Trustees of the Acquiring Fund
shall create the Acquiring Fund with identical investment objectives,
policies and risks to those of the Acquired Fund, and register the same
with the United States Securities and Exchange Commission under the 1940
Act and its shares under the Securities Act of 1933.
SECTION 1.2 The Merger. Upon the terms and conditions set forth in
this Agreement and in accordance with the laws of the State of Delaware and
the State of Massachusetts, on the Closing Date, the Acquired Fund shall
merge with and into the Acquiring Fund. (the "Merger"). As a result of the
Merger, the separate existence of the Acquired Fund shall cease and the
Acquiring Fund shall continue as the surviving entity in the Merger.
ARTICLE II
EFFECT OF THE MERGER
SECTION 2.1 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in this Plan and under applicable
provisions of Delaware and Massachusetts law. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time,
all the assets, property, rights, privileges, powers and franchises of the
Acquired Fund shall vest in the Acquiring Fund, and all debts, liabilities,
obligations restrictions and duties of the Acquired Fund shall become the
debts, liabilities, obligations, restrictions and duties of the Acquiring
Fund. At the Effective Time, by virtue of the Merger, each issued and
outstanding share of common stock of the Acquiring Fund shall remain an
issued and outstanding share of common stock of the Acquiring Fund and
shall not be affected by the Merger.
A-1
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ARTICLE III
DISTRIBUTION OF SHARES
SECTION 3.1 Liquidation. The Acquired Fund will liquidate and
distribute pro rata to its shareholders of record, determined as of the
Closing Date, the shares received by it in exchange for each shareholder's
interest evidenced by such shareholder's shares of beneficial interest in
the Acquired Fund (the "Shares"). For purposes of computing the number of
Shares to be issued to each shareholder of the Acquired Fund, the number of
Shares to be distributed together with the aggregate net asset value shall
be equal to the number of shares owned by each shareholder on the Closing
Date.
SECTION 3.2 Registration of Shares. The Acquired Fund will accomplish
the liquidation and distribution by opening accounts on the books of the
Acquiring Fund in the names of its shareholders and transferring the Shares
credited to the account of each on the books of the Acquiring Fund. Each
account opened shall represent the respective pro rata number of Shares due
each Acquired Fund shareholder.
SECTION 3.3 Issuance of Share Certificates. The Acquiring Fund will
not issue certificates representing redesignated Shares unless requested to
do so by the holder thereof.
SECTION 3.4 Rights and Privileges. From and after the Closing Date,
the rights and privileges of the Shares shall be determined under the
provisions of Delaware law, the Acquiring Fund's Declaration of Trust and
by-laws.
SECTION 3.5 Transfer Tax. Any transfer taxes payable upon the issuance
of Shares in a name other than the registered holder of the shares on the
books of the Acquired Fund shall be paid by the person to whom such Shares
are to be issued as a condition of such transfer.
SECTION 3.6 Books and Records. All books and records of the Acquired
Fund, including all books and records required to be maintained under the
1940 Act and the rules and regulations thereunder, shall be available to
the Acquiring Fund from and after the Closing Date and shall be turned over
to the Acquiring Fund as soon as practicable following the Closing Date.
SECTION IV
VALUATION
SECTION 4.1 Time and Date of Valuation. The valuation of the Acquired
Fund's assets and liabilities to be acquired by the Acquiring Fund shall be
computed as of 4:00 p.m. (Eastern time) on the Closing Date (the "Valuation
Date"), using the valuation procedures set forth in the Acquired Fund's
then-current Prospectus and Statement of Additional Information.
SECTION 4.2 Valuation Procedure. All computations of value shall be
made in accordance with regular practice of the Acquired Fund.
SECTION 4.3 Delay of Valuation. If on the Valuation Date (a) the
primary trading market for portfolio securities shall be closed to trading
or trading thereon shall be restricted; or (b) trading or the reporting of
trading shall be disrupted so that an accurate appraisal of the value of
the net assets of the Acquired Fund is impracticable, the Closing Date
shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
ARTICLE V
CLOSING AND CLOSING DATE
SECTION 5.1 Closing Time and Place. The Closing Date shall be
November 18, 2005, or such later date as the parties may mutually agree.
All acts taking place at the Closing Date shall be deemed to be taking
place simultaneously as of the close of business on the Closing Date,
unless otherwise provided. Closing shall be held at 4:30 p.m. (Eastern
time), at the offices of Nicholas Applegate Capital Management, 600 West
Broadway, San Diego, California 92101, or such other time and/or place as
the parties may mutually agree. On the Closing Date, the parties shall
cause the Merger to be consummated by filing an agreement of merger or
consolidation
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with the Secretary of State of Delaware and the Secretary of State of
Massachusetts. The Merger shall become effective upon the filing of such
agreements of merger (the "Effective Time").
SECTION 5.2 Delivery of Shareholder Records. US Bancorp Fund Services,
LLC, as transfer agent for the Acquired Fund, shall deliver on the Closing
Date a certificate of an authorized officer stating that its records
contain the names and addresses of the shareholders and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to closing.
SECTION 5.3 Delivery of the Confirmations. The Acquiring Fund shall
issue and deliver a confirmation evidencing the Shares to be credited on
the Closing Date to the Secretary of the Acquired Fund, or provide evidence
satisfactory that the Shares have been credited to the Acquired Fund's
accounts on the books of the Acquiring Fund.
SECTION 5.4 Delivery of the Assets. UMB Bank, N.A., as custodian for
the Acquired Fund, shall deliver on the Closing Date a certificate of an
authorized officer stating that: (a) its portfolio securities, cash and
other assets shall have been delivered in proper form to the Acquiring Fund
on the Closing Date; and (b) all necessary taxes, including all applicable
federal and state stock transfer stamps, if any, shall have been paid, or
provision for payment shall have been made, in connection with the delivery
of portfolio securities.
ARTICLE VI
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
SECTION 6.1 Conditions to A Party's Obligations to Effect the Plan.
The respective obligations of the Acquiring Fund and the Acquired Fund to
effect the Plan is subject to the satisfaction or waiver on or prior to the
Closing Date of the following conditions:
(a) Shareholder Approval. The Plan and transactions contemplated
herein shall have been approved by the requisite vote of the holders
of the outstanding shares of the Acquired Fund in accordance with the
provisions of its Declaration of Trust, the provisions of the 1940 Act
and the provisions of applicable Delaware and Massachusetts law..
(b) No Injunctions or Restraints. On the Closing Date, no
action, suit or other proceeding shall be pending before any court or
government agency in which it is sought to restrain or prohibit or
obtain damages or other relief in connection with this Plan or the
transactions contemplated hereby.
(c) Consents. All consents of other parties and all other
consents, orders and permits of Federal, state and local regulatory
authorities deemed necessary by the Acquiring Fund or the Acquired
Fund to permit consummation, in all material respects, of the
transactions contemplated shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve
a risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund; provided that either party may
for itself waive any of such conditions.
(d) Shares to be Issued. The parties shall have agreed on the
number of full and fractional shares that the Acquiring Fund will
issue in connection with the Reorganization.
(e) Effective Registration Statement. The Registration Statement
of the Acquiring Fund shall have become effective and no stop orders
suspending the effectiveness thereof shall have been issued and, to
the best knowledge of the parties hereto, no investigation or
proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated.
(f) Legal Opinion of Acquiring Fund. That the Acquiring Fund
shall have received an opinion of
(a) Paul, Hastings, Janofsky & Walker LLP, counsel to the
Acquired Fund, dated the Closing Date, to the effect that:
(i) the execution, delivery and performance of the
Agreement have been duly authorized by all necessary statutory
trust action by the Professionally Managed Portfolios on behalf
of the Acquired Fund; the Agreement has been duly executed and
delivered by the Professionally
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Managed Portfolios on behalf of the Acquired Fund; and, assuming
that the Registration Statement and the Proxy Statement comply
with the Securities Act of 1933 Act, the 1934 Act, and the 1940
Act, the Agreement constitutes a valid and binding obligation of
the Professionally Managed Portfolios and the Acquired Fund,
enforceable against the Professionally Managed Portfolios and the
Acquired Fund in accordance with its terms;
(ii) the execution and delivery of the Agreement did not,
and the transfer by the Professionally Managed Portfolios of
properties and assets of the Acquired Fund and the assumption of
the Acquired Fund's liabilities by the Institutional Funds and
the Acquiring Fund in accordance with the Agreement will not,
result in the acceleration of any financial obligation of the
Professionally Managed Portfolios under, any of the agreements
listed on Schedule A to the opinion letter;
(iii) no consent, approval, authorization or order of or
filing with any federal or California governmental authority or
to our knowledge, any California or United States federal court
is required for the Professionally Managed Portfolios' execution
and delivery of the Agreement, and the transfer by the
Professionally Managed Portfolios of properties and assets and
the assumption of liabilities by the Institutional Funds and the
Acquiring Fund in accordance with the Agreement, other than (a)
those that have been obtained under the 1933 Act, the 1934
Exchange Act or the 1940 Act, and (b) those that may be required
under state securities or blue sky laws (as to which no opinion
is expressed);
(iv) the Professionally Managed Portfolios is registered
with the SEC as an investment company under the 1940 Act; based
solely on the SEC Confirmation, the Registration Statement has
been declared effective by the Commission under the 1933 Act; to
such counsel's knowledge, based solely on a telephone
conversation with the Commission, such counsel is not aware of
any stop order suspending the effectiveness of the Registration
Statement and, to such counsel's knowledge, no stop order
proceedings for such purpose are pending by the SEC;
(v) to such counsel's knowledge, there is no action, suit
or proceeding at law or in equity, or by or before any federal or
California state court or governmental or regulatory body or
agency or arbitration board or panel pending or overtly
threatened against the Professionally Managed Portfolios or the
Acquired Fund or any of their assets that challenges or seeks to
prohibit, restrain or enjoin the Merger.
(b) __________________, Massachusetts counsel to the
Acquired Fund (or such other firm as may be reasonably acceptable
to the Acquiring Fund), to the effect that
(i) the Professionally Managed Portfolios is a
Massachusetts business trust validly existing and in good
standing under the laws of the State of Massachusetts; the
Acquired Fund is a series of shares of the Professionally Managed
Portfolios duly established and designated by the Declaration of
Trust; the Declaration of Trust provides the Professionally
Managed Portfolios with the statutory trust power necessary for
it to own its properties and assets and conduct its business as
described in the Registration Statement; and
(ii) the execution and delivery of the Agreement did not,
and the transfer by the Professionally Managed Portfolios of
properties and assets of the Acquired Fund and the assumption of
the Acquired Fund's liabilities by the Institutional Funds and
the Acquiring Fund in accordance with the Agreement will not,
violate the Declaration of Trust or the Bylaws or constitute a
breach by the Professionally Managed Portfolios.
(g) Legal Opinion of Acquired Fund. That the Acquired
Fund shall have received an opinion of counsel to the Acquired
Fund, dated the Closing Date, to the effect that:
(i) the execution, delivery and performance of the
Agreement have been duly authorized by all necessary statutory
trust action by the Institutional Funds on behalf of the
Acquiring Fund; the Agreement has been duly executed and
delivered by the Institutional Funds on behalf of the
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Acquiring Fund; and, assuming that the Registration Statement and
the Proxy Statement comply with the Securities Act of 1933 Act,
the 1934 Act, and the 1940 Act, the Agreement constitutes a valid
and binding obligation of the Institutional Funds and the
Acquiring Fund, enforceable against the Institutional Funds and
the Acquiring Fund in accordance with its terms;
(ii) no consent, approval, authorization or order of or
filing with any federal or California governmental authority or
to our knowledge, any California or United States federal court
is required for the Institutional Funds' execution and delivery
of the Agreement, and the transfer by the Professionally Managed
Portfolios of properties and assets and the assumption of
liabilities by the Institutional Funds and the Acquiring Fund in
accordance with the Agreement, other than (a) those that have
been obtained under the 1933 Act, the 1934 Exchange Act or the
1940 Act, and (b) those that may be required under state
securities or blue sky laws (as to which no opinion is
expressed);
(iii) no consent, approval, authorization or order of or
filing with any federal or California governmental authority or
to our knowledge, any California or United States federal court
is required for the Institutional Funds' execution and delivery
of the Agreement, and the transfer by the Professionally Managed
Portfolios of properties and assets and the assumption of
liabilities by the Institutional Funds and the Acquiring Fund in
accordance with the Agreement, other than (a) those that have
been obtained under the 1933 Act, the 1934 Exchange Act or the
1940 Act, and (b) those that may be required under state
securities or blue sky laws (as to which no opinion is
expressed);
(iv) the Institutional Funds is registered with the SEC as
an investment company under the 1940 Act; based solely on the SEC
Confirmation, the Registration Statement has been declared
effective by the Commission under the 1933 Act; to such counsel's
knowledge, based solely on a telephone conversation with the
Commission, such counsel is not aware of any stop order
suspending the effectiveness of the Registration Statement and,
to such counsel's knowledge, no stop order proceedings for such
purpose are pending by the SEC;
(v) to such counsel's knowledge, there is no action, suit
or proceeding at law or in equity, or by or before any federal or
California state court or governmental or regulatory body or
agency or arbitration board or panel pending or overtly
threatened against the Institutional Funds or the Acquiring Fund
or any of their assets that challenges or seeks to prohibit,
restrain or enjoin the Merger.
(vi) the Institutional Funds is a Delaware business trust
validly existing and in good standing under the laws of the State
of Delaware; the Acquiring Fund is a series of shares of the
Institutional Funds duly established and designated by the
Declaration of Trust; the Declaration of Trust provides the
Institutional Funds with the statutory trust power necessary for
it to own its properties and assets and conduct its business as
described in the Registration Statement; and
(vii) the execution and delivery of the Agreement did not,
and the transfer by the Professionally Managed Portfolios of
properties and assets of the Acquired Fund and the assumption of
the Acquired Fund's liabilities by the Institutional Funds and
the Acquiring Fund in accordance with the Agreement will not,
violate the Declaration of Trust or the Bylaws or constitute a
breach by the Institutional Funds.
(h) Tax Opinions. The Acquired Fund shall have received an
opinion of Kirkpatrick & Lockhart LLP substantially to the effect that
for Federal income tax purposes:
(i) The transfer of substantially all of the Acquired
Fund's assets to the Acquiring Fund in exchange for Shares, and
the distribution of Shares to the Acquired Fund shareholders in
liquidation of the Acquired Fund, will constitute a
"reorganization" (the "Reorganization") within the meaning of
Section 368(a)(1) of the Internal Revenue Code of 1986, as
amended;
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(ii) No gain or loss will be recognized by the Acquiring
Fund upon the receipt of the assets of the Acquired Fund solely
in exchange for Shares;
(iii) No gain or loss will be recognized by the Acquired
Fund upon the transfer of its assets to the Acquiring Fund in
exchange for Shares or upon the distribution of Shares to the
Acquired Fund's shareholders in exchange for their shares;
(iv) No gain or loss will be recognized by the Acquired
Fund's Shareholders upon exchange of their Acquired Fund shares
for Shares;
(v) The tax basis of each of the Acquired Fund's assets
acquired by the Acquiring Fund will be the same as the tax basis
of such assets of the Acquired Fund immediately prior to the
Reorganization;
(vi) The tax basis of Shares received by each Acquired
Fund shareholder pursuant to the Reorganization will be the same
as the tax basis of the Acquired Fund shares held by such
shareholder immediately prior to the Reorganization;
(vii) The holding period of the assets of the Acquired
Funds in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund; and
(viii) The holding period of the Shares to be received by
each Acquired Fund shareholder will include the period during
which the Acquired Fund shares exchanged therefor were held by
such shareholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 Representations and Warranties of the Acquired Fund. The
Acquired Fund represents and warrants as follows:
(a) Structure and Standing. It is a series of the Professionally
Managed Portfolios. The Professionally Managed Portfolios is a
business trust duly organized, validly existing and in good standing
under the laws of the State of Massachusetts and has the power to own
all of its properties and assets and to carry out this Agreement.
(b) Power. It has full power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement has been duly authorized by all
necessary action of the Acquired Fund's Board of Trustees, and this
Agreement constitutes a valid and binding contract enforceable in
accordance with its terms, subject to the effects of bankruptcy,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto.
(c) RIC Status. For each fiscal year of its operations, the
Acquired Fund has met the requirements of Subchapter M of the Internal
Revenue Code unless exempt from such requirements.
(d) Litigation. No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending against it and, to the best of its knowledge; none is
threatened against it or any of its properties or assets, which, if
adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. It knows of no
facts which might form the basis for the institution of such
proceedings, and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to
consummate the transactions herein contemplated.
(e) Financial Statements. Its Statement of Assets and
Liabilities and the Annual Report to Shareholders have been audited by
Tait Weller & Baker, independent auditors, and together with the Semi
Annual Report to Shareholders, have been prepared in accordance with
generally accepted
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accounting principles, consistently applied, and such statements
(copies of which have been furnished to the Acquiring Fund) fairly
reflect its financial condition as of such date.
(f) Absence of Certain Changes or Events. Since March 30, 2005
there has not been any material adverse change in its financial
condition, assets, liabilities or business other than changes
occurring in the ordinary course of business, or any incurrence of
indebtedness maturing more than one year from the date of such
indebtedness was incurred, except as otherwise disclosed and accepted
by the Acquiring Fund.
(g) Taxes. At the Closing Date, it has filed, or has obtained
extensions to file, all Federal, state and local tax returns which are
required to be filed by it, and has paid or has obtained extensions to
pay, all Federal, state and local taxes shown on said returns to be
due and owing and all assessments received by it, up to and including
the taxable year in which the Closing Date occurs. All tax liabilities
have been adequately provided for on its books, and no tax deficiency
or liability has been asserted and no question with respect thereto
has been raised by the Internal Revenue Service or by any state or
local tax authority for taxes in excess of those already paid, up to
and including the taxable year in which the Closing Date occurs.
(h) SEC Documents. The current Prospectus and Statement of
Additional Information used during the three years prior to the
Reorganization conforms or conformed at the time of its use in all
material respects to the applicable requirements of the Securities Act
of 1933, the Securities Exchange Act of 1934, and the 1940 Act and the
rules and regulations of the Securities and Exchange Commission
thereunder, and does not or did not at the time of its use include any
untrue statement of a material fact or omit to state any material
facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made, not materially misleading. The Registration Statement and
the Proxy Statement insofar as it relates to it does not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein misleading.
(i) Contracts. There are no material contracts outstanding to
which it is a party that have not been disclosed in the Proxy
Statement or will not otherwise be disclosed to the Acquiring Fund
prior to the Closing Date.
(j) Liabilities. It has no known liabilities of a material
amount, contingent or otherwise, other than those shown on its
Statement of Assets and Liabilities, those shown in the footnotes to
its most recent Annual and Semi Annual Reports to Shareholders, those
incurred in the ordinary course of its business as an investment
company since March 30, 2005, and those incurred in connection with
the Plan.
(k) Capital Structure. All of its issued and outstanding shares
are, and on the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of its issued and
outstanding shares will, at the time of the Closing, be held by
persons and the amounts set forth in the records of the transfer
agent.
7.2 Representations and Warranties of the Acquiring Fund. The
Acquiring Fund represents as follows:
(a) Structure and Standing. It is a series of the Institutional
Funds, a business trust duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the power to
own all of its properties and to carry out this Agreement.
(b) Power. It has full power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery
and performance of this Agreement has been duly authorized by all
necessary action of the Institutional Funds' Board of Trustees, and
this Agreement constitutes a valid and binding contract enforceable in
accordance with its terms, subject to the effects of bankruptcy,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with respect
thereto.
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(c) Litigation. No litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending against it, and, to the best of its knowledge, none is
threatened against it or any of its properties or assets, which, if
adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. It knows of no
facts which might form the basis for the institution of such
proceedings, and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to
consummate the transactions herein contemplated.
(d) SEC Documents. The Registration Statement and Proxy
Statement (i) complies in all material respects with the provisions of
the Securities Act of 1933, Securities Exchange Act of 1934 and the
1940 Act, and (ii) as it relates to the Acquiring Fund does not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein misleading. As of the Closing Date, its prospectus
and statement of additional information will conform in all material
respects to the applicable requirements of the Securities Act of 1933
and the 1940 Act and will not include any untrue statement of material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, misleading.
(e) Contracts. There are no material contracts outstanding to
which it is a party that have not been disclosed in the Registration
and the Proxy Statement or will not otherwise be disclosed to the
Acquired Fund prior to the Closing Date.
(f) Capital Structure. All of its issued and outstanding shares
are, and on the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable.
ARTICLE VIII
COVENANTS
SECTION 8.1 Covenants Relating to the Conduct of Business. During the
period from the date of this Agreement and continuing until the earlier of
the termination of this Agreement or the Closing Date, the Acquired Fund
will operate its business in the ordinary course and shall each use
reasonable efforts to preserve intact its current business, and keep
available the services of their current officers and employees and preserve
its relationships with shareholders, suppliers and others having a business
relationship.
SECTION 8.2 Additional Covenants.
(a) PREPARATION OF THE REGISTRATION STATEMENT AND PROXY
STATEMENT. As soon as reasonably practicable after the execution of
this Agreement, the Acquiring Fund will prepare and file the
Registration Statement and Proxy Statement with the United States
Securities and Exchange Commission in form and substance satisfactory
to both parties.
(b) SHAREHOLDERS MEETING. As soon as practicable the Acquired
Fund will call a special meeting of the shareholders of the for the
purpose of considering the Plan.
(c) LIABILITIES. The Acquired Fund will use its best efforts to
discharge all of its known debts, liabilities, obligations, and duties
prior to the Closing Date.
(d) REGISTRATION OF SHARES. The Acquiring Fund will use its best
efforts to register the Shares with the United States Securities and
Exchange Commission.
SECTION 8.3 Fees and Expenses. Whether or not the Plan is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated thereby shall be paid by Nicholas-Applegate
Capital Management.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination. This Agreement may be terminated by
resolution of the Board of Trustees of either the Acquired Fund or the
Acquiring Fund at any time prior to the Closing Date, whether before or
after approval by the shareholders of either party if:
(a) circumstances develop that, in the opinion of the Board of
Trustees of either the Acquired Fund or the Acquiring Fund, make
proceeding with this Plan inadvisable; or
(b) any approval of the shareholders of the Acquired Fund
required for the consummation of the Plan shall not have been obtained
by reason of the failure to obtain the required vote at a duly held
meeting of the shareholders or at any adjournment or postponement
thereof; or
(c) any governmental body shall have issued an order, decree or
ruling having the effect of permanently enjoining, restraining or
otherwise prohibiting the consummation of the Plan.
SECTION 9.2 EFFECT OF THE TERMINATION. In the event of any such
termination, there shall be no liability for damage on the part of the
Acquiring Fund or of the Acquired Fund or the Trustees of the Acquired Fund
or the Acquiring Fund.
SECTION 9.3 AMENDMENT. This Agreement may be amended prior to the
Closing Date by the parties at any time before or after approval hereof by
the shareholders of either party; provided, however, that after such
shareholder approval there shall not be made any amendment that by law
requires further approval by the shareholders of either party without the
further approval of such shareholders.
SECTION 9.4 WAIVER. At any time prior to the Closing Date, any of the
terms or conditions of this Agreement may be waived by the Trustees of the
Acquired Fund and the Acquiring Fund if, in their judgment after
consultation with legal counsel, such action or waiver will not have a
material adverse effect on the benefits intended under this Agreement to
the shareholders of the Acquired Fund.
SECTION 9.5 PROCEDURE FOR TERMINATION, AMENDMENT OR WAIVER. A
termination, amendment or waiver of this Agreement shall, in order to be
effective, require an affirmative vote by a majority of the Board of
Trustees of both the Acquired Fund and the Acquiring Fund.
SECTION 9.6 SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
effective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
SECTION 9.7 ENTIRE AGREEMENT. This Agreement and any other document
and certificate delivered in connection with the transactions contemplated
by this Agreement shall constitute the entire agreement between the parties
with respect to the subject matter hereof and thereof and supersede all
prior agreements, understandings, negotiations and discussions, whether
written or oral, or the parties.
SECTION 9.8 COUNTERPARTS. This Agreement may be executed in one or
more counterparts. All of such counterparts shall constitute one and the
same agreement and shall become effective when one or more counterparts of
this Agreement have been signed by each party.
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IN WITNESS WHEREOF, the Acquiring Fund and the Acquired Fund have each
caused this Agreement and Plan to be executed and attested on its behalf by its
duly authorized representative as of the date first above written.
The Institutional Funds on behalf of Nicholas-Applegate International
All-Cap Growth Fund
By:
-------------------------------
Charles H. Field, Secretary
Nicholas Applegate Institutional Funds
The Professionally Managed Portfolios on behalf of Nicholas-
Applegate International All-Cap Growth Fund
By:
---------------------------------
Chad E. Fickett, Secretary
Professionally Managed Portfolios
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Nicholas-Applegate(R) Institutional Funds
International All Cap Growth Fund
600 West Broadway
San Diego, California 92101
(800) 551-8643
STATEMENT OF ADDITIONAL INFORMATION
October 18, 2005
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Proxy Statement and Prospectus, dated
October 18, 2005, for the Special Meeting of Shareholders of the
Nicholas-Applegate International All-Cap Growth Fund, a portfolio of the
Professionally Managed Portfolios, to be held on November 18, 2005. Copies of
the Combined Proxy Statement and Prospectus may be obtained at no charge by
writing or calling the Nicholas-Applegate Institutional Funds at the address or
telephone numbers shown above.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined Proxy
Statement and Prospectus.
Further information about the Acquiring Fund is contained in the Acquiring
Fund's Preliminary Statement of Additional Information that is on file with the
Securities and Exchange Commission, which is incorporated by reference into this
Statement of Additional Information. This document may be obtained without
charge by writing to the addresses or calling the telephone numbers shown above.
Further information about the Acquired Fund is contained in the Acquired Fund's
Prospectus and Statement of Additional Information, dated July 30, 2005, and in
the Acquired Fund's audited Annual Report, dated, March 31, 2005, which are
incorporated by reference into this Statement of Additional Information. Any of
these documents referenced may be obtained by calling or writing the Acquired
Fund at (800) 558-9105, 615 East Michigan Street, Milwaukee, Wisconsin 53202.
GENERAL INFORMATION
The shareholders of the Acquired Fund are being asked to approve or
disapprove the Reorganization Agreement dated __________, 2005 by and between
the Professionally Managed Portfolios on behalf of the Acquired Fund and the
Nicholas-Applegate Institutional Funds on behalf of the Acquiring Fund, and the
transactions contemplated thereby. The Reorganization Agreement contemplates the
transfer of substantially all of the property, assets and good will of the
Acquired Fund in exchange for the Acquiring Fund Shares and the assumption by
the Acquiring Fund of the liabilities of the Acquired Fund. Following the
exchange, the Acquired Fund will make a liquidating distribution of the
Acquiring Fund Shares to the Acquired Fund's shareholders, such that an Acquired
Fund shareholder at the Closing Date will receive full and fractional Acquiring
Fund Shares having an aggregate net asset value equal to the aggregate net asset
value of the shareholder's Acquired Fund Shares. A Special Meeting of
Shareholders of the Acquired Fund to consider the Reorganization Agreement and
the transactions contemplated thereby will be held at 615 East Michigan Avenue,
Third Floor, Milwaukee, Wisconsin on Friday, November 18, 2005, at 10:00 a.m.
Eastern time. For further information about the transaction, see the Combined
Proxy Statement and Prospectus.
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
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Financial Statements
Pro Forma Financial Statements 2
</Table>
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PRO FORMA COMBINING NOTES TO FINANCIAL STATEMENTS
OF DUNCAN-HURST INTERNATIONAL GROWTH FUND INTO
NICHOLAS-APPLEGATE INTERNATIONAL ALL-CAP GROWTH FUND
March 31, 2005
(UNAUDITED)
NOTE 1 - BASIS OF PRO FORMA PRESENTATION
The pro forma financial statements and the accompanying pro forma
schedule of investments give effect to the proposed Plan of Reorganization
between Nicholas-Applegate International All-Cap Growth Fund (a series of
Professionally Managed Portfolios) (the "Acquired Fund") and
Nicholas-Applegate All-Cap Growth Fund (a newly organized series of
Nicholas-Applegate Institutional Funds) (the "Acquiring Fund") (collectively,
the "Reorganization") and the consummation of transactions contemplated
therein to be accounted for as a tax-free reorganization of investment
companies. The Reorganization would be accomplished by an exchange of shares
of the Acquiring Fund for the net assets of the Acquired Fund the
distribution of Acquiring Fund shares to the Acquired Fund shareholders. If
the Reorganization were to have taken place at March 31, 2005, Acquired Fund
- - Class I shareholders would have received 3,729,694 shares of Acquiring Fund
- - Class I shares.
The preparation of pro forma combined financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the pro forma
combined financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - PRO FORMA ADJUSTMENTS
(a) Under the terms of the interim investment advisory agreement of
Acquired Fund (the "Agreement"), the advisory fees based on pro forma
combined assets for the year ended March 31, 2005 were $281,550. The advisory
fees were adjusted to reflect the advisory fee rates for the Acquiring Fund.
Upon the closing date of the Reorganization, the advisory fee payable by
Acquiring Fund will be 0.95% of the Fund's average daily net assets.
Correspondingly, advisory fee waivers have been adjusted to reflect the
voluntary agreement by the Acquiring Fund's Investment Adviser to waive
advisory fees to the extent that total expenses (with certain exclusions)
exceed 1.25%.
(b) Pursuant to the master co administrative services agreement for
Class I shares of the Acquiring Fund, the Acquiring Fund will pay the
Investment Adviser a fee calculated at 0.15% of the average daily net assets
of Acquiring Fund Class I shares. Class I shares co administration fees paid
on pro forma combined assets for the year ended March 31, 2005 were $44,455.
The co administration fees were adjusted to reflect the fees that will be
paid by the Acquired Fund in accordance with Acquiring Fund - Class I co
administration agreement.
(c) Pursuant to the terms of the master shareholder servicing agreement
for Class I shares of the Acquiring Fund, the Acquiring Fund pays the
Investment Adviser a fee calculated at 0.15% of the average daily net assets
of Class I shares. The Class I shareholder servicing fees on the pro forma
combined assets for the year ended March 31, 2005 were $44,455. The
shareholder servicing fees were adjusted to reflect the fees that will be
paid by the Acquired Fund in accordance with Acquiring Fund - Class I
shareholder servicing agreement.
(d) Custody, accounting & administration and transfer agency fees have
been adjusted to reflect the estimated amounts the combined entities would
have paid under the agreements Acquiring Fund will have with Brown Brothers
Harriman & Co for custody, accounting and administration services, and UMB
Fund Services, Inc. for transfer agency services upon closing of the
Reorganization.
(e) Fees for a variety of other expense items have been adjusted to
reflect the estimated amounts of costs shared by all portfolios of the
Nicholas-Applegate Institutional Funds that would have been allocated to the
combined entities.
(f) The fee paid to a non affiliated Chief Compliance Officer has been
eliminated.
2
<Page>
NOTE 3 - MERGER COSTS
Merger costs related to the Reorganization are estimated at
approximately $__________ and because these are non recurring costs they have
not been included in the unaudited pro forma statement of operations. These
costs represent the estimated expense of the Acquired Fund carrying out its
obligations under the Reorganization and consist of management's estimate of
legal fees, accounting fees, printing costs and mailing charges related to
the proposed merger. The merger costs related to the Acquiring Fund are
$__________ and Nicholas-Applegate Capital Management has agreed to pay 100%
of these costs.
3
<Page>
PRO FORMA SCHEDULE OF INVESTMENTS OF COMBINED FUND
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRING FUND)
SHARES SHARES VALUE
- ------ ------------- -----------
COMMON STOCKS: 96.6%
AUSTRALIA: 3.8%
Alumina Ltd.
CSL Ltd.
Stargames Ltd.
Woodside Petroleum Ltd.
-----------
-----------
AUSTRIA: 1.0%
Erste Bank der Oesterreichischen Sparkassen AG
-----------
BELGIUM: 2.0%
InBev N.V.
KBC Groupe SA
-----------
-----------
BRAZIL: 2.2%
Companhia Cia Vale do Rio Doce -- Sponsored ADR
Uniao de Bancos Brasileiros S.A. (Unibanco) -- GDR
-----------
-----------
CANADA: 4.7%
ATI Technologies, Inc.(1)
Great Canadian Gaming Corp.(1)
Precision Drilling Corp.(1),(2)
Talisman Energy, Inc.
Teck Cominco Ltd. -- Class B
-----------
-----------
FINLAND: 2.1%
Nokian Renkaat OYJ
YIT-Yhtyma OYJ
-----------
-----------
FRANCE: 5.9%
Axalto Holdings N.V.(1)
Sanofi-Aventis
Total S.A. -- Sponsored ADR
Veolia Environnement
-----------
-----------
GERMANY: 4.1%
HeidelbergCement AG
IVG Immobilien AG
Solarworld AG
-----------
-----------
</Table>
4
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH COMBINED FUNDS
(ACQUIRED FUND) ADJUSTMENTS PROFORMA
SHARES SHARES VALUE SHARES VALUE SHARES VALUE
- ------ ----------- ----------- ---------- ---------- ----------- -----------
COMMON STOCKS: 96.6%
AUSTRALIA: 3.8%
Alumina Ltd. 72,070 $ 328,161 72,070 $ 328,161
CSL Ltd. 15,040 397,408 15,040 397,408
Stargames Ltd. 259,000 278,312 259,000 278,312
Woodside Petroleum Ltd. 14,770 277,462 14,770 277,462
----------- ---------- -----------
1,281,343 1,281,343
----------- ---------- -----------
AUSTRIA: 1.0%
Erste Bank der Oesterreichischen Sparkassen AG 6,500 340,021 6,500 340,021
----------- ---------- -----------
BELGIUM: 2.0%
InBev N.V. 9,380 328,455 9,380 328,455
KBC Groupe SA 4,120 347,451 4,120 347,451
----------- ---------- -----------
675,906 675,906
----------- ---------- -----------
BRAZIL: 2.2%
Companhia Cia Vale do Rio Doce -- Sponsored ADR 11,550 365,095 11,550 365,095
Uniao de Bancos Brasileiros S.A. (Unibanco) -- GDR 11,300 388,494 11,300 388,494
----------- ---------- -----------
753,589 753,589
----------- ---------- -----------
CANADA: 4.7%
ATI Technologies, Inc.(1) 17,040 293,997 17,040 293,997
Great Canadian Gaming Corp.(1) 8,910 354,500 8,910 354,500
Precision Drilling Corp.(1),(2) 3,010 224,727 3,010 224,727
Talisman Energy, Inc. 9,000 307,809 9,000 307,809
Teck Cominco Ltd. -- Class B 10,830 401,360 10,830 401,360
----------- ---------- -----------
1,582,393 1,582,393
----------- ---------- -----------
FINLAND: 2.1%
Nokian Renkaat OYJ 2,180 351,298 2,180 351,298
YIT-Yhtyma OYJ 12,600 356,756 12,600 356,756
----------- ---------- -----------
708,054 708,054
----------- ---------- -----------
FRANCE: 5.9%
Axalto Holdings N.V.(1) 12,100 400,013 12,100 400,013
Sanofi-Aventis 6,070 511,899 6,070 511,899
Total S.A. -- Sponsored ADR 6,430 753,789 6,430 753,789
Veolia Environnement 9,500 336,968 9,500 336,968
----------- ---------- -----------
2,002,669 2,002,669
----------- ---------- -----------
GERMANY: 4.1%
HeidelbergCement AG 4,800 302,057 4,800 302,057
IVG Immobilien AG 19,370 328,965 19,370 328,965
Solarworld AG 6,090 763,076 6,090 763,076
----------- ---------- -----------
1,394,098 1,394,098
----------- ---------- -----------
</Table>
5
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRING FUND)
SHARES SHARES VALUE
- ------ ------------- ------------
GREECE: 2.0%
Piraeus Bank S.A.
National Bank of Greece S.A.
Tsakos Energy Navigation Ltd.(2)
-------------
-------------
HONG KONG: 2.2%
Cheung Kong (Holdings) Ltd.
Henderson Land Development Co. Ltd.
Shun Tak Holdings Ltd.
-------------
-------------
HUNGARY: 0.8%
OTP Bank Rt. -- GDR
-------------
INDONESIA: 2.6%
PT Adhi Karya (Persero), Tbk.
PT Clipan Finance Indonesia, Tbk.(1)
PT Energi Mega Persada, Tbk.
PT Kawasan Industri Jababeka, Tbk.(1)
PT Bank Lippo, Tbk.(1)
-------------
-------------
IRELAND: 5.6%
Anglo Irish Bank Corp. PLC
Kingspan Group PLC
-------------
-------------
ITALY: 0.7%
Saipem SpA
-------------
JAPAN: 21.9%
The Bank of Fukuoka Ltd.
Canon, Inc.
Credit Saison Co. Ltd.
Cyber Agent Ltd.
Fanuc Ltd.
Honda Motor Co. Ltd.
Komatsu Ltd.
Matsui Securities Co. Ltd.
Matsui Securities Co. Ltd.(1),(3)
Mitsubishi Tokyo Financial Group, Inc.
NEOMAX Co. Ltd.
Nidec Corp.
Pacific Management Corp.
Sharp Corp.
</Table>
6
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH COMBINED FUNDS
(ACQUIRED FUND) ADJUSTMENTS PROFORMA
SHARES SHARES VALUE SHARES VALUE SHARES VALUE
- ------ ------------- ------------- ------------- ------------- ------------- -------------
GREECE: 2.0%
Piraeus Bank S.A. 10,110 $ 183,496 10,110 $ 183,496
National Bank of Greece S.A. 4,800 162,416 4,800 162,416
Tsakos Energy Navigation Ltd.(2) 7,630 335,949 7,630 335,949
------------- ------------- -------------
681,861 681,861
------------- ------------- -------------
HONG KONG: 2.2%
Cheung Kong (Holdings) Ltd. 24,000 213,096 24,000 213,096
Henderson Land Development Co. Ltd. 50,000 222,456 50,000 222,456
Shun Tak Holdings Ltd. 328,000 309,105 328,000 309,105
------------- ------------- -------------
744,657 744,657
------------- ------------- -------------
HUNGARY: 0.8%
OTP Bank Rt. -- GDR 4,040 286,840 4,040 286,840
------------- ------------- -------------
INDONESIA: 2.6%
PT Adhi Karya (Persero), Tbk. 1,690,000 157,027 1,690,000 157,027
PT Clipan Finance Indonesia, Tbk.(1) 3,595,700 149,963 3,595,700 149,963
PT Energi Mega Persada, Tbk. 2,166,000 171,524 2,166,000 171,524
PT Kawasan Industri Jababeka, Tbk.(1) 14,388,000 220,279 14,388,000 220,279
PT Bank Lippo, Tbk.(1) 2,283,700 190,489 2,283,700 190,489
------------- ------------- -------------
889,282 889,282
------------- ------------- -------------
IRELAND: 5.6%
Anglo Irish Bank Corp. PLC 35,700 893,252 35,700 893,252
Kingspan Group PLC 85,030 1,005,346 85,030 1,005,346
------------- ------------- -------------
1,898,598 1,898,598
------------- ------------- -------------
ITALY: 0.7%
Saipem SpA 17,800 225,687 17,800 225,687
------------- ------------- -------------
JAPAN: 21.9%
The Bank of Fukuoka Ltd. 86,000 539,881 86,000 539,881
Canon, Inc. 3,500 187,724 3,500 187,724
Credit Saison Co. Ltd. 9,100 327,653 9,100 327,653
Cyber Agent Ltd. 80 280,584 80 280,584
Fanuc Ltd. 3,200 200,289 3,200 200,289
Honda Motor Co. Ltd. 3,500 175,318 3,500 175,318
Komatsu Ltd. 86,000 646,574 86,000 646,574
Matsui Securities Co. Ltd. 9,600 127,875 9,600 127,875
Matsui Securities Co. Ltd.(1),(3) 19,200 250,914 19,200 250,914
Mitsubishi Tokyo Financial Group, Inc. 69 598,573 69 598,573
NEOMAX Co. Ltd. 16,600 391,754 16,600 391,754
Nidec Corp. 2,800 348,678 2,800 348,678
Pacific Management Corp. 190 627,396 190 627,396
Sharp Corp. 20,000 302,598 20,000 302,598
</Table>
7
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRING FUND)
----------------------------
SHARES SHARES VALUE
- ------ ------------ ------------
JAPAN (CONINUED)
Sompo Japan Insurance, Inc.
Taiheiyo Cement Corp.
Toho Titanium Co. Ltd.
Tokyu Corp.
Toyota Motor Corp.
USS Co. Ltd.
Yamada Denki Co. Ltd.
-----------
-----------
NETHERLANDS: 6.6%
ASML Holding N.V. -- New York Shares(1)
IHC Caland N.V.
ING Groep N.V. -- Sponsored ADR
Koninklijke Bam Groep N.V.
Koninklijke Philips Electronics N.V. -- New York Shares
Royal Numico N.V.(1)
-----------
-----------
NORWAY: 5.3%
Petroleum Geo-Services ASA(1)
Tandberg Television ASA(1)
TGS-NOPEC Geophysical Co. ASA(1)
-----------
-----------
PHILIPPINES: 0.9%
Metropolitan Bank & Trust Co.
-----------
SINGAPORE: 2.5%
ASE Test Ltd.(1),(2)
CapitaLand Ltd.
Singapore Petroleum Co. Ltd.
-----------
-----------
SWEDEN: 0.9%
Telefonaktiebolaget LM Ericsson -- Sponsored ADR(1)
-----------
SWITZERLAND: 7.8%
ABB Ltd.(1)
Kudelski SA -- Bearer Shares(1)
Leica Geosystems Holdings AG(1)
Nestle SA -- Registered Shares
Novartis AG -- Sponsored ADR
Roche Holding AG -- NVES
UBS AG -- Registered Shares
-----------
-----------
</Table>
8
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH COMBINED FUNDS
(ACQUIRED FUND) ADJUSTMENTS PROFORMA
------------------------ ------------------------ -----------------------
SHARES SHARES VALUE SHARES VALUE SHARES VALUE
- ------ ----------- ----------- ----------- ----------- ----------- ----------
JAPAN (CONINUED)
Sompo Japan Insurance, Inc. 32,000 $ 334,014 32,000 $ 334,014
Taiheiyo Cement Corp. 125,000 350,963 125,000 350,963
Toho Titanium Co. Ltd. 11,000 337,577 11,000 337,577
Tokyu Corp. 60,000 312,858 60,000 312,858
Toyota Motor Corp. 12,200 454,065 12,200 454,065
USS Co. Ltd. 3,600 278,718 3,600 278,718
Yamada Denki Co. Ltd. 6,700 351,234 6,700 351,234
----------- ----------- -----------
7,425,240 7,425,240
----------- ----------- -----------
NETHERLANDS: 6.6%
ASML Holding N.V. -- New York Shares(1) 15,890 266,475 15,890 266,475
IHC Caland N.V. 5,100 323,977 5,100 323,977
ING Groep N.V. -- Sponsored ADR 11,890 359,435 11,890 359,435
Koninklijke Bam Groep N.V. 9,100 536,786 9,100 536,786
Koninklijke Philips Electronics N.V. -- New York Shares 15,050 414,176 15,050 414,176
Royal Numico N.V.(1) 8,100 331,414 8,100 331,414
----------- ----------- -----------
2,232,263 2,232,263
----------- ----------- -----------
NORWAY: 5.3%
Petroleum Geo-Services ASA(1) 4,700 309,611 4,700 309,611
Tandberg Television ASA(1) 65,430 820,740 65,430 820,740
TGS-NOPEC Geophysical Co. ASA(1) 22,810 669,422 22,810 669,422
----------- ----------- -----------
1,799,773 1,799,773
----------- ----------- -----------
PHILIPPINES: 0.9%
Metropolitan Bank & Trust Co. 494,600 311,353 494,600 311,353
----------- ----------- -----------
SINGAPORE: 2.5%
ASE Test Ltd.(1),(2) 59,900 304,292 59,900 304,292
CapitaLand Ltd. 119,000 169,413 119,000 169,413
Singapore Petroleum Co. Ltd. 147,000 365,118 147,000 365,118
----------- ----------- -----------
838,823 838,823
----------- ----------- -----------
SWEDEN: 0.9%
Telefonaktiebolaget LM Ericsson -- Sponsored ADR(1) 10,780 303,996 10,780 303,996
----------- ----------- -----------
SWITZERLAND: 7.8%
ABB Ltd.(1) 54,800 340,324 54,800 340,324
Kudelski SA -- Bearer Shares(1) 16,440 592,934 16,440 592,934
Leica Geosystems Holdings AG(1) 1,230 344,408 1,230 344,408
Nestle SA -- Registered Shares 1,270 347,382 1,270 347,382
Novartis AG -- Sponsored ADR 5,010 234,368 5,010 234,368
Roche Holding AG -- NVES 3,210 343,967 3,210 343,967
UBS AG -- Registered Shares 5,230 441,516 5,230 441,516
----------- ----------- -----------
2,644,899 2,644,899
----------- ----------- -----------
</Table>
9
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRING FUND)
SHARES SHARES VALUE
- ------ ------------ ------------
THAILAND: 0.8%
TT&T PCL -- NVDR(1)
-----------
TURKEY: 1.2%
Turkcell Iletisim Hizmetleri A.S. --
Sponsored ADR
Turkiye Garanti Bankasi A.S.(1)
-----------
-----------
UNITED KINGDOM: 9.0%
AstraZeneca PLC -- Sponsored ADR
Cookson Group PLC(1)
Exel PLC
GlaxoSmithKline PLC -- Sponsored ADR
Paladin Resources PLC
SABMiller PLC
Vodafone Group PLC -- Sponsored ADR
-----------
-----------
===========
TOTAL COMMON STOCKS (COST $28,393,413)
<Caption>
PRINCIPAL
AMOUNT
-----------
SHORT-TERM INVESTMENTS: 1.9%
MONEY MARKET INVESTMENT: 1.9%
UMB Money Market Fiduciary
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $634,197)
-----------
TOTAL INVESTMENTS IN SECURITIES: 98.5% (COST
$29,027,610)
OTHER ASSETS IN EXCESS OF LIABILITIES: 1.5%
-----------
NET ASSETS: 100.0%
===========
</Table>
- ----------
(1) Non-income producing security.
(2) U.S. Security of a foreign company.
(3) Restricted Security.
ADR -- American Depositary Receipt.
GDR -- Global Depositary Receipt.
NVES -- Non-Voting Equity Security.
NVDR -- Non-Voting Depositary Receipt.
10
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH COMBINED FUNDS
(ACQUIRED FUND) ADJUSTMENTS PROFORMA
SHARES SHARES VALUE SHARES VALUE SHARES VALUE
- ------ ---------- ------------- --------- ---------- ------------ ------------
THAILAND: 0.8%
TT&T PCL -- NVDR(1) 2,280,000 $ 261,835 2,280,000 $ 261,835
------------- ---------- ------------
TURKEY: 1.2%
Turkcell Iletisim Hizmetleri A.S. --
Sponsored ADR 5,330 91,036 5,330 91,036
Turkiye Garanti Bankasi A.S.(1) 82,000 310,993 82,000 310,993
------------- ---------- ------------
402,029 402,029
------------- ---------- ------------
UNITED KINGDOM: 9.0%
AstraZeneca PLC -- Sponsored ADR 12,790 505,589 12,790 505,589
Cookson Group PLC(1) 452,000 341,583 452,000 341,583
Exel PLC 21,280 340,930 21,280 340,930
GlaxoSmithKline PLC -- Sponsored ADR 7,600 348,992 7,600 348,992
Paladin Resources PLC 119,080 411,144 119,080 411,144
SABMiller PLC 31,130 487,270 31,130 487,270
Vodafone Group PLC -- Sponsored ADR 22,520 598,131 22,520 598,131
------------- ---------- ------------
3,033,639 3,033,639
------------- ---------- ------------
TOTAL COMMON STOCKS (COST $28,393,413) 32,718,848 32,718,848
============= ========== ============
<Caption>
PRINCIPAL PRINCIPAL PRINCIPAL
AMOUNT AMOUNT AMOUNT
---------- --------- ------------
SHORT-TERM INVESTMENTS: 1.9%
MONEY MARKET INVESTMENT: 1.9%
UMB Money Market Fiduciary 634,197 634,197 1,268,394 634,197
------------- ---------- ------------
TOTAL SHORT-TERM INVESTMENTS (COST $634,197) 634,197 634,197
------------- ---------- ------------
TOTAL INVESTMENTS IN SECURITIES: 98.5% (COST
$29,027,610) 33,353,045 33,353,045
OTHER ASSETS IN EXCESS OF LIABILITIES: 1.5% 506,912 68,135 575,047
------------- ---------- ------------
NET ASSETS: 100.0% $ 33,859,957 $ 33,928,092
============= ========== ============
</Table>
11
<Page>
PRO-FORMA COMBINING THE STATEMENT OF ASSETS & LIABILITIES AT
MARCH 31, 2005 -- (UNAUDITED)
<Table>
<Caption>
NICHOLAS-APPLEGATE NICHOLAS-APPLEGATE
INTERNATIONAL INTERNATIONAL PRO-FORMA
ALL CAP GROWTH ALL CAP GROWTH COMBINED
(ACQUIRING FUND) (ACQUIRED FUND) STATEMENT OF
PERIOD ENDED PERIOD ENDED ASSETS &
MARCH 31, 2005 MARCH 31, 2005 ADJUSTMENTS LIABILITIES
------------------ -------------- ------------- ------------
ASSETS
Investments, at value* $ $ 33,353,045 $ 33,353,045
Foreign currencies, at value** 741,324 741,324
Cash 171,417 171,417
Receivables: --
Investment securities sold 948,517 948,517
Capital shares sold -- --
Dividends and interest 63,980 63,980
Foreign taxes receivable -- --
Other recivables -- --
Prepaid expenses 7,800 7,800
Other assets --
------------------ -------------- ------------- ------------
Total assets 35,286,083 35,286,083
------------------ -------------- ------------- ------------
LIABILITIES
Payables:
Investments purchased $ 1,346,221 1,346,221
Advisory Fees 20,381 (77,922)(a) (57,541)
Administration Fees 19,666 -- 19,666
Transfer Agent Fees 7,034 7,034
Chief compliance officer fees 500 500
Other Liabilites 32,324 9,787(b) 42,111
------------------ -------------- ------------- ------------
Total Liabilities 1,426,126 1,426,126
------------------ -------------- ------------- ------------
NET ASSETS 33,859,957 68,135 33,928,092
================== ============== ============= ============
* Investments, at cost 29,027,610 29,027,610
================== ============== ============= ============
** Foreign currencies, at cost 743,568 743,568
================== ============== ============= ============
NET ASSETS CONSIST OF:
Paid-in capital $ $ 45,667,281 45,667,281
Undistributed net investment income (loss) 8,108 68,135 76,243
Accumulated net realized gain (loss) on
investments and foreign currencies (16,139,783) (16,139,783)
Net unrealized appreciation (depreciation ) of
investments and of other assets and
liabilities denominated in foreign currencies 4,324,351 4,324,351
------------------ -------------- ------------- ------------
Net Assets applicable to all shares outstanding $ $ 33,859,957 68,135 33,928,092
================== ============== ============= ============
Class I Shares outstanding 3,729,694 3,729,694
Net Asset Value -- Class I Share $ $ 9.08 .02(c) 9.10
</Table>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
(a) Sum of Management fee and Expenses reimbursed from 3/31/2005 SOP
(b) Sum of all other adjustments from 3/31/2005 SOP
(c) NAV impact of adjustments
12
<Page>
PRO-FORMA COMBINING THE STATEMENT OF OPERATIONS
MARCH 31, 2005 (UNAUDITED)
<Table>
<Caption>
NICHOLAS-APPLEGATE NICHOLAS-APPLEGATE
INTERNATIONAL INTERNATIONAL
ALL CAP GROWTH ALL CAP GROWTH PRO-FORMA
(ACQUIRING FUND) (ACQUIRED FUND) COMBINED
PERIOD ENDED PERIOD ENDED STATEMENT OF
MARCH 31, 2005 MARCH 31, 2005 ADJUSTMENTS OPERATIONS
------------------ -------------- ----------- ------------
INVESTMENT INCOME
Dividends, net of foreign taxes* $ $ 485,422 -- 485,422
Interest 3,093 -- 3,093
------------------ -------------- ----------- ------------
Total Income 488,515 -- 488,515
------------------ -------------- ----------- ------------
EXPENSES
Advisory fee 370,460 (88,910)(a) 281,550
Accounting and administration fees 108,973 (90,573)(b) 18,400
Custodian fees 36,826 37,674 (b) 74,500
Transfer agent fees and expenses 34,005 (11,005)(b) 23,000
Shareholder servicing fees -- 44,455 (c) 44,455
Administrative services -- 44,455 (d) 44,455
Professional fees 21,482 (2,082)(e) 19,400
Shareholder reporting 14,996 (6,296)(e) 8,700
Registration fees 16,060 (16,060)(e) --
Trustees' fees and expenses 5,435 (1,635)(e) 3,800
Miscellaneous 4,646 12,354 (e) 17,000
Chief compliance officer fees 1,500 (1,500)(f) --
------------------ -------------- ----------- ------------
Total Expenses 614,383 (79,123) 535,260
Expenses offset --
Expenses reimbursed (175,788) 10,988 (g) (164,800)
------------------ -------------- ----------- ------------
Net Expenses 438,595 (68,135) 370,460
------------------ -------------- ----------- ------------
NET INVESTMENT INCOME (LOSS) 49,920 68,135 118,055
------------------ -------------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain/ (loss) from:
Investments and foreign currencies 4,719,908 -- 4,719,908
Change in unrealized appreciation (depreciation) of:
Investments and foreign currencies (1,393,822) -- (1,393,822)
------------------ -------------- ----------- ------------
NET GAIN (LOSS) ON INVESTMENTS 3,326,086 -- 3,326,086
------------------ -------------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ $ 3,376,006 68,135 3,444,141
================== ============== =========== ============
*Foreign taxes withheld $ 57,088 57,088
------------------ -------------- ----------- ------------
Average net assets 29,636,800 29,636,800
</Table>
(a) -- N-A International All Cap (IAC) will be the survivor w/ current
management fee of 95 bp vs 125 in Duncan-Hurst International Growth (IG)
(b) -- Amount reflect adjumstments necessary to arrive at projected expense
under current Nicholas-Applegate contracts
(c) -- IAC will have a 15 bp co admin fee that IG does not
(d) -- IAC will have a 15 bp shareholder servicing fee that IG does not
(e) -- Amount reflect adjumstments necessary to arrive at projected expense
allocation for expenses shared by all N-A funds
(f) -- Eliminate fee paid to non affiliated CCO
(g) -- Fee cap reduced to 125 bps for IAC versus 148 bps for IG
13
<Page>
COMBINED STATEMENTS OF CHANGES IN NET ASSETS
PERIODS ENDED MARCH 31, 2005 MARCH 31, 2004 (UNAUDITED)
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRING FUND)
---------------------
MARCH 31, MARCH 31,
2005 2004
--------- ---------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $
Net realized gain (loss)
Net unrealized appreciation (depreciation)
--------- ---------
Net increase (decrease) in net assets
from investment operations
--------- ---------
FROM CAPITAL SHARE TRANSACTIONS:
Distributions to sharweholders fom net
investment income
Class I
Proceeds from shares sold
Class I
Distributions reinvested
Class I
Cost of shares redeemed
Class I
--------- ---------
Net increase (decrease) in net assets from
share transactions $
--------- ---------
Net Increase (Decrease) in Net Assets
NET ASSETS
Beginning
--------- ---------
Ending $
========= =========
Undistributed net investment income (loss),
ending $
========= =========
CLASS I -- CAPITAL SHARE ACTIVITY
Shares sold
Distributions reinvested
Shares redeemed
--------- ---------
Net Institutional Share Activity
========= =========
Average NAV per Share based on capstock
transactions
</Table>
(a) Expense adjustments carried from SOP
14
<Page>
<Table>
<Caption>
NICHOLAS-APPLEGATE
INTERNATIONAL ALL CAP GROWTH
(ACQUIRED FUND) ADJUSTMENT ADJUSTMENT
--------------------------- ------------------------
MARCH 31, MARCH 31,
MARCH 31, MARCH 31, 2005 2004
2005 2004 (UNAUDITED) (UNAUDITED)
------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) $ 49,920 $ (29,543) 68,135 (a)
Net realized gain (loss) 4,719,908 7,006,266
Net unrealized appreciation (depreciation) (1,393,822) 6,225,877
------------ ------------
Net increase (decrease) in net assets
from investment operations 3,376,006 13,202,600
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Distributions to sharweholders fom net
investment income
Class I (137,060) --
Proceeds from shares sold
Class I 1,892,025 39,406
Distributions reinvested
Class I 137,060
Cost of shares redeemed
Class I (66,622) (4,326,194)
------------ ------------
Net increase (decrease) in net assets from
share transactions 1,825,403 (4,286,788)
------------ ------------
Net Increase (Decrease) in Net Assets 5,201,409 8,915,812
NET ASSETS
Beginning 28,658,548 19,742,736
------------ ------------
Ending $ 33,859,957 $ 28,658,548
============ ============
Undistributed net investment income (loss),
ending $ 8,108 $ (48,022)
============ ============
CLASS I -- CAPITAL SHARE ACTIVITY
Shares sold 224,038 6,827
Distributions reinvested 15,827 --
Shares redeemed (7,814) (590,045)
------------ ------------
Net Institutional Share Activity 232,051 (583,218)
============ ============
Average NAV per Share based on capstock
transactions 8.46 7.35
<Caption>
COMBINED STATEMENTS OF
CHANGES IN NET ASSETS
---------------------------
MARCH 31, MARCH 31,
2005 2004
(UNAUDITED) (UNAUDITED)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income (loss) 118,055 (29,543)
Net realized gain (loss) 4,719,908 7,006,266
Net unrealized appreciation (depreciation) (1,393,822) 6,225,877
------------ ------------
Net increase (decrease) in net assets
from investment operations 3,444,141 13,202,600
------------ ------------
FROM CAPITAL SHARE TRANSACTIONS:
Distributions to sharweholders fom net
investment income
Class I
Proceeds from shares sold
Class I 1,892,025 39,406
Distributions reinvested
Class I 137,060 --
Cost of shares redeemed
Class I (66,622) (4,326,194)
------------ ------------
Net increase (decrease) in net assets from
share transactions 1,962,463 (4,286,788)
------------ ------------
Net Increase (Decrease) in Net Assets 5,406,604 8,915,812
NET ASSETS
Beginning 28,658,548 19,742,736
------------ ------------
Ending 34,065,152 28,658,548
============ ============
Undistributed net investment income (loss),
ending 76,243 (48,022)
============ ============
CLASS I -- CAPITAL SHARE ACTIVITY
Shares sold 224,038 6,827
Distributions reinvested 15,827 --
Shares redeemed (7,814) (590,045)
------------ ------------
Net Institutional Share Activity 232,051 (583,218)
============ ============
Average NAV per Share based on capstock
transactions 8.46 7.35
</Table>
15
<Page>
PART C. OTHER INFORMATION
Item 15. INDEMNIFICATION
Registrant's trustees, officers, employees and agents are indemnified
against liabilities incurred by them in connection with the defense or
disposition of any action or proceeding in which they may be involved or with
which they may be threatened, while in office or thereafter, by reason of being
or having been in such office, except with respect to matters as to which it has
been determined that they acted with willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of their
office ("Disabling Conduct").
Section 3 of Registrant's Administrative Services Agreement, filed as
Exhibit (h)(2) to Registrant's Form N-1A Registration Statement on May 6, 1999
and incorporated herein by reference, provides for the indemnification of
Registrant's Administrator against all liabilities incurred by it in performing
its obligations under the Agreement, except with respect to matters involving
its Disabling Conduct. Section 9 of Registrant's Distribution Agreement, filed
as Exhibit (e)(1) to Registrant's Form N-1A Registration Statement on May 6,
1999 and incorporated herein by reference, provides for the indemnification of
Registrant's Distributor against all liabilities incurred by it in performing
its obligations under the Agreement, except with respect to matters involving
its Disabling Conduct. Section 8 of the Shareholder Service Agreement, filed as
Exhibit (e)(3) to Registrant's Form N-1A Registration Statement on May 6, 1999
and incorporated herein by reference, provides for the indemnification of
Registrant's Distributor against all liabilities incurred by it in performing
its obligations under the Agreement, except with respect to matters involving
its Disabling Conduct.
Registrant has obtained from a major insurance carrier a trustees' and
officers' liability policy covering certain types of errors and omissions.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933, as amended, and will be governed by the final adjudication of such
issue.
Article V. of Nicholas-Applegate Institutional Fund's Amended and Restated
Declaration of Trust provides as follows:
5.2 INDEMNIFICATION OF TRUSTEES, OFFICERS, EMPLOYEES, AGENTS. The
Trust shall indemnify each of its Trustees, officers, employees, and agents
(including Persons who serve at its request as directors, officers or
trustees of another organization in which it has any interest, as a
shareholder, creditor or otherwise) against all liabilities and expenses
(including amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred by him or her
in connection with the defense or disposition of any action, suit or other
proceeding, whether civil or
<Page>
criminal, in which he or she may be involved or with which he or she may be
threatened, while in office or thereafter, by reason of his or her being or
having been such a Trustee, officer, employee or agent, except with respect
to any matter as to which he or she shall have been adjudicated to have
acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his or her duties; provided; however, that as to any matter
disposed of by a compromise payment by such Person, pursuant to a consent
decree or otherwise, no indemnification either for said payment or for any
other expenses shall be provided unless there has been a determination that
such Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of
his or her office by the court or other body approving the settlement or
other disposition or by a reasonable determination, based upon review of
readily available facts (as opposed to a full trial-type inquiry), that he
or she did not engage in such conduct by written opinion from independent
legal counsel approved by the Trustees. The rights accruing to any Person
under these provisions shall not exclude any other right to which he or she
may be lawfully entitled; provided that no Person may satisfy any right of
indemnity or reimbursement granted herein or in Section 5.1 or to which he
or she may be otherwise entitled except out of the Trust Property. The
Trustees may make advance payments in connection with indemnification under
this Section 5.2, provided that the indemnified Person shall have given a
written undertaking to reimburse the Trust in the event it is subsequently
determined that he or she is not entitled to such indemnification.
<Page>
Item 16. EXHIBITS.
(1) Certificate of Trust of Registrant--filed as Exhibit
1.1 to Amendment No. 1 to the Registrant's Form N-1A
Registration Statement ("Amendment No. 1") on March
17, 1993 and incorporated herein by reference.
(1)(a) Certificate of Amendment of Certificate of Trust of
Registrant--filed as Exhibit 1.2 to Amendment No. 1
to the Registrant's Form N-1A Registration Statement
on March 17, 1993 and incorporated herein by
reference.
(1)(b) Declaration of Trust of Registrant--filed as Exhibit
1 to Registrant's Form N1-A Registration Statement on
December 31, 1992 and incorporated herein by
reference.
(1)(c) Amended and Restated Declaration of Trust of
Registrant--filed as Exhibit 1.4 to Amendment No. 1
to the Registrant's Form N-1A Registration Statement
on March 17, 1993 and incorporated herein by
reference.
(1)(d) Amended and Restated Declaration of Trust dated
February 19, 1999--filed as Exhibit (a)5 to the
Registrant's Form N-1A Registration Statement on May
6, 1999 and incorporated herein by reference.
(1)(e) Amendment No. 1 to the Amended and Restated
Declaration of Trust dated February 19,1999--
filed as Exhibit (a)(6) to the Registrant's Form
N-1A Registration Statement on June 18, 1999 and
incorporated herein by reference.
(2) Amended Bylaws of Registrant--filed as Exhibit 2 to
Amendment No. 2 to the Registrant's Form N-1A
Registration Statement on April 6, 1993 and
incorporated herein by reference.
(2)(a) Amended Bylaws of Registrant dated February 19,
1999--filed as Exhibit 2(b) to the Registrant's Form
N-1A Registration Statement on May 6, 1999 and
incorporated herein by reference.
(3) Not applicable.
(4) Agreement and Plan of Reorganization dated ________,
is filed herewith as Appendix A to the combined
Proxy Statement/Prospectus and incorporated herein
by reference.
(5) Article VIII of Registrant's Declaration of Trust
incorporated herein by reference as Exhibit (1)(e)
and Articles I and VI of Registrant's Amended and
Restated ByLaws incorporated herein by reference as
as Exhibit (2)(a).
(6) Investment Advisory Agreement between Registrant and
Nicholas-Applegate Capital Management--filed as
Exhibit (d) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(6)(a) Form of letter agreement dated August 31, 1999
between Registrant and Nicholas-Applegate Capital
Management adding the Global Health Care Fund to the
Investment Advisory Agreement--filed as Exhibit
(d)(2) to the Registrant's Form N-1A Registration
Statement on June 18, 1999 and incorporated herein by
reference.
(6)(b) Form of Sub Investment Advisory Agreement between
Registrant and Criterion Investment Management
LLC--filed as Exhibit (d)(3) to Post-Effective
Amendment No. 4 on May 25, 2000 and incorporated
herein by reference.
(6)(c) Proposed Investment Advisory Agreement between
Registrant and Nicholas-Applegate Capital
Management--filed as Exhibit (d)(4) to
Post-Effective Amendment No. 5 on November 30, 2000
and incorporated herein by reference.
(6)(d) Proposed Sub Investment Advisory Agreement between
Registrant and Criterion Investment Management
LLC--filed as Exhibit (d)(5) to Post-Effective
Amendment No. 5 on November 30, 2000 and incorporated
herein by reference.
(6)(e) Form of letter agreement dated February 9, 2001
between Registrant and Nicholas-Applegate Capital
Management adding the International Structured and
Small Cap Value Funds to the Investment Advisory
Agreement--filed as Exhibit (d)(6) to Post-Effective
Amendment No. 6 on February 14, 2001 and incorporated
herein by reference.
(6)(f) Form of Letter agreement dated May 8, 2001 between
Registrant and Nicholas-Applegate Capital Management
amending Schedule A to the Investment Advisory
Agreement dated January 31, 2001 filed as Exhibit
(d)(7) to Post Effective Amendment No. 9 on October
1, 2001 and incorporated herein by reference.
(6)(g) Form of letter agreement dated November 8, 2002
between Registrant and Nicholas-Applegate Capital
Management amending Schedule A to the Investment
Management Agreement--filed as Exhibit (d)(8) to Post
Effective Amendment No. 13 on December 6, 2002 and
incorporated herein by reference.
(6)(h) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending
Schedule A to the Investment Management Agreement--
filed as Exhibit (d)(9) to Post-Effective Amendment
No. 17 on October 17, 2003 and incorporated herein by
reference.
(6)(i) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending
Schedule A to the Investment Advisory Agreement--
filed as Exhibit (d)(10) to Post Effective Amendment
No. 19 on March 17, 2004 and incorporated herein by
reference.
(6)(j) Letter Agreement between Registrant and
Nicholas-Applegate Capital Management amending
Schedule A to the Investment Advisory Agreement
adding International Systematic Fund dated
January 25, 2005--filed as Exhibit (d)(10) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(6)(k) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending
Schedule A to the Investment Advisory Agreement--
filed as Exhibit (d)(12) to Post-Effective Amendment
No. 25 on September 1, 2005 and incorporated herein
by reference.
(7) Distribution Agreement between Registrant and
Nicholas-Applegate Securities dated May 10,
1999--filed as Exhibit (e) to the Registrant's Form
N-1A Registration Statement on May 6, 1999 and
incorporated herein by reference.
(7)(a) Distribution Agreement between Registrant and
Nicholas-Applegate Securities--filed as
Exhibit (e)(2) to Post-Effective Amendment No. 5 on
November 30, 2000 and incorporated herein by
reference.
(7)(b) Form of Shareholder Servicing Agreement--filed
as Exhibit (e)(3) to Post-Effective Amendment
No. 8 on April 10, 2001 and incorporated herein by
reference.
(7)(c) Form of Agency Trading Agreement--filed as
Exhibit (e)(4) to Post-Effective Amendment No. 8
on April 10, 2001 and incorporated herein by
reference.
(8) None.
(9) Custodian Services Agreement between Registrant and
Brown Brothers Harriman & Co.--filed as Exhibit 1(g)
to the Registrant's Form N-1A Registration Statement
on May 6, 1999 and incorporated herein by reference.
(9)(a) Foreign Custody Agreement between Registrant and
Brown Brothers Harriman & Co.--filed as Exhibit
(2)(g) to the Registrant's Form N-1A Registration
Statement on May 6, 1999 and incorporated herein by
reference.
(9)(b) Amendment to Custodian Services Agreement between
Registrant and Brown Brothers Harriman & Co.--filed
as Exhibit (3)(g) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(9)(c) Cash Management Authorization Services Agreement
between Registrant and Brown Brothers Harriman &
Co.--filed as Exhibit (4)(g) to the Registrant's Form
N-1A Registration Statement on May 6, 1999 and
incorporated herein by reference.
(9)(d) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. adding the Global Health Care
Fund to the Foreign Custody Agreement dated May 1,
1999--filed as Exhibit (g)(5) to Post-Effective
Amendment #4 on May 25, 2000 and incorporated herein
by reference.
(9)(e) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. adding the Global Health Care
Fund to Custodian Services Agreement dated May 1,
1999--filed as Exhibit (g)(6) to Post-Effective
Amendment #4 on May 25, 2000 and incorporated herein
by reference.
(9)(f) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. adding the Global Health Care
Fund to the Cash Management Authorization Services
Agreement dated May 1, 1999--filed as Exhibit (g)(7)
to Post-Effective Amendment #4 on May 25, 2000 and
incorporated herein by reference.
(9)(g) Amendment to Appendix C to Custodian Services
Agreement between Registrant and Brown Brothers
Harriman & Co.--filed as Exhibit (g)(8) to
Post-Effective Amendment No. 17 on October 17,
2003 and incorporated herein by reference.
(9)(h) Form of letter agreement between Registrant and
Brown Brothers Harriman & Co. adding International
Structured and Small Cap Value Funds to the Cash
Management Authorization Services Agreement dated
May 1, 1999--filed as Exhibit (g)(9) to
Post-Effective Amendment #6 on February 14, 2001
and superseded by Exhibit (g)(10)--filed on
February 14, 2001 and incorporated herein by
reference.
(9)(i) 17f-5 Delegation Schedule between Registrant and
Brown Brothers Harriman & Co. dated February 14,
2001--filed as Exhibit (g)(10) to Post-Effective
Amendment No. 6 on February 14, 2001 and
incorporated herein by reference.
(9)(j) Amendment to Custodian Services Agreement between
Registrant and Brown Brothers Harriman & Co. dated
February 14, 2001--filed as Exhibit (g)(11) to
Post-Effective Amendment No. 7 on April 10, 2001 --
filed as Exhibit (g)(11) to Post-Effective Amendment
No. 8 on May 30, 2001 and incorporated herein by
reference.
(9)(k) Amendment to Appendix C to the Foreign Custody
Manager Delegation Agreement between Registrant and
Brown Brothers Harriman & Co.--filed as Exhibit
(g)(12) to Post-Effective Amendment No. 17 on October
17, 2003 and incorporated herein by reference.
(9)(l) Amendment to the Cash Management Services
Agreement between Registrant and Brown
Brothers Harriman & Co.--filed as Exhibit (g)(13) to
Post-Effective Amendment No. 17 on October 17, 2003
and incorporated herein by reference.
(9)(m) Amendment to Appendix C to Custodian Services
Agreement between Brown Brothers Harriman & Co.
adding Emerging Markets Opportunities Fund--filed
as Exhibit (g)(14) to Post-Effective Amendment
No. 37 on March 17, 2004 and incorporated herein by
reference.
(9)(n) Amendment to Appendix C to the Foreign Custody
Manager Delegation Agreement between
Registrant and Brown Brothers Harriman & Co.
adding Emerging Markets Opportunities Fund--filed
as Exhibit (g)(15) to Post-Effective Amendment
No. 17 on October 17, 2003 and incorporated by
reference herein.
(9)(o) Amendment to Cash Management Services
Agreement between Registrant and Brown
Brothers Harriman & Co. adding Emerging Markets
Opportunities Fund--filed as Exhibit (g)(16) to
Post-Effective Amendment No. 19 on March 17, 2004 and
incorporated herein by reference.
(9)(p) Amendment to Appendix C to Custodian Services
Agreement between Registrant and Brown Brothers
Harriman & Co. adding International Systematic Fund
dated January 25, 2005--filed as Exhibit (g)(17) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(9)(q) Amendment to Appendix C to the Foreign Custody
Manager Delegation Agreement between Registrant
and Brown Brothers Harriman & Co. adding
International Systematic Fund dated
January 25, 2005--filed as Exhibit (g)(18) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(9)(r) Amendment to Cash Management Services Agreement
between Registrant and Brown Brothers Harriman & co.
adding International Systematic Fund dated
January 25, 2005--filed as Exhibit (g)(19) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(9)(s) Form of Amendment to Appendix C to Custodian
Services Agreement between Registrant and Brown
Brothers Harriman & Co. adding International All Cap
Growth Fund--filed as Exhibit (g)(20) to Post-
Effective Amendment No. 25 on September 1, 2005
and incorporated herein by reference.
(9)(t) Form of Amendment to Appendix C to the Foreign
Custody Manager Delegation Agreement between
Registrant and Brown Brothers Harriman & Co. adding
International All Cap Growth Fund--filed as
Exhibit (g)(21) to Post-Effective Amendment No. 25
on September 1, 2005 and incorporated herein by
reference.
(9)(u) Form of Amendment to Cash Management Services
Agreement between Registrant and Brown Brothers
Harriman & co. adding International All Cap Growth
Fund--filed as Exhibit (g)(22) to Post-Effective
Amendment No. 25 on September 1, 2005 and
incorporated herein by reference.
(10) Form of Rule 12b-1 Plan for Class R Shares--filed as
Exhibit (m) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(10)(a) Shareholder Service Plan between Registrant and
Nicholas-Applegate Securities for Class I, Class II
Class III, Class IV, Class V and Class R shares dated
February 7, 2003--filed as Exhibit (m)(1) to Post
Effective Amendment #13 on December 6, 2002 and
incorporated herein by reference.
(10)(b) Rule 18f-3 Plan between Registrant and
Nicholas-Applegate Capital Management--filed as
Exhibit (n) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(10)(c) Amended to Rule 18f-3 Plan between Registrant and
Nicholas-Applegate Capital Management dated November
8, 2002--filed as Exhibit (n)(1) to Post Effective
Amendment #13 on December 6, 2002 and incorporated
herein by reference.
(11) Opinion of Counsel dated September 1, 2005.
(12) Opinion of Counsel with respect to certain tax
consequences for the International All-Cap Growth
Fund.
(13) Administration and Fund Accounting Agency Agreement
between Registrant and Brown Brothers Harriman & Co.
--filed as Exhibit (1)(h) to the Registrant's Form
N-1A Registration Statement on May 6, 1999 and
incorporated herein by reference.
(13)(a) Administration Services Agreement between Registrant
and Nicholas-Applegate Capital Management--filed as
Exhibit (2)(h) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(13)(b) License Agreement between Registrant and
Nicholas-Applegate Capital Management--filed as
Exhibit (3)(h) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(13)(c) Expense Limitation Agreement between Registrant
and Nicholas-Applegate Capital Management--filed as
Exhibit No. (4)(h) to the Registrant's Form N-1A
Registration Statement on May 6, 1999 and
incorporated herein by reference.
(13)(d) Transfer Agency and Service Agreement between
Registrant and State Street Bank and Trust
Company--filed as Exhibit No. (5)(h) to the
Registrant's Form N-1A Registration Statement on May
27, 1999 and incorporated herein by reference.
(13)(e) Shareholder Service Plan between Registrant and
Nicholas-Applegate Securities for Class R
Shares--filed as Exhibit No. (6)(h) to the
Registrant's Form N-1A Registration Statement on May
6, 1999 and incorporated herein by reference.
(13)(f) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. adding Global Health Care
Fund to the Administration and Fund Accounting Agency
Agreement dated May 1, 1999--filed as Exhibit (h)(7)
to Post-Effective Amendment #4 on May 27, 2000 and
incorporated herein by reference.
(13)(g) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management adding Global
Health Care Fund to the Expense Limitation
Agreement--filed as Exhibit (h)(8) to the
Registrant's Form N-1A Registration Statement on June
18, 1999 and incorporated herein by reference.
(13)(h) Form of letter agreement between Registrant and State
Street Bank and Trust Company adding Global Health
Care Fund to the Transfer Agency and Service
Agreement--filed as Exhibit (h)(9) to the
Registrant's Form N-1A Registration Statement on June
18, 1999 and incorporated herein by reference.
(13)(i) Credit Agreement between Registrant and BankBoston,
N.A. dated December 21, 1999--filed as Exhibit
(h)(10) to Post-Effective Amendment #4 on May 25,
2000 and incorporated herein by reference.
(13)(j) Master Securities Lending Agreement between
Registrant and Goldman, Sachs & Co. dated July 22,
1999--filed as Exhibit (h)(11) to Post-Effective
Amendment #4 on May 25, 2000 and incorporated
herein by reference.
(13)(k) Administrative Services Agreement between Registrant
and Nicholas-Applegate Capital Management--filed
as Exhibit (h)(12) to Post-Effective Amendment No. 5
on November 30, 2000 and incorporated herein by
reference.
(13)(l) Form of letter agreement between Registrant and Brown
Brothers Harriman & Co. adding International
Structured and Small Cap Value Funds to the
Administration and Fund Accounting Agency Agreement
dated May 1, 1999--filed as Exhibit (h)(13) to
Post-Effective Amendment No. 6 on February 14, 2001
and superseded by Exhibit (h)(17)--filed as Exhibit
(h)(17) to Post-Effective Amendment No. 7 filed on
April 10, 2001 and incorporated herein by reference.
(13)(m) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management adding
International Structured and Small Cap Value Funds to
the Expense Limitation Agreement--filed as Exhibit
(h)(14) to Post-Effective Amendment No. 6 on February
14, 2001 and incorporated herein by reference.
(13)(n) Form of letter agreement between Registrant and State
Street Bank and Trust Company adding International
Structured and Small Cap Value Funds to the Transfer
Agency and Service Agreement--filed as Exhibit
(h)(16) to Post-Effective Amendment No. 6 filed on
February 14, 2001 and incorporated herein by
reference.
(13)(o) Form of letter agreement between Registrant and Fleet
Bank (formerly BankBoston, N.A.) adding International
Structured and Small Cap Value Funds to the Credit
Agreement dated December 21, 1999--filed as Exhibit
(h)(15) to Post-Effective Amendment No. 6 on February
14, 2001 and incorporated herein by reference.
(13)(p) Amended Appendix C to the Administration and Fund
Accounting Agreement between Registrant and Brown
Brothers Harriman & Company dated February 14, 2001
-- filed as Exhibit (h)(17) to Post-Effective
Amendment No. 7 filed on April 10, 2001 and
incorporated herein by reference.
(13)(q) Letter Agreement dated May 18, 2001 between
Registrant and Nicholas-Applegate Capital Management
amending the Expense Limitation Agreement -- filed as
Exhibit (h)(18) to Post-Effective Amendment No. 8
filed on May 30, 2001 and incorporated herein by
reference.
(13)(r) Letter Agreement dated September 27, 2001 between
Registrant and Nicholas-Applegate Capital Management
amending The Expense Limitation Agreement Filed as
Exhibit (h)(19) to Post-Effective Amendment No. 9 on
October 1, 2001 and incorporated herein by reference.
(13)(s) Letter Agreement dated May 17, 2002 between
Registrant and Nicholas-Applegate Capital Management
amending The Expense Limitation Agreement -- filed as
Exhibit (h)(20) to Post-Effective Amendment #10 on
May 20, 2002 and incorporated herein by reference.
(13)(t) Amendment to the Administration Services agreement
between Registrant and Nicholas-Applegate Capital
Management dated November 8, 2002--filed as Exhibit
(h)(21) to Post Effective Amendment #13 on December
6, 2002 and incorporated herein by reference.
(13)(u) Amendment to the Expense Limitation Agreement between
Registrant and Nicholas-Applegate Capital Management
dated November 8, 2002--filed as Exhibit (h)(22) to
Post Effective Amendment #13 on December 6, 2002 and
incorporated herein by reference.
(13)(v) Transfer Agency Agreement dated March 14, 2003
between Registrant and UMB Fund Services, INC. filed
as Exhibit (h)(23) to Post Effective Amendment #15 on
May 29, 2003 and incorporated herein by reference.
(13)(w) Letter Agreement dated April 1, 2003 between
Registrant and Nicholas-Applegate Capital Management
amending the Expense Limitation Agreement filed as
Exhibit (h)(24) to Post Effective Amendment #15 on
May 29, 2003 and incorporated herein by reference.
(13)(x) Amendment to Credit Agreement dated February 28, 2003
between Registrant and Fleet National Bank filed as
Exhibit (h)(25) to Post Effective Amendment #15 on
May 29, 2003 and incorporated herein by reference.
(13)(y) Securities Lending and Agency Agreement--filed as
Exhibit (h)(26) to Post-Effective Amendment #15 on
May 29, 2003 and incorporated herein by reference.
(13)(z) Amendment to the Expense Limitation Agreement between
Registrant and Nicholas-Applegate Capital Management
dated July 29, 2003 filed as Exhibit (h)(27) to
Post-Effective Amendment #16 on July 29, 2003 and
incorporated herein by reference.
(13)(a)(i) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Expense Limitation Agreement--filed as Exhibit
(h)(28) to Post-Effective Amendment No. 17 on October
17, 2003 and incorporated herein by reference.
(13)(a)(ii) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Administrative Services Agreement--filed as Exhibit
(h)(28) to Post-Effective Amendment No. 17 on October
17, 2003 and incorporated herein by reference.
(13)(a)(iii) Amendment to Appendix C to the Administration and
Accounting Agreement between Registrant and Brown
Brothers Harriman & Co.--filed as Exhibit (h)(30)
to Post-Effective Amendment No. 17 on October 17,
2003 and incorporated herein by reference.
(13)(a)(iv) Fourth Amendment to Securities Lending Agency
Agreement between Registrant and Brown Brothers
Harriman & Co.--filed as Exhibit (h)(31) to
Post-Effective Amendment No. 17 on October 17,
2003 and incorporated herein by reference.
(13)(a)(v) Customer Identification Program Addendum to
Transfer Agency Agreement--filed as Exhibit
(h)(32) to Post-Effective Amendment No. 17 on
October 17, 2003 and incorporated herein by
reference.
(13)(a)(vi) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Expense Limitation Agreement--filed as Exhibit
(h)(33) to Post-Effective Amendment No. 19 on March
17, 2004 and incorporated herein by reference.
(13)(a)(vii) Form of letter agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Administrative Services Agreement--filed as Exhibit
(h)(34) to Post-Effective Amendment No. 19 on March
17, 2004 and incorporated herein by reference.
(13)(a)(viii) Amendment to Appendix C to the Administration
Agreement between Registrant and Brown Brothers
Harriman & Co. filed as Exhibit (h)(35) to
Post-Effective Amendment No. 19 on March 17, 2004
and incorporated herein by reference.
(13)(a)(ix) Fifth Amendment to Securities Lending Agency
Agreement between Registrant and Brown Brothers
Harriman & Co.--filed as Exhibit (h)(36) to
Post-Effective Amendment No. 23 on March 17, 2004
and incorporated herein by reference.
(13)(a)(x) Letter Agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Expense Limitation Agreement adding International
Systematic Fund dated January 25, 2005--filed as
Exhibit (d)(10) to Post-Effective Amendment No. 23 on
February 3, 2005 and incorporated herein by
reference.
(13)(b)(i) Letter Agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Administrative Services Agreement adding
International Systematic Fund dated
January 25, 2005--filed as Exhibit (d)(10) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(13)(b)(ii) Sixth Amendment to Securities Lending Agency
Agreement between Registrant and Brown Brothers
Harriman & Co. adding International Systematic Fund
dated January 25, 2005--filed as Exhibit (d)(10) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(13)(b)(iii) Amendment to Transfer Agency Agreement between
Registrant and UMB Fund Services, INC adding
International Systematic Fund dated January 25,
2005--filed as Exhibit (d)(10) to Post-Effective
Amendment No. 23 on February 3, 2005 and incorporated
herein by reference.
(13)(b)(iv) Amendment to the Fund Accounting and Agency
Agreement between Registrant and Brown Brothers
Harriman & Co. adding International Systematic Fund
dated January 25, 2005--filed as Exhibit (d)(10) to
Post-Effective Amendment No. 23 on February 3, 2005
and incorporated herein by reference.
(13)(b)(v) Form of Letter Agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Expense Limitation Agreement adding International All
Cap Growth Fund--filed as Exhibit (h)(42) to
Post-Effective Amendment No. 25 on September 1, 2005
and incorporated herein by reference.
(13)(b)(vi) Form of Letter Agreement between Registrant and
Nicholas-Applegate Capital Management amending the
Administrative Services Agreement adding
International All Cap Growth Fund--filed as
Exhibit (h)(43) to Post-Effective Amendment No. 25
on September 1, 2005 and incorporated herein by
reference.
(13)(b)(vii) Form of Seventh Amendment to Securities Lending
Agency Agreement between Registrant and Brown
Brothers Harriman & Co. adding International All Cap
Growth Fund--filed as Exhibit (h)(44) to
Post-Effective Amendment No. 25 on September 1, 2005
and incorporated herein by reference.
(13)(b)(viii) Form of Amendment to Transfer Agency Agreement
between Registrant and UMB Fund Services, INC adding
International All Cap Growth Fund--filed as
Exhibit (h)(45) to Post-Effective Amendment No. 25
on September 1, 2005 and incorporated herein by
reference.
(13)(b)(ix) Form of Amendment to the Fund Accounting and
Agency Agreement between Registrant and Brown
Brothers Harriman & Co. adding International All Cap
Growth Fund--filed as Exhibit (h)(46) to
Post-Effective Amendment No. 25 on September 1, 2005
and incorporated herein by reference.
(14) None
(15) None
(16) Power of Attorney
(17) Proxy Card
Item 17. UNDERTAKINGS
(1) The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of this
prospectus which is a part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145 (c) of the Securities Act [17 CFR 230.145c],
the reoffering prospectus will contain the information called for
by the applicable registration form for the reofferings by persons
who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as part of an
amendment to the registration statement and will not be used until
the amendment is effective, and that, in determining any liability
under the 1933 Act, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
(3) The undersigned registrant agrees to file an amendment to the
Registration Statement, pursuant to Rule 485(b) of Regulation C of
the 1933 Act, for the purpose of including Exhibit 12, Opinion of
Counsel Supporting Tax Matters with a reasonable time after closing.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and
the Investment Company Act of 1940, as amended, the Registrant has duly caused
Registration Statement on Form N-14 to be signed on behalf of the Registrant in
the City of San Diego, State of California, on the 16th day of September, 2005.
NICHOLAS-APPLEGATE INSTITUTIONAL FUNDS
(Registrant)
By: /s/ Horacio Valeiras
Horacio Valeiras, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form N-14 has been signed below by the following
persons in the capacities and on the date indicated:
<Table>
<Caption>
NAME TITLE DATE
/s/ Horacio Valeiras* Principal Executive Officer & Trustee September 16, 2005
- -----------------------------
Horacio Valeiras
/s/ Thomas Muscarella Principal Financial Officer & Accounting September 16, 2005
- ----------------------------- Officer
Thomas Muscarella
/s/ George Keane* Chairman of The Board & Trustee September 16, 2005
- -----------------------------
George Keane
/s/ Walter Auch* Trustee September 16, 2005
- -----------------------------
Walter Auch
/s/ Darlene DeRemer* Trustee September 16, 2005
- -----------------------------
Darlene DeRemer
/s/ Charles H. Field, Jr. Secretary September 16, 2005
- -----------------------------
By: Charles H. Field Jr.
Attorney in Fact
</Table>
*Charles Field signs this document on behalf of each trustee marked with an
asterisk pursuant to powers of attorney filed as Exhibits to this Registration
Statement.
By: /s/ Charles H. Field, Jr.
-----------------------------
Charles H. Field, Jr.
<Page>
EXHIBIT INDEX
EXHIBIT NO. & DESCRIPTION
(16) Power of Attorney
(17) Form of Proxy