As filed with the Securities and Exchange Commission on February 1, 1999
File Nos.: 811-07959
333-17391
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. 2
ADVISORS SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
(602) 952-1100
(Registrant's Telephone Number, Including Area Code)
4455 E. Camelback Road, Suite 261E
Phoenix, AZ 85018
(Address of Principal Executive Offices)
------------------
ROBERT H. WADSWORTH
Advisors Series Trust
4455 E. Camelback Road, Suite 261E
Phoenix, AZ 85018
(Name and Address of Agent for Service)
-------------------
Copy to:
Julie Allecta, Esq.
Kelvin Leung, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective. This Registration Statement shall
hereafter become effective in accordance with the provisions of Section 8(a) of
the Securities Act of 1933 (the "1933 Act") or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
No filing fee is required under the 1933 Act because an indefinite number of
shares of beneficial interest, with par value $0.01 per share, has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940.
<PAGE>
2
CROSS REFERENCE SHEET
FORM N-14 PART B
LOCATION IN PROSPECTUS/PROXY STATEMENT
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1 Front Cover; Cross Reference
2 Table of Contents
3 Introduction; Description of the Proposed
Reorganization; Comparison of the Funds; Risk Factors
4 Introduction, The Transaction, The Proposal, Description
of the Proposed Reorganization
5,6 The Transaction, Comparison of the Funds; Risk Factors;
Further Information About the Fund and the New Fund
7 Shares and Voting; Vote Required
8 Not Applicable
9 Not Applicable
FORM N-14 PART B
LOCATION IN STATEMENT OF ADDITIONAL INFORMATION
-----------------------------------------------
10 Cover Page
11 Table of Contents
12 Incorporation of Documents by Reference in Statement of
Additional Information
13 Not Applicable
14 Incorporation of Documents by Reference in Statement of
Additional Information
FORM N-14 PART C
Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of Form N-14.
<PAGE>
3
THE FOLLOWING ITEMS ARE HEREBY INCORPORATED BY REFERENCE:
From Post-Effective Amendment No. 36 of Advisors Series Trust, filed January 8,
1999, (SEC File No. 333-17391):
PRELIMINARY PROSPECTUS FOR SEGALL BRYANT & HAMILL MID CAP FUND,
DATED JANUARY 8, 1999
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION FOR SEGALL BRYANT &
HAMILL MID CAP FUND, DATED JANUARY 8, 1999
From Post-Effective Amendment No. 31 of VAM Institutional Funds, Inc., filed
August 27, 1998 (SEC File No. 2-95930):
PROSPECTUS FOR SEGALL BRYANT & HAMILL GROWTH AND INCOME FUND, DATED
AUGUST 27, 1998
STATEMENT OF ADDITIONAL INFORMATION FOR SEGALL BRYANT & HAMILL
GROWTH AND INCOME FUND, DATED AUGUST 27, 1998
As previously sent to shareholders of the Segall Bryant & Hamill Growth and
Income Fund and filed with the SEC pursuant to Rule 30b2-1:
ANNUAL REPORT FOR THE SEGALL BRYANT & HAMILL GROWTH AND INCOME FUND
FOR THE FISCAL YEAR ENDED APRIL 30, 1998.
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4
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PART A
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<PAGE>
5
VAM INSTITUTIONAL FUNDS, INC.
90 South Seventh Street
Suite 4300
Minneapolis, MN 55402
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
SEGALL BRYANT & HAMILL GROWTH AND INCOME FUND
TO BE HELD MARCH 9, 1999
To the Shareholders of
Segall Bryant & Hamill Growth and Income Fund:
NOTICE IS HEREBY GIVEN that a special meeting of shareholders of Segall
Bryant & Hamill Growth and Income Fund (the "Fund"), a series of VAM
Institutional Funds, Inc., will be held at the offices of the Sub-advisor,
Segall Bryant & Hamill, 10 South Wacker Drive, Suite 2150, Chicago, IL 60606 on
March 9, 1999, at 10:00 A.M., local time, for the following purposes:
1. To approve or disapprove a proposed reorganization of the Fund into
the SB&H Mid Cap Fund, a newly-formed series of Advisors Series Trust.
2. To transact such other business as may properly come before the
special meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on December 21,
1998 (Record Date) will be entitled to notice of and to vote at the special
meeting or any adjournment thereof.
By Order of the Board of Directors
/s/ Thomas J. Abood
--------------------------
Thomas J. Abood, Secretary
January 29, 1999
YOUR VOTE IS IMPORTANT REGARDLESS OF HOW MANY
SHARES YOU OWNED ON THE RECORD DATE.
--------------------
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY FORM, DATE AND
SIGN IT, AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION, WE REQUEST YOUR COOPERATION IN MAILING YOUR
PROXY PROMPTLY.
<PAGE>
1
COMBINED
PROXY STATEMENT
for
Vam Institutional Funds, Inc.
Segall Bryant & Hamill Growth and Income Fund
AND
PROSPECTUS
for
Advisors Series Trust
Segall Bryant & Hamill Mid Cap Fund
DATED: February 2, 1999
The Notice of Special Meeting of Shareholders, Combined Proxy Statement
and Prospectus and a form of Proxy, are being furnished in connection with the
solicitation of proxies by the Board of Directors (Board of Directors) of VAM
Institutional Funds, Inc., (VAM Funds) for use at a Special Meeting of
Shareholders of the Segall Bryant & Hamill Growth and Income Fund (Fund), a
separate series of VAM Funds, to be held on March 9, 1999.
At the Special Meeting, the Fund's shareholders will be asked to vote
on a proposed reorganization (Reorganization) of the Fund into the Segall Bryant
& Hamill Mid Cap Fund (New Fund), a series of Advisors Series Trust (AST Trust).
New Fund is a new series of AST Trust that will not have any assets or commence
operations until after the Reorganization. The Reorganization will include:
+ the transfer of all assets and liabilities of the Fund to the New
Fund in exchange for shares of the New Fund equivalent in value to the
assets and liabilities transferred,
+ the one-for-one distribution of such New Fund shares to Fund
shareholders of record as of the effective date of the Reorganization
(Effective Date) in full redemption of such shareholders' shares in
the Fund, and
+ the immediate liquidation and termination of the Fund.
After the Reorganization, each shareholder of the Fund as of the
Effective Date will hold New Fund shares having the same aggregate net asset
value as the shares of the Fund held immediately before the Reorganization.
Counsel to the New Fund will issue an opinion that, for federal income tax
purposes, this will be treated as a tax-free reorganization that will not cause
the Fund's shareholders to recognize a gain or loss for federal income tax
purposes. See Section II.A.3 below.
<PAGE>
2
The principal executive offices of VAM Funds are located at 90 South
Street, Suite 4300, Minneapolis, MN 55402 (612) 376-7000. The principal
executive offices of AST Trust are located at 4455 E. Camelback Road, Suite
261E, Phoenix, Arizona 85018 (602) 952-1100.
This Combined Proxy Statement and Prospectus sets forth concisely the
information that a shareholder of the Fund should know before voting on the
proposal. It should be read and retained for future reference.
The New Fund is a new series of AST Trust. The registration statement
for the New Fund (which includes the Preliminary Prospectus and the Preliminary
Statement of Additional Information for the New Fund) was initially filed with
the Securities and Exchange Commission (SEC) on October 15, 1998, and later
updated on December 28, 1998 and January 8, 1999, and is incorporated by
reference herein. The Prospectus and Statement of Additional Information for the
Fund dated August 27, 1998, and the Statement of Additional Information relating
to this Combined Proxy Statement and Prospectus of even date herewith are on
file with the SEC and are incorporated by reference herein. The Fund's
Prospectus dated August 27, 1998, and the New Fund's preliminary Prospectus
dated as of January 8, 1999, accompany this document. The Statement of
Additional Information of the Fund dated August 27, 1998, and the Statement of
Additional Information relating to this Combined Proxy Statement and Prospectus
of even date herewith, are available without charge by writing to the AST Trust
at 4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018 (602) 952-1100.
The Annual Report to Shareholders of the Fund for the fiscal year ended
April 30, 1998, containing audited financial statements of the Fund previously
has been mailed to each shareholder entitled to vote at the Special Meeting.
Additional copies of that Annual Report are available without charge by writing
or calling the VAM Funds at its address and telephone number listed above. The
New Fund is a new series of AST Trust and has not commenced operations.
Therefore, no Annual Report to Shareholders of the New Fund is available. It is
expected that this Combined Proxy Statement and Prospectus will be mailed to
Fund shareholders on or about February 4, 1999.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
3
TABLE OF CONTENTS
I. INTRODUCTION
A. THE TRANSACTION
B. THE PROPOSAL
C. SHARES AND VOTING
II. THE PROPOSAL: APPROVAL OF THE PROPOSED REORGANIZATION
A. DESCRIPTION OF THE PROPOSED REORGANIZATION
1. The Reorganization
2. Effect of the Reorganization
3. Federal Income Tax Consequences
4. Description of the New Fund shares
5. Capitalization
B. COMPARISON OF THE FUNDS
1. New Investment Objectives and Policies
2. Investment Restrictions
3. Risk Factors
4. Comparative Summary of Investor Costs
5. Comparative Performance Information
6. Advisory Fees, Sub-Advisory Fees and Other Expenses
7. Distribution and Shareholder Services
8. Distribution Plans
9. Administration, Custody, Fund Accounting and Transfer Agency
Services
10. Purchase Procedures
11. Redemption Procedures
12. Income Dividends, Capital Gain Distributions and Taxes
13. Portfolio Transactions and Brokerage Commissions
14. Shareholders' Rights
C. RECOMMENDATION OF THE BOARD OF DIRECTORS
1. The Legal Framework
2. The Director' Considerations
D. DISSENTERS' RIGHTS OF APPRAISAL
E. FURTHER INFORMATION ABOUT THE FUND AND THE
New Fund
G. VOTE REQUIRED
III. MISCELLANEOUS ISSUES
A. OTHER BUSINESS
B. NEXT MEETING OF SHAREHOLDERS
C. EXPERTS
<PAGE>
4
I. INTRODUCTION
A. THE TRANSACTION
The Special Meeting has been called for the purpose of allowing
shareholders of the Fund to consider and vote on a proposed reorganization of
the Fund (the "Reorganization"). The purpose of the Reorganization is to move
the Fund out of the VAM Funds prior to the impending liquidation of the VAM
Funds and to continue the Fund, with a greater mid cap emphasis, as a separate
mutual fund to be called the Segall Bryant & Hamill Mid Cap Fund (as defined
above, the "New Fund"), which will be a series of Advisors Series Trust. This
reorganization is necessitated by the decision of the Board of Directors of VAM
Funds to dissolve and liquidate all the VAM Funds, including the Growth & Income
Fund managed by Segall Bryant & Hamill (SB&H). If the Fund were simply
liquidated along with the other VAM Funds, distributions of Fund assets would
likely result in current taxation of any built-in gains for shareholders who are
not investing through a tax-exempt or tax-deferred account. If the proposed
Reorganization is approved, the Fund would continue to operate in the form of
the New Fund and there would be no adverse tax consequences for shareholders.
SB&H, the Fund's portfolio adviser since its inception, would continue to be
directly responsible for the New Fund and has agreed to keep the operating
expenses of the New Fund at below their current level. SB&H and the Directors of
the VAM Funds believe it will be in the shareholders' best interests to have the
Fund continue in existence.
The current investment objective of the Fund is to seek growth of
capital with income as a secondary objective. The Fund seeks to achieve its
objective by investing primarily in the equity securities of well-established
U.S. companies which, in the opinion of the Fund's sub-advisor, offer income
potential in addition to growth of capital. The New Fund has an identical
investment objective as the Fund, except that the New Fund will focus its
investments in the equity securities of mid cap companies. SB&H considers mid
cap companies to be those companies whose market capitalization falls within the
range of $1 billion to $10 billion at the time of the New Fund's investment. The
total expenses for the New Fund are projected to be lower than the current total
expenses of the Fund because SB&H has agreed to limit the New Fund's total
expenses to 1.40% of the New Fund's average daily net assets for a period of at
least one year from the date of the Reorganization. Also, SB&H expects that with
an increased marketing effort, the total assets of the New Fund may increase
over time, thereby spreading fixed costs over an even larger asset base,
potentially reducing the New Fund's per share fixed operating expenses to below
1.40%. Of course, there can be no guarantee that the total expenses of the New
Fund will be reduced as a result of the Reorganization or that the investment
objective of either Fund will be achieved.
In light of the foregoing considerations and the other considerations
described in this document, the Board of Directors of the VAM Funds have
considered and approved the Reorganization of the Fund into a newly created
portfolio of AST Trust. AST Trust is a Delaware business trust organized on
October 3, 1996, with fourteen operational series and one series that is not yet
operational. The AST Trust specializes in providing the necessary structure for
adviser-sponsored mutual funds like the Fund and has all the necessary service
providers in place and would be in a position to service the New Fund and its
<PAGE>
5
shareholders without interruption as soon as practicable following the
Reorganization. Giving effect to a commitment by the New Fund's investment
advisor, SB&H, to waive fees payable to it and/or reimburse expenses to keep the
New Fund's total expense ratio to no more than 1.40% annually, the New Fund will
have a lower expense ratio than the Fund from the consummation of the
Reorganization (which is expected to occur in March 1999). SB&H may, in the
future, reduce or eliminate such waiver and reimbursement however. The
Reorganization will be accomplished by transferring all of the assets and
liabilities of the Fund to a new series (Segall Bryant & Hamill Mid Cap Fund or
New Fund) of AST Trust with the result that the existing shareholders of the
Fund will become, after the Reorganization, the shareholders of the New Fund.
The net asset value per share of the New Fund and the number of shares owned by
each New Fund shareholder will be the same on the date of the Reorganization as
the net asset value per share of the Fund and the number of shares owned on that
date by the Fund's shareholders.
The cost of the Reorganization and of the Special Meeting and
solicitation of proxies including the cost of copying, printing and mailing of
proxy materials, will be borne by the SB&H and Investment Company
Administration, LLC. In addition to solicitations by mail, proxies may also be
solicited by officers of the VAM Funds, the AST Trust or SB&H, without special
compensation, by telephone, telegram or otherwise.
B. THE PROPOSAL
At the Special Meeting, the shareholders of the Fund will be asked to
approve the proposed Reorganization of the Fund into the New Fund. The
Reorganization will include the transfer of all of the assets and liabilities of
the Fund to the New Fund in exchange for shares of the New Fund of equivalent
value, the one-for-one distribution of such New Fund shares for Fund shares, and
the immediate liquidation and termination of the Fund.
The Fund and the New Fund (collectively, the Funds) have identical
investment objectives and similar investment policies (see "Comparison of the
Funds-Investment Objectives and Policies," below). The investment objective of
the Fund is to seek growth of capital with income as a secondary objective, by
investing primarily in the equity securities of well-established companies
(I.E., companies with market capitalizations in excess of $1 billion). The New
Fund has an identical investment objective but it seeks to achieve its objective
by investing primarily in the equity securities of medium capitalization
companies (I.E., companies with market capitalization of between $1 billion and
$10 billion at the time of the New Fund's investment).
Investments in the Funds are subject to substantially similar risks.
See Section II.C. below.
The purchase and redemption arrangements of the Funds are substantially
identical. The New Fund and the Fund have different distribution arrangements
which are more fully discussed in Section II.B. below.
<PAGE>
6
The investment advisor to the Fund is Voyageur Asset Management LLC
(VAM LLC) and the sub-advisor to the Fund is SB&H. SB&H will serve as investment
advisor to the New Fund, which does not have a sub-adviser. As discussed below,
the Board of Directors of the VAM Funds believes that the proposed
Reorganization is in the best interests of the Fund and its shareholders, and
that the interests of existing shareholders of the Fund will not be diluted as a
result of the proposed Reorganization. See Section II.D. below.
C. SHARES AND VOTING
VAM Funds is a Minnesota corporation registered with the SEC as an
open-end management investment company. VAM Funds currently has four series, or
funds, outstanding, including the Fund. None of the three other series are
currently operational and the Board of Directors intends to liquidate VAM Funds
following the Reorganization. Currently, the Fund sells only one class (Class A)
of shares. The New Fund has also designated only one class of shares. If the
Reorganization is approved, the Fund's shareholders will receive shares of the
New Fund in exchange for their Fund shares. Like the Fund, the New Fund will
have a plan of distribution pursuant to Rule 12b-1 of the Investment Company Act
of 1940, as amended (1940 Act).
Each Fund share, or fraction thereof, is entitled to one vote or
corresponding fraction thereof at the Special Meeting. At the close of business
on December 21, 1998, the Record Date for the determination of shareholders
entitled to vote at the Special Meeting, there were 548,976.350 shares
outstanding held by 77 record holders (including omnibus accounts representing
multiple underlying beneficial owners).
All shares represented by each properly signed or transmitted proxy
received prior to the Special Meeting will be voted at the Special Meeting. If a
shareholder specifies how the proxy is to be voted on any business properly to
come before the Special Meeting, it will be voted in accordance with such
instruction. A proxy may be revoked by a shareholder at any time prior to its
use by written notice to the VAM Funds, by submission of a later-dated proxy or
by voting in person at the Special Meeting. If any other matters come before the
Special Meeting, proxies will be voted by the persons named therein as proxies
in accordance with such persons' best judgment.
The holders of ten percent of the shares outstanding and entitled to
vote in person or by proxy shall constitute a quorum. When a quorum is present,
approval of the proposal will require the affirmative vote of the lesser of (i)
67% of the shares represented at the Special Meeting if more than 50% of the
outstanding shares is represented, or (ii) shares representing more than 50% of
the Fund's outstanding shares. The Special Meeting may be adjourned from time to
time by a majority of the votes properly cast upon the question of adjourning
the Special Meeting to another date and time, whether or not a quorum is
present, and the Special Meeting may be held as adjourned without further
notice. The persons named in the proxy will vote in favor of such adjournment
those shares which they are entitled to vote if such adjournment is necessary to
obtain a quorum or to obtain a favorable vote on any proposal.
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7
For purposes of determining the presence of a quorum for transacting
business at the Special Meeting, abstentions and broker "non-votes" (that is,
proxies from brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote shares
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present. However, broker
non-votes are disregarded in determining "votes cast" when the voting
requirement is based on achieving a percentage of the voting securities entitled
to vote present in person or by proxy at the Special Meeting.
As of the Record Date, the Fund's shareholders of record and (to the
VAM Fund's knowledge) beneficial owners who owned more than five percent of the
Fund's shares are as follows:
Percentage of the Fund's
Shareholder Name and Address Outstanding Shares
---------------------------- ------------------
Charles Schwab & Co. 45.75%
Speciality Custody Account For The Exclusive Benefit
Of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
National Financial Services Corp. 36.35%
For Exclusive Benefit Of Our Customers
200 Liberty Street 4th FL
New York, NY 10281
The New Fund currently does not have any public shareholders.
The officers and Directors of the VAM Funds, as a group, owned of
record and beneficially less than one percent of the outstanding voting
securities of the Fund as of the Record Date.
<PAGE>
8
II. THE PROPOSAL:
APPROVAL OF THE PROPOSED REORGANIZATION
A. DESCRIPTION OF THE PROPOSED REORGANIZATION
1. THE REORGANIZATION
If the Reorganization is approved, then on the Effective Date the New
Fund will acquire the assets and liabilities of the Fund, and will issue to the
Fund the number of New Fund shares determined by dividing the value of the
Fund's assets and liabilities so transferred by the net asset value of one New
Fund share. The assets and liabilities of the Fund and the net asset value of
the New Fund will be calculated at the close of business on the date immediately
preceding the Effective Date (Valuation Date) in accordance with the Funds'
valuation procedures described in their respective Prospectuses (in the case of
the New Fund, the Prospectus on file with the SEC, and, in the case of the Fund,
the Prospectus dated August 27, 1998). Contemporaneously with that asset
transfer, the Fund will distribute the New Fund shares it receives on a
one-for-one basis to each remaining shareholder of the Fund based on the
percentage of the outstanding shares of the Fund held of record by that
shareholder on the Valuation Date.
This distribution of the New Fund shares by the Fund to its
shareholders in full redemption of such shareholders' Fund shares will be
accomplished by the establishment of book accounts on the New Fund's share
records in the name of the respective shareholders of the Fund, representing the
respective number of New Fund shares deliverable to each Fund shareholder.
Fractional shares will be carried to the third decimal place. Certificates
evidencing the New Fund shares will not be issued to the Fund's shareholders.
Immediately following the Fund's liquidating distribution of the New
Fund shares to the Fund shareholders, the Fund and VAM Funds will liquidate and
terminate.
Consummation of the Reorganization is subject to approval by the
shareholders of the Fund and the satisfaction of certain other conditions. The
Reorganization may be abandoned at any time before the Effective Date upon the
vote of either a majority of the Board of Directors of the VAM Funds or a
majority of the Board of Trustees of AST Trust.
The above is a summary of the Reorganization. The summary does not
purport to be a complete description of the terms of the Reorganization, which
are set forth in the Agreement and Plan of Reorganization attached as Exhibit A
to this document.
2. EFFECT OF THE REORGANIZATION
If the Reorganization is approved and completed, shareholders of the
Fund as of the Effective Date will become shareholders of the New Fund, which
will acquire the net assets of the Fund. The net asset value of the New Fund
shares held by each shareholder of the Fund immediately after consummation of
the Reorganization will be equivalent to the net asset value of the Fund shares
held by that shareholder immediately before consummation of the Reorganization.
On or before the Effective Date the Fund intends to distribute all of
its then remaining net investment income and realized capital gains.
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9
SB&H, the current sub-adviser to the Fund, will, after the
Reorganization, be the investment adviser for the New Fund and therefore will be
the investment adviser for the Fund's assets after the Reorganization. The
current adviser of the Fund, VAM LLC, will cease to have any relationship with
the operation of the Fund (in its reconstituted form as the New Fund). Also,
after the Reorganization, First Fund Distributors, Inc., will be the distributor
of the New Fund's shares instead of Dougherty Summit Securities LLC, the
distributor of shares of the Fund. The current Board of Directors of VAM Funds
will no longer serve in that capacity. It is, however, expected that the New
Fund will be managed in accordance with its existing investment objective and
policies, which are similar to that of the Fund, other than a change of
investment universe to mid cap companies.
3. FEDERAL INCOME TAX CONSEQUENCES
As a condition to the closing of the Reorganization, the Fund and the
New Fund must receive a favorable opinion from Paul, Hastings, Janofsky & Walker
LLP, counsel to the New Fund, substantially to the effect that, for federal
income tax purposes: (a) the transfer by the Fund of substantially all of its
assets to the New Fund solely in exchange for the New Fund shares, as described
above, is a reorganization within the meaning of Section 368(a)(1)(D) of the
Internal Revenue Code of 1986, as amended (Code); (b) no gain or loss is
recognized by the Fund upon the transfer of substantially all of its assets to
the New Fund in exchange solely for shares of the New Fund shares; (c) no gain
or loss is recognized by the New Fund on receipt of the Fund assets in exchange
for the New Fund shares; (d) the basis of the assets of the Fund in the hands of
the New Fund is, in each instance, the same as the basis of those assets in the
hands of the Fund immediately prior to the transaction; (e) the holding period
of the Fund's assets in the hands of the New Fund includes the period during
which the assets were held by the Fund; (f) no gain or loss is recognized to the
shareholders of the Fund upon the receipt of the New Fund shares solely in
exchange for the Fund's shares; (g) the basis of the New Fund shares received by
the Fund shareholders is, in each instance, the same as the basis of the Fund
shares surrendered in exchange therefor; and (h) the holding period of the New
Fund shares received by the Fund shareholders includes the holding period during
which shares of the Fund surrendered and exchanged therefor was held, provided
that such shares were held as a capital asset in the hands of the Fund
shareholders on the date of the exchange. The VAM Funds do not intend to seek a
private letter ruling from the Internal Revenue Service with respect to the tax
effects of the Reorganization.
4. DESCRIPTION OF THE NEW FUND SHARES
Each New Fund Share issued to Fund shareholders pursuant to the
Reorganization will be duly authorized, validly issued, fully paid and
nonassessable when issued, will be transferable without restriction and will
have no preemptive or conversion rights. Each New Fund Share will represent an
equal interest in the assets of the New Fund. The New Fund shares will be sold
and redeemed based upon the net asset value of the New Fund next determined
after receipt of the purchase or redemption request, as described in the New
Fund's Prospectus.
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10
5. CAPITALIZATION
The capitalization of the Funds as of October 31, 1998, and their pro
forma combined capitalization as of that date after giving effect to the
proposed Reorganization are as follows:
(Unaudited) (Unaudited)
New Acquired Pro Forma
Fund Fund Combined
---- ---- --------
Aggregate net assets $0** $ 6,953,093 $ 6,953,093
Shares outstanding* $0** $531,394.837 $531,394.837
Net asset value per share $0** $ 13.08 $ 13.08
- ----------
* Each Fund is authorized to issue an indefinite number of shares.
** The New Fund is a new series of AST Trust. It has not commenced operation
and currently has no assets and no shares outstanding.
<PAGE>
11
B. COMPARISON OF THE FUNDS
A brief comparison of the Funds is set forth below.
1. NAME, INVESTMENT OBJECTIVES AND POLICIES
Effective with the Reorganization, the Fund's name, Segall Bryant and
Hamill Growth & Income Fund, would change to that of the New Fund, Segall Bryant
& Hamill Mid Cap Fund. The investment objective of the Fund is to seek growth of
capital with income as a secondary objective, by investing primarily in the
equity securities of well-established companies (i.e., companies having a market
capitalization in excess of $1 billion). The investment objective of the New
Fund is identical. However, the New Fund will seek to achieve its investment
objective by investing primarily in the equity securities of medium
capitalization companies (i.e., companies whose market capitalization falls
within the range of $1 billion to $10 billion.
The Fund invests primarily (at least 65% of its total assets) in common
stocks and other securities convertible into common stock (including preferred
stocks and debentures). The Fund may also invest up to 35% of its total assets
in debt securities. Under normal market conditions, at least 65% of the value of
the Fund's total assets will be invested in the equity securities of companies
having a market capitalization in excess of $1 billion. The Fund may also invest
in securities of foreign issuers in the form of American Depositary Receipts and
Global Depositary Receipts.
The New Fund has an identical investment objective and policies as the
Fund, except that the New Fund will invest primarily (at least 65% of its total
assets) in equity securities of medium capitalization companies. SB&H considers
medium capitalization companies to be those whose market capitalization falls
within the range of $1 billion to $10 billion at the time of the New Fund's
investment. Also, unlike the Fund, the New Fund is permitted to make short
shares which are not "against the box." What this means is that the New Fund is
permitted to sell securities "short" that it does not own by borrowing those
securities and then selling them. The New Fund would then be obligated to
replace the securities borrowed by purchasing them at the market price at the
time of replacement. See Section II.C. below.
2. INVESTMENT RESTRICTIONS
Both the New Fund and the Fund have identical fundamental investment
restrictions which cannot be changed without the affirmative vote of a majority
of each Fund's outstanding voting securities as defined in the 1940 Act.
<PAGE>
12
3. RISK FACTORS
The New Fund's portfolio, like that of the Fund, is subject to the
general risks and considerations associated with equity investing. In addition,
some of the securities which both the New Fund and the Fund may invest may be of
smaller companies. The securities of smaller companies often trade less
frequently and in more limited volume, and may be subject to more abrupt or
erratic price movements, than securities of larger, more established companies.
Such companies may have limited product lines, markets or financial resources,
or may depend on a limited management group. While the Fund emphasizes
investments in equity securities of well-established companies, the New Fund
will emphasize investment in the equity securities of mid cap companies.
Investing in securities of mid cap companies may involve greater risk than
investing in securities of large cap companies, since securities of mid cap
companies can be subject to more abrupt or erratic movements in value. However,
they tend to involve less risk than securities of small cap companies.
Unlike the Fund, the New Fund may sell "short" securities that it does
not own. Short sales can enhance a fund's return but they involve specific risk
considerations and may be considered a speculative technique. When a fund sells
a security short, it profits from a decline in the price of that security. If a
security that has been sold short increases in value, a fund may lose money on
that position if it must replace the borrowed security (by purchasing it on the
open market). Short sales can cause greater fluctuations in the value of a
fund's shares than if that fund had not engaged in such short sales. The amount
of any gain will be decreased, and the amount of any loss increased, by the
amount of any premium, dividends or interest a fund may be required to pay in
connection with the short sale. Furthermore, under adverse market conditions a
fund might have difficulty purchasing securities to meet its short sale delivery
obligations, and might have to sell portfolio securities to raise the capital
necessary to meet its short sale obligations at a time when fundamental
investment considerations would not favor such sales.
4. COMPARATIVE SUMMARY OF INVESTOR COSTS
The following table summarizes the costs of investing in the Fund,
based on expenses incurred in the most recent fiscal year, and in the New Fund,
based on estimated expenses for the current fiscal year.
Segall Bryant Segall Bryant &
& Hamill Growth Hamill Mid Cap
and Income Fund* Fund**
---------------- ---------------
(pro forma)
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) None None
Sales Charge Imposed on Dividend Reinvestments None None
<PAGE>
13
Maximum Contingent Deferred Sales Charge None None
Redemption Fees None None
Exchange Fees None None
ANNUAL OPERATING EXPENSES:
(as a percentage of average net assets)
Investment Advisory Fee 0.75% 0.75%
12b-1 Fee 0.25% 0.25%
Other Expenses (after voluntary expense
reimbursements) 0.75% 0.40%
Total Fund Operating Expenses (after
voluntary expense reimbursements) 1.75% 1.40%
* For the fiscal year ended April 30, 1998, without voluntary expense
reimbursements and expenses paid by unaffiliated third parties, Other
Expenses would have been 1.39% and Total Fund Operating Expenses would have
been 2.39%.
** SB&H has agreed to reduce its fees and/or pay expenses of the New Fund to
insure that the New Fund's expenses will not exceed 1.40%. If SB&H did not
limit the New Fund's expenses, it is estimated that "Other Expenses" in the
above table would be 1.45% and "Total Fund Operating Expenses" would be
2.45%. If SB&H does waive any of its fees or pay New Fund expenses, the New
Fund may reimburse SB&H in future years. SB&H may, however, in the future
terminate such fee reduction and/or reimbursement of expenses on a
prospective basis.
EXAMPLE
Assume, hypothetically, that each Fund's annual return is 5% and that
its operating expenses are as set forth above, an investor buying $1,000 of the
Fund's and the New Fund's shares would have paid the following total expenses
upon redeeming such shares:
1 Year 3 Years 5 Years 10 Years
Segall, Bryant & Hamill Growth
and Income Fund $18 $55 $95 $206
Segall Bryant & Hamill Mid
Cap Fund $14 $44 N/A N/A
The above example is to show the effect of expenses. This example does not
represent past or future expenses or returns. Actual expenses and returns may
vary.
<PAGE>
14
Performance information on the Fund may be found in its 1998 Annual
Report to Shareholders.
5. ADVISORY FEES, SUB-ADVISORY FEES AND OTHER EXPENSES
The advisory fees of the Fund and the New Fund are identical.
Currently, VAM LLC serves as investment advisor to the Fund pursuant to an
Investment Advisory Agreement between the VAM Funds and VAM LLC dated April 30,
1997. SB&H serves as the sub-advisor to the Fund pursuant to a Sub-Advisory
Agreement between VAM LLC and SB&H dated April 30, 1997. The Fund pays VAM LLC a
monthly investment advisory fee equivalent on an annual basis to 0.75% of its
average daily net assets. VAM LLC in turn pays SB&H sub-advisory fees of 0.75%
of the Fund's average daily net assets.
After the Reorganization, SB&H will serve as investment advisor to the
New Fund pursuant to an Advisory Agreement. The New Fund will pay SB&H a monthly
management fee based upon the New Fund's average daily net assets at the annual
rate of 0.75%. The New Fund does not have any investment sub-advisor.
The expense ratio of the New Fund (which, because of certain voluntary
waivers by SB&H) is expected to be lower than the expense ratio of the Fund for
the balance of 1999 (1.40% for the New Fund as compared to 1.75% for the Fund)
because of certain voluntary waiver and expense reimbursements by SB&H. Absent
the fee waiver, the New Fund's total operating expenses would be 2.45%.
For the fiscal year ended April 30, 1998, the Fund paid advisory fees
of $44,267. During the same period, VAM LLC and the Fund's distributor,
Dougherty Summit Securities LLC, absorbed or waived fees in the amount of
$34,000.
6. DISTRIBUTION AND SHAREHOLDER SERVICES
Dougherty Summit Securities LLC has served as distributor of the Fund's
shares since April 30, 1998. First Fund Distributors, Inc., an affiliate of the
New Fund's administrator -- Investment Company Administration, LLC (ICA LLC)
(which is not affiliated with either the VAM Funds or VAM LLC) will serve as
distributor of the New Fund's shares.
No sales charge is imposed by either the Fund or the New Fund on
investments or reinvestment of dividends or capital gain distributions.
7. DISTRIBUTION PLANS
The VAM Funds have adopted a Rule 12b-1 distribution plan for the
Fund's shares, which provides for the payment of distribution fees at annual
rates of up to 0.25% of the average daily net assets attributable to the shares
of the Fund. Payments under the distribution plan shall be used to compensate or
reimburse the Fund's distributor and broker-dealers for services provided and
<PAGE>
15
expenses incurred in connection with the sale of the Fund's shares, and are not
tied to the amount of actual expenses incurred.
The New Fund has also adopted a distribution plan pursuant to Rule
12b-1 (the "New Fund Plan"). The New Fund Plan provides that the New Fund will
pay for distribution and related expenses at an annual rate of up to 0.25% of
the New Fund's average net assets to SB&H as Distribution Coordinator. Payments
made pursuant to the New Fund Plan will represent compensation for distribution
and service activities, not reimbursement for specific expenses incurred. The
Plan allows excess distribution expenses to be carried forward for the following
three fiscal years. Expenses permitted to be paid by the New Fund under the New
Fund Plan include: preparation, printing and mailing of prospectuses;
shareholder reports such as semi-annual and annual report, performance reports
and newsletters; sales literature and other promotional material to prospective
investors; direct mail solicitation; advertising; public relations; compensation
of sales personnel; advisors or other third parties for the assistance with
respect to the distribution of the New Fund shares; payments to financial
intermediaries for shareholder support; administrative and accounting services
with respect to the shareholders of the New Fund; and such other expenses as may
be approved from time to time by the Board of Trustees of the AST Trust.
8. ADMINISTRATION, CUSTODY, FUND ACCOUNTING AND TRANSFER AGENCY SERVICES
Pursuant to an administration agreement (Administration Agreement)
between AST Trust and ICA LLC, ICA LLC would act as administrator for AST Trust
and would provide various administrative services including (but not limited to)
arranging for the maintenance of certain books and records of the New Fund,
preparing and mailing certain documents in connection with tax and disclosure
obligations, preparing agendas and supporting documentation or, and minutes of,
meetings of AST Trust Board of Trustees and meetings of shareholders and
coordinating all relationships between the New Fund and its other service
providers. The administration services provided to AST Trust pursuant to the
Administration Agreement are similar in scope to the administration services
provided to the VAM Funds pursuant to its existing administration agreement.
Pursuant to a transfer agency agreement (Transfer Agency Agreement)
between AST Trust and American Data Services, Inc. (ADS), ADS would act as the
transfer agent and dividend disbursing agent for the New Fund. The services
provided under the Transfer Agency Agreements are similar to those provided
under the VAM Funds' existing transfer agency agreement.
Pursuant to a custody agreement (Custody Agreement) between AST Trust
and Star Bank, N.A. (Star Bank), Star Bank would act as custodian of the
portfolio securities, cash and other property of the New Fund. Pursuant to the
VAM Funds' existing custody agreement with Norwest Bank Minnesota, N.A.
(Norwest), Norwest provides accounting and certain recordkeeping services for
the VAM Funds' portfolios. The terms of the portions of the Custody Agreement
relating to custodial services are similar in all material respects to the terms
of the VAM Funds' existing custodian agreement with Norwest.
<PAGE>
16
9. PURCHASE PROCEDURES
The Fund generally requires a minimum initial investment of $1,000 and
minimum subsequent investments of $100 or more. The New Fund has identical
minimum purchase requirements. However, for investments in an Individual
Retirement Account and Automatic Investment Plan, the minimum initial investment
is $250 and minimum subsequent investment is $100. In the case of the New Fund,
special reduced minimum investment limits apply to participants in 401(k) plans
and employee benefit plans with separate accounts for employees,
The Fund's shares are purchased at the public offering price, which is
based on the net asset value next determined after receipt of a shareholder's
order in proper form. If a shareholder buys shares through his or her investment
representative, the representative must receive the shareholder's order before
the close of regular trading on the New York Stock Exchange to receive that
day's public offering price. The New Fund shares are purchased using a similar
method. To eliminate the need for safekeeping, neither the Fund nor the New Fund
will issue share certificates.
10. REDEMPTION PROCEDURES
Shareholders of both Funds may redeem their shares at the net asset
value next determined after receipt of a written redemption request or a
telephone redemption order without the imposition of any redemption fee or other
sales charge. Both Funds have only one class of shares. For the Fund, this has
been designated Class A.
For the New Fund no designation has been assigned to its share class.
11. INCOME DIVIDENDS, CAPITAL GAIN DISTRIBUTIONS AND TAXES
The Fund distributes substantially all of its net investment income and
net capital gains to shareholders each year. The New Fund intends to continue
this policy. Both Funds also have identical distribution options. Shareholders
of the Fund and the New Fund may choose from three distribution options: (1)
reinvest all distributions in additional Fund shares without a sales charge; (2)
receive distributions from net investment income in cash while reinvesting
capital gains distributions in additional shares without a sales charge; or (3)
receive all distributions in cash. Shareholders of the New Fund can change their
distribution option by notifying the transfer agent in writing. If a shareholder
does not select an option when the shareholder opens the account, all
distributions will be reinvested in shares of the Fund.
The New Fund intends to qualify as a separate "regulated investment
company" under Subchapter M of the Code for federal income tax purposes and to
meet all other requirements that are necessary for it (but not its shareholders)
to pay no federal taxes on income and capital gains paid to shareholders in the
form of dividends. In order to accomplish this goal, the New Fund must, among
other things, distribute substantially all of its ordinary income and net
capital gains on a current basis and maintain a portfolio of investments which
satisfies certain diversification criteria.
<PAGE>
17
12. PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
After the closing of the Reorganization, SB&H will continue to be
responsible for decisions to buy and sell securities, broker-dealer selection,
and negotiation of commission rates through its new capacity as the advisor. In
placing orders for the Fund's (and after the closing of the Reorganization, the
New Fund's) portfolio transactions, SB&H will use its best efforts to seek to
execute portfolio transactions in a manner which, under the circumstances,
results in total costs or proceeds being the most favorable to the New Fund. In
assessing the best overall terms available for any transaction, SB&H considers
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer, research services provided to SB&H, and the
reasonableness of the commissions, if any, both for the specific transaction and
on a continuing basis. SB&H is not required to obtain the lowest commission or
the best net price for the New Fund on any particular transaction and is not
required to execute any order in a fashion either preferential to the New Fund
relative to other accounts they manage or otherwise materially adverse to any
other accounts.
13. SHAREHOLDERS' RIGHTS
VAM Funds is a Minnesota corporation. Because the Fund is a series of
the VAM Funds, its operations are governed by the VAM Fund's Articles of
Incorporation and By-laws and applicable Minnesota law. AST Trust is a Delaware
business trust. Because the New Fund is a series of AST Trust, its operations
are governed by AST Trust's Agreement and Declaration of Trust and By-laws and
applicable Delaware law.
Under Delaware law, trustees and shareholders of a business trust are
generally afforded by statute the same limited liability as their corporate
counterparts and are permitted liberal indemnifications. However, some states do
not recognize the liability limitation provided by Delaware law. Furthermore,
AST Trust, being a Delaware business trust, has a Board of Trustees instead of a
Board of Directors, as is the case of VAM Funds. The composition of the Board of
Trustees of the AST Trust is also different from that of the VAM Funds, both in
terms of membership and size.
The Funds normally will not hold meetings of shareholders except as
required under the 1940 Act and Minnesota law (in the case of the Fund) or
Delaware law (in the case of the New Fund). However, with respect to each of the
Fund and the New Fund, a meeting of shareholders shall be held upon the written
request of the holders of shares representing not less than 10% of the
outstanding shares entitled to vote on the matters specified in the written
request.
Shareholders of each Fund have no preemptive, conversion or
subscription rights. The shares of each Fund have non-cumulative voting rights,
with each shareholder of that Fund entitled to one vote for each full share of
that Fund (and a fractional vote for each fractional share) held in the
shareholder's name on the books of that Fund as of the record date for the
action in question. On any matter submitted to a vote of shareholders, shares of
each Fund will be voted by that Fund's shareholders individually when the matter
<PAGE>
18
affects the specific interest of that Fund only, such as approval of that Fund's
investment management arrangements. The shares of the Funds will be voted in the
aggregate on other matters, such as the election of trustees or directors, as
appropriate, and ratification of the Boards' selection of the Funds' independent
accountants.
C. RECOMMENDATION OF THE BOARD OF DIRECTORS
In response to the circumstances described above, the Board of
Directors of the VAM Funds, after due consideration, has unanimously approved
the proposed Reorganization, subject to approval by shareholders. The Directors,
after reviewing the terms of the proposed Reorganization, concluded the proposed
Reorganization to be in the best interests of the shareholders of the Fund. The
Board of Directors also unanimously recommends that shareholders vote for the
adoption of the proposal.
1. THE LEGAL FRAMEWORK
The proposed Reorganization, if approved by the Fund's shareholders,
will close as soon as practicable, subject to the satisfaction or certain
conditions thereto. The Investment Advisory Agreement between the New Fund and
SB&H will remain in effect for an initial term of up to two years and will
continue in effect thereafter for successive periods if, and so long as, such
continuance is specifically approved annually by (a) the Board of Trustees of
AST Trust or (b) a majority vote of the New Fund's shareholders, provided that
in either event, the continuance is also approved by a majority of the Trustees
who are not interested persons (independent Trustees) by a vote cast in person
at a meeting called for the purpose of voting on such approval.
2. THE VAM FUND'S DIRECTORS' CONSIDERATIONS
The transactions contemplated by the Reorganization were presented to
the Board of Directors of the VAM Funds for consideration at its December 7,
1998, Board of Directors meeting. The Board of Directors, including a majority
of the independent Directors, voted to approve the proposed Reorganization. The
Board of Directors concluded unanimously that the Proposal set forth in this
Combined Proxy Statement and Prospectus is in the best interests of the Fund and
its shareholders and would not result in the dilution of such shareholders'
interests.
In determining whether to recommend approval of the Reorganization to
shareholders of the Fund, the Board of Directors (including the independent
Directors), made an inquiry into a number of matters and considered the
following factors, among others:
(i) the compatibility of investment objectives, policies and
restrictions of the Fund and the New Fund,
(ii) the capabilities of SB&H and other service providers to the New
Fund,
(iii) the nature of the Fund's existing shareholder base,
(iv) expense ratios and available information regarding the fees and
expenses of the Fund and the New Fund as well as similar funds,
(v) portfolio transaction policies of the Fund and the New Fund,
<PAGE>
19
(vi) the terms and conditions of the Reorganization and whether the
Reorganization would result in dilution of shareholder interests,
(vii) costs incurred by the Fund and New Fund as a result of the
Reorganization,
(viii) tax consequences of the Reorganization, and
(ix) possible alternatives to the Reorganization.
In reaching the decision to approve the Reorganization and to recommend
that the shareholders of the Fund vote to approve the Reorganization, the Board
of Directors, including the independent Directors, unanimously concluded that
the participation of the Fund in the Reorganization is in the best interests of
the Fund's shareholders and would not result in the dilution of such
shareholders' interests. Their conclusion was based on a number of factors,
including the following:
(1) The investment objective of the Fund and the New Fund will be
identical and policies and restrictions will be substantially the
same.
(2) SB&H will continue to be responsible for providing day-to-day
investment management services to the Fund following consummation of
the Reorganization, which the Directors believe to be important to
the Fund's existing shareholder base.
(3) SB&H has agreed to waive fees payable to it and/or reimburse the New
Fund for expenses in excess of fixed expense caps, and to keep (at
least initially) the total operating expenses of the New Fund to
that below the current fee level, even though SB&H may in the future
modify or eliminate such reduction.
D. DISSENTERS' RIGHT OF APPRAISAL
Shareholders of the Fund who object to the proposed Reorganization will
be entitled to "dissenters' rights" under Minnesota law, which allows dissenting
shareholders to recover the fair value of the shareholders' shares. However,
shareholders of the Fund have, in any event, the right at any time up to the
Effective Date to redeem shares of the Fund at net asset value. After the
Reorganization, such shareholders will hold shares of the New Fund, which may
also be redeemed at net asset value in accordance with the procedures described
in the New Fund's preliminary prospectus dated January 8, 1999, subject to the
forward pricing requirements of Rule 22c-1 under the 1940 Act.
E. FURTHER INFORMATION ABOUT THE FUND AND THE NEW FUND
Further information about the Fund is contained in its current
Prospectus and Statement of Additional Information dated August 27, 1998, both
of which are incorporated herein by this reference. Further information about
the New Fund is contained in its Preliminary Prospectus and Preliminary
Statement of Additional Information dated February 26, 1999, which are also
incorporated herein by this reference. Documents that relate to the Fund are
available, without charge, by writing to VAM Institutional Funds, Inc., 90 South
Seventh Street, Suite 4300, Minneapolis, MN 55402 or by calling (800) 385-7003.
Copies of the Fund's Prospectus and the New Fund's Preliminary Prospectus also
<PAGE>
20
accompany this Combined Proxy Statement and Prospectus. The SEC maintains an
Internet web site (http://www.sec.gov) that contains each of these documents,
other material incorporated by reference and other information about companies
that file electronically with the SEC
The VAM Funds are subject to the informational requirements of the
Securities and Exchange Act of 1934 and the 1940 Act, and in accordance
therewith files reports, proxy materials and other information with the SEC.
Such reports, proxy materials and other information can be inspected and copied
at the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer Affairs
and Information Services, of the SEC, Washington, D.C. 20549.
F. VOTE REQUIRED
Approval of the proposed Reorganization requires the affirmative vote
of the holders of a majority (as defined under the 1940 Act and as described
above) of the total number of the Fund's Class A shares outstanding on the
Record Date. If the shareholders of the Fund do not approve the proposed
Reorganization, or if the Reorganization is not consummated for any other
reason, then the Board of Directors will take such further action as it deems to
be in the best interest of the Fund and its shareholders subject to approval by
the shareholders of the Fund if required by applicable law.
The holders of ten percent of the shares outstanding and entitled to
vote in person or by proxy shall constitute a quorum. When a quorum is present,
approval of the proposal will require the vote of a majority of the outstanding
voting securities of a company. As defined under the 1940 Act, a majority is the
vote, at the annual or a special meeting of the security holders of such company
duly called, of the lesser of:
+ 67% of the shares represented at the Special Meeting if more than
50% of the outstanding shares is represented, or
+ shares representing more than 50% of the Fund's outstanding shares.
III. MISCELLANEOUS ISSUES
A. OTHER BUSINESS
The Board of Directors of the VAM Funds know of no other business to be
brought before the Special Meeting. However, if any other matters come before
the Special Meeting, it is the Board of Directors' intention that proxies which
do not contain specific restrictions to the contrary will be voted on such
<PAGE>
21
matters in accordance with the judgment of the persons named in the enclosed
form of proxy.
B. NEXT MEETING OF SHAREHOLDERS
The VAM Funds are not required, and do not intend, to hold annual or
other periodic meetings of shareholders except as required by the 1940 Act. If
the Reorganization is not consummated, the next meeting of the shareholders of
the Fund will be held at such time as the Board of Directors may determine or at
such time as may be legally required. Any shareholder proposal intended to be
presented at such meeting must be received by the VAM Funds at its office at a
reasonable time before the Special Meeting, as determined by the Board of
Directors, in order to be included in the VAM Fund's proxy statement and form of
proxy relating to such meeting, and must satisfy all other legal requirements.
C. EXPERTS
The financial statements of the Fund incorporated in this Combined
Proxy Statement and Prospectus by reference to the Annual Report to Shareholders
for the year ended April 30, 1998, have been so incorporated in reliance on the
report of KPMG Peat Marwick, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE
<PAGE>
22
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION is made as of the 29th day of
January, 1999, by and between VAM INSTITUTIONAL FUNDS, INC. ("VAM Funds"), a
Minnesota corporation, on behalf of Segall Bryant & Hamill Growth and Income
Fund (the "Fund") and ADVISORS SERIES TRUST (the "Trust"), a Delaware business
trust, on behalf of Segall Bryant &Hamill Mid Cap Fund (the "Mid Cap Fund").
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
1. Approval by Shareholders
A meeting of the shareholders of the Fund shall be called and held for
the purpose of acting upon this Agreement and Plan of Reorganization (the
"Agreement") and the transactions contemplated herein.
2. Plan of Reorganization
(a) On behalf of the Fund, VAM Funds will convey, transfer and deliver
to the Trust at the closing provided for in Section 3 (hereinafter called the
"Closing") all of the Fund's then existing assets, the assets belonging to the
Fund to be conveyed, transferred and delivered to the Mid Cap Fund, a
newly-formed series of the Trust. In consideration thereof, the Trust agrees at
the Closing (i) to assume and pay, to the extent that they exist on or after the
effective date of the Reorganization (as defined in Section 3 hereof), all of
the Fund's obligations and liabilities, whether absolute, accrued, contingent or
otherwise, the obligations and liabilities of the Fund to become the obligations
and liabilities of the Mid Cap Fund; and (ii) to deliver to the Fund full and
fractional shares of beneficial interest of the Mid Cap Fund, $0.01 par value
(the "Shares"), equal in number to the number of full and fractional shares of
capital stock of the Fund, $0.01 par value, outstanding immediately prior to the
effective date of the Reorganization.
(b) At the effective date of the Reorganization, VAM Funds will
distribute pro rata to the shareholders of record of the Fund as of the
effective date of the Reorganization the Shares of the Mid Cap Fund received by
the Fund pursuant to this Section 2. Each shareholder of record of the Fund will
receive a number of Shares of the Mid Cap Fund equal to the number of shares of
the Fund held at the effective date of the Reorganization. Such distribution
will be accompanied by the establishment of an open account on the stock records
of the Trust in the name of each such shareholder of the Fund and representing
the number of Shares due such shareholder. Fractional Shares will be carried to
the third decimal place. Certificates representing Shares will not be issued.
(c) Prior to the Closing, all redemption requests received in proper
order and form and not previously satisfied will be aggregated and the total
dollars to be paid out resulting from the redemptions will be set aside by VAM
Funds' transfer agent. After the Closing, the Trust's
<PAGE>
23
transfer agent will honor all such pre-Closing redemptions on behalf of VAM
Funds and its transfer agent.
(d) As soon as practicable after the effective date of the
Reorganization, VAM Funds shall take all necessary steps under Minnesota law to
effect a complete liquidation and dissolution of the Fund.
(e) The transactions contemplated herein are referred to as the
"Reorganization."
3. Closing and Effective Date of the Reorganization
With respect to the Fund, the Closing shall occur on (a) the final
adjournment of the meeting of shareholders of the Fund at which this Agreement
will be considered or (b) such later date as the parties may mutually agree (the
"effective date of the Reorganization").
4. Representations and Warranties; Conditions Precedent
(a) VAM Funds, on behalf of the Fund, represents and warrants to the
Trust the following:
(1) The Fund is in compliance, in all material respects, with all
applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
Investment Company Act of 1940, as amended (the "1940 Act"), the Internal
Revenue Code and all applicable state rules and regulations. To VAM Funds'
knowledge, no litigation or administrative proceeding or investigation of or
before any court or governmental body is now pending or threatened against the
Fund or any of its assets, which could materially adversely affect the Fund's
financial condition or the conduct of its business. VAM Funds knows of no such
facts that might form the basis for any such proceeding and the Fund is not
subject to any order, decree or judgment of any court or governmental body
likely to materially adversely affect its business or the Reorganization.
(2) VAM Funds and the Fund have filed all required federal and other
tax returns and reports. VAM Funds and the Fund have paid all required federal
and state taxes. On the closing date, the Fund will have good and marketable
title to the Fund assets and the authority to assign, deliver or transfer those
assets as per this Agreement. No governmental consents, approvals,
authorizations or filings are required under the 1933 Act, the 1934 Act, the
1940 Act or Minnesota law for the execution and performance of this agreement by
VAM Funds, for itself and on behalf of the Fund, except for such consents,
approvals and authorizations as have already been properly made.
(b) The Trust, on behalf of the Mid Cap Fund, represents and warrants
to VAM Funds the following:
(1) The Mid Cap Fund is in compliance, in all material respects, with
all applicable requirements of the Securities Act of 1933, as amended (the "1933
Act"), the Securities
<PAGE>
24
Exchange Act of 1934, as amended (the "1934 Act"), the Investment Company Act of
1940, as amended (the "1940 Act"), the Internal Revenue Code and all applicable
state rules and regulations. To the Trusts' knowledge, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is now pending or threatened against the Mid Cap Fund or any
of its assets, which could materially adversely affect the Mid Cap Fund's
financial condition or the conduct of its business. The Trust knows of no such
facts that might form the basis for any such proceeding and the Mid Cap Fund is
not subject to any order, decree or judgment of any court or governmental body
likely to materially adversely affect its business or the Reorganization.
(2) The Trust and the Mid Cap Fund have filed all required federal and
other tax returns and reports. The Trust and the Mid Cap Fund have paid all
required federal and state taxes. On the closing date, the Mid Cap Fund will
have the authorization to receive assets from the Fund as per this Agreement. No
governmental consents, approvals, authorizations or filings are required under
the 1933 Act, the 1934 Act, the 1940 Act or Delaware law for the execution and
performance of this agreement by the Trust, for itself and on behalf of the Mid
Cap Fund, except for such consents, approvals and authorizations as have already
been properly made.
(c) Conditions Precedent
The obligations of VAM Funds and the Trust to effectuate the Agreement
hereunder shall be subject to the satisfaction of each of the following
conditions:
(1) Such authority, including "no-action" letters, and orders from the
Securities and Exchange Commission (the "Commission") and state securities
commissions, as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been received.
(2) (i) The Trust's Registration Statement and any amendments thereto,
as may be deemed necessary and appropriate, prepared on Form N-1A shall have
been filed with the Commission under the 1933 Act and the 1940 Act; and (ii) no
stop-order suspending the effectiveness of the Registration Statement shall have
been issued, and no proceeding for that purpose shall have been initiated or
threatened by the Commission (and not withdrawn or terminated).
(3) Confirmation shall have been received from the Commission or its
staff that the Trust, effective upon or before the effective date of the
Reorganization, shall be duly registered as an open-end management investment
company under the 1940 Act.
(4) Each party shall have received an opinion from Paul, Hastings,
Janofsky & Walker LLP, addressed to both parties substantially to the effect
that, for federal income tax purposes: (i) the transfer by the Fund of
substantially all of its assets to the Mid Cap Fund solely in exchange for the
Shares, as described above, is a reorganization within the meaning of Section
368(a)(1)(D) of the Internal Revenue Code (the "Code"); (ii) no gain or loss is
recognized by the Fund upon the transfer of substantially all of its assets to
the Mid Cap Fund in exchange solely for the Shares; (iii) no gain or loss is
recognized by the Mid Cap Fund on receipt of the Fund
<PAGE>
25
assets in exchange for the Shares; (iv) the basis of the assets of the Fund in
the hands of the Mid Cap Fund is, in each instance, the same as the basis of
those assets in the hands of the Fund immediately prior to the transaction; (v)
the holding period of the Fund's assets in the hands of the Mid Cap Fund
includes the period during which the assets were held by the Fund; (vi) no gain
or loss is recognized to the shareholders of the Fund upon the receipt of the
Shares solely in exchange for the Fund's shares; (vii) the basis of the Shares
received by the Fund's shareholders is, in each instance, the same as the basis
of the Fund shares surrendered in exchange therefor; and (viii) the holding
period of the Shares received by the Fund's shareholders includes the holding
period during which shares of the Fund surrendered and exchanged therefor were
held, provided that such shares were held as a capital asset in the hands of the
Fund's shareholders on the date of the exchange. Furthermore, notwithstanding
anything herein to the contrary, neither the Mid Cap Fund nor the Fund may waive
the condition set forth in this paragraph Section 4(a)(4).
(5) The Shares shall have been duly qualified for offering to the
public in such jurisdictions (except where such qualifications are not required)
so as to permit the transfers contemplated by this Agreement to be consummated.
(6) With respect to the Fund, a vote approving this Agreement and the
Reorganization contemplated hereby shall have been adopted by at least a
majority of the outstanding shares of common stock of the Fund entitled to vote
at an annual or special meeting.
(7) With respect to the Mid Cap Fund, the Trustees of the Trust shall
have taken the following action at a meeting duly called for such purposes:
(a) the approval of the Investment Advisory Agreement between
the Trust on behalf of the Mid Cap Fund, and Segall Bryant &
Hamill;
(b) the approval of the Plan of Distribution adopted by the
Trust, on behalf of the Mid Cap Fund;
(c) the approval of the Distribution Agreement between the Trust
and First Fund Distributors, Inc.;
(d) the ratification of the selection of McGladrey & Pullen LLP
as independent certified public accountants for the Mid Cap
Fund;
(e) the authorization of the issuance by the Trust prior to the
effective date of the Reorganization, of one or more Shares
of the Mid Cap Fund to the Fund in consideration for the
payment of $1.00 per Share for the purpose of enabling the
Fund to vote on the matters referred to above in this
Section 4(b);
(f) the submission of the matters referred to in paragraph (g)
of this Section 4(b) to the sole shareholder of the Mid Cap
Fund; and
(g) the authorization of the issuance by the Trust of Shares at
the effective date of the Reorganization in exchange for the
Fund's assets pursuant to the terms and provisions of this
Agreement.
(8) With respect to the Fund, the shareholders of the Fund shall have
voted to approve all actions necessary to carry out the Plan of Reorganization.
<PAGE>
26
At any time prior to the Closing for the Fund, any of the foregoing
conditions (other than the condition set forth in Section 4(b)(4)) may be waived
by the Board of Directors of VAM Funds if, in the judgment of such Board, such
waiver will not have a material adverse effect on the benefits intended under
this Agreement to the shareholders of the Fund.
(9) All accrued and unpaid expenses of the Fund, including all
administrative, legal and other expenses owed by the Fund or Segall Bryant &
Hamill to VAM Funds or its agents shall have been paid in full.
5. Expenses
The expenses of entering into and carrying out the provisions of this
Agreement and the Reorganization and the proxy solicitation contemplated herein
will be borne by the Fund.
6. Indemnification
(a) The Trust and the Mid Cap Fund each agrees to indemnify VAM Funds,
the Fund, its directors (in their capacity as directors or officers), and agents
from all liabilities that may arise in connection with, or as a result of, the
Reorganization or the proxy material distributed to shareholders of the Fund and
the proxy solicitation contemplated in this Agreement. No party shall be
entitled to indemnification under this Agreement unless written notice of the
events or circumstances giving rise to such claim for indemnification has been
provided to the indemnifying party or parties no later than two (2) years after
the date of the Closing. Notwithstanding the above, any such indemnification for
acts occurring after the date of the Closing shall be for a period not later
than one (1) year after such Closing.
(b) The VAM Funds and the Fund each agrees to indemnify the Trust, the
Mid Cap Fund, its directors and trustees (in their capacity as directors and
trustees or officers), and agents from all liabilities that may arise in
connection with, or as a result of, the Reorganization or the proxy material
distributed to shareholders of the Fund and the proxy solicitation contemplated
in this Agreement or as a result of a breach of a representation or warranty
made by VAM Funds or the Fund under this Agreement. No party shall be entitled
to indemnification under this Agreement unless written notice of the events or
circumstances giving rise to such claim for indemnification has been provided to
the indemnifying party or parties no later than two (2) years after the date of
the Closing. Notwithstanding the above, any such indemnification for acts
occurring after the date of the Closing shall be for a period not later than one
(1) year after such Closing.
7. Termination
With respect to the Fund and the Mid Cap Fund, the Board of Directors
of VAM Funds or the Board of Trustees of the Trust, respectively, may terminate
this Agreement and abandon the Reorganization contemplated hereby, at any time
prior thereto, notwithstanding approval thereof by the shareholders of the Fund
if, in the judgment of such Boards, proceeding with the Agreement would be
inadvisable.
<PAGE>
27
8. Entire Agreement
This Agreement embodies the entire agreement between the parties and
there are no agreements, understandings, restrictions or warranties among the
parties other than those set forth herein or herein provided for. Furthermore,
after the Fund's shareholders have approved this Agreement, no amendments may be
made that materially adversely affect the interests of the shareholders of the
Fund unless such amendments are submitted for shareholder approval.
9. Further Assurances
Each of VAM Funds and the Trust shall take such further action as may
be necessary or desirable and proper to consummate the transactions contemplated
hereby.
10. Governing Law
This Agreement and the transactions contemplated hereby shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware.
<PAGE>
28
IN WITNESS WHEREOF, each of VAM Funds and the Trust has caused this
Agreement and Plan of Reorganization to be executed on its behalf by its
Chairman, President or a Vice President and attested by its Secretary or
Assistant Secretary, all as of the day and year first above written.
VAM INSTITUTIONAL FUNDS, INC, a Minnesota
corporation, on behalf of Segall Bryant & Hamill
Growth and Income Fund
------------------------------------------------
ATTEST:
- ----------------------------------
Secretary
ADVISORS SERIES TRUST, a Delaware
business trust, on behalf of SEGALL BRYANT & HAMILL Mid Cap Fund
------------------------------------------------
ATTEST:
- ------------------------------------
Secretary
<PAGE>
28
PROXY
FOR SPECIAL MEETING OF SHAREHOLDERS OF
SEGALL BRYANT & HAMILL GROWTH AND INCOME FUND
ON MARCH 9, 1999
The undersigned hereby appoints Mary Pavia and Paul Fricke, or each of
them, proxies for the undersigned, with full power of substitution, to represent
the undersigned and to vote all of the shares of Segall Bryant & Hamill Growth
and Income Fund (the "Fund") of VAM Institutional Funds, Inc. (the "VAM Funds")
which the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held on March 9, 1999, and at any adjournment thereof.
1. To approve or disapprove a proposed reorganization of the Fund into
the SEGALL BRYANT & HAMILL Mid Cap Fund, a newly formed series of Advisors
Series Trust.
( ) FOR ( ) AGAINST ( ) ABSTAIN
And, in their discretion, to transact any other business that may
lawfully come before the Special Meeting or any adjournment(s) thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND WILL BE
VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR
THE PROPOSAL.
Dated:
---------------------------------
---------------------------------------
Signature of Shareholder
---------------------------------------
Signature of Shareholder
When shares are registered jointly in the names of two or more persons,
ALL such persons must sign. Signature(s) must correspond exactly with the
name(s) the shares are registered under. Please sign, date and return promptly
in the enclosed envelope.
<PAGE>
29
---------------------------------------------
PART B
---------------------------------------------
<PAGE>
30
VAM INSTITUTIONAL FUNDS, INC.
SEGALL BRYANT & HAMILL GROWTH AND INCOME FUND
90 South Seventh Street
Suite 4300
Minneapolis, MN 55402
(612) 376-7000
---------
STATEMENT OF ADDITIONAL INFORMATION
DATED FEBRUARY 2, 1999
FOR REGISTRATION STATEMENT ON FORM N-14
This Statement of Additional Information is not a prospectus and should
be read in conjunction with the Combined Proxy Statement and Prospectus dated
February 2, 1999, which has been filed by Advisors Series Trust ("AST Trust") in
connection with a Special Meeting of Shareholders of the Segall Bryant & Hamill
Growth and Income Fund (the "Fund"), a series of VAM Institutional Funds, Inc.,
(the "VAM Funds") that has been called to vote on an Agreement and Plan of
Reorganization (and the transactions contemplated thereby). Copies of the
Combined Proxy Statement and Prospectus may be obtained at no charge by writing
to the AST Trust at the address indicated above or by calling toll-free (800)
385-7003.
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 VAM Funds, the Fund, AST Trust and the
Segall Bryant & Hamill Mid Cap Fund (the "New Fund") is contained in the Fund's
Prospectus dated August 27, 1998, the New Fund's Preliminary Prospectus dated
January 8, 1999, and the Annual Report of the Fund for the fiscal year ended
April 30, 1998. The Fund's Statement of Additional Information dated August 27,
1998, and the New Fund's Preliminary Statement of Additional Information dated
January 8, 1999, are incorporated by reference in this Statement of Additional
Information and is available without charge by calling American Data Services at
(800) 385-7003
Pro-forma financial statements are attached hereto as Exhibit A.
<PAGE>
31
TABLE OF CONTENTS
Page
----
General Information B-2
Exhibit A B-3
<PAGE>
32
GENERAL INFORMATION
The shareholders of the Fund are being asked to approve a form of
Agreement and Plan of Reorganization (the "Plan") combining the Fund into the
New Fund (and the transactions contemplated thereby). The Plan contemplates the
transfer of all of the assets of the Fund as of the Effective Date to the New
Fund, and the assumption by the New Fund of the liabilities of the Fund, in
exchange for shares of the New Fund. Immediately after the Effective Date, the
Fund will distribute to its shareholders of record as of the close of business
on the Effective Date the shares of the New Fund received. The shares of the New
Fund that will be issued for distribution to the Fund's shareholders will have
an aggregate net asset value equal to the aggregate net asset value of the
shares of the Fund held as of the Closing Date. The VAM Funds will then take all
necessary steps to terminate the qualification, registration and classification
of the Fund. All issued and outstanding shares of the Fund will be canceled on
the Fund's books. Shares of the New Fund will be represented only by book
entries; no share certificates will be issued.
A Special Meeting of the Fund's shareholders to consider the
transaction will be held at the Fund's offices of the current Sub-advisor,
Segall, Bryant & Hamill, 10 S. Wacker Drive, Suite 2150, Chicago, IL 60606, on
March 9, 1999, at 10:00 A.M., local time.
For further information about the transaction, see the Combined Proxy
Statement and Prospectus. For further information about the VAM Funds and the
Fund, see the Fund's Statement of Additional Information, dated August 27, 1998,
which is available without charge by calling the American Data Services at (800)
385-7003. For further information about the AST Trust and the New Fund, see the
New Fund's Preliminary Statement of Additional Information, dated January 8,
1999, which is available without charge by calling the AST Trust at (602)
952-8520.
<PAGE>
33
EXHIBIT A
SEGALL BRYANT AND HAMILL GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS AT OCTOBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
Shares COMMON STOCKS: 87.97% Market Value
- --------------------------------------------------------------------------------
ADVERTISING AGENCIES: 2.94%
3,500 The Interpublic Group of Companies, Inc............. $ 204,750
---------
COMMERCIAL BANKS - U.S.: 2.39%
2,200 Star Banc Corporation............................... 166,375
---------
COMMERCIAL SERVICES: 2.25%
7,400 The ServiceMaster Company........................... 156,325
---------
COMPUTER SERVICES: 2.89%
3,500 Ceridian Corporation*............................... 200,813
---------
COMPUTER SOFTWARE: 2.59%
1,700 Microsoft Corporation*.............................. 179,988
---------
CONSUMER PRODUCTS - MISCELLANEOUS: 2.38%
6,000 Blyth Industries, Inc.*............................. 165,750
---------
DENTAL SUPPLIES AND EQUIPMENT: 1.11%
3,000 DENTSPLY International, Inc......................... 77,250
---------
DIVERSIFIED MANUFACTURING: 3.80%
3,200 Applied Power, Inc.................................. 88,200
8,000 Littlefuse, Inc.*................................... 176,000
---------
264,200
---------
ELECTRIC - INTEGRATED: 1.67%
2,400 New Century Energies, Inc........................... 115,950
---------
ELECTRONICS: 3.92%
6,500 Methode Electronics, Inc............................ 99,938
5,281 Molex Incorporated - Class A........................ 172,623
---------
272,561
---------
FINANCIAL GUARANTEE INSURANCE: 2.18%
3,900 MGIC Investment Corporation......................... 152,100
---------
FOOD - RETAIL: 4.13%
6,000 Safeway, Inc*....................................... $ 286,875
---------
IDENTIFICATION SYSTEMS / DEVICES: 2.57%
4,000 Symbol Technologies, Inc............................ 179,000
---------
INSTRUMENTS - SCIENTIFIC: 3.03%
<PAGE>
34
2,500 The Perkin-Elmer Corporation........................ 210,781
---------
INVESTMENT MANAGEMENT: 1.60%
7,000 Security Capital Group Incorporated - Class B*...... 111,563
---------
LIFE / HEALTH INSURANCE: 2.67%
5,000 Protective Life Corporation......................... 185,313
---------
MEDICAL - BIOMEDICAL GENETICS: 2.20%
2,200 Biogen, Inc.*....................................... 152,900
---------
MEDICAL - DRUGS: 2.70%
4,000 Abbott Laboratories................................. 187,750
---------
MEDICAL INSTRUMENTS: 1.95%
4,000 Biomet, Inc.*....................................... 135,750
---------
MEDICAL PRODUCTS: 2.93%
2,500 Johnson & Johnson................................... 203,750
---------
MULTI-LINE INSURANCE: 1.24%
2,000 The Allstate Corporation............................ 86,125
---------
OFFICE AUTOMATION AND EQUIPMENT: 2.79%
2,000 Xerox Corporation................................... 193,750
---------
OFFICE FURNISHINGS: 0.65%
2,500 Steelcase, Inc. - Class A........................... 45,000
---------
OFFICE SUPPLIES AND FORMS: 4.76%
3,700 Avery Dennison Corporation.......................... $ 153,318
5,700 New England Business Service, Inc................... 177,412
---------
330,730
---------
OPERATIONS: 5.60%
2,400 General Electric Company............................ 210,000
2,800 Illinois Tool Works, Inc............................ 179,550
---------
389,550
---------
PIPELINES: 2.28%
3,000 Enron Corp.......................................... 158,250
---------
PUBLISHING - NEWSPAPERS: 1.66%
2,000 Tribune Company..................................... 115,250
---------
RETAIL - BUILDING PRODUCTS: 5.73%
5,000 Fastenal Company.................................... 180,625
5,000 The Home Depot, Inc................................. 217,500
---------
398,125
---------
RETAIL - DISCOUNT: 2.40%
7,000 Dollar General Corporation.......................... 167,124
---------
SUPER - REGIONAL BANKS - U.S.: 4.64%
3,000 First Union Corporation............................. 174,000
4,000 Norwest Corporation................................. 148,750
---------
322,750
---------
<PAGE>
35
TELEPHONE - LONG DISTANCE: 1.59%
2,000 MCI WORLDCOM, Inc................................... 110,500
---------
TEXTILE APPAREL: 2.73%
11,000 Jones Apparel Group, Inc.*.......................... 189,750
---------
Total Common Stocks (cost $5,052,366)............... 6,116,648
---------
- --------------------------------------------------------------------------------
Principal Amount SHORT-TERM INVESTMENTS: 6.67%
- --------------------------------------------------------------------------------
$257,534 Star Treasury Fund..................................... $ 257,534
750,000 U.S. Treasury Strips*.................................. 206,419
---------
Total Short-Term Investments (cost $425,393)........... 463,953
---------
Total Investments in Securities
(cost $5,477,759+): 94.64%............................ 6,580,601
Liabilities in excess of Other Assets: 5.36%........... 372,492
---------
TOTAL NET ASSETS: 100.0% .............................. 6,953,093
=========
* Non-incoming producing security.
+ At October 31, 1998, the cost of securities for Federal tax purposes was
approximately the same as the basis for financial reporting. Unrealized
appreciation and depreciation of securities were as follows:
Gross unrealized appreciation........................... $1,215,761
Gross unrealized depreciation........................... (112,919)
----------
Net unrealized appreciation............................. $1,102,842
==========
See Notes to Financial Statements.
<PAGE>
36
Notes to Portfolio of Investments
- --------------------------------------------------------------------------------
INVESTMENTS IN SECURITIES
Investments in securities traded on national or international securities
exchanges are valued at the last sales price on that exchange; securities
traded in the over-the-counter market and listed securities for which no
sale was reported on the valuation date are valued on the basis of the
last current bid price. The values of fixed income securities are
determined by using pricing services or prices quoted by independent
brokers. When market quotations are not readily available, or in certain
other circumstances, securities are valued at fair value according to
methods selected in good faith by the Board of Directors. Investments in
short-term securities with maturities of more than 60 days from the
valuation date are valued at the last bid price or at fair value as
determined by a pricing service approved by the Board of Directors.
Short-term securities with maturities of less than 60 days are valued at
amortized cost which approximates market value.
Security transactions are accounted for on trade date. Realized gains and
losses are calculated on the identified cost basis. Dividend income is
recognized on the ex-dividend date. Interest income, including level-yield
amortization of premium and discount,is accrued daily.
<PAGE>
37
Pro Forma Statement of Assets and Liabilities October 31, 1998 (Unaudited)
Pro
Segall, Bryant Forma
& Hamill Growth Adjust- Pro Forma
And Income Fund ments Combined
--------------- ----- --------
ASSETS:
Investment securities, at value $6,580,601 $ 0 $6,580,601
Cash 2,127 19,662 21,789
Receivables:
Interest and Dividends 4,542 0 4,542
Fund Shares Sold 11,200 0 11,200
Portfolio Securities Sold 371,377 0 371,377
Unamortized Organization Expenses 19,662 (19,662) 0
Other assets 2,445 0 2,445
---------- -------- ----------
Total assets 6,991,955 0 6,991,955
---------- -------- ----------
LIABILITIES:
Accrued liabilities:
Administration fees 2,548 0 2,548
Distribution fees 6,525 0 6,525
Investment advisory fees 4,099 0 4,099
Other accrued expenses 12,316 0 12,316
Other Payables 13,374 0 13,374
---------- -------- ----------
Total Liabilities 38,862 0 38,862
---------- -------- ----------
NET ASSETS:
Paid-in capital 5,721,531 0 5,721,531
Accumulated undistributed net investment
income (108,843) 0 (108,843)
Accumulated undistributed net realized
gain (loss) on investment transactions 237,563 0 237,563
Net unrealized appreciation/depreciation
of investment 1,102,842 0 1,102,842
---------- -------- ----------
Net Assets: 6,953,093 0 6,953,093
---------- -------- ----------
Shares of capital stock outstanding
($.01 par value; unlimited number
of shares authorized):
Shares 531,395 0 531,395
Shares:
Net asset value, redemption price and $ 13.08 0 $ 13.08
maximum offering price per share
Cost of Investments $5,477,759 $ 0 $5,477,759
See notes to financial statements
<PAGE>
38
SBH Mid Cap Fund
Pro Forma Statements of Operations
For the six months ended October 31, 1998 (Unaudited)
Segall, Bryant Pro Forma
& Hamill Growth B&H Mid
and Income Pro Forma Cap
Fund Adjustments Fund
--------------- ----------- --------
INVESTMENT INCOME:
Dividend $ 33,055 $ 0 $ 33,055
Interest 1,299 0 1,299
Other 10,450 0 10,450
-------- ------- ---------
Total investment income 44,804 0 44,804
-------- ------- ---------
EXPENSES: (Note 2)
Administrative fees 7,562 7,561 15,123
Distribution fees 8,563 0 8,563
Investment advisory fees 25,689 0 25,689
Custodian fees 1,815 1,785 3,600
Printing and postage 1,025 2,975 4,000
Professional fees 4,285 4,215 8,500
Registration fees 2,554 2,446 5,000
Transfer agent fees 3,277 3,223 6,500
Trustees fees and expenses 1,151 1,099 2,250
Amortization of deferred org. expenses 1,608 (1,608) 0
Fund accounting expense 4,033 3,967 8,000
Other 14,634 (12,630) 3,516
-------- ------- ---------
Total Expenses 76,196 13,033 89,229
-------- ------- ---------
Less amounts waived (16,255) (13,033) (29,288)
-------- ------- ---------
Net expenses 59,941 0 59,941
-------- ------- ---------
Net investment income (15,137) 0 (15,137)
-------- ------- ---------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments (115,805) 0 (115,805)
Change in net unrealized appreciation
on investments (207,898) 0 (207,898)
-------- ------- ---------
Net realized and unrealized loss
on investments (323,703) 0 (323,703)
-------- ------- ---------
Net decrease in net assets from
operations (338,840) 0 (338,840)
======== ======= =========
See notes to financial statements.
<PAGE>
39
SB&H Mid Cap Fund
Notes to the Pro Forma Financial Statements
1. Basis of presentation
The Pro Forma Portfolio of Investments, Statement of Assets and
Liabilities and Statement of Operations ( "Pro Forma Statements" ) reflect the
accounts of the Segall Bryant & Hamill Growth and Income Fund at October 31,
1998 for the six month period then ended.
The Pro Forma Statements give effect to the proposed transfer of all
assets and liabilities of the Segall Bryant & Hamill Growth and Income Fund to
the SB&H Mid Cap Fund in exchange for shares of such SB&H Mid Cap Fund.
The Pro Forma Statements should be read in conjunction with the
historical financial statements of the Segall Bryant & Hamill Growth and Income
Fund included in the Statement of Additional Information.
2. Pro Forma Operating Expenses
The Pro Forma Statement of Operations assume similar rates of gross
investment income for the investments of the SB&H Mid Cap Fund. Accordingly, the
gross investment income is equal to the Segall Bryant & Hamill Growth and Income
Fund's gross investment income. Certain expenses have been adjusted to reflect
the expected expenses of the SB&H Mid Cap Fund more closely.
<PAGE>
40
-----------------------------------------
PART C
-----------------------------------------
<PAGE>
41
ADVISORS SERIES TRUST
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The response to this item is incorporated by reference to Item 25 of
Part C of Post-Effective Amendment No. 30, filed October 15 1998, to the
Registrant's Registration Statement on Form N-1A, Registration Statement No.
333-42505 (the "Registration Statement").
ITEM 16. EXHIBITS
Exhibit No.
1. Agreement and Declaration of Trust (1)
2. By-laws, as amended. (1)
3. Not Applicable.
4. Form of Agreement and Plan of Reorganization (filed herewith
as Exhibit A to Prospectus/Proxy Statement).
5. Specimen share certificate. (3)
6. Investment Advisory Agreement (2)
7. Distribution Agreement. (2)
8. Not Applicable.
9. Custodian Agreement. (3)
10. Rule 12b-1 Distribution Plan. (4)
11. Opinion of Counsel regarding legality of issuance of shares
and other matters. (5)
12. Opinion of Counsel on tax matters. (5)
13(a). Administration Agreement with Investment Company
Administration, LLC. (2)
13(b). Fund Accounting Service Agreement. (2)
13(c). Transfer Agency and Service Agreement. (2)
14. Not Applicable.
15. Not Applicable.
16. Power of Attorney (5)
17. Not Applicable
----------
(1) Previously filed with the Registration Statement on Form N-1A (File
No. 333-17391) on December 6, 1996, and incorporated herein by this
reference.
(2) Previously filed with Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (File No. 333-17391) on January
29, 1997, and incorporated herein by this reference.
(3) Previously filed with Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A (File No. 333-17391) on February
28, 1997, and incorporated herein by this reference.
(4) Previously filed with Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A (File No. 333-17391) on May 1,
1997, and incorporated herein by this reference.
(5) Filed herewith.
<PAGE>
42
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a 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, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(b) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (a) 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.
<PAGE>
43
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 this Registration Statement on Form N-14 to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Phoenix and the State
of Arizona on the 29th day of January, 1999.
ADVISORS SERIES TRUST
By /s/ Eric M. Banhazl*
--------------------------
Eric M. Banhazl, 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 on the dates indicated.
Name Title Date
---- ----- ----
/s/ Eric M. Banhazl* President, Principal Financial January 29, 1999
- --------------------------- and Accounting Officer, and
Eric M. Banhazl Trustee
/s/ Walter E. Auch Sr.* Trustee January 29, 1999
- ---------------------------
Walter E. Auch, Sr.
/s/ Donald E. O'Connor* Trustee January 29, 1999
- ---------------------------
Donald E. O'Connor
/s/ George T. Wofford III* Trustee January 29, 1999
- ---------------------------
George T. Wofford III
*/s/ Robert H. Wadsworth
- ---------------------------
By: Robert H. Wadsworth
Attorney in Fact
<PAGE>
44
EXHIBITS
12. Opinion of Counsel on Tax Matters.
16. Power of Attorney
VIA EDGAR
Law Offices of Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104-2635
Telephone (415) 835-1600
Facsimile (415) 217-5333
Internet www.phjw.com
January 28, 1999
(415) 835-1600 27217.90409
www.phjw.com
VAM Institutional Funds
90 South Seventh Street, Suite 4300
Minneapolis, MN 55402
Advisors Series Trust
4455 E. Camelback Road, Suite 261E
Phoenix, AZ 85018
Re: Reorganization of Segall Bryant & Hamill Growth and
Income Fund, a series of VAM institutional Funds, Inc., into
Segall Bryant &Hamill Mid Cap Fund, a series of Advisors Series Trust
Ladies and Gentlemen:
You have requested our opinion as counsel for Segall Bryant &
Hamill Mid Cap Fund (the "Mid Cap Fund"), a series of Advisors Series Trust, a
Delaware business trust (the "Trust"), with respect to certain Federal income
tax matters in connection with the reorganization of the Mid Cap Fund and the
Segall Bryant & Hamill Growth and Income Fund (the "Fund"), a series of VAM
Institutional Funds, Inc. ("VAM Funds"), a Minnesota corporation. This opinion
is rendered in connection with the transaction described in the Form of
Agreement and Plan of Reorganization as filed in Pre-Effective Amendment No. 1
by Advisors Series Trust on December 14, 1998, by and among VAM Funds, on behalf
of the Fund, and the Trust, on behalf of the Mid Cap Fund (the "Reorganization
Agreement"), and adopts the applicable defined terms therein.
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Advisors Series Trust
January 29, 1999
Page 2 of 7
This letter and the opinion expressed herein are for delivery
to the Fund and the Mid Cap Fund and may be relied upon only by the Fund and the
Mid Cap Fund and by their shareholders. This opinion also may be disclosed by
the Fund, the Mid Cap Fund or any shareholder thereof in connection with an
audit or other administrative proceeding before the Internal Revenue Service
(the "Service") affecting the Fund, the Mid Cap Fund or any shareholder thereof
or in connection with any judicial proceeding relating to the Federal, state or
local tax liability of the Fund, the Mid Cap Fund or any shareholder thereof.
For purposes of this opinion we have assumed the truth and
accuracy of the following facts:
The Trust was duly organized under the laws of the State of
Delaware on October 3, 1996. The Trust is a diversified, open-end management
investment company.
The Mid Cap Fund is a series of the Trust duly established
under the laws of the State of Delaware. The Agreement and Declaration of Trust
permits the Board of Trustees to issue an unlimited number of full and
fractional shares of beneficial interest, with par value of 0.01 per share,
which may be issued in any number of series. The shares of the Mid Cap Fund
issued pursuant to the Reorganization Agreement will be fully paid,
non-assessable, fully transferable and have full voting rights.
VAM Funds is a corporation duly established under the laws of
the State of Minnesota in January, 1985. VAM Funds is a diversified, open-end
management investment company.
The Fund is a series of the Trust duly established under the
laws of the State of Minnesota. The shares of the Fund are widely held. The Fund
has an authorized capital of an unlimited number of shares of beneficial
interests and each outstanding share of the Fund is fully transferable and has
full voting rights.
The final Agreement and Plan of Reorganization will not differ
substantially or in any material respect from the Reorganization Agreement filed
in Pre-Effective Amendment No. 1 by Advisors Series Trust on December 14, 1998.
For valid business purposes, the following transaction will
take place in accordance with the laws of the State of Delaware and pursuant to
the Reorganization Agreement:
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Advisors Series Trust
January 29, 1999
Page 3 of 7
(a) On the date of the closing (the "Closing Date"), VAM Funds
will cause the Fund to transfer substantially all of its assets to the Mid Cap
Fund. Solely in exchange therefor, the Trust will cause the Mid Cap Fund to
assume all of the liabilities of the Fund and to deliver to the Fund a number of
shares of voting common stock of the Mid Cap Fund which represents fifty percent
or more of the aggregate voting shares of such Mid Cap Fund.
(b) VAM Funds will then cause the Fund to liquidate and
distribute all of the shares of the Mid Cap Fund to the shareholders of the Fund
in proportion to their respective interests in the Fund in exchange for their
shares in the Fund.
(c) VAM Funds will then cause the Fund to wind up and dissolve
as soon as practicable thereafter.
In rendering the opinions stated below, we have examined and
relied upon the following, assuming the truth and accuracy of any statements
contained therein:
(1) The Reorganization Agreement;
(2) Such other documents, records and instruments as we
have deemed necessary in order to enable us to render
the opinions referred to in this letter.
For purposes of rendering the opinions stated below, we have,
in addition, relied upon the following representations by the Trust on behalf of
Mid Cap Fund and by VAM Funds on behalf of the Fund, as applicable:
(A) The fair market value of the shares of the Mid Cap Fund
received by each shareholder of the Fund will be approximately equal to the fair
market value of the shares of the Fund surrendered in the exchange.
(B) There is no plan or intention by the shareholders who own
five percent or more of the shares of the Fund and to the best knowledge of the
management of the Fund, there is no plan or intention on the part of the
remaining shareholders of the Fund to sell, exchange, or otherwise dispose of a
number of shares of the Mid Cap Fund received in the transaction that would
reduce the Fund's shareholders' ownership of the shares of the Mid Cap Fund to a
number of shares having a value, as of the date of the transaction, of less than
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Advisors Series Trust
January 29, 1999
Page 4 of 7
50 percent of the value of all of the formerly outstanding shares of the Fund as
of the same date. For purposes of this representation, shares of the Fund
exchanged for cash or other property, surrendered by dissenters, or exchanged
for cash in lieu of fractional shares of the Mid Cap Fund have been treated as
outstanding shares of the Fund on the date of the transaction. Further, in
making this representation, the Fund and the Trust have considered both shares
of the Fund and shares of the Mid Cap Fund that were sold, redeemed, or
otherwise disposed of by the shareholders of the Fund (except for shares which
were required to be redeemed by the Fund or the Mid Cap Fund in the ordinary
course of their respective businesses) prior to the transaction.
(C) The Mid Cap Fund will acquire at least 90 percent of the
fair market value of the net assets and at least 70 percent of the fair market
value of the gross assets held by the Fund immediately prior to the transaction.
For purposes of this representation, amounts used by the Fund to pay its
reorganization expenses, amounts paid by the Fund to shareholders who receive
cash or other property, and all redemptions and distributions (except for
distributions and redemptions occurring in the ordinary course of the Fund's
business as an investment company) made by the Fund immediately preceding the
transfer have been included as assets of the Fund held immediately prior to the
transaction.
(D) After the transaction, the shareholders of the Fund will
be in control of the Mid Cap Fund within the meaning of Section 368(a)(2)(H) of
the Internal Revenue Code of 1986, as amended (the "Code"), which provides that
control means the ownership of shares possessing at least 50 percent of the
total combined voting power of all classes of shares entitled to vote, or at
least 50 percent of the total value of all classes of shares.
(E) The Mid Cap Fund has no plan or intention to reacquire any
of its shares issued in the transaction, except for acquisitions made in the
ordinary course of its business as a series of an investment company.
(F) The Mid Cap Fund has no plan or intention to sell or
otherwise dispose of any of the assets of the Fund acquired in the transaction,
except for: (i) dispositions necessary for the Mid Cap Fund to maintain its
status as a diversified investment company; and (ii) dispositions made in the
ordinary course of its business as a series of an investment company.
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Advisors Series Trust
January 29, 1999
Page 5 of 7
(G) In pursuance of the plan of reorganization, the Fund will
distribute as soon as practicable the shares of the Mid Cap Fund it receives in
the transaction.
(H) The liabilities of the Fund assumed by the Mid Cap Fund
plus the liabilities to which the assets are subject were incurred by the Fund
in the ordinary course of its business and are associated with the assets
transferred.
(I) The fair market value of the assets of the Fund
transferred to the Mid Cap Fund will equal or exceed the sum of the liabilities
assumed by the Mid Cap Fund, plus the amount of liabilities, if any, to which
the transferred assets are subject.
(J) The total adjusted basis of the assets of the Fund
transferred to the Mid Cap Fund will equal or exceed the sum of the liabilities
to be assumed by the Mid Cap Fund, plus the amount of liabilities, if any, to
which the transferred assets are subject.
(K) Following the transaction, the Mid Cap Fund will continue
the historic business of the Fund or use a significant portion of the Fund's
historic business assets in a business.
(L) At the time of the transaction, the Mid Cap Fund did not
and will not have any outstanding warrants, options, convertible securities, or
any other type of right pursuant to which any person could acquire shares in the
Mid Cap Fund that, if exercised or converted, would affect the Fund's
shareholders' acquisition or retention of control of the Mid Cap Fund, as
defined in Section 368(a)(2)(H) of the Code, which provides that control means
the ownership of shares possessing at least 50 percent of the total combined
voting power of all classes of shares entitled to vote, or at least 50 percent
of the total value of all classes of shares.
(M) There is no intercorporate indebtedness existing between
the Fund and the Mid Cap Fund that was issued, acquired, or will be settled at a
discount.
(N) The Fund and the Mid Cap Fund each meets the requirements
of a regulated investment company as defined in Sections 368(a)(2)(F)(i) and
(ii) of the Code.
(O) The Fund is not under the jurisdiction of a court in a
case under Title 11 of the United States Code or a receivership, foreclosure, or
similar proceeding in a Federal or state court.
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Advisors Series Trust
January 29, 1999
Page 6 of 7
(P) The Mid Cap Fund, the Fund and the shareholders of the
Fund will pay their respective expenses, if any, incurred in connection with the
transaction.
Our opinions set forth in this letter are based upon the Code,
regulations of the Treasury Department, published administrative announcements
and rulings of the Service and court decisions, all as of the date of this
letter. Based on the foregoing facts and representations, and provided that the
transaction will take place in accordance with the terms of the Reorganization
Agreement, and further provided that the Fund distributes the shares of the Mid
Cap Fund received in the transaction as soon as practicable, we are of the
opinion that:
(1) The transfer by the Fund of substantially all of its
assets to the Mid Cap Fund solely in exchange for shares of the Mid Cap Fund and
the assumption of the Fund's liabilities, as described above, will be a
reorganization within the meaning of Section 368(a)(1)(D) of the Code.
(2) No gain or loss will be recognized by the Fund upon the
transfer of substantially all of its assets to the Mid Cap Fund in exchange
solely for shares of the Mid Cap Fund.
(3) No gain or loss will be recognized by the Mid Cap Fund
upon the receipt of the assets of the Fund solely in exchange for shares of the
Mid Cap Fund.
(4) The tax basis of the assets of the Fund in the hands of
the Mid Cap Fund will be the same as the tax basis of those assets in the hands
of the Fund immediately prior to the transaction.
(5) The holding period of the Funds' assets in the hands of
the Mid Cap Fund will include the period during which the assets were held by
the Fund.
(6) No gain or loss will be recognized by any shareholders of
the Fund upon exchange of their shares of the Fund for shares of the Mid Cap
Fund.
(7) The tax basis of the shares of the Mid Cap Fund received
by each shareholder of the Fund pursuant to the Reorganization will be the same
as the tax basis of the shares of such Fund held by such shareholder immediately
prior to the Reorganization.
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Advisors Series Trust
January 29, 1999
Page 7 of 7
(8) The holding period of the shares of the Mid Cap Fund to be
received by each shareholder of the Fund will include the period during which
the shares of the Fund exchanged therefor were held by such shareholder.
The opinions set forth above represent our conclusions as to
the application of Federal income tax law existing as of the date of this letter
to the transaction described above, and we can give no assurance that
legislative enactments, administrative changes or court decisions may not be
forthcoming which would require modifications or revocations of our opinions
expressed herein. Moreover, there can be no assurance that positions contrary to
our opinions will not be taken by the Service, or that a court considering the
issues would not hold contrary to such opinions. Further, all the opinions set
forth above represent our conclusions based upon the documents and facts
referred to above. Any material amendments to such documents or changes in any
significant facts would affect the opinions referred to herein. Although we have
made such inquiries and performed such investigation as we have deemed necessary
to fulfill our professional responsibilities, we have not undertaken an
independent investigation of the facts referred to in this letter.
We express no opinion as to any Federal income tax issue or
other matter except those set forth above.
Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker LLP
POWER OF ATTORNEY
The undersigned Trustees and officers of Advisors Series Trust (the
"Trust") hereby appoint Robert H. Wadsworth, his attorney-in-fact and agent, in
all capacities, to execute and to file any documents relating to the
Registration Statements on Form N-14 under the Investment Act of 1940, as
amended, and under the Securities Act of 1933, as amended, and under the laws of
all states and other domestic and foreign jurisdictions, including any and all
amendments thereto, covering the registration and the sale of shares by the
Trusts, including all exhibits and any and all documents required to be filed
with respect thereto with any regulatory authority, including applications for
exemptive orders, rulings or filings of proxy materials. Each of the undersigned
grants to said attorney full authority to do every act necessary to be done in
order to effectuate the same as fully, to all intents and purposes, as he could
do if personally present, thereby ratifying all that said attorney-in-fact and
agents may lawfully do or cause to be done by virtue thereof.
The undersigned Trustees and officers hereby execute this Power of
Attorney as of this 17th day of December, 1997.
/s/ Eric M. Banhazl* President, Principal Financial
- --------------------------- and Accounting Officer, and
Eric M. Banhazl Trustee
/s/ Walter E. Auch Sr.* Trustee
- ---------------------------
Walter E. Auch, Sr.
/s/ Donald E. O'connor* Trustee
- ---------------------------
Donald E. O'Connor
/s/ George T. Wofford III* Trustee
- ---------------------------
George T. Wofford III
