SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
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[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
FLEMING MUTUAL FUND GROUP, INC.
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(Name of Registrant as Specified In Its Charter)
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paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
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FLEMING MUTUAL FUND GROUP, INC.
FLEMING MID CAP VALUE FUND
FLEMING SMALL CAP GROWTH FUND
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IMPORTANT SHAREHOLDER INFORMATION
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This document contains your proxy statement and proxy card. A proxy card is, in
essence, a ballot. When you vote your proxy, it tells us how to vote on your
behalf on important issues relating to the Fleming Mutual Fund Group, Inc. (the
"Corporation"). Each proxy card may be completed by checking the appropriate box
and voting for or against the proposal described in the proxy statement. If you
simply sign the proxy without specifying a vote, your shares will be voted in
accordance with the recommendation of the Corporation's Board of Directors.
Please spend a few minutes with the proxy statement, complete and sign your
proxy card, and return it to us. Voting your proxy, and doing so promptly,
ensures that additional mailings will not be needed. If shareholders do not
return their proxies in sufficient numbers, additional solicitations may be
necessary.
Please take a few moments to exercise your right to vote. Thank you.
<PAGE>
FLEMING MUTUAL FUND GROUP, INC.
FLEMING MID CAP VALUE FUND
FLEMING SMALL CAP GROWTH FUND
Dear Shareholder,
A special meeting of shareholders of the Fleming Mid Cap Value Fund and Fleming
Small Cap Growth Fund (each a "Fund" and, together, the "Funds"), each a
portfolio of Fleming Mutual Fund Group, Inc. (the "Corporation"), has been
scheduled for Thursday, December 14, 2000. Shareholders of record as of the
close of business on Tuesday, October 31, 2000 are entitled to vote at the
meeting and any adjournment of the meeting.
The Corporation's Board of Directors has called the special meeting of
shareholders to ask each Fund's shareholders to approve a new investment
advisory agreement (the "New Agreement") between the Corporation, on behalf of
the Funds, and Robert Fleming Inc. ("RFI"). On August 1, 2000, The Chase
Manhattan Corporation ("Chase") acquired Robert Fleming Holdings Limited, RFI's
indirect parent. The acquisition constituted an "assignment" of the then-current
advisory agreement between the Corporation and RFI (the "Old Agreement"), which,
under Section 15(a) of the Investment Company Act of 1940 (the "1940 Act"),
automatically terminated the Old Agreement.
Since the acquisition, RFI has continued to serve as the investment adviser to
each Fund under an interim advisory agreement, as provided for under the 1940
Act Rule 15a-4. Under the interim advisory agreement, RFI provides the same
advisory services for the same compensation as in the Old Agreement. In
accordance with Rule 15a-4, the interim advisory agreement will terminate on
December 27, 2000.
It is being proposed that RFI continue to serve as the Funds' investment adviser
under the New Agreement after the interim agreement terminates. Under Section
15(a) of the 1940 Act, however, RFI may not serve as the Funds' adviser under
the New Agreement unless each Fund's shareholders approve the New Agreement.
Accordingly, the Board of Directors of the Corporation has called the special
meeting of shareholders to ask shareholders to approve the New Agreement. The
terms of the New Agreement are identical to the terms of the Old Agreement,
except for the dates of execution, effectiveness and termination.
The enclosed proxy statement describes the acquisition and the New Agreement in
greater detail, and explains the factors involved in the Board of Directors'
decision to approve the New Agreement and recommend its approval to
shareholders.
While you are, of course, welcome to join us at the meeting, most shareholders
cast their votes by completing and signing the enclosed proxy card. Whether or
not you plan to attend the meeting, we need your vote. PLEASE COMPLETE, SIGN,
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID
ENVELOPE SO THAT THE MAXIMUM NUMBER OF SHARES MAY BE VOTED. THE PROXY IS
REVOCABLE AT ANY TIME PRIOR TO ITS USE. YOUR VOTE IS IMPORTANT TO US. Please do
not hesitate to call 1-800-264-0592 if you have any questions about the
proposal. Thank you for taking the time to consider this important proposal and
thank you for your investment in the Funds.
Sincerely,
/s/ Jonathan K.L. Simon
Jonathan K.L. Simon
Chairman of the Board of Directors
Fleming Mutual Fund Group, Inc.
<PAGE>
FLEMING MUTUAL FUND GROUP, INC.
FLEMING MID CAP VALUE FUND
FLEMING SMALL CAP GROWTH FUND
320 PARK AVENUE
NEW YORK, NY 10022
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 14, 2000
Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
the Fleming Mid Cap Value Fund and the Fleming Small Cap Growth Fund (each a
"Fund" and, together, the "Funds"), each a portfolio of Fleming Mutual Fund
Group, Inc. (the "Corporation"), will be held at the offices of the Corporation,
320 Park Avenue, New York, New York 10022, on December 14, 2000 at 3:30 p.m.,
local time, to act on the following proposal and to transact other business that
may properly come before the Meeting or any adjournment thereof.
PROPOSAL:
TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON
BEHALF OF THE FUNDS, AND ROBERT FLEMING INC. ("RFI").
The advisory agreement between the Corporation and RFI automatically terminated
on August 1, 2000 when the Chase Manhattan Corporation ("Chase"), a global
financial services firm headquartered in New York, acquired Robert Fleming
Holdings Limited, RFI's indirect parent. Since the acquisition, RFI has served
as investment adviser to the Funds under an interim advisory agreement, which
was implemented pursuant to Rule 15a-4 under the Investment Company Act of 1940
(the "1940 Act"). It is being proposed that RFI continue to serve as the Funds'
investment adviser under a new advisory agreement between the Corporation, on
behalf of the Funds, and RFI (the "New Agreement"). THE BOARD OF DIRECTORS HAS
APPROVED, AND IS RECOMMENDING THAT SHAREHOLDERS OF EACH FUND VOTE TO APPROVE,
THE NEW AGREEMENT.
All Shareholders are cordially invited to attend the Meeting, although most
shareholders choose to exercise their vote by completing and signing a proxy
card. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD. A POSTAGE PAID ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE SO THAT YOU MAY RETURN YOUR PROXY CARD AS SOON AS POSSIBLE. WE
URGE YOU TO VOTE SO THAT A QUORUM WILL BE PRESENT, A MAXIMUM NUMBER OF SHARES
MAY BE VOTED, AND ADDITIONAL SOLICITATIONS CAN BE AVOIDED.
Shareholders of record at the close of business on Tuesday, October 31, 2000 are
entitled to receive notice of and to vote at the Meeting or any adjournment
thereof.
By Order of the Board of Directors,
Larry A. Kimmel
Secretary
Fleming Mutual Fund Group, Inc.
November 21, 2000
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FLEMING MUTUAL FUND GROUP, INC.
FLEMING MID CAP VALUE FUND
FLEMING SMALL CAP GROWTH FUND
320 PARK AVENUE
NEW YORK, NY 10022
PROXY STATEMENT
THIS PROXY STATEMENT IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES
BY THE BOARD OF DIRECTORS OF FLEMING MUTUAL FUND GROUP, INC. (THE
"CORPORATION"), ON BEHALF OF THE FLEMING MID CAP VALUE FUND AND THE FLEMING
SMALL CAP GROWTH FUND (EACH A "FUND" AND, TOGETHER, THE "FUNDS"), EACH A
SEPARATE SERIES OF THE CORPORATION, REGARDING A SPECIAL MEETING OF SHAREHOLDERS
(THE "MEETING") TO BE HELD AT THE OFFICES OF THE CORPORATION, 320 PARK AVENUE,
NEW YORK, NEW YORK 10022, ON DECEMBER 14, 2000 AT 3:30 P.M., LOCAL TIME, TO ACT
ON THE FOLLOWING PROPOSAL AND TO TRANSACT ANY OTHER BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING (OR ANY ADJOURNMENT THEREOF). Shareholders of record at
the close of business on Tuesday, October 31, 2000 ("Shareholders") are entitled
to vote at the Meeting.
As of October 31, 2000, the Funds had the following number of shares
outstanding:
Fleming Mid Cap Value Fund 399,716
Fleming Small Cap Growth Fund 264,846
The Meeting is being called to act on the following proposal and to transact any
other business that may properly come before the Meeting (or any adjournment
thereof):
PROPOSAL:
TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE CORPORATION, ON
BEHALF OF THE FUNDS, AND ROBERT FLEMING INC. ("RFI").
The Board of Directors has called the Meeting to ask Shareholders of each Fund
to approve a new advisory agreement (the "New Agreement"), which would take
effect upon the termination of the interim advisory agreement, as described
below. Accordingly, this Proxy Statement solicits votes on the proposal to
approve the New Agreement.
Each share is entitled to one vote and each fractional share is entitled to a
proportionate fractional vote on the above proposal (the "Proposal"). In
addition to the solicitation of proxies by mail, directors and officers of the
Corporation, officers and employees of Investment Company Administration, LLC,
the Corporation's administrator, and officers and employees of RFI may solicit
proxies in person or by telephone. Persons holding shares as nominees will, upon
request, be reimbursed for their reasonable expenses incurred in sending
soliciting materials to their principals. The cost of solicitation will be borne
by RFI and/or its affiliates. The Proxy Card and this Proxy Statement are being
mailed to the Shareholders on or about November 21, 2000.
Shares represented by duly executed proxies will be voted in accordance with the
instructions given. Proxies may be revoked at any time before they are exercised
by a written revocation received by the President of the Corporation at 320 Park
Avenue, New York, New York 10022, by properly executing a later-dated proxy, or
by attending the Meeting and voting in person.
REPORTS TO SHAREHOLDERS
THE CORPORATION WILL FURNISH, WITHOUT CHARGE, A COPY OF THE MOST RECENT ANNUAL
REPORT AND SEMI ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT TO SHAREHOLDERS OF
THE CORPORATION UPON REQUEST. SHAREHOLDERS SHOULD CONTACT THE CORPORATION AT:
FLEMING MUTUAL FUND GROUP, INC., P.O. BOX 5354, CINCINNATI, OHIO 45201, OR
1-800-264-0592.
1
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THE ACQUISITION
RFI, previously an indirect, wholly-owned subsidiary of Robert Fleming Holdings
Limited, has served as the Funds' investment adviser since each Fund's
inception. On August 1, 2000, The Chase Manhattan Corporation ("Chase") acquired
Robert Fleming Holdings Limited. The acquisition caused an "assignment" of the
then-current advisory agreement between the Corporation and RFI (the "Old
Agreement"), which, under Section 15(a) of the Investment Company Act of 1940
("1940 Act") automatically terminated the Old Agreement.
Since the acquisition, RFI has continued to serve as the investment adviser to
each Fund under an interim advisory agreement, which was implemented pursuant to
Rule 15a-4 under the 1940 Act (the "Interim Agreement"). In anticipation of the
acquisition, the Corporation's Board of Directors met in person on July 27, 2000
to consider the approval of the Interim Agreement. At that Board meeting, the
Directors, including the Directors who are not "interested persons" of the Funds
(as defined under the 1940 Act) ("Independent Directors"), unanimously approved
the Interim Agreement. Under the Interim Agreement, RFI provides the same
advisory services for the same compensation as in the Old Agreement. Under Rule
15a-4, the Interim Agreement will terminate on December 27, 2000.
It is being proposed that RFI continue to serve as the Funds' investment adviser
under the New Agreement after the Interim Agreement terminates. Under Section
15(a) of the 1940 Act, however, RFI may not serve as the Funds' adviser under
the New Agreement unless each Fund's shareholders approve the New Agreement.
Accordingly, the Board of Directors of the Corporation has called the Meeting to
ask Shareholders to approve the New Agreement (a form of which is attached as
Appendix A to this Proxy Statement). On November 7, 2000, the Corporation's
Board of Directors met in person to consider the approval of the New Agreement.
At that Board meeting, the Directors, including the Independent Directors,
unanimously approved the New Agreement. The New Agreement has the same terms as
the Old Agreement, except for the dates of execution, effectiveness and
termination.
THE INTERIM AGREEMENT
The purpose of the Interim Agreement is to allow RFI to continue to provide
investment advisory services to the Funds while the required shareholder
approval of New Agreement with RFI is pending. In evaluating the Interim
Agreement, the Directors reviewed materials furnished by RFI, including
information regarding its personnel, operations and financial condition.
Representatives of RFI discussed with the Directors the terms of the acquisition
and the possible effects of the acquisition on the Corporation, the Funds and
their shareholders, and indicated their belief that, as a consequence of the
acquisition, RFI's operations and the advisory and other services provided by
RFI to the Funds would not be adversely affected. Representatives of RFI
indicated that there would be no change of key management or personnel who
serviced the Funds under the Old Agreement. In addition, representatives of RFI
informed the Directors that the scope and quality of its advisory and other
services provided to the Funds under the Interim Agreement will be at least
equivalent to the scope and quality of services provided under the Old
Agreement, and that, in the event of any material change in the key personnel
who provided advisory services to the Funds under the Old Agreement, the
Directors will be apprised and consulted to assure that they are satisfied that
the services provided under the Interim Agreement would not be diminished in
scope or quality.
The Interim Agreement provides that any advisory fees earned by RFI under the
agreement shall be held in an interest-bearing escrow account and be paid upon
approval of the New Agreement with RFI by shareholders. If Shareholders do not
approve the New Agreement, RFI will be paid, out of the escrow account, the
lesser of (a) any costs incurred in performing its duties under the Interim
Agreement (plus interest earned on that amount while in escrow), or (b) the
total amount in the escrow account (plus interest earned). If the New Agreement
is not approved, RFI may serve as the Funds' investment adviser on a temporary
basis while the Directors consider further action.
GENERAL DESCRIPTION OF THE NEW AGREEMENT
The terms of the New Agreement are identical to the terms of the Old Agreement
except for dates of execution, effectiveness and termination. A form of the New
Agreement is attached to this Proxy Statement as Appendix A. The description of
the New Agreement in this Proxy Statement is qualified in its entirety by
reference to the form of New Agreement in Appendix A. RFI has served as the
investment adviser to the Funds pursuant to the Old Agreement since the Funds'
inception. The Old Agreement was approved by the Funds' sole initial shareholder
and executed on September 30, 1997.
2
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RFI'S RESPONSIBILITIES UNDER THE NEW AGREEMENT
Like the Old Agreement, the New Agreement requires RFI to manage the investment
and reinvestment of the assets of the Funds, continuously review, supervise and
administer the investment program of each of the Funds, determine in its
discretion the securities to be purchased or sold and the portion of each such
Fund's assets to be held uninvested, provide the Corporation with records
concerning RFI's activities that the Corporation is required by the 1940 Act to
maintain, and render regular reports to the Corporation's officers and Board of
Directors concerning RFI's discharge of the foregoing responsibilities.
As in the Old Agreement, the New Agreement also provides that RFI shall not be
liable for any error of judgment or of law, as for any loss suffered by the
Corporation, except a loss resulting from willful misfeasance, bad faith, or
gross negligence on the part of RFI in the performance of its obligations and
duties, or by reason of its reckless disregard of its obligations and duties.
DURATION AND TERMINATION OF THE NEW AGREEMENT
If approved by Shareholders at the Meeting, the New Agreement would take effect
when (i) the Interim Agreement expires or (ii) Shareholder approval is obtained,
whichever occurs later. Unless terminated earlier, the New Agreement will
continue in effect for two years from the date of effectiveness, and thereafter
for periods of one year provided that the continuance is specifically approved
at least annually (i) by the vote of a majority of those members of the
Corporation's Board of Directors who are not parties to the New Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (ii) by vote of a majority of the
outstanding voting securities of the Funds. The New Agreement will terminate
automatically in the event of its assignment (within the meaning of the 1940
Act). The New Agreement may be terminated by any Fund of the Corporation at any
time, on 60 days' written notice to RFI, without the payment of any penalty, by
vote of a majority of the entire Board of Directors of the Corporation or by
vote of a majority of the outstanding voting securities of the Funds.
COMPENSATION UNDER THE NEW AGREEMENT
The advisory fees payable to RFI under the New Agreement are the same as those
under the Old Agreement. Specifically, under the New Agreement, the Corporation
will pay RFI an annual fee equal to the following percentage of each Fund's
average daily net assets:
Fund Advisory Fee
---- ------------
Fleming Mid Cap Value Fund 0.70%
Fleming Small Cap Growth Fund 0.80%
Effective April 1, 2000, RFI contractually agreed to reimburse the Funds'
expenses in an amount sufficient to limit the Fleming Mid Cap Value Fund's and
the Fleming Small Cap Growth Fund's total annual operating expenses (excluding
interest, taxes and certain other expenses) to 0.75% and 0.85% of the respective
Fund's average daily net assets. This contract ends in March 2001. Under this
contract, RFI may be reimbursed for any fees waived or expenses paid on behalf
of a Fund if the Fund's expenses are less than the total annual operating
expenses limitation. The Directors may terminate the expense reimbursement
contract at any time. RFI has represented to the Directors that it will continue
the expense reimbursement contract until March 2002.
Under the Old Agreement, the Fleming Mid Cap Value Fund and Fleming Small Cap
Growth Fund paid RFI $32,908 and $28,012, respectively, during the Funds' last
fiscal year (ended September 30, 2000). The amount of the expense reimbursements
(including fee waivers) with respect to the Fleming Mid Cap Value Fund and
Fleming Small Cap Growth Fund during the Funds' last fiscal year was $136,037
and $141,118, respectively. Effective April 1, 2000, the contractual advisory
fee under the Old Agreement for the Fleming Mid Cap Value Fund was reduced from
0.90% to 0.70% and the contractual advisory fee for the Fleming Small Cap Growth
Fund was reduced from 1.00% to 0.80%.
3
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BOARD APPROVAL OF THE NEW AGREEMENT
The Board of Directors met in person on November 7, 2000 to consider the
approval of the New Agreement. At the Board meeting, the Directors reviewed
materials furnished by RFI and information provided by representatives of Chase
regarding the advisory and related services provided to the Funds following the
acquisition. The Directors, including the Independent Directors, unanimously
approved the New Agreement and recommended that shareholders of each Fund vote
to approve the New Agreement. In approving the New Agreement and making their
recommendation, the Directors considered the experience of RFI in investment
company management and with the management of the Funds; the expected continued
service of the key personnel in the management of the Funds; and the fact that
the proposed compensation and level of advisory services under the New Agreement
are identical to the rate of compensation and level of advisory services under
the Old Agreement. Specifically, the Directors considered the following in
approving the New Agreement and making their recommendation: (1) the
reasonableness of fee and expense ratios of each Fund given the quality of
services expected to be provided under the New Agreement; (2) the fee and
expense ratios of comparable mutual funds; (3) the relative performance of the
Funds since commencement of operations compared to similar mutual funds; (4) the
fact that the terms of the New Agreement are identical to those of the Old
Agreement, except for dates of execution, effectiveness and termination; (5) the
favorable history, reputation, qualification and background of RFI, as well as
the qualifications of its personnel and its financial condition; (6) the
commitment of RFI to maintain the current respective expense ratio of each Fund
and maintain the fee waivers currently in place; (7) the commitment of RFI to
pay the expenses in connection with this proxy solicitation; (8) the possibility
of benefits that may be realized by the Funds as a result of Chase's resources;
and (9) other factors deemed relevant by the Directors.
Based upon a review of the above factors, the Board concluded that the terms of
the New Agreement are fair and reasonable, and that entering into the New
Agreement would be in the best interests of each Fund and its shareholders. THE
DIRECTORS, INCLUDING THE INDEPENDENT DIRECTORS, UNANIMOUSLY VOTED TO APPROVE THE
NEW AGREEMENT AND TO RECOMMEND THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
NEW AGREEMENT.
INFORMATION ABOUT RFI
GENERAL
RFI is a New York-based investment management firm registered with the U.S.
Securities and Exchange Commission. On August 1, 2000, RFI became a wholly-owned
subsidiary of The Chase Manhattan Corporation, a global financial services firm
headquartered in New York with assets under management and held in private
accounts in excess of $244,179,000,000 as of September 30, 2000. As of September
30, 2000, RFI had discretionary management authority over assets in excess of
$5,775,780,000. RFI's principal offices are located at 320 Park Avenue, New
York, New York 10022. The Chase Manhattan Corporation's principal offices are
located at 270 Park Avenue, New York, New York 10017.
In addition to serving as the adviser to the Fleming Mid Cap Value Fund and the
Fleming Small Cap Growth Fund, RFI also serves as the sub-adviser to following
mutual funds that are similar in investment style to the Fleming Small Cap
Growth Fund. These funds' advisers provide administrative and other services to
the funds, and oversee the funds' affairs, thus resulting in a lower fee paid to
RFI when compared to the advisory fees that RFI receives from the Fleming Funds.
Net Assets as of Contractual Fee Paid
Name of Portfolio 9/30/00 Advisory Fee After Waivers
----------------- ------- ------------ -------------
Prudential Target Small $99,745,247.53 0.40% 0.40%
Capitalization Growth
Portfolio
Prudential Target New $10,775,028.02 0.40% 0.40%
Small Cap Growth Fund
RFI does not serve as the investment adviser to any mutual funds that are
comparable to the Fleming Mid Cap Value Fund.
4
<PAGE>
RFI'S DIRECTORS AND PRINCIPAL EXECUTIVE OFFICER*
Simon P. Ball - Chairman of the Board of Directors of RFI from March 2000 to the
present. Group Finance Director of Robert Fleming Holdings Limited from 1998 to
August 2000.
Arthur A. Levy+ - Director of RFI from 1985 to the present. Vice Chairman of RFI
since 1989 and President of RFI since April of 1998.
Christopher M. V. Jones**+ - Director of RFI from 1991 to the present.
Larry A. Kimmel+ - Senior Vice President and Director of Compliance of RFI from
1996 to present.
Iain O.S. Saunders - Director of RFI and Deputy Chairman of Robert Fleming Asset
Management from 1991 to the present.
Henry C. Strutt - Director of RFI from 1999 to the present.
Jonathan K.L. Simon**+ - Director of RFI from 1991 to the present.
Charles R. Bridge - Director and Head of Sales and Trading of RFI from 1998 to
the present.
Eduardo Canet - Director of RFI from 1998 to the present.
----------
* The principal address of each person listed above is 320 Park Avenue, New
York, New York 10022.
** Mr. Jonathan K.L. Simon (a current Director of the Corporation) may have an
interest in the approval of the New Agreement due to his relationships with
RFI and Chase.
+ This person is also a Director and/or officer of the Corporation.
THE DIRECTORS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF THE FUNDS
VOTE FOR APPROVAL OF THE NEW AGREEMENT
If the Shareholders of either Fund do not approve the New Agreement, the
Directors will consider what further action to take. Such actions may include
terminating the Funds.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act permits an investment adviser to a registered
investment company (or any of its affiliated persons) to receive any amount or
benefit in connection with the sale of an investment adviser if two conditions
are satisfied. First, an "unfair burden" may not be imposed on the investment
company as a result of the sale of such interest, or any express or implied
terms, conditions or understandings applicable thereto. The term "unfair
burden", as defined in the 1940 Act, includes any arrangement during the
two-year period after the sale whereby the investment adviser (or predecessor or
successor adviser), or any interested person of any such adviser, receives or is
entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for BONA FIDE
investment advisory and other services), or from any person in connection with
the purchase or sale of securities or other property to, from or on behalf of
the investment company (other than ordinary fees for bona fide principal
underwriting services). The Board of Directors has been advised by RFI that
there are no circumstances arising from the acquisition that would result in the
imposition of an "unfair burden" (as defined in the 1940 Act) on the Funds.
Second, during the three-year period immediately following a change in control
of an investment adviser, at least 75% of the subject investment company's board
of directors must not be "interested persons" (as defined in the 1940 Act) of
the investment company's investment adviser or predecessor adviser. The current
composition of the Corporation's Board of Directors complies with this
condition. Before Chase acquired Robert Fleming Holdings Limited, Mr.
Christopher M. V. Jones resigned from the Corporation's Board of Directors in
order to comply with this condition.
5
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VOTING INFORMATION
ADJOURNMENT
If sufficient votes for approval of the Proposal are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting for a period or periods of not more than 120 days
from the original record date to permit further solicitation of proxies with
respect to the Proposal. Any such adjournment will require the affirmative vote
of a majority of the votes cast at the Meeting in person or by proxy at the
session of the Meeting to be adjourned. The persons named as proxies will vote
in favor of such adjournment those proxies that they are entitled to vote in
favor of the Proposal. They will vote against any such adjournment those proxies
required to be voted against the Proposal. The costs of any such additional
solicitation and of any adjourned session will be borne by RFI and/or its
affiliates.
REQUIRED VOTE
Approval of the Proposal with respect to a Fund requires the affirmative vote of
a majority of the outstanding voting securities of the Fund. The 1940 Act
defines "majority of the outstanding voting securities" as the vote of (i) 67%
or more of a Fund's outstanding shares present at a meeting, if the holders of
more than 50% of the outstanding shares of a Fund are present or represented by
proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less.
Abstentions and broker non-votes will be counted as present for purposes of
determining whether a quorum is present. Abstentions and broker non-votes will
have the effect of votes against the Proposal.
SHAREHOLDER PROPOSALS
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent meeting should send their written proposals to the Secretary of the
Corporation c/o of Investment Company Administration LLC, 915 Broadway, Suite
1605, New York, New York 10010.
QUESTIONS
If you have questions about the matters discussed in this Proxy Statement,
please call 1-800-264-0592.
GENERAL INFORMATION
ADMINISTRATOR
Investment Company Administration, LLC (the "Administrator") serves as the
Corporation's administrator. The Administrator's principal offices are located
4455 East Camelback Road, Suite 261E, Phoenix, Arizona 85018.
DISTRIBUTOR
First Fund Distributors, Inc. (the "Distributor") acts as the Funds' principal
underwriter. The Distributor's principal offices are located at 4455 East
Camelback Road, Suite 261E, Phoenix, Arizona 85018.
5% SHAREHOLDERS
As of October 31, 2000, the following persons were the only persons (other than
officers and Directors of the Corporation) who were, to the knowledge of the
Corporation, beneficial owners of more than 5% of shares of the Funds entitled
to vote at the Meeting:
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NUMBER OF PERCENTAGE
SHAREHOLDER SHARES OWNERSHIP
----------- ------ ---------
FLEMING MID CAP VALUE FUND
Robert Fleming Inc. 131,022 36.42%
320 Park Avenue
New York, NY 10022
Robert Fleming Inc. 401(k) Plan+ 61,219 17.02%
T. Rowe Price Trust Co. Trustee
Dated 11/1/97
4555 Painters Mill Rd, 3rd Floor
Owings Mills, MD 21117
Vincenzo Vigna, IRA Account 44,139 12.27%
P.O. Box 1462
Charlestown, RI 02813
FLEMING SMALL CAP GROWTH FUND
Robert Fleming Inc. 125,386 47.34%
320 Park Avenue
New York, NY 10022
Robert Fleming Inc. 401(k) Plan+ 80,242 30.30%
T. Rowe Price Trust Co. Trustee
Dated 11/1/97
4555 Painters Mill Rd, 3rd Floor
Owings Mills, MD 21117
Christina A. Mohr 37,566 14.18%
514 East 87th Street
New York, NY 10128
----------
+ Certain directors and officers of the Corporation own Fund shares through
the 401(k) Plan. See chart below.
OWNERSHIP OF FUND SHARES BY DIRECTORS AND OFFICERS OF THE CORPORATION
NUMBER OF PERCENTAGE
SHAREHOLDER SHARES OWNERSHIP
----------- ------ ---------
FLEMING MID CAP VALUE FUND
Jonathan K. L. Simon* 48,982 13.62%
320 Park Avenue
New York, NY 10022
Christopher M. V. Jones** 1,940 0.54%
320 Park Avenue
New York, NY 10022
Robert E. Marks 6,581 1.83%
72 Glenville Road
Greenwich, CT 06831
Dominic Solly, IRA Account 3,587 1.00%
63 Clover Ave
Floral Park, NY 11001
7
<PAGE>
NUMBER OF PERCENTAGE
SHAREHOLDER SHARES OWNERSHIP
----------- ------ ---------
FLEMING SMALL CAP GROWTH FUND
Christopher M. V. Jones** 3,055 1.15%
320 Park Avenue
New York, NY 10022
Robert E. Marks 2,259 0.85%
72 Glenville Road
Greenwich, CT 06831
Dominic Solly, IRA Account 1,676 0.63%
63 Clover Ave
Floral Park, NY 11001
----------
* The ownership information for Jonathan K. L. Simon reflects both direct
ownership and ownership of shares through the 401(k) Plan and an IRA
account.
** The ownership information for Christopher M.V. Jones reflects ownership of
shares through the 401(k) Plan.
OTHER MATTERS
The Directors know of no other business to be brought before the Meeting.
However, if any other matters properly come before the Meeting, the persons
designated as proxies on the proxy card will vote on such matters in accordance
with their judgment.
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
8
<PAGE>
APPENDIX A
INVESTMENT ADVISORY AGREEMENT
FLEMING MUTUAL FUND GROUP, INC.
AGREEMENT made this __ day of __________, 2000, by and between Fleming
Mutual Fund Group, Inc., a Maryland corporation (the "Corporation"), and Robert
Fleming Inc. (the "Adviser").
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several portfolios of shares, each having its own
investment policies; and
WHEREAS, the Corporation desires to retain the Adviser to render
investment management services to the funds of the Corporation listed in
Schedule A to this Agreement and such other funds as the Corporation and the
Adviser, from time to time, may agree upon in writing and add to Schedule A of
this Agreement (the "Funds"), and the Adviser is willing to render such
services:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Corporation hereby appoints the Adviser to
act as investment adviser to each of the Funds, for the period and on such terms
set forth in this Agreement. The Corporation employs the Adviser to manage the
investment and reinvestment of the assets of the Funds, to continuously review,
supervise and administer the investment program of each of the Funds, to
determine in its discretion the securities to be purchased or sold and the
portion of each such Fund's assets to be held uninvested, to provide the
Corporation with records concerning the Adviser's activities which the
Corporation is required to maintain, and to render regular reports to the
Corporation's officers and Board of Directors (the "Board") concerning the
Adviser's discharge of the foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the officers and the Board, and in compliance with the objectives,
policies and limitations set forth in the Corporation's prospectus(es) and
statement(s) of additional information, as amended or supplemented from time to
time (referred to collectively as the "Prospectus"), and applicable laws and
regulations.
The Adviser accepts such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings and equipment and the
personnel required by it to perform the services on the terms and for the
compensation provided herein.
2. FUND TRANSACTIONS. The Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of the portfolio securities
for the Funds and is directed to use its best efforts to obtain the best net
results as described in the Corporation's Prospectus from time to time. The
Adviser agrees to promptly communicate to the officers and Directors of the
Corporation such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Adviser will not be deemed to have acted unlawfully,
or to have breached a fiduciary duty to the Corporation or be in breach of any
obligation owing to the Corporation under this Agreement, or otherwise, by
reason of its having directed a securities transaction on behalf of the
Corporation to (i) a broker-dealer, in compliance with the provisions of Section
28(e) of the Securities Exchange Act of 1934 or as described from time to time
in the Prospectus, or (ii) an affiliated broker-dealer in compliance with
applicable provisions of the 1940 Act, or the rules and regulations thereunder,
as described from time to time in the Prospectus.
<PAGE>
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Corporation shall
pay to the Adviser at the end of each month, an advisory fee calculated by
applying a monthly rate, based on the annual percentage rates set forth opposite
each Fund's name on Schedule A hereto, to each Fund's average daily net assets
for the month. The Adviser may, in its discretion and from time to time, waive
all or a portion of its fee.
In the event of termination of this Agreement, the fee provided under this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current month as a percentage of the total
number of days in such month.
4. OTHER SERVICES. At the request of the Corporation, the Adviser, in its
discretion, may make available to the Corporation office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the
Corporation at the Adviser's cost.
5. REPORTS. The Corporation and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Corporation are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Corporation are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Corporation in any way or otherwise be deemed an agent of the
Corporation.
7. LIABILITY OF ADVISER. The Adviser shall not be liable for any error of
judgment or of law, as for any loss suffered by the Corporation in connection
with the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith, or gross negligence on the part of the Adviser
in the performance of its obligations and duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles of
Incorporation of the Corporation and the Articles of Incorporation (or other
governing or organizational documents) of the Adviser, Directors, agents and
shareholders of the Corporation are or may be interested persons of the Adviser
(or any successor thereof) as officers, directors or otherwise; officers, agents
and directors of the Adviser are or may be interested persons of the Corporation
as Directors, officers, shareholders or otherwise; and the Adviser (or any
successor) is or may be an interested person of the Corporation as a shareholder
or otherwise. The effect of any such interrelationships shall be governed by the
Articles of Incorporation (or other governing or organizational documents) and
provisions of the 1940 Act. All such interests shall be fully disclosed between
the parties on an ongoing basis and in the Corporation's Prospectus to the
extent required by law. In addition, brokerage transactions for the Corporation
may be effected through the Adviser or affiliates of the Adviser, acting as
agent, if approved by the Board, subject to the rules and regulations of the
Securities and Exchange Commission.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated,
shall continue until __________, 2002 and thereafter for additional periods of
one year from the anniversary thereof, but only so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Corporation's Board who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, or (b) by vote of a majority of the
outstanding voting securities of each Fund of the Corporation; provided,
however, that if the shareholders of any Fund fail to approve the Agreement as
provided herein, the Adviser may continue to serve that Fund in the manner and
to the extent permitted by the 1940 Act and rules thereunder. This Agreement may
be terminated by any Fund of the Corporation at any time, on 60 days' written
notice to the Adviser, without the payment of any penalty, by vote of a majority
of the entire Board of the Corporation or by vote of a majority of the
outstanding voting securities of the Fund. This Agreement may be terminated by
<PAGE>
the Adviser at any time, without the payment of any penalty, upon 60 days'
written notice to the Corporation. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice under this
Agreement shall be given in writing, addressed and delivered or mailed postpaid,
to the other party at any office of such party.
As used in this Section 9, the terms "assignment," "interested person," and "the
vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Sections 2(a)(4), (19) and (42) of the 1940
Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Corporation must be approved (a) by a vote of a
majority of those members of the Corporation's Board who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such amendment, and (b) to the extent
required by the 1940 Act, by vote of a majority of the outstanding voting
securities of each Fund of the Corporation.
11. GOVERNING LAW. All questions concerning the validity, meaning and
effect of this Agreement shall be determined in accordance with the laws
(without giving effect to the conflict-of-law principles thereof) of the State
of Maryland applicable to contracts made and to be performed in that state.
12. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this __ day of __________, 2000.
FLEMING MUTUAL FUND GROUP, INC. ROBERT FLEMING INC.
By By
--------------------------------- -------------------------------------
Name: Name:
Title: Title:
--------------------------------------------------------------------------------
SCHEDULE A
Fund Rate
---- ----
Mid Cap Value Fund 0.70%
Small Cap Growth Fund 0.80%
<PAGE>
FLEMING MUTUAL FUND GROUP, INC.
320 PARK AVENUE
NEW YORK, NY 10022
FLEMING MID CAP VALUE FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
THURSDAY, DECEMBER 14, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
FLEMING MUTUAL FUND GROUP, INC.
The undersigned Shareholder(s) of the Fleming Mid Cap Value Fund (the "Fund")
hereby appoint(s) Larry A. Kimmel and Arthur A. Levy, each of them (with full
power of substitution), the proxy or proxies of the undersigned to attend the
Special Meeting of Shareholders of the Fund to be held on Thursday, December 14,
2000, and any adjournments thereof, to vote all of the shares of the Fund that
the signer would be entitled to vote if personally present at the Special
Meeting of Shareholders and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
--------------------------------------------------------------------------------
To vote on the following proposal, mark your vote below:
TO APPROVE A NEW ADVISORY AGREEMENT BETWEEN THE FLEMING MUTUAL FUND GROUP,
INC., ON BEHALF OF THE FUND, AND ROBERT FLEMING INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement.
Your signature(s) on this proxy should be exactly as your name or names
appear on this proxy. If the shares are held jointly, each holder should sign.
If signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _________________, 2000
-------------------------------- --------------------------------
Signature Signature
--------------------------------
Title, if applicable
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED HEREIN BY THE SIGNING
SHAREHOLDER(S). IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS FOR THE PROPOSAL.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
<PAGE>
FLEMING MUTUAL FUND GROUP, INC.
320 PARK AVENUE
NEW YORK, NY 10022
FLEMING SMALL CAP GROWTH FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
THURSDAY, DECEMBER 14, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
FLEMING MUTUAL FUND GROUP, INC.
The undersigned Shareholder(s) of the Fleming Small Cap Growth Fund (the "Fund")
hereby appoint(s) Larry A. Kimmel and Arthur A. Levy, each of them (with full
power of substitution), the proxy or proxies of the undersigned to attend the
Special Meeting of Shareholders of the Fund to be held on Thursday, December 14,
2000, and any adjournments thereof, to vote all of the shares of the Fund that
the signer would be entitled to vote if personally present at the Special
Meeting of Shareholders and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
--------------------------------------------------------------------------------
To vote on the following proposal, mark your vote below:
TO APPROVE A NEW ADVISORY AGREEMENT BETWEEN THE FLEMING MUTUAL FUND GROUP,
INC., ON BEHALF OF THE FUND, AND ROBERT FLEMING INC.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement.
Your signature(s) on this proxy should be exactly as your name or names
appear on this proxy. If the shares are held jointly, each holder should sign.
If signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _________________, 2000
-------------------------------- --------------------------------
Signature Signature
--------------------------------
Title, if applicable
ALL PROPERLY EXECUTED PROXIES WILL BE VOTED AS DIRECTED HEREIN BY THE SIGNING
SHAREHOLDER(S). IF NO DIRECTION IS GIVEN WHEN THE DULY EXECUTED PROXY IS
RETURNED, SUCH SHARES WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS FOR THE PROPOSAL.
PLEASE DATE, SIGN AND RETURN PROMPTLY.
