<PAGE>
Securities Act File No. 333-44193
Investment Company Act of 1940 File No. 811-08605
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 7 [X]
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 9 [X]
UAM FUNDS, INC. II
(Exact Name of Registrant as specified in Charter)
c/o UAM Fund Services, Inc.
211 Congress Street, 4/th/ Floor
Boston, Massachusetts, 02110
Registrant's Telephone Number (617) 542-5440
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Michael E. DeFao, Secretary
UAM Fund, Services, Inc.
211 Congress Street, 4/th/ Floor
Boston, Massachusetts, 02110
(NAME AND ADDRESS OF AGENT FOR SERVICE)
COPIES TO:
Audrey C. Talley, Esq.
Drinker, Biddle & Reath, LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA
19107-3496
IT IS PROPOSED THAT THIS FILING BECOME EFFECTIVE (CHECK APPROPRIATE BOX):
[X] Immediately upon filing pursuant to Paragraph (b)
[_] on (date) pursuant to Paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1)
[_] 75 days after filing pursuant to Paragraph (a)(2)
[_] on (date) pursuant to Paragraph (a)(2) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
PART A
PBHG ADVISOR FUNDS, INC.
The prospectus of the Analytic Funds is included in this Post-Effective
Amendment No. 7.
<PAGE>
PART B
PBHG ADVISOR FUNDS, INC.
The statement of additional information of the Analytic Funds is included in
this Post-Effective Amendment No. 7.
<PAGE>
PART C
UAM FUNDS TRUST
OTHER INFORMATION
ITEM 23. EXHIBITS
Exhibits previously filed by the Fund are incorporated by reference to such
filings. The following table describes the location of all exhibits. In the
table, the following references are used: PRE 2 = Pre-Effective Amendment No. 2
to the Registrant's Registration Statement (333-44193/811-02605) filed on April
17, 1998.
<TABLE>
<CAPTION>
Exhibit Incorporated by
- ------- Reference to (Location):
-----------------------
<S> <C> <C>
A. 1. Articles of Amendment and Reinstatement dated April 9, 1998 PRE 2
2. Articles Supplementary dated April 9, 1998 PRE 2
3. Articles Supplementary dated April 6, 1999 Filed herewith
B. Amended and Restated Bylaws PRE 2
C. The rights of security holders are defined in the Registrant's Articles of Amendments PRE 2
and Restatement and in the Registrant's By-Laws.
D. 1. Investment Advisory Agreement For Analytic Defensive Equity Fund Filed herewith
2. Investment Advisory Agreement For Analytic Enhanced Equity Fund Filed herewith
3. Investment Advisory Agreement For Analytic Master Fixed Income Fund Filed herewith
4. Investment Advisory Agreement For Analytic Short-Term Government Fund Filed herewith
E 1. Form of Distribution Agreement Filed herewith
2. Form of Selling Dealer Agreement Filed herewith
F. Bonus or Profit Sharing Contracts Not applicable
G. Custodian Agreement between Registrant and Core States Band, N.A. dated as of PRE 2
April 1, 1998
H 1. Form of Fund Administration Agreement Filed herewith
2. Form of Mutual Funds Service Agreement Filed herewith
I. Opinions and Consents of Counsel Filed herewith
J. 1. Consent of PricewaterhouseCoopers, LLP Filed herewith
2. Consent of Deloitte & Touche, LLP Filed herewith
K. Other Financial Statements Not applicable
L. Stock Subscription Agreement between the Registrant and Pilgrim Baxter & PRE 2
Associates, Ltd.
M. 1. Rule 12b-1 Plan Not applicable
N. Financial Data Schedule Filed herewith
O. Rule 18f-3 Plan Not applicable
P. Powers of Attorney Filed herewith
</TABLE>
<PAGE>
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE FUND
Not applicable.
ITEM 25. INDEMNIFICATION
Reference is made to Article VI of Registrant's Declaration of Trust, which is
incorporated herein by reference. Registrant hereby also makes the undertaking
consistent with Rule 484 under the Securities Act of 1933, as amended. Insofar
as indemnification for liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a trustee, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Provisions for indemnification of UAM Fund Services, Inc. are contained in
Section 6 of its Fund Administration Agreement with the Registrant.
Provisions for indemnification of the Registrant's investment advisers are
contained in Section 7 of their respective Investment Advisory Agreements with
the Registrant.
Provisions for indemnification of Registrant's principal underwriter, UAM Fund
Distributors, Inc., are contained in its Distribution Agreement with the
Registrant.
Provisions for indemnification of Registrant's custodian, The Chase Manhattan
Bank, are contained in Section 12 of its Fund Global Custody Agreement with the
Registrant.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Reference is made to the caption "Investment Adviser" in the Prospectuses
constituting Part A of this Registration Statement and "Investment Adviser" in
Part B of this Registration Statement. The information required by this Item 26
with respect to each director, officer, or partner of other investment adviser
of the Registrant is incorporated by reference to the Forms ADV filed by the
investment advisers listed below with the Securities and Exchange Commission
pursuant to the Investment Advisers Act of 1940, as amended, under the file
numbers indicated:
Investment Adviser File No.
- ------------------ --------
Analytic Investors, Inc. 801-7082
Analytic Investors, Inc. is an affiliate of United Asset Management Corporation
("UAM"), a Delaware corporation owning firms engaged primarily in institutional
investment management.
ITEM 27. PRINCIPAL UNDERWRITERS
(a) UAM Fund Distributors, Inc. ("UAMFDI") acts as sole distributor of the
registrant's shares.
(b) The information required with respect to each director and officer of
UAMFDI is incorporated by reference to Schedule A of Form BD filed pursuant
to the Securities and Exchange Act of 1934 (SEC File No. 8-41126).
(c) Not applicable.
<PAGE>
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
Books or other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, and the Rules promulgated thereunder, are
maintained as follows:
(a) First Union National Bank (successor to CoreStates Bank, N.A.)
530 Walnut Street
Philadelphia, PA 19106
(b) SEI Investments Mutual Funds Services (formerly SEI Fund Resources)
One Freedom Valley Road
Oaks, PA 19456
(c) UAM Fund Services, Inc.
211 Congress Street, 4th Floor
Boston, Massachusetts 02110
(d) UAM Shareholder Services Center, Inc.
825 Duportail Road
Wayne, PA 19087
(e) DST Systems, Inc.
210 West 10th Street
Kansas City, Missouri 64105
ITEM 29. MANAGEMENT SERVICES
Not Applicable.
ITEM 30. UNDERTAKINGS
Not Applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, the Registrant certifies that it meets all of the
requirements for effectiveness of the registration statement under Rule 485(b)
under the Securities Act and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and Commonwealth of Massachusetts on the 7th
day of April, 1999.
UAM FUNDS, INC. II
/s/ Michael E. DeFao
--------------------
Michael E. DeFao
Secretary
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the 7th day of April, 1999:
*
___________________________
Norton H. Reamer, Chairman and
President
*
___________________________
John T. Bennett, Jr., Director
*
___________________________
Nancy J. Dunn, Director
*
___________________________
Philip D. English, Director
*
___________________________
William A. Humenuk, Director
*
___________________________
Peter M. Whitman, Jr., Director
/s/ Gary L. French
- ------------------
Gary L. French, Treasurer
/s/ Michael E. DeFao
- --------------------
* Michael E. DeFao
(Attorney-in-Fact)
<PAGE>
UAM FUNDS
Funds for the Informed Investor(SM)
ANALYTIC FUNDS
INSTITUTIONAL CLASS PROSPECTUS APRIL 7, 1999
Analytic Enhanced Equity Fund
Analytic Defensive Equity Fund
Analytic Master Fixed Income Fund
Analytic Short-Term Government Fund
UAM
The Securities and Exchange Commission (SEC) has not approved or
disapproved these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
- -----------------
<TABLE>
<S> <C>
PORTFOLIO SUMMARY............................................ 1
What are the Objectives of the Funds?....................... 1
What are the Principal Investment Strategies of the Funds?.. 1
What are the Principal Risks of the Funds?.................. 1
How Have the Funds Performed?............................... 2
What are the Fees and Expenses of the Funds?................ 5
INVESTING WITH THE UAM FUNDS................................. 7
Buying Shares............................................... 7
Redeeming Shares............................................ 8
Exchanging Shares........................................... 8
Transaction Policies8
ACCOUNT POLICIES............................................. 12
Small Accounts.............................................. 12
Distributions............................................... 12
Federal Taxes............................................... 12
FUND DETAILS................................................. 14
Principal Investments And Risks Of The Funds................ 14
Other Investment Practices and Strategies................... 16
Year 2000................................................... 17
Investment Management....................................... 17
Shareholder Servicing Arrangements.......................... 1
FINANCIAL HIGHLIGHTS......................................... 2
Analytic Enhanced Equity Fund............................... 2
Analytic Defensive Equity Fund.............................. 3
Analytic Master Fixed Income Fund........................... 3
Analytic Short-Term Government Fund......................... 4
</TABLE>
<PAGE>
PORTFOLIO SUMMARY
WHAT ARE THE OBJECTIVES OF THE FUNDS?
Listed below are the investment objectives of the funds. The funds cannot
guarantee they will meet their investment objectives. A fund may not change
its investment objective without shareholder approval.
ENHANCED EQUITY FUND
The Enhanced Equity Fund seeks above-average total returns through
investments in equity securities.
DEFENSIVE EQUITY FUND
The Defensive Equity Fund seeks to obtain a greater long-term total return
and smaller fluctuations in quarterly total return from a diversified,
hedged common stock portfolio than would be realized from the same
portfolio unhedged.
MASTER FIXED INCOME FUND
The Master Fixed Income Fund seeks above average total returns through
investments in a diversified bond portfolio consisting primarily of U.S.
government, corporate, and mortgage-related fixed income securities.
SHORT-TERM GOVERNMENT FUND
The Short-Term Government Fund seeks to provide a high level of income
consistent with both low fluctuations in market value and low credit risk.
WHAT ARE THE PRINCIPAL INVESTMENT STRATEGIES OF THE FUNDS?
This section summarizes the principal investment strategies of the funds.
For more information see "PRINCIPAL INVESTMENTS AND RISKS OF THE FUNDS."
ENHANCED EQUITY AND DEFENSIVE EQUITY FUNDS
The Enhanced Equity Fund invests primarily in publicly traded equity
securities of corporations whose securities are traded in the U.S. The fund
usually invests in medium to large companies (typically companies with
market capitalizations over $2 billion).
The Defensive Equity Fund invests primarily in common stocks on which
options are traded on national securities exchanges. The fund may also use
futures and options to hedge its investments. By combining stocks and
options, the adviser tries to create a well-diversified and significantly
hedged portfolio.
The adviser selects equity securities for each fund using a proprietary
system that ranks the stocks according to a mathematical model. Using its
system, the adviser believes it can assemble a portfolio of securities that
is style and sector neutral and consistently outperforms traditional
strategies that focus on a single style, such as value or growth.
MASTER FIXED INCOME FUND
The Master Fixed Income Fund invests primarily in high-grade debt
securities. The fund expects to maintain a duration consistent with the
intermediate sector of the bond market.
SHORT-TERM GOVERNMENT FUND
The Short-Term Government Fund normally invests at least 80% of its total
assets in U.S. government securities. The fund expects to invest in debt
securities with maturities of three years or less.
WHAT ARE THE PRINCIPAL RISKS OF THE FUNDS?
This section summarizes the principal risks associated with investing in
the funds. For more information see "PRINCIPAL INVESTMENTS AND RISKS OF THE
FUNDS."
RISKS COMMON TO ALL MUTUAL FUNDS
As with all mutual funds, at any time your investment in a fund may be
worth more or less than the price that you originally paid for it. You may
lose money by investing in a fund because:
The value of the securities it owns changes, sometimes rapidly and
unpredictably.
<PAGE>
. It is not successful in reaching its goal because of its strategy or
because it did not implement its strategy properly.
. Unforeseen occurrences in the securities markets negatively affect it.
ENHANCED EQUITY AND DEFENSIVE EQUITY FUNDS
Since the funds invest mainly in equity securities, their principal risks are
those of investing in equity securities, which may include sudden,
unpredictable drops in value or long periods of decline in value. Equity
securities may lose value because of factors affecting the securities markets
generally, an entire industry or a particular company.
The funds invest in derivatives, which may be volatile and may magnify their
gains or losses, causing it to make or lose substantially more money than they
invested. The funds attempt to moderate these risks by using derivatives only
to gain full market exposure or to hedge their investments.
MASTER FIXED INCOME AND SHORT-TERM GOVERNMENT FUNDS
Since the funds invest in debt securities, the value of their investments
could fall because:
. Of market conditions and economic and political events.
. Interest rates rise, which tends to cause the value of debt securities to
fall.
. A security's credit rating worsens or its issuer becomes unable to honor its
financial obligations.
HOW HAVE THE FUNDS PERFORMED?
The bar charts and tables below illustrate how the performance of the funds has
varied from year to year and provide some indication of the risks of investing
in the funds. The bar charts show the investment returns of each fund for each
calendar year during the periods indicated. The table following each bar chart
compares each fund's average annual returns for the periods indicated to those
of a broad-based securities market index. Past performance does not guarantee
future results.
ENHANCED EQUITY FUND
[BAR CHART APPEARS HERE]
Highest quarter: 20.49% For the quarter ended 21/31/98
Lowest quarter: -8.00% For the quarter ended 9/30/98
<TABLE>
<CAPTION>
Average annual return for periods Since
ended 12/31/98 1 Year 5 Years 6/30/93
-------- --------- ---------
<S> <C> <C> <C>
Enhanced Equity Fund 37.82% 24.33% 22.76%
S&P 500 Index 28.60% 24.05% 22.81%
</TABLE>
<PAGE>
DEFENSIVE EQUITY FUND
[BAR CHART APPEARS HERE]
Highest quarter:16.32% For the quarter ended 21/31/98
Lowest quarter: -7.38% For the quarter ended 9/30/98
<TABLE>
<CAPTION>
Average annual return for periods
ended 12/31/98 1 Year 5 Years 10 Years
-------- --------- ----------
<S> <C> <C> <C>
Defensive Equity Fund 28.89% 17.21% 13.01%
S&P 500 Index 28.60% 24.05% 19.19%
</TABLE>
MASTER FIXED INCOME FUND
[BAR CHART APPEARS HERE]
Highest quarter: 5.40% For the quarter ended 6/30/95
Lowest quarter: -2.76% For the quarter ended 3/31/94
<TABLE>
<CAPTION>
Average annual return for periods Since
ended 12/31/98 1 Year 5 Years 6/30/93
-------- --------- ---------
<S> <C> <C> <C>
Master Fixed Income Fund 3.80% 6.82% 6.87%
Lehman Brothers Government/ Corporate
Bond Index 9.47% 7.30% 7.07%
Lehman Brothers Intermediate
Government/ Corporate Bond Index 8.42% 6.59% 6.43%
</TABLE>
SHORT-TERM GOVERNMENT FUND
[BAR CHART APPEARS HERE]
Highest quarter: 3.84% For the quarter ended 9/30/98
<PAGE>
Lowest quarter: -0.97% For the quarter ended 3/31/94
<TABLE>
<CAPTION>
Average annual return for periods
ended 12/31/98 Since
1 Year 5 Years 6/30/93
-------- --------- ---------
<S> <C> <C> <C>
Short-Term Government Fund 7.10% 5.66% 5.53%
Merrill Lynch 1 to 3 Year Treasury
Index 7.00% 5.98% 5.76%
</TABLE>
<PAGE>
WHAT ARE THE FEES AND EXPENSES OF THE FUNDS?
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT ARE DEDUCTED FROM THE ASSETS OF
A FUND)
This table describes the fees and expenses that you may pay if you buy and
hold shares of a fund.
<TABLE>
<CAPTION>
Enhanced Defensive Master Fixed Short-Term
Equity Fund Equity Fund Income Fund Gov't Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management Fees 0.60% 0.60% 0.45% 0.30%
Other Expenses/+/ 0.67% 0.60% 2.74% 2.43%
Total Fund Operating 1.27% 1.20% 3.19% 2.73%
Expenses*/+/
</TABLE>
/+/ The funds have estimated their "Other Expenses" and "Total Expenses"
for the fiscal year ended 12/31/99.
* Actual Fees and Expenses The funds expect the ratios stated in
the table above to be higher than the expenses you will actually pay
as an investor in the funds. Due to certain expense limits by the
adviser and expense offsets, investors in the fund actually paid the
total operating expenses listed in the table below. Each fund expects
its fee waiver/expense reimbursement arrangement to remain in effect
for the current fiscal year; however, the adviser, at its option, may
end such arrangements at any time.
<TABLE>
<CAPTION>
Enhanced Defensive Master Fixed Short-Term
Equity Fund Equity Fund Income Fund Gov't Fund
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Actual Expenses 0.99% 0.99% 0.80% 0.60%
---------------
</TABLE>
EXAMPLE
- -------
This example can help you to compare the cost of investing in a fund to the
cost of investing in other mutual funds. The example assumes you invest
$10,000 in the fund for the periods shown and then redeem all of your
shares at the end of those periods. The example also assumes that you
earned a 5% return on your investment each year and that you paid the total
expenses stated above (which do not reflect any expense limitations)
throughout the period of your investment. Although your actual costs may be
higher or lower, based on these assumptions your costs would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Enhanced Equity Fund $129 $403 $697 $1,534
Defensive Equity Fund $122 $381 $660 $1,455
Master Fixed Income Fund $322 $984 $1,670 $3,496
</TABLE>
<PAGE>
Short-Term Government Fund $276 $846 $1,443 $3,057
--------------------------
<PAGE>
- --------------------------------------------------------------------------------
INVESTING WITH THE UAM FUNDS
BUYING SHARES
- --------------------------------------------------------------------------------
TO OPEN AN ACCOUNT TO BUY MORE SHARES
-------------------------------------------------------------
By Mail Send a check or Send a check and, if
money order and possible, the "Invest
your account by Mail" stub that
application to the accompanied your
UAM Funds. Make statement to the UAM
checks payable to Funds. Be sure your
"UAM Funds" (the check identifies
UAM Funds will not clearly your name,
accept third-party account number and
checks). the UAM Fund into
which you want to
invest.
-------------------------------------------------------------
By Wire Call the UAM Funds Call the UAM Funds to
for an account get a wire control
number and wire number and wire your
control number and money to the UAM
then send your Funds.
completed account
application to the
UAM Funds.
Wiring Instructions
United Missouri Bank
ABA # 101000695
UAM Funds
DDA Acct. # 9870964163
Ref: portfolio name/account number/
account name/wire control number
-------------------------------------------------------------
By Automatic Not Available To set up a plan,
Investment Plan mail a completed
(Via ACH) application to the
UAM Funds. To cancel
or change a plan,
write to the UAM
Funds. Allow up to
15 days to create the
plan and 3 days to
cancel or change it.
-------------------------------------------------------------
Minimum $2,500 -- regular $100
Investments account
$500 -- IRAs
$250 -- spousal
IRAs
UAM Funds
PO Box 419081
Kansas City, MO 64141-6081
(Toll free) 1-877-UAM-LINK (826-5465)
<PAGE>
REDEEMING SHARES
- --------------------------------------------------------------------------------
By Mail Send a letter signed by all registered
parties on the account to the UAM Funds
specifying:
. The UAM Fund.
. The account number.
. The dollar amount or number of shares you
wish to redeem.
Certain shareholders may have to include
additional documents. Please see the
Statement of Additional Information (SAI)
if you need more information.
----------------------------------------------------------
By Telephone You must first establish the telephone
redemption privilege (and, if desired,
the wire redemption privilege) by
completing the appropriate sections of
the account application.
Call 1-877-UAM-Link (862-5465) to redeem
your shares. Based on your instructions,
the UAM Funds will mail your proceeds to
you or wire them to your bank.
----------------------------------------------------------
By If your account balance is at least
Systematic $10,000, you may transfer as little as
Withdrawal $100 per month from your UAM account to
Plan (Via your financial institution.
ACH)
To participate in this service, you must
complete the appropriate sections of the
account application and mail it to the
UAM Funds.
EXCHANGING SHARES
- --------------------------------------------------------------------------------
At no charge, you may exchange shares of one UAM Fund for shares of the same
class of any other UAM Fund by writing to or calling the UAM Funds. Before
exchanging your shares, read the prospectus of the UAM Fund for which you
want to exchange, which you may obtain from the UAM Funds. You may not
exchange shares represented by certificates over the telephone. You may only
exchange shares between accounts with identical registrations (i.e., the same
names and addresses).
TRANSACTION POLICIES
--------------------
CALCULATING YOUR SHARE PRICE
You may buy, sell or exchange shares of a UAM Fund at a price equal to its net
asset value (NAV) next computed after it receives your order. The funds
calculate their NAVs as of the close of trading on the New York Stock
Exchange (NYSE) (generally 4:00 p.m. Eastern Time) on each day the NYSE is
open. Therefore, to receive the NAV on any given day, the UAM Funds must
accept your order by the close of trading on the NYSE that day. Otherwise,
you will receive the NAV that is calculated on the close of trading on the
following day. The UAM Funds are open for business on the same days as the
NYSE, which is closed on weekends and certain holidays.
Securities that are traded on foreign exchanges may trade on days when a fund
does not calculate its NAV. Consequently, the value of the funds may change
on days when you are unable to purchase or redeem shares of the funds.
<PAGE>
BUYING OR SELLING SHARES THROUGH A FINANCIAL INTERMEDIARY
You may buy, exchange or redeem shares of the UAM Funds through a financial
intermediary (such as a financial planner or adviser). Generally, to buy
or sell shares at the NAV on any given day, your financial intermediary
must receive your order by the close of trading on the NYSE that day.
Your financial intermediary is responsible for transmitting all
subscription and redemption requests, investment information,
documentation and money to the UAM Funds on time.
Certain financial intermediaries have agreements with the UAM Funds that
allow them to enter confirmed purchase or redemption orders on behalf of
clients and customers. Under this arrangement, the financial intermediary
must send your payment to the UAM Funds by the time they price their shares
on the following day. If your financial intermediary fails to do so, it may
be responsible for any resulting fees or losses.
CALCULATING NAV
The UAM Funds calculate their NAV by adding the total value of their assets,
subtracting their liabilities and then dividing the result by the number
of shares outstanding. The UAM Funds value their investments with
readily available market quotations at market value. Investments that do
not have readily available market quotations are valued at fair value,
according to guidelines established by the UAM Funds. The UAM Funds may
also value securities at fair value when events occur that make
established valuation methods (such as stock exchange closing prices)
unreliable. The UAM Funds value debt securities that will mature in 60
days or less at amortized cost, which approximates market value.
IN-KIND TRANSACTIONS
Under certain conditions and at the UAM Funds' discretion, you may pay for
shares of a UAM Fund with securities instead of cash. In addition, the
UAM Funds may pay all or part of your redemption proceeds with
securities instead of cash.
PAYMENT OF REDEMPTION PROCEEDS
The UAM Funds will pay for all shares redeemed within seven days after they
receive a redemption request in proper order. If you redeem shares that
were purchased by check, you will not receive your redemption proceeds
until the check has cleared, which may take up to 15 days from purchase
date. You may avoid these delays by paying for shares with a certified
check, bank check or money order.
SIGNATURE GUARANTEE
You must have your signature guaranteed when (1) you want the proceeds from
your redemption sent to a person or address different from that registered
on the account, or (2) you request a transfer of your shares.
You may obtain a signature guarantee from most banks, savings institutions,
securities dealers, national securities exchanges, registered securities
associations, clearing agencies and other guarantor institutions. A notary
public cannot guarantee a signature.
TELEPHONE TRANSACTIONS
The UAM Funds will employ reasonable procedures to confirm that instructions
communicated by telephone are genuine; they may be liable for any losses if
they fail to do so. The UAM Funds will not be responsible for any loss,
liability, cost or expense for following instructions received by telephone
that it reasonably believes to be genuine.
RIGHTS RESERVED BY THE UAM FUNDS
PURCHASES
---------
At any time and without notice, the UAM Funds may:
<PAGE>
. Stop offering their shares.
. Reject any purchase order.
. Bar an investor engaged in a pattern of excessive trading from buying
shares. (Excessive trading can hurt the performance of the UAM Funds by
disrupting their management and by increasing their expenses.)
REDEMPTIONS
At any time, the UAM Funds may change or eliminate any of the redemption
methods described above, except redemption by mail. The UAM Funds may
suspend your right to redeem if:
. Trading on the NYSE is restricted.
. The SEC allows the UAM Funds to delay redemptions.
<PAGE>
EXCHANGES
The UAM Funds may:
. Modify or cancel the exchange program at any time on 60 days' written
notice to shareholders.
. Reject any request for an exchange.
. Limit or cancel a shareholder's exchange privilege, especially when an
investor is engaged in a pattern of excessive trading.
<PAGE>
ACCOUNT POLICIES
SMALL ACCOUNTS
- --------------------------------------------------------------------------------
The UAM Funds may redeem your shares without your permission if the value
of your account falls below 50% of the required minimum initial investment.
This provision does not apply:
. To retirement accounts and certain other accounts.
. When the value of your account falls because of market fluctuations
and not your redemptions.
The UAM Funds will notify you before liquidating your account and allow you
60 days to increase the value of your account.
DISTRIBUTIONS
- --------------------------------------------------------------------------------
Normally, the Enhanced Equity and Defensive Equity Funds distribute their
net investment income quarterly. The Master Fixed Income and Short-Term
Government Funds accrue dividends daily and pay them monthly to
shareholders. In addition, the funds distribute their net capital gains
once a year. The UAM Funds will automatically reinvest dividends and
distributions in additional shares of the fund, unless you elect on your
account application to receive them in cash.
FEDERAL TAXES
The following is a summary of the federal income tax consequences of
investing in these funds. You may also have to pay state and local taxes on
your investment. You should always consult your tax advisor for specific
guidance regarding the tax effect of your investment in the UAM Funds.
TAXES ON DISTRIBUTIONS
The distributions of the funds will generally be taxable to shareholders as
ordinary income or capital gains (which may be taxable at different rates
depending on the length of time the fund held the relevant assets). You
will be subject to income tax on these distributions regardless of whether
they are paid in cash or reinvested in additional shares. Once a year UAM
Funds will send you a statement showing the types and total amount of
distributions you received during the previous year.
You should note that if you purchase shares just before a distribution, the
purchase price would reflect the amount of the upcoming distribution. In
this case, you would be taxed on the entire amount of the distribution
received, even though, as an economic matter, the distribution simply
constitutes a return of your investment. This is known as "buying into a
dividend" and should be avoided.
TAXES ON EXCHANGES AND REDEMPTIONS
When you redeem or exchange shares in any UAM Fund, you may recognize a gain
or loss for income tax purposes. This gain or loss will be based on the
difference between your tax basis in the shares and the amount you receive
for them. (To aid in computing your tax basis, you generally should retain
your account statements for the periods during which you held shares.) Any
loss realized on shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain dividends that
were received with respect to the shares.
The one major exception to these tax principles is that distributions on,
and sales, exchanges and redemptions of, shares held in an IRA (or other
tax-qualified plan) will not be currently taxable, but they may be taxable
at some time in the future.
To the extent a UAM Fund invests in foreign securities, it may be subject to
foreign withholding taxes with respect to dividends or interest the fund
received from sources in foreign countries. The UAM Funds may elect to
treat some of those taxes as a distribution to shareholders, which would
allow shareholders to offset
<PAGE>
some of their U.S. federal income tax.
BACKUP WITHHOLDING
By law, the UAM Funds must withhold 31% of your distributions and proceeds
if you have not provided complete, correct taxpayer information.
<PAGE>
FUND DETAILS
PRINCIPAL INVESTMENTS AND RISKS OF THE FUNDS
This section briefly describes the principal investment strategies the funds
may employ in seeking their objectives. For more information concerning these
investment practices and their associated risks, please read the "PORTFOLIO
SUMMARY" and the statement of additional information (SAI). You can find
information on each fund's recent strategies and holdings in the annual
report. Each fund may change these strategies without shareholder approval.
ENHANCED EQUITY AND DEFENSIVE EQUITY FUNDS
ENHANCED EQUITY FUND
The Equity Fund normally invests at least 65% of its total assets in equity
securities of corporations whose securities are traded in the U.S. The fund
also selectively uses options and futures to maintain full exposure to the
markets. The fund usually invests in medium to large companies (typically
companies with market capitalizations over $2 billion). The fund selects
equity securities using the proprietary investment process of the adviser
described below.
DEFENSIVE EQUITY FUND
Through its proprietary investment process, the adviser attempts to create a
well-diversified and significantly hedged portfolio by investing in a
combination of stocks, debt securities and options. Typically, the fund
invests at least 65% of its total assets, and at least 80% of its total assets
(taken at current value) excluding cash, cash equivalents and U.S. government
securities, in equity securities.
The fund uses futures and options to hedge the values of its investments
against changes resulting from market conditions. The adviser bases its
hedging decisions on estimates of the fair value and expected contribution
made by the position to the overall expected return of the portfolio.
The fund expects to obtain total return from the following sources:
. Net realized capital gains and changes in unrealized capital appreciation,
if any.
. Dividends and interest income received from investments of the fund.
. Net profits from futures and options.
INVESTMENT PROCESS
The adviser uses a system that it believes can assemble a portfolio of
securities that is style and sector neutral and consistently outperforms
traditional strategies that focus on a single style, such as value or growth.
The adviser begins the stock selection process by using a proprietary system
to rank stocks according to their one month expected return. The adviser's
system is based on a sophisticated mathematical model with variables that
cover multiple dimensions of a stock's true value, such as its momentum,
company fundamentals, liquidity and risk.
Based on its rankings, the adviser then uses an optimization process to select
securities that will:
. Maximize expected returns of the fund
. Minimize expected volatility.
. Diversify the assets of the fund among the various industries, sectors, and
individual securities.
<PAGE>
The adviser also monitors the stocks held by the fund on a real-time basis
using its proprietary portfolio management system for developments in terms of
news events (such as lawsuits or takeover bids) and significant changes in
fundamental factors. The adviser trades securities only when it believes the
incremental return exceeds the associated transaction costs.
EQUITY SECURITIES
Equity securities represent an ownership interest, or the right to acquire an
ownership interest, in an issuer. Different types of equity securities provide
different voting and dividend rights and priority in case of the bankruptcy of
the issuer. Equity securities include common stocks, preferred stocks,
convertible securities, rights and warrants.
Equity securities may lose value because of factors affecting the securities
markets generally, such as adverse changes in economic conditions, the general
outlook for corporate earnings, interest rates or investor sentiment. These
circumstances may lead to long periods of poor performance, such as during a
"bear market." Equity securities may also lose value because of factors
affecting an entire industry, such as increases in production costs, or
factors directly related to that company, such as decisions made by its
management.
DERIVATIVES
The ability of a fund to achieve its objectives with derivatives depends on
the degree to which stock prices correlate with price movements in the it buys
or sells. The fund could be negatively affected if the change in market value
of its securities fails to correlate perfectly with the prices of the futures
and options it purchased or sold.
The lack of a liquid secondary market for a futures contract or option may
prevent the fund from closing its derivative positions and could adversely
impact its ability to achieve its objectives and to realize profits or limit
losses.
Since futures and options transactions involve a high degree of leverage, a
relatively small price movement in a derivative may result in an immediate
and substantial loss (as well as gain) to the fund. The fund also may lose
more than it originally invested in the derivative.
The fund attempts to moderate these risks by using derivatives only to gain
full market exposure or to hedge their investments.
MASTER FIXED INCOME AND SHORT-TERM GOVERNMENT FUNDS
MASTER FIXED INCOME FUND
Normally, The Master Fixed Income Fund invests at least 65% of its total
assets in U.S. dollar denominated investment-grade securities. Investment-
grade debt securities are debt securities that a nationally recognized
statistical rating agency, such as Moody's Investors Service or Standard &
Poor's Rating Group, has rated in its top three rating categories at the time
of purchase. The fund expects to maintain a duration consistent with the
intermediate sector of the bondmarket.
SHORT-TERM GOVERNMENT FUND
To minimize credit risk, the Short-Term Government Fund will normally invest
at least 80% of its total assets.in U.S. government securities. The fund may
invest the remainder of its assets in investment-grade debt securities. To
minimize fluctuations in market value, the fund expects to invest in debt
securities with maturities of three years or less.
INVESTMENT PROCESS
The adviser constructs each fund to match its benchmark with respect to
duration, maturity and quality. In addition, the adviser tries to add value
over the benchmark by using a disciplined quantitative approach to forecast
short-term interest rates and shifts in the yield curve of U.S. treasury
securities.
<PAGE>
DEBT SECURITIES
A debt security is an interest bearing security that corporations and
governments use to borrow money from investors. The issuer of a debt security
promises to pay interest at a stated rate, which may be variable or fixed, and
to repay the amount borrowed at maturity (dates when debt securities are due
and payable). Debt securities include securities issued by the corporations
and the U.S. government and its agencies, mortgage-backed and asset-backed
securities (securities that are backed by pools of loans or mortgages
assembled for sale to investors), commercial paper and certificates of
deposit.
The concept of duration is useful in assessing the sensitivity of an income
fund to interest rate movements, which are the main source of risk for almost
all income funds. Duration measures price volatility by estimating the change
in price of a debt security for a 1% change in its yield. For example, a
duration of five means the price of a debt security will change about 5% for
every 1% change in its yield. Thus, the higher the duration, the more
volatile the security.
The price of a debt security generally moves in the opposite direction from
interest rates (i.e., if interest rates go up the price of the bond will go
down, and vice versa). Some types of debt securities are more affected by
changes in interest rates than others. For example, changes in rates may
cause people to pay off or refinance the loans underlying mortgage-backed and
asset-backed securities earlier or later than expected, which would shorten or
lengthen the maturity of the security. This behavior can negatively affect
the performance of a fund by shortening or lengthening its average maturity
and, thus, reducing its effective duration. The unexpected timing of
mortgage-backed and asset-backed prepayments caused by changes in interest
rates may also cause the fund to reinvest its assets at lower rates, reducing
the yield of the fund.
The credit rating or financial condition of an issuer may affect the value of
a debt security. Generally, the lower the quality rating of a security, the
greater the risks that the issuer will fail to pay interest fully and return
principal in a timely manner. To compensate investors for assuming more risk,
issuers with lower credit ratings usually offer their investors higher "risk
premium" in the form of higher interest rates than they would find with a
safer security, such as a U.S. Treasury security. However, since the interest
rate is fixed on a debt security at the time it is purchased, investors
reflect changes in confidence regarding the certainty of interest and
principal by adjusting the price they are willing to pay for the security.
This will affect the yield-to-maturity of the security. If an issuer defaults
or becomes unable to honor its financial obligations, the security may lose
some or all of its value.
OTHER INVESTMENT PRACTICES AND STRATEGIES
In addition to the principal investments described above, the funds may invest
in foreign securities and may deviate from their investment strategies from
time to time. They may also employ investment practices that are not described
in this prospectus, such as repurchase agreements, when-issued and forward
commitment transactions, lending of securities, borrowing and other
techniques. For information concerning these investment practices and their
risks, you should read the SAI.
FOREIGN SECURITIES
Each fund may invest up to 20% of its total assets in foreign securities.
Foreign securities can be riskier and more volatile than domestic securities.
Adverse political and economic developments or changes in the value of foreign
currency can make it harder for a fund to sell its securities and could reduce
the value of your shares. Changes in tax and accounting standards and
difficulties obtaining information about foreign companies can negatively
affect investment decisions.
SHORT-TERM INVESTING
At times, the adviser may decide to suspend temporarily the normal investment
activities of a fund by investing up to 100% of its assets in a variety of
securities, such as U.S. government and other high quality and short-term debt
obligations. The adviser may temporarily adopt a defensive position to reduce
changes in the value of a fund's shares that may result from adverse market,
economic, political or other developments.
When the adviser pursues a temporary defensive strategy, a fund may not profit
from favorable developments that it would have otherwise profited from if it
were pursuing its normal strategies. Likewise, these strategies may prevent a
fund from achieving its stated objectives.
<PAGE>
PORTFOLIO TURNOVER
The funds may buy and sell investments relatively often because the funds may
need to adjust their holdings in response to market volatility. Such a
strategy often involves higher expenses, including brokerage commissions, and
may increase the amount of capital gains (and, in particular, short-term
gains) realized by a fund. Shareholders must pay tax on such capital gains.
YEAR 2000
Many computer programs in use today cannot distinguish the year 2000 from the
year 1900 because of the way they encode and calculate dates. Consequently,
these programs may not be able to perform necessary functions and could
disrupt the operations of the UAM Funds or financial markets in general. The
year 2000 issue affects all companies and organizations, including those that
provide services to the UAM Funds and those in which the UAM Funds invest.
The UAM Funds and their advisers, administrator, distributor and transfer agent
are taking steps they believe are reasonably necessary to address any Fund
related year 2000-related computer problems. They are actively working on
necessary changes to their own computer systems to prepare for the year 2000
and expect that their systems will be adapted before that date. They are also
requesting information on each service provider's state of readiness and
contingency plan. However, at this time the degree to which the year 2000
issue will affect the UAM Funds' investments or operations cannot be
predicted. Any negative consequences could adversely affect your investment in
the UAM Funds.
INVESTMENT MANAGEMENT
INVESTMENT ADVISER
Analytic Investors, Inc., a California corporation located at 700 South Flower
St., Suite 2400, Los Angeles, CA 90017, is the investment adviser to each of
the funds. The adviser manages and supervises the investment of each fund's
assets on a discretionary basis. The adviser, an affiliate of United Asset
Management Corporation, was founded in 1970 as one of the first independent
investment counsel firms specializing in the creation and continuous
management of optioned equity and optioned debt portfolios for fiduciaries and
other long-term investors. The adviser serves pensions and profit-sharing
plans, endowments, foundations, corporate investment portfolios, mutual
savings banks and insurance companies.
Before March 31, 1999, Pilgrim Baxter & Associates, Ltd. was the funds'
investment adviser, and Analytic Investors was the funds' sub-adviser. The
funds will pay Analytic Investors at the same rates they paid Pilgrim Baxter,
which are set forth in the table below and are expressed as a percentage of
average net assets. In addition, Analytic Investors has voluntarily agreed to
limit the total expenses of each fund to the amounts listed in the table
below. To maintain these expense limits, the adviser may waive a portion of
its management fee and/or reimburse certain expenses of the funds. Each fund
expects its fee waiver/expense reimbursement arrangement to remain in effect
for the current fiscal year; however, the adviser, at its option, may end such
arrangements at any time.
<TABLE>
<CAPTION>
SHORT-TERM
----------
ENHANCED DEFENSIVE MASTER FIXED GOVERNMENT
-------- --------- ------------ ----------
EQUITY FUND EQUITY FUND INCOME FUND FUND
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Management fees 0.60% 0.60% 0.45% 0.30%
Expenses Limit 0.99% 0.99% 0.80% 0.60%
</TABLE>
<PAGE>
PORTFOLIO MANAGERS
Listed below are the investment professionals of the adviser that form the
team primarily responsible for the day-to-day management of the funds and a
description of their business experience during the past five years.
Manager Experience
------------------------------------------------------------------------
Harindra de Silva Dr. de Silva has served as President of the
President adviser from April 1998 to present. He formerly
was Managing Director of the adviser from
October 1996 to April 1998. He initially joined
the adviser in May 1995 as Director of Research.
Concurrently, he serves as President of
Analytic/TSA Investors, Inc. from October 1997
to April 1998. Concurrently, he serves as
Director to Analytic US Market Neutral, Ltd.
from January 1999 to present. He served as
President of the Analytic Optioned Equity Fund
from April 1997 to August 1998. He served as
Principal of Analysis Group (Economic Management
Consultant) from April 1986 to March 1998;
President of AG Risk Management (Investment
Management Consultant) from May 1993 to March
1998; and President of Analytic Series Fund
from April 1997 to July 1998.
Dennis M. Bein Mr. Bein has served as Portfolio Manager of the
Portfolio Manager adviser from 1995 to present. He concurrently
served as Senior Associate, Analysis Group, Inc.
(Economic Management Consultant) from 1990 to
1998.
Greg McMurran Mr. McMurran has served as Chief Investment
Chief Investment Officer of the adviser from January 1998 to
Officer present. He formerly was Director and Portfolio
Manager from February 1996 to January 1998.
Concurrently he serves as Chief Investment
Officer of Analytic/TSA Investors, Inc. from
October 1997 to present. From October 1976 to
February 1996, Mr. McMurran was Senior Vice
President and Senior Portfolio Manager of
Analytic Investment Management.
Bob Bannon Mr. Bannon has served as Managing Director of
Managing Director the advisor from October 1996 to present. He
was Director of Research from February 1996 to
October 1996. Concurrently, he serves as
Managing Director of Analytic/TSA Investors,
Inc. from October 1997 to present. From 1995
to January 1996, Mr. Bannon was Senior Vice
President and Senior Investment Strategist of
TSA Capital Management (Investment Advisor).
Formerly, he served as a Senior Bond Strategist
with I.D.E.A., Inc. (Fixed Income Strategy
Advisor) from May 1992 to April 1995.
Scott Barker Mr. Barker has served as Portfolio Manager of
Portfolio Manager the adviser from 1995 to present. He
concurrently served as Research Analyst, Analysis
Group, Inc. (Economic Management Consultant)
from 1993 to 1998.
<PAGE>
SHAREHOLDER SERVICING ARRANGEMENTS
SHAREHOLDER SERVICING
Certain financial intermediaries (service agents) may charge their clients
account fees for buying or redeeming shares of the UAM Funds. These fees may
include transaction fees and/or service fees paid by the UAM Funds from their
assets attributable to the service agent. The UAM Funds do not pay these fees
on shares purchased directly from UAM Fund Distributors. The service agents
may provide shareholder services to their clients that are not available to a
shareholder dealing directly with the UAM Funds. Each service agent is
responsible for transmitting to its clients a schedule of any such fees and
information regarding any additional or different purchase or redemption
conditions. You should consult your service agent for information regarding
these fees and conditions.
The adviser may pay its affiliated companies for referring investors to the
funds. The adviser and its affiliates may, at their own expense, pay qualified
service providers for marketing, shareholder servicing, recordkeeping and/or
other services performed with respect to the funds.
1
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the
financial performance of the funds. The financial highlights table comes from
the financial statements of each fund and reflects the financial results for a
single fund share. The total returns in the table represent the rate that an
investor would have earned on an investment in the funds (assuming
reinvestment of all dividends and distributions). PricewaterhouseCoopers LLP
has audited the information presented below for the year ended December 31,
1998 and the financial statements of the funds. For periods before December
31, 1998 Deloitte & Touche LLP audited the information below and the financial
statements of the funds. The financial statements and the unqualified opinion
of PricewaterhouseCoopers LLP are included in the annual report of the funds,
which is available upon request.
ANALYTIC ENHANCED EQUITY FUND
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998+ 1997 1996 1995 1994
- ------------------------------ --------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 8.43 $ 7.43 $ 7.95 $ 6.04 $ 6.23
Income from Investment Operations 0.06 0.09 0.13 0.14 0.17
Net Investment Income
Net Gains or Losses on Securities (Realized and 3.07 2.12 1.69 1.98 (0.19)
Unrealized)
Total From Investment Operations 3.13 2.21 1.82 2.12 (0.02)
Less Distributions (0.07) (0.09) (0.13) (0.14) (0.17)
Dividends (From Net Investment Income)
Distributions (From Capital Gains) (0.59) (1.10) (2.20) (0.07) -
In Excess of Net Investment Income - (0.01) - - -
In Excess of Net Realized Gains - (0.01) (0.01) - -
Total Distributions (0.66) (1.21) (2.36) (0.21) (0.17)
Net Asset Value, End of Year $ 10.90 8.43 $ 7.43 $ 7.95 $ 6.04
Total Return 37.82% 29.86% 22.95% 35.36% (0.37)%
Ratios/Supplemental Data $ 33,889 $ 7,331 $ 3,519 $2,318 $ 1,511
Net Assets, End of Year (Thousands)
Ratio of Expenses to Average Net Assets 1.26% 1.00% 0.91% 0.50% 0.24%
Ratio of Net Investment Income to Average Net 0.75% 1.17% 1.53% 2.02% 3.24%
Assets
Portfolio Turnover Rate 297.36% 189.39% 179.47% 10.15% 24.75%
</TABLE>
* You can find the text for this footnote on page 24.
2
<PAGE>
ANALYTIC DEFENSIVE EQUITY FUND
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998* 1997 1996 1995 1994
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 12.41 $ 13.71 $ 12.64 $ 10.60 $ 11.40
Income from Investment Operations 0.05 0.12 0.19 0.23 0.30
Net Investment Income
Net Gains or Losses on Securities (Realized 3.05 2.49 1.78 2.04 (0.02)
and Unrealized)
Total From Investment Operations 3.10 2.61 1.97 2.27 0.28
Less Distributions (0.05) (0.12) (0.19) (0.23) (0.30)
Dividends (From Net Investment Income)
Distributions (From Capital Gains) (3.69) (3.79) (0.71) -- (0.78)
Total Distributions (3.74) (3.91) (0.90) (0.23) (1.08)
Net Asset Value, End of Year $ 11.77 $ 12.41 $ 13.71 $ 12.64 $ 10.60
Total Return 28.89% 19.11% 15.66% 21.52% 2.47%
=======================================================================================================================
Ratios/Supplemental Data $56,021 $46,286 $52,484 $42,648 $48,254
Net Assets, End of Year (Thousands)
Ratio of Expenses to Average Net Assets 1.38% 1.30% 1.23% 1.22% 1.10%
Ratio of Net Investment Income to Average 0.40% 0.75% 1.43% 1.87% 3.45%
Net Assets
Portfolio Turnover Rate 299.28% 75.41% 43.17% 32.37% 48.71%
</TABLE>
ANALYTIC MASTER FIXED INCOME FUND
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998+ 1997 1996 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $10.00 $11.62 $ 11.78 $ 10.75 $ 11.61
Income from Investment Operations 0.54 0.67 0.66 0.69 0.72
Net Investment Income
Net Gains or Losses on Securities (Realized and (0.14) 0.46 (0.01) 1.03 (0.85)
Unrealized)
Total From Investment Operations 0.40 1.13 0.65 1.72 (0.13)
Less Distributions (0.54) (0.67) (0.66) (0.69) (0.72)
Dividends (From Net Investment Income)
Distributions (From Capital Gains) (0.05) (1.98) (0.14) -- (0.01)
In Excess of Net Realized Gain -- (0.10) (0.01) -- --
Total Distributions (0.59) (2.75) (0.81) (0.69) (0.73)
Net Asset Value, End of Year $ 9.81 $10.00 $ 11.62 $ 11.78 $ 10.75
Total Return 3.80% 10.04% 5.69% 16.43% (1.04)%
====================================================================================================================
Ratios/Supplemental Data 4,954 5,712 28,926 24,868 6,155
Net Assets, End of Year (Thousands)
Ratio of Expenses to Average Net Assets 1.07% 0.90% 0.72% 0.69% 0.60%
Ratio of Net Investment Income to Average Net 5.06% 5.60% 5.66% 5.99% 7.16%
Assets
Portfolio Turnover Rate 98.26% 39.98% 21.95% 31.82% 44.30%
</TABLE>
+ You can find the text for this footnote on the next page.
3
<PAGE>
ANALYTIC SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Fiscal Year Ended December 31, 1998+ 1997 1996 1995 1994
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 9.97 $ 9.99 $10.14 $ 9.70 $ 10.19
Income from Investment Operations 0.59 0.56 0.63 0.57 0.49
Net Investment Income
Net Gains or Losses on Securities (Realized and 0.14 (0.02) (0.10) 0.44 (0.49)
Unrealized)
Total From Investment Operations 0.73 0.54 0.53 1.01 0.00
Less Distributions (0.59) (0.56) (0.67) (0.57) (0.49)
Dividends (From Net Investment Income)
In Excess of Net Investment Income (0.01) -- -- -- --
Return of Capital -- -- (0.01) -- --
Total Distributions (0.60) (0.56) (0.68) (0.57) (0.49)
Net Asset Value, End of Year $10.10 $ 9.97 $ 9.99 $ 10.14 $ 9.70
Total Return 7.10% 5.54% 5.28% 10.65% 0.00%
==================================================================================================================
Ratios/Supplemental Data $5,259 $2,978 $1,008 $27,880 $24,481
Net Assets, End of Year (Thousands)
Ratio of Expenses to Average Net Assets 0.84% 0.60% 0.56% 0.50% 0.45%
Ratio of Net Investment Income to Average Net 5.43% 5.53% 5.99% 5.76% 5.37%
Assets
Portfolio Turnover Rate 25.91% 33.50% 31.48% 10.15% 3.21%
</TABLE>
+ The information set forth in these tables for the periods prior to July 27,
1998 is the financial data of the Enhanced Equity Fund, Master Fixed Income
Fund and Short-Term Government Fund, each a series of a predecessor
company, The Analytic Series Fund, Inc. Analytic Enhanced Equity Fund,
Analytic Master Fixed Income Fund and Analytic Short-Term Government
acquired the assets and assumed the liabilities of the Enhanced Equity
Fund, Master Fixed Income Fund and Short-Term Government Fund of the
Analytic Series Fund, Inc. on July 27, 1998. The net asset value at the
beginning of each period and the changes in net asset values including the
net asset values at the end of each period through the date of
reorganization have been restated to reflect the conversion ratios on the
date of reorganization as follows: 0.61425 for the Analytic Enhanced Equity
Fund, 1.1312 for the Analytic Master Fixed Income Fund and 1.0162 for the
Analytic Short-Term Government Fund.
* The information set forth in this table for the periods prior to August 31,
1998 is the financial data of the Defensive Equity Portfolio of Analytic
Optioned Equity Fund, Inc. Analytic Defensive Equity Fund acquired the
assets and assumed the liabilities of the Defensive Equity Portfolio of
Analytic Optioned Equity Fund, Inc. on August 31, 1998. The net asset
values at the beginning of each period and the changes in net asset values
including the net asset values at the end of each period through the date
of reorganization have been restated to reflect the conversion ratio of
0.95328 on the date of reorganization for the Analytic Defensive Equity
Fund.
4
<PAGE>
PORTFOLIO CODES
The reference information below will be helpful to you when you contact the
UAM Funds to purchase or exchange shares, check daily NAVs or get additional
information.
Trading Symbol
Enhanced Equity Fund ANEEX
Defensive Equity Fund ANDEX
Master Fixed Income Fund ANFIX
Short-Term Government Fund ANSTX
<PAGE>
ANALYTIC FUNDS
For investors who want more information about the funds, the following
documents are available upon request.
ANNUAL REPORTS
The annual report of the funds provides additional information about their
investments. In the annual report, you will also find a discussion of the
market conditions and investment strategies that significantly affected the
performance of the Analytic Funds during the last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION
The SAI contains additional detailed information about the funds and is
incorporated by reference into (legally part of) this prospectus.
Investors can receive free copies of these materials, request other
information about the funds and make shareholder inquiries by writing to or
calling:
UAM FUNDS
PO BOX 419081
KANSAS CITY, MO 64141-6081
(TOLL FREE) 1-877-UAM-LINK (826-5465)
WWW.UAM.COM
For a fee, you can get the reports of the funds and SAI by writing to the
SEC's Public Reference Section, Washington, D.C. 20459-6009, or by calling
the SEC at 1-800-SEC-0330. You can get copies of this information for free
on the SEC's Internet site at http://www.sec.gov.
The funds' Investment Company Act of 1940 file number is 811-08605.
[LOGO APPEARS HERE]
<PAGE>
UAM FUNDS
PO BOX 419081
KANSAS CITY, MO 64141-6081
(TOLL FREE) 1-877-UAM-LINK (826-5465)
THE ANALYTIC FUNDS
ANALYTIC ENHANCED EQUITY FUND
ANALYTIC DEFENSIVE EQUITY FUND
ANALYTIC MASTER FIXED INCOME FUND
ANALYTIC SHORT-TERM GOVERNMENT FUND
INSTITUTIONAL CLASS SHARES
STATEMENT OF ADDITIONAL INFORMATION
APRIL 7, 1999
This Statement of Additional Information (SAI) is not a prospectus. However, you
should read it in conjunction with the Prospectus of The Analytic funds dated
April 7, 1999. You may obtain a Prospectus by contacting the UAM funds at the
address listed above.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
UAM FUNDS............................................................... 1
DEFINITIONS............................................................. 3
THE COMPANY............................................................. 3
DESCRIPTION OF PERMITTED INVESTMENTS.................................... 3
Derivatives.......................................................... 3
Illiquid Investments................................................. 6
Investment Companies................................................. 6
Repurchase Agreements................................................ 6
Restricted Securities................................................ 7
Small and Medium Capitalization Stocks............................... 7
Over-the-Counter Stocks.............................................. 7
Technology Companies................................................. 7
INVESTMENT LIMITATIONS.................................................. 7
fundamental Policies................................................. 8
Non-fundamental Policies............................................. 8
MANAGEMENT OF THE COMPANY............................................... 10
CODE OF ETHICS.......................................................... 11
PRINCIPAL HOLDERS OF SECURITIES......................................... 11
INVESTMENT ADVISORY AND OTHER SERVICES................................. 12
Investment Adviser................................................... 12
Distributor.......................................................... 15
Administrative Services.............................................. 15
Custodian............................................................ 17
Independent Public Accountant........................................ 17
BROKERAGE ALLOCATION AND OTHER PRACTICES................................ 17
Selection Of Brokers................................................. 17
Simultaneous Transactions............................................ 17
Brokerage Commissions................................................. 18
CAPITAL STOCK AND OTHER SECURITIES...................................... 18
Description of Shares and Voting Rights.............................. 18
Dividends And Capital Gains Distributions............................ 18
PURCHASE, REDEMPTION, AND PRICING OF SHARES............................. 19
Purchase Of Shares................................................... 19
Exchange Privilege................................................... 21
Transfer Of Shares................................................... 21
Valuation Of Shares.................................................. 21
PERFORMANCE CALCULATIONS................................................ 22
Total Return......................................................... 22
Comparisons.......................................................... 23
TAXES................................................................... 23
FINANCIAL STATEMENTS FINANCIAL STATEMENTS FINANCIAL STATEMENTS
FINANCIAL STATEMENTS FINANCIAL STATEMENTS FINANCIAL STATEMENTS....... 24
APPENDIX A: DESCRIPTION OF SECURITIES AND RATINGS....................... 1
MOODY'S INVESTORS SERVICE, INC....................................... 1
STANDARD & POOR'S RATINGS SERVICES................................... 3
DUFF & PHELPS CREDIT RATING CO....................................... 5
FITCH IBCA RATINGS................................................... 6
APPENDIX B - COMPARISONS................................................ 1
</TABLE>
<PAGE>
DEFINITIONS
The "Company" is UAM funds, Inc. II (formerly PBHG Advisor funds, Inc.)
The term "Adviser" means Analytic Investors, Inc., investment adviser of
the Analytic funds.
UAM is United Asset Management Corporation.
UAMFSI is UAM fund Services, Inc., the Company's administrator, transfer
agent, and shareholder-servicing agent.
UAMFDI is UAM fund Distributors, Inc., the Company's distributor.
UAMSSC is UAM fund Shareholder Servicing Center, the Company's sub-
shareholder-servicing agent.
UAM funds Complex includes UAM funds, Inc., UAM funds, Inc. II, UAM funds
Trust, UAM funds Trust II and all of their funds.
The term "funds" is used to refer to The Analytic funds as a group, while
"fund" refers to a single Analytic fund.
The terms "board" and "governing board" refer to the Company's Board of
Directors as a group, while "board member" refers to a single member of the
board.
"1933 Act" means the Securities Act of 1933, as amended.
"1940 Act" means the Investment Company Act of 1940, as amended.
All other defined terms, which are not otherwise defined in this SAI, have
the same meaning in the SAI as they do in the prospectus of The Analytic funds.
THE COMPANY
This SAI relates to the Company and each of the funds listed on the first
page of this SAI. Each fund is a separate series of the Company, which was
organized under the name "PBHG Advisor Funds, Inc." as a Maryland corporation
on January 9, 1998 and is registered as an open-end management investment
company under the 1940 Act. On April 6, 1999, the Company changed its name to
"UAM Funds, Inc. II." The Company's principal executive office is located at
One International Place, Boston, MA 02110; shareholders should direct all
correspondence to the address listed on the cover of this SAI.
The funds are diversified series of the Company. Each share of a fund
represents an equal proportionate interest in that fund. You cannot invest in a
fund without first reading the fund's Prospectus.
DESCRIPTION OF PERMITTED INVESTMENTS
DERIVATIVES
Derivatives are financial instruments whose value is based on an underlying
asset, such as a stock or a bond, or an underlying economic factor, such as an
interest rate or an index. A fund may use derivatives in an attempt to gain
full market exposure or to hedge its investments. When a fund hedges its
investments it is trying to minimize its loss by protecting them from broad
fluctuations in market prices, interest rates or foreign currency exchange
rates. Investing in derivatives for these purposes is known as "hedging." When
hedging is successful, the fund will have substantially offset any depreciation
in the value of its fund securities by the appreciation in the value of the
derivative position. Although techniques other than the sale and purchase of
derivatives could be used to control the exposure of a fund to market
fluctuations, the use of derivatives may be a more effective means of hedging
this exposure.
FUTURES
A futures contract is an agreement between two parties whereby one party is
obligated to buy and the other is obligated to sell a financial instrument at
an agreed upon price and time. The parties to a futures contract do not have to
pay for
<PAGE>
or deliver the underlying financial instrument until the delivery date. The
parties to a futures contract can hold the contract until its delivery
date, although in many cases they close the contract early by taking an
opposite position in an identical contract. The financial instrument
underlying the contract may be a stock, stock index, bond, bond index,
interest rate, foreign exchange rate or other similar instrument. A fund
will incur commission expenses in both opening and closing futures
positions.
Futures contracts are traded in the United States on commodity exchanges or
boards of trade -- known as "contract markets" -- approved for such trading
and regulated by the Commodity Futures Trading Commission, a federal
agency. These contract markets standardize the terms, including the
maturity date and underlying financial instrument, of all futures
contracts. Contract markets require both the purchaser and seller to
deposit "initial margin" with a futures broker, known as a futures
commission merchant, when they enter into the contract. Initial margin
deposits are typically equal to a percentage of the contract's value. After
they open a futures contract, the parties to the transaction must compare
the purchase price of the contract to its daily market value. If the value
of the futures contract changes in such a way that a party's position
declines, that party must make additional "variation margin" payments so
that the margin payment is adequate. On the other hand, the value of the
contract may change in such a way that there is excess margin on deposit,
possibly entitling the party that has a gain to receive all or a portion of
this amount.
A fund may take a "short position" by selling futures contracts on
securities it owns or on securities with characteristics similar to those
of securities it owns. For example, when a fund expects interest rates to
rise or securities prices to fall, it can seek to offset a decline in the
value of its holdings by selling futures contracts so that a fund is
obligated to sell the securities at a future lower price. When a fund's
short hedging position is successful, the appreciation in the value of the
futures position will offset substantially any depreciation in the value of
the holdings of the fund. On the other hand, a decline in the value of the
futures position would substantially offset any unanticipated appreciation
in the value of the holdings of the fund.
On other occasions, a fund may take a "long" position by purchasing futures
contracts. For example, when a fund expects interest rates to fall or
securities' prices to rise, it can seek to secure a better rate or price
than might later be available by purchasing a futures contract. A fund may
also buy futures contracts as a substitute for transactions in securities,
to alter the investment characteristics of fund securities or to gain or
increase its exposure to a particular securities market.
OPTIONS
An option is a contract between two parties for the purchase and sale of a
financial instrument for a specified price (known as the "strike price" or
"exercise price") at any time during the option period. Unlike a futures
contract, an option grants a right (not an obligation) to buy or sell a
financial instrument. Generally, a seller of an option can grant a buyer
two kinds of rights: a "call" (the right to buy the security) or a "put"
(the right to sell the security). Options have various types of underlying
instruments, including specific securities, indices of securities prices,
foreign currencies, interest rates and futures contracts. Options may be
traded on an exchange (exchange-traded-options) or may be customized
agreements between the parties (over-the-counter or OTC options). Like
futures, a financial intermediary, known as a clearing corporation,
financially backs exchange-traded options. However, OTC options have no
such intermediary and are subject to the risk that the counter-party will
not fulfill its obligations under the contract.
PURCHASING PUT AND CALL OPTIONS
When a fund purchases a put option, it buys the right to sell the
instrument underlying the option at a fixed strike price. In return for
this right, the fund pays the current market price for the option (known as
the "option premium"). A fund may purchase put options to offset or hedge
against a decline in the market value of its securities ("protective puts")
or to benefit from a decline in the price of securities that it does not
own. The fund would ordinarily realize a gain if, during the option period,
the value of the underlying securities decreased below the exercise price
sufficiently to cover the premium and transaction costs. However, if the
price of the underlying instrument does not fall enough to offset the cost
of purchasing the option, a put buyer would lose the premium and related
transaction costs.
Call options are similar to put options, except that the fund obtains the
right to purchase, rather than sell, the underlying instrument at the
option's strike price. A fund would normally purchase call options in
anticipation of an increase in the market value of securities it owns or
wants to buy. A fund would ordinarily realize a gain if, during the
<PAGE>
option period, the value of the underlying instrument exceeded the exercise
price plus the premium paid and related transaction costs. Otherwise, a
fund would realize either no gain or a loss on the purchase of the call
option.
The purchaser of an option may terminate its position by:
. Allowing it to expire and losing its entire premium;
. Exercising the option and either selling (in the case of a put option)
or buying (in the case of a call option) the underlying instrument at
the strike price; or
. Closing it out in the secondary market at its current price.
SELLING (WRITING) PUT AND CALL OPTIONS
When a fund writes a call option it assumes an obligation to sell specified
securities to the holder of the option at a specified price if the option
is exercised at any time before the expiration date. Similarly, when a fund
writes a put option it assumes an obligation to purchase specified
securities from the option holder at a specified price if the option is
exercised at any time before the expiration date. A fund may terminate its
position in an exchange-traded put option before exercise by buying an
option identical to the one it has written. Similarly, it may cancel an
over-the-counter option by entering into an offsetting transaction with the
counter-party to the option.
A fund could try to hedge against an increase in the value of securities it
would like to acquire by writing a put option on those securities. If
security prices rise, a fund would expect the put option to expire and the
premium it received to offset the increase in the security's value. If
security prices remain the same over time, the fund would hope to profit by
closing out the put option at a lower price. If security prices fall, a
fund may lose an amount of money equal to the difference between the value
of the security and the premium it received. Writing covered put options
may deprive a fund of the opportunity to profit from a decrease in the
market price of the securities it would like to acquire.
The characteristics of writing call options are similar to those of writing
put options, except that call writers expect to profit if prices remain the
same or fall. A fund could try to hedge against a decline in the value of
securities it already owns by writing a call option. If the price of that
security falls as expected, a fund would expect the option to expire and
the premium it received to offset the decline of the security's value.
However, a fund must be prepared to deliver the underlying instrument in
return for the strike price, which may deprive it of the opportunity to
profit from an increase in the market price of the securities it holds.
A fund is permitted only to write covered options. A fund can cover a call
option by owning, at the time of selling the option:
. The underlying security (or securities convertible into the underlying
security without additional consideration), index, interest rate,
foreign currency or futures contract.
. A call option on the same security or index with the same or lesser
exercise price.
. A call option on the same security or index with a greater exercise
price and segregating cash or liquid securities in an amount equal to
the difference between the exercise prices.
. Cash or liquid securities equal to at least the market value of the
optioned securities, interest rate, foreign currency or futures
contract.
. In the case of an index, a fund of securities that corresponds to the
index.
. A fund can cover a put option by, at the time of selling the option:
. Entering into a short position in the underlying security.
. Purchasing a put option on the same security, index, interest rate,
foreign currency or futures contract with the same or greater exercise
price.
. Purchasing a put option on the same security, index, interest rate,
foreign currency or futures contract with a lesser exercise price and
segregating cash or liquid securities equal to the difference between
the exercise prices.
. Maintaining the entire exercise price in liquid securities.
<PAGE>
OPTIONS ON SECURITIES INDICES
Options on securities indices are similar to options on securities, except
that the exercise of securities index options requires cash settlement
payments and does not involve the actual purchase or sale of securities. In
addition, securities index options are designed to reflect price
fluctuations in a group of securities or segment of the securities market
rather than price fluctuations in a single security.
OPTIONS ON FUTURES
An option on a futures contract provides the holder with the right to buy a
futures contract (in the case of a call option) or sell a futures contract
(in the case of a put option) at a fixed time and price. Upon exercise of
the option by the holder, the contract market clearing house establishes a
corresponding short position for the writer of the option (in the case of a
call option) or a corresponding long position (in the case of a put
option). If the option is exercised, the parties will be subject to the
futures contracts. In addition, the writer of an option on a futures
contract is subject to initial and variation margin requirements on the
option position. Options on futures contracts are traded on the same
contract market as the underlying futures contract.
The buyer or seller of an option on a futures contract may terminate the
option early by purchasing or selling an option of the same series (i.e.,
the same exercise price and expiration date) as the option previously
purchased or sold. The difference between the premiums paid and received
represents the trader's profit or loss on the transaction.
A fund may purchase put and call options on futures contracts instead of
selling or buying futures contracts. A fund may buy a put option on a
futures contract for the same reasons it would sell a futures contract. It
also may purchase such put options in order to hedge a long position in the
underlying futures contract. A fund may buy call options on futures
contracts for the same purpose as the actual purchase of the futures
contracts, such as in anticipation of favorable market conditions.
A fund may write a call option on a futures contract to hedge against a
decline in the prices of the instrument underlying the futures contracts.
If the price of the futures contract at expiration were below the exercise
price, the fund would retain the option premium, which would offset, in
part, any decline in the value of its fund securities.
The writing of a put option on a futures contract is similar to the
purchase of the futures contracts, except that, if market price declines,
the fund would pay more than the market price for the underlying
instrument. The premium received on the sale of the put option, less any
transaction costs, would reduce the net cost to the fund.
COMBINED POSITIONS
A fund may purchase and write options in combination with each other, or in
combination with futures or forward contracts, to adjust the risk and
return characteristics of the overall position. For example, a fund could
construct a combined position whose risk and return characteristics are
similar to selling a futures contract by purchasing a put option and
writing a call option on the same underlying instrument. Alternatively, a
fund could write a call option at one strike price and buy a call option at
a lower price to reduce the risk of the written call option in the event of
a substantial price increase. Because combined options positions involve
multiple trades, they result in higher transaction costs and may be more
difficult to open and close out.
ADDITIONAL RISKS OF DERIVATIVES
While transactions in derivatives may reduce certain risks, these
transactions themselves entail certain other risks. For example,
unanticipated changes in interest rates, securities prices or currency
exchange rates may result in a poorer overall performance of the fund than
if it had not entered into any derivatives transactions. Derivatives may
magnify a fund's gains or losses, causing it to make or lose substantially
more than it invested.
When used for hedging purposes, increases in the value of the securities a
fund holds or intends to acquire should offset any losses incurred with a
derivative. Purchasing derivatives for purposes other than hedging could
expose the fund to greater risks.
<PAGE>
CORRELATION OF PRICES
A fund's ability to hedge its securities through derivatives depends on the
degree to which price movements in the underlying index or instrument
correlate with price movements in the relevant securities. In the case of
poor correlation, the price of the securities a fund is hedging may not
move in the same amount, or even in the same direction as the hedging
instrument. The adviser will try to minimize this risk by investing only in
those contracts whose behavior it expects to resemble the fund securities
it is trying to hedge. However, if a fund's prediction of interest and
currency rates, market value, volatility or other economic factors is
incorrect, the fund may lose money, or may not make as much money as it
could have.
Derivative prices can diverge from the prices of their underlying
instruments, even if the characteristics of the underlying instruments are
very similar to the derivative. Listed below are some of the factors that
may cause such a divergence.
. Current and anticipated short-term interest rates, changes in
volatility of the underlying instrument, and the time remaining until
expiration of the contract.
. A difference between the derivatives and securities markets, including
different levels of demand, how the instruments are traded, the
imposition of daily price fluctuation limits or trading of an
instrument stops.
. Differences between the derivatives, such as different margin
requirements, different liquidity of such markets and the
participation of speculators in such markets.
. Derivatives based upon a narrower index of securities, such as those
of a particular industry group, may present greater risk than
derivatives based on a broad market index. Since narrower indices are
made up of a smaller number of securities, they are more susceptible
to rapid and extreme price fluctuations because of changes in the
value of those securities.
While currency futures and options values are expected to correlate with
exchange rates, they may not reflect other factors that affect the value of
the investments of a fund. A currency hedge, for example, should protect a
Yen-denominated security from a decline in the Yen, but will not protect a
fund against a price decline resulting from deterioration in the issuer's
creditworthiness. Because the value of a fund's foreign-denominated
investments changes in response to many factors other than exchange rates,
it may not be possible to match the amount of currency options and futures
to the value of the fund's investments precisely over time.
LACK OF LIQUIDITY
Before a futures contract or option is exercised or expires, a fund can
terminate it only by entering into a closing purchase or sale transaction.
This requires a secondary market for such instruments on the exchange where
the fund originally entered into the transaction. If there is no secondary
market for the contract, or the market is illiquid, a fund may have to
purchase or sell the instrument underlying the contract, make or receive a
cash settlement or meet ongoing variation margin requirements. The
inability to close out derivative positions could have an adverse impact on
the ability of the fund to hedge its investments and may prevent a fund
from realizing profits or limiting its losses.
Derivatives may become illiquid (i.e., difficult to sell at a desired time
and price) under a variety of market conditions. For example:
. During periods of market volatility, a commodity exchange may suspend
or limit trading in a particular derivative instrument, an entire
category of derivatives or all derivatives.
. A fund may have difficulty liquidating its existing positions or
recovering excess variation margin payments because of exchange or
clearing house equipment failures, government intervention, insolvency
of a brokerage firm or clearing house or other disruptions of normal
trading activity.
. Investors may lose interest in a particular derivative or category of
derivatives.
MANAGEMENT RISK
If the adviser incorrectly predicts stock market and interest rate trends,
a fund may lose money by investing in derivatives. For example, if a fund
were to write a call option based on its adviser's expectation that the
price of the
<PAGE>
underlying security would fall, but the price were to rise instead, the
fund could be required to sell the security upon exercise at a price below
the current market price. Similarly, if a fund were to write a put option
based on the adviser's expectation that the price of the underlying
security would rise, but the price were to fall instead, the fund could be
required to purchase the security upon exercise at a price higher than the
current market price.
MARGIN
Because of the low margin deposits required upon the opening of a
derivative position, such transactions involve an extremely high degree of
leverage. Consequently, a relatively small price movement in a derivative
may result in an immediate and substantial loss (as well as gain) to the
fund and it may lose more than it originally invested in the derivative.
If the price of a futures contract changes adversely, a fund may have to
sell securities at a time when it is disadvantageous to do so to meet its
minimum daily margin requirement. A fund may lose its margin deposits if a
broker with whom it has an open futures contract or related option becomes
insolvent or declares bankruptcy.
ILLIQUID INVESTMENTS
Illiquid investments are investments that cannot be sold or disposed of in
the ordinary course of business within seven (7) days at approximately the
prices at which they are valued. Under the supervision of the Board of
Directors of the Company, the Adviser determines the liquidity of each
fund's investments and, through reports from the Adviser, the Board
monitors investments in illiquid instruments. In determining the liquidity
of a fund's investments, the Adviser may consider various factors
including: (i) the frequency of trades and quotations; (ii) the number of
dealers and prospective purchasers in the marketplace; (iii) dealer
undertakings to make a market; (iv) the nature of the security (including
any demand or tender features); and (v) the nature of the marketplace for
trades (including the ability to assign or offset a fund's rights and
obligations relating to the investment). Investments currently considered
by a fund to be illiquid include repurchase agreements not entitling the
holder to payment of principal and interest within seven days, over-the-
counter options, and non-government stripped fixed-rate mortgage backed
securities. Also, the Adviser may determine that some government-stripped
fixed-rate mortgage backed securities, loans and other direct debt
instruments, and swap agreements are illiquid. However, with respect to
over-the-counter options a fund writes, all or a portion of the value of
the underlying instrument may be illiquid depending on the assets held to
cover the option and the nature and terms of any agreement a fund may have
to close out the option before expiration. In the absence of market
quotations, illiquid investments are priced at fair value as determined in
good faith by a committee appointed by the Board of Directors. If, through
a change in values, net assets or other circumstances, a fund was in a
position where more than 15% of its net assets were invested in illiquid
securities, it would seek to take appropriate steps to protect liquidity.
INVESTMENT COMPANIES
A fund may invest up to 10% of its total assets, calculated at the time of
investment, in the securities of other open-ended or closed-end investment
companies. A fund may not invest more than 5% of its total assets in the
securities of any one investment company nor may it acquire more than 3% of
the voting securities of any other investment company. The fund will
indirectly bear its proportionate share of any management fees paid by an
investment company in which it invests in addition to the management fee
paid by the fund.
REPURCHASE AGREEMENTS
In a repurchase agreement, a fund buys a security for a relatively short
period (usually not more than 7 days) and simultaneously agrees to sell it
back at a specified date and price. A fund normally uses repurchase
agreements to earn income on assets that are not invested. A fund will
require the counter-party to the agreement to deliver securities serving as
collateral for each repurchase agreement to its custodian either physically
or in book-entry form. The counter party must add to the collateral
whenever the price of the repurchase agreement rises (i.e., the borrower
"marks to the market" on a daily basis).
<PAGE>
If the seller of the security declares bankruptcy or otherwise becomes
financially unable to buy back the security, the fund's right to sell the
security may be restricted. In addition, the value of the security might
decline before the fund can sell it and the fund might incur expenses in
enforcing its rights.
RESTRICTED SECURITIES
Each fund may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified
institutional investors under Rule 144A of the Securities Act of 1933.
Under the supervision of the fund's board, the adviser determines the
liquidity of such investments by considering all relevant factors. Provided
that a dealer or institutional trading market in such securities exists,
these restricted securities are not treated as illiquid securities for
purposes of a fund's investment limitations. The price realized from the
sales of these securities could be more or less than those originally paid
by the fund or less than what may be considered the fair value of such
securities.
SMALL AND MEDIUM CAPITALIZATION STOCKS
Investments in equity securities in general are subject to market
risks that may cause their prices to fluctuate over time. In certain cases,
the Analytic Defensive Equity Fund and Analytic Enhanced Equity Fund may
invest in securities of issuers with small or medium market
capitalizations. An investment in small and medium capitalization companies
involves greater risk and price volatility than that customarily associated
with investments in larger, more established companies. This increased risk
may be due to the greater business risks of their small or medium size,
limited markets and financial resources, narrow product lines and frequent
lack of management depth. The securities of small and medium capitalization
companies are often traded in the over-the-counter market and might not be
traded in volumes typical of securities traded on a national securities
exchange. Thus, the securities of small and medium capitalization companies
are likely to be less liquid, and subject to more abrupt or erratic market
movements, than securities of larger, more established companies.
OVER-THE-COUNTER STOCKS
The Analytic Enhanced Equity Fund and the Analytic Defensive Equity
Fund may invest in over-the-counter stocks. In contrast to the securities
exchanges, the over-the-counter market is not a centralized facility which
limits trading activity to securities of companies which initially satisfy
certain defined standards. Generally, the volume of trading in an unlisted
or over-the-counter common stock is less than the volume of trading in a
listed stock. This means that the depth of market liquidity of some stocks
in which each fund invests may not be as great as that of other securities
and, if a fund were to dispose of such a stock, it might have to offer the
shares at a discount from recent prices, or sell the shares in small lots
over an extended period of time.
TECHNOLOGY COMPANIES
Each fund may invest in securities of technology companies. Such
securities have tended to be subject to greater volatility than securities
of companies that are not dependent upon or associated with technological
issues. A fund may invest in the securities of technology companies
operating in various industries. Many of these industries share common
characteristics. Therefore, an event or issue affecting one such industry
may have a significant impact on other, related industries and, thus, may
affect the value of a fund's investments in technology companies. For
example, technology companies may be strongly affected by worldwide
scientific or technological developments and their products and services
may be subject to governmental regulation or adversely affected by
governmental policies.
INVESTMENT LIMITATIONS
Whenever an investment limitation sets forth a percentage limitation on
investment or utilization of assets, such limitation shall (with the
exception of a limitation relating to borrowing) be determined immediately
after and as a result of a fund's acquisition of such security or other
asset. Accordingly, any later increase or decrease resulting from a change
in values, net assets or other circumstances will not be considered when
determining whether the investment complies with the investment limitations
of the fund.
<PAGE>
FUNDAMENTAL POLICIES
The following investment limitations are fundamental, which means a fund
cannot change them without the approval by vote of a majority of the
outstanding voting securities of the fund, as defined in the 1940 Act. No fund
may:
. Make loans except that each fund, in accordance with its investment
objective and policies, may (a) purchase debt obligations, (b) enter into
repurchase agreements and (c) lend its fund securities.
. Act as an underwriter of securities of other issuers, except as it may
be deemed to be an underwriter under the 1933 Act in connection with the
purchase and sale of fund securities.
. Purchase or sell commodities or commodity contracts, except that a
fund, in accordance with its investment objective and policies, may: (i)
invest in readily marketable securities of issuers which invest or engage
in such activities; and (ii) enter into forward contracts, futures
contracts and options thereon.
. Purchase or sell real estate, or real estate partnership interests,
except that this limitation shall not prevent a fund from investing
directly or indirectly in readily marketable securities of issuers which
can invest in real estate, institutions that issue mortgages, or real
estate investment trusts which deal with real estate or interests
therein.
. Issue senior securities (as defined in the 1940 Act) except as
permitted in connection with the fund's policies on borrowing and
pledging, or as permitted by rule, regulation or order of the SEC.
Purchase more than 10% of the voting securities of any one issuer or
purchase securities of any one issuer if, at the time of purchase, more than 5%
of its total assets will be invested in that issuer except up to 25% of its
assets may be invested without regard to these limits. For purposes of this
investment limitation, the term "issuer" does not include obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities and
repurchase agreements collateralized by such obligations.
Invest 25% or more of its total assets at the time of purchase in
securities of issuers (other than obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities and repurchase agreements
collateralized by such obligations) whose principal business activities are in
the same industry. For purposes of this investment limitation, state and
municipal governments and their agencies and authorities are not deemed to be
industries; utility companies will be divided according to their services (e.g.,
gas, gas transmission, electric, electric and gas, and telephone), and financial
service companies will be classified according to end use of their service
(e.g., automobile finance, bank finance, and diversified finance).
. Borrow money (other than pursuant to reverse repurchase agreements)
except for temporary or emergency purposes and then only in amounts up to
(a) 10% of the total assets of the Analytic Defense Equity Fund and (b)
15% of the total assets of the Analytic Enhanced Equity Fund, the
Analytic Master Fixed Income Fund and the Analytic Short-Term Government
Fund. The temporary borrowing will include, for example, borrowing to
facilitate the orderly sale of fund securities to accommodate substantial
redemption requests if they should occur, to facilitate the settlement of
securities transactions, and is not for investment purposes. All
borrowings in excess of 5% of a fund's total assets will be repaid before
making additional investments. The foregoing percentages will apply at
the time of each purchase of a security.
NON-FUNDAMENTAL POLICIES
In addition to the policies described above, the following limitations are
non-fundamental (i.e., the fund's governing board may change them without
shareholder approval) policies.
ALL FUNDS
As a non-fundamental investment policy, no fund may:
. Pledge more than 10% of its total assets, except that each fund may
pledge assets to the extent permitted by the
<PAGE>
1940 Act in order to (i) secure permitted borrowings or (ii) as may be
necessary in connection with the fund's use of options and futures
contracts.
. Purchase or hold the securities of an issuer if, at the time thereof,
any such purchase or holding would cause more than 15% of the fund's net
assets to be invested in illiquid securities. This limitation does not
include any Rule 144A security that has been determined by, or pursuant
to procedures established by, the board, based on trading markets for
such security, to be liquid.
. Purchase or sell puts, calls, straddles, spreads, and any combination
thereof except that a fund may, in accordance with its investment
objective and policies, write covered call options with respect to any of
its fund securities, write covered put options and enter into closing
purchase transactions with respect to such options, engage in put and
call option transactions and engage in interest rate and stock index
futures contracts and related options transactions.
. Purchase securities of open-end or closed-end investment companies,
except to the extent permitted by the 1940 Act.
. Invest in companies for the purpose of exercising control.
. With respect to the Analytic Defensive Equity Fund, the fund will not
make short sales of securities or maintain a short position, unless at
all times when a short position is open, the fund owns an equal amount of
such securities or owns securities convertible into or exchangeable for
securities, without payment of additional consideration (except upon
exercise of covered call options on such securities with a strike price
no higher than the price at which the securities were sold short or, if
higher, if the difference between the strike price and the price at which
the securities were sold short is maintained in U.S. government
securities in a segregated account with the fund's custodian or a
broker), which are at least equal in an amount to and of the same issue
as the securities sold short and such securities are not subject to
outstanding call options, and unless not more than 10% of the fund's net
assets (taken at current value) are held as collateral for such sales at
any one time.
. Purchase securities on margin, except that each fund may: (i) obtain
short-term credits as necessary for the clearance of security
transactions; and (ii) establish margin accounts as may be necessary in
connection with the fund's use of options and futures contracts.
. Invest in interests in oil, gas or other mineral leases, exploration or
development programs, except that this shall not prevent a fund from
investing in readily marketable securities of issuers that invest or
engage in oil, gas or other mineral leases, exploration or development
programs or issuers secured by interest in such activities.
. Invest more than 5% of the value of its net assets (total assets with
respect to the Analytic Defensive Equity Fund) in securities of issuers
which have a record of less than three years continuous operation,
including in such three years the operation of any predecessor company or
companies, partnership or individual proprietorship if the company whose
securities are to be purchased by the fund has come into existence as a
result of a distribution, merger, consolidation, reorganization or the
purchase of all or substantially all of the assets of such predecessor.
. Purchase or retain the securities of any issuer if, to the knowledge of
the fund, any of the officers or directors of the fund or its investment
adviser owns individually more than one-half of one percent of the
securities of such issuer and together own more than 5% of the securities
of such issuer.
ANALYTIC DEFENSIVE EQUITY FUND
The fund may not:
. Invest more than 10% of the value of its total assets in securities
restricted as to disposition under the Federal securities laws.
. Participate on a joint or a joint and several basis in any trading
account in securities.
. Sell or buy options which are not listed for trading on a national
securities exchange if, as a result, more than 5% of the fund's net
assets would be at risk in connection with all such unlisted options.
<PAGE>
. Sell any covered put stock option if, as a result, the fund would then have
more than 50% of its total assets at current value subject to being invested
upon the exercise of put options.
. Make short sales "against the box," except for the purpose of deferring
realization of gain or loss for Federal income tax purposes and/or to receive
interest on the proceeds of such sales when made in connection with
convertible securities. Such sales will not be made of securities subject to
outstanding options.
MANAGEMENT OF THE COMPANY
The business of the Company is managed by its governing board, which, in turn,
elects officers who are responsible for the day-to-day operations of the
Company and who execute policies formulated by the board. The Company pays each
board member who is not also an officer or affiliated person (independent board
member) a $150 quarterly retainer fee per active fund per quarter and a $2,000
meeting fee. In addition, each independent board member is reimbursed for
travel and other expenses incurred while attending board meetings. The $2,000
meeting fee and expense reimbursements are aggregated for all of the board
members and allocated proportionately among the funds of the UAM Companys
complex. The Company does not pay the remaining board members, each of whom are
affiliated with the Company, for their services as board members.. UAM or its
affiliates or CGFSC pay the Company's officers.
The following table lists the board members and officers of the Company and
provides information regarding their present positions, date of birth,
address, principal occupations during the past five years, aggregate
compensation received from the Company and total compensation received from
the UAM Companys complex. Those people with an asterisk beside their name are
"interested persons" of the Company as that term is defined in the 1940 Act.
<TABLE>
<CAPTION>
Position UAM
------------
Name, Address, DOB funds, Inc. Principal Occupations During the Past 5 years
- ------------------ ---------- ---------------------------------------------
<S> <C> <C>
John T. Bennett, Jr. Director President of Squam Investment Management Company, Inc. and
College Road -- RFD 3 Great Island Investment Company, Inc. since 1993, President
Meredith, NH 03253 of Bennett Management Company from 1988 to 1993.
1/26/29
Nancy J. Dunn Director Financial Officer of World Wildlife fund since 1999.
10 Garden Street Formerly, Vice President for Finance and Administration and
Cambridge, MA 02138 Treasurer of Radcliffe College from 1991 to 1999.
8/14/51
William A. Humenuk Director Executive Vice President and Chief Administrative Officer of
100 King Street West Philip Services Corp.; Director, Hofler Corp.; Formerly, a
P.O. Box 2440, LCD-1, Partner in the Philadelphia office of the law firm Dechert
Hamilton Ontario, Price & Rhoads.
Canada L8N-4J6
4/21/42
Philip D. English Director President and Chief Executive Officer of Broventure Company,
16 West Madison Street Chairman of the Board of Chektec Corporation and Cyber
Baltimore, MD 21201 Inc
8/5/48
<CAPTION>
Total
-----
Aggregate Compensation
--------- ------------
Compensation from From UAM
----------------- --------
Registrant as of funds Complex as of
---------------- -------------------
Name, Address, DOB 12/31/98** 12/31/98***
- ------------------ ---------- -----------
<S> <C> <C>
John T. Bennett, Jr.
College Road -- RFD 3
Meredith, NH 03253
1/26/29 $4,100 $40,000
Nancy J. Dunn
10 Garden Street
Cambridge, MA 02138
8/14/51 $4,100 $40,000
William A. Humenuk
100 King Street West
P.O. Box 2440, LCD-1,
Hamilton Ontario,
Canada L8N-4J6
4/21/42 $4,100 $40,000
Philip D. English
16 West Madison Street
Baltimore, MD 21201
8/5/48 $4,100 $40,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Position UAM
------------
Name, Address, DOB funds, Inc. Principal Occupations During the Past 5 years
------------------ ----------- ---------------------------------------------
<S> <C> <C>
Norton H. Reamer* Director, Chairman, Chief Executive Officer and a Director of United
One International Place President and Asset Management Corporation; Director, Partner or Trustee
Boston, MA 02110 Chairman of each of the Investment Companies of the Eaton Vance Group
3/21/35 of Mutual funds.
Peter M. Whitman, Jr.* Director President and Chief Investment Officer of Dewey Square
One Financial Center Investors Corporation since 1988; Director and Chief
Boston, MA 02111 Executive Officer of H.T. Investors, Inc., formerly a
7/1/43 subsidiary of Dewey Square.
James P. Pappas* Director President of UAM Investment Services, Inc. since March 1999;
211 Congress Street Senior Vice President of UAM Trust Company since January
Boston, Ma 02110 1996; formerly Senior Vice President of UAM Investment
2/24/53 Services, Inc. from 1996-1999; Principal of UAM fund
Distributors, Inc. since December 12, 1995; formerly a
Director and Chief Operating Officer of CS First Boston
Investment Management from 1993-1995.
William H. Park Vice President Executive Vice President and Chief Financial Officer of
One International Place United Asset Management Corporation.
Boston, MA 02110
9/19/47
Gary L. French Treasurer President of UAM fund Services, Inc. and UAM fund
211 Congress Street Distributors, Inc., formerly Vice President of Operations,
Boston, MA 02110 Development and Control of Fidelity Investments in 1995;
7/4/51 Treasurer of the Fidelity Group of Mutual funds from 1991 to
1995.
Michael E. DeFao Secretary Vice President and General Counsel of UAM fund Services,
211 Congress Street Inc. and UAM fund Distributors, Inc.; Associate Attorney of
Boston, MA 02110 Ropes & Gray (a law firm) from 1993 to 1995.
2/28/68
Robert R. Flaherty Assistant Vice President of UAM fund Services, Inc.; formerly Manager
211 Congress Street Treasurer of fund Administration and Compliance of Chase Global fund
Boston, MA 02110 Services Company from 1995 to 1996; Deloitte & Touche LLP
9/18/63 from 1985 to 1995, Senior Manager.
<CAPTION>
Total
-----
Aggregate Compensation
--------- ------------
Compensation from From UAM
----------------- ---------
Registrant as of funds Complex as of
---------------- -------------------
Name, Address, DOB 12/31/98** 12/31/98***
------------------ ---------- -----------
<S> <C> <C>
Norton H. Reamer* 0 0
One International Place
Boston, MA 02110
3/21/35
Peter M. Whitman, Jr.* 0 0
One Financial Center
Boston, MA 02111
7/1/43
James P. Pappas* 0 0
211 Congress Street
Boston, Ma 02110
2/24/53
William H. Park 0 0
One International Place
Boston, MA 02110
9/19/47
Gary L. French 0 0
211 Congress Street
Boston, MA 02110
7/4/51
Michael E. DeFao 0 0
211 Congress Street
Boston, MA 02110
2/28/68
Robert R. Flaherty 0 0
211 Congress Street
Boston, MA 02110
9/18/63
</TABLE>
** The fund has not completed its first year since its organization.
Consequently, the information provided regarding compensation reflects
payments for the period from January 1, 1999 through April 6, 1999, and
estimates of compensation for the period from April 7, 1999 through December
31, 1999.
*** Reflects total payments received from the fund Complex. As of April 6,
1999, there were 50 funds in the fund Complex.
CODE OF ETHICS
The Company has adopted a Code of Ethics that restricts to a certain extent
personal transactions by access persons of the Company and imposes certain
disclosure and reporting obligations.
PRINCIPAL HOLDERS OF SECURITIES
As of March 26, 1999, the members of the governing board and officers of the
Company as a group owned less than 1% of each fund's outstanding shares.
As of March 26, 1999, the following persons or organizations held 5% or
more of the shares of a fund:
<PAGE>
<TABLE>
<CAPTION>
Percentage of
-------------
Shares
------
Name and Address of Shareholder Owned fund
------------------------------- ----- ----
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------
Charles Schwab & Co. Inc. 51.01% Enhanced Equity
Special Custody Account
For Benef of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 8.34% Enhanced Equity
Inv Mgr for Prison Law Office
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
National Financial Services Corp. 11.42% Enhanced Equity
FBO Exclusive Benef of Our Customer
Attn: Mutual Funds
200 Liberty Street
New York, NY 10281-1003
- ---------------------------------------------------------------------------------------------------------------
SEI Trust Co. Cust 9.50% Master Fixed
IRA R/O R Borzilleri Income
Attn: Stephen Monahan
4 Landmark Square
Stamford, CT 06901-2502
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 8.19% Master Fixed
Inv Mgr For Prison Law Office Income
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 14.39% Master Fixed
FBO Mountain Grove Cemetery Assn Income
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
SEI Trust Co Cust 5.52% Master Fixed
IRA R/O Greg McMurran Income
2116 Westwood Avenue
Santa Ana, CA 92706-1924
- ---------------------------------------------------------------------------------------------------------------
Tucker Anthony, Inc. 10.57% Master Fixed
VMEP NHC Pension Income
Attn: Stephen T. Monahan
4 Landmark Square
Stanford, CT 06901-2502
- ---------------------------------------------------------------------------------------------------------------
Charles Schwab & Co., Inc. 18.16% Defensive Equity
Special Custody Account
For Benef of Customers
101 Montgomery Street
San Francisco, CA 94104-4122
- ---------------------------------------------------------------------------------------------------------------
LaSalle National Bank 9.81% Defensive Equity
METZ Banking Pension Trust
DTD July 1, 1997
c/o Mutual Funds, 18th Floor
135 S. LaSalle Street
Chicago, IL 60603-4105
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management 47.74% Short-Term
Investment Government
FBO Southern Baptist Foundation
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 14.82% Short-Term
Inv Mgr For Prison Law Office Government
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
Analytic TSA Global Asset Management, Inc. 14.38% Short-Term
FBO Mountain Crove Cemetery ASSN Government
700 S. Flower Street, Ste 2400
Los Angeles, CA 90017-4211
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
Any persons or organizations listed above as owning 25% or more of the
outstanding shares of a fund may be presumed to "control" (as that term is
defined in the 1940 Act) the fund. As a result, those persons or organizations
could have the ability to vote a majority of the shares of the fund on any
matter requiring the approval of shareholders of the fund.
INVESTMENT ADVISORY AND OTHER SERVICES
INVESTMENT ADVISER
CONTROL OF ADVISER
The Adviser is located at 700 S. Flower Street, Suite 2400, Los Angeles, CA
90017. The Adviser is a wholly-owned subsidiary of UAM and has provided
investment management services to corporations, pension and profit-sharing
plans, 401(k) and thrift plans, trusts, estates and other institutions and
individuals since 1970.
UAM is a holding company incorporated in Delaware in December 1980 for the
purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has
acquired or organized approximately 45 such affiliated firms (the "UAM
Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended
to meet the particular needs of their respective clients. Accordingly, after
acquisition by UAM, UAM Affiliated Firms continue to operate under their own
firm name and with their own leadership and individual investment philosophy
and approach. Each UAM Affiliated Firm manages its own business independently
on a day-to-day basis. Investment strategies employed and securities selected
by UAM Affiliated Firms are separately chosen by each of them. Several UAM
Affiliated Firms also act as investment advisers to separate series or funds
of the UAM funds complex.
INVESTMENT ADVISORY AGREEMENT
SERVICES PERFORMED BY ADVISER
Pursuant to each Investment Advisory Agreement (Advisory Agreements) between the
Company, on behalf of each fund, and the Adviser, the Adviser has agreed to:
<PAGE>
. Manage the investment and reinvestment of the assets of the funds.
. Continuously review, supervise and administer the investment program
of the funds.
. Determine in its discretion the securities a fund will buy or sell and
the portion of its assets such fund will hold uninvested.
LIMITATION OF LIABILITY
In the absence of (1) willful misfeasance, bad faith, or gross negligence
of the part of the Adviser in the performance of its obligations and duties
under the Advisory Agreements, (2) reckless disregard by the Adviser of its
obligations and duties under the Advisory Agreements, or (3) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation
for services, the Adviser shall not be subject to any liability whatsoever to
the fund, for any error of judgment, mistake of law or any other act or
omission in the course of, or connected with, rendering services under the
Advisory Agreements.
CONTINUING AN ADVISORY AGREEMENT
Unless sooner terminated, an Advisory Agreement shall continue for periods
of one year so long as such continuance is specifically approved at least
annually(a) by a majority of those members of the governing board of the
Company who are not parties to the Advisory Agreement or interested persons
of any such party and (b) by a majority of the governing board of the Company
or a majority of the shareholders of the fund. An Advisory Agreement may be
terminated at any time by the fund, without the payment of any penalty, by
vote of a majority of the funds' shareholders or of a majority of the
governing board on 60 days' written notice to the Adviser. The Adviser may
terminate the Advisory Agreements at any time, without the payment of any
penalty, upon 90 days' written notice to the fund. An Advisory Agreement will
automatically and immediately terminate if it is assigned.
INVESTMENT ADVISORY FEE
For its services, the Adviser receives an advisory fee calculated by
applying the annual percentage rates listed below to the average daily net
assets of the fund for the month. The Adviser's fee is paid in monthly
installments.
<TABLE>
<CAPTION>
Annual Percentage Rate
<S> <C>
Analytic Enhanced Equity Fund 0.60%
Analytic Defensive Equity Fund 0.60%
AnaAnalytic Master Fixed Income Fund 0.45%
Analytic Short-Term Government Fund 0.30%
</TABLE>
EXPENSE LIMITATION AND FEE WAIVER
The Adviser has currently agreed to waive or limit its advisory fees or
assume other expenses in an amount that operates to limit the aggregate
annual total of certain operating expenses of each Analytic fund as follows:
0.99% of the Analytic Defensive Equity Fund and the Analytic Enhanced Equity
Fund; 0.80% of the Analytic Master Fixed Income Fund; and 0.60% of the
Analytic Short-Term Government Fund. The expenses subject to such limitation
exclude: (i) interest, taxes, brokerage commissions, and other expenditures
which are capitalized in accordance with generally accepted accounting
principles; (ii) transfer agency fees; and (iii) other extraordinary expenses
not incurred in the ordinary course of a fund's business. The fee
waiver/expense reimbursement arrangement for each fund is expected to remain
in effect for the current fiscal year and can be terminated at any time at
the option of the fund. Each waiver of advisory fees or assumption of other
expenses by the Adviser is subject to a possible reimbursement by each fund
in future years if such reimbursement can be made within the foregoing annual
expense limits.
HISTORY
The Adviser was founded in 1970 as Analytic Investment Management, Inc., one
of the first independent investment counsel firms specializing in the creation
and continuous management of optioned equity and optioned debt funds for
fiduciaries and other long term investors. It is one of the oldest investment
management firms in this specialized area. In 1985 it became a wholly-owned
affiliate of United Asset Management (NYSE:UAM). UAM is an investment
management holding company, with 51 affiliated management firms, managing more
than $206
<PAGE>
billion in assets. In January 1996, Analytic Investment Management, Inc.
acquired and merged with TSA Capital Management which emphasizes U.S. and
global tactical asset allocation, currency management, quantitative equity and
fixed income management, as well as option and yield curve strategies. The
Adviser serves, among others, pension and profit-sharing plans, endowments,
foundations, corporate investment funds, mutual savings banks, and insurance
companies, for which it manages approximately $1 billion.
PHILOSOPHY
Analytic Investors utilizes state of the art quantitative investment
management techniques to deliver superior investment performance. We believe
that the use of such techniques allows us to fulfill our clients' objectives
through rational, systematic identification of market opportunities, while
minimizing the impact of human emotions which often dominate investment
decision making. The firm has based its investment decisions on quantitative
techniques for more than 25 years.
INVESTMENT PROCESS AND STYLE
ENHANCED EQUITY FUND
The Adviser believes the characteristics that drive stock prices can be
systematically identified and measured. There are five primary elements used
to determine a stock's attractiveness: 1) Relative Valuation 2) Growth
Potential 3) Historical Return Momentum 4) Liquidity 5) Risk. The valuation
process examines dozens of financial measures within these five elements. The
Adviser accepts, however, that the predictive power of each of these financial
measures has changed over time and will continue to change into the future. As
a result, the Adviser has developed a unique weighting process for each of
these financial measures which allows our approach to adapt to constantly
changing market conditions. The adaptive approach increases the weight of
those variables that have contributed most heavily to recent performance and
decreases the weight to those measures that have lost their predictive
capacity. The Enhanced Equity process commences by developing rankings for all
the companies in the Equity Universe based on the combined attractiveness of
the five elements. This requires extensive analysis and necessitates the
assistance of a computer model to simultaneously evaluate all the data for
each stock. Once the stocks are ranked, a highly diversified portfolio is
constructed by selecting that combination of stocks which represents the best
potential return while maintaining a risk profile that is similar to the
Equity Universe. In the process, our quantitative approach greatly reduces the
exposures to firm size, market style, and economic sector biases. This is
referred to as being Size Neutral, Style Neutral and Sector Neutral. The
portfolio is monitored daily, and re-balanced monthly to ensure optimum
performance. Individual security positions are limited to a maximum of a 3%
active position relative to their respective weights in the Equity Universe.
The portfolio seeks to be fully invested at all times.
DEFENSIVE EQUITY
The Analytic Defensive Equity Fund is a stock fund which combines a
quantitative approach to stock selection with a unique hedging style. As the
name suggests, the goal of the Fund is to allow shareholders to enjoy
substantial protection against a declining stock market while still allowing
for the shareholder to participate to a large degree in a rising stock market.
The core strategy of the Fund is based on a belief that there are five primary
elements that drive an individual stock's performance: 1) Relative Valuation,
2) Growth Potential, 3) Historical Return Momentum, 4) Liquidity and 5) Risk.
The valuation process examines dozens of financial measures within these five
elements. We accept, however, that the predictive power of each of these
financial measures has changed over time and will continue to change into the
future. As a result, Analytic Investors has developed a unique weighting
process for each of these financial measures which allows our approach to
adapt to constantly changing market conditions. The adaptive approach
increases the weight of those variables that have contributed most heavily to
recent performance and decreases the weight to those measures that have lost
their predictive capacity. The stock selection process commences by developing
rankings for all the companies in the Equity Universe based on the combined
attractiveness of the five elements. This requires extensive analysis and
necessitates the assistance of a computer model to simultaneously evaluate all
the data for each stock. Once the stocks are ranked, a highly diversified
portfolio is constructed by selecting that combination of stocks which
represents the best potential return while maintaining a risk profile that is
similar to the Equity Universe. Individual security positions are limited to a
maximum of a 3% active position relative to their respective weights in the
Equity Universe. Once established, this portfolio is strategically hedged to
reduce the risk to the overall portfolio when individual stocks become
excessively volatile.
<PAGE>
MASTER FIXED INCOME
The Master Fixed Income Fund is an intermediate term bond fund that seeks to
outperform other intermediate term bond funds through three sources of value:
(1) Analyzing shifts in the yield curve ; (2) Tactically increasing and
decreasing the allocation of the Fund to the corporate bond sector; and (3) )
Utilizing a unique method of creating "synthetic" corporatebonds . Analytic
believes that through careful quantitative analysis these three methods can
add value without significantly increasing the volatility of the Fund above
that of the intermediate-term bond market.
The core strategy of the fund begins with the selection of a diversified mix
of Treasuries, agencies, mortgage-related bonds, and high-grade corporate
bonds. Additional value is found in the corporate sector through the creation
of synthetic high-grade corporate instruments using Analytic's option
valuation model. The usefulness of this procedure is in its ability to make
available to the Fund a far broader array of corporate bond choices than can
typically be found in the traditional corporate bond market. This broader
array of choices offered by the creation of synthetic bonds includes (1) bonds
free from the callability feature that so often adds unnecessary risk to the
use of traditional corporate bonds; (2) bonds that have a level of credit
quality that can be higher or lower than the credit quality of existing
corporate bonds; (3) bonds associated with corporations that don't typically
offer corporate bonds. The Fund varies exposure to the synthetic bond market
depending on the availability of mispriced offerings, as identified by
Analytic's real-time, proprietary valuation approach. Finally, the Fund uses a
sophisticated approach to assess the shape of the yield curve and to find
arbitrage opportunities to provide additional value.
Short-Term Government
The Short-Term Government Fund is, a fixed income fund that invests primarily
in high-grade debt instruments of short maturities, three years or less. While
the Fund invests more than half its assets in US Treasury and Agency
securities, the portfolio management team enhances performances through three
sources of value: (1) Selected use of short-term corporate securities; (2) A
sophisticated approach to finding and exploiting yield curve arbitrage
opportunities; and (3) Tactical investments in short-term interest rate
differentials between major global economies.
DISTRIBUTOR
UAMFDI serves as the Company's distributor. The Company offers its shares
continuously. While UAMFDI will use its best efforts to sell shares of the
Company, it is not obligated to sell any particular amount of shares. UAMFDI
receives no compensation for its services. UAMFDI, an affiliate of UAM, is
located at 211 Congress Street, Boston, Massachusetts 02110.
ADMINISTRATIVE SERVICES
ADMINISTRATOR
Pursuant to a fund Administration Agreement with the Company, UAMFSI
manages, administers and conducts the general business activities of the
Company. As a part of its responsibilities, UAMFSI provides and oversees the
provision by various third parties of administrative, fund accounting,
dividend disbursing and transfer agent services for the Company. UAMFSI, an
affiliate of UAM, has its principal office at 211 Congress Street, Boston,
Massachusetts 02110.
UAMFSI will bear all expenses in connection with the performance of its
services under the fund Administration Agreement. Other expenses to be
incurred in the operation of the Company will be borne by the Company or other
parties, including
. Taxes, interest, brokerage fees and commissions.
. Salaries and fees of officers and members of the board who are not
officers, directors, shareholders or employees of an affiliate of UAM,
including UAMFSI, UAMFDI or the Adviser.
. SEC fees and states Blue-Sky fees.
. EDGAR filing fees.
. Processing services and related fees.
<PAGE>
. Advisory and administration fees.
. Charges and expenses of pricing and data services, independent public
accountants and custodians.
. Insurance premiums including fidelity bond premiums.
. Outside legal expenses.
. Costs of maintenance of corporate existence.
. Typesetting and printing of prospectuses for regulatory purposes and for
distribution to current shareholders of the Company.
. Printing and production costs of shareholders' reports and corporate
meetings.
. Cost and expenses of Company stationery and forms.
. Costs of special telephone and data lines and devices.
. Trade association dues and expenses.
. Any extraordinary expenses and other customary Company expenses.
. Unless sooner terminated, the fund Administration Agreement shall
continue in effect from year to year provided the board specifically
approves such continuance at least annually. The board or UAMFSI may
terminate the fund Administration Agreement, without penalty, on not less
than ninety (90) days' written notice. The fund Administration Agreement
shall automatically terminate upon its assignment by UAMFSI without the
prior written consent of the Company.
. UAMFSI will from time to time employ or associate with such person or
persons as may be fit to assist them in the performance of the fund
Administration Agreement. Such person or persons may be officers and
employees who are employed by both UAMFSI and the Company. UAMFSI will pay
such person or persons for such employment. The Company will not incur any
obligations with respect to such persons.
SUB-ADMINISTRATOR
UAMFSI has subcontracted some of the its administrative and fund accounting
services to SEI Investments Mutual funds Services (formerly SEI fund Resources)
under a Mutual funds Service Agreement dated April 6, 1999. SEI is located at
One Freedom Valley Road Oaks, PA 19456.
SUB-TRANSFER AGENT AND SUB-SHAREHOLDER SERVICING AGENT
UAMFSI has subcontracted its transfer agent and dividend-disbursing agent
services to DST Systems, Inc. under an Agency Agreement between UAMFSI and DST
Systems Inc. DST Systems, Inc., is located at P.O. Box 419534, Kansas City,
Missouri 64141-6534.
UAMSSC serves as sub-shareholder servicing agent for the Company under an
agreement between UAMSSC and UAMFSI. The principal place of business of UAMSSC
is 825 Duportail Road, Wayne, Pennsylvania 19087.
ADMINISTRATIVE FEES
In exchange for administrative services, the fund pays a five-part fee to
UAMFSI as follows:
1. An annual base fee calculated at the annual rate equal to $14,500 for the
first operational class and $3,000 for each additional class.
2. A fund specific fee to UAMFSI calculated from the aggregate net assets of
each fund at the following rates:
ANNUAL RATE
-----------
Analytic Enhanced Equity Fund 0.04%
<PAGE>
<TABLE>
<S> <C>
Analytic Defensive Equity Fund 0.06%
Analytic Master Fixed Income Fund 0.04%
Analytic Short-Term Government Fund 0.04%
</TABLE>
3. An annual base fee that UAMFSI pays to SEI Investments Mutual funds
Services for its sub-administration and other services calculated at the
annual rate of $35,500 for the first operational class; $5,000 for each
additional operational class; and 0.03% of their pro rata share of the
combined assets of the funds.
4. An annual base fee that UAMFSI pays to DST Systems, Inc. for its
services as transfer agent and dividend-disbursing agent equal to $10,500
for the first operational class and $10,500 for each additional class.
5. An annual base fee that UAMFSI pays to UAMSSC for its services as sub-
shareholder-servicing agent equal to $7,500 for the first operational class
and $2,500 for each additional class.
The fund also pays certain account and transaction fees and out-of-pocket
expenses that may be based on the number of open and closed accounts, the type
of account or the services provided to the account.
SHAREHOLDER SERVICING ARRANGEMENTS
UAM and any of its affiliates may, at its own expense, compensate a Service
Agent or other person for marketing, shareholder servicing, record-keeping
and/or other services performed with respect to the Company, a fund or any
class of shares of a fund. The person making such payments may do so out of
its revenues, its profits or any other source available to it. Such service
arrangements, when in effect, are made generally available to all qualified
service providers. The Adviser may also compensate its affiliated companies
for referring investors to the funds.
CUSTODIAN
First Union National Bank (successor to CoreStates Bank, N.A.) 530 Walnut
Street Philadelphia, PA 19106, provides for the custody of the Company's assets
pursuant to the terms of a custodian agreement with the Company.
INDEPENDENT PUBLIC ACCOUNTANT
PricewaterhouseCoopers LLP, 2400 Eleven Penn Center, Philadelphia,
Pennsylvania 19103, serves as independent accountant for the Company.
BROKERAGE ALLOCATION AND OTHER PRACTICES
SELECTION OF BROKERS
The Advisory Agreements authorize the Adviser to select the brokers or dealers
that will execute the purchases and sales of investment securities for a fund.
The Advisory Agreement also directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for a fund. The
Adviser may select brokers based on research, statistical and pricing services
they provide to the Adviser. Information and research provided by a broker will
be in addition to, and not instead of, the services the Adviser is required to
perform under the Advisory Agreement. In so doing, a fund may pay higher
commission rates than the lowest rate available when the Adviser believes it is
reasonable to do so in light of the value of the research, statistical, and
pricing services provided by the broker effecting the transaction. The Adviser
may place fund orders with qualified broker-dealers who refer clients to the
Adviser.
It is not the practice of the Company to allocate brokerage or effect
principal transactions with dealers based on sales of shares that a broker-
dealer firm makes. However, the Company may place trades with qualified broker-
dealers who recommend the Company or who act as agents in the purchase of
Company shares for their clients.
SIMULTANEOUS TRANSACTIONS
The Adviser makes investment decisions for a fund independently of decisions
made for its other clients. When a security is suitable for the investment
objective of more than one client, it may be prudent for the Adviser to engage
in a simultaneous transaction, that is, buy or sell the same security for more
than one client. The Adviser strives to allocate such transactions among its
clients, including the funds, in a fair and reasonable manner. Although there
is no specified formula for allocating such transactions, the Company's
governing board periodically reviews the various allocation methods used by
the Adviser, and the results of such allocations.
<PAGE>
BROKERAGE COMMISSIONS
EQUITY SECURITIES
Generally, equity securities are bought and sold through brokerage
transactions for which commissions are payable. Purchases from underwriters
will include the underwriting commission or concession, and purchases from
dealers serving as market makers will include a dealer's mark-up or reflect a
dealer's mark-down.
DEBT SECURITIES
Debt securities are usually bought and sold directly from the issuer or an
underwriter or market maker for the securities. Generally, each fund will not
pay brokerage commissions for such purchases. When a debt security is bought
from an underwriter, the purchase price will usually include an underwriting
commission or concession. The purchase price for securities bought from dealers
serving as market makers will similarly include the dealer's mark up or reflect
a dealer's mark down. When a fund executes transactions in the over-the-counter
market, it will deal with primary market makers unless prices that are more
favorable are otherwise obtainable.
CAPITAL STOCK AND OTHER SECURITIES
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Company's Articles of Incorporation, as amended, provide that: (i) all
consideration received by the Company for shares of any fund and all assets in
which such consideration is invested would belong to that fund and would be
subject to the liabilities related thereto; (ii) each share of stock shall
entitle the holder thereof to one vote for each dollar (and each fractional
dollar thereof) of net asset value (number of shares owned times net asset value
per share) of shares of stock outstanding in such holder's name on the books of
the Company, and all shares of stock shall be voted in the aggregate; provided,
however, that to the extent series voting is required by the 1940 Act or
Maryland law, or otherwise directed by the board, as to any such matter, shares
of stock shall be voted by series; (iii) in the event of the liquidation or
dissolution of any series of stock of the Company, stockholders of such series
shall be entitled to receive out of the assets of such series available for
distribution to stockholders the assets belonging to such series; and the assets
so distributable to the stockholders of such series shall be distributed among
such stockholders in proportion to the number of shares of such series held by
them and recorded on the books of the Company; and (iv) no holder of shares of
stock of the Company shall, as such holders, have any preemptive rights to
purchase or subscribe for any additional shares of stock of the Company or any
other security of the Company.
The Company will not hold annual meetings except when required to by the 1940
Act or other applicable law.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Company tries to distribute substantially all of the net investment income
of a fund and net realized capital gains so as to avoid income taxes on its
dividends and distributions and the imposition of the federal excise tax on
undistributed income and capital gains. However, the Company cannot predict the
timing or amount of any such dividends or distributions.
Distributions by a fund reduce its net asset value ("NAV"). A distribution
that reduces the NAV of a fund below its cost basis may be taxable, although
from an investment standpoint, it is a return of capital. If you buy shares of a
fund on or before the "record date" - the date that establishes which
shareholders will receive an upcoming distribution - for a distribution, you
will receive some of the money you invested as a taxable distribution.
Unless the shareholder elects otherwise in writing, all dividend and capital
gains distributions are automatically received in additional shares of a fund at
net asset value (as of the business day following the record date). This will
remain in effect until the Company is notified by the shareholder in writing at
least three days prior to the record date that either the Income Option (income
dividends in cash and capital gains distributions in additional shares at net
asset value) or the Cash Option (both income dividends and capital gains
distributions in cash) has been elected. An account statement is sent to
shareholders whenever an income dividend or capital gains distribution is paid.
Each fund will be treated as a separate entity (and hence as a separate
"regulated investment company") for federal tax purposes. Each fund will
distribute its net capital gains to its investors, but will not offset (for
federal income tax purposes) such gains against any net capital losses of
another fund.
<PAGE>
PURCHASE, REDEMPTION, AND PRICING OF SHARES
PURCHASE OF SHARES
Service Agents may enter confirmed purchase orders on behalf of their
customers. If shares of a fund are purchased in this manner, the Service Agent
must receive your investment order before the close of trading on the New York
Stock Exchange ("NYSE") and transmit it to UAMSSC before the close of its
business day to receive that day's share price. UAMSSC must receive proper
payment for the order by the time the fund is priced on the following business
day. Service Agents are responsible to their customers and the Company for
timely transmission of all subscription and redemption requests, investment
information, documentation, and money.
Purchases of shares of a fund will be made in full and fractional shares of
the fund calculated to three decimal places. Certificates for fractional shares
will not be issued. Certificates for whole shares will not be issued except at
the written request of the shareholder.
The Company reserves the right in its sole discretion to reduce or waive the
minimum for initial and subsequent investment for certain fiduciary accounts
such as employee benefit plans or under circumstances where certain economies
can be achieved in sales of a fund's shares.
IN-KIND PURCHASES
If accepted by the Company, shareholders may purchase shares of a fund in
exchange for securities that are eligible for acquisition by the fund.
Securities to be exchanged that are accepted by the Company will be valued as
described under "VALUATION OF SHARES" at the next determination of net asset
value after acceptance. Shares issued by a fund in exchange for securities will
be issued at net asset value determined as of the same time. All dividends,
interest, subscription, or other rights pertaining to such securities shall
become the property of the fund and must be delivered to the Company by the
investor upon receipt from the issuer. Securities acquired through an in-kind
purchase will be acquired for investment and not for immediate resale.
The Company will not accept securities in exchange for shares of a fund
unless:
. At the time of exchange, such securities are eligible to be included in
the fund (current market quotations must be readily available for such
securities).
. The investor represents and agrees that all securities offered to be
exchanged are liquid securities and not subject to any restrictions upon
their sale by the fund under the 1933 Act, or otherwise.
. The value of any such securities (except U.S. government securities)
being exchanged together with other securities of the same issuer owned by
the fund will not exceed 5% of the net assets of the fund immediately after
the transaction.
. Investors who are subject to Federal taxation upon exchange may realize
a gain or loss for Federal income tax purposes depending upon the cost of
securities or local currency exchanged. Investors interested in such
exchanges should contact the Adviser.
REDEMPTION OF SHARES
When you redeem, your shares may be worth more or less than the price you paid
for them depending on the market value of the investments held by the fund.
BY MAIL
Requests to redeem shares must include:
. Share certificates, if issued.
. A letter of instruction or an assignment specifying the number of shares
or dollar amount to be redeemed, signed by all registered owners of the
shares in the exact names in which they are registered.
. Any required signature guarantees (see "SIGNATURE GUARANTEES").
. Any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pension and
profit sharing plans and other organizations.
<PAGE>
BY TELEPHONE
The following tasks cannot be accomplished by telephone:
. Changing the name of the commercial bank or the account designated to
receive redemption proceeds (this can be accomplished only by a written
request signed by each shareholder, with each signature guaranteed).
. Redemption of certificated shares by telephone.
The Company and its Sub-Transfer Agent will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may be
liable for any losses if they fail to do so. These procedures include requiring
the investor to provide certain personal identification at the time an account
is opened, as well as prior to effecting each transaction requested by
telephone. In addition, all telephone transaction requests will be recorded and
investors may be required to provide additional telecopied written instructions
of such transaction requests. The Company or Sub-Transfer Agent may be liable
for any losses due to unauthorized or fraudulent telephone instructions if the
Company or the Sub-Transfer Agent does not employ the procedures described
above. Neither the Company nor the Sub-Transfer Agent will be responsible for
any loss, liability, cost, or expense for following instructions received by
telephone that it reasonably believes to be genuine.
REDEMPTIONS-IN-KIND
If the governing board determines that it would be detrimental to the best
interests of remaining shareholders of the Company to make payment wholly or
partly in cash, the Company may pay redemption proceeds in whole or in part by a
distribution in-kind of liquid securities held by a fund in lieu of cash in
conformity with applicable rules of the SEC. Investors may incur brokerage
charges on the sale of fund securities received in payment of redemptions.
However, the Company has made an election with the SEC to pay in cash all
redemptions requested by any shareholder of record limited in amount during any
90-day period to the lesser of $250,000 or 1% of the net assets of the Company
at the beginning of such period. Such commitment is irrevocable without the
prior approval of the SEC. Redemptions in excess of the above limits may be paid
in whole or in part, in investment securities or in cash, as the Directors may
deem advisable; however, payment will be made wholly in cash unless the
governing board believes that economic or market conditions exist which would
make such a practice detrimental to the best interests of the Company. If
redemptions are paid in investment securities, such securities will be valued as
set forth under "Valuation of Shares." A redeeming shareholder would normally
incur brokerage expenses if these securities were converted to cash.
SIGNATURE GUARANTEES
To protect your account, the Company and its Sub-Transfer Agent from fraud,
signature guarantees are required for certain redemptions. The purpose of
signature guarantees is to verify the identity of the person who has authorized
a redemption from your account.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies, and
savings associations. A complete definition of eligible guarantor institutions
is available from the Company's Sub-Transfer Agent. Broker-dealers guaranteeing
signatures must be a member of a clearing corporation or maintain net capital of
at least $100,000. Credit unions must be authorized to issue signature
guarantees. Signature guarantees will be accepted from any eligible guarantor
institution that participates in a signature guarantee program.
The signature guarantee must appear either (1) on the written request for
redemption, (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed, or (3) on all stock
certificates tendered for redemption and, if shares held by the Company are also
being redeemed, on the letter or stock power.
OTHER REDEMPTION INFORMATION
Normally, the Company will pay for all shares redeemed under proper procedures
within one business day of and no more than seven days after the receipt of the
request, or earlier if required under applicable law. The Company may suspend
the right of redemption or postpone the date at times when both the NYSE and
Custodian Bank are closed, or under any emergency circumstances determined by
the SEC.
<PAGE>
The Company may suspend redemption privileges or postpone the date of payment:
. During any period that both the NYSE and Custodian Bank are closed, or
trading on the NYSE is restricted as determined by the Commission.
. During any period when an emergency exists as defined by the rules of
the Commission as a result of which it is not reasonably practicable for a
fund to dispose of securities owned by it, or to fairly determine the value
of its assets.
. For such other periods as the Commission may permit.
EXCHANGE PRIVILEGE
The exchange privilege is only available with respect to funds that are
qualified for sale in the shareholder's state of residence. Exchanges are based
on the respective net asset values of the shares involved. The Institutional
Class and Institutional Service Class Shares of UAM funds do not charge a sales
commission or charge of any kind.
Neither the Company nor any of its service providers will be responsible for
the authenticity of the exchange instructions received by telephone. The
governing board of the Company may restrict the exchange privilege at any time.
Such instructions may include limiting the amount or frequency of exchanges and
may be for the purpose of assuring such exchanges do not disadvantage the
Company and its shareholders.
TRANSFER OF SHARES
Shareholders may transfer shares of each fund to another person by making a
written request to the Company. Your request should clearly identify the account
and number of shares you wish to transfer. All registered owners should sign the
request and all stock certificates, if any, which are subject to the transfer.
The signature on the letter of request, the stock certificate or any stock power
must be guaranteed in the same manner as described under "Signature Guarantees."
As in the case of redemptions, the written request must be received in good
order before any transfer can be made.
VALUATION OF SHARES
The Company does not price its shares on those days when the New York Stock
Exchange is closed, which are currently: New Year's Day; Dr. Martin Luther King,
Jr. Day; Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor
Day; Thanksgiving Day; and Christmas Day.
EQUITY SECURITIES
Equity securities listed on a securities exchange for which market quotations
are readily available are valued at the last quoted sale price of the day. Price
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted equity securities and listed securities not traded
on the valuation date for which market quotations are readily available are
valued neither exceeding the asked prices nor less than the bid prices.
Quotations of foreign securities in a foreign currency are converted to U.S.
dollar equivalents. The converted value is based upon the bid price of the
foreign currency against U.S. dollars quoted by any major bank or by a broker.
DEBT SECURITIES
Debt securities are valued according to the broadest and most representative
market, which will ordinarily be the over-the-counter market. Debt securities
may be valued based on prices provided by a pricing service when such prices are
believed to reflect the fair market value of such securities. Securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost when the Board of Directors determines that amortized cost reflects fair
value.
FOREIGN SECURITIES
Foreign securities are valued on the basis of quotations from the primary
market in which they are traded and are translated from the local currency into
U.S. dollars using current exchange rates. In addition, if quotations are not
readily available, or if the values have been materially affected by events
occurring after the closing of a foreign market, assets may be valued by another
method that the board believes accurately reflects fair value.
OTHER ASSETS
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at fair
value using methods determined by the governing board.
<PAGE>
PERFORMANCE CALCULATIONS
The funds measure performance by calculating yield and total return. Both
yield and total return figures are based on historical earnings and are not
intended to indicate future performance. Performance quotations by investment
companies are subject to rules adopted by the SEC, which require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by the fund be accompanied by
certain standardized performance information computed as required by the SEC.
Current yield and average annual compounded total return quotations used by the
Company are based on the standardized methods of computing performance mandated
by the SEC. An explanation of the method used to compute or express performance
follows.
TOTAL RETURN
Total return is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A cumulative
or aggregate total return reflects actual performance over a stated period of
time. An average annual total return is a hypothetical rate of return that, if
achieved annually, would have produced the same cumulative total return if
performance had been constant over the entire period.
The average annual total return of a fund is determined by finding the average
annual compounded rates of return over 1, 5 and 10 year periods that would
equate an initial hypothetical $1,000 investment to its ending redeemable value.
The calculation assumes that all dividends and distributions are reinvested when
paid. The quotation assumes the amount was completely redeemed at the end of
each one, five and ten-year period and the deduction of all applicable fund
expenses on an annual basis.
These figures are calculated according to the following formula:
P (1 + T)/n/ = ERV
Where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of the 1, 5 or 10 year periods at the end of the 1,
5 or 10 year periods (or fractional portion thereof).
The average annual total rates of return of the funds as of December 31, 1998,
are as follows:
<TABLE>
<CAPTION>
One Year Ended Five Years Ended 10 Years Since Inception Inception Date
<S> <C> <C> <C> <C> <C>
Analytic Enhanced Equity Fund 37.82% 24.33% N/A 22.76% 6/30/93
Analytic Defensive Equity Fund 28.89% 17.21% 13.01% N/A N/A
Analytic Master Fixed Income Fund 3.80% 6.82% N/A 6.87% 6/30/93
Analytic Short-Term Government Fund 7.10% 5.66% N/A 5.53% 6/30/93
</TABLE>
YIELD
Yield refers to the income generated by an investment in a fund over a given
period of time, expressed as an annual percentage rate. Yields are calculated
according to a standard that is required for all funds. As this differs from
other accounting methods, the quoted yield may not equal the income actually
paid to shareholders.
The current yield is determined by dividing the net investment income per
share earned during a 30-day base period by the maximum offering price per share
on the last day of the period and annualizing the result. Expenses accrued for
the period include any fees charged to all shareholders during the base period.
Yield is obtained using the following formula:
<PAGE>
Yield = 2[((a-b)/(cd)+1)/6/-1]
Where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that
were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
The funds' yields and adjusted yields for the month ended February 28, 1999
were:
Yield
Analytic Master Fixed Income Fund 3.81%
Analytic Short-Term Government Fund 3.80%
COMPARISONS
The funds' performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further
described in this SAI. This information may also be included in sales
literature and advertising.
To help investors better evaluate how an investment in a fund might satisfy
their investment objective, advertisements regarding the funds may discuss
various measures of fund performance as reported by various financial
publications. Advertisements may also compare performance (as calculated
above) to performance as reported by other investments, indices and averages.
Please see Appendix B for publications, indices and averages that may be used.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the composition of investments in each fund, that
the averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by each
fund to calculate its performance. In addition, there can be no assurance that
each fund will continue this performance as compared to such other averages.
TAXES
In order for a fund to continue to qualify for federal income tax treatment
as a regulated investment company under the Internal Revenue Code of 1986, as
amended, at least 90% of its gross income for a taxable year must be derived
from qualifying income; i.e., dividends, interest, income derived from loans
of securities, and gains from the sale of securities or foreign currencies, or
other income derived with respect to its business of investing in such
securities or currencies, as applicable.
Each fund will distribute to shareholders annually any net capital gains
that have been recognized for federal income tax purposes. Shareholders will
be advised on the nature of the payments.
If for any taxable year a fund does not qualify as a "regulated investment
company" under Subchapter M of the Internal Revenue Code, all of the fund's
taxable income would be subject to tax at regular corporate rates without any
deduction for distributions to shareholders. In this event, a fund's
distributions to shareholders would be taxable as ordinary income to the
extent of the current and accumulated earnings and profits of the particular
fund, and would be eligible for the dividends received deduction in the case
of corporate shareholders. The funds intend to qualify as a "regulated
investment company" each year.
Dividends and interest received by each fund may give rise to withholding
and other taxes imposed by foreign countries. These taxes would reduce each
fund's dividends but are included in the taxable income reported on your tax
statement if each fund qualifies for this tax treatment and elects to pass it
through to you. Consult a tax adviser for more information regarding
deductions and credits for foreign taxes.
<PAGE>
EXPENSES
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Investment Investment
Advisory Fees Advisory Fees Administrator Brokerage
Paid* Waived* Fee+ Commissions
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------
Analytic Enhanced Equity Fund
-----------------------------
1998 $ 48,830 $ 66,917 $ 48,987 $ 64,668
---------------------------------------------------------------------------------------------------
1997 -0- $ 40,662 $ 21,124 $ 16,005
---------------------------------------------------------------------------------------------------
1996 $ 3,860 $ 50,426 $ 7,140 $ 24,710
- -----------------------------------------------------------------------------------------------------
Analytic Defensive Equity Fund
------------------------------
1998 $253,110 $105,594 $ 80,296 $258,118
---------------------------------------------------------------------------------------------------
1997 $389,998 -0- $115,544 $159,674
---------------------------------------------------------------------------------------------------
1996 $363,576 -0- $126,424 $149,614
- -----------------------------------------------------------------------------------------------------
Analytic Master Fixed Income Fund
---------------------------------
1998 $ 11,870 $ 10,391 $ 33,890 $ 27,405
---------------------------------------------------------------------------------------------------
1997 $ 65,462 $ 40,662 $ 55,769 $ 43,983
---------------------------------------------------------------------------------------------------
1996 $ 70,152 $ 50,426 $ 57,248 $ 27,017
---------------------------------------------------------------------------------------------------
Analytic Short-Term Government Fund
-----------------------------------
1998 $ 5,656 $ 5,012 $ 32,639 $ 2,737
---------------------------------------------------------------------------------------------------
1997 -0- $ 2,791 $ 24,891 -0-
---------------------------------------------------------------------------------------------------
1996 $ 36,314 $ 40,090 $ 54,386 -0-
---------------------------------------------------------------------------------------------------
</TABLE>
* From July 27, 1998 to December 31, 1998, Pilgrim Baxter & Associates, Ltd.
("Pilgrim Baxter") was the investment adviser to Analytic Enhanced Equity,
Master Fixed Income and Short-Term Government Funds and Analytic Investors,
Inc. was the funds' sub-adviser. During that period, any fees paid to
Analytic Investors were paid from Pilgrim Baxter advisory fees. Before July
27, 1998 Analytic Investors was to investment adviser to the funds. From
August 31, 1998 to December 31, 1998, Pilgrim Baxter was the investment
adviser to Analytic Defensive Equity Fund and Analytic Investors, Inc., was
the fund's sub-adviser. During that period, any fees paid to Analytic
Investors were paid from Pilgrim Baxter advisory fees. Before August 31,
1998 Analytic Investors was to investment adviser to the funds.
+ From July 27, 1998, to December 31, 1998 PBHG Fund Services, Inc. was the
administrator to Analytic Enhanced Equity, Master Fixed Income and Short-
Term Government Funds. From May 15, 1997 to July 27, 1998, UAM Fund
Services, Inc. was the administrator to Funds. Before May 15, 1997, Analytic
Investors was the administrator to Funds. From August 31, 1998, to December
31, 1998 PBHG Fund Services, Inc. was the administrator to Analytic
Defensive Equity Fund. From May 15, 1997 to August 31, 1998, UAM Fund
Services, Inc. was the administrator to Fund. Before May 15, 1997, Analytic
Investors was the administrator to Funds.
FINANCIAL STATEMENTS FINANCIAL STATEMENTS FINANCIAL
STATEMENTS FINANCIAL STATEMENTS FINANCIAL
STATEMENTS FINANCIAL STATEMENTS
FINANCIAL STATEMENTS
The financial statements and financial highlights for each fund for the
fiscal period ended December 31, 1998, and the report thereon by
PricewaterhouseCoopers LLP, the Company's independent accountant appear in
funds' 1998 Annual Report and are incorporated by reference into this SAI. No
other parts are incorporated by reference herein. Copies of the 1998 Annual
Report may be obtained free of charge by telephoning the Company at the
telephone number appearing on the front page of this SAI.
<PAGE>
APPENDIX A: DESCRIPTION OF SECURITIES AND RATINGS
MOODY'S INVESTORS SERVICE, INC.
PREFERRED STOCK RATINGS
aaa An issue which is rated "aaa" is considered to be a top-
quality preferred stock. This rating indicates good asset
protection and the least risk of dividend impairment within
the universe of preferred stock.
aa An issue which is rated "aa" is considered a high-grade
preferred stock. This rating indicates that there is a
reasonable assurance the earnings and asset protection will
remain relatively well maintained in the foreseeable future.
a An issue which is rated "a" is considered to be an upper-
medium grade preferred stock. While risks are judged to be
somewhat greater than in the "aaa" and "aa" classification,
earnings and asset protection are, nevertheless, expected to
be maintained at adequate levels.
baa An issue which is rated "baa" is considered to be a medium-
grade preferred stock, neither highly protected nor poorly
secured. Earnings and asset protection appear adequate at
present but may be questionable over any great length of
time.
ba An issue which is rated "ba" is considered to have
speculative elements and its future cannot be considered
well assured. Earnings and asset protection may be very
moderate and not well safeguarded during adverse periods.
Uncertainty of position characterizes preferred stocks in
this class.
b An issue which is rated "b" generally lacks the
characteristics of a desirable investment. Assurance of
dividend payments and maintenance of other terms of the
issue over any long periods of time may be small.
caa An issue which is rated "caa" is likely to be in arrears on
dividend payments. This rating designation does not purport
to indicate the future status of payments.
ca An issue which is rated "ca" is speculative in a high degree
and is likely to be in arrears on dividends with little
likelihood of eventual payments.
c This is the lowest rated class of preferred or preference
stock. Issues so rated can thus be regarded as having
extremely poor prospects of ever attaining any real
investment standing.
NOTE: Moody's applies numerical modifiers 1, 2, and 3 in each rating
classification: the modifier 1 indicates that the security ranks in the
higher end of its generic rating category; the modifier 2 indicates a mid-
range ranking and the modifier 3 indicates that the issue ranks in the lower
end of its generic rating category.
DEBT RATINGS - TAXABLE DEBT & DEPOSITS GLOBALLY
Aaa Bonds which are rated Aaa are judged to be of the best
quality. They carry the smallest degree of investment risk
and are generally referred to as "gilt-edged." Interest
payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various
protective elements are likely to change, such changes as
can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated Aa are judged to be of high quality by
all standards. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of
greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than
the Aaa securities.
A Bonds which are rated A possess many favorable investment
attributes and are to be considered as upper-medium grade
obligations. Factors giving security to principal and
interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment
sometime in the future.
A-1
<PAGE>
Baa Bonds which are rated Baa are considered as medium-grade
obligations, (i.e., they are neither highly protected nor
poorly secured). Interest payments and principal security
appear adequate for the present but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.
Ba Bonds which are rated Ba are judged to have speculative
elements; their future cannot be considered as well-assured.
Often the protection of interest and principal payments may
be very moderate, and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B Bonds which are rated B generally lack characteristics of
the desirable investment. Assurance of interest and
principal payments or of maintenance of other terms of the
contract over any long period of time may be small.
Caa Bonds which are rated Caa are of poor standing. Such issues
may be in default or there may be present elements of danger
with respect to principal or interest.
Ca Bonds which are rated Ca represent obligations which are
speculative in a high degree. Such issues are often in
default or have other marked shortcomings.
C Bonds which are rated C are the lowest rated class of bonds,
and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
NOTE: Moody's applies numerical modifiers 1, 2 and 3 in each generic rating
classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.
SHORT-TERM PRIME RATING SYSTEM - TAXABLE DEBT & DEPOSITS GLOBALLY
Moody's short-term debt ratings are opinions of the ability of issuers to
repay punctually senior debt obligations. These obligations have an original
maturity not exceeding one year, unless explicitly noted.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:
Prime-1 Issuers rated Prime-1 (or supporting institution) have a
superior ability for repayment of senior short-term debt
obligations. Prime-1 repayment ability will often be
evidenced by many of the following characteristics:
. High rates of return on funds employed.
. Conservative capitalization structure with moderate
reliance on debt and ample asset protection.
. Broad leading market positions in well-established
industries.
. margins in earnings coverage of fixed financial charges
and high internal cash generation.
. Well-established access to a range of financial markets
and assured sources of alternate liquidity.
Prime-2 Issuers rated Prime-2 (or supporting institutions) have a
strong ability for repayment of senior short-term debt
obligations. This will normally be evidenced by many of the
characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject
to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions.
Ample alternate liquidity is maintained.
Prime 3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligation. The effect of industry characteristics and
market compositions may be more pronounced. Variability in
earnings and profitability may result in changes in the
level of debt protection measurements and may require
relatively high financial leverage. Adequate alternate
liquidity is maintained.
Not Prime Issuers rated Not Prime do not fall within any of the Prime
rating categories.
A-2
<PAGE>
STANDARD & POOR'S RATINGS SERVICES
PREFERRED STOCK RATINGS
AAA This is the highest rating that may be assigned by Standard &
Poor's to a preferred stock issue and indicates an extremely
strong capacity to pay the preferred stock obligations.
AA A preferred stock issue rated AA also qualifies as a high-
quality, fixed-income security. The capacity to pay preferred
stock obligations is very strong, although not as
overwhelming as for issues rated AAA.
A An issue rated A is backed by a sound capacity to pay the
preferred stock obligations, although it is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions.
BBB An issue rated BBB is regarded as backed by an adequate
capacity to pay the preferred stock obligations. Whereas it
normally exhibits adequate protection parameters, adverse
economic conditions or changing circumstances are more likely
to lead to a weakened capacity to make payments for a
preferred stock in this category than for issues in the A
category.
BB, B, CCC Preferred stock rated BB, B, and CCC are regarded, on
balance, as predominantly speculative with respect to the
issuer's capacity to pay preferred stock obligations. BB
indicates the lowest degree of speculation and CCC the
highest. While such issues will likely have some quality and
protective characteristics, these are outweighed by large
uncertainties or major risk exposures to adverse conditions.
CC The rating CC is reserved for a preferred stock issue that is
in arrears on dividends or sinking fund payments, but that is
currently paying.
C A preferred stock rated C is a nonpaying issue.
D A preferred stock rated D is a nonpaying issue with the
issuer in default on debt instruments.
N.R. This indicates that no rating has been requested, that there
is insufficient information on which to base a rating, or
that Standard & Poor's does not rate a particular type of
obligation as a matter of policy.
Plus (+) or To provide more detailed indications of preferred stock
quality, ratings from AA to CCC may be modified by
minus (-) the addition of a plus or minus sign to show relative
standing within the major rating categories.
LONG-TERM ISSUE CREDIT RATINGS
Issue credit ratings are based, in varying degrees, on the following
considerations:
Likelihood of payment-capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;
Nature of and provisions of the obligation;
Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.
AAA An obligation rated AAA have the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its
financial commitment on the obligation is extremely strong.
AA An obligation rated AA differs from the highest-rated
obligations only in small degree. The obligor's capacity to
meet its financial commitment on the obligation is very
strong.
A An obligation rated A is somewhat more susceptible to the
adverse effects of changes in circumstances and economic
conditions than obligations in higher- rated categories.
However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.
BBB An obligation rated BBB exhibits adequate protection
parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
of the obligator to meet its financial commitment on the
obligation.
A-3
<PAGE>
Obligations rated BB, B, CCC , CC and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and
C the highest. While such obligations will likely have some quality and
protective characteristics, these may be outweighed by large uncertainties or
major risk exposures to adverse conditions.
BB An obligation rated BB is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing
uncertainties or exposures to adverse business, financial,
or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the
obligation.
B An obligation rated B is more vulnerable to nonpayment than
obligations rated BB, but the obligor currently has the
capacity to meet its financial commitment on the obligation.
Adverse business, financial, or economic conditions will
likely impair the obligor's capacity or willingness to meet
its financial commitment on the obligation.
CCC An obligation rated CCC is currently vulnerable to non-
payment, and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet
its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the
obligor is not likely to have the capacity to meet its
financial commitment on the obligations.
CC An obligation rated CC is currently highly vulnerable to
nonpayment.
C The C rating may be used to cover a situation where a
bankruptcy petition has been filed or similar action has
been taken, but payments on this obligation are being
continued.
D An obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made
on the date due even if the applicable grace period has not
expired, unless Standard & Poor's believes that such
payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition
or the taking of a similar action if payments on an
obligation are jeopardized.
PLUS (+) OR MINUS (-) The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
R This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligation linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk-such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.
SHORT-TERM ISSUE CREDIT RATINGS
Short-term ratings are generally assigned to those obligations considered
short-term in the relevant market. In the U.S., for example, that means
obligations with an original maturity of no more than 365 days - including
commercial paper. Short-term ratings are also used to indicate the
creditworthiness of an obligor with respect to put features on long-term
obligations. The result is a dual rating in which the short-term rating
addresses the put feature, in addition to the usual long-term rating. Medium-
term notes are assigned long-term ratings.
A-1 A short-term obligation rated A-1 is rated in the highest
category by Standard & Poor's. The obligor's capacity to
meet its financial commitment on the obligation is strong.
Within this category, certain obligations are designated
with a plus sign (+). This indicates that the obligor's
capacity to meet its financial commitment on these
obligations is extremely strong.
A-2 A short-term obligation rated A-2 is somewhat more
susceptible to the adverse effects of changes in
circumstances and economic conditions than obligation in
higher rating categories. However, the obligor's capacity to
meet its financial commitment on the obligation is
satisfactory.
A-3 A short-term obligation rated A-3 exhibits adequate
protection parameters. However, adverse economic conditions
or changing circumstances are more likely to lead to a
weakened capacity of the obligor to meet its financial
commitment on the obligation.
A-4
<PAGE>
B A short-term obligation rated B is regarded as having
significant speculative characteristics. The obligor
currently has the capacity to meet its financial commitment
on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate
capacity to meet its financial commitment on the obligation.
C A short-term obligation rated C is currently vulnerable to
nonpayment and is dependent upon favorable business,
financial, and economic conditions for the obligor to meet
its financial commitment on the obligation.
D A short-term obligation rated D is in payment default. The D
rating category is used when payments on an obligation are
not made on the date due even if the applicable grace period
has not expired, unless Standard & Poors' believes that such
payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition
or the taking of a similar action if payments on an
obligation are jeopardized.
DUFF & PHELPS CREDIT RATING CO.
LONG-TERM DEBT AND PREFERRED STOCK
AAA Highest credit quality. The risk factors are negligible,
being only slightly more than for risk-free U.S. Treasury
debt.
AA+/AA High credit quality. Protection factors are strong. Risk is
modest but may vary slightly from time to time because of
economic conditions.
A+/A/A- Protection factors are average but adequate. However, risk
factors are more variable in periods of greater economic
stress.
BBB+/BBB Below-average protection factors but still considered
sufficient for prudent investment. Considerable
BBB- variability in risk during economic cycles.
BB+/BB/BB- Below investment grade but deemed likely to meet obligations
when due. Present or prospective financial protection
factors fluctuate according to industry conditions. Overall
quality may move up or down frequently within this category.
B+/B/B- Below investment grade and possessing risk that obligation
will not be net when due. Financial protection factors will
fluctuate widely according to economic cycles, industry
conditions and/or company fortunes. Potential exists for
frequent changes in the rating within this category or into
a higher or lower rating grade.
CCC Well below investment-grade securities. Considerable
uncertainty exists as to timely payment of principal,
interest or preferred dividends. Protection factors are
narrow and risk can be substantial with unfavorable
economic/industry conditions, and/or with unfavorable
company developments.
DD Defaulted debt obligations. Issuer failed to meet scheduled
principal and/or interest payments. Issuer failed to meet
scheduled principal and/or interest payments.
DP Preferred stock with dividend arrearages.
SHORT-TERM DEBT
HIGH GRADE
D-1+ Highest certainty of timely payment. Short-term liquidity,
including internal operating factors and/or access to
alternative sources of funds, is outstanding, and safety is
just below risk-free U.S. Treasury short-term obligations.
D-1 Very high certainty of timely payment. Liquidity factors are
excellent and supported by good fundamental protection
factors. Risk factors are minor.
A-5
<PAGE>
D-1- High certainty of timely payment. Liquidity factors are
strong and supported by good fundamental protection factors.
Risk factors are very small.
GOOD GRADE
D-2 Good certainty of timely payment. Liquidity factors and
company fundamentals are sound. Although ongoing funding
needs may enlarge total financing requirements, access to
capital markets is good. Risk factors are small.
SATISFACTORY GRADE
D-3 Satisfactory liquidity and other protection factors qualify
issues as to investment grade. Risk factors are larger and
subject to more variation. Nevertheless, timely payment is
expected.
NON-INVESTMENT GRADE
D-4 Speculative investment characteristics. Liquidity is not
sufficient to insure against disruption in debt service.
Operating factors and market access may be subject to a high
degree of variation.
DEFAULT
D-5 Issuer failed to meet scheduled principal and/or interest
payments.
FITCH IBCA RATINGS
INTERNATIONAL LONG-TERM CREDIT RATINGS
INVESTMENT GRADE
AAA Highest credit quality. 'AAA' ratings denote the lowest
expectation of credit risk. They are assigned only in case
of exceptionally strong capacity for timely payment for
financial commitments. This capacity is highly unlikely to
be adversely affected by foreseeable events.
AA Very high credit quality. 'AA' ratings denote a very low
expectation of credit risk. They indicate very strong
capacity for timely payment of financial commitments. This
capacity is not significantly vulnerable to foreseeable
events.
A High credit quality. 'A' ratings denote a low expectation
of credit risk. The capacity for timely payment of
financial commitments is considered strong. This capacity
may, nevertheless, be more vulnerable to changes in
circumstances or in economic conditions than is the case
for higher ratings.
B Good credit quality. 'BBB' ratings indicate that there is
currently a low expectation of credit risk. The capacity
for timely payment of financial commitments is considered
adequate, but adverse changes in circumstances and in
economic conditions are more likely to impair this
capacity. This is the lowest investment-grade category.
SPECULATIVE GRADE
BB Speculative. 'BB' ratings indicate that there is a
possibility of credit risk developing, particularly as the
result of adverse economic change over time; however,
business or financial alternatives may be available to
allow financial commitments to be met. Securities rated in
this category are not investment grade.
B Highly speculative. 'B' ratings indicate that significant
credit risk is present, but a limited margin of safety
remains. Financial commitments are currently being met;
however, capacity for continued payment is contingent upon
a sustained, favorable business and economic environment.
A-6
<PAGE>
CCC,CC,C High default risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon
sustained, favorable business or economic developments. A
'CC' rating indicates that default of some kind appears
probable. 'C' ratings signal imminent default.
DDD,DD,D Default. Securities are not meeting current obligations
and are extremely speculative. 'DDD' designates the highest
potential for recovery of amounts outstanding on any
securities involved. For U.S. corporates, for example, 'DD'
indicates expected recovery of 50% - 90% of such
outstandings, and 'D' the lowest recovery potential, i.e.
below 50%.
INTERNATIONAL SHORT-TERM CREDIT RATINGS
F1 Highest credit quality. Indicates the strongest capacity
for timely payment of financial commitments; may have an
added "+" to denote any exceptionally strong credit
feature.
F2 Good credit quality. A satisfactory capacity for timely
payment of financial commitments, but the margin of safety
is not as great as in the case of the higher ratings.
F3 Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term
adverse changes could result in a reduction to non-
investment grade.
B Speculative. Minimal capacity for timely payment of
financial commitments, plus vulnerability to near-term
adverse changes in financial and economic conditions.
C High default risk. Default is a real possibility. Capacity
for meeting financial commitments is solely reliant upon a
sustained, favorable business and economic environment.
D Default. Denotes actual or imminent payment default.
NOTES
"+" or "-" may be appended to a rating to denote relative status within major
rating categories. Such suffixes are not added to the 'AAA' long-term rating
category, to categories below 'CCC', or to short-term ratings other than 'F1'.
'NR' indicates that Fitch IBCA does not rate the issuer or issue in question.
'Withdrawn': A rating is withdrawn when Fitch IBCA deems the amount of
information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.
RatingAlert: Ratings are placed on RatingAlert to notify investors that there
is a reasonable probability of a rating change and the likely direction of
such change. These are designated as "Positive", indicating a potential
upgrade, "Negative", for a potential downgrade, or "Evolving", if ratings may
be raised, lowered or maintained. RatingAlert is typically resolved over a
relatively short period.
A-7
<PAGE>
APPENDIX B - COMPARISONS
CDA Mutual Fund Report, published by CDA Investment Technologies, Inc. --
analyzes price, current yield, risk, total return and average rate of
return (average annual compounded growth rate) over specified time periods
for the mutual fund industry.
Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change, over time in
the price of goods and services in major expenditure groups.
Donoghue's Money Fund Average -- is an average of all major money market
fund yields, published weekly for 7 and 30-day yields.
Dow Jones Industrial Average - a price-weighted average of thirty blue-chip
stocks that are generally the leaders in their industry and are listed on
the New York Stock Exchange. It has been a widely followed indicator of
the stock market since October 1, 1928.
Dow Jones Industrial Average -- an unmanaged price weighted average of 30
blue-chip stocks.
Financial publications: Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times,
Global Investor, Investor's Daily, Lipper Analytical Services, Inc.,
Morningstar, Inc., New York Times, Personal Investor, Wall Street Journal
and Weisenberger Investment Companies Service -- publications that rate
fund performance over specified time periods.
Historical data supplied by the research departments of First Boston
Corporation, J.P. Morgan & Co, Inc., Salomon Smith Barney, Merrill Lynch &
Co., Inc., Lehman Brothers, Inc. and Bloomberg L.P.
IBC's Money Fund Average/All Taxable - an average of all major money market
fund yields, published weekly for 7- and 30-day yields.
IFC Investable Index - an unmanaged index maintained by the International
Finance Corporation. This index consists of 890 companies in 25 emerging
equity markets, and is designed to measure more precisely the returns
portfolio managers might receive from investment in emerging markets equity
securities by focusing on companies and markets that are legally and
practically accessible to foreign investors.
Lehman Aggregate Bond Index - an unmanaged fixed income market value-
weighted index that combines the Lehman Government/Corporate Index and the
Lehman Mortgage-Backed Securities Index, and includes treasury issues,
agency issues, corporate bond issues and mortgage backed securities. It
includes fixed rate issuers of investment grade (BBB) or higher, with
maturities of at least one year and outstanding par values of at least $200
million for U.S. government issues and $25 million for others.
Lehman Corporate Bond Index - an unmanaged indices of all publicly issues,
fixed-rate, nonconvertible investment grade domestic corporate debt. Also
included are yankee bonds, which are dollar-denominated SEC registered
public, noncovertible debt issued or guaranteed by foreign sovereign
governments, municipalities, or governmental agencies, or international
agencies.
Lehman Government Bond Index -an unmanaged treasury bond index including
all public obligations of the U.S. Treasury, excluding flower bonds and
foreign-targeted issues, and the Agency Bond Index (all publicly issued
debt of U.S. government agencies and quasi-federal corporation, and
corporate debt guaranteed by the U.S. government). In addition to the
aggregate index, sub-indices cover intermediate and long term issues.
Lehman Government/Corporate Index -- an unmanaged fixed income market
value-weighted index that combines the Government and Corporate Bond
Indices, including U.S. government treasury securities, corporate and
yankee bonds. All issues are investment grade (BB) or higher, with
maturities of at least one year and outstanding par value of at least $100
million of r U.S. government issues and $25 million for others. Any
security downgraded during the month is held in the index until month end
and then removed. All returns are market value weighted inclusive of
accrued income.
Lehman High Yield Bond Index - an unmanaged index of fixed rate, non-
investment grade debt. All bonds included in the index are dollar
denominated, noncovertible, have at least one year remaining to maturity
and an outstanding par value of at least $100 million.
B-1
<PAGE>
Lehman Intermediate Government/Corporate Index - an unmanaged fixed income
market value-weighted index that combines the Lehman Government Bond Index
(intermediate-term sub-index) and Lehman Corporate Bond Index.
Lipper 1-5 Year Short Investment Grade Debt Funds Average -- is an average
of 100 funds that invest at least 65% of assets in investment grade debt
issues (BBB or higher) with dollar-weighted average maturities of 5 years
or less.
Lipper Balanced Fund Index - an unmanaged index of open-end equity funds
whose primary objective is to conserve principal by maintaining at all time
a balanced portfolio of both stocks and bonds. Typically, the stock/bond
ratio ranges around 60%/40%.
Lipper Equity Income Fund Index - an unmanaged index of equity funds which
seek relatively high current income and growth of income through investing
60% or more of the portfolio in equities.
Lipper Equity Mid Cap Fund Index - an unmanaged index of funds which by
prospectus or portfolio practice invest primarily in companies with market
capitalizations less than $5 billion at the time of purchase.
Lipper Equity Small Cap Fund Index - an unmanaged index of funds by
prospectus or portfolio practice invest primarily in companies with market
capitalizations less than $1 billion at the time of purchase.
Lipper Growth Fund Index - an unmanaged index composed of the 30 largest
funds by asset size in this investment objective.
Lipper Mutual Fund Performance Analysis and Lipper -Fixed Income Fund
Performance Analysis -- measures total return and average current yield for
the mutual fund industry. Rank individual mutual fund performance over
specified time periods, assuming reinvestments of all distributions,
exclusive of any applicable sales charges.
Merrill Lynch 1-4.99 Year Corporate/Government Bond Index -- is an
unmanaged index composed of U.S. treasuries, agencies and corporates with
maturities from 1 to 4.99 years. Corporates are investment grade only (BBB
or higher).
Morgan Stanley Capital International EAFE Index -- arithmetic, market
value-weighted averages of the performance of over 900 securities listed on
the stock exchanges of countries in Europe, Australia and the Far East.
Mutual Fund Source Book, published by Morningstar, Inc. - analyzes price,
yield, risk and total return for equity funds.
NASDAQ Composite Index -- is a market capitalization, price only, unmanaged
index that tracks the performance of domestic common stocks traded on the
regular NASDAQ market as well as national market System traded foreign
common stocks and ADRs..
New York Stock Exchange composite or component indices -- unmanaged indices
of all industrial, utilities, transportation and finance stocks listed on
the New York Stock Exchange.
Russell 1000 Index - an unmanaged index composed of the 1000 largest stocks
in the Russell 3000 Index.
Russell 2000 Growth Index - contains those Russell 2000 securities with
higher price-to-book ratios and higher forecasted growth values.
Russell 2000 Index -- an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000 Index.
Russell 2000 Value Index - contains those Russell 2000 securities with a
less-than-average growth orientation. Securities in this index tend to
exhibit lower price-to-book and price-earnings ratios, higher dividend
yields and lower forecasted growth values than the growth universe.
Russell 2500 Growth Index - contains those Russell 2500 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend
yields and higher forecasted growth values than the value universe.
Russell 2500 Index - an unmanaged index composed of the 2,5000 smallest
stocks in the Russell 3000.
Russell 2500 Value Index - contains those Russell 2500 securities with a
less-than-average growth orientation. Securities in this index tend to
exhibit lower price-to-book and price-earnings ratios, higher dividend
yields and lower forecasted growth values then the Growth universe.
Russell 3000 Index - composed of the 3,000 largest U.S. publically traded
companies based on total market capitalization, which represents
approximately 98% of the investable U.S. equity market.
B-2
<PAGE>
Russell Mid-Cap Index -- is composed of the 800 smallest stocks in the
Russell 1000 Index, with an average capitalization of $1.96 billion.
Salomon Smith Barney Global excluding U.S. Equity Index - an comprised of
the smallest stocks (less than $1 billion market capitalization) of the
Extended Market Index, of both developed and emerging markets.
Salomon Smith Barney One to Three Year Treasury Index - an unmanaged index
comprised of U.S. treasury notes and bonds with maturities one year or
greater, but less than three years.
Salomon Smith Barney Three-Month T-Bill Average -- the average for all
treasury bills for the previous three-month period.
Salomon Smith Barney Three-Month U.S. Treasury Bill Index - a return
equivalent yield average based on the last three 3-month Treasury bill
issues.
Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings and Loan League Fact Book.
Standard & Poors' 600 Small Cap Index - an unmanaged index comprised of 600
domestic stocks chosen for market size, liquidity, and industry group
representation. The index is comprised of stocks from the industrial,
utility, financial, and transportation sectors.
Standard & Poors' Midcap 400 Index -- consists of 400 domestic stocks
chosen for market size (medium market capitalization of approximately $700
million), liquidity, and industry group representation. It is a market-
value weighted index with each stock affecting the index in proportion to
its market value.
Standard & Poors' 500 Stock Index- an unmanaged index composed of 400
industrial stocks, 40 financial stocks, 40 utilities stocks and 20
transportation stocks.
Standard & Poors' Barra Value Index - is constructed by dividing the
securities in the S&P 500 Index according to price-to-book ratio. This
index contains the securities with the lower price-to-book ratios; the
securities with the higher price-to-book ratios are contained in the
Standard & Poor's Barra Growth Index.
Standard & Poors' Utilities Stock Price Index - a market capitalization
weighted index representing three utility groups and, with the three
groups, 43 of the largest utility companies listed on the New York Stock
Exchange, including 23 electric power companies, 12 natural gas
distributors and 8 telephone companies.
Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates --
historical measure of yield, price and total return for common and small
company stock, long-term government bonds, U.S. treasury bills and
inflation.
U.S. Three-Month Treasury Bill Average - the average return for all
treasury bills for the previous three month period.
Value Line -- composed of over 1,600 stocks in the Value Line Investment
Survey.
Wilshire Real Estate Securities Index - a market capitalization weighted
index of publicly traded real estate securities, including real estate
investment trusts, real estate operating companies and partnerships. The
index is used by he institutional investment community as a broad measure
of the performance of public real estate equity for asset allocation and
performance comparison.
Wilshire REIT Index - includes 112 real estate investment trusts (REITs)
but excludes seven real estate operating companies that are included in the
Wilshire Real Estate Securities Index..
Note: With respect to the comparative measures of performance for equity
securities described herein, comparisons of performance assume reinvestment
of dividends, except as otherwise stated.
B-3
<PAGE>
Exhibit Description
- ------- -----------
A. 3. Articles Supplementary dated April 6, 1999
D Investment Advisory Agreement
E 1. Form of Distribution Agreement
2. Form of Selling Dealer Agreement
H 1. Form of Fund Administration Agreement
2. Form of Mutual Funds Service Agreement
I. Opinions and Consents of Counsel
J. 1. Consent of PricewaterhouseCoopers, LLP
2. Consent of Deloitte & Touche, LLP
N. Financial Data Schedule
P. Powers of Attorney
<PAGE>
UAM FUNDS, INC. II
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
UAM FUNDS, INC. II, a Maryland corporation having its principal office in
the City of Baltimore (the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law ("MGCL"), the Board of Directors of the
Corporation, at a meeting called for such purpose on April 6, 1999, adopted
these Articles Supplementary classifying or reclassifying unissued shares of the
Common Stock of the Corporation.
SECOND: Five billion three-hundred million (5,300,000,000) shares of the
following series and classes have been reclassified by the Company's Board of
Directors as unclassified shares of the Corporation:
<TABLE>
<CAPTION>
Name of Series Total Number of Shares Reallocated to Unclassified
- -------------- --------------------------------------------------
<S> <C>
PBHG Advisor Focused Value Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Blue Chip Growth Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Cash Reserves Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor High Yield Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Growth II Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
</TABLE>
<PAGE>
PBHG Advisor Large Cap Concentrated Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Trend Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Value Opportunities Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Global Technology & Communications Fund
series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Growth Opportunities Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor New Contrarian Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor New Opportunities Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor REIT Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Financial Services Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
PBHG Advisor Health Care Fund series
Class A Shares 100,000,000
Class B Shares 100,000,000
Class I Shares 100,000,000
Analytic Defensive Equity Fund series
Class B Shares 100,000,000
Class I Shares 100,000,000
-2-
<PAGE>
Analytic Enhanced Equity Fund series
Class B Shares 100,000,000
Class I Shares 100,000,000
Analytic Master Fixed Income Fund series
Class B Shares 100,000,000
Class I Shares 100,000,000
Analytic Short-Term Government Fund series
Class B Shares 100,000,000
Class I Shares 100,000,000
THIRD: (a) The Board of Directors of the Corporation hereby
reclassifies from the unclassified shares, all of which
are unissued, 100,000,000 shares of each of the
Analytic Defensive Equity Fund series, Analytic
Enhanced Equity Fund series, Analytic Master Fixed
Income Fund series and Analytic Short-Term Government
Fund series as Institutional Service Class Shares of
each said series of Common Stock of the Corporation,
par value $.001 per share, such Institutional Service
Class shares having such preferences, conversion or
other rights, voting powers, restrictions, limitations
as to dividends, qualifications, and terms and
conditions of redemption, identical to Institutional
Class Shares of each such series, respectively, in all
respects, except for the class designation, the
allocation of certain expenses, voting rights and
exchange privileges.
(b) The shares of the Institutional Service Class of each
series designated in (a) above, respectively, represent
proportionate interests in the same portfolio of
investments as shares of the Institutional Class of
each such series, respectively, of the Corporation.
The shares of the Institutional Service Class of each
such series have the same preferences, conversion or
other rights, voting powers, restrictions, limitations
as to dividends, qualifications, and terms and
conditions of redemption as the shares of the
respective Institutional Class of such series, all as
set forth in the Articles of Incorporation of the
Corporation, except for the differences hereafter set
forth:
1. The dividends and distributions of investment
income and capital gains with respect to the
Institutional Service Class of shares of Common
Stock of each such series shall be in such amounts
as may be declared from time to time by the Board
-3-
<PAGE>
of Directors, and such dividends and distributions
may vary with respect to such class from the
dividends and distributions of investment income
and capital gains with respect to the other
classes of the series and of the Common Stock of
the Corporation to reflect differing allocations
of the expenses of the classes, to such extent and
for such purposes as the Board of Directors may
deem appropriate. The allocation of investment
income and losses, capital gains and losses and
expenses and liabilities of the Corporation among
the classes of the series of the Common Stock of
the Corporation shall be determined by the Board
of Directors in a manner that is consistent with
any plan previously adopted by the Corporation
pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "1940 Act"),
as such plan may then be in effect.
2. Except as may otherwise be required by law
pursuant to any applicable order, rule, or
interpretation issued by the Securities and
Exchange Commission, or otherwise, the holders of
the Institutional Service Class Shares of each
such series shall have (i) exclusive voting rights
with respect to any matter submitted to a vote of
stockholders that affects only holders of the
Institutional Service Class Shares of the series,
including without limitation, the provisions of
any Distribution Plan adopted pursuant to Rule
12b-1 under the 1940 Act ("Distribution Plan")
applicable to the Institutional Service Class of
such series and (ii) no voting rights with respect
to the provisions of any Distribution Plan
applicable to any other classes of the Common
Stock of the Corporation or with regard to any
other matter submitted to a vote of stockholders
which does not affect holders of the Institutional
Service Class of the series of shares set forth in
Articles Second and Third.
FOURTH: After giving effect to the reclassification, the total amount of
stock classified to each series and class is as follows:
-4-
<PAGE>
Name of Series Total Number of Shares Classified
- -------------- ---------------------------------
Analytic Defensive Equity Fund series
. Institutional Class Shares 100,000,000
. Institutional Service Class Shares 100,000,000
Analytic Enhanced Equity Fund series
. Institutional Class Shares 100,000,000
. Institutional Service Class Shares 100,000,000
Analytic Master Fixed Income Fund series
. Institutional Class Shares 100,000,000
. Institutional Service Class Shares 100,000,000
Analytic Short-Term Government Fund series
. Institutional Class Shares 100,000,000
. Institutional Service Class Shares 100,000,000
Unclassified Shares 9,200,000,000
-------------
TOTAL AUTHORIZED SHARES 10,000,000,000
IN WITNESS WHEREOF, UAM Funds, Inc. II has caused these Articles
Supplementary to be signed in its name and on its behalf this 6th day of April,
1999.
UAM FUNDS, INC. II
By:_________________________
Norton H. Reamer
Chairman of the Board and President
Attest:
By:______________________
Michael E. DeFao
Secretary
-5-
<PAGE>
THE UNDERSIGNED, President of UAM Funds, Inc. II, who executed on
behalf of said Corporation the foregoing Articles Supplementary to the Articles
of Incorporation, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said Corporation, the foregoing Articles
Supplementary to the Articles of Incorporation to be the corporate act of said
Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters in fact set forth herein with respect to the
approval thereof are true in all material respects, under the penalties of
perjury.
UAM FUNDS, INC. II
By:_______________________
Norton H. Reamer
Chairman of the Board and President
<PAGE>
INVESTMENT ADVISORY AGREEMENT
-----------------------------
UAM FUNDS, INC. II
ANALYTIC DEFENSIVE EQUITY FUND
AGREEMENT made this 6/th/ day of April, 1999 by and between UAM Funds, Inc.
II, a Maryland corporation (the "Fund"), and Analytic Investors, Inc., a
California corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Analytic Defensive Equity Fund (the
"Portfolio") for the period and on such terms as set forth in this Agreement.
The Fund employs the Adviser to manage the investment and reinvestment of the
assets of the Portfolio, to continuously review, supervise and administer the
investment program of the Portfolio, to determine in its discretion the
securities to be purchased or sold and the portion of the Portfolio's assets to
be held uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular reports
to the Fund's officers and Board of Directors concerning the Adviser's discharge
of the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Directors of the Fund, and in compliance with the objectives, policies and
limitations set forth in the Portfolio's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to policies established by the Board of Directors of the Fund, the
Adviser may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that
<PAGE>
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets for
the month: 0.60%.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
2
<PAGE>
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any shareholder of the Fund, for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Portfolio.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and the effect of any
such interrelationships shall be governed by said Articles of Incorporation and
the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of March 31, 2001 or the date
of the first annual or special meeting of the shareholders of the Portfolio and,
if approved by a majority of the outstanding voting securities of the Portfolio,
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Fund or (c) by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the shareholders of the
----------------
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the extent permitted by
the 1940 Act and rules thereunder. This Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a
3
<PAGE>
majority of the entire Board of Directors of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to the Adviser. This Agreement may be terminated by the Adviser at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
This Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered or mailed postpaid, to the other party at the principal office of
such party.
As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) for changes
or amendments requiring shareholder approval pursuant to the 1940 Act or other
applicable law, by vote of a majority of the outstanding voting securities of
the Portfolio.
11. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 6th day of April, 1999
ANALYTIC INVESTORS, INC. UAM FUNDS, INC. II
By:__________________________ By:__________________________
Harindra de Silva Norton H. Reamer
President President and Chairman of
the Board
4
<PAGE>
INVESTMENT ADVISORY AGREEMENT
-----------------------------
UAM FUNDS, INC. II
ANALYTIC ENHANCED EQUITY FUND
AGREEMENT made this 6/th/ day of April, 1999 by and between UAM Funds, Inc.
II, a Maryland corporation (the "Fund"), and Analytic Investors, Inc., a
California corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Analytic Enhanced Equity Fund (the "Portfolio")
for the period and on such terms as set forth in this Agreement. The Fund
employs the Adviser to manage the investment and reinvestment of the assets of
the Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's activities
which the Fund is required to maintain, and to render regular reports to the
Fund's officers and Board of Directors concerning the Adviser's discharge of the
foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Directors of the Fund, and in compliance with the objectives, policies and
limitations set forth in the Portfolio's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to policies established by the Board of Directors of the Fund, the
Adviser may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that
<PAGE>
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets for
the month: 0.60%.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
2
<PAGE>
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any shareholder of the Fund, for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Portfolio.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and the effect of any
such interrelationships shall be governed by said Articles of Incorporation and
the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of March 31, 2001 or the date
of the first annual or special meeting of the shareholders of the Portfolio and,
if approved by a majority of the outstanding voting securities of the Portfolio,
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Fund or (c) by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the shareholders of the
----------------
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the extent permitted by
the 1940 Act and rules thereunder. This Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a
3
<PAGE>
majority of the entire Board of Directors of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to the Adviser. This Agreement may be terminated by the Adviser at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
This Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered or mailed postpaid, to the other party at the principal office of
such party.
As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) for changes
or amendments requiring shareholder approval pursuant to the 1940 Act or other
applicable law, by vote of a majority of the outstanding voting securities of
the Portfolio.
11. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 6th day of April, 1999
ANALYTIC INVESTORS, INC. UAM FUNDS, INC. II
By:__________________________ By:__________________________
Harindra de Silva Norton H. Reamer
President President and Chairman of
the Board
4
<PAGE>
INVESTMENT ADVISORY AGREEMENT
-----------------------------
UAM FUNDS, INC. II
ANALYTIC MASTER FIXED INCOME FUND
AGREEMENT made this 6/th/ day of April, 1999 by and between UAM Funds, Inc.
II, a Maryland corporation (the "Fund"), and Analytic Investors, Inc., a
California corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Analytic Master Fixed Income Fund (the
"Portfolio") for the period and on such terms as set forth in this Agreement.
The Fund employs the Adviser to manage the investment and reinvestment of the
assets of the Portfolio, to continuously review, supervise and administer the
investment program of the Portfolio, to determine in its discretion the
securities to be purchased or sold and the portion of the Portfolio's assets to
be held uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular reports
to the Fund's officers and Board of Directors concerning the Adviser's discharge
of the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Directors of the Fund, and in compliance with the objectives, policies and
limitations set forth in the Portfolio's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to policies established by the Board of Directors of the Fund, the
Adviser may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that
<PAGE>
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets for
the month: 0.45%.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
2
<PAGE>
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any shareholder of the Fund, for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Portfolio.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and the effect of any
such interrelationships shall be governed by said Articles of Incorporation and
the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of March 31, 2001 or the date
of the first annual or special meeting of the shareholders of the Portfolio and,
if approved by a majority of the outstanding voting securities of the Portfolio,
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Fund or (c) by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the shareholders of the
----------------
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the extent permitted by
the 1940 Act and rules thereunder. This Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a
3
<PAGE>
majority of the entire Board of Directors of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to the Adviser. This Agreement may be terminated by the Adviser at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
This Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered or mailed postpaid, to the other party at the principal office of
such party.
As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) for changes
or amendments requiring shareholder approval pursuant to the 1940 Act or other
applicable law, by vote of a majority of the outstanding voting securities of
the Portfolio.
11. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 6th day of April, 1999
ANALYTIC INVESTORS, INC. UAM FUNDS, INC. II
By:__________________________ By:__________________________
Harindra de Silva Norton H. Reamer
President President and Chairman of
the Board
4
<PAGE>
INVESTMENT ADVISORY AGREEMENT
-----------------------------
UAM FUNDS, INC. II
ANALYTIC SHORT-TERM GOVERNMENT FUND
AGREEMENT made this 6/th/ day of April, 1999 by and between UAM Funds, Inc.
II, a Maryland corporation (the "Fund"), and Analytic Investors, Inc., a
California corporation (the "Adviser").
1. DUTIES OF ADVISER. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's Analytic Short-Term Government Fund (the
"Portfolio") for the period and on such terms as set forth in this Agreement.
The Fund employs the Adviser to manage the investment and reinvestment of the
assets of the Portfolio, to continuously review, supervise and administer the
investment program of the Portfolio, to determine in its discretion the
securities to be purchased or sold and the portion of the Portfolio's assets to
be held uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular reports
to the Fund's officers and Board of Directors concerning the Adviser's discharge
of the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of
Directors of the Fund, and in compliance with the objectives, policies and
limitations set forth in the Portfolio's prospectus and applicable laws and
regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the terms
and for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the
brokers or dealers that will execute the purchases and sales of securities of
the Portfolio and is directed to use its best efforts to obtain the best
available price and most favorable execution, except as prescribed herein.
Subject to policies established by the Board of Directors of the Fund, the
Adviser may also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if the
Adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that
<PAGE>
particular transaction or the Adviser's overall responsibilities with respect to
the Fund. The execution of such transactions shall not be deemed to represent an
unlawful act or breach of any duty created by this Agreement or otherwise. The
Adviser will promptly communicate to the officers and Directors of the Fund such
information relating to portfolio transactions as they may reasonably request.
3. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets for
the month: 0.30%.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last business
day on which this Agreement is in effect subject to a pro rata adjustment based
on the number of days elapsed in the current fiscal month as a percentage of the
total number of days in such month.
4. OTHER SERVICES. At the request of the Fund, the Adviser in its
discretion may make available to the Fund office facilities, equipment,
personnel and other services. Such office facilities, equipment, personnel and
services shall be provided for or rendered by the Adviser and billed to the Fund
at the Adviser's cost.
5. REPORTS. The Fund and the Adviser agree to furnish to each other
current prospectuses, proxy statements, reports to shareholders, certified
copies of their financial statements, and such other information with regard to
their affairs as each may reasonably request.
6. STATUS OF ADVISER. The services of the Adviser to the Fund are not to
be deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. LIABILITY OF ADVISER. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of its
obligations and duties hereunder, or (iii) a loss resulting from a breach of
2
<PAGE>
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as amended
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Fund, or to any shareholder of the Fund, for any error or judgment, mistake
of law or any other act or omission in the course of, or connected with,
rendering services hereunder including, without limitation, for any losses that
may be sustained in connection with the purchase, holding, redemption or sale of
any security on behalf of the Portfolio.
8. PERMISSIBLE INTERESTS. Subject to and in accordance with the Articles
of Incorporation of the Fund and the Articles of Incorporation of the Adviser,
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and shareholders
of the Adviser are or may be interested in the Fund as Directors, officers,
agents, shareholders or otherwise; and the Adviser (or any successor) is or may
be interested in the Fund as a shareholder or otherwise; and the effect of any
such interrelationships shall be governed by said Articles of Incorporation and
the provisions of the 1940 Act.
9. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of March 31, 2001 or the date
of the first annual or special meeting of the shareholders of the Portfolio and,
if approved by a majority of the outstanding voting securities of the Portfolio,
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Directors of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Fund or (c) by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the shareholders of the
----------------
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve in such capacity in the manner and to the extent permitted by
the 1940 Act and rules thereunder. This Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a
3
<PAGE>
majority of the entire Board of Directors of the Fund or by vote of a majority
of the outstanding voting securities of the Portfolio on 60 days' written notice
to the Adviser. This Agreement may be terminated by the Adviser at any time,
without the payment of any penalty, upon 90 days' written notice to the Fund.
This Agreement will automatically and immediately terminate in the event of its
assignment. Any notice under this Agreement shall be given in writing, addressed
and delivered or mailed postpaid, to the other party at the principal office of
such party.
As used in this Section 9, the terms "assignment", "interested persons",
and "a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. AMENDMENT OF AGREEMENT. This Agreement may be amended by mutual
consent, but the consent of the Fund must be approved (a) by vote of a majority
of those members of the Board of Directors of the Fund who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such amendment, and (b) for changes
or amendments requiring shareholder approval pursuant to the 1940 Act or other
applicable law, by vote of a majority of the outstanding voting securities of
the Portfolio.
11. SEVERABILITY. If any provisions of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this 6th day of April, 1999
ANALYTIC INVESTORS, INC. UAM FUNDS, INC. II
By:__________________________ By:__________________________
Harindra de Silva Norton H. Reamer
President President and Chairman of
the Board
4
<PAGE>
DISTRIBUTION AGREEMENT
BETWEEN
UAM FUND DISTRIBUTORS, INC.
AND
UAM FUNDS, INC. II
THIS AGREEMENT entered into the 6th day of April, 1999, by and between UAM
FUNDS, INC. II, a Maryland Corporation, with an office located at 211 Congress
Street, Boston, Massachusetts 02110 (the "Fund"), and UAM FUND DISTRIBUTORS,
INC., a Massachusetts corporation with its principal office located at 211
Congress Street, Boston, Massachusetts 02110 (the "Distributor").
W I T N E S S E T H:
--------------------
In consideration of the mutual covenants and agreements of the parties
hereto, the parties intending to be bound, mutually covenant and agree with each
other as follows:
1. The Fund hereby appoints the distributor as agent of the Fund to
effect the sale and public distribution of shares of the capital stock of the
Fund.
2. The Fund shall compensate the distributor for its services rendered
pursuant to the Fund's Rule 12b-1 Distribution Plan as adopted by various
portfolios or classes of the portfolios of the Fund pursuant to Investment
Company Act Rule 12b-1, a copy of which, as presently in force, is attached
hereto.
3. The Distributor shall be the agent for the Fund for the sale of its
shares either through dealers or otherwise and the Fund agrees that it will not
sell any shares to any person except to fill orders for the shares received
through the distributor; provided, however, that the foregoing shall not apply:
(a) to shares issued or sold in connection with the merger or consolidation of
any other investment company with the Fund or the acquisition by purchase or
otherwise of all or substantially all of the assets of any investment company or
substantially all of the outstanding shares of any such company by the Fund; (b)
to shares which may be offered by the Fund to its stockholders for reinvestment
of cash distributed from capital gains or net investment income of the Fund; (c)
to shares which may be issued to shareholders of a series of the Fund who
exercise any exchange privilege set forth in a Prospectus of the Fund; (d) to
shares issued to existing stockholders as the result of a stock split; (e) to
shares which the Fund otherwise may issue directly to registered stockholders
pursuant to authority of its Board of Directors; or (f) shares sold in any
jurisdiction in which the Distributor is not registered as a broker-dealer.
4. The Fund hereby authorizes the Distributor to sell its shares in
accordance with the following schedule of prices:
<PAGE>
The applicable price will be the respective public offering price applicable
to each portfolio of the Fund or class of a Portfolio of the Fund next
effective after receipt and acceptance by the Fund of a proper offer to
purchase, determined in accordance with the Articles of Incorporation, By-
Laws, Registration Statement and Prospectus for the portfolios and classes of
portfolios of the Fund.
5. Orders for the purchase of shares placed by the Distributor shall be
subject to the provisions of Rule 2830 of the Conduct Rules of the NASD, the
provisions of which are hereby incorporated by reference.
6. The Fund agrees to prepare and file registration statements with the
Securities and Exchange Commission and the Securities Departments of various
states and other jurisdictions in which the shares may be offered, at its own
expense, and do such other things and to take such other actions as may be
mutually agreed upon by and between the parties as shall be reasonably necessary
in order to effect the registration and the sale of the Fund's shares. The
Distributor shall cooperate with the Fund in the preparation and filing of
applications for registration and qualification of the shares under applicable
law.
7. With respect to the apportionment of costs between the Fund and the
Distributor of activities with which both are concerned, the following will
apply:
(a) At its own expense, the Fund shall pay all costs incurred in the
preparation and mailing of the Fund's current Prospectuses, Statements of
Additional Information and reports to stockholders.
(b) The Distributor will pay the costs incurred in printing and
mailing copies of Prospectuses to prospective investors.
(c) The Distributor will pay advertising and promotional expenses,
including the costs of literature sent to prospective investors.
(d) The Distributor will pay the costs of any additional copies of
Fund financial and other reports and other Fund literature supplied to the
Distributor by the Fund for sales promotion purposes.
8. Normally, the Fund shall not exercise any direction or control over
the time and place of solicitation, the persons to be solicited, or the manner
of solicitation; but the Distributor agrees that solicitations shall be in a
form acceptable to the Fund and shall be subject to such terms and conditions as
may be prescribed from time to time by the Fund, the Registration Statement, the
Prospectuses, the Articles of Incorporation, and By-Laws of the Fund, and shall
not violate any provision of the laws of the United States or any other
jurisdiction to which solicitations are subject, or violate any rule or
regulation promulgated by any lawfully constituted authority to which the Fund
or Distributor may be subject.
-2-
<PAGE>
9. (a) The Fund appoints and designates the Distributor as agent of the
Fund and the Distributor accepts such appointment as such agent, to repurchase
shares of the Fund in accordance with the provisions of the Articles of
Incorporation and By-Laws of the Fund.
(b) In connection with such redemptions or repurchases the Fund
authorizes and designates the Distributor to take any action, to make any
adjustments in net asset value, and to make any arrangements for the payment of
the redemption or repurchase price authorized or permitted to be taken or made
in accordance with the Investment Company Act of 1940 and as set forth in the
By-Laws and then current Prospectuses of the Fund.
(c) The authority of the Distributor under this paragraph 9 may, with
the consent of the Fund, be redelegated in whole or in part to another person or
firm.
(d) The authority granted in this paragraph 9 may be suspended by the
Fund at any time or from time to time pursuant to the provisions of its Articles
of Incorporation until further notice to the Distributor. The President or any
Vice President of the Fund shall have the power granted by said provisions.
After any such suspension the authority granted to the Distributor by this
paragraph 9 shall be reinstated only by a written instrument executed by the
Fund's President or any Vice President.
10. The Distributor shall keep and maintain adequate records in respect of
its activities which further the sale of shares. The Distributor is authorized
to direct the disposition of monies payable by the Fund pursuant to the Fund's
Rule 12b-1 Plan and, consequently, the Distributor shall provide to the Fund's
Board of Directors, and the Directors shall review, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
11. The Distributor agrees that it will not place orders for more shares
than are required to fill the requests received by it as agent of the Fund and
that it will expeditiously transmit all such orders to the Fund.
12. (a) This Agreement shall become effective April 6, 1999 and shall
continue in effect for a period of more than one year from its effective date
only as long as such continuance is approved, at least annually, by a vote of
the Board of Directors of the Fund, and of the Directors who are not "Interested
persons" of the Fund and have no direct or indirect financial interest in the
operation of the Fund's Rule 12b-1 Distribution Plan or in any agreements
related to the Fund's Rule 12b-1 Distribution Plan, cast in person at a meeting
called for the purpose of voting on such Agreement.
(b) This Agreement may be terminated at any time, without the payment
of any penalty, by vote of a majority of the members of the Board of Directors
of the Fund who are not interested persons of the Fund and have no direct or
indirect financial
-3-
<PAGE>
interest in the operation of the Fund's Rule 12b-1 Distribution Plan or in any
agreements related to the Fund's Rule 12b-1 Distribution Plan or by vote of a
majority of the outstanding voting securities of the Fund on not more than sixty
days' written notice to the Distributor. This Agreement shall automatically
terminate in the event of its assignment by the Distributor unless the United
States Securities and Exchange Commission has issued an order exempting the Fund
and the Distributor from the provisions of the Investment Company Act of 1940,
as amended, which would otherwise have effected the termination of this
Agreement.
13. No amendment to this Agreement shall be executed or become effective
unless its terms have been approved in the manner described in paragraph 12(a)
above for approval of this Agreement.
14. The Fund and the Distributor hereby each agree that all literature and
publicity issued by either of them referring directly or indirectly to the Fund
or to the Distributor shall be submitted to and receive the approval of the Fund
and the Distributor before the same may be used by either party.
15. The Distributor agrees to use its best efforts in effecting the sale
and public distribution of the shares of the Fund and to perform its duties in
redeeming the shares of the Fund, but nothing contained in this Agreement shall
make the Distributor or any of its officers and directors or shareholders liable
for any loss sustained by the Fund or the Fund's officers, directors or
shareholders, or by any other person on account of any act done or omitted to be
done by the Distributor under this Agreement; provided, that nothing herein
contained shall protect the Distributor against any liability to the Fund or to
any of its shareholders to which the Distributor would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties as Distributor or by reason of its reckless disregard of its
obligations or duties as Distributor under this Agreement. Nothing in this
Agreement shall protect the Distributor from any liabilities which it may have
under the Securities Act of 1933 or the Investment Company Act of 1940.
16. As used in this Agreement the terms "interested persons,"
"assignment," and "majority of the outstanding voting securities" shall have the
respective meanings specified in the Investment Company Act of 1940 as now in
effect.
17. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts, except to the extent such laws are preempted by
the Investment Company Act of 1940.
18. Any notice required to be given hereunder shall be sent via first
class mail to the address of the party as set forth above.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers on the day and year above written.
Attest: UAM FUNDS, INC. II
_______________________________ _______________________________________
Gary L. French, Treasurer
Attest: UAM FUND DISTRIBUTORS, INC.
_______________________________ _______________________________________
Michael E. DeFao, Vice President and
General Counsel
-5-
<PAGE>
UAM FUND DISTRIBUTORS, INC.
211 Congress Street
Boston, Massachusetts 02110
SELLING DEALER AGREEMENT
UAM FUNDS, INC. AND UAM FUNDS TRUST
(Institutional Class Shares)
Dealer:
Gentlemen:
We invite you, as a selected dealer, to participate as principal in the
distribution of the Institutional Class Shares (the "Shares") of the Portfolios
of UAM Funds, Inc. and of UAM Funds Trust (each Portfolio is referred to herein
as the "Fund") with respect to which we have been retained to act as exclusive
national distributor and which are offered for sale pursuant to currently
effective federal Prospectuses describing such Shares.
OFFERING PRICE TO PUBLIC:
- -------------------------
Orders for Shares received from you and accepted by the Fund, will be at
the public offering price applicable to each order as set forth in that Fund's
Prospectus relating to such Shares. The manner of computing the net asset value
of Shares, the public offering price and the effective time of orders received
from you are described in the Prospectuses for the Shares. We reserve the
right, at any time and without notice, to suspend the sale of Fund Shares.
SALES, ORDERS AND CONFIRMATIONS:
- --------------------------------
In offering Fund Shares to the public or otherwise, you shall act as dealer
for your own account, and in no transaction shall you have any authority to act
as agent for the Fund, for any other selected dealer or for us. No person is
authorized to make any representation concerning the Shares or any Fund except
those contained in the relevant and current Prospectus and in written
information issued by the Fund or by us as a supplement to such Prospectus. In
purchasing Fund Shares, you shall rely solely on such representations contained
in the Prospectus and in such written supplemental information.
All sales are made subject to confirmation and orders are subject to
acceptance or rejection by the Fund in its sole discretion. Your orders must be
wired, telephoned or written to the Fund as provided in the relevant and current
Prospectus. You agree to place orders for the same number of Shares sold by you
at the price at which such Shares are sold. You agree that
<PAGE>
you will not purchase Shares except for investment or for the purpose of
covering purchase orders already received and that you will not, as principal,
sell Fund Shares unless purchased by you from the Fund under the terms hereof.
You also agree that you will not withhold placing with us orders received from
your customers so as to profit yourself from such withholding. Each of your
orders shall be confirmed by you in writing on the same day.
PAYMENT AND ISSUANCE OF CERTIFICATES:
- -------------------------------------
The Shares purchased by you hereunder shall be paid for in full at the
public offering price, by check payable to the Fund, at its office, within three
business days after our acceptance of your order. If not so paid, we reserve
the right to cancel the sale and to hold you responsible for any loss sustained
by us or the Fund (including lost profit) in consequence. Certificates
representing the Shares will not be issued unless a specific request is received
from the purchaser. Certificates, if requested, will be issued in the names
indicated by registration instructions accompanying your payment.
REDEMPTIONS:
- ------------
The relevant Prospectus describes the provisions whereby a Fund, under all
ordinary circumstances, will redeem Shares held by shareholders on demand. You
agree that you will not make any representations to shareholders relating to the
redemption of their Shares other than the statements contained in the relevant
and current Prospectus, and the underlying organizational documents of the Fund,
to which it refers, and that you will quote as the redemption price only the
price determined by the Fund. You shall not repurchase any Shares from your
customers at a price below that next quoted by the Fund for redemption. You may
hold such repurchased Shares for investment purposes or submit such Shares to
the Fund for redemption.
DISTRIBUTION AND/OR SERVICE FEES :
- ----------------------------------
We expect you to provide distribution and marketing services (the
"Services") in the promotion of the sale of the Shares of such Fund and the
retention of assets by such Fund and/or services and assistance to your
customers who own Fund Shares, including but not limited to, answering routine
inquiries regarding the Shares or a Fund or the status of a customer's account
and providing information to customers relating to maintaining their investment
in the Fund. Certain of the managers (the "Managers") of the Funds may, from
time to time, determine to provide support for the distribution and marketing
of, and/or the provision of services to the holders of, the Shares in the form
of payments or additional payments to selected broker-dealers who enter into
Selling Dealer Agreements with us. Accordingly, for your Services in respect of
Shares of any Fund the Manager of which has determined to provide such support
and has adopted a Supplemental Plan (a "Supplemental Plan"), you will receive a
supplemental fee (the "Supplemental Fees"), as established by each particular
Manager from time to time, subject to the further provisions of this Agreement,
the terms of the then current and applicable Prospectus relating to such Shares
and the instructions received by us from such Manager. The
<PAGE>
Supplemental Fees, if any, in respect of Shares of a particular Fund may be
based on such factors as initial and/or current purchase prices or net asset
values of such Shares acquired by or held in the accounts of your customers or
certain customers and the periods for which such shares have been held and may
be subject to such other minimums as may be established by the Managers or by us
from time to time. Such Supplemental Fees may consist of a conversion fee
component, if any, and/or a new contribution fee component, if any, the rates of
which shall be as provided in the schedule of fees set forth in Appendix A
attached hereto, as the same may be amended by us at any time and from time to
time by notice thereof to you; provided, however, that in no event shall the
rate of any such component be in excess of the current rates set forth in any
form of subsequent notice furnished to you by us or on our behalf, or by the
Manager or the Fund.
We reserve the right, at any time, without notice, to modify, suspend or
terminate payments hereunder, or any component of such payments, either with
respect to one or more Funds or classes of Shares or generally with respect to
the Funds and the Shares; and the payment of Supplemental Fees hereunder shall
be automatically suspended or terminated if and to the extent that payments from
the relevant Manager are suspended or terminated, or automatically reduced if
and to the extent that the corresponding rates of payments to be made from the
relevant Manager are reduced. Any such action may be for any reason whatsoever
or no reason at all; and you agree that you shall not be entitled to any
payments for any period after the effective date of any such suspension or
termination, nor shall you be entitled to any payments after the effective date
of any such modification or reduction except as may be calculated pursuant to a
modified or reduced schedule of fees substituted for the previously effective
schedule.
You understand and agree that we merely administer and forward payments
pursuant to the Supplemental Plans of the Managers and that we shall have no
liability to you for such payments. Accordingly, you agree that anything to the
contrary herein notwithstanding (i) we shall have no liability to you, and you
shall have no recourse whatsoever against us or our assets, for any payment for
which provision is made in this Agreement, and (ii) your sole recourse, if any,
in respect of any such payment for which provision is made in this Agreement
shall be against the respective Manager.
LEGAL COMPLIANCE:
- -----------------
This Agreement and any transaction with, or payments to, you pursuant to
the terms hereof is conditioned on each party's representation to the other
party that, as of the date of this Agreement it is, and at all times during the
effectiveness of this Agreement it will be, a registered broker-dealer under the
Securities Exchange Act of 1934, as amended, and qualified under applicable
state securities laws in each jurisdiction in which the actions contemplated to
be taken by it under this Agreement require it to be qualified to act as a
broker-dealer in securities, and a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"). Each party agrees to
notify the other promptly in writing and immediately suspend sales of Shares if
this representation ceases to be true. Each party also agrees that it will
comply with the rules of the NASD including, in particular, Sections 2, 21(c)
and 26 of Article III of its Rules of
<PAGE>
Fair Practice, as amended, and that each party will maintain adequate records
with respect to its transactions with the other and the Funds.
BLUE SKY MATTERS:
- -----------------
We shall have no obligation or responsibility with respect to your right to
sell Shares in any state or jurisdiction. We may furnish you with information
identifying the states and jurisdictions where the Shares of a Fund are
qualified for sale; and you will not transact orders for Shares except in such
states and jurisdictions as identified by us.
LITERATURE:
- -----------
We will furnish you with copies of each Fund's relevant Prospectus and
sales literature (if any) and other information made publicly available by us or
the Fund which relate to the Fund or the Shares of such Fund, in reasonable
quantities upon your request. You agree to deliver a copy of the current and
relevant Prospectus in accordance with the provisions of the Securities Act of
1933 to each purchaser of Shares. We shall file Fund sales literature and
promotional material with the NASD as required. You may not publish or use any
sales literature or promotional materials with respect to the Shares, the Funds
or any Fund without our prior review and written approval.
NOTICES AND COMMUNICATIONS:
- ---------------------------
All communications from you (other than purchase and sale orders) should be
addressed to us at 211 Congress Street, Boston, Massachusetts 02110, Attention:
Compliance Officer. Any notice from us to you shall be deemed to have been duly
given if mailed or telegraphed to you at the address set forth below. Each of
us may change the address to which notices shall be sent by notice to the other
in accordance with the terms hereof.
TERMINATION:
- ------------
This Agreement may be terminated by either party at any time by written
notice to that effect and will terminate without notice upon the appointment of
a trustee for you under the Securities Investor Protection Act, or any other act
of insolvency by you. Notwithstanding the termination of this Agreement, you
shall remain liable for any amounts otherwise owing to us or the Funds and for
your portion of any transfer tax or other liability which may be asserted or
assessed against the Fund, or us.
AMENDMENT:
- ----------
This Agreement may be amended or revised to modify, suspend or terminate
payments hereunder as provided in the section above entitled "Distribution
and/or Service Fees" or to amend Appendix A as provided in said section. This
Agreement may be otherwise amended or
<PAGE>
revised at any time by us upon notice to you and you will be deemed to have
accepted any such other amendment or revision upon placing any subsequent order
for Shares.
GENERAL:
- --------
Your acceptance hereof will constitute an obligation on your part to
observe all the terms and conditions hereof. In the event that you breach any
of the terms and conditions of this Agreement, you will indemnify us, the Funds,
and our affiliates for any damages, losses, costs and expenses (including
reasonable attorneys' fees and expenses) arising out of or relating to such
breach. In the event that we breach any of the terms and conditions of this
Agreement, we will indemnify you and your affiliates for any damages, losses,
costs and expenses (including reasonable attorneys' fees and expenses) arising
out of or relating to such breach. Nothing contained herein shall constitute
you, us and any dealers an association or partnership. All references in this
Agreement to the "Prospectus" refer to the then current and relevant version of
the Prospectus of the particular Fund or Funds concerned and include the
Statement of Additional Information incorporated by reference therein and any
stickers or supplements thereto.
This Agreement is to be construed in accordance with the laws of The
Commonwealth of Massachusetts.
Please confirm this Agreement by dating and executing, by your duly
authorized representative, one copy of this Agreement below and return it to us.
Keep the enclosed duplicate copy for your records.
UAM FUND DISTRIBUTORS, INC.
BY:
------------------------------------
(Name of Officer and Title)
<PAGE>
SELECTED DEALER AGREEMENT ACCEPTANCE
------------------------------------
UAM FUND DISTRIBUTORS, INC.
The undersigned hereby confirms its acceptance of, and agreement to the
terms of, the foregoing Selected Dealer Agreement and acknowledges that any
purchase of Fund Shares made during the effectiveness of this Agreement is
subject to all the applicable terms and conditions set forth in this Agreement,
and agrees to pay for the shares at the price and upon the terms and conditions
stated in the Agreement. The undersigned hereby acknowledges receipt of
Prospectuses relating to the Fund Shares and confirms that, in executing this
Selected Dealer Agreement, it has relied on such Prospectuses and not on any
other statement whatsoever, written or oral.
PLEASE SIGN HERE AND COMPLETE BELOW
------------------------------------------
(Full Corporate Name of Broker-Dealer)
By:
-----------------------------------
(Name of Officer and Title)
----------------------------------------
(Broker-Dealer's Tax Identification No,)
----------------------------------------
(Notice Address -- Please include name
of compliance contact)
Date:
-----------------------------------
<PAGE>
APPENDIX A
SCHEDULE OF FEES
SUPPLEMENTAL FEES
(CERTAIN DEFINED CONTRIBUTION PLANS ONLY)
Supplemental fees for sales of shares in the Funds set forth below will be
determined quarterly as of the end of each calendar quarter. Supplemental fees
will consist of the following:
(i) Once a Plan becomes a shareholder of the UAM Funds, a payment at an annual
rate of basis points applied to the average daily net assets in the
---
account (excluding money market assets which will be paid at an annual rate
of basis points of average daily net assets for such funds) for that
---
calendar quarter. These payments will be made after the completion of each
calendar quarter, based on the average daily net assets in the respective
accounts. Amounts related to investments for partial quarters will be
pro-rated based on the number of calendar days that the Plan is a
shareholder during that quarter.
(i)
(i)
(ii) Balances in a shareholder account exchanged into another shareholder
account or into another Portfolio of the Funds will continue to accrue
and be paid at the applicable rate, but in no event will any such payment
exceed the rate that would have been applicable had such exchange not
occurred.
A-9
<PAGE>
Name of Fund
- ------------
Acadian Emerging Markets Portfolio (I)
Analytic Defensive Equity Fund (I)
Analytic Enhanced Equity Fund (I)
Analytic Master Fixed Income Fund (I)
Analytic Short-Term Government Fund (I)
BHM&S Total Return Bond Portfolio (I)
Cambiar Opportunity Portfolio (I)
C&B Balanced Portfolio (I)
C&B Equity Portfolio (I)
C&B Equity Portfolio for Taxable Investors(I)
C&B Mid Cap Equity Portfolio (I)
Chicago Asset Management Intermediate Bond Portfolio (I)
Chicago Asset Management Value/Contrarian Portfolio (I)
Clipper Focus Portfolio (I)
DSI Balanced Portfolio (I)
DSI Disciplined Value Portfolio (I)
DSI Limited Maturity Bond Portfolio (I)
DSI Money Market Portfolio (I)
DSI Small Cap Value Portfolio (I)
FMA Small Company Portfolio (I)
FPA Crescent Portfolio (I)
Hanson Equity Portfolio (I)
Heitman Real Estate Portfolio (I)
ICM Equity Portfolio (I)
ICM Fixed Income Portfolio (I)
ICM Small Company Portfolio (I)
Jacobs International Octagon Portfolio (I)
McKee Domestic Equity Portfolio (I)
A-10
<PAGE>
McKee International Equity Portfolio (I)
McKee Small Cap Equity Portfolio (I)
McKee U.S. Government Portfolio (I)
MJI International Equity Portfolio (I)
NWQ Balanced Portfolio (I)
NWQ Special Equity Portfolio (I)
Pell Rudman Mid-Cap Growth Portfolio (I)
Rice, Hall, James Small Cap Portfolio (I)
Rice, Hall, James Small/Mid Cap Portfolio (I)
SAMI Preferred Stock Income Portfolio (I)
Sirach Bond Portfolio (I)
Sirach Equity Portfolio (I)Sirach Equity Portfolio (I)
Sirach Growth Portfolio (I)
Sirach Special Equity Portfolio (I)
Sirach Strategic Balanced Portfolio (I)
Sterling Partners' Balanced Portfolio (I)
Sterling Partners' Equity Portfolio (I)
Sterling Partners' Small Cap value Portfolio (I)
TS&W Balanced Portfolio (I)
TS&W Equity Portfolio (I)
TS&W Fixed Income Portfolio (I)
TS&W International Equity Portfolio (I)
A-11
<PAGE>
UAM FUND DISTRIBUTORS, INC.
UAM Fund Distributors, Inc., the distributor of the UAM Funds, Inc. and UAM
Funds Trust (collectively, the "Funds"), is a member of the National Securities
Clearing Corporation ("NSCC") Fund/Serv. Accordingly, transactions in shares of
portfolios of the Funds may be processed through Fund/Serv. If you are
interested in utilizing Fund/Serv, please provide the information requested
below.
Firm Name:
--------------------------------------
Address:
--------------------------------------
--------------------------------------
--------------------------------------
NSCC Dealer #:
-----------------------
NSCC Dealer Alpha Code:
-----------------------
NSCC Clearing #:
-----------------------
Phone Number:
-----------------------
Fax Number:
-----------------------
Mutual Fund Contact:
-----------------------
UAM Fund Distributors, Inc. has also executed and filed with the NSCC the
Investment Company Institute's ("ICI") Standard Networking Agreement. Provided
your firm has also executed and filed such agreement, Networking may be
utilized. If your firm wishes to utilize Networking, please complete the below
acknowledgment. By completing this acknowledgment, you agree that your firm
will participate in Networking under the terms of the ICI Standard Agreement.
Acknowledgment
Firm:
----------------------------
By:
-----------------------------
Name:
Title:
Date:
A-12
<PAGE>
FUND ADMINISTRATION AGREEMENT
UAM FUNDS, INC. II
AGREEMENT made as of April 6, 1999, by and between UAM Funds, Inc. II, a
corporation organized under the laws of the State of Maryland (the "Fund"), and
UAM Fund Services, Inc., a Delaware corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is registered as a diversified, open-end, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund wishes to retain the Administrator to provide certain
transfer agent, fund accounting and administration services with respect to the
Fund, and the Administrator is willing to furnish or provide for the furnishing
of such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Administrator to provide
-----------
transfer agent, fund accounting and fund administration services to the Fund,
subject to the supervision of the Board of Directors of the Fund (the "Board"),
for the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees to furnish the services herein set forth in
return for the compensation as provided in Paragraph 4 of this Agreement. The
Fund presently issues shares of common stock in one or more series each
representing separate interests in a portfolio of investments and cash.
Hereinafter, each such series shall be referred to as a "Portfolio." The term
"Portfolio" as hereinafter used shall be deemed to include not only separate
series of the Fund, but also separate classes of series of the Fund. The Fund
shall notify the Administrator in writing of each additional Portfolio
established by the Fund. Each new Portfolio shall be subject to the provisions
of this Agreement, except to the extent that said provisions (including those
relating to the compensation and expenses payable by the Fund and its
Portfolios) may be modified with respect to such new Portfolio in writing by the
Fund and the Administrator at the time of the addition of such new Portfolio.
2. Delivery of Documents. The Fund will upon request furnish the
---------------------
Administrator with copies, properly certified or authenticated, of each of the
following in their most current form:
(a) Resolutions of the Fund's Board authorizing the appointment of
the Administrator to provide certain transfer agency, fund accounting and
administration services to the Fund and approving this Agreement;
(b) The Fund's Articles of Incorporation ("Articles");
(c) The Fund's Bylaws ("Bylaws");
1
<PAGE>
(d) The Fund's Notification of Registration of Form N-8A under the
1940 Act as filed with the Securities and Exchange Commission ("SEC");
(e) The Fund's Registration Statement, as amended, on Form N-1A (the
"Registration Statement") under the Securities Act of 1933 and the 1940 Act, as
filed with the SEC; and
(f) The Fund's most recent Prospectuses and Statements of Additional
Information and supplements thereto (such Prospectuses and Statements of
Additional Information and supplements thereto, as presently in effect and as
from time to time hereafter amended and supplemented, herein called the
"Prospectuses").
The Fund will furnish the Administrator from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Services Provided by the Administrator. The Administrator will provide
--------------------------------------
the following services subject to the control, direction and supervision of the
Board, and in compliance with the objectives, policies and limitations set forth
in the Fund's Registration Statement, Bylaws and applicable laws and
regulations.
(a) General Administration. The Administrator shall manage,
----------------------
administer and conduct the general business activities of the Fund other than
those which have been contracted to other third parties by the Fund as of the
date hereof. The Administrator shall provide the personnel and facilities
necessary to perform such general business activities. A detailed description of
these services is included in Attachment A to this Agreement.
(b) Fund Accounting. The Administrator shall provide the following
---------------
accounting services to the Fund: (i) maintenance of the books and records and
accounting controls for the Fund's assets, including records of all securities
transactions; (ii) calculation of the Portfolios' net asset values in accordance
with the Prospectuses and, if requested by the Fund, transmission of the net
asset values to the NASD for publication of prices; (iii) accounting for
dividends, interest and other income received and distributions made by the
Fund; (iv) preparation and filing of the Fund's state and federal tax returns
and Semi-Annual Reports on Form N-SAR; (v) production of transaction data,
financial reports and such other periodic and special reports as the Board may
reasonably request; (vi) the preparation of financial statements for the semi-
annual and annual reports and other shareholder communications; (vii) liaison
with the Fund's independent auditors; and (viii) monitoring and administration
of arrangements with the Fund's custodian and depository banks. A complete
listing of reports that will be available to the Fund is included in Attachment
B of this Agreement.
(c) Transfer Agent. The Administrator shall:
--------------
(i) Maintain records showing for each Fund shareholder the
following: (A) name, address and tax identifying number; (B) number of shares
held of any Portfolio of the Fund; (C) historical information including
dividends paid and the date and price of all transactions including individual
purchases and redemptions; and (D) any dividend reinvestment order, application,
dividend address and correspondence relating to the current maintenance of the
account.
2
<PAGE>
(ii) Record the issuance of shares of common stock of the Fund
and shall notify the Fund in case any proposed issue of shares by the Fund shall
result in an over-issue as identified by Section 8-104(2) of the Uniform
Commercial Code and in case any issue would result in such an over-issue, shall
refuse to countersign and issue, and/or credit, said shares. Except as
specifically agreed in writing between the Administrator and the Fund, the
Administrator shall have no obligation when countersigning and issuing and/or
crediting shares, to take cognizance of any other laws relating to the issue and
sale of such shares except insofar as policies and procedures of the Stock
Transfer Association recognize such laws.
(iii) Process all orders for the purchase of shares of the Fund
in accordance with the Fund's current Registration Statement. Upon receipt of
any check or other payment for purchase of shares of the Fund from an investor,
it will: (A) stamp the envelope with the date of receipt; (B) forthwith process
the same for collection; and (C) determine the amounts thereof due the Fund, and
notify the Fund of such determination and deposit, such notification to be given
on a daily basis of the total amounts determined and deposited to the Fund's
custodian bank account during such day. The Administrator shall then credit the
share account of the investor with the number of shares to be purchased
according to the price of the Fund's shares in effect for purchases made on the
date such payment is received by the Administrator, determined as set forth in
the Fund's current Prospectuses, and shall promptly mail a confirmation of said
purchase to the investor, all subject to any instructions which the Fund may
give to the Administrator with respect to the timing or manner of acceptance of
orders for shares relating to payments so received by it.
(iv) Receive and stamp with the date of receipt all requests for
redemptions or repurchase of shares held in certificate or non-certificate form
and shall process redemptions and repurchase requests as follows: (A) if such
certificate or redemption request complies with the applicable standards
approved by the Fund, the Administrator shall on each business day notify the
Fund of the total number of shares presented and covered by such requests
received by the Administrator on such day; (B) on or prior to the seventh
calendar day succeeding any such request for redemption, the Administrator shall
notify the custodian, subject to the instructions from the Fund, to transfer
monies to such account as designated by the Administrator for such payment to
the redeeming shareholder of the applicable redemption or repurchase price; (C)
if any such certificate or request for redemption or repurchase does not comply
with applicable standards, the Administrator shall promptly notify the investor
of such fact, together with the reason therefor, and shall effect such
redemption at the relevant Portfolio's price next determined after receipt of
documents complying with said standards or at such other time as the Fund shall
so direct.
(v) Acknowledge all correspondence from shareholders relating
to their share accounts and undertake such other shareholder correspondence as
may from time to time be mutually agreed upon.
(vi) Process redemptions, exchanges and transfers of Fund shares
upon telephone instructions from qualified shareholders in accordance with the
procedures set forth in the Fund's current Prospectuses. The Administrator shall
be permitted to act upon the instruction of any person by telephone to redeem,
exchange and/or transfer Fund shares from any account for which such services
have been authorized. The Fund hereby agrees to indemnify and
3
<PAGE>
hold the Administrator harmless against all losses, costs or expenses, including
attorneys' fees and expenses suffered or incurred by the Administrator directly
or indirectly as a result of relying on the telephone instructions of any person
acting on behalf of a shareholder account for which telephone services have been
authorized.
(vii) Transfer on the records of the Fund maintained by it,
shares represented by certificates, as well as issued shares held in non-
certificate form, upon the surrender to it of the certificate or, in the case of
non-certificated shares, comparable transfer documents in proper form for
transfer and, upon cancellation thereof, to countersign and issue new
certificates or other documents of ownership for a like amount of stock and to
deliver the same pursuant to the transfer instructions.
(viii) Supply, at the expense of the Fund, a supply of continuous
form blank stock certificates. Such blank stock certificates shall be properly
signed, manually or by facsimile, as authorized by the Fund, and shall bear the
Fund's corporate seal or facsimile thereof; and notwithstanding the death,
resignation or removal of any officers of the Fund authorized to sign
certificates of stock, the Administrator may, until otherwise directed by the
Fund, continue to countersign certificates which bear the manual or facsimile
signature of such officer.
(ix) Upon the request of a shareholder of the Fund who requests
a certificate representing his shares, countersign and mail by first class mail
a share certificate to the investor at his address as set forth on the transfer
books of the Fund.
(x) In the event that any check or other order for the payment
of money is returned unpaid for any reason, take such steps, including
redepositing said check for collection or returning said check to the investor,
as the Administrator may, at its discretion, deem appropriate and notify the
Fund of such action, unless the Fund instructs otherwise. However, the
Administrator shall not be liable to the Fund for any returned checks or other
order for the payment of money if it follows reasonable procedures with respect
thereto.
(xi) Prepare, file with the Internal Revenue Service, and mail
to shareholders such returns for reporting payment of dividends and
distributions as are required by applicable laws to be so filed and/or mailed,
and the Administrator shall withhold such sums as are required to be withheld
under applicable Federal income tax laws, rules and regulations.
(xii) Mail proxy statements, proxy cards and other materials and
shall receive, examine and tabulate returned proxies. The Administrator shall
make interim reports of the status of such tabulation to the Fund upon request,
and shall certify the final results of the tabulation.
(d) Dividend Disbursing. The Administrator shall act as Dividend
-------------------
Disbursing Agent for the Fund, and, as such, shall prepare and mail checks or
credit income and capital gain payments to shareholders. The Fund shall advise
the Administrator of the declaration of any dividend or distribution and the
record and payable date thereof at least five (5) days prior to the record date.
The Administrator shall, on or before the payment date of any such dividend or
distribution, notify the Fund's custodian of the estimated amount required to
pay any portion of said dividend or distribution which is payable in cash, and
on or before the
4
<PAGE>
payment date of such distribution, the Fund shall instruct its custodian to make
available to the Administrator sufficient funds for the cash amount to be paid
out. If a shareholder is entitled to receive additional shares by virtue of any
such distribution or dividend, appropriate credits will be made to his account
and/or certificates delivered where requested. A shareholder not electing
issuance of certificates will receive a confirmation from the Administrator
indicating the number of shares credited to his account.
(e) Miscellaneous. The Administrator will also:
-------------
(i) Provide office facilities (which may be in the offices of
the Administrator or a corporate affiliate of them, but shall be in such
location as the Fund shall reasonably approve) and the services of a principal
financial officer to be appointed by the Fund;
(ii) Furnish statistical and research data, clerical services
and stationery and office supplies;
(iii) Assist in the monitoring of regulatory and legislative
developments which may affect the Fund and, in response to such developments,
counsel and assist the Fund in routine regulatory examinations or investigations
of the Fund, and work with outside counsel to the Fund in connection with
regulatory matters or litigation.
(iv) In performing its duties: (A) will act in accordance with
the Fund's Articles, Bylaws, Prospectuses and the instructions and directions of
the Board and will conform to, and comply with, except as otherwise provided
herein, the requirements of the 1940 Act and all other applicable federal or
state laws and regulations; and (B) will consult with outside legal counsel to
the Fund, as necessary or appropriate.
(v) Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under said Act in
connection with the services required to be performed hereunder. The
Administrator further agrees that all such records which it maintains for the
Fund are the property of the Fund and further agrees to surrender promptly to
the Fund any of such records upon the Fund's request.
(f) The Administrator may, at its expense and discretion, subcontract
with any entity or person concerning the provisions of the services contemplated
hereunder. The Administrator will provide prompt notice of such delegation and
provide copies of any such subcontract to the Fund.
4. Fees; Expenses; Expense Reimbursement.
-------------------------------------
(a) For the services rendered for the Fund pursuant to this
Agreement, the Administrator shall be entitled to a fee based on the average net
assets of the Fund determined at the annual rate outlined in Attachment C of
this Agreement and applied to the average daily net assets of the Fund. Such
fees are to be computed daily and paid monthly on the first business day of the
following month. Upon any termination of this Agreement before the end of any
month, the fee for such part of the month shall be prorated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
5
<PAGE>
(b) For the purpose of determining fees payable to the Administrator,
the value of the Fund's net assets shall be computed as required by its
Prospectuses, generally accepted accounting principles and resolutions of the
Board.
(c) The Administrator will from time to time employ or associate with
such person or persons as may be fit to assist them in the performance of this
Agreement. Such person or persons may be officers and employees who are employed
by both the Administrator and the Fund. The compensation of such person or
persons for such employment shall be paid by the Administrator and no obligation
will be incurred by or on behalf of the Fund in such respect.
(d) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise expressly
provided herein. Other expenses to be incurred in the operation of the Fund will
be borne by the Fund or other parties, including taxes, interest, brokerage fees
and commissions, if any, salaries and fees of officers and members of the Board
who are not officers, directors, shareholders or employees of the Administrator,
or the Fund's investment adviser or distributor, SEC fees and state Blue Sky
fees, EDGAR filing fees, processing services and related fees, advisory and
administration fees, charges and expenses of pricing and data services,
independent public accountants and custodians, insurance premiums including
fidelity bond premiums, outside legal expenses, costs of maintenance of
corporate existence, typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund, printing and
production costs of shareholders' reports and corporate meetings, cost and
expenses of Fund stationery and forms; costs of special telephone and data lines
and devices; trade association dues and expenses; and any extraordinary expenses
and other customary Fund expenses; provided, however, that, except as provided
in any distribution plan adopted by the Fund, the Fund will not bear, directly
or indirectly, the cost of any activity which is primarily intended to result in
the distribution of shares of the Fund. In addition, the Administrator may
utilize one or more independent pricing services, approved from time to time by
the Board, to obtain securities prices in connection with determining the net
asset values of the Fund, and the Fund will reimburse the Administrator for its
share of the cost of such services based upon its actual use of the services for
the benefit of the Fund.
5. Proprietary and Confidential Information. The Administrator agrees on
----------------------------------------
behalf of itself and its employees to treat confidentially and as proprietary,
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and not to use such records and
information for any purpose other than performance of their responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where the Administrator may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund. Waivers of
confidentiality are automatically effective without further action by the
Administrator with respect to Internal Revenue levies, subpoenas and similar
actions, or with respect to any request by the Fund.
6
<PAGE>
6. Duties, Responsibilities and Limitation of Liability.
----------------------------------------------------
(a) In the performance of its duties hereunder, the Administrator
shall be obligated to exercise due care and diligence and to act in good faith
in performing the services provided for under this Agreement. In performing its
services hereunder, the Administrator shall be entitled to rely on any oral or
written instructions, notices or other communications from the Fund and its
custodians, officers and directors, investors, agents, legal counsel and other
service providers which communications the Administrator reasonably believes to
be genuine, valid and authorized.
(b) Subject to the foregoing, the Administrator shall not be liable
for any error of judgment or mistake of law or for any loss or expense suffered
by the Fund, in connection with the matters to which this Agreement relates,
except for a loss or expense resulting from willful misfeasance, bad faith or
gross negligence on the Administrator's part in the performance of its duties or
from reckless disregard by the Administrator of its obligations and duties under
this Agreement. Any person, even though also an officer, director, partner,
employee or agent of the Administrator, who may be or become an officer,
director, partner, employee or agent of the Fund, shall be deemed when rendering
services to the Fund or acting on any business of the Fund (other than services
or business in connection with the Administrator's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an officer,
director, partner, employee or agent or person under the control or direction of
the Administrator even though paid by the Administrator. In no event shall the
Administrator be liable to the Fund or any other party for special or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits) even if the Administrator has been advised of such loss or
damage and regardless of the form of action.
(c) The Administrator shall not be responsible for, and the Fund
shall indemnify and hold the Administrator harmless from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities, except for a loss or expense resulting from willful
misfeasance, bad faith or gross negligence on the Administrator's part in the
performance of its duties or from reckless disregard by the Administrator of its
obligations and duties under this Agreement, arising out of or attributable to:
(i) All actions of the Administrator or its officers, employers
or agents required to be taken pursuant to this Agreement;
(ii) The reliance on or use by the Administrator or its
officers, employers or agents of information, records, or documents which are
received by the Administrator or its officers, employers or agents and furnished
to it or them by or on behalf of the Fund, and which have been prepared or
maintained by the Fund or its officers, employees or agents;
(iii) The Fund's refusal or failure to comply with the terms of
this Agreement or the Fund's lack of good faith, or its actions, or lack
thereof, involving gross negligence or willful misfeasance;
(iv) The taping or other form of recording of telephone
conversations or other forms of electronic communications with other agents of
the Fund, its
7
<PAGE>
investors and shareholders, or reliance by the Administrator on telephone or
other electronic instructions of any person acting on behalf of a shareholder or
shareholder account for which telephone or other electronic services have been
authorized; and
(v) The offer or sale of shares by the Fund in violation of any
requirement under the Federal securities laws or regulations or the securities
laws or regulations of any state, or in violation of any stop order or other
determination or ruling by any Federal agency or any state agency with respect
to the offer or sale of such shares in such state resulting from activities,
actions, or omissions by the Fund or its officers, employees, or agents prior to
the effective date of this Agreement.
(d) The Administrator shall indemnify and hold the Fund harmless from
and against any and all losses, damages, costs, charges, reasonable attorneys'
fees and expenses, payments, expenses and liability arising out of or
attributable to the Administrator's refusal or failure to comply with the terms
of this Agreement; the Administrator's breach of any representation or warranty
made by it herein; or the Administrator's lack of good faith, or acts involving
gross negligence, willful misfeasance or reckless disregard of its duties
hereunder.
7. Term. The Administrator will start the provision of the services
----
contemplated by this Agreement on the date first hereinabove written or whenever
the current service provider ceases to provide its services and the operative
terms of the Agreement will continue through April 15, 1999, unless sooner
terminated as provided herein. Thereafter, unless sooner terminated as provided
herein, this Agreement shall continue in effect from year to year provided such
continuance is specifically approved at least annually by the Board. This
Agreement is terminable, without penalty, by the Board or by the Administrator,
on not less than ninety (90) days' written notice. Except as provided in
Section 8 hereof, this Agreement shall automatically terminate upon its
assignment by the Administrator without the prior written consent of the Fund.
Upon termination of this Agreement, the Fund shall pay to the Administrator such
compensation and any reimbursable expenses as may be due under the terms hereof
as of the date of termination or the date that the provision of services ceases,
whichever is later.
8. Non-Assignability. This Agreement shall not be assigned by any of
-----------------
the parties hereto without the prior consent in writing of the other party;
provided, however, that the Administrator may in its own discretion and without
limitation or prior consent of the Fund, whenever and on such terms and
conditions as it deems necessary or appropriate, enter into subcontracts,
agreements and understandings with non-affiliated third parties; provided, that
such subcontract, agreement or understanding shall not discharge the
Administrator from its obligations hereunder or the delegation of its duties to
another third party.
9. Force Majeure. The Administrator shall not be responsible or liable
-------------
for any failure or delay in performance of its obligations under this Agreement
arising out of or caused, directly or indirectly, by circumstances beyond its
control, including without limitation, acts of God, earthquakes, fires, floods,
wars, civil or military authority or governmental actions, nor shall any such
failure or delay give the Fund the right to terminate this Agreement, unless
such failure or delay shall result in the Fund's inability to comply with the
requirements of state and federal law.
8
<PAGE>
10. Use of Name. The Fund and the Administrator agree not to use the
-----------
other's name nor the names of such other's affiliates, designees or assignees in
any prospectus, sales literature or other printed material written in a manner
not previously expressly approved in writing by the other or such other's
affiliates, designees or assignees except where required by the SEC or any state
agency responsible for securities regulation.
11. Notice. Any notice required or permitted hereunder shall be in
------
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):
If to the administrator
or the Fund: UAM Funds, Inc. II
c/o UAM Fund Services, Inc.
211 Congress Street - 4th floor
Boston, MA 02110
Attn: Gary L. French, President
With a copy to: Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Attn: Audrey C. Talley, Esq.
Notice shall be effective upon receipt if by mail, on the date of
personal delivery (by private messenger, courier service or otherwise) or upon
confirmed receipt of telex or facsimile, whichever occurs first.
12. Waiver. The failure of a party to insist upon strict adherence to
------
any term of this Agreement on any occasion shall not be considered a waiver nor
shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
13. Severability. If any provision of this Agreement is invalid or
------------
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
14. Successor and Assigns. The covenants and conditions herein contained
---------------------
shall, subject to the provisions as to assignment, apply to and bind the
successors and assigns of the parties hereto.
15. Governing Law. This Agreement shall be governed by Massachusetts law
-------------
including its choice of law provisions.
16. Amendments. This Agreement may be modified or amended from time to
----------
time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought.
9
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date indicated above.
UAM FUNDS, INC. II
By: ________________________________________
Name: Gary L. French
Title: Treasurer
UAM FUND SERVICES, INC.
By: ________________________________________
Name: Michael E. DeFao
Title: Vice President & General Counsel
10
<PAGE>
ATTACHMENT A
FUND ADMINISTRATION SERVICES
Compliance
- ----------
Prepare and update compliance manuals and procedures.
Assist in the training of portfolio managers, management and Fund accountants
concerning compliance manuals and procedures.
Monitor each Portfolio's compliance with investment restrictions (i.e. issuer or
industry diversification, etc.) listed in the current Prospectuses and Statement
of Additional Information. (Frequency - Daily)
Monitor each Portfolio's compliance with the requirements of the Internal
Revenue Code (the "Code") Section 851 for qualification as regulated investment
companies. (Frequency - Monthly)
Calculate and recommend dividend and capital gain distributions in accordance
with distribution policies detailed in the Prospectuses. (Frequency -
Determined by Prospectus)
Prepare year-end dividend and capital gain distributions to establish Fund's
status as RIC under Section 4982 of the Code regarding minimum distribution
requirements. File Federal Excise Tax Return (Form 8613). (Frequency -
Annually)
Mail quarterly requests for "Securities Transaction Reports" to the Fund's
Trustees/Directors and Officers and "access persons" under the terms of the
Fund's Code of Ethics and SEC regulations.
Monitor investment manager's compliance with Board directives such as "Approved
Issuers Listings for Repurchase Agreements" and provisions of Rule 2a-7 for
money market funds. (Frequency - Daily)
Review investments involving interests in any broker, dealer, underwriter or
investment adviser to ensure continued compliance with Section 12(d)(3) of the
1940 Act. (Frequency - Quarterly)
Monitor the Fund's brokerage allocation and prepare quarterly brokerage
allocation reports for Board meetings (consistent with reporting from the
current service provider).
A-1
<PAGE>
Reporting
- ---------
Prepare agreed upon management reports and Board materials such as unaudited
financial statements, distribution summaries and deviations of mark-to-market
valuation and the amortized cost for money market funds.
Report Fund performance to outside services as directed by Fund management.
Prepare and file Fund's Semi-Annual Reports on Form N-SAR with the SEC.
Prepare and file Portfolio Federal tax returns along with all state and local
tax returns and State Expense Limitation returns, where applicable.
Prepare and coordinate printing of Fund's Semi-Annual and Annual Reports to
shareholders.
File copies of every report to shareholders with the SEC under Rule 30b2-1.
Notify shareholders as to what portion, if any, of the distributions made by the
Fund during the prior fiscal year were exempt-interest dividends under Section
852(b)(5)(A) of the Code.
Provide Form 1099-MISC to persons other than corporations (i.e.,
Trustees/Directors) to whom the Fund paid more than $600 during the year.
Administration
- --------------
Serve as officers of the Fund and attend Fund Board meetings.
Prepare Fund portfolio expense projections, establish accruals and review on a
periodic basis.
Expenses based on a percentage of Fund's average daily net assets (advisory and
administrative fees).
Expenses based on actual charges annualized and accrued daily (audit fees,
registration fees, directors' fees, etc.).
For new Portfolios, obtain Employer Identification Number and CUSIP number.
Estimate organization (offering) costs and monitor against actual disbursements.
Provide financial information for Fund proxies and Prospectuses (Expense Table).
Coordinate all communications and data collection with regards to any regulatory
examinations and yearly audit by independent accountants.
Act as liaison to investment advisors concerning new products.
A-2
<PAGE>
Legal Affairs
- -------------
Prepare and update documents, such as Articles of Incorporation/Declaration of
Trust, foreign corporation qualification filings, Bylaws and stock certificates.
Update and file post-effective amendments to the Fund's registration statement
on Form N-1A and prepare supplements as needed.
Prepare and file Rule 24f-2 Notice.
Prepare proxy materials and administer shareholder meetings.
Review contracts between the Fund and its service providers (must be sensitive
to conflict of interest situations).
Research technical issues and questions arising out of a Fund's special status
under the tax and securities laws and monitor legal trends, developments and
changes.
Apprise and train management and staff with respect to important legal issues.
Prepare and maintain all state registrations and exemptions of the Fund's
securities including annual renewals, registering new Portfolios, preparing and
filing sales reports, filing copies of the registration statement and final
prospectus and statement of additional information, and increasing registered
amounts of securities in individual states.
Review and monitor fidelity bond and errors and omissions insurance coverage and
make any related regulatory filings.
Prepare agenda and Board materials, including materials relating to contract
renewals, for all Board meetings.
Maintain minutes of Board and shareholder meetings.
Act as liaison with Fund's distributor and outside Fund counsel:
Coordinate and monitor the work of outside counsel.
Respond to questions from the investment advisors concerning legal
questions relating to investments.
A-3
<PAGE>
ATTACHMENT B
Domestic Fund Accounting Daily Reports
- --------------------------------------
A) General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C) Pricing Reports
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E) Other
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
B-1
<PAGE>
International Fund Accounting Daily Reports
- -------------------------------------------
A) General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B) Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C) Currency Reports
1. Currency Purchase/Sales Journal
2. Currency Valuation Report
D) Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
E) Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F) Other
1. Exchange Rate Report
B-2
<PAGE>
Monthly Fund Accounting Reports
- -------------------------------
A) Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
10. SEC Yield Calculation Work Sheet
B) International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
B-3
<PAGE>
ATTACHMENT C
FEE SCHEDULE TO THE FUND ADMINISTRATION AGREEMENT
For its services, the Fund pays a five-part fee to the Administrator as follows:
1. An annual base fee calculated at the annual rate of:
A. $14,500 for the first operational class of each portfolio; plus
B. $ 3,000 for each additional operational class of each portfolio
2. A portfolio specific fee calculated from the aggregate net assets of the
portfolios at the annual rates set forth on the attached Exhibit 1.
3. An annual base fee that the Administrator pays to SEI Fund Resources
pursuant to a Mutual Funds Service Agreement calculated at the annual rate
of:
A. $35,000 for the first operational class of each portfolio; plus
B. $5,000 for each additional operational class of each portfolio; plus
C. 0.03% of their pro rata share of the combined assets of the Fund.
4. An annual base fee according to Exhibit B that the Administrator pays to
DST Systems, Inc., the Fund's sub-transfer agent, pursuant to an Agency
Agreement.
5. An annual base fee that the Administrator pays to UAM Shareholder Services
Center, Inc. pursuant to a Sub-Shareholder Servicing Agreement at the
annual rate of:
A. $7,500 for the first operational class of each portfolio; plus
B. $2,500 for each additional class of each portfolio; plus
C. $30 per account.
These fees do not include out-of-pocket expenses, which under this Agreement
will be billed separately.
C-1
<PAGE>
EXHIBIT 1
<TABLE>
<CAPTION>
PORTFOLIO % OF AVERAGE NET ASSETS
- --------- -----------------------
<S> <C>
Analytic Enhanced Equity Fund 0.04%
Analytic Defensive Equity Fund 0.06%
Analytic Master Fixed Income Fund 0.04%
Analytic Short-Term Government Fund 0.04%
</TABLE>
Exhibit-1
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
. Sub-Fund administration Services
. Sub-Fund accounting Services
UAM FUNDS, INC. II
APRIL 6, 1999
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
AGREEMENT made as of April 6, 1999 by and between UAM FUND SERVICES,
INC. ("UAMFSI"), a Delaware corporation, and SEI Fund Resources ("Service
Provider"), a _______ corporation.
W I T N E S S E T H:
WHEREAS, UAM Funds, Inc. II (the "Fund") is registered as an open-end
management, investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), and currently offers for sale to investors its shares
in several investment portfolios (each a "Portfolio," collectively the
"Portfolios") and classes of such Portfolios (each a "Class, collectively the
"Classes");
WHEREAS, UAMFSI is responsible for the provision of certain fund
administration, fund accounting and transfer agent services with respect to the
Fund pursuant to the Agreement between UAMFSI and the Fund dated April 6, 1999
(the "Administration Agreement"); and
WHEREAS, UAMFSI wishes to retain Service Provider to provide certain
fund sub-administration and sub-accounting services with respect to the Fund,
and Service Provider is willing to furnish such services;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. UAMFSI hereby appoints Service Provider to provide
certain fund sub-administration and sub-accounting services for the Fund,
subject to the supervision of UAMFSI and the Board of Directors of the Fund (the
"Board"), for the period and on the terms set forth in this Agreement. Service
Provider accepts such appointment and agrees to furnish the services herein set
forth in return for the compensation as provided in Paragraph 5, of and Schedule
A, to this Agreement.
2. REPRESENTATIONS AND WARRANTIES.
(a) Service Provider represents and warrants to UAMFSI that:
1
<PAGE>
(i) Service Provider is a corporation existing under the laws
of the State of ______;
(ii) Service Provider is duly qualified to carry on its
business in the Commonwealth of Massachusetts;
(iii) Service Provider is empowered under applicable laws and by
its Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;
(iv) all requisite corporate proceedings have been taken to
authorize Service Provider to enter into and perform this Agreement;
(v) Service Provider has, and will continue to have, access to
the facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
(vi) no legal or administrative proceedings have been
instituted or threatened which would impair Service Provider's ability to
perform its duties and obligations under this Agreement; and
(vii) Service Provider's entrance into this Agreement shall not
cause a material breach or be in material conflict with any other agreement or
obligation of Service Provider or any law or regulation applicable to Service
Provider.
(b) UAMFSI represents and warrants to Service Provider that:
(i) UAMFSI is a corporation existing under the laws of the
State of Delaware;
(ii) UAMFSI is duly qualified to carry on its business in the
Commonwealth of Massachusetts;
(iii) UAMFSI is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;
(iv) all requisite corporate proceedings have been taken to
authorize UAMFSI to enter into and perform this Agreement;
(v) UAMFSI has, and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
(vi) no legal or administrative proceedings have been
instituted or threatened which would impair UAMFSI's ability to perform its
duties and obligations under this Agreement; and
2
<PAGE>
(vii) UAMFSI's entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of UAMFSI or any law or regulation applicable to UAMFSI;
(c) UAMFSI represents and warrants to Service Provider with respect
to the Fund that:
(i) the Fund is a Maryland corporation, duly organized and
existing and in good standing under the laws of the State of Maryland;
(ii) the Fund is an investment company properly registered
under the 1940 Act;
(iii) a registration statement for the Fund under the Securities
Act of 1933, as amended ("1933 Act") and the 1940 Act on Form N-1A has been
filed and will be effective and will remain effective during the term of this
Agreement, and all necessary filings under the laws of the states will have been
made and will be current during the term of this Agreement; and
(iv) that outside counsel to the Fund has represented that the
Fund's registration statements comply in all material respects with the
Securities Act of 1933 ("1933 Act") and the 1940 Act (including the rules and
regulations thereunder) and none of the Fund's prospectuses contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein not misleading .
3. DELIVERY OF DOCUMENTS. UAMFSI will promptly furnish to Service
Provider such copies, properly certified or authenticated, of contracts,
documents and other related information that Service Provider may reasonably
request or require to properly discharge its duties. Such documents may include
but are not limited to the following:
(a) Resolutions of the Fund's Board authorizing the appointment of
UAMFSI to provide certain fund administration and fund accounting services to
the Fund and approving this Agreement;
(b) UAMFSI's and the Fund's Articles of Incorporation;
(c) UAMFSI's and the Fund's By-Laws;
(d) Authorization by the Fund contained in the Administration
Agreement allowing UAMFSI to make representations to Service Provider on its
behalf;
3
<PAGE>
(e) The Fund's Notification of Registration on Form N-8A under the
1940 Act, as filed with the Securities and Exchange Commission ("SEC");
(f) The Fund's registration statement including exhibits, as amended,
on Form N-1A (the "Registration Statement") under the 1933 Act and the 1940 Act,
as filed with the SEC;
(g) Copies of the Investment Advisory Agreements between the Fund and
its investment advisers (the "Advisory Agreements");
(h) Opinions of counsel and auditors' reports;
(i) The Fund's Prospectus(es) and Statement(s) of Additional
Information relating to all Portfolios and all amendments and supplements
thereto (such Prospectus(es) and Statement(s) of Additional Information and
supplements thereto, as presently in effect and as from time to time hereafter
amended and supplemented, herein called the "Prospectuses"); and
(j) Such other agreements as the Fund may enter into from time to
time which may be relevant to the performance of Service Provider's duties and
obligations under the terms of this Agreement, including securities lending
agreements, futures and commodities account agreements, brokerage agreements,
and options agreements.
4. SERVICES PROVIDED
(a) Service Provider will provide the following services subject to
the control, direction and supervision of UAMFSI and the Fund's Board and in
compliance with the objectives, policies and limitations set forth in the Fund's
Registration Statement, Articles of Incorporation and By-Laws; applicable laws
and regulations; and all resolutions and policies implemented by the Board:
(i) Fund Sub-Administration
(ii) Sub-Accounting
A description of each of the above services is contained in Schedules B and C
respectively, to this Agreement.
(b) Service Provider will also:
(i) provide office facilities with respect to the provision of
the services contemplated herein (which may be in the offices of Service
Provider or a corporate affiliate of Service Provider);
4
<PAGE>
(ii) provide the services of individuals to serve as officers
of the Fund who will be designated by Service Provider with the approval of
UAMFSI, and elected by the Board;
(iii) provide or otherwise obtain personnel sufficient for
provision of the services contemplated herein;
(iv) furnish equipment and other materials, which Service
Provider believes are necessary or desirable for provision of the services
contemplated herein; and
(v) keep records relating to the services provided hereunder
in such form and manner as set forth in Schedules B and C in accordance with the
1940 Act. To the extent required by Section 31 of the 1940 Act and the rules
thereunder, Service Provider agrees that all such records prepared or maintained
by Service Provider relating to the services provided hereunder are the property
of UAMFSI and the Fund and will be preserved for the periods prescribed under
Rule 31a-2 under the 1940 Act, maintained at UAMFSI's and/or the Fund's expense,
and made available in accordance with such Section and rules. Service Provider
further agrees to surrender promptly to UAMFSI or the Fund upon its request and
cease to retain in its records and files those records and documents created and
maintained by Service Provider pursuant to this Agreement, unless otherwise
required by law. Service Provider will provide a copy of such records to UAMFSI,
upon request, in a mutually agreed upon electronic format.
5. FEES; EXPENSES; EXPENSE REIMBURSEMENT.
(a) As compensation for the services rendered to the Fund and UAMFSI
pursuant to this Agreement, UAMFSI shall pay Service Provider monthly fees
determined as set forth in Schedule A to this Agreement. Such fees are to be
billed monthly and shall be due and payable upon receipt of the invoice. Upon
any termination of this Agreement before the end of any month, the fee for the
part of the month before such termination shall be prorated according to the
proportion which such part bears to the full monthly period and shall be payable
upon the date of termination of this Agreement.
(b) For the purpose of determining fees calculated as a function of
the Fund's assets, the value of the Fund's assets and net assets shall be
computed as required by its currently effective Prospectus, generally accepted
accounting principles, and resolutions of the Fund's Board.
5
<PAGE>
(c) Service Provider may, in its sole discretion, from time to time
employ or associate with such person or persons as may be appropriate to assist
Service Provider in the performance of this Agreement. Such person or persons
may be officers and employees who are employed or designated as officers by both
Service Provider and the Fund. The compensation of such person or persons for
such employment shall be paid by Service Provider and no obligation will be
incurred by or on behalf of the Fund or UAMFSI in such respect.
(d) UAMFSI may request additional services, additional processing, or
special reports on behalf of the Fund or itself. UAMFSI shall submit such
requests in writing together with such specifications and requirements
documentation as may be reasonably required by Service Provider. If Service
Provider elects to provide such services or arrange for their provision, it
shall be entitled to reasonable additional fees and expenses at its customary
rates and charges, or such other fees, if any, mutually agreed to by Service
Provider and UAMFSI.
(e) Service Provider will bear all of its own expenses in connection
with the performance of the services under this Agreement except as otherwise
expressly provided herein. UAMFSI agrees to promptly reimburse Service Provider
for any equipment and supplies specially ordered by or for UAMFSI or the Fund
through Service Provider and for any other expenses not contemplated by this
Agreement that Service Provider may incur on the Fund's and/or UAMFSI's behalf
at the Fund's and/or UAMFSI's request or as consented to by the Fund and/or
UAMFSI, provided that Service Provider will notify the Fund and/or UAMFSI of the
approximate amount of such expenses prior to incurring them. Such other
expenses to be incurred in the operation of the Fund and to be borne by the Fund
and/or UAMFSI, include, but are not limited to: taxes; interest; brokerage fees
and commissions; salaries and fees of officers and directors who are not
officers, directors, shareholders or employees of Service Provider, or the
Fund's investment advisers or distributor; SEC and state Blue Sky registration
and qualification fees, levies, fines and other charges; EDGAR filing fees,
processing services and related fees; advisory and administration fees; charges
and expenses of pricing and data services, independent public accountants and
custodians; insurance premiums including fidelity bond premiums; auditing
expenses; expenses of fund counsel and counsel to the independent trustees;
costs of maintenance of corporate existence; expenses of typesetting and
printing of prospectuses for regulatory purposes and for distribution to current
shareholders of the Fund (the Fund's distributor to bear the expense of all
other printing, production, and distribution of prospectuses, statements of
6
<PAGE>
additional information, and marketing materials); expenses of printing and
production costs of shareholders' reports and proxy statements and materials;
costs and expenses of Fund stationery and forms; costs and expenses of special
telephone and data lines and devices; costs associated with corporate,
shareholder, and Board meetings; trade association dues and expenses; and any
extraordinary expenses and other customary Fund expenses. In addition, Service
Provider may utilize one or more independent pricing services, approved from
time to time by the Fund's Board, to obtain securities prices and to act as
backup to the primary pricing services, in connection with determining the net
asset values of the Fund, and UAMFSI and/or the Fund will reimburse Service
Provider for the Fund's share of the cost of such services based upon the actual
usage, or a pro-rata estimate of the use, of the services for the benefit of the
Fund.
(f) All fees, out-of-pocket expenses, or additional charges of
Service Provider shall be billed on a monthly basis and shall be due and payable
upon receipt of the invoice.
Service Provider will render, after the close of each month in which
services have been furnished, a statement reflecting all of the charges for such
month. Charges remaining unpaid after thirty (30) days of receipt shall bear
interest in finance charges equivalent to, in the aggregate, the Prime Rate (as
determined by Service Provider) plus two percent per year and all costs and
expenses of effecting collection of any such sums, including reasonable
attorney's fees, shall be paid by UAMFSI to Service Provider.
In the event that UAMFSI is more than sixty (60) days delinquent in
its payments of monthly billings in connection with this Agreement (with the
exception of specific amounts which may be contested in good faith by UAMFSI),
this Agreement may be terminated upon thirty (30) days' written notice to UAMFSI
by Service Provider. UAMFSI must notify Service Provider in writing of any
contested amounts within thirty (30) days of receipt of a billing for such
amounts. Disputed amounts are not due and payable while they are being
disputed. The fees set forth in Schedule A may be changed from time to time
upon agreement of the parties.
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Service Provider agrees on
behalf of itself and its employees to treat confidentially and as proprietary
information of the Fund, all records and other information relative to the
Fund's prior, present or potential shareholders, and to not use such records and
information for any purpose other than performance of Service Provider's
responsibilities and duties hereunder. Service Provider may seek a waiver of
such confidentiality provisions by furnishing reasonable prior notice to the
Fund and UAMFSI
7
<PAGE>
and obtaining approval in writing from the Fund and UAMFSI, which approval shall
not be unreasonably withheld and may not be withheld where Service Provider may
be exposed to civil or criminal contempt proceedin gs for failure to comply,
when requested to divulge such information by duly constituted authorities.
Waivers of confidentiality are automatically effective without further action by
Service Provider with respect to Internal Revenue Service levies, subpoenas and
similar actions, or with respect to any request by the Fund or UAMFSI.
7. DUTIES, RESPONSIBILITIES, AND LIMITATION OF LIABILITY.
(a) In the performance of its duties hereunder, Service Provider
shall be obligated to act in good faith in performing the services provided for
under this Agreement. In performing its services hereunder, UAMFSI represents
and warrants that Service Provider shall be entitled to rely on any oral or
written instructions, notices or other communications, including electronic
transmissions, from UAMFSI and the Fund and its custodians, officers and
directors, investors, agents, legal counsel and other service providers which
Service Provider reasonably believes to be genuine, valid and authorized, and
that Service Provider shall also be entitled to consult with and rely on the
advice and opinions of outside legal counsel retained by UAMFSI and/or the Fund,
as necessary or appropriate.
(b) Service Provider shall not be liable for any error of judgment or
mistake of law or for any loss or expense suffered by the Fund or UAMFSI, in
connection with the matters to which this Agreement relates, except for a loss
or expense solely caused by or resulting from willful misfeasance, bad faith or
gross negligence on Service Provider's part in the performance of its duties or
from reckless disregard by Service Provider of its obligations and duties under
this Agreement. Any person, even though also an officer, director, partner,
employee or agent of Service Provider, who may be or become an officer,
director, partner, employee or agent of the Fund, shall be deemed when rendering
services to the Fund or acting on any business of the Fund (other than services
or business in connection with Service Provider's duties hereunder) to be
rendering such services to or acting solely for the Fund and not as an officer,
director, partner, employee or agent or person under the control or direction of
Service Provider even though paid by Service Provider. In no event shall
Service Provider be liable to the Fund, UAMFSI or any other party for special,
indirect or consequential loss or damage of any kind whatsoever (including
8
<PAGE>
but not limited to lost profits), even if Service Provider has been advised of
the likelihood of such loss or damage and regardless of the form of action.
(c) Subject to Paragraph 7 (b) above, Service Provider shall not be
responsible for, and UAMFSI shall indemnify and hold Service Provider harmless
from and against, any and all losses, damages, costs, reasonable attorneys' fees
and expenses, payments, expenses and liabilities arising out of or attributable
to:
(i) all actions of Service Provider or its officers or agents
required to be taken pursuant to this Agreement;
(ii) the reliance on or use by Service Provider or its officers
or agents of information, records, or documents which are received by Service
Provider or its officers or agents and furnished to it or them by or on behalf
of UAMFSI and/or the Fund, and which have been prepared or maintained by UAMFSI
and/or the Fund or any third party on behalf of UAMFSI and/or the Fund;
(iii) UAMFSI's refusal or failure to comply with the terms of
this Agreement or UAMFSI's lack of good faith, or its actions, or lack thereof,
involving negligence or willful misfeasance;
(iv) the breach of any representation or warranty of UAMFSI
hereunder;
(v) any delays, inaccuracies, errors in or omissions from data
provided to Service Provider by data and pricing services;
(vi) the reliance on or the carrying out by Service Provider or
its officers or agents of any proper instructions reasonably believed to be duly
authorized, or requests of the Fund or UAMFSI;
(vii) the offer or sale of shares by the Fund in violation of
any requirement under the Federal securities laws or regulations or the
securities laws or regulations of any state, or in violation of any stop order
or other determination or ruling by any Federal agency or any state agency with
respect to the offer or sale of such shares in such state (1) resulting from
activities, actions, or omissions by the Fund or its other service providers and
agents, or (2) existing or arising out of activities, actions or omissions by or
on behalf of the Fund prior to the effective date of this Agreement;
9
<PAGE>
(viii) any failure of the Fund's registration statement to
comply with the 1933 Act and the 1940 Act (including the rules and regulations
thereunder) and any other applicable laws, or any untrue statement of a material
fact or omission of a material fact necessary to make any statement therein not
misleading in a Fund's prospectus; and
(ix) the actions taken by UAMFSI, its investment advisers, and
its distributor in compliance with applicable securities, tax, commodities and
other laws, rules and regulations, or the failure to so comply.
8. TERM. This Agreement shall become effective on the date first
hereinabove written and shall continue through ___________, unless sooner
terminated, as provided herein. Thereafter, unless sooner terminated, this
Agreement shall continue in effect from year to year provided such continuance
is specifically approved by UAMFSI. This Agreement may be modified or amended
from time to time by mutual agreement between the parties hereto. This Agreement
may be terminated by either party on 90 days' prior written notice; subject to
renegotiation after the initial term. Upon termination of this Agreement,
UAMFSI shall pay to Service Provider such compensation and any out-of-pocket or
other reimbursable expenses which may become due or payable under the terms
hereof as of the date of termination or after the date that the provision of
services ceases, whichever is later.
9. NOTICES. Any notice required or permitted hereunder shall be in
writing to the parties at the following address (or such other address as a
party may specify by notice to the other):
If to UAMFSI:
UAM Fund Services, Inc.
211 Congress Street, 4th Floor
Boston, MA 02110
Attention: Gary L. French, President
Fax: (617) 542-7440
If to Service Provider:
[Service]
10
<PAGE>
Notice shall be effective upon receipt if by mail, on the date of personal
delivery (by private messenger, courier service or otherwise) or upon confirmed
receipt of telex or facsimile, whichever occurs first.
10. ASSIGNABILITY. This Agreement shall not be assigned by either of
the parties hereto without the prior consent in writing of the other party;
provided, however, that Service Provider may in its own discretion and without
limitation or prior consent of the Fund or UAMFSI, whenever and on such terms
and conditions as Service Provider deems necessary or appropriate, subcontract,
delegate or assign its rights, duties, obligations and liabilities to
subsidiaries or affiliates of Service Provider; provided, further, that any such
subcontract, agreement or understanding shall not discharge Service Provider or
its affiliates or subsidiaries, as the case may be, from its obligations
hereunder. Similarly, Service Provider or its affiliated subcontractor,
designee, or assignee may at its discretion, without notice to the Fund or
UAMFSI, enter into such subcontracts, agreements and understandings, whenever
and on such terms and conditions as Service Provider or they deem necessary or
appropriate to perform services hereunder, with non-affiliated third parties;
provided, that such subcontract, agreement or understanding shall not discharge
Service Provider, or its subcontractor, designee, or assignee, as the case may
be, from Service Provider's obligations hereunder. Service Provider or its
affiliated subcontractor, designee, or assignee shall, however, be discharged
from Service Provider's obligations hereunder, if UAMFSI, the Fund or its
sponsor, investment advisers or distributor require Service Provider or its
affiliated subcontractor, designee, or assignee to enter into any subcontract,
agreement or understanding to perform services hereunder with any non-affiliated
third party; and UAMFSI shall indemnify and hold harmless Service Provider and
its affiliated subcontractor, designee, or assignee from and against, any and
all losses, damages, costs, reasonable attorneys' fees and expenses, payments,
expenses and liabilities arising out of or attributable to such subcontract,
agreement or understanding.
11. WAIVER. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
nor shall it deprive such party of the right thereafter to insist upon strict
adherence to that term or any term of this Agreement. Any waiver must be in
writing signed by the waiving party.
12. FORCE MAJEURE. Service Provider shall not be responsible or
liable for any failure or delay in performance of its obligations under this
Agreement arising out of or caused,
11
<PAGE>
directly or indirectly, by circumstances beyond its control, including without
limitation, acts of God, earthquakes, fires, floods, wars, acts of civil or
military authorities, or governmental actions, nor shall any such failure or
delay give the Fund the right to terminate this Agreement.
13. AMENDMENTS. This Agreement may be modified or amended from time
to time by mutual written agreement between the parties. No provision of this
Agreement may be changed, discharged, or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, discharge or termination is sought. The addition of new portfolios or
new classes of portfolios to the Fund will be deemed self-executing amendments
to this Agreement requiring no further action, subject to the approval of
Service Provider. Such self-executing amendments will be subject to the terms
and conditions of this Agreement, and may in no other way alter the terms and
conditions contained herein, unless done so by mutual written agreement between
the parties.
14. SEVERABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of the Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance it shall nevertheless
remain applicable to all other persons and circumstances.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
SUBSTANTIVE LAWS OF THE STATE OF MASSACHUSEETS (EXCLUDING ITS CHOICE OF LAW
PROVISIONS), INCLUDING THE DETERMINATION OF WHEN AN "ASSIGNMENT" HAS OCCURRED.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
UAM FUND SERVICES, INC.
Attest:____________________ By: _______________________
Name:______________________ Name:______________________
Title:_____________________
SEI FUND RESOURCES
Attest:_____________________ By:________________________
12
<PAGE>
Name:__________________ Name:___________________
Title:__________________
13
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE A
FEES AND EXPENSES
UAMFSI shall pay Service Provider monthly fees for its services to the Fund
calculated at the annual rate set forth below.
. $35,000 for the first operational Class of a Portfolio; plus
. $5,000 for each additional operational Class of a Portfolio; plus
. 0.03% of the total net assets of the Fund.
These fees do not include out-of-pocket expenses, which will be billed monthly
and due upon billing.
A-1
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE B
GENERAL DESCRIPTION OF FUND SUB-ADMINISTRATION SERVICES
I. FINANCIAL AND TAX REPORTING
A. Prepare agreed upon management reports and Board of Directors
materials such as unaudited financial statements and distribution
summaries.
B. Report Fund performance to outside services as directed by Fund
management or UAMFSI.
C. Calculate dividend and capital gain distributions in accordance with
distribution policies detailed in the Fund's prospectus(es). Assist
UAMFSI in making final determinations of distribution amounts.
D. Estimate and recommend year-end dividend and capital gain
distributions necessary to establish the Portfolio's status as a
regulated investment company ("RIC") under Section 4982 of the
Internal Revenue Code of 1986, as amended (the "Code") regarding
minimum distribution requirements.
E. Working with the Fund's public accountants or other professionals,
prepare and file Fund's Federal tax return on Form 1120-RIC along with
all state and local tax returns where applicable. Prepare and file
Federal Excise Tax Return (Form 8613).
F. Prepare and file Fund's Form N-SAR with the SEC.
G. Prepare and coordinate printing of Fund's Semiannual and Annual
Reports to Shareholders.
H. Notify shareholders as to what portion, if any, of the distributions
made by the Fund's during the prior fiscal year were exempt-interest
dividends under Section 852 (b)(5)(A) of the Code.
I. Provide Form 1099-MISC to persons other than corporations (i.e.,
Directors to whom the Fund paid more than $600 during the year).
J. Prepare and file California State Expense Limitation Report, if
applicable.
K. Provide financial information for Fund proxies and prospectuses
(Expense Table).
B-1
<PAGE>
II. PORTFOLIO COMPLIANCE
A. Assist with monitoring each Portfolio's compliance with investment
restrictions (e.g., issuer or industry diversification, etc.) listed
in the current prospectus(es) and Statement(s) of Additional
Information, although primary responsibility for such compliance shall
remain with the Fund's investment adviser or investment manager.
B. Assist with monitoring each Portfolio's compliance with the
requirements of Section 851 of the Code for qualification as a RIC
(i.e., 90% Income, 30% Income - Short Three, Diversification Tests)
although primary responsibility for such compliance shall remain with
the Fund's investment adviser or investment manager.
C. Assist with monitoring investment manager's compliance with Board
directives such as "Approved Issuers Listings for Repurchase
Agreements", Rule 17a-7, and Rule 12d-3 procedures, although primary
responsibility for such compliance shall remain with the Fund's
investment adviser or investment manager.
D. Mail quarterly requests for "Securities Transaction Reports" to the
Fund's Directors and Officers and "access persons" under the terms of
the Fund's Code of Ethics and SEC regulations.
E. Prepare and update compliance manuals and procedures.
F. Mail, collect and review on a quarterly basis compliance checklists
for each Portfolio.
III. GENERAL ADMINISTRATION
A. Furnish officers of the Fund, subject to reasonable UAMFSI and Board
approval.
B. Prepare Fund or Portfolio expense projections, establish accruals and
review on a periodic basis, including expenses based on a percentage
of Fund's average daily net assets (advisory and administrative fees)
and expenses based on actual charges annualized and accrued daily
(audit fees, registration fees, directors' fees, etc.).
C. For new Portfolios, obtain Employer or Taxpayer Identification Number
and CUSIP numbers. Estimate organizational costs and expenses and
monitor against actual disbursements.
D. Coordinate all communications and data collection with regard to any
regulatory examinations and yearly audits by independent accountants.
B-2
<PAGE>
E. File copies of financial reports to shareholders with the SEC under
Rule 30b2-1.
B-3
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE C
GENERAL DESCRIPTION OF FUND SUB-ACCOUNTING SERVICES
I. GENERAL DESCRIPTION
Service Provider shall provide the following accounting services to the
Fund:
A. Maintenance of the books and records and accounting controls for the
Fund's assets, including records of all securities transactions;
B. Calculation of each Portfolio's Net Asset Value in accordance with the
prospectus and once the Portfolio meets eligibility requirements,
transmission to NASDAQ and to such other entities as directed by the
Fund and/or UAMFSI;
C. Accounting for dividends and interest received and distributions made
by the Fund;
D. Production of transaction data, financial reports and such other
periodic and special reports as UAMFSI and/or the Board may reasonably
request;
E. Liaison with the Fund's independent auditors; and
F. A listing of reports that will be available to UAMFSI and the Fund is
included below.
II. DOMESTIC FUND ACCOUNTING DAILY REPORTS
A. General Ledger Reports
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
5. Amortization/Accretion Report
6. Maturity Projection Report
C. Pricing Reports
C-1
<PAGE>
1. Pricing Report
2. Pricing Report by Market Value
3. Pricing Variance by % Change
4. NAV Report
5. NAV Proof Report
6. Money Market Pricing Report
D. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Report
2. Accounts Payable for Investments Report
3. Interest Accrual Report
4. Dividend Accrual Report
E. Other Reports
1. Dividend Computation Report
2. Cash Availability Report
3. Settlement Journal
III. INTERNATIONAL FUND ACCOUNTING DAILY REPORTS
A. General Ledger
1. Trial Balance Report
2. General Ledger Activity Report
B. Portfolio Reports
1. Portfolio Report by Sector
2. Cost Lot Report
3. Purchase Journal
4. Sell/Maturity Journal
C. Currency Reports
1. Currency Purchase /Sales Journal
2. Currency Valuation Report
D. Pricing Reports
1. Pricing Report by Country
2. Pricing Report by Market Value
3. Price Variance by % Change
4. NAV Report
5. NAV Proof Report
E. Accounts Receivable/Payable Reports
1. Accounts Receivable for Investments Sold/Matured
2. Accounts Payable for Investments Purchased
C-2
<PAGE>
3. Accounts Receivable for Forward Exchange Contracts
4. Accounts Payable for Forward Exchange Contracts
5. Interest Receivable Valuation
6. Interest Recoverable Withholding Tax
7. Dividends Receivable Valuation
8. Dividends Recoverable Withholding Tax
F. Other Reports
1. Exchange Rate Report
IV. MONTHLY FUND ACCOUNTING REPORTS
A. Standard Reports
1. Cost Proof Report
2. Transaction History Report
3. Realized Gain/Loss Report
4. Interest Record Report
5. Dividend Record Report
6. Broker Commission Totals
7. Broker Principal Trades
8. Shareholder Activity Report
9. Fund Performance Report
B. International Reports
1. Forward Contract Transaction History Report
2. Currency Gain/Loss Report
C-3
<PAGE>
MUTUAL FUNDS SERVICE AGREEMENT
SCHEDULE D
SERVICE QUALITY STANDARDS
UAM Funds, Inc. II and SEI Fund Resources agree that the attached listing of
service quality standards constitute Schedule D of the Mutual Funds Service
Agreement dated April 6, 1999.
D-1
<PAGE>
UAM FUNDS
SERVICE QUALITY STANDARDS
CLIENT RELATIONSHIP MANAGER SERVICE QUALITY STANDARDS
-----------------------------------------------------
<TABLE>
<CAPTION>
GOAL STANDARD
---- --------
(100%)
<S> <C> <C>
Deliver quality service standards 15/th/ of the month
reporting/monthly reporting
Deliver monthly calendar of events 2 days before month end
Coordinate weekly operations meeting Every week
Deliver minutes to participants on the 2 days after weekly
weekly meeting
Coordinate and track project plan of 2 days after weekly
all open items/issues
meetings
Address any issues/problems followed 3 days after issue
up in writing if agreed
</TABLE>
<PAGE>
SUB-ACCOUNTING SERVICE QUALITY STANDARDS
----------------------------------------
<TABLE>
<CAPTION>
GOAL STANDARD
---- --------
<S> <C> <C>
Pricing Accuracy* 99%
Reporting NAV to NASDAQ 98%
Reporting NAV to the Transfer Agent (CGFSC) 98%
Cash Availability reported to Adviser by 12:30 pm 98%
Trades recorded on T+1 (cut-off time 2:00 p.m.) 98%
(dependent on Adviser delivery)
Collection of Past Due items (USA only) 30 Days 99%
Weekly custody reconciliation 100%
Monthly cost proof reconciliation 100%
Accuracy of mil rate/dividend rate 98%
Notification of stale prices to Adviser/FSI After 7 days 100%
(5 business
- 7 calendar)
</TABLE>
* "Pricing" refers to a price that is published or sent to an Adviser.
<PAGE>
SUB-ADMINISTRATION SERVICE QUALITY STANDARDS
--------------------------------------------
<TABLE>
<CAPTION>
Goal Standard
---- --------
<S> <C> <C>
ADMINISTRATION
Compliance warnings/fails memos
Daily reviews T+4 98%
Monthly/Quarterly reviews 4/th/ business day 100%
Adviser Compliance Checklists
Mailed to Advisers Cal Qtr. End 100%
Contact Advisers of non receipt 16/th/ of following month 100%
Report issues/status to FSI 20/th/ of the following month 100%
Survey Reporting completed and 98%
delivered on required due dates:
ICI, Morning Star, Lipper and Value Line
Monthly Financial statements mailed to 3/rd/ business day 100%
Clients Portfolio Acquisition Report
Portfolio Holdings Report
Basic Financial Statements mailed By following month end 90%
to clients Assets and Liabilities
Statement Change of Net Assets
Statement of Operations
Monthly expense cap analysis spreadsheet 8th business day 100%
Payment of Adviser and Administrative 8/th/ business day 100%
Fees
CODE OF ETHICS REPORTING
Mailings 5 days before cal. Qtr. end 100%
Contact Advisers of non receipt 15th day after cal. Qtr. end 100%
Reporting to FSI 20th day after cal. Qtr. end 100%
TAX AND FINANCIAL REPORTING
Tax returns (1120 RICs) will be prepared 8 1/2 months after year end 100%
Annual Financial statements will be 55/th/ day after year end 100%
mailed to shareholders
</TABLE>
<PAGE>
SUB-ADMINISTRATION SERVICE QUALITY STANDARDS
--------------------------------------------
<TABLE>
<CAPTION>
Goal Standard
---- --------
<S> <C> <C>
Semi-Annual Financial statements will 55/th/ day after semi annual 100%
be mailed to shareholders period
N-SAR will be filed with the SEC 60th day after year end 100%
N-SAR will be filed with the SEC 60th day after semi-annual 100%
period
BLUE SKY
Written warnings if sales reach 80% 2 days after reaching 100%
of amount registered threshold
Over sales in a state
Notification 1 day after over sale 100%
State Filing 1 week after over sale 100%
Renewals with states 2 weeks prior to expiration 100%
New filings 3 weeks after FSI 100%
authorization
Notice filing with states 1 week after filing with SEC 100%
Document requests from states 3 days after request 100%
</TABLE>
* Except for 12/31 annual and 6/30 semi-annual (one extra day)
<PAGE>
Drinker Biddle & Reath LLP
1345 Chestnut Street, Suite 1100
Philadelphia, PA 19107
(215) 988-2700
April 7, 1999
UAM Funds, Inc. II
c/o UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Re: UAM Funds, Inc. II - Common Stock
- -------------------------------------
Ladies and Gentlemen:
We have acted as counsel for UAM Funds, Inc. II, a Maryland corporation
("UAM"), in connection with the registration by UAM of its shares of common
stock, par value $.001 per share. The Articles of Amendment and Restatement of
UAM authorize the issuance of ten billion (10,000,000,000) shares of common
stock, which are divided into multiple series and classes (each a "Class" and
collectively, "Classes"). The shares of common stock designated into each such
series are referred to herein as the "Common Stock." You have asked for our
opinion on certain matters relating to the Common Stock.
We have reviewed UAM's Articles of Amendment and Restatement and Amended
and Restated Bylaws, resolutions of UAM's Board of Directors ("Board"),
certificates of public officials and of UAM's officers and such other legal and
factual matters as we have deemed appropriate. We have also reviewed UAM's
Registration Statement on Form N-1A under the Securities Act of 1933 (the
"Registration Statement"), as amended through Post-Effective Amendment No. 7
thereto.
This opinion is based exclusively on the laws of the State of Maryland and
the federal law of the United States of America.
We have also assumed the following for purposes of this opinion.
1. The shares of common Stock have been issued in accordance with the
Articles of Amendment and Restatement and Amended and Restated Bylaws
of UAM and resolutions of UAM's Board and UAM's shareholders relating
to the creation, authorization and issuance of the Common Stock.
2. Prior to the issuance of any shares of future Common Stock, the Board
(a) will duly authorize the issuance of such future Common Stock, (b)
will determine with respect to each class of such future Common Stock
the preferences, limitations and relative rights applicable thereto
and (c) if such future Common Stock is classified into separate
series, will duly take the action necessary (i) to create such series
and to determine the number of shares of such series
<PAGE>
and the relative designations, preferences, limitations and relative
rights thereof and (ii) to amend UAM's Articles of Amendment and
Restatements to provide for such additional series.
3. With respect to the shares of future Common Stock, there will be
compliance with the terms, conditions and restrictions applicable to
the issuance of such shares that are set forth in (i) UAM's Articles
of Amendment and Restatement and Amended and Restated Bylaws, each as
amended as of the date of such issuance, and (ii) the applicable
future series designations.
4. The Board will not change the number of shares of any series of Common
Stock, or the preferences, limitations or relative rights of any class
or series of Common Stock after any shares of such class or series
have been issued.
Based upon the foregoing, we are of the opinion that the shares
of Common Stock will be, when issued in accordance with, and sold for the
consideration described in, the Registration Statement (provided that (i) the
price of such shares is not less than the par value thereof and (ii) the UAM
number of shares of any class of series issued does not exceed the authorized
number of shares for such class or series on the date of issuance of the
shares), validly issued, fully paid and non-assessable by UAM.
We consent to the filing of this opinion with Post-Effective Amendment No.
7 of the Registration Statement to be filed by UAM with the Securities and
Exchange Commission.
Very truly yours,
/s/ Drinker Biddle & Reath LLP
DRINKER BIDDLE & REATH LLP
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No. 7
to the Registration Statement of the UAM Funds, Inc. II on Form N-1A (File No.
333-44193) of our report on the financial statements and financial highlights of
the Analytic Defensive Equity, Analytic Enhanced Equity, Analytic Master Fixed
Income and Analytic Short-Term Government Funds, (the "Funds"), as of December
31, 1998, and for the year then ended, which Report is included in the Annual
Report to Shareholders for the year ended December 31, 1998 which is
incorporated by reference in the Post-Effective Amendment to the Registration
Statement. We also consent to the reference to our Firm under the heading
"Financial Highlights" in the Prospectus and under the headings "Independent
Public Accountants" and "Financial Statements" in the Statement of Additional
Information.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
April 5, 1999
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the reference to us under the heading "Financial Highlights" in
the Prospectus in this Post-Effective Amendment No. 7 to the Registration
Statement on Form N-1A of The Analytic Funds (File No. 333-44193).
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 5, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
John T. Bennett, Jr.
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
Nancy J. Dunn
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
Philip D. English
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
William A. Humenuck
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
James P. Pappas
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
Norton H. Reamer
Date: April 6, 1999
<PAGE>
UAM FUNDS, INC. II
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that the undersigned hereby appoints Gary
L. French, Michael E. DeFao and Robert R. Flaherty, and any one of them, his
true and lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him and in his name, place and stead, in his capacity as
officer, to execute in his name on behalf of UAM Funds, Inc. II (the "Fund") any
agreement previously approved by the Board of the Fund, and all amendments to
the Fund's Articles of Incorporation, foreign corporation qualification and
authority to conduct business, and any and all instruments necessary or
incidental in connection therewith pursuant to the laws of the State of
Maryland, and the Commonwealth of Massachusetts, as applicable. Further, such
attorneys-in-fact and agents may file same with the State of Maryland or the
Commonwealth of Massachusetts as the case which have been previously approved or
adopted by the Board of Directors. The undersigned does hereby ratify and
confirm all that said attorneys and agents, or any of them, shall do cause to be
done by virtue hereof. The powers of the aforesaid attorneys-in-fact are hereby
expressly limited to the purposes stated above.
__________________________
Peter M. Whitman, Jr.
Date: April 6, 1999
<TABLE> <S> <C>
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<TABLE> <S> <C>
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