BURNHAM FUND INC, DEFS14A, 1998-09-23

BURNHAM FUND INC
DEFS14A, 1998-09-23

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________________________________________________________________________________

SECTION 240.14a-101
SCHEDULE 14a
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

THE BURNHAM FUND, INC.
...............................................................................
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
...............................................................................
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)

Payment of Filing Fee (Check the appropriate box):
[x] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
........................................................................

(2) Aggregate number of securities to which transaction applies:

........................................................................

(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
........................................................................

(4) Proposed maximum aggregate value of transaction:
........................................................................

(5) Total fee paid:
........................................................................

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:
........................................................................

(2) Form, Schedule or Registration Statement No.:
........................................................................

(3) Filing Party:
........................................................................

(4) Date Filed:
........................................................................

________________________________________________________________________________

THE BURNHAM FUND, INC.
1325 AVENUE OF THE AMERICAS, 17TH FLOOR
NEW YORK, NEW YORK 10019

September 18, 1998

Dear Burnham Fund Shareholder:

We are pleased to invite you to a Special Meeting of Shareholders of The
Burnham Fund Inc. to be held in our offices on Thursday, November 19, 1998 at
2:00 p.m. At the meeting, you will be asked to vote on important proposals
affecting your Burnham Fund. The Board of Directors of the Fund unanimously
agreed that these proposals are in the Fund's and your best interests.

I am sure that you, like most people, lead a busy life and are tempted to
put this proxy aside for another day. Please do not delay. When shareholders
fail to return their proxies, additional expenses incur to pay for follow-up
mailings and telephone calls. PLEASE REVIEW THIS PROXY STATEMENT AND SIGN AND
RETURN THE PROXY CARD TODAY.

After reviewing each matter carefully, your Board of Directors unanimously
recommends that you vote 'FOR' each proposal.

YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
Detailed information about the proposals and the reasons for them are contained
in the proxy statement. Please take the time to review the material, cast your
vote on the enclosed proxy card and return the Proxy Card in the enclosed
postage-paid envelope.

The Fund is using Shareholder Communications Corporation, a professional
proxy solicitation firm, to assist shareholders in the voting process. If you
have any questions regarding the issues to be voted or need assistance in
completing your proxy card, please contact our proxy solicitor at
1-800-733-8481, ext. 434.

We thank you for your time in considering these important proposals and for
your continuing investment in and support of The Burnham Fund.

Sincerely,

<TABLE>
<S> <C>
I. W. BURNHAM, II JON M. BURNHAM
I.W. Burnham, II Jon M. Burnham
Chairman President and Chief Executive Officer
</TABLE>

THE BURNHAM FUND, INC.
1325 AVENUE OF THE AMERICAS, 17TH FLOOR
NEW YORK, NEW YORK 10019
1-800-874-FUND

------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD THURSDAY, NOVEMBER 19, 1998

------------------------
THIS IS THE FORMAL AGENDA FOR THE FUND'S SPECIAL MEETING. IT TELLS YOU WHAT
MATTERS WILL BE VOTED ON AND THE TIME AND PLACE OF THE MEETING, IN CASE YOU WANT
TO ATTEND IN PERSON.

To the shareholders of The Burnham Fund, Inc.:

A Special Meeting of Shareholders of the fund will be held at 1325 Avenue
of the Americas, 17th Floor, New York, New York 10019, at 2:00 p.m., New York
time, on Thursday, November 19, 1998, to consider and act upon the following:

2. For Class C shares only. A proposal to approve the conversion
of Class C shares into Class A shares. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.

3. A proposal to elect the nominees named in the attached proxy
statement to serve on the Delaware business trust's board of
trustees after the reorganization until their successors have
been duly elected and qualified. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE.

4. A proposal to ratify the selection of PricewaterhouseCoopers
LLP as the fund's independent public accountants for the
fiscal year ending December 31, 1998. THE BOARD OF DIRECTORS
RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.

5. A proposal to approve an amended and restated investment
advisory agreement with Burnham Asset Management Corporation,
the fund's investment adviser, as described in the attached
proxy statement. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE FOR THIS PROPOSAL.

6(a)-(n). Proposals to reclassify, amend or eliminate certain of the
fund's fundamental investment policies and restrictions. THE
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THESE
PROPOSALS.

7. Any other business that may properly come before the meeting
or any adjournment.
</TABLE>

Shareholders of record as of the close of business on August 27, 1998 are
entitled to vote at the meeting and any related follow-up meetings. The attached
proxy statement and proxy card are being mailed to shareholders on or about
September 18, 1998.

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN
THE ENCLOSED PROXY CARD. PLEASE TAKE A FEW MINUTES TO VOTE NOW.

BY ORDER OF THE BOARD OF DIRECTORS,
MICHAEL E. BARNA
Michael E. Barna
Secretary

New York, New York
September 18, 1998

PROXY STATEMENT
OF
THE BURNHAM FUND, INC.

This proxy statement contains the information you should know before voting
on the proposals summarized below.

The Burnham Fund, Inc. will furnish without charge a copy of its Annual
Report and most recent Semi-Annual Report to any shareholder who asks for them.
Shareholders who want to obtain a copy of the fund's report(s) should write to
the fund, 1325 Avenue of the Americas, 17th floor, New York, New York 10019 or
should call 1-800-874-FUND.

INTRODUCTION

This proxy statement is being used by the fund's board of directors to
solicit proxies to be voted at a special meeting of shareholders of your fund.
This meeting will be held at 1325 Avenue of the Americas, 17th Floor, New York,
New York 10019, at 2:00 p.m., New York time, on Thursday, November 19, 1998, to
consider and act upon the following:

<TABLE>
<S> <C>
1. A proposal to approve an agreement and plan of reorganization providing for the reorganization of
the fund from a Maryland corporation into a series of a Delaware business trust. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
2. For Class C shares only. A proposal to approve the conversion of Class C shares into Class A
shares. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
3. A proposal to elect the nominees named in the proxy statement to serve on the Delaware business
trust's board of trustees after the reorganization until their successors have been duly elected
and qualified. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH NOMINEE.
4. A proposal to ratify the selection of PricewaterhouseCoopers LLP as the fund's independent public
accountants for the fiscal year ending December 31, 1998. THE BOARD OF DIRECTORS RECOMMENDS THAT
YOU VOTE FOR THIS PROPOSAL.
5. A proposal to approve an amended and restated investment advisory agreement with Burnham Asset
Management Corporation, the fund's investment adviser, as described in the attached proxy
statement. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
6(a)-(n). Proposals to reclassify, amend or eliminate certain of your fund's fundamental investment policies
and restrictions. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THESE PROPOSALS.
7. Any other business that may properly come before the meeting or any adjournment.
</TABLE>

This proxy statement and the proxy card are being mailed to your fund's
shareholders on or about September 18, 1998.

WHO IS ELIGIBLE TO VOTE?

Shareholders of record on August 27, 1998 are entitled to attend and vote
on each proposal at the meeting or any adjourned meeting. Each share is entitled
to one vote. Shares represented by properly executed proxies, unless revoked
before or at the meeting, will be voted according to shareholders' instructions.
If you sign a proxy, but do not fill in a vote, your shares will be voted to
approve the proposals. If any other business comes before the meeting, your
shares will be voted at the discretion of the persons named as proxies.

PROPOSAL 1
TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION

PURPOSE OF THE REORGANIZATION

At the meeting of the fund's board of directors on August 27, 1998 (board
meeting), the directors, including the directors who are not 'interested
persons' of the fund or the adviser (independent directors), approved and
recommended that the fund's shareholders approve a reorganization of the fund as
a series of a business trust under the laws of the state of Delaware. The fund
is currently organized as a corporation under the laws of the state of Maryland.
The most efficient way for the fund to become a Delaware business trust is by a
tax-free reorganization of the type described in this proxy statement. As a
Delaware business trust, the fund will take advantage of the greater operational
flexibility available under the Delaware Business Trust Act. These advantages
include:

granting the fund's trustees greater power to act without shareholder
approval, thus avoiding the time and expense of calling a shareholder
meeting, mailing proxy materials and soliciting shareholders; and

enabling the fund to adopt new methods of operation and employ new
technologies that are expected to reduce costs of operation and are
generally not expressly permitted under Maryland law, such as electronic
communications with shareholders.

Based on information provided by the fund's adviser, Burnham Asset
Management Corp., and distributor, Burnham Securities, Inc., your board of
directors believes that reorganizing the fund as a series of a Delaware business
trust offers certain advantages over the current form of organization. The
fund's management expects that shareholders ultimately will benefit from these
advantages. The new form of organization offers potential for greater efficiency
and cost savings, although no immediate cost savings are expected to result. In
addition, the new form of organization will not change the investment
objectives, policies or procedures of the fund, except as described in this
proxy statement. Because it believes that these advantages would allow the fund
to operate more efficiently, your board of directors has determined that the
proposed reorganization would be in the best interests of the fund and the
shareholders.

DESCRIPTION OF REORGANIZATION

The reorganization will take place according to the terms and conditions of
an agreement and plan of reorganization between the fund and the Delaware
business trust. You are being asked to approve the agreement and plan of
reorganization, a copy of which is attached to this proxy statement as Exhibit
A. The agreement provides for the reorganization of the fund as a series of a
Delaware business trust on the following terms:

The reorganization is scheduled to occur on or about December 15, 1998.
Your fund will transfer all of its assets to a corresponding series of the
new Delaware trust and the new series will assume all of your fund's
liabilities. Until the completion of this transfer and the actions
described below, the new series will have no assets and no shareholders.

The new series will issue to your fund a number of Class A, Class B and
Class C shares identical to the number of, and with the same net asset
value per share as, your fund's Class A, Class B and Class C shares,
respectively. As part of the liquidation of your fund, these shares will
be distributed to Class A, Class B and Class C shareholders of record of
your fund on the reorganization date after the vote described below. As a
result, Class A, Class B and Class C shareholders of your fund will end up
as Class A, Class B and Class C shareholders, respectively, of the new
series.

Your fund, as the only shareholder of the new series until your fund
distributes the new series' shares to you, will vote to approve the
investment advisory agreement between the new series and the adviser. The
investment advisory agreement will be identical to the investment advisory
agreement you are being asked to approve in proposal 5.

After the reorganization, the existence of your fund will be terminated
and you will own shares of the new series, which will continue to carry on
the business of your fund in substantially the same manner as before the
reorganization.

Your fund's board of directors may terminate the agreement and plan of
reorganization (even if the shareholders of your fund have already
approved it) at any time before the reorganization date, if the board
believes that proceeding with the reorganization would no longer be
advisable.

The following diagram shows how the reorganization would be carried out:

[REORGANIZATIONAL CHART]

GOVERNANCE OF THE FUND

If shareholders approve this proposal, the fund will be governed by a
Delaware declaration of trust rather than the Maryland articles of
incorporation. The table below will answer several questions that you might have
about how the fund's operations under the Delaware declaration of trust will
differ from operations under the Maryland articles of incorporation. The table
is only a summary of information in the declaration of trust, which is attached
as Exhibit B. You should read the entire declaration of trust.

<TABLE>
<CAPTION>
MARYLAND DELAWARE
DIFFERENCES IN FUND OPERATIONS CORPORATION BUSINESS TRUST
<S> <C> <C>
Do the trustees/directors have the power to amend the governing instrument Generally no Generally yes
without shareholder approval?
Termination possible without shareholder approval? No Yes
Can trustees/directors effect a merger or consolidation with another entity No Yes
without shareholder approval?
Can trustees/directors sell, lease, exchange, transfer, pledge or otherwise No Yes
dispose of all or any part of the assets without shareholder approval?
Can trustees/directors cause any series to become a separate trust without No Yes
shareholder approval?
Can trustees/directors change the corporation's or trust's domicile without No Yes
shareholder approval?
Can trustees/directors approve a share split without shareholder approval? Generally no Yes
Are separate boards authorized for different series? No Yes
Are there limits on shareholder derivative actions? Yes Yes
Is there an annual shareholder meeting requirement? No No
Is dollar based voting (i.e., one vote per dollar of net asset value, rather No Yes
than one vote per share) permissible?
Indemnification for directors, officers and employees except in cases of Yes Yes
willful misfeasance or gross negligence?
Does state law impose additional director liability other than what the Yes No
federal securities law already prescribes?
Does state law impose additional possible shareholder liability for receipt Yes No
of distributions in excess of legal limits?
</TABLE>

As a series of a Delaware business trust, the fund will be governed by a
board of trustees whose duties and responsibilities in governing a mutual fund
are essentially the same as those of a board of directors. All of the existing
directors have agreed to serve as trustees and you are being asked to elect them
as trustees of the Delaware business trust in proposal 3. PricewaterhouseCoopers
LLP will continue to serve as the fund's independent accountants and Investors
Fiduciary Trust Company will continue to serve as the fund's custodian, fund's
investment accounting and dividend disbursing agent.

If shareholders approve proposal 5, the fund's investment advisory fee will
decrease and several of the terms of the fund's investment management contract
will change. See proposal 5 below for a discussion of the proposed changes to
the investment management contract.

The material terms of the Rule 18f-3 multiple class plan and the Rule 12b-1
distribution and service plans for Class A, Class B and Class C shareholders
will not change as a result of the reorganization. The fund's Class C
shareholders are also being asked in proposal 2 to approve the conversion of the
fund's Class C shares to Class A shares after the reorganization is completed.
If approved, the Rule 12b-1 Class C distribution plan will be terminated. The
fund's Rule 18f-3 multiple class plan and

the Rule 12b-1 distribution and service plans will be amended to delete any
provisions for Class C shares but will otherwise not be materially changed as a
result of the conversion.

Your fund's investment objective, investment policies and investment
strategies will not change as a result of the reorganization. Subject to
shareholder approval of proposal 6, the fund's fundamental investment
restrictions will be amended or eliminated and the fund's fundamental investment
policies will be reclassified as non-fundamental.

The trust's board is considering a 3:1 (approximately) split of the fund's
shares that will be effective when the reorganization and the conversion of the
fund's Class C shares to Class A shares are complete. This means that, upon
approval by the trustees, after the share split you will own approximately three
shares for every share owned before the split. The exact number of shares you
will receive for each share you own will depend on the share's net asset value
at the time of the share split. Although the exact number of shares may vary,
you will own the same dollar amount in the fund before and after the share
split.

SHAREHOLDER ACCOUNTS AND ELECTIONS

The fund's transfer agent will establish accounts for all fund shareholders
containing the appropriate number of shares of the new trust to be received by
each shareholder at the close of the reorganization. Each account and its
elections will be identical in all material respects to those currently
maintained by the fund for its shareholders.

EXPENSES OF THE REORGANIZATION

The fund will bear the costs of the reorganization, which are expected to
be approximately $120,000.

TAX CONSEQUENCES OF THE REORGANIZATION

The reorganization will be tax-free for federal income tax purposes and
will not take place unless both funds receive a satisfactory opinion from Hale
and Dorr LLP, counsel to the funds, substantially to the effect that:

The reorganization will be a 'reorganization' within the meaning of
Section 368(a)(1) of the Internal Revenue Code of 1986 (Code), and each
fund will be 'a party to a reorganization' within the meaning of Section
368(b) of the Code;

No gain or loss will be recognized by your fund upon (1) the transfer of
all of its assets and liabilities to the new series as described above or
(2) the distribution by your fund of shares of the new series to your
fund's shareholders;

No gain or loss will be recognized by the new series upon the receipt of
your fund's assets solely in exchange for the issuance of shares of the
new series and the assumption of all of your fund's liabilities by the new
series;

The tax basis of the assets of your fund acquired by the new series will
be the same as the tax basis of those assets in the hands of your fund
immediately before the transfer;

The tax holding period of the assets of your fund in the hands of the new
series will include your fund's tax holding period for those assets;

The shareholders of your fund will not recognize gain or loss upon the
exchange of all their shares of your fund solely for shares of the new
series as part of the reorganization;

The tax basis of shares of the new series received by your fund's
shareholders in the reorganization will be the same as the tax basis of
the shares of your fund surrendered in exchange; and

The tax holding period of the shares of the new series received by your
fund's shareholders will include the tax holding period of your fund's
shares surrendered in the exchange, provided that the shares of your fund
were held as capital assets on the date of the exchange.

SURRENDER OF SHARE CERTIFICATES

If your shares are represented by one or more share certificates before the
reorganization date, you must either surrender the certificates to the fund or
deliver to the fund a lost certificate affidavit, in the form that the fund
requires. In addition, the fund may require a surety bond to accompany the
affidavit. On the reorganization date, all certificates that have not been
surrendered:

will be canceled,

will not evidence ownership of the acquired fund's shares and

will evidence ownership of the surviving fund's shares.

Shareholders may not redeem or transfer shares of the surviving fund
received in the reorganization until they have surrendered their fund share
certificates or delivered a lost certificate affidavit. THE SURVIVING FUND WILL
NOT ISSUE SHARE CERTIFICATES IN THE REORGANIZATION.

BOARD EVALUATION AND RECOMMENDATION

For the reasons described above, the board of directors of your fund,
including the independent directors, approved the reorganization. In particular,
the directors determined that the reorganization was in the best interests of
your fund and that the interests of your fund's shareholders would not be
diluted as a result of the reorganization.

THE DIRECTORS RECOMMEND THAT THE FUND'S SHAREHOLDERS VOTE FOR THE PROPOSAL
TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION.

REQUIRED VOTE

The affirmative vote of a majority of the fund's shares outstanding and
entitled to vote is required to approve the reorganization of the fund as a
series of a Delaware business trust. If the required approval of shareholders is
not obtained, the fund will remain organized as a Maryland corporation.

PROPOSAL 2
(FOR CLASS C SHAREHOLDERS ONLY)
APPROVAL OF CONVERSION
OF CLASS C SHARES TO CLASS A SHARES

PURPOSE OF THE CONVERSION

At the board meeting, the directors, including the independent directors,
approved and recommended that the shareholders of the fund's Class C shares
approve a conversion of the Class C shares to Class A shares and the termination
of Class C. The fund currently offers three classes of shares. Under the fund's
current Rule 18f-3 plan, each share of the fund represents an equal pro rata
interest in the fund, regardless of class. Each share has identical voting,
dividend, liquidation and other rights, except for: (1) the amount and type of
fees permitted by different Rule 12b-1 distribution plans; (2) voting rights on
matters concerning Rule 12b-1 plans; and (3) expenses which each class bears
that the board determines should be allocated or charged on a class specific
basis. The investing public has not shown sufficient interest in the Class C
shares. As a result, expenses charged to the Class C shares have adversely
affected the net asset values of, net income attributable to, and the dividends
payable on these shares.

Converting the fund's Class C shares to Class A shares offers Class C
shareholders the advantage of lower expenses than they currently bear.
Currently, Class A shares are subject to a front-end sales charge and a Rule
12b-1 distribution fee. Class C shares are subject to a contingent deferred
sales charge ('CDSC') if held for less than one year, a Rule 12b-1 distribution
fee and a service fee. Class C shareholders will not pay a front-end sales
charge for the conversion to Class A shares. After Class C shares are converted
to Class A shares, the converted shares will bear no service fees and lower
distribution fees. The converted shares will be subject to the fund's Class A
Rule 12b-1 distribution plan. The plan is attached to the proxy statement as
Exhibit C. The fund's investment adviser, Burnham

Asset Management Corp., also believes that the economies of scale which will
result from the conversion will make Class A more desirable to the investing
public.

<TABLE>
<CAPTION>
CLASS A CLASS C
------- -------

<S> <C> <C>
Shareholder Transaction Expenses
Maximum Front-End Sales Charge.................................................. 5.00% None
Maximum Contingent Deferred Sales Charge........................................ None 1.00%
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees................................................................. 0.63% 0.63%
Distribution Fees............................................................... 0.25% 0.75%
Service Fees.................................................................... None 0.25%
Other Expenses.................................................................. 0.42% 0.42%
------- -------
Total Operating Expenses................................................... 1.30% 2.05%
------- -------
------- -------
</TABLE>

The board also voted to terminate the existence of Class C shares and,
accordingly, the Rule 12b-1 Class C distribution plan. Terminating the Rule
12b-1 Class C distribution plan will not affect the Rule 12b-1 Class A
distribution plan or Rule 12b-1 Class B distribution plan.

YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE PROPOSED CONVERSION AND
TERMINATION OF CLASS C SHARES IS IN THE BEST INTERESTS OF THE CLASS C
SHAREHOLDERS.

DESCRIPTION OF CONVERSION

The conversion, if approved by shareholders, will take place after the
reorganization of the fund from a Maryland corporation to a series of a Delaware
business trust. The conversion is separate from the reorganization and is not
contingent upon or related to consummation of the reorganization. The conversion
will take place on the following terms:

The conversion is scheduled to occur on the same date as the
reorganization. If proposal 1 is approved, the conversion will follow the
fund's reorganization from a Maryland corporation to a series of a
Delaware business trust.

The fund will issue to each Class C shareholder an amount of Class A
shares with a total net asset value equal to the total net asset value of
that shareholder's holdings of the fund's Class C shares in exchange for
the surrender and termination of those Class C shares.

After the conversion, each Class C shareholder will own Class A shares of
the fund.

The fund's Rule 18f-3 multiple class plan and the Rule 12b-1 distribution
and service plans will be amended to delete any provisions for Class C shares
but will otherwise not materially change as a result of the conversion.

SHAREHOLDER ACCOUNTS AND ELECTIONS

The fund's transfer agent will establish accounts for all Class C
shareholders containing the appropriate amount of Class A shares of the fund to
be received by each shareholder as a part of the conversion.

TAX CONSEQUENCES OF THE CONVERSION

The conversion will be tax-free for federal income tax purposes.
Specifically:

The Class C shareholders will not recognize gain or loss upon the
conversion of all their shares for Class A shares;

The tax basis of the Class A shares received by the Class C shareholders
in the conversion will be the same as the tax basis of their Class C
shares immediately prior to the conversion; and

The tax holding period of the Class A shares received by the Class C
shareholders in the conversion will include their holding period for the
converted Class C shares, provided that such Class C shares were held as
capital assets on the date of the conversion.

BOARD EVALUATION AND RECOMMENDATION

For the reasons described above, the board of directors of your fund,
including the independent directors, approved the conversion. In particular, the
directors determined that the conversion was in the best interests of the fund's
Class C shareholders.

THE DIRECTORS RECOMMEND THAT THE FUND'S CLASS C SHAREHOLDERS VOTE FOR THE
PROPOSAL TO APPROVE THE CONVERSION.

REQUIRED VOTE

Approval of proposal 2 requires a majority shareholder vote of the Class C
shareholders, defined as the affirmative vote of the lesser of:

67% or more of the Class C shares present at the meeting, if the holders
of more than 50% of the Class C shares are present or represented by
proxy, or

more than 50% of the outstanding Class C shares.

PROPOSAL 3
ELECTION OF BOARD OF TRUSTEES

At the board meeting, the directors nominated the persons named in the
table below to serve as trustees of the fund after it is reorganized as a series
of a Delaware business trust (as described in proposal 1). Unless you direct
otherwise, the persons named on the accompanying proxy card intend to vote at
the meeting for the election of each nominee.

Each elected trustee will hold office until the trustee resigns or is
removed, or until a successor is elected and qualified. Each nominee has
consented to being named in this proxy statement and intends to serve if
elected. If any nominee is unable to serve, an event not now anticipated, the
persons named as proxies may vote for another person designated by the board of
directors.

The following table sets forth each nominee's position(s) with the fund,
age, address, principal occupation or employment during the past five years and
directorships. The table also shows the number of shares of the fund
beneficially owned by each nominee, directly or indirectly, on July 31, 1998.

(table continued on next page)

(table continued from previous page)

<TABLE>
<CAPTION>
SHARES OF THE FUND
BENEFICIALLY OWNED
AND PERCENTAGE OF
FIRST TOTAL SHARES
NAME, AGE, POSITION(S) WITH PRINCIPAL OCCUPATION OR EMPLOYMENT BECAME A OUTSTANDING ON
THE FUND AND ADDRESS AND DIRECTORSHIPS DIRECTOR JULY 31, 1998'D'
- ---------------------------------------- -------------------------------------------- -------- ------------------
<S> <C> <C> <C>
Claire B. Benenson (79) ................ Consultant on Financial Conferences. Trustee 1975 2,285/0.05%
Director of Zweig Series Trust. Trustee of Euclid
870 United Nations Plaza Market Neutral Fund. Former Trustee of Simms
New York, New York Global Fund and former Director of Financial
Conferences and Chairman, Department of
Business and Financial Affairs, The New
School for Social Research.
Lawrence N. Brandt (71) ................ Director and President of Lawrence N. 1992 19,804/0.42%
Director Brandt, Inc. (real estate development).
2510 Rock Creek Drive, N.W.
Washington, D.C.
Alvin P. Gutman (80) ................... Chairman of the Board of Pressman- Gutman 1975 0
Director 8350 Fisher Rd. Co., Inc. (textile converters).
Elkins Park, Pennsylvania
William W. Karatz (72) ................. Senior counsel to, and formerly a partner 1989 0
Director in, the law firm of Winthrop, Stimson,
700 Park Avenue Putnam & Roberts.
New York, New York
John C. McDonald (62) .................. President of MBX Inc. (telecommunications). 1989 872/0.02%
Director
49-035 Calle Flora
La Quinta, CA
Donald B. Romans (67) .................. President of Romans and Company (Private 1975 16,054/0.34%
Director Investors and Financial Consultants);
233 East Wacker Drive Chairman of Merlin Corp. Trustee of Zweig
Chicago, Illinois Series Trust. Trustee of Euclid Market
Neutral Fund.
Robert F. Shapiro (63) ................. Vice Chairman and Partner of Klingenstein, 1989 8,308/0.18%
Director Fields & Co., Inc. President of RFS &
787 Seventh Avenue Associates, Inc. (investment and consulting
New York, New York firm). Former Chairman, New Street Capital
Corp.
Robert M. Shavick (72) ................. Legal Consultant; Member, Panel of 1989 1,894/0.04%
Director Arbitrators, American Arbitration
601 Bayport Way Association, New York Stock Exchange,
Longboat Key, Florida American Stock Exchange and National
Association of Securities Dealers, Inc.
Former Director of Florida Business Journal,
Public Trustee-Pension Funds for employees
of the Town of Longboat Key, Florida,
Hearing Officer, Sarasota Manatee Airport
Authority and Mediator, Circuit and County
Courts, Florida.
</TABLE>

(table continued on next page)

(table continued from previous page)

- ------------

'D' As of July 31, 1998, the officers and nominees, as a group, owned 3% of the
outstanding Class A shares of the fund. Information about beneficial
ownership of shares is based on information provided to the fund by the
nominees.

* Every nominee who is an interested person of the fund, as defined in the
Investment Company Act of 1940, as amended (the 1940 Act), is indicated by an
asterisk.

Ms. Benenson, Mr. Brandt, Mr. Romans and Mr. Shapiro currently serve on the
audit committee of the fund's board. The functions of the audit committee
include recommending independent auditors to the board, monitoring the
independent auditors' performance, reviewing the results of audits and
responding to certain other matters deemed appropriate by the board. If elected
as trustees, these directors will continue to serve on the board's audit
committee.

During the fiscal year ended December 31, 1997, the board of directors held
four meetings and the audit committee held three meetings. All of the nominees
then serving as directors attended at least 75% of the meetings of the board or
applicable committee, if any, held during the fiscal year.

OTHER EXECUTIVE OFFICERS

The following table provides information about those persons who, in
addition to Mr. I.W. Burnham, II and Mr. Jon M. Burnham, serve as executive
officers of the fund. Each executive officer was elected by the directors, will
be elected by the trustees and is expected to serve until a successor is chosen
and qualified, or until resignation or removal by the board. Unless otherwise
indicated, the business address of the officers of the fund is 1325 Avenue of
the Americas, New York, New York.

<TABLE>
<CAPTION>
NAME, AGE AND
POSITION WITH THE FUND PRINCIPAL OCCUPATION(S)
- -------------------------------------------------- --------------------------------------------------------------
<S> <C>
Michael E. Barna (37) ............................ Executive Vice President and Assistant Secretary of Burnham
Executive Vice President, Chief Financial Officer, Asset Management Corporation.
Treasurer and Secretary
Ronald M. Geffen (46) ............................ Managing Director of Burnham Asset Management Corporation and
Vice President Burnham Securities Inc.
Debra B. Hyman (37) .............................. Vice President and Director of Burnham Asset Management
Executive Vice President Corporation and Burnham Securities Inc. Daughter of Jon M.
Burnham and granddaughter of I.W. Burnham, II.
Frank A. Passantino (34) ......................... Vice President of Burnham Asset Management Corporation and
Vice President and Assistant Secretary Burnham Securities Inc.
</TABLE>

REMUNERATION OF TRUSTEES AND OFFICERS

The following table provides information about the compensation paid by the
fund to the nominees for their services as fund directors during the most recent
fiscal year. Compensation paid by the fund to Mr. I.W. Burnham, II and Mr. Jon
M. Burnham, interested persons of the adviser, is reimbursed to the fund by the
adviser. The fund paid no pension or retirement benefits to the directors. The
fund pays no salary or other compensation to its officers.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM FUND AND FUND
AGGREGATE COMPLEX FOR CALENDAR
COMPENSATION YEAR ENDED
NAME OF PERSON, POSITION FROM FUND DECEMBER 31, 1997
- ------------------------------------------------------------------ ------------ --------------------

<S> <C> <C>
Jon M. Burnham
President, Chief Executive Officer and Director................... 0 0
I.W. Burnham, II
Chairman and Director............................................. 0 0
Claire B. Benenson, Director...................................... $6,000 $6,000
Lawrence N. Brandt, Director...................................... $ 0 $ 0
Alvin P. Gutman, Director......................................... $5,000 $5,000
William W. Karatz, Director....................................... $5,000 $5,000
John C. McDonald, Director........................................ $5,000 $5,000
Donald B. Romans, Director........................................ $6,000 $6,000
Robert F. Shapiro, Director....................................... $6,000 $6,000
Robert M. Shavick, Director....................................... $5,000 $5,000
David H. Solms, Director.......................................... $5,000 $5,000
Robert S. Weinberg, Director...................................... $4,500 $4,500
Robert J. Wilbur, Director........................................ $5,000 $5,000
</TABLE>

REQUIRED VOTE

In accordance with your fund's articles of incorporation and by-laws, the
vote of a plurality of all of the shares of the fund voted at the meeting is
sufficient to elect the nominees.

BOARD RECOMMENDATION

THE FUND'S DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE FOR THE ELECTION
OF EACH NOMINEE TO SERVE AS A TRUSTEE OF THE DELAWARE BUSINESS TRUST.

PROPOSAL 4
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

The firm of PricewaterhouseCoopers LLP, formerly Coopers & Lybrand L.L.P.,
has served as the fund's independent public accountant for the past ten calendar
years. On July 1, 1998, Coopers & Lybrand L.L.P. merged with Price Waterhouse
LLP to form PricewaterhouseCoopers LLP. The directors have received assurances
from PricewaterhouseCoopers LLP that there will be no change as a result of the
merger in the amount and quality of professional services that
PricewaterhouseCoopers LLP will provide to the fund. Audit services during the
fiscal year ended December 31, 1997 consisted of examinations of the fund's
financial statements for this period and reviews of the fund's filings with the
SEC.

The board of directors, including a majority of the independent directors,
has selected PricewaterhouseCoopers LLP as the fund's independent public
accountants for the fiscal year ending December 31, 1998, subject to shareholder
ratification at the meeting. A representative of PricewaterhouseCoopers LLP is
expected to be available at the meeting to make a statement if he or she desires
to do so and to respond to appropriate questions.

REQUIRED VOTE

The ratification of the selection of PricewaterhouseCoopers LLP as
independent public accountants for the fiscal year ending December 31, 1998
requires a 'majority shareholder vote,' defined as the affirmative vote of the
lesser of:

67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the fund are present or represented by proxy, or

more than 50% of the outstanding shares of the fund.

BOARD RECOMMENDATION

THE FUND'S DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE FOR THE PROPOSAL
TO RATIFY PRICEWATERHOUSECOOPERS LLP AS THE FUND'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.

PROPOSAL 5
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT

GENERAL

At the board meeting, the directors, including the independent directors,
approved, and recommended that shareholders approve, a new investment advisory
agreement with Burnham Asset Management Corporation (Burnham), the fund's
current adviser. The fund has been managed since 1989 by the adviser under an
investment management contract (existing contract) that was most recently
approved by shareholders on August 9, 1989 and by the board of directors on
June 24, 1998. If the proposed investment advisory agreement (proposed
agreement) is approved, it will be effective on the date of the proposed
reorganization of the fund as a Delaware business trust, as described in
proposal 1. If the proposed agreement is approved, but the reorganization is not
approved, the proposed agreement will be effective on December 1, 1998.

The terms of the proposed agreement reflect a decrease in the fee that the
fund pays to the adviser for its services under the agreement from 0.625% to
0.6% of the fund's average daily net assets. The adviser recommended a decrease
in the advisory fee because the services that the adviser will provide to the
fund under the proposed agreement will be limited to investment advisory
services. Administrative services that Burnham currently provides to the fund
will be provided for under a separate administration agreement with Burnham. The
increasing complexity of the research needed to support the fund's investment
program and intricacy of administering the fund's business affairs is making
significant demands on the adviser's resources. The adviser will continue to
provide high quality investment advisory services under the proposed agreement.
The purpose of the administration agreement is to permit Burnham to provide
administrative services to the fund under a different arrangement. Additional
revenue to Burnham from the administration agreement will permit Burnham to hire
additional personnel or engage the services of a sub-administrator. The reduced
advisory fee when combined with the administration fee results in a net increase
in the amount payable to the adviser of 0.125% of the fund's average net assets.
The terms of the administration agreement are discussed below.

THE EXISTING CONTRACT AND THE PROPOSED AGREEMENT

Many of the terms of the agreements are substantially similar and are
outlined here. The discussion of the similarities and differences between the
agreements is a summary only. You should read the entire proposed agreement,
which is attached to this proxy statement as Exhibit D.

Under both the existing contract and the proposed agreement:

The adviser, subject to the direction of the board, provides the fund with
a continuous investment management program for the management of its
assets, consistent with the fund's investment objective and policies. The
adviser determines what securities should be bought and sold for the fund
and what portion of the fund's assets should remain uninvested.

The adviser provides the fund with research and statistical and advisory
reports upon industries, businesses, corporation or securities.

The adviser maintains the books and records of the fund with respect to
the fund's securities transactions and preserves the books and records as
required by the 1940 Act. The adviser provides the board with such
periodic and special reports about the fund's investments and performance
as the board may reasonably request.

The adviser may act as investment adviser to any other person, firm or
corporation, and may perform management and other services for other
persons or entities.

When placing orders for the purchase and sale of securities for the fund's
account with broker-dealers, the adviser is required to seek the most
favorable execution and net price available. However, the adviser may
execute brokerage transactions at a higher cost to the fund if the adviser
determines in good faith that the amount of the commission is reasonable
in relation to the value of the brokerage and research services provided
to the adviser by the broker-dealer.

The adviser is liable to the fund only for its acts and omissions caused
by its willful misfeasance, bad faith or gross negligence in the
performance of its duties or its reckless disregard of its obligations
under the agreements.

Each agreement may be amended and will terminate in accordance with the
requirements of the 1940 Act. This means that a material amendment requires the
approval of the board, including the independent directors, and a majority
shareholder vote. A material amendment is one that changes the duties and
responsibilities of the parties to the contract or increases the compensation of
the adviser. Termination of either agreement may occur at any time without
payment of a penalty with 60 days' notice to the other party. The board may
terminate the agreement on behalf of the fund or the shareholders may terminate
the agreement by a majority shareholder vote. Each agreement will terminate if
it is assigned, which might happen if the ownership of the adviser were to
change. Each agreement must be approved each year by the board, including a
majority of the independent directors, or by a majority shareholder vote.

MATERIAL DIFFERENCES BETWEEN THE EXISTING CONTRACT AND THE PROPOSED AGREEMENT

There are several important differences between the existing contract and
the proposed agreement. These differences are summarized below.

ADVISORY FEE

Under the existing contract, the fund pays the adviser a monthly fee at an
annual rate of 0.625% of the average daily net asset value of the fund during
the month. The advisory fee is prorated for the number of days in the month if
the adviser commences services after the first of the month or the contract is
terminated before the end of the month.

Under the proposed agreement, the advisory fee is less than that under the
existing contract. The fund will pay the adviser a monthly fee at an annual rate
of 0.6% of the average daily net asset value of the fund during the month. The
advisory fee will be prorated for the number of days in the month if the adviser
commences services after the first of the month or the contract is terminated
before the end of the month. The proposed agreement expressly provides that the
adviser may from time to time agree not to impose all or a portion of its fee
and/or undertake to reimburse the fund for all or a portion of its expenses not
required to be paid by the adviser. Unlike the existing contract, there is no
provision to limit the fund's expenses in accordance with state securities laws.
States no longer have the authority to regulate mutual funds.

ADDITIONAL SERVICES

Under the existing contract, the adviser provides the fund with the
services necessary to administer the fund's business as an investment company.
To provide these services, the adviser is required to calculate the fund's net
asset value, pay the salaries of persons whose duties include the preparation of
the fund's financial statements and reports, prepare the fund's registration
statements, prospectuses and other statements required by regulatory authorities
and furnish the fund with office space for all of its operations, not just its
investment operations. The adviser is not required to provide services
customarily provided by the custodian, distributor, transfer agent and
registrant, dividend disbursing agent, independent accountants, broker-dealers
and legal counsel.

Under the proposed agreement, the adviser will furnish the fund with office
space and all office facilities, equipment and personnel required for managing
the fund's investment operations. The proposed agreement does not require the
adviser to provide administrative services to the fund.

PAYMENT OF EXPENSES

Under the existing contract, the adviser pays all of its own costs and
expenses incurred in providing the required services to the fund. The fund pays
all expenses for the operation of the fund that the adviser does not pay,
including: taxes, brokerage commissions, expenses of printing and mailing
communications to the fund's shareholders, and the fees of the custodian,
transfer agent and registrant, dividend disbursing agent, independent
accountants and legal counsel.

Under the proposed agreement, the adviser will pay all its expenses that
are not paid by the fund, if those expenses are incurred by the adviser or the
fund in connection with the investment and reinvestment of the fund's assets.
Under the proposed agreement, the fund will pay:

charges and expenses for fund accounting, pricing and appraisal services
and related overhead, including, to the extent such services are performed
by personnel of the adviser or its affiliates, office space and facilities
and personnel compensation, training and benefits;

the charges and expenses of auditors;

the charges and expenses of any custodian, transfer agent, plan agent,
dividend disbursing agent and registrar appointed by the fund with respect
to the fund's shares;

issue and transfer taxes chargeable to the fund in connection with
securities transactions to which the fund is a party;

insurance premiums, interest charges, dues and fees for membership in
trade associations and all taxes and corporate fees payable by the fund to
federal, state or other governmental agencies;

fees and expenses involved in registering and maintaining registrations of
the fund and/or its shares with the Securities and Exchange Commission,
state or blue sky securities agencies and foreign countries, including the
preparation of prospectuses and statements of additional information for
filing with the Commission;

all expenses of shareholders' and board meetings and of preparing,
printing and distributing prospectuses, notices, proxy statements and all
reports to shareholders and to governmental agencies;

charges and expenses of legal counsel to the fund and the board;

any distribution fees paid by the fund in accordance with rule 12b-1 under
the 1940 Act;

compensation of the board members who are not affiliated with or
interested persons of the adviser or the fund (other than as board
members);

the cost of preparing and printing share certificates, if any; and

interest on borrowed money, if any.

ABILITY TO ENGAGE SUBADVISERS

Under the existing contract, there is no express provision authorizing the
adviser to engage the services of one or more subadvisers to provide investment
management services to the fund.

Under the proposed agreement, there is a provision that expressly
authorizes the adviser to engage one or more subadvisers, subject to approval by
the board and, if required, the shareholders. The adviser has not and has no
current intention to ask the board to approve the engagement of a subadviser to
the fund.

USE OF THE NAME 'BURNHAM'

Under the existing contract, there is no provision limiting the fund's use
of the name 'Burnham' to the time during which the adviser acts as the fund's
investment adviser.

Under the proposed agreement, if the adviser no longer acts as the fund's
investment adviser, the fund (to the extent it lawfully can) will not use the
name 'Burnham Fund' or any name derived from the name 'Burnham' or any other
name indicating that the fund is advised by or otherwise connected with the
adviser.

ADMINISTRATION AGREEMENT

At the board meeting, the directors approved the appointment of Burnham
Asset Management Corporation as the fund's administrator and an administration
agreement between Burnham and the fund. The 1940 Act does not require the
approval of an administration agreement by the fund's shareholders. For this
reason, shareholders are not being asked to approve the administration
agreement. For the reasons described in this proposal, your board of directors,
including the independent directors, believe that it is in the fund's best
interests to adopt an administration agreement for your fund. After its initial
term expires, the administration agreement (and the appointment of Burnham as
administrator) must be approved each year by the board, including the
independent directors.

Under the administration agreement, the administrator will provide the fund
with office space and personnel to assist the fund in managing its affairs. The
adviser proposed to the board of directors that the fund engage an administrator
to provide it with administrative services as an alternative to proposing that
the board approve an increase in the advisory fee. The increasing complexity of
the research needed to support the adviser's investment activities on behalf of
the fund combined with the increasing scope and intricacy of administering the
fund's business affairs has resulted in unprecedented demands on the adviser's
personnel and other resources. The board believes that the adviser can continue
to provide high quality investment advisory services to the fund under the
proposed agreement and at the proposed annual fee of 0.60% of the fund's assets,
if administrative services are provided to the fund under a different
arrangement. The board also believes that Burnham can provide administrative
services as administrator under the administration agreement for the proposed
fee of no more than 0.15% of the fund's assets. The additional revenue to
Burnham from the administration fee is intended to enable the administrator to
hire additional personnel to administer the fund's affairs or to engage the
services of a sub-administrator. Burnham will pay the sub-administrator's fee
out of its administration fee. The fund will have no obligation to pay the
sub-administrator.

Duties of the Administrator. The administrator's duties require it to:

provide supervision of all aspects of the fund's operations not related to
the fund's investment and reinvestment of its assets;

provide the fund with personnel to perform the executive, administrative,
accounting and clerical services required to effectively administer the
fund;

arrange for, at the fund's expense, (a) the preparation of the fund's
required tax returns, (b) the preparation and submission of reports to
existing shareholders and (c) the periodic updating of the fund's
prospectus and statement of additional information and the preparation of
reports filed with the Commission and other regulatory authorities;

maintain all of the fund's records not required to be maintained by the
adviser under the proposed agreement; and

provide the fund with adequate office space and all necessary office
equipment and services, including, without limitation, telephone service,
heat, utilities, stationery, office supplies and similar items.

Administration Fee and Allocation of Expenses. The board of directors has
approved an administration fee, payable monthly by the fund according to the
following schedule:

<TABLE>
<CAPTION>
ANNUAL ADMINISTRATION FEE
AVERAGE DAILY NET ASSETS AS A PERCENTAGE OF ASSETS
- ------------------------------------------------------------------- -------------------------

<S> <C>
For amounts up to $150,000,000..................................... 0.15%
$150,000,000 to 300,000,000........................................ 0.125%
Over $300,000,000.................................................. 0.10%
</TABLE>

The fee will compensate the administrator for the services it provides to
the fund. Burnham will pay all costs that it incurs in performing its duties
under the agreement. Burnham will not be required to pay any expenses of the
fund other than the expenses that the agreement allocates to the administrator.
The fund will pay its advisory fee and all of the expenses listed under 'Payment
of expenses' above under the description of the proposed agreement.

COMPARISON OF THE FUND'S EXPENSES UNDER THE AGREEMENTS

The following chart shows the expenses, including advisory fees, paid by
the fund under the existing contract for the fund's most recently completed
fiscal year, and estimated for the proposed agreement, based on the same period.

ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)

<TABLE>
<CAPTION>
PROFORMA PROPOSED AGREEMENT
EXISTING CONTRACT
------------------------------ ------------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C*
------- ------- ------- ------- ------- --------

<S> <C> <C> <C> <C> <C> <C>
Management fees............................... 0.63% 0.63% 0.63% 0.60% 0.60% 0.60%
Distribution fees(1).......................... 0.25%(2) 0.75% 0.75% 0.25% 0.75% 0.75%
Service fees.................................. None 0.25% 0.25% None 0.25% 0.25%
Other expenses:
(after expense limitation).................. 0.42% 0.42% 0.42%(3) 0.47% 0.57% 0.57%(4)
------- ------- ------- ------- ------- --------
Total operating expenses
(after expense limitation).................. 1.30% 2.05% 2.05%(3) 1.32% 2.17% 2.17%(4)
------- ------- ------- ------- ------- --------
------- ------- ------- ------- ------- --------
</TABLE>

- ------------

* Information about proforma expenses for Class C shares under the terms of the
proposed agreement is provided in the event Class C shareholders do not
approve the conversion of Class C shares to Class A shares as described in
proposal 2.

(1) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.

(2) Restated to reflect current fee. During the fiscal year ended December 31,
1997, the Class A shares paid distribution fees of 0.06% because of certain
NASD sales expense limitations applicable to the distributor.

(3) The adviser has voluntarily agreed to limit the expenses of Class C shares.
The adviser may discontinue this policy at any time. If this agreement were
not in effect, the other expenses and total annual operating expenses of
Class C shares would be 1.40% and 3.03%, respectively.

(4) The adviser has voluntarily agreed to limit the expenses of Class C shares
and may discontinue this policy at any time. If the agreement were not in
effect, the other expenses and total operating expenses of Class C shares
would be 1.55% and 3.15%, respectively.

Example. You would pay the following expenses on a $1,000 investment,
assuming payment of the maximum sales charge, and a 5% annual return.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
UNDER THE EXISTING UNDER THE PROPOSED UNDER THE EXISTING UNDER THE PROPOSED
CONTRACT ASSUMING AGREEMENT ASSUMING CONTRACT ASSUMING NO AGREEMENT ASSUMING
COMPLETE REDEMPTION COMPLETE REDEMPTION REDEMPTIONS OF NO REDEMPTIONS OF
OF SHARES AT THE END OF SHARES AT THE END SHARES AT THE END OF SHARES AT THE END OF
OF THE PERIOD: OF THE PERIOD: THE PERIOD: THE PERIOD:
- -----------------------------------------------------------------------------------------------------------------------------
CLASS OF FUND SHARES A B C A B C A B C A B C
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
1 year $ 63 $ 71 $ 31 $ 63 $ 72 $ 32 $ 63 $ 21 $ 21 $ 63 $ 22 $ 22
- -----------------------------------------------------------------------------------------------------------------------------
3 years $ 89 $ 94 $ 64 $ 90 $ 98 $ 68 $ 89 $ 64 $ 64 $ 90 $ 68 $ 68
- -----------------------------------------------------------------------------------------------------------------------------
5 years $118 $130 $110 $129 $136 $116 $118 $110 $110 $119 $116 $116
- -----------------------------------------------------------------------------------------------------------------------------
10 years* $199 $219 $238 $201 $228 $250 $199 $219 $238 $201 $228 $250
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

- ------------
* 10 year figures for Class B shares assume conversion to Class A shares after
eight years.

ANALYSIS OF THE PROPOSAL AND FACTORS CONSIDERED BY THE BOARD OF DIRECTORS

The directors have concluded that the terms of the proposed agreement and
the changes from the existing contract, including the decrease in the investment
advisory fee and the removal of administrative services, are fair and
reasonable. In approving the proposed agreement and recommending its approval to
the shareholders, the directors, including the independent directors,
considering the best interests of the shareholders of the fund, took into
account all the factors they considered important. These factors included:

the nature, quality and scope of the services provided to the fund by the
adviser;

the increased research needed to keep abreast of new types of securities
and the globalization and generally greater complexity of the securities
markets;

the increased scope and complexity of administering investment companies;

the necessity of the adviser's maintaining and enhancing its ability to
retain and attract capable personnel to serve the fund and the increased
competition for high quality investment management personnel;

the investment record of the adviser in managing the fund;

comparative information concerning similar investment companies with
respect to investment performance, the levels of investment management
fees and expenses ratios in the industry generally;

the revenues and allocated expenses (including the methods of allocation)
of the adviser in connection with its performance of services under the
proposed agreement;

possible benefits other than the advisory fee which the adviser and its
affiliates derive from their relationship with the fund;

the financial resources of the adviser and the continuance of appropriate
incentives to assure that the adviser continues to provide high quality
services to the fund;

the fact that the advisory fee has not been modified since 1989; and

various other factors.

In evaluating the proposed agreement, the directors relied on their ongoing
review of the adviser's activities on behalf of the fund and were also provided
additional specific data and analyses by the adviser. The directors considered
information obtained from Strategic Insight relating to investment management
fees and total expenses paid by other investment companies comparable to the
fund.

The directors also considered the reduced advisory fee rate in comparison
to those of other comparable mutual funds. The directors noted that the net
effect of the decrease in the fund's advisory fee and the assumption by the fund
of the expenses of the fund's administration, was a net increase in amounts
payable to the adviser of 0.125% of the fund's average net assets.

The directors also considered the reduced administration fee rate which
would apply upon increases in the fund's net assets and the anticipated
economies of scale that would result.

The directors also considered the fact that the adviser's management fee
income, administration fee income and profit margin would likely be higher in
future years as a result of the combined effect of the advisory fee and the
administration fee.

In addition to the information summarized in the preceding discussion, the
independent directors reviewed and evaluated other facts and information deemed
by them to be relevant to their consideration of the proposed agreement. The
independent directors also considered benefits which may accrue to the adviser
or its affiliated companies by virtue of their association with the fund. These
'spin off' benefits may include, among others, the placement of fund portfolio
transactions through broker-dealers that are affiliated with the adviser and the
promotion to fund shareholders of various other products and services offered by
the adviser and its affiliated companies.

INFORMATION ABOUT THE ADVISER

The adviser is registered under the Investment Advisers Act of 1940 and has
been providing investment advisory services to the fund, high net-worth
individuals and tax-exempt institutional investors since 1989. Mr. I.W.
Burnham, II is the honorary chairman of Burnham and Burnham Securities, Inc.
Mr. Jon M. Burnham, the son of I.W. Burnham, is chairman, chief executive
officer and a director of Burnham and Burnham Securities. A majority of the
outstanding shares of the adviser are owned by I.W. Burnham, II and Jon M.
Burnham. The directors of the adviser and their principal occupations during the
past five years are set forth in the following table.

DIRECTORS OF THE ADVISER

<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION DURING THE LAST FIVE YEARS
- ----------------------------- ---------------------------------------------------------------------------

<S> <C>
I.W. Burnham, II............. Honorary Chairman, Burnham Asset Management Corporation; Honorary Chairman,
Burnham Securities, Inc.
Jon M. Burnham............... Chairman and Chief Executive Officer, Burnham Asset Management Corporation;
Chairman and Chief Executive Officer, Burnham Securities, Inc.
Debra B. Hyman............... Vice President, Burnham Asset Management Corporation; Vice President,
Burnham Securities, Inc.
George Stark................. Senior Managing Director, Burnham Asset Management Corporation; Senior
Managing Director, Burnham Securities, Inc.
</TABLE>

BROKERAGE COMMISSIONS ON PORTFOLIO TRANSACTIONS

During the fund's fiscal year ended December 31, 1997, the fund paid total
brokerage commissions of $216,771. The amount paid to the distributor, an
affiliate of the adviser, during that year was $147,149, which represented
67.88% of the total brokerage commissions paid.

OTHER MATERIAL PAYMENTS BY THE FUND TO AFFILIATES OF THE ADVISER

For the fiscal year ended December 31, 1997, the fund paid $64,435 to
Burnham Securities for distribution related services.

VOTE REQUIRED

Approval of proposal 5 requires a 'majority shareholder vote,' as defined
in proposal 4.

BOARD RECOMMENDATION

THE FUND'S DIRECTORS RECOMMEND THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL
OF THE PROPOSED INVESTMENT ADVISORY AGREEMENT.

PROPOSALS 6(a) THROUGH 6(n)
AMENDMENT TO AND ELIMINATION OF CERTAIN
INVESTMENT RESTRICTIONS AND RECLASSIFICATION
OF FUNDAMENTAL POLICIES AS NON-FUNDAMENTAL

The 1940 Act, which regulates the operations of mutual funds, requires that
funds adopt fundamental restrictions about certain types of investments and
practices. Fundamental restrictions may be changed only with shareholder
approval. The adviser has recommended and your board has approved, subject to
shareholder approval, a proposal to eliminate or amend certain of the fund's
fundamental restrictions. Many of the fund's fundamental restrictions contain
policies that were adopted in response to state 'blue sky' laws and regulations
that restricted certain types of fund practices and investments. The states no
longer have the power to enforce these restrictions. Some of the fundamental
restrictions are being liberalized to the extent permitted under the 1940 Act in
light of recent more flexible interpretive positions of the staff of the
Securities and Exchange Commission. The proposed changes to the fund's
fundamental restrictions may expand the range of investment opportunities and
techniques available to manage the fund's portfolio.

The table on the following page sets forth the fund's current fundamental
restrictions and the proposed amended or eliminated restrictions.

PROPOSED AMENDMENTS TO AND ELIMINATION OF INVESTMENT RESTRICTIONS

The restrictions listed on the following page are not presented in the same
order as in the fund's statement of additional information. In addition, the
amended restrictions, if approved, will be reordered in the fund's new statement
of additional information.

Although the board has approved amendments to the fund's investment
restrictions that authorize the fund to invest to the full extent permitted by
the 1940 Act, the fund has no current intention of changing its actual
investment strategies and practices as a result of these amendments. Future
changes to the fund's investment policies normally will require that the fund's
board approve the changes and that the fund amend its registration statement to
reflect the changes.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROPOSAL CURRENT FUNDAMENTAL RESTRICTION AMENDED FUNDAMENTAL RESTRICTION
6(a) The fund may not engage in short sales, other than Eliminated (not required by the 1940 Act).
short sales 'against the box'. Short sales occur * * * *
'against the box' when the fund contemporaneously owns Elimination of this restriction means that
the underlying securities or securities substantially the fund may engage in short sales to the
identical to, or convertible into, securities limits of the 1940 Act. However, the board
equivalent in kind and amount to those sold short. has adopted a non-fundamental policy
(Current restriction no. 2). prohibiting the fund from engaging in
short sales.
6(b) The fund may not purchase securities on margin, except Eliminated (not required to be fundamental
that the fund may obtain such short-term credits as by the 1940 Act).
are necessary for the clearance of transactions. For * * * *
purposes of this restriction, the making of margin The fund's ability to purchase securities
deposits in connection with transactions in options is on margin is limited by provisions of the
not deemed to be a purchase of securities on margin. 1940 Act. The fund has no intention to
(Current restriction no. 8). purchase securities on margin. If the fund
engages in futures transactions, the fund
will comply with any margin requirements
under the Commodity Exchange Act.
6(c) The fund may not pledge, mortgage or hypothecate its Eliminated (not required by the 1940 Act).
assets, except when necessary to secure borrowings of * * * *
money, but then not in an amount in excess of 15% of This restriction was imposed on the fund
the value of the Fund's net assets. However, the by state securities regulations that no
fund's board of directors currently has a policy, longer apply to the fund. The fund's
which is subject to change without shareholder borrowing activities will be regulated by
approval, not to pledge, mortgage or hypothecate its its restriction on borrowing and by the
assets in excess of 10% of its net assets at market requirements of the 1940 Act. The fund has
value. The fund does not currently intend to pledge no current intention to borrow for
its assets. For purposes of this restriction, purposes of purchasing additional
collateral or escrow arrangements with respect to the securities.
writing of options are not deemed to be pledges of
assets. (Current restriction no. 11).
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROPOSAL CURRENT FUNDAMENTAL RESTRICTION AMENDED FUNDAMENTAL RESTRICTION
6(d) The fund may not invest more than 5% of the value of Eliminated (not required by the 1940 Act).
its total assets in securities of companies which * * * *
(with their predecessors) have not had at least three This restriction was imposed on the fund
years of continuous operations. (Current restriction by state securities regulations that no
no. 15). longer apply to the fund. Without this
The board of directors has adopted a policy which is restriction, the fund's investments in
subject to change at any time, that this restriction unseasoned issuers are subject only to the
includes equity securities which, at the time of fund's diversification limits. This means
purchase, the fund believes will not be resalable that the fund could invest up to 25% of
within a reasonable period of time at prices its assets in the securities of a single
reasonably related to the market for such securities. unseasoned issuer. Unseasoned issuers are
typically small companies in business for
less than 3 years. Although these
companies present an opportunity for the
fund to purchase securities of companies
with capital appreciation potential, the
companies may be subject to a greater risk
of failure than more established
companies.
* * * *
The board has adopted a non-fundamental
investment restriction limiting the fund's
investments in illiquid securities to not
more than 15% of the fund's net assets. A
security is illiquid if it cannot be
disposed of in 7 days at a price that is
approximately equal to the price at which
the fund is valuing the security.
6(e) The fund may not write or purchase options or warrants Eliminated (not required by the 1940 Act).
or lend portfolio securities in excess of the * * * *
limitations specified [in certain sections of the Limits on the fund's ability to invest in
statement of additional information]. (Current options and warrants are not required by
restriction no. 10). the 1940 Act to be fundamental. The fund's
board has adopted a non-fundamental policy
identical to the fund's fundamental
restriction on options transactions. The
policy limiting the fund's investments in
warrants will be eliminated entirely.
Unnecessarily limiting the fund's
opportunity to purchase warrants may
prevent the fund from capitalizing on an
appropriate opportunity to acquire the
underlying stocks.
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROPOSAL CURRENT FUNDAMENTAL RESTRICTION AMENDED FUNDAMENTAL RESTRICTION
6(f) The fund may not borrow money, except from banks as a Amended as follows: The fund may not
temporary measure for extraordinary or emergency borrow money or issue senior securities,
purposes, and then not in an amount in excess of 10% except to the extent permitted by the 1940
of the value of the fund's total assets, inclusive of Act.
the amount borrowed. The fund has not borrowed money * * * *
and does not currently intend to borrow money to an The amended restriction permits borrowing
extent exceeding 5% of its total assets. If the value and the issuance of senior securities to
of the fund's assets (including the amount borrowed), the extent consistent with the 1940 Act.
less its liabilities not including any borrowing, The positions of the staff of the
becomes at any time less than 300% of the amount of Securities and Exchange Commission on
any outstanding bank debt, the fund, within three borrowing and senior securities have
business days, will reduce its bank debt to the extent evolved in recent years with the
necessary to meet the required 300% asset coverage. development of new investment strategies,
Such a reduction is required by the provisions of the such as reverse repurchase agreements. The
1940 Act. This may require sales at a time when it is fund wants the flexibility to use new
disadvantageous to do so. The amount of any borrowing investment techniques consistent with the
will be limited by any applicable margin limitations 1940 Act, as interpreted in the future.
imposed by Federal Reserve Board regulations. (Current
restriction no. 1).
The fund may not issue any senior securities, except
insofar as bank borrowings might be considered as the
issuance of senior securities. (Current restriction
no. 4).
6(g) The fund may not make loans of money to other persons, Amended as follows: The fund may not make
except that this restriction shall not prohibit (a) loans to other persons, except loans of
the purchase of a portion of an issue of publicly securities not exceeding one-third of the
distributed debt securities, (b) the loan of portfolio fund's total assets, investments in debt
securities and (c) the entry into repurchase obligations and transactions in repurchase
agreements or the sale of securities coupled with a agreements.
simultaneous agreement to repurchase them from the * * * *
buyer. (Current restriction no. 3). The first sentence of the existing
Under current interpretations of the staff of the restriction is not substantively changed,
Securities and Exchange Commission, and subject to but has been rewritten to conform to a
changes in such interpretations, the fund may enter more modern phrasing of lending
into such repurchase or resale agreements having a restrictions.
duration of more than seven days only to an extent * * * *
which, when added to all other illiquid assets, would The second part of the existing
not exceed 10% of the fund's total assets. Other than restriction has been eliminated. As noted
the purchase of publicly distributed debt securities, above, the fund's board has adopted a
the fund has not engaged in such investments or non-fundamental restriction to limit the
entered into repurchase or resale agreements having a fund's investments in illiquid securities
duration of more than seven days and does not to 15% of its net assets.
currently intend to do so.
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROPOSAL CURRENT FUNDAMENTAL RESTRICTION AMENDED FUNDAMENTAL RESTRICTION
6(h) The fund may not invest in companies for the purpose Eliminated (not required to be fundamental
of exercising control or management of such companies. by the 1940 Act).
(Current restriction no. 5). * * * *
The board has adopted a non-fundamental
policy to prohibit the fund from investing
in companies for the purpose of exercising
control or management of the companies.
6(i) The fund may not invest in the securities of other Eliminated (not required by the 1940 Act).
investment companies, unless acquired in connection * * * *
with a plan of reorganization. (Current restriction Elimination of this restriction means that
no. 6). the fund may invest in other investment
companies to the limits of the 1940 Act.
However, the fund's ability to invest in
other investment companies is limited by
the 1940 Act's percentage limitations on
these investments.
6(j) The fund may not invest in the securities of any Eliminated (not required by the 1940 Act).
issuer if, at the time of the fund's purchase or * * * *
holding thereof, any of the officers or directors of This restriction was imposed by state
the fund or of the adviser owns beneficially more than securities regulations that no longer
1/2 of 1%, and such officers and directors owning more apply to the fund. This restriction is not
than 1/2 of 1% together own beneficially more than 5%, necessary because principal transactions
of the issuer's securities. (Current restriction no. with affiliated persons are already
7). restricted by the 1940 Act.
6(k) The fund may not purchase and sell limited partnership Amended and restated as two restriction as
interests, real estate, commodities or commodity follows: The fund may not purchase, sell
contracts except in connection , with a merger, or invest in real estate but subject to
consolidation or reorganization of a corporation or its other investment policies and
other organization in which the fund has an restrictions may invest in securities of
investment, or in satisfaction of a debt. Any limited companies that deal in real estate or are
partnership interests, real estate, commodities or engaged in the real estate business. These
commodity contracts so acquired will be disposed of as companies include real estate investment
soon as reasonably practicable consistent with the trusts and securities secured by real
best interests of the fund's shareholders. (Current estate or interests in real estate. The
restriction no. 9). fund may hold and sell real estate
acquired through default, liquidation or
other distributions of an interest in real
estate as a result of the fund's ownership
of securities.
The fund may not invest in commodities or
commodity futures contracts, except for
transactions in financial derivative
contracts, such as forward currency
contracts; financial futures contracts and
options on financial futures contracts;
options on securities, currencies and
financial indices; and swaps, caps,
floors, collars and swaptions.
</TABLE>

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PROPOSAL CURRENT FUNDAMENTAL RESTRICTION AMENDED FUNDAMENTAL RESTRICTION
6(l) The fund may not underwrite the securities of other Amended as follows: The fund may not
issuers, or acquire restricted securities which the underwrite securities of other issuers,
fund may not be free to sell to the public without except insofar as the fund may be deemed
registration of the securities under the Securities an underwriter under the Securities Act of
Act of 1933, as amended, if such acquisition would 1933 when selling portfolio securities.
cause the fund to have more than 10% of the value of * * * *
its total assets invested in such securities. It shall The 1940 Act prohibits the fund from
be a condition of any such investment that the issuer underwriting securities. That substantive
of the securities purchased by the fund will, upon portion of the existing fundamental
specified circumstances, file a registration statement restriction will not change, but is
relating to the securities and the seller or issuer rewritten for clarity. As noted above, the
will pay the cost of such registration statement. board will adopt a non-fundamental
However, at the present time, the board of directors restriction to limit the fund's
has a policy which is subject to change at any time investments in illiquid securities to 15%
without shareholder approval which limits such of the fund's net assets.
investments to 5% of the value of the fund's net
assets. (Current restriction no. 12).
6(m) The fund may not invest more than 5% of the value of Amended as follows: With respect to 75% of
its total assets in the equity securities of any one the fund's total assets, the fund may not
issuer. (Current restriction no. 13). invest more than 5% of the fund's total
The fund may not invest in more than 10% of the assets in the securities of any single
outstanding voting securities of any one issuer or in issuer or own more than 10% of the
more than 10% of any class of securities of any one outstanding voting securities of any one
issuer (except government obligations). (Current issuer, in each case other than (1)
restriction no. 14). securities issued or guaranteed by the
U.S. Government, its agencies or
instrumentalities or (2) securities of
other investment companies.
* * * *
The above diversification restriction will
apply to 75% instead of 100% of the fund's
total assets. The 100% limitation is not
required by the 1940 Act. This change will
allow the fund to invest up to 25% of its
total assets in non-diversified positions.
</TABLE>

PROPOSAL 6(n)
PROPOSED RECLASSIFICATION OF THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES AS NON-FUNDAMENTAL

Although not required by the 1940 Act, funds sometimes classified
investment policies that are not investment restrictions as fundamental. Like
fundamental restrictions, fundamental policies can be changed only by
shareholder vote. At some time in the past, all of the fund's 'investment
policies' described in the prospectus, in addition to its investment
restrictions, were classified as fundamental policies. For this reason, it is
extremely difficult for the investment adviser to determine what language in the
prospectus is a fundamental investment policy which cannot be changed without
shareholder

approval and what language is explanatory disclosure. This makes it more
difficult for the fund to take advantage of novel equity-related securities and
investment strategies as these are developed over time. Also, it is more
difficult for the investment adviser and the board to monitor the fund's
compliance with its fundamental policies.

The fund's board has approved the reclassification of the fund's investment
policies as non-fundamental, subject to your approval. The board believes that
this will provide the fund with greater flexibility to take advantage of
industry developments without the additional expense of a shareholder meeting.
The board has not approved any changes to the fund's investment policies other
than those described in this proxy statement. If the board were to approve such
a change in the future that change would be described in the fund's prospectus.

VOTE REQUIRED

Approval of each of proposals 6(a)-6(n) requires a majority shareholder
vote as defined in proposal 4. If shareholders do not approve the
reclassification of the fund's investment policies as non-fundamental, these
policies will continue to be fundamental.

BOARD EVALUATION AND RECOMMENDATION

The directors of your fund believe that the proposed elimination or
amendment of the fund's fundamental investment restrictions and the
reclassification of the fund's investment policies as non-fundamental will more
clearly reflect current regulatory practice and will expand the investment
opportunities available to the fund. ACCORDINGLY, THE DIRECTORS RECOMMEND THAT
YOU APPROVE THE PROPOSALS TO ELIMINATE OR AMEND THE FUND'S FUNDAMENTAL
INVESTMENT RESTRICTIONS AND RECLASSIFY THE FUND'S INVESTMENT POLICIES AS
NON-FUNDAMENTAL, AS DESCRIBED ABOVE.

OTHER MATTERS

VOTING RIGHTS

Each share of your fund is entitled to one vote and each fractional share
is entitled to that fractional vote. The vote required to approve each proposal
is described in the proposal.

Shares of your fund represented in person or by proxy, including shares
which abstain or do not vote on a proposal, will be counted for purposes of
determining whether there is a quorum at the meeting. Accordingly, an abstention
from voting has the same effect as a vote against a proposal. However, if a
broker or nominee holding shares in 'street name' indicates on the proxy card
that it does not have discretionary authority to vote on a proposal, those
shares will not be considered present and entitled to vote on that proposal.
Thus, a 'broker non-vote' has no effect on the voting in determining whether a
proposal has been adopted if more than 50% of the outstanding shares (excluding
the 'broker non-votes') are present or represented. However, for purposes of
determining whether a proposal has been adopted by more than 50% of the
outstanding shares of the fund a 'broker non-vote' has the same effect as a vote
against that proposal because shares represented by a 'broker non-vote' are
considered to be outstanding shares.

INFORMATION CONCERNING THE MEETING

SOLICITATION OF PROXIES

In addition to the mailing of these proxy materials, proxies may be
solicited by telephone, by fax or in person by the trustees, officers and
employees of your fund, by personnel of the adviser, the fund's principal
distributor, and the fund's transfer agent or by broker-dealer firms. A third
party proxy solicitation firm, Shareholder Communications Corporation, has been
engaged to provide proxy solicitation services at a cost of approximately
$30,000. The fund will pay this cost.

The mailing address of the fund, the adviser and the distributor is 1325
Avenue of the Americas, 17th Floor, New York, New York 10019.

REVOKING PROXIES

A shareholder signing and returning a proxy has the power to revoke it at
any time before it is exercised:

By filing a written notice of revocation with your fund's distributor,
Burnham Securities Inc., 1325 Avenue of the Americas, 17th Floor, New
York, New York 10019 Attn: Frank Passantino.

By returning a duly executed proxy with a later date before the time of
the meeting, or

If a shareholder has executed a proxy but is present at the meeting and
wishes to vote in person, by notifying the secretary of the fund (without
complying with any formalities) at any time before it is voted.

Being present at the meeting alone does not revoke a previously executed
and returned proxy.

OUTSTANDING SHARES AND QUORUM

As of July 31, 1998, 4,667,801 Class A shares, 67,417 Class B shares and
11,601 Class C shares of common stock of the fund were outstanding. Only
shareholders of record on August 27, 1998 (record date) are entitled to notice
of and to vote at the meeting. A majority of the outstanding shares of the fund
that are entitled to vote will be considered a quorum for the transaction of
business.

OTHER BUSINESS

The fund's board of directors knows of no business to be presented for
consideration at the meeting other than the proposals in this proxy statement.
If other business is properly brought before the meeting, proxies will be voted
according to the best judgment of the persons named as proxies.

ADJOURNMENTS

If a quorum is not present in person or by proxy at the time any session of
the meeting is called to order, the persons named as proxies may vote those
proxies that have been received to adjourn the meeting to a later date. If a
quorum is present but there are not sufficient votes in favor of a proposal, the
persons named as proxies may propose one or more adjournments of the meeting to
permit further solicitation of proxies concerning that proposal. Any adjournment
will require the affirmative vote of a majority of the fund's shares present at
the session of the meeting to be adjourned. If an adjournment of the meeting is
proposed because there are not sufficient votes in favor of a proposal, the
persons named as proxies will vote those proxies favoring that proposal in favor
of adjournment, and will vote those proxies against the proposal against
adjournment.

TELEPHONE AND ELECTRONIC VOTING

In addition to soliciting proxies by mail, by fax or in person, the fund
may arrange to have votes recorded by telephone by officers and employees of the
fund or by personnel of the adviser or transfer agent. The telephone and
electronic voting procedures are designed to verify a shareholder's identity, to
allow a shareholder to authorize the voting of shares in accordance with the
shareholder's instructions and to confirm that the voting instructions have been
properly recorded. If these procedures were subject to a successful legal
challenge, these telephone or electronic votes would not be counted at the
meeting. The fund has not obtained an opinion of counsel about telephone and
electronic voting, but is currently not aware of any challenge.

A shareholder will be called on a recorded line at the telephone
number in the fund's account records and will be asked to provide the
shareholder's social security number or other identifying information.

The shareholder will then be given an opportunity to authorize proxies
to vote his or her shares at the meeting in accordance with the
shareholder's instructions.

To ensure that the shareholder's instructions have been recorded
correctly, the shareholder will also receive a confirmation of the voting
instructions by mail.

A toll-free number will be available in case the voting information
contained in the confirmation is incorrect.

If the shareholder decides after voting by telephone to attend the
meeting, the shareholder can revoke the proxy at that time and vote the
shares at the meeting.

OWNERSHIP OF SHARES OF THE FUND

To the knowledge of the fund, as of July 31, 1998, the following persons
owned of record or beneficially 5% or more of the outstanding Class A, Class B
and Class C shares of your fund.

<TABLE>
<CAPTION>
PERCENT OF SHARES
BENEFICIALLY OWNED
DIRECTLY OR INDIRECTLY
ACCOUNT NAME ON JULY 31, 1998
- ---------------------------------------------------------------------------------- ----------------------
<S> <C>
CLASS B SHARES
Lewco Securities Corp. ........................................................... 33.53%
Harborside Finance Center
34 Exchange Place
Jersey City, NJ 07302
Donaldson Lufkin Jenrette ........................................................ 15.48%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303
CLASS C SHARES
Donaldson Lufkin Jenrette ........................................................ 76.31%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07302
</TABLE>

EXHIBIT A

AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION (the 'Agreement') is made this
day of November, 1998, between The Burnham Fund, Inc., a Maryland corporation
(the 'Fund'), and Burnham Investors Trust, a Delaware business trust (the
'Trust'), each with principal offices at 1325 Avenue of the Americas, 17th
Floor, New York, New York 10019.

1. Plan of Reorganization and Liquidation

(a) The Fund shall assign, sell, convey, transfer and deliver to a new
series of the Trust (the 'Successor Fund') at the Closing provided for in
Section 2 (hereinafter called the 'Closing') all of its then existing
assets of every kind and nature. In consideration therefor, the Trust, on
behalf of the Successor Fund, agrees that at the Closing (i) the Successor
Fund shall assume all of the Fund's obligations and liabilities then
existing, whether absolute, accrued, contingent or otherwise, including all
unpaid fees and expenses of the Fund in connection with the transactions
contemplated hereby and (ii) the Trust shall issue and deliver to the Fund
a number of full and fractional shares of each class of shares of
beneficial interest of the Successor Fund (the 'Successor Fund Shares'),
which is equal to the number of full and fractional shares of the
corresponding class of shares of the Fund then outstanding.

(b) Upon consummation of the transactions described in paragraph (a)
of this Section 1, the Fund shall distribute in complete liquidation pro
rata to its shareholders of record as of the Closing Date the Successor
Fund Shares received by the Fund. This distribution shall be accomplished
by establishing an account on the share record books of the Successor Fund
in the name of each shareholder of each class of shares of the Fund,
representing with respect to each class of shares of the Successor Fund the
number of full and fractional Successor Fund Shares equal to the number of
shares of the corresponding class of shares of the Fund owned of record by
the shareholder at the Closing Date.

(c) As promptly as practicable after the above liquidation of the
Fund, the legal existence of the Fund shall be terminated.

2. Closing and Closing Date. The Closing shall occur after the close of
business on November 30, 1998 or at such later time and date as the parties may
mutually agree (the 'Closing Date').

3. Conditions Precedent. The obligations of the Fund, the Trust and the
Successor Fund to effect the transactions contemplated hereunder (the
'Reorganization') shall be subject to the satisfaction of each of the following
conditions:

(a) All such filings shall have been made with, and all such
authorizations and orders shall have been received from, the Securities and
Exchange Commission (the 'SEC') and state securities commissions as may be
necessary to permit the parties to carry out the transactions contemplated
by this Agreement.

(b) Each party shall have received an opinion of counsel substantially
to the effect that for federal income tax purposes: (1) the acquisition of
the assets and assumption of the liabilities of the Fund by the Successor
Fund in exchange for Successor Fund Shares, the distribution of such
Successor Fund Shares to the shareholders of the Fund in complete
liquidation of the Fund, and the termination of the Fund will constitute a
'reorganization' within the meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986, as amended (the 'Code'), and the Successor Fund and
the Fund will each be 'a party to a reorganization' within the meaning of
Section 368(b) of the Code; (2) no gain or loss will be recognized by the
Fund upon the transfer of all of its assets to the Successor Fund solely in
exchange for the Successor Fund Shares and the assumption by the Successor
Fund of the liabilities of the Fund and the distribution by the Fund of
such Successor Fund Shares to the shareholders of the Fund; (3) no gain or
loss will be recognized by the Successor Fund upon the receipt of all of
the assets of the Fund in exchange solely for Successor Fund Shares and the
assumption by the Successor Fund of the liabilities of the Fund; (4) the
tax basis of the Successor Fund in the assets received from the Fund will
be the same as the tax basis of

A-1

such assets in the hands of the Fund immediately prior to the transfer of
such assets to the Successor Fund; (5) the Successor Fund's tax holding
period for the assets acquired from the Fund will include, in each
instance, the Fund's tax holding period for those assets; (6) no gain or
loss will be recognized by the Fund's shareholders upon the exchange of
their shares of the Fund solely for Successor Fund Shares as part of the
reorganization; (7) the tax basis of the Successor Fund Shares received by
the Fund's shareholders in the transaction will be, for each shareholder,
the same as the tax basis of the shares of the Fund exchanged therefor; and
(8) the tax holding period of the Successor Fund Shares received by the
Fund's shareholders will include, for each shareholder, the shareholder's
tax holding period for the shares of the Fund surrendered in exchange
therefor, provided that the surrendered shares were held as capital assets
in the hands of the Fund's shareholders on the date of the exchange. The
opinion may cover any additional matters deemed material by such counsel.

(c) This Agreement and the Reorganization shall have been adopted and
approved by the affirmative vote of the holders of a majority of the Fund's
shares outstanding and entitles to vote. All shares of the Fund will be
voted together as a single class.

(d) The Trust, on behalf of the Successor Fund, shall have entered
into an Investment Advisory Agreement with Burnham Asset Management
Corporation, Inc. which shall be substantially identical in form and
substance to the Investment Advisory Agreement approved by shareholders at
the meeting of shareholders on November 19, 1998 and in effect on the
Closing Date between the Fund and Burnham Asset Management Corporation. The
Investment Advisory Agreement shall have been approved by the Trustees of
the Trust, including, to the extent required by law, the Trustees of the
Trust who are not 'interested persons' of the Trust as defined in the 1940
Act.

(e) The Trust, on behalf of the Successor Fund, shall have entered
into a Transfer Agency Agreement with State Street Bank and Trust Company
and a Distribution Agreement with Burnham Securities, Inc. The Transfer
Agency Agreement shall be substantially identical in form and substance to
the agreement in effect at the Closing Date between the Fund and State
Street Bank and Trust Company. The Distribution Agreement shall be
substantially identical to that in effect at the Closing Date, except to
the extent that the parties agree otherwise and subject to shareholder
approval of certain 12b-1 distribution plans. These agreements shall have
been approved by the Trustees of the Trust and, to the extent required by
law, by the Trustees of the Trust who are not 'interested persons' of the
Trust as defined in the 1940 Act.

(f) The Trustees of the Trust, including those Trustees of the Trust
who are not 'interested persons' of the Trust as defined in the 1940 Act,
shall have selected as auditors for the Successor Fund such auditors as
shall have been selected and ratified for the Fund. This selection shall
have been ratified by the Fund as the sole shareholder of the Successor
Fund prior to the consummation of the Reorganization.

(g) The Trust, on behalf of the Successor Fund, shall have adopted a
Class A Shares Distribution Plan, a Class B Shares Distribution Plan and a
Class C Shares Distribution Plan pursuant to Rule 12b-1 under the 1940 Act
substantially identical in form and substance to the Fund's Class A Shares
Distribution Plan, Class B Shares Distribution Plan and a Class C Shares
Distribution Plan, respectively, in effect on the Closing Date. Each of the
Successor Fund's Distribution Plans shall be approved by the Trustees of
the Trust in accordance with Rule 12b-1 and by the Fund, as the sole
shareholder of the Successor Fund, prior to the consummation of the
Reorganization.

At any time prior to the Closing, any of the foregoing conditions except
condition 3(c) may be waived by the Board of Directors of the Fund or the Board
of Trustees of the Trust if in their judgment, the waiver will not have a
material adverse effect on the interests of the shareholders of the Fund.

4. Amendment. This Agreement may be amended at any time by action of the
Directors of the Fund and the Trustees of the Trust, notwithstanding the
approval thereof by the shareholders of the Fund, provided that no amendment
shall have a material adverse effect on the interests of the shareholders of the
Fund.

A-2

5. Termination. The Board of Directors of the Fund or the Board of Trustees
of the Trust may terminate this Agreement and abandon the Reorganization,
notwithstanding the approval thereof by the shareholders of the Fund, at any
time prior to the Closing, if circumstances should develop that, in their
judgment, make proceeding with the Reorganization inadvisable.

This Agreement shall be executed in any number of counterparts each of
which shall be deemed to be an original, but all counterparts together shall
constitute only one instrument.

IN WITNESS WHEREOF the parties have hereunto caused this Agreement to be
executed and delivered by their duly authorized officers as of the day and year
first above written.

<TABLE>
<CAPTION>
THE BURNHAM FUND, INC.

<S> <C>
Attest: ............................................. By: .................................................
By: Name:
Its: Secretary Its:

BURNHAM INVESTORS TRUST
on behalf of its series, Burnham Fund

Attest: ............................................. By: .................................................
By: Name:
Its: Secretary Its:
</TABLE>

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EXHIBIT B

BURNHAM INVESTORS TRUST
AGREEMENT AND
DECLARATION OF TRUST

This AGREEMENT AND DECLARATION OF TRUST is made on August 20, 1998 by the
undersigned Trustee (together with all other persons from time to time duly
elected, qualified and serving as Trustees in accordance with the provisions of
Article II hereof, the 'Trustees');

NOW, THEREFORE, the Trustees declare that all money and property
contributed to the Trust shall be held and managed in trust pursuant to this
Agreement and Declaration of Trust.

ARTICLE I
NAME AND DEFINITIONS

SECTION 1. Name. The name of the Trust created by this Agreement and
Declaration of Trust is 'Burnham Investors Trust'.

SECTION 2. Definitions. Unless otherwise provided or required by the
context:

(a) 'Administrator' means the party, other than the Trust, to the contract
described in Article III, Section 3 hereof.

(b) 'By-laws' means the By-laws of the Trust adopted by the Trustees, as
amended from time to time, which By-laws are expressly herein incorporated by
reference as part of the 'governing instrument' within the meaning of the
Delaware Act.

(d) 'Commission,' 'Eligible Foreign Custodian,' 'Qualified Foreign Bank,'
'Interested Person' and 'Principal Underwriter' have the meanings provided in
the 1940 Act. Except as such term may be otherwise defined by the Trustees in
conjunction with the establishment of any Series of Shares, the term 'Majority
Shareholder Vote' shall have the same meaning as is assigned to the term 'vote
of a majority of the outstanding voting securities' in the 1940 Act.

(e) 'Covered Person' means a person so defined in Article IV, Section 2.

(f) 'Custodian' means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).

(g) 'Declaration' shall mean this Agreement and Declaration of Trust, as
amended or restated from time to time. Reference in this Declaration of Trust to
'Declaration,' 'hereof,' 'herein,' and 'hereunder' shall be deemed to refer to
this Declaration rather than exclusively to the article or section in which such
words appear.

(h) 'Delaware Act' means Chapter 38 of Title 12 of the Delaware Code
entitled 'Treatment of Delaware Business Trusts,' as amended from time to time.

(i) 'Fund Complex' has the meaning provided in the Securities Exchange Act
of 1934, as amended.

(j) 'Distributor' means the party, other than the Trust, to the contract
described in Article III, Section 1 hereof.

(k) 'His' shall include the feminine and neuter, as well as the masculine,
genders.

(l) 'Investment Adviser' means the party, other than the Trust, to the
contract described in Article III, Section 2 hereof.

(m) 'Net Asset Value' means the net asset value of each Series of the
Trust, determined as provided in Article VI, Section 3.

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(n) 'Person' means and includes individuals, corporations, partnerships,
trusts, associations, limited liability companies, joint ventures, estates and
other entities, and governments and agencies and political subdivisions thereof,
whether domestic or foreign.

(o) 'Series' means a series of Shares established pursuant to Article V.

(p) 'Shareholder' means a record owner of Outstanding Shares;

(q) 'Shares' means the equal proportionate transferable units of interest
into which the beneficial interest of each Series or Class is divided from time
to time (including whole Shares and fractions of Shares). 'Outstanding Shares'
means Shares shown in the books of the Trust or its transfer agent as then
issued and outstanding, but does not include Shares which have been repurchased
or redeemed by the Trust and which are held in the treasury of the Trust.

(r) 'Transfer Agent' means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.

(s) 'Trust' means Burnham Investors Trust established hereby, and reference
to the Trust, when applicable to one or more Series, refers to that Series.

(t) 'Trustees' means the persons who have signed this Declaration of Trust,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who may from time to time be duly qualified and serving as
Trustees in accordance with Article II, in all cases in their capacities as
Trustees hereunder.

(u) 'Trust Property' means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the Trust or any Series or the
Trustees on behalf of the Trust or any Series.

(v) The '1940 Act' means the Investment Company Act of 1940, as amended
from time to time.

ARTICLE II
THE TRUSTEES

SECTION 1. Management of the Trust. The business and affairs of the Trust
shall be managed by or under the direction of the Trustees, and they shall have
all powers necessary or desirable to carry out that responsibility. The Trustees
may execute all instruments and take all action they deem necessary or desirable
to promote the interests of the Trust. Any determination made by the Trustees in
good faith as to what is in the interests of the Trust shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees.

SECTION 2. Powers. The Trustees in all instances shall act as principals,
free of the control of the Shareholders. The Trustees shall have full power and
authority to take or refrain from taking any action and to execute any contracts
and instruments that they may consider necessary or desirable in the management
of the Trust. The Trustees shall not in any way be bound or limited by current
or future laws or customs applicable to trust investments, but shall have full
power and authority to make any investments which they, in their sole
discretion, deem proper to accomplish the purposes of the Trust. The Trustees
may exercise all of their powers without recourse to any court or other
authority. Subject to any applicable limitation herein or in the By-laws or
resolutions of the Trust, the Trustees shall have power and authority, without
limitation:

(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.

(b) To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts for
or evidence of equity interests; bonds, debentures, bills, time notes and all
other evidences of indebtedness; negotiable or non-negotiable instruments;
government securities, including securities of any state, municipality or other
political subdivision thereof, or any governmental or quasi-governmental agency
or instrumentality; and money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and all kinds of
repurchase agreements, of any corporation, company, trust, association, firm or
other business organization however established,

B-2

and of any country, state, municipality or other political subdivision, or any
governmental or quasi-governmental agency or instrumentality; or any other
security, property or instrument in which the Trust or any of its Series shall
be authorized to invest.

(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to sell or
otherwise dispose of, to lend and to pledge any such securities, to enter into
repurchase agreements, reverse repurchase agreements, firm commitment agreements
and forward foreign currency exchange contracts, to purchase and sell options on
securities, securities indices, currency and other financial assets, futures
contracts, options on futures contracts, swaps, collars, caps, floors and
swaptions of all descriptions and to engage in all types of hedging and
risk-management transactions.

(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and repurchase agreements included in the Trust Property,
including the right to vote thereon and otherwise act with respect thereto and
to do all acts for the preservation, protection, improvement and enhancement in
value of all such securities and repurchase agreements.

(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.

(f) To borrow money or other property in the name of the Trust exclusively
for Trust purposes and in this connection issue notes or other evidence of
indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; and to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.

(h) To adopt By-laws not inconsistent with this Declaration providing for
the conduct of the business of the Trust and to amend and repeal them to the
extent such right is not reserved to the Shareholders.

(i) To elect and remove such officers and appoint and terminate such agents
as they deem appropriate.

(j) To employ as custodian of any assets of the Trust, subject to any
provisions herein or in the By-laws, one or more banks, trust companies or
companies that are members of a national securities exchange, or other entities
permitted by the Commission to serve as such.

(k) To retain one or more transfer agents and shareholder servicing agents,
or both.

(l) To provide for the distribution of Shares either through a Principal
Underwriter as provided herein or by the Trust itself, or both, or pursuant to a
distribution plan of any kind.

(m) To set record dates in the manner provided for herein or in the
By-laws.

(n) To delegate such authority as they consider desirable to any officers
of the Trust and to any agent, independent contractor, manager, investment
adviser, custodian or underwriter.

(o) To hold any security or other property (i) in a form not indicating any
trust, whether in bearer, book entry, unregistered or other negotiable form, or
(ii) either in the Trust's or Trustees' own name or in the name of a custodian
or a nominee or nominees, subject to safeguards according to the usual practice
of business trusts or investment companies.

(p) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes, and with
separate Shares representing beneficial interests in such Series, and to
establish separate Classes, all in accordance with the provisions of Article V.

(q) To the full extent permitted by Section 3804 of the Delaware Act, to
allocate assets, liabilities and expenses of the Trust to a particular Series
and assets, liabilities and expenses to a particular Class

B-3

or to apportion the same between or among two or more Series or Classes,
provided that any liabilities or expenses incurred by a particular Series or
Class shall be payable solely out of the assets belonging to that Series or
Class as provided for in Article V, Section 4.

(r) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern whose securities are held
by the Trust; to consent to any contract, lease, mortgage, purchase, or sale of
property by such corporation or concern; and to pay calls or subscriptions with
respect to any security held in the Trust.

(s) To compromise, arbitrate, or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited to,
claims for taxes.

(t) To make distributions of income, capital gains, returns of capital (if
any) and redemption proceeds to Shareholders in the manner hereinafter provided
for.

(u) To establish committees for such purposes, with such membership, and
with such responsibilities as the Trustees may consider proper, including a
committee consisting of fewer than all of the Trustees then in office, which may
act for and bind the Trustees and the Trust with respect to the institution,
prosecution, dismissal, settlement, review or investigation of any legal action,
suit or proceeding, pending or threatened.

(v) To issue, sell, repurchase, redeem, cancel, retire, acquire, hold,
resell, reissue, dispose of and otherwise deal in Shares; to establish terms and
conditions regarding the issuance, sale, repurchase, redemption, cancellation,
retirement, acquisition, holding, resale, reissuance, disposition of or dealing
in Shares; and, subject to Articles V and VI, to apply to any such repurchase,
redemption, retirement, cancellation or acquisition of Shares any funds or
property of the Trust or of the particular Series with respect to which such
Shares are issued.

(w) To invest part or all of the Trust Property (or part or all of the
assets of any Series), or to dispose of part or all of the Trust Property (or
part or all of the assets of any Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act all without any requirement of approval by
Shareholders. Any such other investment company may (but need not) be a trust
(formed under the laws of the State of Delaware or of any other state) which is
classified as a partnership for federal income tax purposes.

(x) To carry on any other business in connection with or incidental to any
of the foregoing powers, to do everything necessary or desirable to accomplish
any purpose or to further any of the foregoing powers, and to take every other
action incidental to the foregoing business or purposes, objects or powers.

(y) To sell or exchange any or all of the assets of the Trust, subject to
Article IX, Section 4.

(z) To enter into joint ventures, partnerships and other combinations and
associations.

(aa) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;

(bb) To purchase and pay for entirely out of Trust Property such insurance
as the Trustees may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust or payment of distributions and principal on its portfolio
investments, and, subject to applicable law and any restrictions set forth in
the By-laws, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, Principal Underwriters, or independent
contractors of the Trust, individually, against all claims and liabilities of
every nature arising by reason of holding Shares, holding, being or having held
any such office or position, or by reason of any action alleged to have been
taken or omitted by any such Person as Trustee, officer, employee, agent,
investment adviser, Principal Underwriter, or independent contractor, including
any action taken or omitted that may be determined to constitute negligence,
whether or not the Trust would have the power to indemnify such Person against
liability;

B-4

(cc) To adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans and trusts, including the purchasing of life insurance and annuity
contracts as a means of providing such retirement and other benefits, for any or
all of the Trustees, officers, employees and agents of the Trust;

(dd) To enter into contracts of any kind and description;

(ee) To interpret the investment policies, practices or limitations of any
Series or Class; and

(ff) To guarantee indebtedness and contractual obligations of others.

The clauses above shall be construed as objects and powers, and the
enumeration of specific powers shall not limit in any way the general powers of
the Trustees. Any action by one or more of the Trustees in their capacity as
such hereunder shall be deemed an action on behalf of the Trust or the
applicable Series, and not an action in an individual capacity. No one dealing
with the Trustees shall be under any obligation to make any inquiry concerning
the authority of the Trustees, or to see to the application of any payments made
or property transferred to the Trustees or upon their order. In construing this
Declaration, the presumption shall be in favor of a grant of power to the
Trustees.

SECTION 3. Certain Transactions. Except as prohibited by applicable law,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust to, any Trustee or officer of the
Trust or any firm of which any such Trustee or officer is a member acting as
principal, or have any such dealings with any investment adviser, administrator,
distributor or transfer agent for the Trust or with any Interested Person of
such person. The Trust may employ any such person or entity in which such person
is an Interested Person, as broker, legal counsel, registrar, investment
adviser, administrator, distributor, transfer agent, dividend disbursing agent,
custodian or in any other capacity upon customary terms.

SECTION 4. Initial Trustees; Election and Number of Trustees. The initial
Trustees shall be the persons signing this Declaration. The number of Trustees
shall be fixed from time to time by a majority of the Trustees; provided, that
there shall be at least one (1) Trustee. The Shareholders shall elect the
Trustees (other than the initial Trustee) on such dates as the Trustees may fix
from time to time.

SECTION 5. Term of Office of Trustees. Each Trustee shall hold office for
life or until his successor is elected or the Trust terminates; except that (a)
any Trustee may resign by delivering to the other Trustees or to any Trust
officer a written resignation effective upon such delivery or a later date
specified therein; (b) any Trustee may be removed with or without cause at any
time by a written instrument signed by at least a majority of the then Trustees,
specifying the effective date of removal; (c) any Trustee who requests to be
retired, who has reached any mandatory retirement age established by the
Trustees, or who is declared bankrupt or has become physically or mentally
incapacitated or is otherwise unable to serve, may be retired by a written
instrument signed by a majority of the other Trustees, specifying the effective
date of retirement; and (d) any Trustee may be removed at any meeting of the
Shareholders by a vote of at least two-thirds of the Outstanding Shares.

SECTION 6. Vacancies; Appointment of Trustees. Whenever a vacancy shall
exist in the Board of Trustees, regardless of the reason for such vacancy, the
remaining Trustees shall appoint any person as they determine in their sole
discretion to fill that vacancy, consistent with the limitations under the 1940
Act. Such appointment shall be made by a written instrument signed by a majority
of the Trustees or by a resolution of the Trustees, duly adopted and recorded in
the records of the Trust, specifying the effective date of the appointment. The
Trustees may appoint a new Trustee as provided above in anticipation of a
vacancy expected to occur because of the retirement, resignation or removal of a
Trustee, or an increase in the number of Trustees, provided that such
appointment shall become effective only at or after the expected vacancy occurs
and provided further that any new Trustee shall have reached the age of majority
in the state in which he resides and in the State of New York. As soon as any
such Trustee has accepted his appointment, the trust estate shall vest in the
new Trustee, together with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder. Whenever a vacancy in
the number of Trustees shall occur, until such vacancy is filled as provided in
this Article II, the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Declaration.

B-5

SECTION 7. Temporary Vacancy or Absence. Whenever a vacancy in the Board of
Trustees shall occur, until such vacancy is filled, or while any Trustee is
absent from his domicile (unless that Trustee has made arrangements to be
informed about, and to participate in, the affairs of the Trust during such
absence), or is physically or mentally incapacitated, the remaining Trustees
shall have all the powers hereunder and their certificate as to such vacancy,
absence, or incapacity shall be conclusive. Any Trustee may, by power of
attorney, delegate his powers as Trustee for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees.

SECTION 8. Chairman. The Trustees may appoint one of their number to be
Chairman of the Board of Trustees. The Chairman shall preside at all meetings of
the Trustees, shall be responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may be the chief
executive, financial and/or accounting officer of the Trust.

SECTION 9. Action by the Trustees. The Trustees shall act by majority vote
at a meeting duly called at which a quorum is present, including a meeting held
by conference telephone, teleconference or other electronic media or
communication equipment by means of which all persons participating in the
meeting can communicate with each other; or by written consent of a majority of
Trustees (or such greater number as may be required by applicable law) without a
meeting. A majority of the Trustees shall constitute a quorum at any meeting.
Meetings of the Trustees may be called orally or in writing by the Chairman, the
President or by any one of the Trustees. Notice of the time, date and place of
all Trustees' meetings shall be given to each Trustee as set forth in the
By-laws; provided, however, that no notice is required if the Trustees provide
for regular or stated meetings. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice or who signs a
waiver of notice either before or after the meeting. The Trustees by majority
vote may delegate to any Trustee or Trustees or committee authority to approve
particular matters or take particular actions on behalf of the Trust. Any
written consent or waiver may be provided and delivered to the Trust by
facsimile or other similar electronic mechanism.

SECTION 10. Ownership of Trust Property. The Trust Property of the Trust
and of each Series shall be held separate and apart from any assets now or
hereafter held in any capacity other than as Trustee hereunder by the Trustees
or any successor Trustees. Legal title in and beneficial ownership of all of the
assets of the Trust shall at all times be considered as vested in the Trust,
except that the Trustees may cause legal title in and beneficial ownership of
any Trust Property to be held by, or in the name of one or more of the Trustees
acting for and on behalf of the Trust, or in the name of any person as nominee
acting for and on behalf of the Trust. No Shareholder shall be deemed to have a
severable ownership in any individual asset of the Trust or of any Series or any
right of partition or possession thereof, but each Shareholder shall have, as
provided in Article V, a proportionate undivided beneficial interest in the
Trust or Series or Class thereof represented by Shares. The Shares shall be
personal property giving only the rights specifically set forth in this Trust
Instrument. The Trust, or at the determination of the Trustees one or more of
the Trustees or a nominee acting for and on behalf of the Trust, shall be deemed
to hold legal title and beneficial ownership of any income earned on securities
of the Trust issued by any business entities formed, organized, or existing
under the laws of any jurisdiction, including the laws of any foreign country.
Upon the resignation or removal of a Trustee, or his otherwise ceasing to be a
Trustee, he shall execute and deliver such documents as the remaining Trustees
shall require for the purpose of conveying to the Trust or the remaining
Trustees any Trust Property held in the name of the resigning or removed
Trustee. Upon the incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the remaining Trustees
shall require as provided in the preceding sentence.

SECTION 11. Effect of Trustees Not Serving. The death, resignation,
retirement, removal, incapacity or inability or refusal to serve of the
Trustees, or any one of them, shall not operate to annul the Trust or to revoke
any existing agency created pursuant to the terms of this Declaration.

SECTION 12. Trustees, etc. as Shareholders. Subject to any restrictions in
the By-laws, any Trustee, officer, agent or independent contractor of the Trust
may acquire, own and dispose of Shares to the same extent as any other
Shareholder; the Trustees may issue and sell Shares to and buy Shares from any
such person or any firm or company in which such person is interested, subject
only to any general limitations herein.

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SECTION 13. Series Trustees. In connection with the establishment of one or
more Series or Classes, the Trustees establishing such Series or Class may
appoint, to the extent permitted by the Delaware Act, separate Trustees with
respect to such Series or Classes (the 'Series Trustees'). Series Trustees may,
but are not required to, serve as Trustees of the Trust or any other Series or
Class of the Trust. The Series Trustees shall have, to the exclusion of any
other Trustee of the Trust, all the powers and authorities of Trustees hereunder
with respect to such Series or Class, but shall have no power or authority with
respect to any other Series or Class. Any provision of this Declaration relating
to election of Trustees by Shareholders shall entitle only the Shareholders of a
Series or Class for which Series Trustees have been appointed to vote with
respect to the election of such Series Trustees and the Shareholders of any
other Series or Class shall not be entitled to participate in such vote. In the
event that Series Trustees are appointed, the Trustees initially appointing such
Series Trustees shall, without the approval of any Outstanding Shares, amend
either the Declaration or the By-laws to provide for the respective
responsibilities of the Trustees and the Series Trustees in circumstances where
an action of the Trustees or Series Trustees affects all Series of the Trust or
two or more Series represented by different Trustees.

ARTICLE III
CONTRACTS WITH SERVICE PROVIDERS

SECTION 1. Underwriting Contract. The Trustees may in their discretion from
time to time enter into an exclusive or non-exclusive underwriting contract or
contracts providing for the sale of the Shares whereby the Trustees may either
agree to sell the Shares to the other party to the contract or appoint such
other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.

SECTION 2. Advisory or Management Contract. The Trustees may in their
discretion from time to time enter into one or more investment advisory or
management contracts or, if the Trustees establish multiple Series, separate
investment advisory or management contracts with respect to one or more Series
whereby the other party or parties to any such contracts shall undertake to
furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers or persons to whom the Investment Advisers
delegate certain or all of their duties, or any of them, under any such
contracts (subject to such general or specific instructions as the Trustees may
from time to time adopt) to effect purchases, sales, loans or exchanges of
portfolio securities and other investments of the Trust on behalf of the
Trustees or may authorize any officer, employee or Trustee to effect such
purchases, sales, loans or exchanges pursuant to recommendations of such
Investment Advisers, or any of them (and all without further action by the
Trustees). Any such purchases, sales, loans and exchanges shall be deemed to
have been authorized by all of the Trustees.

SECTION 3. Administration Agreement. The Trustees may in their discretion
from time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes, separate administration agreements with
respect to each Series or Class, whereby the other party to such agreement shall
undertake to manage the business affairs of the Trust or of a Series or Class
thereof and furnish the Trust or a Series or a Class thereof with office
facilities, and shall be responsible for the ordinary clerical, bookkeeping and
recordkeeping services at such office facilities, and other facilities and
services, if any, and all upon such terms and conditions as the Trustees may in
their discretion determine.

SECTION 4. Service Agreement. The Trustees may in their discretion from
time to time enter into service agreements with respect to one or more Series or
Classes of Shares whereby the other parties to

B-7

such Service Agreements will provide administration and/or support services
pursuant to administration plans and service plans, and all upon such terms and
conditions as the Trustees in their discretion may determine.

SECTION 5. Transfer Agent. The Trustees may in their discretion from time
to time enter into a transfer agency and shareholder services contract whereby
the other party to such contract shall undertake to furnish transfer agency and
shareholder services to the Trust. The contract shall have such terms and
conditions as the Trustees may in their discretion determine. Such services may
be provided by one or more Persons.

SECTION 6. Custodian. The Trustees may appoint or otherwise engage one or
more banks or trust companies, each having aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000), or any other entity satisfying the requirements of
the 1940 Act, to serve as Custodian with authority as its agent, but subject to
such restrictions, limitations and other requirements, if any, as may be
contained in the By-laws of the Trust. The Trustees may also authorize the
Custodian to employ one or more sub-custodians as meet the requirements of
applicable provisions of the 1940 Act, and upon such terms and conditions as may
be agreed upon between the Custodian and such sub-custodian, to hold securities
and other assets of the Trust and to perform the acts and services of the
Custodian, subject to applicable provisions of law and resolutions adopted by
the Trustees. The Trustees may delegate to the Trust's officers, Investment
Adviser, Custodian or a Qualified Foreign Bank the responsibility to select
Eligible Foreign Custodians in accordance with the provisions of the 1940 Act or
any rule, regulation or order of the Commission thereunder.

SECTION 7. Affiliations of Trustees or Officers, Etc. The fact that:

(i) any of the Shareholders, Trustees or officers of the Trust or any
Series thereof is a shareholder, director, officer, partner, trustee,
employee, manager, adviser or distributor of or for any partnership,
corporation, trust, association or other organization or of or for any
parent or affiliate of any organization, with which a contract of the
character described in this Article III or for services as Custodian,
Transfer Agent or disbursing agent or for related services may have been or
may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder of or has an interest in the Trust, or
that

(ii) any partnership, corporation, trust, association or other
organization with which a contract of the character described in Sections
1, 2, 3 or 4 of this Article III or for services as Custodian, Transfer
Agent or disbursing agent or for related services may have been or may
hereafter be made also has any one or more of such contracts with one or
more other partnerships, corporations, trusts, associations or other
organizations, or has other business or interests.

shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.

ARTICLE IV
COMPENSATION, LIMITATION OF LIABILITY AND INDEMNIFICATION

SECTION 1. Compensation. The Trustees as such shall be entitled to
reasonable compensation from the Trust, and they may fix the amount of such
compensation. Nothing herein shall in any way prevent the employment of any
Trustee for advisory, management, legal, accounting, investment banking or other
services and payment for the same by the Trust.

SECTION 2. Limitation of Liability. All persons contracting with or having
any claim against the Trust or a particular Series shall look only to the assets
of all Series or such particular Series for payment under such contract or
claim; and neither the Trustees nor, when acting in such capacity, any of the
Trust's officers, employees or agents, whether past, present or future, shall be
personally liable therefor. Every written instrument or obligation on behalf of
the Trust or any Series shall contain a statement to the foregoing effect, but
the absence of such statement shall not operate to make any Trustee or officer
of the Trust liable thereunder. Provided they have exercised reasonable care and
have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees and

B-8

officers of the Trust shall not be responsible or liable for any act or omission
or for neglect or wrongdoing of them or any officer, agent, employee, Investment
Adviser or independent contractor of the Trust, but nothing contained in this
Declaration or in the Delaware Act shall protect any Trustee or officer of the
Trust against liability to the Trust or to Shareholders to which he would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.

SECTION 3. Indemnification. (a) Subject to the exceptions and limitations
contained in subsection (b) below:

(i) every person who is, or has been, a Trustee or an officer,
employee or agent of the Trust (including any individual who serves at its
request as director, officer, partner, trustee or the like of another
organization in which it has any interest as a shareholder, creditor or
otherwise) ('Covered Person') shall be indemnified by the Trust or the
appropriate Series to the fullest extent permitted by law against liability
and against all expenses reasonably incurred or paid by him in connection
with any claim, action, suit or proceeding in which he becomes involved as
a party or otherwise by virtue of his being or having been a Covered Person
and against amounts paid or incurred by him in the settlement thereof; and

(ii) as used herein, the words 'claim,' 'action,' 'suit,' or
'proceeding' shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened, and
the words 'liability' and 'expenses' shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.

(b) No indemnification shall be provided hereunder to a Covered Person:

(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office,
or (B) not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or

(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office; (A) by the court or other
body approving the settlement; (B) by at least a majority of those Trustees
who are neither Interested Persons of the Trust nor are parties to the
matter based upon a review of readily available facts (as opposed to a full
trial-type inquiry); (C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full
trial-type inquiry) or (D) by a vote of a majority of the Outstanding
Shares entitled to vote (excluding any Outstanding Shares owned of record
or beneficially by such individual).

(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, and shall inure to the benefit of the heirs, executors and
administrators of a Covered Person.

(d) To the maximum extent permitted by applicable law, expenses in
connection with the preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in subsection (a) of this
Section may be paid by the Trust or applicable Series from time to time prior to
final disposition thereof upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by him to the Trust or
applicable Series if it is ultimately determined that he is not entitled to
indemnification under this Section; provided, however, that either (i) such
Covered Person shall have provided appropriate security for such undertaking,
(ii) the Trust is insured against losses arising out of any such advance
payments or (iii) either a majority of the Trustees who are neither Interested
Persons of the Trust nor parties to the matter, or independent legal counsel in
a written opinion, shall have determined, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that there is reason
to believe that such Covered Person will not be disqualified from
indemnification under this Section.

B-9

(e) Any repeal or modification of this Article IV by the Shareholders, or
adoption or modification of any other provision of the Declaration or By-laws
that would be inconsistent with this Article, shall be prospective only, to the
extent that such repeal, or modification would, if applied retrospectively,
adversely affect any limitation on the liability of any Covered Person or
indemnification available to any Covered Person with respect to any act or
omission which occurred prior to such repeal, modification or adoption.

SECTION 4. Indemnification of Shareholders. If any Shareholder or former
Shareholder of any Series shall be held personally liable solely by reason of
his being or having been a Shareholder and not because of his acts or omissions
or for some other reason, the Shareholder or former Shareholder (or his heirs,
executors, administrators or other legal representatives or in the case of any
entity, its general successor) shall be entitled out of the assets belonging to
the applicable Series to be held harmless from and indemnified against all loss
and expense arising from such liability. The Trust, on behalf of the affected
Series, shall, upon request by such Shareholder, assume the defense of any claim
made against such Shareholder for any act or obligation of the Series and
satisfy any judgment thereon from the assets of the Series.

SECTION 5. No Bond Required of Trustees. No Trustee shall be obligated to
give any bond or other security for the performance of any of his duties
hereunder.

SECTION 6. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the Trustees or
any officer, employee or agent of the Trust or a Series thereof shall be bound
to make any inquiry concerning the validity of any transaction purporting to be
made by the Trustees or by said officer, employee or agent or be liable for the
application of money or property paid, loaned, or delivered to or on the order
of the Trustees or of said officer, employee or agent. Every obligation,
contract, instrument, certificate, Share, other security of the Trust or a
Series thereof or undertaking, and every other act or thing whatsoever executed
in connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as Trustees
under this Declaration or in their capacity as officers, employees or agents of
the Trust or a Series thereof. Every written obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking made or issued by the Trustees may recite that the same is executed
or made by them not individually, but as Trustees under the Declaration, and
that the obligations of the Trust or a Series thereof under any such instrument
are not binding upon any of the Trustees or Shareholders individually, but bind
only the Trust Property or the Trust Property of the applicable Series, and may
contain any further recital which they may deem appropriate, but the omission of
such recital shall not operate to bind the Trustees individually. The Trustees
shall at all times maintain insurance for the protection of the Trust Property
or the Trust Property of the applicable Series, its Shareholders, Trustees,
officers, employees and agents in such amount as the Trustees shall deem
adequate to cover possible tort liability, and such other insurance as the
Trustees in their sole judgment shall deem advisable.

SECTION 7. Reliance on Experts, Etc. Each Trustee, officer or employee of
the Trust or a Series thereof shall, in the performance of his duties, powers
and discretion hereunder be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust or a Series thereof,
upon an opinion of counsel, or upon reports made to the Trust or a Series
thereof by any of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers, accountants,
appraisers or other experts or consultants selected with reasonable care by the
Trustees, officers or employees of the Trust, regardless of whether such counsel
or expert may also be a Trustee.

ARTICLE V
SERIES; CLASSES; SHARES

SECTION 1. Establishment of Series or Class. The Trust shall consist of one
or more Series. Without limiting the authority of the Trustees to establish and
designate any further Series, the Trustees hereby establish five Series which
shall be designated as Burnham Fund, Burnham Dow 30 Focused Fund, Burnham
Financial Services Fund, Burnham Small Cap Value Fund and Burnham Money Market
Fund.

B-10

The preferences, voting powers, rights and privileges of such Series and any
classes thereof shall be as set forth in the Trust's registration statement or
statements filed with the Commission, as from time to time in effect. Each
additional Series shall be established and is effective upon the adoption of a
resolution of a majority of the Trustees or any alternative date specified in
such resolution. The Trustees shall designate the relative rights and
preferences of the Shares of each Series. The Trustees may divide the Shares of
any Series into Classes. Without limiting the authority of the Trustees to
establish and designate any further Classes, the Trustees hereby establish (i)
with respect to Burnham Fund, three Classes of Shares which shall be designated
Class A, Class B and Class C Shares; (ii) with respect to Burnham Financial
Services Fund and Burnham Small Cap Value Fund, two Classes of Shares which
shall be designated Class A and Class B Shares; and (iii) with respect to
Burnham Dow 30 Focused Fund and Burnham Money Market Fund, a single Class of
Shares which shall have no designation. The Classes of Shares of the Series
herein established and designated and any Shares of any further Series and
Classes that may from time to time be established and designated by the Trustees
shall be established and designated, and the variations in the relative rights
and preferences as between the different Series or Classes shall be fixed and
determined, by the Trustees; provided, that all Shares shall be identical except
for such variations as shall be fixed and determined between different Series or
Classes by the Trustees in establishing and designating such Series or Class.
Such designation may be directly set forth by resolution or may be made by a
resolution referring to, or authorizing or approving of, another document that
sets forth such relative rights and preferences of such Series (or Class)
including, without limitation, any registration statement of the Trust, or as
otherwise provided in such resolution.

All references to Shares in this Declaration shall be deemed to be Shares
of any or all Series or Classes as the context may require. The Trust shall
maintain separate and distinct records for each Series and hold and account for
the assets thereof separately from the other assets of the Trust or of any other
Series. A Series may issue any number of Shares of any Class thereof and need
not issue Shares. Each Share of a Series shall represent an equal beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
a Class thereof shall be entitled to receive his pro rata share of all
distributions made with respect to such Series or Class. Upon redemption of his
Shares, such Shareholder shall be paid solely out of the funds and property of
such Series. The Trustees may adopt and change the name of any Series or Class.

SECTION 2. Shares. The beneficial interest in the Trust shall be divided
into transferable Shares of one or more separate and distinct Series or Classes
established by the Trustees. The number of Shares of each Series and Class is
unlimited and each Share shall have a par value of $0.10 per Share or such other
amount as the Trustees may establish. All Shares issued hereunder shall be fully
paid and nonassessable. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust. The
Trustees shall have full power and authority, in their sole discretion and
without obtaining Shareholder approval, to issue original or additional Shares
at such times and on such terms and conditions as they deem appropriate; to
issue fractional Shares and Shares held in the treasury; to establish and to
change in any manner Shares of any Series or Classes with such preferences,
terms of conversion, voting powers, rights and privileges as the Trustees may
determine (but the Trustees may not change Outstanding Shares in a manner
materially adverse to the Shareholders of such Shares); to divide or combine the
Shares of any Series or Classes into a greater or lesser number; to classify or
reclassify any unissued Shares of any Series or Classes into one or more Series
or Classes of Shares; to abolish any one or more Series or Classes of Shares; to
issue Shares to acquire other assets (including assets subject to, and in
connection with, the assumption of liabilities) and businesses; and to take such
other action with respect to the Shares as the Trustees may deem desirable.
Shares held in the treasury shall not confer any voting rights on the Trustees
and shall not be entitled to any dividends or other distributions declared with
respect to the Shares.

SECTION 3. Investment in the Trust. The Trustees shall accept investments
in any Series or Class from such persons and on such terms as they may from time
to time authorize. At the Trustees' discretion, such investments, subject to
applicable law, may be in the form of cash or securities in which that Series is
authorized to invest, valued as provided in Article VI, Section 3. Investments
in a Series shall be credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after the investment is
received or accepted as may be determined by the

B-11

Trustees; provided, however, that the Trustees may, in their sole discretion,
(a) impose a sales charge upon investments in any Series or Class, (b) issue
fractional Shares, (c) determine the Net Asset Value per Share of the initial
capital contribution or (d) authorize the issuance of Shares at a price other
than Net Asset Value to the extent permitted by the 1940 Act or any rule, order
or interpretation of the Commission thereunder. The Trustees shall have the
right to refuse to accept investments in any Series at any time without any
cause or reason therefor whatsoever.

SECTION 4. Assets and Liabilities of Series. All consideration received by
the Trust for the issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof (including any proceeds derived from the
sale, exchange or liquidation of such assets, and any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be), shall
be held and accounted for separately from the assets of every other Series and
are referred to as 'assets belonging to' that Series. The assets belonging to a
Series shall belong only to that Series for all purposes, subject only to the
rights of creditors of that Series, and to no other Series. Any assets, income,
earnings, profits, and proceeds thereof, funds, or payments which are not
readily identifiable as belonging to any particular Series shall be allocated by
the Trustees between and among one or more Series as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series for all purposes, and such assets, earnings, income,
profits or funds, or payments and proceeds thereof shall be referred to as
assets belonging to that Series. The assets belonging to a Series shall be so
recorded upon the books of the Trust, and shall be held by the Trustees in trust
for the benefit of the Shareholders of that Series. The assets belonging to a
Series shall be charged with the liabilities of that Series and all expenses,
costs, charges and reserves attributable to that Series, except that liabilities
and expenses allocated solely to a particular Class shall be borne by that
Class. Any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular Series
or Class shall be allocated and charged by the Trustees between or among any one
or more of the Series or Classes in such manner as the Trustees deem fair and
equitable. Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.

Without limiting the foregoing, but subject to the right of the Trustees to
allocate general liabilities, expenses, costs, charges or reserves as herein
provided, and subject to the statutory provision of Section 3804 of the Delaware
Act referred to below, the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
Series shall be enforceable against the assets of such Series only, and not
against the assets of the Trust generally or any other Series, and none of the
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to the Trust generally or any other Series shall
be enforceable against the assets of such Series. Notice of this contractual
limitation on liabilities among Series may, in the Trustees' discretion, be set
forth in the certificate of trust of the Trust (whether originally or by
amendment) as filed or to be filed in the Office of the Secretary of State of
the State of Delaware pursuant to the Delaware Act, and upon the giving of such
notice in the certificate of trust, the statutory provisions of Section 3804 of
the Delaware Act relating to limitations on liabilities among Series (and the
statutory effect under Section 3804 of setting forth such notice in the
certificate of trust) shall become applicable to the Trust and each Series. Any
person extending credit to, contracting with or having any claim against any
Series may look only to the assets of that Series to satisfy or enforce any debt
with respect to that Series. No Shareholder or former Shareholder of any Series
shall have a claim on or any right to any assets allocated or belonging to any
other Series.

SECTION 5. Ownership and Transfer of Shares. The Trust or a transfer or
similar agent for the Trust shall maintain a register containing the names and
addresses of the Shareholders of each Series and Class thereof, the number of
Shares of each Series and Class held by such Shareholders, and a record of all
Share transfers. The register shall be conclusive as to the identity of
Shareholders of record and the number of Shares held by them from time to time.
The Trustees may authorize the issuance of certificates representing Shares and
adopt rules governing their use. The Trustees may make rules governing the
transfer of Shares, whether or not represented by certificates. Except as
otherwise provided by the Trustees, Shares shall be transferable on the books of
the Trust only by the record holder thereof or by his duly authorized agent upon
delivery to the Trustees or the Trust's transfer agent

B-12

of a duly executed instrument of transfer, together with a Share certificate if
one is outstanding, and such evidence of the genuineness of each such execution
and authorization and of such other matters as may be required by the Trustees.
Upon such delivery, and subject to any further requirements specified by the
Trustees or contained in the By-laws, the transfer shall be recorded on the
books of the Trust. Until a transfer is so recorded, the Shareholder of record
of Shares shall be deemed to be the holder of such Shares for all purposes
hereunder and neither the Trustees nor the Trust, nor any transfer agent or
registrar or any officer, employee or agent of the Trust, shall be affected by
any notice of a proposed transfer. Without limitation of the foregoing, the
Trust or its agent may issue certificates representing Shares and transfer such
certificates to a governmental unit, agency, authority, or authorized depository
without prior notice to a Shareholder and without liability to such Shareholder,
to the extent such action is taken (1) in the response to a notice of levy, lien
or similar action from the Internal Revenue Service or a state tax authority,
(2) in compliance with state laws governing escheat or abandonment of property,
or (3) otherwise in compliance with any applicable legal obligation.

SECTION 6. Status of Shares; Limitation of Shareholder Liability. Shares
shall be deemed to be personal property giving Shareholders only the rights
provided in this Declaration. Every Shareholder, by virtue of having acquired a
Share, shall be held expressly to have assented to and agreed to be bound by the
terms of this Declaration and to have become a party hereto. No Shareholder
shall be personally liable for the debts, liabilities, obligations and expenses
incurred by, contracted for, or otherwise existing with respect to, the Trust or
any Series. The death, incapacity, dissolution, termination or bankruptcy of a
Shareholder during the existence of the Trust shall not operate to terminate the
Trust, nor entitle the representative of any such Shareholder to an accounting
or to take any action in court or elsewhere against the Trust or the Trustees,
but entitles such representative only to the rights of such Shareholder under
this Trust. Ownership of Shares shall not entitle the Shareholder to any title
in or to the whole or any part of the Trust Property or right to call for a
partition or division of the same or for an accounting, nor shall the ownership
of Shares constitute the Shareholders as partners. Neither the Trust nor the
Trustees shall have any power to bind any Shareholder personally or to demand
payment from any Shareholder for anything, other than as agreed by the
Shareholder. Shareholders shall have the same limitation of personal liability
as is extended to shareholders of a private corporation for profit incorporated
in the State of Delaware. Every written obligation of the Trust or any Series
shall contain a statement to the effect that such obligation may only be
enforced against the assets of the appropriate Series or all Series; however,
the omission of such statement shall not operate to bind or create personal
liability for any Shareholder or Trustee.

ARTICLE VI
DISTRIBUTIONS AND REDEMPTIONS

SECTION 1. Distributions. The Trustees or a committee of one or more
Trustees and one or more officers may declare and pay dividends and other
distributions, including dividends on Shares of a particular Series and other
distributions from the assets belonging to that Series. No dividend or
distribution, including, without limitation, any distribution paid upon
termination of the Trust or of any Series (or Class) with respect to, nor any
redemption or repurchase of, the Shares of any Series (or Class) shall be
effected by the Trust other than from the assets held with respect to such
Series, nor shall any Shareholder of any particular Series otherwise have any
right or claim against the assets held with respect to any other Series except
to the extent that such Shareholder has such a right or claim hereunder as a
Shareholder of such other Series. The Trustees shall have full discretion to
determine which items shall be treated as income and which items as capital; and
each such determination and allocation shall be conclusive and binding upon the
Shareholders. The amount and payment of dividends or distributions and their
form, whether they are in cash, Shares or other Trust Property, shall be
determined by the Trustees. Dividends and other distributions may be paid
pursuant to a standing resolution adopted once or more often as the Trustees
determine. All dividends and other distributions on Shares of a particular
Series shall be distributed pro rata to the Shareholders of that Series in
proportion to the number of Shares of that Series they held on the record date
established for such payment, except that such dividends and distributions shall
appropriately reflect expenses allocated to a particular Class of such Series
and shall be reduced by any required backup, nonresident alien, or other

B-13

withholding taxes, which shall be deposited by the Trust in accordance with
applicable law. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or similar plans as the Trustees
deem appropriate.

SECTION 2. Redemptions. Each Shareholder of a Series shall have the right
at such times as may be permitted by the Trustees to require the Series to
redeem all or any part of his Shares at a redemption price per Share equal to
the Net Asset Value per Share at such time as the Trustees shall have prescribed
by resolution, or, to the extent permitted by the 1940 Act, at such other
redemption price and at such times as the Trustees shall prescribe by
resolution. In the absence of such resolution, the redemption price per Share
shall be the Net Asset Value next determined after receipt by the Series of a
request for redemption in proper form less (1) such charges as are determined by
the Trustees and described in the Trust's Registration Statement for that Series
under the Securities Act of 1933 and (2) any required withholding taxes, which
shall be deposited by the Trust in accordance with applicable law. The Trustees
may specify conditions, prices, and places of redemption, may specify binding
requirements for the proper form or forms of requests for redemption and may
specify the amount of any deferred sales charge or redemption fee to be withheld
from redemption proceeds. Payment of the redemption price may be wholly or
partly in securities or other assets at the value of such securities or assets
used in such determination of Net Asset Value, or may be in cash. Upon
redemption, Shares may be reissued from time to time. The Trustees may require
Shareholders to redeem Shares for any reason under terms set by the Trustees,
including, but not limited to, the failure of a Shareholder to supply a taxpayer
identification number or other information or certification required by federal
or state tax laws, or to have the minimum investment required, or to pay when
due for the purchase of Shares issued to him. To the extent permitted by law,
the Trustees may retain the proceeds of any redemption of Shares required by
them for payment of amounts due and owing by a Shareholder to the Trust or any
Series or Class or any governmental authority. Without limitation of the
foregoing, the Trust may mandatorily redeem shares and the Trust or its agent
may transfer the proceeds of such a redemption to a governmental unit, agency,
authority, or authorized depository without prior notice to a Shareholder and
without liability to such shareholder, to the extent such action is taken (1) in
response to a notice of levy, lien, or similar action from the Internal Revenue
Service or a state tax authority, (2) in compliance with state laws governing
escheat or abandonment of property, (3) in satisfaction of withholding tax
requirements (including any applicable interest and penalties) applicable to any
prior distribution or distributions (including a redemption or redemptions) to
the Shareholder that were not satisfied at the time of such distribution or
distributions or (4) otherwise in compliance with any applicable legal
obligation. Notwithstanding the foregoing, the Trustees may postpone payment of
the redemption price and may suspend the right of the Shareholders to require
any Series or Class to redeem Shares during any period of time when and to the
extent permissible under the 1940 Act.

SECTION 3. Determination of Net Asset Value. The Trustees shall cause the
Net Asset Value of Shares of each Series or Class to be determined from time to
time in a manner consistent with applicable laws and regulations. The Trustees
may delegate the power and duty to determine Net Asset Value per Share to one or
more Trustees or officers of the Trust or to a custodian, depository or other
agent appointed for such purpose. The Net Asset Value of Shares shall be
determined separately for each Series or Class at such times as may be
prescribed by the Trustees or, in the absence of action by the Trustees, as of
the close of regular trading on the New York Stock Exchange on each day for all
or part of which such Exchange is open for unrestricted trading.

SECTION 4. Suspension of Right of Redemption. If, as referred to in
Section 2 of this Article, the Trustees postpone payment of the redemption price
and suspend the right of Shareholders to redeem their Shares, such suspension
shall take effect at the time the Trustees shall specify, but not later than the
close of business on the business day next following the declaration of
suspension. Thereafter Shareholders shall have no right of redemption or payment
until the Trustees declare the end of the suspension. If the right of redemption
is suspended, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value per Share next determined after the
suspension terminates.

SECTION 5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price

B-14

not exceeding the Net Asset Value per Share determined as of the time when the
purchase or contract of purchase is made or the Net Asset Value as of any time
which may be later determined, provided payment is not made for the Shares prior
to the time as of which such Net Asset Value is determined.

ARTICLE VII
SHAREHOLDERS' VOTING POWERS AND MEETINGS

SECTION 1. Voting Powers. The Shareholders shall have power to vote only
with respect to (a) the election of Trustees as provided in Article II, Section
4; (b) the removal of Trustees as provided in Article II, Section 5(d); (c) any
investment advisory or management contract entered into pursuant to Article III,
Section 2, unless a shareholder vote is not required pursuant to the provisions
of the 1940 Act or any rule, regulation or order of the Commission thereunder;
(d) any termination of the Trust to the extent and as provided in Article IX,
Section 3; (e) the amendment of this Declaration to the extent and as provided
in Article IX, Section 7; and (f) such additional matters relating to the Trust
as may be required or authorized by law, this Declaration, or the By-laws or any
registration of the Trust with the Commission or as the Trustees may consider
desirable.

On any matter submitted to a vote of the Shareholders, all Shares shall be
voted by individual Series or Class, except (a) when required by the 1940 Act,
Shares shall be voted in the aggregate and not by individual Series or Class,
and (b) when the Trustees have determined that the matter affects the interests
of more than one Series or Class, then the Shareholders of all such Series or
Classes shall be entitled to vote together thereon. As determined by the
Trustees without the vote or consent of Shareholders, on any matter submitted to
a vote of Shareholders either (i) each whole Share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional Share shall
be entitled to a proportionate fractional vote or (ii) each dollar of net asset
value (number of Shares owned times net asset value per Share of such Series or
Class, as applicable) shall be entitled to one vote on any matter on which such
Shares are entitled to vote and each fractional dollar amount shall be entitled
to a proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy or in any manner
provided for in the By-laws. The By-laws may provide that proxies may be given
by any electronic or telecommunications device or in any other manner, but if a
proposal by anyone other than the officers or Trustees is submitted to a vote of
the Shareholders of any Series or Class, or if there is a proxy contest or proxy
solicitation or proposal in opposition to any proposal by the officers or
Trustees, Shares may be voted only in person or by written proxy. Until Shares
of a Series are issued, as to that Series the Trustees may exercise all rights
of Shareholders and may take any action required or permitted to be taken by
Shareholders by law, this Declaration or the By-laws. Meetings of Shareholders
shall be called and notice thereof and record dates therefor shall be given and
set as provided in the By-laws.

SECTION 2. Quorum; Required Vote. One-third of the Outstanding Shares of
each affected Series or Class, or one-third (33 1/3%) of the Outstanding Shares
of the Trust, entitled to vote in person or by proxy shall be a quorum for the
transaction of business at a Shareholders' meeting with respect to such Series
or Class, or with respect to the entire Trust, respectively. Any lesser number
shall be sufficient for adjournments. Any adjourned session of a Shareholders'
meeting may be held within a reasonable time without further notice. Except when
a larger vote is required by law, this Declaration or the By-laws, a majority of
the Outstanding Shares voting at a Shareholders' meeting in person or by proxy
shall decide any matters to be voted upon with respect to the entire Trust and a
plurality of such Outstanding Shares shall elect a Trustee; provided, that if
this Declaration or applicable law permits or requires that Shares be voted on
any matter by individual Series or Classes, then a majority of the Outstanding
Shares of that Series or Class voting at a Shareholders' meeting in person or by
proxy on the matter shall decide that matter insofar as that Series or Class is
concerned. Shareholders may act as to the Trust or any Series or Class by the
written consent of a majority (or such other amount as may be required by
applicable law) of the Outstanding Shares of the Trust or of such Series or
Class, as the case may be.

SECTION 3. Record Dates.

(a) For the purpose of determining the Shareholders of any Series (or
Class) who are entitled to receive payment of any dividend or of any other
distribution, the Trustees may from time to time fix a

B-15

date, which shall be before the date for the payment of such dividend or such
other payment, as the record date for determining the Shareholders of such
Series (or Class) having the right to receive such dividend or distribution.
Without fixing a record date, the Trustees may for distribution purposes close
the register or transfer books for one or more Series (or Classes) any time
prior to the payment of a distribution. Nothing in this Section shall be
construed as precluding the Trustees from setting different record dates for
different Series (or Classes).

(b) The Trustees may fix in advance a date up to one hundred twenty (120)
days before the date of any Shareholders' meeting, or the date for the allotment
of rights, or the date when any change or conversion or exchange of Shares shall
go into effect as a record date for the determination of the Shareholders
entitled to notice of, and to vote at, any such meeting, or to receive any such
allotment of rights, or to exercise such rights in respect of any such change,
conversion or exchange of Shares.

SECTION 4. Additional Provisions. The By-laws may include further
provisions for Shareholders' votes and meetings and related matters.

ARTICLE VIII
EXPENSES OF THE TRUST AND SERIES

SECTION 1. Payment of Expenses by the Trust. Subject to Article V, Section
4, the Trust or a particular Series shall pay, or shall reimburse the Trustees
from the assets belonging to all Series or the particular Series, for their
expenses (or the expenses of a Class of such Series) and disbursements,
including, but not limited to, interest charges, taxes, brokerage fees and
commissions; expenses of issue, repurchase and redemption of Shares; certain
insurance premiums; applicable fees, interest charges and expenses of third
parties, including the Trust's investment advisers, managers, administrators,
distributors, custodians, transfer agents, fund accountants; fees of pricing,
interest, dividend, credit and other reporting services; costs of membership in
trade associations; telecommunications expenses; funds transmission expenses;
auditing, legal and compliance expenses; costs of forming the Trust and its
Series and maintaining its existence; costs of preparing and printing the
prospectuses of the Trust and each Series, statements of additional information
and Shareholder reports and delivering them to Shareholders; expenses of
meetings of Shareholders and proxy solicitations therefor; costs of maintaining
books and accounts; costs of reproduction, stationery and supplies; fees and
expenses of the Trustees; compensation of the Trust's officers and employees and
costs of other personnel performing services for the Trust or any Series; costs
of Trustee meetings; Commission registration fees and related expenses; state or
foreign securities laws registration and notice fees and related expenses; and
for such non-recurring items as may arise, including litigation to which the
Trust or a Series (or a Trustee or officer of the Trust acting as such) is a
party, and for all losses and liabilities by them incurred in administering the
Trust. The Trustees shall have a lien on the assets belonging to the appropriate
Series, or in the case of an expense allocable to more than one Series, on the
assets of each such Series, prior to any rights or interests of the Shareholders
thereto, for the reimbursement to them of such expenses, disbursements, losses
and liabilities.

SECTION 2. Payment of Expenses by Shareholders. The Trustees shall have the
power, as frequently as they may determine, to cause each Shareholder, or each
Shareholder of any particular Series, to pay directly, in advance or arrears,
for charges of the Trust's custodian or transfer, shareholder servicing or
similar agent, an amount fixed from time to time by the Trustees, by setting off
such charges due from such Shareholder from declared but unpaid dividends owed
such Shareholder and/or by reducing the number of Shares in the account of such
Shareholder by that number of full and/or fractional Shares which represents the
outstanding amount of such charges due from such Shareholder.

ARTICLE IX
MISCELLANEOUS

SECTION 1. Trust Not a Partnership. This Declaration creates a trust and
not a partnership. No Trustee shall have any power to bind personally either the
Trust's officers or any Shareholder.

B-16

SECTION 2. Trustee Action. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care under the
circumstances then prevailing shall be binding upon everyone interested. Subject
to the provisions of Article IV, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law.

SECTION 3. Termination of the Trust. (a) This Trust shall have perpetual
existence. Subject to the vote of a majority of the Outstanding Shares of the
Trust or of each Series to be affected, voting at a Shareholders' meeting in
person or by proxy the Trustees may

(i) sell and convey all or substantially all of the assets of all
Series or any affected Series to another Series or to another
entity which is an open-end investment company as defined in the
1940 Act, or is a series thereof, for adequate consideration,
which may include the assumption of all outstanding obligations,
taxes and other liabilities, accrued or contingent, of the Trust
or any affected Series, and which may include shares of or
interests in such Series, entity, or series thereof; or

(ii) at any time sell and convert into money all or substantially all
of the assets of all Series or any affected Series.

Upon making reasonable provision for the payment of all known liabilities of all
Series or any affected Series in either (i) or (ii), by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds or assets (as
the case may be) ratably among the Shareholders of all Series or any affected
Series; however, the payment to any particular Class of such Series may be
reduced by any fees, expenses or charges allocated to that Class.

(b) The Trustees may take any of the actions specified in subsection (a)
(i) and (ii) above without obtaining the vote of a majority of the Outstanding
Shares of the Trust or any Series voting at a Shareholders' meeting in person or
by proxy if a majority of the Trustees determines that the continuation of the
Trust or Series is not in the best interests of the Trust, such Series, or their
respective Shareholders as a result of factors or events adversely affecting the
ability of the Trust or such Series to conduct its business and operations in an
economically viable manner. Such factors and events may include the inability of
the Trust or a Series to maintain its assets at an appropriate size, changes in
laws or regulations governing the Trust or the Series or affecting assets of the
type in which the Trust or Series invests, or economic developments or trends
having a significant adverse impact on the business or operations of the Trust
or such Series.

(c) Upon completion of the distribution of the remaining proceeds or assets
pursuant to subsection (a) the Trustees and the Trust or affected Series shall
be discharged of any and all further liabilities and duties hereunder with
respect thereto and the right, title and interest of all parties therein shall
be canceled and discharged and any such Series shall terminate. Following
completion of winding up of its business, the Trustees shall cause a certificate
of cancellation of the Trust's certificate of trust to be filed in accordance
with the Delaware Act, which certificate of cancellation may be signed by any
one Trustee, and upon filing of such certificate of cancellation, the Trust
shall terminate.

SECTION 4. Reorganization. (a) Notwithstanding anything else herein, to
change the Trust's form or place of organization the Trustees may, without
Shareholder approval (unless such approval is required by applicable law), (i)
cause the Trust to merge or consolidate with or into one or more entities, if
the surviving or resulting entity is the Trust or another open-end management
investment company under the 1940 Act, or a series thereof, that will succeed to
or assume the Trust's registration under the 1940 Act, (ii) cause the Shares to
be exchanged under or pursuant to any state or federal statute to the extent
permitted by law, or (iii) cause the Trust to incorporate under the laws of
Delaware or any other U.S. jurisdiction. Any agreement of merger or
consolidation or certificate of merger may be signed by a majority of Trustees
and facsimile signatures conveyed by electronic or telecommunication means shall
be valid.

(b) Pursuant to and in accordance with the provisions of Section 3815(f) of
the Delaware Act, an agreement of merger or consolidation approved by the
Trustees in accordance with this Section 4 may effect any amendment to the
Declaration or effect the adoption of a new trust instrument of the Trust if it
is the surviving or resulting trust in the merger or consolidation.

B-17

(c) The Trustees may create one or more business trusts to which all or any
part of the assets, liabilities, profits or losses of the Trust or any Series or
Class thereof may be transferred and may provide for the conversion of Shares in
the Trust or any Series or Class thereof into beneficial interests in any such
newly created trust or trusts or any series or classes thereof.

SECTION 5. Declaration of Trust. The original or a copy of this Declaration
of Trust and of each amendment hereto or Declaration of Trust supplemental shall
be kept at the office of the Trust where it may be inspected by any Shareholder.

Anyone dealing with the Trust may rely on a certificate by a Trustee or an
officer of the Trust as to the authenticity of the Declaration of Trust or any
such amendments or supplements and as to any matters in connection with the
Trust. The masculine gender herein shall include the feminine and neuter
genders. Headings herein are for convenience only and shall not affect the
construction of this Declaration of Trust. This Declaration of Trust may be
executed in any number of counterparts, each of which shall be deemed an
original.

SECTION 6. Applicable Law. This Declaration and the Trust created hereunder
are governed by and construed and administered according to the Delaware Act and
the applicable laws of the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration of Trust
(a) the provisions of Section 3540 of Title 12 of the Delaware Code, or (b) any
provisions of the laws (statutory or common) of the State of Delaware (other
than the Delaware Act) pertaining to trusts which relate to or regulate (i) the
filing with any court or governmental body or agency of trustee accounts or
schedules of trustee fees and charges, (ii) affirmative requirements to post
bonds for trustees, officers, agents or employees of a trust, (iii) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (iv) fees or
other sums payable to trustees, officers, agents or employees of a trust, (v)
the allocation of receipts and expenditures to income or principal, (vi)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding of trust assets, or (vii) the establishment of fiduciary or
other standards of responsibilities or limitations on the acts or powers of
trustees, which are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees set forth or referenced in this
Declaration. The Trust shall be of the type commonly called a Delaware business
trust, and, without limiting the provisions hereof, the Trust may exercise all
powers which are ordinarily exercised by such a trust under Delaware law. The
Trust specifically reserves the right to exercise any of the powers or
privileges afforded to trusts or actions that may be engaged in by trusts under
the Delaware Act, and the absence of a specific reference herein to any such
power, privilege or action shall not imply that the Trust may not exercise such
power or privilege or take such actions.

SECTION 7. Amendments. The Trustees may, without any Shareholder vote,
amend or otherwise supplement this Declaration by making an amendment, a
Declaration of Trust supplemental hereto or an amended and restated trust
instrument; provided, that Shareholders shall have the right to vote on any
amendment (a) which would affect the voting rights of Shareholders granted in
Article VII, Section 1, (b) to this Section 7, (c) required to be approved by
Shareholders by law or by the Trust's registration statement(s) filed with the
Commission, and (d) submitted to them by the Trustees in their discretion. Any
amendment submitted to Shareholders which the Trustees determine would affect
the Shareholders of any Series shall be authorized by vote of the Shareholders
of such Series and no vote shall be required of Shareholders of a Series not
affected. Notwithstanding anything else herein, (i) any amendment to Article IV
which would have the effect of reducing the indemnification or other rights
provided thereby to Trustees, officers, employees, and agents of the Trust or to
Shareholders or former Shareholders, and any repeal or amendment of this
sentence shall each require the affirmative vote of the holders of two-thirds of
the Outstanding Shares of the Trust entitled to vote thereon and (ii) no
amendment to Article IV that would have the effect of reducing the
indemnification or other rights provided thereby to Trustees, officers,
employees, and agents of the Trust or to Shareholders or former Shareholders
shall be effective with respect to any acts or omissions of any such Persons
occurring or otherwise relating to any time period prior to the adoption of such
amendment or shall otherwise have any retroactive effect.

B-18

SECTION 8. Derivative Actions. In addition to the requirements set forth in
Section 3816 of the Delaware Act, a Shareholder may bring a derivative action on
behalf of the Trust only if the following conditions are met:

(a) Shareholders eligible to bring such derivative action under the
Delaware Act who hold at least 10% of the Outstanding Shares of the Trust, or
10% of the Outstanding Shares of the Series or Class to which such action
relates, shall join in the request for the Trustees to commence such action;

(b) the Trustees must be afforded a reasonable amount of time to consider
such shareholder request and to investigate the basis of such claim. The
Trustees shall be entitled to retain counsel or other advisers in considering
the merits of the request and shall require an undertaking by the Shareholders
making such request to reimburse the Trust for the expense of any such advisers
in the event that the Trustees determine not to bring such action; and

(c) Shareholders are not relieved of the conditions in Sections 8(a) and
(b) if a Trustee who is not an Interested Person of the Trust or any Series
serves as a trustee of any other investment company in the Fund Complex.

(d) Shareholders of an unaffected Series or Class may not bring a
derivative action on behalf of another Series or Class.

SECTION 9. Fiscal Year. The fiscal year of the Trust shall end on a
specified date as adopted by resolution of the Trustees. The taxable year of
each Series of the Trust shall be as determined by the Trustees from time to
time.

SECTION 10. Severability. The provisions of this Declaration are severable.
If the Trustees determine, with the advice of counsel, that any provision hereof
conflicts with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination. If any provision hereof
shall be held invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision only in such jurisdiction
and shall not affect any other provision of this Declaration.

IN WITNESS WHEREOF, the undersigned being the sole Trustee of the Trust
executed this instrument as of the date first written above.

By: /s/ MICHAEL E. BARNA
...................................
MICHAEL E. BARNA
as Trustee and not individually

1325 Avenue of the Americas, 17th Floor
New York, New York 10019

B-19

EXHIBIT C

BURNHAM INVESTORS TRUST
ON BEHALF OF
BURNHAM FUND
RULE 12b-1 DISTRIBUTION PLAN

CLASS A AND CLASS B SHARES

WHEREAS, BURNHAM INVESTORS TRUST, a Delaware business trust (the 'Trust'),
engages in business as an open-end management investment company and is
registered as such under the Investment Company Act of 1940, as amended (the
'Act');

WHEREAS, the Trust has issued and is authorized to issue shares of
beneficial interest with a par value per share as set forth in the Agreement and
Declaration of Trust ('Shares');

WHEREAS, the Board of Trustees of the Trust (the 'Board') has established
and designated two classes of Shares of each Fund, Class A Shares and Class B
Shares;

WHEREAS, Burnham Securities Inc. (the 'Distributor') serves as the
principal distributor of the Shares pursuant to the Distribution Contract
between the Trust and the Distributor dated September 7, 1989 and amended as of
, 1998, which Distribution Contract, as amended, has been duly
approved by the Board, in accordance with the requirements of the Act (the
'Distribution Contract');

WHEREAS, each Fund plans to offer Class A Shares and Class B Shares
pursuant to Rule 18f-3 under the Act, which permits each Fund to implement a
multiple class distribution system providing investors with the option of
purchasing shares of various classes;

WHEREAS, the Board as a whole, and the trustees who are not interested
persons of the Trust (as defined in the Act) and who have no direct or indirect
financial interest in the operation of the Rule 12b-1 plan provided for herein
(the 'Plan') or any agreements related to the Plan (the 'Qualified Trustees'),
have determined, after review of all information and consideration of all
pertinent facts reasonably necessary to an informed determination of whether the
Plan should be implemented, in the exercise of reasonable business judgment and
in light of their fiduciary duties, that there is a reasonable likelihood that
the Plan will benefit each Fund, the applicable class and the shareholders of
each class, and have accordingly approved the Plan by votes cast in person at a
meeting called for the purpose of voting on the Plan; and

NOW, THEREFORE, in consideration of the foregoing, the Trust hereby adopts
the Plan in accordance with Rule 12b-1 under the Act on the following terms and
conditions:

1. (a) The Trust shall pay to the Distributor, as the principal distributor
of the Shares, a distribution fee at the rate of up to .25% per annum of the
average daily net asset value of the Class A Shares of each Fund. The fee shall
be calculated and accrued daily and paid monthly or at such other intervals as
the Board shall determine.

(b) The Trust shall pay to the Distributor, as the principal distributor of
the Shares, a distribution fee at the rate of up to .75% per annum of the
average daily net asset value of the Class B Shares of each Fund and a service
fee at a rate of up to .25% per annum of the average daily net asset value of
the Class B Shares of each Fund. Each fee shall be calculated and accrued daily
and paid monthly or at such other intervals as the Board shall determine.

2. The amounts set forth in paragraph 1 of the Plan shall be paid for the
Distributor's services and expenses as the principal distributor of each Fund's
Class A Shares and Class B Shares and shall be used by the Distributor to
furnish, or cause or encourage others to furnish, services and incentives in
connection with the promotion, offering and sale of each Fund's Class A and
Class B Shares, and where suitable and appropriate, the retention of each Fund's
Class A and Class B Shares by the respective Fund's shareholders, and in
connection therewith may be spent by the Distributor, in its discretion, on,
among other things, compensation to and expenses (including overhead and
telephone expenses) of account executives or other employees of the Distributor
or of other broker-dealers who engage in or support the distribution of each
Fund's Class A and Class B Shares; printing of prospectuses and reports

C-1

for other than existing shareholders; advertising; preparation, printing and
distribution of sales literature; and allowances to other broker-dealers.

3. The Plan shall not take effect as to a class of Shares of a Fund until
it has been approved by (a) a vote of at least 'a majority of the outstanding
voting securities' (as defined in the Act) of that class of Shares of that Fund,
and (b) a majority vote of both (i) the Board, and (ii) the Qualified Trustees,
cast in person at a meeting called for the purpose of voting on the Plan.

4. The Plan and any related agreements shall continue in effect for so long
as such continuance is specifically approved at least annually by a majority of
both (i) the Board, and (ii) the Qualified Trustees, cast in person at a meeting
called for the purpose of voting thereon.

5. In each year that the Plan remains in effect, any person authorized to
direct the disposition of monies paid or payable by the Trust pursuant to the
Plan or any related agreement shall prepare and furnish to the Board, and the
Board shall review, at least quarterly, written reports, complying with the
requirements of Rule 12b-1 under the Act, of the amounts expended under the Plan
and the purposes for which such expenditures were made.

6. The Plan may be terminated as a class of Shares of a Fund at any time by
a majority vote of the Qualified Trustees or by a 'vote of a majority of the
outstanding voting securities' (as defined in the Act) of that class of Shares
of that Fund.

7. The Plan may not be amended in order to increase materially the amount
of distribution expenses provided for in paragraph 1 above unless such amendment
is approved by the shareholders in the manner provided in subparagraph 3(a)
above, and no material amendment to the Plan shall be made unless approved by
the Board and the Qualified Trustees in the manner provided in subparagraph 3(b)
above.

8. While the Plan shall be in effect, the selection and nomination of
trustees of the Trust who are not 'interested persons' (as defined in the Act)
of the Trust shall be committed to the discretion of the trustees then in office
who are not 'interested persons' of the Trust.

9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not less
than six years from the date of this Plan, or the agreements or such reports, as
the case may be, the first two years in an easily accessible place.

Dated: April 26, 1995, as amended , 1998.

BURNHAM INVESTORS TRUST
By:
...................................
Name:
Title:

BURNHAM SECURITIES INC.
By:
...................................
Name:
Title:

C-2

EXHIBIT D

INVESTMENT ADVISORY AGREEMENT
DECEMBER , 1998

BURNHAM ASSET MANAGEMENT CORPORATION
1325 Avenue of the Americas
17th Floor
New York, NY 10019

Gentlemen:

The undersigned, Burnham Investors Trust, a Delaware business trust (the
'Trust'), is an investment company registered under the Investment Company Act
of 1940, as amended ('1940 Act'). The Trust hereby engages you to act as the
investment adviser to each series of the Trust set forth on Schedule I and any
other series of the Trust as the parties may agree from time to time
(collectively, the 'Funds'), subject to the terms and conditions set forth
below.

SECTION 1. INVESTMENT ADVISORY SERVICES.

a. You will regularly provide each Fund with investment research, advice
and supervision and will furnish continuously an investment program for each
Fund, consistent with the investment objectives and policies of each Fund. You
will from time to time recommend to each Fund what securities, in your opinion,
should be purchased or sold by the Fund and what portion of the assets of the
Fund should remain uninvested. In conducting such review and making such
recommendations, you will be guided by each Fund's investment policies and
restrictions as described in the Trust's registration statement under the
Securities Act of 1933, as amended, and the 1940 Act, as filed with the
Securities and Exchange Commission and as amended from time to time; by policies
adopted by the Board of Trustees; and by the provisions of the 1940 Act and the
rules promulgated thereunder, so that at all times each Fund will be in
compliance with its investment policies and restrictions and with the
requirements of the 1940 Act. The Trust agrees to supply you with copies of all
such documents and to notify you of any changes in the Funds' investment
policies and restrictions.

b. In rendering such investment advisory services to the Fund pursuant to
this Agreement, you may employ, retain or otherwise avail yourself of the
services or facilities of other persons or organizations for the purpose of
providing you or the Fund with statistical and other factual information, advice
regarding economic factors and trends, advice as to occasional transactions in
specific securities or any other information, advice or assistance that you may
deem necessary, appropriate or convenient for the discharge of your obligations
hereunder or otherwise helpful to the Fund or in the discharge of your overall
responsibilities with respect to the other accounts for which you or your
affiliates serve as investment adviser.

c. You may employ one or more sub-investment advisers (each a 'Subadviser')
to provide investment advisory services to one or more of the Funds by entering
into a written agreement with each Subadviser. However, any agreement first will
be approved in accordance with the requirements of the 1940 Act as such
requirements may be modified or superseded by rule, regulation, order or
interpretive position of the Securities and Exchange Commission. The authority
given to you in this Agreement may be delegated by you under any such agreement;
provided, that any Subadviser will be subject to the same restrictions and
limitations on investments and brokerage discretion as you are. The Trust agrees
that you will not be accountable to any Fund or its shareholders for any loss or
other liability relating to specific investments directed by any Subadviser,
even though you retain the right to reverse any such investment, because, in the
event a Subadviser is retained, you and the Funds will rely almost exclusively
on the expertise of such Subadviser for the selection and monitoring of specific
investments.

D-1

d. You and any person performing executive or trading functions for a Fund,
whose services were made available to the Fund by you, are specifically
authorized to allocate brokerage and principal business to firms that provide
such services or facilities and to cause a Fund to pay a member of a securities
exchange or any other securities broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another
member of an exchange, broker or dealer would have charged for effecting that
transaction, if you or such person determine in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services (as such services are defined in Section 28(e) of the Securities
Exchange Act of 1934) provided by such member, broker or dealer, viewed in terms
of either that particular transaction or your or such person's overall
responsibilities with respect to the accounts as to which you or such person
exercise investment discretion (as that term is defined in Section 3(a)(35) of
the Securities Exchange Act of 1934).

SECTION 2. BOOKS, RECORDS AND REPORTS, ETC.

a. You will maintain all books and records with respect to each Fund's
securities transactions required by sub-paragraphs (b)(5), (6), (9) and (10) and
paragraph (f) of Rule 31a-1 under the 1940 Act (other than those records being
maintained by the Trust's administrator, custodian or transfer agent) and
preserve such records for the periods prescribed therefor by Rule 31a-2 under
the 1940 Act.

b. You will furnish to the Board of Trustees, at its regularly scheduled
meetings, and at such other times as the Board may reasonably request, a resume
of the portfolio and report on all matters pertaining to your services as
investment adviser. In addition, you will furnish the Trust with such reports
and other data as the Board may request, including, without being limited to,
industry surveys, news of recent developments, statistical data, and such other
information as may keep the Board properly informed on developments relating to
each Fund's portfolio, or similar data relating to securities which you
recommend for inclusion in the portfolio of each Fund.

SECTION 3. MULTIPLE CAPACITIES.

a. Nothing contained in this Agreement will prohibit you from acting, and
being separately compensated for acting, in one or more capacities on behalf of
the Trust including, but not limited to, the capacities of administrator, broker
and distributor. The Trust understands that you may act as investment adviser or
in other capacities on behalf of other investment companies and customers. While
information and recommendations you supply to the Funds will in your judgment be
appropriate under the circumstances and in light of the investment objectives of
each Fund, they may be different from the information and recommendations you
supply to other Funds, investment companies and customers. You will give the
Funds equitable treatment under the circumstances in supplying information,
recommendations and any other services requested of you, but you will not be
required to give preferential treatment to the Funds as compared with the
treatment given to any other investment company or customer. Whenever you will
act in multiple capacities on behalf of the Funds, you will maintain the
appropriate separate accounts and records for each such capacity. All
information and advice supplied by you to each Fund hereunder will be for its
own use exclusively.

b. Nothing in this Agreement will in any way limit or restrict you or any
of your officers, directors, or employees from buying, selling or trading in any
securities for your or their own accounts or other accounts.

c. When you deem the purchase or sale of a security to be in the best
interest of a Fund as well as other clients, you may, to the extent permitted by
applicable laws and regulations, aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage commissions,
if any. In such event, you will allocate the securities so purchased or sold, as
well as the expenses incurred in the transaction, in the manner you consider to
be the most equitable and consistent with your fiduciary obligations to the
Funds and to your other clients.

d. You are an independent contractor and not an employee of the Trust for
any purpose. If you ever give any advice to your clients concerning the shares
of the Trust, you will act solely as investment counsel for such clients and not
in any way on behalf of the Trust or any Fund.

D-2

SECTION 4. PAYMENT OF EXPENSES.

a. Except as otherwise provided herein, you will at your own expense
furnish to the Trust office space in your offices or in such other place as may
be agreed upon from time to time, and all necessary office facilities, equipment
and personnel for managing each Fund's investments, and you will arrange, if
desired by the Trust, for members of your organization to serve as trustees,
officers or agents of the Trust.

b. You will pay directly or reimburse the Trust for the compensation (if
any) of the Trustees who are affiliated with, or 'interested persons' (as
defined in the 1940 Act) of, you and all officers of the Trust.

c. The Trust, on behalf of each Fund to the extent allowable to that Fund,
will assume and will pay: (i) charges and expenses for fund accounting, pricing
and appraisal services and related overhead, including, to the extent such
services are performed by your personnel, or your affiliates, office space and
facilities and personnel compensation, training and benefits; (ii) the charges
and expenses of auditors; (iii) the charges and expenses of any administrator,
custodian, transfer agent, plan agent, dividend disbursing agent and registrar
appointed by the Trust; (iv) issue and transfer taxes chargeable to a Fund in
connection with securities transactions to which the Fund is a party; (v)
insurance premiums, interest charges, dues and fees for membership in trade
associations and all taxes and corporate fees payable by the Trust to federal,
state or other governmental agencies; (vi) fees and expenses involved in
registering and maintaining registrations of the Trust and/or its shares with
the Commission, state or blue sky securities agencies and foreign countries,
including the preparation of prospectuses and statements of additional
information for filing with the Commission; (vii) all expenses of shareholders'
and Trustees' meetings and of preparing, printing and distributing prospectuses,
notices, proxy statements, and reports to shareholders and reports to
governmental agencies; (viii) charges and expenses of legal counsel to the Trust
and the Trustees; (ix) any distribution fees paid by a Fund in accordance with
Rule 12b-1 under the 1940 Act; (x) compensation of those Trustees of the Trust
who are not affiliated with or interested persons of you, the Trust (other than
as Trustees) or Burnham Securities, Inc.; (xi) the cost of preparing and
printing share certificates; and (xii) interest on borrowed money, if any.

d. In addition to the expenses described in Section 4(c) above, each Fund
will pay all brokers' and underwriting commissions chargeable to the Fund in
connection with securities transactions to which the Fund is a party.

SECTION 5. COMPENSATION FOR SERVICES.

a. Each Fund will pay you, as compensation for your services and expenses
assumed hereunder, a fee as set forth in Schedule II. Management fees payable
hereunder will be computed daily and paid monthly in arrears. If this Agreement
is effective subsequent to the first day of the month, or if this Agreement is
terminated, the fee provided in this section will be computed on the basis of
the number of days in the month for which this Agreement is in effect, subject
to a pro rata adjustment based on the number of days elapsed in the current
month as a percentage of the total number of days in such month.

b. You may from time to time agree not to impose all or a portion of your
fee otherwise payable hereunder (in advance of the time such fee or a portion
thereof would otherwise accrue) and/or undertake to pay or reimburse the Trust
for all or a portion of its expenses not otherwise required to be borne or
reimbursed by you. Any such fee reduction or undertaking may be discontinued or
modified by you at any time.

c. Nothing herein will preclude you or your affiliates from executing
brokerage transactions for the Funds, charging the Funds brokerage commissions
for these transactions and deriving a profit from these transactions.

SECTION 6. LIABILITY OF THE INVESTMENT ADVISER AND TRUST.

a. You will be liable for your own acts and omissions caused by your
willful misfeasance, bad faith, or gross negligence in the performance of your
duties or by your reckless disregard of your obligations

D-3

under this Agreement, and nothing herein will protect you against any such
liability to the Trust or its shareholders. You will not be liable for the acts
and omissions of any agent employed by you, nor for those of any bank, trust
company, broker or other person with whom or into whose hands any moneys, shares
of the Trust or securities and investments may be deposited or come in
compliance with the provisions of this Agreement. You will not be liable for any
defect in title of any property acquired, nor for any loss unless it occurs
through your own willful default. Subject to the first sentence of this section,
you will not be liable for any action taken or omitted on advice, obtained in
good faith, of counsel, provided such counsel is satisfactory to the Trust.

b. None of the trustees, officers, agents or shareholders of the Trust will
be personally liable hereunder or are assuming any liability for obligations
entered into on behalf of the Trust. All persons dealing with the Trust must
look solely to the property of the Trust for the enforcement of any claims
against the Trust. No Fund will be liable for any claims against any other Fund
of the Trust.

SECTION 7. USE OF THE NAME 'BURNHAM.'

a. The Trust agrees that in the event that neither you nor any of your
affiliates acts as an investment adviser to the Trust or a Fund, the name of the
Trust or Fund will be changed to one that does not contain the name 'Burnham' or
otherwise suggest an affiliation with you.

SECTION 8. TERMINATION OF AGREEMENT, ASSIGNMENT AND AMENDMENT.

a. This Agreement may be terminated at any time with respect to any Fund
without the payment of any penalty upon 60 days' written notice by the
terminating party to the other party, by you or by the Trust acting pursuant to
a resolution adopted by the Board, or by the vote of the holders of the lesser
of (1) 67% of the affected Fund's voting shares present at a meeting if the
holders of more than 50% of the outstanding shares of that Fund are present in
person or by proxy, or (2) more than 50% of the outstanding shares of that Fund.

b. This Agreement will automatically terminate in the event of its
assignment. Termination will not affect rights of the parties which have accrued
prior thereto.

c. This Agreement contains the entire agreement of the parties hereto, and
is intended to be the complete and exclusive statement of the terms hereof. It
may not be added to or changed orally, and may not be modified or rescinded
except by a writing signed by the parties hereto and in accordance with any
applicable requirements of the 1940 Act as modified or superseded by any rule,
regulation, order or interpretive position of the Commission.

SECTION 9. DURATION OF AGREEMENT.

a. Unless sooner terminated, this Agreement will continue in effect until
July 31, 2000, and from year to year thereafter until terminated, provided that
the continuation of the Agreement and the terms thereof are approved annually in
accordance with the requirements of the 1940 Act, as modified or superseded by
rule, regulation, order or interpretative position of the Commission, subject to
your right and the Trust's right to terminate this Agreement as provided in
Section 8 hereof.

SECTION 10. DEFINITIONS.

a. The terms 'assignment' and interested person' when used in this
Agreement will have the meanings given such terms in the 1940 Act.

SECTION 11. CONCERNING APPLICABLE PROVISIONS OF LAW.

a. This Agreement will be subject to all applicable provisions of law,
including, without being limited to, the applicable provisions of the 1940 Act.
To the extent that any provisions herein conflict with any applicable provisions
of law, the latter will control.

b. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without

D-4

rendering invalid or unenforceable the remaining terms or provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.

c. This Agreement will be governed by the substantive law of the State of
New York and the applicable provisions of the 1940 Act.

d. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

SECTION 12. EFFECTIVE DATE.

a. This Agreement is effective December , 1998.

SECTION 13. MISCELLANEOUS.

a. The captions in this agreement are included for convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.

Very truly yours,
BURNHAM INVESTORS TRUST
By:
...................................
Name:
Title:

Attest: .............................
MICHAEL E. BARNA
Secretary

Accepted:

BURNHAM ASSET MANAGEMENT CORPORATION

By:
................................
Name:
Title:

Attest: .............................
JON M. BURNHAM
Chief Executive Officer

D-5

SCHEDULE I

As of December 1, 1998:

Burnham Fund

D-6

SCHEDULE II

ANNUAL FEE RATE
AS A PERCENTAGE FUND
OF AVERAGE DAILY
NET ASSET VALUE
--------------------

<S> <C>
Burnham Fund...................................................................... 0.60

</TABLE>

The average net asset value for the month will be based on the net asset
value used in determining the price at which Fund shares are sold, repurchased
or redeemed on each day of the month.

If this Agreement becomes effective as to a Fund subsequent to the first
day of a month, or terminates before the last day of a month, your compensation
for such fraction of the month will be determined by applying the foregoing
percentages to the average daily net asset value of the Fund during such
fraction of a month and in the proportion that such fraction of a month bears to
the entire month.

D-7

APPENDIX 1
PROXY CARD

THE BURNHAM FUND, INC.
<S> <C>
The undersigned holder of shares of beneficial interest
of The Burnham Fund, Inc. hereby constitutes and appoints
Michael E. Barna, Jon M. Burnham, Debra B. Hyman and Frank
A. Passantino, and each of them singly, proxies and
attorneys of the undersigned, with full power of
THE BURNHAM FUND INC substitution to each, for and in the name of the
1325 AVENUE OF THE AMERICAS-17 FL undersigned, to vote and act upon all matters at the special
NEW YORK NY 10019 meeting of shareholders of the fund to be held on Thursday,
November 19, 1998 at the offices of the fund, 1325 Avenue of
the Americas, 17th Floor, New York, New York, at 2:00 p.m.,
eastern time, and at any and all adjournments thereof,
relating to all shares of the fund held by the undersigned
or relating to all shares of the fund held by the
undersigned which the undersigned would be entitled to vote
or act, with all the powers the undersigned would possess if
personally present. All proxies previously given by the
undersigned relating to the meeting are hereby revoked.

Specify your desired action by check marks in the
appropriate space. This proxy will be voted as specified. If
no specification is made, the proxy will be voted in favor
of each item. The persons named as proxies have
discretionary authority, which they intend to exercise in
favor of the proposals referred to and according to their
best judgment as to any other matters which properly come
before the meeting.

This proxy is solicited by the board of directors.

</TABLE>

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: BURNHAM

THE BURNHAM FUND, INC.

Please complete, sign, date and return this proxy in the enclosed envelope as
soon as possible.

Please sign exactly as your name or names appear above. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as such.

If a corporation, please sign in full corporate name by president or other
authorized officer.

If a partnership, please sign in partnership name by authorized person.

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

VOTE ON PROPOSALS FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C>
1. To approve the agreement and plan of reorganization. [ ] [ ] [ ]

2. To approve the conversion of Class C shares into Class [ ] [ ] [ ]
A shares. (FOR CLASS C SHAREHOLDERS ONLY)

VOTE ON TRUSTEES FOR AGAINST ABSTAIN
3. To elect the following nominees to the Board of Trustees:
1) I.W. Burnham II, 2) Jon M. Burnham, 3) Claire B.
Benenson, 4) Lawrence N. Brandt, 5) Alvin P. Gutman,
6) William W. Karatz, 7) John C. McDonald, 8) Donald B. [ ] [ ] [ ]
Romans, 9) Robert F. Shapiro, 10) Robert M. Shavick, 11)
David H. Solms, 12) Robert S. Weinberg, 13) Robert J.
Wilbur.

To withhold authority to vote, mark "For All Except"
and write the nominee's number on the line below.

--------------------------

FOR AGAINST ABSTAIN

4. To ratify the selection of PricewaterhouseCoopers LLP [ ] [ ] [ ]
as the Fund's independent public accountants.

5. To approve an amended and restated investment advisory [ ] [ ] [ ]
agreement with Burnham Asset Management Corporation.

6a. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding short sales.

6b. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding purchasing securities
on margin.

Signature [PLEASE SIGN WITHIN BOX] Date

FOR AGAINST ABSTAIN
6c. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding pledging, mortgaging
or hypothecating assets.

6d. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding "unseasoned" issuers.

6e. To approve the elination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding options, warrants and
securities lending.

6f. To approve the amendment of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding borrowing and the
issuance of senior securities.
FOR AGAINST ABSTAIN

6g. To approve the amendment of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding loans.

6h. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding investment for the
purpose of control.

6i. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding investment companies.

6j. To approve the elimination of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding transactions with
affiliates.

6k. To approve the amendment of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding limited partnerships,
real estate and commodities.

6l. To approve the amendment of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding underwriting.

6m. To approve the amendment of the Fund's fundamental [ ] [ ] [ ]
investment restriction regarding diversification.

6n. To approve the reclassification of the Fund's investment [ ] [ ] [ ]
policies from fundamental to non-fundamental.

7. To transact any other business that may properly come [ ] [ ] [ ]
before the meeting or any adjournment.

Signature (Joint Owners) Date

</TABLE>

APPENDIX 2
TELEPHONIC AND INTERNET VOTING
INSTRUCTION ENCLOSURE

- --------------------------------------------------------------------------------
TOUCH-TONE TELEPHONE VOTING

In order to expedite your vote and avoid a trip to the Post Office, you may
use a touch-tone telephone to give us your voting instructions.

DIAL 1-800-690-6903 and follow the simple instructions.
- --------------------------------------------------------------------------------

INTERNET VOTING

To vote by Internet:
1. Read the Proxy Statement and have your ballot at hand.
2. Go to website www.proxyvote.com.
3. Enter the 12-digit Control Number found on your ballot.
4. Follow the simple instructions.

- --------------------------------------------------------------------------------

STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as . . . . . . . . . . . . . . . . . . 'D'