<PAGE> 1
FILE NOS: 2-76640/811-3429
2-76639/811-3428
2-79359/811-3568
2-74285/811-3274
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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
CAPITAL APPRECIATION FUND
HIGH YIELD BOND TRUST
MANAGED ASSETS TRUST
MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(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)(4) 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:
- --------------------------------------------------------------------------------
<PAGE> 2
CAPITAL APPRECIATION FUND
HIGH YIELD BOND TRUST
MANAGED ASSETS TRUST
MONEY MARKET PORTFOLIO
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
March 19, 1999
To the Shareholders:
Notice is hereby given that a Special Shareholder Meeting of each of the
Funds listed above (the "Funds") will be held jointly at its office at One Tower
Square, Hartford, Connecticut on Friday, April 30, 1999 at 9:00 a.m. for the
following purposes: NOT ALL PROPOSALS AFFECT EACH FUND
1. PROPOSAL TO ADOPT STANDARD FUNDAMENTAL INVESTMENT POLICIES
<TABLE>
<S> <C>
Item 1.A. Proposal to Amend the Fundamental Investment
Policies on Issuer Diversification
Item 1.B. Proposal to Amend the Fundamental Investment
Policies on Industry Concentration
Item 1.C. Proposal to Amend the Fundamental Investment
Policies on Borrowing
Item 1.D. Proposal to Amend the Fundamental Investment
Policies on Real Estate
Item 1.E. Proposal to Amend the Fundamental Investment
Policies on Loans
Item 1.F. Proposal to Amend the Fundamental Investment
Policies on Commodities
Item 1.G. Proposal to Amend the Fundamental Investment
Policies on Underwriting
</TABLE>
203/205/206/207
<PAGE> 3
2. PROPOSAL TO REDESIGNATE AND AMEND (IF APPLICABLE) OR ELIMINATE CERTAIN
FUNDS' FUNDAMENTAL INVESTMENT POLICIES
<TABLE>
<S> <C>
Item 2.A. Proposal to Redesignate and Amend the Fundamental
Investment Policies on Liquidity
Item 2.B Proposal to Redesignate and Amend the Fundamental
Investment Policies on Investments to Exercise
Control
Item 2.C. Proposal to Redesignate and Amend the Fundamental
Investment Policies on Short Sales
Item 2.D. Proposal to Redesignate and Amend the Fundamental
Investment Policies on Purchasing On Margin
Item 2.E. Proposal to Redesignate and Amend the Fundamental
Investment Policies on Pledging Assets
Item 2.F. Proposal to Eliminate the Fundamental Investment
Policies on Oil, Gas And Minerals
Item 2.G. Proposal to Eliminate the Fundamental Investment
Policies on "Unseasoned Issuers"
Item 2.H. Proposal to Eliminate the Fundamental Investment
Policy on Puts and Calls
Item 2.I. Proposal to Eliminate the Fundamental Investment
Policies on Investing in Warrants
Item 2.J. Proposal to Redesignate and Amend the Fundamental
Investment Policies on Investing in the
Securities of Other Investment Companies
Item 2.K. Proposal to Redesignate and Amend the Fundamental
Investment Policy on Maximum Maturity of
Investments to Comply with Rule 2a-7.
Item 2.L. Proposal to Redesignate the Fundamental
Investment Policy on "Credit Ratings of Issuers"
Item 2.M. Proposal to Eliminate the Fundamental Investment
Policies on Securities in Which Management Holds
Interests
</TABLE>
<PAGE> 4
3. PROPOSAL TO AMEND CERTAIN FUNDAMENTAL INVESTMENT POLICIES TO PERMIT EACH
FUND TO INVEST ALL OR A PORTION OF ITS ASSETS IN ONE OR MORE INVESTMENT
COMPANIES AND RELATED AMENDMENTS TO EACH FUNDS' ADVISORY AGREEMENT
4. To act on any and all such other business as may properly come before the
meeting.
The close of business on March 1, 1999 has been fixed as the record date
for the determination of beneficial Shareholders entitled to notice of and to
vote at said meeting.
By order of the Board of Trustees.
/s/ ERNEST J. WRIGHT
ERNEST J. WRIGHT, SECRETARY
Please complete and return the enclosed proxy card as soon as possible in
the post-paid envelope provided. Your prompt response is appreciated.
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT
YOU OWN.
<PAGE> 5
CAPITAL APPRECIATION FUND
HIGH YIELD BOND TRUST
MANAGED ASSETS TRUST
MONEY MARKET PORTFOLIO
SHAREHOLDERS MEETINGS
APRIL 30, 1999
PROXY STATEMENT
THE BOARDS OF TRUSTEES OF CAPITAL APPRECIATION FUND ("CAF"), HIGH YIELD
BOND TRUST ("HYBT"), MANAGED ASSETS TRUST ("MAT") AND MONEY MARKET PORTFOLIO
("MMP"), (EACH, A "FUND" AND COLLECTIVELY, THE "FUNDS") SOLICIT YOUR PROXY ON
BEHALF OF EACH FUND. This proxy statement is being furnished in connection with
the solicitation of voting instructions, as further described below, from owners
of variable contracts ("beneficial owners") for use at each Fund's special
shareholders meeting to be held at the Fund's office, One Tower Square,
Hartford, Connecticut, beginning at 9:00 a.m. on April 30, 1999, and any
adjournments (collectively, the "Meeting"). This proxy material will be mailed
to beneficial owners of Fund shares beginning on or about March 19, 1999.
GENERAL
The purpose of the Meeting generally is to adopt standard fundamental
investment policies for all of the Funds. The specific purposes for each Fund
are set forth below and in the accompanying Notice. To adopt the proposed
standard fundamental investment policies, a Fund may need to adopt a fundamental
policy or to amend, redesignate, or eliminate some or all of current fundamental
investment policies. The following chart indicates the beneficial owners who are
entitled to provide instructions on each proposal:
SUMMARY OF VOTING ON PROPOSAL ITEMS
<TABLE>
<CAPTION>
1. 1. 1. 1. 1. 1. 1. 2. 2. 2. 2. 2. 2. 2. 2. 2. 2. 2.
FUND A B C D E F G A B C D E F G H I J K
- ---- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAF.................. X X X X X X X X X X X X X X X X
HYBT................. X X X X X X X X X X X X X
MAT.................. X X X X X X X X X X X X X
MMP.................. X X X X X X X X X X X X X X X X X
<CAPTION>
2. 2.
FUND L M 3.
- ---- --- --- ---
<S> <C> <C> <C>
CAF.................. X X
HYBT................. X X
MAT.................. X X
MMP.................. X X
</TABLE>
<PAGE> 6
VOTE BY PROXY
An instruction card is enclosed for use at the Meeting. You may revoke the
instruction card at any time before the vote is taken at the Meeting by sending
a written notice of revocation to the Trust's Secretary or by appearing in
person to provide instructions at the Meeting. All instruction cards that are
properly executed, received in time, and not so revoked will be voted at the
Meeting in accordance with the instructions on them. Instruction cards that are
properly executed but provide no specific instructions will be voted in favor of
the Proposals.
COST OF SOLICITATION
Each Fund will pay a portion of the Meeting costs, including the cost of
proxy solicitation allocated on the basis of each Fund's relative net asset
value. Under each Fund's respective Management Agreement, The Travelers
Insurance Company ("Travelers Insurance") reimburses the Fund for the amount by
which its aggregate annual expenses (including the cost, among other things, of
printing, preparing and mailing special meeting notices and proxy solicitation
materials) exceeds 1.25% of each Fund's average net assets (0.40% for MMP) for
any year during which its Management Agreement remains in effect. Travelers
Insurance is located at One Tower Square, Hartford, Connecticut 06183. Travelers
Insurance has engaged the services of Management Information Services ("MIS") to
assist in the solicitation of proxies. The aggregate cost of soliciting the
Funds' beneficial owners is expected to be approximately $35,000.
In addition to the solicitation of proxies by mail, each Fund's trustees,
officers, and/or employees of a Fund's adviser may solicit proxies in person or
by telephone. The adviser for each Fund is Travelers Asset Management
International Corporation ("TAMIC" or the "adviser").
SHAREHOLDERS AND THE VOTE
Shareholders may vote only on matters that concern the Fund or Funds in
which they hold shares. Shareholders are entitled to one vote for each full
share owned and fractional votes for fractional shares. Only shareholders of
record of each Fund at the close of business on March 1, 1999 (the record date)
will be entitled to notice of and to vote at the Meeting.
2
<PAGE> 7
The number of full and fractional votes for which a beneficial owner is
entitled to provide voting instructions is set forth on the enclosed instruction
card(s). Shares owned by two or more persons (whether as joint tenants,
co-fiduciaries, or otherwise) will be voted as follows, unless a written
instrument or court order providing to the contrary has been filed with the
Trust: (1) if only one person votes, that vote will bind all; (2) if more than
one person votes, the vote of the majority will bind all; and (3) if more than
one person votes and the vote is evenly divided, the vote will be cast
proportionately.
As of the record date, separate accounts that fund variable annuity
contracts and variable life insurance contracts issued by Travelers Insurance
and The Travelers Life and Annuity Company (collectively, with their affiliates,
"The Travelers") were the record owners of all of the Funds' shares. As of that
date, no single shareholder or group, other than The Travelers, beneficially
owned more than 5% of a Fund's outstanding shares.
This proxy material is being mailed to owners of, or participants in,
variable annuities and variable life insurance contracts who had allocated
amounts to one or more Fund through certain separate accounts as of the record
date (namely, the beneficial owners of the shares). The beneficial owners
instruct The Travelers how to vote the shares in which the beneficial owners
have a beneficial interest. The Travelers will vote all shares held by it as
instructed by the contract owners or participants. Further, The Travelers
intends to vote all shares for which no instruction cards are received in the
same proportion as the shares for which instructions are received.
To hold the Meeting with respect to a Fund, a majority of each Fund's
shares entitled to vote must be present in person or by proxy at the Meeting. In
the event that a quorum is present but sufficient votes in favor of one or more
items of a Proposal are not received by the Meeting time, the persons named as
proxies may propose one or more adjournments of the Meeting to permit further
solicitation of proxies. Any such adjournment requires the affirmative vote of a
majority of the shares present in person or by proxy at the Meeting to be
adjourned. The persons named as proxies will vote in favor of such adjournment
if they determine that such adjournment and additional solicitation is
reasonable and in the interests of the particular Fund's shareholders. Each
Fund's shareholders vote separately with respect to each item of a Proposal,
pursuant to the Investment Company Act of 1940, as amended (the "1940 Act") and
the applicable Declaration of Trust.
3
<PAGE> 8
VOTE REQUIRED: APPROVAL OF EACH ITEM OF EACH PROPOSAL FOR A FUND REQUIRES THE
AFFIRMATIVE VOTE OF THE HOLDERS OF THE LESSER OF: (A) 67% OF THE FUND'S SHARES
PRESENT AT THE MEETING IN PERSON OR BY PROXY, OR (B) A MAJORITY OF THE FUND'S
OUTSTANDING SHARES.
Each Fund's Board of Trustees (each, a "Board", and collectively, the
"Boards") has approved and recommends that Fund shareholders approve the
following Proposals to amend, redesignate (and amend as applicable), or
eliminate each Fund's current investment policies. Proposal items that are
approved at the Meeting will become effective on May 1, 1999. Proposal items
that are not approved will not be implemented.
THE PROPOSALS GENERALLY
For each item of the Proposals, the relevant current investment policy is
described generally below. Each proposed fundamental investment policy also is
specifically discussed below. Items designated as "fundamental" may be changed
only with shareholder approval as described above. The effect of a "FOR" vote on
each item of the Proposals is detailed; specifically, whether the current policy
will be: (1) amended, (2) redesignated (and amended as applicable), or (3)
eliminated entirely.
Each Board may adopt additional or supplemental fundamental investment
policies for the Fund without shareholder approval if required by federal
regulators or if each Board determines the policies to be necessary or
desirable. The proposed standard investment policies meet all of the
requirements of the 1940 Act, and no other fundamental investment policies in
addition to the proposed policies are presently required by the 1940 Act. A
detailed listing of the proposed fundamental and operating (nonfundamental)
policies as well as each Fund's current fundamental policies are provided in
Appendices A and B, respectively, for your reference.
The reasons for the Proposals are: (1) to conform the Funds' fundamental
policies to ones that are expected to become standard for all mutual funds
managed by The Travelers, (2) to simplify and modernize the policies that are
required to be fundamental by the 1940 Act, and (3) to eliminate as fundamental
any policies that are not required to be fundamental by that Act. The Boards
believe that standard policies will assist the Funds, The Travelers, and the
adviser and subadviser in monitoring compliance with the various policies to
which the Funds are subject. By reducing to a minimum those
4
<PAGE> 9
policies that can be changed only with shareholder approval, the Funds will be
able to minimize costs and delay associated with holding frequent annual
shareholders' meetings. The Boards propose to amend certain of the Funds'
investment policies, as described below, in order to render clearer and simpler
statements of the Funds' fundamental policies. Finally, the Boards also believe
that The Travelers' and the adviser's and subadviser's ability to manage the
Funds' assets efficiently in a changing investment environment should be
enhanced and that investment management opportunities should be increased by
these changes. Each Board may approve or revise nonfundamental investment
policies without seeking approval from shareholders.
The Boards do not anticipate that amending, redesignating and amending, or
eliminating a Fund's current fundamental investment policies generally will
result in a material change in the level of risk associated with an investment
in that Fund. If the proposed changes are approved by a Fund's shareholders at
the Meeting, the registration statement (including each Fund's prospectus and
statement of additional information) will be revised to reflect the changes and
reflect any modified investment policies. In the event that a proposed change is
not approved by a Fund's shareholders, the Fund will retain the relevant current
fundamental policy.
In the following discussion, "the Fund" refers to each Fund.
IN ALL THREE PROPOSALS, FUND POLICIES THAT ARE DESIGNATED AS FUNDAMENTAL
MAY NOT BE CHANGED WITHOUT SHAREHOLDER APPROVAL BY SHAREHOLDERS. OPERATING
(NONFUNDAMENTAL) POLICIES MAY BE CHANGED BY THE BOARDS WITHOUT SHAREHOLDER
APPROVAL.
1. PROPOSAL TO ADOPT STANDARD FUNDAMENTAL
INVESTMENT POLICIES
ITEM 1.A. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON ISSUER
DIVERSIFICATION
The Boards have proposed amending the Funds' fundamental investment
policies on issuer diversification to conform such policies to the requirements
of Section 5(b)(1) of the 1940 Act and to permit the Funds greater flexibility
to invest in securities that the adviser or subadviser considers to present
attractive investment opportunities, including possible conversion to
master-feeder or fund-of-funds structures. The 1940 Act requires that a
"diversified" mutual fund
5
<PAGE> 10
adopt a fundamental investment policy with regard to diversification. The Funds
are "diversified" within the meaning of the 1940 Act. This means that by law,
each Fund must not, with respect to 75% of its total assets, invest more than 5%
of its total assets in the securities of any one issuer or acquire more than 10%
of the outstanding voting securities of any one issuer. These policies apply
only at the time of investment, and the Fund may invest up to 25% of its total
assets without regard to such policies. In addition, these policies do not apply
to Fund holdings of or investments in cash, cash items, U.S. government
securities or securities of other investment companies.
Currently each Fund's policy is more restrictive than is required by the
1940 Act. The Funds apply the diversification policies to a higher percentage of
their assets than is required by law. The proposed investment policy would
conform the Fund's diversification policies with the law and among the other
Funds managed by the adviser. It should be understood that the proposed
amendment, by permitting the Fund to invest a greater percentage of its assets
with a single issuer or to hold an increased percentage of an issuers voting
securities, could potentially increase the risk to the Fund in the event of
adverse developments affecting the securities of such issuer.
The proposed fundamental investment policy on diversification is set forth
below in italics followed by a summary of the Fund's current fundamental
investment policy on issuer diversification. The Boards believe it is in the
best interests of each Fund and its shareholders and beneficial owners to adopt
the proposed fundamental investment policy in lieu of its current fundamental
diversification policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] WITH RESPECT TO 75% OF
ITS ASSETS, PURCHASE A SECURITY OTHER THAN A SECURITY ISSUED OR GUARANTEED BY
THE U.S. GOVERNMENT, ITS AGENCIES, INSTRUMENTALITIES, OR GOVERNMENT-SPONSORED
ENTERPRISES OR A SECURITY OF AN INVESTMENT COMPANY IF, AS A RESULT: (1) MORE
THAN 5% OF THE FUND'S TOTAL ASSETS WOULD BE INVESTED IN THE SECURITIES OF A
SINGLE ISSUER, OR (2) THE FUND WOULD OWN MORE THAN 10% OF THE OUTSTANDING VOTING
SECURITIES OF ANY SINGLE ISSUER.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: Adoption of the proposed
fundamental diversification policy represents a change in each Fund's
fundamental diversification policy. Currently, each Fund applies part or all of
its diversification policies to a percentage higher than the 75% required by the
1940 Act for diversified funds. Approval of the proposed policy would establish
that the diversification policies for each Fund apply to only 75% of the Fund's
assets. For CAF,
6
<PAGE> 11
MAT, and MMP the percentage of assets to which the securities-of-a-
single-issuer restriction applies would change from 100% to 75%. For HYBT the
percentage of assets to which the securities-of-a-single-issuer restriction
applies would change from 85% to 75%. For CAF, HYBT, MAT, and MMP the percentage
of assets to which the voting securities restriction applies would change from
100% to 75%.
In addition, the proposed policy exempts from the diversification
restrictions securities issued or guaranteed by the U.S. Government, its
agencies, instrumentalities, or government-sponsored enterprises and securities
of an investment company. Currently, not every Fund exempts these types of
securities from its diversification policies. CFA and HYBT, do not exempt U.S.
government securities from either the securities-of-a-single-issuer or the
voting securities restrictions of their diversification policies. MAT exempts
U.S. government securities from the securities-of-a-single-issuer restriction.
MMP exempts U.S. government securities from both the
securities-of-a-single-issuer and the voting securities restrictions. No Fund
currently exempts securities of an investment company from either the
securities-of-a-single-issuer or the voting securities restrictions.
ITEM 1.B. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON INDUSTRY
CONCENTRATION
The 1940 Act requires that a mutual fund adopt a fundamental policy whether
or not the fund may invest more than 25% of its assets (concentration policy) in
the securities of issuers in any one industry. The concentration policy need not
apply to investments in U.S. government securities.
The proposed fundamental investment policy on industry concentration is set
forth below in italics followed by a summary of the Funds' current fundamental
industry concentration policies. The Boards believe it is in the best interests
of each Fund and its shareholders and beneficial owners to adopt the proposed
fundamental investment policy in lieu of its current fundamental industry
concentration policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] PURCHASE A SECURITY IF,
AS A RESULT, MORE THAN 25% OF THE FUND'S TOTAL ASSETS WOULD BE INVESTED IN
SECURITIES OF ISSUERS CONDUCTING THEIR PRINCIPAL BUSINESS ACTIVITIES IN THE SAME
INDUSTRY. FOR PURPOSES OF THIS POLICY, THERE IS NO LIMIT ON: (1) INVESTMENTS IN
U. S. GOVERNMENT SECURITIES, IN REPURCHASE AGREEMENTS COVERING U. S. GOVERNMENT
SECU-
7
<PAGE> 12
RITIES, IN SECURITIES ISSUED BY THE STATES, TERRITORIES OR POSSESSIONS OF THE
UNITED STATES ("MUNICIPAL SECURITIES") OR IN FOREIGN GOVERNMENT SECURITIES; OR
(2) INVESTMENT IN ISSUERS DOMICILED IN A SINGLE JURISDICTION. NOTWITHSTANDING
ANYTHING TO THE CONTRARY, TO THE EXTENT PERMITTED BY THE 1940 ACT, THE FUND MAY
INVEST IN ONE OR MORE INVESTMENT COMPANIES; PROVIDED THAT, EXCEPT TO THE EXTENT
THAT IT INVESTS IN OTHER INVESTMENT COMPANIES PURSUANT TO SECTION 12(D)(1)(A) OF
THE 1940 ACT, THE FUND TREATS THE ASSETS OF THE INVESTMENT COMPANIES IN WHICH IT
INVESTS AS ITS OWN FOR PURPOSES OF THIS POLICY.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: Each Fund currently has a
fundamental policy prohibiting concentration in any one industry. The proposed
restriction clarifies that government securities and securities of investment
companies (under certain circumstances) are exempt from the current prohibition.
The proposed policy also clarifies that issuers domiciled in the same
jurisdiction are not considered to be in the same industry. CAF, HYBT, and MAT
currently have a policy generally prohibiting concentration. Currently, MMP's
fundamental concentration policy exempts securities issued by banks and
securities issued or guaranteed by the U.S. government, its agencies, or
instrumentalities. No Fund currently states that concentration does not include
issuers domiciled in a single jurisdiction.
ITEM 1.C. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON BORROWING
The 1940 Act requires that a mutual fund adopt a fundamental policy on
borrowing. The 1940 Act prohibits a fund from issuing any senior security
(including debt), except that it permits borrowing from banks in an amount not
exceeding one third of its total assets.
Because a Fund may occasionally need to borrow money to meet substantial
shareholder redemption or exchange requests when available cash is not
sufficient to satisfy these needs, the Boards have proposed amending the Funds'
current policies to permit the Funds greater flexibility to engage in borrowing
transactions. Much of what is included in the Funds' current fundamental
borrowing policies is not required by applicable law. The proposed fundamental
investment policy would permit borrowing up to the maximum amount allowed by the
1940 Act and related Securities and Exchange Commission ("SEC") interpretations.
Also, the proposed policy would conform the Funds' policies on borrowing to
other funds managed by the adviser. The Boards believe that standard policy will
assist the
8
<PAGE> 13
Funds and the adviser in monitoring compliance with the various investment
policies to which the Funds are subject.
The proposed fundamental investment policy on borrowing is set forth below
in italics followed by a summary of the Funds' current fundamental borrowing
policies. The Boards believe it is in the best interests of each Fund and its
shareholders and beneficial owners to adopt the proposed fundamental investment
policy on borrowing in lieu of its current fundamental investment policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] BORROW MONEY IF, AS A
RESULT, OUTSTANDING BORROWINGS WOULD EXCEED AN AMOUNT EQUAL TO ONE THIRD OF THE
FUND'S TOTAL ASSETS.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed policy would allow
each Fund to borrow from any person and for any reason and could materially
increase the percentage of a Fund's assets that may be borrowed. Currently, CAF
and HYBT are restricted to borrowing 10% of their respective gross assets and
one third of their net assets. MAT is restricted to borrowing 10% of its total
assets. MMP currently is permitted to borrow up to one-third of its assets.
The proposed policy would change each Fund's borrowing policies by allowing
the Funds to borrow for purposes other than "emergency", "temporary", or
"extraordinary" and by allowing the Funds to make additional investments before
paying back their borrowings. The proposed policy would change MMP's policy on
borrowing by allowing the Fund to borrow for purposes other than to facilitate
transactions during abnormally heavy redemption requests. Approval of the
proposed policy would permit clarification of each Fund's policy as well as
permit it to engage in borrowing in a manner consistent with current law and the
SEC's interpretive positions.
ITEM 1.D. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON REAL ESTATE
The 1940 Act requires that a mutual fund adopt a fundamental policy on
acquiring interests in real estate. The Boards have proposed that the Funds'
current fundamental investment policies on investments in real estate be amended
so that they are more clear and uniform.
The proposed fundamental real estate policy is not expected to affect the
Funds' investment programs or instruments in which they invest. The Funds will
not purchase or sell real estate. The Boards believe that the proposed real
estate policy would clarify that the Funds are permitted to hold and sell real
estate only in the event that
9
<PAGE> 14
the Fund acquired the real estate as a result of the ownership of securities or
other instruments. Further, the proposed amendment would clarify that the Funds
may purchase all types of securities secured by real estate, or interests
therein, or issued by companies that invest in real estate.
The proposed fundamental investment policy on real estate is set forth
below in italics followed by a summary of the Funds' current fundamental real
estate investment policies. The Boards believe it is in the best interests of
each Fund and its shareholders and beneficial owners to adopt the proposed
fundamental real estate policy in lieu of its current fundamental investment
policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] PURCHASE OR SELL REAL
ESTATE UNLESS ACQUIRED AS A RESULT OF OWNERSHIP OF SECURITIES OR OTHER
INSTRUMENTS (BUT THIS SHALL NOT PREVENT THE FUND FROM INVESTING IN SECURITIES OR
OTHER INSTRUMENTS BACKED BY REAL ESTATE OR IN SECURITIES OF COMPANIES ENGAGED IN
THE REAL ESTATE BUSINESS).
CHANGES TO CURRENT FUNDAMENTAL POLICIES: For each Fund, the proposed
fundamental investment policy primarily would conform the language of their
current real estate policies to the standard policy. The proposed policy would
also permit each Fund to invest in securities backed by real estate and
securities of companies engaged in the real estate business. Further, the
proposed policy would ensure that no Fund would be in violation of a fundamental
investment policy in the event that it were to acquire real estate as a result
of its ownership of securities or other instruments. Currently, CAF is not
prohibited from purchasing real estate but is prohibited from purchasing real
estate investment trusts that deal in real estate or related interests. HYBT is
prohibited from purchasing real estate or interests in real estate, except
through the purchase of securities commonly purchased by financial institutions
that do not include direct interests in real estate or mortgages. MAT is
prohibited from purchasing or selling real estate, but is allowed to invest in
securities secured by real estate or interests therein. MMP is prohibited from
investing in real estate, other than money market securities secured by real
estate, or money market securities issued by companies that invest in real
estate or related interests.
ITEM 1.E. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON LOANS
The 1940 Act requires that a mutual fund adopt a fundamental policy on
loans. The Funds' current fundamental loan policies prohibit the Funds from many
types of lending that are permitted by law.
10
<PAGE> 15
The Boards believe that securities lending and other forms of lending could
be attractive investments for the Funds. The Boards propose to amend each Fund's
current fundamental loan policies to permit the Fund to engage in securities
lending to the extent permitted by applicable law. The proposed policy generally
would incorporate each Fund's current investment policy while restating it more
clearly and succinctly. Further, the proposed policy would allow the Funds to
make loans to the extent permitted by law, up to one third of the Fund's total
assets.
The proposed fundamental investment policy on loans is set forth below in
italics followed by a brief explanation of the changes the proposal would bring
to each Fund's current fundamental investment policies on loans. The Boards
believe it is in the best interests of each Fund and its shareholders and
beneficial owners to adopt the proposed fundamental loan policy in lieu of its
current fundamental investment policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] MAKE LOANS TO OTHER
PARTIES IF, AS A RESULT, MORE THAN ONE THIRD OF ITS TOTAL ASSETS WOULD BE LOANED
TO OTHER PARTIES. FOR PURPOSES OF THIS LIMITATION, ENTERING INTO REPURCHASE
AGREEMENTS, LENDING SECURITIES, AND ACQUIRING ANY DEBT SECURITY ARE NOT DEEMED
TO BE THE MAKING OF LOANS.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed policy would allow
each Fund to invest up to the statutory maximum of one third its assets, for any
reason (as permitted by law and the Funds' investment restrictions), rather than
prohibiting them from lending at all, other than in a few enumerated situations.
Further, the proposed policy would clarify that repurchase agreements, lending
of securities and debt securities are not considered "loans" for the purposes of
the calculating the one-third limitation.
ITEM 1.F. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON COMMODITIES
The 1940 Act requires that a mutual fund adopt a fundamental policy on
investments in commodities. The Boards have proposed amendments to the Funds'
current fundamental investment policies to provide the Funds with greater
flexibility in buying and selling futures contracts and options on futures
contracts. The Funds' current investment policy prohibits investment in
commodities, though CAF and MAT are permitted to invest in specific types of
securities (i.e. futures contracts and options on futures contracts) for hedging
pur-
11
<PAGE> 16
poses. The restrictive provisions of the Funds' current fundamental investment
policies on commodities are not required by law. The Boards believe the Funds'
adviser should have greater flexibility to enter into futures contracts and
related options consistent with the Funds' investment objectives and programs,
as market and regulatory developments require and permit, without the necessity
of seeking further shareholder approval. The new policy would also conform each
Fund's policy on commodities to one that is expected to become standard for the
advisor's funds. The Boards believe that standardized policies will assist the
Funds and their adviser in monitoring compliance with the various investment
policies to which the Funds are subject.
The proposed fundamental investment policy on commodities is set forth
below in italics followed by a brief explanation of the changes the proposal
would bring to each Fund's current fundamental investment policy on commodities.
The Boards believe it is in the best interests of each Fund and its shareholders
and beneficial owners to adopt the proposed fundamental commodities policy in
lieu of its current fundamental investment policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] PURCHASE OR SELL
PHYSICAL COMMODITIES UNLESS ACQUIRED AS A RESULT OF OWNERSHIP OF SECURITIES OR
OTHER INSTRUMENTS (BUT THIS SHALL NOT PREVENT THE FUND FROM PURCHASING OR
SELLING OPTIONS AND FUTURES CONTRACTS AND OPTIONS ON FUTURES OR FROM INVESTING
IN SECURITIES OR OTHER INSTRUMENTS BACKED BY PHYSICAL COMMODITIES).
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed policy would change
the policies of all the Funds by allowing them to own physical commodities if
such commodities happen to be acquired through ownership of securities or other
instruments and allowing them to invest in securities backed by physical
commodities. The proposed policy also would allow them to invest in options,
futures contracts and options on futures without limitation as to purpose. CAF
and MAT currently are prohibited from purchasing commodities or commodities
contracts except transactions involving financial futures contracts to limit
transaction and borrowing costs and for hedging purposes. HYBT currently is
prohibited from purchasing and MMP from investing in any commodities or
commodities contracts.
12
<PAGE> 17
ITEM 1.G. PROPOSAL TO AMEND THE FUNDAMENTAL
INVESTMENT POLICIES ON UNDERWRITING
The 1940 Act requires that a mutual fund adopt a fundamental investment
policy on underwriting securities issued by other issuers. The Funds' current
fundamental investment policies on underwriting provide that the Funds will not
engage in underwriting the securities of other issuers. The Boards propose to
restate each Fund's current policy on underwriting to make it more succinct and
uniform. The proposed policy, which does not represent a material change in the
Funds' current investment policies, would prohibit the Funds from underwriting
the securities of other issuers (which is not a part of the normal activities of
a mutual fund). The proposed policy also would clarify that sales of portfolio
securities by the Funds that may be deemed to be an underwriting are not
prohibited.
The proposed fundamental investment policy on underwriting is set forth
below in italics followed by a brief explanation of the changes the proposal
would bring to each Fund's current fundamental investment underwriting policy.
The Boards believe it is in the best interests of each Fund and its shareholders
and beneficial owners to adopt the proposed fundamental underwriting policy in
lieu of its current fundamental investment policy.
PROPOSED NEW FUNDAMENTAL POLICY: [THE FUND MAY NOT] UNDERWRITE (AS THAT
TERM IS DEFINED IN THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"))
SECURITIES ISSUED BY OTHER PERSONS EXCEPT, TO THE EXTENT THAT IN CONNECTION WITH
THE DISPOSITION OF ITS ASSETS, THE FUND MAY BE DEEMED TO BE AN UNDERWRITER.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed policy would not
materially change CAF's, HYBT's, or MAT's investment policies regarding
underwriting, but make the language more succinct and uniform. The proposed
restriction does not materially change MMP's restriction on underwriting, but
merely clarifies that, for purposes of this restriction, it is permissible for
the Fund to be technically deemed an underwriter in connection with the
disposition of its assets.
13
<PAGE> 18
2. PROPOSAL TO REDESIGNATE (AND AMEND AS APPLICABLE) OR ELIMINATE CERTAIN
FUNDAMENTAL INVESTMENT POLICIES
ITEM 2.A. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON LIQUIDITY
The Boards have proposed that the fundamental investment policies on
purchasing unmarketable or illiquid securities be redesignated as operating
policies. If the proposed change is approved by shareholders, each Board has
approved adopting an operating policy that would: (1) allow the Fund to invest
up to 15% (10% for MMP) of its net assets in illiquid securities, and (2)
conform the Fund's operating policy in this area to one that is expected to
become standard for all the adviser's funds. CAF's, HYBT's and MAT's current
fundamental policies for illiquid securities limits each Fund to a maximum of
10% of its total assets, which is no longer required by the 1940 Act and SEC
interpretations. MMP's current policy restricts purchases only of repurchase
agreements with remaining maturities of more than seven days. The proposed
operating policy would permit the Funds (except MMP) to invest up to 15% (10%
for MMP) of its net assets, currently permissible under applicable SEC
interpretations, which should provide the Funds with greater flexibility in
responding to market and regulatory developments. Further, MMP's policy would be
consistent with current legal requirements.
As open-end investment companies, the Funds may not hold a significant
amount of illiquid securities because such securities may present valuation
problems, and it is possible the Funds could have difficulty satisfying
redemptions within seven days as required under the 1940 Act. In general, the
SEC defines an illiquid security as one that cannot be sold in the ordinary
course of business within seven days at approximately the value at which a Fund
has valued the security. Illiquid securities may include those securities with
legal or contractual restrictions on resale ("restricted securities") and
repurchase agreements with a duration of more than seven days.
In recognition of the increased size and liquidity of the institutional
markets for unregistered securities and in light of the importance of
institutional investors in the capital formation process, the SEC has adopted
rules, including Rule 144A under the 1933 Act, designed to further facilitate
efficient trading among institutional investors. These rules permit a broader
institutional trading market for securities subject to restriction on resale to
the general public. Since
14
<PAGE> 19
institutional markets are developing that trade in these securities, the Funds
are constrained by their current investment policies. Accordingly, the adviser
has recommended that the Funds' current fundamental policy be eliminated.
Further, the adviser has recommended that the Funds adopt operating policies
that would permit investing in illiquid securities to the extent permissible
under the 1940 Act and treating "restricted" securities that are nonetheless
liquid to be purchased without regard to the Funds' limit on illiquid
investments. Of course, the Funds would modify their operating policy to comply
with future regulatory and market developments.
If this proposal is approved by shareholders, the specific types of
securities that might be deemed to be illiquid would be determined from time to
time by the adviser under policies approved by the Boards, with reference to
legal, regulatory and market developments. By making the Funds' policies on
illiquid securities nonfundamental, the Funds would be able to respond more
quickly to market developments because no shareholder vote would be required to
redefine what types of securities may be deemed illiquid. In accordance with the
Funds' policies prohibiting the Funds from acting as underwriters, no Fund would
purchase restricted securities for the purpose of subsequent distribution in a
manner that would cause the Fund to be deemed an underwriter.
If adopted by shareholders, the new operating policy would allow the Funds
to invest up to 15% of its net assets in illiquid securities. The 15% limit for
CAF, HYBT, and MAT would be a higher percentage of illiquid securities than the
Funds are currently permitted (10%) and is the result of a 1992 liberalization
by the SEC regarding these securities. If the fundamental policy is changed to
an operating policy, the Funds would, without the necessity of any further
shareholder vote, be able to take advantage of any future changes in SEC policy
in this area.
The proposed operating policy is set forth below in italics followed by a
summary of the Funds' current fundamental investment policies on illiquid
(including "restricted") securities. The Boards believe it is in the best
interests of each Fund and its shareholders and beneficial owners to redesignate
and amend such policies as the proposed operating (nonfundamental) policy.
PROPOSED NEW OPERATING POLICY: [THE FUND MAY NOT] INVEST MORE THAN 15% (10%
FOR MMP) OF ITS NET ASSETS IN: (1) SECURITIES THAT CANNOT BE DISPOSED OF WITHIN
SEVEN DAYS AT THEIR THEN-CURRENT VALUE; (2) REPURCHASE AGREEMENTS NOT ENTITLING
THE HOLDER TO PAYMENT OF
15
<PAGE> 20
PRINCIPAL WITHIN SEVEN DAYS; AND (3) SECURITIES SUBJECT TO RESTRICTIONS ON THE
SALE OF THE SECURITIES TO THE PUBLIC WITHOUT REGISTRATION UNDER THE 1933 ACT
("RESTRICTED SECURITIES") THAT ARE NOT READILY MARKETABLE. THE FUND MAY TREAT
CERTAIN RESTRICTED SECURITIES AS LIQUID PURSUANT TO GUIDELINES ADOPTED BY THE
EACH FUND'S BOARD OF TRUSTEES.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed operating policy
would allow CAF, HYBT and MAT to invest up to 15% of its assets in illiquid or
restricted securities, rather than the current 10%, and its redesignation as an
operating policy would give the Funds more flexibility to respond to changing
market conditions. If adopted by shareholders , the new operating policy would
conform MMP's policy with current legal requirements. If the fundamental policy
is changed to the proposed operating policy, the Fund would, without the
necessity of any further shareholder vote, be able to respond to any future
changes in SEC rules or policy relative to money market funds.
ITEM 2.B PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON
INVESTMENTS TO EXERCISE CONTROL
The Boards recommend that the shareholders approve the redesignation of the
policies prohibiting purchasing securities for the purpose of exercising control
of the issuer from fundamental to operating policies. If the proposed change is
approved by shareholders, each Board has approved adopting operating policies
that would: (1) prohibit investing for the sole purpose of exercising control of
an issuer, and (2) conform each Fund's operating policy in this area to one that
is expected to become standard for all the adviser's funds to which this type of
restriction is appropriate.
The Funds currently have fundamental investment policies that prohibit them
from investing in securities for the purpose of exercising control over or
management of a company. In the past, this restriction was mandated by certain
state securities laws. However, as a result of the recent enactment of the
National Securities Market Improvement Act of 1996 ("NSMIA"), state law
restrictions on investment to exercise control or management no longer apply to
the Funds. In addition, the 1940 Act currently does not contain any equivalent
restrictions. The Boards, therefore, have concluded that it is in the best
interests of each Fund and its shareholders and owners indirectly invested in
the Fund to redesignate such policy as a nonfundamental operating policy.
16
<PAGE> 21
The proposed operating policy on investing to exercise control is set forth
below in italics. The Boards believe it is in the best interests of each Fund
and its shareholders and beneficial owners to redesignate the policy as an
operating (nonfundamental) policy and to adopt the proposed language.
PROPOSED NEW OPERATING POLICY: [THE FUND WILL NOT] MAKE INVESTMENTS FOR THE
PURPOSE OF EXERCISING CONTROL OF AN ISSUER. INVESTMENTS BY THE FUND IN ENTITIES
CREATED UNDER THE LAWS OF FOREIGN COUNTRIES SOLELY TO FACILITATE INVESTMENT IN
SECURITIES IN THAT COUNTRY WILL NOT BE DEEMED THE MAKING OF INVESTMENTS FOR THE
PURPOSE OF EXERCISING CONTROL.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: The proposed policy would not
cause any material changes to the Funds' current policies regarding investing to
exercise control. It would merely make their language uniform and clarify that
the Funds could invest in certain types of foreign pools created for
non-residents of that country without being deemed investing for the purpose of
exercising control.
ITEM 2.C. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON SHORT SALES
The Funds have fundamental investment policies limiting short sales of
securities. The Boards recommend that shareholders approve redesignating the
fundamental investment policies as operating policies.
In a short sale, an investor sells a borrowed security and has a
corresponding obligation to the lender to return the identical security. Under
the proposed operating policy, entering into short sales "against-the-box" would
not be deemed to be engaging in the strategy of short sales of securities. In a
short sale "against-the-box," a Fund could engage in short sales if it owned,
or, by virtue of its ownership of other securities, had the right to obtain,
securities equivalent in kind and amount to the securities sold short.
The Boards recommend that the shareholders redesignate the current
fundamental policies as operating policies and adopt the proposed new language.
The proposal is set forth below in italics followed by a summary of the Funds'
current fundamental investment policies on short sales of securities. The Boards
believe it is in the best interests of each Fund and its shareholders and
beneficial owners to
17
<PAGE> 22
redesignate the policy as an operating (nonfundamental) policy and to adopt the
proposed language.
PROPOSED NEW OPERATING POLICIES: [THE FUND WILL NOT] SELL SECURITIES SHORT,
UNLESS IT OWNS OR HAS THE RIGHT TO OBTAIN SECURITIES EQUIVALENT IN KIND AND
AMOUNT TO THE SECURITIES SOLD SHORT (SHORT SALES "AGAINST-THE-BOX"), AND
PROVIDED THAT TRANSACTIONS IN FUTURES CONTRACTS AND OPTIONS ARE NOT DEEMED TO
CONSTITUTE SELLING SECURITIES SHORT.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: Adoption of the proposed
operating policies would not materially change the substance of any of the
Funds' policies. It would merely clarify that sales "against the box" and
transactions in futures contracts and options, if any, are not considered short
sales.
ITEM 2.D. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON PURCHASING ON MARGIN
The Funds have fundamental investment policies limiting purchasing
securities on margin. Margin purchases involve the purchase of securities with
money borrowed from a broker. "Margin" is the cash or eligible securities that
the borrower places with its broker as collateral for the margin loan. The
Boards recommend that shareholders approve redesignating the fundamental
investment policies as operating policies. The purpose of the proposal is to
allow the Funds greater flexibility in responding to market and regulatory
developments by providing the Boards with the authority to make changes in the
respective Fund's policy on margin without further shareholder approval. The new
policy would also make the Funds' policies on margin uniform with the policies
of other funds managed by their adviser, allowing for more efficient management.
The Boards believe that standardized policies will assist the Funds and their
adviser in monitoring compliance with the various investment policies to which
the Funds are subject.
Set forth below is the proposed operating policy in italics followed by a
summary of the Funds' current fundamental investment policies on purchasing
securities on margin. The Boards believe it is in the best interests of each
Fund and its shareholders and beneficial owners to redesignate the policy as an
operating (nonfundamental) policy and to adopt the proposed language.
18
<PAGE> 23
PROPOSED NEW OPERATING POLICY: [THE FUND WILL NOT] PURCHASE SECURITIES ON
MARGIN, EXCEPT THAT THE FUND MAY USE SHORT-TERM CREDIT FOR THE CLEARANCE OF ITS
PORTFOLIO TRANSACTIONS, AND PROVIDED THAT INITIAL AND VARIATION MARGIN PAYMENTS
IN CONNECTION WITH FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS SHALL NOT
CONSTITUTE PURCHASING SECURITIES ON MARGIN.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: For CAF and MAT, the proposed
operating policy would eliminate the 5% restriction and clarify that initial and
variation margin payments in connection with futures contracts and options on
futures contracts do not constitute purchasing securities on margin for purposes
of this restriction. HYBT and MMP currently are prohibited from making any
purchases of securities on margin. The proposed operating policy would change
HYBT's and MMP's policies in that it would allow the Funds to use short-term
credit necessary to clear transactions and initial and variation margin payments
made in connection with any purchase and sale of futures contracts and options
on futures contracts.
ITEM 2.E. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON PLEDGING ASSETS
Each Fund has a fundamental policy on pledging assets. The Boards have
proposed that the policy be eliminated and replaced with an operating policy.
Restrictions on pledging assets were imposed under certain state securities
laws. As a result of the recent enactment of NSMIA, however, state law
restrictions on pledging no longer apply to the Funds. In addition, the 1940 Act
currently does not contain any specific restrictions on pledging, except
indirectly as it relates to "borrowings." The Boards do not anticipate that
redesignating the Funds' current fundamental investment policies on pledging
will result in a material change of the Funds' practices.
The new operating policy would allow each Fund to pledge its assets,
consistent with its current or proposed fundamental policy on borrowing and only
as it is permitted by the 1940 Act. The Boards believe it is advisable to
provide the Funds with greater flexibility in pursuing their investment
objectives and in responding to regulatory and market developments. The new
policy would also conform the Funds' policies on pledging its assets to one that
is expected to become standard for the Funds advised by the adviser. The Boards
believe that standard policies will assist the Funds and adviser in
19
<PAGE> 24
monitoring compliance with the various investment policies to which the Funds
are subject.
The proposed operating policy is set forth below in italics followed by a
summary of the Funds' current fundamental investment policy on pledging. The
Boards believe it is in the best interests of each Fund and its shareholders and
beneficial owners to redesignate the fundamental investment policy as an
operating policy and to adopt the proposed language.
PROPOSED NEW OPERATING POLICY: [THE FUND WILL NOT] PLEDGE ITS ASSETS EXCEPT
AS PERMITTED BY THE 1940 ACT.
CHANGES TO CURRENT FUNDAMENTAL POLICIES: Currently each Fund is restricted
to pledging assets to secure permitted borrowing in an amount that is a
percentage of the Funds assets. The proposed operating policy would eliminate
CAF's, HYBT's, and MAT's 10% and MMP's 15% restriction. Further, it would allow
them to pledge their assets consistent with their current or proposed
fundamental policies on borrowing and with what is permitted by the 1940 Act.
ITEM 2.F. PROPOSAL TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES ON
OIL, GAS AND MINERALS
CAF and MMP currently have fundamental investment policies prohibiting
investment in oil, gas and mineral leases and exploration and development
programs. In the past, this policy was imposed by certain state securities laws
and regulations. However, as the result of the recent enactment of NSMIA, these
state law restrictions no longer apply to the Funds. The 1940 Act currently does
not contain any equivalent restrictions. Moreover, this provision is redundant
because the fundamental investment restriction regarding physical commodities
exists under both the current and the proposed investment policies on
commodities. The Boards have concluded that it is in the best interests of each
Fund and its shareholders and owners indirectly invested in the Fund to
eliminate such policies.
ITEM 2.G. PROPOSAL TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES ON
"UNSEASONED ISSUERS"
CAF and MMP currently have fundamental investment policies that prohibit
them from investing in securities issued by a corporation that has not been in
continuous operation for three years (typically
20
<PAGE> 25
referred to as "unseasoned issuers"). This investment policy is based on
restrictions on investment in unseasoned issuers contained in certain state
securities laws and regulations. However, as a result of the recent enactment of
NSMIA, state law restrictions on permissible investments no longer apply to the
Funds. In addition, the 1940 Act currently does not contain any equivalent
restrictions. Their Boards, therefore, have concluded that it is in the best
interests of each Fund and its shareholders to eliminate the policy on
unseasoned issuers. In addition, the Boards believe that elimination of this
policy will increase the Funds' flexibility to invest in unseasoned issuers that
otherwise might meet its investment objectives and policies.
Securities of unseasoned issuers may be subject to greater risk than
securities of more established companies because unseasoned issuers have only a
brief operating history and may have more limited markets and financial
resources. However, the Boards believe that the increasing prevalence of
unseasoned issuers, the investment opportunities offered by such issuers, and
the fact that any such investments would be made in accordance with the
investment objectives and policies of the Funds warrants the elimination of the
current policy.
ITEM 2.H. PROPOSAL TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES ON
PUTS AND CALLS
MMP currently has a fundamental investment policy that prohibits it from
writing (i.e., selling) or purchasing put or call options or any combination
thereof. Options such as puts and calls are contracts giving the holder the
right to either buy or sell a financial instrument at a specified price before a
specified time. If the option is not exercised or sold, it becomes worthless at
its expiration date, and the premium payment is lost to the option holder. If a
mutual fund writes an option, it receives a premium that it keeps whether or not
the option is sold.
In the past, the Fund's current fundamental policy restricting writing or
purchasing puts and calls was a response to certain state securities laws and
regulations. However, as a result of the recent enactment of NSMIA, state law
restrictions on purchasing put or call options no longer apply to the Fund. In
addition, the 1940 Act currently does not require that such restriction be
fundamental. Moreover, the Board believes that allowing the Fund to utilize put
and call options would provide the Fund with an additional means of attempting
to hedge some of the risks associated with certain invest-
21
<PAGE> 26
ments, affording it greater flexibility in pursuing its investment objective.
The Board believes it in the best interest of MMP and its shareholders and
beneficial owners that the Fund be provided with greater flexibility in
responding to market and regulatory developments. It is proposed therefore that
MMP's fundamental policy restricting the use of these instruments be eliminated.
ITEM 2.I. PROPOSAL TO ELIMINATE FUNDAMENTAL INVESTMENT POLICY ON INVESTING
IN WARRANTS
CAF currently has a fundamental investment policy that limits the Fund's
investment in warrants to 5% of its total assets. Restrictions on purchasing
warrants were imposed under certain state securities laws. As a result of the
recent enactment of NSMIA, however, state law restrictions on purchasing
warrants no longer apply to the Fund. In addition, the 1940 Act currently does
not contain any specific restrictions on purchasing warrants. The Board,
therefore, has concluded that it is in the best interests of the Fund and its
shareholders and beneficial owners to eliminate the current policy on purchasing
warrants. The Board does not anticipate that eliminating the Fund's current
fundamental investment policies on warrants will result in a material change of
the Fund's practices.
ITEM 2.J. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICIES ON INVESTING IN THE SECURITIES OF OTHER INVESTMENT
COMPANIES
MMP's current policy prohibits it from investing in securities issued by
other investment companies, except in the case of a merger, consolidation or
reorganization. CAF, HYBT and MAT currently have fundamental investment policies
regarding investments in securities issued by other investment companies that
would not allow the Funds to invest in other investment companies for cash
management or other purposes, including use of a master-feeder or fund-of-funds
structure. While the 1940 Act limits the extent to which a mutual fund may
invest in other investment companies, it does not require the adoption of a
fundamental policy with respect to investment in other investment companies.
Further, the Funds' current fundamental policy are redundant to the 1940 Act in
that it merely recites prohibitions similar to those set forth in that Act with
respect to investments in other investment companies. The Boards believe that
the fundamental policy is unnecessary and should be eliminated and the standard
operating policy adopted instead. Moreover, the
22
<PAGE> 27
Boards believe that the 1940 Act provisions regarding investment in other
investment companies may change from time to time. The elimination of the
fundamental policy and adoption of the standard operating policy, therefore,
would permit the Funds maximum flexibility in responding to a changing
regulatory environment and, further, allow the Funds to adopt master-feeder or
fund-of-funds structures.
The Boards believe it is in the best interests of each Fund and its
shareholders and beneficial owners to eliminate the current fundamental policy
and restrictions on investment in other investment companies and to adopt the
following operating policy:
PROPOSED NEW OPERATING POLICY: [THE FUND MAY NOT] INVEST IN SECURITIES OF
ANOTHER INVESTMENT COMPANY, EXCEPT TO THE EXTENT PERMITTED BY THE 1940 ACT AND
RULES, REGULATIONS AND EXEMPTIVE ORDERS OF THE SECURITIES EXCHANGE COMMISSION.
CHANGES TO THE CURRENT POLICIES: The proposed operating policy would
eliminate unnecessary restrictions on CAF's, HYBT's and MAT's ability to respond
to a changing regulatory environment, and would allow each of the Funds to adopt
a master-feeder or fund-of-funds structure. CAF, HYBT, and MAT currently cannot
purchase the securities of any other investment company except in the open
market and at customary brokerage rates and in no event more than 3% of the
voting securities of any investment company. MAT may purchase securities of
another investment company in connection with a merger, consolidation, purchase
of assets or similar transaction approved by the Fund's shareholders.
ITEM 2.K. PROPOSAL TO REDESIGNATE AND AMEND THE FUNDAMENTAL INVESTMENT
POLICY ON MAXIMUM MATURITY OF INVESTMENTS TO COMPLY WITH RULE
2A-7
MMP's current fundamental policy prohibits it from purchasing any security
with a maturity date of more than one year. The 1940 Act and Rule 2a-7
thereunder provide requirements to govern the investments of all money market
funds. These requirements prescribe credit quality, diversification, and
maturity restrictions for all money market funds. MMP's current policy is
limited to only one aspect of the Rule, maturity, and limits the Fund to a
requirement that was changed by the SEC several years ago. Further, because the
Fund "holds itself out" as a money market fund, it must comply with the
23
<PAGE> 28
current requirements of the 1940 Act Rule 2a-7, whether or not those
requirements are incorporated in a policy.
The Board believes that the current fundamental policy is not only unduly
restrictive but also is unnecessary and should be eliminated. The Fund should
have an operating (nonfundamental) policy to comply with the requirements that
govern all money market funds and the standard operating policy adopted instead.
Moreover, the Board believes that the 1940 Act provisions regarding money market
funds may change from time to time. The elimination of the fundamental policy
and adoption of the standard operating policy, therefore, would permit the Fund
maximum flexibility in responding to a changing regulatory environment.
The Board believes it is in the best interests of the Fund and its
shareholders and beneficial owners to redesignate and amend the current
fundamental policy to comply with the requirements of the 1940 Act regarding
money market funds.
PROPOSED NEW OPERATING POLICY: THE FUND SHALL INVEST PURSUANT TO THE 1940
ACT AND RULE 2A-7 AND OTHER RULES GOVERNING INVESTMENTS OF MONEY MARKET FUNDS.
ITEM 2.L. PROPOSAL TO REDESIGNATE THE FUNDAMENTAL INVESTMENT POLICY ON
"CREDIT RATINGS OF ISSUERS"
MAT currently has a fundamental investment policy that prohibits it from
investing in securities rated below investment grade or more than 10% of its
assets invested in debt securities in securities rated lower than BBB by
Standard & Poor's Corporation ("S&P") or BAA by Moody's Investors Services
("Moody's"), or, if unrated, deemed comparable to such securities. This
investment policy is based on restrictions on investment in lower-rated issuers
contained in certain state securities laws and regulations. However, as a result
of the recent enactment of NSMIA, state law restrictions on permissible
investments no longer apply to the Fund. In addition, the 1940 Act currently
does not contain any equivalent restrictions. The investment adviser has
indicated that it would be desirable to use the ratings of an additional rating
agency, Fitch Investors Service, Inc. ("Fitch"). Further, rating agency ratings
are only one factor that contributes to the investment adviser's overall
evaluation of credit quality and safety of an issuer. The Board, therefore, has
concluded that it is in the best interests of the Fund and its shareholders to
redesignate as operational the policy on credit rating of issuers. In addition,
the Board
24
<PAGE> 29
believe that redesignating this policy will increase the Fund's flexibility to
invest in certain lower-rated issuers that otherwise might meet its investment
objectives, quality standards and policies.
Debt rated BB by S&P or Fitch or BA by Moody's is considered predominately
speculative regarding its capacity to pay interest and repay principal in
accordance with the terms of the debt. The investment adviser does not intend to
purchase this lower-quality debt except as a result of an independent quality
evaluation. The Board believes it is in the best interests of the Fund and its
shareholders and beneficial owners to redesignate the current fundamental policy
restricting credit ratings of issuers as an operating policy and adopt the
following operating policy:
PROPOSED NEW OPERATING POLICY: THE FUND NORMALLY DOES NOT PURCHASE ANY
SECURITIES RATED B OR LOWER AND, OF THE PORTION OF ITS TOTAL ASSETS INVESTED IN
DEBT SECURITIES, DOES NOT PURCHASE MORE THAN 10% IN SECURITIES RATED BB BY S&P
OR FITCH OR BA BY MOODY'S.
ITEM 2.M. PROPOSAL TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES ON
SECURITIES IN WHICH MANAGEMENT HOLDS INTERESTS
CAF, HYBT and MMP currently have fundamental investment policies that
generally prohibit them from investing in securities in which the officers,
trustees or directors of the adviser or its affiliates hold "substantial"
investments. This investment policy is based on restrictions on investments
contained in certain state securities laws and regulations. However, as a result
of the recent enactment of NSMIA, state law restrictions on permissible
investments no longer apply to the Funds. In addition, the 1940 Act currently
does not contain any equivalent restrictions. The Funds, however, are subject to
certain disclosure requirements with regard to such investments. Their Boards,
therefore, have concluded that it is in the best interests of each Fund and its
shareholders to eliminate the policy on these issuers. In addition, the Boards
believe that elimination of this policy will increase the Funds' flexibility to
invest in issuers that otherwise might meet its investment objectives and
policies. The Board does not anticipate that eliminating the Funds' current
fundamental investment policies on these securities will result in a material
change of the Funds' practices.
25
<PAGE> 30
3. PROPOSAL TO AMEND CERTAIN FUNDAMENTAL INVESTMENT POLICIES TO PERMIT EACH
FUND TO INVEST ALL OR A PORTION OF ITS ASSETS IN ONE OR MORE INVESTMENT
COMPANIES AND RELATED AMENDMENTS TO THE FUND'S ADVISORY AGREEMENT
Approval of this Proposal would enable a Fund, with the approval of its
Boards, at some future time to invest its assets in a master-feeder or
fund-of-funds structure. None of the Funds currently intends to convert to
either a master-feeder or fund-of-funds structure. In a master-feeder structure,
a fund seeks to achieve its investment objective by investing in a single
investment company having substantially the same investment objective, policies
and risk profile as the Fund. In a fund-of-funds structure, a Fund diversifies
its assets by investing in two or more investment companies, each with a
different investment objective, policies and risk profiles. A Fund investing in
either a master-feeder or fund-of-funds structure would continue to pursue its
current investment objective through investment in one or more investment
companies, referred to as "Master Portfolios." The Master Portfolio in turn
would invest directly in the securities of individual issuers. A Fund investing
in one or more Master Portfolios is referred to as a "Feeder Fund."
The following illustration compares a traditional mutual fund structure
(where a Fund invests directly in portfolio securities) with a master-feeder and
a fund-of-funds structure.
26
<PAGE> 31
[INVESTMENTS CHART]
The primary reason to use a master-feeder or fund-of-funds structure would
be to provide a mechanism to pool, in a single Master Portfolio, the common
investments of a number of Feeder Funds and potentially other direct investors
in the Master Portfolio. After approval of this Proposal and a subsequent Board
determination to implement the policies described herein (which is not currently
proposed), the assets of more than one Feeder Fund could be pooled in each
Master Portfolio. That pooling of assets is designed to create a larger asset
base for each Feeder Fund in order to provide investment and administrative
efficiencies and enhanced portfolio diversification. See "Board Evaluation"
below. There can be no assurance that any Fund's total expenses would be reduced
as a result of the Fund's investment in a master-feeder or fund-of-funds
structure.
Approval by shareholders of a Fund of this Proposal will permit that Fund
to convert in the future to a master-feeder or fund-of-funds structure or
otherwise invest all or a portion of its investable assets in one or more
investment companies to the extent permitted by law.
Specifically, approval of this Proposal by Fund shareholders would permit a
Fund, solely with each Boards approval at some future time, to use a
master-feeder or fund-of-funds structure. It would amend that Fund's fundamental
investment policies regarding
27
<PAGE> 32
diversification, concentration and/or investment in the securities of other
investment companies. The amendments would clarify that the diversification and
concentration policies of a Fund operating in a master-feeder or fund-of-funds
structure apply to the portfolio securities of the Master Portfolios in which
the Fund invests rather than to the interests in the Master Portfolios held by
the Fund. These amendments are discussed in detail below under "Amendments to
Investment Policies."
Approval of this Proposal by a Fund also would amend that Fund's investment
advisory agreement, for a Fund using a master-feeder or fund-of-funds structure,
to eliminate the payment by a Feeder Fund of advisory fees for portfolio
management on assets invested in a Master Portfolio.
Upon approval of this Proposal, a Fund could convert to a master-feeder or
fund-of-funds structure solely upon the Boards' determination that the
conversion is in the best interests of the Fund and its shareholders. A Fund
would provide shareholders prior notice of a conversion. The Boards would retain
the right to withdraw a Fund's investment in a Master Portfolio at any time, and
the Fund could thereafter resume investing directly in individual securities or
could re-invest its assets in another Master Portfolio.
The conversion to a master-feeder or fund-of-funds structure would be
accomplished by transferring each converting Fund's assets to the appropriate
Master Portfolio in exchange for an interest in the Master Portfolio equal in
value to the assets transferred. Each converting Fund's assets would be
transferred in kind to the Master Portfolio(s) and valued in accordance with the
Fund's normal valuation procedures. The conversion would not affect the net
asset value of the shares of a Fund. All costs of the conversions would be borne
by the Fund or Funds involved.
MASTER-FEEDER AND FUND-OF-FUNDS STRUCTURES
Each Master Portfolio would be a separate series of a registered, open-end
management investment company that was formed as a business trust under Delaware
law. Each master-feeder or fund-of-funds structure and its corresponding risks
are described separately below. Aspects of the two structures that are similar
are described below under "Common Aspects of the Master-Feeder or Fund-of-Funds
Structures."
28
<PAGE> 33
MASTER-FEEDER
In a master-feeder structure, a Feeder Fund holds as its primary asset an
interest in a Master Portfolio with substantially the same investment objective,
policies and risk profile as the Fund. In addition, to the extent necessary to
manage cash balances, a Feeder Fund may invest directly in cash and cash
equivalents. The Fund would otherwise continue its normal operations. The
structure is designed to achieve investment and administrative efficiencies and
enhanced portfolio diversification by allowing a Fund to pool its assets with
the assets of other entities invested in the Master Portfolio.
When required under the 1940 Act, a Master Portfolio will hold a meeting of
interestholders in order to obtain their approval of a change to the Portfolio's
operations. As an interestholder of a Master Portfolio, a Feeder Fund would be
entitled to vote in proportion to the Fund's relative interest in the Master
Portfolio. If required by the 1940 Act or applicable state law, a Fund investing
through a master-feeder structure will hold a meeting of its shareholders to
obtain instructions on how to vote its interest in the Master Portfolio and will
vote its interest in the Master Portfolio in proportion to the votes cast by the
Fund's shareholders or may, under certain circumstances, without a meeting of
shareholders vote its interests in the Master Portfolio in proportion to the
votes cast by the outside interestholders. In other circumstances, the Boards
will vote the Feeder Fund's interest in the Master Portfolio in accordance with
the best interests of the Fund's shareholders.
Subject to applicable legal requirements, the Feeder Fund will not seek
instructions from its shareholders with respect to: (1) any proposal relating to
a Master Portfolio that, if made with respect to the Fund, would not require the
vote of Fund shareholders; or (2) any proposal relating to the Master Portfolio
that is substantially the same as a proposal previously approved by the Fund's
shareholders.
FUND-OF-FUNDS
In a fund-of-funds structure, a Feeder Fund holds interests in two or more
Master Portfolios and, to the extent it manages a portion of its assets
directly, individual securities of other issuers. The Fund would otherwise
continue its normal operations. A Fund might invest in a number of different
Master Portfolios to achieve investment and administrative efficiencies and
enhanced portfolio diversification by
29
<PAGE> 34
pooling its assets with the assets of other entities invested in the Master
Portfolios.
In general, the fund-of-funds structure is suitable for a Feeder Fund that
follows a "multi-style" investment approach. That approach involves the
investment, through percentage allocations consistent with the Fund's investment
objective and policies, in a number of Master Portfolios, each with a different
investment objective and investment policies. The "multi-style" approach is
intended to increase asset diversification and to reduce the risk of relying on
a single investment style. A Fund would convert to a fund-of-funds structure if
the Boards were to determine that it was in the best interests of the Fund to
follow a "multi-style" investment approach in which the Fund's assets would be
allocated among several Master Portfolios.
A Feeder Fund's investments in the investment styles and Master Portfolios
would be viewed by the adviser as no different from investments made directly by
the adviser on behalf of a Fund in portfolio securities. Accordingly, consistent
with a Feeder Fund's investment objective and policies, the adviser would be
able to make changes in the percentage allocations at any time it deemed
appropriate, including in response to market or other conditions. The adviser
also would rebalance periodically the investments among the Master Portfolios to
ensure that the Fund continued to operate in accordance with any target
percentage allocations.
When business or financial conditions warrant, a Feeder Fund might assume a
temporary defensive position and directly invest without limit in cash or
prime-quality cash equivalents. During periods when and to the extent that a
Feeder Fund assumes a temporary defensive position, the Fund's assets could be
invested outside of the specified ranges.
If a Master Portfolio holds a meeting of interestholders, for instance to
obtain their approval of a change in the Portfolio's operations or investment
advisory agreement, a Feeder Fund, as an interestholder of a Master Portfolio,
would be entitled to vote in proportion to its relative interest in the Master
Portfolio. A Feeder Fund investing through a fund-of-funds structure would not,
in general, hold a shareholder meeting when a Master Portfolio is conducting a
meeting of its interestholders. As with any direct investment in securities, the
Boards would vote the Fund's interests in the Master Portfolio in the best
interests of the shareholders of the Fund.
30
<PAGE> 35
COMMON ASPECTS OF THE MASTER-FEEDER AND FUND-OF-FUNDS STRUCTURES
A Fund would invest in a Master Portfolio on the same terms and conditions
as any other investor in the Master Portfolio and would bear a proportionate
share of the Master Portfolio's expenses.
The Master Portfolios generally offer their shares only to institutional or
other qualified shareholders. Other pooled investment vehicles that invest in
the Master Portfolio, including other mutual funds, might be marketed in
different ways than those used by a particular Feeder Fund or to different types
of investors than those investing in that Feeder Fund. Another mutual fund
investing in a Master Portfolio might sell fund shares to the general public at
a different public offering price than the Funds' shares and could have
different fees and expenses than the Funds. Also, other investors in a Master
Portfolio may have different yields and returns than those of a particular
Feeder Fund.
If there are other investors in a Master Portfolio, there could be no
assurance that a vote of all the interestholders of the Master Portfolio would
result in the same outcome as a vote of the shareholders of the Feeder Fund. If
the outcome of a Master Portfolio vote were not consistent with the vote of the
Fund shareholders, the Boards would consider whether it was still in the best
interests of the Fund and its shareholders to invest in the Master Portfolio.
The Boards would retain the right to redeem a Feeder Fund's investment in a
Master Portfolio at any time if the Boards were to determine that it is in the
best interests of the Fund and its shareholders to do so. A Fund might redeem,
for example, if the outcome of a vote of the interestholders of a Master
Portfolio were not acceptable to the Boards. A redemption could result in an
in-kind distribution of portfolio securities (as opposed to a cash distribution)
to the Fund by the Master Portfolio.
If a Feeder Fund were to withdraw its investment from a Master Portfolio,
the Boards would consider what action should be taken to manage the withdrawn
assets. Possible actions could include management of the Fund's assets in
accordance with its investment objectives and policies by its adviser (and/or
named subadvisers) or investment of the assets in another Master Portfolio. The
inability of a Fund to find a suitable replacement investment(s) could have a
significant impact on Fund shareholders.
31
<PAGE> 36
A Feeder Fund's investments in a Master Portfolio could be affected by the
actions of other large investors in the Master Portfolio. If, for example, a
Master Portfolio had another large investor that redeemed its interest in the
Master Portfolio, the Fund and the Master Portfolio's remaining investors could
experience higher pro rata operating expenses and resulting lower returns.
Investment of a Feeder Fund's assets in a Master Portfolio would affect the
Fund's current arrangements for management and administrative services. As a
result of the investment, some services would be provided by the service
providers of the relevant Master Portfolio while others would continue to be
provided directly to the Fund. Except as described in this Proxy Statement, the
overall rate at which a Fund would bear costs for the provision of investment
advisory and other services would remain unchanged.
TAX CONSEQUENCES
Management of the Trust would proceed with a conversion to a master-feeder
or fund-of-funds structure only upon receipt of an opinion of counsel to the
effect that neither a contribution of the Feeder Fund's assets to a Master
Portfolio in exchange for an interest in the Master Portfolio nor a withdrawal
of a Fund's assets (at that time) from a Master Portfolio would result in the
recognition of gain or loss to the Fund for federal income tax purposes.
Each Fund currently qualifies for treatment as a regulated investment
company under the Internal Revenue Code of 1986. As such, a Fund does not pay
federal income or excise taxes to the extent that it distributes to shareholders
its net investment income and any net realized capital gain at certain times.
The Funds are not liable for any income, corporate excise, or franchise taxes in
the Commonwealth of Massachusetts. Each Master Portfolio in which a Fund would
invest would conduct its operations in a manner such that any Fund so invested
would qualify for treatment as a regulated investment company.
A Master Portfolio would not be required to pay federal income taxes on its
net investment income and capital gains, as it would be structured for treatment
as a partnership for federal income tax purposes. All of a Master Portfolio's
interest, dividends and gains and losses would be deemed to have been "passed
through" to the respective Feeder Funds in proportion to each Fund's holdings of
the Master Portfolio, regardless of whether such interests, dividends or
32
<PAGE> 37
gains were distributed by the Portfolio or losses were realized by the
Portfolio.
AMENDMENTS TO THE ADVISORY AGREEMENTS
Approval of this Proposal constitutes approval of changes to the investment
advisory agreements between an adviser and the Trust on behalf of the Funds (the
"Advisory Agreements"). A provision would be added to each agreement that would
prohibit duplicative payment at the Feeder Fund level of an advisory fee for
investment management services if Fund assets were invested in a Master
Portfolio.
AMENDMENTS TO INVESTMENT POLICIES
Upon approval of this Proposal by the shareholders of each Fund, the Fund
would amend its fundamental investment policies regarding diversification and
concentration that otherwise would be inconsistent with the conversion of the
Fund to a master-feeder or fund-of-funds structure. The amendments described
below would not in any other way affect the manner in which a Fund currently
operates. The Funds' new (or current, as the case may be) diversification and
concentration policies, which are set forth in Appendices A and B to this Proxy
Statement, would be superseded or supplemented by the policies stated above.
EFFECTS ON THE FUNDS
Approval of this Proposal would affect the Funds in the following ways.
Currently, all Funds are not permitted to invest using either a master-feeder or
fund-of-funds structure. Upon approval of this Proposal, all Funds would be
permitted, in the future, subject to the Boards' approval, to invest using a
master-feeder or fund-of-funds structure without obtaining shareholder approval
at that time. None of these Funds, however, currently intend to convert to
either master-feeder or fund-of-funds structure.
Shareholders of each Fund are requested to approve this Item to: (1) permit
the Fund to convert in the future to a master-feeder or fund-of-funds structure
subject only each Boards approval at that time; (2) approve the amendments to
the Investment Advisory Agreements; and, (3) standardize the Funds' investment
policies with respect to master-feeder or fund-of-fund structures.
33
<PAGE> 38
BOARD EVALUATION
In considering the matters described in this Proposal at the Meeting, the
Boards considered each Fund, including generally the potential benefits, costs
and risks, as presented to the Boards by The Travelers, of a possible future
conversion to a master-feeder or fund-of-funds structure. In this regard, the
Boards considered the following:
- The possibility that a Fund using a master-feeder or fund-of-funds
structure could achieve greater investment and administrative
efficiencies and potentially enhanced portfolio diversification than it
could realize if it did not so convert. The Boards considered that to the
extent certain operating costs may be fixed and are currently borne by a
Fund alone, these expenses could instead be borne in whole or in part
directly by a Master Portfolio and indirectly shared pro rata by the Fund
and other investors in the Fund's Master Portfolio.
- The agreement of advisers to waive fees and/or reimburse expenses so as
to maintain the total combined operating expenses of the Master
Portfolios for the first fiscal year following conversion to a
master-feeder structure at the same levels as each Fund's total operating
expenses prior to the conversion.
- The fact that a larger asset base might allow the purchase of investment
securities by a Master Portfolio in larger denominations, resulting in
possible reductions in certain transactional and custodial expenses.
- The diversification that might be achieved by investing in a portfolio
with a larger asset base. Greater diversification is beneficial to
shareholders of a Fund because it may reduce the negative effect of the
adverse performance of any one security on the performance of the entire
investment portfolio.
- The flexibility both to attract and retain assets under management
provided by a master-feeder or fund-of-funds structure.
- The fact that in certain cases the foregoing benefits would likely arise
only if a Fund's Master Portfolio were to attract the assets of investors
other than those currently investing in the Fund; and, that there could
be no assurance that expense savings or other benefits would be realized
even if other investors were to invest in a Master Portfolio.
34
<PAGE> 39
- Management of the Trust's opinion that over time the aggregate per share
expenses of a Fund investing in a Master Portfolio should not be more
than the expenses that would be incurred by a Fund if it continues to
invest directly in securities, although there can be no assurance that
any expense savings would be realized.
- The possibility that the advisers and The Travelers might benefit through
increased economies of scale in the event that assets under management
rise, whether or not there would be a corresponding benefit to Fund
shareholders; particularly, that conversion to a master-feeder or
fund-of-funds structure may enable TAMIC to increase assets under
management through development of new feeder funds with less risk than
would be possible without this structure. Because investors in a new
feeder fund would invest their assets in a Master Portfolio with an
established performance record, TAMIC could attract assets with less risk
of limited success than is typical in the early, developmental years of
an investment vehicle.
Based on the foregoing, each Board, including a majority of the independent
trustees, determined that it would be in the best interests of each Fund and its
respective shareholders for shareholders to approve this Proposal.
OTHER BUSINESS
The management of the Funds knows of no other business that may come before
the meeting. However, if any additional matters are properly presented at the
meeting, it is intended that the persons named in the enclosed proxy, or their
substitutes, will vote such proxy in accordance with their judgment on such
matters.
GENERAL INFORMATION
As of March 1, 1999, there were 13,261,512.622 shares of beneficial
interest of CAF outstanding, 2,848,393.806 shares of beneficial interest of HYBT
outstanding, 14,142,760.347 shares of beneficial interest of MAT outstanding,
and 46,644,406.280 shares of beneficial interest of MMP outstanding.
A copy of each Fund's Annual Shareholder Report or the year ended December
31, 1998, including financial statements, has been mailed to shareholders of
record at the close of business on that date and to persons who became
shareholders of record between that
35
<PAGE> 40
time and the close of business on March 1, 1999, the record date for the
determination of the shareholders who are entitled to be notified of and to vote
at the meeting.
SHAREHOLDER PROPOSALS
The Funds do not have annual or any other regularly scheduled meetings of
Shareholders, and currently have no plans to hold another meeting of
Shareholders of the Funds. Special Meetings of the Shareholders may be called by
the Trustees upon the written request of Shareholders owning at least 25% of the
outstanding Shares entitled to vote and such written Shareholders request must
be received by the Funds' Secretary at One Tower Square, Hartford, Connecticut
06183 within a reasonable time before the solicitation is made.
It is suggested that beneficial Shareholders submit their proposals by
Certified Mail -- Return Receipt Requested by December 31, 1999. The Securities
and Exchange Commission has adopted certain requirements which apply to any
proposals of Shareholders.
THE INVESTMENT ADVISER
Travelers Asset Management International Corporation, One Tower Square,
Hartford, Connecticut serves as investment adviser to the Funds pursuant to an
Investment Advisory Agreement.
THE FUND'S ADMINISTRATION
Travelers Insurance, One Tower Square, Hartford, Connecticut 06183, is the
administrator of the Funds. Travelers has entered into a subadministrative
contract with an affiliate, SSBC Fund Management Inc., to provide these services
to the Funds.
36
<PAGE> 41
OFFICERS OF THE FUNDS
<TABLE>
<CAPTION>
POSITION HELD
NAME TITLE SINCE
---- ----- -------------
<S> <C> <C>
Heath B. McLendon Chairman and President January 27, 1995
Ernest J. Wright Secretary October 21, 1994
Kathleen A. McGah Assistant Secretary January 27, 1995
Lewis E. Daidone Treasurer October 25, 1996
Irving David Controller October 25, 1996
Barbara Brinn Assistant Controller October 25, 1996
Marianne Motley Assistant Treasurer October 25, 1996
</TABLE>
37
<PAGE> 42
APPENDIX A
PROPOSED FUNDAMENTAL INVESTMENT POLICIES
Subject to shareholder approval at a meeting held April 30, 1999, the Fund
adopted the following investment policies as fundamental (those that may not be
changed without shareholder approval). The Fund may not:
1. DIVERSIFICATION: with respect to 75% of its assets, purchase a security
other than a security issued or guaranteed by the U.S. Government, its agencies
or instrumentalities or a security of an investment company if, as a result,
more than 5% of the Fund's total assets would be invested in the securities of a
single issuer or the Fund would own more than 10% of the outstanding voting
securities of any single issuer.
2. INDUSTRY CONCENTRATION: purchase a security if, as a result, more than
25% of the Fund's total assets would be invested in securities of issuers
conducting their principal business activities in the same industry. For
purposes of this limitation, there is no limit on: (1) investments in U. S.
government securities, in repurchase agreements covering U. S. government
securities, in securities issued by the states, territories or possessions of
the United States ("municipal securities") or in foreign government securities;
or (2) investment in issuers domiciled in a single jurisdiction. Notwithstanding
anything to the contrary, to the extent permitted by the 1940 Act, the Fund may
invest in one or more investment companies; provided that, except to the extent
that it invests in other investment companies pursuant to Section 12(d)(1)(A) of
the 1940 Act, the Fund treats the assets of the investment companies in which it
invests as its own for purposes of this policy.
3. BORROWING: borrow money if, as a result, outstanding borrowings would
exceed an amount equal to one-third of the Fund's total assets.
4. REAL ESTATE: purchase or sell real estate unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business).
5. LENDING: make loans to other parties if, as a result, more than
one-third of its total assets would be loaned to other parties. For purposes of
this limitation, entering into repurchase agreements,
A-1
<PAGE> 43
lending securities and acquiring any debt security are not deemed to be the
making of loans.
6. COMMODITIES: purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments (but this shall not
prevent the Fund from purchasing or selling options and futures contracts or
from investing in securities or other instruments backed by physical
commodities).
7. UNDERWRITING: underwrite (as that term is defined in the 1933 Act)
securities issued by other persons except, to the extent that in connection with
the disposition of its assets, the Fund may be deemed to be an underwriter.
8. SENIOR SECURITIES: issue any class of senior securities except to the
extent consistent with the 1940 Act.
PROPOSED OPERATING (NONFUNDAMENTAL) POLICIES
The following investment policies are operating (nonfundamental) policies
with which the Fund (except as noted) currently complies:
1. BORROWING: for purpose of the borrowing limitation, the following are
not treated as borrowings to the extent they are fully collateralized: (1) the
delayed delivery of purchased securities (such as the purchase of when-issued
securities); (2) reverse repurchase agreements; (3) dollar-roll transactions;
and (5) the lending of securities ("leverage transactions"). (See Fundamental
Limitation No. 3 "Borrowing".)
2. LIQUIDITY: The Fund will not invest more than 15% (10% for Money Market
Portfolio) of its net assets in: (1) securities that cannot be disposed of
within seven days at their then-current value; (2) repurchase agreements not
entitling the holder to payment of principal within seven days; and, (3)
securities subject to policies on the sale of the securities to the public
without registration under the 1933 Act ("restricted securities") that are not
readily marketable. The Fund may treat certain restricted securities as liquid
pursuant to guidelines adopted by the Fund's Board of Trustees.
3. EXERCISING CONTROL OF ISSUERS: The Fund will not make investments for
the purpose of exercising control of an issuer. Investments by the Fund in
entities created under the laws of foreign countries solely to facilitate
investment in securities in that country will not be
A-2
<PAGE> 44
deemed the making of investments for the purpose of exercising control.
4. OTHER INVESTMENT COMPANIES: The Fund will not invest in securities of
another investment company, except to the extent permitted by the 1940 Act.
5. SHORT SALES: The Fund will not sell securities short, unless it owns or
has the right to obtain securities equivalent in kind and amount to the
securities sold short (short sales "against-the-box"), provided that
transactions in futures contracts and options are not deemed to constitute
selling securities short.
6. PURCHASING ON MARGIN: The Fund will not purchase securities on margin,
except that the Fund may use short-term credit for the clearance of its
portfolio transactions, and provided that initial and variation margin payments
in connection with futures contracts and options on futures contracts shall not
constitute purchasing securities on margin.
7. LENDING: The Fund will not lend a security if, as a result, the amount
of loaned securities would exceed an amount equal to one-third of the Fund's
total assets.
A-3
<PAGE> 45
APPENDIX B
CAPITAL APPRECIATION FUND
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund will not:
(1) invest more than 5% of its total assets, computed at market value, in
the securities of any one issuer;
(2) invest in more than 10% of any class of securities of any one issuer;
(3) invest more than 5% of the value of its total assets in companies
which have been in operation for less than three years;
(4) borrow money, except to facilitate redemptions or for emergency or
extraordinary purposes and then only from banks and in amounts of up
to 10% of its gross assets computed at cost; while outstanding, a
borrowing may not exceed one-third of the value of the Fund's net
assets, including the amount borrowed; the Fund has no intention of
attempting to increase its net income by means of borrowing and all
borrowings will be repaid before additional investments are made;
assets pledged to secure borrowings shall be no more than the lesser
of the amount borrowed or 10% of the Fund's gross assets computed at
cost;
(5) underwrite securities, except that the Fund may purchase securities
from issuers thereof or others and dispose of such securities in a
manner consistent with its other investment policies; in the
disposition of restricted securities the Fund may be deemed to be an
underwriter, as defined in the Securities Act of 1933 (the "1933
Act");
(6) purchase real estate investment trusts that deal in real estate or
interests therein, or commodities or commodity contracts, except
transactions involving financial futures in order to limit
transactions and borrowing costs, and for hedging purposes;
(7) invest for the primary purpose of control or management;
(8) make margin purchases or short sales of securities, except that the
Fund may place up to 5% of the value of its net
B-1
<PAGE> 46
assets in total margin deposits for positions in futures contracts;
(9) make loans, except that the Fund may purchase money market securities,
buy publicly and privately distributed debt securities and lend
limited amounts of its portfolio securities to broker-dealers; all
such investments must be consistent with the Fund's investment
objective and policies;
(10) invest more than 25% of its total assets in the securities of issuers
in any single industry;
(11) purchase the securities of any other investment company except in the
open market and at customary brokerage rates and in no event more than
3% of the voting securities of any investment company;
(12) invest in interests in oil, gas or other mineral exploration or
development programs;
(13) invest more than 5% of its net assets in warrants, valued at the lower
of cost or market; warrants acquired by the Fund in units or attached
to securities will be deemed to be without value with regard to this
restriction. The Fund is subject to restrictions in the sale of
portfolio securities to, and in its purchase or retention of
securities of, companies in which the management personnel of The
Travelers Investment Management Company Inc. ("TIMCO") have a
substantial interest; or
(14) invest in an amount of up to 10% of the value of the Fund's net assets
in restricted securities which may not be publicly sold without
registration under the 1933 Act.
B-2
<PAGE> 47
HIGH YIELD BOND TRUST
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund will not:
1. invest more than 5% of its total assets in any one issuer with regard
to 85% of the Fund's assets;
2. invest in more than 10% of any class of securities (as defined in the
Declaration of Trust) of any one issuer;
3. borrow money, except to facilitate redemptions or for emergency or
extraordinary purposes and then only from banks and in amounts of up to
10% of its gross assets computed at cost; while outstanding, according
to the 1940 Act, a borrowing may not exceed one-third of the value of
the Fund's net assets, including the amount borrowed; the Fund has no
intention of attempting to increase its net income by borrowing and all
borrowings will be repaid before additional investments are made;
assets pledged to secure borrowings shall be no more than the lesser of
the amount borrowed or 10% of the Fund's gross assets computed at cost;
4. underwrite securities, except that the Fund may purchase securities
from issuers thereof or others and dispose of such securities in a
manner consistent with its other investment policies; in the
disposition of restricted securities the Fund may be deemed to be an
underwriter, as defined in the Securities Act of 1933;
5. purchase real estate or interests in real estate, except through the
purchase of securities of a type commonly purchased by financial
institutions which do not include direct interests in real estate or
mortgages, or commodities or commodity contracts;
6. invest for the primary purpose of control or management;
7. make margin purchases or short sales of securities;
8. make loans, except that the Fund may purchase money market securities,
buy publicly and privately distributed debt securities and lend limited
amounts of its portfolio securities to broker-dealers; all such
investments must be consistent with the Fund's investment objective and
policies;
B-3
<PAGE> 48
10. invest more than 25% of its total assets in the securities of issuers
in any single industry;
11. purchase the securities of any other investment company except in the
open market and at customary brokerage rates and in no event more than
3% of the voting securities of any investment company. When consistent
with its investment objectives, the Fund may purchase securities of
brokers, dealers, underwriters or investment advisers. The Fund is
subject to restrictions in the sale of portfolio securities to, and in
its purchase or retention of securities of, companies in which the
management personnel of the Fund's adviser have a substantial interest;
or
12. invest more than 10% of the value of the Fund's net assets in illiquid
securities.
B-4
<PAGE> 49
MANAGED ASSETS TRUST
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund will not:
(1) purchase any securities which are rated lower than BBB by S&P, BAA by
Moody's or, if unrated by such services, are, in TAMIC's opinion, of
equivalent quality, if as a result more than 10% of the Fund's assets
which are invested in debt securities would be invested in such
securities; or purchase any debt securities rated B or lower by either
service or their equivalent;
(2) purchase any securities (other than securities issued by the U.S.
Government, its agencies or instrumentalities or securities which are
backed by the full faith and credit of the United States) of any
issuer if as a result more than 5% of its total assets would be
invested in the securities of the issuer, except that up to 25% of its
total assets may be invested without regard to this 5% limitation;
(3) invest in securities of a single issuer if, as a result, the Fund owns
more than 10% of the outstanding voting securities of such issuer;
(4) borrow money, except from banks as a temporary measure in an amount
not to exceed 10% of its total assets to facilitate redemptions or for
emergency or extraordinary purposes, and any such borrowings will be
repaid before additional investments are made;
(5) pledge assets, except to secure indebtedness permitted by restriction
(4) above and in amounts not in excess of the lesser of the dollar
amounts borrowed or 10% of the Fund's total assets;
(6) underwrite securities of other issuers, except that the Fund may
purchase securities from the issuer thereof or others and dispose of
such securities in a manner consistent with its investment objective
and policies;
(7) purchase or sell real estate, except that the Fund may invest in
securities secured by real estate or interests therein or issued by
companies, including real estate investment trusts, which invest in
real estate or interests therein;
B-5
<PAGE> 50
(8) purchase or sell commodities or commodity contracts, except
transactions involving financial futures contracts in order to limit
transaction and borrowing costs and for hedging purposes;
(9) invest for the purpose of control or management;
(10) purchase securities on margin, except that the Fund may obtain such
short term credits as may be necessary for the clearance of purchases
and sales of securities and place up to 5% of the value of its net
assets in total margin deposits for positions in futures contracts;
(11) make short sales of securities or maintain short positions;
(12) make loans, except that the Fund may purchase or hold debt obligations
and repurchase agreements in a manner consistent with its investment
objective and restrictions;
(13) purchase any security if as a result more than 25% of its total assets
would be invested in a single industry;
(14) purchase securities of other investment companies, except in the open
market and at customary brokerage rates and in no event more than 3%
of the voting securities of any investment company or in connection
with a merger, consolidation, purchase of assets or similar
transaction approved by the Fund's shareholders; or
(15) invest more than 10% of its total assets in illiquid securities.
B-6
<PAGE> 51
MONEY MARKET PORTFOLIO
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
The Fund will not:
(1) purchase any security which has a maturity date more than one year
from the date of the Fund's purchase;
(2) invest more than 25% of its assets in the securities of issuers in any
single industry, exclusive of securities issued by banks or securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities;
(3) invest more than 5% of its assets in the securities of any one issuer,
other than securities issued or guaranteed by the U.S. Government.
However, the Fund may invest up to 25% of its total assets in first
tier securities, as defined in Rule 2a-7, of a single issuer for a
period of up to three business days after the purchase thereof.
(4) invest in more than 10% of the outstanding securities of any one
issuer, exclusive of securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities;
(5) borrow money except from banks on a temporary basis in an aggregate
amount not to exceed one-third of the Fund's assets, including the
amount borrowed, and to be used exclusively to facilitate the orderly
maturation and sale of portfolio securities during any periods of
abnormally heavy redemption requests, if they should occur; such
borrowings may not be used to purchase investments, and the Fund will
not purchase any investments while any such borrowings exist;
(6) pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities owned or held by the Fund except as may
be necessary in connection with any borrowing mentioned above and in
an aggregate amount not to exceed 15% of the Fund's assets;
(7) make loans, provided that the Fund may purchase money market
securities or enter into repurchase agreements;
(8) enter into repurchase agreements if, as a result thereof, more than
10% of the Fund's assets would be subject to repurchase agreements
maturing in more than seven days;
B-7
<PAGE> 52
(9) make investments for the purpose of exercising control;
(10) purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or
reorganization;
(11) invest in real estate, other than money market securities secured by
real estate or interests therein, or money market securities issued by
companies which invest in real estate or interests therein,
commodities or commodity contracts, interests in oil, gas or other
mineral exploration or development programs;
(12) purchase any securities on margin;
(13) make short sales of securities or maintain a short position or write,
purchase or sell puts, calls, straddles, spreads or combinations
thereof;
(14) invest in securities of issuers, other than agencies and
instrumentalities of the U.S. Government, having a record, together
with predecessors, of less than three years of continuous operation if
more than 5% of the Fund's assets would be invested in such
securities;
(15) purchase or retain securities of any issuer if those officers,
Trustees or Directors of the Fund or TAMIC who own individually more
than 0.5% of the outstanding securities of such issuer together own
more than 5% of the securities of such issuer; or
(16) act as an underwriter of securities.
B-8
<PAGE> 53
This page intentionally left blank.
<PAGE> 54
CAPITAL APPRECIATION FUND
HIGH YIELD BOND TRUST
MANAGED ASSETS TRUST
MONEY MARKET PORTFOLIO
PROXY STATEMENT
203/205/206/207
<PAGE> 55
THIS INSTRUCTION CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. THE
BOARD OF TRUSTEES RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3. THE SHARES
REPRESENTED HEREBY WILL BE VOTED BY THE PROXIES IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED BENEFICIAL OWNER, IF NO DIRECTION IS MADE, THIS INSTRUCTION
CARD WILL BE VOTED FOR PORPOSALS 1, 2 AND 3.
Please vote by filling in the appropriate box(es) below.
Please fold and detach card at perforation before mailing
<TABLE>
<S> <C> <C> <C>
1. PROPOSAL TO ADOPT STANDARD FUNDAMENTAL INVESTMENT POLICIES ON: FOR AGAINST ABSTAIN
Please refer to Chart on Page 1 and description on pages 5 to 13 of proxy statement. ALL ALL ALL
1.A. Issuer Diversification 1.C. Borrowing 1.E. Loans
1.B. Industry Concentration 1.D. Real Estate 1.F. Commodities
1.G. Underwriting
If you do not wish to approve a particular investment policy change, applicable to your
Fund, write the number of the sub-proposal on the line below.
- ----------------------------------------------------------------------------------------
2. PROPOSAL TO REDESIGNATE (AND AMEND AS APPLICABLE) OR ELIMINATE FUNDAMENTAL FOR AGAINST ABSTAIN
INVESTMENT POLICIES ON: ALL ALL ALL
Please refer to Chart on Page 1 and description on pages 14 to 25 of the proxy statement.
2.A. Liquidity 2.F. Oil, Gas and Minerals 2.K. Maximum Maturity of Investments
2.B. Exercise Control 2.G. Unseasoned Issuers 2.L. Credit Ratings of Issuers
2.C. Short Sales 2.H. Puts and Calls 2.M. Securities in which Management
2.D. Purchasing On Margin 2.I. Warrants Holds Interests
2.E. Pledging Assets 2.J. Other Investment Companies
If you do not wish to approve a particular investment policy change, applicable to your
Fund, write the number of the sub-proposal on the line below.
- ---------------------------------------------------------------------------------------- FOR AGAINST ABSTAIN
</TABLE>
3. PROPOSAL TO AMEND CERTAIN FUNDAMENTAL INVESTMENT POLICIES TO PERMIT EACH
FUND TO INVEST ALL OR A PORTION OF ITS ASSETS IN ONE OR MORE INVESTMENT
COMPANIES AND RELATED AMENDMENTS TO THE FUND'S ADVISORY AGREEMENT.
<PAGE> 56
Please fold and detach card at perforation before mailing.
INSTRUCTION CARD FOR THE SPECIAL SHAREHOLDER
FUND NAME PRINTS HERE MEETING TO BE HELD ON APRIL 30, 1999
The undersigned, revoking all instruction cards heretofore given, hereby
appoints Heath B. McLendon and Robert E. McGill III, or either one of
them, as proxies with full power of substitution, to vote on behalf of the
undersigned all shares of the above referenced Fund that the undersigned is
entitled to vote at the Special Shareholders Meeting to be held at 9:00 a.m. on
Friday, April 30, 1999 at One Tower Square, Hartford, Connecticut, and at any
adjournment thereof, in the manner directed below with respect to the matters
described in the Proxy Statement for the Special Meeting, receipt of which is
hereby acknowledged, and in their discretion, upon such other matters as may
properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN DATE AND RETURN THIS
INSTRUCTION CARD PROMPTLY USING THE
ENCLOSED PRE-ADDRESSED, POSTAGE-PAID
ENVELOPE.
PLEASE SIGN EXACTLY AS NAME APPEARS AT LEFT
DATE: ___________________, 1999
Signature(s) if held jointly (Title(s), if required
If signing in a representative capacity (as attorney)
executor, or administrator, trustee, guardian or
custodian, corporate officer or general partner),
please indicate such capacity following signature.
Instruction cards for custodian accounts must be
signed by the named custodian, not by the minor.
