<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. ____)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Wayne Hummer Money Fund Trust
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
WAYNE HUMMER MONEY FUND TRUST
IMPORTANT INFORMATION
FOR SHAREHOLDERS
May 21, 1999
Wayne Hummer Money Fund Trust (the "Trust") will hold a special meeting of
shareholders on June 30, 1999. It is important for you to vote on the issues
described in this Proxy Statement. We recommend that you read the Proxy
Statement in its entirety; the explanations it includes will help you decide
upon the issues.
TIME IS OF THE ESSENCE . . . YOUR PARTICIPATION IN THIS PROCESS IS
IMPORTANT! BE SURE TO COMPLETE AND RETURN YOUR PROXY CARD PROMPTLY TO AVOID
ADDITIONAL EXPENSE TO THE TRUST.
Q: Why am I being asked to vote?
A: Mutual funds are required to obtain shareholders' votes to elect
trustees and for certain types of changes, like those included in this
Proxy Statement. You have a right to vote on these changes.
Q: What issues am I being asked to vote on?
A: The proposals include the election of Trustees, approval of changes to
the Trust's fundamental investment policies, approval of a
Reorganization of the Trust into another mutual fund sponsored by Wayne
Hummer and approval of the Investment Advisory Agreement that would
apply after the Reorganization.
Q: Why are individuals recommended for election to the Board of Trustees?
A: The Trust is devoted to serving the needs of its shareholders, and the
Board is responsible for managing the Trust's business affairs to meet
those needs. The Board represents the shareholders of the Trust and can
exercise all of the Trust's powers, except those reserved only for
shareholders. The Proxy Statement includes a brief description of each
nominee's background and current position with the Trust.
Q: Why are the Trust's "fundamental policies" being changed?
A: Every mutual fund has certain investment policies that can be changed
only with the approval of its shareholders. These are referred to as
"fundamental" investment policies. Several of the Trust's fundamental
policies were adopted to reflect regulatory, business, or industry
conditions that no longer exist or no longer are necessary. By reducing
the number of "fundamental policies," the Trust may be able to minimize
the costs and delays associated with frequent shareholder meetings.
Also, the investment adviser's ability to manage the Trust's assets may
be enhanced and investment opportunities increased.
Q: What is the purpose of the Reorganization?
A: Wayne Hummer Management Company (the "Adviser") presently advises the
Trust, a Massachusetts business trust having one portfolio of shares,
the Money Market portfolio (the "Fund") and Wayne Hummer Investment
Trust, which has two portfolios, the Wayne Hummer Growth Fund and the
Wayne Hummer Income Fund. The reorganization would result in the assets
and liabilities of the Fund being transferred to a new money market
series ("New Fund") of Wayne Hummer Investment Trust in a manner such
that the shareholders of the Fund at the time of the Reorganization
would instead become shareholders of New Fund. The Adviser believes that
having all of its funds in the same Massachusetts business trust and
selling their shares out of the same prospectus would be more efficient
and may result in certain economies of scale.
<PAGE>
Q: Why am I being asked to authorize the approval of an Advisory Agreement
between the Adviser and Wayne Hummer Investment Trust?
A: The Reorganization contemplates that the shareholders of the Fund will
become shareholders of the New Fund, which will be a portfolio of Wayne
Hummer Investment Trust. The Amended Investment Advisory and Management
Agreement ("New Agreement") that would govern the rendering of advisory
services by the Adviser to the New Fund is substantially the same as the
Investment Advisory and Management Agreement ("Old Agreement") between
the Adviser and the Trust. Although the fee structures of the New
Agreement and the Old Agreement are identical, there are a few
differences in other provisions that are described in the accompanying
proxy statement.
Q: How do I vote my shares?
A: You may vote in person at the special meeting of shareholders or simply
sign and return the enclosed Proxy Card. You may also vote by telephone
or by the Internet as described in the Proxy Statement. If we do not
receive your proxy card, your Wayne Hummer Investment Executive or an
employee of Wayne Hummer Management Co. may contact you to request that
you cast your vote.
Q: Who do I call if I have questions about the Proxy Statement?
A: Call your Wayne Hummer Registered Representative or Jean Maurice at
Wayne Hummer's toll-free number 1-800-621-4477.
Q: How do the members of the Board of Trustees suggest that I vote?
A: After careful consideration, the Board of Trustees has unanimously
approved these proposals and recommends that you vote FOR all proposals.
2
<PAGE>
PROXY STATEMENT
WAYNE HUMMER MONEY FUND TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 30, 1999
To the Shareholders:
May 21, 1999
You are invited to attend a special meeting of the shareholders of Wayne
Hummer Money Fund Trust (the "Trust") to be held at the offices of Wayne
Hummer Investments L.L.C., 300 South Wacker Drive, 14th Floor, Chicago,
Illinois, at 10:00 a.m. (Central time), on June 30, 1999, for the following
purposes and to transact such other business, if any, as may properly come
before the meeting:
(1) To elect seven Trustees.
(2) To make changes to the Trust's fundamental investment policies:
(a) to eliminate the restriction on the types of securities in which
the Trust may invest;
(b) to eliminate the policy on diversification;
(c) to eliminate the limitation on investment in any one issuer;
(d) to eliminate the prohibition against investing for control;
(e) to amend the policy on portfolio lending;
(f) to eliminate the restriction on the purchase of shares of other
investment companies;
(g) to eliminate the prohibition on investing in real estate or oil
interests;
(h) to eliminate the prohibition against investing in unseasoned
issuers;
(i) to eliminate the fundamental policies on restricted and illiquid
securities;
(j) & (k) to amend policies on borrowing and the issuance of senior
securities.
(l) to amend the policy on pledging portfolio securities; and
(m) to eliminate the prohibition against purchasing securities of
issuers in which affiliates of the Trust hold an interest.
(3) To approve an Agreement and Plan of Reorganization and the
transactions contemplated thereby, the net effect of which would be to
reorganize the Money Market portfolio of the Trust (the "Fund") into a
newly created money market series of the Wayne Hummer Investment Trust (the
"Reorganization"). (The Reorganization is conditioned upon the
authorization of the approval of the Investment Advisory and Management
Agreement, as described in Item (4), below.)
(4) In conjunction with the Reorganization, to authorize the Fund, as
the sole shareholder of the Money Market Fund series of Wayne Hummer
Investment Trust, to vote its share in favor of an amended Investment
Advisory and Management Agreement between Wayne Hummer Management Company
and Wayne Hummer Investment Trust. (The authorization of the approval of
the Investment Advisory and Management Agreement is conditioned upon
approval of the Reorganization, as described in Item (3), above.)
(5) To transact such other business as may properly come before the
meeting or any adjournment thereof.
<PAGE>
The Board of Trustees has fixed April 23, 1999, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Trustees
Robert J. Moran
Secretary
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY TO AVOID ADDITIONAL EXPENSE.
YOU CAN HELP THE TRUST AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP
LETTERS TO ENSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. IF YOU
ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE SPECIAL
MEETING. THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES.
<PAGE>
PROXY STATEMENT
WAYNE HUMMER MONEY FUND TRUST
300 South Wacker Drive, 15th Floor
Chicago, Illinois 60606
About the Proxy Solicitation and the Special Meeting
The enclosed proxy is solicited on behalf of the Board of Trustees of the
Trust (the "Board" or "Trustees"). The proxies will be voted at the special
meeting of shareholders of the Trust to be held on June 30, 1999, at the
offices of Wayne Hummer Investments L.L.C., 300 South Wacker Drive, 14th
Floor, Chicago, Illinois 60606 at 10:00 a.m. (Central time) (such special
meeting and any adjournment or postponement thereof are referred to as the
"Special Meeting").
The cost of the solicitation, including the printing and mailing of proxy
materials, will be borne by the Trust. In addition to solicitations through
the mails, proxies may be solicited by officers, employees, and agents of the
Trust, Wayne Hummer Management Company, the Trust's investment adviser, and/or
Wayne Hummer Investments L.L.C., the Trust's distributer, or, if necessary, a
communications firm retained for this purpose. Such solicitations may be by
telephone or otherwise. The Trust will reimburse custodians, nominees, and
fiduciaries for the reasonable costs incurred by them in connection with
forwarding solicitation materials to the beneficial owners of shares held of
record by such persons.
Shareholders may vote by filling out and signing the enclosed proxy card
and returning it in the postage paid envelope provided. Consistent with state
law, you may also vote by touchtone telephone or by the Internet. To vote by
telephone, have your proxy card ready and dial the toll-free number that
appears on your voting instruction form. Enter the 12-digit control number
found on the card and follow the instructions you will be given. To vote using
the Internet, have your proxy card available, go to the website
www.proxyvote.com, enter the 12-digit control number found on your proxy card
and follow the instructions you will be given. Shareholders who communicate
proxies by telephone or by the Internet have the same power and authority to
issue, revoke, or otherwise change their voting instruction as currently
exists for instructions communicated in written form described below under
"Additional Information--Quorum and Voting Requirements." Any telephonic or
Internet voting will follow procedures designed to ensure accuracy and prevent
fraud, including requiring identifying shareholder information, recording the
shareholder's instructions, and confirming to the shareholder after the fact.
At its meeting on January 23, 1999, the Board (i) reviewed the investment
policies of the Trust and approved changes to them, subject to shareholder
approval, (ii) approved an Agreement and Plan of Reorganization (which was
amended and restated on May 7, 1999), the effect of which would be to
reorganize the Money Market portfolio of the Trust (the "Fund") into a newly
created money market series (the "New Fund") of Wayne Hummer Investment Trust
(the "Reorganization"); and (iii) considered and recommended that, in
conjunction with the Reorganization, the shareholders of the Trust authorize
the Trust as the sole shareholder of the New Fund, to vote its share of the
New Fund in favor of an amended Investment Advisory and Management Agreement
between Wayne Hummer Management Company and Wayne Hummer Investment Trust. The
purposes of the Special Meeting are set forth in the accompanying Notice. The
Trustees know of no business other than that mentioned in the Notice that will
be presented for consideration at the Special Meeting. Should other business
properly be brought before the Special Meeting, proxies will be voted in
accordance with the best judgment of the persons named as proxies. This proxy
statement and the enclosed proxy card are expected to be mailed on or about
May 21, 1999, to shareholders of record at the close of business on April 23,
1999 (the "Record Date"). On the Record Date, the Trust had 350,513,563
outstanding shares.
The Trust's principal executive offices are located at 300 South Wacker
Drive, 15th Floor, Chicago, Illinois 60606. The Trust's toll-free telephone
number is 1-800-621-4477. The Trust's Annual Report, which includes audited
financial statements for the fiscal year ended March 31, 1999, and Semi-annual
Report for the period ended September 30, 1998 were previously mailed to
shareholders. Any shareholder wishing to receive another copy of the Annual
Report and Semi-annual Report should contact the Trust's Treasurer, Ms. Jean
Maurice, at the above address for the Trust, or by use of the Trust's toll-
free telephone number, set forth above.
<PAGE>
ITEM 1
ELECTION OF SEVEN TRUSTEES
The persons named as proxies intend to vote in favor of the election of
Steven R. Becker, Charles V. Doherty, Joel D. Gingiss, Patrick B. Long, David
P. Poitras, James J. Riebandt and Eustace K. Shaw as Trustees of the Trust.
All of the nominees, except for Messrs. Poitras and Riebandt, are presently
serving as Trustees.
Mr. Doherty was appointed Trustee on October 25, 1994, to fill a vacancy
resulting from the retirement of Samuel B. Lyons. Messrs. Becker, Long,
Gingiss and Shaw were previously elected by shareholders of the Trust on
December 13, 1990. Mr. Riebandt was elected a Trustee by the Board of Trustees
on May 7, 1999 when it increased the Board from six to seven Trustees. If
elected, Mr. Poitras will fill a vacancy resulting from the retirement of
Philip M. Burno, who also was elected by the shareholders on December 13,
1990. Mr. Burno's retirement would become effective upon the election of Mr.
Poitras. The Board of Trustees and Wayne Hummer Management Company wish to
express their appreciation to Mr. Burno for his contributions to the Trust.
All nominees have consented to serve if elected. If elected, the Trustees
will hold office without limit in time until death, resignation, retirement,
or removal or until the next meeting to elect Trustees and the election and
qualification of their successors.
If any nominee for election as a Trustees named above shall by reason of
death or for any other reason become unavailable as a candidate at the Special
Meeting, votes pursuant to the enclosed proxy may be cast for a substitute
candidate by the proxies named on the proxy card, or their substitutes,
present and acting at the Special Meeting. Any such substitute candidate for
election as an interested Trustee shall be nominated by the Executive
Committee. The selection of any substitute candidate for election as a Trustee
who is not an interested person shall be made by a majority of the members of
the Nominating Committee of the Trust, none of the members of which are
interested persons of the Trust, other than Mr. Doherty. The Board has no
reason to believe that any nominee will become unavailable for election as a
Trustee.
2
<PAGE>
About the Nominees
The nominees are listed below with their ages at May 13, 1999, present
positions with the Trust, and principal occupations during the past five years.
The companies or organizations related to the principal occupations of the
nominees standing for election as Trustees who are not interested persons of
the Trust are not affiliated with the Trust.
<TABLE>
<CAPTION>
Shares
Beneficially
Trustee Owned on
Name, Age and Principal Occupations During Last 5 Years Since May 13, 1999
------------------------------------------------------- ------- ------------
<S> <C> <C>
Steven R. Becker (48)*+.................................... 1982 338,652(1)
Principal, Wayne Hummer Investments L.L.C., prior to April
1, 1996, Partner, Wayne Hummer & Co.; Director and former
Vice President, Wayne Hummer Management Company.
Charles V. Doherty (65)*+.................................. 1994 27,040(2)
Managing Director, Madison Asset Group, Chicago, Illinois
(registered investment adviser); Director, Lakeside Bank,
Chicago, Illinois (Illinois state-chartered bank);
Director, Knight Trimark Group, Inc. (holding company for
securities broker); Director, Howe Barnes Securities, Inc.
(securities broker); Director, NationsBank Financial
Products; Director, Brauvin Capital Corp. (REIT).
Joel D. Gingiss (56)+...................................... 1982 9,728(3)
Assistant State Attorney, Lake County, Illinois, September
1993 to present; formerly Chairman of the Board of
Directors and President, Gingiss International (franchisor
of Gingiss Formalwear Stores); past President,
International Franchise Association.
Patrick B. Long (56)....................................... 1982 2,226
Chairman and Chief Executive Officer, KMS Industries, Inc.
(fusion energy research); Chairman and Director, OG
Technologies, Inc. (surface measurement technology
company); Chairman and Director, AVIQS LLC (machine vision
company).
David P. Poitras (38)*..................................... Nominee 0
Vice President, Wayne Hummer Investment Trust; Vice
President, Wayne Hummer Management Company since May 1992;
Principal, Wayne Hummer Investments L.L.C.; prior to April
1, 1996, Partner, Wayne Hummer & Co.; Bond Department
Manager, Wayne Hummer.
James J. Riebandt (48)..................................... Nominee 193,109(4)
Member, Riebandt & DeWald, P.C. (law firm).
Eustace K. Shaw (73)....................................... 1982 20,071(5)
Chairman of the Board of Directors, B. F. Shaw Printing
Co.; formerly publisher, Newton Daily News.
</TABLE>
- --------
* Interested person of the Trust, as defined by the 1940 Act. Messrs. Becker
and Poitras are interested persons by reason of being an officer, director,
manager or employee of the investment adviser and/or distributor. Mr.
Doherty is an interested person by virtue of serving as a director of a
registered broker dealer, which is not affiliated with the Trust, Wayne
Hummer Management Company or Wayne Hummer Investments L.L.C.
3
<PAGE>
+ Member of the Executive Committee of the Trust.
(1) Includes shares owned by Mr. Becker's spouse and shares which Mr. Becker
is deemed to beneficially own that are held by his minor children. Mr.
Becker disclaims beneficial ownership of these shares.
(2) Includes shares owned by Mr. Doherty's spouse and shares which Mr. Doherty
is deemed to beneficially own that are held by his spouse. Mr. Doherty
disclaims beneficial ownership of these shares.
(3) Includes shares Mr. Gingiss is deemed to beneficially own that are held by
his spouse and by Mr. Gingiss as a trustee for children. Mr. Gingiss
disclaims beneficial ownership of these shares.
(4) Includes shares that Mr. Riebandt is deemed to beneficially own that are
held by his wife and by a trust for which Mr. Riebandt is a trustee. Mr.
Riebandt disclaims beneficial ownership of these shares.
(5) Represents shares Mr. Shaw is deemed to beneficially own that are held by
a trust and a corporation. Mr. Shaw disclaims beneficial ownership of
these shares.
During the fiscal year ended March 31, 1999, there were 4 meetings of the
Board of Trustees. Each of the trustees attended 75% or more of the meetings
of the Board and all of the Committees of the Board of which they are members.
The interested Trustees, other than Mr. Doherty, do not receive fees from the
Trust. All non-interested Trustees and Mr. Doherty were reimbursed for
expenses for attendance at Board of Trustees meetings.
The Board of Trustees has an Audit Committee composed of Messrs. Doherty
(Chairman), Gingiss, Long and Shaw, none of whom, other than Mr. Doherty, is
an interested person of the Trust. The Audit Committee makes recommendations
to the Board regarding the selection of independent public auditors and
reviews the work, of the independent public auditors. The Audit Committee held
2 meeting during the fiscal year ended March 31, 1999.
The Nominating Committee of the Board of Trustees is composed of Messrs.
Long (Chairman), Doherty and Gingiss, none of whom, other than Mr. Doherty,
are interested persons of the Trust. The Nominating Committee is authorized to
seek, review and recommend to the Board and shareholders candidates for
trusteeships to be held by persons who are not interested persons of the
Trust. The Nominating Committee held 1 meeting during the fiscal year ended
March 31, 1999. At its meeting of May 7, 1999, the Nominating Committee
recommended the nominees listed above as persons to be elected as Trustees at
the Special Meeting. No policy or procedure has been established as to the
recommendation of Trustee nominees by shareholders.
The Executive Committee of the Board of Trustees is composed of Messrs.
Becker, Burno, Doherty and Gingiss, all of which, except Mr. Gingiss, are
interested persons of the Trust. Mr. Burno, a member of the Executive
Committee, is not standing for re-election. The Executive Committee is
authorized to exercise such powers and authority of the Board of Trustees, as
the Board of Trustees may determine, when the Board of Trustees is not in
session and as are consistent with law. The Executive Committee held 1 meeting
during the fiscal year ended March 31, 1999.
Trustee Compensation
Wayne Hummer Management Company, the investment adviser of the Trust, pays
the compensation of all Trustees of the Trust, other than Mr. Doherty, who are
interested persons of the Trust. Effective January 1, 1999, the Trust pays
each Trustee who is not affiliated with the Trust's investment adviser
("Outside Trustees") at the rate of $5,000 per year, plus $500 for each Board
or committee meeting attended. Prior to January 1, 1999 the annual retainer
paid to Outside Trustees was $2,000 per year. The Trustees of the Trust also
serve as trustees of Wayne Hummer Investment Trust and the Outside Trustees
receive identical compensation for such service. If the Reorganization becomes
effective and the Trust ceases to exist, the annual retainer and per meeting
fee to be paid by Wayne Hummer Investment Trust to each Outside Trustee will
be increased to $10,000 and $1,000, respectively.
4
<PAGE>
The following table sets forth the compensation received by each Trustee of
the Trust for the fiscal year ended March 31, 1999. The information in the last
column of the table sets forth the total compensation received by all trustees
for calendar year 1998 for service as a trustee of the Trust and the Wayne
Hummer Investment Trust (collectively, the "Hummer Funds"):
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation Paid to Trustees
Trustee from the Trust from Hummer Funds
------- ---------------------- ------------------
<S> <C> <C>
Charles V. Doherty.............. $6,000 $9,500
Joel D. Gingiss................. $6,000 $9,500
Patrick B. Long................. $5,500 $9,000
Eustace K. Shaw................. $5,500 $9,000
</TABLE>
Officers of the Trust
The Officers of the Trust are listed below with their ages at May 13, 1999,
positions with the Trust, and principal occupations during the past five years.
<TABLE>
<CAPTION>
Position with
Name and Age the Trust Principal Occupation During Last 5 Years
- ------------ ------------- -------------------------------------------
<S> <C> <C>
David P. Poitras (38)... President Vice President, Wayne Hummer Investment
Trust; Vice President, Wayne Hummer
Management Company since May 1992;
Principal, Wayne Hummer Investments L.L.C.;
prior to April 1, 1996, Partner, Wayne
Hummer & Co.; Bond Department Manager,
Wayne Hummer.
Jean M. Maurice (36).... Treasurer Treasurer and Secretary, Wayne Hummer
Investment Trust
Robert J. Moran (53).... Secretary Partner, Vedder, Price, Kaufman & Kammholz
(law firm)
</TABLE>
Wayne Hummer Management Company pays all compensation of officers of the
Trust, other than Mr. Moran. Mr. Moran, the Secretary of the Trust, receives no
compensation for acting in such capacity. Vedder, Price, Kaufman & Kammholz,
the law firm of which Mr. Moran is a partner is paid legal fees by the Trust,
Wayne Hummer Investment Trust, Wayne Hummer Management Company and Wayne Hummer
Investments L.L.C. for legal services rendered.
Ownership of Trust Shares
As of May 13, 1999, the Trustees and officers as a group beneficially owned
less than 1% of the outstanding Shares of the Trust. As of May 13, 1999, the
Wayne Hummer Employees Profit Sharing Trust (the "Retirement Plan") owned of
record and beneficially 0.71% of the outstanding Shares of the Trust. Messrs.
Rowland, Cannova, Reilly, Kratzer and Poitras, as trustees of the Retirement
Plan, may be deemed to hold beneficial ownership of the percentage of Shares of
the Trust as stated above. Messrs. Rowland, Kratzer and Poitras are also Voting
Members of Wayne Hummer Investments L.L.C., the Trust's Distributor. Messrs.
Poitras and Rowland also are officers of the Trust and Wayne Hummer Management
Company, the Trust's Investment Adviser. Messrs. Cannova and Reilly are
employed by Wayne Hummer Investments L.L.C.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES.
5
<PAGE>
ITEM 2
CHANGES TO THE FUNDAMENTAL INVESTMENT POLICIES OF THE FUND
The Investment Company Act of 1940 (the "1940 Act") requires investment
companies such as the Trust to adopt certain types of investment policies that
can be changed only by shareholder vote. An investment
company may also elect to designate other policies that may be changed only by
shareholder vote. Both types of policies are referred to as "fundamental
policies." All other policies are non-fundamental and may be changed with
Board approval and without a shareholder vote. Certain of the fundamental
policies of the Trust have been adopted in the past to reflect regulatory,
business or industry conditions that are no longer relevant. Additionally,
several of the restrictions have been superseded by the detailed requirements
of Rule 2a-7 under the 1940 Act, which applies to "money market funds" such as
the Trust, that value their portfolio securities by the amortized cost method.
Accordingly, the Trustees have approved, and have authorized the submission to
the Trust's shareholders for their approval, the removal, amendment, and/or
reclassification as non-fundamental of certain of the Trust's fundamental
policies.
The proposed amendments would:
(i) simplify and modernize the policies that are required to be
fundamental by the 1940 Act;
(ii) reclassify those fundamental policies that are not required to be
fundamental by the 1940 Act as non-fundamental policies; and
(iii) eliminate fundamental policies that are no longer required by the
securities laws of individual states.
By reducing to a minimum those policies that can be changed only by
shareholder vote, the Trustees believe that the Trust would be able to
minimize the costs and delay associated with holding shareholder meetings in
order to make further changes in the fundamental policies. The Trustees also
believe that the proposals may enhance the flexibility of the investment
adviser to manage the Trust in a changing investment environment and increase
investment management opportunities available to the Trust.
As a general matter, if these proposals are not approved, the policies will
continue as currently stated. The Board of Trustees will then consider what
future action should be taken.
ITEM 2(a)
ELIMINATION OF THE RESTRICTION ON THE TYPES OF SECURITIES
IN WHICH THE TRUST MAY INVEST
Currently, the fundamental investment policy of the Trust with regard to
securities which may be purchased by the Trust states the following:
The Trust may not purchase any securities other than money market
instruments and securities described in the Trust's current prospectus or
Statement of Additional Information.
This policy was adopted by the Trust at its inception and was intended to
ensure that the Trust would meet its investment objective (to maximize current
income to the extent consistent with preservation of capital and maintenance
of liquidity) by limiting the securities which the Trust was permitted to
purchase. The Securities and Exchange Commission ("SEC") has subsequently
adopted Rule 2a-7 to regulate money market funds, such as the Trust. In part,
Rule 2a-7 prescribes and limits the types of securities in which money market
funds may invest. As the number of money market funds has increased, the types
of securities which are available and eligible for purchase by money market
funds has also increased. The Trust and its Adviser have consistently
maintained the Trust's investments within the categories permitted by Rule 2a-
7.
In order to provide the Trust with investment flexibility, and because the
current policy duplicates and may conflict with Rule 2a-7, it is being
proposed that this policy be eliminated.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
6
<PAGE>
ITEM 2(b)
ELIMINATION OF THE POLICY ON DIVERSIFICATION
The current fundamental investment policy of the Trust with regard to
diversification is as follows:
The Trust may not purchase the securities (other than of the United
States Government, its agencies and instrumentalities) of any one issuer if
immediately after such purchase more than 5% of the value of the Trust's
total assets (taken at market value at the time of each investment) would
be invested in such issuer, except that up to 25% of the value of the
Trust's total assets may be invested without regard to such 5% limitation
but shall instead be subject to a 10% limitation.
When the current policy was adopted, the Trust was subject to the laws of
certain states which required this specific policy on investment in securities
of a single issuer despite the fact that the 1940 Act had a less restrictive
standard. Since the enactment of the National Securities Markets Improvement
Act ("NSMIA"), the states no longer have jurisdiction over the policy of the
Trust with regard to investment in the securities of a single issuer.
This policy restates the general requirements of Section 5(b)(1) of the
1940 Act for an investment company to be classified as a "diversified"
investment company. An investment company such as the Trust may not change its
classification as a "diversified" investment company to a non-diversified
company without the approval of shareholders. Therefore, this policy provides
investors with no greater protection than is available to them under the 1940
Act.
Additionally, Rule 2a-7 prohibits a money market fund from investing more
than 5% of its total assets in the securities of any one issuer, and then only
issuers of the highest credit rating. That standard is substantially more
restrictive than the Trust's current policy. Therefore, it is proposed to
eliminate the current policy in order to clarify that the more restrictive
requirements of Rule 2a-7 control the Trust's diversification.
The Board has adopted a non-fundamental policy on diversification to comply
with Rule 2a-7. The Board may change this policy without shareholder approval
if Rule 2a-7 changes.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(c)
ELIMINATION OF THE LIMITATION ON INVESTMENT IN ANY ONE ISSUER
The current fundamental investment policy of the Trust with regard to
investment in the securities of a single issuer is as follows:
The Trust may not purchase more than 10% of any one class of an issuer's
outstanding securities, except that such restriction shall not apply to
securities of the United States Government, its agencies or
instrumentalities, certificates of deposit, bankers' acceptances or
repurchase agreements.
In general, Section 5(b)(1) of the 1940 Act prohibits a diversified
investment companies, such as the Trust, from purchasing more than 10% of the
voting securities of a single issuer, as to 75% of the investment company's
assets. However, there may be occasions when the Trust would seek to purchase
more than 10% of a particularly attractive class of non-voting money market
securities of an issuer with a particularly high credit rating. The current
policy would have the effect of prohibiting the Trust from engaging in such a
transaction, although the transaction would not cause the Trust to be in
violation of the 1940 Act or in violation of Rule 2a-7. Therefore, it is
proposed that this policy be eliminated in order to provide the Trust with
additional investment flexibility.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
7
<PAGE>
ITEM 2(d)
ELIMINATION OF THE PROHIBITION AGAINST INVESTING FOR CONTROL
The current fundamental policy prohibiting the Trust from investing for
control is as follows:
The Trust may not make investments for the purpose of exercising control
or management.
When this policy was adopted, the Staff of the SEC encouraged investment
companies to adopt negative investment policies, such as this policy, which
stated that the investment company would not engage in a certain activity,
rather than simply requiring investment companies to adopt relevant policies
when the investment company did intend to engage in the activity (in this
case, investing for control). The SEC has since decided that negative
investment policies, such as this policy, are not necessarily desirable and
that, in particular, it is no longer necessary for an investment company to
adopt a negative policy with regard to investing for control.(/1/)
Furthermore, the Trust has no intention of investing for control of an
issuer; in most cases, it would be impossible for an investor to gain control
of an issuer through the purchase of money market instruments, such as those
purchased by the Trust. Therefore, it is proposed that this policy be
eliminated.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(e)
AMENDMENT OF THE POLICY ON PORTFOLIO LENDING
The current fundamental investment policy of the Trust with regard to the
lending of portfolio securities is as follows:
The Trust may not lend securities in excess of 20% of the Trust's total
assets, taken at market value; provided, however, that loans not exceeding
20% of the Trust's total assets may be made if collateral is maintained
from the borrower equal at all times to the current market value of the
securities loaned.
The Board of Trustees have approved and recommended that this policy be
amended to read as follows:
The Trust may not lend any of its assets, except portfolio securities.
This shall not prevent the Trust from purchasing or holding U.S. Government
Obligations, money market instruments, variable rate demand notes, bonds,
debentures, notes, certificates of indebtedness, or other debt securities,
entering into repurchase agreement, or engaging in other transactions where
permitted by the Trust's investment objective, policies, and limitations or
the Trust's Declaration of Trust.
This amendment would permit the Trust to loan its portfolio securities in
accordance with such policies as the Board of Trustees and the Investment
Adviser of the Trust may establish from time to time. Of course, such policies
would be in accordance with any applicable guidelines issued by the SEC or any
other regulatory body having jurisdiction over such transactions. The
amendment would also clarify that the policy was not intended to prevent the
Trust from purchasing bonds, notes, or other debt securities or entering into
transactions otherwise permitted by the Trust's investment objective,
policies, and limitations. Loans of securities involve a risk that the
borrower may fail to return the securities or may fail to provide additional
collateral.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
- --------
(1) Instruction 3. to Item 4 and Item 12(c) of Form N1-A, Registration Form
Used by Open-End Management Investment Companies (1998).
8
<PAGE>
ITEM 2(f)
ELIMINATION OF THE RESTRICTION ON THE PURCHASE OF SHARES OF
OTHER INVESTMENT COMPANIES
The current fundamental investment policy of the Trust with respect to the
purchase of shares of other investment companies is as follows:
The Trust may not purchase securities of other investment companies,
except in connection with a merger, consolidation, acquisition or
reorganization, or by purchase in the open market of securities of closed-
end investment companies where no underwriter or dealer's commission or
profit, other than customary broker's commission, is involved and only if
immediately thereafter no more than 10% of the Trust's total assets would
be invested in such securities.
When the current policy was adopted, the Trust was subject to the laws of
certain states which required this specific policy on investment in shares of
other investment companies despite the fact that the 1940 Act had a less
restrictive standard. Since the enactment of the National Securities Markets
Investment Act ("NISMIA"), the states no longer have jurisdiction over the
policy of the Trust with regard to the purchase of shares of other investment
companies.
Section 12(d) of the 1940 Act generally limits investment by the Trust in
the shares of all other investment companies to 10% of the value of the total
assets of the Trust. However, there are certain exceptions to this limitation;
for example, the Trust would be allowed to invest more than 10% of its total
assets in shares of an investment company which does not charge a sales load
of more than 1 1/2% of the public offering price of its shares. This would
allow the Trust to invest of more than 10% of its total assets, for example,
in a specialized money market fund for temporary defensive purposes.
If the Trust were to invest in other investment companies, as a shareholder
of another investment company, the Trust would bear, along with other
shareholders, its pro rata portion of the other investment company's expenses,
including advisory fees. These expenses would be in addition to the expenses
the Trust bears directly in connection with its own operations. Therefore,
investors will bear not only his or her proportionate share of certain
expenses of the Trust, but also, indirectly, similar expenses of the other
investment company. In the event of investing in other investment companies,
the Adviser will consider waiving its fees to reduce or eliminate any
duplicative fees.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(g)
ELIMINATION OF THE PROHIBITION ON INVESTING IN
REAL ESTATE OR OIL INTERESTS
The current fundamental policy of the Trust with regard to real estate and
oil interests is as follows:
The Trust may not purchase or sell real estate (other than money market
securities secured by real estate or interests therein or money market
securities issued by companies which invest in reals estate, or interests
therein), commodities or commodity contracts, oil or gas interests or other
mineral exploration or development programs.
9
<PAGE>
The Board of Trustees has adopted and recommended that the policy be
eliminated and replaced with the following:
The Trust may not purchase or sell 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) or commodities or commodity contracts.
When the current policy was adopted, the Trust was subject to the laws of
certain states which required this specific policy on investment in real
estate and oil interests, despite the fact that the 1940 Act did not similarly
restrict such investments by investment companies. Since the enactment of
NSMIA, states no longer have jurisdiction over the policy of the Trust with
regard to investment in real estate or oil interests.
Neither the Trust nor the Adviser has any current intent to invest assets
of the Trust in any of the investments prohibited by the current fundamental
policy, nor would such investments be permissible for money market funds under
Rule 2a-7. However, it is proposed that this policy be eliminated in an effort
to modernize and simplify the Trust's investment policies.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(h)
ELIMINATION OF THE PROHIBITION AGAINST
INVESTING IN UNSEASONED ISSUERS
The current fundamental policy prohibiting investing in unseasoned issuers
is as follows:
The Trust may not purchase securities of issuers (other than securities
of the United States Government, its agencies or instrumentalities) having
a record, together with its predecessors, of less than three years of
continuous operation if, regarding all such securities, more than 5% of the
Trust's total assets, taken at market value, would be invested in such
securities.
When the current policy was adopted, the Trust was subject to the laws of
certain states which required this specific policy on investment in securities
of unseasoned issuers, despite the fact that the 1940 Act did not similarly
restrict investments by investment companies. Since the enactment of the
NSMIA, the states no longer have jurisdiction over the policy of the Trust
with regard to investment in the securities of unseasoned issuers.
Neither the 1940 Act nor Rule 2a-7, which has strict investment
requirements for money market funds, prohibits the Trust from investing in
unseasoned issuers; instead, the standards of Rule 2a-7 relating to
creditworthiness of the issuer would cover the permissibility of investing in
securities of a young issuer. Since the Board of Trustees believes that
creditworthiness is more relevant to the investment of money market funds, it
is proposed that this prohibition be eliminated to provide for increased
investment flexibility. Unseasoned issuers, however, have less of a track
record. Less financial and other information is available concerning these
types of issuers.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
10
<PAGE>
ITEM 2(i)
ELIMINATION OF FUNDAMENTAL POLICIES
ON RESTRICTED AND ILLIQUID SECURITIES
(WHICH WOULD BE REPLACED BY NON-FUNDAMENTAL POLICIES)
The current fundamental policy of the Trust regarding investments in
restricted securities is as follows:
The Trust may not invest in securities restricted as to disposition
under the federal securities laws (except money market instruments issued
under Section 4(2) of the Securities Act).
The current fundamental policy of the Trust regarding investments in
illiquid securities is as follows:
The Trust may not invest more than 10% of its assets in securities
(including repurchase agreement maturing in more than seven days) which are
considered illiquid.
These policies were adopted because, historically, restricted securities
were viewed as illiquid since they could not be sold within seven days.
Investment companies, such as the Trust, are required to meet a shareholder's
redemption request at the current net asset value within seven days of
receiving the request for redemption. In order to do this, some portion of the
securities in the Trust's portfolio must be "liquid," so that the securities
can be sold in sufficient time to obtain the necessary cash to meet redemption
requests. It is important to note that there is a ready market for many
restricted securities which, in fact, can be purchased without jeopardizing
the liquidity of the Trust's portfolio.
Certain state securities regulators previously required mutual funds to
have a fundamental policy limiting investment in restricted securities. Since
the enactment of NSMIA, states no longer have such jurisdiction. Furthermore,
rules adopted by the SEC have substantially increased the number of restricted
securities that can now be considered liquid and, in addition, have given to
the Trustees the ability to determine, under specific guidelines, that a
security is liquid. The Trustees may delegate this duty to the investment
adviser, provided the Adviser's determination of liquidity is made in
accordance with the guidelines established and monitored by the Trustees.
The Trust's current policy prevents the Trust from acquiring restricted
securities, other than Section 4(2) commercial paper, even though they are
viewed by the Adviser to be liquid. If this proposal is approved, the Trust
will be able to invest to an unlimited extent in restricted securities as long
as they meet the Trustees' guidelines for liquidity. Restricted securities may
be less liquid than other securities. Less liquid securities may be difficult
or impossible to sell at the time or at a price that the Trust would like. The
Trust may have to lower the price, sell other securities instead or forgo an
investment opportunity, any of which could have a negative effect on Trust
management or performance. The Trust will adopt a non-fundamental policy on
restricted securities that will read substantially as follows:
The Trust may not invest more than 10% of its net assets in securities
(including repurchase agreements maturing in more than seven days) which
are considered illiquid.
If a restricted security is determined not to be liquid, the purchase of
that security, together with other illiquid securities, may not exceed 10%
of the Trust's net assets.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE PROPOSAL
* * *
11
<PAGE>
ITEM 2(j) & (k)
AMENDMENT OF POLICIES ON
BORROWING AND THE ISSUANCE OF SENIOR SECURITIES
The fundamental investment policy of the Trust with regard to borrowing is
as follows:
The Trust may not borrow money except from banks and only as a temporary
measure for extraordinary or emergency purposes, but not for investment
purposes or in any amount exceeding 5% of the Trust's total assets, taken
at market value.
In addition to these policies, the Trust has the following policy:
The Trust may not issue a class of securities which is senior to the
Shares, except as provided pursuant to paragraph 14 and in accordance with
the Investment Company Act of 1940.
The Board of Trustees has approved and recommended that these policies be
amended and restated to read as follows:
The Trust may not issue senior securities or borrow money except as a
temporary measure for extraordinary purposes and then only in amounts not
in excess of 5% of the value of its net assets. In addition, the Fund may
enter into reverse repurchase agreements and otherwise borrow up to one-
third of the value of its total assets, including the amount borrowed, in
order to meet redemption requests without immediately selling any portfolio
instruments.
Shareholders will vote, as separate items, on amending both the Trust's
current policy on borrowing and senior securities. [The proposal requires the
approval by shareholders of both item 2(j) and 2(k)].
While this proposal increases the ability of the Trust to borrow, it still
limits borrowings to temporary or emergency purposes. In addition, under the
proposal, while any such borrowings exceed 5% of the Trust's total assets, no
additional purchases of investment securities could be made by the Trust. If,
due to market fluctuations or other reasons, the value of the Trust's assets
falls below 300% of its borrowings, the Trust would reduce its borrowings
within three (3) business days. To do this, the Trust may have to sell a
portion of its investments at a time when it may be disadvantageous to do so.
Any borrowing by the Trust would increase the Trust's volatility and the risk
of loss in a declining market. Also, as a matter of clarification, the
proposal prohibits the issuance of senior securities as defined in the 1940
Act, but excludes permitted borrowings from the definition of "senior
securities." Finally, the proposal allows the Trust to invest in reverse
repurchase agreements. Reverse repurchase agreements involve the risk that the
interest income earned on the investment of the proceeds will be less than the
interest expense, that the market value of the securities sold to the Trust
may decline below the price of the securities the Trust is obligated to
repurchase and that the securities may not be returned to the Trust.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(l)
AMENDMENT OF THE POLICY ON
PLEDGING PORTFOLIO SECURITIES
The current fundamental investment policy of the Trust with regard to the
pledging of portfolio securities is as follows:
The Trust may not mortgage, pledge, hypothecate or in any manner
transfer (except as provided in paragraph (9) [the policy on lending of
portfolio securities] above), as security for indebtedness, any securities
owned or held by the Trust except as may be necessary in connection with
borrowings mentioned in paragraphs (15) and (16) above [the policies on
borrowing by the Trust], and then such mortgaging, pledging or
hypothecating may not exceed 15% of the Trust's total assets.
12
<PAGE>
The Board of Trustees has approved and recommended that this policy be
amended to read as follows:
The Trust may not mortgage, pledge, hypothecate or in any manner
transfer (except as provided in paragraph (3) [the policy on lending of
portfolio securities] above), as security for indebtedness, any securities
owned or held by the Trust except as may be necessary in connection with
borrowings permitted under the investment policies of the Trust.
The purpose of this amendment is to remove the limitation of 15% of the
Trust's total assets upon the amount of portfolio securities which may be
pledged. When the current policy was adopted, the Trust was subject to the
laws of certain states which required this specific policy on investment in
shares of other investment companies despite the fact that the 1940 Act did
not place an explicit limitation on the lending of portfolio securities. Since
the enactment of NSMIA, the state no longer have jurisdiction over the policy
of the Trust with regard to the pledging of portfolio securities.
The proposed amendment will permit the pledging of securities in any amount
to secure borrowings of the Trust which are permitted under the 1940 Act and
the Trust's investment policies and limitations. The 1940 Act and the
investment policy of the Trust (as it is proposed that such policy be amended,
below) permit the Trust to borrow up to one-third of its assets. However, the
proposed investment policy on borrowing would permit the Trust to borrow only
as a temporary or emergency measure or to enable the Trust to meet redemption
demands when the liquidation of portfolio securities is disadvantageous. Any
borrowing by the Trust would increase the Trust's volatility and the risks of
loss in a declining market.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(m)
ELIMINATION OF THE PROHIBITION AGAINST PURCHASING SECURITIES OF ISSUERS IN
WHICH AFFILIATES OF THE TRUST HOLD AN INTEREST
The current fundamental investment policy of the Trust with regard to
purchasing securities of issuers in which affiliates of the Trust hold an
interest is as follows:
The Trust may not purchase or retain securities of any issuer employing,
as an officer or director, any person serving as an officer or Trustee of
the Trust, or purchase or retain the securities of any issuer, if, to the
Trustees' knowledge, those officers, directors or Trustees of the Trust or
its Investment Adviser who individually either directly or indirectly own,
control or hold with power to vote more than 0.5% of the outstanding
securities of such issuer, together own directly or indirectly, control or
hold with power to vote more than 5% of such outstanding securities.
When the current policy was adopted, the Trust was subject to the laws of
certain states which required this specific policy on investment in securities
of issuers in which affiliates of the Trust hold an interest, despite the fact
that the 1940 Act had a different standard. Since the enactment of NSMIA, the
states no longer have jurisdiction over the policy of the Trust with regard to
the investment in securities of issuers in which affiliates of the Trust hold
an interest.
Section 17(d) of the 1940 Act generally prohibits affiliates of an
investment company such as the Trust from jointly participating in any
enterprise with their affiliated investment company. This prohibition has been
interpreted by the SEC to include the purchase by an investment company of
securities of issuers affiliated with directors or officers of the investment
company, unless such purchase is pursuant to an exemptive order issued by the
SEC.
13
<PAGE>
It is proposed that this investment policy be eliminated since it is
duplicative and may conflict with Section 17(d) of the 1940 and the policies
of the SEC thereunder.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 3.
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
At its meeting of January 23, 1999, the Board of Trustees of the Trust
unanimously approved an Agreement and Plan of Reorganization (the
"Reorganization Agreement") in the form attached hereto as Annex A. (The
Reorganization Agreement was amended and restated by the Board of Trustees at
its meeting of May 7, 1999 to delay its Effective Date, as described below).
The Reorganization Agreement provides for the reorganization (the
"Reorganization") of the Money Market portfolio of the Trust into a newly
created money market series of Wayne Hummer Investment Trust. The Trust and
Wayne Hummer Investment Trust both are Massachusetts business trusts who have
Wayne Hummer Management Company as their investment adviser and Wayne Hummer
Investments L.L.C. as the distributor of their shares. Wayne Hummer Investment
Trust presently issues shares in two portfolios: the Wayne Hummer Growth Fund
and the Wayne Hummer Income Fund.
The purpose of the Reorganization is to assimilate the Trust's Money Market
portfolio into Wayne Hummer Investment Trust so as to achieve savings and
operating efficiencies by providing increased standardization of documents and
operational policies and to realize certain economics of scale. The Board
considered all issues which the Trustees believe to be material associated
with the Reorganization and determined that the Reorganization is in the best
interests of the shareholders and that existing shareholders will not be
diluted as a result of the Reorganization. Upon completion of the
Reorganization, Wayne Hummer Investment Trust will have three investment
portfolios, the Wayne Hummer Growth Fund, the Wayne Hummer Income Fund and the
Wayne Hummer Money Market Fund, the shares of which will be sold using a
single prospectus.
The Reorganization contemplates that (i) the Trust's Money Market portfolio
(the "Fund") will transfer all its assets to a newly created money market
series ("New Fund") of Wayne Hummer Investment Trust in exchange for shares of
the New Fund and the assumption by the New Fund of certain of the liabilities
of the Fund; (ii) distribution by the Fund to each shareholder of the Fund of
a number of New Fund shares (including any fractional shares) equal in value
and number to such shareholder's shares of the Fund in exchange for their
shares of the Fund; and (iii) the subsequent termination of the Fund (and the
Trust) and cancellation of all shares of the Fund.
If shareholders do not approve the reorganization, the Fund will continue
in business as the sole outstanding portfolio of the Trust.
Procedures for the Reorganization
In connection with the Reorganization, after the close of business on the
date of effectiveness of the Reorganization (the "Effective Date") but prior
to its completion, one share of the New Fund will be issued to the Fund. The
Fund, as the sole shareholder of the New Fund, will then take the following
actions:
(1) Approve the amended Investment Advisory and Management Agreement
between Wayne Hummer Management Company and Wayne Hummer Investment Trust
(if authorized by the Trust's shareholders as set forth in Item 4 of this
Proxy Statement).
(2) Ratify the selection of Ernst & Young LLP as auditors for the New
Fund for the year ending March 31, 2000.
(3) Ratify the election as board members of Wayne Hummer Investment
Trust the same persons who are nominated as Board Members of the Trust in
Item 1 (if such persons are approved by shareholders).
14
<PAGE>
Thereafter, on the Effective Date, the Fund will transfer all its assets to
the New Fund in exchange for shares of New Fund and the assumption by New Fund
of the liabilities of the Fund, the Fund will distribute to each shareholder
of the Fund shares of the New Fund in a number equal to the number of shares
(including any fractional share) of the Fund then owned by such shareholder
and having the same net asset value per share as the net asset value per share
of the shares the Fund on the Effective Date, the shares of the Fund owned by
the shareholder will be canceled and the Fund and Trust will then terminate. A
shareholder of the Fund will therefore acquire the same pro rata interest in
the New Fund as of the Effective Time of the Reorganization as the shareholder
had in the Fund immediately prior to the Reorganization. The New Fund will
then operate in the same manner and with the same investment objectives and
policies as those of the Fund, giving effect to the results of the shareholder
votes on the other items, including the change of fundamental investment
policies in Item 2.
Confirmations of the shares of the New Fund received in the Reorganization
in exchange for shares of the Fund will not be issued to shareholders because
the number and value of shares held by a shareholder will not be changed by
the Reorganization.
If approved by shareholders of the Fund, it is expected that the
Reorganization will be made effective at the close of business on July 30,
1999, but it may be effective at a different time.
Certain Comparative Information about the Trust and Wayne Hummer Investment
Trust
The Agreement and Declaration of Trust ("Declaration of Trust") of the
Trust and Wayne Hummer Investment Trust are substantially similar. The
shareholders of Wayne Hummer Investment Trust, however, are considering
authorizing an amendment to the Wayne Hummer Investment Trust's Declaration of
Trust ("Amendment") at a special meeting to be held June 30, 1999. The
Amendment would permit the Trustees of Wayne Hummer Investment Trust, without
further shareholder action, to issue one or more additional classes of shares
in each presently outstanding or future portfolio of Wayne Hummer Investment
Trust, having such preferences or special or relative rights and privileges as
the Trustees may determine.
The purpose of the Amendment would be to permit Wayne Hummer Investment
Trust to make its shares available with a variety of different distribution
and service arrangements, with related differences in fees. These arrangements
would be intended (1) to enable investors to choose the service and fee
arrangements best suited to their individual preferences and (2) to encourage
registered representatives of Wayne Hummer Investments L.L.C. and of other
securities firms to offer shares of the various portfolios of Wayne Hummer
Investment Trust, by making them more directly competitive with funds offered
by other sponsors. To the extent this leads to increased sales of Wayne Hummer
Investment Trust's shares, Wayne Hummer Investment Trust and its shareholders
may also benefit from greater investment flexibility for Wayne Hummer
Investment Trust and, to the extent of any increase in the size of Wayne
Hummer Investment Trust, possible reductions in operating expense ratios due
to economies of scale. Wayne Hummer Investment Trust has no present intention
of creating additional classes of shares for any other purposes. Any such
additional class of shares would participate in all other respects on an equal
proportionate basis with all other classes of shares, including as to
investment income, realized and unrealized gains and losses on portfolio
investments and all other operating expenses of Wayne Hummer Investment Trust.
All classes of shares would vote together as a single class at meetings of
shareholders, except that shares of a class which is affected by any matter
materially differently from shares of other classes would vote as a separate
class and holders of shares of a class not affected by a matter will not vote
on that matter. There is no present intention that Wayne Hummer Investment
Trust will create additional classes of shares for any of its portfolios if
the Amendment is authorized or that, if additional classes of shares are
authorized in the future, the shares of the New Fund would be included.
Further, the terms of any such arrangement and the determination whether to
implement it would be made in light of then existing business conditions.
15
<PAGE>
Federal Income Tax Consequences
It is anticipated that the transactions contemplated by the Reorganization
will be tax-free for federal income tax purposes. It is a condition of closing
of the Reorganization that at the Effective Date, the Trust shall have
received an opinion of Vedder, Price, Kaufman & Kammholz, that under the
Internal Revenue Code of 1986 the reorganization of the Fund into the New Fund
pursuant to the Reorganization will not give rise to the recognition of
income, deductions, gain or loss for federal income tax purposes to the Fund,
the Trust, or the shareholders of the Fund. A shareholder's adjusted basis for
tax purposes in shares of the New Fund after the Reorganization will be the
same as his adjusted basis for tax purposes in the shares of the Fund
immediately before the Reorganization. The holding period of the shares of the
New Fund received by the shareholders of the Fund will include the holding
period of shares of the Fund exchanged therefor, provided that at the time of
the exchange the shares of the Fund were held as capital assets
The Reorganization is contingent upon the shareholders authorizing the
approval of the amended Investment Advisory and Management Agreement between
Wayne Hummer Management Company and Wayne Hummer Investment Trust as provided
in Item 4.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE PROPOSAL
* * *
ITEM 4
APPROVAL OF THE AMENDED INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Wayne Hummer Management Company (the "Adviser") has served as the
investment adviser to the Trust since the Trust's inception in 1982. The
Adviser has also served, since 1983, as the investment adviser to Wayne Hummer
Investment Trust ("Investment Trust"), pursuant to an Investment Advisory and
Management Agreement dated December 15, 1983, most recently amended November
24, 1992 (the "Advisory Agreement"). If the Reorganization is approved and the
Money Market portfolio of the Trust is reorganized into a newly created series
of the Investment Trust ("New Fund"), it has been proposed that the Advisory
Agreement be amended to include the New Fund as a series of the Investment
Trust subject to the Advisory Agreement. At its meeting on January 23, 1999,
the Board of Trustees of the Trust voted to so amend the Advisory Agreement;
and further recommend that the shareholders of the Trust, in conjunction with
the Reorganization, authorize the Money Market portfolio of the Trust, as the
sole shareholder of the New Fund, to vote its share in favor of approval of
the Advisory Agreement (the "Amended Advisory Agreement").
With certain exceptions, the Amended Advisory Agreement insofar as it
relates to the New Fund is substantially the same as the current Investment
Advisory and Management Agreement between the Money Market portfolio of the
Trust and Wayne Hummer Management Company (the "Current Agreement"). The
duties and responsibilities of the Adviser to the New Fund would be
substantially the same as under the Current Agreements, as are the fees which
will be paid to the Adviser for the performance of these duties and
responsibilities. Under each Agreement, the Adviser receives the following
advisory fees from the Fund or the New Fund:
<TABLE>
<CAPTION>
Advisory Fee
(as a percentage
of average daily
Average Daily Net Assets of the Portfolio net assets)
----------------------------------------- ----------------
<S> <C>
Up to $500 million...................................... 0.50%
In excess of $500 million, but not exceeding $750
million................................................ 0.425%
In excess of $750 million, but not exceeding $1 billion. 0.375%
In excess of $1 billion, but not exceeding $1.5 billion. 0.35%
In excess of $1.5 billion, but not exceeding $2 billion. 0.325%
In excess of $2 billion, but not exceeding $2.5 billion. 0.30%
In excess of $2.5 billion............................... 0.275%
</TABLE>
16
<PAGE>
The Amended Advisory Agreement would continue in force from year to year so
long as its continuance is specifically approved by the Board for each
Portfolio of the Wayne Hummer Investment Trust in the manner required by the
Investment Company Act of 1940. The continuance of the Advisory Agreement was
last approved by the Board of Trustees of the Wayne Hummer Investment Trust on
May 7, 1999. The Advisory Agreement was last submitted to shareholders for
approval on July 19, 1988. The Current Agreement between the Adviser is dated
March 11, 1982 and was last approved by the Board on May 1, 1998 and by
shareholders on December 13, 1990.
The Amended Advisory Agreement may be terminated with respect to any or all
of the Portfolios of the Wayne Hummer Investment Trust by the Trust or by the
Adviser upon 60 days' notice. (These terms are substantially the same as the
corresponding terms of the Current Agreement.)
The Amended Advisory Agreement does not differ from the Current Agreement
in any material respect.
The Board of Trustees of the Trust believes that the authorization of the
Agreement is in the best interests of the Trust and recommends a vote in favor
of the proposal.
Investment Adviser
The Adviser is an Illinois corporation and a registered investment adviser
under the Investment Adviser's Act of 1940. In addition to advising the Trust,
the Adviser acts as investment adviser to the Wayne Hummer Investment Trust,
an investment company with approximately $159.8 million in aggregate net
assets offered in two investment portfolios, the Wayne Hummer Income Fund
("Income Fund") and the Wayne Hummer Growth Fund ("Growth Fund"), and to
various private and pension accounts with aggregate assets of approximately
$578 million. All of the outstanding shares of the Adviser are owned pro rata
by those persons who hold voting membership interests in Wayne Hummer
Investments L.L.C. The principal offices of the Adviser and Wayne Hummer
Investments L.L.C. are located at 300 South Wacker Drive, Chicago, Illinois
60606. For the fiscal year ended March 31, 1999, advisory fees paid by the
Trust were $1,587,540.
The Adviser also furnishes portfolio accounting services to the Trust
pursuant to a written agreement ("Accounting Agreement"). Such services
include maintaining for the Trust and its portfolios books, accounts, ledgers
and journals, preparing daily trial balances, pricing the Trust's portfolio
securities, and preparing required financial and other reports. For rendering
such services, each portfolio of the Trust pays the Adviser (i) an equipment
fee of $50 per month, and (ii) a fee, accrued daily and paid monthly, equal to
1/100th of 1% of the daily net assets of the portfolios, not to exceed $15,000
per annum. The Adviser also is reimbursed monthly by each portfolio for its
approximate out-of-pocket costs of obtaining certain pricing, software and
related services. For the year ended March 31, 1999, the Adviser was paid
aggregate fees of $15,600 and was reimbursed $9,707 pursuant to the Accounting
Agreement.
The outstanding shares of the Adviser are owned by those persons who are
"voting members" of Wayne Hummer Investments L.L.C., the distributor of the
Trust's shares, in proportion to their ownership of such membership interests.
Philip Hummer, William A. Rogers and Steven R. Becker, the holders of the
three largest voting membership interests in Wayne Hummer Investments L.L.C.,
own 7.73%, 6.98% and 6.40% of such voting membership interests, respectively.
The directors of the Adviser are H. Flagg Baum, Philip W. Hummer, William
A. Rogers, Steven R. Becker and Philip M. Burno, all of whom are voting
members of Wayne Hummer Investments, L.L.C. and are principally engaged in
that firm's securities brokerage business. Mr. Rowland, president of the
Adviser, serves as the Adviser's principal executive officer and owns 3.78% of
the voting membership interests in Wayne Hummer Investments L.L.C.
The initial organizational expenses of the New Fund and all expenses
relating to the initial registration of the New Fund's shares will be paid by
the New Fund. Such costs and expenses are anticipated to be approximately
$15,000.
17
<PAGE>
As of March 31, 1999, the Growth Fund had net assets of $139,493,694 and
the Income Fund had net assets of $20,327,381. The Growth Fund pays the
Adviser a fee equal to .80 of 1% of the first $100 million of average daily
net assets and .65 of 1% of the next $150 million of average daily net assets.
The Income Fund pays the Adviser a fee equal to .50 of 1% of the first $250
million of average daily net assets. For the year ended March 31, 1999, the
Growth Fund and the Income Fund paid the Adviser advisory fees of $1,030,442
and $103,836, respectively.
The approval of the Advisory Agreement is contingent upon the shareholders
approving the Reorganization as provided in Item 3.
THE BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ADDITIONAL INFORMATION
Quorum and Voting Requirements
Election of a Trustee requires the affirmative vote of a plurality of the
votes cast at the Special Meeting. A "plurality" is defined as more votes cast
for than against each Nominee. For Items 2 and 4, the favorable vote of: (a)
the holders of 67% or more of the outstanding voting securities of the Trust
present at the meeting, if the holders of 50% or more of the outstanding
voting securities of the Trust are present or represented by proxy; or (b) the
vote of the holders of more than 50% of the outstanding voting securities of
the Trust, whichever is less, is required to approve the amendment of the
investment policies of the Trust, and to authorize the Trust as the sole
shareholder of the New Fund, to approval of the amended Investment Advisory
and Management Agreement between Wayne Hummer Investment Trust and Wayne
Hummer Management Company. For Item 3, the favorable vote of the holders of a
majority (more than 50%) of the outstanding shares of the Trust is necessary
to authorize the Reorganization.
Only shareholders of record on the Record Date will be entitled to vote at
the Special Meeting. Each share of the Trust is entitled to one vote.
Fractional shares are entitled to proportionate shares of one vote.
Any person giving a proxy has the power to revoke it any time prior to its
exercise by executing a superseding proxy or by submitting a written notice of
revocation to the Secretary of the Trust. In addition, although mere
attendance at the Special Meeting will not revoke a proxy, a shareholder
present at the Special Meeting may withdraw his or her proxy and vote in
person. All properly executed and unrevoked proxies received in time for the
Special Meeting will be voted in accordance with the instructions contained in
the proxies. If no instruction is given on the proxy, the persons named as
proxies will vote the shares represented thereby in favor of the matters set
forth in the attached Notice.
In order to hold the Special Meeting, a "quorum" of shareholders must be
present. Holders of a majority of the total number of outstanding shares of
the Trust, present in person or by proxy, shall be required to constitute a
quorum for the purpose of voting on the proposals made.
For purposes of determining a quorum for transacting business at the
Special Meeting, abstentions and broker "non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not received
instructions from the beneficial owner or other persons entitled to vote
shares on a particular matter with respect to which the brokers or nominees do
not have discretionary power) will be treated as shares that are present but
which have not been voted. For this reason, abstentions and broker non-votes
will have the effect of a "no" vote for purposes of obtaining the requisite
approval of the proposals.
If a quorum is not present, the Special Meeting may be adjourned to a later
date by the affirmative vote of a majority of the shares of the Trust present
or represented by proxy. In the event that a quorum is present but sufficient
votes in favor of one or more of the proposals have not been received, the
persons named as proxies
18
<PAGE>
may propose one or more adjournments of the Special Meeting to permit further
solicitations of proxies with respect to such proposal(s). Any adjournment for
this purpose will require the affirmative vote of a majority of the shares cast
in person or by proxy at the session of the Special Meeting to be adjourned.
The persons named as proxies will vote those proxies which they are entitled to
vote FOR the proposal in favor of such an adjournment and will vote those
proxies required to be voted AGAINST the proposal against any adjournment. A
shareholder vote may be taken on the proposals in this proxy statement prior to
any such adjournment if sufficient votes have been received for approval.
Proposals of Shareholders
As a Massachusetts business trust, the Trust is not required to hold annual
meetings, but will hold special meetings as required or deemed desirable. In
addition, if Item 3 is approved, the Wayne Hummer Investment Trust, as a
Massachusetts business trust, likewise is not required to hold an annual
meeting, but will hold special meetings as required or deemed desirable. Any
shareholder who wishes to submit proposals for consideration at a meeting of
shareholders should send such proposal to the Trust or the Wayne Hummer
Investment Trust (if Item 3 is approved) at 300 South Wacker Drive, 15th Floor,
Chicago, Illinois 60606. To be considered for presentation at a shareholders
meeting, rules promulgated by the SEC require that, among other things, a
shareholder's proposal must be received at the offices of the Trust a
reasonable time before a solicitation is made. Timely submission of a proposal
does not mean that such proposal will be included.
5% Shareholders
On May 13, 1999 there were no persons known to the Trust who own, control or
hold with the power to vote 5% or more of the Trust's outstanding voting
securities.
Distributor
Wayne Hummer Investments L.L.C., a Delaware limited liability company, is
the Distributor of the Trust's shares. Wayne Hummer Investments L.L.C. is a
federally registered broker/dealer, a member of the National Association of
Securities Dealers and a member of the New York, American and Chicago Stock
Exchanges.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
No business other than the matter described above is expected to come before
the Special Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment or postponement
of the Special Meeting, the persons named on the enclosed proxy card will vote
on such matters according to their best judgment in the interests of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO POSTAGE IF MAILED
IN THE UNITED STATES.
By Order of the Trustees
Robert J. Moran
Secretary
May 21, 1999
19
<PAGE>
APPENDIX A
AMENDED AND RESTATED
AGREEMENT AND PLAN OF REORGANIZATION
Wayne Hummer Money Fund Trust ("WHMFT"), a Massachusetts business trust, on
behalf of its series of shares designated Money Market Portfolio (the "Fund")
and Wayne Hummer Investment Trust ("WHIT"), a Massachusetts business trust, on
behalf of its series of shares designated Wayne Hummer Money Market Fund (the
"New Fund"), agree upon the following plan of reorganization (the "Plan"):
1. The Fund shall transfer to the New Fund all of the assets of the Fund
(including the share(s) of the New Fund owned by the Fund, which shall be
canceled), in exchange for which the New Fund shall simultaneously assume
all of the liabilities of the Fund, and shall issue to the Fund a number of
New Fund shares equal in number and net asset value to the number and net
asset value of shares (including fractional shares) of the Fund then
outstanding. The Fund then will distribute to each registered shareholder
of the Fund shares of the New Fund in a number and net asset value equal to
the number and net asset value of shares (including any fractional share)
of the Fund then owned by the shareholder, in exchange for and cancellation
of the shareholder's shares of the Fund.
2. The distribution to the shareholders of the Fund shall be
accomplished by establishing an account on the share records of the New
Fund in the name of each registered shareholder of the Fund, and crediting
that account with a number of shares of the New Fund equal to the number of
shares (including any fractional share) of the Fund owned of record by the
shareholder at the time of the distribution.
3. Promptly thereafter, the Fund shall be completely liquidated and
WHMFT shall be terminated.
4. The closing of the transaction in section 1 above shall occur at the
close of business on July 30, 1999, at the offices of WHIT, or at such
other date, time or place as may be agreed upon by the parties.
5. The obligations of WHMFT and WHIT to effect the transactions
contemplated hereunder shall be subject to the satisfaction of each of the
following conditions:
a. All necessary filings shall have been made with the Securities
and Exchange Commission and state securities commissions and no order
or directive shall have been received that any other or further action
is required to permit the parties to carry out the transactions
contemplated by this Plan.
b. WHMFT and WHIT each shall have received an opinion from its legal
counsel substantially to the effect that for federal income tax
purposes: (i) no gain or loss will be recognized by the Fund upon the
transfer of its assets and liabilities to the New Fund or upon the
distribution to its shareholders of shares of the New Fund received as
a result of such transfer; (ii) the tax basis of the assets of the Fund
in the hands of the New Fund will be the same as the tax basis of such
assets in the hands of the Fund immediately prior to the transfer;
(iii) the holding period of the assets of the Fund transferred to the
New Fund will include the period during which such assets were held by
the Fund; (iv) no gain or loss will be recognized by the New Fund upon
the receipt of the assets of the Fund in exchange for shares of the New
Fund and the assumption by the New Fund of the liabilities and
obligations of the Fund; (v) no gain or loss will be recognized by the
shareholders of the Fund upon receipt of the shares of the New Fund;
(vi) the basis of the shares of the New Fund received by the
shareholders of the Fund will be the same as the basis of the shares of
the Fund exchanged therefor; and (vii) the holding period of shares of
the New Fund received by the shareholders of the Fund will include the
holding period of the shares of the Fund exchanged therefor, provided
that at the time of the exchange the shares of the Fund were held as
capital assets; and as to such other matters as it may reasonably
request. WHMFT and WHIT will cooperate in providing such legal counsel
with reasonable and customary representations regarding the Fund, New
Fund actions contemplated by this Plan, and such other matters as
reasonably requested.
c. This Plan and the reorganization contemplated hereby shall have
been adopted and approved by the affirmative vote of the holders of the
requisite number of the outstanding shares of WHMFT entitled to vote
thereon as required by law at the time such vote is taken.
A-1
<PAGE>
d. New Fund will have been formed for the sole purpose of effecting
the actions contemplated by this Plan and will conduct no business
other than that which is necessary to effect this Plan.
e. The Trustees of WHIT shall have authorized, and the New Fund
shall have issued, one share of the New Fund to the Fund in
consideration of the payment equal to the net asset value of one share
of the Fund on the day of the Closing for the purpose of enabling the
Fund to approve as sole shareholder of the New Fund the investment
management agreement between WHIT and Wayne Hummer Management Company,
for the New Fund; such approval shall have taken place and the New Fund
shall have become subject to said agreement in accordance with the
terms thereof.
At any time prior to the Closing, any of the foregoing conditions may be
waived by the WHMFT and the WHIT if such a waiver will not have a material
adverse effect on the interests of the shareholders of the Fund or the New
Fund, as the case may be.
6. This agreement may be amended at any time, and may be terminated at
any time before the completion of the transaction in section 1, regardless
of whether or not this agreement and plan of reorganization has been
approved by the shareholders of the Fund, by agreement of WHMFT and WHIT,
provided that no amendment shall have a material adverse effect upon the
interests of shareholders of the Fund. In any case, this agreement and plan
of reorganization may be terminated by either WHMFT or WHIT, if the
transaction in section 1 has not occurred by the close of business on
September 30, 1999.
7. A copy of the Declaration of the Trust of each of WHMFT and WHIT is
on file with the Secretary of the Commonwealth of Massachusetts, and notice
is hereby given that this instrument is executed on behalf of the trustees
of WHMFT and WHIT as the trustees of WHMFT and WHIT, respectively, and not
individually and that the obligations under this instrument are not binding
upon any of the trustees, officers or shareholders of either WHMFT or WHIT
individually, but binding only upon the assets and property of the New
Fund.
8. At any time after the completion of the transaction in section 1,
WHMFT acting through its officers, or if then dissolved through its last
officers, shall execute and deliver to WHIT, such additional instruments of
transfer or other written assurances as WHIT may reasonably request in
order to vest in WHIT, acting for the New Fund, title to the assets
transferred by the Fund under this agreement.
9. This agreement shall be construed in accordance with applicable
federal law and the laws of the State of Illinois, except as to the
provisions of section 7 hereof, which shall be construed in accordance with
the laws of the Commonwealth of Massachusetts.
Dated: May 7, 1999
Wayne Hummer Money Fund Trust.
By:
David P. Poitras
President
Wayne Hummer Investment Trust.
By:
Thomas J. Rowland
President
A-2
<PAGE>
WAYNE HUMMER MONEY FUND TRUST
Investment Adviser
WAYNE HUMMER MANAGEMENT COMPANY
300 South Wacker Drive
Chicago, Illinois 60606
Distributor
WAYNE HUMMER INVESTMENTS L.L.C.
300 South Wacker Drive
Chicago, Illinois 60606
<PAGE>
WAYNE HUMMER MANAGEMENT COMPANY
300 SOUTH WACKER DR., 14th FLOOR
CHICAGO, IL 60606
SPECIAL MEETING OF SHAREHOLDERS OF THE
WAYNE HUMMER MONEY FUND TRUST
TO BE HELD ON JUNE 30, 1999
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned Shareholders of
Wayne Hummer Money Fund Trust hereby appoint Steven R. Becker or Charles V.
Doherty, or either of them, true and lawful attorneys, with the power of
substitution of each, to vote all shares of Wayne Hummer Money Fund Trust, 300
South Wacker Drive, 14th Floor, Chicago, Illinois 60606, which the undersigned
is entitled to vote at the Special Meeting of Shareholders to be held on June
30, 1999, at 10:00 a.m., and at any adjournments thereof.
The attorneys named will vote the shares represented by this voting
instruction/proxy in accordance with the choices made on this ballot. If no
choice is indicated as to the item, this voting instruction/proxy will be voted
affirmatively on the matters. Discretionary authority is hereby conferred as to
all other matters as may properly come before the Special Meeting or any
adjournment thereof.
THIS VOTING INSTRUCTION/PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
TRUSTEES OF WAYNE HUMMER MONEY FUND TRUST. THIS VOTING INSTRUCTION/PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THIS VOTING INSTRUCTION/PROXY WILL BE
VOTED "FOR" THE PROPOSALS.
TO VOTE BY TOUCH-TONE PHONE OR THE INTERNET:
CALL TOLL FREE: 1-800-690-6903 OR VISIT THE WEBSITE AT www.proxyvote.com
Please sign this voting instruction/proxy exactly as your name appears on
the books of the Trust. Joint owners should each sign personally. Trustees and
other fiduciaries should indicate the capacity in which they sign, and where
more than one name appears, a majority must sign. If a corporation, this
signature should be that of an authorized officer who should state his or her
title.
YOUR VOTE IS IMPORTANT.
Please complete, sign and return this card as soon as possible.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [X]
KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS VOTING INSTRUCTION/PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
WAYNE HUMMER MONEY FUND TRUST
The Board of Trustees recommends a vote FOR each of the following:
Vote on Trustees
For Withhold For All
All All Except
[ ] [ ] [ ]
1. To elect (01) Steven R. Becker,
(02) Charles V. Doherty,
(03) Joel D. Gingiss,
(04) Patrick B. Long,
(05) David P. Poitras,
(06) James J. Riebandt and
(07) Eustace K. Shaw as
Trustees of the Trust.
To withhold authority to vote, mark "For All Except" and write the nominee's
number on the line below.
_____________________________
<TABLE>
<CAPTION>
Vote on Proposals For Against Abstain
<S> <C> <C> <C> <C>
2. To approve or disapprove of changes
to the Trust's fundamental investment
policies of the Funds.
a. Types of securities [ ] [ ] [ ]
b. Diversification [ ] [ ] [ ]
c. Investment in one issuer [ ] [ ] [ ]
d. Investing for control [ ] [ ] [ ]
e. Portfolio lending [ ] [ ] [ ]
f. Other investment companies [ ] [ ] [ ]
g. Investment in real estate or oil
interests [ ] [ ] [ ]
h. Unseasoned issuers [ ] [ ] [ ]
i. Restricted and illiquid securities [ ] [ ] [ ]
j. Borrowing securities [ ] [ ] [ ]
k. Senior securities [ ] [ ] [ ]
l. Pledging portfolio securities [ ] [ ] [ ]
m. Securities of issuers in which
affiliates of the Trust hold
an interest [ ] [ ] [ ]
3. To approve or disapprove the Agreement
and Plan of Reorganization. [ ] [ ] [ ]
4. To approve or disapprove the Amended
Investment Advisory and Management
Agreement. [ ] [ ] [ ]
</TABLE>
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Signature [PLEASE SIGN WITHIN BOX] Date
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Signature (Joint Owners) Date
