<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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14a-6(e)(2))
[_] 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 March __, 1999
Wayne Hummer Money Fund Trust, (the "Trust") will hold a special meeting of
shareholders on May 14, 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 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, changes to the Trust's
fundamental investment policies, approving a Reorganization of the
Trust into another mutual fund sponsored by Wayne Hummer and
authorizing 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. In the past, these 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 can 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 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 be
shareholders of New Fund upon its completion. 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.
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 is 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 very similar to 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 you should know about and approve.
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. If we do not receive your
proxy card, Shareholder Communications Corporation, our proxy
solicitor, 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 a
_________________________. Wayne Hummer's toll-free number is
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. The Board recommends that you read the
enclosed materials carefully and vote FOR all proposals.
<PAGE>
PROXY STATEMENT
Wayne Hummer Money Fund Trust
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 14, 1999
To the Shareholders: March __, 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 May 14, 1999, for the following purposes and to
transact such other business, if any, as may properly come before the meeting:
(1) To elect six 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 policy on investment in 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 purchasing unseasoned
issuers;
(i) to amend and make non-fundamental the policies on restricted and
illiquid securities;
(j) to amend and restate the fundamental investment policies on
borrowing and the issuance of senior securities.
(k) to amend the fundamental policy on pledging portfolio securities;
and
(l) 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 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.
The Board of Trustees has fixed March 2, 1999, as the record date for
determination of shareholders entitled to vote at the meeting.
By Order of the Trustees
Jean M. Maurice
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 May 14, 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, telegraph 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 page envelope provided. You may also vote by
telephone. To vote by telephone, have your proxy card ready and dial
1-800-____-_____. 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, the effect of
which would be to reorganize the Money Market portfolio of the Trust (the
"Fund") into a newly created 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
March __, 1999, to shareholders of record at the close of business on March 2,
1999 (the "Record Date"). On the Record Date, the Trust had 352,432,621
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, 1998, and Semi-annual
Report for the period ended September 30, 1998 were previously mailed to
shareholders. Any shareholder wishing to receive another copy of
<PAGE>
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.
2
<PAGE>
ITEM 1
ELECTION OF SIX 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, and Eustace K. Shaw as Trustees of the Trust. All of the nominees,
except for Mr. Poitras, 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 July 19, 1988.
If elected, Mr Poitras will fill a vacancy resulting from the retirement of Mr.
Philip M. Burno, who also was elected by the shareholders on July 19, 1988. 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 will 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. The Board has no reason to believe that any nominee will become
unavailable for election as a Trustee.
About the Nominees
The nominees are listed below with their ages, 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>
NAME, AGE AND
PRINCIPAL OCCUPATIONS TRUSTEE SHARES
DURING LAST 5 YEARS SINCE OWNED
------------------- ------- ------
<S> <C> <C>
Steven R. Becker (47)*+ 1983 399,702/(1)/
Member, Wayne Hummer Investments L.L.C., and (prior
to April 1996) Partner, Wayne Hummer & Co.; Director
and Former Vice President, Wayne Hummer Management
Company.
Charles V. Doherty (65)*+ 1994 22,872/(2)/
Chief Operating Officer and Director, Lakeside Bank,
Chicago, Illinois; Managing Director, Madison Asset
Group (Investment Adviser); President and Director,
Doherty Zable & Co. (Public Accountants); (September 1,
1989, to December 31, 1992) President and Chief
Operating Officer, Midwest Stock Exchange (now,
Chicago Stock Exchange).
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND
PRINCIPAL OCCUPATIONS TRUSTEE SHARES
DURING LAST 5 YEARS SINCE OWNED
------------------- ------- -----
<S> <C> <C>
Joel D. Gingiss (56)+ 1983 24,111/(3)/
Assistant State Attorney, Lake County, Illinois; Former
Chairman and President, Gingiss International (franchisor
of Gingiss Formalwear Stores); Past President,
International Franchise Association.
Patrick B. Long (55) 1983 2,210
Chairman, Chief Executive Officer and Director, KMS
Industries, Inc. (fusion energy research); Chairman, Chief
Executive Officer and Director, OG Technologies, Inc.
[TYPE OF BUSINESS]; Chairman, Chief Executive
Officer and Director, AVIQS, LLC [TYPE OF
BUSINESS].
David P. Poitras (38)* Nominee 0
President, Wayne Hummer Money Fund Trust; Vice
President, Wayne Hummer Management Company;
Member, Wayne Hummer Investments L.L.C., and (prior
to April, 1996) Partner, Wayne Hummer & Co.
Eustace K. Shaw (73) 1983 38,485/(4)/
President and Chairman, B. F. Shaw Printing Co.; former
publisher, Newton Daily News.
</TABLE>
- ---------------
*Interested person of the Trust, as defined by the 1940 Act, by reason of being
an officer, director or member of the investment adviser and/or distributor.
+Member of the Executive Committee of the Trust. Mr. Burno, who presently is a
member of the Executive Committee, is not standing for re-election. The
Executive Committee is elected by the Board of Trustees and is composed of four
Trustees, two of whom are interested persons as defined in the Investment
Company Act of 1940. 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.
(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 (minors for whom Mr. Gingiss acts as trustee). Mr. Gingiss
disclaims beneficial ownership of these shares.
(4) 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.
- --------------
The Trustees serve in similar capacities with Wayne Hummer Investment
Trust. During the fiscal year ended March 31, 1998, there were four meetings of
the Board of Trustees. Each of the current 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
4
<PAGE>
do not receive fees from the Trust. All Trustees 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 is an interested person of the
Trust. The Audit Committee reviews the work and any recommendations of the
Trust's independent public auditors. Based on such review, it is authorized to
make recommendations to the Board. The Audit Committee held one meeting for the
fiscal year ended March 31, 1998.
The Nominating Committee of the Board of Trustees is composed of Messrs
Long (Chairman), Doherty and Gingiss, none of whom are interested persons of the
Trust. The Nominating Committee is authorized to seek and 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 no
meetings for the fiscal year ended March 31, 1998. At its meeting of January 23,
1999, the Nominating Committee unanimously recommended the nominees listed above
as persons to be elected as Trustees at the Special Meeting.
Trustee Compensation
Wayne Hummer Management Company, the investment adviser of the Trust, pays
the compensation of all Trustees of the Trust who are interested persons of the
Trust. Effective January 1, 1999, the Trust pays each Trustee who is not an
interested person of the Trust $5,000 per year, plus $500 and expenses for each
Board and committee meeting attended. Prior to January 1, 1999 the annual
retainer paid to a Trustee was $2,000 per year. It is anticipated that, in
accordance with the recommendation of the Audit Committee, upon the
effectiveness of the Reorganization, the annual retainer and per meeting fee to
be paid by Wayne Hummer Investment Trust to each Trustee who is not an
interested person will be increased to $10,000 and $1,000, respectively.
The following table sets forth the compensation received by all Trustees of
the Trust for the fiscal year ended March 31, 1998. 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>
Steven R. Becker $ 0 $ 0
Philip M. Burno $ 0 $ 0
Charles V. Doherty $4,500 $9,500
Joel D. Gingiss $4,500 $9,500
Patrick B. Long $4,500 $9,500
Eustace K. Shaw $4,500 $9,500
</TABLE>
5
<PAGE>
Officers of the Trust
The Officers of the Trust are listed below with their ages, 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 Management
Company; Member, Wayne Hummer
Investments L.L.C., and (prior to April,
1996) Partner, Wayne Hummer & Co.
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 Management Company and Wayne Hummer Investments L.L.C. for legal
services rendered.
Ownership of Trust Shares
As of January 1, 1999, the Trustees and officers as a group
beneficially owned less than 1% of the outstanding Shares of the Trust. As of
January 1, 1999, the Wayne Hummer Employees Profit Sharing Trust (the
"Retirement Plan") owned of record and beneficially 0.78% 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 IN FAVOR OF THE ELECTION
OF EACH OF THE NOMINEES.
* * *
ITEM 2
APPROVAL OR DISAPPROVAL OF CHANGES
TO THE FUNDAMENTAL INVESTMENT POLICIES OF THE FUNDS
The Investment Trust Act of 1940 (the "1940 Act") requires investment
companies such as the Trust to adopt certain specific 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 often 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 in effect. 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.
6
<PAGE>
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 frequent shareholder meetings. The
Trustees also believe that the proposals will 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)
TO ELIMINATE 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 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
* * *
ITEM 2(b)
TO ELIMINATE 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
7
<PAGE>
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 without the approval of
shareholders. Therefore, this policy is provides investors with no additional
protection than is available to them under the 1940 Act.
Additionally, Rule 2a-7 prohibits money market funds 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. This 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 OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(c)
TO ELIMINATE THE POLICY ON INVESTMENT IN 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 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 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
* * *
ITEM 2(d)
TO ELIMINATE 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.
8
<PAGE>
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)
TO AMEND THE POLICY ON PORTFOLIO LENDING
The current fundamental investment policy of the Trust with regard to the
lending of portfolio securities is as follows:
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:
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 establish from time to time. Of course, such policies would
be in accordance with any applicable guidelines issued by the SEC or an 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.
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).
9
<PAGE>
ITEM 2(f)
TO ELIMINATE 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 NSMIA, 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 make a investment of more than 10% of its total assets, for
example, in a specialized money market fund for temporary defensive purposes.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(g)
TO ELIMINATE 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.
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
* * *
10
<PAGE>
ITEM 2(h)
TO ELIMINATE THE PROHIBITION AGAINST
INVESTING IN UNSEASONED ISSUERS
The current fundamental policy prohibiting investing in unseasoned issuers
is as follows:
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, prohibit the Trust from investing in
unseasoned issuers; instead, the standards of Rule 2a-7 depend upon the
creditworthiness of the 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.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(i)
TO AMEND AND MAKE NON-FUNDAMENTAL THE POLICIES
ON RESTRICTED AND ILLIQUID SECURITIES
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 federate 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 many restricted securities are, in fact, quite liquid,
and 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
11
<PAGE>
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 a significant
amount of 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. 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.
If shareholders do not approve the above proposal, the Trust will continue
to invest no more than 5% of the value of its total assets in restricted
securities of any kind, except Section 4(2) commercial paper.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(j)
TO AMEND AND RESTATE THE FUNDAMENTAL INVESTMENT 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, both funds have 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 have approved and recommended that these policies be
amended and restated to read as follows:
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 Company 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.
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
12
<PAGE>
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. Finally, 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."
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
ITEM 2(k)
TO AMEND THE FUNDAMENTAL 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.
The Board of Trustees have 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.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
* * *
13
<PAGE>
ITEM 2(l)
TO ELIMINATE 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 investment
companies such as the Trust from jointly participating in any enterprise with
their affiliated investment companies. This prohibition has been interpreted by
the SEC to include the purchase by an investment company in 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.
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.
TO APPROVE 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 provides for the reorganization (the "Reorganization")
of the Money Market portfolio of the Trust into a newly created 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 issued 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. 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 out of one prospectus.
The Reorganization contemplates that (i) the Trust's Money Market portfolio
(the "Fund") will transfer all its assets to a newly created series ("New Fund")
of Wayne Hummer Investment Trust in exchange for shares of the New
14
<PAGE>
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; and (iii) the subsequent termination of the Fund
(and the Trust) and cancellation of the outstanding 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.)
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
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 May 31, 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 May 14, 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.
15
<PAGE>
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 economics 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.
Federal Income Tax Consequences
It is anticipated that the transactions contemplated by the Reorganization
will be tax-free for federal income tax purposes. At the Effective Date, the
Trust will receive 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 OR DISAPPROVAL 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 1988, as the investment adviser to Wayne Hummer
Investment Trust, pursuant to an Investment Advisory and Management Agreement
dated April 29, 1988 (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 Wayne Hummer Investment Trust ("New Fund"), it has been
proposed that the Advisory Agreement be amended to include the New Fund as a
series of the 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
16
<PAGE>
portfolio of the Trust, as the sole shareholder of the New Fund to vote its
share in favor of approval of the Advisory Agreement.
With certain exceptions, the Advisory Agreement is substantially the same
as the current Investment Advisory and Management Agreement between the Money
Market series of the Trust and Wayne Hummer Management Company (the "Current
Agreement"). The duties and responsibilities of the Adviser are substantially
the same under both Agreements, as are the fees which will be paid to the
Adviser for the performance of these duties and responsibilities. Under both
Agreements, the Adviser receives the following advisory fees:
<TABLE>
<CAPTION>
Average Daily Net Assets of the Portfolio Advisory Fee
- ------------------------------------------- ----------------------------
(as a percentage of average
----------------------------
daily 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, 0.325%
but not exceeding $2 billion
- ------------------------------------------------------------------------
In excess of $2 billion,
but not exceeding $2.5 billion 0.30%
- ------------------------------------------------------------------------
In excess of $2.5 billion 0.275%
- ------------------------------------------------------------------------
</TABLE>
The Advisory Agreement continues 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 Agreement was last approved by the Board of
Trustees of the Wayne Hummer Investment Trust on May 1, 1998. The Advisory
Agreement was last submitted to shareholders for approval on December 13, 1990.
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 _______ __, 19__.
The 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 Advisory Agreement differs from the Current Agreement in the following
material respects:
1. The Advisory Agreement requires the Adviser to waive its advisory fee
and to reimburse a portfolio for operating expenses in the event that the
operating expenses of a portfolio of the Wayne Hummer Investment Trust
exceed 1.5% of average daily net assets; the corresponding expense
limitation under the Current Agreement imposes a cap of 1.0% of average
daily net assets. In the event that the operating expenses of the Money
Market Series of the Wayne Hummer Investment Trust were to exceed 1.0% of
average daily net assets, the Adviser would not be under a contractual
obligation to waive its advisory fee or reimburse the Money Market Series
for other operating expenses unless, and only to the extent that, such
expenses exceeded 1.5% of average daily net assets. The Adviser has
undertaken in writing to the Board of Trustees to maintain the limit the
expenses of the Money Market
17
<PAGE>
Series of the Wayne Hummer Investment Trust to 1.0% of average daily
net assets for the fiscal year ending March 31, 2000, and that it will
not withdraw this undertaking in the future on less than one year's
notice to the Trust.
2. Under the Advisory Agreement, the Adviser is required to arrange, but
not pay for, the computation of the net asset value of the net asset
value of the portfolios of the Wayne Hummer Investment Trust as
provided in its current prospectus and to arrange, but not pay for,
the bookkeeping service related to such computation. There is no
corresponding requirement under the Current Agreement; however, as a
matter of course, the Adviser has arranged for these computation and
related bookkeeping services to be provided to the Trust, at the
expense of the Trust, on the same basis as if such a requirement
existed in the Current Agreement.
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 $163 million in aggregate net assets
offered in two investment portfolios, the Wayne Hummer Income Fund and the Wayne
Hummer 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, 1998, advisory fees paid by
the Trust were $1,311,192.
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, 1998, the Adviser was paid
aggregate fees of $15,000 and was reimbursed $9,452 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 Wayne Hummer, William B. Hummer and William A. Rogers, the holders of the
three largest voting membership interests in Wayne Hummer Investments L.L.C.,
own 8.92%, 7.06% and 7.06% 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 3.82% of the voting
membership interests in Wayne Hummer Investments L.L.C.
The Adviser bore all of the initial organizational expenses of the New
Fund, and all expenses relating to the initial registration of the New Trust's
shares. Such costs and expenses, which are anticipated to be approximately
$__________ will be amortized by the New Fund and reimbursed to the Adviser in
twenty (20) equal consecutive quarterly installment payments commencing
September 30, 1999.
The Adviser also acts as investment adviser to Wayne Hummer Investment
Trust, an investment company presently offering its shares in two portfolios;
the Wayne Hummer Growth Fund portfolio ("Growth Fund") and the
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Wayne Hummer Income Fund portfolio ("Income Fund"). As of January 31, 1998, the
Growth Fund had net assets of $142,246,917 and the Income Fund had net assets of
$20,769,815. 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, 1998, the Growth Fund and the Income Fund paid the
Adviser advisory fees of $950,496 and $110,478, 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
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votes in favor of one or more of the proposals have not been received, the
persons named as proxies 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 March 2, 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
The Trust is not required, and does not intend, to hold annual meetings of
shareholders. Shareholders wishing to submit proposals for consideration for
inclusion in a proxy statement for the next meeting of shareholders should send
their written proposals to Wayne Hummer Money Fund Trust, 300 S. Wacker Drive,
15th Floor, Chicago, Illinois 60603, so that they are received within a
reasonable time before any such meeting.
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
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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
March 3, 1999
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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
Cusip 609346200
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SPECIAL MEETING OF SHAREHOLDERS OF THE
WAYNE HUMMER MONEY FUND TRUST TO BE HELD
ON MAY 14, 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, 15th Floor, Chicago, Illinois 60606, which the undersigned
is entitled to vote at the Special Meeting of Shareholders to be held on May 14,
1999, at 300 South Wacker Drive, 15th Floor, Chicago, Illinois 60606, at 10:00
a.m., and at any adjournments thereof.
The attorneys named will vote the shares represented by this proxy in
accordance with the choices made on this ballot. If no choice is indicated as to
the item, this 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 PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF WAYNE HUMMER
MONEY FUND TRUST. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE PROPOSALS.
Proposal 1 To elect Steven R. Becker, Philip M. Burno, Charles V. Doherty, Joel
D. Gingiss, Patrick B. Long, and Eustace K. Shaw as Trustees of the
Trust.
FOR [ ] AGAINST [ ] WITHHOLD AUTHORITY VOTE [ ]
FOR ALL EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a particular
nominee, mark the "For All Except" box and strike a line through the
nominee(s') name. Your shares will be voted for the remaining
nominees.
Proposal 2 To approve or disapprove of changes to the Trust's fundamental
investment policies of the Funds.
FOR ALL EXCEPT AS MARKED BELOW
[ ] AGAINST ALL [ ] ABSTAIN ALL [ ]
2.a Types of Securities
2.b Diversification
2.c Investment in one issuer
2.d Investing for control
2.e Portfolio lending
2.f Other investment companies
2.g Investment in real estate oil interests
2.h Unseasoned issuers
2.i Restricted and illiquid securities
2.j Borrowing and issuing senior securities
2.k Pledging portfolio securities
2.l Securities of issuers in which affiliates of
the Trust hold an interest
Proposal 3 To approve or disapprove the Agreement and Plan of Reorganization.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
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Proposal 4 To authorize, in conjunction with the Reorganization, the approval
of an amended Investment Advisory and Management Agreement between
Wayne Hummer Management Company and Wayne Hummer Investment Trust.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Mark with an X in the box.
YOUR VOTE IS IMPORTANT. Please complete, sign and return this card as soon
as possible.
Date
------------------------------
Signature
------------------------------
Signature (Joint Owners)
Please sign this 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.
Cusip 609346200
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APPENDIX A
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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 May 31, 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.
A-1
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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.
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 July 31, 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 January 23, 1999
Wayne Hummer Money Fund Trust.
By:
---------------------------
David P. Poitras
President
A-2
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Wayne Hummer Investment Trust.
By:
---------------------------
Thomas J. Rowland
President
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