<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone America Hartwell Emerging Growth Fund, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Balanced Fund II
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Capital Preservation and Income Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Emerging Markets Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Fund for Total Return
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Fund of the Americas
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Global Opportunities Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Global Resources and Development Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Government Securities Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Intermediate Term Bond Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Liquid 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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Omega Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Small Company Growth Fund II
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone State Tax Free Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone State Tax Free Fund - Series II
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Strategic Income Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone Tax Free Income Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN A PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Keystone World Bond Fund
- --------------------------------------------------------------------------------
(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:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0- 11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total Fee Paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE>
KEYSTONE AMERICA FAMILY OF FUNDS
200 BERKELEY STREET
BOSTON, MASSACHUSETTS 02116-5034
TELEPHONE NUMBER (617) 338-3200
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 9, 1996
KEYSTONE AMERICA HARTWELL EMERGING
GROWTH FUND, INC.
("EMERGING GROWTH")
KEYSTONE BALANCED FUND II ("BALANCED FUND")
KEYSTONE CAPITAL PRESERVATION AND INCOME FUND
("CAPITAL PRESERVATION AND INCOME")
KEYSTONE EMERGING MARKETS FUND
("EMERGING MARKETS")
KEYSTONE FUND FOR TOTAL RETURN ("TOTAL RETURN")
KEYSTONE FUND OF THE AMERICAS
("FUND OF THE AMERICAS")
KEYSTONE GLOBAL OPPORTUNITIES FUND
("GLOBAL OPPORTUNITIES")
KEYSTONE GLOBAL RESOURCES AND
DEVELOPMENT FUND
("GLOBAL RESOURCES")
KEYSTONE GOVERNMENT SECURITIES FUND
("GOVERNMENT SECURITIES")
KEYSTONE INTERMEDIATE TERM BOND FUND
("INTERMEDIATE TERM")
KEYSTONE LIQUID TRUST ("LIQUID TRUST")
KEYSTONE OMEGA FUND ("OMEGA")
KEYSTONE SMALL COMPANY GROWTH FUND II
("SMALL COMPANY GROWTH")
KEYSTONE STATE TAX FREE FUND ("STATE TAX FREE")
STATE TAX FREE HAS FOUR EXISTING SERIES:
- FLORIDA TAX FREE FUND ("FLORIDA TAX FREE")
- MASSACHUSETTS TAX FREE FUND ("MASSACHUSETTS TAX FREE")
- NEW YORK INSURED TAX FREE FUND ("NEW YORK INSURED")
- PENNSYLVANIA TAX FREE FUND ("PENNSYLVANIA TAX FREE")
KA
<PAGE>
KEYSTONE STATE TAX FREE FUND-SERIES II
("STATE TAX FREE II")
STATE TAX FREE II HAS TWO EXISTING SERIES:
- CALIFORNIA INSURED TAX FREE FUND ("CALIFORNIA INSURED")
- MISSOURI TAX FREE FUND ("MISSOURI TAX FREE")
KEYSTONE STRATEGIC INCOME FUND
("STRATEGIC INCOME")
KEYSTONE TAX FREE INCOME FUND
("TAX FREE INCOME")
KEYSTONE WORLD BOND FUND ("WORLD BOND")
To the shareholders of the Keystone America Family of Funds:
A Joint Special Meeting (the "Meeting") of shareholders of each fund listed
above (each a "Fund") will be held at the offices of the Funds, 200 Berkeley
Street, Boston, Massachusetts, on Monday, December 9, 1996, at 3:30 P.M., Boston
time, for the purpose of considering and acting upon the following proposals:
1.* FOR THE SHAREHOLDERS OF ALL FUNDS, to elect Trustees** of each Fund,
subject, in the case of Global Opportunities and Liquid Trust, to
adoption of Proposal 4 below.
2.* FOR THE SHAREHOLDERS OF ALL FUNDS, to approve an Investment Advisory
and Management Agreement between each Fund and Keystone Investment
Management Company, substantially as described in the accompanying
Proxy Statement.
3. FOR THE SHAREHOLDERS OF EACH OF EMERGING GROWTH, GLOBAL OPPORTUNITIES
AND GLOBAL RESOURCES ONLY, to approve a SubAdvisory Agreement for each
such Fund, substantially as described in the Proxy Statement.
4. FOR THE SHAREHOLDERS OF EACH OF GLOBAL OPPORTUNITIES AND LIQUID TRUST
ONLY, to amend the Fund's Declaration of Trust to permit the Board of
Trustees to fix the number of Trustees from time to time.
5. FOR SHAREHOLDERS OF EMERGING GROWTH ONLY, to ratify the selection of
KPMG Peat Marwick LLP as the independent public accountants of the Fund
for its current fiscal year.
6. To transact such other business as may properly come before the
Meeting or any adjournments thereof.
* Proposals 1 and 2, if approved, will not become effective unless the
proposed merger of Keystone Investments, Inc. with and into an
affiliate of First Union Corporation, as described in the accompanying
Proxy Statement, becomes effective.
** As used in this Notice, the term "Trustee" includes each Director of
Emerging Growth.
Shareholders of record of each Fund, other than Emerging Growth, at the
close of business on October 18, 1996, and shareholders of record of Emerging
Growth at the close of business on October 28, 1996, are entitled to receive
notice of and to vote at the Meeting and any adjournments thereof on any matters
relating to that Fund.
By order of the Board of Trustees of each Fund,
Rosemary D. Van Antwerp
Secretary
October 21, 1996
PLEASE FILL IN, DATE AND SIGN YOUR PROXY - NOW - AND MAIL IT - TODAY - IN THE
STAMPED ENVELOPE ENCLOSED FOR YOUR CONVENIENCE. IN ORDER TO AVOID UNNECESSARY
EXPENSE OR DELAY, YOUR PROMPT RESPONSE IS REQUESTED, NO MATTER WHAT SIZE YOUR
HOLDINGS MAY BE.
<PAGE>
KEYSTONE AMERICA HARTWELL
EMERGING GROWTH FUND, INC.
("EMERGING GROWTH")
KEYSTONE BALANCED FUND II ("BALANCED FUND")
KEYSTONE CAPITAL PRESERVATION AND INCOME FUND
("CAPITAL PRESERVATION AND INCOME")
KEYSTONE EMERGING MARKETS FUND
("EMERGING MARKETS")
KEYSTONE FUND FOR TOTAL RETURN ("TOTAL RETURN")
KEYSTONE FUND OF THE AMERICAS
("FUND OF THE AMERICAS")
KEYSTONE GLOBAL OPPORTUNITIES FUND
("GLOBAL OPPORTUNITIES")
KEYSTONE GLOBAL RESOURCES AND
DEVELOPMENT FUND ("GLOBAL RESOURCES")
KEYSTONE GOVERNMENT SECURITIES FUND
("GOVERNMENT SECURITIES")
KEYSTONE INTERMEDIATE TERM BOND FUND
("INTERMEDIATE TERM")
KEYSTONE LIQUID TRUST ("LIQUID TRUST")
KEYSTONE OMEGA FUND ("OMEGA")
KEYSTONE SMALL COMPANY GROWTH FUND II
("SMALL COMPANY GROWTH")
KEYSTONE STATE TAX FREE FUND ("STATE TAX FREE")
STATE TAX FREE HAS FOUR EXISTING SERIES:
- FLORIDA TAX FREE FUND ("FLORIDA TAX FREE")
- MASSACHUSETTS TAX FREE FUND ("MASSACHUSETTS TAX FREE")
- NEW YORK INSURED TAX FREE FUND ("NEW YORK INSURED")
- PENNSYLVANIA TAX FREE FUND ("PENNSYLVANIA TAX FREE")
KEYSTONE STATE TAX FREE FUND-SERIES II
("STATE TAX FREE II")
STATE TAX FREE II HAS TWO EXISTING SERIES:
- CALIFORNIA INSURED TAX FREE FUND ("CALIFORNIA INSURED")
- MISSOURI TAX FREE FUND ("MISSOURI TAX FREE")
KEYSTONE STRATEGIC INCOME FUND
("STRATEGIC INCOME")
KEYSTONE TAX FREE INCOME FUND
("TAX FREE INCOME")
<PAGE>
KEYSTONE WORLD BOND FUND ("WORLD BOND")
200 BERKELEY STREET
BOSTON, MASSACHUSETTS 02116-5034
TELEPHONE NUMBER (617) 338-3200
PROXY STATEMENT FOR THE
JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 9, 1996
The accompanying Proxy is solicited by the Board of Trustees(1) of each of
the above funds (each a "Fund"), as applicable, to be used at a Joint Special
Meeting and any adjournment or adjournments thereof (the "Meeting") of their
shareholders. The proxy material is expected to be mailed to shareholders of all
Funds, except Emerging Growth, on or about October 25, 1996, and to shareholders
of Emerging Growth on or about November 4, 1996. The purpose of the Meeting is
to consider proposals ("Proposals") relating to the proposed merger (the
"Merger") of Keystone Investments, Inc. (the corporate parent of the Funds'
investment adviser and their principal underwriter) with and into an affiliate
of First Union Corporation, a multibank holding company, as described herein, as
well as certain other Proposals.
Certain terms used throughout this Proxy Statement are defined in the text.
There is also a "Definitions" section at the end of this Proxy Statement.
All properly executed Proxies received prior to the Meeting will be voted at
the Meeting in accordance with the instructions marked thereon. Proxies received
prior to the Meeting on which no vote is indicated will be voted "for" each
Proposal as to which it is entitled to be voted. Abstentions do not constitute
votes "for" a proposal, have the same effect as votes "against" a Proposal, and
are treated as shares present at the Meeting for the purpose of determining
whether a quorum is present at the Meeting. Broker non-votes (i.e., Proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owner or other person entitled to vote each share ("Share")
on a particular matter with respect to which the brokers or nominees do not have
discretionary power) do not constitute votes "for" or "against" a Proposal and
are disregarded for purposes of determining a quorum and for every other purpose
relating to such Proposal.
- ----------
(1)As used in this Proxy Statement, the term "Trustee" includes each Director of
Emerging Growth.
<PAGE>
Any shareholder may revoke his or her Proxy at any time before it is voted
by (i) giving written notice of revocation to the Secretary of the Fund, (ii)
properly executing and delivering a later-dated Proxy or (iii) appearing in
person at the Meeting to vote his or her Shares.
The Boards of Trustees know of no business which will be presented for
consideration at the Meeting other than that set forth in Proposals 1 through 5
of the Notice of Meeting. If any other matters are properly presented, it is the
intention of the persons designated as Proxies (Messrs. Bissell and Elfner and
Ms. Van Antwerp) to vote such Proxies in accordance with their judgment on such
matters.
Shareholders of record of each Fund, except for Emerging Growth, at the
close of business on October 18, 1996 are entitled to notice of and to vote at
the Meeting. Shareholders of record of Emerging Growth at the close of business
on October 28, 1996 are entitled to notice of and to vote at the Meeting. See
Exhibit F for the Shares of each Fund outstanding on October 1, 1996. Each share
is entitled to one vote on all matters described herein.
FUNDS AFFECTED BY EACH PROPOSAL AND VOTES REQUIRED FOR ADOPTION OF EACH
PROPOSAL
The following sets forth the Funds for which each Proposal is being made
and the shareholder votes required to adopt each Proposal:
PROPOSAL AFFECTED FUNDS
- -------- --------------
1. Election of Trustees All Funds
2. Approval of New Investment Advisory and All Funds
Management Agreement
3. Approval of New SubAdvisory Emerging Growth, Global
Agreement Opportunities, and Global
Resources
4. Amendment to Declaration of Trust Global Opportunities and
Liquid Trust
5. Ratification of Selection of Accountant Emerging Growth
ALL FUNDS:
Approval of Proposals 2 and 3, as applicable, requires the affirmative vote
of holders of (a) 67% of the Shares represented at the Meeting, if more than 50%
of the Shares outstanding are represented, or (b) more than 50% of the
outstanding Shares, whichever is less.
EACH FUND, EXCEPT EMERGING GROWTH, GLOBAL OPPORTUNITIES AND LIQUID TRUST:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of Shares represented at the Meeting, if more than 50% of the
outstanding Shares are represented.
GLOBAL OPPORTUNITIES:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of the Shares represented at the Meeting, if more than 25% of the
outstanding Shares are represented. Approval of Proposal 4 requires the
affirmative vote of the holders of a majority of the outstanding Shares.
LIQUID TRUST:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of the Shares represented at the Meeting, if more than 25% of the
outstanding Shares are represented. Approval of Proposal 4 requires the
affirmative vote of the holders of a majority of the outstanding Shares.
EMERGING GROWTH:
Approval of Proposals 1 and 5 require the affirmative vote of the holders of
a majority of the Shares represented at the Meeting and entitled to vote, if
more than one-third of the outstanding Shares are represented.
INTRODUCTION
The Proposed Merger. Keystone Investments, Inc. ("Keystone Investments") is
the corporate parent of wholly-owned operating subsidiaries (which together with
Keystone Investments are sometimes referred to herein as "Keystone") which
include the Funds' investment adviser and manager, principal underwriter and
transfer agent. Keystone has provided investment advisory and management,
underwriting, distribution, administrative, transfer agency and trustee services
to mutual funds and private accounts since Keystone Investment Management
Company ("KIMCO"), the Funds' investment adviser, was organized in 1932.
Keystone Management, Inc. ("Keystone Management") serves as investment manager
of certain of the Funds. In connection with the Merger, it is proposed that all
of the functions currently performed by Keystone Management for such Funds be
assumed by KIMCO, as more fully described below. Keystone currently manages and
advises 32 mutual funds and other clients with assets which in the aggregate
total over $11 billion. Keystone Investments has entered into an Agreement and
Plan of Acquisition and Merger, dated September 6, 1996, as the same may be
amended from time to time (the "Merger Agreement"), with First Union Corporation
("First Union"), its wholly-owned subsidiary (except for directors' qualifying
shares), First Union National Bank of North Carolina ("FUNB-NC"), and First
Union Keystone, Inc. ("FKI"), a newly organized wholly-owned subsidiary of
FUNB-NC. The principal offices of First Union, FUNB-NC and FKI are at One First
Union Center, Charlotte, North Carolina 28288. The Merger Agreement provides for
the merger (the "Merger") of Keystone Investments with and into FKI, which will
then adopt the name "Keystone Investments, Inc." ("New Keystone Investments").
First Union is a publicly owned multibank holding company registered under
the federal Bank Holding Company Act of 1956, as amended. First Union and its
subsidiaries provide a broad range of financial services to individuals and
businesses through offices in 38 states and four foreign countries. The Capital
Management Group ("CMG") of FUNB-NC manages, advises or otherwise oversees the
investment of over $34 billion in assets belonging to a wide range of
institutional, trust and individual clients, including registered investment
companies, or series thereof, with assets of approximately $8.1 billion.
Evergreen Asset Management Corp. and Lieber & Company, wholly-owned subsidiaries
of FUNB-NC, serve as investment adviser, manager, and/or subadviser to
institutional, trust and individual clients, including registered investment
companies, or series thereof, with assets totalling approximately $8 billion.
The registered investment companies for which FUNB- NC, Evergreen Asset
Management Corp. and Lieber & Company serve as manager, investment adviser
and/or subadviser are referred to collectively as the "Evergreen funds."
Evergreen Asset Management Corp. also provides administrative services to
the Evergreen funds and, to the extent it is not obligated to provide such
services under the investment advisory agreements into which it has entered with
certain of the Evergreen funds, receives an administrative fee based on each
Fund's average annual net assets. Lieber & Company, in addition to being a
registered investment adviser, is a broker-dealer and member of the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Lieber & Company provides brokerage
services to the investment companies managed by Evergreen Asset Management Corp.
and to certain institutions and individuals. First Union Brokerage Services,
Inc. ("FUBS"), a wholly-owned subsidiary of FUNB-NC, is a registered
broker-dealer that is principally engaged in providing retail brokerage
services, consistent with its federal banking authorizations. FUBS currently
acts as a selected dealer for shares of the Evergreen funds and it is expected
that, following the Merger, FUBS will also become a selected dealer for shares
of the Funds. First Union Capital Markets Corp., a wholly-owned subsidiary of
First Union, is a registered broker-dealer principally engaged in providing,
consistent with its federal banking authorizations, private placement,
securities dealing and underwriting services. First Union's banking
subsidiaries, with operations in North Carolina, South Carolina, Georgia,
Florida, Tennessee, Virginia, Maryland, the District of Columbia, New Jersey,
Delaware, Connecticut, Pennsylvania and New York, engage in domestic retail
banking, worldwide commercial banking, trust banking, investment management and
other financial services and banking related activities. First Union's non-bank
financial services-related subsidiaries provide many additional services,
including mortgage banking, insurance, home equity lending, leasing, investment
banking, insurance, and securities brokerage services.
In the Merger, First Union will issue shares of its voting common stock
("First Union Common Stock") and options on such First Union Common Stock to the
beneficial owners of all of Keystone Investments' outstanding voting common
stock ("Keystone Stock") and options thereon. Substantially all of the
outstanding shares of Keystone Stock and options thereon are beneficially owned
by certain of Keystone's present and former officers and employees and members
of their families and trusts established by them (collectively referred to
herein as Management). Except for 140,042 shares held by the Keystone
Investments, Inc. Savings and Investment Plan and certain unaffiliated
stockholders, all of the Keystone Stock outstanding as of the date hereof is
held pursuant to eight voting trust agreements ("voting trusts") for which
certain of Keystone's senior officers and directors are the voting trustees. A
majority of the outstanding Keystone Stock, totalling 52%, is held by seven
senior officers or directors and a spouse of one such individual, and is subject
to two of such voting trusts. These officers and directors, who may be deemed to
control Keystone, are Messrs. George S. Bissell, Albert H. Elfner, III, Ralph J.
Spuehler, Jr., Stephen J. Arpante, Philip M. Byrne, Edward F. Godfrey and Roger
T. Wickers and, together with such spouse, are referred to herein as the
"Controlling Stockholders". Their address is 200 Berkeley Street, Boston,
Massachusetts 02116. Each of Messrs. Bissell, Elfner, Spuehler, Godfrey and
Byrne is also an "affiliated person" of Keystone Investments (as defined under
the 1940 Act). The Controlling Stockholders have agreed to have their Keystone
Stock voted in favor of the Merger at a Special Meeting of Stockholders of
Keystone Investments to be held on December 2, 1996 and, accordingly, it is
expected that the Merger Agreement will be approved at such Special Meeting.
The Merger Agreement provides that First Union will issue in the Merger
2,912,000 shares of First Union Common Stock which, at September 6, 1996, had an
aggregate value of $186,004,000. The number of shares that will ultimately be
issued upon the Merger is subject to certain adjustments, including an
adjustment downwards of 13.5% in the event that net redemptions of shares of the
Funds and certain other Keystone funds prior to the effective date of the Merger
equal or exceed in the aggregate 15% of the net asset value of the outstanding
shares of such funds on September 6, 1996. In addition, in the event that the
average per share market price of First Union Common Stock over a period of ten
trading days ending on the day five business days prior to the Effective Date
(as defined herein) declines by a certain amount determined with reference to
the market prices of shares of a certain peer group of bank holding companies,
Keystone Investments will have the option to terminate the Merger Agreement,
subject to the right of First Union to increase the aggregate number of shares
of First Union Common Stock to be issued in the Merger to compensate for such a
decline in accordance with the Merger Agreement. Assuming the consummation of
the Merger during the month of December, 1996 an estimated 2,523,089 shares of
First Union Common Stock, having an aggregate market value as of October 16,
1996 of $171,570,052 would be issuable in exchange for all of the shares of
Keystone Stock. The balance of the First Union Common Stock issuable in the
Merger will be paid to assignees of Keystone TA Limited Partnership ("KTLP"), a
former shareholder of Keystone Investments, which assisted current management in
a leveraged buyout of Keystone Investments in 1989, pursuant to an agreement
with Keystone Investments.
Under current federal banking law, an officer or director of a bank holding
company, or a subsidiary thereof, is prohibited from serving as an officer or
director of an open-end investment company. Accordingly, Mr. Bissell, the
current Chairman of the Funds' Boards of Trustees, who is standing for
re-election to such Boards and is currently a director of Keystone Investments,
will be prohibited from becoming a director of New Keystone Investments, which
will be a wholly-owned subsidiary of FUNB-NC following the Merger. Mr. Bissell
will receive approximately 15.97% of the shares of First Union Common Stock
issued to Management. (Receipt by Mr. Bissell may include receipt by family
members and trusts established by him.) Mr. Elfner, the President and a Trustee
of each of the Funds, is not standing for re-election and will resign as the
President of each Fund if the Merger is consummated. Mr. Elfner is a director
and chief executive officer of Keystone Investments and will continue as such of
New Keystone Investments following the Merger. He will receive approximately
9.77% of the shares of First Union Common Stock issued to Management. In
addition to the shares of First Union Common Stock to be issued in the Merger as
the consideration for the acquisition by New Keystone Investments of Keystone
Investments' assets through the Merger, New Keystone Investments will, also
through the Merger, assume all of Keystone Investments' liabilities as of the
Effective Date, estimated at that time to be approximately $182,000,000,
including senior secured notes in the amount of $145,000,000.
The Merger is expected to become effective on December 11, 1996, or a later
agreed date (the "Effective Date"), upon the satisfaction of specified terms and
conditions including, among other things, receipt of all necessary regulatory
approvals. Consummation of the Merger is conditioned on First Union and Keystone
Investments receiving, or obtaining a waiver of the requirement to receive, all
necessary approvals by governmental regulatory authorities, including approvals
of the Office of the Comptroller of the Currency and the Federal Reserve Board
and the expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Consummation of the Merger
is subject to a number of additional conditions, including the approvals
proposed hereby of new investment advisory and management agreements. To satisfy
this condition, shareholders of Keystone funds which, in the aggregate, provided
at least 90% of the management and advisory fees paid to Keystone by all of the
Keystone funds for the twelve months ended August 31, 1996 must approve such
proposed agreements.
If the Merger is consummated, First Union, indirectly, and FUNB-NC,
directly, will own all of the outstanding voting securities of New Keystone
Investments, which in turn will own directly or indirectly all of the
outstanding voting securities of the Keystone operating (and any other)
subsidiaries, including the Funds' investment adviser and manager, principal
underwriter, transfer agent and shareholder services provider. Such new
ownership will constitute a change in the identity and control ("Change in
Control") of Keystone Investments and its direct and indirect subsidiaries,
which will cause the Funds' current investment advisory and management
agreements, including subadvisory agreements, where applicable, and principal
underwriting agreements, to terminate automatically in accordance with their
terms, as required by the Investment Company Act of 1940, as amended (the "1940
Act"). Such terminations will necessitate adoption of new agreements for
provision of such services. Shareholder approvals of the new investment advisory
and management agreements, including new subadvisory agreements, where
applicable, are proposed and described herein. Shareholder approvals of new
underwriting and other agreements for distribution-related services, as
described below, are not required. Such agreements have been acted upon only by
each Fund's Board of Trustees, including a majority of the Independent Trustees
(Trustees who are independent, i.e., not "interested persons", as defined in the
1940 Act, and who have no direct or indirect financial interest in such
agreements). All new investment advisory and management agreements are proposed
to be with KIMCO, which is currently the investment manager or adviser, or both,
of the Keystone funds, and with the current subadvisers, where applicable.
Keystone Management, which is the investment manager of some of the Funds, will
not remain as such. The consolidation of all investment advisory services for
the Funds under KIMCO will not involve any material changes in the services
provided to Funds for which Keystone Management currently serves as manager. All
of the proposed investment advisory and management agreements will, except as
indicated above, be substantively identical to the existing investment advisory
and management agreements. EACH FUND'S ADVISORY FEE RATE WILL REMAIN UNCHANGED.
(See "Advisory Fee Waivers and Expense Subsidies" below.)
Following the consummation of the Merger, First Union does not have any
current intention to make any immediate significant changes in the way that New
Keystone Investments provides investment advisory and management services to the
Funds. To facilitate this continuity, Keystone Investments (the obligations of
which will be assumed by New Keystone Investments) has entered into employment
contracts, effective as of the Effective Date, with each of three directors and
executive officers of Keystone Investments (Albert H. Elfner, III, Edward F.
Godfrey and Ralph J. Spuehler, Jr.). Among other things, each such employment
contract provides for a payment to be made at the end of the one-, two- and/or
three-year periods following the Effective Date during which Messrs. Elfner,
Godfrey or Spuehler, as the case may be, remains an employee of Keystone in his
present or substantially equivalent positions. Each annual payment would equal
$440,000 for Mr. Elfner, $345,000 for Mr. Godfrey and $220,000 for Mr. Spuehler.
Such payments would also be made under certain circumstances following
termination of the employment of Messrs. Elfner, Godfrey or Spuehler,
respectively, and the expiration of a one-year non-compete period following such
termination. Messrs. Elfner and Godfrey are expected to continue to be actively
involved in providing services to the Funds to substantially the same extent to
which each has historically been involved. Mr. Spuehler is expected to be
actively involved in providing transfer agency and other shareholder services to
the Funds. Mr. Spuehler was the President of the Funds' transfer agent from 1987
to 1995. Under federal banking regulations, neither Mr. Elfner nor Mr. Godfrey
will be able to continue as an officer of the Funds.
If the Merger is consummated, Keystone Investment Distributors Company
("KID") (which is currently the principal underwriter of all of the Keystone
funds except Keystone Institutional Adjustable Rate Fund ("Adjustable Rate") and
Keystone Institutional Trust ("Institutional"), whose principal underwriter at
present is Fiduciary Investment Company, Inc.) would no longer be able to act as
principal underwriter of such Funds due to regulatory restrictions imposed by
the Glass-Steagall Act upon national banks such as FUNB-NC and their affiliates
that prohibit such entities from acting as the underwriters or distributors of
mutual fund shares. However KID will continue to receive compensation from such
Funds or such Funds' principal underwriter in respect of underwriting and
distribution services performed prior to the consummation of the Merger and,
following the consummation of the Merger, is expected to be compensated by such
Funds or their principal underwriter for providing certain marketing support
services to such Funds or their principal underwriter. In view of the foregoing,
such Funds' Boards of Trustees, as well as the Boards of Trustees of Adjustable
Rate and Institutional, approved the appointment of Evergreen Funds Distributor,
Inc. ("EFD"), an affiliate of Furman Selz LLC ("Furman Selz"), as principal
underwriter of the Funds at their meeting held on September 5, 1996, effective
upon the consummation of the Merger. At that time the Boards also approved the
amendment of the existing underwriting agreements with KID to permit KID to
continue to receive payments from the Funds with respect to distribution and
underwriting services rendered prior to the Merger, and the entry by EFD into
marketing services agreements with KID which provide for KID to furnish
post-Merger marketing support and services. The address of EFD and Furman Selz
is 230 Park Avenue, New York, New York. EFD is currently the principal
underwriter of the Evergreen funds.
Furman Selz, which currently acts as sub-administrator to the Evergreen
Funds and which is expected to act as such for the Funds following the Merger,
is a registered investment adviser and broker-dealer that provides services to a
wide range of clients including investment companies, institutions and
individuals. In addition, Furman Selz, either directly or through wholly-owned
subsidiaries such as EFD, provides underwriting and distribution services to
investment companies, including investment companies managed by banks or bank
affiliates, such as FUNB-NC and Evergreen Asset Management Corp., which
themselves are prohibited from acting as principal underwriters for registered
investment companies. In connection with the foregoing, Furman Selz has entered
into an agreement with BISYS Group, Inc. ("BISYS"), pursuant to which Furman
Selz has agreed to sell to BISYS its mutual funds administration and
distribution business. Pursuant to the terms of the agreement between BISYS and
Furman Selz, EFD will become a wholly-owned subsidiary of BISYS. It is not
expected that the acquisition of the mutual funds administration and
distribution business by BISYS will affect the services provided by EFD.
As principal underwriter of the Funds following consummation of the Merger,
EFD shall: (i) make payments to securities dealers and others engaged in the
sale of Shares; and (ii) make payments of principal and interest in connection
with the financing of commission payments made in connection with the sale of
Shares. EFD and/or KID may also do the following: (i) provide telephone
facilities and shareholder services; (ii) formulate and implement marketing and
promotional activities, including, but not limited to, direct mail promotions
and television, radio, newspaper, magazine and other mass media advertising;
(iii) prepare, print and distribute sales literature; (iv) prepare, print and
distribute Prospectuses of the Funds and reports for recipients other than
existing shareholders of the Funds; (v) provide to the Funds such information,
analyses and opinions with respect to marketing and promotional activities as
the Funds may, from time to time, reasonably request; and (vi) provide to the
Funds such other marketing-related and promotional services as the Funds may,
from time to time, reasonably request.
In the case of Shares sold with a front-end sales charge, EFD may retain the
difference between the current offering price of Shares, as set forth in the
current Prospectus for each Fund, and their net asset value, less any
reallowance that is payable in accordance with the sales charge schedule in
effect at any given time with respect to the Shares. In the case of Shares of
the Funds subject to a contingent deferred sales charge ("CDSC"), EFD may retain
any CDSCs payable with respect to the redemption of any Shares.
EFD will receive compensation from the Funds under the Rule 12b-1
distribution plans adopted by each of the Funds in the form of distribution
fees. EFD may pay all or part of the distribution fees to KID for the
marketing-related services described above. In addition, KID will continue to
receive all or part of the fees payable by the Funds under the distribution
plans in respect of services rendered prior to the consummation of the Merger.
The annual rate of charges payable by the Funds after the Merger under the
proposed distribution arrangements with EFD (including the marketing services
arrangement with KID) will not be greater than the annual rate of charges
currently payable by the Funds under their arrangements with KID. EFD intends to
obtain financing from FUNB-NC for advanced commission payments made in
connection with the sale of certain classes of Shares at market interest rates
for this type of financing. EFD may sell, assign, pledge or hypothecate its
rights to receive compensation as principal underwriter of the Funds in
connection with the financing of such commission payments, made by EFD at the
time Shares are sold, to Mutual Fund Funding 1994-1, a bankruptcy remote
subsidiary of Furman Selz, or such other entity as may be created for this
purpose, and Mutual Fund Funding 1994-1, or such other entity, may in turn
pledge or assign such rights to FUNB-NC as lender to secure the financing of
such commission payments.
If the Merger is consummated, the Funds' transfer agent, Keystone Investor
Resources Center, Inc. ("KIRC"), an indirect subsidiary of Keystone Investments,
will become an indirect subsidiary of New Keystone Investments, FUNB-NC and
First Union. KIRC is expected to become the transfer agent and shareholder
services provider for the Evergreen funds, which will substantially increase
KIRC's operations. For additional information, see the section of this Proxy
Statement entitled "General Information."
There is proposed for election as Trustees of each Fund a Board consisting
of the current members of its Board, other than Albert H. Elfner, III, and eight
additional members who are currently Trustees of some or all of the Evergreen
funds, all as described herein. As stated previously, Mr. Elfner is the current
President and a Trustee of each Fund. Because he will be a director and chief
executive officer of New Keystone Investments, which will be a subsidiary of
FUNB-NC and First Union if the Merger is consummated, Mr. Elfner will be
prohibited by current federal banking law from holding any positions with the
Keystone funds or Evergreen funds. Adoption of the Proposal to elect Trustees as
herein provided is contingent on the Merger becoming effective.
If the Merger is not consummated, the new investment advisory and management
and subadvisory, where applicable, and principal underwriting and other
agreements would not be entered into; the Funds' current agreements would remain
in place; the election of Trustees would not be effected; and the Funds' current
Trustees would continue in office. The current Trustees would, under these
circumstances, take such actions, if any, as they deemed necessary. If the
shareholders of any Fund do not approve the proposed new investment advisory and
management agreements, but the requisite shareholder approvals of other Keystone
funds sufficient to satisfy the conditions to the Merger are obtained and the
Merger is consummated, KIMCO will be unable to continue serving as investment
adviser (and Keystone Management as manager, to the extent applicable) of each
such non-approving Fund pursuant to its existing investment advisory and/or
management agreement. In that event, the Board of Trustees of each non-approving
Fund, with the assistance of Keystone, will consider alternative advisory and
management arrangements for each such Fund.
ADVISORY FEE WAIVERS AND EXPENSE SUBSIDIES
As set forth in Exhibits I and J, the investment advisory fee for certain of
the Funds has been waived in whole or part, and, in certain cases, Keystone may
provide additional expense subsidies, to limit such Funds' respective annual
expenses to the amounts specified in the Exhibits. Following the Merger, such
waivers or subsidies will be continued for the minimum period of time stated in
Exhibit J, or on a month-to-month basis if no minimum period is specified. While
there is no current intention to eliminate or reduce such waivers or subsidies,
there can be no assurance that New Keystone Investments will continue such
waivers or subsidies beyond any specified minimum period or, in the case of
month-to-month waivers or subsidies, beyond the month in which the Merger
becomes effective.
1. ELECTION OF BOARDS OF TRUSTEES
The first Proposal is to elect each of the individuals nominated as a
Trustee to hold office until his successor is elected and qualifies or until his
death, retirement, resignation or removal from office. The special election is
being held to add eight Trustees to the existing Boards, contingent on the
consummation of the Merger. As required by current federal banking law, Albert
H. Elfner, III, who will be a director and chief executive officer of New
Keystone Investments if the Merger is consummated, will not be standing for
re-election and, upon consummation of the Merger, will resign as a Trustee and
President of the Funds. The current Board of Trustees of each Fund, including
its Independent Trustees, has nominated the individuals described below for
election as Trustees. The nominees were selected by the Nominating Committees of
the Boards, each of which consists only of Independent Trustees. Approval of
this Proposal for Global Opportunities and Liquid Trust is subject to the
approval of Proposal 4.
It is not expected that any of the nominees will decline or become
unavailable for election. In case this should happen, the discretionary power
given in the Proxy may be used to vote for a substitute nominee or nominees or
to fix the number of Trustees at less than nineteen. The Proxies solicited
hereby cannot be voted by shareholders for persons other than the nominees
named. Each nominee has consented to being named in this Proxy Statement and to
serve as a Trustee if elected. The nominees for election as Trustees of each
Fund and certain information about them is set forth below:
NOMINEES FOR TRUSTEES
NAME (AGE)
(TRUSTEE SINCE) PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
- --------------- -------------------------------------------
Laurence B. Ashkin (68) Trustee of all the Evergreen funds other than
(new) Evergreen Investment Trust; Real estate
developer and construction consultant;
President of Centrum Equities and Centrum
Properties, Inc.
Frederick Amling (69) Trustee of the Keystone funds; Professor,
(1993) Finance Department, George Washington
University; President, Amling & Company
(investment advice); Outside Director, Torray
Fund (mutual fund); former Member, Board of
Advisers, Credito Emilano (banking).
Charles A. Austin III (61) Trustee of the Keystone funds; Investment
(1993) Counselor to Appleton Partners, Inc.
(investment advice); former Managing Director,
Seaward Management Corporation (investment
advice).
Foster Bam (69) Trustee of all the Evergreen funds other than
(new) Evergreen Investment Trust; Partner in the
law firm of Cummings & Lockwood; Director,
Symmetrix, Inc. (sulphur company) and Pet
Practice, Inc. (veterinary services); former
Director, Chartwell Group Ltd. (manufacturer
of office furnishings and accessories), Waste
Disposal Equipment Acquisition Corporation
and Rehabilitation Corporation of America
(rehabilitation hospitals).
George S. Bissell (67)* Chairman of the Boards of Trustees of the
(1979) Keystone funds; Director, Keystone Investments;
Chairman of the Board and Trustee of Anatolia
College; Trustee of University Hospital (and
Chairman of its Investment Committee); former
Chairman of the Board and Chief Executive
Officer of Keystone Investments and certain
other companies affiliated with Keystone
Investments.
Edwin D. Campbell (69) Trustee of the Keystone funds; Principal,
(1993) Padanaram Associates, Inc.; former Executive
Director, Coalition of Essential Schools, Brown
University; former Director and Executive Vice
President, National Alliance of Business; former
Vice President, Educational Testing Services;
former Dean, School of Business, Adelphi
University.
Charles F. Chapin (67) Trustee of the Keystone funds; former Group
(1993) Vice President, Textron Corp.; former
Director, Peoples Bank (Charlotte, N.C.).
K. Dun Gifford (57) Trustee of the Keystone funds; Trustee,
(1982) Treasurer and Chairman of the Finance
Committee, Cambridge College; Chairman Emeritus
and Director, American Institute of Food and
Wine; President and Chairman, Oldways
Preservation and Exchange Trust (education);
former Chairman of the Board, Director and
Executive Vice President, The London Harness Co.
(specialty retail stores); former Managing
Partner, Roscommon Capital Corp.; former Chief
Executive Officer, Gifford Gifts of Fine Foods;
former Chairman, Gifford, Drescher & Associates
(environmental consulting); former Director,
Keystone Investments and KIMCO.
James S. Howell (71) Chairman of the Evergreen funds; former
(new) Chairman of the Distribution Foundation for
the Carolinas; former Vice President of Lance
Inc. (food manufacturing).
Leroy Keith, Jr. (57) Trustee of the Keystone funds; President and
(1993) Chairman of the Board of Carson Products
Company; Director of Phoenix Total Return Fund
and Equifax, Inc.; Trustee of Phoenix Series
Fund, Phoenix Multi-Portfolio Fund and the
Phoenix Big Edge Series Fund; former President,
Morehouse College.
F. Ray Keyser, Jr. (69) Trustee of the Keystone funds; Chairman and
(1973) of Counsel, Keyser, Crowley, Meub, Layden,
Kulig & Sullivan, P.C.; Member, Governor's (VT)
Council of Economic Advisers; Chairman of the
Board and Director, Central Vermont Public
Service Corporation and Lahey Hitchcock Clinic;
Director, Vermont Yankee Nuclear Power
Corporation, Grand Trunk Corporation, Grand
Trunk Western Railroad, Union Mutual Fire
Insurance Company, New England Guaranty
Insurance Company, Inc. and the Investment
Company Institute; former Director and
President, Associated Industries of Vermont;
former Governor of Vermont; former Director of
Central Vermont Railway, Inc., S.K.I. Ltd., and
Arrow Financial Corp.; former Director and
Chairman of the Board, Proctor Bank and Green
Mountain Bank.
Gerald M. McDonnell (56) Trustee of the Evergreen funds; Sales
(new) Representative with Nucor-Yamoto, Inc. (steel
producer).
Thomas L. McVerry (57) Trustee of the Evergreen funds; former Vice
(new) President and Director of Rexham Corporation;
former Director of Carolina Cooperative
Federal Credit Union.
William Walt Pettit (40) Trustee of the Evergreen funds; Partner in (new)
(new) the law firm of Holcomb and Pettit, P.A.
David M. Richardson (55) Trustee of the Keystone funds; Vice Chair and
(1993) former Executive Vice President, DHR
International, Inc. (executive recruitment);
Director, Commerce and Industry Association
of New Jersey, 411 International, Inc. and
J&M Cumming Paper Co.; former Senior Vice
President, Boyden International Inc.
(executive recruitment).
Russell A. Trustee of the Evergreen funds; Medical
Salton, III MD (48) Director, U.S. Health Care/Aetna Health
(new) Services; former Managed Health Care
Consultant; former President, Primary
Physician Care.
Michael S. Scofield (53) Trustee of the Evergreen funds; Attorney, Law
(new) Offices of Michael S. Scofield.
Richard J. Shima (57) Trustee of the Keystone funds; Executive
(1993) Consultant, Drake Beam Morin, Inc. (executive
outplacement); Director, Connecticut Natural Gas
Corporation, Trust Company of Connecticut,
Middlesex Mutual Assurance Company, Hartford
Hospital, Old State House Association and
Enhance Financial Services, Inc.; Chairman,
Board of Trustees, Hartford Graduate Center;
Trustee, Greater Hartford YMCA; former Director,
Vice Chairman, and Chief Investment Officer, The
Travelers Corporation; former Managing Director,
Russell Miller, Inc. (insurance); and former
Director, Kingswood-Oxford School.
Andrew J. Simons (57)* Trustee of the Keystone funds; Partner in the
(1993) law firm of Farrell, Fritz, Caemmerer,
Cleary, Barnosky & Armentano, P.C.; Adjunct
Professor of Law, St. John's University;
Adjunct Professor of Law, Touro College
School of Law; former President, Nassau
County Bar Association.
- ----------
*May be considered an "interested person" within the meaning of the 1940 Act.
If the Merger is consummated and Mr. Bissell is elected, he will be deemed
an "interested person" of the Funds by virtue of his ownership of First Union
Common Stock. While Mr. Simons, if elected, may be deemed an "interested person"
as a result of certain legal services rendered to a subsidiary of First Union by
his law firm, Farrell, Fritz, Caemmerer, Cleary, Barnosky & Amentano, P.C., Mr.
Simons is applying for an exemption from the Securities and Exchange Commission
("SEC") which would allow him to retain his status as an Independent Trustee.
Such exemption, if granted, may not be granted until after the Merger is
effective.
COMPENSATION OF TRUSTEES
Trustees who are not Independent Trustees will receive no compensation from
the Funds. The compensation (including all expenses incurred in connection with
any meeting attended) paid by each Fund to the Trustees as a group during the
Fund's most recently completed fiscal year, or fiscal period, if a full fiscal
year has not been completed since a Fund's inception, as well as the annual
retainer and fee per meeting currently paid to each Independent Trustee is set
forth in Exhibit G to this Proxy Statement. If elected, the eight newly elected
Trustees will begin receiving such amounts as of January 1, 1997, or on the
Effective Date of the Merger, whichever is later.
TRUSTEES' AND COMMITTEE MEETINGS
Prior to meetings of the shareholders at which Trustees are to be elected or
if a vacancy in the Boards of Trustees occurs between such meetings, a
Nominating Committee recommends candidates for nomination to the Boards of
Trustees. The members of the Nominating Committee are Messrs. Campbell, Chapin,
Gifford, Keith and Keyser. The Nominating Committee's recommendations for
nominees for election as Independent Trustees are voted on by the Independent
Trustees. The Funds currently have no procedure to consider persons recommended
by shareholders for nomination to the Boards.
Messrs. Amling, Austin, Richardson, Shima and Simons represent the Funds
on the Audit Committee. The Audit Committee reviews the services performed by
KPMG Peat Marwick, the independent public accountant for each of the Keystone
funds.
Each of the Trustees attended at least 75% of the total number of meetings
of the Board of Trustees and applicable Committees of each Fund during its most
recently completed fiscal year, or fiscal period, if a full fiscal year has not
been completed since a Fund's inception.
Exhibit H contains information about the number of Board of Trustees,
Nominating Committee and Audit Committee meetings held by each Fund during its
most recently completed fiscal year, or fiscal period, if a full fiscal year has
not been completed since a Fund's inception.
After the consummation of the Merger, an Advisory Committee consisting of
Messrs. Keyser and Shima will be established to assist the Boards of Trustees of
the Evergreen funds. Messrs. Keyser and Shima will be paid an annual retainer
and a fee per meeting for their services to the Advisory Committee.
OFFICERS OF THE FUNDS AND KIMCO
The executive officers of the Funds are directors, officers or employees of
KIMCO. As required by current federal banking law, following consummation of the
Merger, officers and/or employees of Keystone will no longer be permitted to
serve as officers of the Funds. Instead, such officers are expected to be
provided by Furman Selz. The current executive officers of the Funds, their
ages, and the period for which each executive officer has served, are (and are
expected to continue until consummation of the Merger to be): George S. Bissell
(age 67), Chairman of the Board since 1979 and former Chief Executive Officer;
Albert H. Elfner, III (age 52), President and Chief Executive Officer since
1994; and James R. McCall (age 51), Senior Vice President since 1993. Each of
the executive officers has been a director, officer or employee of KIMCO or its
affiliates for at least five years.
If the Merger is consummated, the executive officers of each Fund will be
John Pileggi (age 36), President and Treasurer and George O. Martinez (age 36),
Secretary. Messrs. Pileggi and Martinez have been officers or employees of
Furman Selz for at least five years.
The executive officers and directors of KIMCO, who are expected to continue
to be such, or who are expected to be elected if the Merger is consummated, are:
Albert H. Elfner, III Chairman and Chief Executive Officer
James R. McCall President
Edward F. Godfrey Senior Vice President, Chief Financial
Officer and Treasurer
Philip M. Byrne Senior Vice President
Rosemary D. Van Antwerp Senior Vice President, General Counsel
and Secretary
Donald McMullen Director
William M. Ennis II Director
Barbara J. Colvin Director
The address of each of the persons referred to above except Messrs.
McMullen and Ennis and Ms. Colvin is 200 Berkeley Street, Boston,
Massachusetts 02116-5034. The address of Messrs. McMullen and Ennis and Ms.
Colvin is 301 South College Street, Charlotte, North Carolina 23288-0630.
RECOMMENDATION OF THE TRUSTEES
The Board of Trustees of each Fund, including its Independent Trustees,
recommends that the shareholders vote FOR the election of each Trustee.
2. APPROVAL OF MANAGEMENT AND ADVISORY AGREEMENTS
BACKGROUND OF PROPOSAL
KIMCO is the investment adviser or manager, or both, of the Funds. Keystone
Management is the investment manager of certain Funds for which KIMCO is only
the investment adviser. If the Merger is consummated, only KIMCO will be the
investment adviser and manager of all of the Funds, and Keystone Management will
cease to have any such function. KIMCO is a wholly-owned subsidiary of Keystone
Investments.
If the Merger is consummated, the Change in Control described in the
"Introduction" above will automatically terminate the Funds' investment advisory
and management agreements and subadvisory agreements, where applicable, in
accordance with their terms, as required by the 1940 Act. The new investment
advisory and management agreements and subadvisory agreements, where applicable,
of each Fund proposed hereby for approval by the Funds' shareholders will be
substantively identical to each Fund's existing agreements. EACH FUND'S ADVISORY
FEE RATE WILL REMAIN UNCHANGED. (See "Advisory Fee Waivers and Expense
Subsidies.") Such approvals by shareholders of Keystone funds which in the
aggregate provided at least 90% of the advisory and management fees paid to
Keystone by such Keystone funds for the twelve months ended August 31, 1996 is a
condition of the consummation of the Merger.
TERMS OF ADVISORY AND MANAGEMENT AGREEMENTS
Pursuant to each Fund's proposed advisory and management agreement, KIMCO
will act as investment adviser and manager to each Fund, except where a
subadviser is employed as adviser.
The investment advisory and management agreement of each Fund currently
requires, and each proposed agreement will require, KIMCO to manage and
administer the operation of such Fund, and to manage the investment and
reinvestment of such Fund's assets in conformity with such Fund's investment
objectives and restrictions, subject to the supervision of the Trustees of the
Fund, as well as to provide office space, all necessary office facilities,
equipment and personnel in connection with its services under the investment
advisory and management agreement, and all other expenses of KIMCO incurred in
connection with the investment advisory and management services provided. All
charges and expenses, other than those specifically referred to as being borne
by its investment manager and adviser, are currently, and will continue to be,
paid by each Fund, including, but not limited to, custodian charges and
expenses, bookkeeping and auditors' charges and expenses, transfer agent charges
and expenses, fees of Independent Trustees, brokerage commissions, brokerage
fees and expenses, issue and transfer taxes, costs and expenses under
distribution plans, interest, taxes and corporate fees payable to governmental
agencies, the cost of share certificates, fees and expenses of the registration
and qualification of the Fund and its Shares with the SEC or under state or
other securities laws, expenses of preparing, printing and mailing of
prospectuses, statements of additional information, notices, reports and proxy
materials to shareholders of the Fund, expenses of shareholders' and Trustees'
meetings, charges and expenses of legal counsel for the Fund and for the
Trustees of the Fund, charges and expenses of filing annual and other reports
with the SEC and other authorities, and all extraordinary charges and expenses
of the Fund.
The form of proposed investment advisory and management agreement for each
Fund, except Emerging Growth, is attached hereto as Exhibit A. Appendix I to
Exhibit A contains each such Fund's advisory fee schedule.
Each Fund's current and proposed investment advisory and management
agreement, except as stated below, provides that KIMCO shall have no liabilities
in connection with rendering services thereunder, other than liabilities
resulting from KIMCO's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties, and that each Fund will indemnify KIMCO
against liabilities, losses and expenses incurred in connection with all
liabilities, except those stated above and liabilities involving breach of
KIMCO's fiduciary duties in respect of receipt of compensation for its services.
As is the case with its current agreement, the proposed agreement for Emerging
Growth, which is included in Exhibit B hereto, does not provide for such
indemnification by Emerging Growth although such agreement contains the same
limit on liabilities of KIMCO.
If approved by the shareholders of each Fund, the proposed investment
advisory and management agreement, and subadvisory agreement, where applicable,
for such Fund will continue in effect until two years from its effective date
(the Effective Date of the Merger), and, thereafter, will continue from year to
year, subject to termination as hereafter described, if approved annually by the
shareholders or Board of Trustees of such Fund, and, in either case, by a
majority of the Independent Trustees by vote in person at a meeting called for
such purpose, all as required by the 1940 Act. Each such agreement must also
provide that it will automatically terminate upon any "assignment" of the
agreement, which term includes, as is the case with the current agreements if
the Merger is consummated, a change in control of a Fund's investment adviser
and manager, or subadviser, where applicable. The terms of the proposed
agreements being submitted to shareholders and the execution of such agreements
upon consummation of the Merger were approved unanimously by all of the Trustees
of each Fund at meetings called for such purpose on September 5, 1996 or
September 18, 1996.
Subadvisers may be appointed pursuant to provisions therefor in advisory and
management agreements which permit delegation by the adviser and manager of
substantially all or any part of the functions of the adviser and manager at the
expense of the adviser and manager by agreement with a subadviser. Such
agreement must have the same approvals of Fund shareholders and Trustees and the
same continuation and termination provisions as are required for the primary
advisory and management agreements. The proposed subadvisory agreements are
substantively identical to the current subadvisory agreements. The terms of the
proposed subadvisory agreements for Emerging Growth, Global Opportunities and
Global Resources are described in Proposal 3.
As of September 30, 1996, KIMCO served as investment adviser to the Keystone
funds listed in Exhibit I, whose investment objectives are substantially similar
to each other.
If the Merger is consummated, Furman Selz, which is not affiliated with
First Union, will provide personnel and certain administrative services to the
Funds pursuant to a sub-administration agreement under which it will receive
from KIMCO a fee at the maximum annual rate of 1/100th of 1% of the average
daily net asset value of each Fund's total assets. The terms of such sub-
administration agreement have been approved by the Funds' Boards of Trustees. As
stated above, Furman Selz has agreed to sell its mutual funds administration and
distribution business to BISYS. Upon the consummation of this transaction, BISYS
will act as sub-administrator pursuant to an identical agreement (see page 13).
EFD, currently a subsidiary of Furman Selz, will be the Funds' new principal
underwriter.
Exhibit J shows the amounts of compensation received by KIMCO and other
affiliates of KIMCO for the most recently completed fiscal year, or fiscal
period, if a full fiscal year has not been completed since the Fund's inception,
pursuant to its investment advisory and/or management agreements. Exhibit K
shows the amounts paid to KID for the most recently completed fiscal year, or
fiscal period, if a full fiscal year has not been completed since the Fund's
inception, for its principal underwriting and distribution services to each
Fund.
CONSIDERATIONS OF THE TRUSTEES
In considering the terms of the new investment advisory and management
agreements, together with the changes to other contracts for services described
above and approved by the Trustees, the Trustees of each Fund concluded that the
Merger should result in substantial contributions to the operations of the Funds
in four major areas consisting of: (i) investment advisory services; (ii) sales
of Fund Shares; (iii) management efficiencies and economies of scale; and (iv)
transfer agency and shareholder services and exchange options, some of which
contributions are substantially interdependent.
The Trustees, after examining relevant materials furnished to them by First
Union, Keystone and Furman Selz and attending meetings with executives and
employees of First Union and its subsidiaries, Furman Selz and EFD and the
Trustees of the Evergreen funds, determined that these expected contributions
would be largely due to First Union's financial strength, investment advisory
asset base and mutual funds under management, personnel base, transfer agency
and shareholder services requirements, marketing capability and ability to make
available additional choices of funds for exchange or purchase by Keystone fund
shareholders. A description of certain ways in which some of these attributes of
First Union are expected to contribute to Keystone's operations in the best
interests of Funds and their shareholders follows:
Investment Advisory Services -- The Trustees expect that the increased
financial strength and stability of the investment adviser after the Merger
would be likely to: (a) enhance the investment adviser's ability to attract and
retain desirable advisory and other management personnel; (b) create
opportunities for augmenting the technological and other support infrastructure
available for portfolio management and administrative services; and (c) provide
the investment adviser with access to research and other resources of the
investment management personnel of First Union and its affiliates. The Trustees
concluded that the foregoing potential benefits, considered together with the
fact that no increase in the rate of investment management and advisory fees to
be charged to the Funds was planned or contemplated, would be in the best
interest of the Funds and their shareholders.
Sales of Shares -- The Trustees concluded that (a) the proposed new
distribution arrangements, which include intended use of First Union's retail
brokerage affiliate to make Shares of the Funds available to purchasers; and (b)
the increased likelihood that major broker-dealers would choose to make Shares
of the Funds available, in view of the expected greater asset base and
additional exchange options to their clients that would result from the Merger,
could lead to a significant increase in sales of Shares and therefore in asset
levels.
Management Efficiencies and Economies of Scale -- The Trustees also
concluded that the Merger could result in greater economies of scale for the
Funds in the event Fund assets increase substantially as a result of increased
sales, as described above. They noted that any increases in asset levels would
result in the fixed costs of the Funds being spread over a larger number of
Shares and that a reduction in such costs on a per-share basis could be realized
depending on the magnitude of post-merger increases in asset levels relative to
current net assets of a particular Fund. They also considered that if sales were
increased, the resulting cash flow would permit portfolio management personnel
to increase the size of existing portfolios and to avoid some of the costs
associated with the untimely sales of securities to meet redemptions.
Transfer Agency, Shareholder Services and Exchange Options -- The Trustees
considered that the addition of the Evergreen funds to the family of funds
served by KIRC will enable it to enjoy economies of scale that could lead to
enhanced services to the Funds and that such economies of scale could possibly
result in a reduction of, and reduce the necessity for, increases in transfer
agency expenses for the Funds. The Trustees also concluded that the exchange
options that the First Union affiliation would eventually provide to Fund
shareholders would be a significant benefit.
The parties to the Merger Agreement have each agreed for a period of three
years following the Effective Date to use their reasonable best efforts to
assure compliance with the safe harbor provisions of Section 15(f) of the 1940
Act. Section 15(f) provides that an investment adviser to a registered
investment company may receive a benefit in connection with a sale of any
interest in such adviser which results in an assignment of an investment
advisory contract so long as the following two conditions are satisfied: (i) for
a period of three years after such assignment, at least 75% of the Board of
Trustees of the investment company cannot be "interested persons," as defined in
the 1940 Act, (i.e., must be Independent Trustees) of the new investment adviser
or its predecessor; and (ii) no "unfair burden" (as defined in the 1940 Act) is
imposed on the investment company as a result of the assignment or any express
or implied terms, conditions or understandings applicable thereto.
RECOMMENDATION OF TRUSTEES
The Board of Trustees of each Fund, including its Independent Trustees,
recommends that the shareholders vote FOR approval of each proposed investment
management and advisory agreement.
3. APPROVAL OF SUBADVISORY AGREEMENTS
FOR EMERGING GROWTH, GLOBAL OPPORTUNITIES
AND GLOBAL RESOURCES
As discussed above, the Change in Control of Keystone Investments would
automatically terminate the subadvisory agreements for Emerging Growth, Global
Opportunities and Global Resources in accordance with their terms and as
required by the 1940 Act. The new subadvisory agreement for each Fund will be
substantially identical to the existing subadvisory agreement for each Fund.
Pursuant to each proposed subadvisory agreement, KIMCO delegates its
investment advisory functions under each Fund's proposed advisory and management
agreement to the subadviser, except that in the case of Global Opportunities
these delegated functions are limited to the Fund's non-North American portfolio
and to recommending to KIMCO (but not deciding) the portions of that portfolio
to be held invested or uninvested from time to time.
Exhibit L shows the amounts of compensation received by each such Fund's
subadvisor for each such Fund's most recent fiscal year pursuant to its
subadvisory agreement.
For more detailed information concerning the subadvisers, see the section
entitled "SubAdvisers" below. The proposed subadvisory agreements for Emerging
Growth, Global Opportunities and Global Resources are attached to this Proxy
Statement as Exhibits C, D and E, respectively.
RECOMMENDATION OF THE TRUSTEES
The Board of Trustees of each of Emerging Growth, Global Opportunities and
Global Resources, including the Independent Trustees, recommends that the
shareholders vote FOR the proposed subadvisory agreements.
4. AMENDMENT TO DECLARATIONS OF TRUST OF
GLOBAL OPPORTUNITIES AND LIQUID TRUST TO INCREASE
THE NUMBER OF TRUSTEES
Article IV, Section 4 of the Declaration of Trust of each of Global
Opportunities and Liquid Trust provides that the Board of Trustees shall consist
of no less than three Trustees and no more than fifteen Trustees. Consequently,
the proposed election of Trustees described in Proposal 1 requires the amendment
of each Declaration of Trust by the shareholders. The Boards of Trustees of most
of the Keystone funds have the authority to fix the number of Trustees from time
to time, without the need for shareholder approval and the attendant costs of a
shareholder meeting. It is therefore proposed that the Declaration of Trust of
each of Global Opportunities and Liquid Trust be amended by substituting for the
first sentence of Section 4 of Article IV, the following sentence:
"Number of Trustees. The number of Trustees serving shall be such number
as shall be fixed from time to time by action of a majority of the Trustees."
The Boards of Trustees can then take action to increase the number of
Trustees.
RECOMMENDATION OF THE TRUSTEES
The Board of Trustees of each of Global Opportunities and Liquid Trust,
including the Independent Trustees, recommends that the shareholders vote FOR
approval of the amendment to the Declaration of Trust of Global Opportunities
and Liquid Trust.
5. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC
ACCOUNTANT FOR EMERGING GROWTH
FOR ITS CURRENT FISCAL YEAR
The audit services expected to be provided by KPMG Peat Marwick for the
current fiscal year include work in connection with the expression of an opinion
on the annual financial statements of Emerging Growth and review of the Fund's
Annual Report to shareholders and its filings with the SEC. During its most
recent fiscal year Emerging Growth paid KPMG Peat Marwick $51,373 for its
services.
A representative of KPMG Peat Marwick is expected to attend the Meeting and
will be given an opportunity to make a statement and respond to appropriate
questions from shareholders.
RECOMMENDATION OF THE DIRECTORS
The Board of Directors of Emerging Growth, including the Independent
Directors, recommends that the shareholders of Emerging Growth vote FOR the
ratification of the selection of KPMG Peat Marwick as independent public
accountant for Emerging Growth.
SUBADVISORS
J. M. HARTWELL LIMITED PARTNERSHIP
J. M. Hartwell Limited Partnership ("J.M. Hartwell"), the subadviser to
Emerging Growth, is a registered investment adviser which was formed on May 2,
1994 in Delaware to provide investment advice to mutual funds and other
clients.
J. M. Hartwell is owned as follows:
NAME PERCENTAGE OWNERSHIP
---- --------------------
JMH Management Corporation 68.00%
(The sole general partner)
Millwill Corporation, which is owned 15.35%
by William C. Miller, IV
Affiliated Managers Group, Inc. 8.75%
Boulderwood Corp. 5.27%
B. Nicholson Corp. 2.63%
-----
100%
Affiliated Managers Group, Inc. owns 80% of the outstanding stock of JMH
Management Corporation and thus controls J. M. Hartwell because of JMH
Management Corporation's status as sole general partner of J. M. Hartwell.
Mr. William C. Miller, IV, is the President and only executive officer of
J. M. Hartwell and also owns the remaining 20% of the outstanding stock of JMH
Management Corporation. The address of J. M. Hartwell and Mr. Miller is 515
Madison Avenue, New York, New York 10022.
CREDIT LYONNAIS INTERNATIONAL ASSET MANAGEMENT, NORTH AMERICA
Credit Lyonnais International Asset Management, North America ("Credit
Lyonnais, N.A."), the subadviser to Global Opportunities, is a registered
investment adviser which was formed in Dublin, Ireland on April 23, 1991 to
provide investment advice to clients in North America. It is an indirect
wholly-owned subsidiary of Credit Lyonnais, a financial institution with assets
of approximately $300 billion and over 500 branches in 70 countries. Credit
Lyonnais, N.A. is affiliated with the investment management division of Credit
Lyonnais, which manages assets in excess of $70 billion. The sole shareholder of
Credit Lyonnais is the Republic of France.
The names, addresses and principal occupations of the chief executive
officers and each director of Credit Lyonnais, N.A. are:
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
Norman Steinberg Senior Vice President
50 Rowes Wharf, Suite 420
Boston, Massachusetts 02110
Jacques Dalloz Senior Vice President and Director
168, rue de Rivoli
Paris, France
Jean Francois Baume Chief Investment Officer and Director
168, rue de Rivoli
Paris, France
Maurice Monbaron Manager and Director
Place Belaire
Geneva 11, Switzerland
EQUITILINK INTERNATIONAL MANAGEMENT LIMITED
EquitiLink International Management Limited ("EquitiLink"), the subadviser
to Global Resources, is a registered investment adviser which was formed in
Jersey, Channel Islands on October 15, 1985 to provide investment advice to
registered investment companies.
The owners of EquitiLink and their percentages of ownership are as follows:
NAME AND ADDRESS PERCENTAGE OWNERSHIP
- ---------------- --------------------
Nathan Spatt 4.61%
1 Transvaal Avenue
Double Bay NSW 2028 Australia
Laurence Freedman 40.54%
190 George Street
Sydney NSW 2000 Australia
Brian Sherman 40.54%
190 George Street
Sydney NSW 2000 Australia
Michael Gleeson-White 4.51%
9a Wellington Street
Woollahra NSW 2025 Australia
Roy Randall 3.72%
19 Martin Place
Sydney NSW 2000 Australia
Julian Block 2.94%
19 Martin Place
Sydney NSW 2000 Australia
Martin Bloom 1.57%
1 Market Street
Sydney NSW 2000 Australia
David Manor 1.18%
190 George Street
Sydney NSW 2000 Australia
David Bruce 0.39%
190 George Street
Sydney NSW 2000 Australia
-------
100%
The names, addresses and principal occupations of the chief executive
officer and each director of EquitiLink are:
NAME AND ADDRESS
<TABLE>
<CAPTION>
(TITLE) PRINCIPAL OCCUPATION
- ------- --------------------
<S> <C>
Roger C. Maddock Chairman and Managing Director,
Union House, Union Street EquitiLink
St. Helier, Jersey, Channel Islands
(Chairman and Managing Director)
Laurence S. Freedman Joint Managing Director,
190 George Street EquitiLink Limited and
Sydney NSW 2000 Australia EquitiLink Australia Limited
(Non-Executive Director)
Brian M. Sherman Chairman and Joint Managing
190 George Street Director, EquitiLink Limited;
Sydney NSW 2000 Australia Joint Managing Director,
(Non-Executive Director) EquitiLink Australia Limited
David Manor Executive Director, EquitiLink
190 George Street Limited and EquitiLink
Sydney NSW 2000 Australia Australia Limited
(Non-Executive Director)
Richard P. Strickler Senior Vice President, EquitiLink
45 Broadway U.S.A.
New York, NY 10006
(Non-Executive Director)
Henry Lipworth Director, EquitiLink
26 Belsize Lane
London NW3 SAB
UK
(Non-Executive Director)
Simon Brewer Director, EquitiLink
Union House, Union Street
St. Helier, Jersey
Channel Islands
(Director)
</TABLE>
GENERAL INFORMATION
CERTAIN BROKERAGE
Pursuant to principal underwriting agreements with certain Keystone funds,
Kokusai Securities Co., Ltd. ("Kokusai") and Nomura Securities Co., Ltd.
("Nomura"), each acts as principal underwriter for the sale of Shares of such
Funds in Japan.
Exhibit M contains the total of brokerage commissions paid, the total amount
of brokerage commissions paid to Kokusai and Nomura and the percentage of
aggregate brokerage commissions paid to Kokusai and Nomura by each Fund in the
Keystone America Family during its most recently completed fiscal year, or
fiscal period, if a full fiscal year has not been completed since a Fund's
inception.
TRANSFER AGENCY AGREEMENTS
KIRC is the transfer agent of the Shares of each Fund and performs transfer
agency, recordkeeping, dividend disbursing and other related services for each
Fund.
Exhibit N to this Proxy Statement contains a schedule of fees for such
services paid by each Fund for its most recently completed fiscal year, or
fiscal period, if a full fiscal year has not been completed since a Fund's
inception.
OTHER SERVICES PROVIDED TO THE FUNDS BY KIMCO
The Fund Administration Department of Keystone Investments provides
accounting and bookkeeping services to each of the Funds. Exhibit N of this
Proxy Statement contains a schedule of fees paid by each Fund to the Fund
Administration Department of Keystone Investments for such services for its most
recently completed fiscal year, or fiscal period, if a full fiscal year has not
been completed since a Fund's inception.
ADDITIONAL INFORMATION
PAYMENT OF EXPENSES
Each Fund will pay its proportionate share of expenses of the preparation,
printing and mailing to its shareholders of the Proxy, accompanying Notice of
Meeting and this Proxy Statement and any supplementary solicitation of its
shareholders.
SUPPLEMENTARY SOLICITATION
Supplementary solicitation for each Fund may be made by mail, telephone,
telegraph or personal interview by officers of the Funds, by officers or
employees of KIRC, KIMCO, Keystone Investments, First Union or their
subsidiaries, or by securities dealers through whom Shares have been sold.
The Funds may also retain First Data Corp. Investors Services Group ("First
Data") to assist in the Proxy solicitation process, and may contact certain
shareholders of the Funds by telephone. Shareholders of certain Funds that are
contacted by KIRC or First Data may be asked to cast their votes by telephonic
Proxy. Such Proxies will be recorded in accordance with the procedures set forth
below. The Funds believe these procedures are reasonably designed to ensure that
the identity of the shareholder casting the vote is accurately determined and
that the voting instructions of the shareholder are accurately reflected. KIRC
expects to receive opinions of counsel which address the validity, under the
applicable laws of the Commonwealths of Massachusetts and Pennsylvania, of
proxies given orally by shareholders of each Fund other than Emerging Growth.
Such opinions are expected to conclude that a court of Massachusetts or
Pennsylvania would find that there is no Massachusetts or Pennsylvania law or
public policy, as applicable, against the acceptance of proxies signed by an
orally-authorized agent.
In all cases where a telephonic Proxy is solicited, a representative of KIRC
or First Data ("representative") will ask for the shareholder's full name,
address, social security or employer identification number, title (if the
shareholder is authorized to act on behalf of an entity, such as a corporation),
and the number of Shares owned. If the information solicited agrees with KIRC's
information or the information provided to First Data by KIRC, then the
representative will explain the process, read the Proposals listed on the Proxy
and ask for the shareholder's instructions on each Proposal. The representative,
although he or she will answer questions about the process, will not recommend
to the shareholder how to vote, other than to read any recommendations set forth
in this Proxy Statement. Within 24 hours, KIRC will send the shareholder a
letter or mailgram to confirm the shareholder's vote and to ask the shareholder
to call KIRC immediately if the shareholder's instructions are not correctly
reflected in the confirmation.
If the shareholder wishes to participate in the Meeting, but does not wish
to give his/her Proxy by telephone, he/she may still submit the Proxy included
with this Proxy Statement or attend the Meeting in person. Any Proxy given by
the shareholder, whether in writing or by telephone, is revocable.
It is expected that the cost of retaining First Data to assist in the Proxy
solicitation process will not exceed $20,000, which cost will be allocated among
the Funds pro rata based on their respective net assets.
SUBSTANTIAL SHAREHOLDERS
Exhibit O contains information about the beneficial ownership by
shareholders of 5% or more of each Fund's outstanding Shares as of September 30,
1996.
On that date, the Trustees, nominees for Trustee and executive officers as a
group, "beneficially owned" less than 1% of each Fund's outstanding Shares,
except that Mr. Bissell owned 22,302 Shares (18.2%) of Emerging Markets.
The term "beneficial ownership" is as defined under Section 13(d) of the
1934 Act. The information as to beneficial ownership is based on statements
furnished to each Fund by the existing Trustees, officers of such Fund, nominees
for Trustees and/or on records of KIRC.
SHAREHOLDER PROPOSALS
Except for Emerging Growth, no Fund is required or intends to hold annual or
other periodic meetings of shareholders except as required by the 1940 Act. The
next meeting of the shareholders of each Fund will be held at such time as the
Board of Trustees may determine or at such time as may be legally required.
Proposals of shareholders intended to be presented at a Fund's next meeting must
be received by the Fund for inclusion in the Fund's Proxy Statement and Proxy
within a reasonable time before the meeting.
It is suggested that shareholders submit their proposals by Certified Mail -
Return Receipt Requested. The SEC has adopted certain requirements which apply
to any proposals of shareholders.
ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS
EACH OF THE FUNDS WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT
ANNUAL REPORT (AND MOST RECENT SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT,
IF ANY) TO A SHAREHOLDER OF THE FUND UPON REQUEST. ANY SUCH REQUEST SHOULD BE
DIRECTED TO KIRC AT 200 BERKELEY STREET, BOSTON, MASSACHUSETTS 02116-5034 or
(800) 343-2898.
CERTAIN DEFINITIONS USED IN THIS PROXY STATEMENT
"12b-1 Plan(s)" The Distribution Plans adopted by the Funds pursuant
to Rule 12b-1 issued under the 1940 Act.
"1933 Act" The Securities Act of 1933, as amended.
"1934 Act" The Securities Exchange Act of 1934, as amended.
"1940 Act" The Investment Company Act of 1940, as amended.
"Board(s) of The Boards of Trustees or Directors of the Funds.
Trustees"
"FKI" First Union Keystone, Inc., One First Union Center,
Charlotte, North Carolina 28288. Upon the
effectiveness of the Merger, FKI will become the
successor to Keystone Investments and will be
renamed "Keystone Investments, Inc."
"First Union" First Union Corporation, One First Union Center,
Charlotte, North Carolina 28288. First Union owns
all of the outstanding shares of FUNB-NC (except for
directors' qualifying shares).
"FUNB-NC" First Union National Bank of North Carolina, One
First Union Center, Charlotte, North Carolina 28288.
"Furman Selz" Furman Selz LLC, 230 Park Avenue, New York, New
York 10169. If the Merger occurs, Furman Selz will
provide certain personnel and administrative services
to the Funds.
"Independent Those Trustees or Directors of the Funds who are not
Trustees" "interested persons" of the Funds as defined in the
1940 Act and who have no direct or indirect financial
interest in the operation of a 12b-1 Plan or in any
agreements related to the Plan.
"KID" Keystone Investment Distributors Company, 200 Berkeley
Street, Boston, Massachusetts 02116-5034, a
wholly-owned subsidiary of KIMCO. KID is the principal
underwriter of the Funds and of other Keystone funds.
"KIMCO" Keystone Investment Management Company, 200 Berkeley
Street, Boston, Massachusetts 02116-5034, a wholly-
owned subsidiary of Keystone Investments, Inc. and
the investment adviser of each of the Funds, except
where a subadviser is employed.
"Keystone Keystone Investments, Inc., 200 Berkeley Street,
Investments" Boston, Massachusetts 02116-5034, which owns all of
the outstanding shares of KIMCO. Keystone Investments
is predominantly owned by current and former employees
of Keystone Investments and its affiliates, their
family members and their trusts.
"KPMG Peat KPMG Peat Marwick LLP, independent public
Marwick" accountant. KPMG Peat Marwick is the independent
public accountant for each of the Keystone funds, First
Union and certain mutual funds managed or advised by
subsidiaries of First Union.
"Merger Agreement and Plan of Acquisition and Merger, dated
Agreement" September 6, 1996, by and among First Union, FUNB-
NC, FKI, Inc., and Keystone Investments, as amended
from time to time.
"Merger" The proposed merger of Keystone Investments with and
into an affiliate of First Union pursuant to the Merger
Agreement.
"mutual fund" An open-end management investment company registered
under the 1940 Act.
October 21, 1996
<PAGE>
EXHIBIT A
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the day of , by and between [FUND], a
Massachusetts business trust (the "Fund"), and KEYSTONE INVESTMENT MANAGEMENT
COMPANY, a Delaware corporation (the "Adviser").
WHEREAS, the Fund and the Adviser wish to enter into an Agreement setting
forth the terms on which the Adviser will perform certain services for the
Fund.
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Fund and the Adviser agree as follows:
1. The Fund hereby employs the Adviser to manage and administer the
operation of the Fund, to supervise the provision of services to the Fund by
others, and to manage the investment and reinvestment of the assets of the
Fund in conformity with the Fund's investment objectives and restrictions as
may be set forth from time to time in the Fund's then current prospectus and
statement of additional information, if any, and other governing documents,
all subject to the supervision of the Board of Trustees of the Fund, for the
period and on the terms set forth in this Agreement. The Adviser hereby
accepts such employment and agrees during such period, at its own expense, to
render the services and to assume the obligations set forth herein, for the
compensation provided herein. The Adviser shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund in
any way or otherwise be deemed an agent of the Fund.
2. The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of the Fund with broker-dealers selected
by the Adviser. In executing portfolio transactions and selecting broker-
dealers, the Adviser will use its best efforts to seek best execution on
behalf of the Fund. In assessing the best execution available for any
transaction, the Adviser shall consider all factors it deems relevant,
including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker-
dealer, and the reasonableness of the commission, if any (all for the specific
transaction and on a continuing basis). In evaluating the best execution
available, and in selecting the broker-dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research services
(as those terms are used in Section 28(e) of the Securities Exchange Act of
1934 (the "1934 Act") provided to the Fund and/or other accounts over which
the Adviser or an affiliate of the Adviser exercises investment discretion.
The Adviser is authorized to pay a broker-dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for
the Fund which is in excess of the amount of commission another broker-dealer
would have charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by such broker-
dealer viewed in terms of that particular transaction or in terms of all of
the accounts over which investment discretion is so exercised.
3. The Adviser, at its own expense, shall furnish to the Fund office space
in the offices of the Adviser or in such other place as may be agreed upon by
the parties from time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and shall arrange, if
desired by the Fund, for members of the Adviser's organization to serve
without salaries from the Fund as officers or, as may be agreed from time to
time, as agents of the Fund. The Adviser assumes and shall pay or reimburse
the Fund for: (1) the compensation (if any) of the Trustees of the Fund who
are affiliated with the Adviser or with its affiliates, or with any adviser
retained by the Adviser, and of all officers of the Fund as such, and (2) all
expenses of the Adviser incurred in connection with its services hereunder.
The Fund assumes and shall pay all other expenses of the Fund, including,
without limitation: (1) all charges and expenses of any custodian or
depository appointed by the Fund for the safekeeping of its cash, securities
and other property; (2) all charges and expenses for bookkeeping and auditors;
(3) all charges and expenses of any transfer agents and registrars appointed
by the Fund; (4) all fees of all Trustees of the Fund who are not affiliated
with the Adviser or any of its affiliates, or with any adviser retained by the
Adviser; (5) all brokers' fees, expenses and commissions and issue and
transfer taxes chargeable to the Fund in connection with transactions
involving securities and other property to which the Fund is a party; (6) all
costs and expenses of distribution of its shares incurred pursuant to a Plan
of Distribution adopted under Rule 12b-1 under the Investment Company Act of
1940 ("1940 Act"); (7) all taxes and trust fees payable by the Fund to
Federal, state or other governmental agencies; (8) all costs of certificates
representing shares of the Fund; (9) all fees and expenses involved in
registering and maintaining registrations of the Fund and of its shares with
the Securities and Exchange Commission (the "Commission") and registering or
qualifying its shares under state or other securities laws, including, without
limitation, the preparation and printing of registration statements,
prospectuses and statements of additional information for filing with the
Commission and other authorities; (10) expenses of preparing, printing and
mailing prospectuses and statements of additional information to shareholders
of the Fund; (11) all expenses of shareholders' and Trustees' meetings and of
preparing, printing and mailing notices, reports and proxy materials to
shareholders of the Fund; (12) all charges and expenses of legal counsel for
the Fund and for Trustees of the Fund in connection with legal matters
relating to the Fund, including, without limitation, legal services rendered
in connection with the Fund's existence, trust and financial structure and
relations with its shareholders, registrations and qualifications of
securities under Federal, state and other laws, issues of securities, expenses
which the Fund has herein assumed, whether customary or not, and extraordinary
matters, including, without limitation, any litigation involving the Fund, its
Trustees, officers, employees or agents; (13) all charges and expenses of
filing annual and other reports with the Commission and other authorities; and
(14) all extraordinary expenses and charges of the Fund. In the event that the
Adviser provides any of these services or pays any of these expenses, the Fund
will promptly reimburse the Adviser therefor.
The services of the Adviser to the Fund hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others.
4. As compensation for the Adviser's services to the Fund during the
period of this Agreement, the Fund will pay to the Adviser a fee at the annual
rate of:
For each Fund's Advisory Fee Schedule see Appendix I attached hereto.
5. The Adviser may enter into an agreement to retain, at its own expense,
a firm or firms ("SubAdviser") to provide the Fund all of the services to be
provided by the Adviser hereunder, if such agreement is approved as required
by law. Such agreement may delegate to such SubAdviser all of Adviser's
rights, obligations and duties hereunder.
6. The Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from the Adviser's willful
misfeasance, bad faith, gross negligence or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though also
an officer, Director, partner, employee, or agent of the Adviser, who may be
or become an officer, Trustee, employee or agent of the Fund, shall be deemed,
when rendering services to the Fund or acting on any business of the Fund
(other than services or business in connection with the Adviser's duties
hereunder), to be rendering such services to or acting solely for the Fund and
not as an officer, Director, partner, employee, or agent or one under the
control or direction of the Adviser even though paid by it. The Fund agrees to
indemnify and hold the Adviser harmless from all taxes, charges, expenses,
assessments, claims and liabilities (including, without limitation,
liabilities arising under the Securities Act of 1933, the 1934 Act, the 1940
Act, and any state and foreign securities and blue sky laws, as amended from
time to time) and expenses, including (without limitation) attorneys' fees and
disbursements, arising directly or indirectly from any action or thing which
the Adviser takes or does or omits to take or do hereunder provided that the
Adviser shall not be indemnified against any liability to the Fund or to its
shareholders (or any expenses incident to such liability) arising out of a
breach of fiduciary duty with respect to the receipt of compensation for
services, willful misfeasance, bad faith, or gross negligence on the part of
the Adviser in the performance of its duties, or from reckless disregard by it
of its obligations and duties under this Agreement.
7. The Fund shall cause its books and accounts to be audited at least once
each year by a reputable independent public accountant or organization of
public accountants who shall render a report to the Fund.
8. Subject to and in accordance with the Declaration of Trust of the Fund,
the Articles of Incorporation of the Adviser and the governing documents of
any SubAdviser, it is understood that Trustees, Directors, officers, agents
and shareholders of the Fund or any Adviser are or may be interested in the
Adviser (or any successor thereof) as Directors and officers of the Adviser or
its affiliates, as stockholders of Keystone Investments, Inc. or otherwise;
that Directors, officers and agents of the Adviser and its affiliates or
stockholders of Keystone Investments, Inc. are or may be interested in the
Fund or any Adviser as Trustees, Directors, officers, shareholders or
otherwise; that the Adviser (or any such successor) is or may be interested in
the Fund or any SubAdviser as shareholder, or otherwise; and that the effect
of any such adverse interests shall be governed by said Declaration of Trust
of the Fund, Articles of Incorporation of the Adviser and governing documents
of any SubAdviser.
9. This Agreement shall continue in effect after [ ]
only so long as (1) such continuance is specifically approved at least
annually by the Board of Trustees of the Fund or by a vote of a majority of
the outstanding voting securities of the Fund, and (2) such renewal has been
approved by the vote of a majority of Trustees of the Fund who are not
interested persons, as that term is defined in the 1940 Act, of the Adviser or
of the Fund, cast in person at a meeting called for the purpose of voting on
such approval.
10. On sixty days' written notice to the Adviser, this Agreement may be
terminated at any time without the payment of any penalty by the Board of
Trustees of the Fund or by vote of the holders of a majority of the
outstanding voting securities of the Fund; and on sixty days' written notice
to the Fund, this Agreement may be terminated at any time without the payment
of any penalty by the Adviser. This Agreement shall automatically terminate
upon its assignment (as that term is defined in the 1940 Act). Any notice
under this Agreement shall be given in writing, addressed and delivered, or
mailed postage prepaid, to the other party at the main office of such party.
11. This Agreement may be amended at any time by an instrument in writing
executed by both parties hereto or their respective successors, provided that
with regard to amendments of substance such execution by the Fund shall have
been first approved by the vote of the holders of a majority of the
outstanding voting securities of the Fund and by the vote of a majority of
Trustees of the Fund who are not interested persons (as that term is defined
in the 1940 Act) of the Adviser, any predecessor of the Adviser, or of the
Fund, cast in person at a meeting called for the purpose of voting on such
approval. A "majority of the outstanding voting securities of the Fund" shall
have, for all purposes of this Agreement, the meaning provided therefor in the
1940 Act.
12. Any compensation payable to the Adviser hereunder for any period other
than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the day and year first above written.
[FUND]
By: ----------------------------------------------------------
Title:
KEYSTONE INVESTMENT MANAGEMENT
COMPANY
By: ----------------------------------------------------------
Title:
<PAGE>
APPENDIX I TO EXHIBIT A
FOR BALANCED FUND AND TOTAL RETURN:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
1.5% of gross dividend and interest income plus
0.60% of the first $100,000,000, plus
0.55% of the next $100,000,000, plus
0.50% of the next $100,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of the next $100,000,000, plus
0.35% of the next $500,000,000, plus
0.30% of amounts over $1,000,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR CAPITAL PRESERVATION AND INCOME:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
2.0% of gross dividend and interest income plus
0.50% of the first $100,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of the next $100,000,000, plus
0.35% of the next $100,000,000, plus
0.30% of the next $100,000,000, plus
0.25% of amounts over $500,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR EMERGING MARKETS:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
1.25% of the first $250,000,000, plus
1.00% of amounts over $250,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR FUND OF THE AMERICAS:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
0.75% of the first $200,000,000, plus
0.65% of the next $200,000,000, plus
0.55% of the next $200,000,000, plus
0.45% of amounts over $600,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR GLOBAL OPPORTUNITIES:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
1.00% of the first $200,000,000, plus
0.95% of the next $200,000,000, plus
0.85% of the next $200,000,000, plus
0.75% of amounts over $600,000,000.
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR GLOBAL RESOURCES:
The Fund will pay to the Adviser a fee at the annual rate of 1.00% of the
aggregate net asset value of shares of the Fund.
FOR GOVERNMENT SECURITIES, INTERMEDIATE TERM,
STRATEGIC INCOME, AND TAX FREE INCOME:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
2.0% of gross dividend and interest income plus
0.50% of the first $100,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of the next $100,000,000, plus
0.35% of the next $100,000,000, plus
0.30% of the next $100,000,000, plus
0.25% of amounts over $500,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR LIQUID TRUST:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
0.50% of the first $500,000,000, plus
0.45% in excess of $500,000,000 and less than
$1,000,000,000, plus
0.40% of amounts over $1,000,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR OMEGA:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
0.75% of the first $250,000,000, plus
0.675% of the next $250,000,000, plus
0.60% of the next $500,000,000, plus
0.50% of amounts over $1,000,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR SMALL COMPANY GROWTH:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
0.70% of the first $100,000,000, plus
0.65% of the next $100,000,000, plus
0.60% of the next $100,000,000, plus
0.55% of the next $100,000,000, plus
0.50% of the next $100,000,000, plus
0.45% of the next $500,000,000, plus
0.40% of the next $500,000,000, plus
0.35% of amounts over $1,500,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR STATE TAX FREE AND STATE TAX FREE II:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
0.55% of the first $50,000,000, plus
0.50% of the next $50,000,000, plus
0.45% of the next $100,000,000, plus
0.40% of the next $100,000,000, plus
0.35% of the next $100,000,000, plus
0.30% of the next $100,000,000, plus
0.25% of amounts over $500,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
FOR WORLD BOND:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
1.5% of gross dividend and interest income plus
0.50% of the first $500,000,000, plus
0.45% of the next $500,000,000, plus
0.40% of amounts over $1,000,000,000
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
A pro rata portion of a Fund's fee shall be payable in arrears at the end of
each day or calendar month as the Adviser may from time to time specify to the
Fund. If and when this Agreement terminates, any compensation payable
hereunder for the period ending with the date of such termination shall be
payable upon such termination. Amounts payable hereunder shall be promptly
paid when due.
<PAGE>
EXHIBIT B
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the day of , by and between KEYSTONE AMERICA HARTWELL
EMERGING GROWTH FUND, INC., a New York corporation ("Fund"), and KEYSTONE
INVESTMENT MANAGEMENT COMPANY, a Delaware corporation ("Adviser").
WHEREAS, the Fund and the Adviser wish to enter into an Advisory Agreement
setting forth the terms on which the Adviser will perform certain services for
the Fund.
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Fund and the Adviser agree as follows:
1. The Fund hereby employs the Adviser to manage and administer the
operation of the Fund, to supervise the provision of services to the Fund by
others, and to manage the investment and reinvestment of the assets of the Fund
in conformity with the Fund's then current objectives and restrictions as may be
set forth from time to time in the Fund's then current prospectus and statement
of additional information, if any, and other governing documents, all subject to
the supervision of the Board of Directors of the Fund, for the period and on the
terms set forth in this Agreement. The Adviser hereby accepts such employment
and agrees during such period, at its own expense, to render the services and to
assume the obligations set forth herein, for the compensation provided herein.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
2. The Adviser shall place all orders for the purchase and sale of portfolio
securities for the account of the Fund with broker-dealers selected by the
Adviser. In executing portfolio transactions and selecting broker-dealers, the
Adviser will use its best efforts to seek best execution on behalf of the Fund.
In assessing the best execution available for any transaction, the Adviser shall
consider all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker-dealer, and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In evaluating
the best execution available, and in selecting the broker-dealer to execute a
particular transaction, the Adviser may also consider the brokerage and research
services (as those terms are used in Section 28(e) of the Securities Exchange
Act of 1934 ("1934 Act") provided to the Fund and/or other accounts over which
the Adviser, an affiliate of the Adviser (to the extent permitted by law) or
another investment adviser of the Fund exercises investment discretion. The
Adviser is authorized to cause the Fund to pay a broker-dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction if, but only if,
the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer viewed in terms of that particular transaction or in terms of all
of the accounts over which investment discretion is so exercised.
3. The Adviser, at its own expense, shall furnish to the Fund office space
in the offices of the Adviser or in such other place as may be agreed upon by
the parties from time to time, all necessary office facilities, equipment and
personnel in connection with its services hereunder, and shall arrange, if
desired by the Fund, for members of the Adviser's organization to serve without
salaries from the Fund as officers or, as may be agreed from time to time, as
agents of the Fund. The Adviser assumes and shall pay or reimburse the Fund for:
(1) the compensation (if any) of the Directors of the Fund who are affiliated
with the Adviser or with its affiliates and of all officers of the Fund as such,
and (2) all expenses of the Adviser incurred in connection with its services
hereunder. The Fund assumes and shall pay all other expenses of the Fund,
including, without limitation: (1) all charges and expenses of any custodian or
depository appointed by the Fund for the safekeeping of its cash, securities and
other property; (2) all charges and expenses for bookkeeping and auditors; (3)
all charges and expenses of any transfer agents and registrars appointed by the
Fund; (4) all fees of all Directors of the Fund who are not affiliated with the
Adviser or any of its affiliates; (5) all brokers' fees, expenses and
commissions and issue and transfer taxes chargeable to the Fund in connection
with transactions involving securities and other property to which the Fund is a
party; (6) all costs and expenses of distribution of its shares of common stock
("shares") incurred pursuant to a Plan of Distribution adopted under Rule 12b-1
under the Investment Company Act of 1940 ("1940 Act"); (7) all taxes and
corporation fees payable by the Fund to federal, state or other governmental
agencies; (8) all costs of certificates representing shares of the Fund; (9) all
fees and expenses involved in registering and maintaining registrations of the
Fund and of its shares with the Securities and Exchange Commission
("Commission") and registering or qualifying its shares under state or other
securities laws, including, without limitation, the preparation and printing of
registration statements, prospectuses and statements of additional information
for filing with the Commission and other authorities; (10) expenses of
preparing, printing and mailing prospectuses and statements of additional
information to shareholders of the Fund; (11) all expenses of shareholders' and
Directors' meetings and of preparing, printing and mailing notices, reports and
proxy materials to shareholders of the Fund; (12) all charges and expenses of
legal counsel for the Fund and for Directors of the Fund in connection with
legal matters relating to the Fund, including, without limitation, legal
services rendered in connection with the Fund's existence, corporate and
financial structure and relations with its shareholders, registrations and
qualifications of securities under federal, state and other laws, issues of
securities, expenses which the Fund has herein assumed, whether customary or
not, and extraordinary matters, including, without limitation, any litigation
involving the Fund, its Directors, officers, employees or agents; (13) all
charges and expenses of filing annual and other reports with the Commission and
other authorities; and (14) all extraordinary expenses and charges of the Fund.
In the event that the Adviser provides any of these services or pays any of
these expenses, the Fund will promptly reimburse the Adviser therefor.
The services of the Adviser to the Fund hereunder are not to be deemed
exclusive, and the Adviser shall be free to render similar services to others.
4. As compensation for the Adviser's services to the Fund during the period
of this Agreement, the Fund will pay to the Adviser a fee: calculated and paid
pursuant to the provisions of this Paragraph 4. The fee described below will be
calculated and paid monthly. The period which forms the basis for each monthly
fee calculation shall be the twelve months ending with the month for which such
fee calculation is made, and each such twelve-month period shall be referred to
below as the "fee period."
(a) BASIC FEE. As primary compensation for the services rendered and the
expenses assumed by the Adviser, the Fund shall pay the Adviser a monthly basic
advisory fee, based on the net asset value of the Fund averaged daily over the
fee period ("average daily net asset value"), in an amount equal to one twelfth
of (i) 1.0% of that portion of the average daily net asset value during the fee
period up to and including $100,000,000, (ii) .90% of that portion of the
average daily net asset value during the fee period exceeding $100,000,000 up to
and including $200,000,000, (iii) .80% of that portion of the average daily net
asset value during the fee period exceeding $200,000,000 up to and including
$300,000,000, (iv) .70% of that portion of the average daily net asset value
during the fee period exceeding $300,000,000 up to and including $400,000,000,
and (v) .65% of that portion of the average daily net asset value during the fee
period exceeding $400,000,000. The average daily net asset value will be
computed by averaging the net asset values of the Fund at the close of each
business day during the fee period.
(b) INCENTIVE FEE. The monthly basic advisory fee shall be subject to an
incentive adjustment, depending on the investment performance of the Fund
relative to the Standard & Poor's Index of 500 Stocks (herein called the
"Index") during the fee period. The incentive adjustment, if any, shall be
computed as of the end of each fee period, shall be added to or subtracted from
the monthly basic advisory fee calculated for such fee period and shall be
calculated as follows:
(i) There shall be added to the net asset value of a share of the Fund
outstanding at the close of business on the last business day of the fee
period: (A) the value of all cash distributions per share of the Fund made
during such fee period, accumulated to the end of such fee period, which
amount shall be treated as if reinvested in shares of the Fund at the net
asset value per share, after giving effect to any such distributions, in
effect at the close of business on the respective record date or dates for
the payment thereof, and (B) the value of capital gains taxes per share of
the Fund paid or payable on undistributed realized long-term capital gains
during the fee period, accumulated to the end of such fee period, which
amount shall be treated as reinvested in shares of the Fund at the net asset
value per share, after giving effect to such taxes, in effect at the close
of business on the date on which provision is made therefor. The adjusted
net asset value per share of the Fund, as so calculated, shall then be
compared with the net asset value of a share of the Fund at the close of
business on the business day immediately preceding the first day of the fee
period. The difference between such adjusted net asset value of a share at
the close of business on the last day of the fee period and the net asset
value of a share at the close of business on the day immediately preceding
the first day of the fee period shall then be expressed as a percentage of
the net asset value of a share of the Fund at the close of business on the
day immediately preceding the first day of the fee period (such percentage
being herein referred to as the "net asset value percentage change").
(ii) There shall be added to the level of the Index at the close of
business on the last business day of the fee period, in accordance with
Commission guidelines, the value, computed consistently with the Index, of
cash distributions made during the fee period and accumulated to the end of
such fee period, by companies whose securities comprise the Index. For this
purpose, cash distributions on the securities which comprise the Index made
during the fee period shall be treated as reinvested in the Index at the
close of business on the last day of each month following the payment of
such distribution. The adjusted level of the Index thus obtained shall then
be compared to the level of the Index at the close of business on the
business day immediately preceding the first day of the fee period and the
difference in the two levels shall be expressed as a percentage of the Index
level at the close of business on the business day immediately preceding the
first day of the fee period (such percentage being herein referred to as the
"Index percentage change").
(iii) The Index percentage change will then be subtracted from the net
asset value percentage change to determine the performance differential, it
being understood that at any time either the percentage change and/or the
performance differential could result in a negative figure. To the extent
that the performance differential, positive or negative, exceeds 5
percentage points, there shall be an excess performance differential (herein
referred to as the "excess performance differential"). If the performance
differential is 5 percentage points (or less), there shall be no excess
performance differential and no incentive adjustment shall be applied to the
basic advisory fee for that period.
(iv) The incentive adjustment for each fee period shall be an amount
equal to one twelfth of 5% of the excess performance differential multiplied
by the average daily net asset value for the fee period provided, however,
that in no event shall the incentive adjustment for any fee period exceed
one twelfth of 1/2 of 1% of the average daily net asset value during such
fee period.
(v) For purposes hereof, the incentive adjustment shall be computed in
accordance with any applicable rules, regulations and interpretive releases
promulgated by the Commission.
(c) Notwithstanding the provisions of Article 2(b) above, the Adviser agrees
to reimburse the Fund for its actual expenses incurred, exclusive of brokerage
commissions, interest, taxes, dividends on short sales and the positive
incentive adjustment, if any, in excess of the lowest expense maximum permitted
by the state securities commissions of the states in which the Fund currently
has registered its securities for sale (hereinafter called the "maximum expense
limitation").
(d) ACCRUAL AND PAYMENT OF FEE. The Fund's expenses (including the monthly
basic advisory fee) and the incentive adjustment for each fee period will be
computed and accrued daily and taken into account in computing the daily net
asset value of a Fund share. However, expenses in excess of the maximum expense
limitation shall not be accrued for the purpose of computing the daily net asset
value of a Fund share. The incentive adjustment for any fee period will not be
accrued for the purpose of calculating the basic advisory fee or the incentive
adjustment for such period or for the purpose of determining the performance
differential for such period. The amount of the basic advisory fee and any
incentive adjustment will be determined monthly promptly after the close of a
fee period, and the fee for such fee period will be paid after such
determination.
(e) PRORATED PAYMENT. For any partial month in which this Agreement
commences or terminates, as the case may be, there shall be a proration of the
basic fee and the incentive adjustment, if any. Upon termination, the basic fee
and the incentive adjustment, if any, will be calculated as described in
Paragraph 4(a) and Paragraph 4(b) above, except that the fee period shall
consist of the twelve month period ending with the date of termination of this
Agreement.
5. The Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from the Adviser's willful misfeasance,
bad faith, gross negligence or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
Director, partner, employee, or agent of the Adviser, who may be or become an
officer, Director, employee or agent of the Fund, shall be deemed, when
rendering services to the Fund or acting on any business of the Fund (other than
services or business in connection with the Adviser's duties hereunder), to be
rendering such services to or acting solely for the Fund and not as an officer,
Director, partner, employee, or agent or one under the control or direction of
the Adviser even though paid by it.
6. The Fund shall cause its books and accounts to be audited at least once
each year by a reputable independent public accountant or organization of public
accountants who shall render a report to the Fund.
7. Subject to and in accordance with the Certificate of Incorporation of the
Fund and the Certificate of Incorporation of the Adviser, it is understood that
Directors, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof as Directors and officers of
the Adviser or its affiliates, as stockholders of Keystone Investments, Inc.,
J.M. Hartwell Limited Partnership or otherwise; that Directors, officers and
agents of the Adviser and its affiliates, or stockholders of Keystone
Investments, Inc. are or may be interested in the Fund as Directors, officers,
shareholders or otherwise; that the Adviser (or any such successor) is or may be
interested in the Fund as shareholder, or otherwise, and that the effect of any
such adverse interests shall be governed by said Certificate of Incorporation of
the Fund and Certificate of Incorporation of the Adviser.
8. The Adviser may enter into an agreement to retain at its own expense any
other firm or firms to provide the Fund investment advisory services, if such
agreement is approved by a vote of a majority of the outstanding voting
securities of the Fund and by the vote of a majority of the Directors of the
Fund who are not parties to such agreement or interested persons (as that term
is defined in the 1940 Act) of the Fund or of any such party, cast in person at
a meeting called for the purpose of voting on such approval.
9. This Agreement shall continue in effect for two years from the date set
forth above and after such date only so long as (1) such continuance is
specifically approved at least annually by the Board of Directors of the Fund or
by a vote of a majority of the outstanding voting securities of the Fund, and
(2) such renewal has been approved by the vote of a majority of Directors of the
Fund who are not interested persons (as that term is defined in the 1940 Act) of
the Adviser or of the Fund, cast in person at a meeting called for the purpose
of voting on such approval.
10. On sixty days' written notice to the Adviser, this Agreement may be
terminated at any time without the payment of any penalty by the Board of
Directors of the Fund or by vote of the holders of a majority of the outstanding
voting securities of the Fund; and on sixty days' written notice to the Fund,
this Agreement may be terminated at any time without the payment of any penalty
by the Adviser. This Agreement shall automatically terminate upon its assignment
(as that term is defined in the 1940 Act). Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postage prepaid, to the
other party at the main office of such party.
11. This Agreement may be amended at any time by an instrument in writing
executed by both parties hereto or their respective successors, provided that
with regard to amendments of substance such execution by the Fund shall have
been first approved by the vote of the holders of a majority of the outstanding
voting securities of the Fund and by the vote of a majority of the Directors of
the Fund who are not interested persons (as that term is defined in the 1940
Act) of the Adviser or of any predecessor of the Adviser, or of the Fund, cast
in person at a meeting called for the purpose of voting on such approval. A
"majority of the outstanding voting securities of the Fund" shall have, for all
purposes of this Agreement, the meaning provided therefor in the 1940 Act.
12. Any compensation payable to the Adviser hereunder for any period other
than a full year shall be proportionately adjusted.
13. The provisions of this Agreement shall be governed, construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on
the day and year first above written.
KEYSTONE AMERICA
HARTWELL EMERGING GROWTH FUND, INC.
By: ----------------------------------------------------------
Title:
KEYSTONE INVESTMENT MANAGEMENT COMPANY
By: ----------------------------------------------------------
Title:
<PAGE>
EXHIBIT C
SUBADVISORY AGREEMENT
AGREEMENT made as of the day of , 199 by and between
KEYSTONE INVESTMENT MANAGEMENT COMPANY ("KIMCO"), a Delaware corporation, and
J.M. HARTWELL LIMITED PARTNERSHIP ("JMH"), a New York limited partnership.
WITNESSETH:
WHEREAS, KIMCO provides investment and management services to Keystone
America Hartwell Emerging Growth Fund, Inc. (the "Fund"), a New York
Corporation, under an Investment Advisory and Management Agreement dated
, 199 (the "IA Contract") pursuant to which KIMCO has agreed to
manage the investment and reinvestment of the assets of the Fund, subject to
the supervision of the Board of Directors of the Fund, for the period and on
the terms set forth in the IA Contract;
WHEREAS, KIMCO and JMH wish to enter into an agreement for JMH's
investment advisory services to the Fund.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, KIMCO and JMH agree as follows:
1. Consistent with the investment objectives and policies of the Fund from
time to time and subject to the supervision of the Board of Directors of the
Fund and KIMCO, JMH will regularly provide the Fund with investment research,
advice and supervision and will furnish continuously an investment program for
the Fund's portfolio. JMH will recommend securities to be purchased for, or
sold from, the portfolio of the Fund and will recommend what portion of the
Fund's assets shall be held uninvested. JMH shall advise and assist the
officers of the Fund and KIMCO in taking such steps as are necessary or
appropriate to carry out the decisions of the Fund's Board of Directors and
the appropriate committees of such Board regarding the foregoing matters. JMH
will furnish to KIMCO from time to time, as needed or requested, investment
research and advice concerning the purchase or sale by the Fund of such
portfolio securities and other assets. Such recommendations and services are
also to include advice on the selection of such securities to be purchased or
sold, the price(s) and size of each transaction and what portion of the Fund's
assets shall be held uninvested. JMH will direct the trading of all securities
and all other transactions.
2. JMH shall place all orders for the purchase and sale of portfolio
securities for the account of the Fund with broker-dealers selected by JMH. In
executing portfolio transactions and selecting broker-dealers, JMH will use
its best efforts to seek best execution on behalf of the Fund. In assessing
the best execution available for any transaction, JMH shall consider all
factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker-dealer and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In
evaluating the best execution available, and in selecting the broker-dealer to
execute a particular transaction, JMH may also consider the brokerage and
research services (as those terms are used in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other accounts over which
JMH or KIMCO or an affiliate of either (to the extent permitted by law)
exercises investment discretion. JMH is authorized to cause the Fund to pay a
broker-dealer who provides such brokerage and research services a commission
for executing a portfolio transaction for the Fund which is in excess of the
amount of commission another broker-dealer would have charged for effecting
that transaction if, but only if, JMH determines in good faith that such
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker-dealer viewed in terms of that
particular transaction or in terms of all of the accounts over which
investment discretion is so exercised.
3. For its services for each calendar month, JMH will receive promptly
after calculation of each monthly fee due KIMCO a fee calculated in accordance
with the following:
a. 40% of KIMCO's basic fee for such month, as defined in the IA
Contract ("Basic Fee"), on all assets of the Fund ("Base Assets"), plus
b. 60% of KIMCO's Incentive Fee for such month, as defined in the IA
Contract ("Incentive Fee"), on all assets, provided, however, that JMH's
total fee will always equal at least 25% of the combined total fee paid by
the Fund to KIMCO pursuant to the IA Contract.
4. JMH shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the performance of this
Agreement, except a loss resulting from JMH's willful misfeasance, bad faith,
gross negligence or from reckless disregard by it of its obligations and
duties under this Agreement. Any person, even though also an officer,
Director, partner, employee, or agent of JMH, who may be or become an officer,
Director, employee or agent of the Fund, shall be deemed, when rendering
services to the Fund or acting on any business of the Fund (other than
services or business in connection with JMH's duties hereunder), to be
rendering such services to or acting solely for the Fund and not as an
officer, Director, partner, employee, or agent or one under the control or
direction of JMH even though paid by it.
5. This Agreement shall continue in effect for two years from the date set
forth above and shall be automatically renewed for successive one-year periods
unless JMH or KIMCO has given the other at least sixty days' written notice of
its intention to terminate this Agreement at the end of the contract period
then in effect; provided, however, that the continuation of this Agreement for
more than two years shall be subject to the receipt of annual approvals of the
Fund's Directors or shareholders in accordance with the Investment Company Act
of 1940 (the "Act") and the rules thereunder. Notwithstanding the foregoing,
this Agreement may be terminated at any time, without a payment of any
penalty, by vote of the Fund's Board of Directors or a majority of the Fund's
outstanding voting securities (within the meaning of the Act) on not more than
sixty days' written notice to JMH. In addition, this Agreement shall terminate
automatically if it is assigned (within the meaning of the Act) by either
party.
6. JMH acknowledges that it has copies of the Fund's Certificate of
Incorporation, By-Laws, Prospectus and Statement of Additional Information and
undertakings provided under state securities laws as of the date hereof. So
long as this Agreement remains in effect, KIMCO shall promptly furnish to JMH
any amendments or supplements to these documents which may hereafter be
adopted.
7. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on
the date of service if personally served on the party to whom notice is to be
given, or on the second day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
If to JMH: J. M. Hartwell Limited Partnership
515 Madison Avenue
New York, New York 10022
Attention: (Name or title)
If to KIMCO: Keystone Investment Management Company
200 Berkeley Street
Boston, MA 02116-5034
Attention: President
8. This Agreement constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties
hereto relating to the subject matter hereof. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the waiver.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date and year first above written.
KEYSTONE INVESTMENT MANAGEMENT
COMPANY
By: ------------------------------------------------------
(Name)
(Title)
J. M. HARTWELL LIMITED PARTNERSHIP
By: ------------------------------------------------------
(Name)
(Title)
<PAGE>
EXHIBIT D
SUBADVISORY AGREEMENT
Agreement made as of the day of , 199 by and between
KEYSTONE INVESTMENT MANAGEMENT COMPANY ("Keystone"), a Delaware corporation,
and CREDIT LYONNAIS INTERNATIONAL ASSET MANAGEMENT, North America ("CLIAM"), a
company an unlimited Irish corporation.
WITNESSETH:
WHEREAS, Keystone provides investment and management services to Keystone
Global Opportunities Fund (the "Fund"), a Massachusetts business trust, under
an Investment Advisory and Management Agreement dated , 199 (the
"IA Contract") pursuant to which Keystone has agreed to manage the investment
and reinvestment of the assets of the Fund, subject to the supervision of the
Board of Trustees of the Fund, for the period and on the terms set forth in
the IA Contract;
WHEREAS, Keystone and CLIAM wish to enter into an agreement for CLIAM's
investment advisory services to the Fund with respect to the Fund's non-North
American portfolio.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, CLIAM and Keystone agree as follows:
1. Consistent with the investment objectives and policies of the Fund from
time to time and subject to the supervision of the Board of Trustees of the
Fund and Keystone, CLIAM will regularly provide the Fund with investment
research, advice and supervision by furnishing continuously an investment
program for the Fund's non-North American portfolio. CLIAM will determine
securities to be purchased for, or sold from, the non-North American portfolio
of the Fund, the price(s) and size of each transaction, and will recommend
what portion of the Fund's non-North American assets shall be held uninvested.
CLIAM shall advise and assist the officers of the Fund and Keystone in taking
such steps as are necessary or appropriate to carry out the decisions of the
Fund's Board of Trustees and the appropriate committees of such Board
regarding the foregoing matters. CLIAM will direct the trading of all non-
North American securities and all other non-North American transactions of the
Fund.
2. CLIAM shall place all orders for the purchase and sale of non-North
American portfolio securities for the account of the Fund with broker-dealers
selected by CLIAM. In executing non-North American portfolio transactions and
selecting broker-dealers, CLIAM will use its best efforts to seek best
execution on behalf of the Fund. In assessing the best execution available for
any transaction, CLIAM shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer and the
reasonableness of the commission, if any (all for the specific transaction and
on a continuing basis). In evaluating the best execution available, and in
selecting the broker-dealer to execute a particular transaction, CLIAM may
also consider the brokerage and research services (as those terms are used in
Section 28(e) of the Securities Exchange Act of 1934) provided to the Fund
and/or other accounts over which CLIAM or an affiliate of CLIAM exercises
investment discretion. CLIAM is authorized to pay a broker-dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the Fund which is in excess of the amount of commission
another broker-dealer would have charged for effecting that transaction if,
but only if, CLIAM determines in good faith that such commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker-dealer viewed in terms of that particular transaction
or in terms of all of the accounts over which investment discretion is so
exercised.
The services of CLIAM to Keystone and the Fund hereunder are not to be
deemed exclusive, and CLIAM shall be free to render similar services to
others.
3. For its services as described in paragraph 1 above, for the preceding
fiscal quarter, CLIAM will receive from Keystone on the first business day of
each fiscal quarter a fee which is 50% of the management fee paid by the Fund
to Keystone for the preceding quarter on Fund assets of up to $250,000,000 and
30% of the management fee paid by the Fund to Keystone for the preceding
quarter on Fund assets in excess of $250,000,000.
4. This Agreement shall continue in effect until [ ],
and shall be automatically renewed for successive one-year periods unless
CLIAM or Keystone has given the other at least sixty days' written notice of
its intention to terminate this Agreement at the end of the contract period
then in effect; provided, however, that the continuation of this Agreement for
more than two years shall be subject to the receipt of annual approvals of the
Fund's Trustees or shareholders in accordance with the Investment Company Act
of 1940 (the "Act") and the rules thereunder. Notwithstanding the foregoing,
the Agreement may be terminated at any time, without a payment of any penalty,
by vote of the Fund's Board of Trustees or a majority of the Fund's
outstanding voting securities (within the meaning of the Act) on not more than
sixty days' written notice to CLIAM. In addition, this Agreement shall
terminate automatically if it is assigned (within the meaning of the Act) by
either party.
5. CLIAM acknowledges that it has copies of the Fund's Declaration of
Trust, By-laws, Prospectus and Statement of Additional Information in effect
as of the date hereof. So long as this Agreement remains in effect, Keystone
shall promptly furnish to CLIAM any amendments or supplements to these
documents which may hereafter be adopted.
6. CLIAM shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Fund in connection with the performance of
this Agreement, except a loss resulting from CLIAM's willful misfeasance, bad
faith, gross negligence or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
Director, partner, employee, or agent of CLIAM, who may be or become an
officer, Trustee, employee or agent of the Fund shall be deemed, when
rendering services to the Fund or acting on any business of the Fund (other
than services or business in connection with CLIAM's duties hereunder), to be
rendering such services to or acting solely for the Fund and not as an
officer, Director, partner, employee, or agent or one under the control or
direction of CLIAM even though paid by it. Keystone agrees to indemnify and
hold CLIAM harmless from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
Securities Act of 1933, the Securities Exchange Act of 1934, the Act, and any
state and foreign securities and blue sky laws, as amended from time to time)
and expenses, including (without limitation) attorneys' fees and
disbursements, arising directly or indirectly from any action or thing which
CLIAM takes or does or omits to take or do hereunder, but only to the extent
that Keystone itself is entitled to indemnification from the Fund in respect
of such act or thing taken or done or omitted to be taken or done by CLIAM
which indemnification is in excess of all costs and liabilities paid or
incurred by Keystone in respect of such act or thing taken or done or omitted
to be taken or done by CLIAM and/or in respect of any act or thing taken or
done or omitted to be taken or done by Keystone in connection therewith, and
provided that CLIAM shall not be indemnified against any cost, expense or
liability (or any expenses incident thereto) arising out of a breach of
fiduciary duty with respect to the receipt of compensation for services,
willful misfeasance, bad faith, or gross negligence on the part of CLIAM in
the performance of its duties, or from reckless disregard by it of its
obligations and duties under this Agreement.
7. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on
the date of service if personally served on the party to whom notice is to be
given, or on the second day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
If to CLIAM: Credit Lyonnais International
Asset Management, North America
One Earlsfort Center
Hatch Street
Dublin 2 Ireland
Attention: Managing Director
If to Keystone: Keystone Investment Management Company
200 Berkeley Street
Boston, MA 02116-5034
Attention: President
8. This Agreement constitutes the entire agreement between the parties
hereto pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties
hereto relating to the subject matter hereof. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or not
similar, nor shall any waiver constitute a continuing waiver. No waiver shall
be binding unless executed in writing by the party making the waiver.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date and year first above written.
KEYSTONE INVESTMENT MANAGEMENT
COMPANY
By: ------------------------------------------------------
(Name)
(Title)
CREDIT LYONNAIS INTERNATIONAL
ASSET MANAGEMENT, North America
By: ------------------------------------------------------
(Name)
(Title)
<PAGE>
EXHIBIT E
SUBADVISORY AGREEMENT
Agreement made as of the day of , 199 by and between
KEYSTONE INVESTMENT MANAGEMENT COMPANY ("KIMCO"), a Delaware corporation, and
EQUITILINK INTERNATIONAL MANAGEMENT LIMITED ("EIML"), a corporation registered
in Jersey, Channel Islands.
WHEREAS, KIMCO provides investment and management services to Keystone
Global Resources and Development Fund (the "Fund"), a Massachusetts business
trust, under an Investment Advisory and Management Agreement dated
, 199 (the "IA Contract") pursuant to which KIMCO has agreed to manage the
investment and reinvestment of the assets of the Fund, subject to the
supervision of the Board of Trustees of the Fund, for the period and on the
terms set forth in the IA Contract;
WHEREAS, KIMCO and EIML wish to enter into an agreement for EIML's
investment advisory and consulting services to the Fund.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, KIMCO and EIML agree as follows:
1. Non-Discretionary Capacity. Consistent with the investment objectives
and policies of the Fund, EIML will furnish to KIMCO from time to time, as
needed or requested by KIMCO, investment research and advice concerning the
purchase or sale by the Fund of portfolio securities and other assets. Such
recommendations and services are also to include advice on the selection of
such securities to be purchased or sold, the price and size of each
transaction and what portions of the Fund's assets shall be allocated to
different countries and to different industries, and what portion shall be
held in cash, cash equivalents or money market instruments (the "Non-
Discretionary Capacity").
2. Discretionary Authority. Consistent with the investment objectives and
policies of the Fund from time to time, as needed or requested by KIMCO, and
subject to the supervision of the Board of Trustees of the Fund and KIMCO,
EIML will provide the Fund with investment research, advice and supervision
and furnish an investment program for all or such portions of the assets of
the Fund as are designated by KIMCO. Such services may include the selection
of securities to be purchased or sold, determination of the price and size of
each transaction and what portion of the Fund's assets shall be allocated to
different countries and to different industries, and what portions shall be
held in cash, cash equivalents or money market instruments. EIML shall advise
and assist the officers of the Fund and KIMCO in taking such steps as are
necessary or appropriate to carry out the decisions of the Fund's Board of
Trustees and the appropriate committees of such Board regarding the matters
referred to in paragraph 1 above and this paragraph 2.
3. When acting in accordance with the discretionary authority provided
herein (the "Discretionary Capacity"), EIML shall place all orders for the
purchase and sale of portfolio securities for the account of the Fund in
connection therewith with broker-dealers selected by EIML or KIMCO. In
executing portfolio transactions and selecting broker-dealers, EIML will use
its best efforts to seek best execution on behalf of the Fund. In assessing
the best execution available for any transaction, EIML shall consider all
factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker-dealer and the reasonableness of the commission, if
any (all for the specific transaction and on a continuing basis). In
evaluating the best execution available, and in selecting the broker-dealer to
execute a particular transaction, EIML may also consider the brokerage and
research services (as those terms are used in Section 28(e) of the Securities
Exchange Act of 1934) provided to the Fund and/or other accounts over which
EIML or KIMCO or an affiliate of either (to the extent permitted by law)
exercises investment discretion.
4. EIML shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Fund in any way or otherwise be deemed
an agent of the Fund.
5. For each month, promptly after calculation of the monthly investment
advisory fee due KIMCO under its Investment Advisory and Management Agreement
with the Fund, EIML will receive for such month or applicable part thereof:
(a) for its services in a Non-Discretionary Capacity, 20% of KIMCO's Net Fee
(as defined below) for such month or part thereof; plus (b) for its services
in a Discretionary Capacity, 10% of KIMCO's Net Fee for such month or part
thereof on that portion of the Fund's assets for which EIML provided services
in a Discretionary Capacity. KIMCO's Net Fee as used herein shall mean the net
investment advisory fee received by KIMCO from the Fund after subtracting from
such fee the amount of any payment made to the Fund or on its behalf by KIMCO
or any reduction in such fee to KIMCO from the Fund pursuant to any subsidy
established for or expense limit imposed on the Fund.
6. EIML shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund in connection with the performance of this
Agreement, except a loss resulting from EIML's misfeasance, bad faith,
negligence or from reckless disregard by it of its obligations and duties
under this Agreement. Any person, even though also an officer, Director,
partner, employee, or agent of EIML, who may be or may become an officer,
Director, employee or agent of the Fund, shall be deemed, when rendering
services to the Fund or acting on any business of the Fund (other than
services or business in connection with EIML's duties hereunder), to be
rendering such services to or acting solely for the Fund and not as an
officer, Director, partner, employee, or agent or one under the control or
direction of EIML even though paid by it.
7. This Agreement shall continue in effect ,
until [ ],
and shall be automatically renewed for successive one-year periods unless
sooner terminated by either party giving at least sixty days' written notice
of its intention to terminate this Agreement to the other party; provided,
however, that the continuation of this Agreement for more than two years shall
be subject to the receipt of annual approvals of the Fund's Trustees or
shareholders in accordance with the Investment Company Act of 1940 (the "Act")
and the rules thereunder. Notwithstanding the foregoing, this Agreement may be
terminated at any time, without a payment of any penalty, by vote of the
Fund's Board of Trustees or a majority of the Fund's outstanding voting
securities (within the meaning of the Act) on not more than sixty days'
written notice to EIML. In addition, this Agreement shall terminate
automatically if it is assigned (within the meaning of the Act) by either
party.
8. EIML acknowledges that it has copies of the Fund's Declaration of
Trust, By-Laws, Prospectus and Statement of Additional Information and
undertakings provided under state securities laws as of the date hereof. So
long as this Agreement remains in effect, KIMCO shall promptly furnish to EIML
any amendments or supplements to these documents which may hereafter be
adopted.
9. All notices, requests, demands or other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on
the date of service if personally served on the party to whom notice is to be
given, or on the second day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
pre-paid, and properly addressed as follows:
If to EIML: Union House
Union Street
St. Helier
Jersey JE2 3RF British Channel Islands
Attention: (name)
(title)
If to KIMCO: Keystone Investment Management Company
200 Berkeley Street
Boston, MA 02116-5034
Attention: (name)
(title)
10. This Agreement constitutes the entire agreement between the parties
hereto with respect to the services to be provided to the Fund by EIML and
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties hereto with respect to the services to be
provided to the Fund by EIML. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto.
No waiver of any of the provisions of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall
any waiver constitute a continuing waiver. No waiver shall be binding unless
executed in writing by the party making the waiver.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
on the date and year first above written.
KEYSTONE INVESTMENT MANAGEMENT
COMPANY
By: ------------------------------------------------------
(Name)
(Title)
EQUITILINK INTERNATIONAL
MANAGEMENT LIMITED
By: ------------------------------------------------------
(Name)
(Title)
<PAGE>
EXHIBIT F
SHARES OUTSTANDING ON OCTOBER 1, 1996
NUMBER OF
SHARES OUTSTANDING
NAME OF FUND ------------------
- ------------
Emerging Growth .......................................... 3,463,334
Balanced Fund ........................................... 578,635
Capital Preservation and Income .......................... 7,283,257
Emerging Markets ......................................... 124,532
Total Return ............................................. 4,768,377
Fund of the Americas ..................................... 9,250,047
Global Opportunities ..................................... 31,429,997
Global Resources ......................................... 2,119,023
Government Securities .................................... 5,274,943
Intermediate Term ........................................ 4,119,242
Liquid Trust ............................................. 328,740,230
Omega .................................................... 13,759,369
Small Company Growth ..................................... 4,729,350
State Tax Free:
Florida Tax Free ....................................... 9,442,542
Massachusetts Tax Free ................................. 1,260,237
New York Insured ....................................... 2,578,982
Pennsylvania Tax Free .................................. 6,677,611
State Tax Free II:
California Insured ..................................... 3,098,188
Missouri Tax Free ...................................... 2,706,709
Strategic Income ......................................... 31,695,687
Tax Free Income .......................................... 13,492,788
World Bond ............................................... 1,656,550
<PAGE>
EXHIBIT G
COMPENSATION OF TRUSTEES
<TABLE>
<CAPTION>
COMPENSATION OF
FISCAL YEAR TRUSTEES AS A ANNUAL MEETING
NAME OF FUND ENDED GROUP RETAINER FEE
- ---------- ---------------- ------------------- ------------ -----------
<S> <C> <C> <C> <C>
Emerging Growth ..................... 9/30/96 $ 0 $ 0 $ 0
Balanced Fund ....................... 6/30/97* 0 0 0
Capital Preservation and
Income ............................ 9/30/96 0 0 0
Emerging Markets .................... 10/31/96** 0 0 0
Total Return ........................ 11/30/95 0 0 0
Fund of the Americas ................ 10/31/95 12,419 500 20
Global Opportunities ................ 9/30/96 30,601 2,000 80
Global Resources .................... 3/31/96 0 0 0
Government Securities ............... 7/31/96 0 0 0
Intermediate Term ................... 7/31/96 0 0 0
Liquid Trust ........................ 6/30/96 34,299 2,000 80
Omega ............................... 12/31/95 7,179 500 20
Small Company Growth ................ 5/31/96 0 0 0
State Tax Free ...................... 3/31/96 0 0 0
State Tax Free II ................... 11/30/95 0 0 0
Strategic Income .................... 7/31/96 30,556 2,000 80
Tax Free Income ..................... 11/30/95 12,634 500 20
World Bond .......................... 10/31/95 0 0 0
</TABLE>
*Balanced Fund began operations on September 3, 1996; these fees are
for the period from September 3, 1996 to September 30, 1996.
**Emerging Markets Fund began operations on February 20, 1996; these
fees are for the period from February 20, 1996 to September 30, 1996.
<PAGE>
EXHIBIT H
TRUSTEES' MEETINGS
<TABLE>
<CAPTION>
FISCAL BOARD OF AUDIT NOMINATING
YEAR TRUSTEES COMMITTEE COMMITTEE
FUND ENDED MEETINGS MEETINGS MEETINGS
- ---- ---- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Emerging Growth ............................ 9/30/96 7 2 3
Balanced Fund............................... 6/30/97 2 1 1
Capital Preservation and Income ............ 9/30/96 7 2 2
Emerging Markets ........................... 10/31/96 6 2 2
Total Return ............................... 11/30/95 7 3 0
Fund of the Americas ....................... 10/31/95 7 3 0
Global Opportunities ....................... 9/30/96 7 2 2
Global Resources ........................... 3/31/96 6 2 0
Government Securities ...................... 7/31/96 5 2 1
Intermediate Term .......................... 7/31/96 5 2 1
Liquid Trust ............................... 6/30/96 6 2 1
Omega ...................................... 12/31/95 7 2 0
Small Company Growth ....................... 5/31/96 2 1 0
State Tax Free ............................. 3/31/96 7 2 0
State Tax Free II .......................... 11/30/95 7 3 0
Strategic Income ........................... 7/31/96 6 2 1
Tax Free Income ............................ 11/30/95 7 3 0
World Bond ................................. 10/31/95 7 3 0
</TABLE>
<PAGE>
EXHIBIT I
KEYSTONE FUNDS ADVISED BY KIMCO WITH SUBSTANTIALLY
SIMILAR INVESTMENT OBJECTIVES
(1) LONG-TERM GROWTH OF CAPITAL BY INVESTING IN EQUITY SECURITIES OF
COMPANIES WITH SMALL MARKET CAPITALIZATIONS:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone $ 99,047,880 Basic monthly fee of 1.00% N/A
America Hartwell up to and including
Emerging Growth $100,000,000, declining to
Fund, Inc. 0.65% of amounts over
$400,000,000, plus an
incentive fee of up to 1/
2 of 1% depending on the
fund's investment
performance relative to
the S&P 500
Keystone Small 1,887,126,536 0.70% of the first N/A
Company Growth $100,000,000, declining to
Fund (S-4) 0.35% of amounts over
$1,500,000,000.
Keystone Small 49,961,602 0.70% of the first Class A, B and C
Company Growth $100,000,000, declining to expenses are limited
Fund II 0.35% of amounts over to 1.95%, 2.70% and
$1,500,000,000. 2.70%, respectively,
on a month-by-month
basis
Keystone 2,424,779 0.80% of the first Expenses are limited
Institutional $100,000,000, declining to to 1.00% until 12/
Trust - Small 0.65% of amounts over 31/96 and month-by-
Capitalization $250,000,000. month thereafter
Growth Fund
(2) CURRENT INCOME CONSISTENT WITH LOW VOLATILITY OF PRINCIPAL BY
INVESTING PRIMARILY IN ADJUSTABLE RATE SECURITIES:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone Capital $70,932,291 2.0% of gross dividend and Class A, B and C
Preservation and interest income, plus expenses are limited
Income Fund 0.50% of the first to 0.90%, 1.65% and
$100,000,000, declining to 1.65%, respectively,
0.25% of amounts over on a month-by-month
$500,000,000. basis
Keystone 80,334,379 0.30% KIMCO pays
Institutional substantially all of
Adjustable Rate the Fund's expenses
Fund from its fee
(3) HIGHEST POSSIBLE INCOME, EXEMPT FROM FEDERAL TAXES, WHILE
PRESERVING CAPITAL BY INVESTING PRIMARILY IN MUNICIPAL BONDS:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone Tax $1,614,941,007 2.0% of gross dividend and N/A
Free Fund interest income, plus
0.50% of the first
$100,000,000, declining to
0.25% of amounts over
$500,000,000
Keystone Tax 130,422,171 2.0% of gross dividend and N/A
Free Income Fund interest income, plus
0.50% of the first
$100,000,000, declining to
0.25% of amounts over
$500,000,000
(4) CURRENT INCOME AND CAPITAL APPRECIATION CONSISTENT WITH
CONSERVATION OF PRINCIPAL:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone $1,507,263,796 1.5% of gross dividend and N/A
Balanced interest income, plus
Fund (K-1) 0.60% of the first
$100,000,000, declining to
0.30% of amounts over
$1,000,000,000
Keystone 5,918,452 1.5% of gross dividend and Class A, B and C
Balanced Fund II interest income, plus expenses are limited
0.60% of the first to 1.50% 2.25% and
$100,000,000, declining to 2.25%, respectively
0.30% of amounts over through June 30,
$1,000,000,000 1997 and on a month-
by-month basis
thereafter
(5) MONEY MARKET FUNDS THAT SEEK CURRENT INCOME WHILE PRESERVING CAPITAL:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone Liquid $ 329,102,669 0.50% of the first N/A
Trust $500,000,000, declining to
0.40% of amounts over
$1,000,000,000
Master Reserves 35,244,197 5% quarterly of gross KIMCO pays
Trust income minus the Fund's substantially all of
net expenses. the Fund's expenses
from its fee
(6) INCOME EXEMPT FROM FEDERAL AND STATE INCOME TAX IN A PARTICULAR STATE:
ANNUAL EXPENSE
NET ASSETS ANNUAL INVESTMENT ADVISORY LIMITATION, IF ANY
AS OF FEES (PERCENT OF AVERAGE (AS A PERCENTAGE OF
FUND NAME 9/30/96 DAILY NET ASSETS) AVERAGE NET ASSETS)*
--------- --------- ----------------- --------------------
Keystone State $ 208,500,751 For each portfolio: 0.55% For each portfolio,
Tax Free Fund, of the first $50,000,000, Class A, B and C
which is declining to 0.25% of expenses are limited
comprised of the amounts over $500,000,000 to 0.75%, 1.50% and
following 1.50%, respectively,
portfolios: on a month-by-month
* Keystone basis
Florida Tax
Free Fund
* Keystone
Massachusetts
Tax Free Fund
* Keystone
Pennsylvania
Tax Free Fund
* Keystone New
York Insured
Tax Free Fund
Keystone State 55,214,423 For each portfolio: 0.55% For each portfolio,
Tax Free Fund -- of the first $50,000,000, Class A, B and C
Series II, which declining to 0.25% of expenses are limited
is comprised of amounts over $500,000,000 to 0.75%, 1.50% and
the following 1.50%, respectively,
portfolios: on a month-by-month
* Keystone basis
California
Insured Tax
Free Fund
* Keystone
Missouri Tax
Free Fund
*The expense limitations referred to herein are voluntary and temporary. See
"Advisory Fee Waivers and Expense Subsidies" section of this Proxy Statement.
<PAGE>
EXHIBIT J
INVESTMENT ADVISORY FEES
<TABLE>
<CAPTION>
ANNUAL
EXPENSE
AMOUNT OF NET LIMITATION,
ADVISORY AMOUNT IF ANY (AS A
NET ASSETS FEE WITHOUT OF ADVISORY PERCENTAGE OF
FISCAL YEAR ON SEPT. 30, EXPENSE FEE FOR LAST AVERAGE NET
NAME OF FUND ENDED 1996 LIMITATION* FISCAL YEAR ASSETS)
- -------------------- -------------- ------------------ -------------- -------------- --------------------
<S> <C> <C> <C> <C> <C>
Keystone Quality Bond
Fund (B-1) .......... 10/31/95 $ 230,715,654 $1,876,672 $1,876,672 N/A
Keystone Diversified
Bond Fund (B-2) ..... 8/31/96 559,514,552 3,481,728 3,481,728 N/A
Keystone High Income
Bond Fund (B-4) ..... 7/31/96 608,072,883 3,788,171 3,788,171 N/A
Keystone Balanced
Fund (K-1) .......... 6/30/96 1,507,263,796 6,447,849 6,447,849 N/A
Keystone Strategic
Growth Fund (K-2) ... 10/31/95 495,847,080 2,779,544 2,779,544 N/A
Keystone Growth and
Income Fund (S-1) ... 8/31/96 238,062,693 1,492,757 1,492,757 N/A
Keystone Mid-Cap
Growth Fund (S-3) ... 8/31/96 296,988,272 1,908,509 1,908,509 N/A
Keystone Small Company
Growth Fund (S-4) ... 5/31/96 1,887,126,535 8,473,139 8,473,139 N/A
Keystone Institutional
Adjustable Rate ..... 9/30/96 80,334,379 121,105 121,105 Limited to 0.55%
0.30% for
Class Z
Keystone Institutional
Trust ............... 6/30/96 2,424,779 9,209 0 Limited to 1.00%
Keystone International
Fund Inc. ........... 10/31/95 146,207,691 985,652 985,652 N/A
Keystone Precious
Metals Holdings, Inc. 2/28/96 183,434,527 1,354,605 1,354,605 N/A
Keystone Tax Free ..... 12/31/95 1,614,941,007 5,327,202 5,327,202 N/A
Keystone America
Hartwell Emerging
Growth Fund, Inc. ... 9/30/96 99,047,880 655,127 655,127 N/A
Keystone Balanced
Fund II ............. 6/30/97** 5,918,452 2,000 0 Limited to 1.50%
for Class A and
2.25% for
Classes B & C
Keystone Capital
Preservation and
Income Fund ......... 9/30/96 70,932,291 493,147 152,131 Limited to 0.90%
for Class A and
1.65% for
Classes B & C
Keystone Emerging
Markets Fund ........ 10/31/96*** 1,410,832 4,999 0 Limited to 0.00%
for Classes
A, B, C
Keystone Fund for
Total Return ........ 11/30/95 76,411,739 300,290 300,290 Limited to 1.50%
for Class A
Keystone Fund of the
Americas ............ 10/31/95 101,796,477 1,099,920 1,099,920 N/A
Keystone Global
Opportunities Fund .. 9/30/96 760,814,697 2,198,709 2,198,709 N/A
Keystone Global
Resources and
Development Fund .... 3/31/96 23,675,381 217,332 217,332 N/A
Keystone Government
Securities Fund ..... 7/31/96 49,686,570 365,012 212,093 Limited to 1.15%
for Class A and
1.90% for
Classes B & C
Keystone Intermediate
Term Bond Fund ...... 7/31/96 36,360,905 273,644 82,548 Limited to 1.10%
for Class A and
1.85% for
Classes B & C
Keystone Liquid Trust . 6/30/96 329,102,669 1,359,239 1,359,239 N/A
Keystone Omega Fund ... 12/31/95 258,883,032 1,280,436 1,280,436 N/A
Keystone Small
Company Growth
Fund II ............. 5/31/96 49,961,602 21,221 0 Limited to 1.95%
for Class A and
2.70% for
Classes B & C
Keystone State Tax
Free Fund............ 3/31/96 208,500,751 1,168,889 449,481 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
Keystone State Tax
Free Fund II ........ 11/30/95 55,214,423 233,519 21,379 Limited to 0.75%
for Class A and
1.50% for
Classes B & C
Keystone Strategic
Income Fund ......... 7/31/96 220,559,401 1,663,669 1,663,669 N/A
Keystone Tax Free
Income Fund ......... 11/30/95 130,422,171 919,802 919,802 N/A
Keystone World Bond
Fund ................ 10/31/95 14,626,084 93,806 93,806 N/A
</TABLE>
* The expense limitations referred to herein are voluntary and temporary. See
"Advisory Fee Waivers and Expenses Subsidies" section of this Proxy
Statement.
** Balanced Fund began operations on September 3, 1996; these fees are for the
period from September 3, 1996 to September 30, 1996.
*** Emerging Markets began operations on February 20, 1996; these fees are for
the period from February 20, 1996 to September 30, 1996.
<PAGE>
EXHIBIT K
DISTRIBUTION PLAN EXPENSES
DEFERRED
DISTRIBUTION PLAN SALES
FISCAL EXPENSES PAID CHARGES
YEAR BY THE FUND PAID
NAME OF FUND ENDED TO KID TO KID
- ---------- ---- ------------------ ----------
Emerging Growth - Class A ......... 9/30/96 $ 190,592 $ 0
Emerging Growth - Class B-1 ....... 9/30/96 48,372 21,953
Emerging Growth - Class B-2 ....... 9/30/96 21,303 15,128
Emerging Growth - Class C ......... 9/30/96 23,206 667
Balanced Fund - Class A ........... 6/30/97* 15 0
Balanced Fund - Class B-1 ......... 6/30/97* 20 0
Balanced Fund - Class B-2 ......... 6/30/97* 644 0
Balanced Fund - Class C ........... 6/30/97* 47 0
California Insured - Class A ...... 11/30/95 5,342 0
California Insured - Class B-1 .... 11/30/95 119,706 22,807
California Insured - Class B-2 .... 11/30/95 24,302 8,846
California Insured - Class C ...... 11/30/95 9,218 1,374
Capital Preservation and Income -
Class A ......................... 9/30/96 47,988 0
Capital Preservation and Income -
Class B-1 ....................... 9/30/96 520,801 48,007
Capital Preservation and Income -
Class B-2 ....................... 9/30/96 12,568 7,104
Capital Preservation and Income -
Class C ......................... 9/30/96 30,755 1,319
Emerging Markets - Class A ........ 10/31/96** 0 0
Emerging Markets - Class B-1 ...... 10/31/96** 0 0
Emerging Markets - Class B-2 ...... 10/31/96** 0 0
Emerging Markets - Class C ........ 10/31/96** 0 0
Florida Tax Free - Class A ........ 3/31/96 56,304 0
Florida Tax Free - Class B-1 ...... 3/31/96 456,390 154,136
Florida Tax Free - Class B-2 ...... 3/31/96 34,480 11,768
Florida Tax Free - Class C ........ 3/31/96 111,012 4,730
Fund of the Americas - Class A .... 10/31/95 44,881 0
Fund of the Americas - Class B-1 .. 10/31/95 1,147,012 690,014
Fund of the Americas - Class B-2 .. 10/31/95 4,137 926
Fund of the Americas - Class C .... 10/31/95 136,477 2,563
Total Return - Class A ............ 11/30/95 60,006 0
Total Return - Class B-1 .......... 11/30/95 119,006 26,817
Total Return - Class B-2 .......... 11/30/95 15,321 1,486
Total Return - Class C ............ 11/30/95 80,007 1,935
Global Opportunities - Class A .... 9/30/96 454,914 3,832
Global Opportunities - Class B-1 .. 9/30/96 1,887,420 334,012
Global Opportunities - Class B-2 .. 9/30/96 1,340,049 367,862
Global Opportunities - Class C .... 9/30/96 1,093,407 39,416
Global Resources - Class A ........ 3/31/96 11,886 0
Global Resources - Class B-1 ...... 3/31/96 144,420 64,546
Global Resources - Class B-2 ...... 3/31/96 7,960 3,723
Global Resources - Class C ........ 3/31/96 17,285 565
Government Securities - Class A ... 7/31/96 66,218 19
Government Securities - Class B-1 . 7/31/96 150,440 35,987
Government Securities - Class B-2 . 7/31/96 46,694 26,599
Government Securities - Class C ... 7/31/96 86,726 410
Intermediate Term Bond - Class A .. 7/31/96 31,314 0
Intermediate Term Bond - Class B-1 7/31/96 151,467 60,145
Intermediate Term Bond - Class B-2 7/31/96 28,749 13,724
Intermediate Term Bond - Class C .. 7/31/96 100,878 267
Liquid Trust - Class A ............ 6/30/96 148,564 0
Liquid Trust - Class B-1 .......... 6/30/96 77,113 58,225
Liquid Trust - Class B-2 .......... 6/30/96 25,876 14,926
Liquid Trust - Class C ............ 6/30/96 27,202 8,703
Massachusetts Tax Free - Class A . 3/31/96 2,256 0
Massachusetts Tax Free - Class B-1 3/31/96 56,056 8,841
Massachusetts Tax Free - Class B-2 3/31/96 7,645 9,552
Massachusetts Tax Free - Class C .. 3/31/96 19,215 464
Missouri Tax Free - Class A ....... 11/30/95 4,684 7,026
Missouri Tax Free - Class B-1 ..... 11/30/95 143,316 19,684
Missouri Tax Free - Class B-2 ..... 11/30/95 10,777 3,605
Missouri Tax Free - Class C ....... 11/30/95 14,349 204
New York Insured - Class A ........ 3/31/96 5,591 0
New York Insured - Class B-1 ...... 3/31/96 116,859 24,311
New York Insured - Class B-2 ...... 3/31/96 22,305 3,761
New York Insured - Class C ........ 3/31/96 21,248 2,432
Omega - Class A ................... 12/31/95 152,234 0
Omega - Class B-1 ................. 12/31/95 422,149 89,735
Omega - Class B-2 ................. 12/31/95 57,588 26,650
Omega - Class C ................... 12/31/95 113,669 3,097
Pennsylvania Tax Free - Class A ... 3/31/96 44,529 0
Pennsylvania Tax Free - Class B-1 . 3/31/96 282,940 53,803
Pennsylvania Tax Free - Class B-2 . 3/31/96 36,440 5,971
Pennsylvania Tax Free - Class C ... 3/31/96 87,375 22
Small Company Growth - Class A .... 5/31/96 2,211 0
Small Company Growth - Class B-1 .. 5/31/96 2,722 65
Small Company Growth - Class B-2 .. 5/31/96 10,641 2,095
Small Company Growth - Class C .... 5/31/96 8,108 6,541
Strategic Income - Class A ........ 7/31/96 181,536 0
Strategic Income - Class B-1 ...... 7/31/96 1,279,839 434,682
Strategic Income - Class B-2 ...... 7/31/96 119,872 56,338
Strategic Income - Class C ........ 7/31/96 390,758 4,275
Tax Free Income - Class A ......... 11/30/95 229,818 247
Tax Free Income - Class B-1 ....... 11/30/95 310,343 78,314
Tax Free Income - Class B-2 ....... 11/30/95 10,012 7,635
Tax Free Income - Class C ......... 11/30/95 216,296 2,161
World Bond - Class A .............. 10/31/95 22,659 0
World Bond - Class B-1 ............ 10/31/95 29,857 7,154
World Bond - Class B-2 ............ 10/31/95 1,996 0
World Bond - Class C .............. 10/31/95 13,920 21
*Balanced Fund began operations on September 3, 1996; these fees are
for the period from September 3, 1996 to September 30, 1996.
**Emerging Markets began operations on February 20, 1996; these fees
are for the period from February 20, 1996 to September 30, 1996.
<PAGE>
EXHIBIT L
SUBADVISORY FEES
<TABLE>
<CAPTION>
AGGREGATE
AMOUNT
OF SUBADVISORY
FISCAL NET ASSETS ON FEE FOR LAST
NAME OF FUND SUBADVISER YEAR ENDED SEPT. 30, 1996 FISCAL YEAR
- ------------ ---------- ---------- -------------- -----------
<S> <C> <C> <C> <C>
Emerging Growth ............ J.M. Hartwell 9/30/96 $ 99,047,880 $ 411,286
Global Resources .......... EquitiLink 3/31/96 23,675,381 43,466
Global
Opportunities ............ Credit Lyonnais, N.A. 9/30/96 760,814,697 3,469,699
</TABLE>
<PAGE>
EXHIBIT M
BROKERAGE BY FUND
<TABLE>
<CAPTION>
% OF FUND'S % OF FUND'S
BROKERAGE AGGREGATE AGGREGATE
COMMISSIONS BROKERAGE BROKERAGE BROKERAGE BROKERAGE
FISCAL PAID BY COMMISSIONS COMMISSIONS COMMISSIONS COMMISSIONS
YEAR FUND PAID TO PAID TO PAID TO PAID TO
FUND ENDED FOR FYE KOKUSAI NOMURA KOKUSAI NOMURA
- ---- ---- --------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Growth .... 9/30/96 N/A N/A N/A N/A N/A
Balanced Fund ...... 6/30/97* $ 9,457 $ 96 N/A 1.02% N/A
Capital Preservation
and Income ....... 9/30/96 N/A N/A N/A N/A N/A
Emerging Markets ... 10/31/96** 19,459 N/A N/A N/A N/A
Fund of the 10/31/95 745,401 11,550 27,233 1.55% 3.65%
Total Return ....... 11/30/95 558,534 11,524 700 2.06% .13%
Global ............. 9/30/96 5,532,154 222,512 232,047 4.02% 4.19%
Global Resources ... 3/31/96 67,138 3,846 2,451 5.73% 3.65%
Government
Securities ....... 7/31/96 N/A N/A N/A N/A N/A
Intermediate Term .. 7/31/96 N/A N/A N/A N/A N/A
Liquid Trust ....... 6/30/96 N/A N/A N/A N/A N/A
Omega .............. 12/31/95 1,479,567 27,827 N/A 1.88% N/A
Small Company
Growth ........... 5/31/96 78,272 560 N/A .72% N/A
State Tax Free ..... 3/31/96 N/A N/A N/A N/A N/A
State Tax Free II .. 11/30/95 N/A N/A N/A N/A N/A
Strategic Income ... 7/31/96 N/A N/A N/A N/A N/A
Tax Free Income .... 11/30/95 N/A N/A N/A N/A N/A
World Bond ......... 10/31/95 N/A N/A N/A N/A N/A
</TABLE>
*Balanced Fund began operations on September 3, 1996; these fees are
for the period from September 3, 1996 to September 30, 1996.
**Emerging Markets began operations on February 20, 1996; these fees
are for the period from February 20, 1996 to September 30, 1996.
<PAGE>
EXHIBIT N
FEES PAID TO KIRC AND FUND ADMINISTRATION
FEES PAID TO FEES PAID TO
FISCAL KIRC FUND ADMINISTRATION
YEAR DURING LAST DURING
NAME OF FUND ENDED FISCAL YEAR LAST FISCAL YEAR
- ------------ -------- --------------- ------------------
Emerging Growth ........ 9/30/96 $ 291,583 $ 20,900
Balanced Fund .......... 6/30/97* 0 0
Capital Preservation
and Income ...... 9/30/96 139,248 24,176
Emerging Markets ...... 10/31/96** 0 0
Fund of the Americas .... 10/31/95 656,071 19,208
Global Opportunities .... 9/30/96 2,013,849 26,856
Global Resources ........ 3/31/96 87,125 8,622
Government Securities ... 7/31/96 124,611 24,249
Intermediate Term ....... 7/31/96 106,796 23,963
Liquid Trust ............ 6/30/96 759,359 17,571
Omega ................... 12/31/95 565,768 15,027
Small Company Growth .... 5/31/96 17,953 N/A
State Tax Free .......... 3/31/96 269,934 116,489
State Tax Free II ....... 11/30/95 57,396 40,642
Strategic Income ........ 7/31/96 655,455 24,365
Tax Free Income ......... 11/30/95 211,525 19,338
World Bond ............. 10/31/95 74,907 19,141
*Balanced Fund began operations on September 3, 1996; these fees are for the
period from September 3, 1996 to September 30, 1996.
**Emerging Markets began operations on February 20, 1996; these fees are for
the period from February 20, 1996 to September 30, 1996.
<PAGE>
EXHIBIT O
LIST OF SHAREHOLDERS WITH FUND OWNERSHIP
OF 5% OR MORE
<TABLE>
<CAPTION>
NUMBER PERCENTAGE
OF SHARES OF
NAME OF FUND REGISTRATION OWNED FUND
------------ ------------ --------- -----------
<S> <C> <C> <C>
Emerging Growth - Class C Lavedna Ellingson 8,412.726 9.897%
Douglas Ellingson JT WROS
8510 McClintock
Tempe, AZ 85284-2527
Painewebber FBO 5,081.572 5.987%
John T. Frankfurth
333 North Portage Path
Path #24
Akron, OH 44303
Balanced Fund - Class A Keystone Investment Mgmt. Co. 294,000.000 8.293%
ATTN: Corp. Finance 21st Fl
200 Berkeley Street
Boston, MA 02116-5022
Balanced Fund - Class B Elizabeth J. Rogers 19,705.400 9.211%
P.O. Box 622
Scarborough, ME 04070-0622
Reinhard Hanselka 19,512.195 9.120%
6323 Thomas Dr., Apt. 1206
Panama City Beach, FL 32408
State Street Bank and Trust 12,080.539 5.647%
Co. Cust.
IRA FBO
John A. Matlock
700 Coolsand
Live Oak, TX 78233
Balanced Fund - Class C Keystone Investment Mgmt. Co. 3,000.000 43.048%
ATTN: Corp. Finance 21st Fl
200 Berkeley Street
Boston, MA 02116-5022
A.G. Edwards & Sons 989.794 14.204%
Custodian for Donald W. Reeser
IRA Account
615 S. Van Buren
Enid, OK 73707-6932
State Street Bk and Tr. Co. Cust. 746.998 10.720%
IRA FBO Lucy A. Arre
10917 Berkshire Lane
Jacksonville, FL 32225-1536
State Street Bk and Tr. Co. Cust. 730.217 10.479%
IRA FBO Peggy L. Reeser
1721 Surrey Lane
Enid, OK 73703-1625
California Insured - Class C Victor E. Rylander 18,207.368 11.998%
Lucille Rylander JT WROS
4102 Caflur Ave.
San Diego, CA 92117-4436
Prudential Securities FBO 11,286.599 7.437%
Rakesh C. Gupta
Neelam Gupta Co-TTEES
FBO Gupta Family Living
Trust 12/22/94
Hemet, CA 92544
Richard B. Smith 10,120.070 6.669%
Doris M. Smith TTEE
Smith Trust
U/A DTD 4/8/93
4853 Mt. Royal Court
San Diego, CA 92117-2917
Gaine T. Bradford 9,269.635 6.108%
Eola Bradford TTEES
U/D/T DTD 11/29/85
5118 Escalon Ave.
Los Angeles, CA 90043-1624
Capital Preservation and Great American Federal Savings 579,356.053 24.741%
Income - Class A and Loan
ATTN: Mr. Raymond G. Suchta
4750 Clairton Blvd.
Pittsburgh, PA 15236-2116
Emerging Markets - Class A Keystone Investment Mgmt. Co. 98,000.000 79.979%
ATTN: Corp. Finance 21st Fl
200 Berkeley Street
Boston, MA 02116-5022
State Street Bk and Tr. Co. Cust. 22,301.517 18.201%
Rollover IRA FBO
George S. Bissell
78 Forest Street
Wellesley, MA 02181-6828
Emerging Markets - Class B Keystone Investment Mgmt. Co. 1,000.000 100.00%
ATTN: Corp. Finance 21st Fl
200 Berkeley Street
Boston, MA 02116-5022
Emerging Markets - Class C Keystone Investment Mgmt. Co. 1,000.000 100.00%
ATTN: Corp. Finance 21st Fl
200 Berkeley Street
Boston, MA 02116-5022
Florida Tax Free - Class C Painewebber FBO 62,334.000 5.778%
Betty J. Puskar Trustee
Betty J. Puskar Rev. Trust
708 Ocean Drive
Juno Beach, FL 33408-1911
Total Return - Class C Lavedna Ellingson 132,219.662 17.898%
Douglas Ellingson TTEES
Lavedna Ellingson Marital Trust
U/A DTD 5-1/86
8510 McClintock
Tempe, AZ 85284-2527
Lavedna Ellingson 37,190.270 5.034%
Douglas Ellingson TTEES
Ellingson Rev Trust
U/A DTD 9-3-84
8510 McClintock
Tempe, AZ 85284-2527
Government Securities - Dale R. Kremer 107,749.461 12.333%
Class C John H. Bausch, Jr. Execs
U/W Eleanor L. Deutsch
P.O. Box 372
Danville, PA 17821-0372
First Federal Savings and Loan 105,597.533 12.086%
Association
ATTN: Robert J. Scheidler
212 N. Franklin St.
Greensburg, IN 47240-1735
Intermediate Term Bond - NFSC FEBO #A1F-362239 51,792.484 5.279%
Class C American Federation of Teachers
AFL-CIO Building
555 New Jersey Ave., NW
Washington, D.C. 20001-2029
Massachusetts Tax Free - Richard Nakashian 21,830.838 10.497%
Class A P.O. Box 3150
Pocasset, MA 02559-3150
Robert M. Buddington 16,570.665 7.968%
P.O. Box 549
S. Orleans, MA 02662-0549
Margaret Vogel 14,258.749 6.856%
Tr #21720
Keystone Trust Company Trustee
865 Central Ave. H403
Needham, MA 02192-1341
Ida R. Rodriguez 12,310.814 5.919%
Tr #21528
Keystone Trust Company Trustee
58 Helen Rd.
Needham, MA 02192-3934
Dolores S. Faber 10,776.101 5.181%
20 Buttonwood Street
New Bedford, MA 02740-1550
Shirley W. Tower TTEE 10,532.505 5.064%
Shirley W. Tower Trust
U/A Dated Sept. 18, 1992
119 Brookhaven Dr.
E. Longmeadow, MA 01028-1474
Massachusetts Tax Free - Anthony H. Cincotta 21,450.191 9.051%
Class C 13 Shipway Place
Charlestown, MA 02129-4301
Salvatore M. Moscariello 14,678.413 6.194%
Irene A. Moscariello JT TEN
24 Van Norden Road
Reading, MA 01867-1244
Missouri Tax Free - Class A Painewebber FBO 15,209.000 5.945%
Fred C. Klingbeil TTEE
Fred C. Klingbeil Trust
UAD 6/15/70
15500 Hwy. 72
Rolla, MD 65401-5826
Missouri Tax Free - Class C Painewebber FBO 22,743.218 15.464%
Dorothy K. Pruett Trustee
Dorothy K. Pruett Revocable Trust
U/A DTD 7-10-92
516 West 119th Terrace
Kansas City, MO 64145-1043
Painewebber FBO 19,596.836 13.325%
Lorraine Wilder TTEE
Lorraine Wilder Rev Tr
U/A DTD 7-26-88
220 16th Street
Chillicothe, MO 64601-1514
Painewebber FBO 15,340.595 10.431%
Jeannette M. Holz Trust Fund
Jeannette M. Holz TTEE
U/A DTD 10/15/83
Box 698
Lake Ozark, MO 65049-0698
New York Insured - Class C Fred Zucker 38,862.336 16.826%
20 Old Brook Rd.
Dix Hills, NY 11746-6430
NFSC FEBO # CM5-403911 21,603.713 9.354%
Otto Steckel Huber
605 Harrison Ave.
Harrison, NY 10528-1406
Carol T. Whitman 16,937.542 7.333%
P.O. Box 43
Whippleville, NY 12995
Painewebber FBO 14,974.000 6.483%
Laurie D. Wax TTEE
Irrevocable Trust of 1995
U/A DTD 5/2/95
Via Di Monterinaldi 14
Florence, Italy
Carol L. Moore 13,062.672 5.656%
Rt 2 Box 1055
Chateaugay, NY 12920-9522
Liquid Trust - Class B Charles G. Koch 1,050,000.000 7.965%
ATTN: R. Williams
4111 East 37th St. N.
Wichita, KS 67220
Liquid Trust - Class C Beacon Council 396,513.760 11.506%
80 Southwest 8th St.
Miami, FL 33130-3047
Small Company Growth - Painewebber FBO 87,796.000 8.441%
Class C L.D. Hancock Foundation, Inc.
P.O. Box 2203
Tupelo, MS 38803-2203
Tax Free Income - Class B Alletta Laird Downs TTEE 205,973.223 6.032%
Alletta Laird Downs Trust
U/A DTD 3-29-89
P.O. Box 3666
Wilmington, DE 19807-0666
World Bond - Class C Painewebber FBO 11,075.779 9.094%
Painewebber Cdn. FBO
Howard I. Richert
P.O. Box 3321
Weehawken, NJ 07087-8154
Painewebber FBO 9,071.000 7.448%
Painewebber Cdn. FBO
Jerry H. Hall
P.O. Box 3321
Weehawken, NJ 07087-8154
State Street Bk. And Tr. Co. Cust. 8,122.273 6.669%
Univ. Of Texas/Austin Orp. FBO
Arnold H. Buss
3318 Perry Lane
Austin, TX 78731-5331
NFSC FEBO # A4M-609811 6,180.470 5.075%
The Stover Foundation Inc.
C N Stover & P S Stover TTEES
Access Program
148 Klinesville Road
Flemington, NJ 08822-5572
</TABLE>
<PAGE>
[LOGO] KEYSTONE
INVESTMENTS
October 21, 1996
Dear Shareholder:
On December 9, 1996, a Special Meeting of Shareholders of the Keystone
Funds will be held in connection with the proposed acquisition of Keystone
Investments, Inc. by First Union Corporation, the nation's sixth largest bank
holding company whose organization manages the Evergreen Group of Mutual
Funds. The enclosed proxy material describes the important matters to be voted
upon at that meeting.
If you will be unable to attend the special meeting in person, we ask that
you sign the enclosed proxy card and return it as soon as possible in the
accompanying postage-paid envelope. IT IS VERY IMPORTANT THAT YOU VOTE
PROMPTLY SO THAT WE MAY ENSURE THAT THE NECESSARY QUORUM OF VOTING SHARES IS
REPRESENTED AT THE MEETING.
If the proposals described in the proxy statement are approved,
* Keystone Investment Management Company, your Fund's investment adviser,
will become a subsidiary of First Union Corporation and
* Certain Independent Trustees of the Evergreen Funds will join the
present Independent Trustees on the Boards of the Keystone Funds.
THE PROPOSED ACQUISITION WILL NOT ALTER THE INVESTMENT STRATEGY OR
OBJECTIVES OF YOUR FUND, WILL NOT CHANGE YOUR FUND'S MANAGEMENT CONTRACT, AND
WILL NOT INCREASE YOUR FUND'S MANAGEMENT FEES.
The Independent Trustees of the Keystone Funds have unanimously approved
the proposals and encourage you to do the same. They believe that the
acquisition of Keystone by First Union will create significant opportunities
for benefits to the shareholders of the Keystone Funds in a number of
meaningful ways, including,
* Significantly increased financial strength and stability that should
enhance Keystone's ability to attract and retain top quality investment,
administrative and service personnel and provide opportunities for
enhanced future technology and administrative services for the Funds.
First Union has indicated its intention to devote the resources
necessary for it to become one of the largest mutual fund organizations
in the country.
* Potential economies of scale in the Keystone Funds' shareholder
servicing and transfer agency operations by incorporating the Evergreen
Funds into the Keystone operations.
* Potential growth of the Keystone Funds through the retail brokerage
affiliates of First Union, which will make shares available throughout
its network. It has become clear that competitive growth in fund assets
is necessary to attract and retain top quality investment,
administrative and service personnel.
* Future ability to exchange shares of Keystone Funds for shares of the
Evergreen Funds, including types of funds not currently offered by
Keystone.
The accompanying proxy materials are, by their nature, lengthy and complex.
If you have any questions, please call 1-800-343-2898.
Of course, we will be delighted if you can attend the meeting and discuss
these proposals, or any other relevant matter, with us personally. If,
however, time or distance precludes you from joining us, IT IS IMPORTANT THAT
YOU ACT PROMPTLY BY SIGNING AND RETURNING THE ENCLOSED PROXY CARD SO THAT WE
WILL HAVE A QUORUM AT THE MEETING ON DECEMBER 9.
We appreciate your continued support and look forward to receiving your
votes of approval.
Sincerely yours,
/s/Albert H. Elfner, III /s/George S. Bissell
Albert H. Elfner, III George S. Bissell
Chairman and Chief Executive Chairman, Board of Trustees
Officer, Keystone Investments, Inc. Keystone Mutual Funds
<PAGE>
MTG
[LOGO] KEYSTONE
INVESTMENTS
October 21, 1996
Dear Shareholder:
On December 9, 1996, a Special Meeting of Shareholders of the Keystone
Funds will be held in connection with the proposed acquisition of Keystone
Investments, Inc. by First Union Corporation, the nation's sixth largest bank
holding company whose organization manages the Evergreen Group of Mutual
Funds. The enclosed proxy material describes the important matters to be voted
upon at that meeting.
If you will be unable to attend the special meeting in person, we ask that
you sign the enclosed proxy card and return it as soon as possible in the
accompanying postage-paid envelope. IT IS VERY IMPORTANT THAT YOU VOTE
PROMPTLY SO THAT WE MAY ENSURE THAT THE NECESSARY QUORUM OF VOTING SHARES IS
REPRESENTED AT THE MEETING.
If the proposals described in the proxy statement are approved,
* Keystone Investment Management Company, your Fund's investment adviser,
will become a subsidiary of First Union Corporation and
* Certain Independent Trustees of the Evergreen Funds will join the
present Independent Trustees on the Boards of the Keystone Funds.
THE PROPOSED ACQUISITION WILL NOT ALTER THE INVESTMENT STRATEGY OR
OBJECTIVES OF YOUR FUND, WILL NOT CHANGE YOUR FUND'S MANAGEMENT CONTRACT, AND
WILL NOT INCREASE YOUR FUND'S MANAGEMENT FEES.
The Independent Trustees of the Keystone Funds have unanimously approved
the proposals and encourage you to do the same. They believe that the
acquisition of Keystone by First Union will create significant opportunities
for benefits to the shareholders of the Keystone Funds in a number of
meaningful ways, including,
* Significantly increased financial strength and stability that should
enhance Keystone's ability to attract and retain top quality investment,
administrative and service personnel and provide opportunities for
enhanced future technology and administrative services for the Funds.
First Union has indicated its intention to devote the resources
necessary for it to become one of the largest mutual fund organizations
in the country.
* Potential economies of scale in the Keystone Funds' shareholder
servicing and transfer agency operations by incorporating the Evergreen
Funds into the Keystone operations.
* Potential growth of the Keystone Funds through the retail brokerage
affiliates of First Union, which will make shares available throughout
its network. It has become clear that competitive growth in fund assets
is necessary to attract and retain top quality investment,
administrative and service personnel.
* Future ability to exchange shares of Keystone Funds for shares of the
Evergreen Funds, including types of funds not currently offered by
Keystone.
Of course, we will be delighted if you can attend the meeting and discuss
these proposals, or any other relevant matter, with us personally. If,
however, time or distance precludes you from joining us, IT IS IMPORTANT THAT
YOU ACT PROMPTLY BY SIGNING AND RETURNING THE ENCLOSED PROXY CARD SO THAT WE
WILL HAVE A QUORUM AT THE MEETING ON DECEMBER 9.
We appreciate your continued support and look forward to receiving your
votes of approval.
Sincerely yours,
/s/Albert H. Elfner, III /s/George S. Bissell
Albert H. Elfner, III George S. Bissell
Chairman and Chief Executive Chairman, Board of Trustees
Officer, Keystone Investments, Inc. Keystone Mutual Funds
<PAGE>
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
You can help reduce the cost of additional mailings by
[Logo] KEYSTONE promptly returning your signed proxy. No matter how
INVESTMENTS many shares you own, your vote counts!
PLEASE SIGN AND RETURN YOUR PROXY TODAY!
Please fold and detach card at perforation before mailing
FUND NAME PRINTS HERE PROXY FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MONDAY, DECEMBER 9, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
Messrs. George S. Bissell and Albert H. Elfner, III and Ms. Rosemary D.
Van Antwerp, or any of them as Proxies of the undersigned, with full power of
substitution, to vote on behalf of the undersigned all shares of the Fund which
the undersigned is entitled to vote at a meeting of shareholders to be held at
3:30 P.M., Boston time, on Monday December 9, 1996, at the offices of the Fund,
200 Berkeley Street, Boston, Massachusetts and at all adjournments thereof, as
fully as the undersigned would be entitled to vote if personally present, on
the proposals set forth in the Notice of such meeting, substantially as
described in the Proxy Statement accompanying such Notice, as follows:
NOTE: PLEASE SIGN IN BOX BELOW EXACTLY AS
YOUR NAME(S) APPEAR ON THIS CARD.
Dated: ____________________, 1996
NOTE: When signing as attorney, executor,
administrator, trustee, guardian, or as
custodian for a minor, please sign your
name and give your full title as such. If
signing on behalf of a corporation,
please sign the full corporate name and
your name and indicate your title. If you
are a partner signing for a partnership,
please sign the partnership name and your
name. Joint owners should each sign this
proxy. Please sign, date and return.
_________________________________________
_________________________________________
Signature(s) KA
<PAGE>
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES (DIRECTORS) OF THE FUND.
THE BOARD OF TRUSTEES (DIRECTORS) RECOMMENDS A VOTE FOR PROPOSALS 1
---
THROUGH 5, INCLUDING A VOTE FOR THE ELECTION OF ALL NOMINEES FOR TRUSTEE
---
(DIRECTOR).
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSAL IF
---
NO CHOICE IS INDICATED.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER MATTERS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENTS THEREOF.
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX BELOW USING BLUE OF BLACK INK OR
DARK PENCIL. DO NOT USE RED INK. [ ]
Please fold and detach card at perforation before mailing
1. FOR THE SHAREHOLDERS OF ALL FUNDS, FOR AUTHORITY TO VOTE
to elect the following persons as WITHHELD ON ALL
Trustee (Director) of the Fund: TRUSTEES (DIRECTORS)
Laurence B. Ashkin, Frederick Amling, Charles
A. Austin III, Foster Bam, George S. Bissell, [ ] [ ]
Edwin D. Campbell, Charles F. Chapin,
K. Dun Gifford, James S. Howell, Leroy
Keith, Jr., F. Ray Keyser, Gerald M. McDonnell,
Thomas L. McVerry, William Walt Pettit, David
M. Richardson, Russell A. Salton, III M.D.,
Michael S. Scofield, Richard J. Shima and
Andrew J. Simons, subject to the completion of
the Merger, substantially as described in the
Proxy Statement.
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PLEASE
WRITE HIS NAME BELOW:)
- --------------------------------------------------------------------------------
2. FOR THE SHAREHOLDERS OF ALL FUNDS, FOR AGAINST ABSTAIN
to approve an Investment Advisory and [ ] [ ] [ ]
Management Agreement between Keystone
Investment Management Company and the
Fund, subject to completion of the
Merger, substantially as described in
the Proxy Statement. (Advisory fee
rates will NOT change.)
3. FOR THE SHAREHOLDERS OF KEYSTONE [ ] [ ] [ ]
AMERICA HARTWELL EMERGING GROWTH FUND,
INC., KEYSTONE GLOBAL OPPORTUNITIES FUND
AND KEYSTONE GLOBAL RESOURCES AND
DEVELOPMENT FUND ONLY, to approve a
SubAdvisory Agreement subject to
completion of the Merger, substantially
as described in the Proxy Statement.
(The subadvisory fee rate will NOT change.)
4. FOR THE SHAREHOLDERS OF KEYSTONE [ ] [ ] [ ]
GLOBAL OPPORTUNITIES FUND AND KEYSTONE
LIQUID TRUST ONLY, to amend the Fund's
Declaration of Trust to permit the Board
of Trustees to fix the number of
Trustees from time to time.
5. FOR THE SHAREHOLDERS OF KEYSTONE [ ] [ ] [ ]
AMERICA HARTWELL EMERGING GROWTH FUND,
INC. ONLY, to ratify the selection of
KPMG Peat Marwick LLP as the independent
public accountant of the Fund for its
current fiscal year.
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF CARD.
