<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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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:
[X] Preliminary Proxy Statement [ ] Confidential for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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>
PRELIMINARY PROXY MATERIAL: FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY.
KEYSTONE AMERICA FAMILY OF MUTUAL 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")
- PENNSYLVANIA TAX FREE FUND ("PENNSYLVANIA TAX FREE")
- NEW YORK INSURED TAX FREE FUND ("NEW YORK INSURED")
<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 3:00
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 EMERGING GROWTH, GLOBAL OPPORTUNITIES AND
GLOBAL RESOURCES ONLY, to approve a SubAdvisory Agreement for each
such Fund, substantially as described in the Proxy Agreement.
4. FOR THE SHAREHOLDERS OF GLOBAL OPPORTUNITIES AND LIQUID TRUST ONLY,
to amend the 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>
PRELIMINARY PROXY MATERIAL: FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY.
KEYSTONE AMERICA HARTWELL
EMERGING GROWTH FUND
("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")
- PENNSYLVANIA TAX FREE FUND ("PENNSYLVANIA TAX FREE")
- NEW YORK INSURED TAX FREE FUND ("NEW YORK INSURED")
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.
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.
- ----------
(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 Items 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 Emerging Growth of record at the close of
business on October 28, 1996 are entitled to notice of and to vote at the
Meeting. See Exhibit A 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 Accountants Emerging Growth
ALL FUNDS:
Approval of Proposals 2 and 3, as applicable, require 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 GLOBAL OPPORTUNITIES, EMERGING GROWTH AND LIQUID TRUST:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of Shares present in person or by proxy at the Meeting and entitled
to vote, if more than 50% of the outstanding Shares are represented at the
Meeting.
GLOBAL OPPORTUNITIES:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of the Shares present in person or by proxy at the Meeting and
entitled to vote, if more than 25% of the outstanding shares are represented
at the Meeting. Approval of Proposal 4 requires the affirmative vote of the
holders of a majority of the Shares entitled to vote.
LIQUID TRUST:
Approval of Proposal 1 requires the affirmative vote of the holders of a
majority of the Shares present in person or by proxy at the Meeting and
entitled to vote, if more than 25% of the outstanding shares are represented
at the Meeting. Approval of Proposal 4 requires the affirmative vote of the
holders of a majority of the Shares entitled to vote.
EMERGING GROWTH:
Approval of Proposals 1 and 5 require the affirmative vote of the holders
of a majority of the Shares present in person or by proxy at the Meeting and
entitled to vote, if more than one-third of the outstanding Shares are
represented at the Meeting.
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 FKI, Inc.,
a newly organized wholly-owned subsidiary of FUNB-NC. The principal offices of
First Union, FUNB-NC and FKI, Inc. 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, Inc., 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 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 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 it has entered into 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., 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 Keystone Investments' voting common stock ("Keystone
Stock") (and options on such Keystone Stock). Substantially all of the
outstanding Keystone Stock (and options on such Keystone Stock) are beneficially
owned by certain of Keystone's present and former officers and employees and
members of their families and trusts established by them. Except for 140,042
shares held by the Keystone Employees Investment and Savings Plan and certain
unaffiliated shareholders, 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, totaling 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, along with such spouse, are referred to herein
as the "Controlling Stockholders". 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 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. At _______ , 1996 an estimated ______ shares of First
Union Common Stock, having an aggregate market value of ________ were 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, which
assisted current management in a leveraged buyout of Keystone in 1989 pursuant
to a Securities Redemption 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 _____ % 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
_____ % 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 to be approximately $182,000,000 at that time.
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 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 in 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.
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 and Spuehler, respectively, remain employees of Keystone in their
present or substantially equivalent positions. Each annual payment would equal
$ ________ for Mr. Elfner, $ ________ for Mr. Godfrey and $ ________ for Mr.
Spuehler. Such payments would also be made under certain circumstances following
termination of the employment of Messrs. Elfner, Godfrey and 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, Mr. Elfner will not be able to
continue as an officer of the Funds.
If the Merger is consummated, Keystone Investment Distributors Company
("KID") would no longer be able to act as principal underwriter of the Funds due
to regulatory restrictions imposed by the Glass-Steagall Act upon national banks
like 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 the Funds or the 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 certain of the Funds or their principal
underwriter for providing certain marketing support services to the Funds or
their principal underwriter. In view of the foregoing, the Funds' Boards
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 provide 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 and its affiliate, Evergreen Asset Management Corp., is the
investment adviser of such funds.
Furman Selz 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
administrative 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's") EFD may
retain any CDSC's 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
which 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, except 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 Funds
sufficient to satisfy the conditions to the Merger are obtained, KIMCO will be
unable to continue serving as investment adviser to each such non-approving Fund
pursuant to the existing investment advisory and 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.
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:
<PAGE>
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
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,
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
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
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
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,
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 C. Chapin (67) Trustee of the Keystone funds; former Group
Vice President, Textron Corp.; former
Director, Peoples Bank (Charlotte, N.C.).
K. Dun Gifford (57) Trustee of the Keystone funds; Trustee,
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 Keystone.
James S. Howell (71) Chairman of the Evergreen funds; former
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
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
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.;
and former Director and Chairman of the
Board, Proctor Bank and Green Mountain Bank.
Gerald M. McDonnell (56) Trustee of the Evergreen funds; Sales
Representative with Nucor-Yamoto, Inc. (steel
producer).
Thomas L. McVerry (57) Trustee of the Evergreen funds; former Vice
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 the
law firm of Holcomb and Pettit, P.A.
David M. Richardson (55) Trustee of the Keystone funds; Vice Chair and
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
Services; former Managed Health Care Consultant;
former President, Primary Physician Care.
Michael S. Scofield (53) Trustee of the Evergreen funds; Attorney, Law
Offices of Michael S. Scofield.
Richard J. Shima (57) Trustee of the Keystone funds; Executive
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
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 B 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.
Exhibit C 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.
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.
After the consummation of the Merger, Messrs. Keyser and Shima are
expected to become members of the Evergreen funds' Advisory Committee
established to assist the Boards of Trustees of the Evergreen funds.
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 officer of each Fund will be
John Pileggi (age 36), President and Treasurer. Mr. Pileggi has been an officer
or employee 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 Chief Executive Officer, [Chairman of
the Board and Director]
James R. McCall President and [Director]
Edward F. Godfrey Senior Vice President, Chief Financial
Officer, Treasurer and [Director]
Philip M. Byrne Senior Vice President and [Director]
Ralph J. Spuehler [Director]
Rosemary D. Van Antwerp Senior Vice President, General Counsel
and Secretary
[Directors to be added or revised]
The address of each of the persons referred to above is 200 Berkeley Street,
Boston, Massachusetts 02116-5034.
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. 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 to
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 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 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 D. Appendix I to
Exhibit D contains each such Fund's advisory fee schedule.
Each Fund's 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. The proposed agreement
for Emerging Growth included in Exhibit E hereto does not provide for such
indemnity by Emerging Growth although such agreement contains the same limit
on liabilities of KIMCO.
If approved by the shareholders of each Fund, the investment advisory and
management, 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 will be 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, Keystone served as investment adviser to the
Keystone funds listed in Exhibit F, 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 ----. EFD, currently a subsidiary of Furman Selz, will be
the Funds' new principal underwriter.
Exhibit G 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 management agreements.
Exhibit H 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 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 factors 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 fund universe, 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 are expected
to contribute to Keystone's operations in the best interests of the 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 affiliates 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 increased substantially as a result of increased
sales, as described above. They noted that any increases in asset levels would
result in lower fixed costs of the Funds being reduced on a per-share basis.
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
increased and/or improved services to the Funds and that such economies of scale
could reduce the likelihood of increases in transfer agency expenses for the
Funds. The Trustees also found 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 J. M. Hart-
well, Credit Lyonnais, N.A. and EquitiLink, respectively, for the most recent
fiscal year pursuant to their subadvisory agreements.
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 Exhibit I, J and K, respectively.
RECOMMENDATION OF THE TRUSTEES
The Board of Trustees, including its 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 Group 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 Boards of Trustees of Global Opportunities and Liquid Trust, including
the Independent Trustees, recommend that the shareholders vote FOR approval of
the amendment to the Declaration of Trust of Global Opportunities and Liquid
Trust, respectively.
5. RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC
ACCOUNTANTS 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 $30,727 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/or respond to
appropriate questions from shareholders.
RECOMMENDATION OF THE DIRECTORS
The Board of Directors, including the Independent Directors, of Emerging
Growth, recommends that the shareholders of Emerging Growth, vote FOR the
ratification of the selection of KPMG Peat Marwick as independent public
accountants for such Funds.
SUBADVISORS
J. M. HARTWELL
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 Limited Partnership is owned as follows:
JMH Management Corporation 68.00%
(The sole general partner)
Millwill Corporation, which is owned 15.32%
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 Limited Partnership
because of JMH Management Corporation's status as sole general partner of J.
M. Hartwell Limited Partnership.
Mr. William C. Miller, IV, the executive officer of J. M. Hartwell is the
President 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 Ave., New York, New York 10022.
CREDIT LYONNAIS
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 $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 occupation of the chief executive
officer and Directors of Credit Lyonnais are:
NAME AND ADDRESS PRINCIPAL OCCUPATION
- ---------------- --------------------
Norm 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
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 percentage of ownership is as follows:
NAME 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 occupation of the chief executive
officer and Directors of EquitiLink are:
NAME AND ADDRESS
(TITLE) PRINCIPAL OCCUPATION
- ------- --------------------
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)
GENERAL INFORMATION
CERTAIN BROKERAGE
Pursuant to principal underwriting agreements with ,
dated December 31, 1989, Kokusai Securities Co., Ltd. ("Kokusai") and Nomura
Securities Co., Ltd. ("Nomura"), each acts as principal underwriter for the
sale of the shares of certain Keystone 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 for all Keystone
funds' most recently completed fiscal years, or fiscal periods 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 of 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 the 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 the 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 the
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 ____________________ (" ____ ") to assist in the
Proxy solicitation process, and may contact certain shareholders of the Fund
over the telephone. Shareholders that are contacted by ______ may be asked to
cast their vote by telephonic Proxy. Such Proxies will be recorded in accordance
with the procedures set forth below. KIMCO believes 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. ______ has received an opinion of
________________ that addresses the validity, under the applicable law of the
Commonwealth of Massachusetts, of a proxy given orally. Such opinion concludes
that a Massachusetts court would find that there is no Massachusetts law or
Massachusetts public policy against the acceptance of proxies signed by an
orally-authorized agent.
In all cases where a telephonic Proxy is solicited, the _____ 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 the information provided to ______ by KIMCO,
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 ____ hours, ______
will send the shareholder a letter or mailgram to confirm the Shareholder's vote
and asking the shareholder to call _____ 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 in person. Any Proxy given by the
shareholder, whether in writing or by telephone, is revocable.
It is expected that the cost of retaining to assist in the Proxy
solicitation process will not exceed $80,000, which cost will be allocated
among the Funds pro rata.
SUBSTANTIAL SHAREHOLDERS
Exhibit O contains information about the beneficial ownership by
shareholders of more than 5% 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.
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 Trustees" The Boards of Trustees or Directors of the Funds.
"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
would provide certain personnel and
administrative services to the Funds.
"Independent Trustees" Those Trustees or Directors of the Funds who
are not "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
(other than Adjustable Rate and Institutional)
and of other Keystone funds.
"KIMCO" Keystone Investment Management Company, 200
Berkeley Street, Boston, Massachusetts 02116,
a wholly-owned subsidiary of Keystone
Investments, Inc. and the investment adviser
of each of the Funds, except where a
subadviser is employed.
"Keystone Investments" Keystone Investments, Inc., 200 Berkeley
Street, 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 Marwick" KPMG Peat Marwick LLP, independent public
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" Agreement and Plan of Acquisition and Merger,
dated September 6, 1996, between First Union,
FUNB-NC, FKI, Inc. (an affiliate of First
Union), 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
NUMBER OF
NAME OF FUND SHARES OUTSTANDING
- ------------ ------------------
Emerging Growth .......................................... 3,463,334
Balanced Fund ........................................... 578,635
Capital Preservation and Income .......................... 7,283,257
Emerging Markets ......................................... 124,532
Fund of the Americas ..................................... 9,250,047
Total Return ............................................. 4,768,377
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 Tax Free ...................................... 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 B
<TABLE>
<CAPTION>
COMPENSATION OF TRUSTEES
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
<FN>
* Balanced Fund began operations on August 16, 1996; these fees are for the period from August 16, 1996
to September 30, 1996.
** Emerging Markets Fund began operations on May 31, 1996; these fees are for the period from May 31, 1996
to September 30, 1996.
</TABLE>
<PAGE>
EXHIBIT C
<TABLE>
<CAPTION>
FISCAL BOARD OF AUDIT NOMINATING
YEAR TRUSTEES COMMITTEE COMMITTEE
FUND ENDED MEETINGS MEETINGS MEETINGS
- ---- ---- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Emerging Growth Fund ....................... 9/30/96 7 2 2
Keystone Balanced Fund II .................. 6/30/97 1 0 0
Capital Preservation and Income ............ 9/30/96 7 1 1
Emerging Markets ........................... 10/31/96 6 1 1
Fund of the Americas ....................... 10/31/95 7 3 0
Total Return ............................... 11/30/95 7 3 0
Global Opportunities ....................... 9/30/96 7 1 0
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 2 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 D
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
AGREEMENT made the ____ day of ____________, by and between
[FUND], a Massachusetts business trust/Pennsylvania common law 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 broker's 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/Trust
Agreement 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/Trust Agreement of the Fund, Articles of Incorporation of the Adviser
and governing documents of any SubAdviser.
9. This Agreement shall continue in effect after July 1, 1994 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 D
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:
AGGREGATE NET ASSET VALUE
MANAGEMENT FEE OF THE SHARES OF THE FUND
- --------------------------------------------------------------------------------
1%
- --------------------------------------------------------------------------------
computed as of the close of business on each business day.
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
$100,000,000, 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 each 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 E
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, INC., a Delaware corporation
("Adviser").
WHEREAS, the Fund and the Adviser wish to enter into a 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 broker's 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 F
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:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- ------------------------- --------------------
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
Trust - Small 0.65% of amounts over 12/31/96 and
Capitalization $250,000,000. month-by-month
Growth Fund thereafter
(2) CURRENT INCOME CONSISTENT WITH LOW VOLATILITY OF PRINCIPAL BY
INVESTING PRIMARILY IN ADJUSTABLE RATE SECURITIES:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- ------------------------- --------------------
Keystone $ 70,932,291 2.0% of gross dividend and Class A, B and C
Capital interest income, plus expenses are limited
Preservation 0.50% of the first to 0.90%, 1.65% and
and Income Fund $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:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- -------------------------- --------------------
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:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- -------------------------- --------------------
Keystone $1,507,263,796 1.5% of gross dividend and N/A
Balanced interest income, plus
Fund (K-1) 0.50% of the first
$100,000,000, declining to
0.25% 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
0.50% of the first to 1.50% 2.25% and
$100,000,000, declining to 2.25%, respectively
0.25% 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:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- -------------------------- --------------------
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 35,368,376 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:
ARRANGEMENTS WHEREBY
THE ADVISER HAS
NET ASSETS ANNUAL INVESTMENT ADVISORY AGREED TO LIMIT
AS OF FEES (PERCENT OF AVERAGE THE FUND'S ANNUAL
FUND NAME 9/30/96 DAILY NET ASSETS) EXPENSES
--------- ---------- -------------------------- --------------------
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
<PAGE>
EXHIBIT G
<TABLE>
<CAPTION>
INVESTMENT ADVISORY FEES
EXPENSE
AGGREGATE LIMITATION,
AMOUNT IF ANY (AS A
NET ASSETS OF ADVISORY PERCENTAGE OF
FISCAL YEAR ON SEPT. 30, FEE FOR LAST AVERAGE NET
NAME OF FUND ENDED 1996 FISCAL YEAR ASSETS)
- -------- --------------- --------------- --------------- ---------------------
<S> <C> <C> <C> <C>
B-1 ..................................................... 10/31/95 $1,876,672 N/A
B-2 ..................................................... 8/31/96 3,481,728 N/A
B-4 ..................................................... 7/31/96 3,788,171 N/A
K-1 ..................................................... 6/30/96 6,447,849 N/A
K-2 ..................................................... 10/31/95 2,779,544 N/A
S-1 ..................................................... 8/31/96 1,492,757 N/A
S-3 ..................................................... 8/31/96 1,908,509 N/A
S-4 ..................................................... 5/31/96 8,473,139 N/A
Adjustable Rate ......................................... 9/30/96 N/A
Institutional ........................................... 6/30/96 9,209 Limited to 1.00%
International ........................................... 10/31/95 985,652 N/A
Precious Metals ......................................... 2/28/96 1,354,605 N/A
Tax Free ................................................ 12/31/95 5,327,202 N/A
Emerging Growth ......................................... 9/30/96 N/A
Balanced Fund ........................................... 6/30/97* Limited to 1.50% for
Class A and 2.25%
for Classes B & C
Capital Preservation and Income ......................... 9/30/96 Limited to 0.90% for
Class A and 1.65%
for Classes B & C
Emerging Markets ........................................ 10/31/96** Limited to 0.00% for
Classes A, B, C
Total Return ............................................ 11/30/95 300,290 N/A
Fund of the Americas .................................... 10/31/95 1,099,920 N/A
Global Opportunities .................................... 9/30/96 N/A
Global Resources ........................................ 3/31/96 217,332 N/A
Government Securities ................................... 7/31/96 365,012 N/A
Intermediate Term ....................................... 7/31/96 273,644 Limited to 1.10% for
Class A and 1.85%
for Classes B & C
Liquid Trust ............................................ 6/30/96 1,359,239 N/A
Omega ................................................... 12/31/95 1,280,436 N/A
Small Company Growth .................................... 5/31/96 21,221 Limited to 1.95% for
Class A and 2.70%
for Classes B & C
State Tax Free .......................................... 3/31/96 1,168,889 Limited to 0.75% for
Class A and 1.50%
for Classes B & C
State Tax Free II ....................................... 11/30/95 233,519 Limited to 0.75% for
Class A and 1.50%
for Classes B & C
Strategic Income ........................................ 7/31/96 1,663,669 N/A
Tax Free Income ......................................... 11/30/95 919,802 N/A
World Bond .............................................. 10/31/95 93,806 N/A
<FN>
* Balanced Fund began operations on August 16, 1996; these fees are for the period from August 16, 1996 to September 30, 1996.
** Emerging Markets began operations on May 31, 1996; these fees are for the period from May 31, 1996 to September 30, 1996.
</TABLE>
<PAGE>
EXHIBIT H
DISTRIBUTION PLAN EXPENSES
DISTRIBUTION PLAN
FISCAL EXPENSES PAID DEFERRED
YEAR BY THE FUND SALES CHARGES
NAME OF FUND ENDED TO KID PAID TO KID
- ---------- ------ ------------------ -------------
Emerging Growth - Class A .... 9/30/96 $ 189,819 $ 0
Emerging Growth - Class B-1 .. 9/30/96 21,648
Emerging Growth - Class B-2 .. 9/30/96 15,098
Emerging Growth - Class C .... 9/30/96 23,074 667
Balanced Fund II - Class A ... 6/30/97* 1,504 0
Balanced Fund II - Class B-1 . 6/30/97* 0
Balanced Fund II - Class B-2 . 6/30/97* 604
Balanced Fund II - Class C ... 6/30/97* 44 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 46,809 0
Capital Preservation and
Income - Class B-1 ......... 9/30/96 520,832 48,007
Capital Preservation and
Income - Class B-2 ......... 9/30/96 12,537 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 9/30/96 454,207 3,832
Global Opportunities -
Class B-1 .................. 9/30/96 319,512
Global Opportunities -
Class B-2 .................. 9/30/96 332,712
Global Opportunities - Class C 9/30/96 1,087,637 40,026
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 8,941
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 II began operations on August 16, 1996; these fees are for the
period from August 16, 1996 to September 30, 1996.
**Emerging Markets began operations on May 31, 1996; these fees are for the
period from May 31, 1996 to September 30, 1996.
<PAGE>
EXHIBIT I
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 corporation.
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 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 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 J
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 with limited liability incorporated in Ireland.
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 for two years from the date set
forth above 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 indemnity from the Fund
in respect of such act or thing taken or done or omitted to be taken or done by
CLIAM which indemnity 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 K
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 for two years from the date set
forth above 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 L
<TABLE>
<CAPTION>
SUBADVISORY FEES
AGGREGATE
AMOUNT
OF SUBADVISORY
FISCAL NET ASSETS ON FEE FOR LAST
NAME OF FUND NAME OF SUBADVISER YEAR ENDED SEPT. 30, 1996 FISCAL YEAR
- ------------ ------------------- -------- -------------- ---------------
<S> <C> <C> <C> <C>
Emerging Growth ........ J.M. Hartwell 9/30/96 $ 98,814 $ 411,286
Global Resources ....... EquitiLink 3/31/96 23,632 43,466
Global Opportunities ... Credit Lyonnais, N.A. 9/30/96 759,412 3,469,699
</TABLE>
<PAGE>
EXHIBIT M
<TABLE>
<CAPTION>
BROKERAGE BY FUND
% OF FUND'S % OF FUND'S
AGGREGATE AGGREGATE
BROKERAGE BROKERAGE BROKERAGE BROKERAGE BROKERAGE
FISCAL COMMISSIONS COMMISSIONS COMMISSIONS COMMISSIONS COMMISSIONS
YEAR PAID BY PAID TO PAID TO PAID TO PAID TO
FUND ENDED FUND 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 II ... 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 Americas 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 Opportunities 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
<FN>
* Balanced Fund II began operations on August 16, 1996; these fees are for the period from August 16, 1996 to
September 30, 1996.
** Emerging Markets began operations on May 31, 1996; these fees are for the period from May 31, 1996 to September
30, 1996.
</TABLE>
<PAGE>
EXHIBIT N
FEES PAID TO KIRC AND FUND REPORTING
FEES PAID TO FEES PAID TO
FISCAL KIRC FUND REPORTING
YEAR DURING LAST DEPARTMENT DURING
NAME OF FUND END 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
Total Return .................... 11/30/95 150,009 19,380
Fund of the Americas ............ 10/31/95 656,071 19,207
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 August 16, 1996; these fees are for the
period from August 16, 1996 to September 30, 1996.
** Emerging Markets began operations on May 31, 1996; these fees are for the
period from May 31, 1996 to September 30, 1996.
<PAGE>
[LOGO] KEYSTONE
INVESTMENTS
October , 1996
Dear Shareholder:
On December 9, 1996, a Special Meeting of Shareholders of the Keystone Funds
will be held to approve the proposed acquisition of Keystone Investments, Inc.
by First Union Corp., the nation's sixth largest bank holding company and
manager of the Evergreen Group of Mutual Funds. The enclosed proxy material
describes the important issues which will 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 SHAREHOLDER VOTES 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 Corp. and
* The Independent Trustees of the Evergreen Funds will join the present
Independent Trustees on the Boards of the Keystone Funds.
IT SHOULD BE CLEARLY UNDERSTOOD THAT THE PROPOSED ACQUISITION WILL NOT
ALTER THE INVESTMENT STRATEGY OR OBJECTIVES OF YOUR FUND AND IT WILL NOT
INCREASE YOUR FUND'S MANAGEMENT FEES.
The Independent Non-Management Trustees of the Keystone Funds have
unanimously approved the proposals and encourage you to do the same. They
believe that the acquisition 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 to enable
Keystone to attract and retain the highest caliber of investment,
administrative and service personnel and for enhanced future technology
and administrative services for the Funds. First Union has indicated
publicly (and privately) its intention to devote the resources necessary
to become one of the largest mutual fund sponsors 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.
* 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 the highest caliber of 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- ____ .
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.
<PAGE>
We appreciate your continued support and look forward to receiving your
votes of approval.
Sincerely yours,
/s/ Albert H. Elfner, III
Albert H. Elfner, III
Chairman
<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 each Fund which
the undersigned is entitled to vote at a meeting of shareholders to be held at
3:00 P.M., Boston time, on Monday December 9, 1996 at the offices of the Funds,
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 said meeting, 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) OF THE FUND 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, [ ] [ ]
Bissell, Edwin D. Campbell, Charles F. Chapin,
K. Dun Gifford, Leroy Keith, Jr., James S.
Howell, 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 (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 (as described in the Proxy
Statement), 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 (as described in
the Proxy Statement), 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
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.
