SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Countrywide Investment 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>
COUNTRYWIDE INVESTMENT TRUST
312 Walnut Street
21st Floor
Cincinnati, Ohio 45202
September __, 1999
Dear Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Countrywide Investment Trust to be held on Wednesday, October 27, 1999 at 10:00
a.m., Eastern Time, in the 10th Floor Conference Center at 312 Walnut Street,
Cincinnati, Ohio 45202.
We have previously informed you of a recent development involving
Countrywide Investments, Inc. (the "Adviser"), the Trust's investment adviser
and principal underwriter, and its parent company, Countrywide Financial
Services, Inc. ("CFS"). On August 24, 1999, Fort Washington Investment Advisors,
Inc. entered into an agreement to buy all of the stock of CFS from Countrywide
Credit Industries, Inc., its parent company.
Fort Washington Investment Advisors is part of Western-Southern Enterprise,
a dynamic group of financial services companies owned by The Western and
Southern Life Insurance Company. Western-Southern Enterprise provides life
insurance, annuities, mutual funds, business planning insurance, health
insurance, asset management and other related financial services for millions of
customers nationwide. Founded in 1888, The Western and Southern Life Insurance
Company is a strong organization with solid values, a rich heritage and an
exciting future and holds the highest ratings for claims paying ability awarded
by three independent insurance rating agencies.
As a full-service registered investment advisory firm, Fort Washington
Investment Advisors offers professional and comprehensive investment management
services for foundations and endowments, corporate pension funds, insurance
companies, mutual funds, colleges and universities, religious organizations and
high net worth individuals. Fort Washington Investment Advisors and its advisory
subsidiaries have assets under management exceeding $16 billion.
We view this transaction as very positive for a number of reasons. As a
local company, Fort Washington Investment Advisors is well acquainted with the
business community in which the Adviser operates. Fort Washington and its
affiliates will provide the Adviser with access to its extensive resources.
Moreover, it is anticipated that there will be no material change in the
investment strategies we employ or investment professionals assigned to the
Trust.
Under the Investment Company Act, the purchase of CFS is considered an
assignment of the management agreements between the Adviser and the Trust, with
respect to each series of the Trust. The management agreements for each series
of the Trust require that we obtain approval from shareholders of a new
management agreement as a result of the transaction.
<PAGE>
You are also being asked to elect a substantially new group of trustees and
to ratify the selection of Arthur Andersen LLP as the Trust's independent public
accountants for the current fiscal year. No change of accountants is being
proposed.
The Board of Trustees has given full and careful consideration to each of
these matters and has concluded that the proposals are in the best interests of
the Trust and its shareholders. The Board of Trustees therefore recommends that
you vote to elect the proposed slate of Trustees and "FOR" each of the other
matters discussed in the proxy statement.
YOUR VOTE IS IMPORTANT. TO ASSURE YOUR REPRESENTATION AT THE MEETING,
PLEASE VOTE BY SIGNING AND DATING THE ENCLOSED PROXY AND RETURNING IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE OR FAXING IT TO (513) _________, WHETHER OR NOT YOU
EXPECT TO BE PRESENT AT THE MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE
YOUR PROXY AND VOTE YOUR SHARES IN PERSON.
Very truly yours,
Robert H. Leshner
President
<PAGE>
COUNTRYWIDE INVESTMENT TRUST
NOTICE TO SPECIAL MEETING OF SHAREHOLDERS
To Be Held on October 27, 1999
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of
Countrywide Investment Trust (the "Trust") will be held in the 10th Floor
Conference Center at 312 Walnut Street, Cincinnati, Ohio 45202, on Wednesday,
October 27, 1999 at 10:00 a.m., Eastern time, to consider and vote on the
following matters:
1. Approval of new management agreements with Countrywide Investments, Inc.,
to become effective upon the closing of the proposed acquisition of
Countrywide Financial Services, Inc. by Fort Washington Investment
Advisors, Inc. NO FEE INCREASE IS PROPOSED.
2. Election of nine trustees to serve until their successors are duly elected
and qualified.
3. Ratification of the selection of Arthur Andersen LLP as the Trust's
independent public accountants for the fiscal year ending September 30,
1999. NO CHANGE IN ACCOUNTANTS IS PROPOSED.
4. Transaction of any other business, not currently contemplated, that may
properly come before the meeting or any adjournment thereof.
Shareholders of record at the close of business on September 16, 1999 are
entitled to notice of and to vote at this meeting and any adjournment thereof.
By order of the Board of Trustees,
Tina D. Hosking, Secretary
September ____, 1999
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, PLEASE VOTE BY SIGNING AND DATING
THE ENCLOSED PROXY AND RETURNING IT PROMPTLY IN THE ACCOMPANYING ENVELOPE OR BY
FAXING IT TO (513) _________, WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING. IF YOU ATTEND THE MEETING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR
SHARES IN PERSON.
<PAGE>
COUNTRYWIDE INVESTMENT TRUST
312 Walnut Street
21st Floor
Cincinnati, Ohio 45202
------------
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on October 27, 1999
------------
PROXY STATEMENT
------------
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Countrywide Investment Trust (the "Trust")
for use at the special meeting of shareholders to be held at 10:00 a.m. on
Wednesday, October 27, 1999, and at any adjournment(s) thereof. The meeting will
be held in the 10th Floor Conference Center at 312 Walnut Street, Cincinnati,
Ohio 45202. This proxy statement and form of proxy were first mailed to
shareholders on or about September __, 1999.
Fort Washington Investment Advisors, Inc. ("Fort Washington") has agreed to
buy all of the outstanding stock of Countrywide Financial Services, Inc.,
("CFS"), the parent company of Countrywide Investments, Inc. (the "Adviser"). If
the sale is completed, the Adviser will become a wholly-owned, indirect
subsidiary of Fort Washington. As a result, the shareholders are being asked to
consider the following proposals:
1. Approval of new management agreements for each fund of the Trust with the
Adviser, to become effective upon the closing of the proposed acquisition
of CFS by Fort Washington.
2. Election of nine trustees to serve until their successors are duly elected
and qualified.
3. Ratification of the selection of Arthur Andersen LLP as the Trust's
independent public accountants for the Funds' fiscal year ending September
30, 1999.
4. Transaction of any other business, not currently contemplated, that may
properly come before the meeting or any adjournment thereof.
<PAGE>
PROPOSAL 1 - NEW MANAGEMENT
AGREEMENTS WITH COUNTRYWIDE INVESTMENTS, INC.
BACKGROUND
- ----------
CFS (the Adviser's parent company) is currently owned by Countrywide Credit
Industries, Inc. On August 24, 1999, Countrywide Credit Industries, Inc. entered
into an agreement to sell all of the stock of CFS to Fort Washington (the
"Acquisition"). Countrywide Fund Services, Inc., the Trust's administrator,
transfer agent and accounting and pricing agent, is a wholly-owned subsidiary of
CFS. As a result of the Acquisition, the Adviser and Countrywide Fund Services,
Inc. will become wholly-owned, indirect subsidiaries of Fort Washington. It is
anticipated that the closing will occur immediately following the shareholder
meeting. The Acquisition is subject to the satisfaction of various conditions,
including, but not limited to, the following:
1. The Board of Trustees of the Trust, Countrywide Strategic Trust and
Countrywide Tax-Free Trust (collectively, the "Trusts") must approve
new management agreements with the Adviser for each mutual fund within
the three trusts (collectively, the "Countrywide Funds").
2. The shareholders of each Countrywide Fund must approve a new
management agreement with the Adviser.
3. A new Board of Trustees (the composition of which is satisfactory to
Fort Washington) must be elected by the shareholders of each
Countrywide Trust.
Under the Investment Company Act of 1940, as amended (the "Investment
Company Act"), a transaction which results in a change of control or management
of an investment adviser may be deemed an "assignment." The Investment Company
Act further provides that an investment advisory agreement will automatically
terminate in the event of its assignment. The Acquisition constitutes a "change
in control" of the Adviser for purposes of the Investment Company Act of 1940
and will cause the "assignment" and resulting termination of the present
investment advisory agreements.
Section 15(f) of the Investment Company Act provides that, when a change in
the control of an investment adviser occurs, the investment adviser or any of
its affiliated persons may receive any amount or benefit in connection therewith
if the following two conditions are satisfied:
(1) An "unfair burden" must not be imposed on the investment company as a
result of the transaction relating to the change of control, or any
express or implied terms, conditions or understandings applicable
thereto. The term "unfair burden" includes any arrangement during the
two-year period after the change in control whereby the investment
adviser (or predecessor or successor adviser), or any interested
person of any such adviser, receives or is entitled to receive any
compensation, directly or indirectly, from the investment company or
its security holders (other than fees for bona fide investment
advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from, or on
behalf of the investment company (other than fees for bona fide
principal underwriting services). No such compensation arrangements
are contemplated as a result of the Acquisition.
2
<PAGE>
(2) During the three-year period immediately following consummation of the
transaction, at least 75% of the Trust's Board of Trustees must not be
"interested persons" of the investment adviser or predecessor
investment adviser within the meaning of the Investment Company Act.
THE PRESENT MANAGEMENT AGREEMENTS.
- ----------------------------------
The Adviser currently provides investment advisory services to each Fund of
the Trust pursuant to six separate management agreements between the Trust and
the Adviser. The management agreements for the Short Term Government Income
Fund, Intermediate Term Government Income Fund, Adjustable Rate U.S. Government
Securities Fund, Money Market Fund, Intermediate Bond Fund and Institutional
Government Income Fund are substantially identical to each other in all
respects. The agreements require the Adviser to furnish an investment program
for the applicable Fund and to determine which securities to purchase and sell
and what portion of the Fund's assets to keep uninvested. Each of the current
management agreements were last approved by shareholders of each Fund and took
effect on February 28, 1997. The agreements were submitted to shareholders in
1997 because the Adviser was being acquired by Countrywide Credit Industries,
Inc. The present management agreements were last approved by the Board of
Trustees, including a majority of the Trustees who are not interested persons,
as defined in the 1940 Act, of the Adviser or the Trust (the "Independent
Trustees"), on February 9, 1999.
THE NEW MANAGEMENT AGREEMENTS.
- ------------------------------
Each Fund will enter into a separate new management agreement with the
Adviser. The terms and conditions of the new management agreements are
substantially identical in all material respects to those of the present
management agreements with the exception of a change in the effective date and
the termination date.
Under the new management agreements, the Adviser will select portfolio
securities for investment by the Funds, purchase and sell securities of the
Funds, and upon making any purchase or sale decision, place orders for the
execution of such portfolio transactions, all in accordance with the Investment
Company Act and any rules thereunder, the supervision and control of the Board
of Trustees of the Trust, such specific instructions as the Board of Trustees
may adopt and communicate to the Adviser and the investment objectives, policies
and restrictions of each Fund.
The Adviser will receive from the Institutional Government Income Fund a
fee at an annual rate of 0.20% of the average daily net assets of the Fund. The
Adviser will receive from each of the other Funds a fee at an annual rate of
0.50% of the average daily net assets of the Fund up to $50 million; 0.45% of
such assets from $50 million to $150 million; 0.40% of such assets from $150
million to $250 million; and 0.375% of such assets in excess of $250 million.
These are the same fees that the Adviser currently receives from each Fund under
its present management agreement.
During the fiscal year ended September 30, 1998, the Short Term Government
Income Fund, Intermediate Term Government Income Fund, Adjustable Rate U.S.
Government Securities Fund, Money Market Fund, Intermediate Bond Fund and
Institutional Government Income Fund paid to the Adviser advisory fees (net of
voluntary fee waivers) of $________, $________, $________ and $_______,
respectively. There is no assurance that any fee for waivers will continue in
the future.
3
<PAGE>
If a new management agreement is approved by shareholders of a Fund, the
new management agreement will become effective when the Acquisition is
completed. Each new management agreement provides that it will remain in force
for an initial term of two years, and from year to year thereafter, subject to
annual approval by (a) the Board of Trustees or (b) a vote of a majority (as
defined in the Investment Company Act) of the outstanding shares of the Fund;
provided that in either event continuance is also approved by a majority of the
Independent Trustees, by a vote cast in person at a meeting called for the
purpose of voting such approval. Each new management agreement may be terminated
at any time, on sixty days' written notice, without the payment of any penalty,
by the Board of Trustees, by a vote of the majority of the outstanding voting
securities of the applicable Fund, or by the Adviser. Each new management
agreement automatically terminates in the event of its assignment.
Each new management agreement provides that the Adviser shall not be liable
for any action taken or omitted to be taken by it in its reasonable judgment, in
good faith and believed by it to be authorized or within the discretion or
rights conferred upon it by such Agreement, or in accordance with specific
instructions from the Trust, provided that such acts or omissions shall not have
resulted from the Adviser's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the Adviser
in its actions under such Agreement, or breach of its obligations thereunder.
The form of the new management agreement for the Funds is attached as
Exhibit A. You should read the agreement. The description in this Proxy
Statement of the new management agreements is only a summary.
Approval of new management agreements by the shareholders of each Fund of
the Trust is a condition to the closing of the Acquisition. Fort Washington,
however, may elect to proceed with the closing of the Acquisition if the
shareholders of one or more Funds do not approve a new management agreement. If
this occurs and the Acquisition is completed, the present management agreements
will automatically terminate and, for those Funds whose shareholders have not
approved a new management agreement, the Board of Trustees will promptly take
such actions as they consider are in the best interests of the shareholders.
These actions could include (i) appointing an interim adviser to serve at cost
until such time as a management agreement is approved (and shareholders could be
asked to reconsider the new management agreement), or (ii) liquidating the Fund.
If the Acquisition is not completed for any reason, the Adviser will continue to
serve as the investment adviser of each Fund pursuant to the terms of the
present management agreements.
INFORMATION CONCERNING FORT WASHINGTON.
- ---------------------------------------
Fort Washington Investment Advisors, Inc., located at 420 East Fourth
Street, Cincinnati, Ohio 45202, is a wholly-owned subsidiary of The Western and
Southern Life Insurance Company, located at 400 Broadway, Cincinnati, Ohio
45202.
INFORMATION CONCERNING THE ADVISER.
- -----------------------------------
The Adviser is a wholly owned subsidiary of CFS. Both the Adviser and CFS
are located at 312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202. CFS is a
wholly-owned subsidiary of Countrywide Credit Industries, Inc., which is located
at 4500 Park Granada, Calabasas, California 91302. The Adviser
4
<PAGE>
also serves as the Trust's principal underwriter. If the Acquisition is
completed, the Adviser will continue to serve as the Trust's principal
underwriter pursuant to the terms of a new underwriting agreement which was
approved by the Board of Trustees, including a majority of the Independent
Trustees, on September 8, 1999. The new underwriting agreement may be terminated
by either party on sixty days written notice. During the fiscal year ended
September 30, 1998, the Short Term Government Income Fund, Intermediate Term
Government Income Fund, Adjustable Rate U.S. Government Securities Fund, Money
Market Fund, Intermediate Bond Fund and Institutional Government Income Fund
paid to the Adviser underwriting fees of $_______, $______, $______, $______,
$______ and $______, respectively.
The table below gives the name, address and principal occupation of each
current director and principal executive officer of the Adviser. If the
Acquisition is completed, different individuals may be elected to serve as
directors and officers of the Adviser.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS POSITION WITH ADVISER PRINCIPAL OCCUPATION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Angelo R. Mozilo Chairman/Director Chairman of Countrywide Home Loan, Inc.
4500 Park Granada
Calabasas, CA 91302
- ---------------------------------------------------------------------------------------------------------------------------
Robert H. Leshner President/Chief Executive President & CEO of CFS
312 Walnut Street Officer/Director
21 Floor
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------------
Andrew S. Bielanski Director Managing Director of Portfolio
4500 Park Granada Services of Countrywide Home Loan, Inc.
Calabasas, CA 91302
- ---------------------------------------------------------------------------------------------------------------------------
Thomas H. Boone Director Managing Director of Portfolio
4500 Park Granada Services of Countrywide Home Loan, Inc.
Calabasas, CA 91302
- ---------------------------------------------------------------------------------------------------------------------------
Marshall M. Gates Director Managing Director of Developing
4500 Park Granada Markets of Countrywide Home Loan, Inc.
Calabasas, CA 91302
- ---------------------------------------------------------------------------------------------------------------------------
William E. Hortz Executive Vice-President Executive Vice-President and Director
312 Walnut Street and Director of Sales of Sales of CFS
21 Floor
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------------
Maryellen Peretzky Senior Vice-President, Chief Senior Vice-President, Chief Administrative
312 Walnut Street Operating Officer and Secretary Officer and Secretary of CFS
21 Floor
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------------
5
<PAGE>
- ---------------------------------------------------------------------------------------------------------------------------
Terrie A. Wiedenheft First Vice-President, Chief First Vice-President, Chief Financial
312 Walnut Street Financial Officer and Treasurer Officer and Treasurer of CFS
21 Floor
Cincinnati, OH 45202
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Adviser serves as investment adviser to the affiliated registered
investment companies listed below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Name of Fund Net Assets as of Annual Advisory Fee
September 1, 1999 (as a percentage of assets)
- --------------------------------------------------------------------------------------------------------------
COUNTRYWIDE STRATEGIC TRUST
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Aggressive Growth Fund $___________ 1.00% of average daily net assets of
- -------------------------------------------------------------------- assets of each Fund up to $50 Million;
Growth/Value Fund $___________ .90% of the next $50 million million of
- -------------------------------------------------------------------- such assets; .80% of The next $100
Utility Fund $___________ million of such assets; and .75 of such
- -------------------------------------------------------------------- assets over $200 million.
Equity Fund $___________
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
Name of Fund Net Assets as of Annual Advisory Fee
September 1, 1999 (as a percentage of assets)
- --------------------------------------------------------------------------------------------------------------
COUNTRYWIDE TAX FREE TRUST
- --------------------------------------------------------------------------------------------------------------
Tax-Free Money Fund* $ 26,359,400
- --------------------------------------------------------------------
Ohio Insured Tax-Free Money Fund* 64,059,676 .50% of average daily net assets of each
- -------------------------------------------------------------------- Fund up to $100 million; .45% of such
California Tax-Free Money Fund 55,142,888 assets from $100 million to $200
- -------------------------------------------------------------------- million; .40% of such assets from $200
Florida Tax-Free Money Fund* 32,677,016 million to $300 million; and .375% of
- -------------------------------------------------------------------- such assets over $300 million.
Tax-Free Intermediate Term Fund 51,237,332
- --------------------------------------------------------------------
Ohio Tax-Free Money Fund* 425,515,326
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*During the 1999 fiscal year, the Adviser waived all or a portion of its
advisory fees for such Funds. There is no assurance that any fee waivers will
continue in the future.
INFORMATION CONCERNING COUNTRYWIDE FUND SERVICES, INC.
- ------------------------------------------------------
Countrywide Fund Services, Inc., an affiliate of the Adviser, provides
transfer agency, shareholder servicing and accounting and pricing services to
the Funds. The address of Countrywide Fund Services, Inc. is 312 Walnut Street,
21st Floor, Cincinnati, Ohio 45202. During the fiscal year ended September 30,
1998, it received fees from the Funds for its services as transfer and
shareholder servicing agent and accounting and pricing services agent as
follows:
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<PAGE>
As Transfer and As Accounting and
Shareholder Pricing Services
----------- ----------------
Short Term Government Income Fund $________ $________
Intermediate Term Government Income Fund $________ $________
Adjustable Rate U.S. Government
Securities Fund $________ $________
Money Market Fund $________ $________
Intermediate Bond Fund $________ $________
Institutional Government Income Fund $________ $________
Countrywide Fund Services, Inc. is retained by the Adviser to assist the
Adviser in providing administrative services to the Funds. In this capacity,
Countrywide Fund Services, Inc. supplies executive, administrative and
regulatory services, supervises the preparation of tax returns, and coordinates
the preparation of reports to shareholders and reports to and filings with the
Securities and Exchange Commission and state securities authorities. The Adviser
(not the Funds) pays Countrywide Fund Services, Inc. [a fee of $37,500 per month
for these services, which is split equally among the Trust, Countrywide
Strategic Trust and Countrywide Tax-Free Trust.]
If the Acquisition is completed, Countrywide Fund Services, Inc. will
continue to provide transfer agent, accounting and pricing and administrative
services to the Trust at the same rates as are currently in effect, pursuant to
new service agreements which were approved by the Board of Trustees, including a
majority of the Independent Trustees, on September 8, 1999. Either party may
terminate the new service agreements on sixty days written notice.
EVALUATION BY THE BOARD OF TRUSTEES.
- ------------------------------------
On September 8, 1999, the Board of Trustees, including all of the
Independent Trustees, by vote cast in person, unanimously approved, subject to
the required shareholder approval described herein, the new management
agreements. Prior to such approval, the Independent Trustees met separately with
their counsel, who did not represent Countrywide Credit Industries, Inc. or Fort
Washington and/or their affiliates, to advise them with respect to their
responsibilities under state and federal law in reaching a determination with
respect to the new management agreements and related matters. In addition to
their attendance at the Board of Trustees' meetings held on August 25 and
September 8, 1999, the Independent Trustees met separately with their counsel on
August 24, August 25, September 7 and September 8, 1999 for the purpose of
assisting them in reaching a determination with respect to the new management
agreements. In conducting their evaluation, the Independent Trustees reviewed
and discussed various materials provided on behalf of Fort Washington by The
Western and Southern Life Insurance Company or its affiliates ("Western
Southern") at the request of the Independent Trustees and other relevant
information.
7
<PAGE>
Included among these materials were: (i) financial statements of Western
Southern; (ii) information concerning the personnel and operations of Western
Southern; (iii) biographical information concerning the directors and officers
of Western Southern, the proposed Trustees for the Trust, and the investment
management personnel of Western Southern; (iv) forms of proposed investment
advisory agreements, underwriting agreements, distribution plans and related
agreements to be adopted by the Funds and a comparison of such agreements and
plans with those currently in effect for the Funds; (v) information concerning
the marketing capabilities of Western Southern; (vi) incentives being offered to
assure that key personnel will be retained; (vii) information pertaining to the
composition of the Funds' investment portfolios and any proposed changes in
investment practices or techniques following consummation of the transaction;
(viii) information pertaining to proposed advisory fees, Fund expenses and
proposed servicing arrangements with the Funds' service providers; (ix) data
concerning historical performance of Western Southern's proprietary funds; (x) a
description of the brokerage allocation and soft dollar practices with respect
to Western Southern's proprietary funds; and (xi) information pertaining to
Western Southern's Year 2000 readiness.
On September 8, 1999, the Board of Trustees of the Funds, including all of
the Independent Trustees, approved the new management agreements, subject to
shareholder approval. In determining to recommend approval of the new management
agreements to shareholders, the Independent Trustees, separately, and the entire
Board of Trustees considered the following factors, among others:
(1) Countrywide Credit Industries, Inc.'s desire to provide its customers with
a wider variety of investment products through alliances with multiple
providers rather than continue operating a proprietary family of funds and
its intention to reduce the extent and scope of its investment company
service business;
(2) Western Southern's commitment to the development and expansion of its
investment advisory business;
(3) the management fees and management services to be performed under the new
management agreements are the same as those under the existing management
agreements, and the other terms of the agreements are identical in all
material respects, except for the dates of their execution, effectiveness
and termination;
(4) there are no changes contemplated in the objectives and policies of the
Funds, and the proposed transaction will not materially affect the level or
quality of advisory services currently provided to the Funds;
(5) the possibility that sales of shares of the Funds will be enhanced by
Western Southern's reputation, distribution capabilities and financial
resources following consummation of the proposed transaction, and that such
growth may result in economies of scale that will benefit the shareholders
in the form of lower expense ratios;
(6) the fact that Western Southern has agreed that it will use its best efforts
to satisfy the provisions of Section 15(f) of the Investment Company Act;
(7) the performance of the Funds as compared to similar mutual funds and other
comparable indices; and
(8) the fact that the Funds will not bear the expenses of the transaction or
any of the costs of preparing and mailing proxy materials to shareholders.
As a result of their considerations, the Board of Trustees, including all
of the Independent Trustees, determined that the new management agreements would
be in the best interests of the Funds
8
<PAGE>
and their shareholders. Accordingly, the Board of Trustees, by separate vote of
the Independent Trustees and the entire Board of Trustees, unanimously approved
the new management agreements and voted to recommend them to shareholders for
approval.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS APPROVE THE NEW MANAGEMENT
AGREEMENTS.
PROPOSAL 2 - ELECTION OF TRUSTEES TO SERVE
UPON CONSUMMATION OF THE ACQUISITION
On September 8, 1999, all of the Independent Trustees met to review
pertinent information on the nominees for election to the Board of Trustees. At
such meeting, the Independent Trustees, who were represented by their counsel
for the purpose of assisting them in reaching a determination with respect to
the nominees, determined that Mr. Lerner and Mr. Robertson would meet in person
with candidates proposed for election to the Board of Trustees by Fort
Washington and report thereon to all of the Independent Trustees. On September
__, 1999, the Independent Trustees held a meeting at which the Independent
Trustees reviewed the backgrounds and qualifications of the proposed nominees.
Following a full discussion, the Independent Trustees selected the nine persons
proposed for election at this meeting. Thereafter, the full Board of Trustees,
based upon the selection and recommendation of the Independent Trustees,
nominated such persons for election as Trustees.
Six individuals not currently serving on the Board of Trustees have been
nominated to serve as Trustees, effective upon completion of the Acquisition. If
elected by shareholders, these individuals will serve together with three
members of the present Board of Trustees: Robert H. Leshner, H. Jerome Lerner
and Oscar P. Robertson. When the Acquisition is completed, Donald L. Bogdon,
M.D., Howard J. Levine, Angelo R. Mozilo, Fred A. Rappoport, John F. Seymour,
Jr. and Sebastiano Sterpa will no longer serve as Trustees. In the event the
Acquisition is not completed for any reason, the members of the present Board of
Trustees will continue to serve as Trustees.
Nine nominees are to be elected as Trustees, each to serve until his or her
successor is duly elected and qualified. The current Independent Trustees
reserve the right to substitute another person or persons of their choice as a
nominee or nominees if a nominee is unable to serve as a Trustee at the time of
the meeting for any reason. Nothing, however, indicates that such a situation
will arise. The following table sets forth certain information regarding each
nominee for election as a Trustee.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Name and Principal Occupation During the Age Trustee Amount of Beneficial Ownership of Compensation
Five Years and Directorships of Public Since Shares of the Trust (1) for the Year
Companies Ended September
30, 1999
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
H. Jerome Lerner 61 1981 None
Principal of HJL Enterprises and
Chairman of Crane Electronics, Inc. (a
manufacturer of electronic connectors).
He is also a Trustee of Countrywide
Strategic Trust and Countrywide
Investment Trust.
- -----------------------------------------------------------------------------------------------------------------------------
Robert H. Leshner* 60 1981 _________ shares of the ____ Fund
President and a director of Countrywide (___% of the _____ Fund)
Investments, Inc. (the Adviser of the
Trust), Countrywide Financial Services,
Inc. (a financial services company and
parent of Countrywide Investments, Inc.,
Countrywide Fund Services, Inc. and CW
Fund Distributors, Inc.), Countrywide
Fund Services, Inc. (a registered
transfer agent) and CW Fund
Distributors, Inc. (a registered
broker-dealer). He is also President and
a Trustee of Countrywide Strategic Trust
and Countrywide Investment Trust.
- -----------------------------------------------------------------------------------------------------------------------------
9
<PAGE>
- -----------------------------------------------------------------------------------------------------------------------------
Oscar P. Robertson*** 60 1981 ________ shares of the ____ Fund
President of Orchem Corp. (a chemical (___% of the Fund);
specialties distributor) and Orpack ________ shares of the ____ Fund
Stone Corporation (a corrugated box (___% of the Fund).
manufacturer). He is also a Trustee of
Countrywide Investment Trust and
Countrywide Strategic Trust.
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
_____________________
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Voting and investment power as of ________, 1999.
* Robert H. Leshner, as an affiliated person of Countrywide Investments,
Inc., the Trust's investment adviser and principal underwriter, is an
"interested person" of the Trust within the meaning of Section
2(a)(19) of the 1940 Act. Mr. Leshner may directly or indirectly
receive benefits from the new management agreements as a result of
such affiliation. Prior to the acquisition of CFS by Countrywide
Credit Industries, Inc. in 1997, Mr. Leshner was the controlling
shareholder of CFS and indirectly controlled the Adviser and
Countrywide Fund Services, Inc. [Indicate each nominee who is an
interested person.]
** The percentage of shares of a Fund owned beneficially by the nominee
does not exceed one percent of the outstanding shares of such Fund.
*** On February 2, 1996, an involuntary petition under Chapter 7 of the
U.S. Bankruptcy Code was filed by creditors against Orchem, Inc., of
which Mr. Robertson was the chief executive officer. The case was
subsequently converted to a Chapter 11 bankruptcy and is still pending
in the U.S. Bankruptcy Court.
All nominees have consented to being named in this proxy statement and have
agreed to serve if elected. Each nominee is also standing for election as a
trustee of Countrywide Strategic Trust and Countrywide Tax-Free Trust. Trustees
on the Board who are not interested persons of the Trust currently receive a
quarterly retainer of $1,500, plus $1,500 for each Board meeting attended. These
fees are split equally among the Trust, Countrywide Strategic Trust and
Countrywide Tax-Free Trust.
The Trust has an Audit Committee currently consisting of H. Jerome
Lerner, Oscar P. Robertson and Sebastiano Sterpa. If all of the nominees to
serve on the Board are elected by shareholders, it is
10
<PAGE>
anticipated that the Audit Committee will consist of ______ nominees for
election as trustees who are not interested persons of the Trust, the Adviser or
the Sub-Adviser. The Audit Committee makes recommendations to the Board of
Trustees concerning the selection of the Trust's independent public accountants,
reviews with such accountants the scope and results of the Trust's annual audit,
reviews the annual and semiannual financial reports of the Trust and considers
any comments which the accountants may have regarding the Trust's financial
statements or books of account. Audit Committee members receive no additional
compensation for attending an Audit Committee meeting. The Trust has no standing
nominating or compensation committee.
During the fiscal year ended September 30, 1998, the Board of Trustees and
the Audit Committee each held ______ meetings. During such fiscal year, each
Trustee attended at least 75% of the aggregate of (i) the total number of
meetings of the Board of Trustees (held during the period during which he has
been a trustee) and (ii) the total number of meetings held by any committee of
the Board of Trustees on which he served.
11
<PAGE>
EXECUTIVE OFFICERS.
- -------------------
The Trust's executive officers are set forth below. The business address of
each current officer is 312 Walnut Street, 21st Floor, Cincinnati, Ohio 45202.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
NAME AND PRINCIPAL OCCUPATION DURING THE PAST FIVE YEARS AGE OFFICER SINCE POSITION WITH
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
<S> <C> <C> <C>
ANGELO R. MOZILO 60 Chairman
Chairman, Director and Chief Executive Officer of Countrywide Credit Industries,
Inc. (a holding company). He is Chairman and director of Countrywide Home Loans,
Inc. (a residential mortgage lender), Countrywide Financial Services, Inc.,
Countrywide Investments, Inc., Countrywide Fund Services, Inc., CW Fund
Distributors, Inc., Countrywide Servicing Exchange (a loan servicing broker),
Countrywide Lending Corporation and Countrywide Capital Markets, Inc. (parent
company). He is also a director of CMM Municipal Services, Inc. (a tax lien
purchaser), CTC Real Estate Services Corporation ( a foreclosure trustee),
LandSafe, Inc. (parent company) and various LandSafe, Inc. subsidiaries which
provide property appraisals, credit reporting services, home inspection
services, flood zone determination services, title insurance and/or closing
services for residential mortgages.
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
ROBERT H. LESHNER 60 President
President and director of Countrywide Investments, Inc. (the investment adviser
and principal underwriter of the Trust), Countrywide Financial Services, Inc. (a
financial services company and parent of Countrywide Investments, Inc.,
Countrywide Fund Services, Inc. and CW Fund Distributors, Inc.), Countrywide
Fund Services, Inc. (a registered transfer agent) and CW Fund Distributors, Inc.
(a registered broker-dealer). He is also President and a Trustee of Countrywide
Tax-Free Trust and Countrywide Investment Trust, registered investment
companies.
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
MARYELLEN PERETZKY 47 Vice President
Senior Vice President, Chief Operating Officer and Secretary of Countrywide
Investment, Inc. and Senior Vice President and Secretary of Countrywide
Financial Services, Inc., Countrywide Fund Services, Inc. and CW Fund
Distributors, Inc. She is also Vice President of Countrywide Investment Trust
and Countrywide Tax-Free Trust.
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
WILLIAM E. HORTZ 41 Vice President
Executive Vice President and Director of Sales of Countrywide Investments, Inc.
and Countrywide Financial Services, Inc. He is also Vice President of
Countrywide Investment Trust and Countrywide Strategic Trust. From 1996 until
1998, he was President of Peregrine Asset Management (an investment adviser).
From 1991 until 1996, he was Regional Director of Neuberger & Berman Management
(an investment adviser).
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
TINA D. HOSKING 31 Secretary
Associate General Counsel and Assistant Vice President of Countrywide Fund
Services, Inc. and CW Fund Distributors, Inc. She is also Secretary of
Countrywide Investment Trust and Countrywide Tax-Free Trust.
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
THERESA M. SAMOCKI 29 Treasurer
Assistant Vice President-Fund Accounting Manager of Countrywide Fund Services,
Inc. and CW Fund Distributors, Inc. She is also Treasurer of Countrywide
Investment Trust and Countrywide Tax-Free Trust.
- -------------------------------------------------------------------------------------- ------- --------------- ----------------
</TABLE>
12
<PAGE>
PROPOSAL 3 - RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP has been selected by vote of the Board of Trustees,
including a majority of the Independent Trustees, as the Trust's independent
public accountants for the current fiscal year ending September __, 2000. The
employment of Arthur Andersen LLP is conditioned upon the right of the Trust, by
a vote of a majority of its outstanding shares, to terminate the employment
without any penalties.
Arthur Andersen LLP has acted as the Trust's independent public accountants
since [1983]. If the Trust's shareholders do not ratify the selection of Arthur
Andersen LLP, other certified public accountants will be considered for
selection by the Board of Trustees. Ratification of the accountants is not a
condition precedent to the completion of the Acquisition.
Representatives of Arthur Andersen LLP are not expected to be present at
the meeting although they will have an opportunity to attend and to make a
statement, if they desire to do so. If representatives of Arthur Andersen LLP
are present, they will be available to respond to appropriate questions from
shareholders
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS RATIFY THE SELECTION OF
ARTHUR ANDERSEN LLP.
THE PROXY
The Board of Trustees solicits proxies so that each shareholder has the
opportunity to vote on each proposal to be considered at the meeting. A proxy
for voting your shares at the meeting is enclosed. Your proxy, if properly
executed, duly returned and not revoked, will be voted according to the
instructions on the proxy. A proxy which is properly executed that has no voting
instructions with respect to a proposal will be voted for that proposal. In
addition, proxies will be voted in the discretion of the proxy holders, in
accordance with the recommendations of the Board of Trustees, if any, on any
matter to come before the meeting that the Trust did not have notice of a
reasonable time prior to the mailing of this Proxy Statement. You may revoke
your proxy at any time before it is exercised by (1) filing a written
notification of revocation with the Secretary of the Trust, (2) submitting a
proxy bearing a later date, or (3) attending and voting at the meeting.
COST OF SOLICITATION
The Trust has retained Management Information Systems ("MIS") to solicit
proxies for the special meeting. MIS is responsible for printing proxies,
mailing proxy material to shareholders, soliciting brokers, custodians, nominees
and fiduciaries, tabulating the returned proxies and performing other proxy
solicitation services. The anticipated cost of such services is approximately
$_______, and will be paid by [the Adviser]. [The Adviser] will also pay the
printing, postage and any other costs of the solicitation.
In addition to solicitation through the mail, proxies may be solicited by
officers, employees and agents of the Trust without cost to the Trust. Such
solicitation may be by telephone, facsimile or otherwise. [The Adviser] will
reimburse brokers, custodians, nominees and fiduciaries for the reasonable
13
<PAGE>
expenses incurred by them in connection with forwarding solicitation material to
the beneficial owners of shares held of record by such persons.
OUTSTANDING SHARES AND VOTING REQUIREMENTS
RECORD DATE
- -----------
The Board of Trustees has fixed the close of business on September 16, 1999
as the record date for determining the shareholders entitled to notice of and to
vote at the special meeting of shareholders or any adjournment thereof. The
Trust is composed of six separate funds, the Short Term Government Income Fund,
Intermediate Term Government Income Fund, Adjustable Rate U.S. Government
Securities Fund, Money Market Fund, Intermediate Bond Fund and Institutional
Government Income Fund (individually a "Fund" and collectively, the "Funds"),
each of which is represented by a separate series of the Trust's shares. As of
the record date there were __________ shares of beneficial interest, no par
value, of the Trust outstanding, comprised of _____________ shares of the Short
Term Government Income Fund, ______________ shares of the Intermediate Term
Government Income Fund, _____________ shares of the Adjustable Rate U.S.
Government Securities Fund, _______________ shares of the Money Market Fund,
_______________ shares of the Intermediate Bond Fund and ________________ shares
of the Institutional Government Income Fund. All full shares of the Trust are
entitled to one vote, with proportionate voting for fractional shares.
QUORUM
- ------
[For Proposal 2, the presence, in person or by proxy, of more than 50% of
the outstanding shares of the Trust is necessary to constitute a quorum at the
meeting. For the other Proposals, the presence, in person or by proxy, of more
than 50% of the outstanding shares of a Fund is necessary to constitute a quorum
for that Fund.]
VOTING
- ------
The vote of a majority of the outstanding shares of a Fund is required for
approval of the new management agreement with respect to that Fund (Proposal 1
above). The vote of a majority of the outstanding shares for purposes of
Proposal 1 means the vote of the lesser of (1) 67% or more of the shares present
or represented by proxy at the meeting, if the holders of more than 50% of the
outstanding shares are present or represented by proxy, or (2) more than 50% of
the outstanding shares. The vote of a plurality of the Trust's shares
represented at the meeting is required for the election of Trustees (Proposal 2
above). The vote of a simple majority of the shares voted is required for the
ratification of the selection of Arthur Andersen LLP as the independent public
accountants for each Fund (Proposal 3 above).
If the meeting is called to order but a quorum is not represented at the
meeting, the persons named as proxies may vote the proxies which have been
received to adjourn the meeting to a later date. If a quorum is present at the
meeting but sufficient votes to approve the proposals described herein are not
received, the persons named as proxies may propose one or more adjournments of
the meeting to permit further solicitation of proxies. Any such adjournment will
require the affirmative vote of a majority of those shares represented at the
meeting in person or by proxy. The proxy holders will vote those proxies
received which voted in favor of the proposal in favor of such an adjournment
and will vote those proxies received which voted against the proposal against
any such adjournment. A shareholder vote may be
14
<PAGE>
taken on one or more of the proposals in this proxy statement prior to any such
adjournment if sufficient votes have been received and it is otherwise
appropriate. Abstentions and "broker non-votes" are counted for purposes of
determining whether a quorum is present but do not represent votes cast with
respect to a proposal. "Broker non-votes'" are shares held by a broker or
nominee for which an executed proxy is received by the Trust, but are not voted
as to one or more proposals because instructions have not been received from the
beneficial owners or persons entitled to vote and the broker or nominee does not
have discretionary voting power. Accordingly, "broker non-votes" and abstentions
effectively will be a vote against Proposal 1.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -----------------------------------------------
On September 16, 1999, the following persons owned 5% or more of the
outstanding shares of the Trust (or any Fund): [Insert charts with name of Fund,
beneficial owner name, amount and nature of beneficial ownership and % of Fund.]
The following table sets forth the shares of each Fund beneficially owned,
as of September 16, 1999, by the executive officers and Trustees of the Trust
who are not also nominees for election as Trustees:
[insert chart]
The Trustees of the Trust intend to vote all of their shares to elect the
proposed slate of Trustees and in favor of all other proposals. On the record
date, all nominees for election as trustees and officers as a group owned of
record or beneficially ________% of the outstanding shares of the [______] Fund
and [less than 1%] of the outstanding shares of each of the other Funds.
[No other person owned of record and, according to information available to
the Trust, no other person owned beneficially, 5% or more of the outstanding
shares of the Trust (or any Fund) on the record date. ]
SHAREHOLDER PROPOSALS
The Trust has not received any shareholder proposals to be considered for
presentation at the meeting. Under the proxy rules of the Securities and
Exchange Commission, shareholder proposals may, under certain conditions, be
included in the Trust's proxy statement and proxy for a particular meeting.
Under these rules, proposals submitted for inclusion in the Trust's proxy
material must be received by the Trust a reasonable time before the solicitation
is made. The fact that the Trust receives a shareholder proposal in a timely
manner does not insure its inclusion in its proxy material because there are
other requirements in the proxy rules relating to such inclusion. You should be
aware that annual meetings of shareholders are not required as long as there is
no particular requirement under the Investment Company Act which must be met by
convening such a shareholder meeting.
OTHER BUSINESS
The proxy holders have no present intention of bringing any matter before
the meeting other than those specifically referred to above or matters in
connection with or for the purpose of effecting the same. Neither the proxy
holders nor the Board of Trustees are aware of any matters which may be
presented by others. If any other business shall properly come before the
meeting, the proxy holders intend to vote thereon in accordance with their best
judgment.
15
<PAGE>
A COPY OF tHE TRUST'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED MARCH 31,
1999, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES, IS AVAILABLE AT NO CHARGE BY
MAKING A WRITTEN REQUEST DIRECTED TO MS. TINA D. HOSKING, SECRETARY, COUNTRYWIDE
STRATEGIC TRUST, 312 WALNUT STREET, 21ST FLOOR, CINCINNATI, OHIO 45202-4094, OR
BY CALLING THE TRUST NATIONWIDE TOLL-FREE AT 800-543-0407 OR IN CINCINNATI AT
(513) 629-2050.
By Order of the Board of Trustees,
Tina D. Hosking, Secretary
Date: September ___, 1999
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED REPLY ENVELOPE OR BY FAX TO (513) ________________.
16
<PAGE>
FORM OF
MANAGEMENT AGREEMENT TO:
TO: COUNTRYWIDE INVESTMENTS, INC.
312 Walnut Street
Cincinnati, Ohio 45202
Dear Sirs:
Countrywide Investment Trust (hereinafter referred to as the "Trust")
herewith confirms our agreement with you.
The Trust has been organized to engage in the business of an investment
company. The ______ Fund (the "Fund") has been established as a series of the
Trust. You have been selected to act as the investment adviser of the Fund and
to provide certain other services, as more fully set forth below, and you are
willing to act as such investment adviser and to perform such services under the
terms and conditions hereinafter set forth. Accordingly, the Trust agrees with
you as follows upon the date of the execution of this Agreement.
1. ADVISORY SERVICES
-----------------
You will regularly provide the Fund with such investment advice as you in
your discretion deem advisable and will furnish a continuous investment program
for the Fund consistent with its investment objectives and policies. You will
determine what securities shall be purchased for the Fund, what portfolio
securities shall be held or sold by the Fund, and what portion of the Fund's
assets shall be held uninvested, subject always to the Fund's investment
objectives, policies and restrictions, as each of the same shall be from time to
time in effect, and subject further, to such policies and instructions as the
Board of Trustees (the "Board") of the Trust may from time to time establish and
supply to you copies thereof. You will advise and assist the officers of the
Trust in taking such steps as are necessary or appropriate to carry out the
decisions of the Board and the appropriate committees of the Board regarding the
conduct of the business of the Trust.
2. ALLOCATION OF CHARGES AND EXPENSES
----------------------------------
You will pay the compensation and expenses of any persons rendering any
services to the Fund who are officers, directors, stockholders or employees of
your corporation and will make available, without expense to the Fund, the
services of such of your employees as may duly be elected officers or trustees
of the Trust, subject to their individual consent to serve and to any
limitations imposed by law. The compensation and expenses of any officers,
trustees and employees of the Trust who are not officers, directors, employees
or stockholders of your corporation will be paid by the Trust.
You will pay all advertising and promotion expenses incurred in connection
with the sale or distribution of the Fund's shares to the extent such expenses
are not assumed by the Fund under the Trust's Plans of Distribution Pursuant to
Rule 12b-1.
<PAGE>
The Fund will also be responsible for the payment of all other operating
expenses of the Fund, including fees and expenses incurred by the Fund in
connection with membership in investment company organizations, brokerage fees
and commissions, legal, auditing and accounting expenses, expenses of
registering shares under Federal and State securities laws, insurance expenses,
taxes or governmental fees, fees and expenses of the custodian, transfer,
shareholder service and dividend disbursing agent and accounting and pricing
agent of the Fund, expenses including clerical expenses of issue, sale,
redemption or repurchase of shares of the Fund, the fees and expenses of
trustees of the Trust who are not affiliated with you, the cost of preparing and
distributing reports and notices to shareholders, the cost of printing or
preparing prospectuses for delivery to the Fund's shareholders, the cost of
printing or preparing stock certificates or any other documents, statements or
reports to shareholders, expenses of shareholders' meetings and proxy
solicitations, such extraordinary or non-recurring expenses as may arise,
including litigation to which the Fund may be a party and indemnification of the
Trust's officers and trustees with respect thereto, or any other expense not
specifically described above incurred in the performance of the Fund's
obligations. All other expenses not assumed by you herein incurred by the Fund
in connection with the organization, registration of shares and operations of
the Fund will be borne by the Fund.
3. COMPENSATION OF THE ADVISER
---------------------------
For all of the services to be rendered and payments made as provided in
this Agreement, the Fund will pay you as of the last day of each month, a fee
equal to the annual rate of: ____________________.
The total fees payable during each of the first and second halves of each
fiscal year of the Trust shall not exceed the semiannual total of the daily fee
accruals requested by you during the applicable six month period. The average
value of net assets shall be determined pursuant to the applicable provisions of
the Declaration of Trust of the Trust or a resolution of the Board, if required.
If, pursuant to such provisions, the determination of net asset value of the
Fund is suspended for any particular business day, then for the purposes of this
paragraph, the value of the net assets of the Fund as last determined shall be
deemed to be the value of the net assets as of the close of the business day, or
as of such other time as the value of the Fund's net assets may lawfully be
determined, on that day. If the determination of the net asset value of the
Fund's shares has been suspended for a period including such month, your
compensation payable at the end of such month shall be computed on the basis of
the value of the net assets of the Fund as last determined (whether during or
prior to such month).
4. EXECUTION OF PURCHASE AND SALE ORDERS
-------------------------------------
In connection with purchases or sales of portfolio securities for the
account of the Fund, it is understood that you will arrange for the placing of
all orders for the purchase and sale of portfolio securities for the Fund's
accounts with brokers or dealers selected by you, subject to review of this
selection by the Board from time to time. You will be responsible for the
negotiation and the allocation of principal business and portfolio brokerage. In
the selection of such brokers or dealers and the placing of such orders, you are
directed at all times to seek for the Fund the best qualitative execution,
taking into account such factors as price (including the applicable brokerage
commission or dealer spread), the execution capability, financial responsibility
and responsiveness of the broker or dealer and the brokerage and research
services provided by the broker or dealer.
<PAGE>
You should generally seek favorable prices and commission rates that are
reasonable in relation to the benefits received. In seeking best qualitative
execution, you are authorized to select brokers or dealers who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to the Fund and/or the other accounts over
which you exercise investment discretion. You are authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if
you determine in good faith that the amount of the commission is reasonable in
relation to the value of the brokerage and research services provided by the
executing broker or dealer. The determination may be viewed in terms of either a
particular transaction or your overall responsibilities with respect to the Fund
and to accounts over which you exercise investment discretion. The Trust and you
understand that, although the information may be useful to the Fund and you, it
is not possible to place a dollar value on such information. The Board shall
periodically review the commissions paid by the Fund to determine if the
commissions paid over representative periods of time were reasonable in relation
to the benefits to the Fund.
Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc., and subject to seeking best qualitative execution, you
may give consideration to sales of shares of the Fund as a factor in the
selection of brokers and dealers to execute portfolio transactions of the Fund.
If any occasion should arise in which you give any advice to clients of
yours concerning the shares of the Fund, you will act solely as investment
counsel for such client and not in any way on behalf of the Trust. Your services
to the Fund pursuant to this Agreement are not to be deemed to be exclusive and
it is understood that you may render investment advice, management and other
services to others.
5. LIMITATION OF LIABILITY OF ADVISER
----------------------------------
You (including your directors, officers, shareholders, employees, control
persons and affiliates of any thereof) 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 matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from the reckless disregard by you of your
obligations and duties under this Agreement ("disabling conduct"). However, you
will not be indemnified for any liability unless (1) a final decision is made on
the merits by a court or other body before whom the proceeding was brought that
you were not liable by reason of disabling conduct, or (2) in the absence of
such a decision, a reasonable determination is made, based upon a review of the
facts, that you were not liable by reason of disabling conduct, by (a) the vote
of a majority of a quorum of trustees who are neither "interested persons" of
the Trust as defined in the Investment Company Act of 1940 nor parties to the
proceeding ("disinterested, non-party trustees"), or (b) an independent legal
counsel in a written opinion. The Fund will advance attorneys' fees or other
expenses incurred by you in defending a proceeding, upon the undertaking by or
on behalf of you to repay the advance unless it is ultimately determined that
you are entitled to indemnification, so long as you meet at least one of the
following as a condition to the advance: (1) you shall provide a security for
your undertaking, (2) the Fund shall be insured against losses arising by reason
of any lawful advances, or (3) a majority of a quorum of the disinterested,
non-party trustees of the Trust, or an independent legal counsel in a written
opinion, shall determine, based on a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe that you
ultimately will be found entitled to indemnification. Any person employed by you
who may also be or become an employee of the Trust shall be deemed, when acting
within the scope of his employment by the Trust, to be acting in such employment
solely for the Trust and not as your employee or agent.
<PAGE>
6. DURATION AND TERMINATION OF THIS AGREEMENT
------------------------------------------
This Agreement shall be effective upon its execution, shall remain in force
for a period of two (2) years from that date and remain in force from year to
year thereafter, subject to annual approval by (i) the Board of the Trust or
(ii) a vote of a majority (as defined in the Investment Company Act of 1940) of
the outstanding voting securities of the Fund, provided that in either event
continuance is also approved by a majority of the trustees who are not
"interested persons" (as defined in the Investment Company Act of 1940) of you
or of the Trust, by a vote cast in person at a meeting called for the purpose of
voting such approval.
If the shareholders of the Fund fail to approve the Agreement in the manner
set forth above, upon approval of the Board, including a majority of the
trustees who are not interested persons of you or of the Trust, you may continue
to serve or act in such capacity for the Fund for the period of time (not
exceeding one hundred and twenty days after the termination of the Agreement)
pending required approval of the Agreement, of a new agreement with you or a
different adviser or other definitive action; provided that the compensation to
be paid by the Fund to you will be equal to the lesser of your actual costs
incurred in furnishing investment advisory services to the Fund or the amount
you would have received under this Agreement.
This Agreement may, on sixty days' written notice, be terminated at any
time without the payment of any penalty, by the Board, by a vote of a majority
of the outstanding voting securities of the Fund or by you. This Agreement shall
automatically terminate in the event of its assignment.
7. AMENDMENT OF THIS AGREEMENT
---------------------------
No provision of this Agreement may be changed, waived, discharged or
terminated orally, and no amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Fund and by the Board, including a majority of the trustees
who are not interested persons of you or of the Trust, cast in person at a
meeting called for the purpose of voting on such approval.
8. LIMITATION OF LIABILITY
-----------------------
It is expressly agreed that the obligations of the Fund hereunder shall not
be binding upon any of the trustees, shareholders, nominees, officers, agents or
employees of the Trust, personally, but bind only the trust property of the
Fund, as provided in the Declaration of Trust of the Trust. The execution and
delivery of this Agreement have been authorized by the trustees of the Trust and
the shareholders of the Fund and signed by the officers of the Trust, acting as
such, and neither such authorization by such trustees and shareholders nor such
execution and delivery by such officers shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Fund as provided in the Trust's
Declaration of Trust.
<PAGE>
9. MISCELLANEOUS
-------------
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same Agreement.
If you are in agreement with the foregoing, please sign the form of
acceptance on the accompanying counterpart of this letter and return such
counterpart to the Trust, whereupon this letter shall become a binding contract
upon the date thereof.
Yours very truly,
ATTEST: COUNTRYWIDE INVESTMENT TRUST
____________________ By:_____________________________________
Dated:
ACCEPTANCE
The foregoing Agreement is hereby accepted.
ATTEST: COUNTRYWIDE INVESTMENTS, INC.
____________________ By:_____________________________________
Dated:
<PAGE>
PROXY
COUNTRYWIDE INVESTMENT TRUST
SPECIAL MEETING OF SHAREHOLDERS
October 27, 1999
The undersigned shareholder of Countrywide Investment Trust (the "Company")
hereby nominates, constitutes and appoints Robert H. Leshner and Maryellen
Peretzky, and each of them, the attorney, agent and proxy of the undersigned,
with full powers of substitution, to vote all the shares of the Trust which the
undersigned is entitled to vote at the Special Meeting of Shareholders of the
Trust to be held in the 10th Floor Conference Center, 312 Walnut Street,
Cincinnati, Ohio 45202, on Wednesday, October 27, 1999 at 10:00 a.m. and at any
and all adjournments thereof, as fully and with the same force and effect as the
undersigned might or could do if personally present as follows:
1. APPROVAL OF NEW MANAGEMENT AGREEMENT WITH COUNTRYWIDE INVESTMENTS,
INC.
|_| FOR |_| AGAINST |_| ABSTAIN
2. ELECTION OF THE NINE PERSONS BELOW TO SERVE AS TRUSTEES UNTIL THEIR
SUCCESSORS ARE ELECTED AND QUALIFIED:
Robert H. Leshner H. Jerome Lerner Oscar P. Robertson
_________ __________ _________ _________ _________
|_| AUTHORITY GIVEN |_| AUTHORITY WITHHELD
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR SOME BUT NOT ALL OF THE NOMINEES
NAMED ABOVE, YOU SHOULD CHECK THE BOX MARKED "AUTHORITY GIVEN" AND YOU SHOULD
ENTER THE NAME(S) OF THE NOMINEE(S) WITH RESPECT TO WHOM YOU WISH TO WITHHOLD
AUTHORITY TO VOTE IN THE SPACE PROVIDED BELOW:
- --------------------------------------------------------------------------------
3. RATIFICATION OF APPOINTMENT OF ARTHUR ANDERSEN LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1999.
|_| FOR |_| AGAINST |_| ABSTAIN
PLEASE SIGN AND DATE ON THE REVERSE SIDE
<PAGE>
THE BOARD OF TRUSTEES RECOMMENDS A VOTE OF "FOR" ON PROPOSALS 1 AND 3, AND
"AUTHORITY GIVEN" ON PROPOSAL 2. THE PROXY SHALL BE VOTED IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF TRUSTEES UNLESS A CONTRARY INSTRUCTION IS
INDICATED, IN WHICH CASE THE PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH
INSTRUCTIONS. ON OTHER MATTERS, IF ANY, PRESENTED AT THE MEETING, THIS PROXY
SHALL BE VOTED IN THE DISCRETION OF THE PROXY HOLDERS, IN ACCORDANCE WITH THE
RECOMMENDATIONS OF THE BOARD OF TRUSTEES, IF ANY.
_______________ DATED:___________, 1999 ____________________________________
Number of Shares (Please Print Your Name)
____________________________________
(Signature of Shareholder)
____________________________________
(Please Print Your Name)
____________________________________
(Signature of Shareholder)
(Please date this proxy and sign
your name as it appears on the
label. Executors, administrators,
trustees, etc. should give their
full titles. All joint owners
should sign.)
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUST'S BOARD OF TRUSTEES, AND MAY BE
REVOKED PRIOR TO ITS EXERCISE BY FILING WITH THE SECRETARY OF THE TRUST A
WRITTEN INSTRUMENT REVOKING THIS PROXY OR A DULY EXECUTED PROXY BEARING A LATER
DATE, OR BY APPEARING IN PERSON AND VOTING AT THE MEETING.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY.