VONTOBEL FUNDS, INC.
1500 Forest Avenue, Suite 223, Richmond, Virginia 23229
804-285-8211 * 800-527-9500 * Fax 804-285-8251
FILED VIA EDGAR
June 3, 1997
Filing Desk
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Vontobel Funds, Inc.
Sand Hill Portfolio Manager Fund (the "Fund")
File Nos 002-78931 & 811-03551
Preliminary Proxy Material
Gentlemen:
Pursuant to the requirements of Rule 14a-6(a) under the
Securities Exchange Act of 1934, submitted electronically via the
EDGAR system, is a preliminary copy of the proxy statement, notice
of meeting and form of proxy to be furnished to shareholders of the
above-referenced Fund in connection with a special meeting of
shareholders.
At the special meeting, shareholders will vote to approve or
disapprove an Agreement and Plan of Reorganization pursuant to
which the Fund will transfer all of its assets to a newly created
series of The World Funds, Inc.
Please direct questions and comments relating to this filing
to Michael V. Farrell, Esquire at (215) 564-8095 or, in his
absence, to Steven M. Felsenstein, Esquire at (215) 564-8074.
Very truly yours,
/s/ John Pasco, III
John Pasco, III
Enclosures
cc: Steven M. Felsenstein, Esquire
Michael V. Farrell, Esquire
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant
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 240.14a-11(c) or 240.14a-12
Vontobel Funds, 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 byr 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
VONTOBEL FUNDS, INC.
1500 Forest Avenue, Suite 223
Richmond, Virginia 23229
SAND HILL PORTFOLIO MANAGER FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
to be held on
[ ________, 1997 ]
Notice To Shareholders:
A special meeting of shareholders (the "Meeting") of Sand Hill Portfolio
Manager Fund (the "Fund") of Vontobel Funds, Inc. (the "Company") will be
held at 10:00 a.m. local time, on , 1997, at the office of
the Company at 1500 Forest Avenue, Richmond, Virginia, for the following
purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization (the
"Plan") pursuant to which the Fund will transfer all of its assets to
a newly-created series (the "New Fund") of The World Funds, Inc. (the
"World Funds"), in exchange for shares of common stock of the New
Fund, as set forth in the accompanying Proxy Statement,
including authorization for the directors of the Company to vote
shares of the New Fund acquired in the reorganization as provided in
the Plan.
2. To transact such other business as may properly come before the Meeting.
Shareholders of record at the close of business on May 30, 1997 are entitled
to vote at the Meeting or any adjournment thereof.
BY ORDER OF THE BOARD OF DIRECTORS
John Pasco, III
Chairman
___________, 1997
Richmond, Virginia
IMPORTANT
Whether or not you plan to attend the meeting, please mark your voting
instructions on the enclosed proxy and promptly date, sign and return it
in the enclosed envelope. No postage is required if mailed in the United
States. We ask your cooperation in helping the Fund by mailing your proxy
promptly.<PAGE>
VONTOBEL FUNDS, INC.
1500 Forest Avenue, Suite 223
Richmond, Virginia 23229
804-285-8211
___________________________
SAND HILL PORTFOLIO MANAGER FUND
___________________________
PROXY STATEMENT
Special Meeting of Shareholders
to be held on
________, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Vontobel Funds, Inc. (the
"Company") to be used at the Special Meeting of the Shareholders of the Sand
Hill Portfolio Manager Fund (the "Fund"), to be held at 10:00 a.m. local time
on , 1997, at the offices of the Company at 1500 Forest
Avenue, Richmond, Virginia, and at any adjournment thereof (such meeting and
any adjournment being referred to as the "Meeting"), for the purposes set
forth in the accompanying Notice of Meeting.
Proxies will be voted in accordance with the instructions contained
thereon. If no instruction is given, proxies that are signed and returned
will be voted in favor of the proposals. A shareholder may revoke his or
her proxy at any time before it is exercised by delivering a written notice
to the Fund expressly revoking such proxy, by executing and forwarding to
the Fund a subsequently dated proxy, or by attending the Meeting and voting
in person. This proxy statement and the accompanying form of proxy are being
first sent to shareholders on or about June , 1997. In the event that
at the time the Meeting is called to order a quorum is not present in person
or by proxy, the meeting may be adjourned to a later date to permit the Fund
to obtain a quorum. In the event a quorum is present but sufficient votes
in favor of the proposals have not been received, the Meeting may be
adjourned to solicit additional votes. In that event, only those proxies
that have been received which would be voted to approve the proposal will be
voted in favor of an adjournment, and those proxies that have been received
which would be voted against the proposals will be voted against the
adjournment.
As of the close of business on May 30, 1997, the record date fixed by the
Board of Directors for the determination of shareholders of the Fund entitled
to notice of and to vote at the Meeting (the "Record Date"), 563,722.387
shares of the Fund were outstanding. Each share is entitled to one vote.
The vote of the holders of a "majority of the outstanding voting
securities" of the Fund, as defined in the 1940 Act, represented at the
meeting in person or by proxy, is required for the approval of each proposal
("1940 Act Majority Vote"). A 1940 Act Majority Vote means the vote of (a)
at least 67% of the shares of the Fund present in person or by proxy, if more
than 50% of the shares of the Fund are represented at the meeting, or (b)
more than 50% of the outstanding shares of the Fund, whichever is less.
Under Maryland law, abstentions and broker non-votes will be included for
purposes of determining whether a quorum is present at the Meeting, but will
be treated as votes not cast and, therefore, would not be counted for purposes
of determining whether the proposals have been approved. No other business may
properly come before the Meeting.
The cost of solicitation, including preparing and mailing the proxy
materials, will be borne by the Fund's shareholder servicing agent, which
expects to be reimbursed for such costs by Vontobel USA Inc., which serves
as investment advisor to other series of the Company. In addition to
solicitations through the mails, employees of the Fund and the Fund's
investment advisor may solicit proxies by telephone, telegraph and personal
interviews. It is not anticipated that any of the foregoing persons will be
specially engaged for that purpose.
PRINCIPAL SHAREHOLDERS
As of the Record Date, the following are known by the Company to be
beneficial owners of more than five percent of the Fund's outstanding shares:
Number of Shares Percentage
Name & Address Beneficially Owned of Fund
National Financial Services 143,286.581 25.418%
One World Financial Ceter
200 Liberty St., 4th Floor
New York, N.Y. 10281-1003
Arthur & Anna Kull 48,851.210 8.666%
280 West Harvest Rund
Idaho Falls, ID 83404
Marianne Conley 33,880.832 6.010%
4860 Valley Forge Lane
Plymouth, MN 55442
TOTAL 226,018.623 40.094%
As of the Record Date, the Directors and executive officers of the
Company, as a group, beneficially owned less than 1% of the Fund's
outstanding shares.
Item 1. APPROVAL OR DISAPPROVAL OF THE PROPOSED
REORGANIZATION
On May 13, 1997, the Board of Directors of the Company approved an
AgreemenPlan of Reorganization (the "Plan") between the Company, on behalf of
the Fund, and The World Funds, Inc. (the "World Funds"), on behalf of the
Sand Hill Portfolio Manager Fund (the "New Fund), a series of the World
Funds. The Plan provides for the transfer of all of the assets
of the Fund to the New Fund solely in exchange for shares of common stock of
the New Fund and the assumption by the New Fund of all of the liabilities of
the Fund, followed by the pro-rata distribution of those shares, on the
closing date, to the holders of the Fund's shares (the "Reorganization").
The Company will liquidate the Fund promptly after the Reorganization.
A copy of the Plan is attached hereto as Exhibit A.
The New Fund will operate as a registered, open-end management investment
company with the same investment objective, policies and restrictions as the
Fund and, subject to approval by its Board of Directors and shareholders,
will enter into an investment advisory agreement with Sand Hill Advisors,
Inc. (the "Advisor") identical in all material respects to the Fund's
existing investment advisory agreement with the Advisor. Furthermore, the New
Fund intends to enter into administration, custody, distribution, pricing
and transfer agency agreements with the Fund's current service providers on
substantially the same terms as the Fund's existing agreements.
Reasons for the Reorganization
When the Fund was organized, it was one of four series of a registered
investment company called The World Funds, Inc. Two of the series were
advised by Vontobel USA Inc. ("VUSA"), and one series was advised by Newport
Fund Management, Inc. In the intervening period, that investment company
has changed its name to Vontobel Funds, Inc. to reflect the fact that six of
the seven series presently in operation or in organization are advised by
VUSA.
Due to the increase in the number of series of the Company which are
managed by VUSA (the "Vontobel Series"), management of the Fund considered
whether the efforts and attention applied to administrative and marketing
efforts on behalf of the Fund may be overshadowed by the corresponding
efforts on behalf of the Vontobel Series. Management concluded that, despite
efforts to avoid any adverse effect on the Fund, it would be in the
interest of shareholders of the Fund to become a part of a fund in which one
other group did not have a dominating role. They concluded that it would be
more efficient from an administrative standpoint to establish a separate
entity to focus on the needs of the Fund without the distractions arising
from operating the Vontobel Series.
Furthermore, management believes that reorganizing the Fund into an
entity separate from the Vontobel Series may open up additional distribution
channels for the New Fund's shares. For example, the New Fund might be able
to take advantage of different marketing opportunities without the
constraints which may be associated with being a series of the Company.
Background
The Fund is a series of the Company, an open-end, series investment
company currently comprised of the Fund and four other series, and has two
additional series "in registration" at the present time. The Company is a
corporation organized under the laws of the State of Maryland pursuant to
Articles of Incorporation filed in October 1983. The Advisor has served
as the investment advisor of the Fund since the Fund's inception in January
1995.
Procedures for the Reorganization
If approved by shareholders, the Reorganization will be accomplished in
the following manner: (i) the Company, on behalf of the Fund, will assign,
deliver and otherwise transfer all of the Fund's assets free and clear of
all liens and encumbrances to the New Fund, a series of the World Funds;
(ii) the New Fund, in exchange for the Fund's assets, will assume all of the
Fund's liabilities and will issue to the Fund a number of full and fractional
shares of beneficial interest in the New Fund ("New Fund Shares") equal to
the number of Fund shares then outstanding which are held by the Fund's
shareholders; and (iii) the Fund will distribute to each of its shareholders
a number of full and fractional New Fund Shares equal to the number of full
and fractional Fund shares held by that shareholder. Thereafter, the Company
will take all necessary steps to terminate the Fund promptly pursuant to the
provisions of the laws of the State of Maryland, and the Fund will not
conduct any business except in connection with its liquidation.
Subject to approval by shareholders, it is expected that the
Reorganization will be made effective at 4:00 p.m., Eastern time, on or about
_____________, 1997, or at such later time and date as the parties may
mutually agree (the "Closing Date"). The Closing Date shall not be earlier
than the date of effectiveness of the New Fund's registration statement under
the Securities Act of 1993, as amended. At any time before the Reorganization
is effective, the Company and the World Funds may agree to terminate the
Reorganization, and, if the Reorganization has not been made effective by
_____________, 1997, the Plan will automatically terminate on that date
unless a later date is agreed to by both the Company and the World Funds.
Upon approval of the Reorganization, the World Funds will issue the New
Fund Shares referred to in clause (ii) above. Pursuant to the Plan, and
prior to the distribution of such shares of the New Fund to the shareholders
of the Fund, the President of the Company, as the agent of the shareholders
of the Fund, will execute a Consent of Sole Shareholder: (a) approving the
election of the four directors of the Company listed herein as directors of the
World Funds, (b) approving the Investment Advisory Agreement between the New
Fund and Sand Hill Advisors, Inc. (see Approval of Investment Advisory
Agreement for the New Fund below), and (c) ratifying the selection of the
firm of Tait, Weller & Baker to serve as the independent accountants for the
World Funds.
Following the execution of the consent, an open account would be
established on the records of the New Fund in the name of each shareholder
of the Fund. The transfer agent will record in such account the number of
New Fund Shares equal to the number of shares of the Fund owned of record by
the shareholder at the Closing Date. Certificates, if any, for shares
of the Fund issued prior to the Reorganization would represent the same number
of outstanding shares of the New Fund following the Reorganization.
Shareholders with certificates should continue to safeguard them, as it will
be necessary to present such certificates for any transfer, exchange or
redemption. In the interest of economy and convenience, certificates
representing the New Fund Shares will not be physically issued.
The New Fund Shares that would be issued to the shareholders of the Fund
would have no asset-based sales charge or distribution or service fee under
Rule 12b-1 and would not be subject to any deferred sales charge on
redemption. Dividends and distributions payable on New Fund Shares to
shareholders electing to have such dividends and distributions reinvested
would be reinvested without a sales charge in additional New Fund Shares.
Subject to approval by its Board of Directors and shareholders, the New
Fund will enter into an investment advisory agreement with the Advisor (see
Approval of Investment Advisory Agreement for the New Fund below). The fee
payable to the Advisor under such management agreement and the terms and
conditions of the agreement will be the same as those provided in the Fund's
existing investment advisory agreement with the Advisor. The investment
advisory fees will continue to be payable at a rate of 1.00% per annum of the
first $100 million of the New Fund's average daily net assets and 0.75% per
annum of average daily net assets over $100 million.
The New Fund also will enter into servicing arrangements with the
entities which presently provide such services to the Company for the Fund.
It will execute an administrative services agreement with Commonwealth
Shareholder Services, Inc., a custodian agreement with Star Bank, a
distribution agreement with First Dominion Capital Corp., a fund accounting
agreement with Star Bank, a fund expense agreement with Commonwealth Shareholder
Services, Inc. and a transfer agency and dividend disbursing agent agreement
with Fund Services, Inc., in each case with substantially identical terms and
conditions as the Fund's existing agreements with such service providers.
The World Funds will also continue to make available to shareholders the
retirement vehicles which are now available to shareholders in the Fund.
Comparison of the Fund and the New Fund
Both the Company and the World Funds are corporations duly organized
under the laws of the State of Maryland. The funds are both governed by the
provisions of the Maryland General Corporation Law and the funds' respective
Articles of Incorporation and By-Laws, which are substantially the same in
all material respects. Each fund has been authorized by its Board of
Directors to establish separate series of shares and, pursuant to such
authority, the Company established the Fund and the World Funds established
the New Fund.
Each of the Company and the World Funds is managed under the direction
of its Board of Directors. The Board of Directors of the World Funds is
comprised of four of the five individuals who presently comprise the
Company's Board of Directors. Mr. Henry Schlegel, who has served as a
Director of the Company since February 1997, is an officer of VUSA, the
advisor to the Vontobel Series. He has indicated that his service on the Board
of the World Funds following the Reorganization would be inconsistent with
the purposes of the Reorganization. The remaining four directors have served
s Directors of the Company for periods commencing prior to the organization
of the Fund.
The Company is registered under the 1940 Act as an open-end, management
investment company, and the World Funds has filed registration and other
forms to be registered under the 1940 Act as an open-end, management
investment company. The Reorganization will not be implemented and completed
if such registration is not in effect. In conducting their operations
as registered investment companies, both funds are subject to the provisions of
the 1940 Act and rules and regulations of the U.S. Securities and Exchange
Commission thereunder.
The investment objective both of the Fund and of the New Fund is to
maximize total return consistent with allocating portfolio investments among
equity securities, debt securities and short term investments. Each fund
seeks to achieve its objective by investing in a mix of asset classes and
markets throughout the world and is subject to identical investment policies
and limitations. The Reorganization provides for the New Fund to be managed by
the Advisor using the same portfolio management strategies and techniques
that the Advisor employs in managing the Fund.
The expenses of operating the New Fund are not anticipated to be
materially different from those of the Fund. The principal cost of operating
the Fund is the investment advisory fee paid to the Advisor, which is based
upon the assets in the Fund. This fee will be payable by the New Fund at the
same rate as the Fund, and therefore will not change as a result of the
Reorganization. General costs of operating the Company, which are presently
assumed by all series of the Company, will be paid by the New Fund.
Shareholders of the New Fund will have voting rights that are identical
to the voting rights of the Fund's shareholders. They will have the right to
vote at regular and special meetings of the World Funds and the New Fund, as
and when held, for, among other things, election of directors, changes in
fundamental investment objectives, policies or restrictions;
ratification of the selection by the Directors of the independent accountants;
and such additional matters relating to the World Funds or the New Fund as
may be required by law to be submitted to shareholders. If, at any time,
less than a majority of the Directors holding office have been elected by
shareholders, the Directors then in office will call a shareholders' meeting
for the purpose of electing a Board of Directors. At any meeting of
shareholders called for such purpose by at least 10% of the holders of the
World Fund's outstanding shares, a Director may be removed by a vote of two-
thirds of the World Fund's outstanding shares. Like shares of series of the
Company, each whole share of the World Funds is entitled to one vote with each
fraction being entitled to a proportionate fractional vote. Neither fund has
cumulative voting rights with respect to the election of Directors.
Shareholders of the Fund may obtain copies of the Company and World
Funds' Articles of Incorporation and By-Laws without charge upon written
request to the Secretary of the Company and the World Funds.
Waiver of Investment Restriction
The Fund has a fundamental investment restriction, which may not be
changed without shareholder approval, under which it may not own more than 10%
of the outstanding voting securities of any one issuer.
Such restriction would otherwise prohibit the purchase by the Fund of
the initial shares of the New Fund, which is necessary to complete the
Reorganization (see Procedures for the Reorganization above). Accordingly, a
vote for the Fund's Reorganization will be deemed also a vote to authorize
the Company to acquire all of the voting shares of the New Fund to the
extent (and only to the extent) necessary to carry out the Fund's
Reorganization n the manner described above. Such purchase of the shares
will be made only for the purpose of completing the Reorganization and the
temporary waiver of the restriction will have no effect thereafter.
Federal Income Tax Consequences
It is anticipated that the Reorganization contemplated under the Plan
will be tax-free for federal tax purposes for the Company, the World Funds
and their respective shareholders. It is a condition of the Plan that the
Company and the World Funds receive an opinion of Stradley, Ronon, Stevens &
Young, LLP substantially to the effect that for federal income tax purposes:
(i) the acquisition of the assets and assumption of the liabilities of the Fund
by the New Fund in return for New Fund Shares followed by the distribution of
such shares to Fund shareholders will constitute a "reorganization" within
the meaning of Section 368(a)(1)(F) of the Internal Revenue Code (the
"Code"), and the Fund and the New Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by the Fund upon the exchange of its assets for
New Fund Shares and the assumption by the New Fund of the liabilities of the
Fund; (iii) the tax basis of the assets of the Fund received by the New Fund
will be the same as the tax basis of such assets in the hands of the
Fund immediately prior to the transfer; (iv) the New Fund's holding period for
the assets acquired from the Fund will include the period during which such
assets were held by the Fund; (v) no gain or loss will be recognized by the
New Fund upon the receipt of the assets of the Fund in exchange for New Fund
Shares and the assumption by the New Fund of the liabilities of the Fund;
(vi) no gain or loss will be recognized by the shareholders of the Fund upon
the receipt of New Fund Shares in exchange for their shares in the Fund as
part of the transaction; (vii) the basis of the New Fund Shares received by
the shareholders of the Fund will be the same as the basis of the shares of
the Fund exchanged therefor; and (viii) the holding period of the New Fund
Shares received by the shareholders of the Fund will include the holding period
of the shares of the Fund exchanged therefor, provided that at the time of
the exchange the shares of the Fund were held as capital assets; and as to
such other matters as the Company and the World Funds may reasonably request.
Approval of the Election of Four Directors of the New Fund
By voting in favor of the Plan, shareholders of the Fund will be
authorizing the Board of Directors of the Company, acting through the
Chairman of the Company on behalf of the shareholders of the New Fund, to
vote New Fund Shares issued in connection with the Reorganization in favor
of the election of the following four nominees as directors of the New
Fund: John Pasco, III, Samuel Boyd, Jr. William E. Poist and Paul M.
Dickinson. Certain information concerning the nominees is set forth below.
Each of the nominees has agreed to serve if elected, and if any of the
nominees is unavailable to serve for any reason, the persons named as proxies
will vote for a substitute nominee selected by the Company's Board of
Directors. The Company currently knows of no reason why any of the nominees
listed below would be unable or unwilling to serve if elected. All of the
nominees are currently directors of the Company.
Certain information regarding the nominees and the Fund's current
Directors and Executive Officers is set forth below:
Nominees for Director
Name and Position
with the New Fund<PAGE>
Principal Occupation for Past
5 Years<PAGE>
Age<PAGE>
Fund Shares
Owned Beneficially
May 15, 1997<PAGE>
Percent Owned
Beneficially
May 15, 1997<PAGE>
John Pasco III*
Chairman, Director and
Treasurer
<PAGE>
Treasurer and Director of
Commonwealth Shareholder
Services, Inc., the Company's
Administrator, since 1985.
Director, President and
Treasurer of Commonwealth
Capital Management, Inc. (a
registered Investment Advisor)
since 1983. Director and
shareholder of Fund Services,
Inc., the Company's Transfer
and Disbursing Agent, since
1987 and shareholder of
Commonwealth Fund
Accounting, Inc. which provides
bookkeeping services to Star
Bank. Mr. Pasco is also a
certified public accountant.
<PAGE>
52 2,000 0.35% Samuel Boyd, Jr.
Director<PAGE>
Manager of the Customer
Services Operations and
Accounting Division of the
Potomac Electric Power
Company. Mr. Boyd is also a
certified public accountant. <PAGE>
56 0.000 0.00%
<PAGE>
William E. Poist
Director<PAGE>
Financial and Tax consultant
through his firm Management
Consulting for Professionals.
Mr. Poist is also a certified
public accountant.<PAGE>
58 77.313 0.01% Paul M. Dickinson
Director<PAGE>
President of Alfred J. Dickinson,
Inc. Realtors<PAGE>
49 0.000 0.00%
* If elected to the Board, Mr. Pasco would be deemed an "interested person" of
the New Fund within the meaning of Section
2(a)(19) under the 1940 Act.
Current Directors and Officers of the Fund
Name<PAGE>
Position Age Position Since Principal
Occupation
or Employment<PAGE>
Shares Owned
Beneficially
May 30, 1997<PAGE>
John Pasco, III* Chairman, Director
and Treasurer<PAGE>
52 1983 See "Nominees for
Director"<PAGE>
2.000
<PAGE>
Henry Schlegel* Director 44 1997 Director, President
and Chief Executive
Officer of Vontobel
USA, Inc., a
registered investment
adviser<PAGE>
0.000
<PAGE>
Samuel Boyd, Jr. Director 56 1983 See "Nominees for
Director"<PAGE>
0.000
<PAGE>
William E. Poist Director 58 1983 See "Nominees for
Director"<PAGE>
77.313
<PAGE>
Paul M. Dickinson Director 49 1987 See "Nominees for
Director"<PAGE>
0.000
<PAGE>
Jane H. Williams* President of the
Fund and a Vice
President of the
Company<PAGE>
49 1995 Executive Vice
President and a
Director of Sand Hill
Advisors, Inc.<PAGE>
10,476.528<PAGE>
F. Byron Parker, Jr.* Secretary 54 1986 Secretary of
Commonwealth
Shareholder Services,
Inc. since 1986.
Partner in the law
firm Mustian &
Parker<PAGE>
0.000
* Interested Person of the Fund as defined in Section 2(a)(19) of the 1940
Act.
During the fiscal year ended December 31, 1996, the Directors of the
Company received compensation from the Company, as follows:
Compensation Table<PAGE>
(1)
Name of Person
Position<PAGE>
(2)
Aggregate
Compensation
From Registrant<PAGE>
(3)
Pension or
Retirement
Benefits Accrued
As Part of Fund
Expenses<PAGE>
(4)
Estimated Annual
Benefits Upon
Retirement<PAGE>
(5)
Total
Compensation
From Registrant
and Fund
Complex Paid to
Directors<PAGE>
John Pasco, III
Director<PAGE>
$0 N/A N/A N/A
<PAGE>
Henry Schlegel
Director<PAGE>
$0 N/A N/A N/A
<PAGE>
Samuel Boyd, Jr.
Director<PAGE>
$8,000 N/A N/A N/A
<PAGE>
William E. Poist
Director<PAGE>
$8,000 N/A N/A N/A
<PAGE>
Paul M. Dickinson
Director<PAGE>
$8,000 N/A N/A N/A
Mr. Pasco, Chairman of the Board of the Company, owns 100% of the stock
of Commonwealth Shareholder Services Inc. ("CSS"), which serves as
administrator to the Company. For the fiscal year ended December 31, 1996,
CSS received $17,681 in administrators fees from the Fund. Mr. Pasco also
owns 100% of the stock of First Dominion Capital Corp. which acts as the
principal underwriter for the company.
Approval of Investment Advisory Agreement for the New Fund
By voting in favor of the Plan, shareholders of the Fund will be
authorizing the Board of Directors of the Company, acting through the
Chairman of the Company on behalf of the shareholders of the New Fund, to
vote New Fund Shares issued in connection with the Reorganization in favor of
approval of the New Fund's Investment Advisory Agreement with the Advisor.
The Board of Directors selected the Advisor to continue as the investment
adviser to the Fund based upon the same factors which have supported the
continuation of the Fund's existing agreement with the Advisor, including the
investment performance of the Adviser in the past, the knowledge and
experience of the Adviser with respect to managing the types of portfolio
securities in which the Fund invests and the reasonableness of the Advisor's
fee.
The terms and conditions of the proposed Investment Advisory Agreement
(attached hereto as Exhibit B) are substantially identical in all material
respects to the existing agreement between the Fund and the Advisor, with
changes reflecting only matters such as the name of the parties, the date and
periods of the agreement and other non-material changes.
Existing Investment Advisory Agreement
The Fund's Investment Advisory Agreement with the Advisor is dated
December 29, 1994 and was renewed until January 31, 1998 by a vote of the
Company's Board of Directors at a meeting held for this purpose on January
20, 1997.
Pursuant to the Advisory Agreement, the Advisor provides the Fund with
investment advisory services, subject to the supervision of the Company's
Board of Directors, and with office space, and pays the ordinary and
necessary office and clerical expenses relating to investment research,
statistical analysis, supervision of its portfolio and certain other costs.
The Advisor also bears the cost of fees, salaries and other remuneration of
the Company's Directors, officers or employees who are officers, Directors,
or employees of the Advisor. The Fund is responsible for all other costs and
expenses, such as, but not limited to, brokerage fees and commissions in
connection with the purchase and sale of securities, legal, auditing,
bookkeeping and record keeping services, custodian and transfer agency fees
and other costs and fees of registration of, or filing of notice of, its
shares for sale under various state and Federal securities laws.
Under the Advisory Agreement, the Advisor is entitled to be paid monthly
compensation that is accrued daily at an annual rate of 1.00% of the average
daily net assets of the Fund. This fee is higher than that paid by many
investment companies. If the assets of the Fund exceed $100,000,000, the
Advisor is entitled to a fee for such assets computed at an annual rate
of 0.75% on such excess. The Advisory Agreement requires that the fee be paid
monthly, within five (5) business days after the end of the month. All
expenses not specifically assumed by the Investment Advisor are assumed by
the Fund.
The Advisory Agreement contemplates the authority of the Advisor to
place rders pursuant to its investment determinations for the Fund either
directly with the issuer or with any broker or dealer. In placing orders
with brokers or dealers, the Advisor will attempt to obtain the best net
price and the most favorable execution of its orders. The Advisor may purchase
and sell securities to and from brokers and dealers who provide research or
investment information which benefits the Fund, the Advisor, or the Advisor's
other clients, or who provide other services to the Fund or sell its shares.
Investment Advisor
The Advisor is a privately held corporation located at 3000 Sand Hill
Road, Building 3, Suite 150, Menlo Park, California 94025.
The Directors and Executive Officers of the Advisor are as follows:
Name<PAGE>
Position Gary K. Conway President and Director Jane H. Williams
<PAGE>
Executive Vice President
and Director<PAGE>
Rowland R. Foster Secretary/Vice President and
Director<PAGE>
Jane E. Creighton Vice President and Director<PAGE>
Jane H. Williams is also President of the Fund and a Vice President of
the Company. The following persons own beneficially ten percent or more of
the outstanding voting securities of the Advisor: Gary K. Conway, Jane H.
Williams and Rowland R. Foster.
Independent Accountants
The World Funds has selected Tait, Weller & Baker as its independent
accountants, and that firm will be responsible for auditing the financial
statements of the New Fund. Tait, Weller & Baker presently serves as the
independent accountant for the Fund. As stated above, by voting in favor of
the Plan, shareholders of the Fund will be authorizing the Board of Directors
of the Company, acting through the Chairman of the Company on behalf of the
shareholders of the New Fund, to vote New Fund Shares issued in connection
with the Reorganization in favor of ratifying the selection of Tait, Weller &
Baker.
Expenses
Commonwealth Shareholders Services, Inc. ("CSS"), the Fund's shareholder
servicing agent, has agreed to bear costs of preparing, printing and mailing
the proxy materials for this meeting to the shareholders of the Fund, and
certain other costs arising from the holding of the Meeting. CSS expects
that it will be reimbursed for such costs by VUSA.
Considerations of the Directors of the Fund
At a meeting held on May 13, 1997, the Directors of Company reviewed the
Plan and determined that the Reorganization is in the best interests of the
Fund and shareholders of the Fund.
In making this determination, the Directors carefully reviewed and
evaluated the terms and provisions of the Plan, the identical investment
objectives, policies and limitations of the Fund and New Fund, the identical
expense ratios between the two Funds and the tax consequences of the
Reorganization to the Fund and its shareholders. In addition, the Directors
considered the services to be provided to the New Fund, particularly the fact
that the Advisor and the Distributor will provide the same advisory and
share distribution services to the New Fund that they provide to the Fund.
The Directors, including the Directors who are not interested persons
(as defined in the 1940 Act) of the Company, World Funds or their affiliates,
approved unanimously the proposed Reorganization. In doing so, they
concluded that after the Reorganization (i) the New Fund will continue to
receive the benefit of the same services which it receives at the present time,
but without a concern that factors related to the more numerous Vontobel
Series may distract from the attention required for the effective operation
of the Fund, and (ii) the distribution of shares of the New Fund may be
enhanced in the future because of additional distribution networks and
options available as a result of the Reorganization.
Required Vote
The Articles of Incorporation of the Company provide that a proposal
for the merger or consolidation of Company, or any sale, lease or exchange of
substantially all of its property and assets, its dissolution or certain
amendments to its charter documents would require the affirmative vote of a
majority of the then outstanding shares of the corporation entitled to vote.
The Articles of Incorporation also provide that, when a matter affects only one
class or series of shares of the corporation, only the shareholders of such
class or series are entitled to vote upon the matter. The Reorganization is
deemed to affect only the Fund, and therefore will be submitted only for a
vote by the Fund's shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR
APPROVAL OF THE PLAN.
In the event that the Reorganization is not approved by the required
Fund's shareholders, the Reorganization will not be consummated, and the Board
of the Company will consider what further steps, if any, to pursue.
Item 2. OTHER MATTERS THAT MAY COME BEFORE THE MEETING
This Meeting of the shareholders of the Fund is a special meeting, and
will generally conduct only those matters set forth in the Notice of the
Meeting. The Board of Directors of the Company knows of no other business to
be brought before the Meeting. However, if any other matters properly come
before the Meeting, it is the intention of the Board that proxies that
do not contain specific instructions to the contrary will be voted on such
matters in accordance with the judgment of the persons designated therein as
proxies.
* * * * *
Other Information
First Dominion Capital Corp. is the Distributor of the Fund's shares,
and Commonwealth Shareholder Services serves as Administrator to the Fund.
The address of both the Distributor and Administrator is 1500 Forest Avenue,
Suite 223, Richmond, Virginia 23229
Shareholder Reports
The most recent Annual Report for the Fund was distributed to
shareholders in February 1997. An additional copy is available at no cost to
shareholders of the Fund upon request by contacting the Company at 1500
Forest Avenue, Suite 223, Richmond, Virginia 23229 or by calling (800)
527-9500.
Shareholder Proposals
Any shareholder who desires to submit a shareholder proposal may do so
by submitting such proposal in writing, addressed to the Secretary of the
Fund, at 1500 Forest Avenue, Suite 223, Richmond, Virginia 23229.
Ordinarily, the Fund does not hold shareholders meetings.
BY ORDER OF THE BOARD OF DIRECTORS
John Pasco, III
Chairman
June __, 1997<PAGE>
BY SIGNING AND DATING THE BACK OF THIS CARD, YOU AUTHORIZE THE
PROXIES TO VOTE EACH PROPOSAL AS MARKED. IF NOT MARKED, THE PROXIES WILL
VOTE "FOR" EACH PROPOSAL, AND AS THEY SEE FIT ON ANY OTHER MATTER AS MAY
PROPERLY COME BEFORE THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY ATTEND
THE MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED
ENVELOPE.
VONTOBEL FUNDS, INC.
SAND HILL PORTFOLIO MANAGER FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS - ________, 1997
The undersigned hereby constitutes and appoints John Pasco III and F.
Byron Parker, Jr., or any of them, with power of substitution, as proxies to
appear and vote all of the shares of stock standing in the name of the
undersigned on the record date at the special meeting of shareholders of Sand
Hill Portfolio Manager Fund to be held at 1500 Forest Avenue, Suite 223,
Richmond Virginia 23229 on the ___ day of ______ 1997 at 10:00 a.m.
local time, or at any postponement or adjournment thereof; and the undersigned
hereby instructs said proxies to vote as indicated on this proxy card.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED IN THE
FOLLOWING ITEM 1. IF NO CHOICE IS SPECIFIED, THEY WILL BE VOTED TO APPROVE
PROPOSAL NUMBER 1. PLEASE REFER TO THE PROXY STATEMENT DISCUSSION OF THESE
MATTERS. THIS PROXY IS SOLICITED ON BEHALF OF THE FUND'S BOARD OF DIRECTORS.
1. To approve an Agreement and Plan of Reorganization between the
Company and The World Funds, Inc., and to authorize such steps
in furtherance thereof as are set forth in the proxy
statement, including approval of an investment advisory agreement
with Sand Hill Advisors, Inc.
FOR AGAINST ABSTAIN
2. To transact such other business as may properly come before the
Meeting.
_____________________________________________________________ ______________
SIGNATURE SIGNATURE (JOINT OWNER) DATE
PLEASE DATE AND SIGN NAME OR NAMES TO AUTHORIZE THE VOTING OF YOUR SHARES AS
INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT
OWNERS SHOULD SIGN. PERSONS SIGNING AS AN EXECUTOR, ADMINISTRATOR, TRUSTEE
OR OTHER REPRESENTATIVE SHOULD GIVE FULL TITLE AS SUCH.
<PAGE>
Exhibit A
AGREEMENT
AND
PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of
, 1997 (the "Agreement"), by and between Vontobel Funds, Inc.
("Vontobel Funds"), a Maryland corporation, on behalf of the Sand
Hill Portfolio Manager Fund, a series of Vontobel Funds (the "Sand
Hill Fund") and The World Funds, Inc. ("World Funds") a Maryland
corporation, on behalf of the Sand Hill Portfolio Manager Fund, a
series of World Funds (the "New Sand Hill Fund").
WHEREAS, Vontobel Funds was organized under Maryland law as a
corporation in October 1983; Vontobel Funds is an open-end
management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"); Vontobel Funds
has authorized capital consisting of 500,000,000 shares of common
stock, par value $.01 per share, of which it has allocated
50,000,000 shares to the Sand Hill Fund; the Sand Hill Fund is a
duly organized and a validly existing series of Vontobel Funds; and
WHEREAS, World Funds was organized under Maryland law as a
corporation under Articles of Incorporation dated May 8, 1997 and
filed on May 9, 1997; World Funds is an open-end management
investment company registered under the 1940 Act; World Funds has
authorized capital consisting of 250,0000,000 shares of common
stock, par value $.01 per share, of which it has allocated
50,000,000 shares to the New Sand Hill Fund; and the New Sand Hill
Fund is duly organized and a validly existing series of World
Funds;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree to effect (i) the transfer of
all of the assets of the Sand Hill Fund to the New Sand Hill Fund
solely in exchange for (a) the assumption by the New Sand Hill Fund
of all or substantially all of the liabilities of the Sand Hill
Fund and (b) shares of common stock of the New Sand Hill Fund,
followed by the distribution, at the Effective Time (as defined in
Section 9 of this Agreement), of such shares of common stock of the
New Sand Hill Fund to the holders of shares of common stock of the
Sand Hill Fund on the terms and conditions hereinafter set forth in
liquidation of the Sand Hill Fund. For convenience, the shares of
common stock of the New Sand Hill Fund that are given in exchange
for the assets of the Sand Hill Fund are referred to hereinafter as
the "New Sand Hill Fund Shares." The parties hereto covenant and
agree as follows:
1. Plan of Reorganization.
(a) At the Effective Time, the Sand Hill Fund will assign,
deliver and otherwise transfer all of its assets and good and
marketable title thereto, free and clear of all liens,
encumbrances and adverse claims except as provided in this
Agreement, and assign all or substantially all of its
liabilities as are set forth in a statement of assets and
liabilities, to be prepared as of the Effective Time (the
"Statement of Assets and Liabilities") to the New Sand Hill
Fund, and the New Sand Hill Fund shall acquire all such
assets, and shall assume all such liabilities of the Sand Hill
Fund, in exchange for delivery to the Sand Hill Fund of a
number of New Sand Hill Fund Shares (both full and fractional)
equivalent in number and value to the Sand Hill Fund Shares
outstanding immediately prior to the Effective Time. The
assets and stated liabilities of the Sand Hill Fund, as set
forth in the Statement of Assets and Liabilities attached
hereto as Exhibit A, shall be exclusively assigned to and
assumed by the New Sand Hill Fund. All debts, liabilities,
obligations and duties of the Sand Hill Fund, to the extent
that they exist at or after the Effective Time and are stated
in the Statement of Assets and Liabilities, shall after the
Effective Time attach to the New Sand Hill Fund and may be
enforced against the New Sand Hill Fund to the same extent as
if the same had been incurred by the New Sand Hill Fund.
(b) Approval of this Agreement by the shareholders of the
Sand Hill Fund shall be deemed to authorize and direct the
Board of Directors of Vontobel Funds to execute a consent as
sole shareholder of the New Sand Hill Fund of the World Funds
approving the Investment Advisory Agreement between the New
Sand Hill Fund and Sand Hill Advisors, Inc., electing four
directors of the World Funds and ratifying the selection of
the firm of Tait, Weller & Baker to serve as the independent
accountants for the World Funds.
2. Transfer of Assets. The assets of the Sand Hill Fund to be
acquired by the New Sand Hill Fund shall include, without
limitation, all cash, cash equivalents, securities, receivables
(including interest and dividends receivable) as set forth in the
Statement of Assets and Liabilities, as well as any claims or
rights of action or rights to register shares under applicable
securities laws, any books or records of the Sand Hill Fund and
other property owned by the Sand Hill Fund at the Effective Time.
3. Liquidation of the Sand Hill Fund. Promptly after the
Effective Time, the Sand Hill Fund will liquidate and the New Sand
Hill Fund Shares (both full and fractional) received by the Sand
Hill Fund will be distributed to the shareholders of record of the
Sand Hill Fund as of the Effective Time in exchange for their
respective Sand Hill Fund Shares and in complete liquidation of the
Sand Hill Fund. Each shareholder of the Sand Hill Fund will
receive a number of New Sand Hill Fund Shares equal in number and
value to the Sand Hill Fund Shares held by that shareholder, and
each Sand Hill Fund share and New Sand Hill Fund Share will be of
equivalent net asset value per share. Such liquidation and
distribution will be accompanied by the establishment of an open
account on the share records of the New Sand Hill Fund in the name
of each shareholder of record of the Sand Hill Fund and
representing the respective number of New Sand Hill Fund Shares due
such shareholder. As soon as practicable after the Effective Time,
the Vontobel Funds shall take all steps as shall be necessary and
proper to effect a complete termination of the Sand Hill Fund
pursuant to the laws of the State of Maryland. After the Effective
Time, the Sand Hill Fund shall not conduct any business except in
connection with its liquidation.
4. Representations and Warranties of New Sand Hill Fund. The New
Sand Hill Fund represents and warrants to the Sand Hill Fund as
follows:
(a) Organization, Existence, etc. World Funds is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has the
power to carry on its business as it is now being conducted.
(b) Registration as Investment Company. World Funds has
filed registration and other forms to be registered under the
1940 Act as an open-end management investment company; as of
the Effective Time such registration shall be in effect and
shall not have been revoked or rescinded.
(c) Financial Statements. The unaudited financial
statements, if any, of World Funds relating to the New Sand
Hill Fund dated as of , 1997 will be
delivered to the Sand Hill Fund as of the Effective Time, and
will fairly present the financial position of the New Sand
Hill Fund as of the date thereof.
(d) Shares to be Issued Upon Reorganization. The New Sand
Hill Fund Shares to be issued in connection with the
Reorganization have been duly authorized and upon consummation
of the Reorganization as contemplated herein will be validly
issued, fully paid and nonassessable.
(e) Authority Relative to this Agreement. World Funds, on
behalf of the New Sand Hill Fund, has the power to enter into
this Agreement and to carry out its obligations hereunder.
The execution, delivery and performance of this Agreement, and
the consummation of the transactions contemplated hereby, have
been duly authorized by the World Funds' Board of Directors,
and by the stockholders of Vontobel Funds, and no other
proceedings by the World Funds is necessary to authorize its
officers to effectuate this Agreement and the transactions
contemplated hereby. The New Sand Hill Fund is not a party to
or obligated under any charter, by-law, indenture or contract
provision or any other commitment or obligation, or subject to
any order or decree, which would be violated by its executing
and carrying out this Agreement.
(f) Liabilities. There are no liabilities of the New Sand
Hill Fund, whether or not determined or determinable, other
than liabilities disclosed or provided for in the New Sand
Hill Fund's Financial Statements, if any, and liabilities
incurred in the ordinary course of business prior to the
Effective Time or otherwise previously disclosed to the Sand
Hill Funds, none of which has been materially adverse to the
business, assets or results of operations of the New Sand Hill
Fund. The World Funds' Registration Statement does not
contain any untrue statement of a material fact required to be
stated therein or make the statements therein not misleading.
(g) Litigation. Except as previously disclosed to the Sand
Hill Fund, there are no claims, actions, suits or proceedings
pending or, to the actual knowledge of the New Sand Hill Fund,
threatened which would materially adversely affect the New
Sand Hill Fund or its assets or business or which would
prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
(h) Contracts. Except for contracts and agreements disclosed
to the Sand Hill Fund, under which no default exists, and the
agreements pertaining to the conduct of the business of the
New Sand Hill Fund identified in Schedule 4(h) which are to be
approved in connection with this Reorganization, the New Sand
Hill Fund is not a party to or subject to any material
contract, debt instrument, plan, lease, franchise, license or
permit of any kind or nature whatsoever.
(i) Taxes. As of the Effective Time, all Federal and other
tax returns and reports of the New Sand Hill Fund required by
law to have been filed shall have been filed, and all other
taxes shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the best of the
New Sand Hill Fund's knowledge, no such return is currently
under audit and no assessment has been asserted with respect
to any of such returns.
5. Representations and Warranties of the Sand Hill Fund . The
Sand Hill Fund represents and warrants to the New Sand Hill Fund as
follows:
(a) Organization, Existence, etc. The Sand Hill Fund is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland and has the
power to carry on its business as it is now being conducted.
(b) Registration as Investment Company. Vontobel Funds is
registered under the 1940 Act as an open end management
investment company; and such registration has not been revoked
or rescinded and is in full force and effect.
(c) Financial Statements. The audited financial statements
of Vontobel Funds relating to the Sand Hill Fund for the
fiscal year ended December 31, 1996 as delivered to the New
Sand Hill Fund, fairly represent the financial position of the
Sand Hill Fund as of the date thereof, and the results of its
operations and changes in its net assets for the periods
indicated.
(d) Marketable Title to Assets. The Sand Hill Fund will
have, at the Effective Time, good and marketable title to, and
full right, power and authority to sell, assign, transfer and
deliver, the assets to be transferred to the New Sand Hill
Fund. Upon delivery and payment for such assets, the New Sand
Hill Fund will have good and marketable title to such assets
without restriction on the transfer thereof free and clear of
all liens, encumbrances and adverse claims.
(e) Authority Relative to this Agreement. Vontobel Funds, on
behalf of the Sand Hill Fund, has the power to enter into this
Agreement and to carry out its obligations hereunder. The
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, have
been duly authorized by Vontobel Funds' Board of Directors,
and by the stockholders of Vontobel Funds who shall be
entitled to vote on such actions, and no other proceedings by
the Vontobel Funds are necessary to authorize its officers to
effectuate this Agreement and the transactions contemplated
hereby. The Sand Hill Fund is not a party to or obligated
under any charter, by-law, indenture or contract provision or
any other commitment or obligation, or subject to any order or
decree, which would be violated by its executing and carrying
out this Agreement.
(f) Liabilities. There are no liabilities of the Sand Hill
Fund, whether or not determined or determinable, other than
liabilities disclosed or provided for in the Sand Hill Fund's
Financial Statements, and liabilities incurred in the ordinary
course of business subsequent to December 31, 1996, or
otherwise previously disclosed to the New Sand Hill Fund, none
of which has been materially adverse to the business, assets
or results of operations of the Sand Hill Fund. Vontobel
Fund's Registration Statement, which is on file with the
Securities and Exchange Commission, does not contain any
untrue statement of a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
(g) Litigation. Except as previously disclosed to the New
Sand Hill Fund, there are no claims, actions, suits or
proceedings pending or, to the knowledge of the Sand Hill
Fund, threatened which would materially adversely affect the
Sand Hill Fund or its assets or business or which would
prevent or hinder in any material respect consummation of the
transactions contemplated hereby.
(h) Contracts. Except for contracts and agreements disclosed
to the New Sand Hill Fund, under which no default exists, the
Sand Hill Fund, at the Effective Time, is not a party to or
subject to any material contract, debt instrument, plan,
lease, franchise, license or permit of any kind or nature
whatsoever.
(i) Taxes. As of the Effective Time, all Federal and other
tax returns and reports of the Sand Hill Fund required by law
to have been filed shall have been filed, and all other taxes
shall have been paid so far as due, or provision shall have
been made for the payment thereof, and to the best of the Sand
Hill Fund's knowledge, no such return is currently under audit
and no assessment has been asserted with respect to any of
such returns.
6. Conditions Precedent to Obligations of the New Sand Hill Fund.
(a) All representations and warranties of the Sand Hill Fund
contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they
may be affected by the transactions contemplated by this
Agreement, as of the Effective Time, with the same force and
effect as if made on and as of the Effective Time.
(b) The New Sand Hill Fund shall have received an opinion of
qualified counsel, dated as of the Effective Time, addressed
to and in form and substance satisfactory to counsel for the
New Sand Hill Funds, to the effect that (i) the Sand Hill Fund
is duly organized and validly existing as a series of Vontobel
Funds under the laws of the State of Maryland; (ii) Vontobel
Funds is an open-end management investment company registered
under the 1940 Act; (iii) this Agreement and the
Reorganization provided for herein and the execution of this
Agreement have been duly authorized and approved by all
requisite action of the Sand Hill Fund, and this Agreement has
been duly executed and delivered by the Vontobel Funds on
behalf of the Sand Hill Fund and is a valid and binding
obligation of the Sand Hill Fund, subject to applicable
bankruptcy, insolvency, fraudulent conveyance and similar laws
or court decisions regarding enforcement of creditors' rights
generally; (iv) to the best of counsel's knowledge after
reasonable inquiry, no consent, approval, order or other
authorization of any Federal or state court or administrative
or regulatory agency is required for the Sand Hill Fund to
enter into this Agreement or carry out its terms that has not
been obtained other than where the failure to obtain any such
consent, approval, order or authorization would not have a
material adverse effect on the operations of the New Sand Hill
Fund; and (v) upon consummation of this Agreement, the New
Sand Hill Fund shall have acquired all of the Sand Hill Fund's
assets listed in the Statement of Assets and Liabilities, free
and clear of all liens, encumbrances or adverse claims, other
than such as may be disclosed in the financial statements of
Sand Hill Fund or by writing delivered herewith.
(c) The Sand Hill Fund shall have delivered to the New Sand
Hill Fund at the Effective Time the Sand Hill Fund's Statement
of Assets and Liabilities, prepared in accordance with
generally accepted accounting principles consistently applied,
together with a certificate of the Treasurer or Assistant
Treasurer of the Sand Hill Fund as to the aggregate asset
value of the Sand Hill Fund's portfolio securities.
7. Conditions Precedent to Obligations of the Sand Hill Fund.
(a) All representations and warranties of the New Sand Hill
Fund contained in this Agreement shall be true and correct in
all material respects as of the date hereof and, except as
they may be affected by the transactions contemplated by this
Agreement, as of the Effective Time, with the same force and
effect as if made on and as of the Effective Time.
(b) The Sand Hill Fund shall have received an opinion of
qualified counsel, dated as of the Effective Time, addressed
to and in form and substance satisfactory to counsel for the
Sand Hill Fund, to the effect that: (i) the New Sand Hill Fund
is duly organized and a validly existing series of World Funds
under the laws of the State of Maryland; (ii) World Funds is
an open-end management investment company registered under the
1940 Act; (iii) this Agreement and the Reorganization provided
for herein and the execution of this Agreement have been duly
authorized and approved by all requisite corporate action of
the New Sand Hill Fund and this Agreement has been duly
executed and delivered by the World Funds and is a valid and
binding obligation of the New Sand Hill Fund, subject to
applicable bankruptcy, insolvency, fraudulent conveyance and
similar laws or court decisions regarding enforcement of
creditors' rights generally; (iv) to the best of counsel's
knowledge, no consent, approval, order or other authorization
of any Federal or state court or administrative or regulatory
agency is required for the New Sand Hill Fund to enter into
this Agreement or carry out its terms that has not already
been obtained, other than where the failure to obtain any such
consent, approval, order or authorization would not have a
material adverse effect on the operations of the New Sand Hill
Fund; and (v) the New Sand Hill Fund Shares to be issued in
the Reorganization have been duly authorized and upon issuance
thereof in accordance with this Agreement will be validly
issued, fully paid and nonassessable.
(c) The New Sand Hill Fund shall have delivered to the Sand
Hill Fund at the Effective Time, a certificate of the
Treasurer or Assistant Treasurer of the New Sand Hill Fund as
to the aggregate asset value of the New Sand Hill Fund's
portfolio securities, if any.
8. Further Conditions Precedent to Obligations of the Sand Hill
Fund and the New Sand Hill Fund. The obligations of the Sand Hill
Fund and the New Sand Hill Fund to effectuate this Agreement shall
be subject to the satisfaction of each of the following conditions:
(a) Such authority from the United States Securities and
Exchange Commission (the "SEC") and state securities
commissions as may be necessary, in the opinion of the parties
and their counsel, to permit the parties to carry out the
transactions contemplated by this Agreement shall have been
received.
(b) The Registration Statement on Form N-1A of the New Sand
Hill Fund shall be effective under the Securities Act of 1933,
as amended (the "1933 Act"), and, to the best knowledge of the
New Sand Hill Fund, such effectiveness shall not be suspended
and no investigation or proceeding for that purpose shall have
been instituted or be pending, threatened or contemplated
under the 1933 Act.
(c) The Sand Hill Fund and the New Sand Hill Fund shall have
received on or before the Effective Time an opinion of counsel
satisfactory to the Sand Hill Fund and the New Sand Hill Fund
substantially to the effect that for Federal income tax
purposes:
(1) No gain or loss will be recognized to the Sand Hill
Fund upon the transfer of its assets in exchange solely
for the New Sand Hill Fund Shares and the assumption by
the New Sand Hill Fund of the corresponding Sand Hill
Fund's stated liabilities;
(2) No gain or loss will be recognized to the New Sand
Hill Fund on its receipt of the Sand Hill Fund's assets
in exchange for the New Sand Hill Fund Shares and the
assumption by the New Sand Hill Fund of the Sand Hill
Fund's liabilities;
(3) The basis of the Sand Hill Fund's assets in the New
Sand Hill Fund's hands will be the same as the basis of
those assets in the Sand Hill Fund's hands immediately
before the conversion;
(4) The New Sand Hill Fund's holding period for the
assets transferred to the New Sand Hill Fund by the Sand
Hill Fund will include the holding period of those assets
in the Sand Hill Fund's hands immediately before the
conversion;
(5) No gain or loss will be recognized to the Sand Hill
Fund on the distribution of the New Sand Hill Fund Shares
to the Sand Hill Fund's shareholders in exchange for
their Sand Hill Fund shares;
(6) No gain or loss will be recognized to the Sand Hill
Fund's shareholders as a result of the Sand Hill Fund's
distribution of New Sand Hill Fund Shares to the Sand
Hill Fund's shareholders in exchange for their shares of
the Sand Hill Fund's stock;
(7) The basis of the New Sand Hill Fund Shares received
by a Sand Hill Fund shareholder will be the same as the
adjusted basis of that shareholder's Sand Hill Fund
shares surrendered in exchange therefor; and
(8) The holding period of the New Sand Hill Fund Shares
received by the Sand Hill Fund's shareholders will
include the holding period of the shares of the Sand Hill
Fund exchanged therefor, provided that said Sand Hill
Fund shares were held as capital assets on the date of
the conversion.
(d) A vote approving this Agreement and the Reorganization
contemplated hereby shall have been adopted by at least a
majority of the outstanding shares of the Sand Hill Fund
entitled to vote at an annual or special meeting.
(e) The Board of Directors of World Funds, at a meeting duly
called for such purpose, shall have authorized the issuance by
the New Sand Hill Fund Shares at the Effective Time in
exchange for the assets of the Sand Hill Fund pursuant to the
terms and provisions of this Agreement.
(f) Shareholders shall have authorized the Vontobel Funds'
Board of Directors to vote to elect the directors of the World
Funds and to approve the Investment Advisory Agreement between
the New Sand Hill Fund and Sand Hill Advisors, Inc., and the
Board of Vontobel Funds shall have executed a consent for such
purpose.
9. Effective Time of the Reorganization. The exchange of the
Sand Hill Fund's assets for New Sand Hill Fund Shares shall be
effective as of the close of business on __________________, 1997,
or at such other time and date as fixed by the mutual consent of
the parties (the "Effective Time").
10. Termination. This Agreement and the transactions contemplated
hereby may be terminated and abandoned without penalty by
resolution of the Board of Directors of Vontobel Funds or World
Funds, at any time prior to the Effective Time, if circumstances
should develop that, in the opinion of such Board, make proceeding
with the Agreement inadvisable.
11. Amendment and Waiver. This Agreement may be amended, modified
or supplemented in such manner as may be mutually agreed upon in
writing by the parties; PROVIDED, that no such amendment may have
the effect of changing the provisions for determining the number or
value of New Sand Hill Fund Shares to be paid to the Sand Hill
Fund's shareholders under this Agreement to the detriment of the
Sand Hill Fund's shareholders without their further approval.
Furthermore, either party may waive any breach by the other party
or the failure to satisfy any of the conditions to its obligations
(such waiver to be in writing and authorized by the President or
any Vice President of the waiving party with or without the
approval of such party's shareholders).
12. Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of Maryland.
13. Notices. Any notice, report, statement or demand required or
permitted by any provision of this Agreement shall be in writing
and shall be given by prepaid telegraph, telecopy, certified mail,
internet or overnight express courier addressed as follows:
if to the Vontobel Funds:
1500 Forest Avenue
Suite 223
Richmond, Virginia 23229
if to the World Funds:
1500 Forest Avenue
Suite 223
Richmond, Virginia 23229
with a copy to:
Steven M. Felsenstein, Esq.
Stradley, Ronon, Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
14. Fees and Expenses.
(a) The Sand Hill Fund and the New Sand Hill Funds each
represent and warrant to the other that there are no brokers
or finders entitled to receive any payments in connection with
the transactions provided for herein.
(b) Except as otherwise provided for herein, all expenses of
the transactions contemplated by this Agreement incurred by
each of the Sand Hill Fund and the New Sand Hill Fund will be
borne by Commonwealth Shareholder Services, Inc. Such
expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the
provisions of this Agreement; (ii) expenses associated with
the preparation and filing of the Proxy Statement under the
Securities Exchange Act of 1934, as amended; (iii) fees and
expenses of preparing and filing such forms as are necessary
to comply with applicable state securities laws; (iv) postage;
(v) printing; (vi) accounting fees; (vii) legal fees; and
(viii) solicitation costs of the transaction. The New Sand
Hill Fund shall pay its own Federal registration fees and any
fees required under state securities laws.
15. Headings, Counterparts, Assignment.
(a) The article and paragraph headings contained in this
Agreement are for reference purposes only and shall not effect
in any way the meaning or interpretation of this Agreement.
(b) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors
and assigns, but no assignment or transfer hereof or of any
rights or obligations hereunder shall be made by any party
without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed
to confer upon or give any person, firm or corporation other
than the parties hereto and their respective successors and
assigns any rights or remedies under or by reason of this
Agreement.
16. Entire Agreement.Each of the New Sand Hill Fund and the Sand
Hill Fund agree that neither party has made any representation,
warranty or covenant not set forth herein and that this Agreement
constitutes the entire agreement between the parties. The
representations, warranties and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated
hereunder.
17. Further Assurances. Each of the New Sand Hill Funds and the
Sand Hill Funds shall take such further action as may be necessary
or desirable and proper to consummate the transactions contemplated
hereby.
18. Binding Nature of Agreement. As provided in each
corporation's Articles of Incorporation, as amended and
supplemented to date, on file with the State Department of
Assessments and Taxation of the State of Maryland, this Agreement
was executed by the undersigned officers of Vontobel Funds and
World Funds, on behalf of each of the Sand Hill Fund and the New
Sand Hill Fund, respectively, as officers and not individually, and
the obligations of this Agreement are not binding upon the
undersigned officers individually, but are binding only upon the
assets and property of each corporation. Moreover, no series of a
corporation shall be liable for the obligations of any other series
of that corporation.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
Attest: VONTOBEL FUNDS, INC. on behalf of
its series, the Sand Hill Portfolio
Manager Fund
By
Name:
Title: Title:
Attest: THE WORLD FUNDS, INC. on behalf of
its series, the Sand Hill Portfolio
Manager Fund
By
Name: Name
Title: Title:
<PAGE>
SCHEDULE 4(h)
List of Contracts Pertaining to the Operations of the New Sand
Hill Fund
(1) Investment Advisory Agreement with Sand Hill Advisors, Inc.
(2) Administrative Services Agreement with Commonwealth
Shareholder Services, Inc.
(3) Custodian Agreement and IRA Custody Agreement with Star Bank
(4) Transfer Agency and Dividend Disbursing Agent Agreement with
Fund Services, Inc.
(5) Distribution Agreement with First Dominion Capital Corp.
(6) Fund Expense Agreement with Commonwealth Shareholder
Services, Inc.
(7) Fund Accounting Agreement with Star Bank.
<PAGE>
Exhibit B
INVESTMENT ADVISORY AGREEMENT
Investment Advisory Agreement (the "Agreement") dated
, 1997 by and between THE WORLD FUNDS, INC., a Maryland
corporation (herein called the "Fund"), and SAND HILL ADVISERS,
INC., a California corporation (the "Advisor") and a registered
investment adviser under the Investment Advisers Act of 1940, as
amended.
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), consisting of several series of shares,
each having its own investment policies; and
WHEREAS, the Fund desires to retain the Advisor to furnish
investment advisory and management services to certain portfolios
of the Fund, subject to the control of the Fund's Board of
Directors, and the Advisor is willing to so furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be bound, it is
agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints the Advisor to
act as the advisor to the SAND HILL PORTFOLIO MANAGER FUND series
of the Fund (the "Portfolio") for the period and on the terms set
forth in this Agreement. The Advisor accepts such appointment
and agrees to furnish the services herein set forth, for the
compensation herein provided.
2. Duties of the Advisor. The Fund employs the Advisor to
manage the investments and reinvestment of the assets of the
Portfolio, and to continuously review, supervise, and administer
the investment program of the Portfolio, to determine in its
discretion the securities to be purchased or sold, to provide the
Fund and Commonwealth Shareholder Services, Inc. (the
"Administrator") with records concerning the Advisor's activities
which the Fund is required to maintain, and to render regular
reports to the Fund's Officers and Board of Directors and to the
Administrator concerning the Advisor's discharge of the foregoing
responsibilities.
The Advisor shall discharge the foregoing
responsibilities subject to the control of the Fund's Board of
Directors and in compliance with such policies as the Board may
from time to time establish, and in compliance with the
objectives, policies, and limitations for the Portfolio as set
forth in its Prospectus and Statement of Additional Information,
as amended from time to time, and applicable laws and
regulations. The Fund will instruct each of its agents and
contractors to co-operate in the conduct of the business of the
Portfolio.
The Advisor accepts such employment and agrees, at its
own expense, to render the services and to provide the office
space, furnishings, and equipment and the personnel required by
it to perform the services on the terms and for the compensation
provided herein.
3. Portfolio Transactions. The Advisor is authorized to
select the brokers and dealers that will execute the purchases
and sales of portfolio securities for the Portfolio and is
directed to use its best efforts to obtain the best price and
execution for the Portfolio's transactions in accordance with the
policies of the Fund as set forth from time to time in the
Portfolio's Prospectus and Statement of Additional Information.
The Advisor will promptly communicate to the Fund and to the
Administrator such information relating to portfolio transactions
as they may reasonably request.
It is understood that the Advisor will not be deemed to
have acted unlawfully, or to have breached a fiduciary duty to
the Fund or be in breach of any obligation owing to the Fund
under this Agreement, or otherwise, by reason of its having
directed a securities transaction on behalf of the Fund to an
unaffiliated broker-dealer in compliance with the provisions of
Section 28(e) of the Securities Exchange Act of 1934 or as
described from time to time by the Portfolio's Prospectus and
Statement of Additional Information. Subject to the foregoing,
the Advisor may direct any transaction of the Portfolio to a
broker which is affiliated with the Advisor in accordance with,
and subject to, the policies and procedures approved by the Board
of Directors of the Fund pursuant to Rule 17e-1 under the 1940
Act. Such brokerage services are not deemed to be provided under
this Agreement.
4. Compensation of the Advisor. For the services to be
rendered by the Advisor under this Agreement, the Portfolio shall
pay to the Advisor, and the Advisor will accept as full
compensation a fee, accrued daily and payable within five (5)
business days after the last business day of each month, at an
annual rate of one percent on the first $100 million of the
average daily net assets of the Portfolio and 3/4 of one percent
on the Portfolio's average daily net assets over $100 million.
All rights of compensation under this Agreement for
services performed as of the termination date shall survive the
termination of this Agreement.
5. Expenses. During the term of this Agreement, the
Advisor will pay all expenses incurred by it in connection with
the management of the Fund. Notwithstanding the foregoing, the
Portfolio shall pay the expenses and costs of the Portfolio for
the following:
( 1) Taxes;
( 2) Brokerage fees and commissions with regard to
portfolio transactions;
( 3) Interest charges, fees and expenses of the
custodian of the securities;
( 4) Fees and expenses of the Fund's transfer agent and
the Administrator;
( 5) Its proportionate share of auditing and legal
expenses;
( 6) Its proportionate share of the cost of maintenance
of corporate existence;
( 7) Its proportionate share of compensation of
directors of the Fund who are not interested
persons of the Advisor as that term is defined by
law;
( 8) Its proportionate share of the costs of corporate
meetings;
( 9) Federal and State registration fees and expenses
incident to the sale of shares of the Portfolio;
(10) Costs of printing and mailing Prospectuses for the
Portfolio's shares, reports and notices to
existing shareholders;
(11) The Advisory fee payable to the Advisor, as
provided in paragraph 4 herein;
(12) Costs of recordkeeping (other than investment
records required to be maintained by the Advisor),
and daily pricing;
(13) Distribution expenses in accordance with any
Distribution Plan as and if approved by the
shareholders of the Portfolio; and
(14) Expenses and taxes incident to the failure of the
Portfolio to qualify as a regulated investment
company under the provisions of the Internal
Revenue Code of 1986, as amended, unless such
expenses and/or taxes arise from the negligence of
another party.
If the expenses projected to be borne by the Portfolio
(exclusive of interest, brokerage commissions, taxes and
extraordinary items, but inclusive of Advisory fees) in any
fiscal year are expected to exceed any applicable state expense
limitation provision to which the Fund is subject, the Advisory
fee payable by the Portfolio to the Advisor shall be reduced on
each day such fee is accrued to the extent of that day's portion
of such excess expenses. The amount of such reduction shall not
exceed the actual amount of the Advisory fee otherwise payable in
such year. Accruals of expenses and adjustments to advisory fees
otherwise payable under this Agreement, and the amounts payable
monthly in accordance with this Agreement, shall be adjusted as
required from month to month.
It is understood that the Fund will register its shares
in states which impose expense limitations on mutual funds only
with the prior written consent of the Advisor and, if consent is
granted, the Advisor agrees to reimburse the Fund for any excess
expenses incurred over such states' limitation up to a maximum of
its Advisory fee.
6. Reports. The Fund and the Advisor agree to furnish to
each other, if applicable, current information required for the
preparation by such parties of prospectuses, statements of
additional information, proxy statements, reports to
shareholders, certified copies of their financial statements, and
to furnish to each other such other information and documents
with regard to their affairs as each may reasonably request.
7. Status of the Advisor. The services of the Advisor to
the Fund are not to be deemed exclusive, and the Advisor shall be
free to render similar services to others so long as its services
to the Fund are not impaired thereby.
Pursuant to comparable agreements, the Fund may also
retain the services of the Advisor to serve as the investment
advisor of other series of the Fund.
8. Books and Records. In compliance with the requirements
of the 1940 Act, the Advisor hereby agrees that all records which
it maintains for the Fund are the property of the Fund, and
further agrees to surrender promptly to the Fund any of such
records upon the Fund's request. The Advisor further agrees to
preserve for the periods prescribed by the 1940 Act, and the
rules or orders thereunder, the records required to be maintained
by the 1940 Act.
9. Limitation of Liability of Advisor. The duties of the
Advisor shall be confined to those expressly set forth herein,
and no implied duties are assumed by or may be asserted against
the Advisor hereunder. The Advisor 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 a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss
resulting from willful misfeasance, bad faith or negligence on
the part of the Advisor in the performance of its duties or from
reckless disregard by it of its obligations and duties under this
Agreement. (As used in this Paragraph 9, the term "Advisor"
shall include directors, officers, employees and other corporate
agents of the Advisor as well as that corporation itself).
10. Permissible Interests. Directors, agents, and
shareholders of the Fund are or may be interested in the Advisor
(or any successor thereof) as directors, officers, or
shareholders, or otherwise; directors, officers, agents, and
shareholders of the Advisor are or may be interested in the Fund
as directors, officers, shareholders or otherwise; and the
Advisor (or any successor) is or may be interested in the Fund as
a shareholder or otherwise. In addition, brokerage transactions
for the Fund may be effected through affiliates of the Advisor if
approved by the Fund's Board of Directors, subject to the rules
and regulations of the Securities and Exchange Commission, and
the policies and procedures adopted by the Fund.
11. License of Advisor's Name. The Advisor hereby
authorizes the Fund to use the name "Sand Hill" for the
Portfolio. The Fund agrees that if this Agreement is terminated
it will promptly redesignate the name of the Portfolio to
eliminate any reference to the name "Sand Hill" or any derivation
thereof unless the Advisor waives this requirement in writing.
12. Duration and Termination. This Agreement shall become
effective on the date first above written subject to its approval
by the shareholders of the Portfolio and unless sooner terminated
as provided herein, shall continue in effect for two (2) years
from that date. Thereafter, this Agreement shall be renewable
for successive periods of one year each, provided such
continuance is specifically approved annually (a) by the vote of
a majority of those members of the Fund's Board of Directors who
are not parties to this Agreement or interested persons of any
such party (as that term is defined in the 1940 Act), cast in
person at a meeting called for the purpose of voting on such
approval, and (b) by vote of either the Board of Directors or of
a majority of the outstanding voting securities (as that term is
defined in the 1940 Act) of the Portfolio. Notwithstanding the
foregoing, this Agreement may be terminated by the Portfolio or
by the Fund at any time on sixty (60) days written notice,
without the payment of any penalty, provided that termination
must be authorized either by vote of the Fund's Board of
Directors or by vote of a majority of the outstanding voting
securities of the Portfolio or by the Advisor on sixty (60) days
written notice. This Agreement will automatically terminate in
the event of its assignment (as that term is defined in the 1940
Act).
13. Amendment of this Agreement. No provision of this
Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or
termination is sought. No material amendment of this Agreement
shall be effective until approved by vote of the holders of a
majority of the Portfolio's outstanding voting securities (as
defined in the 1940 Act).
14. Notice. Any notice required or permitted to be given
by either party to the other shall be deemed sufficient if sent
by registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the address stated
below:
(a) To the Fund at: 1500 Forest Avenue
Suite 223
Richmond, VA 23229
(b) To the Advisor at: 3000 Sand Hill Road
Building Three, Suite 150
Menlo Park, CA 94025-7111
15. Miscellaneous. The captions in this Agreement are
included for convenience of reference only and in no way define
or limit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of the Agreement shall not be affected
thereby. This Agreement shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
16. Applicable Law. This Agreement shall be construed in
accordance with, and governed by, the laws of the State of
Maryland, and the applicable provisions of the 1940 Act. To the
extent that the applicable laws of the State of Maryland, or any
of the provisions herein, conflict with the applicable provisions
of the 1940 Act, the latter shall control.
17. This Agreement may be executed in two or more
counterparts, each of which, when so executed, shall be deemed to
be an original, but such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as
of the day and year first above written.
SAND HILL ADVISERS, INC.
BY:
Gary K. Conway
President
THE WORLD FUNDS, INC.
BY:
John Pasco, III
Chairman
