<PAGE> 1
SCHEDULE 14a
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[x] Preliminary Proxy Statement [ ] Confidential, for
Use of the Commission Only
(as permitted by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE ARCH FUND, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange act Rules 14a-6(i)(1)
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:
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<PAGE> 2
THE ARCH FUND(R), INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
, 1997
-----------
To the Shareholders of
The ARCH Fund, Inc.
An Annual Meeting of Shareholders of The ARCH Fund, Inc. (the "Fund")
will be held on January 20, 1998, at 9:00 A.M. Central Time, at the offices of
Mississippi Valley Advisors Inc., One Mercantile Center, Southeast Conference
Room, 21st Floor, St. Louis, Missouri 63101, for the following purposes:
(1) The election of a Board of seven (7) Directors;
(2) The ratification or rejection of the selection of
KPMG Peat Marwick LLP as the Fund's independent accountants for the
fiscal year ending November 30, 1998;
(3) With respect to the Treasury Money Market Portfolio
and Money Market Portfolio only, the approval or disapproval of a
change in the Portfolios' fundamental investment limitations to permit
securities lending; and
(4) The transaction of such other business as may
properly come before the meeting or any adjournment thereof.
The proposals referred to above are discussed in the Proxy Statement
attached to this Notice. Each shareholder is invited to attend the Special
Meeting of Shareholders in person. Shareholders of record at the close of
business on November 3, 1997 have the right to vote at the meeting. If you
cannot be present at the meeting, we urge you to fill in, sign and promptly
return the enclosed proxy in order that the meeting can be held and a maximum
number of shares may be voted.
By Order of the Board of Directors
W. BRUCE McCONNEL, III
Secretary
<PAGE> 3
WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE SPECIAL MEETING OF SHAREHOLDERS OF THE FUND SCHEDULED FOR JANUARY 20,
1998 WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A
MAJORITY OF THE SHARES ELIGIBLE TO VOTE ARE REPRESENTED. IN THAT EVENT, THE
FUND WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM.
CLEARLY, YOUR VOTE COULD BE CRITICAL IN ALLOWING THE FUND TO HOLD THE MEETING
AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY.
-2-
<PAGE> 4
THE ARCH FUND(R), INC.
3435 STELZER ROAD
COLUMBUS, OHIO 43219
1-800-452-ARCH (2724)
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors of The ARCH Fund, Inc. (the "Fund") for
use at an Annual Meeting of Shareholders of the Fund to be held at the offices
of Mississippi Valley Advisors Inc., One Mercantile Center, Southeast
Conference Room, 21st Floor, St. Louis, Missouri 63101 on January 20, 1998, at
9:00 A.M. Central Time (such meeting and any adjournment thereof is referred to
as the "Meeting"). It is expected that the solicitation of proxies will be
primarily by mail. The Fund's officers and service contractors may also
solicit proxies by telephone, telegraph, facsimile or personal interview. In
connection with the solicitation of certain shareholders, the Fund's service
contractors have retained Automatic Data Processing to assist in the
solicitation of proxies and to tabulate votes returned at a cost of
approximately $___________. The Fund will bear all proxy solicitation costs.
Any shareholder giving a proxy may revoke it at any time before it is exercised
by submitting to the Fund a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and electing to vote in person.
This Proxy Statement and the enclosed Proxy are expected to be distributed to
shareholders on or about ____________, 1997.
The following table summarizes the proposals to be voted on at the
Meeting and indicates those shareholders who are being solicited with respect
to each proposal.
PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
1. Election of a Board of seven (7) Directors. All Portfolios voting
together in the aggregate.
2. Ratification or rejection of the
selection of KPMG the Peat Marwick LLP as All Portfolios voting
the Fund's independent accountants together in the aggregate.
for the fiscal year ending November
30, 1998.
3. Approval or disapproval of a change Shareholders of the Treasury
in fundamental investment limitations Money Market Portfolio and
to permit the Treasury Money Market Money Market Portfolio
Portfolio and Money Market Portfolio voting separately on a
to engage in securities lending. Portfolio-by-Portfolio basis.
All classes of shares of the
same Portfolio will vote
together.
-1-
<PAGE> 5
A Proxy is enclosed with respect to the shares you own in the Fund.
If the Proxy is executed properly and returned, the shares represented by it
will be voted at the Meeting in accordance with the instructions thereon. Each
full share is entitled to one vote and each fractional share to a proportionate
fractional vote. If you do not expect to be present at the Meeting and wish
your shares to be voted, please complete the enclosed Proxy and mail it in the
enclosed reply envelope.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF EACH
PROPOSAL DESCRIBED IN THIS PROXY STATEMENT.
-2-
<PAGE> 6
PROPOSAL 1
(ALL PORTFOLIOS)
At the Meeting, shareholders will be asked to consider the election of
seven Directors, who will constitute the entire Board of Directors of the Fund.
Each elected Director will hold office for an indefinite term until the earlier
of (1) the date the election of a Director's successor in office becomes
effective, or (2) the date a Director resigns or his term as a Director is
terminated in accordance with the Fund's By-Laws. Normally, there will be no
meetings of shareholders for the purpose of electing Directors except as
required by the Investment Company Act of 1940 (the "1940 Act"). See "Other
Matters" below. The Directors may, as permitted by the 1940 Act, appoint
additional Directors without shareholder approval.
All shares represented by valid Proxies will be voted in the election
of Directors for each nominee named below, unless authority to vote for a
particular nominee is withheld. The seven nominees who receive the highest
number of votes cast at the Meeting will be elected as Directors. Cumulative
voting is not permitted. Each nominee has consented to being named in this
Proxy Statement and to serve if elected. If a nominee withdraws from the
election or is otherwise unable to serve, the named proxies will vote for the
election of such substitute nominee as the Board of Directors may recommend,
unless the Board decides to reduce the number of Directors serving on the
Board.
Messrs. Woodham, Cox, Hunt, Jacobsen and Winney are incumbent
Directors who are standing for re-election. Messrs. Woodham, Cox and Winney
were last elected by shareholders at a meeting held on June 29, 1993. Messrs.
Hunt and Jacobsen were each appointed to the Board of Directors on September
27, 1994. In addition, Messrs. Cox and Hunt, Directors of the Fund who are not
"interested persons" of the Fund as defined in the 1940 Act and who comprise
the Nominating Committee, have nominated Messrs. Brandt and Moore at a meeting
of the Nominating Committee held on September 16, 1997 as additional Directors
to be voted on by the Fund's shareholders.
The following table contains relevant information about the nominees:
-3-
<PAGE> 7
<TABLE>
<CAPTION>
FUND SHARES OWNED
BENEFICIALLY AS OF
POSITION(S) HELD PRINCIPAL OCCUPATIONS SEPTEMBER 30,
NAME AND ADDRESS AGE WITH ARCH DURING PAST 5 YEARS 1997
---------------- --- ---------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Jerry V. Woodham* 54 Chairman of the Board; Treasurer, St. Louis University, None
St. Louis University President; Director August 1996 to present;
3500 Lindell Blvd. since 1982. Treasurer, Washington University,
Fitzgerald Hall 1981 to 1995.
St. Louis, MO 63103
Robert M. Cox, Jr. 52 Director since 1991. Senior Vice President- ***
Emerson Electric Co. Acquisition and Development,
8000 W. Florissant Ave. Emerson Electric Co.
St. Louis, MO 63136
Joseph J. Hunt 54 Director since 1994. General Vice-President None
Iron Workers District Council International Association of
3544 Watson Road Bridge, Structural and Ornamental
St. Louis, MO 63139 Iron Workers (International Labor
Union), January 1994 to present;
General Organizer, International
Association of Bridge, Structural
and Ornamental Iron Workers,
September 1983 to December 1993.
James C. Jacobsen** 62 Director since 1994. Vice Chairman and Director, ***
Kellwood Company Kellwood Company (manufacturer of
600 Kellwood Parkway wearing apparel and camping
Chesterfield, MO 63017 softgoods).
Ronald D. Winney* 55 Director since 1992; Treasurer, Ralston Purina ***
Ralston Purina Company Treasurer Company.
Checkerboard Square
St. Louis, MO 63164
Donald E. Brandt 43 Nominee Senior Vice President, Finance None
Union Electric Company and Corporate Services, Union
P.O. Box 66149 Electric Company (electric
St. Louis, MO 63166 utility company); Director,
Huntco, Inc.
</TABLE>
-4-
<PAGE> 8
<TABLE>
<CAPTION>
FUND SHARES OWNED
BENEFICIALLY AS OF
POSITION(S) HELD PRINCIPAL OCCUPATIONS SEPTEMBER 30,
NAME AND ADDRESS AGE WITH ARCH DURING PAST 5 YEARS 1997
---------------- --- ---------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Patrick J. Moore 43 Nominee Vice President & Chief Financial None
Jefferson Smurfit Corporation Officer since 1996 and Vice
8182 Maryland Avenue President & General Manager,
St. Louis, MO 63105 1994-1996, of Industrial
Packaging Division, Corporate
Vice President & Treasurer, 1993-
1994, and Treasurer, 1992-1993,
Jefferson Smurfit Corporation
(paper, paperboard and
packaging).
</TABLE>
- ------------------------
* Mr. Woodham is an "interested person" of the Fund as defined in the
1940 Act because he serves as an officer of the Fund. Mr. Winney is
an "interested person" of the Fund because he owns stock of Mercantile
Bancorporation Inc., of which Mississippi Valley Advisors Inc., the
Fund's investment adviser, is an indirect wholly-owned subsidiary, and
because he serves as an officer of the Fund.
** Mr. Jacobsen previously owned stock of Mercantile Bancorporation Inc.
and held interest-bearing accounts at Mercantile Bank National
Association, the direct parent of Mississippi Valley Advisors Inc. He
no longer owns any securities issued by Mercantile Bancorporation Inc.
or any of its affiliates.
*** As of September 30, 1997, Mr. Cox beneficially owned 364.661 shares of
the Fund's Growth & Income Equity Portfolio. As of that date, Mr.
Jacobsen beneficially owned 243 shares of the Company's Growth &
Income Equity Portfolio and Mr. Jacobsen's wife beneficially owned
165,730 shares of the Company's Money Market Portfolio. As of such
date, Mr. Winney was the beneficial owner of 366 shares of the
Company's Small Cap Equity Portfolio and he shared voting power with
respect to 2,925 shares of the Company's Small Cap Equity Portfolio
and 499 shares of the Company's International Equity Portfolio.
Each Director receives an annual fee of $10,000 plus
reimbursement of expenses incurred as a Director. Additionally, the
Chairman of the Board and President receives an additional annual fee
of $5,000 for services in such capacities. Remuneration for services
rendered during the Fund's fiscal year ended November 30, 1996 and
distributed to all Directors and officers as a group was $75,000.00.
As of September 30, 1997, the Directors and officers of the Fund, as a
group, owned less than 1% of the outstanding shares of each Portfolio
of the Fund.
The following chart provides certain information about the fees
received by the Fund's Directors for their services as members of the
Board of Directors for the fiscal year ended November 30, 1996.
-5-
<PAGE> 9
<TABLE>
<CAPTION>
Aggregate Compensation Pension or Retirement Total Compensation from
from Benefits Accrued Estimated Annual Registrant and Fund
Name of Person/ The Arch Fund, as Part of Fund Benefits upon Complex*
Position Inc. Expenses Retirement Paid to Directors
--------------- ----------------- ---------------- ----------- ------------------
<S> <C> <C> <C> <C>
Jerry V. Woodham $15,000.00 N/A N/A $15,000.00
President and Chairman of
the Board of Directors
Robert M. Cox, Jr. $10,000.00 N/A N/A $10,000.00
Director
Joseph J. Hunt $10,000.00 N/A N/A $10,000.00
Director
James C. Jacobsen $10,000.00 N/A N/A $10,000.00
Director
Donald E. Kiernan** $10,000.00 N/A N/A $10,000.00
Director
Lyle L. Meyer** $10,000.00 N/A N/A $10,000.00
Director
Ronald D. Winney $10,000.00 N/A N/A $10,000.00
Director and Treasurer
</TABLE>
- ------------------------
* The "Fund Complex" consists solely of the Fund.
** Messrs. Kiernan and Meyer resigned as Directors of the Fund on April 3,
1997 and September 17, 1997, respectively.
The Board of Directors of the Fund held five meetings during
the last fiscal year, which ended on November 30, 1996. During that
year, Messrs. Woodham, Cox, Hunt and Winney attended all meetings and
Mr. Jacobsen attended all but one meeting. The Board of Directors
held four meetings during the current fiscal year, which ends on
November 30, 1997. During this year, Messrs. Woodham, Cox, Hunt and
Jacobsen have attended all of the meetings, and Mr. Winney attended
two of the meetings. The Board does not have standing audit or
compensation committees but does have a standing nominating committee
consisting of Messrs. Cox and Hunt, neither of whom is an "interested
person" of the Fund. The Nominating Committee held no meetings during
the last fiscal year ended November 30, 1996 and held one meeting
during the current fiscal year ending November 30, 1997. The
Nominating Committee is prepared to review nominations from
shareholders to fill any future vacancies on the Board in written
communications delivered to the Fund at its address on page 1.
Mr. Woodham has served as Chairman of the Board since March
20, 1984.
-6-
<PAGE> 10
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH
NOMINEE FOR DIRECTOR OF THE FUND.
PROPOSAL 2
(ALL PORTFOLIOS)
Shareholders are also being asked to vote upon the ratification or
rejection of the selection of KPMG Peat Marwick LLP ("KPMG") as independent
accountants for the Fund's fiscal year ending November 30, 1998. Approval of
the proposal requires the affirmative vote of a majority of the Fund's
outstanding shares entitled to vote. Unless instructed otherwise, the persons
named as proxies in the accompanying Proxy will vote for KPMG.
The Board of Directors of the Fund, including all of the Directors who
are not "interested persons" of the Fund, selected KPMG as the Fund's
independent accountants for the fiscal year ending November 30, 1998 at a
meeting held on September 16, 1997. KPMG has stated that it has no material
direct or indirect financial interest in the Fund. KPMG, with offices at Two
Nationwide Plaza, Columbus, Ohio 43215 has served as the Fund's independent
accountants since June 1989.
As part of its audit of the Fund's financial statements for the fiscal
year ended November 30, 1996, KPMG reviewed the Fund's annual report to
shareholders and its related filings with the Securities and Exchange
Commission (the "SEC"); reviewed and tested for compliance with various rules
and regulations applicable to investment companies, and reviewed the accounting
controls and procedures in connection with the audit. In addition, KPMG
performed additional non-audit services for the Fund in connection with the
Fund's filings and prepared and reviewed the Fund's tax returns.
A representative of KPMG is expected to be available by telephone at
the Meeting should any matter arise requiring consultation with the
accountants, and KPMG will be given the opportunity to make a statement if it
chooses.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
RATIFICATION OF THE SELECTION OF KPMG AS INDEPENDENT ACCOUNTANTS OF THE FUND.
PROPOSAL 3
(TREASURY MONEY MARKET PORTFOLIO AND MONEY MARKET PORTFOLIO)
Shareholders of the Treasury Money Market Portfolio and Money Market
Portfolio are also being asked to vote upon the approval or disapproval of a
change in the fundamental investment
-7-
<PAGE> 11
limitations of such Portfolios to permit the Portfolios to loan portfolio
securities. The fundamental investment limitations of the Treasury Money
Market Portfolio and Money Market Portfolio presently provide that neither
Portfolio may "[m]ake loans, except that a Portfolio may purchase or hold debt
instruments in accordance with its investment objective and policies and may
enter into repurchase agreements with respect to securities (together with any
cash collateral) that are consistent with the Portfolio's permitted investments
and that equal at all times at least 100% of the value of the repurchase
price." Fund counsel has advised that this limitation prohibits securities
lending by these two Portfolios.
The Fund's Board of Directors has approved, at the recommendation of
MVA, amendments to the fundamental investment limitations of the Treasury Money
Market Portfolio and Money Market Portfolio that would remove the current
restrictions on portfolio securities lending. As amended, the investment
limitation on loans with respect to each of these Portfolios would provide that
a Portfolio may not "[m]ake loans, except that a Portfolio may purchase or hold
debt instruments in accordance with its investment objective and policies, lend
portfolio securities and enter into repurchase agreements with respect to
securities (together with any cash collateral) that are consistent with the
Portfolio's permitted investments and that equal at all times at least 100% of
the value of the repurchase price." (Emphasis added.)
Subject to approval of the proposed amendment by shareholders at the
Meeting, each Portfolio would be permitted to loan portfolio securities to
financial institutions such as banks and broker-dealers in accordance with
policies adopted from time to time by the Fund. The Fund expects that such
policies would provide that portfolio securities would be loaned only if
collateral is continuously maintained by the Fund's custodian at no less than
102% of the amount of the loan by "marking to market" daily, and that any cash
collateral received by a Portfolio in connection with its loans would be
invested in U.S. Government securities and repurchase agreements collateralized
by U.S. Government securities.
Securities loans offer the potential of increasing the income earned
by a Portfolio in connection with its investment activities. Securities loans
also involve, however, risks of delay in receiving additional collateral or in
recovering the securities loaned or even loss of rights in the collateral
should the borrower of the securities fail financially. In addition, such
loans involve risk of loss in connection with the investment of cash collateral
received by a Portfolio from the borrower of the loaned securities. A
Portfolio's ability to maintain its net asset value at $1.00 per share may be
affected in the event of such a loss. Securities loans will, however, be made
only to
-8-
<PAGE> 12
borrowers deemed by the Portfolios' investment adviser to be creditworthy and
only when, in its judgment, the income to be earned from the loan justifies the
attendant risks.
Approval of the proposal to change the Portfolios' fundamental
investment limitations to permit securities lending requires the affirmative
vote of the holders of a majority of the outstanding shares entitled to vote of
each of the Treasury Money Market Portfolio and Money Market Portfolio, voting
separately by Portfolio. If the proposal is approved by the shareholders of
either Portfolio at the Meeting, the change will thereafter be effective with
respect to that Portfolio whether or not the proposal is approved by the
shareholders of the other Portfolio.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
APPROVAL OF THE CHANGE IN THE FUNDAMENTAL INVESTMENT LIMITATIONS OF THE
TREASURY MONEY MARKET PORTFOLIO AND MONEY MARKET PORTFOLIO TO PERMIT SECURITIES
LENDING.
VOTING INFORMATION
RECORD DATE. Only shareholders of record at the close of business on
November 3, 1997 will be entitled to vote at the Meeting. On that date, the
outstanding shares were as follows:
Number of
Portfolio and Shares Outstanding
-------------- ------------------
Class of Shares
---------------
Money Market Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Treasury Money Market Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Tax-Exempt Money Market Portfolio
Trust Shares
Investor A Shares
U.S. Government Securities Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Intermediate Corporate Bond Portfolio
Trust Shares
Institutional Shares
Investor A Shares
-9-
<PAGE> 13
Number of
Portfolio and Shares Outstanding
-------------- ------------------
Class of Shares
---------------
Bond Index Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Government & Corporate Bond Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Short-Intermediate Municipal Portfolio
Trust Shares
Investor A Shares
Missouri Tax-Exempt Bond Portfolio
Trust Shares
Investor A Shares
Investor B Shares
National Municipal Bond Portfolio
Trust Shares
Investor A Shares
Investor B Shares
Equity Income Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Equity Index Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Growth & Income Equity Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Small Cap Equity Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
International Equity Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
Balanced Portfolio
Trust Shares
Institutional Shares
Investor A Shares
Investor B Shares
-10-
<PAGE> 14
With the exception of Proposal 3, for which only shares of the Treasury Money
Market Portfolio and Money Market Portfolio will vote on a
Portfolio-by-Portfolio basis, all shares of the Fund will vote in the aggregate
and not by class or Portfolio at the Meeting.
QUORUM. A quorum is constituted with respect to the Fund, and, for
Proposal 3, with respect to each of the Treasury Money Market Portfolio and
Money Market Portfolio, by the presence in person or by proxy of the holders of
more than 50% of the outstanding shares. For purposes of determining the
presence of a quorum, abstentions, but not broker "non-votes" (that is, proxies
from brokers or nominees indicating that such persons have not received
instructions from the beneficial owners or other persons entitled to vote
shares on a particular matter with respect to which the brokers or nominees do
not have discretionary power), will be treated as shares that are present at
the Meeting but which have not been voted. Abstentions and broker "non-votes"
will have the effect of a "no" vote for purposes of obtaining the requisite
approval of each proposal.
In the event that a quorum is not present at the Meeting or at any
adjournment thereof, or in the event that a quorum is present at the Meeting
but sufficient votes to approve any of the proposals are not received, the
persons named as proxies, or their substitutes, may propose and vote for one or
more adjournments of the Meeting to permit the further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares affected by the adjournment that are represented at the Meeting in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR any of the proposals in
favor of such adjournments, and will vote those proxies required to be voted
AGAINST all proposals against any such adjournments.
OTHER SHAREHOLDER INFORMATION. At the record date for the Meeting,
affiliates of Mercantile Bancorporation Inc. ("Mercantile") held of record
approximately _____% of the outstanding shares of the Fund as agent or
custodian for their customers. In addition, at that date, affiliates of
Mercantile held investment and/or voting power with respect to a majority of
the Fund's outstanding shares on behalf of their customers. The name, address
and share ownership of each person who may have possessed sole or shared voting
or investment power with respect to more than 5% of the Fund's outstanding
shares at that date were:
-11-
<PAGE> 15
Percentage
Name and Class and Percentage of Portfilo
Fund Address Shares Owned Owned Shares Owned
---- -------- ------------ ---------- ------------
[BISYS TO PROVIDE]
For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25% of the voting securities of a
company is presumed to "control" such company. Under this definition,
Mercantile and its affiliates may be deemed to be controlling persons of the
Fund. The Fund has been advised by Mercantile that subject to its fiduciary
responsibilities, it intends to vote the shares over which it has voting power
FOR and AGAINST each proposal presented at the Meeting in the same proportions
as the total votes that are cast FOR and AGAINST the proposal by other
shareholders of the Fund.
ADDITIONAL INFORMATION
OFFICERS. Officers of the Fund are elected by the Directors and hold
office until they resign, are removed or are otherwise disqualified to serve.
The following table sets forth certain information about the Fund's officers
who are not also Directors.
<TABLE>
<CAPTION>
Principal Occupations During Past 5 Years
Officer Position with and Other
Name and Address Age Since the Fund Affiliations
---------------- --- ------- --------------- -----------------------------------------
<S> <C> <C> <C> <C>
Timothy S. Engelbrecht 40 1992 Vice President - Director of Mutual Funds,
Mississippi Valley Advisors Inc. Securities Senior Associate, Mississippi Valley
7th and Washington Streets Transactions Advisors Inc. (registered investment
St. Louis, MO 63166 adviser).
W. Bruce McConnel, III 54 1982 Secretary Partner of the law firm of Drinker Biddle &
Suite 1100 Reath LLP, Philadelphia, Pennsylvania since
1345 Chestnut Street 1977.
Philadelphia, PA 19107
Walter B. Grimm 52 1993 Vice President Employee of BISYS Fund Services.
3435 Stelzer Road and Assistant
Columbus, OH 43219 Treasurer
David Bunstine 32 1997 Assistant Secretary Employee of BISYS Fund Services.
3435 Stelzer Road
Columbus, OH 43219
</TABLE>
The officers of the Fund receive no compensation directly from the
Fund for performing the duties of their offices. Mississippi Valley Advisors
Inc., of which Mr. Engelbrecht is an employee, receives advisory fees for
services it provides to the Fund as its investment adviser. Mercantile Bank
National Association, the parent of Mississippi Valley Advisors Inc., also
receives fees for services provided as the Fund's custodian. Drinker Biddle &
Reath LLP, of which Mr. McConnel is a partner,
-12-
<PAGE> 16
receives legal fees for services provided to the Fund. Messrs. Grimm and
Bunstine are employed by BISYS Fund Services Ohio, Inc., the Fund's
administrator, which receives administration fees for its services to the Fund,
and by BISYS Fund Services, the Fund's distributor, which receives fees
pursuant to certain plans adopted by the Fund with respect to certain share
classes in accordance with Rule 12b-1 under the 1940 Act.
INVESTMENT ADVISER AND SUB-ADVISER. Mississippi Valley Advisors Inc.,
the Fund's adviser, has its principal offices located at One Mercantile Center,
Seventh & Washington Streets, St. Louis, Missouri 63101. Clay Finlay Inc., the
sub-adviser to the Fund's International Equity Portfolio, has its principal
offices at 200 Park Avenue, 56th Floor, New York, New York 10166.
ADMINISTRATOR AND DISTRIBUTOR. BISYS Fund Services Ohio, Inc. (the
"Administrator") serves as the Fund's administrator. BISYS Fund Services (the
"Distributor") serves as the exclusive distributor of the shares of the Fund.
The Administrator's and Distributor's principal offices are located at 3435
Stelzer Road, Columbus, Ohio 43219.
OTHER MATTERS
The Fund does not intend to hold Annual Meetings of Shareholders
except to the extent that such meetings may be required under the 1940 Act or
state law. Shareholders who wish to submit proposals for inclusion in the
Proxy Statement for a subsequent shareholder meeting should send their written
proposals to the Fund at its principal office within a reasonable time before
such meeting.
No business other than the matters described above is expected to come
before the Meeting, but should any other matter requiring a vote of
shareholders arise, including any question as to an adjournment of the Meeting,
the persons named in the enclosed Proxy will vote thereon according to their
best judgment in the interests of the Fund.
Dated: , 1997
--------------
-13-
<PAGE> 17
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO COMPLETE THE ENCLOSED PROXY
AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN
THE UNITED STATES.
THE FUND WILL FURNISH, WITHOUT CHARGE, COPIES OF THE FUND'S ANNUAL AND
SEMI-ANNUAL REPORTS TO SHAREHOLDERS DATED NOVEMBER 30, 1996 AND MAY 31, 1997,
RESPECTIVELY, TO ANY SHAREHOLDER UPON REQUEST. THE FUND'S ANNUAL AND SEMI-
ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE FUND BY WRITING TO THE
FUND AT P.O. BOX 78069, ST. LOUIS, MISSOURI 63178 OR BY CALLING 1-800-551-3731.
-14-
<PAGE> 18
THE ARCH FUND(R), INC.
MONEY MARKET PORTFOLIO
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE ARCH
FUND(R), INC. (THE "FUND") FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD ON JANUARY 20, 1998, AT 9:00 A.M. CENTRAL TIME, AT THE OFFICES OF
MISSISSIPPI VALLEY ADVISORS INC. ONE MERCANTILE CENTER, SOUTHEAST CONFERENCE
ROOM, 21ST FLOOR, ST. LOUIS, MISSOURI 63101.
THE UNDERSIGNED HEREBY APPOINTS WALTER B. GRIMM, DAVID BUNSTINE AND
SUE A. WALTERS, AND EACH OF THEM, WITH FULL POWER OF SUBSTITUTION, AS PROXIES
OF THE UNDERSIGNED TO VOTE AT THE ABOVE-STATED SPECIAL MEETING, AND AT ALL
ADJOURNMENTS OR POSTPONEMENTS THEREOF, ALL SHARES OF CLASS A COMMON STOCK
EVIDENCING INTERESTS IN THE FUND'S MONEY MARKET PORTFOLIO (THE "PORTFOLIO")
HELD OF RECORD BY THE UNDERSIGNED ON NOVEMBER 3, 1997, THE RECORD DATE FOR THE
MEETING, UPON THE FOLLOWING MATTERS AND UPON ANY OTHER MATTER THAT MAY COME
BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] Withhold authority to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through his name in the list below:
D.E. Brandt R.M. Cox, Jr. J.J. Hunt J.C. Jacobsen
P.J. Moore R.D. Winney J.V. Woodham
(2) Proposal to ratify the selection of KPMG Peat Marwick LLP as the
Fund's independent accountant for the fiscal year ending November 30,
1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve a change in a fundamental investment limitation of
the Portfolio to permit securities lending:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Meeting.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED
HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE "FOR" THE PROPOSALS.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN
IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ----------------------------------- -----------------------------------
SIGNATURE DATE SIGNATURE(JOINT OWNERS) (DATE)
-15-
<PAGE> 19
THE ARCH FUND(R), INC.
TREASURY MONEY MARKET PORTFOLIO
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE ARCH FUND(R),
INC. (THE "FUND") FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
JANUARY 20, 1998, AT 9:00 A.M. CENTRAL TIME, AT THE OFFICES OF MISSISSIPPI
VALLEY ADVISORS INC. ONE MERCANTILE CENTER, SOUTHEAST CONFERENCE ROOM, 21ST
FLOOR, ST. LOUIS, MISSOURI 63101.
THE UNDERSIGNED HEREBY APPOINTS WALTER B. GRIMM, DAVID BUNSTINE AND SUE
A. WALTERS, AND EACH OF THEM, WITH FULL POWER OF SUBSTITUTION, AS PROXIES OF
THE UNDERSIGNED TO VOTE AT THE ABOVE-STATED SPECIAL MEETING, AND AT ALL
ADJOURNMENTS OR POSTPONEMENTS THEREOF, ALL SHARES OF CLASS B COMMON STOCK
EVIDENCING INTERESTS IN THE FUND'S TREASURY MONEY MARKET PORTFOLIO (THE
"PORTFOLIO") HELD OF RECORD BY THE UNDERSIGNED ON NOVEMBER 3, 1997, THE RECORD
DATE FOR THE MEETING, UPON THE FOLLOWING MATTERS AND UPON ANY OTHER MATTER THAT
MAY COME BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] Withhold authority to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through his name in the list below:
D.E. Brandt R.M. Cox, Jr. J.J. Hunt J.C. Jacobsen
P.J. Moore R.D. Winney J.V. Woodham
(2) Proposal to ratify the selection of KPMG Peat Marwick LLP as the Fund's
independent accountant for the fiscal year ending November 30, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve a change in a fundamental investment limitation of
the Portfolio to permit securities lending::
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED
HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE "FOR" THE PROPOSALS.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN
IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ----------------------------------- -----------------------------------
SIGNATURE DATE SIGNATURE(JOINT OWNERS) (DATE)
-16-
<PAGE> 20
THE ARCH FUND(R), INC.
GROWTH & INCOME EQUITY PORTFOLIO, GOVERNMENT &
CORPORATE BOND PORTFOLIO, U.S. GOVERNMENT SECURITIES
PORTFOLIO, SMALL CAP EQUITY PORTFOLIO, BALANCED PORTFOLIO,
INTERNATIONAL EQUITY PORTFOLIO, SHORT-INTERMEDIATE MUNICIPAL
PORTFOLIO, TAX-EXEMPT MONEY MARKET PORTFOLIO, MISSOURI
TAX-EXEMPT BOND PORTFOLIO, EQUITY INCOME PORTFOLIO, NATIONAL
MUNICIPAL BOND PORTFOLIO, INTERMEDIATE CORPORATE BOND
PORTFOLIO, EQUITY INDEX PORTFOLIO AND BOND INDEX PORTFOLIO
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE ARCH FUND(R),
INC. (THE "FUND") FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON
JANUARY 20, 1998, AT 9:00 A.M. CENTRAL TIME, AT THE OFFICES OF MISSISSIPPI
VALLEY ADVISORS INC. ONE MERCANTILE CENTER, SOUTHEAST CONFERENCE ROOM, 21ST
FLOOR, ST. LOUIS, MISSOURI 63101.
THE UNDERSIGNED HEREBY APPOINTS WALTER B. GRIMM, DAVID BUNSTINE AND SUE
A. WALTERS, AND EACH OF THEM, WITH FULL POWER OF SUBSTITUTION, AS PROXIES OF
THE UNDERSIGNED TO VOTE AT THE ABOVE-STATED SPECIAL MEETING, AND AT ALL
ADJOURNMENTS OR POSTPONEMENTS THEREOF, ALL SHARES OF CLASS C, CLASS D, CLASS E,
CLASS F, CLASS G, CLASS H, CLASS I, CLASS J, CLASS K, CLASS M, CLASS N, CLASS
O, CLASS P AND CLASS Q COMMON STOCK EVIDENCING INTERESTS IN THE FUND'S GROWTH &
INCOME EQUITY PORTFOLIO, GOVERNMENT & CORPORATE BOND PORTFOLIO, U.S. GOVERNMENT
SECURITIES PORTFOLIO, SMALL CAP EQUITY PORTFOLIO, BALANCED PORTFOLIO,
INTERNATIONAL EQUITY PORTFOLIO, SHORT-INTERMEDIATE MUNICIPAL PORTFOLIO,
TAX-EXEMPT MONEY MARKET PORTFOLIO, MISSOURI TAX-EXEMPT BOND PORTFOLIO, EQUITY
INCOME PORTFOLIO, NATIONAL MUNICIPAL BOND PORTFOLIO, INTERMEDIATE CORPORATE
BOND PORTFOLIO, EQUITY INDEX PORTFOLIO AND BOND INDEX PORTFOLIO, RESPECTIVELY,
HELD OF RECORD BY THE UNDERSIGNED ON NOVEMBER 3, 1997, THE RECORD DATE FOR THE
MEETING, UPON THE FOLLOWING MATTERS AND UPON ANY OTHER MATTER THAT MAY COME
BEFORE THE MEETING, IN THEIR DISCRETION:
(1) Election of Directors:
[ ] For all nominees listed below (except as marked to the
contrary below)
[ ] Withhold authority to vote for all nominees listed below
INSTRUCTION: To withhold authority to vote for any individual
nominee, strike a line through his name in the list below:
D.E. Brandt R.M. Cox, Jr. J.J. Hunt J.C. Jacobsen
P.J. Moore R.D. Winney J.V. Woodham
(2) Proposal to ratify the selection of KPMG Peat Marwick LLP as the Fund's
independent accountant for the fiscal year ending November 30, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED
HEREON AND, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE "FOR" THE PROPOSALS.
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. WHEN SHARES ARE HELD BY
JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY OR
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE
AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY
PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN
IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- ----------------------------------- -----------------------------------
SIGNATURE DATE SIGNATURE(JOINT OWNERS) (DATE)
-17-
