<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
PACIFIC HORIZON FUNDS, INC.
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(Name of Registrant as Specified in Its Charter)
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(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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PACIFIC HORIZON FUNDS, INC.
400 BELLEVUE PARKWAY
WILMINGTON, DELAWARE 19809
Dear Shareholder:
You are cordially invited to attend an Annual Meeting of Shareholders of
Pacific Horizon Funds, Inc. (the "Company") to be held on Friday, June 19, 1998
at 9:00 a.m., Eastern Time, at 400 Bellevue Parkway, Wilmington, Delaware.
At the Meeting, shareholders will be asked to vote on the following
matters: (1) election of directors, (2) approval or disapproval of an advisory
agreement between the Company and Robertson, Stephens & Company Investment
Management, L.P. (an indirect wholly-owned subsidiary of BankAmerica
Corporation), (3) approval or disapproval of an amendment to the Company's
Charter, (4) approval or disapproval of changes to the fundamental investment
objectives, policies and/or limitations of each fund of the Company, and (5)
ratification or rejection of the selection of Price Waterhouse LLP as the
Company's independent accountants for the fiscal year ending February 28, 1999.
Whether or not you plan to be present at the Meeting, your vote is needed.
If you do not plan to be present at the Meeting, please complete, sign and
return the enclosed proxy card(s) promptly. A postage paid envelope is enclosed
for this purpose.
We look forward to seeing you at the Meeting or receiving your proxy
card(s) so your shares may be voted at the Meeting.
Sincerely yours,
Dr. Cornelius J. Pings
President
SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY
CARD(S) IN THE ENCLOSED ENVELOPE.
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PACIFIC HORIZON FUNDS, INC.
------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------
April __, 1998
To the Shareholders of
Pacific Horizon Funds, Inc.
An Annual Meeting of Shareholders of Pacific Horizon Funds, Inc. (the
"Company") will be held on June 19, 1998, at 9:00 A.M. Eastern Time, at the
offices of the Company at 400 Bellevue Parkway, Wilmington, Delaware. The Funds
of the Company are: Prime Fund, Treasury Fund, Treasury Only Fund, Government
Fund, Tax-Exempt Money Fund, California Tax-Exempt Money Market Fund,
Intermediate Bond Fund, Corporate Bond Fund, U.S. Government Securities Fund,
Capital Income Fund, National Municipal Bond Fund, California Tax-Exempt Bond
Fund, Short Term Government Fund, Asset Allocation Fund, Blue Chip Fund,
International Equity Fund and Aggressive Growth Fund. The Meeting will be held
for the following purposes:
(1) To elect Messrs. Leonard B. Auerbach, Edward S. Bottum, Douglas
B. Fletcher, John W. Glynn, Jr., Robert E. Greeley, James K. Peterson,
Andrew P. Pilara, Jr. and Cornelius J. Pings, Directors of the Company;
(2) With respect to each Fund except the Blue Chip and Intermediate
Bond Funds, to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P. (an indirect, wholly-owned subsidiary of BankAmerica
Corporation);
(3) To approve or disapprove an amendment to the Company's Charter;
(4) To approve or disapprove changes to the following fundamental
investment limitations of each Fund of the Company:
(a) limitation on underwriting of securities;
(b) limitation on real estate transactions;
(c) limitation on commodity transactions;
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(d) limitation on industry concentration;
(e) limitation on lending;
(f) limitation on borrowing and issuance of senior
securities; and
(g) limitation on issuer concentration.
(5) To approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) with respect to each Fund, the limitation on short sales
and purchasing securities on margin;
(b) with respect to the National Municipal Bond, Aggressive
Growth, California Tax-Exempt Bond, Prime, Treasury and
California Tax-Exempt Money Market Funds, the limitation
on purchasing securities of companies for the purpose of
exercising control;
(c) with respect to each Fund except the Government and
Treasury Only Funds, the limitation on purchasing
securities of other investment companies;
(d) with respect to each Fund except the Aggressive Growth,
Short Term Government, Prime, Treasury, Government and
Treasury Only Funds, the limitation on put, call,
straddle and spread transactions;
(e) with respect to each Fund except the National Municipal
Bond, International Equity, Corporate Bond, Short Term
Government and California Tax-Exempt Money Market Funds,
the limitation on illiquid securities;
(f) with respect to the Intermediate Bond, Blue Chip and
Asset Allocation Funds, the limitation on transactions
in certain securities by Board members;
(g) with respect to the U.S. Government Securities, Capital
Income, California Tax- Exempt Bond and California
Tax-Exempt Money Market Funds, the limitation on
unseasoned issuers;
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(h) with respect to the Aggressive Growth Fund, the policy
on investment in equity securities;
(i) with respect to the U.S. Government Securities Fund, the
policy with respect to investment in certificates of the
Government National Mortgage Association ("GNMA");
(j) with respect to the Capital Income Fund, the policy with
respect to investment in convertible securities;
(k) with respect to the California Tax-Exempt Bond Fund, the
policy with respect to investment in California
municipal securities;
(l) with respect to the Tax-Exempt Money Fund, the policy
with respect to investments in municipal securities; and
(m) with respect to the California Tax-Exempt Money Market
Fund, the policy with respect to investments in
California municipal securities;
(6) To approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective of the following
funds: National Municipal Bond, International Equity, Corporate Bond,
Intermediate Bond, Blue Chip, Asset Allocation, Aggressive Growth, U.S.
Government Securities, Capital Income, California Tax-Exempt Bond,
Short-Term Government, Prime, Treasury, Tax-Exempt Money and California
Tax-Exempt Money Market Funds;
(7) To approve or disapprove a new fundamental investment limitation
of the Prime Fund with regard to industry concentration (Prime Fund only);
(8) To ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountants for the fiscal year ending February 28,
1999; and
(9) 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 March 24, 1998
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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
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WE NEED YOUR PROXY VOTE IMMEDIATELY
A SHAREHOLDER MAY THINK HIS OR HER VOTE IS NOT IMPORTANT, BUT IT IS VITAL. BY
LAW, THE ANNUAL MEETING OF SHAREHOLDERS OF THE FUND SCHEDULED FOR JUNE 19, 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
COMPANY WOULD CONTINUE TO SOLICIT VOTES IN AN ATTEMPT TO ACHIEVE A QUORUM.
CLEARLY, YOUR VOTE COULD BE CRITICAL IN ALLOWING THE COMPANY TO HOLD THE MEETING
AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY.
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PACIFIC HORIZON FUNDS, INC.
400 BELLEVUE PARKWAY
WILMINGTON, DELAWARE 19809
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Pacific Horizon Funds, Inc. (the "Company")
for use at an Annual Meeting of Shareholders of the Company to be held at 400
Bellevue Parkway, Wilmington, Delaware, on June 19, 1998, at 9:00 A.M. Eastern
Time (such meeting and any adjournment thereof is referred to as the "Meeting").
The Funds of the Company are the Prime Fund, Treasury Fund, Treasury Only Fund,
Government Fund, Tax-Exempt Money Fund, California Tax-Exempt Money Market Fund,
Intermediate Bond Fund, Corporate Bond Fund, U.S. Government Securities Fund,
Capital Income Fund, National Municipal Bond Fund, California Tax-Exempt Bond
Fund, Short Term Government Fund, Asset Allocation Fund, Blue Chip Fund,
International Equity Fund and Aggressive Growth Fund (each a "Fund" and
collectively, the "Funds"). It is expected that the solicitation of proxies will
be primarily by mail. The Company's officers and service contractors may also
solicit proxies by telephone, telegraph, facsimile, personal interview or the
Internet. In connection with the solicitation of certain shareholders, the
Company's service contractors have retained D.F. King to assist in the
solicitation of proxies and to tabulate votes returned at a cost of
approximately $140,000. The Company 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 Company 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 April __, 1998.
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
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1. To elect Messrs. Leonard B. Auerbach, The Shareholders of all Funds of
Edward S. Bottum, Douglas B. the Company will vote together.
Fletcher, John W. Glynn, Jr., Robert
E. Greeley, James K. Peterson, Andrew
P. Pilara, Jr., and Cornelius J.
Pings, Directors of the Company.
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PROPOSAL SHAREHOLDERS SOLICITED
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2. To approve or disapprove a new The shareholders of each Fund,
Investment Advisory Agreement between except the Blue Chip and
the Company and Robertson, Stephens & Intermediate Bond Funds (which
Company Investment Management, L.P. will not vote), will vote
(an indirect, wholly-owned subsidiary separately on a Fund by Fund
of BankAmerica Corporation.) basis. All classes of shares of
the same Fund will vote together.
3. To approve or disapprove an amendment The shareholders of all Funds of
to the Company's Charter. the Company will vote together.
4. To approve or disapprove changes to
the following fundamental investment
limitations of each Fund of the
Company:
(a) limitation on underwriting of The shareholders of each Fund
securities; (b) limitation on real will vote separately on a Fund by
estate transactions; (c) limitation Fund basis on each investment
on commodity transactions; (d) limitation. All classes of
limitation on industry concentration; shares of the same Fund will vote
(e) limitation on lending; (f) together.
limitation on borrowing and issuance
of senior securities; and (g)
limitation on issuer concentration;
5. To approve or disapprove certain
changes to the following fundamental
investment policies and limitations,
including a change to make all of such
policies and limitations non-fundamental:
(a) limitation on short sales and The shareholders of each Fund
purchasing securities on margin; will vote separately on a Fund by
Fund basis. All classes of shares
of the same Fund will vote
together.
(b) limitation on purchasing The shareholders of each of the
securities of companies for the following funds will vote
purpose of exercising control; separately on a Fund by Fund
basis: National Municipal Bond
Fund, Aggressive Growth Fund,
California Tax-Exempt Bond Fund,
Prime Fund, Treasury Fund and
California Tax-Exempt Money Market
Fund. All classes of shares of the
same Fund will vote together.
(c) Limitation on purchasing The shareholders of each Fund,
securities of other investment except the Government and
companies; Treasury Only Funds (which will not
vote), will vote separately on a
Fund by Fund basis. All classes of
shares of the same Fund will vote
together.
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PROPOSAL SHAREHOLDERS SOLICITED
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(d) limitation on put, call, The shareholders of each Fund,
straddle and spread transactions; except the Aggressive Growth,
Short-Term Government, Prime,
Treasury (which will not vote),
Government and Treasury Only Funds
will vote separately on a Fund by
Fund basis. All classes of shares
of the same Fund will vote
together.
(e) limitation on illiquid The shareholders of each Fund,
securities; except the National Municipal
Bond, International Equity,
Corporate Bond, Short-Term
Government, and California Tax-
Exempt Money Market Funds (which
will not vote), will vote
separately on a Fund by Fund
basis. All classes of shares of
the same Fund will vote together.
(f) limitation on transactions in The shareholders of each of the
certain securities by Board members; Intermediate Bond Fund, Blue Chip
Fund and Asset Allocation Fund will
vote separately on a Fund by Fund
basis. All classes of shares of the
same Fund will vote together.
(g) limitation on unseasoned The shareholders of each of the
issuers; U.S. Government Securities,
Capital Income, California
Tax-Exempt Bond and California
Tax-Exempt Money Market Funds will
vote separately on a Fund by Fund
basis. All classes of shares of the
same Fund will vote together.
(h) policy on investment in equity The shareholders of the
securities; Aggressive Growth Fund will vote
separately. All classes of
shares of the Fund will vote
together.
(i) policy on investment in GNMA The shareholders of the U.S.
certificates; Government Securities Fund will
vote separately. All classes of
shares of the Fund will vote
together.
(j) policy on investment in The shareholders of the Capital
convertible securities; Income Fund will vote separately.
All classes of shares of the Fund
will vote together.
(k) policy on investment in The shareholders of the
California municipal securities; California
Tax-Exempt Bond Fund will vote
separately. All classes of shares
of the Fund will vote together.
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PROPOSAL SHAREHOLDERS SOLICITED
-------- ----------------------
(l) policy on investment in The shareholders of the Tax-
municipal securities; Exempt Money Fund will vote
separately. All classes of
shares of the Fund will vote
together.
(m) policy on investment in The shareholders of the
California municipal securities; California Tax-Exempt Money Market
Fund will vote separately. All
classes of the Fund will vote
together.
6. To approve or disapprove a change in The shareholders of each Fund
the fundamental investment objective except the Government and
to a non-fundamental investment Treasury Only Funds (which will
objective; not vote) will vote separately on
a Fund by Fund basis. All
classes of the same Fund will
vote together.
7. To approve or disapprove a new The shareholders of the Prime
fundamental investment limitation of Fund will vote separately. All
the Prime Fund regarding investment classes of the Fund will vote
concentration; and together.
8. To ratify or reject the selection of The shareholders of each Fund of
Price Waterhouse LLP as the Company's the Company will vote together.
independent accountant for the fiscal
year ending February 28, 1999.
A Proxy is enclosed with respect to the shares you own in the Company. 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.
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INTRODUCTION
On June 8, 1997, BankAmerica Corporation ("BankAmerica"), the parent
of Bank of America National Trust and Savings Association ("Bank of America"),
the Company's former adviser, entered into an Agreement and Plan of Merger with
Robertson, Stephens & Company Group, L.L.C. and Robertson, Stephens & Company,
Inc., pursuant to which each of those entities were merged into an indirect,
wholly owned subsidiary of BankAmerica. Upon the consummation of those mergers
on October 1, 1997, BankAmerica became the owner of the entire beneficial
interest in Robertson, Stephens & Company Investment Management, L.P. ("RSIM,
L.P.") and Robertson Stephens Investment Management, Inc. ("RSIM, Inc."). Both
RSIM, L.P. and RSIM, Inc. and investment affiliates in the Robertson Stephens
Management Group have in excess of $5 billion under management in public and
private investment pools. Bank of America has approximately $67 billion in
assets under management.
As of March 1, 1998, BankAmerica consolidated Bank of America's
investment advisory division with RSIM, L.P. Bank of America has informed the
Company that the consolidation did not result in a change in the actual control
or management of the Company's investment adviser or administrator. As a part of
the consolidation, RSIM, L.P. assumed the investment advisory agreements between
the Company and Bank of America with respect to each Fund of the Company except
the Blue Chip and Intermediate Bond Funds, and with respect to the Blue Chip and
Intermediate Bond Funds, which currently invest all of their respective assets
in the Blue Chip and Investment Grade Bond Portfolios of Master Investment
Trust, Series I ("MIT, I"), RSIM, L.P. assumed the investment advisory agreement
between MIT, I and Bank of America (collectively, the "Existing Agreements").
Such assumption of the Company's Existing Agreements by RSIM, L.P. was approved
by the Board of Directors (the "Board") including a majority of the Board
members who are not interested persons as that term is defined in the Investment
Company Act of 1940 ("1940 Act"), at a meeting held on February 3, 1998. RSIM,
L.P. provides the same services for the same fees as provided by Bank of America
under the Existing Agreements.
PROPOSAL 1: ELECTION OF DIRECTORS
(ALL FUNDS)
At the Meeting, shareholders will be asked to consider the election
of eight Directors, who will constitute the entire Board of the Company. If
elected, each Director will hold office until the next Annual Meeting of
Shareholders and until his successor is elected and qualified.
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The election of the eight directors is part of a restructuring of the
boards of the registered investment companies advised by BankAmerica affiliates
(the "Bank of America/Robertson Stephens Complex") into essentially the same
board for each investment company in the Complex. The restructuring is intended
to centralize board decision-making. The Board, including a majority of the
Directors who are not "interested persons" as defined under the 1940 Act,
approved the proposed restructuring of the Board at a meeting on March 27, 1998.
Therefore, the Board is proposing that, at the Meeting, shareholders elect the
eight (8) nominees listed below to serve as Directors of the Company. Messrs.
Pings and Fletcher were last elected to the Board of the Company by public
shareholders of the Company on January 21, 1988. Messrs. Auerbach, Bottum,
Glynn, Greeley, Peterson and Pilara are recommended for election by shareholders
for the first time. Thomas M. Collins and Kermit O. Hanson will continue to
serve as Directors until shareholder approval of the nominees.
It is intended that the voting instructions/proxies will be voted
for the election of the nominees as Directors described in the table below. All
of the nominees have consented to serve as Directors of the Company, if elected.
In case any nominee shall be unable or shall fail to act as a Director by virtue
of an unexpected occurrence, the voting instructions/proxies may be voted for
such other person(s) as shall be determined by the persons acting under the
voting instructions/proxies in their discretion.
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NAME, AGE, PRINCIPAL YEAR FIRST
OCCUPATION AND AFFILIATIONS BECAME A DIRECTOR
--------------------------- -----------------
Leonard B. Auerbach (51)
Nominee Trustee, Robertson Stephens Investment Trust (registered
investment company) since 1987; Chief Executive Officer
and President of All Performance Mortgage Trust
(provider of mortgage investment capital) (since 1997)
President and Chairman, Auerbach Associates, Inc.
(management consulting firm) since 1979; President,
LBA&C, Inc. (since 19__); formerly President, Tuttle and
Auerbach Securities, Inc. (introducing broker trading
futures on behalf of institutional hedging clients and
individuals) from 1989 to July 1997); Director, Roelof
Mining Inc. (since 19__); Chairman, Intraview Systems
Corporation (from ____ to March 1986); General Partner,
Tuttle & Co. (from 1989 to 1997); Director, Headlands
Mortgage (since 1998) Limited Partner, Robertson Stephens
Residential Fund L.P., RS Property Fund I, L.P., and
Robertson Stephens Commercial Property Fund, L.P.,
(since 1993), of which RSRF Company L.L.C., RSRE II, L.L.C.,
and Robertson Stephens & Company, Inc., respectively,
affiliates of RSIM, L.P. and RSIM, Inc., are the general
partners.
Edward S. Bottum (63) Nominee
Managing Director, Chase Franklin Corporation (venture
capital firm) (since 1990); Trustee, Time Horizon Funds
(since 1995); Trustee and Chairman, Pacific Innovations
Trust (since 1997) (registered investment company);
formerly Vice Chairman of Continental Bank N.A. (retired
1990); formerly Trustee, 231 Funds (registered
investment company) (February 1993 to August 1995).
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NAME, AGE, PRINCIPAL YEAR FIRST
OCCUPATION AND AFFILIATIONS BECAME A DIRECTOR
--------------------------- -----------------
Douglas B. Fletcher (73) 1985
Chairman of the Board, Fletcher Capital Advisor,
Incorporated (registered investment advisor) (since
1991); Partner, Newport Partners (private venture
capital firm) (since 1981); Director, FCA Securities,
Inc. (registered broker/dealer) (since 1996); Chairman
of the Board and Chief Executive Officer, First Pacific
Advisors, Inc. (registered investment adviser) and seven
investment companies under its management (prior to
1983); former Allied Member, New York Stock Exchange;
Chairman of the Board of FPA Paramount Fund, Inc.
(through 1984); Chairman, TIS Mortgage Investment
Company (real estate investment trust); Trustee and
former Vice Chairman of the Board, Claremont McKenna
College; Chartered Financial Analyst.
John W. Glynn, Jr. (57) Nominee
Trustee, Robert Stephens Investment Trust (registered
investment company) (since 1997); Principal and
Chairman, Glynn Capital Management (investment
management firm) (since 1983); Director, Neurex
Corporation (since 19__); Director, Sterling Payot
Company (private investment banking firm) (since 19__);
Special Limited Partners, New Enterprise Associates
(since 1984); Limited Partner, The Orphan Fund
(from 1991 to June 1997) of which RSIM, L.P. is a
general partner; Lecturer at the Darden School of
Business at the University of Virginia and at the
Stanford Business School (since 19__).
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NAME, AGE, PRINCIPAL YEAR FIRST
OCCUPATION AND AFFILIATIONS BECAME A DIRECTOR
--------------------------- -----------------
Robert E. Greeley (66) 1993
Chairman, Page Mill Asset Management (a private
investment company) (since 1991); Morgan Grenfell Small
Cap Fund (since 1986); Trustee, Master Investment Trust
Series I (registered investment company) (since 1993),
Master Investment Trust, Series II (registered
investment company) (1993 to 1997), Time Horizon Funds
(registered investment company) (since 1995); Trustee
and President, Pacific Innovations Trust (since 1997)
registered investment company); formerly Director,
Bunker Hill Income Securities, Inc. (from 1989 to 1994);
Trustee, SunAmerica Fund Group (previously Equitec
Siebel Fund Group) (registered investment companies)
(from 1984 to 1992); formerly Director, Manager,
Corporate Investments, Hewlett Packard Company (from
1979 to 1991).
James K. Peterson (57) Nominee
Trustee, Robertson Stephens Investment Trust (registered
investment company) (since 1987); Managing Director, Oak
Glen Consultancy, LLC (an investment consulting firm)
(since 1996); Managing Director of Siguler Guff Advisers,
L.L.C. (an investment advisory firm (since _____))
(investment consultant) (since 1996); Director, IBM
Retirement Funds (from April 1988 to October 1996);
[Limited Partner, Robertson Stephens Residential Fund,
L.P. (since 19__), of which RSRS Company L.L.C., an
affiliate of RSIM, L.P. and RSIM, Inc., is the general
partner.
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NAME, AGE, PRINCIPAL YEAR FIRST
OCCUPATION AND AFFILIATIONS BECAME A DIRECTOR
--------------------------- -----------------
*Andrew P. Pilara, Jr. (56) Nominee
Managing Director, Robertson Stephens Investment
Management Company (since 1995); President and Trustee,
Robertson Stephens Investment Trust (registered
investment company) (since 1997); Portfolio Manager,
The Robertson Stephens Global National Resources,
Global Value and Partners Funds and member of the
Contrarian Fund team (since August 1993); President,
Pilara Associates (investment advisory firm) (from
1974 to 1993).
*Cornelius J. Pings (69) 1982
President, Association of American Universities (since
February 1993); Provost (from 1982 to January 1993) and
Senior Vice President for Academic Affairs (from 1981 to
January 1993), University of Southern California;
Trustee, Master Investment Trust, Series I (since 1995);
former Trustee, Master Investment Trust, Series II (from
1995 to 1997); Director, Foxmyers Group, Inc. (insurance
company) (since 1991).
- ----------
* "Interested Person" as defined in the 1940 Act. Mr. Pilara is an
"interested" person by reason of his employment with RSIM, L.P. Mr. Pings
is an "interested" person solely by reason of his position as President of
the Company.
The term of office of each person elected as a Director will be
until the next Annual Meeting of Shareholders after his election and until his
successor shall have been duly elected and qualified.
Mr. Glynn is a director of Sterling Payot, Mr. Bottum is a director
of Chase Franklin Corporation ("Chase Franklin") and Mr. Fletcher is a director
of FCA Securities, Inc. Sterling Payot, Chase Franklin and FCA Securities, Inc.
are broker-dealers registered with the Securities and Exchange Commission.
Sterling Payot, Chase Franklin and FCA Securities, Inc. do not execute portfolio
transactions for any of the Funds nor do they engage in principal transactions
with or act as distributor for any of the Funds. Messrs. Glynn, Bottum and
Fletcher have advised the Company that Sterling Payot, Chase Franklin and FCA
Securities,
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<PAGE> 19
Inc., respectively, will not execute portfolio transactions for, engage in
principal transactions with, or act as distributor for, any of the Funds during
any period when he is affiliated with the particular broker-dealer and is a
Director of the Company. The Board has determined that none of the Funds nor
their shareholders will be adversely affected as a result of Sterling Payot,
Franklin Chase and FCA Securities, Inc. not executing such transactions for the
Funds or engaging in such principal transactions with or acting as distributor
for the Funds. Accordingly, Mr. Glynn, Mr. Bottum and Mr. Fletcher will not be
considered interested persons of the Company due to their relationship with
Sterling Payot, Chase Franklin and FCA Securities, Inc., respectively.
In the fiscal year of the Company ended February 28, 1998, the
Directors met nine times. Each of the current Directors attended 75% or more of
the meetings of the Board.
The Board has an audit committee, contract review committee,
nominating committee and a valuation committee. Each member of the Board is also
a member of the audit and contract review committees. Messrs. Fletcher, Greeley,
Hanson and Collins are members of the nominating committee. Messrs. Collins,
Fletcher and Greeley are members of the valuation committee and Mr. Hanson
serves as an alternate. The audit committee is responsible for reviewing the
results of the audit of the Company by its independent public accountant. The
contract review committee is responsible for reviewing the performance of the
Company's service providers in connection with the renewal of the Company's
service contracts. The nominating committee is responsible for reviewing the
credentials of proposed nominees for the Company's Board and for selecting and
nominating those directors who are not "interested persons" (as defined in the
1940 Act) of the Company. The valuation committee is responsible for handling
issues arising out of the pricing of securities. For the fiscal year ended
February 28, 1998, the audit committee met twice, the valuation committee and
contact review committee met once, and the nominating committee did not meet.
The nominating committee will not consider names recommended by the Company's
shareholders.
For his services as Director of the Company, each Director currently
receives an annual retainer of $50,000 with a fee of $1,000 for each day of
board meetings in which he participates. Dr. Pings receives an additional
$40,000 per annum as Chairman of the Board. Each member of a committee of the
Board is entitled to receive $1,000 for each committee meeting in which he
participates, and each Chairman of a committee of the Board is entitled to
receive an annual retainer of $1,000 for his services as Chairman of the
committee. Each Director will also be reimbursed for out-of-pocket expenses
incurred as a Director. The following table sets forth (i) the aggregate
compensation
-11-
<PAGE> 20
paid by the Company for the fiscal year ended February 28, 1998 to the Directors
and the nominees for Director, and (ii) the aggregate compensation paid to such
Directors and nominees for services on the Company's Board and that of all other
funds in the "Fund Complex" (as defined in Schedule 14A under the Securities
Exchange Act of 1934):
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT TOTAL
BENEFITS ESTIMATED COMPENSATION
AGGREGATE ACCRUED ANNUAL FROM THE
COMPENSATION AS PART OF BENEFITS COMPANY
FROM THE FUND UPON AND FUND
NAME COMPANY EXPENSES RETIREMENT COMPLEX (1)
---- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C>
Leonard B. Auerbach (2) Not Applicable Not Applicable Not Applicable $____
Edward S. Bottum (2) Not Applicable Not Applicable Not Applicable $29,125
Douglas B. Fletcher $36,750 $23,195 $49,295 $109,240
John W. Glynn, Jr. (2) Not Applicable Not Applicable Not Applicable $____
Robert E. Greeley (3) $36,750 $16,220 $33,010 $116,730
James K. Peterson (2) Not Applicable Not Applicable Not Applicable $____
Andrew Pilara(2) Not Applicable Not Applicable Not Applicable $____
Cornelius J. Pings (4) $69,250 $26,984 $56,285 $152,019
Thomas M. Collins* $46,750 $16,199 * $97,377
Kermit O. Hanson* $35,750 $28,422 * $133,575
</TABLE>
- ----------
(1) The "Fund Complex" consists of the Company, Master Investment Trust,
Series I, Time Horizon Funds, Pacific Innovations Trust, Seafirst
Retirement Funds (which were merged into the Company on June 23, 1997) and
the Robertson Stephens Investment Trust.
(2) Nominee. Messrs. Auerbach, Glynn and Peterson currently serve as Trustees
of the Robertson Stephens Investment Trust. Mr. Bottum currently serves as
Trustee for the Time Horizon Funds.
(3) Mr. Greeley currently also serves as Trustee for the Time Horizon Funds
and Master Investment Trust, Series I.
(4) Dr. Pings also serves as Trustee for Master Investment Trust, Series I.
* Messrs. Collins and Hanson will continue to serve as Directors until
shareholder approval of the nominees. Assuming the Meeting is held on June
19, 1998: Mr. Collins will be entitled to retirement benefits of $_______
(___%), $_______ (___%), $_______ (___%), $_______ (___%), $_______
(___%), $_______ (___%), $_______ (___%), $_______ (___%), $_______
(___%), $_______ (___%), $_______ (___%), $_______ (___%), $_______
(___%), $_______ (___%), $_______ (___%), $_______ (___%) and $_______
(___%) from the Prime, Treasury, Treasury Only, Government, Tax-Exempt
Money, California Tax-Exempt Money Market, Intermediate Bond, Corporate
Bond, U.S. Government Securities, Short-Term Government, National
Municipal Bond, California Tax-Exempt Bond, Capital Income, Asset
Allocation, Aggressive Growth, Blue Chip and International Equity Funds,
respectively; and Mr. Hanson will be entitled to retirement benefits of
$_______ (___%), $_______ (___%), $_______ (___%), $_______ (___%),
$_______ (___%), $_______ (___%), $_______ (___%), $_______ (___%),
$_______ (___%), $_______ (___%), $_______ (___%), $_______ (___%),
$_______ (___%), $_______ (___%), $_______ (___%), $_______ (___%) and
$_______ (___%) from the Prime, Treasury, Treasury Only, Government,
Tax-Exempt Money, California Tax-Exempt Money Market, Intermediate Bond,
Corporate Bond, U.S. Government Securities, Short-Term Government,
National Municipal Bond, California Tax-Exempt Bond, Capital Income, Asset
Allocation, Aggressive Growth, Blue Chip and International Equity Funds,
respectively. Bank of America has agreed to reimburse the Company $_______
in the aggregate relating to these benefits.
-12-
<PAGE> 21
Under the retirement plan approved by the Board of Directors,
including a majority of its Directors who are not "interested persons" of the
Company, a Director in office on or after February 28, 1994 and who on or before
March 18, 1998 dies or resigns is entitled to receive ten annual payments each
equal to the greater of (i) the "Applicable Percentage" set forth below of the
annual Director's retainer that was payable by the Company during the year of
his/her death or resignation, or (ii) the Applicable Percentage of the annual
Director's retainer then in effect for Directors of the Company during the year
of such payment:
<TABLE>
<CAPTION>
YEARS OF SERVICE
AFTER FEBRUARY 28, 1994 APPLICABLE PERCENTAGE*
----------------------- ----------------------
<S> <C>
Fewer than 5 0**
5 but fewer than 6 50
6 but fewer than 7 60
7 but fewer than 8 70
8 but fewer than 9 80
9 but fewer than 10 90
10 or more 100
</TABLE>
Such Director is also entitled to receive an additional retirement
benefit following his death or resignation equal to an additional percentage of
the annual Director's retainer described above in this paragraph. The additional
percentage equals one-half of the difference between 100 percent and the
Director's Applicable Percentage. The Director's additional retirement benefit
is paid at the same time and in the same manner as the regular retirement
benefit.
- ----------
* For service that includes a fractional year, a Director's years of service is
rounded to the nearest quarter of a year of service, and the Director's
Applicable Percentage is rounded to the nearest 0.25%.
** A Director who either resigns in good standing or dies before completing five
years of service as a director is assigned an Applicable Percentage of 50
percent.
-13-
<PAGE> 22
The amount payable each year to a Director who dies or resigns is increased by
$1,000 for each year of service that the Director served as Chairman of the
Board since the Company's inception in 1982. The retirement benefit in which a
Director has become vested may not be reduced by later Board action.
In lieu of receiving ten annual payments, a Director may elect to
receive substantially equivalent benefits through a single-sum cash payment of
the present value of such benefits to be paid by the Company within 45 days of
the death or resignation of the Director. The present value of such benefits
shall be calculated (i) based on the retainer that was payable by the Company
during the year of the Director's death or resignation (and not on any retainer
payable to Directors thereafter), and (ii) using the interest rate in effect as
of the date of the Director's death or resignation by the Pension Benefit
Guaranty Corporation (or any successor thereto) for valuing immediate annuities
under terminating defined benefit pension plans.
The obligation of the Company to pay benefits to a former Director
is neither secured nor funded by the Company but shall be binding upon its
successors in interest. The payment of benefits under the retirement plan has no
priority or preference over the lawful claims of the Company's creditors or
shareholders, and the right to receive such payments is not assignable or
transferable by a Director (or former Director) other than by will, by the laws
of descent and distribution, or by the Director's written designation of a
beneficiary.
In order for Proposal 1 to be adopted, it must be approved by a majority
of a quorum of shareholders. For more information, see "Voting Information -
Quorum."
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
EACH NOMINEE FOR DIRECTOR OF THE COMPANY.
PROPOSAL 2: APPROVAL OF INVESTMENT ADVISORY AGREEMENT
(ALL FUNDS EXCEPT THE BLUE CHIP AND INTERMEDIATE BOND FUNDS)
At the Meeting, shareholders of each of the Funds (except for the
Blue Chip and Intermediate Bond Funds) will be asked to vote on the approval of
a new investment advisory agreement (the "New Agreement"), which is summarized
below. A copy of the New Agreement is attached to this Proxy Statement as
Appendix A, and the description of the Agreement which follows is qualified in
its entirety by reference to Appendix A.
Currently, the Company has various advisory agreements on behalf of
different Funds with Bank of America, which have been assumed by RSIM, L.P., as
described above. The New
-14-
<PAGE> 23
Agreement would replace the various advisory agreements with a single agreement
between the Company and RSIM, L.P. Shareholders of the Blue Chip and
Intermediate Bond Funds are not being asked to approve the New Agreement.
Currently, these Funds do not have an investment advisory agreement because they
invest all of their respective assets in MIT,I which in turn is subject to a
separate investment advisory agreement with Bank of America that has also been
assumed by RSIM,L.P. (the "MIT, I Agreement"). Although the New Agreement is not
being submitted to shareholders of the Blue Chip and Intermediate Bond Funds, it
is expected that on or about July 1, 1998 the Blue Chip and Intermediate Bond
Funds will withdraw their investments from the Blue Chip and Investment Grade
Bond Portfolios, respectively of MIT, I, will invest directly in portfolio
securities and will adopt an advisory agreement substantially similar to the
existing advisory agreement for the Blue Chip and Investment Grade Bond
Portfolios.
DESCRIPTION OF THE EXISTING AGREEMENTS
As mentioned above, pursuant to an Assumption Agreement dated March
1, 1998, RSIM, L.P. assumed the Existing Agreements. The Existing Agreements
were last approved by shareholders as follows:
FUND DATE OF AGREEMENT APPROVAL
- ---- ----------------- --------
Prime April 22, 1992 By public
Treasury shareholders on
Tax-Exempt Money December 2, 1991
California Tax-
Exempt Money
Market
Treasury Only March 1, 1993 By sole shareholder
Government on February 27, 1993
Aggressive Growth April 22, 1992 By public
U.S. Government shareholders on
Securities December 2, 1991
California Tax-
Exempt Bond
Capital Income November 1, 1994 By public
shareholders on
December 29, 1994
-15-
<PAGE> 24
National Municipal July 1, 1996 By sole
Bond+ interestholder of
National Municipal
Bond Portfolio of
Master Investment
Trust, Series II
("MIT, II") on
January 20, 1994
Short-Term July 30, 1996 By sole shareholder
Government on August 1, 1996
Corporate Bond+ September 1, 1996 By sole
interestholder of
the Corporate Bond
Portfolio of MIT, I
on December 3, 1993
International January 1, 1997 By public
Equity* shareholders on
December 23, 1996
Asset Allocation+ June 23, 1997 By public
shareholders on
April 28, 1995
+ Prior to July 1, 1996, September 1, 1996 and June 23, 1997, the National
Municipal Bond Fund, Corporate Bond Fund and Asset Allocation Fund operated in a
master-feeder structure and invested all of their respective assets in the
National Municipal Bond Portfolio of MIT, II, Corporate Bond Portfolio of MIT, I
and Asset Allocation of MIT, I. On July 1, 1996, September 1, 1996 and June 23,
1997, respectively, the National Municipal Bond Fund, Corporate Bond Fund and
Asset Allocation Fund withdrew their investments from such portfolios and
invested directly in portfolio securities. The shareholders of the National
Municipal Bond Fund, Corporate Bond Fund and Asset Allocation Fund did not
approve the new investment advisory agreement pursuant to a position of the
staff of the Securities and Exchange Commission ("SEC") which permitted feeder
funds to reorganize into a managed portfolio without such approvals.
* The International Equity Fund is subadvised by Wellington Management Company
pursuant to a sub-advisory agreement dated and approved on the same dates as
those with respect to the Agreement with Bank of America.
In each of the Existing Agreements, RSIM, L.P. has agreed, subject
to Board oversight, to provide a continuous investment program and to be
responsible for, make decisions with respect to and place orders for all
purchases and sales of each Fund's securities. Wellington Management Company,
LLP serves as
-16-
<PAGE> 25
sub-adviser to the International Equity Fund, and would continue in such
capacity under the New Agreement.
UNLESS A DIFFERENCE IS SPECIFICALLY DISCUSSED BELOW IN "DESCRIPTION
OF PROPOSED ADVISORY AGREEMENT," THE TERMS OF THE NEW AGREEMENT ARE
SUBSTANTIALLY THE SAME AS THOSE IN THE EXISTING AGREEMENTS AND THERE ARE NO
OTHER MATERIAL DIFFERENCES. THE ADVISORY FEES PROVIDED FOR IN THE EXISTING
AGREEMENTS WILL REMAIN THE SAME AND NOT CHANGE IN THE NEW AGREEMENT.
For the services provided and expenses assumed pursuant to the
Existing Agreement with respect to the Prime, Treasury, Government, Treasury
Only, Tax-Exempt Money and California Tax-Exempt Money Market Funds, RSIM, L.P.
is entitled to fees, computed daily and payable monthly, at the annual rate of
.10% of the first $3 billion of net assets of each such Fund, .09% of the next
$2 billion of net assets of each such Fund, plus .08% of the amount over $5
billion of net assets of each such Fund. For the services provided and expenses
assumed pursuant to the Existing Agreements, RSIM, L.P. is entitled to fees,
computed daily and payable monthly, at the annual rate of .25% with respect to
the Short-Term Government Fund; .30% with respect to the California Tax-Exempt
Bond Fund and Investment Grade Bond Portfolio of MIT, I; .35% with respect to
the U.S. Government Securities and National Municipal Bond Funds; .40% with
respect to the Asset Allocation Fund; .45% with respect to the Capital Income
and Corporate Bond Funds; .50% with respect to the Blue Chip Portfolio of MIT,
I; .60% with respect to the Aggressive Growth Fund; and .75% with respect to the
International Equity Fund. For the fiscal year ended February 28, 1998, the
Company and (MIT, I with respect to the Blue Chip and Investment Grade Bond
Portfolio) paid Bank of America and Bank of America voluntarily waived the
following amounts:
-17-
<PAGE> 26
<TABLE>
<CAPTION>
TOTAL ADVISORY TOTAL ADVISORY
FUND FEES PAID FEES WAIVED*
- ---- ------------- --------------
<S> <C> <C>
Prime $7,234,054 --
Treasury 2,708,981 --
Government 460,263 $210,869
Treasury Only 439,545 --
Tax-Exempt Money 636,863 --
California Tax-Exempt
Money Market 1,149,877 --
Asset Allocation 581,916 --
Corporate Bond 164,104 164,104
Short Term Government 64,249 64,249
National Municipal Bond 48,653 44,468
California Tax-Exempt Bond 828,272 194,717
U.S. Government Securities 257,392 211,393
Capital Income 1,637,658 --
Aggressive Growth 1,239,141 --
International Equity 232,581 232,581
</TABLE>
- ----------
* Under the Existing Agreements, RSIM, L.P. may terminate, reduce or
increase its fee waivers at any time.
Effective September 15, 1997, Bank of America became administrator
to the Funds of the Company. For the period from September 15, 1997 to February
28, 1998, the Company paid Bank of America administration fees and Bank of
America voluntarily waived the following amounts:
<TABLE>
<CAPTION>
ADMINISTRATION ADMINISTRATION
FUND FEES PAID FEES WAIVED
- ---- ------------- -----------
<S> <C> <C>
Prime $3,929,655 --
Treasury 1,359,676 --
Government 210,009 --
Treasury Only 190,516 --
Tax-Exempt Money 322,955 --
California Tax-Exempt Money Market 575,369 --
Asset Allocation 160,798 --
Corporate Bond 34,608 $34,608
Intermediate Bond 51,576 3,867
Short-Term Government 27,820 27,820
National Municipal Bond 12,713 12,713
California Tax-Exempt Bond 249,745 43,399
U.S. Government Securities 66,773 49,554
Capital Income 359,132 --
Aggressive Growth 294,171 --
Blue Chip 405,556 --
International Equity 33,933 33,932
</TABLE>
Effective March 1, 1998, RSIM, L.P. assumed administration
responsibilities for Bank of America.
For the fiscal year ended February 28, 1998, Bank of America or its affiliates
received the following fees relating to Pacific
-18-
<PAGE> 27
Horizon Shares of the following Funds pursuant to the Special Management
Services Plan:
<TABLE>
<CAPTION>
BANK OF AFFILIATES OF
FUND AMERICA BANK OF AMERICA
- ---- ------- ---------------
<S> <C> <C>
Prime $_____ $6,742,687
Treasury $_____ $789,384
Treasury Only $_____ $607,979
Government $_____ $427,718
Tax-Exempt Money $_____ $377,885
California Tax-Exempt
Money Market $_____ $1,676,744
</TABLE>
For the fiscal year ended February 28, 1998, Bank of America or its affiliates
received the following fees relating to Horizon Service Shares of the following
Funds pursuant to the Shareholder Services Plan:
<TABLE>
<CAPTION>
BANK OF AFFILIATES OF
FUND AMERICA BANK OF AMERICA
- ---- ------- ---------------
<S> <C> <C>
Prime $_____ $7,381,916
Treasury $_____ $3,668,245
Treasury Only $_____ $432,402
Government $_____ $586,936
Tax-Exempt Money $_____ $422,932
California Tax-Exempt
Money Market $_____ $1,187,827
</TABLE>
For the fiscal year ended February 28, 1998, Bank of America or its affiliates
received the following fees relating to X, S, and
-19-
<PAGE> 28
Y Shares of the following Funds pursuant to the Distribution and Service Plan:
<TABLE>
<CAPTION>
BANK OF AFFILIATES OF
FUND AMERICA BANK OF AMERICA
- ---- ------- ---------------
<S> <C> <C>
Prime Fund
X Shares $_____ $2,468,893
S Shares $_____ $950,478
Y Shares $_____ $401,445
Treasury Fund
X Shares $_____ $345,956
S Shares $_____ $0
Y Shares $_____ $246,527
Tax-Exempt Money
S Shares $_____ $41,847
California Tax-Exempt
Money Market Fund
X Shares $_____ $200,290
S Shares $_____ $266,540
</TABLE>
For the fiscal year ended February 28, 1998, Bank of America or its affiliates
received the following fees relating to A and SRF Shares of the following Funds
pursuant to the Shareholder Service Plan:
<TABLE>
<CAPTION>
BANK OF AFFILIATES OF
FUND AMERICA BANK OF AMERICA
- ---- ------- ---------------
<S> <C> <C>
Corporate Bond
A Shares $_____ $ 18,541
U.S. Government Securities
A Shares $_____ $ 129,541
Short Term Government
A Shares $_____ $ 0
Capital Income
A Shares $_____ $ 772,752
Intermediate Bond
A Shares $_____ $ 40,786
SRF Shares $_____ $ 55,252
National Municipal Bond
A Shares $_____ $ 2,159
</TABLE>
-20-
<PAGE> 29
<TABLE>
<S> <C> <C>
California Tax-Exempt Bond
A Shares $_____ $ 313,116
Asset Allocation
A Shares $_____ $ 86,340
SRF Shares $_____ $ 313,527
Blue Chip
A Shares $_____ $ 476,702
SRF Shares $_____ $ 139,317
Aggressive Growth
A Shares $_____ $ 209,931
International Equity
A Shares $_____ $ 1,787
</TABLE>
For the fiscal year ended February 28, 1998, affiliates of Bank of America
received the following fees relating to K Shares of the following Funds pursuant
to the Distribution Plan:
<TABLE>
<CAPTION>
AFFILIATES OF
BANK OF AMERICA
---------------
<S> <C>
Corporate Bond $ 0
U.S. Government Securities $ 0
Capital Income $660
Intermediate Bond $ 0
National Municipal Bond $ 0
California Tax-Exempt Bond $ 0
Asset Allocation $ 0
Blue Chip $ 0
Aggressive Growth $ 0
International Equity $ 0
</TABLE>
For the fiscal year ended February 28, 1998, Bank of America or its affiliates
received the following fees from K Shares of the
-21-
<PAGE> 30
following Funds pursuant to the Administrative and Shareholder
Services Plan:
<TABLE>
<CAPTION>
BANK AFFILIATES OF
OF AMERICA BANK OF AMERICA
---------- ---------------
<S> <C> <C>
Corporate Bond $_____ $ 0
U.S. Government Securities $_____ $ 0
Capital Income $_____ $330
Intermediate Bond $_____ $ 0
National Municipal Bond $_____ $ 0
California Tax-Exempt Bond $_____ $ 0
Asset Allocation $_____ $ 0
Blue Chip $_____ $ 0
Aggressive Growth $_____ $ 0
International Equity $_____ $ 0
</TABLE>
From March 1, 1997 through February 28, 1998, the _____________
paid $_______, respectively, in brokerage commissions to affiliated
brokers. Such commissions represented _______% of the ___________
aggregate brokerage commissions.
DESCRIPTION OF THE PROPOSED ADVISORY AGREEMENT
The New Agreement would consolidate the advisory relationship with
all Funds of the Company other than the Blue Chip and Intermediate Bond Funds,
and would designate RSIM, L.P. as the adviser. As discussed above, as of March
1, 1998, Bank of America's investment advisory division was consolidated with
RSIM, L.P. Bank of America has informed the Company that neither the
consolidation nor the assumption of the Existing Agreements by RSIM, L.P.
resulted in a change of actual control or management of the Company's investment
adviser. In recognition of the commonality between Bank of America and RSIM,
L.P., the New Agreement, similar to certain Existing Agreements, would provide
that RSIM, L.P. could provide advisory services through its own employees or the
employees of an affiliated company that also is under the common control of
BankAmerica, as long as such employees function as part of an organized group of
persons that is managed at all times by authorized officers of RSIM, L.P.
As mentioned above, the terms of the New Agreement are substantially
the same as those in the Existing Agreements, and the advisory fees remain
unchanged.
The New Agreement, like the Existing Agreements, provides that RSIM,
L.P. may from time to time employ or associate itself with a sub-adviser. The
New Agreement provides, in addition, that notwithstanding the employment of any
sub-adviser, RSIM, L.P., with respect to the International Equity Fund, will:
(i) establish and monitor general investment criteria and policies for the
Funds; (ii) review and analyze on a
-22-
<PAGE> 31
periodic basis the Funds' portfolio holdings and transactions in order to
determine their appropriateness in light of the Funds' respective shareholder
bases; and (iii) review and analyze on a periodic basis the policies established
by any sub-adviser for any Fund with respect to the placement of orders for the
purchase and sale of portfolio securities.
The New Agreement, like the Existing Agreements, provides that,
subject to the supervision of the Board (and RSIM, L.P., with respect to any
sub-adviser) RSIM, L.P. will provide a continuous investment program for the
Funds, including investment research and management with respect to all
securities, investments, and cash equivalents in the Funds. RSIM, L.P. will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Funds. RSIM, L.P. will provide the services
rendered by it under the New Agreement in accordance with the investment
objectives, policies and restrictions as stated in the Company's currently
effective Registration Statement, resolutions of the Board, and, with respect to
any sub-adviser, the investment criteria and policies established from time to
time for any Fund advised by RSIM, L.P. RSIM, L.P. agrees in the New Agreement
to review, monitor and report to the Board regarding the performance and
investment procedures of any sub-adviser employed by the Board.
Pursuant to the New Agreement, RSIM, L.P. further agrees that it
will, among other things, (i) conform with all applicable rules and regulations
of the Securities and Exchange Commission and will conduct its activities under
its respective agreement in accordance with other applicable law; (ii) place
orders for the purchase and sale of portfolio securities for the Funds with
brokers or dealers selected by RSIM, L.P. (or, with respect to any sub-adviser,
in accordance with the policy set forth in the affected Fund's Registration
Statement or as RSIM, L.P. or the Board may direct); and (iii) not purchase any
securities from or sell any securities to RSIM, L.P., any sub-adviser,
administrator, sub-administrator or distributor of the Company or any of their
affiliates acting as principal or broker, except as permitted by law. RSIM, L.P.
also agrees to maintain such books and records regarding the securities
transactions with respect to the Funds as may be required or otherwise requested
by the Company and the Board, and to supply the Company and the Board with
reports, statistical data and economic information as requested.
Like the Existing Agreements, under the New Agreement, RSIM, L.P.
agrees to maintain a policy and practice of conducting its investment advisory
operations independently of any commercial banking operations of Bank of America
or any of its affiliates.
-23-
<PAGE> 32
RSIM, L.P. agrees in the New Agreement, as it did in the Existing
Agreements, to treat confidentially and as proprietary information of the
Company all records and other information relative to the Company and prior or
present Company shareholders or those persons or entities who respond to
inquires concerning investment in the Company, and agrees not to use such
records and information for any purpose other than performance of its
responsibilities and duties under the New Agreement, except after prior
notification to and approval in writing by the Company.
The New Agreement, like the Existing Agreements, provides that RSIM,
L.P. will pay all expenses incurred by it in connection with its activities
under the New Agreement other than the cost of securities (including brokerage
commissions, if any) purchased or sold with respect to the Funds.
The New Agreement, like the Existing Agreements, provides that in
executing portfolio transactions and selecting brokers or dealers, RSIM, L.P.
will use its best efforts to seek on behalf of the Funds the best overall terms
available. In assessing the best overall terms available for any transaction,
RSIM, L.P. will consider all factors that it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In evaluating the best overall terms available, and in
selecting the broker or dealer to execute a particular transaction, RSIM, L.P.
may also consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934, as amended)
provided with respect to a Fund, and/or other accounts over which RSIM, L.P. or
its affiliates exercise investment discretion. RSIM, L.P. is authorized, subject
to the prior approval of the Board, to negotiate and pay to a broker or dealer
who provides such brokerage and research services a commission for executing a
portfolio transaction with respect to a Fund that is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, RSIM, L.P. determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of that particular
transaction or in terms of the overall responsibilities of RSIM, L.P. to the
Fund and to the Company. RSIM, L.P., however, is not required to seek prior
approval from the Board, so long as the broker or dealer selected by RSIM, L.P.
obtains the best price and execution on a particular transaction.
In executing portfolio transactions with respect to a Fund, RSIM,
L.P. may, but is not obligated to, to the extent permitted by applicable laws
and regulations, aggregate the
-24-
<PAGE> 33
securities to be sold or purchased with those of its other clients where such
aggregation is not inconsistent with the policies set forth in the Company's
Registration Statement. In such event, RSIM, L.P. will allocate the securities
so purchased or sold, and the expenses incurred in the transaction, in the
manner it considers to be most equitable and consistent with its fiduciary
obligations to such Fund and such other clients.
The New Agreement, like the Existing Agreements, provides that RSIM,
L.P. will not be liable for any error of judgment or mistake of law or for any
loss suffered by the Company in connection with the performance of the New
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or any loss resulting from willful
misfeasance, bad faith or negligence on the part of RSIM, L.P. in the
performance of its duties or from reckless disregard by it of its obligations
and duties under the New Agreement.
If approved by a majority of the outstanding shares (as defined
below) of each Fund, the New Agreement will continue in effect until October 31,
1999. Thereafter, if not terminated, the New Agreement shall continue in effect
for successive annual periods, provided such continuance is approved at least
annually (i) by the vote of a majority of those members of the Board who are not
"interested persons" of any party to the New Agreement (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 (ii) by the Board or by vote of a majority of the
outstanding voting securities of each Fund.
EVALUATION BY THE BOARD OF DIRECTORS OF THE COMPANY.
The New Agreement was unanimously approved by the Board and by a
majority of those members of the Board who were not "interested persons" (as
that term is defined in the 1940 Act) of any party to the Agreement at a meeting
held on March 18, 1998. The Board considered that the New Agreement is
substantially the same as the Company's Existing Agreements (except as noted
above), that the contractual advisory fee rate payable by each Fund under the
New Agreement would be identical to that payable under the Existing Agreements
and that Bank of America had informed the Board that the consolidation of Bank
of America's investment advisory business with RSIM, L.P. did not result in a
change of actual control or management of the investment adviser to the Company.
The Board also considered the benefits which RSIM, L.P. may derive from the New
Agreement. Based on its evaluation, the Board concluded that approval of the New
Agreement would be in the best interests of the Company and its shareholders.
-25-
<PAGE> 34
INFORMATION ABOUT THE PROPOSED ADVISER
As described above, RSIM, L.P. is a wholly owned indirect subsidiary
of BankAmerica, a publicly-owned bank holding company, whose offices are both at
555 California Street, San Francisco, California 94104. As of March 1, 1998, to
the Company's knowledge, no person owned more than 10% of the issued and
outstanding shares of any class of stock of BankAmerica.
RSIM, L.P. provides investment advisory and management services to
registered investment companies, private investment pools and private accounts.
RSIM, L.P. is a limited partnership, the general partner of which is
Robertson, Stephens Investment Management Company, ("RSIMC") 555 California
Street, San Francisco, California 94104. RSIMC and RSIM, L.P. are both
wholly-owned by BankAmerica Corporation, a publicly owned corporation traded on
the New York Stock Exchange. The names of the principal executive officers of
RSIM, L.P. as of March 1, 1998 were as follows:
<TABLE>
<CAPTION>
POSITION WITH OTHER BUSINESS TYPE OF
NAME RSIM, L.P. CONNECTIONS BUSINESS
- ---- ---------- ----------- --------
<S> <C> <C> <C>
George Randall Hecht President Executive Officer Bank Investment Banking
of America National Adviser
Trust and Savings
Association
Terry Otton Chief Financial Officer BankAmerica, Robertson Investment
and Managing Director Stephens Banking/Broker
Paul Harbor Stephens Chief Investment Chief Investment Investment Adviser
Officer Officer, Robertson,
Stephens Investment
Management, Inc.
Dana K. Welch General Counsel and BankAmerica Robertson Investment
Managing Director Stephens Banking/Broker
</TABLE>
The above persons may be reached c/o RSIM, LP, 555 California
Street, San Francisco, California 94104.
RSIM, LP does not serve as investment adviser to any registered
investment company portfolios which have investment objectives similar to the
Funds of the Company.
No officer or director of the Company, other than Mr. Pilara, is an
officer, employee, or general partner of RSIM, L.P.
Mr. Pilara is an employee of RSIM, L.P.
The approval of the New Agreement requires the affirmative vote of
the holders of a "majority of the outstanding shares" of each Fund to which it
would apply (as defined by the 1940 Act), which means the lesser of (a) the
holders of 67% or
-26-
<PAGE> 35
more of the shares of each Fund present at the Meeting if the holders of more
than 50% of the outstanding shares of such Fund are present in person or by
proxy or (b) more than 50% of the outstanding shares of such Fund. This voting
requirement is hereafter referred to as a "majority of the outstanding shares."
For more information, see "Voting Information - Quorum."
If the New Agreement is approved by the shareholders of each Fund,
then the corresponding Existing Agreement will terminate with respect to such
Fund upon the execution of the New Agreement. If the New Agreement is not
approved with respect to any Fund, then the applicable Existing Agreement will
continue in effect for that particular Fund.
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE NEW AGREEMENT.
PROPOSAL 3: APPROVAL OF AMENDMENT TO
THE COMPANY'S CHARTER
(ALL FUNDS)
At the Meeting, shareholders will be asked to approve a change to
the Company's Charter. As currently written, the Company's Charter and By-Laws
provide that a quorum for a meeting of shareholders requires the presence,
either in person or by proxy, of a majority of shareholders entitled to vote on
a matter. If approved by shareholders, the Charter would be amended to provide
that a quorum for a meeting of shareholders requires the presence, either in
person or by proxy, of thirty percent of the outstanding shares entitled to vote
on a matter. The language that would be added to the Charter is as follows:
-27-
<PAGE> 36
ARTICLE X
***
(5) The presence in person or by proxy of stockholders of the
Corporation entitled to cast at least thirty percent (30%) of all of the
votes entitled to be cast at the meeting shall constitute a quorum at any
meeting of stockholders, except that with respect to any matter that under
applicable statutes or regulatory requirements requires approval by a
separate vote of one or more classes of stock, the presence in person or
by proxy of stockholders of the Corporation entitled to cast at least
thirty percent (30%) of the votes of the particular class of stock
required to be voted separately on the matter shall constitute a quorum
with respect to that class of stock.
The proposed Charter amendment would permit shareholder action to
proceed based upon a proportion of shareholders notwithstanding the lack of
participation by a majority of shareholders. Such amendment would reduce the
costs associated with attempting to obtain a higher quorum and with the
adjournment of shareholder meetings when faced with a lack of quorum.
The Board may amend the Company's By-Laws without shareholder
approval. Subject to the approval of this Proposal by shareholders, the Board at
a meeting on March 18, 1998 approved the By-Laws' provision with respect to
quorum in order to be consistent with the Charter amendment.
In order for Proposal 3 to be adopted, it must be approved by a
majority of a quorum of shareholders. For more information, see "Voting
Information - Quorum."
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS
THAT SHAREHOLDERS VOTE "FOR" THE CHARTER AMENDMENT
PROPOSALS 4(a)-(g): APPROVAL OF CHANGES
TO FUNDAMENTAL INVESTMENT LIMITATIONS
(EACH FUND ON A FUND-BY-FUND BASIS)
Certain investment policies and limitations of the Funds are matters
of fundamental policy and may not be changed with respect to a particular Fund
without the approval of its shareholders. Many fundamental policies with respect
to particular matters differ from one Fund to the next. The Company's adviser
has recommended to the Board that the Funds'
-28-
<PAGE> 37
fundamental investment limitations relating to (1) the underwriting of
securities; (2) real estate transactions; (3) commodity transactions; (4)
industry concentration; (5) lending; (6) borrowing; and (7) issuer concentration
be amended to make them uniform among all the Funds of the Company.
Approval of Proposals 4(a)-(g) would provide for a uniform set of
fundamental limitations that would apply to the Funds of the Company. The
proposed changes also would provide for the greatest flexibility of such
policies to the extent permitted by law.
Attached as Appendix B to this Proxy Statement are charts for each
Fund of the Company which list each Fund's current fundamental investment
limitation and its proposed replacement. In order for the proposals comprising
Proposals 4(a)-(g) to be adopted for a particular Fund, they each must be
approved by a "majority of the outstanding shares" of that Fund. Shares of each
Fund affected will be voted separately on a Fund-by-Fund basis on Proposals
4(a)-(g).
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE CHANGING OF THE FUNDAMENTAL INVESTMENT POLICIES
AND LIMITATIONS AS SET FORTH IN PROPOSAL 5.
PROPOSALS 5(a)-(m)
(EACH FUND ON A FUND-BY-FUND BASIS)
Proposals 5(a)-(m) would, upon the approval of shareholders, change
certain fundamental investment policies and limitations of the Funds to
non-fundamental policies and limitations. Unlike a fundamental policy or
limitation, a non-fundamental investment policy or limitation may be changed
without the approval of shareholders. These proposals would avoid the delay and
expense of a shareholder vote in the event that it is decided that the
investment policy or limitation should be changed. Neither the 1940 Act nor
state securities laws require such policies to be fundamental. Upon the approval
of Proposals 5(a)-(m) by shareholders, the Board would revise the newly
non-fundamental policies as shown in Appendix B to provide for consistency and
flexibility among each of the Funds.
Because of the lack of uniformity of the fundamental investment
limitations among the Funds of the Company, not every Fund will vote on each
proposal to change each fundamental investment limitation. To the extent that a
Fund is not currently subject to a certain fundamental investment limitation, it
will not need to vote on a change to that particular limitation. A chart
beginning on page 1 of this Proxy Statement summarizes which Funds will need to
vote on a particular limitation. In addition, Appendix B to this Proxy Statement
-29-
<PAGE> 38
lists each Fund's current fundamental investment limitation and its proposed
non-fundamental replacement.
In order for the proposals comprising Proposal 5(a)-(m) to be
adopted for a particular Fund, to the extent that a proposal applies to a
particular Fund, it must be approved by a "majority of the outstanding shares"
of that Fund. Shares of each Fund affected will be voted separately on a
Fund-by-Fund basis on Proposals 5(a)-(m). For more information, see "Voting
Information - Quorum."
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE CHANGING OF THE FUNDAMENTAL INVESTMENT POLICIES
AND LIMITATIONS TO NON-FUNDAMENTAL POLICIES AND LIMITATIONS AS
SET FORTH IN PROPOSALS 5(a)-(m).
PROPOSAL 6: APPROVAL OF CERTAIN CHANGES TO THE
FUNDAMENTAL INVESTMENT OBJECTIVES
OF CERTAIN FUNDS
(CERTAIN FUNDS ON A FUND-BY-FUND BASIS)
Proposal 6 would, upon approval of shareholders, change the
fundamental investment objectives of the National Municipal Bond, International
Equity, Corporate Bond, Intermediate Bond, Blue Chip, Asset Allocation,
Aggressive Growth, U.S. Government Securities, Capital Income, California
Tax-Exempt Bond and Short-Term Government Fund to non-fundamental investment
objectives. In addition, upon approval of shareholders of the Prime, Treasury,
Tax-Exempt Money and California Tax-Exempt Money Market Funds, the fundamental
investment objectives would change to non-fundamental investment objectives as
follows:
================================================================================
FUND REVISED OBJECTIVE
- --------------------------------------------------------------------------------
Prime and Treasury Fund The Funds seek current income, a stable share
price and daily liquidity.
- --------------------------------------------------------------------------------
California Tax-Exempt The Fund seeks current income free of federal
Money Market Fund income tax and California state personal tax,
a stable share price, and daily liquidity.
- --------------------------------------------------------------------------------
Tax-Exempt Money Fund The Fund seeks current income exempt from
federal income taxes, a stable share price
and daily liquidity.
================================================================================
-30-
<PAGE> 39
Unlike a fundamental investment objective, a non-fundamental investment
objective may be changed without approval of shareholders. This proposal would
avoid the delay and expense of a shareholder vote in the event that it was
decided that a Fund's investment objective should be changed. Neither the 1940
Act nor state securities laws require a fund's investment objective to be
fundamental.
Attached as Appendix B to this Proxy Statement are charts for each
Fund of the Company which list each Fund's current fundamental investment
objective and limitations and its proposed replacement.
In order for Proposal 6 to be adopted with respect to an affected
Fund, it must be approved by a "majority of the outstanding shares" of that
Fund. For more information, see "Voting Information - Quorum."
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE CHANGING OF CERTAIN FUNDAMENTAL INVESTMENT
OBJECTIVES OF CERTAIN FUNDS AS SET FORTH IN PROPOSAL 6.
PROPOSAL 7: APPROVAL OF A NEW FUNDAMENTAL
INVESTMENT LIMITATION OF THE PRIME FUND
(PRIME FUND)
Proposal 7 would, upon approval of shareholders, revise the industry
concentration limitation to the Company's Prime Fund. RSIM, L.P. has recommended
to the Board that the Fund adopt a policy to concentrate (invest more than 25%
of its total assets) in obligations of one or more issuers conducting their
principal business activity in the banking and finance industry. RSIM, L.P.
believes the ability to concentrate the Prime Fund's investments in the above
listed investments will provide greater investment flexibility and may enhance
the Fund's performance potential.
Appendix B attached to this Proxy Statement lists each of the Prime
Fund's current fundamental investment limitations and their proposed
replacements.
In order for Proposal 7 to be adopted with respect to the Prime
Fund, it must be approved by a "majority of the outstanding shares" of that
Fund. For more information, see "Voting-Information-Quorum."
THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" THE APPROVAL OF A NEW FUNDAMENTAL INVESTMENT
LIMITATION OF THE PRIME FUND AS SET FORTH IN PROPOSAL 7.
-31-
<PAGE> 40
PROPOSAL 8: RATIFICATION OF INDEPENDENT ACCOUNTANTS
(ALL FUNDS)
Shareholders are also being asked to vote upon the ratification or
rejection of the selection of Price Waterhouse LLP ("Price Waterhouse") as
independent accountants for the Company's fiscal year ending February 28, 1999.
The Board, including all of the Directors who are not "interested
persons" of the Company (as defined in the 1940 Act), selected Price Waterhouse
as the Company's independent accountants for the fiscal year ending February 28,
1999 at a meeting to be held on March 18, 1998. Price Waterhouse has stated that
it has no material direct or indirect financial interest in the Company. Price
Waterhouse, with offices at 1177 Avenue of the Americas, New York, New York has
served as the Company's independent accountants since 1989.
A representative of Price Waterhouse is expected to be available by
telephone at the Meeting should any matter arise requiring consultation with the
accountants, and Price Waterhouse will be given the opportunity to make a
statement if it chooses.
In order for Proposal 8 to be adopted, it must be approved by a
"majority of the outstanding shares" of the Company. For more information, see
"Voting Information Quorum." Unless instructed otherwise, the persons named as
proxies in the accompanying Proxy will vote for Price Waterhouse.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE AS
INDEPENDENT ACCOUNTANTS OF THE COMPANY.
VOTING INFORMATION
RECORD DATE. Only shareholders of record at the close of business on
March 24, 1998 will be entitled to vote at the Meeting. On that date, the number
of outstanding shares were as follows:
<TABLE>
<CAPTION>
PORTFOLIO AND NUMBER OF
CLASS OF SHARES SHARES OUTSTANDING
- --------------- ------------------
<S> <C>
Prime Fund
Pacific Horizon Shares 2,487,858,458.94
Horizon Shares 2,240,566,013.35
Horizon Service Shares 1,736,821,697.41
</TABLE>
-32-
<PAGE> 41
<TABLE>
<CAPTION>
PORTFOLIO AND NUMBER OF
CLASS OF SHARES SHARES OUTSTANDING
- --------------- ------------------
<S> <C>
X Shares 954,534,723.43
Y Shares 139,556,652.13
S Shares 669,112,671.84
Treasury Fund
Pacific Horizon Shares 329,427,526.25
Horizon Shares 718,101,326.50
Horizon Service Shares 1,794,032,887.14
X Shares 247,368,64.08
Y Shares 73,049,036.71
S Shares -0-
Treasury Only Fund
Pacific Horizon Shares 206,568,163.31
Horizon Shares 35,461,651.67
Horizon Service Shares 189,181,402.68
Government Fund
Pacific Horizon Shares 154,690,600.54
Horizon Shares 336,713,237.88
Horizon Service Shares 279,099,318.99
Tax-Exempt Money Fund
Pacific Horizon Shares 150,710,100.67
Horizon Shares 336,713,237.88
Horizon Service Shares 194,932,071.85
S Shares 29,798,616.46
California Tax-Exempt Money Market Fund
Pacific Horizon Shares 599,923,209.23
Horizon Shares -0-
Horizon Service Shares 350,906,686.77
S Shares 153,648,372.71
X Shares 30,129,521.19
Intermediate Bond Fund
A Shares 4,349,206.03
K Shares 55,528.71
</TABLE>
-33-
<PAGE> 42
<TABLE>
<CAPTION>
PORTFOLIO AND NUMBER OF
CLASS OF SHARES SHARES OUTSTANDING
- --------------- ------------------
<S> <C>
SRF Shares 3,199,191.29
Corporate Bond Fund
A Shares 2,303,496.47
K Shares 19,753.58
U.S. Government Securities Fund
A Shares 7,445,319.85
K Shares 100,312.15
Short-Term Government Fund
A Shares 3,277,391.78
National Municipal Bond Fund
A Shares 1,511,389.60
K Shares -0-
California Tax-Exempt Bond Fund
A Shares 28,230,943.81
K Shares -0-
Capital Income Fund
A Shares 22,880,071.66
K Shares 169,448.78
Asset Allocation Fund
A Shares 2,429,300.09
K Shares 75,884.78
SRF Shares 11,783,835.70
Aggressive Growth Fund
A Shares 9,446,947.37
K Shares 145,592.00
Blue Chip Fund
A Shares 10,099,194.92
K Shares 247,729.94
SRF Shares 13,945,805.47
International Equity Fund
A Shares 3,962,207.17
K Shares 57,680.95
</TABLE>
-34-
<PAGE> 43
With the exception of Proposals 2, 4, 5, 6 and 7, for which shares
of each Fund will vote on a Fund-by Fund basis, all shares of the Company will
vote in the aggregate and not by class or Fund at the Meeting.
QUORUM. A quorum is constituted with respect to the Company, and,
for Proposals 2, 4, 5, 6 and 7, with respect to each Fund, 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,
Bank of America and its affiliates held of record approximately 71.64%, 70.79%,
93.06%, 87.35%, 99.75%, 96.63%, 97.14%, 44.61%, 85.96%, 91.25%, 99.75%, 98.47%,
61.74%, 97.39%, 47.61%, 92.68% and 97.11% of the outstanding shares of the
Prime, Treasury, Treasury Only, Government, Tax-Exempt Money, California
Tax-Exempt Money Market, Intermediate Bond, Corporate Bond, Capital Income, U.S.
Government Securities, Short-Term Government, National Municipal Bond,
California Tax-Exempt Bond, Asset Allocation, Aggressive Growth, Blue Chip and
International Equity Funds, respectively, as agent or custodian for their
customers. In addition, at that date, Bank of America and its affiliates held
investment and/or voting power with respect to a majority of the Company's
outstanding shares on behalf of their customers. The Company has been advised by
Bank of America 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
-35-
<PAGE> 44
total votes that are cast FOR, ABSTAIN, and AGAINST the proposal by other
shareholders of the Company that have shares over which Bank of America does not
have voting power.
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 Company's outstanding shares at that record date were:
<TABLE>
<CAPTION>
% OF
# OF OUTSTANDING OUTSTANDING
SHARES SHARES
---------------- -----------
<S> <C> <C>
PRIME FUND - PACIFIC HORIZON SHARES
BA Investment Services, Inc. 33,770,259.690 81.7%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
BancAmerica Robertson Stephens 250,011,895.890 10.0%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
PRIME FUND-HORIZON SHARES
Bank of America NT&SA 814,340,340.870 36.3%
Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
PRIME FUND - HORIZON SERVICE SHARES
Bank of America NT&SA 855,684,546.380 41.3%
Financial Management and Trust Services
P.O. Box 513577 - Terminal Annex
Los Angeles, CA 90051
BA Investment Services, Inc. 335,308,311.150 16.2%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
Security Pacific Cash Management 761,751,200.000 36.8%
c/o Bank of America
1850 Gateway Blvd.
Concord, CA 94520
PRIME FUND - X SHARES
BA Investment Services, Inc. 497,303,729.110 52.1%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
</TABLE>
-36-
<PAGE> 45
<TABLE>
<CAPTION>
% OF
# OF OUTSTANDING OUTSTANDING
SHARES SHARES
---------------- -----------
<S> <C> <C>
Paul G. Allen 56,541,496.870 5.9%
110 - 110th Avenue N.E., Suite 550
Bellevue, WA 98004
PRIME FUND - Y SHARES
BA Arizona 8,361,520.430 6.0%
2044 Franklin Street
Oakland, CA 94612
Anodizing, Inc. 7,580,731.240 5.4%
7933 NE 21st Avenue
Portland, OR 97211
E TEK Dynamics, Inc. 24,196,541.990 17.3%
1885 Lundy Avenue
San Jose, CA 95131
PRIME FUND - S SHARES
BA Investment Services, Inc. 666,621,134.190 99.6%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
TREASURY FUND - PACIFIC HORIZON SHARES
HARE & Co., Bank of New York 85,260,292.390 25.9%
and Short Term Investment Funds
One Wall Street
New York, NY 10286
BA Investment Services, Inc. 185,471,561.450 56.3%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
Hellman & Friedman Capital 20,082,279.790 6.1%
Partners III, Limited Partnership
1 Maritime Plaza, 12th Floor
San Francisco, CA 94111
</TABLE>
-37-
<PAGE> 46
<TABLE>
<CAPTION>
% OF
# OF OUTSTANDING OUTSTANDING
SHARES SHARES
---------------- -----------
<S> <C> <C>
TREASURY FUND - HORIZON SHARES
Bank of America NT&SA 292,337,915.270 40.7%
Private Banking
Attn: Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
HARE & Co. 90,181,808.910 12.6%
c/o Bank of New York
One Wall Street, 5th Floor
New York, NY 10286
KPMG Peat Marwick LLP 50,000,000.000 7.0%
3 Chestnut Ridge Road
Montvale, NJ 07645
Los Angeles Department of Airports 38,770,620.050 5.4%
515 South Flower Street
Los Angeles, CA 90071
Century Theatres Inc. 57,863,412.550 8.1%
150 Pelican Way
San Rafael, CA 94901
TREASURY FUND - HORIZON SERVICE SHARES
HARE & Co. 73,037,698.540 12.8%
c/o Bank of New York
One Wall Street, 5th Floor
New York, NY 10286
Security Pacific Cash Management 179,767,500.000 30.7%
c/o Bank of America
1850 Gateway Blvd.
Concord, CA 94520
Bank of America FM&TS 300,097,553.060 51.2%
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
TREASURY FUND - X SHARES
BA Investment Services, Inc. 14,366,165.450 5.8%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
Bank of America California 29,845,549.770 12.1%
2044 Franklin Street
Oakland, CA 94612
Victoria Partners 13,593,481.090 5.5%
d/b/a Monte Carlo Resort & Casino
3770 Las Vegas Blvd.
Las Vegas, NV 89109
</TABLE>
-38-
<PAGE> 47
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
Lyondell Petrochemical Co. 32,111,779.440 13.0%
1221 McKinney Street, Ste. 1600
Houston, TX 77253
New V Studios LLC 20,047,879.080 8.1%
100 Universal City Plaza Bldg
Universal City, CA 91608
TREASURY FUND - Y SHARES
Bank of America California 5,000,000.000 6.8%
2044 Franklin Street
Oakland, CA 94612
BA Arizona 7,395,857.780 10.1%
2044 Franklin Street
Oakland, CA 94612
BA Nevada 5,285,864.850 7.2%
2044 Franklin Street
Oakland, CA 94612
CCC TA Welfare Benefit Trust 6,315,494.540 8.6%
2950 E. Richelle Ave
Las Vegas, NV 89121
Collectron AZ 4,383,321.650 6.0%
P.O. Box 1931
Nogabs, AZ 85628
TREASURY ONLY FUND - PACIFIC HORIZON
SHARES
HARE & Co., Bank of New York and Short 20,091,400.950 9.7%
Term Investment Funds
One Wall Street
New York, NY 10286
BA Investment Services, Inc. 108,219,463.160 52.4%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
BancAmerica Robertson Stephens 71,340,694.310 34.5%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
TREASURY ONLY FUND - HORIZON SHARES
Bank of America Illinois 6,409,149.550 18.1%
231 S. LaSalle Street
Chicago, IL 60697
Bank of America NT&SA 21,808,462.940 61.5%
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
</TABLE>
-39-
<PAGE> 48
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
Hoff Companies, Inc. 2,480,942.930 7.0%
280E Corporate Drive
Suite 200
Meridian, ID 83642
City and County of San Francisco 4,048,541.520 11.4%
Mayors Office of Community
25 Van Ness Avenue, Suite 700
San Francisco, CA 94102
TREASURY ONLY FUND - HORIZON SERVICE
SHARES
The Torrance Company 13,801,090.940 7.3%
3 Del Amo Fashion Center
Torrance, CA 90503
Bank of America NT&SA 48,016,044.780 25.4%
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
BA Investment Services, Inc. 19,426,454.620 10.3%
FBO Customers
P.O. Box 7042
San Francisco, CA 94120
GOVERNMENT - PACIFIC HORIZON SHARES
HARE & Co., Bank of New York and Short 10,480,100.560 6.8%
Term Investment Funds
One Wall Street
New York, NY 10286
BA Investment Services, Inc. 93,221,381.710 60.3%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
BancAmerica Robertson Stephens 27,647,083.820 17.9%
FBO Customers
P.O. Box 7042
San Francisco, CA 94120
GOVERNMENT FUND - HORIZON SHARES
Sunquest Information Systems, Inc. 20,830,581.570 33.4%
1407 Eisenhower Blvd
Johnstown, PA 15904
Kaiser Aluminum & Chemical Co. 5,668,000.000 9.1%
5847 San Felipe
Houston, TX 77057
Bank of America NT&SA 7,812,660.390 12.5%
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
</TABLE>
-40-
<PAGE> 49
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
New Life Science Products, Inc. 7,557,426.510 12.1%
549 Albany Street
Boston, MA 02118
Skinner Corporation 7,662,092.800 12.3%
1326 Fifth Avenue, Suite 711
Seattle, WA 98101
Imperial Thrift & Loan Assoc 3,304,158.100 5.3%
700 N. Central Ave
Glendale, CA 91203
GOVERNMENT FUND - HORIZON SERVICE
SHARES
Good Health Plan of Washington 16,242,669.860 5.8%
1501 4th Avenue, Suite 500
Seattle, WA 98101
The Salvation Army 22,607,649.960 8.1%
10 W. Algonquin
Des Plains, IL 60016
Bank of America NT&SA 37,347,398.430 13.4%
Trust, Financial Management & Trust
Services
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
Security Pacific Cash Management 15,388,300.000 5.5%
c/o Bank of America
1850 Gateway Blvd
Concord, CA 94520
TAX EXEMPT MONEY FUND - PACIFIC HORIZON
SHARES
BA Investment Services, Inc. 144,567,774.110 95.9%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
TAX EXEMPT MONEY FUND - HORIZON SHARES
Bank of America NT&SA 331,920,607.570 98.6%
The Private Bank
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
TAX EXEMPT MONEY FUND - HORIZON SERVICE
SHARES
BA Investment Services, Inc. 30,264,776.490 15.5%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
</TABLE>
-41-
<PAGE> 50
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
Bank of America 131,372,590.550 67.3%
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
TAX EXEMPT MONEY FUND - S SHARES
BA Investment Services, Inc. 29,798,616.460 100%
FBO Customers
P.O. Box 7042
San Francisco, CA 94120
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- - PACIFIC HORIZON SHARES
BA Investment Services, Inc. 321,856,893.670 53.7%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
BancAmerica Robertson Stephens 249,805,327.070 41.6%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- - HORIZON SERVICE SHARES
Bank of America NT&SA 368,254,524.030 62.8%
Attn: Common Trust Funds Unit
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
BA Investment Services, Inc. 183,143,168.490 31.2%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
- - X SHARES
BA Investment Services, Inc. 30,129,521.110 100%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
- - S SHARES
BA Investment Services, Inc. 153,648,372.710 100%
FBO Customers
Unit 17852
P.O. Box 7042
San Francisco, CA 94120
</TABLE>
-42-
<PAGE> 51
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
INTERMEDIATE BOND FUND - A SHARES
PACO - Attn: Mutual Funds 540,599.937 12.4%
P.O. Box 513577
Los Angeles, CA 90051
Bank of America NT&SA 2,323,909.838 53.5%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
PACO 450,133.989 10.4%
P.O. Box 513577
Los Angeles, CA 90051
INTERMEDIATE BOND FUND - K SHARES
Corelink Financial, Inc. 55,755.075 100%
P.O. Box 4054
Concord, CA 94524
INTERMEDIATE BOND FUND - SRF SHARES
PFPC, Inc. 3,199,184.025 100%
400 Bellevue Parkway
Wilmington, DE 19809
CORPORATE BOND FUND - A SHARES
PACO 202,812.363 8.8%
Attn: Mutual Fund
P.O. Box 513577
Los Angeles, CA 90051
Bank of America NT&SA 476,847.574 20.8%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
CORPORATE BOND FUND - K SHARES
Corelink Financial, Inc. 19,735.291 100%
P.O. Box 4054
Concord, CA 94524
U.S. GOVERNMENT SECURITIES FUND -
K SHARES
Corelink Financial, Inc. 99,093.067 100%
P.O. Box 4054
Concord, CA 94524
</TABLE>
-43-
<PAGE> 52
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
SHORT-TERM GOVERNMENT FUND - A SHARES
Bank of America NT&SA 3,080,906.697 94%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
NATIONAL MUNICIPAL BOND FUND - A SHARES
BA Investment Services, Inc. 77,228.754 5.4%
185 Berry Street
3rd Floor
San Francisco, CA 94104
CALIFORNIA TAX-EXEMPT BOND FUND -
A SHARES
Bank of America NT&SA 2,987,918.520 10.6%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
CAPITAL INCOME FUND - K SHARES
Corelink Financial, Inc. 153,560.735 91.2%
P.O. Box 4054
Concord, CA 94524
ASSET ALLOCATION FUND - A SHARES
Corelink Financial, Inc. 240,277.340 10.0%
P.O. Box 4054
Concord, CA 94524
Bank of America NT&SA 147,497.446 6.1%
FBO PACO
Attn: Mutual Funds Unit
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
ASSET ALLOCATION FUND - K SHARES
Corelink Financial, Inc. 76,967.847 100%
P.O. Box 4054
Concord, CA 94524
ASSET ALLOCATION - SRF SHARES
PFPC Inc. 11,770,615.432 100%
400 Bellevue Parkway
Wilmington, DE 19809
AGGRESSIVE GROWTH FUND - K SHARES
Corelink Financial Inc. 145,217.613 100%
P.O. Box 4054
Concord, CA 94524
</TABLE>
-44-
<PAGE> 53
<TABLE>
<CAPTION>
% of
# OF OUTSTANDING Outstanding
SHARES Shares
-------------- ----
<S> <C> <C>
BLUE CHIP FUND - A SHARES
Bank of America NT&SA 902,886.782 9.1%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 513577
Terminal Annex
Los Angeles, CA 90051
BLUE CHIP FUND - K SHARES
Corelink Financial Inc. 246,347.392 99.5%
P.O. Box 4054
Concord, CA 94524
BLUE CHIP FUND - SRF SHARES
PFPC Inc. 13,944,812.211 100%
400 Bellevue Parkway
Wilmington, DE 19809
INTERNATIONAL EQUITY FUND - A SHARES
PACO 729,145.018 16.4%
Attn: Mutual Funds
P.O. Box 513577
Los Angeles, CA 90051
Bank of America NT&SA 905,092.465 22.8%
The Private Bank
Attn: Common Trust Funds Unit 38329
P.O. Box 3577
Terminal Annex
Los Angeles, CA 90051
PACO 1,399,995.053 35.3%
Attn: Mutual Funds
P.O. Box 513577
Los Angeles, CA 90051
INTERNATIONAL EQUITY FUND - K SHARES
Corelink Financial, Inc. 57,454.492 100%
P.O. Box 4054
Concord, CA 94524
</TABLE>
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.
ADDITIONAL INFORMATION
OFFICERS. Officers of the Company 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 Company's
officers who are not also Directors.
-45-
<PAGE> 54
<TABLE>
<CAPTION>
Principal Occupations During
Officer Position with Past 5 years and Other
Name and Address Age Since the Company Affiliations
- ---------------- --- ----- ----------- ------------
<S> <C> <C> <C> <C>
Stephen M. Wynne 41 1997 Vice President Executive Vice President and
Executive Chief Accounting Officer
Vice President (since 1993) and Senior Vice
PFPC Inc. President and Chief
400 Bellevue Parkway Accounting Officer (1991 to
Wilmington, DE 19809 1993), PFPC Inc.; Executive
Vice President, PFPC
International (since
1995); Vice President and
Chief Accounting
Officer, PNC Institutional
Management Corp.
(since 1987).
Jay F. Nusblatt 36 1997 Treasurer Vice President and Director
Vice President of Fund Accounting and
PFPC Inc. Administration, PFPC Inc.
103 Bellevue Parkway (since 1993); formerly
Wilmington, DE 19809 Assistant Vice President,
Fund/Plan Services, Inc.
(1989 to 1993).
Linda L. Kaufmann 36 1997 Assistant Vice President and Director,
Vice President Treasurer Investment Accounting, PFPC
PFPC Inc. Inc. (since 1996); Senior
103 Bellevue Parkway Manager, Investment
Wilmington, DE 19809 Accounting, PFPC, Inc. (1994
1996); and Manager,
Investment Accounting, PFPC,
Inc. (1991-1994).
W. Bruce McConnel, III 55 1983 Secretary Partner of the law firm of
1345 Chestnut Street Drinker Biddle Reath LLP.
Philadelphia National Bank
Building, Suite 1100
Philadelphia, PA 19107
Gary M. Gardner 46 1997 Assistant Chief Counsel-Mutual Funds,
Chief Counsel-Mutual Funds Secretary PNC Bank (since 1994);
PNC Bank Associate General Counsel,
1600 Market Street The Boston Company, Inc.
28th Fl. (1992 to 1994); General
Philadelphia, PA 19103 Counsel, SunAmerica Asset
Management Inc. (1986 to
1992).
J. Robert Dugan 32 1997 Assistant Counsel-Mutual Funds,
Counsel-Mutual Funds Secretary Secretary PNC Bank (since
PNC Bank 1993); Associate, Drinker
1600 Market Street Biddle & Reath LLP (1990 to
28th Fl. 1993).
Philadelphia, PA 19103
</TABLE>
The officers of the Company receive no compensation directly from
the Company for performing the duties of their offices. PFPC Inc., of which
Messrs. Wynne and Nusblatt and Ms. Kaufmann are employees, receives fees for
sub-administrative services provided for the Company and receives fees pursuant
to
-46-
<PAGE> 55
certain plans adopted by the Company with respect to certain share classes in
accordance with Rule 12b-1 under the 1940 Act. PNC Bank, of which Messrs.
Gardner and Dugan are employees, serves as custodian of certain of the Funds and
receives fees for such custodial services provided for the Company. PNC Bank is
also an affiliate of PFPC Inc. Drinker Biddle & Reath LLP, of which Mr. McConnel
is a partner, receives legal fees for services provided to the Company.
INVESTMENT ADVISER AND SUB-ADVISER. RSIM, L.P., the Company's
adviser, has its principal offices located at 555 California Street, San
Francisco, California 94104. Wellington Management Company, LLP, the sub-adviser
to the Company's International Equity Fund, has its principal offices at 75
State Street, Boston, Massachusetts 02109.
ADMINISTRATOR AND DISTRIBUTOR. RSIM, L.P., 555 California Street,
San Francisco, California 94104, serves as the Company's administrator, and PFPC
Inc., 400 Bellevue Parkway, Wilmington, Delaware 19809 (the "Sub-Administrator")
serves as the Company's sub-administrator. Provident Distributors, Inc., Four
Falls Corporate Center, 6th Floor, West Conshohocken, Pennsylvania 19428 (the
"Distributor") serves as the exclusive distributor of the shares of the Company.
The Sub-Administrator is an indirect, wholly-owned subsidiary of PNC Bank Corp.,
a registered bank holding company.
OTHER MATTERS
The Company 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 Company 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 Company.
Dated: _________, 1998
-47-
<PAGE> 56
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 COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE COMPANY'S ANNUAL AND
SEMI-ANNUAL REPORTS TO SHAREHOLDERS DATED FEBRUARY 28, 1998 AND AUGUST 31, 1997,
RESPECTIVELY, TO ANY SHAREHOLDER UPON REQUEST. THE COMPANY'S ANNUAL AND
SEMI-ANNUAL REPORTS TO SHAREHOLDERS MAY BE OBTAINED FROM THE COMPANY BY WRITING
TO THE COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE 19809.
-48-
<PAGE> 57
APPENDIX A
PACIFIC HORIZON FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of , 1998 between PACIFIC HORIZON
FUNDS, INC., a Maryland corporation (herein called the "Company"), and
ROBERTSON, STEPHENS & COMPANY INVESTMENT MANAGEMENT, L.P. (the "Adviser").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Company desires to retain the Adviser to furnish investment
advisory services to the investment portfolios of the Company listed on Schedule
A and any other investment portfolios which may be organized in the future and
listed on Schedule A (the "Funds") ;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
A. APPOINTMENT.
1. The Company hereby appoints the Adviser to act as investment
adviser to each Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. The Adviser may,
in its discretion, provide such services through its own employees or the
employees of one or more affiliated companies that are qualified to act as
investment adviser to the Company under applicable law and are under the common
control of BankAmerica Corporation provided (i) that all persons, when providing
services hereunder, are functioning as part of an organized group of persons,
and (ii) that such organized group of persons is managed at all times by
authorized officers of the Adviser.
2. In the event that the Company establishes one or more investment
portfolios other than the Funds with respect to which it desires to retain the
Adviser to act as investment adviser hereunder, it shall notify the Adviser in
writing. If the Adviser is willing to render such services under this Agreement
it shall so notify the Company in writing whereupon such investment portfolio
shall become a "Fund" hereunder and shall be subject to the provisions of this
Agreement to the same extent as the Funds except to the extent that said
provisions (including those relating to the compensation payable by the Funds to
the Adviser) are modified with respect to such Fund in
A-1
<PAGE> 58
writing by the Company and the Adviser at the time. The Funds and any additional
investment portfolios established hereunder in accordance with this paragraph
are sometimes collectively referred to herein as the "Funds" and individually as
a "Fund."
B. SERVICES. Subject to the supervision of the Company's Board of
Directors (the "Board"), the Adviser, in consultation with any Sub-Adviser
appointed pursuant to Section 3 hereof with respect to a particular Fund, will
provide a continuous investment program for each of the Funds, including
investment research and management with respect to all securities and
investments and cash equivalents in the Funds. The Adviser will determine from
time to time what securities and other investments will be purchased, retained
or sold by the Company with respect to each Fund. The Adviser will provide the
services under this Agreement in accordance with each Fund's investment
objective, policies and restrictions as stated in the Company's registration
statement, as from time to time amended, and resolutions of the Board. The
Adviser further agrees that it:
1. Will conform with all applicable rules and regulations of the
Securities and Exchange Commission and will in addition conduct its activities
under this Agreement in accordance with other applicable law, including but not
limited to banking law.
2. Will review, monitor and report to the Board of Directors
regarding the performance and investment procedures of any Sub-Adviser (as
defined in Section 3 of this Agreement).
3. Will assist and consult with any Sub-Adviser appointed with
respect to a particular Fund in connection with that Fund's continuous
investment program (as defined in Section 3 of this Agreement).
4. Will place all orders for the purchase and sale of portfolio
securities for the account of each Fund with brokers or dealers selected by the
Adviser. In executing portfolio transactions and selecting brokers or dealers,
the Adviser will use its best efforts to seek on behalf of the Company and each
Fund the best overall terms available. In assessing the best overall terms
available for any transaction the Adviser shall consider all factors it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a particular
transaction, the Adviser may also consider the brokerage and research services
(as those terms are defined in Section 28(e) of the Securities Exchange Act of
1934, as amended) provided to any Fund and/or other accounts
A-2
<PAGE> 59
over which the Adviser or any affiliate of the Adviser exercises investment
discretion. The Adviser is authorized, subject to the prior approval of the
Board, to negotiate and pay to a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for any
Fund which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the Adviser
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer
viewed in terms of that particular transaction or in terms of the overall
responsibilities of the Adviser to the particular Fund and to the Company. No
prior approval by the Board, however, shall be required so long as the broker or
dealer selected by the Adviser obtains best price and execution on a particular
transaction. In no instance will portfolio securities be purchased from or sold
to the Adviser, any Sub-Adviser, any administrator, sub-administrator or
distributor of the Company, or an affiliated person of any of them acting as
principal or as broker, except as permitted by law. In executing portfolio
transactions for any Fund, the Adviser may, but shall not be obligated to, to
the extent permitted by applicable laws and regulations, aggregate the
securities to be sold or purchased with those of other Funds and its other
clients where such aggregation is not inconsistent with the policies set forth
in the Company's registration statement. In such event, the Adviser will
allocate the securities so purchased or sold, and the expenses incurred in the
transaction, pursuant to any applicable law or regulation and in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Funds and such other clients.
In performing the investment advisory services hereunder, the Adviser is
authorized to purchase, sell or otherwise deal with securities or other
instruments for which (a) the Adviser, (b) any affiliate of the Adviser, (c) an
entity in which the Adviser or an affiliate of the Adviser has a direct or
indirect interest, or (d) another member of a syndicate or other intermediary
(where an entity referred to in (a), (b) or (c) above was a member of the
syndicate), has acted, now acts or in the future will act as an underwriter,
syndicate member, market-maker, dealer, broker or in any other similar capacity,
whether the purchase, sale or other dealing occurs during the life of the
syndicate or after the close of the syndicate, provided such purchase, sale or
dealing is permitted under the 1940 Act and the rules thereunder. Insofar as
permitted by law any rules of or under applicable law prohibiting or restricting
in any way an agent or fiduciary from dealing with itself or from dealing with
respect to any matter in which it may or does have a personal interest shall not
apply to the Adviser, to the extent its actions are authorized under this
paragraph.
A-3
<PAGE> 60
5. Will maintain all books and records with respect to the
securities transactions for the Funds, keep books of account with respect to
such Funds and furnish the Board such periodic special reports as the Board may
request.
6. Will maintain a policy and practice of conducting its investment
advisory operations independently of any commercial banking operations of any
banking entity with which it is affiliated. When the Adviser makes investment
recommendations for a Fund, its investment advisory personnel will not inquire
or take into consideration whether the issuer of securities proposed for
purchase or sale for the Fund's account are customers of the commercial
department of any affiliated banking entity. In dealing with commercial
customers, the commercial department of any banking affiliate of the Adviser
will not inquire or take into consideration whether securities of those
customers are held by the Funds.
7. Will treat confidentially and as proprietary information of the
Company all records and other information relative to the Company and prior or
present Company shareholders or those persons or entities who respond to
inquiries concerning investment in the Company, and will not use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder or under any other agreement with the Company except after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where the Adviser may
be exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Company. Nothing contained herein, however, shall prohibit
the Adviser from advertising to or soliciting the public generally with respect
to other products or services, including, but not limited to, any advertising or
marketing via radio, television, newspapers, magazines or direct mail
solicitation, regardless of whether such advertisement or solicitation may
coincidentally include prior or present Company shareholders or those persons or
entities who have responded to inquiries regarding the Company.
C. SUB-ADVISER. It is understood that the Adviser may from time to time
employ or associate with itself such person or persons as the Adviser believes
to be fitted to assist it in the performance of this Agreement (each a
"Sub-Adviser"); provided, however, that the compensation of such person or
persons shall be paid by the Adviser and that the Adviser shall be as fully
responsible to the Company for the acts and omissions of any such person as it
is for its own acts and omissions; and provided further, that the retention of
any Sub-Adviser shall be approved as may be required by the 1940 Act.
Notwithstanding any such employment or association, the Adviser with respect to
the International Equity Fund, shall itself (a) establish and monitor
A-4
<PAGE> 61
general investment criteria and policies for the Fund involved, (b) review and
analyze on a periodic basis such Fund's portfolio holdings and transactions in
order to determine their appropriateness in light of the Fund's shareholder
base, and (c) review and analyze on a periodic basis the policies established by
any Sub-Adviser for such Fund with respect to the placement of orders for the
purchase and sale of portfolio securities. In the event that any Sub-Adviser
appointed hereunder is terminated, the Adviser may provide investment advisory
services pursuant to this Agreement to the Funds without further shareholder
approval.
D. SERVICES NOT EXCLUSIVE. The Adviser will for all purposes herein be
deemed to be an independent contractor and will, unless otherwise expressly
provided herein or authorized by the Board from time to time, have no authority
to act for or represent the Company in any way or otherwise be deemed its agent.
The investment management services furnished by the Adviser hereunder are not
deemed exclusive, and the Adviser will be free to furnish similar services to
others so long as its services under this Agreement are not impaired thereby.
E. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31-1 under the
1940 Act.
F. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under the Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Company.
G. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Company will pay the Adviser and the Adviser
will accept as full compensation therefor a fee, computed daily and paid monthly
(in arrears) for the Funds and at the annual rates set forth on Schedule B. Such
fee as is attributable to a Fund will be a separate charge to each such Fund and
will be the several (and not joint or joint and several) obligation of each such
Fund.
H. LIMITATION OF LIABILITY. Subject to the provisions of Section 3 hereof
concerning the Adviser's responsibility for the acts and omissions of persons
employed by or associated with the Adviser, the Adviser will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Company
in connection with the performance of this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the
A-5
<PAGE> 62
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or negligence on the part of the Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
I. DURATION AND TERMINATION. This Agreement will become effective with
respect to each Fund as of the date first above written, provided that the
shareholders of each such Fund have previously approved the Agreement in
accordance with the requirements of the 1940 Act. This Agreement will become
effective with respect to any additional Fund on the date of receipt by the
Company of notice from the Adviser in accordance with Section 1(b) hereof that
the Adviser is willing to serve as investment adviser with respect to such Fund,
provided that this Agreement (as supplemented by the terms specified in any
notice and agreement pursuant to Section 1(b) hereof) shall have been approved
by the shareholders of such Fund in accordance with the requirements of the 1940
Act.
Unless sooner terminated as provided herein, this Agreement will continue
in effect until October 31, 1999. Thereafter, if not terminated, this Agreement
shall continue in effect as to a particular Fund for successive annual periods,
provided such continuance is specifically approved at least annually (a) by the
vote of a majority of those members of the Board who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board or by vote of a
majority of the outstanding voting securities of such Fund. Notwithstanding the
foregoing, this Agreement may be terminated as to any Fund at any time, without
the payment of any penalty, by the Company (by vote of the Board or by vote of a
majority of the outstanding voting securities of such Fund), or by the Adviser,
on sixty days' written notice. This Agreement will immediately terminate in the
event of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning as the meaning of such terms in the 1940 Act.)
J. 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 amendment of this Agreement will be
effective as to a particular Fund until approved by vote of a majority of the
outstanding voting securities of such Fund.
K. NOTICES. Notices of any kind to be given to the Adviser hereunder by
the Company will be in writing and will be duly given if mailed or delivered to
the Adviser at ______________________, or at such other address or to such
A-6
<PAGE> 63
individuals as will be so specified by the Adviser to the Company. Notices of
any kind to be given to the Company hereunder by the Adviser will be in writing
and will be duly given if mailed or delivered to the Company at 400 Bellevue
Parkway, Suite 108, Wilmington, Delaware 19809 (with a copy to Association of
American Universities, 1200 New York Avenue, N.W., Suite 550, Washington, D.C.
20005, Attention: Dr. Cornelius J. Pings), or at such other address or to such
individual as will be so specified by the Company to the Adviser.
L. 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 this Agreement will not be affected
thereby. This Agreement will be binding upon and will inure to the benefit of
the parties hereto and their respective successors and will be governed by the
internal laws, and not the law of conflicts, of the State of Maryland; provided
that nothing herein will be construed in a manner inconsistent with the 1940
Act, the Investment Advisers Act of 1940, as amended, or any rule or regulation
of the Securities and Exchange Commission thereunder. This Agreement may be
executed in two or more parts which together shall constitute a single
Agreement.
A-7
<PAGE> 64
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.
PACIFIC HORIZON FUNDS, INC.
By:________________________________________
Name:
Title:
ROBERTSON, STEPHENS & COMPANY
INVESTMENT MANAGEMENT, L.P.
By:________________________________________
Name:
Title:
A-8
<PAGE> 65
Schedule A
FUNDS
Prime
Treasury
Treasury Only
Government
Tax-Exempt Money
California Tax-Exempt Money Market
Aggressive Growth
U.S. Government Securities
Capital Income
California Tax-Exempt Bond
Asset Allocation
National Municipal Bond
International Equity
Short-Term Government
Corporate Bond
A-9
<PAGE> 66
Schedule B
<TABLE>
<CAPTION>
FUND FEE AS A PERCENTAGE
- ---- OF EACH FUND'S NET ASSETS
-------------------------
<S> <C>
Prime, Treasury, Treasury Only, .10% of the first $3 billion;
Government, Tax-Exempt Money .09% of the next $2 billion;
and California Tax-Exempt plus .08% of the amount over
$5 Money Market Funds 5 billion
Short-Term Government Fund .25%
California Tax-Exempt Bond Fund .30%
U.S. Government Securities Fund .35%
National Municipal Bond Fund .35%
Asset Allocation Fund .40%
Capital Income Fund .45%
Corporate Bond Fund .45%
Aggressive Growth Fund .60%
International Equity Fund .75%
</TABLE>
A-10
<PAGE> 67
APPENDIX B
FUNDAMENTAL
INVESTMENT LIMITATION
COMPARISON CHART
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
LIMITATION ON UNDERWRITING OF SECURITIES
<S> <C>
1. The Fund may not underwrite the 1. A Fund may not underwrite any
securities of other issuers except issue of securities within the
that all of the assets of the Fund meaning of the Securities Act of
may be invested in another 1933 (the "1933 Act") except when
investment company. it might technically be deemed to
be an underwriter either (a) in
connection with the disposition of
a portfolio security, or (b) in
connection with the purchase of
securities directly from the
issuer thereof in accordance with
its investment objective.
</TABLE>
<PAGE> 68
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
LIMITATION ON REAL ESTATE TRANSACTIONS
<S> <C>
2. The Fund may not purchase or sell 2. A Fund may not purchase or sell
real estate (However, the Fund real estate, except a Fund may
may, to the extent appropriate to purchase securities of issuers
its investment objective, purchase which deal or invest in real
securities issued by the U.S. estate and may purchase securities
Government, its agencies and which are secured by real estate
instrumentalities, purchase or interests in real estate.
securities issued by or on behalf
of the States, territories, and
possessions of the United States,
the District of Columbia and their
respective authorities, agencies,
instrumentalities and political
subdivisions, the interest on
which, in the opinion of bond
counsel to the issuer, is exempt
from regular Federal income tax
("Municipal Securities") secured
by real estate or interests
therein or securities issued by
companies investing in real estate
or interests therein).
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase or sell 3. A Fund may not purchase or sell
commodity contracts, or invest in commodities, except that a Fund
oil, gas or mineral exploration or may to the extent consistent with
development programs. However, the its investment objective, invest
National Municipal Bond Fund may, in securities of companies that
to the extent appropriate to its purchase or sell commodities or
investment objective, purchase which invest in such programs, and
publicly traded purchase and sell options, forward
</TABLE>
-2-
<PAGE> 69
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
securities of companies engaging contracts, futures contracts, and
in whole or in part in such options on futures contracts. This
activities, but may enter into limitation does not apply to
futures contracts and options foreign currency transactions
thereon in accordance with its including without limitation
Prospectus. forward currency contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not invest 25% or 4. A Fund may not purchase any
more of its total assets in the securities which would cause 25%
securities of one or more issuers or more of the value of its total
conducting their principal assets at the time of purchase to
business activities in the same be invested in the securities of
industry, except that this one or more issuers conducting
limitation shall not apply to their principal business
Municipal Securities or activities in the same industry,
governmental guarantees of the provided that (a) there is no
Municipal Securities and that all limitation with respect to
of the assets of the Fund may be obligations issued or guaranteed
invested in another investment by the U.S. government, any state
company. or territory of the United States,
or any of their agencies,
instrumentalities or political
subdivisions, and (b) assets may
be invested in the securities of
one or more diversified management
investment companies to the extent
permitted by the Investment
Company Act of 1940 and the rules
and regulations thereunder (the
"1940 Act").
Notwithstanding the above
limitation, there is no limitation
with respect to
</TABLE>
-3-
<PAGE> 70
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
investments by any Money Market
Fund in repurchase agreements,
domestic bank obligations and
certain bank obligations
considered to be issued by
domestic banks pursuant to
regulations or pronouncements of
the Securities and Exchange
Commission ("SEC") or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance
industry.
LIMITATION ON LENDING
5. The Fund may not make loans except 5. A Fund may not make loans, except
that the Fund may purchase or hold to the extent permitted by the
debt instruments and enter into Investment Company Act of 1940
repurchase agreements pursuant to Act.
its investment objective and
policies.
</TABLE>
-4-
<PAGE> 71
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
LIMITATION ON BORROWING
<S> <C>
6. The Fund may not borrow money 6. A Fund may not borrow money, issue
except from banks or through senior securities or mortgage,
reverse repurchase agreements to pledge or hypothecate its assets
meet redemptions and other except to the extent permitted
temporary purposes in amounts of under the 1940 Act.
up to 25% of its total assets at
the time of such borrowing. The
National Municipal Bond Fund will
not purchase securities while its
borrowings (including reverse
repurchase agreements) are
outstanding.
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase 7. A Fund may not purchase securities
securities of any one issuer (except securities issued or
(except securities issued by the guaranteed by the U.S. Government,
U.S. Government, its agencies or its agencies or instrumentali-
instrumentalities) if, ties) of any one issuer if, as a
immediately after and as a result, result, more than 5% of its total
more than 5% of its total assets assets will be invested in the
will be invested in the securities securities of such issuer or it
of such issuer, except that up to would own more than 10% of the
25% of its total assets may be voting securities of such issuer,
invested without regard to this 5% except that (a) up to 25% of its
limitation and that all of the total assets may be invested
assets of the Fund may be invested without regard to these
in another investment company. limitations and (b) a Fund's
assets may be invested in the
securities of one or more
diversified management investment
companies to the extent permitted
by the 1940 Act.
</TABLE>
-5-
<PAGE> 72
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
Notwithstanding the foregoing
restriction, as a nonfundamental
policy, each of the Money Market
Funds, may invest without regard
to the 5% limitation in securities
subject to certain guarantees and
certain money market fund
securities in accordance with Rule
2a-7 under the 1940 Act or any
successor rule, and as otherwise
permitted in accordance with Rule
2a-7.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
8. The Fund may not sell securities 8. Designate as non-fundamental and
short or purchase securities on restate as follows:
margin, except such short-term
credits as are necessary for the A Fund may not sell securities
clearance of transactions. For short, maintain a short position,
this purpose, the deposit or or purchase securities on margin,
payment by the National Municipal except for such short-term credits
Bond Fund for initial or as are necessary for the clearance
maintenance margin in connection of transactions. For this purpose,
with future contracts is not a deposit or payment by a Fund for
considered to be the purchase or initial or maintenance margin in
sale of a security on margin. connection with future contracts
is not considered to be the
purchase or sale of a security on
margin.
</TABLE>
-6-
<PAGE> 73
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON PURCHASING SECURITIES OF
COMPANIES FOR THE PURPOSE OF EXERCISING
CONTROL
9. The Fund may not purchase 9. Designate as non-fundamental and
securities of companies for the leave unchanged.
purpose of exercising control.
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
10. The Fund may not acquire any other 10. Designate as non-fundamental and
investment company or investment restate as follows:
company security except as
provided for in the 1940 Act A Fund may not purchase securities
provided that all of the assets of of other investment companies
the Fund may be invested in except as permitted by the 1940
another investment company. Act.
LIMITATION ON PUT, CALL, STRADDLE AND
SPREAD TRANSACTIONS
11. The Fund may not write or sell 11. Designate as non-fundamental and
puts, calls, straddles, spreads or restate as follows:
combinations thereof except that
the National Municipal Bond Fund A Fund may not write or sell puts,
may acquire standby commitments calls, straddles, spreads or
with respect to its Municipal combinations thereof except that a
Securities and may enter into Fund may acquire standby
futures contracts and options commitments and may enter into
thereon to the extent disclosed in futures contracts and options in
the Prospectus and the Statement accordance with its investment
of Additional Information. objective.
INVESTMENT OBJECTIVE
12. The Fund seeks as high a level of 12. Designate as non-fundamental and
current interest income free of leave unchanged.
Federal income tax as is
consistent with prudent
</TABLE>
-7-
<PAGE> 74
NATIONAL MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
investment management and
preservation of capital.
</TABLE>
-8-
<PAGE> 75
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Funds may not underwrite the 1. A Fund may not underwrite any
securities of other issuers, issue of securities within the
provided that all of the assets of meaning of the 1933 Act except
the Funds may be invested in their when it might technically be
respective Master Portfolio or deemed to be an underwriter either
another investment company. (a) in connection with the
disposition of a portfolio
security, or (b) in connection
with the purchase of securities
directly from the issuer thereof
in accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Funds may not purchase or sell 2. A Fund may not purchase or sell
real estate, except that each Fund real estate, except a Fund may
may, to the extent appropriate to purchase securities of issuers
its investment objective, invest which deal or invest in real
in securities and instruments estate and may purchase securities
guaranteed by agencies or which are secured by real estate
instrumentalities of the U.S. or interests in real estate.
Government and securities issued
by companies which invest in real
estate or interests therein.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Funds may not purchase or sell 3. A Fund may not purchase or sell
commodities or commodity commodities, except that a Fund
contracts, or invest in oil, gas may to the extent consistent with
or mineral exploration or its investment objective, invest
development programs, except that: in securities of companies that
(a) it may, to the extent purchase or sell commodities or
appropriate to its investment which invest in such programs,
</TABLE>
-9-
<PAGE> 76
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
objective, invest in securities and purchase and sell options,
issued by companies which purchase forward contracts, futures
or sell commodities or commodity contracts and options on futures
contracts or which invest in such contracts. This limitation does
programs; and (b) it may purchase not apply to foreign currency
and sell futures contracts and transactions including without
options on futures contracts. limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Funds may not purchase any 4. A Fund may not purchase any
securities which would cause 25% securities which would cause 25%
or more of the value of its total or more of the value of its total
assets at the time of such assets at the time of purchase to
purchase to be invested in the be invested in the securities of
securities of one or more issuers one or more issuers conducting
conducting their principal their principal business
business activities in the same activities in the same industry,
industry; provided, however, that provided that (a) there is no
(a) there is no limitation with limitation with respect to
respect to investments in obligations issued or guaranteed
obligations issued or guaranteed by the U.S. government, any state
by the federal government and its or territory of the United States,
agencies and instrumentalities; or any of their agencies,
(b) each utility (such as gas, gas instrumentalities or political
transmission, electric and subdivisions, and (b) assets may
telephone service) will be be invested in the securities of
considered a single industry for one or more diversified management
purposes of this policy; and (c) investment companies to the extent
wholly-owned finance companies permitted by the 1940 Act.
will be considered to be in the
industries of their parents if Notwithstanding the above
their activities are primarily limitation, there is no limitation
related to financing the with respect to investments by any
Money Market Fund in repurchase
</TABLE>
-10-
<PAGE> 77
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
activities of their parents. agreements, domestic bank
obligations and certain bank
obligations considered to be
issued by domestic banks pursuant
to regulations or pronouncements
of the SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance
industry.
LIMITATION ON LENDING
5. The Funds may not make loans, 5. A Fund may not make loans, except
except that with respect to the to the extent permitted by the
International Equity Fund it may 1940 Act.
invest in debt securities,
repurchase agreements and
securities loans and with respect
to the Corporate Bond Fund, it may
purchase or hold debt obligations
in accordance with its investment
objective, policies and
limitations; may enter into
repurchase agreements with respect
to securities; and may lend
portfolio securities against
collateral consisting of cash or
securities of the U.S. Government
and its agencies and
instrumentalities which are
consistent with its permitted
investments.
</TABLE>
-11-
<PAGE> 78
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON BORROWING
6. The Funds may not borrow money for 6. A Fund may not borrow money, issue
the purpose of obtaining senior securities or mortgage,
investment leverage or issue pledge or hypothecate its assets
senior securities (as defined in except to the extent permitted
the 1940 Act), provided that each under the 1940 Act.
Fund and the respective Master
Portfolio may borrow from banks
for temporary purposes and in an
amount not exceeding 10% of the
value of the total assets of each
Fund or the respective Master
Portfolio; or mortgage, pledge or
hypothecate any assets, except in
connection with any such borrowing
and in amounts not in excess of
the lesser of the dollar amounts
borrowed or 10% of the value of
its total assets at the time of
such borrowing. This restriction
shall not apply to (a) the sale of
portfolio securities accompanied
by a simultaneous agreement as to
their repurchase, or (b)
transactions in currency, options,
futures contracts and options on
futures contracts, or forward
commitment transactions.
LIMITATION ON ISSUER CONCENTRATION
7. The Funds may not purchase 7. A Fund may not purchase securities
securities (except securities (except securities issued or
issued by the
</TABLE>
-12-
<PAGE> 79
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
U.S. Government, its agencies or guaranteed by the U.S. Government,
instrumentalities) if, as a its agencies or instrumentalities)
result more than 5% of its total of any one issuer if, as a result,
assets will be invested in the more than 5% of its total assets
securities of any one issuer, will be invested in the securities
except that up to 25% of its total of such issuer or it would own
assets may be invested without more than 10% of the voting
regard to this 5% limitation; securities of such issuer, except
provided that all of the assets of that (a) up to 25% of its total
the Funds may be invested in their assets may be invested without
respective Master Portfolio or regard to these limitations; and
another investment company. (b) a Fund's assets may be
invested in the securities of one
The Funds may not purchase or more diversified management
securities of any issuer if as a investment companies to the extent
result it would own more than 10% permitted by the 1940 Act.
of the voting securities of such
issuer; provided that all of the Notwithstanding the foregoing
assets of each Fund may be restriction, each of the Money
invested in the respective Master Market Funds, as a non-fundamental
Portfolio or another investment policy, may invest without regard
company. to the 5% limitation in securities
subject to certain guarantees and
certain money market fund
securities in accordance with Rule
2a-7 under the 1940 Act or any
successor rule, and as otherwise
permitted in accordance with Rule
2a-7.
LIMITATION ON SHORT SALES AND
PURCHASING SECURITIES OR MARGIN
8. The Funds may not purchase 8. Designate as non-fundamental and
securities on margin (except for restate as follows:
such short- term credits as may be
necessary for the
</TABLE>
-13-
<PAGE> 80
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
clearance of transactions), make A Fund may not sell securities
short sales of securities or short, maintain a short position
maintain a short position. For or purchase securities on margin,
this purpose, the deposit or except for such short-term credits
payment by a Fund for initial or as may be necessary for the
maintenance margin in connection clearance of transactions. For
with futures contracts is not this purpose, the deposit or
considered to be the purchase or payment by a Fund for initial or
sale of a security on margin. maintenance margin in connection
with futures contracts is not
considered to be the purchase or
sale of a security on margin.
LIMITATION ON PURCHASING
SECURITIES OF OTHER INVESTMENT
COMPANIES
9. The Funds may not purchase 9. Designate as non-fundamental and
securities of other investment restate as follows:
companies to the extent prohibited
by the 1940 Act, except that the A Fund may not purchase securities
Corporate Bond Fund may purchase of other investment companies
securities of other investment except as permitted by the 1940
companies in connection with a Act.
merger, consolidation, acquisition
or reorganization; or as may
otherwise be permitted by the 1940
Act; provided that all of the
assets of the Corporate Bond Fund
may be invested in the Corporate
Bond Master Portfolio or another
investment company.
LIMITATION ON PUT, CALL, STRADDLE AND
SPREAD TRANSACTIONS
</TABLE>
-14-
<PAGE> 81
INTERNATIONAL EQUITY AND CORPORATE BOND FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
10. The Funds may not write or sell 10. Designate as non-fundamental and
puts, calls, straddles, spreads or restate as follows:
combinations thereof, except that
it may engage in options A Fund may not write or sell puts,
transactions. calls, straddles, spreads or
combinations thereof except that a
Fund may acquire standby
commitments and may enter into
futures contracts and options in
accordance with its investment
objective.
INVESTMENT OBJECTIVE
INTERNATIONAL EQUITY FUND
11. The Fund seeks long-term capital 11. Designate as non-fundamental and
growth by investing primarily in leave unchanged.
foreign equity securities.
CORPORATE BOND FUND
12. The Fund seeks to provide 12. Designate as non-fundamental and
investors with high current income leave unchanged.
consistent with reasonable
investment risk.
</TABLE>
-15-
<PAGE> 82
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Funds may not underwrite any 1. A Fund may not underwrite any
issue of securities, provided, issue of securities within the
however, that a Fund may invest meaning of the 1933 Act except
all its assets in a diversified, when it might be technically
open-end management investment deemed to be an underwriter either
company, or a series thereof, (a) in connection with the
having substantially the same disposition of a portfolio
investment objectives, policies security or (b) in connection with
and restrictions as such Fund, the purchase of securities
without regard to the limitations directly from the issuer thereof
set forth in this paragraph. in accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Funds may not purchase or sell 2. A Fund may not purchase or sell
real estate or real estate real estate, except a Fund may
mortgage loans, but this shall not purchase securities of issuers
prevent investments in instruments which deal or invest in real
secured by real estate or estate and may purchase securities
interests therein or in marketable which are secured by real estate
securities of issuers that engage or interests in real estate.
in real estate operations.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Funds may not purchase or sell 3. A Fund may not purchase or sell
commodities contracts, except that commodities, except that a Fund
any Fund may purchase or sell may, to the extent consistent with
futures contracts on financial its investment objective, invest
instruments, such as bank in securities of companies that
certificates of deposit and U.S. purchase or sell commodities or
Government securities, foreign which invest in such programs, and
currencies and stock indexes and purchase and sell options, forward
options
</TABLE>
-16-
<PAGE> 83
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
on any such futures if such contracts, futures contracts, and
options are written by other options on futures contracts. This
persons and if (i) the futures or limitation does not apply to
options are listed on a national foreign currency transactions
securities or commodities including without limitation
exchange, (ii) the aggregate forward currency contracts.
premiums paid on all such options
that are held at any time do not
exceed 20% of the total net assets
of that Fund, and (iii) the
aggregate margin deposits required
on all such futures or options
thereon held at any time do not
exceed 5% of the total assets of
the Fund.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Funds may not purchase any 4. A Fund may not purchase any
securities for any Fund that would securities which would cause 25%
cause more than 25% of the value or more of the value of its total
of the Fund's total assets at the assets at the time of purchase to
time of such purchase to be be invested in the securities of
invested in the securities of one one or more issuers conducting
or more issuers conducting their their principal business
principal activities in the same activities in the same industry,
industry; provided that there is provided that (a) there is no
no limitation with respect to limitation with respect to
investments in obligations issued obligations issued or guaranteed
or guaranteed by the United States by the U.S. government, any state
Government, its agencies and or territory of the United States,
instrumentalities; and provided or any of their agencies,
further that a Fund may invest all instrumentalities or political
its assets in a diversified, subdivisions, and (b) assets may
open-end management investment be invested in the securities of
company, or a series thereof, with one or more diversified
</TABLE>
-17
<PAGE> 84
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
substantially the same investment management investment companies to
objectives, policies and the extent permitted by the 1940
restrictions as the Fund without Act.
regard to the limitations set
forth in this paragraph. Notwithstanding the above
limitation, there is no limitation
with respect to investments by any
Money Market Fund in repurchase
agreements, domestic bank
obligations and certain bank
obligations considered to be
issued by domestic banks pursuant
to regulations or pronouncements
of the SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance
industry.
LIMITATION ON LENDING
5. The Funds may not make loans to 5. A Fund may not make loans, except
other persons, except that a Fund to the extent permitted by the
may make time or demand deposits 1940 Act.
with banks, provided that time
deposits shall not have an
aggregate value in excess of 10%
of a Fund's net assets, and may
purchase bonds, debentures or
similar obligations that are
publicly distributed, may loan
portfolio securities not in excess
of 10% of the value of the total
assets of such Fund, and may enter
into repurchase agreements as
</TABLE>
-18-
<PAGE> 85
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
long as repurchase agreements
maturing in more than seven days
do not exceed 10% of the value of
the total assets of a Fund.
LIMITATION ON BORROWING
6. The Funds may not borrow money for 6. A Fund may not borrow money, issue
any Fund except for temporary senior securities or mortgage,
emergency purposes and then only pledge or hypothecate its assets
in an amount not exceeding 5% of except to the extent permitted
the value of the total assets of under the 1940 Act.
that Fund. Borrowing shall, for
purposes of this paragraph,
include reverse repurchase
agreements. Any borrowings, other
than reverse repurchase
agreements, will be from banks.
Pacific Horizon will repay all
borrowings in any Fund before
making additional investments for
that Fund and interest paid on
such borrowings will reduce
income.
The Funds may not pledge, mortgage
or hypothecate the assets of any
Fund to any extent greater than
10% of the value of the total
assets of that Fund.
The Funds may not issue senior
securities.
LIMITATION ON ISSUER DIVERSIFICATION
7. The Funds may not purchase 7. A Fund may not purchase securities
securities (except securities (except securities issued or
issued by the
</TABLE>
-19-
<PAGE> 86
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
U.S. Government, its agencies or guaranteed by the U.S. Government,
instrumentalities) if, as a its agencies or instrumentalities)
result, more than 5% of its total of any one issuer if, as a result,
assets will be invested in the more than 5% of its total assets
securities of any one issuer or it will be invested in the securities
would own more than 10% of the of such issuer or it would own
voting securities of such issuer, more than 10% of the voting
except that up to 25% of its total securities of such issuer, except
assets may be invested without that (a) up to 25% of its total
regard to these limitations; and assets may be invested without
provided that all of its assets regard to these limitations; and
may be invested in a diversified, (b) a Fund's assets may be
open-end management investment invested in the securities of one
company, or a series thereof, with or more diversified, management
substantially the same investment investment companies to the extent
objectives, policies and permitted by the 1940 Act.
restrictions without regard to the
limitations set forth in this Notwithstanding the foregoing
paragraph. restriction, each of the Money
Market Funds, as a non-fundamental
policy, may invest without regard
to the 5% limitation in securities
subject to certain guarantees and
certain money market fund
securities in accordance with Rule
2a-7 under the 1940 Act or any
successor rule, and as otherwise
permitted in accordance with Rule
2a-7.
</TABLE>
-20-
<PAGE> 87
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
8. The Funds may not purchase on 8. Designate as non-fundamental and
margin or sell short. restate as follows:
A Fund may not sell securities
short, maintain a short position
or purchase securities on margin,
except for such short-term credits
as may necessary for the clearance
of transactions. For this purpose,
the deposit or payment by a Fund
for initial or maintenance margin
in connection with futures
contracts is not considered to be
the purchase or sale of a security
on margin.
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
9. The Funds may not purchase 9. Designate as non-fundamental and
securities of any other restate as follows:
investment company (except
in connection with a A Fund may not purchase securities
merger, consolidation, of other investment companies
acquisition or except as permitted by the 1940
reorganization) if, Act.
immediately after such
purchase, Pacific Horizon
(and any companies
controlled by it) would
own in the aggregate (i)
more than 3% of the total
outstanding voting stock
of such investment
company, (ii) securities
issued by such investment
company would have an
aggregate value in excess
</TABLE>
-21-
<PAGE> 88
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
of 5% of the value of the total
assets of Pacific Horizon, or
(iii) securities issued by such
investment company and all other
investment companies would have an
aggregate value in excess of 10%
of the value of the total assets
of Pacific Horizon provided,
however, that a Fund may invest
all its assets in a diversified,
open-end management investment
company, or a series thereof,
having substantially the same
investment objectives, policies
and restrictions as such Fund,
without regard to the limitations
set forth in this paragraph.
LIMITATION ON PUT, CALL, STRADDLE AND SPREAD
TRANSACTIONS
10. The Funds may not invest in or 10. Designate as non-fundamental and
sell put, call, straddle or spread restate as follows:
options or interests in oil, gas
or other mineral exploration or A Fund may not write or sell puts,
development programs. calls, straddles, spreads or
combinations thereof except that a
Fund may acquire standby
commitments and may enter into
futures contracts and options in
accordance with its investment
objective.
LIMITATION ON INVESTMENT IN ILLIQUID
SECURITIES
11. The Funds may not invest the 11. Designate as non-fundamental and
assets of any Fund in restate as follows:
nonmarketable securities
</TABLE>
-22-
<PAGE> 89
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
that are not readily marketable A Fund may not invest more than
(including repurchase agreements 15% (10% with respect to the Money
maturing in more than seven days, Market Funds) of its net assets in
securities described in illiquid securities.
restriction (2) with respect to
such Fund in the Prospectuses,
restricted securities, certain OTC
options and securities used as
cover for such options and
stripped mortgage-backed
securities) to any extent greater
than 10% of the value of the total
assets of that Fund; provided,
however, that a Fund may invest
all its assets in a diversified,
open-end management investment
company, or a series thereof with
substantially the same investment
objectives, policies and
restrictions as the Fund, without
regard to the limitations set
forth in this paragraph.
LIMITATION ON PURCHASE OF SECURITIES BY
BOARD MEMBERS
12. The Funds may not purchase or 12. This investment limitation will be
retain securities of an issuer if eliminated.
those members of the Board of
Pacific Horizon or the Master
Portfolio, each of whom own more
than 1/2 of 1% of such securities,
together own more than 5% of the
securities of such issuer,
provided, however, that a Fund may
invest all its assets in a
diversified, open-end management
</TABLE>
-23-
<PAGE> 90
INTERMEDIATE BOND, BLUE CHIP AND ASSET ALLOCATION FUNDS
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
investment company, or a series
thereof, having substantially the
same investment objectives,
policies and restrictions as such
Fund, without regard to the
limitations set forth in this
paragraph.
INVESTMENT OBJECTIVE
INTERMEDIATE BOND FUND
13. The Fund seeks to obtain interest 13. Designate as non-fundamental and
income and capital appreciation. leave unchanged.
BLUE CHIP FUND
14. The Fund seeks long-term capital 14. Designate as non-fundamental and
appreciation through investment in leave unchanged.
blue chip stocks.
ASSET ALLOCATION FUND
15. The Fund seeks long-term growth 15. Designate as non-fundamental and
from capital appreciation and leave unchanged.
dividend and interest income.
</TABLE>
-24-
<PAGE> 91
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Fund may not underwrite the 1. A Fund may not underwrite any
securities of other issuers. issue of securities within the
meaning of the 1933 Act except
when it might be technically
deemed to be an underwriter either
(a) in connection with the
disposition of a portfolio
security in connection with or (b)
the purchase of securities
directly from the issuer thereof
in accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Fund may not purchase or sell 2. A Fund may not purchase or sell
real estate (however, the Fund real estate, except a Fund may
may, to the extent appropriate to purchase securities of issuers
its investment objective, purchase which deal or invest in real
securities issued by companies estate and may purchase securities
investing in real estate or which are secured by real estate
interests therein). or interests in real estate.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase or sell 3. A Fund may not purchase or sell
commodity contracts, or invest in commodities, except that a Fund
oil, gas or mineral exploration or may, to the extent consistent with
development programs, except that its investment objective, invest
the Fund may, to the extent in securities of companies that
appropriate to its investment purchase or sell commodities or
objective, purchase publicly which invest in such programs, and
traded securities of companies purchase and sell options, forward
engaging in whole or in part in contracts, futures contracts, and
such activities, options on
</TABLE>
-25-
<PAGE> 92
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
and may enter into futures futures contracts. This limitation
contract and related options. does not apply to foreign currency
transactions including without
limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not purchase any 4. A Fund may not purchase any
securities which would cause 25% securities which would cause 25%
or more of the Fund's total assets or more of the value of its total
at the time of purchase to be assets at the time of purchase to
invested in the securities of one be invested in the securities of
or more issuers conducting their one or more issuers conducting
principal business activities in their principal business
the same industry, provided that activities in the same industry,
(a) there is no limitation with provided that (a) there is no
respect to obligations issued or limitation with respect to
guaranteed by the U.S. Government, obligations issued or guaranteed
its agencies or instrumentalities; by the U.S. government, any state
(b) wholly-owned finance companies or territory of the United States,
will be considered to be in the or any of their agencies,
industries of their parents if instrumentali- ties or political
their activities are primarily subdivisions, and (b) assets may
related to financing the be invested in the securities of
activities of the parents; and (c) one or more diversified management
the industry classification of investment companies to the extent
utilities will be determined permitted by the 1940 Act.
according to their service. For
example, gas, gas transmission, Notwithstanding the above
electric and gas, electric and limitation, there is no limitation
telephone will be considered a with respect to investments by any
separate industry. Money Market Fund in repurchase
agreements, domestic bank
obligations and certain bank
obligations considered to be
issued by
</TABLE>
-26-
<PAGE> 93
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
domestic banks pursuant to
regulations or pronouncements of
the SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance
industry.
LIMITATION ON LENDING
5. The Fund may not make loans except 5. A Fund may not make loans, except
that the Fund may purchase or hold to the extent permitted by the
debt instruments or enter into 1940 Act.
repurchase agreements pursuant to
its investment objective and
policies and may lend portfolio
securities in an amount not
exceeding 30% of its total assets.
LIMITATION ON BORROWING
6. The Fund may not borrow money or 6. A Fund may not borrow money, issue
issue senior securities, except senior securities or mortgage,
that the Fund may borrow from pledge or hypothecate its assets
banks or enter into reverse except to the extent permitted
repurchase agreements to meet under the 1940 Act.
redemptions or for other temporary
purposes in amounts up to 10% of
its total assets at the time of
such borrowing; or mortgage,
pledge or hypothecate any assets
except in connection with any such
borrowing and in amounts not in
excess of the lesser of the dollar
</TABLE>
-27-
<PAGE> 94
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
amounts borrowed or 10% of its
total assets at the time of such
borrowing; or purchase securities
at any time after such borrowings
(including reverse repurchase
agreements) have been entered into
and before they are repaid. The
Fund's transactions in futures and
related options (including the
margin posted by the Fund in
connection with such transactions)
are not subject to this investment
limitation.
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase 7. A Fund may not purchase securities
securities of any one issuer (except securities issued or
(other than obligations issued or guaranteed by the U.S. Government,
guaranteed by U.S. Government, its its agencies or instrumentalities)
agencies or instrumentalities) if of any one issuer if as a result,
immediately thereafter more than more than 5% of its total assets
15% of its total assets would be would be invested in the
invested in certificates of securities of such issuer or it
deposit or bankers' acceptances of would own more than 10% of the
any one bank, or more than 5% of voting securities of such issuer,
its total assets would be invested except that (a) up to 25% of the
in other securities of any one Fund's total assets may be
bank or the securities of any invested without regard to these
other issuer (except that up to limitations; and (b) a Fund's
25% of the Fund's total assets may assets may be invested in the
be invested without regard to this securities of one or more
limitation). diversified management investment
companies to the extent permitted
by the 1940 Act.
</TABLE>
-28-
<PAGE> 95
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
Notwithstanding the foregoing
restriction, each of the Money
Market Funds, as a non-fundamental
policy, may invest without regard
to the 5% limitation in securities
subject to certain guarantees and
certain money market fund
securities in accordance with Rule
2a-7 under the 1940 Act or any
successor rule, and as otherwise
permitted in accordance with Rule
2a-7.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
8. The Fund may not purchase 8. Designate as non-fundamental and
securities on margin, make short restate as follows:
sales of securities or maintain a
short position, except that this A Fund may not sell securities
limitation shall not apply to short, maintain a short position
transactions in futures contracts or purchase securities on margin,
and related options. except for such short-term credits
as may be necessary for the
clearance of transactions. For
this purpose, a deposit or payment
by a Fund for initial or
maintenance margin in connection
with future contracts is not
considered to be the purchase or
sale of a security on margin.
</TABLE>
-29-
<PAGE> 96
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON PURCHASING SECURITIES OF
COMPANIES FOR THE PURPOSE OF EXERCISING
CONTROL
9. The Fund may not purchase 9. Designate as non-fundamental and
securities of companies for the leave unchanged.
purpose of exercising control.
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
10. The Fund may not acquire any other 10. Designate as non-fundamental and
investment company or investment restate as follows:
company security except in
connection with a merger, A Fund may not purchase securities
consolidation, reorganization or of other investment companies
acquisition of assets or as may except as permitted by the 1940
otherwise be permitted by the Act.
Investment Company Act of 1940.
LIMITATION ON ILLIQUID SECURITIES
11. The Fund may not purchase 11. Designate as non-fundamental and
securities without restate as follows:
available market
quotations which cannot be A Fund may not invest more than
sold without registration 15% (10% with respect to the Money
or the filing of a Market Funds) of its net assets in
notification under Federal illiquid securities.
or state securities laws,
enter into repurchase
agreements providing for
settlement more than seven
days after notice, or
purchase any other
securities deemed illiquid
by the Directors if, as a
result, such securities
and repurchase agreements
would exceed 10% of the
Fund's total value.
</TABLE>
-30-
<PAGE> 97
AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
The Fund intends that variable
amount master demand notes with
maturities of nine months or less,
as well as any investments in
securities that are not registered
under the 1933 Act but that may be
purchased by institutional buyers
under Rule 144A and for which a
liquid trading market exists as
determined by the Board of
Directors or Bank of America
(pursuant to guidelines adopted by
the Board), will not be subject to
this 10% limitation on illiquid
securities.
LIMITATION ON INVESTMENT IN EQUITY
SECURITIES
12. Except for temporary defensive 12. Designate as non-fundamental and
periods, the Aggressive Growth leave unchanged.
Fund will invest at least 65% of
its total assets in equity
securities.
INVESTMENT OBJECTIVE
13. The Fund seeks to achieve maximum 13. Designate as non-fundamental and
capital appreciation. leave unchanged.
</TABLE>
-31-
<PAGE> 98
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Funds may not underwrite any 1. A Fund may not underwrite any issue
issue of securities, except to the of securities within the meaning of
extent that the purchase of the 1933 Act except when it might be
securities directly from the issuer technically deemed to be an
thereof in accordance with the underwriter either (a) in connection
Fund's investment objective, with the disposition of a portfolio
policies and limitations may be security or (b) in connection with
deemed to be underwriting. the purchase of securities directly
from the issuer thereof in
accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Funds may not purchase or sell 2. A Fund may not purchase or sell real
real estate, except that a Fund may, estate, except a Fund may purchase
to the extent appropriate to its securities of issuers which deal or
investment objective, invest in GNMA invest in real estate and may
Certificates and securities issued purchase securities which are
by companies which invest in real secured by real estate or interests
estate or interests therein. in real estate.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Funds may not purchase or sell 3. A Fund may not purchase or sell
commodities or commodity contracts, commodities, except that a Fund may
or invest in oil, gas or mineral to the extent consistent with its
exploration or development programs, investment objective, invest in
except that: (a) a Fund may, to the securities of companies that
extent appropriate to its investment purchase or sell commodities or
objective, invest in securities which invest in such programs, and
issued by companies which purchase and sell options, forward
contracts, futures
</TABLE>
-32-
<PAGE> 99
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
purchase or sell commodities or contracts, and options on futures
commodity contracts or which invest contracts. This limitation does not
in such programs; and (b) a Fund may apply to foreign currency
purchase and sell futures contracts transactions including without
and options on futures contracts. limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Funds may not purchase any 4. A Fund may not purchase any
securities which would cause 25% or securities which would cause 25% or
more of the value of its total more of the value of its total
assets at the time of such purchase assets at the time of purchase to be
to be invested in the securities of invested in the securities of one or
one or more issuers conducting their more issuers conducting their
principal business activities in the principal business activities in the
same industry; provided, however, same industry, provided that (a)
that (a) there is no limitation with there is no limitation with respect
respect to investments in to obligations issued or guaranteed
obligations issued or guaranteed by by the U.S. government, any state or
the federal government and its territory of the United States, or
agencies and instrumentalities; (b) any of their agencies,
each utility (such as gas, gas instrumentalities or political
transmission, electric and telephone subdivisions, and (b) assets may be
service) will be considered a single invested in the securities of one or
industry for purposes of this more diversified management
policy; and (c) wholly-owned finance investment companies to the extent
companies will be considered to be permitted by the 1940 Act.
in the industries of their parents
if their activities are primarily Notwithstanding the above
related to financing the activities limitation, there is no limitation
of their parents. with respect to investments by any
Money Market Fund in repurchase
agreements, domestic bank
obligations and certain
</TABLE>
-33-
<PAGE> 100
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
bank obligations considered to be
issued by domestic banks pursuant to
regulations or pronouncements of the
SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance industry.
LIMITATION ON LENDING
5. The Funds may not make loans, except 5. A Fund may not make loans, except to
that the Funds may purchase or hold the extent permitted by the 1940
debt obligations in accordance with Act.
its investment objective, policies
and limitations; may enter into
repurchase agreements with respect
to securities; and may lend
portfolio securities against
collateral consisting of cash or
securities of the U.S. Government
and its agencies and its agencies
and instrumentalities which are
consistent with its permitted
investments.
LIMITATION ON BORROWING
6. The Funds may not borrow money 6. A Fund may not borrow money, issue
except from banks for temporary senior securities or mortgage,
purposes and in an amount not pledge or hypothecate its assets
exceeding 10% of the value of the except to the extent permitted under
Fund's total assets, issue senior the 1940 Act.
securities (as defined in the 1940
Act)
</TABLE>
-34-
<PAGE> 101
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
or mortgage, pledge or hypothecate
any assets except in connection with
any such borrowing and in amounts
not in excess of the lesser of the
dollar amounts borrowed or 10% of
the value of the Fund's total assets
at the time of such borrowing.
Borrowing may take the form of sale
of portfolio securities accompanied
by a simultaneous agreement as to
their repurchase. (This borrowing
provision is not for investment
leverage, but solely to facilitate
management of the Fund's portfolio
by enabling the Fund to meet
redemption requests when the
liquidation of portfolio securities
is deemed to be disadvantageous or
inconvenient. The Fund will not
purchase any securities while
borrowings are outstanding. Interest
paid on borrowed funds will reduce
the net investment income of the
Fund.) For the purpose of this
restriction, collateral or escrow
arrangements with respect to margin
for futures contracts are not deemed
to be a pledge of assets, and
neither such arrangements nor the
purchase of futures contracts are
deemed to be
</TABLE>
-35-
<PAGE> 102
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
the issuance of a senior security.
LIMITATION ON ISSUER CONCENTRATION
7. The Funds may not purchase the 7. A Fund may not purchase the
securities of any issuer if as a securities (except securities issued
result more than 5% of the value of or guaranteed by the U.S.
the Fund's total assets would be Government, its agencies or
invested in the securities of such instrumentalities) if as a result,
issuer, except that up to 25% of the more than 5% of the value of its
value of the Fund's total assets may total assets would be invested, in
be invested without regard to this the securities of one issuer, or it
5% limitation. Securities issued or would own 10% of the outstanding
guaranteed by the United States voting securities of such issuer,
Government or its agencies or except that up to 25% of the (a)
instrumentalities are not subject to Fund's total assets may be invested
this investment limitation. without regard to these limitations;
and (b) a Fund's assets may be
The Funds may not purchase invested in the securities of one or
securities of any issuer if as a more diversified management
result the Fund will own more than investment companies to the extent
10% of the voting securities of such permitted by the 1940 Act.
issuer.
Notwithstanding the foregoing
restriction, each of the Money
Market Funds, as a non- fundamental
policy, may invest without regard to
the 5% limitation in securities
subject to certain guarantees and
certain money market fund securities
in accordance with Rule 2a-7 under
the 1940 Act or any successor rule,
and as otherwise permitted in
accordance with Rule 2a-7.
</TABLE>
-36-
<PAGE> 103
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON SHORT SALES AND
PURCHASING SECURITIES OR MARGIN
8. The Funds may not purchase 8. Designate as non-fundamental and
securities on margin (except for restate as follows:
such short- term credits as may be
necessary for the clearance of A Fund may not sell securities
transactions), make short sales of short, maintain a short position, or
securities or maintain a short purchase securities on margin,
position. except for such short-term credits
as may be necessary for the
clearance of transactions. For this
purpose, a deposit or payment by a
Fund for initial or maintenance
margin in connection with future
contracts is not considered to be
the purchase or sale of a security
on margin.
LIMITATION ON PURCHASING SECURITIES
OF OTHER INVESTMENT COMPANIES
9. The Funds may not purchase 9. Designate non-fundamental and
securities of other investment restate as follows:
companies, except (a) securities of
money-market funds, to the extent A Fund may not purchase securities
permitted by the Investment Company of other investment companies,
Act of 1940, or (b) in connection except as permitted by the 1940 Act.
with a merger, consolidation,
acquisition or reorganization.
LIMITATION ON PUT, CALL, STRADDLE
AND SPREAD TRANSACTIONS
10. The Funds may not write or sell 10. Designate as non-fundamental and
puts, calls, straddles, spreads or restate as follows:
combinations thereof, except that
the Funds may A Fund may not write or sell puts,
calls,
</TABLE>
-37-
<PAGE> 104
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
write covered call options. straddles, spreads or combinations
thereof except that a Fund may
acquire standby commitments and may
enter into futures contracts and
options in accordance with its
investment objectives.
LIMITATION ON ILLIQUID SECURITIES
11. The Funds may not invest more than 11. Designate as non-fundamental and
10% of the value of its total assets restate as follows:
in securities with legal or
contractual restrictions on resale A Fund may not invest more than 15%
(including repurchase agreements (10% with respect to the Money
with terms greater than seven days Market Funds) of its net assets in
over the-counter options and the illiquid securities.
securities covering such options).
LIMITATION ON UNSEASONED ISSUERS
12. The Funds may not purchase 12. This investment limitation will be
securities of any issuer which has eliminated.
been in continuous operation for
less than three years (including
operations of its predecessors),
except obligations issued or
guaranteed by the U.S. government or
its agencies.
LIMITATION ON INVESTMENT IN GNMA
CERTIFICATES (U.S. GOVERNMENT
SECURITIES FUND ONLY)
13. Under normal market conditions, the 13. Designate as non-fundamental and
U.S. Government Securities Fund may restate as follows:
not invest less than 65% of its
total assets in GNMA Certificates. Under normal market conditions, the
U.S.
</TABLE>
-38-
<PAGE> 105
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
Government Securities Fund may not
invest less than 65% of its total
assets in securities issued by the
U.S. Government, its agencies,
instrumentalities or sponsored
enterprises.
LIMITATION ON INVESTMENT IN
CONVERTIBLE SECURITIES (CAPITAL
INCOME FUND ONLY)
14. Under normal market conditions, the 14. Designate as non-fundamental and
Capital Income Fund may not invest leave unchanged.
less than 65% of its total assets in
Convertible Securities. For purposes
of this limitation, securities
acquired upon the conversion of
Convertible Securities are deemed to
be Convertible Securities for a
period of two months after the
effective date of their conversion.
INVESTMENT OBJECTIVE
U.S. GOVERNMENT SECURITIES FUND
15. The Fund strives to provide 15. Designate as non-fundamental and
investors with a high level of leave unchanged.
current income, consistent with
preservation of capital.
</TABLE>
-39-
<PAGE> 106
U.S. GOVERNMENT SECURITIES FUND AND CAPITAL INCOME FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
CAPITAL INCOME FUND
16. The Fund seeks to provide investors 17. Designate as non-fundamental and
with a total investment return, leave unchanged.
comprised of current income and
capital appreciation, consistent
with prudent investment risk.
</TABLE>
-40-
<PAGE> 107
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Fund may not underwrite the 1. A Fund may not underwrite any issue
securities of other issuers. of securities within the meaning of
the 1933 Act except when it might be
technically deemed to be an
underwriter either (a) in connection
with the disposition of a portfolio
security or (b) in connection with
the purchase of securities directly
from the issuer thereof in
accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Fund may not purchase or sell 2. A Fund may not purchase or sell real
real estate (however, the Fund may, estate, except a Fund may purchase
to the extent appropriate to its securities of issuers which deal or
investment objective, purchase invest in real estate and may
Municipal Securities secured by real purchase securities which are
estate or interests therein or secured by real estate or interests
securities issued by companies in real estate.
investing in real estate or
interests therein).
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase or sell 3. A Fund may not purchase or sell
commodity contracts, or invest in commodities, except that a Fund may,
oil, gas or mineral exploration or to the extent consistent with its
development programs (however, the investment objective, invest in
Fund may, to the extent appropriate securities of companies that
to its investment objective, purchase or sell commodities or
purchase publicly traded securities which invest in such programs, and
of companies purchase and sell options, forward
</TABLE>
-41-
<PAGE> 108
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
engaging in whole or in part in such contracts, futures contracts, and
activities). options on futures contracts or
indices. This limitation does not
apply to foreign currency
transactions including without
limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not purchase any 4. A Fund may not purchase any
securities which would cause 25% or securities which would cause 25% or
more of the Fund's total assets at more of the value of its total
the time of purchase to be invested assets at the time of purchase to be
in the securities of one or more invested in the securities of one or
issuers conducting their principal more issuers conducting their
business activities in the same principal business activities in the
industry, provided that this same industry, provided that (a)
limitation shall not apply to there is no limitation with respect
Municipal Securities or governmental to obligations issued or guaranteed
guarantees of Municipal Securities; by the U.S. government, any state or
and provided, further, that for the territory of the United States, or
purpose of this limitation only, any of their agencies,
industrial development bonds that instrumentalities or political
are backed only by the assets and subdivisions, and (b) assets may be
revenues of a nongovernmental user invested in the securities of one or
shall not be deemed to be Municipal more diversified management
Securities. investment companies to the extent
permitted by the 1940 Act.
Notwithstanding the above
limitation, there is no limitation
with respect to investments by any
Money Market Fund in repurchase
agreements, domestic bank
</TABLE>
-42-
<PAGE> 109
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
obligations and certain bank
obligations considered to be issued
by domestic banks pursuant to
regulations or pronouncements of the
SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance industry.
LIMITATION ON LENDING
5. The Fund may not make loans except 5. A Fund may not make loans, except to
that the Fund may purchase or hold the extent permitted by the 1940
debt instruments and enter into Act.
repurchase agreements pursuant to
its investment objective and
policies.
LIMITATION ON BORROWING
6. The Funds may not borrow money or 6. A Fund may not borrow money, issue
issue senior securities, except that senior securities or mortgage,
the Fund may borrow from banks or pledge or hypothecate its assets
enter into reverse repurchase except to the extent permitted under
agreements to meet redemptions or the 1940 Act.
for other temporary purposes in
amounts up to 10% of its total
assets at the time of such
borrowing; or mortgage, pledge or
hypothecate any assets except in
connection with any such borrowing
and in amounts not in excess of the
lesser of the dollar amounts
borrowed or 10% of
</TABLE>
-43-
<PAGE> 110
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
its total assets at the time of such
borrowing.
The Fund may not purchase securities
while its borrowings (including
reverse repurchase agreements) are
outstanding.
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase securities 7. A Fund may not purchase securities
of any one issuer (other than (except securities issued or
obligations issued or guaranteed by guaranteed by the U.S. Government,
the U.S. Government, its agencies or its agencies or instrumentalities)
instrumentalities) if immediately of any one issuer if as a result
thereafter more than 15% of its more than 5% of its total assets
total assets would be invested in would be invested in the securities
certificates of deposit or bankers' of such issuer or it would own more
acceptances of any one bank, or more than 10% of the outstanding voting
than 5% of its total assets would be securities of such issuer, except
invested in other securities of any that (a) up to 25% of the Fund's
one bank or the securities of any total assets may be invested without
other issuer (except that up to 25% regard to these limitations; and (b)
of the Fund's total assets may be a Fund's assets may be invested in
invested without regard to this the securities of one or more
limitation). diversified management investment
companies to the extent permitted by
the 1940 Act.
Notwithstanding the foregoing
restriction, each of the Money
Market Funds, as a non- fundamental
policy, may invest without regard to
the 5% limitation in securities
subject to
</TABLE>
-44-
<PAGE> 111
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
certain guarantees and certain money
market fund securities in accordance
with Rule 2a-7 under the 1940 Act or
any successor rule, and as otherwise
permitted in accordance with Rule
2a-7.
LIMITATION ON SHORT SALES AND
PURCHASING SECURITIES ON MARGIN
8. The Fund may not purchase securities 8. Designate as non-fundamental and
on margin, make short sales of restate as follows:
securities or maintain a short
position. A Fund may not sell securities
short, maintain a short position, or
purchase securities on margin,
except for such short-term credits
as may be necessary for the
clearance of transactions. For this
purpose, a deposit or payment by a
Fund for initial or maintenance
margin in connection with futures
contracts is not considered to be
the purchase or sale of a security
on margin.
LIMITATION ON PURCHASING SECURITIES
OF COMPANIES FOR THE PURPOSE
OF EXERCISING CONTROL
9. The Fund may not purchase securities 9. Designate as non-fundamental and
of companies for the purpose of leave unchanged.
exercising control.
LIMITATION ON PURCHASING SECURITIES
OF OTHER INVESTMENT COMPANIES
10. The Fund may not acquire any other 10. Designate as non-fundamental and
investment company or investment restate as follows:
</TABLE>
-45-
<PAGE> 112
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
company security except in A Fund may not purchase securities
connection with a merger, of other investment companies except
consolidation, reorganization or as permitted by the 1940 Act.
acquisition of assets.
LIMITATION ON PUT, CALL, STRADDLE
AND SPREAD TRANSACTIONS
11. The Fund may not write or sell puts, 11. Designate as non-fundamental
calls, straddles, spreads, or restate as follows:
combinations thereof except that the
Fund may acquire stand-by A Fund may not write or sell puts,
commitments with respect to its calls, straddles, spreads or
Municipal Securities. combinations thereof except that a
Fund may acquire standby commitments
and may enter into futures contracts
and options in accordance with its
investment objective.
LIMITATION ON ILLIQUID SECURITIES
12. The Fund may not invest more than 12. Designate as non-fundamental and
10% of its total assets in restate as follows:
securities with legal or contractual
restrictions on resale or for which A Fund may not invest more than 15%
no readily available market exists, (10% with respect to the Money
including repurchase agreements Market Funds) of its net assets in
providing for settlement more than illiquid securities.
seven days after notice.
</TABLE>
-46-
<PAGE> 113
CALIFORNIA TAX-EXEMPT BOND FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNSEASONED ISSUERS
13. The Fund may not invest in 13. This fundamental investment
industrial revenue bonds where the limitation will be eliminated.
payment of principal and interest
are the responsibility of a company
(including its predecessors) with
less than three years of continuous
operation.
INVESTMENT OBJECTIVE
14. The Fund seeks as high a level of 14. Designate as non-fundamental and
current interest income free of leave unchanged.
Federal Income Tax and California
state personal income tax as is
consistent with prudent investment
management and preservation of
capital.
LIMITATION ON INVESTMENT IN CALIFORNIA
MUNICIPAL SECURITIES
15. The Fund, under normal 15. Designate as non-fundamental and
circumstances, will invest at least restate as follows:
80% of its assets in California
municipal securities. The Fund, under normal
circumstances, will invest at least
65% of its assets in California
municipal securities.
</TABLE>
-47-
<PAGE> 114
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Fund may not underwrite the 1. A Fund may not underwrite any issue
securities of other issuers, of securities within the meaning of
provided that all of the assets of the 1933 Act except when it might be
the Fund may be invested in another technically deemed to be an
investment company. underwriter either (a) in connection
with the disposition of a portfolio
security or (b) in connection with
the purchase of securities directly
from the issuer thereof in
accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Fund may not purchase or sell 2. A Fund may not purchase or sell real
real estate, except that the Fund estate, except a Fund may purchase
may, to the extent appropriate to securities of issuers which deal or
its investment objective, invest in invest in real estate and may
securities and instruments purchase securities which are
guaranteed by agencies or secured by real estate or interests
instrumentalities of the U.S. in real estate.
Government, and securities issued by
companies which invest in real
estate or interests therein.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase or sell 3. A Fund may not purchase or sell
commodities or commodity contracts, commodities, except that a Fund may,
or invest in oil, gas or mineral to the extent consistent with its
exploration or development programs. investment objective, invest in
This restriction shall not apply to securities of companies that
securities issued by companies which purchase or sell commodities or
which invest in such programs,
</TABLE>
-48-
<PAGE> 115
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
purchase or sell commodities or and purchase and sell options,
commodity contracts or which invest forward contracts, futures
in such programs, or to futures contracts, and options on futures
contracts or options on futures contracts. This limitation does not
contracts. apply to foreign currency
transactions including without
limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not purchase any 4. A Fund may not purchase any
securities which would cause 25% or securities which would cause 25% or
more of the value of its total more of the value of its total
assets at the time of such purchase assets at the time of purchase to be
to be invested in the securities of invested in the securities of one or
one or more issuers conducting their more issuers conducting their
principal business activities in the principal business activities in the
same industry; provided, however, same industry, provided that (a)
that (a) there is no limitation with there is no limitation with respect
respect to investments in to obligations issued or guaranteed
obligations issued or guaranteed by by the U.S. government, any state or
the federal government and its territory of the United States, or
agencies or instrumentalities; (b) any of their agencies,
each utility (such as gas, gas instrumentalities or political
transmission, electric and telephone subdivisions, and (b) assets may be
service) will be considered a single invested in the securities of one or
industry for purposes of this more diversified management
policy; and (c) wholly-owned finance investment companies to the extent
companies will be considered to be permitted by the 1940 Act.
in the industries of their parents
if their activities are primarily Notwithstanding the above
related to financing the limitation, there is no limitation
with respect to investments by any
Money Market Fund in repurchase
</TABLE>
-49-
<PAGE> 116
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
activities of their parents. agreements, domestic bank
obligations and certain bank
obligations considered to be issued
by domestic banks pursuant to
regulations or pronouncements of the
SEC or its staff.
Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance industry.
LIMITATION ON LENDING
5. The Fund may not make loans, except 5. A Fund may not make loans, except to
investments in debt securities and the extent permitted by the 1940
repurchase agreements. Act.
LIMITATION ON BORROWING
6. The Fund may not borrow money for 6. A Fund may not borrow money, issue
the purpose of obtaining investment senior securities or mortgage,
leverage or issue senior securities pledge or hypothecate its assets
(as defined in the 1940 Act), except to the extent permitted under
provided that the Fund may borrow the 1940 Act.
from banks for temporary purposes in
an amount not exceeding 10% of the
value of the total assets of the
Fund; or mortgage, pledge or
hypothecate any assets, except in
connection with any such borrowing
and in amounts not in excess of the
lesser of the dollar amounts
borrowed or 10% of the value of its
total assets at the time of such
borrowing. This
</TABLE>
-50-
<PAGE> 117
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
restriction shall not apply to (a)
the sale of portfolio securities
accompanied by a simultaneous
agreement as to their repurchase, or
(b) transactions in currency,
options, futures contracts and
options on futures contracts, or
forward commitment transactions.
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase securities 7. A Fund may not purchase securities
(except securities issued by the (except securities issued or
U.S. Government, its agencies or guaranteed by the U.S. Government,
instrumentalities) if, as a result its agencies or instrumentalities)
more than 5% of its total assets of any one issuer if, as a result,
will be invested in the securities more than 5% of its total assets
of any one issuer, except that up to will be invested in the securities
25% of its total assets may be of such issuer or it would own more
invested without regard to this 5% than 10% of the outstanding voting
limitation; provided that all of the securities of such issuer, except
assets of the Fund may be invested that (a) up to 25% of its total
in another investment company. assets may be invested without
regard to these limitations; and (b)
The Fund may not purchase securities a Fund's assets may be invested in
of any issuer if as a result it the securities of one or more
would own more than 10% of the diversified management investment
voting securities of such issuer; companies to the extent permitted by
provided that all of the assets of the 1940 Act.
the Fund may be invested in another
investment company. Notwithstanding the foregoing
restriction, each of the Money
Market Funds, as a non-fundamental
policy, may invest without regard to
</TABLE>
-51-
<PAGE> 118
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
the 5% limitation in securities
subject to certain guarantees and
certain money market fund securities
in accordance with Rule 2a-7 under
the 1940 Act or any successor rule,
and as otherwise permitted in
accordance with Rule 2a-7.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
8. The Fund may not purchase securities 8. Designate as non-fundamental and
on margin (except for such short- restate as follows:
term credits as may be necessary for
the clearance of transactions), make A Fund may not sell securities
short sales of securities or short, maintain a short position, or
maintain a short position. For this purchase securities on margin,
purpose, the deposit or payment by except for such short-term credits
the Fund for initial or maintenance as may be necessary for the
margin in connection with futures clearance of transactions. For this
contracts is not considered to be purpose, the deposit or payment by
the purchase or sale of a security the Fund for initial or maintenance
on margin. margin in connection with futures
contracts is not considered to be
the purchase or sale of a security
on margin.
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
9. The Fund may not purchase securities 9. Designate as non-fundamental and
of other investment companies to the restate as follows:
extent prohibited by the 1940 Act.
A Fund may not purchase securities
of other investment companies except
as permitted by the 1940 Act.
</TABLE>
-52-
<PAGE> 119
SHORT-TERM GOVERNMENT FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
INVESTMENT OBJECTIVE
10. The Fund seeks high current income 10. Designate as non-fundamental and
consistent with relative stability leave unchanged.
of principal.
</TABLE>
-53-
<PAGE> 120
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Funds may not underwrite the 1. A Fund may not underwrite any issue
securities of other issuers. of securities within the meaning of
the 1933 Act except when it might be
technically deemed to be an
underwriter either (a) in connection
with the disposition of a portfolio
security or (b) in connection with
the purchase of securities directly
from the issuer thereof in
accordance with its investment
objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Funds may not purchase or sell 2. A Fund may not purchase or sell real
real estate (however, a Fund may, to estate, except a Fund may purchase
the extent appropriate to its securities of issuers which deal or
investment objective, purchase invest in real estate and may
securities issued by companies purchase securities which are
investing in real estate or secured by real estate or interests
interests therein. in real estate.
LIMITATION ON COMMODITY TRANSACTIONS
3. None 3. A Fund may not purchase or sell
commodities, except that a Fund may,
to the extent be consistent with its
investment objective, invest in
securities of companies that
purchase or sell commodities or
which invest in such programs, and
purchase and sell options, forward
contracts, futures contracts and
options on futures contracts. This
</TABLE>
-54-
<PAGE> 121
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
limitation does not apply to foreign
currency transactions including
without limitation forward currency
contracts.
LIMITATION ON INDUSTRY CONCENTRATION
Prime Fund Only Prime Fund and Treasury Fund
4. The Fund may not purchase any 4. A Fund may not purchase any
securities which would cause 25% or securities which would cause 25% or
more of the Fund's total assets at more of the value of its total
the time of purchase to be invested assets at the time of purchase to be
in the securities of one or more invested in the securities of one or
issuers conducting their principal more issuers conducting their
business activities in the same principal business activities in the
industry, provided that (a) there is same industry, provided that (a)
no limitation with respect to there is no limitation with respect
obligations issued or guaranteed by to obligations issued or guaranteed
the U.S. Government, its agencies or by the U.S. government, any state or
instrumentalities or domestic bank territory of the United States, or
certificates of deposit, bankers' any of their agencies,
acceptances and repurchase instrumentalities or political
agreements secured by instruments of subdivisions, and (b) assets may be
domestic branches of U.S. banks or invested in the securities of one or
obligations of the U.S. Government, more diversified management
its agencies or instrumentalities; investment companies to the extent
(b) wholly-owned finance companies permitted by the 1940 Act.
will be considered to be in the
industries of their parents if their Notwithstanding the above
activities are primarily related to limitation, there is no limitation
financing the activities of the with respect to investments by any
parents; and (c) the industry Money Market Fund in repurchase
agreements, domestic bank
obligations and certain bank
obligations
</TABLE>
-55-
<PAGE> 122
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
classification of utilities will be considered to be issued by domestic
determined according to their banks pursuant to regulations or
service. For example, gas, gas pronouncements of the SEC or its
transmission, electric and gas, staff.
electric and telephone will each be
considered a separate industry. Notwithstanding the above
limitation, the Prime Fund will
invest more than 25% of its assets
in the banking and finance industry.
Treasury Fund Only Treasury Fund Only
5. The Fund may not concentrate its 5. See limitation listed in Number 4.
investments in any particular
industry (excluding obligations of
the U.S. Government, obligations of
domestic banks, and repurchase
agreements), but if it is deemed
appropriate for the achievement of
its investment objective, up to 25%
of the assets of the Fund (taken at
market value at the time of each
investment) may be invested in any
one industry; provided, that nothing
in this investment restriction shall
affect the Fund's ability to invest
a portion or all of its assets in a
corresponding investment company
with the same investment objective
and policies.
LIMITATION ON LENDING
6. The Funds may not make loans except 6. A Fund may not make loans,
that (i) a
</TABLE>
-56-
<PAGE> 123
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
Fund may purchase or hold debt except to the extent permitted by
instruments and enter into the 1940 Act.
repurchase agreements pursuant to
its investment objective and
policies, and (ii) the Prime Fund
may lend portfolio securities.
LIMITATION ON BORROWING
7. The Funds may not borrow money or 7. A Fund may not borrow money, issue
issue senior securities, except that senior securities or mortgage,
each Fund may borrow from banks or pledge or hypothecate its assets
enter into reverse repurchase except to the extent permitted under
agreements to meet redemptions or the 1940 Act.
for other temporary purposes in
amounts up to 10% of its total
assets at the time of such
borrowing; or mortgage, pledge or
hypothecate any assets except in
connection with any such borrowing
and in amounts not in excess of the
lesser of the dollar amount borrowed
or 10% of its total assets at the
time of such borrowing; or purchase
securities at any time after such
borrowings (including reverse
repurchase agreements) have been
entered into and before they are
repaid.
LIMITATION ON ISSUER CONCENTRATION
8. The Funds may not purchase 8. A Fund may not purchase securities
securities of any one issuer (other except securities issued or
than obligations issued or guaranteed by the U.S. Government,
guaranteed by the U.S. Government, its agencies or instrumentalities)
its agencies of
</TABLE>
-57-
<PAGE> 124
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
or instrumentalities) if immediately any one issuer if as a result more
thereafter more than 15% of its than 5% of its total assets would be
total assets would be invested in invested in securities of such
certificates of deposit or bankers' issuer or it would own more than 10%
acceptances of any one bank, or more of the outstanding voting securities
than 5% of its total assets would be of such issuer except that (a) up to
invested in other securities of any 25% of the Fund's total assets may
one bank or the securities of any be invested without regard to this
other issuer (except that up to 25% limitation; and (b) a Fund's assets
of the Fund's total assets may be may be invested in the securities of
invested without regard to this one or more diversified management
limitation). investment companies to the extent
permitted by the 1940 Act.
Notwithstanding the foregoing
restriction, each of the Money
Market Funds, as a non-fundamental
policy, may invest without regard to
the 5% limitation in securities
subject to certain guarantees and
certain money market fund securities
in accordance with Rule 2a-7 under
the 1940 Act or any successor rule,
and as otherwise permitted in
accordance with Rule 2a-7.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
9. The Funds may not purchase 9. Designate as non-fundamental and
securities on margin, make short restate as follows:
sales of securities or maintain a
short position. A Fund may not sell securities
short, maintain a short position, or
purchase securities on
</TABLE>
-58-
<PAGE> 125
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
margin, except for such short-term
credits as are necessary for the
clearance of transactions. For this
purpose, a deposit or payment by a
Fund for initial or maintenance
margin in connection with future
contracts is not considered to be
the purchase or sale of a security
on margin.
LIMITATION ON PURCHASING SECURITIES
OF COMPANIES FOR THE PURPOSE
OF EXERCISING CONTROL
10. The Funds may not purchase 10. Designate as non-fundamental and
securities of companies for the leave unchanged.
purpose of exercising control.
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
11. The Funds may not acquire any other 11. Designate as non-fundamental and
investment company or investment restate as follows:
company security except in
connection with a merger, A Fund may purchase securities of
consolidation, reorganization or other investment companies except as
acquisition of assets. permitted under the 1940 Act, and
the rules and regulations
thereunder.
LIMITATION ON ILLIQUID SECURITIES
12. The Funds may not purchase 12. Designate as non-fundamental and
securities without available market restate as follows:
quotations which cannot be sold
without registration or the filing A Fund may not invest more than 15%
of a notification under federal or (10% with respect to the Money
state securities laws, enter into Market Funds) of its net assets in
repurchase illiquid securities.
</TABLE>
-59-
<PAGE> 126
PRIME FUND AND TREASURY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ---------- ---------------------
<S> <C>
agreements providing for settlement
more than seven days after notice,
or purchase any other securities
deemed illiquid by the Directors if,
as a result, such securities and
repurchase agreements would exceed
10% of the Fund's total assets.
CONCENTRATION POLICY
Prime Fund Only Prime Fund Only
13. None 13. Add the following fundamental
Investment policy:
The Fund will concentrate its
investments in obligations of the
banking and finance industries.
INVESTMENT OBJECTIVE - PRIME AND TREASURY FUND
14. The Funds seek high current income 14. Designate as non-fundamental and
and stability of principal. restate as follows:
The Funds seek current income, a
stable share price and daily
liquidity.
</TABLE>
-60-
<PAGE> 127
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Funds may not 1. A Fund may not underwrite
underwrite securities any issue of securities
issued by other persons, within the meaning of the
except that all of the 1933 Act except when it
assets of a Fund may be might be technically
invested in a deemed to be an
corresponding investment underwriter either (a) in
company with the same connection with the
investment objective and disposition of a portfolio
policies and except security or (b) in
insofar as a Fund may connection with the
technically be deemed an purchase of securities
underwriter under the 1933 directly from the issuer
Act in selling a security. thereof in accordance with
its investment objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Funds may not purchase 2. A Fund may not purchase or
or sell real estate sell real estate, except
(including limited that a Fund may purchase
partnership interests but securities of issuers
excluding securities which deal or invest in
secured by real estate or real estate and may
interests therein), purchase securities which
interests in oil, gas or are secured by real estate
mineral leases, or interests in real
commodities or commodity estate.
contracts in the ordinary
course of business (each
Fund reserves the freedom
of action to hold and to
sell real estate acquired
as a result of the
ownership of securities by
such Fund).
LIMITATION ON COMMODITY TRANSACTIONS
3. None. 3. A Fund may not purchase or
sell commodities, except a
Fund may to the extent
consistent with its
investment objective,
</TABLE>
-61-
<PAGE> 128
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
invest in securities of
companies that purchase or
sell commodities or which
invest in such programs,
purchase and sell options,
forward contracts, futures
contracts, and options on
futures contracts. This
limitation does not apply
to foreign currency
transactions including
without limitation forward
currency contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Funds may not concentrate 4. A Fund may not purchase
its investments in any any securities which would
particular industry (excluding cause 25% or more of the
obligations of the U.S. value of its total assets
Government, obligations of at the time of purchase to
domestic banks, and repurchase be invested in the
agreements), but if it is deemed securities of one or more
appropriate for the achievement issuers conducting their
of its investment objective, up principal business
to 25% of the assets of the Fund activities in the same
(taken at market value at the industry, provided that
time of each investment) may be (a) there is no limitation
invested in any one industry; with respect to
provided, that nothing in this obligations issued or
investment restriction shall guaranteed by the U.S.
affect the Fund's ability to government, any state or
invest a portion or all of its territory of the United
assets in a corresponding States, or any of their
investment company with the same agencies, instrumentali-
investment objective and ties or political
policies. subdivisions, and (b)
assets may be invested in
the securities of one or
more diversified
management investment
companies to the extent
permitted by the 1940 Act.
Notwithstanding the above
limitation, there is no
</TABLE>
-62-
<PAGE> 129
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
limitation with respect to
investments by any Money
Market Fund in repurchase
agreements, domestic bank
obligations and certain
bank obligations considered
to be issued by domestic
banks pursuant to
regulations or
pronouncements of the SEC
or its staff.
Notwithstanding the above
limitation, the Prime Fund
will invest more than 25%
of its assets in the
banking and finance
industry.
LIMITATION ON LENDING
5. The Funds may not make 5. A Fund may not make loans,
loans to other persons except to the extent
except (a) through the permitted by the 1940 Act.
lending of securities held
by a Fund, (b) through the
use of fixed time deposits
or repurchase agreements
or the purchase of short
term obligations, or (c)
by purchasing all or a
portion of an issue of
debt securities of types
commonly distributed
privately to financial
institutions; for purposes
of this investment
restriction the purchase
of short-term commercial
paper or a portion of an
issue of debt securities
which are part of an issue
to the public shall not be
considered the making of a
loan.
</TABLE>
-63-
<PAGE> 130
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
LIMITATION ON BORROWING
6. The Funds may not borrow 6. A Fund may not borrow
money, except that as a money, issue senior
temporary measure for securities or mortgage,
extraordinary or emergency pledge or hypothecate its
purposes, each Fund may assets except to the extent
borrow from banks in an permitted under the 1940
amount not to exceed 1/3 Act.
of the value of its net
assets, including the
amount borrowed; moreover,
neither Fund may purchase
any securities at any time
at which borrowings exceed
5% of the total assets of
the Fund (taken at market
value) (it is intended
that each Fund would
borrow money only from
banks and only to
accommodate requests for
withdrawals while
effecting an orderly
liquidation of
securities).
The Funds may not issue any
senior security (as that term is
defined in the 1940 Act) if such
issuance is specifically
prohibited by the 1940 Act or
the rules and regulations
promulgated thereunder, except
as appropriate to evidence a
debt incurred without violating
the above restriction regarding
borrowing.
LIMITATION ON ISSUER CONCENTRATION
7. The Funds may not purchase 8. A Fund may not purchase
securities of any one securities except
</TABLE>
-64-
<PAGE> 131
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
issuer (other than securities issued or
obligations issued or guaranteed by the U.S.
guaranteed by the U.S. Government, its agencies
Government, its agencies or instrumentalities) of
or instrumentalities) if any one issuer if as a
immediately thereafter result more than 5% of its
more than 15% of its total total assets would be
assets would be invested invested in securities of
in certificates of deposit such issuer or it would
or bankers' acceptances of own more than 10% of the
any one bank, or more than outstanding voting
5% of its total assets securities of such issuer
would be invested in other except that (a) up to 25%
securities of any one bank of the Fund's total assets
or the securities of any may be invested without
other issuer (except that regard to this limitation;
up to 25% of the Fund's and (b) a Fund's assets
total assets may be may be invested in the
invested without regard to securities of one or more
this limitation). diversified management
investment companies to
the extent permitted by
the 1940 Act.
Notwithstanding the
foregoing restriction, each
of the Money Market Funds,
as a non-fundamental
policy, may invest without
regard to the 5% limitation
in securities subject to
certain guarantees and
certain money market
fund securities in
accordance with Rule
2a-7 under the 1940 Act
or any successor rule,
and as otherwise
permitted in accordance
with Rule 2a-7.
LIMITATION ON SHORT SALES AND PURCHASING SECURITIES ON MARGIN
8. The Funds may not purchase 7. A Fund may not sell
any security or evidence securities short, maintain
of interest therein on a short position or
</TABLE>
-65-
<PAGE> 132
GOVERNMENT FUND AND TREASURY ONLY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
margin, except that a Fund purchase on margin, except
may obtain such short term for such short term credit
credit as may be necessary as are necessary for the
for the clearance of clearance of transactions.
purchases and sales of For this purpose, a
securities. deposit or payment by a
Fund for initial or
maintenance margin in
connection with future
contracts is not
considered to be the
purchase or sale of a
security on margin.
LIMITATION ON ILLIQUID SECURITIES
9. The Funds may not invest 8. A Fund may not invest more
more than 10% of the than 15% (10% with respect
Fund's net assets in to the Money Market Funds)
securities that are not of its net assets in
readily marketable (such illiquid securities.
as repurchase agreements
maturing in more than
seven days). If changes
in the markets of certain
securities cause a Fund to
exceed such 10% limit, the
Fund will take steps to
bring the aggregate amount
of its illiquid securities
back below 10% of its net
assets.
</TABLE>
-66-
<PAGE> 133
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Fund may not 1. A Fund may not underwrite
underwrite any issue of any issue of securities
securities, except to the within the meaning of the
extent that the purchase 1933 Act except when it
of securities directly might be technically
from the issuer thereof in deemed to be an
accordance with the Fund's underwriter either (a) in
investment objective, connection with the
policies and limitations disposition of a portfolio
may be deemed to be security or (b) in
underwriting. connection with the
purchase of securities
directly from the issuer
thereof in accordance with
its investment objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Fund may not purchase 2. A Fund may not purchase or
or sell real estate, sell real estate, except
except that the Fund may, that a Fund may purchase
to the extent appropriate securities of issuers
to its investment which deal or invest in
objective, invest in real estate and may
securities issued by purchase securities which
companies which invest in are secured by real estate
real estate or interests or interests in real
therein. estate.
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase 3. A Fund may not purchase or
or sell commodities or sell commodities, except
commodity contracts, or that a Fund may, to the
invest in oil, gas or extent consistent with its
mineral exploration or investment objective,
development programs, invest in securities of
except that the Fund may, companies that purchase or
to the extent appropriate sell commodities or which
to its investment invest in such programs
objective, invest in and purchase and sell
securities issued by options, forward
companies which purchase contracts, futures
or sell commodities or contracts, and options on
</TABLE>
-67-
<PAGE> 134
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
commodity contracts or futures contracts. This
which invest in such limitation does not apply
programs. to foreign currency
transactions including
without limitation forward
currency contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not purchase 4. A Fund may not purchase
any securities which would any securities which would
cause 25% or more of the cause 25% or more of the
value of its total assets value of its total assets
at the time of such at the time of purchase to
purchase to be invested in be invested in the
the securities of one or securities of one or more
more issuers conducting issuers conducting their
their principal business principal business
activities in the same activities in the same
industry; provided, industry, provided that
however, that (a) there is (a) there is no limitation
no limitation with respect with respect to
to investments in obligations issued or
Municipal Securities or guaranteed by the U.S.
obligations issued or government, any state or
guaranteed by the Federal territory of the United
Government and its States, or any of their
agencies and agencies, instrumentali-
instrumentalities; ties or political
(b) although there is no subdivisions, and (b)
limitation with respect to assets may be invested in
investments in the securities of one or
certificates of deposit more diversified
and bankers' acceptances management investment
issued by domestic companies to the extent
branches of United States permitted by the 1940 Act.
banks, no more than 10% of
the total value of the Notwithstanding the above
Fund's assets at the time limitation, there is no
of purchase may be limitation with respect to
invested in certificates investments by any Money
of deposit and bankers' Market Fund in repurchase
acceptances issued by agreements, domestic bank
domestic branches of obligations and certain
foreign banks and no more bank obligations considered
than 25% of the total to be issued by
</TABLE>
-68-
<PAGE> 135
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
value of the Fund's assets domestic banks pursuant to
at the time of purchase regulations or
may be invested in pronouncements of the SEC
certificates of deposit or its staff.
and bankers' acceptances
issued by domestic Notwithstanding the above
branches of foreign banks limitation, the Prime Fund
and foreign branches of will invest more than 25%
domestic banks; (c) each of its assets in the
utility service (such as banking and finance
gas, gas transmission, industry.
electric and telephone
service) will be
considered a single
industry for purposes of
this policy; and
(d) wholly-owned finance
companies will be
considered to be in the
industries of their
parents if their
activities are primarily
related to financing the
activities of their
parents.
LIMITATION ON LENDING
5. The Fund may not make 5. A Fund may not make loans,
loans, except that the except to the extent
Fund may purchase or hold permitted by the 1940 Act.
debt obligations in
accordance with its
investment objective,
policies and limitations,
and may enter into
repurchase agreements with
respect to securities.
LIMITATION ON BORROWING
6. The Fund may not borrow 6. A Fund may not borrow
money except from banks money, issue senior
for temporary purposes and securities or mortgage,
in amounts not in excess pledge or hypothecate its
of 10% of the value of the assets except to the
</TABLE>
-69-
<PAGE> 136
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
Fund's total assets at the extent permitted under the
time of such borrowing, or 1940 Act.
mortgage, pledge or
hypothecate any assets
except in connection with
any such borrowing and in
amounts not in excess of
the lesser of the dollar
amounts borrowed or 10% of
the value of the Fund's
total assets at the time
of such borrowing. (This
borrowing provision is not
for investment leverage,
but solely to facilitate
management of the Fund's
portfolio by enabling the
Fund to meet redemption
requests when the
liquidation of portfolio
securities is deemed to be
disadvantageous or
inconvenient. The Fund
will not purchase any
securities while
borrowings are
outstanding. Interest
paid on borrowed funds
will reduce the net
investment income of the
Fund.)
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase 7. A Fund may not purchase
the securities of any the securities (except
issuer if as a result more securities issued by the
than 5% of the value of U.S. Government, its
the Fund's total assets agencies or
would be invested in the instrumentalities) if as a
securities of such issuer, result more than 5% of the
except that up to 25% of value of its total assets
the value of the Fund's would be invested in the
total assets may be securities of one issuer
invested without regard to or it would own more than
this 5% limitation. 10% of the outstanding
</TABLE>
-70-
<PAGE> 137
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
Securities issued or voting securities of such
guaranteed by the United issuer, except that (a) up
States Government or its to 25% of the value of the
agencies or Fund's total assets may be
instrumentalities are not invested without regard to
subject to this investment this 5% limitation; and
limitation. For purposes (b) a Fund's assets may be
of this limitation and the invested in the securities
Fund's policy on of one or more diversified
concentration of investment management
investments set forth in companies to the extent
the Prospectus, a permitted by the 1940 Act.
governmental agency,
authority, instrumentality Notwithstanding the
or other political foregoing restriction, each
subdivision is deemed to of the Money Market Funds
be an issuer, separate may, as a non-fundamental
from the government policy, invest without
creating such subdivision, regard to the 5% limitation
if the security issued by in securities subject to
such subdivision is backed certain guarantees and
only by the assets and certain money market fund
revenues of the securities in accordance
subdivision, and a with Rule 2a-7 under the
guarantee of a security is 1940 Act or any successor
not deemed to be a rule, and as otherwise
security issued by the permitted in accordance
guarantor, provided that with Rule 2a-7.
no more than 10% of the
value of the Fund's total
assets is invested in
securities issued or
guaranteed by such
guarantor.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES ON MARGIN
8. The Fund may not purchase 8. Designate as non-
securities on margin, make fundamental and restate as
short sales of securities follows:
or maintain a short
position. A Fund may not sell
securities short, maintain
a short position, or
purchase securities on
margin, except for such
</TABLE>
-71-
<PAGE> 138
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
short-term credits as are
necessary for the clearance
of transactions. For this
purpose, a deposit or
payment by a Fund for
initial or maintenance
margin in connection with
future contracts is not
considered to be the
purchase or sale of a
security on margin.
LIMITATION ON PURCHASING SECURITIES
OF OTHER INVESTMENT COMPANIES
9. The Fund may not purchase 9. Designate as non-
securities of other fundamental and restate as
investment companies, follows:
except in connection with
a merger, consolidation, A Fund may not purchase
acquisition or securities of other
reorganization. investment companies,
except as permitted under
the 1940 Act.
LIMITATION ON ILLIQUID SECURITIES
10. The Fund may not invest 10. Designate as non-
more than 10% of the value fundamental and restate as
of its total assets in follows:
securities with legal or
contractual restrictions A Fund may not invest more
on resale (including than 15% (10% with respect
repurchase agreements with to the Money Market Funds)
terms greater than seven of its net assets in
days). illiquid securities.
LIMITATION ON WRITING AND SELLING PUTS,
CALLS, STRADDLES OR SPREADS
11. The Fund may not write or 11. Designate as non-
sell puts, calls, fundamental and restate as
straddles, spreads or follows:
combinations thereof.
A Fund may not write or
sell puts, calls,
</TABLE>
-72-
<PAGE> 139
TAX EXEMPT MONEY FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
straddles, spreads or
combinations thereof except
that a Fund may acquire
standby commitments and may
enter into futures
contracts and options in
accordance with its
investment objectives.
LIMITATION ON INVESTMENT IN MUNICIPAL
SECURITIES
12. Under normal 12. Designate as non-
circumstances, the Fund fundamental and leave
may not invest less than unchanged.
80% of its total assets in
Municipal Securities
(other than private
activity bonds the
interest on which may be
subject to the federal
alternative minimum tax).
INVESTMENT OBJECTIVE - TAX-EXEMPT
MONEY FUND
13. The Fund seeks as high a level 13. Designate as
of current interest income non-fundamental and restate
free of federal income tax as as follows: The Fund seeks
is consistent with the current income exempt from
relative stability of federal income taxes, a
principal. stable share price and
daily liquidity.
</TABLE>
-73-
<PAGE> 140
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
LIMITATION ON UNDERWRITING OF SECURITIES
1. The Fund may not 1. A Fund may not underwrite
underwrite the securities securities within the
of other issuers. meaning of the 1933 Act
except when it might be
technically deemed to be
an underwriter either (a)
in connection with the
disposition of a portfolio
security or (b) in
connection with the
purchase of securities
directly from the issuer
thereof in accordance with
its investment objective.
LIMITATION ON REAL ESTATE TRANSACTIONS
2. The Fund may not purchase 2. A Fund may not purchase or
or sell real estate sell real estate, except
(however, a Fund may, to that a Fund may purchase
the extent appropriate to securities of issuers
its investment objective, which deal or invest in
purchase securities issued real estate and may
by companies investing in purchase securities which
real estate or interests are secured by real estate
therein and the Fund may or interests in real
purchase Municipal estate.
Securities secured by real
estate or interests
therein).
LIMITATION ON COMMODITY TRANSACTIONS
3. The Fund may not purchase 3. A Fund may not purchase or
or sell commodity sell commodities, except
contracts, or invest in that a Fund may to the
oil, gas or mineral extent consistent with its
exploration or development investment objective,
programs (however, the invest in securities of
Fund may, to the extent companies that purchase or
appropriate to its sell commodities or which
investment objective, invest in such programs
</TABLE>
-74-
<PAGE> 141
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
purchase publicly traded and purchase and sell
securities of companies options, forward
engaging in whole or in contracts, futures
part in such activities). contracts, and options on
futures contracts. This
limitation does not apply
to foreign currency
transactions including
without limitation forward
currency contracts.
LIMITATION ON INDUSTRY CONCENTRATION
4. The Fund may not purchase 4. A Fund may not purchase
any securities which would any securities which would
cause 25% or more of the cause 25% or more of the
Fund's total assets at the value of its total assets
time of purchase to be at the time of purchase to
invested in the securities be invested in the
of one or more issuers securities of one or more
conducting their principal issuers conducting their
business activities in the principal business
same industry, provided activities in the same
that this limitation shall industry, provided that
not apply to Municipal (a) there is no limitation
Securities or governmental with respect to
guarantees of Municipal obligations issued or
Securities; and provided, guaranteed by the U.S.
further, that for the government, any state or
purpose of this limitation territory of the United
only, industrial States, or any of their
development bonds that are agencies, instrumentali-
backed only by the assets ties or political
and revenues of a non- subdivisions, and (b)
governmental user shall assets may be invested in
not be deemed to be the securities of one or
Municipal Securities. more diversified
management investment
companies to the extent
permitted by the 1940 Act.
Notwithstanding the above
limitation, there is no
limitation with respect to
investments by any Money
Market Fund in repurchase
</TABLE>
-75-
<PAGE> 142
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
agreements, domestic bank
obligations and certain
bank obligations considered
to be issued by domestic
banks pursuant to
regulations or
pronouncements of the SEC
or its staff.
Notwithstanding the above
limitation, the Prime Fund
will invest more than 25%
of its assets in the
banking and finance
industry.
LIMITATION ON LENDING
5. The Fund may not make loans 5. A Fund may not make loans,
except that (i) the Fund except to the extent
may purchase or hold debt permitted by the 1940 Act.
instruments and enter into
repurchase agreements
pursuant to its investment
objective and policies.
LIMITATION ON BORROWING
6. The Fund may not borrow 6. A Fund may not borrow
money or issue senior money, issue senior
securities, except that securities or mortgage,
the Fund may borrow from pledge or hypothecate its
banks or enter into assets except to the extent
reverse repurchase permitted under the 1940
agreements to meet Act.
redemptions or for other
temporary purposes in
amounts up to 10% of its
total assets at the time
of such borrowing; or
mortgage, pledge or
hypothecate any assets
except in connection with
any such borrowing and in
amounts not in excess of
the lesser of the dollar
</TABLE>
-76-
<PAGE> 143
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
amounts borrowed or 10% of
its total assets at the
time of such borrowing.
The Fund may not purchase
securities while its
borrowings (including
reverse repurchase
agreements) are
outstanding.
LIMITATION ON ISSUER CONCENTRATION
7. The Fund may not purchase 7. Designate as non-
the securities of any fundamental and restate as
issuer if as a result more follows:
than 5% of the value of
the Fund's total assets The Fund may not purchase
would be invested in the the securities of any
securities of such issuer, issuer if as a result more
except that (a) up to 50% than 5% of the value of the
of the value of the Fund's Fund's total assets would
total assets may be be invested in the
invested without regard to securities of such issuer,
this 5% limitation except that (a) up to 50%
provided that no more than of the value of the Fund's
25% of the value of the total assets may be
Fund's total assets are invested without regard to
invested in the securities this 5% limitation provided
of any one issuer and that no more than 25% of
(b) this 5% limitation the value of the Fund's
does not apply to total assets are invested
securities issued or in the securities of any
guaranteed by the one issuer and (b) a Fund's
U.S. Government, its assets may be invested in
agencies or the securities of one or
instrumentalities. more diversified management
investment companies to the
extent permitted by the
1940 Act.
Notwithstanding the
foregoing restriction, the
California Tax Exempt Money
Market Fund may invest
without regard to
</TABLE>
-77-
<PAGE> 144
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
the 5% limitation in
securities subject to
certain guarantees and
certain money market fund
securities in accordance
with Rule 2a-7 under the
1940 Act or any successor
rule, and as otherwise
permitted in accordance
with Rule 2a-7.
LIMITATION ON SHORT SALES AND PURCHASING
SECURITIES OR MARGIN
8. The Fund may not purchase 8. Designate as non-
securities on margin, make fundamental and restate as
short sales of securities follows:
or maintain a short
position. A Fund may not sell
securities short, maintain
a short position, or
purchase securities on
margin, except for such
short-term credits as one
necessary for the clearance
of transactions. For this
purpose, a deposit or
payment by a Fund for
initial or maintenance
margin in connection with
future contracts is not
considered to be the
purchase or sale of a
security on margin.
LIMITATION ON PURCHASING SECURITIES OF
COMPANIES FOR THE PURPOSE OF EXERCISING
CONTROL
9. The Fund may not purchase 9. Designate as non-
securities of companies fundamental and leave
for the purpose of unchanged.
exercising control.
</TABLE>
-78-
<PAGE> 145
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
LIMITATION ON PURCHASING SECURITIES OF
OTHER INVESTMENT COMPANIES
10. The Fund may not acquire 10. Designate as non-
any other investment fundamental and restate as
company or investment follows:
company security except in
connection with a merger, A Fund may not purchase
consolidation, securities of other
reorganization or investment companies except
acquisition of assets. as permitted under the 1940
Act.
LIMITATION ON INVESTMENTS IN PUTS, CALLS,
STRADDLES AND SPREADS
11. The Fund may not write or 11. Designate as non-
sell puts, calls, fundamental and restate as
straddles, spreads, or follows:
combinations thereof
except that the Fund may A Fund may not write or
acquire stand-by sell puts, calls,
commitments with respect straddles, spreads or
to its Municipal combinations thereof except
Securities. that a Fund may acquire
standby commitments and may
enter into futures
contracts and options in
accordance with its
investment objective.
LIMITATION ON INVESTMENT IN UNSEASONED
ISSUERS
12. The Fund may not invest in 12. This fundamental
industrial revenue bonds investment limitation will
where the payment of be eliminated.
principal and interest are
the responsibility of a
company (including its
predecessors) with less
than three years of
continuous operation.
</TABLE>
-79-
<PAGE> 146
CALIFORNIA TAX EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental
Limitation Investment Limitation
- ------------------------------ ---------------------
<S> <C>
INVESTMENT IN CALIFORNIA MUNICIPAL SECURITIES
13. The Fund may not under 13. Designate as non-
normal market conditions fundamental and leave
invest less than 80% of unchanged.
its net assets in
California Municipal
Securities.
INVESTMENT OBJECTIVE - CALIFORNIA
TAX-EXEMPT MONEY MARKET FUND
14. The Fund seeks as high a 14. Designate as non-
level of current interest fundamental and restate as
income free of federal follows: The Fund seeks
income tax and California current income free of
state personal income tax federal income tax and
as is consistent with the California state personal
preservation of capital tax, a stable share price,
and relative stability of and daily liquidity.
principal.
</TABLE>
-80-
<PAGE> 147
PACIFIC HORIZON FUNDS, INC.
PRIME FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S PRIME FUND HELD OF RECORD BY
THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 148
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(7) Proposal to approve or disapprove a new fundamental investment limitation
of the Prime Fund regarding investment concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 149
PACIFIC HORIZON FUNDS, INC.
TREASURY FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S TREASURY FUND HELD OF RECORD BY
THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 150
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 151
PACIFIC HORIZON FUNDS, INC.
TREASURY ONLY FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S TREASURY ONLY FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 152
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 153
PACIFIC HORIZON FUNDS, INC.
GOVERNMENT FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S GOVERNMENT FUND HELD OF RECORD
BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 154
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 155
PACIFIC HORIZON FUNDS, INC.
TAX-EXEMPT MONEY FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S TAX-EXEMPT MONEY FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 156
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(l) policy on investment in municipal securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
<PAGE> 157
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 OWNER) DATE
<PAGE> 158
PACIFIC HORIZON FUNDS, INC.
CALIFORNIA TAX-EXEMPT MONEY MARKET FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S CALIFORNIA TAX-EXEMPT MONEY
MARKET FUND HELD OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 159
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on unseasoned issuers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(m) policy on investment in California municipal securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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.
<PAGE> 160
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 OWNER) DATE
<PAGE> 161
PACIFIC HORIZON FUNDS, INC.
INTERMEDIATE BOND FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S INTERMEDIATE BOND FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 162
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on transactions in certain securities by Board members.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(7) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) 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.
<PAGE> 163
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 OWNER) DATE
<PAGE> 164
PACIFIC HORIZON FUNDS, INC.
CORPORATE BOND FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S CORPORATE BOND FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 165
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 166
PACIFIC HORIZON FUNDS, INC.
U.S. GOVERNMENT SECURITIES FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND _____, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S U.S. GOVERNMENT SECURITIES FUND
HELD OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 167
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on unseasoned issuers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(i) policy on investment in GNMA certificates.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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.
<PAGE> 168
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 OWNER) DATE
<PAGE> 169
PACIFIC HORIZON FUNDS, INC.
CAPITAL INCOME FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S CAPITAL INCOME FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 170
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on unseasoned issuers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(j) policy on investment in convertible securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
<PAGE> 171
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 OWNER) DATE
<PAGE> 172
PACIFIC HORIZON FUNDS, INC.
NATIONAL MUNICIPAL BOND FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S NATIONAL MUNICIPAL BOND FUND
HELD OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 173
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the Meeting.
<PAGE> 174
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 OWNER) DATE
<PAGE> 175
PACIFIC HORIZON FUNDS, INC.
CALIFORNIA TAX-EXEMPT BOND FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S CALIFORNIA TAX-EXEMPT BOND FUND
HELD OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 176
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on unseasoned issuers.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(k) policy on investment in California municipal securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 177
(9) 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 OWNER) DATE
<PAGE> 178
PACIFIC HORIZON FUNDS, INC.
SHORT TERM GOVERNMENT FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT A ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S SHORT-TERM GOVERNMENT FUND HELD
OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 179
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 180
PACIFIC HORIZON FUNDS, INC.
ASSET ALLOCATION FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S ASSET ALLOCATION FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 181
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on transactions in certain securities by Board members.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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.
<PAGE> 182
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 OWNER) DATE
<PAGE> 183
PACIFIC HORIZON FUNDS, INC.
BLUE CHIP FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT ____ A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S BLUE CHIP FUND HELD OF RECORD
BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 184
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on transactions in certain securities by Board members.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(7) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) 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
<PAGE> 185
NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE
SIGN IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
- -------------------------------- ---------------------------
SIGNATURE DATE
- -------------------------------- ---------------------------
SIGNATURE (JOINT OWNER) DATE
<PAGE> 186
PACIFIC HORIZON FUNDS, INC.
INTERNATIONAL EQUITY FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT 9:00 A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S INTERNATIONAL EQUITY FUND HELD
OF RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 187
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on put, call, straddle and spread transactions.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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 OWNER) DATE
<PAGE> 188
PACIFIC HORIZON FUNDS, INC.
AGGRESSIVE GROWTH FUND
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF PACIFIC HORIZON
FUNDS, INC. (THE "COMPANY") FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON FRIDAY, JUNE 19, 1998, AT ____ A.M. EASTERN TIME, AT THE OFFICES OF THE
COMPANY AT 400 BELLEVUE PARKWAY, WILMINGTON, DELAWARE.
THE UNDERSIGNED HEREBY APPOINTS ______ AND ______, AND EACH OF THEM, WITH
FULL POWER OF SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE
ABOVE-STATED ANNUAL MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF,
ALL SHARES EVIDENCING INTERESTS IN THE COMPANY'S AGGRESSIVE GROWTH FUND HELD OF
RECORD BY THE UNDERSIGNED ON MARCH 24, 1998, 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:
L.B. Auerbach E.S. Bottum D.B. Fletcher J.W. Glynn, Jr.
R.E. Greeley J.K. Peterson A.P. Pilara, Jr. C.J Pings
(2) Proposal to approve or disapprove a new Investment Advisory Agreement
between the Company and Robertson, Stephens & Company Investment
Management, L.P.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) Proposal to approve or disapprove an amendment to the Company's Charter.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal to approve or disapprove changes to the following fundamental
investment limitations of the Fund:
(a) limitation on underwriting of securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on real estate transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on commodity transactions;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(d) limitation on industry concentration;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
<PAGE> 189
(e) limitation on lending;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(f) limitation on borrowing and issuance of senior securities;
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(g) limitation on issuer concentration.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(5) Proposal to approve or disapprove certain changes to the following
fundamental investment policies and limitations, including a change to
make all of such policies and limitations non-fundamental:
(a) limitation on short sales and purchasing securities on margin.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(b) limitation on purchasing securities of companies for the purpose of
exercising control.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(c) limitation on purchasing securities of other investment companies.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(e) limitation on illiquid securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(h) policy on investment in equity securities.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(6) Proposal to approve or disapprove a change in the fundamental investment
objective to a non-fundamental investment objective.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(8) Proposal to ratify or reject the selection of Price Waterhouse LLP as the
Company's independent accountant for the fiscal year ending February 28,
1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(9) 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.
<PAGE> 190
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 OWNER) DATE
