(File Nos. 33-8120 and 811-4808)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No.___)
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
THE RODNEY SQUARE MULTI-MANAGER FUND
(Name of Registrant as Specified In Its Charter)
R. DARRELL MOUNTS, ESQ.
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue,
N.W., 2nd Floor
Washington, D.C. 20036
(202)778-9000
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
------------------------------------------
5) Total fee paid:
------------------------------------------
[ ] Fee paid previously with preliminary materials.
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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:
----------------------------
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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THE RODNEY SQUARE MULTI-MANAGER FUND
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890-0001
-------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 8, 1998
To the Shareholders:
A Special Meeting of Shareholders (the "Meeting") of The Rodney Square
Multi-Manager Fund (the "Fund") will be held at the ________________________, on
January 8, 1998, at _____ _.m. Eastern time, for the following purposes:
1. To elect the trustees of the Fund;
2. To ratify the selection of Ernst & Young LLP as independent
auditors of the Fund;
3. To approve or disapprove a new investment advisory agreement for
the Growth Portfolio;
4. To approve or disapprove an amendment of the investment objective
of the Growth Portfolio;
5. To approve or disapprove amendments to the fundamental investment
limitations of the Growth Portfolio;
6. To approve or disapprove amendments to the Fund's Declaration of
Trust; and
7. To transact any other business as may properly come before the
Meeting or any adjournment thereof.
You are entitled to vote at the Meeting and any adjournments thereof if
you owned shares of beneficial interest in the Fund at the close of business on
November 17, 1997. If you attend the Meeting, you may vote your shares in
person. If you do not expect to attend, please complete, date, sign, and mail
the enclosed proxy card in the enclosed postage prepaid envelope.
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By Order of the Board of Trustees,
Carl M. Rizzo, Secretary
December 12, 1997
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ENCLOSED PROXY CARD IN THE POSTAGE PAID
RETURN ENVELOPE ENCLOSED, SO THAT A QUORUM WILL BE PRESENT AND A MAXIMUM NUMBER
OF SHARES MAY BE VOTED. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO
SIGN YOUR PROXY CARD AND RETURN IT. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO
ITS USE.
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THE RODNEY SQUARE MULTI-MANAGER FUND
RODNEY SQUARE NORTH
1100 NORTH MARKET STREET
WILMINGTON, DE 19890-0001
-------------------
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 8, 1998
-----------
This Proxy Statement is furnished to shareholders in connection with
the solicitation of proxies by the Board of Trustees of The Rodney Square
Multi-Manager Fund (the "Fund") for use at a Special Meeting of Shareholders
(the "Meeting") to be held on January 8, 1998 at ____ __.m. Eastern time at
___________, and at any adjournment thereof. Copies of this Proxy Statement and
the accompanying materials were first sent to shareholders on or about December
12, 1997.
The individuals named as proxies on the enclosed proxy card will vote
in accordance with your direction as indicated thereon if your proxy card is
received properly executed by you or by your duly appointed agent or
attorney-in-fact. If you sign, date and return the proxy card, but give no
voting instructions, the duly appointed proxies will vote your shares in favor
of the five nominees for trustees named herein; in accordance with the
recommendation of your Board of Trustees as to all other proposals described
herein; and at the discretion of the proxies on any other matter that may
properly come before the Meeting. Any person giving a proxy may revoke it at any
time prior to its use by giving written notice of such revocation to the Fund
prior to the Meeting, by delivering a subsequently dated proxy to the Fund prior
to the Meeting, or by attending and voting at the Meeting in person. Proxies
will be solicited principally by mail, but officers of the Fund or agents
appointed by the Fund may also solicit proxies by other means.
The Board of Trustees has fixed the close of business on November 17,
1997 as the record date ("Record Date") for the determination of the
shareholders entitled to notice of and to vote at the Meeting or any adjournment
thereof. As of that date, there were approximately [______] outstanding shares
of the Growth Portfolio, the sole series of the Fund. Each shareholder is
entitled to one vote for each share held on the Record Date.
The presence at the Meeting, in person or by proxy, of the holders of
at least a majority of the Fund's outstanding shares as of the Record Date is
required to constitute a quorum for the purpose of transacting business at the
Meeting. In the event that a quorum is not represented at the Meeting or at any
adjournment thereof, or, even if a quorum is so represented, in the event that
sufficient votes in favor of any of the proposals set forth in the Notice of the
Meeting are not received, the persons named as proxies may propose and vote for
one or more adjournments of the Meeting and further solicitation of proxies may
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be made without the necessity of further notice. The persons named as proxies
will vote in favor of any such adjournment if such proxies instruct them to vote
in favor of any of the proposals to be considered at the adjourned meeting, and
will vote against any such adjournment if such proxies instruct them to vote
against or to abstain from voting on all of the proposals to be considered at
the adjournment meetings. A shareholder vote may be taken on one or more of the
proposals prior to an adjournment if sufficient votes have been received and it
is otherwise appropriate.
Abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for or
against any proposal or for or against any adjournment to permit further
solicitation of proxies. Accordingly, abstentions and broker non-votes
effectively will be a vote against such adjournment or against any proposal
where the required vote is a percentage of the shares present or outstanding.
Abstentions and broker non-votes will not be counted, however, as votes cast for
purposes of determining whether sufficient votes have been received to approve a
proposal. Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial owners or
other person entitled to vote and the broker does not have discretionary voting
authority.
A COPY OF THE FUND'S MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL REPORT
TO SHAREHOLDERS WILL BE AVAILABLE TO ANY SHAREHOLDER, WITHOUT CHARGE, UPON
WRITTEN REQUEST TO: RODNEY SQUARE MANAGEMENT CORPORATION, 1100 NORTH MARKET
STREET, WILMINGTON, DE 19890-0001 OR BY PHONE, TOLL-FREE AT 800-336-9970.
PROPOSAL 1. TO ELECT TRUSTEES OF THE FUND
Unless you give contrary instructions on the proxy card, your proxy
will be voted FOR the election of the five nominees listed below. Each nominee
has indicated his willingness to serve if elected. If any of the nominees should
withdraw or otherwise become unavailable for election the proxies will vote for
such other nominee or nominees as the Board of Trustees may recommend. [Each
nominee, except Messrs _____________ and Christian, has served as a Trustee
since the Fund's commencement of operations. Mr. ____________ has served as a
Trustee since ____________________ and Mr. Christian has served as a Trustee
since May 1996.]
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<TABLE>
<CAPTION>
Shares of the
Position with Fund, Fund Beneficially
Business Experience Owned Directly or
Nominee During The Past 5 Years Indirectly on
(Age) and Other Directorships November __, 1997
----- ----------------------- -----------------
<S> <C> <C>
Martin L. Klopping* President, elected in 1995, and Trustee, has been
President and Director of RSMC since 1984. He is also
(44) a Director of Rodney Square Distributors, Inc.,
elected in 1992. He is also a Chartered Financial
Analyst and member of the SEC Rules and Investment
Advisers Committees of the Investment Company
Institute.
Eric Brucker Trustee, has been Dean of the School of
Management at the University of Michigan - Dearborn
since June 1992.
(56) He was Professor of Economics, Trenton State College
from September 1989 through June 1992. He was Vice
President for Academic Affairs, Trenton State College
from September 1989 through June 1991.
Fred L. Buckner Trustee, has retired as President and Chief Operating
Officer of Hercules Incorporated (diversified
(64) chemicals), positions he held from March 1987 through
March 1992. He also served as a member of the
Hercules Incorporated Board of Directors from 1986
through March 1992.
Robert J. Christian* Trustee, has been Chief Investment Officer of WTC
since February 1996 and Director of RSMC since
(47) February 1996. He was Chairman and Director of PNC
Equity Advisors Company, and President and Chief
Investment Officer of PNC Asset Management Group, Inc.
from 1994 to 1996. He was Chief Investment Officer of
PNC Bank, N.A. from 1992 to 1996, Director of
Provident Capital Management (________) from 1993 to
1996, and Director of Investment Strategy PNC Bank,
N.A. from 1989 to 1992. He is also a Trustee of
LaSalle University and a member of the Board of
Governors for the Pennsylvania Economy League.
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John J. Quindlen Trustee, has retired as Senior Vice President-Finance
of E.I. du Pont de Nemours and Company, Inc.
(65) (diversified chemicals), a position he held from 1984
through November 1993. He also served as Chief
Financial Officer of E.I. du Pont de Nemours and
Company, Inc. from 1984 through June 1993.
</TABLE>
- -------------
* Messrs. Klopping and Christian are deemed to be "interested persons"
of the Fund, as defined in the Investment Company Act of 1940, as amended ("1940
Act"), by virtue of their positions with Rodney Square Management Corporation
("RSMC") or Wilmington Trust Company ("WTC").
Information with respect to the executive officers of the Fund is
provided below. See "Executive Officers of the Fund." To the knowledge of the
Fund's management, as of the record date, the directors and officers of the Fund
owned, as a group, ____ shares of the Growth Portfolio's common stock, which is
less than 1% of the outstanding shares of the Growth Portfolio.
There were four meetings of the Board held during the Fund's fiscal
year ended December 31, 1996. Each Trustee attended all meetings. The Board has
an Audit Committee comprised of Messrs. Brucker, Buckner and Quindlen. The
purpose of the Audit Committee is to oversee the annual audit of the Fund and
review the performance of the Fund's independent accountants. During the Fund's
fiscal year ended December 31, 1996, the Audit Committee met one time. The Board
has a Nominating Committee comprised of Messrs. Brucker, Buckner and Quindlen.
The purpose of the Nominating Committee is to select nominees to the Board of
Trustees. The Nominating Committee did not meet during the fiscal year ended
December 31, 1996. The Board has a Contract Review Committee comprised of
Messrs. Brucker, Buckner and Quindlen. The purpose of the Contract Review
Committee is to review the Fund's investment advisory, distribution and other
contractual arrangements with affiliates to the Fund. During the Fund's fiscal
year ended December 31, 1996, the Contract Review Committee met one time. The
Board does not have a Compensation Committee.
The fees and expenses of the Trustees who are not "interested persons"
of the Fund ("Independent Trustees"), as defined in the 1940 Act, are paid by
the Fund. The following table shows the fees paid during the fiscal year ended
December 31, 1996, to the Independent Trustees for their services to the Fund
and to the other mutual funds which are advised by RSMC or WTC.
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1996 TRUSTEES COMPENSATION
TOTAL COMPENSATION FROM THE
COMPENSATION RODNEY SQUARE FAMILY
INDEPENDENT TRUSTEE (1) FROM THE FUND OF FUNDS
Eric Brucker $1,725 $17,450
Fred L. Buckner $1,725 $17,450
John J. Quindlen $1,725 $17,450
(1) Trustees do not receive any pension or retirement benefits from the Fund.
REQUIRED VOTE. Election of each nominee as a Trustee of the Fund requires the
vote of a plurality of all the outstanding shares of the Fund present at the
Meeting in person or by proxy.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" THE NOMINEES.
PROPOSAL 2. TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS
INDEPENDENT AUDITORS OF THE FUND
The Trustees, including the Independent Trustees, unanimously selected
the firm of Ernst & Young LLP as the Fund's independent auditors to audit the
books and the accounts of the Fund for the fiscal year ending December 31, 1997.
The professional services which are expected to be rendered by Ernst & Young LLP
include the issuance of an opinion on the financial statements of the Fund and
an opinion on other reports filed with the SEC. Ernst & Young LLP has advised
the Fund that it has no material direct or indirect ownership interest in the
Fund. Representatives of Ernst & Young LLP are not expected to be present at the
Meeting, but have been afforded the opportunity to make a statement if they so
desire and will be available should any matter arise requiring their presence.
REQUIRED VOTE. Ratification of the selection of Ernst & Young LLP as
independent auditors for the Fund requires the affirmative vote of a majority of
the shares of the Fund present at the Meeting in person or by proxy.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
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BACKGROUND REGARDING PROPOSALS 3 AND 4
Since it commenced operation in 1987, the Growth Portfolio has offered
investors the opportunity to take advantage of a blending of different
investment styles within a single fund. Under this approach, two or more
different sub-advisers, each following a separate investment style, have been
responsible for management of a portion of the Portfolio's assets. At the time
of this proxy, the current portfolio sub-advisors are Frontier Capital
Management Co., Inc. ("Frontier") and William Blair & Company L.L.C. ("Blair").
Frontier's investment approach with regard to the Portfolio has been to invest
in smaller cap U.S. growth companies. Blair's investment approach with regard to
the Portfolio has been to invest in a broad range of growth companies of all
sizes, with an emphasis on larger companies. Taken together, these investment
approaches have resulted in the Portfolio's investments being spread across the
available investment universe of U.S. growth companies in regards to size, with
a not insignificant exposure to smaller U.S. companies.
Over the past decade, investors have increasingly become more
knowledgeable regarding investment styles and the various segments of the equity
securities market and more sophisticated with respect to the allocation of
assets among investment styles and market segments. Accordingly, RSMC and its
parent WTC, now believe that investors would be better served by providing them
with products that incorporate only one specific investment style, such as a
"growth" or value" orientation, and/or focus on only one segment of the equity
securities market, such as securities of "large cap" or "small cap" issuers.
Such an approach would allow investors themselves to allocate their assets among
the styles and sectors they deem appropriate, rather than receiving a blend of
styles and segments in a single product.
Approval of Proposal 3 will result in the termination of Frontier and
Blair as Portfolio sub-advisers and the assumption of the advisory role by WTC.
WTC's mandate, with respect to this Portfolio, will be to invest at least 85% of
the Portfolio's total assets in equity (or related) securiites of large cap U.S.
growth companies (defined as companies whose market capitalization, at time of
purchase, is equal to or greater than that of the smallest company in the
Russell 1000 Index and which possess growth, as contrasted to value,
characteristics). Under this mandate, the Portfolio, unlike many other mutual
funds, will not reserve authority to depart from its investment objective to
temporarily pursue defensive investment policies in an effort to preserve its
capital. The Portfolio will instead adhere, during all market cycles, to
investing not less than 85% of its total assets in equity securities of large
cap U.S. growth issuers. This policy creates the risk that the Portfolio may
experience capital losses if adverse market conditions arise. In addition to
focusing exclusively on larger cap issuers, the methods and procedures by which
WTC typically defines and identifies growth companies for investment may be
different from the definitions and techniques employed by the prior
sub-advisers. With respect to not more than 15% of the Portfolio's total assets,
the Adviser may hold cash and cash equivalents including high quality money
market instruments and/or money market funds in order to manage the cash flow in
the Portfolio.
In view of the foregoing, RSMC proposed and the Board approved at its
November 17, 1997 meeting the restructuring of the Portfolio that would result
in: (1) a change to the Portfolio's investment policies such that the Portfolio
will seek its objective by investing at least 85% of its total assets in equity
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securities of U.S. large cap issuers (defined as having a market capitalization,
at time of investment, equal to or greater than that of the smallest issuer in
the Russell 1000 Index); (2) a change in the investment management structure of
the Portfolio such that, pursuant to a New Advisory Agreement ("New Advisory
Agreement"), WTC would be responsible for the day-to-day management of the
Portfolio's assets without the use of any sub-advisers, so that the current
sub-advisers would no longer provide any services to the Portfolio (see Proposal
3); (3) a change in the name of the Fund to The Rodney Square Equity Fund and a
change in the name of the Growth Portfolio to the Large Cap Growth Equity
Portfolio; and (4) the amendment of the Portfolio's investment objective (see
Proposal 4). In connection with the restructuring of the Growth Portfolio and
consistent with their belief regarding the changed investment environment
described above, WTC and RSMC also expect to propose establishment of several
new equity funds, each managed pursuant to a particular style and each investing
primarily in a particular market segment.
As a result of the changes proposed, shareholders should expect that
the investment experience of the Growth Portfolio would change in several ways.
First, by restricting the new adviser to investment in large cap companies, the
Portfolio may experience a pattern of returns and volatility that is not similar
to that produced in the past. Generally, companies with high relative rates of
growth tend to reinvest more of their profits into the company and pay out less
to shareholders in the form of current dividends. As a result, equity investors
tend to receive most of their return in the form of capital appreciation. This
makes growth company issues more volatile than the market as a whole. Second,
the purposeful blending of investments in both large and small growth companies
in this Portfolio today affords investors some diversification benefit against a
protracted period of underperformance by companies in one size classification or
the other. Under the proposed restructuring the benefit of mitigating this risk
within a single Portfolio will be lost. Third, investors interested in pursuing
investment in smaller companies, or desiring to maintain a balanced blend of
size exposures such as this Portfolio formerly provided, will need to look to
other investments to achieve this goal. WTC and RSMC expect to offer
shareholders a new small cap equity fund suitable for achieving exposure to
small U.S. companies as part of the larger fund family reconfiguration being
proposed at this time.
The proposed changes to the Growth Portfolio's investment structure
will necessitate the sale of certain currently held portfolio securities.
Securities to be sold are anticipated to amount, on a current market value
basis, to between 35% to 45% of the Portfolio's current total assets. If the
proposed changes are approved by shareholders, WTC intends to complete the sale
and redeployment of these positions within three months of the implementation of
the Portfolio's new investment structure. During this period the Portfolio may
not be fully invested in equity securities of U.S. large cap issuers. In
addition, the Portfolio will likely incur increased trading costs and
distributable net capital gains during its fiscal year ending December 31, 1998
than have been incurred in prior years.
In addition to the foregoing changes, the Board also approved at its
November 17, 1997 meeting, changes to the distribution arrangements of the
Growth Portfolio. In particular, the Board approved (1) the termination of the
Growth Portfolio's Rule 12b-1 plan; (2) the elimination of the front-end sales
charge that is imposed on investments in the Portfolio; and (3) a change in the
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initial investment requirement from $1,000 initial investment in the Portfolio
to $200,000 initial investment across the Rodney Square Fund Complex. The
changes to the Portfolio's distribution arrangements will become effective
__________________.
PROPOSAL 3. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT FOR THE
GROWTH PORTFOLIO
PROPOSED NEW ADVISORY AGREEMENT. Under its current Fund Management
Agreement ("Current Advisory Agreement") with RSMC, RSMC is paid by the Fund a
monthly management fee at an annual rate of 1.00% of the Growth Portfolio's
average daily net assets up to $200 million of Fund assets and 0.95% of its
average daily net assets in excess of $200 million. The Current Advisory
Agreement also provides that RSMC may delegate its investment decision-making
authority to one or more persons or companies pursuant to a sub-advisory
agreement between RSMC, the Fund and each such portfolio sub-adviser.
Accordingly, RSMC has currently delegated its investment decision-making
authority to Frontier Capital Management Co., Inc., and William Blair & Company
L.L.C. ("Sub-advisers"). Pursuant to these agreements, RSMC pays out of the fund
management fee it receives a monthly fee to each Sub-adviser at the annual rate
of 0.50% of the average daily net assets under the Sub-adviser's management.
Under the New Advisory Agreement, the Fund would appoint WTC, the
parent company of RSMC, as its investment adviser. Although the contract would
permit WTC to delegate advisory functions to sub-advisers, it is contemplated
that WTC would directly provide all advisory services to the Growth Portfolio.
The investment advisory fee to be paid to WTC would be reduced to an annual rate
of 0.55% of the Growth Portfolio's average daily net assets. The provisions of
the Current Advisory Agreement, and of the New Advisory Agreement are
substantially the same, except for the identity of the adviser, the commencement
date and the proposed lower advisory rate, described above.
If the New Advisory Agreement is approved by shareholders, the Current
Advisory Agreement with RSMC and the agreements with the Sub-advisers would be
terminated promptly and the Growth Portfolio would cease to be multi-managed.
Further information about WTC and the New Advisory Agreement is set forth below
under "Additional Information." The form of the New Advisory Agreement is set
forth in Exhibit A.
Under the New Advisory Agreement, WTC agrees to act as investment
adviser of the Fund and agrees: (1) to direct the investments of the Portfolio,
subject to and in accordance with the Portfolio's investment objective, policies
and limitations; (2) to purchase and sell securities and other investments of
the Portfolio; (3) to furnish for the use of the Fund office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Fund; (4) to pay the salaries of all personnel of the Fund or
WTC performing services relating to research, statistical and investment
activities; (5) to make available and provide such information as the Fund or
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its administrator may reasonably request for use in the preparation of its
registration statement, reports and other documents required by any applicable
federal, foreign or state statutes or regulations; (6) to adopt a written code
of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and
Section 204A of the Investment Advisers Act of 1940 and provide the Fund and its
administrator with a copy of the code of ethics and evidence of its adoption;
(7) to immediately notify the Trustees of the occurrence of any event which
would disqualify WTC from serving as an investment adviser of an investment
company pursuant to Section 9 of the 1940 Act or any other applicable statute or
regulation; (8) to make its officers and employees available to the Trustees and
officers of the Fund for consultation and discussion regarding the management of
the Portfolio and its investment activities; (9) to, subject to the control and
direction of the Trustees, select brokers and dealers to execute portfolio
transactions for the Portfolio, and for the selection of the markets on or in
which the transactions will be executed; (10) to place orders through such
brokers or dealers in conformity with the policies with respect to portfolio
transactions set forth in the Fund's registration statement; (11) to not adopt a
formula for allocation of a portfolio's brokerage; (12) that WTC may, to the
extent permitted by applicable laws and regulations, aggregate securities to be
sold or purchased for any portfolio and for other clients in order to obtain the
most favorable price and efficient execution; (13) that no Portfolio Adviser
will execute any portfolio transactions with a broker or dealer which is an
"affiliated person" of the Fund, the Manager, the Consultant or any Portfolio
Adviser without the prior written approval of the Manager and that the Manager
agrees that it will provide each Portfolio Adviser with a list of brokers; (14)
that WTC may, in its discretion, use brokers who provide a portfolio with
research, analysis, advice and similar services to execute portfolio
transactions on behalf of portfolio, and WTC may pay to those brokers in return
for brokerage and research services a higher commission than may be charged by
other brokers, subject to WTC determining in good faith that such commission is
reasonable in terms either of the particular transaction or of the overall
responsibility of WTC to portfolio and its other clients and that the total
commissions paid by such portfolio will be reasonable in relation to the
benefits to portfolio over the long term; and (15) that WTC shall provide such
reports as the Trustees may reasonably request with respect to each portfolio's
total brokerage and portfolio transaction activities and the manner in which
that business was allocated.
The New Advisory Agreement further provides that, in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties hereunder on the part of WTC, WTC shall not be subject to
liability to the Fund or to any shareholder of the Fund or its portfolios for
any act or omission in the course of, or connected with, rendering services
thereunder or for any losses that may be sustained in the purchase, holding or
sale of any security or the making of any investment for or on behalf of the
Fund.
If approved by Shareholders, the New Advisory Agreement will become
effective shortly following the date of approval and will remain in effect for
an initial two-year term. Thereafter, the New Advisory Agreement will continue
in effect with respect to the Growth Portfolio if it is approved at least
annually by a vote of the shareholders of the Growth Portfolio or by the Board.
The New Advisory Agreement will terminate automatically in the event of its
assignment (as defined in the 1940 Act). The last annual reapproval of the
Current Advisory Agreement by the Board occurred on February 17, 1997.
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WILMINGTON TRUST COMPANY. WTC, the Fund's proposed investment adviser,
is a state-chartered bank organized as a Delaware corporation in 1903. WTC is a
wholly owned subsidiary of Wilmington Trust Corporation, a publicly held bank
holding company. WTC is Delaware's largest full-service bank and, with more than
[$75] billion in trust, custody and investment management assets, WTC ranks
among the nation's leading money management firms. As of December 31, 1996, the
trust department of WTC was the [seventeenth] largest in the United States as
measured by discretionary assets under management. WTC is engaged in a variety
of investment advisory activities, including the management of collective
investment pools, and has nearly a century of experience managing the personal
investments of high net-worth individuals. WTC currently serves as investment
adviser to two mutual funds, The Rodney Square Municipal Income Portfolio and
The Rodney Square Diversified Income Portfolio, and manages over [$53] billion
for various other institutional clients. The principal offices of WTC are
located at 1100 North Market Street, Wilmington, Delaware 19890-0001.
[The names, addresses and principal occupations of the principal
executive officers and directors of WTC are set forth under _____.] Each officer
of the Fund is an officer, employee or director of [WTC] or its affiliate, RSMC,
as indicated under "Executive Officers of the Fund," below. As of _____, 199__,
[name and address] owns [of record or beneficially] ten percent or more of the
outstanding voting securities of WTC.
TRUSTEE CONSIDERATION. In approving the proposed New Advisory
Agreement, the Trustees analyzed the factors they deemed relevant, including
WTC's expertise and experience providing advice to clients with similar
investment objectives to that proposed for the Growth Portfolio. The Trustees
also considered that the fees for investment advisory services would be lower
under the proposed arrangement than is currently charged by RSMC under the
current Advisory Agreement. After full consideration of these and other factors,
the Trustees, including a majority of the independent Trustees, approved the
proposed New Advisory Agreement and recommended that it be submitted to
shareholders for approval.
REQUIRED VOTE. Approval of Proposal 3 requires the affirmative vote of
a "majority of the outstanding voting securities" of the Growth Portfolio, which
for this purpose means the affirmative vote of the lesser of (1) 67% or more of
the shares of the Portfolio present at the Meeting or represented by Proxy if
more than 50% of the outstanding shares of the Portfolio are so present or
represented or (2) more than 50% of the outstanding shares of the Portfolio.
Approval of Proposal 3 is contingent upon the approval of Proposal 4.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
PROPOSAL 4: TO APPROVE THE AMENDMENT OF THE INVESTMENT OBJECTIVE OF
GROWTH PORTFOLIO
PROPOSED NEW INVESTMENT OBJECTIVE. At a meeting held on November 17,
1997, the Board approved an amendment to the investment objective of the Growth
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Portfolio so that the Growth Portfolio will seek "superior long-term growth of
capital." "Superior" with respect to the new objective means that which would
exceed the long-term growth of capital from an investment in the securities
comprising the Russell 1000 Growth Index (assuming the reinvestment of dividends
and capital gain distributions). The Portfolio's current investment objective is
similar. Under it, the Portfolio seeks "superior long-term capital appreciation
by investing in securities of companies which are judged by its portfolio
advisers to possess strong growth characteristics." "Superior" with respect to
the current objective means that which exceeds the long-term capital
appreciation from an investment in the securities comprising the Standard &
Poor's 500 Composite Stock Price Index (assuming the reinvestment of dividends
and capital gain distributions).
REQUIRED VOTE. Approval of Proposal 4 requires the affirmative vote of
a "majority of the outstanding voting securities" of the Growth Portfolio, which
for this purpose means the affirmative vote of the lesser of (1) 67% or more of
the shares of the Portfolio present at the Meeting or represented by Proxy if
more than 50% of the outstanding shares of the fund are so present or
represented or (2) more than 50% of the outstanding shares of the Portfolio.
Approval of Proposal 4 is contingent upon the approval of Proposal 3.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 4
PROPOSAL 5. TO APPROVE AMENDMENTS TO THE FUNDAMENTAL INVESTMENT
LIMITATIONS OF THE GROWTH PORTFOLIO
REASONS FOR THE PROPOSED CHANGES. Pursuant to the 1940 Act, the Growth
Portfolio has adopted certain fundamental investment limitations and policies
("fundamental limitations"), which are set forth in the Growth Portfolio's
statement of additional information, and which may be changed only with
shareholder approval. Limitations and policies that the Growth Portfolio has not
specifically designated as being fundamental are considered to be
"non-fundamental" and may be changed by the Growth Portfolio's Board without
shareholder approval.
Several of the fundamental limitations that the Growth Portfolio has
adopted reflect regulatory, business or industry conditions, practices or
requirements that are no longer in effect. Other fundamental investment
limitations were enacted in response to state blue sky laws. On October 11,
1996, President Clinton signed the National Securities Markets Improvement Act
of 1996 ("NSMIA"). This legislation preempted state blue sky laws, under which
the Growth Portfolio previously was regulated. Accordingly, the Board has
approved revisions to the Growth Portfolio's fundamental limitations in order to
simplify, modernize and make more uniform those investment limitations that are
required to be fundamental.
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Although the proposed changes to the fundamental limitations will allow
the Growth Portfolio greater investment flexibility to respond to future
investment opportunities, the Board does not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
in the level of investment risk associated with an investment in the Growth
Portfolio.
The text and a summary description of each proposed change to the
Growth Portfolio's fundamental limitations are set forth below. Shareholders
should refer to Exhibit B to this proxy statement for the complete text of the
Growth Portfolio's existing fundamental limitations. Any non-fundamental
limitation may be modified or eliminated by the Board at any future date without
any further approval of shareholders.
If the proposed changes are approved by shareholders of the Growth
Portfolio at the Special Meeting, the Growth Portfolio's statement of additional
information will be revised, as appropriate, to reflect those changes.
This will occur as soon as practicable following the meeting.
1. MODIFICATION OF FUNDAMENTAL LIMITATION ON PURCHASING OR SELLING REAL ESTATE,
COMMODITIES OR COMMODITIES OR INTERESTS IN OIL, GAS OR MINERAL LEASES
Currently, purchases or sales of real estate, commodities or commodity
contracts, and interests in oil, gas or mineral leases are addressed in one
fundamental limitation that reads as follows:
"The Portfolio will not as a matter of fundamental policy .
. . purchase or sell real estate (including limited
partnership interests but excluding securities secured by
real estate or interests therein) interests in oil, gas or
mineral leases, commodities or commodity contracts, except
that the Fund, reserves the freedom of action (i) to hold
and to sell real estate acquired for the Portfolio as a
result of the ownership of marketable securities provided
that the Portfolio's ownership of real estate for which
there is no established market will never exceed 10% of its
net assets and (ii) to purchase or sell futures contracts
including but not limited to contracts for the future
delivery of securities and futures contracts based on
securities indexes."
It is proposed that this fundamental limitation be split into two fundamental
limitations, one addressing real estate and the other addressing commodities.
The portion of the fundamental investment limitation regarding oil, gas and
mineral leases would be eliminated.
The following is the text and a summary description of the proposed
changes to the current fundamental limitation.
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<PAGE>
a. NEW FUNDAMENTAL LIMITATION ON REAL ESTATE INVESTMENTS.
PROPOSED TEXT OF FUNDAMENTAL LIMITATION:
"The Portfolio will not as a matter of fundamental policy .
. . purchase or sell real estate, but this limitation shall
not prevent the Portfolio from investing in obligations
secured by real estate or interests therein or obligations
issued by companies that invest in real estate or interests
therein, including real estate investment trusts."
DISCUSSION: The proposed new investment limitation is consistent with
the investment limitations of other funds in the Rodney Square Family of Funds
and would clarify the types of real estate related securities that are
permissible investments for each Fund.
The Growth Portfolio's investment limitations currently state that the
Growth Portfolio may not "purchase or sell real estate (including real estate
limited partnerships interests but excluding securities secured by real estate
or interests therein)." The proposed changes would eliminate the reference to
real estate limited partnerships. Thus, if the proposed change is approved, the
Growth Portfolio would be able to invest in real estate limited partnerships.
However, the Growth Portfolio does not intend to invest in real estate limited
partnerships. As a result, the Board believes that the proposed changes are not
expected to have any change upon the operations of the Growth Portfolio.
b. NEW FUNDAMENTAL LIMITATION ON INVESTING IN COMMODITIES.
PROPOSED TEXT OF FUNDAMENTAL LIMITATION:
"The Portfolio will not as a matter of fundamental policy .
. . purchase or sell physical commodities unless acquired as
a result of owning securities or other instruments, but the
Portfolio may purchase, sell or enter into financial options
and futures, forward and spot currency contracts, swap
transactions and other derivative financial instruments."
DISCUSSION: The proposed new fundamental limitation is structured to
ensure that the Growth Portfolio will have the maximum flexibility to enter into
hedging and other transactions utilizing financial contracts and derivative
products when doing so is permitted by operating policies established for the
Growth Portfolio by its Board. The Board believes that this flexibility is
necessary for the Growth Portfolio to respond to the rapid and continuing
development of derivative products. The proposed changes broaden the exception
to this fundamental limitation to cover all financial derivative instruments
rather than only financial futures and currency instruments. In connection with
the proposed change to the fundamental limitation, the Board also approved a
non-fundamental limitation to limit investment in futures contracts to no more
than 10% of the Growth Portfolio's total assets.
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<PAGE>
c. ELIMINATION OF FUNDAMENTAL LIMITATION ON INVESTMENTS IN OIL, GAS
AND MINERAL LEASES AND PROGRAMS.
PROPOSED CHANGE: Upon the approval of Proposal 5, the existing
fundamental limitations on investments in oil, gas or minerals would be
eliminated.
DISCUSSION: The Growth Portfolio is not required to have a fundamental
limitation with respect to oil, gas or mineral investments. In order to maximize
the Growth Portfolio's flexibility in this area, the Board believes that the
limitation on oil, gas and mineral investments should be eliminated. This
limitation was imposed by state blue sky laws and NSMIA preempts that
requirement. Notwithstanding the elimination of this fundamental limitation, the
Growth Portfolio expects to continue to invest in securities, and not in oil,
gas and mineral leases and programs.
2. MODIFICATION OF FUNDAMENTAL LIMITATION AND ADDITION OF NON-FUNDAMENTAL
LIMITATION ON BORROWING.
PROPOSED TEXT OF FUNDAMENTAL LIMITATION:
"The Portfolio will not as a matter of fundamental policy . . . borrow
money, except for temporary or emergency purposes and then in an
aggregate amount not in excess of 10% of the Portfolio's total
assets."
PROPOSED TEXT OF NON-FUNDAMENTAL LIMITATION:
"As a matter of non-fundamental policy, the Portfolio will not . . .
purchase securities while borrowings in excess of 5% of the
Portfolio's total assets are outstanding."
DISCUSSION: The proposed change to the fundamental investment
limitation is intended to increase the ability of the Growth Portfolio to borrow
for temporary defensive purposes such as to satisfy redemptions of Growth
Portfolio shares. Currently, the Portfolio's fundamental limitation imposes a 5%
limit on borrowing. The proposed new non-fundamental limitation is required by
the Securities and Exchange Commission when the fundamental investment
limitation on borrowing allows for borrowing in excess of 5%. Such a
non-fundamental limitation is designed to prevent the Growth Portfolio from
engaging in leveraging through borrowing. The Growth Portfolio has no intention
to engage in such a practice.
3. APPROVAL OF FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENT OF ALL
OF THE GROWTH PORTFOLIO'S ASSETS IN A SINGLE POOLED INVESTMENT FUND.
PROPOSED TEXT OF FUNDAMENTAL LIMITATION:
"The Portfolio may as a fundamental policy . . . invest all of its
investable assets (cash, securities and receivables related to
securities) in an open-end management investment company having
16
<PAGE>
substantially the same investment objective, policies and limitations
as the Portfolio, not withstanding any other investment policy of the
Portfolio."
DISCUSSION: The Board has approved, subject to shareholder approval,
the adoption of a new fundamental investment policy that would permit the Growth
Portfolio to pool its assets with other appropriate investment funds. The
purpose of this proposal is to enhance the flexibility of the Growth Portfolio
and permit it to take advantage of potential efficiencies in the future
available through investment in another pooled investment fund organized as an
open-end investment company ("Pooled Fund"). A number of mutual funds operate
under structures pursuant to which several funds invest all their assets in a
single Pooled Fund. For example, a fund offering its shares not subject to a
sales load to institutional investors might pool its investments with another
fund that offers its shares subject to a front-end or contingent deferred sales
load to retail investors. This structure allows several funds with different
features, but the same investment objective, policies and restrictions, to
combine their investments instead of managing them separately.
At present, certain of the fundamental investment limitations of the
Growth Portfolio may prevent it from investing all of its assets in another
registered investment company and would require a vote of Growth Portfolio
shareholders before such a structure could be adopted. To avoid the costs
associated with a subsequent shareholder meeting, the Board recommends that
shareholders vote at the January 8, 1998 meeting to permit the assets of the
Growth Portfolio to be invested in a single Pooled Fund, without a further vote
of shareholders, but only if the Board subsequently determines that such action
is in the best interests of the Growth Portfolio and its shareholders. If the
shareholders approve this proposal, the fundamental limitations of the Growth
Portfolio that currently may prohibit investment in a Pooled Fund, in effect,
would be modified to permit the investment in a Pooled Fund with substantially
the same investment objective, policies and restrictions as the Fund, including,
without limitation, the limitations on investing in a single issuer or in
issuers in a single industry.
The Growth Portfolio's methods of operation and shareholder services
would not be materially affected by its investment in a Pooled Fund, except that
the assets of the Growth Portfolio would be managed as part of a larger pool. If
the Growth Portfolio invested all of its assets in a Pooled Fund, it would hold
only investment securities issued by the Pooled Fund, and the Pooled Fund would
directly invest in individual securities of other issuers. The Growth Portfolio
would otherwise continue its normal operation. The Board would retain the right
to withdraw the Growth Portfolio's investments from the Pooled Fund at any time
and the Growth Portfolio would then resume investing directly in individual
securities of other issuers as it does currently.
The Growth Portfolio's investment adviser, may benefit from the use of
a Pooled Fund if overall assets under management are increased (since management
fees are based on assets). Also, the investment adviser's expense of providing
investment and other services to the Growth Portfolio may be reduced.
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<PAGE>
At present the Board has not considered any specific proposal to
authorize pooling of assets. The Board will authorize investing the Growth
Portfolio's assets in a Pooled Fund only if it first determines that pooling is
in the best interests of the Growth Portfolio and its shareholders. In
determining whether to invest in a Pooled Fund, the Board will consider, among
other things, the opportunity to reduce costs and achieve operational
efficiencies. The Board will not authorize investment in a Pooled Fund if it
would increase materially costs to the Growth Portfolio's shareholders, unless
there were perceived to be a corresponding increase in benefits to shareholders.
4. MODIFICATION OF FUNDAMENTAL LIMITATION ON ISSUING SENIOR SECURITIES.
PROPOSED TEXT OF FUNDAMENTAL LIMITATION:
"The Portfolio will not as a matter of fundamental policy . . . issue
senior securities, except to the extent permitted by the 1940 Act."
DISCUSSION: The 1940 Act establishes limits on the ability of the
Growth Portfolio to engage in leverage through the issuance of "senior
securities," a term that is defined, generally, to refer to Fund obligations
that have a priority over the Fund's shares with respect to the distribution of
assets or the payment of dividends. Currently, the fundamental limitation
regarding senior securities is more limiting than the limitations imposed by the
1940 Act. The proposed change would relax this fundamental limitation to make it
no more limiting that than the limitations imposed under the 1940 Act. The Board
believes that changing the Fund's fundamental limitations in this manner will
provide flexibility for future contingencies. However, the Board does not
believe the proposed change will have any impact on the current operations of
the Growth Portfolio.
REQUIRED VOTE. Approval of Proposal 5 requires the affirmative vote of
a "majority of the outstanding voting securities" of the Growth Portfolio, which
for this purpose means the affirmative vote of the lesser of (1) 67% or more of
the shares of the Portfolio present at the Meeting or represented by Proxy if
more than 50% of the outstanding shares of the fund are so present or
represented or (2) more than 50% of the outstanding shares of the Portfolio.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE
"FOR" PROPOSAL 5.
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<PAGE>
PROPOSAL 6. TO APPROVE THE AMENDMENT OF THE FUND'S DECLARATION OF TRUST
PROPOSED CHANGES. RSMC is proposing amendments to the Fund's
Declaration of Trust that would enable the Board to establish classes of shares
in a series of the Fund. Currently, no such action is contemplated. However, the
proposed amendments would permit the Board to do so without the need to obtain
shareholder approval. The amendments to the Fund's Declaration of Trust also
reflects a change in the name of the Fund to The Rodney Square Equity Fund and
the name of the Growth Portfolio to the Large Cap Growth Portfolio, as discussed
above.
The proposed amendments to the Fund's Declaration of Trust appear as
Exhibit C to this proxy statement.
REQUIRED VOTE. Approval of Proposal 4 requires the affirmative vote of
a "majority of the outstanding voting securities" of the Fund, which for this
purpose means the affirmative vote of the lesser of (1) 67% or more of the
shares of the Fund present at the Meeting or represented by Proxy if more than
50% of the outstanding shares of the fund are so present or represented or (2)
more than 50% of the outstanding shares of the Fund.
THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE "FOR" PROPOSAL 6.
OTHER BUSINESS
The Trustees know of no other business to be brought before the
Meeting. However, if any other matters properly come before the Meeting, it is
the intention that proxies that do not contain specific instructions to the
contrary will be voted on such matter in accordance with the judgment of the
persons therein designated.
ADDITIONAL INFORMATION
The Fund will incur expenses in connection with preparing and mailing
the enclosed form of proxy and accompanying Notice and Proxy Statement. The Fund
will also reimburse banks, brokers and others for their reasonable expenses in
forwarding proxy solicitation material to the beneficial owners of the shares of
the Fund. [As noted above, however, it is anticipated that WTC will reimburse
the Fund for these and other Plan Expenses.] Broker dealer firms holding Fund
shares in "street name" for the benefit of their customers and clients will
request the instructions of such customers and clients on how to vote their
shares on the proposals before the Meeting. The Fund will include shares held of
record by broker dealers as to which such authority has been granted in its
tabulation of the total number of votes present for purposes of determining
whether the necessary quorum of shareholders exists.
FUND MANAGEMENT. The Fund's investment adviser and administrator is
Rodney Square Management Corporation and the Fund's distributor is Rodney Square
Distributors, Inc., both of which are located at 1100 North Market Street,
Wilmington, DE 19890-0001.
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<PAGE>
EXECUTIVE OFFICERS OF THE FUND. The executive officers of the Fund,
other than those who also serve as Trustees, are:
Joseph M. Fahey, Jr. - Vice President, has been with RSMC since 1984, as a
Secretary of RSMC since 1986, a Director of RSMC since 1989 and a Vice President
of RSMC since 1992.
Robert C. Hancock - Vice President and Treasurer, has been Vice President of
RSMC since 1988 and Treasurer of RSMC since 1990. He is also a member of the
Accounting/Treasurer Committee of the Investment Company Institute.
Carl M. Rizzo, Esq. - Secretary, was appointed Vice President of RSMC in July,
1996. From 1995 to 1996 he was Assistant General Counsel of Aid Association for
Lutherans (a fraternal benefit association); from 1994 to 1995 Senior Associate
Counsel of United Services Automobile Association (an insurance and financial
services firm); and from 1987 to 1994 Special Counsel or Attorney-Adviser with a
federal government agency.
Diane D. Marky - Assistant Secretary, has been a Senior Fund Administrator since
1994 and a Fund Administration Officer of RSMC since 1991.
Connie L. Meyers - Assistant Secretary, has been a Fund Administrator of RSMC
since August, 1994. She was a Corporate Custody Administrator for WTC from 1989
to 1994.
John J. Kelley - Assistant Treasurer, has been a Vice President of RSMC since
1995 and was an Assistant Vice President of RSMC from 1989 to 1994.
SHAREHOLDER PROPOSALS
The Fund does not hold annual shareholder meetings. Accordingly, no
anticipated date of the next shareholder meeting can be provided at this time.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent shareholder meeting or to propose persons to be considered by the
Fund's Nominating Committee as nominees for Trustees should send their written
request or proposal to the Secretary of the Fund.
All shareholders are urged to mark, date, sign and return the Proxy
Card in the enclosed envelope, which requires no postage if mailed in the United
States.
By Order of the Trustees,
--------------------------------
Carl M. Rizzo
Secretary
Dated: December 1, 1997
<PAGE>
EXHIBITS
--------
NUMBER DESCRIPTION
- ------ -----------
A. Proposed Advisory Agreement
B. Current Fundamental and Non-Fundamental Limitations of
the Growth Portfolio
C. Proposed Amendments to the Declaration of Trust of The
Rodney Square Multi-Manager Fund
<PAGE>
EXHIBIT A
ADVISORY AGREEMENT
between
THE RODNEY SQUARE MULTI-MANAGER FUND
and
WILMINGTON TRUST COMPANY
AGREEMENT made this _____ day of January, 1998, by and between The
Rodney Square Multi-Manager Fund, a Massachusetts business trust (hereinafter
called the "Fund"), and Wilmington Trust Company, a Delaware corporation
(hereinafter called the "Adviser").
WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended ("Investment Company Act"), as an open-end management
investment company, and offers for sale distinct series of shares of beneficial
interest ("Series") each corresponding to a distinct portfolio; and
WHEREAS, the Fund desires to avail itself of the services, information,
advice, assistance and facilities of an investment adviser on behalf of one or
more Series of the Fund, and to have that investment adviser provide or perform
for the Series various research, statistical and investment services; and
WHEREAS, the Adviser is willing to furnish such services to the Fund
with respect to each of the Series listed on Schedule A to this Agreement (the
"Portfolio" or "Portfolios") on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, it is agreed between the parties as follows:
1. EMPLOYMENT OF THE ADVISER. The Fund hereby employs the Adviser to
invest and reinvest the assets of the Portfolio in the manner set forth in
Section 2 of this Agreement subject to the direction of the Trustees and the
officers of the Fund, for the period, in the manner, and on the terms set forth
hereinafter. The Adviser hereby accepts such employment and agrees during such
period to render the services and to assume the obligations herein set forth.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, except as expressly provided or authorized (whether herein
or otherwise), have no authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY, THE ADVISER. The
Adviser undertakes to provide the services hereinafter set forth and to assume
the following obligations:
A. INVESTMENT ADVISORY SERVICES.
(a) The Adviser shall direct the investments of each
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<PAGE>
Portfolio, subject to and in accordance with the Portfolio's investment
objective, policies and limitations as provided in its Prospectus and Statement
of Additional Information ("the Prospectus") and other governing instruments, as
amended from time to time, and any other directions and policies which the
Trustees may issue to the Adviser from time to time.
(b) The Adviser is authorized, in its discretion and
without prior consultation with the Fund, to purchase and sell securities and
other investments of each Portfolio.
B. CORPORATE MANAGEMENT SERVICES.
(a) The Adviser shall furnish for the use of the Fund
office space and all necessary office facilities, equipment and personnel for
servicing the investments of the Fund.
(b) The Adviser shall pay the salaries of all personnel of
the Fund or the Adviser performing services relating to research, statistical
and investment activities.
C. PROVISION OF INFORMATION NECESSARY FOR PREPARATION OF
REGISTRATION STATEMENT, AMENDMENTS AND OTHER MATERIALS. The Adviser will make
available and provide such information as the Fund or its administrator may
reasonably request for use in the preparation of its registration statement,
reports and other documents required by any applicable federal, foreign or state
statutes or regulations.
D. CODE OF ETHICS. The Adviser will adopt a written code of
ethics complying with the requirements of Rule 17j-1 under the Investment
Company Act and Section 204A of the Investment Advisers Act of 1940 and will
provide the Fund and its administrator with a copy of the code of ethics and
evidence of its adoption. Within forty-five (45) days of the end of the last
calendar quarter of each year while this Agreement is in effect, an executive
officer of the Adviser shall certify to the Trustees that the Adviser has
complied with the requirements of Rule 17j-1 and Section 204A during the
previous year and that there has been no violation of the Adviser's code of
ethics or, if such a violation has occurred, that appropriate action was taken
in response to such violation. Upon the written request of the Fund or its
administrator, the Adviser shall permit the Fund or its administrator to examine
the reports required to be made to the Adviser by Rule 17j-l(c)(l).
E. DISQUALIFICATION. The Adviser shall immediately notify the
Trustees of the occurrence of any event which would disqualify the Adviser from
serving as an investment adviser of an investment company pursuant to Section 9
of the Investment Company Act or any other applicable statute or regulation.
F. OTHER OBLIGATIONS AND SERVICES. The Adviser shall make its
officers and employees available to the Trustees and officers of the Fund for
consultation and discussion regarding the management of each Portfolio and its
investment activities.
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<PAGE>
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE.
A. The Adviser, subject to the control and direction of the
Trustees, shall have authority and discretion to select brokers and dealers to
execute portfolio transactions for each Portfolio, and for the selection of the
markets on or in which the transactions will be executed.
B. In acting pursuant to Section 3A, the Adviser will place
orders through such brokers or dealers in conformity with the policies with
respect to portfolio transactions set forth in the Fund's registration
statement.
C. It is understood that neither the Fund nor the Adviser will
adopt a formula for allocation of a Portfolio's brokerage.
D. It is understood that the Adviser may, to the extent permitted
by applicable laws and regulations, aggregate securities to be sold or purchased
for any Portfolio and for other clients in order to obtain the most favorable
price and efficient execution. In that event, allocation of the securities
purchased or sold, as well as expenses incurred in the transaction, will be made
by the Adviser in the manner it considers to be the most equitable and
consistent with its fiduciary obligations to the Fund and to its other clients.
E. It is understood that the Adviser may, in its discretion, use
brokers who provide a Portfolio with research, analysis, advice and similar
services to execute portfolio transactions on behalf of the Portfolio, and the
Adviser may pay to those brokers in return for brokerage and research services a
higher commission than may be charged by other brokers, subject to the Adviser
determining in good faith that such commission is reasonable in terms either of
the particular transaction or of the overall responsibility of the Adviser to
the Portfolio and its other clients and that the total commissions paid by such
Portfolio will be reasonable in relation to the benefits to the Portfolio over
the long term.
F. It is understood that the Adviser may use brokers who (i) are
affiliated with the Adviser provided that no such broker will be utilized in any
transaction in which such broker acts as principal; and (ii) the commissions,
fees or other remuneration received by such brokers is reasonable and fair
compared to the commissions fees or other remuneration paid to other brokers in
connection with comparable transactions involving similar securities being
purchased or sold during a comparable period of time.
G. The Adviser shall provide such reports as the Trustees may
reasonably request with respect to each Portfolio's total brokerage and
portfolio transaction activities and the manner in which that business was
allocated.
4. DELEGATION OF ADVISER'S OBLIGATIONS AND SERVICES. With respect to any
or all Portfolios, the Adviser may enter into one or more contracts
("Sub-Advisory Contract") with a sub-adviser in which the Adviser delegates to
such sub-adviser any or all of its obligations or services specified in Section
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<PAGE>
2 of this Agreement, provided that each Sub-Advisory Agreement imposes on the
sub-adviser bound thereby all the duties and conditions the Adviser is subject
to under this Agreement, and further provided that each Sub-Advisory Agreement
meets all requirements of the Investment Company Act and rules thereunder.
5. EXPENSES OF THE FUND. It is understood that the Fund will pay all its
expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Fund shall include, without limitation:
A. fees payable for administrative services;
B. fees payable for accounting services;
C. the cost of obtaining quotations for calculating the value
of the assets of each Portfolio;
D. interest and taxes;
E. brokerage commissions, dealer spreads and other costs in
connection with the purchase or sale of securities;
F. compensation and expenses of its Trustees other than those
who are "interested persons" of the Fund within the meaning
of the Investment Company Act;
G. Legal and audit expenses;
H. fees and expenses related to the registration and
qualification of the Fund and its shares for distribution
under state and federal securities laws;
I. expenses of typesetting. printing and mailing reports,
notices and proxy material to shareholders of the Fund:
J. all other expenses incidental to holding meetings of the
Fund's shareholders, including proxy solicitations therefor:
K. premiums for fidelity bond and other insurance coverage;
L. the Fund's association membership dues;
M. expenses of typesetting for printing Prospectuses;
N. expenses of printing and distributing Prospectuses to
existing shareholders;
O. out-of-pocket expenses incurred in connection with the
provision of custodial and transfer agency services;
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<PAGE>
P. service fees payable by each Portfolio to the Distributor
for providing personal services to the shareholders of each
Portfolio and for maintaining shareholder accounts for those
shareholders;
Q. distribution fees; and
R. such non-recurring expenses as may arise, including costs
arising from threatened actions, actions, suits and
proceedings to which the Fund is a party and the legal
obligation which the Fund may have to indemnify its Trustees
and officers with respect thereto.
6. COMPENSATION OF THE ADVISER. For the services and facilities to be
furnished hereunder, the Adviser shall receive an advisory fee equivalent to the
annual rate listed along with each Portfolio's name in Schedule B attached
hereto. This advisory fee shall be payable monthly as soon as practicable after
the last day of each month based on the average of the daily values placed on
the net assets of the Fund as determined at the close of business on each day
throughout the month, with each Portfolio to contribute pro-rata to the payment
to the Adviser on the basis of its net assets. The assets of each Portfolio will
be valued separately as of the close of regular trading on the New York Stock
Exchange (currently 4:00 p.m., Eastern time) on each business day throughout the
month or, if the Fund lawfully determines the value of the net assets of any
Portfolio as of some other time on each business day, as of such time with
respect to that Portfolio. If the Fund determines the value of the net assets of
any Portfolio more than once on any business day, the last such determination on
that day shall be deemed to be the sole determination on that day. The value of
net assets shall be determined pursuant to the applicable provisions of the
Fund's Declaration of Trust, its By-Laws and the Investment Company Act. If,
pursuant to such provisions, the determination of the net asset value of any
Portfolio of the Fund is suspended for any particular business day, then the
value of the net assets of that Portfolio on that day shall be deemed to be the
value of its net assets as determined on the preceding business day. If the
determination of the net asset value of any Portfolio has been suspended for
more than one month, the Adviser's compensation payable at the end of that month
shall be computed on the basis of the value of the net assets of the Portfolio
as last determined (whether during or prior to such month). This advisory fee
shall also serve as compensation for the additional services also listed on
Schedule B provided by the Adviser under separate agreements with the Fund, with
respect to each Portfolio, provided that any related reasonable out-of-pocket
expenses incurred in the provision of services under those agreements shall be
borne by the Fund.
7. ACTIVITIES AND AFFILIATES OF THE ADVISER.
A. The services of the Adviser to the Fund are not to be deemed
exclusive, the Adviser being free to render services to others and engage in
other activities, provided, however, that such other services and activities do
not, during the term of this Agreement, interfere, in a material manner, with
the Adviser's ability to meet all of its obligations with respect to rendering
services to the Fund hereunder.
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B. The Fund acknowledges that the Adviser or one or more of its
"affiliated persons" may have investment responsibilities or render investment
advise to or perform other investment advisory services for other individuals or
entities and that the Adviser, its "affiliated persons" or any of its or their
directors, officers, agents or employees may buy, sell or trade in securities
for its or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 3, the Fund agrees that the Adviser or its "affiliated
persons" may give advice or exercise investment responsibility and take such
other action with respect to Affiliated Accounts which may differ from the
advice given or the timing or nature of action with respect to the Portfolios of
the Fund, provided that the Adviser acts in good faith. The Fund acknowledges
that one or more of the Affiliated Accounts may at any time hold, acquire,
increase, decrease, dispose of or otherwise deal with positions in investments
in which one or more Portfolios may have an interest. The Adviser shall have no
obligation to recommend for any Portfolio a position in any investment which an
Affiliated Account may acquire, and the Fund shall have no first refusal,
co-investment or other rights in respect of any such investment, either for its
Portfolios or otherwise.
C. Subject to and in accordance with the Declaration of Trust and
By-Laws of the Fund as currently in effect and the Investment Company Act and
the rules thereunder, it is understood that Trustees, officers and agents of the
Fund and shareholders of the Fund are or may be interested in the Adviser or its
"affiliated persons" as directors, officers, agents or shareholders of the
Adviser or its "affiliated persons"; that directors, officers, agents and
shareholders of the Adviser or its "affiliated persons" are or may be interested
in the Fund as trustees, officers, agents, shareholders or otherwise; that the
Adviser or its "affiliated persons" may be interested in the Fund as
shareholders or otherwise; and that the effect of any such interests shall be
governed by said Declaration of Trust, By-Laws and the Investment Company Act
and the rules thereunder.
8. LIABILITIES OF THE ADVISER.
A. Except as provided below, in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Fund or to any shareholder of the Fund or its Portfolios for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the purchase, holding or
sale of any security or the making of any investment for or on behalf of the
Fund.
B. No provision of this Agreement shall be construed to protect
any Trustee or officer of the Fund, or the Adviser, from liability in violation
of Sections 17(h), 17(i), 36(a) or 36(b) of the Investment Company Act.
9. EFFECTIVE DATE; TERM. This Agreement shall become effective on the
date first written above and shall remain in force for a period of two years
from such date, and from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of Trustees,
including the vote of a majority of the Trustees who are not "interested
26
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persons" of the Fund, cast in person at a meeting called for the purpose of
voting on such approval, or by vote of a majority of the outstanding voting
securities. The aforesaid provision shall be construed in a manner consistent
with the Investment Company Act and the rules and regulations thereunder.
10. ASSIGNMENT. No "assignment" of this Agreement shall be made by the
Adviser, and this Agreement shall terminate automatically in event of such
assignment. The Adviser shall notify the Fund in writing in advance of any
proposed change of "control" to enable the Fund to take the steps necessary to
enter into a new advisory agreement.
11. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement between the Adviser and the Fund, which amendment is subject
to the approval of the Trustees of the Fund and, where required by the
Investment Company Act, the shareholders of any affected Portfolio in the manner
required by the Investment Company Act and the rules thereunder.
12. TERMINATION. This Agreement:
A. may at any time be terminated without payment of any penalty
by the Fund with respect to any Portfolio (by vote of the
Board of Trustees of the Fund or by "vote of a majority of
the outstanding voting securities") on sixty (60) days'
written notice to the Adviser;
B. shall immediately terminate in the event of its
"assignment"; and
C. may be terminated with respect to any Portfolio by the
Adviser on sixty (60) days' written notice to the Fund.
13. DEFINITIONS. As used in this Agreement, the terms "affiliated
person," "assignment," 'control," "interested person" and "vote of a majority of
the outstanding voting securities" shall have the meanings set forth in the
Investment Company Act and the rules and regulations thereunder, subject to any
applicable orders of exemption issued by the Securities and Exchange Commission.
14. NOTICE. Any notice under this Agreement shall be given in writing
addressed and delivered or mailed postage prepaid to the other party to this
Agreement at its principal place of business.
15. SEVERABILITY. 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 shall not be affected thereby.
16. SHAREHOLDER LIABILITY. The Adviser is hereby expressly put on notice
of the limitation of shareholder liability as set forth in the Declaration of
Trust of the Fund and agrees that obligations assumed by the Fund pursuant to
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this Agreement shall be limited in all cases to the Fund and its assets, and if
the liability relates to one or more Portfolios, the obligations hereunder shall
be limited to the respective assets of such Portfolio or Portfolios. The Adviser
further agrees that it shall not seek satisfaction of any such obligation from
the shareholders or any individual shareholder of the Portfolios of the Fund,
nor from the Trustees or any individual Trustee of the Fund.
17. GOVERNING LAW. To the extent that state law has not been preempted
by the provisions of any law of the United States heretofore or hereafter
enacted, as the same may be amended from time to time, this Agreement shall be
administered, construed and enforced according to the laws of the State of
Delaware.
IN WITNESS WHEREOF the parties have caused this instrument to be signed
on their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date first written
above.
THE RODNEY SQUARE MULTI-MANAGER FUND
(SEAL) By:
--------------------------------------
President
WILMINGTON TRUST COMPANY
(SEAL) By:
--------------------------------------
Senior Vice President
28
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SCHEDULE A
THE RODNEY SQUARE MULTI-MANAGER FUND
PORTFOLIO LISTING
29
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SCHEDULE B
THE RODNEY SQUARE MULTI-MANAGER FUND
FEE AND SERVICES SCHEDULE
30
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EXHIBIT B
CURRENT INVESTMENT LIMITATIONS OF THE GROWTH PORTFOLIO
The investment limitations described below are fundamental, and may not
be changed without the affirmative vote of the lesser of (i) 67% or more of the
shares of the Portfolio present at a shareholders' meeting if holders of more
than 50% of the outstanding shares of the Portfolio are present in person or by
proxy or (ii) more than 50% of the outstanding shares of the Portfolio.
The Portfolio will not as a matter of fundamental policy:
1. with respect to 75% of the Portfolio's total assets, invest more than
5% of the value of its total assets in the securities of any one issuer, except
debt obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government obligations");
2. with respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer if such purchase would cause more than 10% of the
voting securities of such issuer to be held by the Portfolio;
3. borrow money, except that the Portfolio may borrow an amount not
exceeding 5% of its total assets for temporary or emergency purposes;
4. purchase securities (other than U.S. Government obligations), if such
purchase would cause more than 25% in the aggregate of the market value of the
total assets of the Portfolio at the time of such purchase to be invested in the
securities of one or more issuers having their principal business activities in
the same industry;
5. act as underwriter of the securities issued by others, except to the
extent that the purchase of securities in accordance with the Portfolio's
investment objective and policies directly from the issuer thereof and the later
disposition thereof may be deemed to be underwriting;
6. issue senior securities, except as appropriate to evidence
indebtedness that the Fund is permitted to incur and except that the Fund may
issue shares of additional series which the Trustees may establish;
7. purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein), interests
in oil, gas or mineral leases, commodities or commodity contracts, except that
the Fund, reserves the freedom of action (i) to hold and to sell real estate
acquired for the Portfolio as a result of the ownership of marketable securities
provided that the Portfolio's ownership of real estate for which there is no
established market will never exceed 10% of its net assets and (ii) to purchase
or sell futures contracts including but not limited to contracts for the future
delivery of securities and futures contracts based on securities indexes; or
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8. make loans to other persons, except loans of portfolio securities and
except to the extent that the purchase of debt obligations in accordance with
the Portfolio's investment objectives and policies and the entry into repurchase
agreements may be deemed to be loans.
In addition, the Portfolio has adopted several non-fundamental policies,
which can be changed by the Board of Trustees without shareholder approval.
As a matter of non-fundamental policy, the Portfolio will not:
1. purchase or otherwise acquire any security or invest in a repurchase
agreement with respect to any securities if, as a result, more than 15% of the
Portfolio's net assets (taken at current value) would be invested in repurchase
agreements not entitling the holder to payment of principal within seven days
and in securities that are illiquid by virtue of legal or contractual
restrictions on resale or the absence of a readily available market;
2. purchase the securities of open-end investment companies or invest
more than 10% of its total net assets, taken at market value, in the securities
of closed-end investment companies, provided that no purchase of securities of
closed-end companies shall be made except by purchase in the open market when no
commission or profit to a sponsor or broker-dealer results from such purchase
other than the customary broker's commission (except when part of a plan of
merger, consolidation, reorganization or acquisition of assets);
3. purchase securities on margin except to obtain such credits as may be
necessary for the clearance of the purchases and sales of securities, or make
short sales, unless by virtue of its ownership of other securities, it has the
right to obtain securities equivalent in kind and amount to the securities sold
and, if the right is conditional, the sale is made upon the same conditions; or
4. engage in futures contract transactions.
For purposes of fundamental investment limitation (1), repurchase
agreements fully collateralized by U.S. Government obligations will be treated
as U.S. Government obligations. Whenever an investment policy or limitation
states a maximum percentage of the Portfolio's assets that may be invested in
any security or other asset or sets forth a policy regarding quality standards,
such percentage or standard limitation shall be determined immediately after the
Portfolio's acquisition of such security or other asset. Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered when determining whether the investment
complies with the Portfolio's investment policies and limitations.
"Value" for the purposes of all investment limitations shall mean the
value used in determining the Portfolio's net asset value.
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EXHIBIT C
AMENDMENTS TO DECLARATION
OF TRUST OF THE RODNEY SQUARE MULTI-MANAGER FUND
WHEREAS, Article XI, Section 7 of the Declaration of Trust of the Rodney
Square Multi-Manager Fund ("Trust") provides that the Declaration may be amended
by the Trustees; and
WHEREAS, the Trustees desire to amend said Declaration of Trust;
NOW THEREFORE, the said Declaration of Trust shall be amended to revoke
in their entirety the following sections of articles of the Declaration of Trust
and the following sections of articles are substituted in place thereof as
follows:
ARTICLE I
NAME AND DEFINITIONS
NAME
SECTION 1. This Trust shall be known as "The Rodney Square Equity Fund."
DEFINITIONS
SECTION 2.
(f) "Shares" means the equal proportionate transferable units of
interest into which the beneficial interest of each Series or Class thereof,
shall be divided from time to time, and includes fractions of shares as well as
whole shares consistent with the requirements of Federal and/or other securities
laws (all of the transferable units of a Series or of a single Class may be
referred to as "Shares" as the context may require); and
(i) "Class" refers to the class of Shares of a Series of the Trust
established in accordance with the provisions of Article III.
* * * * *
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
SECTION 1. The beneficial interest in the Trust shall be divided into
such transferable Shares of one or more separate and distinct Series or Classes
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thereof as the Trustees shall from time to time create and establish. The number
of Shares is unlimited and each Share shall have a par value of $0.001 per Share
and upon issuance in accordance with the terms thereof shall be fully paid and
nonassessable. The Trustees shall have full power and authority, in their sole
discretion and without obtaining any prior authorization or vote of the
Shareholders of the Trust, to create and establish (and to change in any manner)
Shares with such preferences, terms of conversion, voting powers, rights and
privileges as the Trustees may from time to time determine, to divide or combine
the Shares into a greater or lesser number, to classify or reclassify any
unissued Shares into one or more Series or Classes of Shares, to abolish any one
or more Series or Classes of Shares, and to take such other action with respect
to the Shares as the Trustees may deem desirable. The Trustees, in their
discretion without a vote of the Shareholders, may divide the Shares of
beneficial interest of any Series into Classes. In such event, each Class of a
Series shall represent interests in the assets of a Series and have identical
voting, dividend, liquidation and other rights and the same terms and
conditions, except that expenses allocated to that Class of a Series may be
borne solely by such Class as shall be determined by the Trustees and a Class of
a Series may have exclusive voting rights with respect to matters affecting only
that Class. Without limiting the authority of the Trustees set forth in this
Section 1 to establish and designate any further Series, the Trustees have
established and designated a Series of Shares to be known as the "Large Cap
Growth Portfolio."
ESTABLISHMENT OF SERIES OR CLASS
SECTION 2. The establishment of any Series or Class in addition to those
set forth in Section 1 shall be effective upon the adoption of a resolution by a
majority of the then Trustees setting forth such establishment and designation
and the relative rights and preferences of the Shares of such Series or Class
thereof. At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated, the Trustees may by a
majority vote abolish that Series or Class and the establishment and designation
thereof.
INVESTMENT IN THE TRUST
SECTION 4. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the appropriate
Series is authorized to invest, valued as provided in Article IX, Section 3.
After the date of the initial contribution of capital, the number of Shares to
represent the initial contribution may in the Trustees' discretion be considered
as outstanding and the amount received by the Trustees on account of the
contribution shall be treated as an asset of the Trust or a Series thereof, as
appropriate. Subsequent investments in the Trust or Series shall be credited to
each Shareholder's account in the form of full Shares at the Net Asset Value per
Share next determined after the investment is received; provided, however, that
the Trustees may, in their sole discretion, (a) impose a sales charge upon
investments in the Trust or Series and (b) issue fractional Shares. The Trustees
shall have the right to refuse to accept investments in the Trust or any Series
at any time without any cause or reason therefor whatsoever.
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ASSETS AND LIABILITIES OF SERIES
SECTION 5. All consideration received by the Trust for the issue or sale
of Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall be
referred to as "assets belonging to" that Series. In addition, any assets,
income, earnings, profits, and proceeds thereof, funds, or payments which are
not readily identifiable as belonging to any particular Series shall be
allocated by the Trustees between and among one or more of the Series in such
manner as they, in their sole discretion, deem fair and equitable. Each such
allocation shall be conclusive and binding upon the Shareholders of all Series
for all purposes, and shall be referred to as assets belonging to that Series.
The assets belonging to a particular Series shall be so recorded upon the books
of the Trust, and shall be held by the Trustees in Trust for the benefit of the
holders of Shares of that Series. The assets belonging to each particular Series
shall be charged with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series, except that expenses allocated
solely to a particular Class shall be borne by that Class. Any general
liabilities, expenses, costs, charges or reserves of the Trust or Series which
are not readily identifiable as belonging to any particular Series or Class
shall be allocated and charged by the Trustees between or among any one or more
of the Series or Classes in such manner as the Trustees in their sole discretion
deem fair and equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series or Classes for all purposes. Any creditor of
any Series may look only to the assets of that Series to satisfy such creditor's
debt. See Article X, Section 1.
* * * * *
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
SECTION 1.
(m) To establish separate and distinct Series with separately defined
investment objectives and policies and distinct investment purposes in
accordance with the provisions of Article III and to establish separate Classes
thereof.
(n) To allocate assets, liabilities and expenses of the Trust to a
particular Series and liabilities and expenses to a particular Class thereof, or
to apportion the same between or among two or more Series or Classes, as
applicable, provided that any liabilities or expenses incurred by a particular
Series or Class shall be payable solely by that Series or Class as provided for
in Article III.
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* * * * *
ARTICLE VIII
SHAREHOLDERS VOTING POWERS AND MEETINGS
VOTING POWERS
SECTION 1. The Shareholders shall have power to vote (i) for the
election of Trustees as provided in Article IV, Section 2, (ii) for the removal
of Trustees as provided in Article IV, Section 3(d), (iii) with respect to any
investment advisory or management contract as provided in Article VII, Section
1, (iv) with respect to any termination or reorganization of the Trust as
provided in Article XI, Section 4, (v) with respect to the amendment of this
Declaration of Trust to the extent and as provided in Article XI, Section 7,
(vi) to the same extent as the shareholders of a Massachusetts business
corporation, as to whether or not a court action, proceeding or claim should be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder of a particular
Series or Class shall not be entitled to bring any derivative or class action on
behalf of any other Series or Class of the Trust, and (vii) with respect to such
additional matters relating to the Trust as may be required or authorized by
law, by this Declaration of Trust, or the By-Laws of the Trust, if any, or any
registration of the Trust with the Securities and Exchange Commission (the
"Commission") or any State, or as the Trustees may consider desirable. On any
matter submitted to a vote of the Shareholders, all Shares shall be voted by
individual Series, except (i) when required by the 1940 Act, Shares shall be
voted in the aggregate and not by individual Series and (ii) when the Trustees
have determined that the matter affects only the interests of one or more Series
or one or more Classes, then only the Shareholders of such Series or Class shall
be entitled to vote thereon. Each whole Share shall be entitled to one vote as
to any matter on which it is entitled to vote, and each fractional Share shall
be entitled to a proportionate fractional vote. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
Until Shares are issued, the Trustees may exercise all rights of Shareholders
and may take any action required or permitted by law, this Declaration of Trust
or any By-Laws of the Trust to be taken by Shareholders.
MEETINGS
SECTION 2. The first Shareholders' meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other place
as the Trustees may designate. Special meetings of the Shareholders of any
Series or Class thereof may be called by the Trustees and shall be called by the
Trustees upon the written request of Shareholders owning at least one-tenth of
the outstanding Shares entitled to vote. Whenever ten or more Shareholders
meeting the qualifications set forth in Section 16(c) of the 1940 Act, as the
same may be amended from time to time, seek the opportunity of furnishing
materials to the other Shareholders with a view to obtaining signatures on such
a request for a meeting, the Trustees shall comply with the provisions of said
Section 16(c) with respect to providing such Shareholders access to the list of
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the Shareholders of record of the Trust or the mailing of such materials to such
Shareholders of record. Shareholders shall be entitled to at least fifteen days'
notice of any meeting.
QUORUM AND REQUIRED VOTE
SECTION 3. A majority of Shares entitled to vote in person or by proxy
shall be a quorum for the transaction of business at a Shareholders' meeting,
except that where any provision of law or of this Declaration of Trust permits
or requires that holders of any Series or Class thereof shall vote as a Series
or Class thereof, then a majority of the aggregate number of Shares of that
Series or Class thereof entitled to vote shall be necessary to constitute a
quorum for the transaction of business by that Series or Class thereof. Any
lesser number shall be sufficient for adjournments. Any adjourned session or
sessions may be held, within a reasonable time after the date set for the
original meeting, without the necessity of further notice. Except when a larger
vote is required by any provision of this Declaration of Trust or the By-Laws, a
majority of the Shares voted in person or by proxy shall decide any questions
and a plurality shall elect a Trustee, provided that where any provision of law
or of this Declaration of Trust permits or requires that the holders of any
Series shall vote as a Series, or a Class shall vote as a Class, then a majority
of the Shares of that Series or Class voted on the matter shall decide that
matter insofar as the Series or Class is concerned.
* * * * *
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
SECTION 1.
(b) The Trustees shall have power, to the fullest extent permitted by
the laws of the Commonwealth of Massachusetts, at any time to declare and cause
to be paid dividends on Shares of a particular Series, from the assets belonging
to that Series, which dividends, at the election of the Trustees, may be paid
daily or otherwise pursuant to a standing resolution or resolutions adopted only
once or with such frequency as the Trustees may determine, and may be payable in
Shares of that Series or Class thereof, as appropriate, at the election of each
Shareholder of that Series or Class. All dividends and distributions on Shares
of a particular Series shall be distributed pro rata to the holders of that
Series in proportion to the number of Shares of that Series held by such holders
at the date and time of record established for the payment of such dividends or
distributions, except that such dividends and distributions shall appropriately
reflect expenses allocated to a particular Class of such Series.
(c) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute a "stock dividend" pro rata
among the Shareholders of a particular Series as of the record date of that
Series (fixed as provided in Section 3 of Article XI hereof).
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REDEMPTIONS
SECTION 2. In case any holder of record of Shares of a particular Series
or Class desires to dispose of his Shares, he may deposit at the office of the
transfer agent or other authorized agent of that Series a written request or
such other form of request as the Trustees may from time to time authorize,
requesting that the Series purchase the Shares in accordance with this Section
2; and the Shareholder so requesting shall be entitled to require the Series to
purchase, and the Series or the principal underwriter of the Series shall
purchase his said Shares, but only at the Net Asset Value of the Series or Class
of shares held by the shareholder (as described in Section 3 hereof) minus any
applicable sales charge or redemption or repurchase fee. The Series shall make
payment for any such Shares to be redeemed, as aforesaid, in cash or property
from the assets of that Series and payment for such Shares shall be made by the
Series or the principal underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request is effective;
provided, however, that if Shares being redeemed have been purchased by check,
the Trust may postpone payment until the Trust has assurance that good payment
has been collected for the purchase of the Shares. The Trust may require
Shareholders to pay a sales charge to the Trust, the underwriter or any other
person designated by the Trustees upon redemption or repurchase of Shares of any
Series or Class thereof, in such amount as shall be determined from time to time
by the Trustees. The amount of such sales charge may but need not vary depending
on various factors, including without limitation the holding period of the
redeemed or repurchased Shares. The Trustees may also charge a redemption or
repurchase fee in such amount as may be determined from time to time by the
Trustees.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
SECTION 3. The term "Net Asset Value" of any Series shall mean that
amount by which the assets of that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Such value per Share shall
be determined separately for each Series of Shares and shall be determined on
such days and at such times as the Trustees may determine. Such determination
may be made on a Series by Series or Class by Class basis, as appropriate, and
shall include any expense allocated to a specific Series or Class. The
determination shall be made with respect to securities for which market
quotations are readily available, at the market value of such securities; and
with respect to other securities and assets, at the fair value as determined in
good faith by the Trustees, provided, however, that the Trustees, without
Shareholder approval, may alter the method of appraising portfolio securities
insofar as permitted under the 1940 Act and the rules, regulations and
interpretations thereof promulgated or issued by the Commission or insofar as
permitted by any order of the Commission applicable to the Series. The Trustees
may delegate any of their powers and duties under this Section 3 with respect to
appraisal of assets and liabilities. At any time the Trustees may cause the
value per Share last determined to be determined again in a similar manner and
may fix the time when such predetermined values shall become effective.
* * * * *
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ARTICLE XI
MISCELLANEOUS
TERMINATION OF TRUST
SECTION 4.
(b) Subject to a Majority Shareholder Vote of each Series affected by
the matter or, if applicable, to a Majority Shareholder Vote of the Trust, the
Trustees may
(i) sell, convey, merge and transfer all or substantially all of the
assets of the Trust or any affected Series to another trust,
partnership, association or corporation organized under the laws of any
state which is an open-end management investment company as defined in
the 1940 Act, for adequate consideration which may include the
assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust or any affected Series, and which
may include shares of beneficial interest or stock of such trust,
partnership, association or corporation; or
(ii) at any time sell and convert into money all or substantially all
of the assets of the Trust or any affected Series.
Upon making provision for the payment of all liabilities of the Trust or
any affected Series in either (i) or (ii), by such assumption or otherwise, the
Trustees shall distribute the remaining proceeds or assets (as the case may be)
ratably among the holders of the Shares of the Trust or any affected Series then
outstanding; however, the payment to any particular Class within such Series may
be reduced by any fees, expenses or charges allocated to that Class.
* * * * *
Said Declaration of Trust dated August 19, 1986, as previously amended
and restated on November 10, 1986, and as amended on December 29, 1986, is
hereby ratified and confirmed in all other respects.
IN WITNESS WHEREOF, the undersigned, being the majority of the Trustees
of the Trust, have executed this Amended Declaration of Trust this __ day of
_______, 199_.
--------------------
--------------------
--------------------
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THE RODNEY SQUARE MULTI-MANAGER FUND
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 23, 1997
KNOWN ALL MEN BY THESE PRESENTS that the undersigned shareholder(s) of
The Rodney Square Multi-Manager Fund (the "Fund") hereby appoints ________ and
________ or any one of them true and lawful attorneys, with power of
substitution of each, to vote all shares which the undersigned is entitled to
vote, at the Special Meeting of Shareholders to be held on December 23, 1997 and
at any adjournment thereof ("Meeting").
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES. The attorneys named
will vote the shares represented by this proxy in accordance with the choices
made on this card. IF NO CHOICE IS INDICATED AS TO ANY ITEM, THIS PROXY WILL BE
VOTED AFFIRMATIVELY ON THESE MATTERS.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Meeting.
1. To elect Eric Brucker, Fred L. Buckner, Robert J. Christian, Martin L.
Klopping and John J. Quindlen, as Trustees of the Fund.
FOR /__/ AGAINST /__/ ABSTAIN /__/
All nominees listed above (except as marked to the contrary below)
- -----------------------------
(INSTRUCTION: To withhold authority to vote for any individual nominee(s) write
the name(s) on the line provided above.)
2. To ratify the selection of Ernst & Young LLP as the Fund's independent
certified public accountants.
FOR /__/ AGAINST /__/ ABSTAIN /__/
3. To approve a new investment advisory agreement for the Growth
Portfolio.
FOR /__/ AGAINST /__/ ABSTAIN /__/
4. To approve the amendment of the investment objective of the Growth
Portfolio.
FOR /__/ AGAINST /__/ ABSTAIN /__/
40
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5. To approve amendments to the fundamental investment limitations of the Growth
Portfolio.
FOR /__/ AGAINST /__/ ABSTAIN /__/
To vote against the proposed changes to one or more specific fundamental
investment limitations, but to approve the others, place an "X" in the
box at left AND indicate the number(s) (as set forth in the proxy
statement) of the investment limitation(s) you do not want to change on
this line: ____________________
6. To approve amendments to the Fund's Declaration of Trust.
FOR /__/ AGAINST /__/ ABSTAIN /__/
7. To transact any other business as may properly come before the Meeting
or any adjournment thereof.
Date , 1997
------------------
------------------
Please sign exactly as your name or names appear
hereon. If shares are held jointly, either holder
may sign. Corporate proxies should be signed by an
authorized officer.
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY TO AVOID ADDITIONAL EXPENSE TO
THE FUND.
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