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SUPPLEMENT TO THE PROSPECTUS
TMK/United Funds, Inc.
The following information supplements and supersedes any contrary information
contained in the Prospectus:
At a special meeting of shareholders scheduled for July 24, 1997 ("Special
Meeting"), shareholders of each series (each, a "Portfolio") of TMK/United
Funds, Inc. will be asked to approve proposals relating to the following, as
applicable to one or more of the Portfolios:
Investment Restrictions. Shareholders of each Portfolio will be asked to
approve elimination of or changes to certain of the Portfolios' fundamental
investment restrictions. If approved, the current fundamental restrictions of a
Portfolio other than Money Market Portfolio, regarding mortgaging or pledging
securities, arbitrage transactions, and options, futures contracts, forward
currency contracts and other derivative instruments, and each Portfolio's
current fundamental restriction regarding securities owned by affiliated
persons, would be eliminated. Also, if approved, the current fundamental
restrictions regarding diversification and loans, and, for each Portfolio other
than Money Market Portfolio, investments in commodities and commodity contracts,
margin purchases and short sales, would be modified.
If the foregoing changes to a Portfolio's fundamental investment restrictions
are approved, that Portfolio intends to implement new non-fundamental, operating
policies regarding derivative instruments and mortgaging or pledging securities.
These operating policies would be in addition to the other non-fundamental
restrictions and policies set forth in the prospectus and Statement of
Additional Information and could be changed by the Board of Directors without
shareholder approval.
The Fund intends to change, after the Special Meeting, the goal of Income
Portfolio to state that the Income Portfolio "seeks, as a primary goal, to
maintain current income, subject to market conditions. As a secondary goal, the
Portfolio seeks capital growth."
The Fund also intends to change, after the Special Meeting, the Asset Strategy
Portfolio's goal to state that the Asset Strategy Portfolio "seeks high total
return over the long term" and then (a) eliminate the operating policy limiting
the amount of a reallocation among the Portfolio's asset classes and (b) revise
the current operating policy regarding the specified mix and ranges of its
assets as follows:
Mix Range
Stock class 0-100%
70%
Bond class 0-100%
25%
Short-term class 0-100%
5%
To be attached to the cover page of the Prospectus of TMK/United Funds, Inc.
dated April 4, 1997, as supplemented April 22, 1997.
This Supplement is dated May 29, 1997.
U-1145
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TMK/UNITED FUNDS, INC.
Supplement to the Statement of Additional Information
Dated April 4, 1997, As Supplemented April 22, 1997
The following information supplements and supersedes any contrary information
contained in the Statement of Additional Information:
Investment Restrictions. At a special meeting of shareholders scheduled for
July 24, 1997 ("Special Meeting"), shareholders of each series (each, a
"Portfolio") of TMK/United Funds, Inc. will be asked to approve elimination and
modification of certain of the Portfolios' fundamental investment restrictions.
If approved, the following investment restrictions will supersede and replace
the fundamental investment restrictions listed in the "Investment Restrictions"
section:
A Portfolio (other than Asset Strategy Portfolio) may not:
Issue senior securities (except that each Portfolio may borrow money as
described below);
Purchase or sell physical commodities; however, this policy shall not
prevent a Portfolio other than Money Market Portfolio from purchasing
and selling foreign currency, futures contracts, options, forward
contracts, swaps, caps, collars, floors, and other financial
instruments;
Buy real estate nor any nonliquid interests in real estate investment
trusts;
Make loans, except loans of portfolio securities, and a Portfolio may buy
debt securities and other obligations consistent with its goal and its
other investment policies and restrictions;
Invest for the purpose of exercising control or management of other
companies;
Sell securities short (unless, for a Portfolio other than Money Market
Portfolio, it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short) or purchase securities on
margin; except that, for a Portfolio other than Money Market Portfolio,
(1) this policy does not prevent the Portfolio from entering into short
positions in foreign currency, futures contracts, options, forward
contracts, swaps, caps, collars, floors and other financial
instruments, (2) the Portfolio may obtain such short-term credits as
are necessary for the clearance of transactions, and (3) the Portfolio
may make margin payments in connection with futures contracts,
options, forward contracts, swaps, caps, collars, floors and other
financial instruments;
Engage in the underwriting of securities, except insofar as it may be
deemed an underwriter in selling shares of a Portfolio and except as it
may be deemed such in the sale of restricted securities;
Except for Small Cap Portfolio (see "Borrowing"), borrow money except from
banks as a temporary measure or for extraordinary or emergency purposes
and not for investment purposes, and only up to 5% of the value of a
Portfolio's total assets; or
With respect to 75% of its total assets, purchase securities of any one
issuer (other than cash items and "Government securities" as defined in
the 1940 Act), if immediately after and as a result of such purchase,
(a) the value of the holdings 2of the Portfolio in the securities of
such issuer exceeds 5% of the value of the Portfolio's total assets, or
(b) the Portfolio owns more than 10% of the outstanding voting
securities of such issuer; or may not purchase a security if, as a
result, more than 25% of its assets would then be invested in
securities of companies in any one industry (U.S. Government securities
are not included in this restriction), provided, however, that Science
and Technology Portfolio may invest more than 25% of its assets in
securities of companies in the science and technology industries.
The following are fundamental policies of Asset Strategy Portfolio and may
not be changed without shareholder approval. Asset Strategy Portfolio may
not:
With respect to 75% of the Portfolio's total assets, purchase the
securities of any issuer (other than obligations issued or guaranteed
by the United States government, or any of its agencies or
instrumentalities) if, as a result thereof, (a) more than 5% of the
Portfolio's total assets would be invested in securities of such
issuer, or (b) the Portfolio would hold more than 10% of the
outstanding voting securities of such issuer;
Issue bonds or any other class of securities preferred over shares of the
Portfolio in respect of the Portfolio's assets or earnings, provided
that the Portfolio may issue additional classes of shares in accordance
with the Fund's Articles of Incorporation;
Sell securities short (unless it owns or has the right to obtain securities
equivalent in kind and amount to the securities sold short) or purchase
securities on margin, except that (1) this policy does not prevent the
Portfolio from entering into short positions in foreign currency,
futures contracts, options, forward contracts, swaps, caps, collars,
floors and other financial instruments, (2) the Portfolio may obtain
such short-term credits as are necessary for the clearance of
transactions, and (3) the Portfolio may make margin payments in
connection with futures contracts, options, forward contracts, swaps,
caps, collars, floors and other financial instruments;
Borrow money, except that the Portfolio may borrow money for emergency or
extraordinary purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of the value of its total assets (less
liabilities other than borrowings). Any borrowings that come to exceed
33 1/3% of the value of the Portfolio's total assets by reason of a
decline in net assets will be reduced within three days to the extent
necessary to comply with the 33 1/3% limitation. For purposes of this
limitation, "three days" means three days, exclusive of Sundays and
holidays;
Underwrite securities issued by others, except to the extent that the
Portfolio may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
Purchase the securities of any issuer (other than obligations issued or
guaranteed by the United States government or any of its agencies or
instrumentalities) if, as a result, more than 25% of the Portfolio's
total assets (taken at current value) would be invested in the
securities of issuers having their principal business activities in the
same industry;
Invest in real estate limited partnerships or purchase or sell real estate
unless acquired as a result of ownership of securities (but this shall
not prevent the Portfolio from purchasing and selling securities issued
by companies or other entities 3or investment vehicles that deal in
real estate or interests therein, nor shall this prevent the Portfolio
from purchasing interests in pools of real estate mortgage loans);
Purchase or sell physical commodities, except that the Portfolio may
purchase and sell precious metals for temporary, defensive purposes;
however, this policy shall not prevent the Portfolio from purchasing
and selling foreign currency, futures contracts, options, forward
contracts, swaps, caps, collars, floors and other financial
instruments; or
Make loans, except (a) by lending portfolio securities provided that no
securities loan will be made if, as a result thereof, more than 10% of
the Portfolio's total assets (taken at current value) would be lent to
another party; (b) through the purchase of debt securities and other
obligations consistent with its goal and its other investment policies
and restrictions; and (c) by engaging in repurchase agreements with
respect to portfolio securities.
As an additional fundamental policy of Money Market Portfolio that may not
be changed without shareholder approval, Money Market Portfolio may not:
Engage in arbitrage transactions; or
Pledge, mortgage or hypothecate assets as security for indebtedness except
to secure permitted borrowings.
If the proposed changes to a Portfolio's fundamental investment restrictions are
approved, that Portfolio intends to implement the following new non-fundamental,
operating policies which would supersede and replace the Portfolio's current
non-fundamental restrictions and policies on these matters:
Generally, the Portfolio may purchase and sell any type of derivative
instrument (including, without limitation, futures contracts, options,
forward contracts, swaps, caps, collars, floors and indexed securities).
However, the Portfolio will only purchase or sell a particular
derivative instrument if the Portfolio is authorized to invest in the
type of asset by which the return on, or value of, the derivative
instrument is primarily measured or, with respect to foreign currency
derivatives, if the Portfolio is authorized to invest in foreign
securities.
The Portfolio may not pledge its assets in connection with any permitted
borrowings; however, this policy does not prevent the Portfolio from
pledging its assets in connection with its purchase and sale of futures
contracts, options, forward contracts, swaps, caps, collars, floors and
other financial instruments.
This Supplement is dated May 29, 1997.
