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. approved proposals relating to the following, as applicable to one
or more of the Portfolios:
Investment Restrictions. Shareholders of each Portfolio approved the
elimination of the current fundamental restrictions of that 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 approved elimination of the Portfolio's
current fundamental restriction regarding securities owned by affiliated
persons. Also, shareholders approved modification of 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.
Since the foregoing changes to a Portfolio's fundamental investment restrictions
were approved, that Portfolio intends to implement new non-fundamental,
operating policies regarding derivative instruments and mortgaging or pledging
securities. These operating policies will be in addition to the other non-
fundamental restrictions and policies set forth in the Prospectus and Statement
of Additional Information and can be changed by the Board of Directors without
shareholder approval.
The Fund intends to change 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 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%
The Fund intends to implement the foregoing changes on October 1, 1997.
To be attached to the cover page of the Prospectus of TMK/United Funds, Inc.
dated April 4, 1997, as previously supplemented.
This Supplement is dated July 25, 1997.
U-1160
<PAGE>
TMK/UNITED FUNDS, INC.
Supplement to the Statement of Additional Information
Dated April 4, 1997, As Previously Supplemented
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. approved elimination and modification of
certain of the Portfolios' fundamental investment restrictions. As approved and
as planned to be implemented October 1, 1997, 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:
(i) Issue senior securities (except that each Portfolio may borrow money
as described below);
(ii) 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;
(iii) Buy real estate nor any nonliquid interests in real estate investment
trusts;
(iv) Make loans, except loans of portfolio securities, and a Portfolio may
buy debt securities and other obligations consistent with its goals
and its other investment policies and restrictions;
(v) Invest for the purpose of exercising control or management of other
companies;
(vi) 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;
(vii) 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;
(viii) 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
(ix) 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 of 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 buy 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.
As additional fundamental policies of Money Market Portfolio that may not
be changed without shareholder approval, Money Market Portfolio may not:
(i) Engage in arbitrage transactions; or
(ii) Pledge, mortgage or hypothecate assets as security for indebtedness
except to secure permitted borrowings.
The following are fundamental policies of Asset Strategy Portfolio and may
not be changed without shareholder approval. Asset Strategy Portfolio may
not:
(i) 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;
(ii) 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;
(iii) 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;
(iv) 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;
(v) 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;
(vi) 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;
(vii) 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 or 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);
(viii) 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
(ix) 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.
Since the proposed changes to the Portfolios' fundamental investment
restrictions were approved, the Portfolios intend to implement, effective
October 1, 1997, the following new non-fundamental, operating policies which
would supersede and replace the Portfolio's current non-fundamental restrictions
and policies on these matters:
(i) 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.
(ii) 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 July 25, 1997.
