CLEARWATER INVESTMENT TRUST
Clearwater Small Cap Fund
332 Minnesota Street, Suite 2100
St. Paul, Minnesota 55101
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held June 24, 1999
A special meeting of shareholders of the fund (meeting) will be held on
Thursday, June 24, 1999, at 8:30 a.m. (Central time) at 332 Minnesota Street,
Suite 2100, St. Paul, Minnesota 55101 for the following purposes:
(1) To approve the subadvisory contract with Kennedy Capital Management; and
(2) To transact other business that may properly come before the meeting or any
adjournment of the meeting.
Your Trustees Unanimously Recommend That You Vote
Vote In Favor Of this Proposal.
Fund shareholders of record at the close of business on April 30, 1999
will be entitled to vote at the meeting or at any adjournment of the meeting.
The proxy statement and proxy card are being mailed to shareholders on or about
May 14, 1999.
It is important that you return your signed and dated proxy card
promptly, regardless of the size of your holdings, so that a quorum may be
assured.
By order of the board of trustees
Philip W. Pascoe, Chairman
<PAGE>
May 14, 1999
CLEARWATER INVESTMENT TRUST
Clearwater Small Cap Fund
332 Minnesota Street, Suite 2100
St. Paul, Minnesota 55101
PROXY STATEMENT
GENERAL
This proxy statement is furnished in connection with the solicitation
of proxies by and on behalf of the board of trustees of Clearwater Investment
Trust (trust) to be used at the special meeting of shareholders (meeting) of
Clearwater Small Cap Fund (fund) to be held at 332 Minnesota Street, Suite 2100,
St. Paul, Minnesota 55101 on Thursday, June 24, 1999, at 8:30 a.m. (Central
time) for the purpose set forth in the accompanying Notice of Meeting.
The trustees have fixed the close of business on April 30, 1999 as the
record date (record date) for determining the shareholders of the fund entitled
to notice of and to vote at the meeting. These shareholders will be entitled to
one vote per share at the meeting or any adjournment of the meeting. On the
record date, 3,208,958.609shares of beneficial interest of the fund were
outstanding. Appendix A sets forth the persons who owned beneficially or of
record more than 5% of the fund's shares on the record date.
Proxies will be solicited by mail and also may be solicited in person
or by telephone by officers of the trust, Clearwater Management Company (CMC),
the fund's investment adviser, or the trustees.
This proxy statement and the proxy card are being mailed to
shareholders on or about May 14, 1999.
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PROPOSAL 1
Approval of a new subadvisory contract
with Kennedy Capital Management
General
CMC provides investment advisory services to the fund pursuant to a
management contract that was approved by shareholders on February 24, 1998. CMC
is a Minnesota corporation, is registered as an investment adviser under the
Investment Advisers Act of 1940 (Advisers Act) and is located at 322 Minnesota
Street, St. Paul, Minnesota 55101. CMC and the fund's trustees have delegated
responsibility to manage the fund's investment portfolio to Kennedy Capital
Management (KCM) pursuant to a subadvisory contract among CMC, the trust, on
behalf of the fund, and KCM (existing subadvisory contract).
KCM has been providing subadvisory services to the fund since January
1, 1994. The existing subadvisory contract was approved by the trustees on
December 31, 1993 in reliance on a provision of the Investment Company Act of
1940, as amended (1940 Act), and by shareholders on April 20, 1994. Shareholders
also approved an amendment to the existing subadvisory contract on February 24,
1998. KCM is a Missouri corporation, is registered as an investment adviser
under the Advisers Act, and is located at 10829 Olive Boulevard, St. Louis,
Missouri, 63141.
The trust is registered and regulated as an investment company under
the 1940 Act. The 1940 Act provides that an investment company's investment
subadvisory agreement terminates automatically upon its "assignment." Under the
1940 Act, a direct or indirect transfer of a controlling block of the voting
securities of any person controlling an investment subadviser is deemed to be an
assignment. As described further below, the ownership of KCM has changed and the
existing subadvisory contract has terminated as a result of that change.
The change of control
KCM was founded in 1980 by Mr. Gerald T. Kennedy to offer advice,
investment management and related services to institutional and individual
clients. On March 17, 1999, Mr. Kennedy died unexpectedly. At the time of his
death, approximately 75% of the stock of KCM was held in a trust of which Mr.
Kennedy was the beneficiary. No other person or entity at that time owned more
than 10% of the stock of KCM. The 1940 Act presumes that beneficial ownership of
more than 25% of a company's stock gives the owner "control" over the company.
Since Mr. Kennedy's death, beneficial ownership of his stock has been
transferred to a marital trust for the benefit of his wife, Elizabeth Kennedy.
To provide for continuity of investment subadvisory services to the
fund as a result of the change in control of KCM, the trustees, including the
trustees who are not "interested" persons of the trust, CMC or KCM at a meeting
held on April 16, 1999, voted to approve, and recommended that the fund's
shareholders approve, a new subadvisory contract (new subadvisory contract) with
KCM. Under the new subadvisory contract, KCM will continue to provide investment
portfolio management services to the fund. Approval of the new subadvisory
contract will not increase the subadvisory fee rate paid by the fund.
During the period from March 17, 1999 to April 16, 1999, KCM agreed to
continue to provide
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<PAGE>
services to the fund on the same terms as in the existing subadvisory agreement.
Fees that would have been paid to KCM during that period have been held in
escrow by CMC pending shareholder approval of the terms of the new subadvisory
contract. Your vote to approve the new subadvisory contract will be considered
to include approval of payment to KCM of its fee for subadvisory services to the
fund during the period from March 17 to April 16, 1999.
Material terms of the new subadvisory contract
The material terms of the new subadvisory contract are substantially
identical to those of the existing subadvisory contract. The following
discussion of the new subadvisory contract is only a summary of the form of the
contract attached to the proxy statement as EXHIBIT A. You should read the
entire form of contract.
The new subadvisory contract provides that (i) KCM will, subject to the
supervision of CMC and the board of trustees, regularly provide the fund with
advice concerning the investment management of the fund's portfolio as
appropriate to the achievement of the investment objectives and place orders for
the purchase and sale of portfolio securities of the fund; (ii) the new
subadvisory contract will remain in full force and effect for two years from the
date it was signed and from year to year thereafter upon the approvals required
by the 1940 Act and will terminate automatically in the event of its assignment;
(iii) in the event that the new subadvisory contract terminates during any
portion of a year, the fee due to KCM shall be prorated for that portion of a
calendar quarter during which the contract was in effect; and (iv) KCM is not
liable to CMC, the trust or any shareholder, except for willful misfeasance, bad
faith or gross negligence or for reckless disregard of its obligations and
duties under the contract.
Material difference between the existing subadvisory contract and the new
subadvisory contract
Amendment and Approval Provisions. The SEC occasionally issues rules or
grants exemptive relief from certain specific requirements of the 1940 Act when
it believes that such actions are in the public interest. The existing
subadvisory contract recites word for word certain provisions of the 1940 Act
with respect to trustee and shareholder approval of amendments to the contract
and the annual approval of the contract. The new subadvisory contract has been
revised to delete these specific recitations and states that amendments and
approvals will be obtained in accordance with the requirements of the 1940 Act,
as such requirements may be modified by rule, regulation or order of the SEC.
Although the wording in the new subadvisory contract has changed, the contract
still requires that it can only be amended or approved on an ongoing basis in
accordance with the regulatory requirements of the 1940 Act.
Trustees' evaluation
The trustees have considered several factors relating to the new
subadvisory contract with KCM and believe that it would be in the best interests
of the fund and its shareholders that the new subadvisory contract with KCM be
approved to permit KCM to continue to serve as the fund's subadviser. In making
this determination, the trustees considered KCM's qualifications as an
investment adviser, the nature of the services provided in the past and to be
provided to the fund by KCM, and KCM's investment strategy. The trustees also
considered the fund's performance history since KCM assumed responsibility to
manage the fund's investment portfolio in 1994 and the fact that the change in
ownership is not expected to result in any changes to the investment philosophy
at KCM, the management of KCM or the portfolio manager assigned to manage the
fund's investments. The trustees approved the subadvisory fee to be paid by CMC
to KCM based on its analysis of the factors described above. The trustees
believe the new subadvisory contract and the proposed subadvisory fee to be
reasonable and fair, and the appointment of KCM to be in the best interests of
the fund's shareholders.
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In evaluating the change to the approval and amendment provisions of
the new subadvisory contract, the trustees noted that although the text of the
contract was amended, the amendments would not alter the requirement that the
subadvisory contract be approved in accordance with the regulatory requirements
of the 1940 Act as in effect at the time of the approval. The trustees
determined that the amended provisions continue to provide the protection
afforded to the fund and the shareholders by the 1940 Act.
Trustees' Recommendation
The trustees unanimously recommend that you vote to approve the
subadvisory contract with KCM.
Required Vote
Approval of the new subadvisory contract requires an affirmative vote
of a majority of the outstanding shares of the fund which means the vote of the
lesser of (i) 67% or more of the shares present at the meeting, if the holders
of more than 50% of the shares of the fund are present or represented by proxy,
or (ii) more than 50% of the fund's outstanding shares. If the fund's
shareholders do not approve the new subadvisory contract, the trustees will seek
to obtain interim advisory services for the fund either from KCM or from another
advisory organization. Thereafter, the trustees would either negotiate a new
subadvisory contract with an advisory organization selected by the trustees or
make other appropriate arrangements, subject to any required approval by the
fund's shareholders.
ADDITIONAL INFORMATION
Other Business
As of the date of this proxy statement, the trustees are not aware of
any matters to be presented for action at the meeting other than those described
above. Should other business properly be brought before the meeting, it is
intended that the accompanying proxy will be voted in accordance with the
judgment of the persons named as proxies.
Proxies and Voting at the Meeting
The enclosed proxy is revocable by a shareholder at any time before it
is exercised by written notice to the trust (addressed to the secretary at the
trust's principal executive offices), by executing a superseding proxy or by
attending the meeting and voting in person. All valid proxies received prior to
the meeting (including any adjournment of the meeting) will be voted at the
meeting. Matters on which a choice has been provided will be voted as indicated
on the proxy card and, if no instruction is given, the persons named as proxies
will vote the shares represented by the proxy in favor of the proposal and will
use their best judgment in connection with the transaction of any other business
that may properly come before the meeting.
In the event that at the time the meeting is called to order a quorum
is not present in person or by proxy, the persons named as proxies may vote
those proxies which have been received to adjourn the meeting to a later date.
In the event that a quorum is present but sufficient votes in favor of the
proposal have not been received, the persons named as proxies may propose one or
more adjournments of the meeting to permit further solicitation of proxies. Any
adjournment will require the affirmative vote of a
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majority of the shares of the fund present in person or by proxy at the meeting.
The persons named as proxies will vote those proxies which they are entitled to
vote in favor of the proposal in favor of an adjournment, and will vote those
proxies required to be voted against the proposal against an adjournment.
A majority of the shares of the fund outstanding and entitled to vote
will be a quorum for the transaction of business at the meeting, but any lesser
number will be sufficient for adjournments. Abstentions will be treated as
shares that are present and entitled to vote with respect to the proposal, but
will not be counted as a vote in favor of the proposal. Accordingly, an
abstention from voting on the proposal has the same effect as a vote against the
proposal.
Manner and cost of proxy solicitation
In addition to the solicitation by use of the mails, certain officers
and employees of CMC, none of whom will receive compensation for their services
other than their regular salaries, may solicit the return of proxies personally
or by telephone or fax. CMC will bear all of the costs associated with the
meeting, including the cost of solicitation.
Shareholder proposals
The trust is not required and does not intend to hold a meeting of
shareholders each year. Instead, meetings will be held only when and if
required. Any shareholders desiring to present a proposal for consideration at
the next meeting of fund shareholders must submit the proposal in writing, so
that it is received by the fund within a reasonable time before any meeting.
Other Information
The trust is an affiliated person of Weeden Securities Corporation
(Weeden). During 1998, the fund engaged in no securities transactions with
Weeden.
It is important that proxies be returned promptly.
May 14, 1999
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APPENDIX A
<TABLE>
<CAPTION>
Clearwater Small Cap Fund
Ownership of Trustees, Officers, Nominees and Other 5% Shareholders
Personal/ Sole Voting Shared Voting Sole Investment Shared Spouse
Revocable Trust Investment
<S> <C> <C> <C> <C> <C> <C>
FTW 58,375.437 58,375.437 638,567.815 58,375.437 757,420.672 20,995.160
1.82% 1.82% 19.90% 1.82% 23.60% 0.65%
PWP 0.000 0.000 0.000 0.000 118,852.857 0.000
3.70%
RJP 0.000 3,392.310 71,349.229 3,392.310 71,349.229 197.027
0.11% 2.22% 0.11% 2.22% 0.01%
SBCJR 0.000 0.000 0.000 0.000 0.000 0.000
SRDJR 530.116 530.116 103,234.712 530.116 103,234.712 0.000
0.02% 0.02% 3.22% 0.02% 3.22%
DCT 5,109.266 5,109.266 78,914.627 5,109.266 197,767.484 0.000
0.16% 0.16% 2.46% 0.16% 6.16%
WJD 26,342.615 172,182.680 191,890.419 26,342.615 456,583.341 63,557.497
0.82% 5.37% 5.98% 0.82% 14.23% 1.98%
DCW 24,209.855 24,209.855 186,650.611 24,209.855 186,650.611 N/A
0.75% 0.75% 5.82% 0.75% 5.82%
GHW 0.000 0.000 606,394.829 0.000 606,394.829 0.000
18.90% 18.90%
WTW 31,714.742 34,485.230 614,020.622 34,485.230 732,873.479 0.000
0.99% 1.07% 19.13% 1.07% 22.84%
DMW 0.000 0.000 216,148.689 0.000 216,148.689 0.000
6.74% 6.74%
WSRIII 0.000 8,144.426 263,312.942 8,144.426 263,312.942 0.000
0.25% 8.21% 0.25% 8.21%
CAW 145,986.396 145,986.396 142,987.894 145,986.396 142,987.894 N/A
4.55% 4.55% 4.46% 4.55% 4.46%
ERT 13,501.336 13,501.336 237,749.622 13,501.336 237,749.622 0.000
0.42% 0.42% 7.41% 0.42% 7.41%
FkWP 0.000 0.000 237,679.730 0.000 356,532.587 N/A
7.41% 11.11%
AEZ 449.711 449.711 161,031.543 449.711 161,031.543 0.000
0.01% 0.01% 5.02% 0.01% 5.02%
</TABLE>
<TABLE>
<CAPTION>
Key
Trustees and Officers Other 5% Holders
<S> <C> <C> <C> <C> <C>
FTW Frederick T. Weyerhaeuser* WJD W. John Driscoll* ERT Edward R. Titcomb*
PWP Philip W. Pascoe** DCW David C. Weyerhaeuser* FkWP Frank W. Piasecki*
RJP Robert J. Phares* GHW George H. Weyerhaeuser** AEZ Anne E. Zacarro*
SBCJR Samuel B. Carr, Jr.* WTW William T. Weyerhaeuser**
SRDJR Stanley R. Day, Jr.* DMW David M. Weyerhaeuser**
DCT Daniel C. Titcomb* WSRIII Walter S. Rosenberry, III*
<FN>
*332 Minnesota Street, Suite 2100, St. Paul, MN 55101-1394.
**1145 Broadway, Suite 1500, P.O. Box 1278, Tacoma, WA 98402.
</FN>
</TABLE>
6
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EXHIBIT A
SUBADVISORY CONTRACT AMONG THE TRUST, ON BEHALF
OF CLEARWATER SMALL CAP FUND, CMC AND KCM
SUBADVISORY CONTRACT
AGREEMENT made as of the 16th day of April, 1999, by and among
CLEARWATER INVESTMENT TRUST, a Massachusetts business trust (the "Trust"),
CLEARWATER MANAGEMENT CO., INC., a Minnesota corporation (the "Manager"), and
KENNEDY CAPITAL MANAGEMENT, a Missouri corporation (the "Subadviser").
W I T N E S S E T H:
WHEREAS, the Manager desires to utilize the services of the Subadviser
as financial counsel with respect to Clearwater Small Cap Fund (the "Fund"), a
separate series of the Trust; and
WHEREAS, the Subadviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and benefits
herein contained, it is agreed as follows:
1. The Subadviser's Services. The Subadviser will serve the Manager as
financial counsel with respect to the Fund which is under the management of the
Manager pursuant to the Management Contract dated March 1, 1998 between the
Manager and the Trust. Subject to the supervision of the Manager, the investment
policies and restrictions applicable to the Fund as set forth in the
registration statement of the Trust filed with the Securities and Exchange
Commission and such resolutions as from time to time may be adopted by the
Trust's Trustees and furnished to the Subadviser, the Subadviser is hereby
authorized and directed and hereby agrees to develop, recommend and implement
such investment program and strategy for the Fund as may from time to time in
the circumstances appear most appropriate to the achievement of the investment
objectives of the Fund as stated in the aforesaid registration statement, to
provide research and analysis relative to the investment program and investments
of the Fund, to determine what securities should be purchased and sold and what
portion of the assets of the Fund should be held in cash or cash equivalents or
other assets and to monitor on a continuing basis the performance of the
portfolio securities of the Fund. In addition, the Subadviser will place orders
for the purchase and sale of portfolio securities and will advise the Manager
and the custodian for the Fund on a prompt basis of each purchase and sale of a
portfolio security specifying the name of the issuer, the description and amount
or number of shares of the security purchased, the market price, commission and
gross or net price, trade date, settlement date and identity of the effecting
broker or dealer. From time to time as the Trustees of the Trust or the Manager
may reasonably request, the Subadviser will furnish to the Trust's officers and
to each of its Trustees reports on portfolio transactions and reports on issues
of securities held by the Fund, all in such detail as any such Trustee or the
Manager may reasonably request.
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The Subadviser also will inform the Trust's officers and Trustees on a current
basis of changes in investment strategy or tactics. The Subadviser will make its
officers and employees available to meet with the Trust's officers and Trustees
and the Manager's officers and Directors at least quarterly on due notice to
review the investments and investment program of the Fund in the light of
current and prospective economic and market conditions.
2. Avoidance of Inconsistent Position.
(a) In connection with purchases and sales of portfolio securities for
the account of the Fund, the Subadviser will not act as a principal or agent or
receive any commission except as permitted by the Investment Company Act of
1940, as amended (the "1940 Act"). The Subadviser shall arrange for the placing
of all orders for the purchase and sale of portfolio securities for the Fund's
account with brokers or dealers selected by the Subadviser. In the selection of
such brokers or dealers and the placing of such orders, the Subadviser is
directed at all times to seek for the Fund the most favorable execution and net
price available except as otherwise described herein. It is understood that it
is desirable for the Fund that the Subadviser have access to supplemental
investment and market research and security and economic analyses provided by
brokers who may execute brokerage transactions at a higher cost to the Fund than
may result when allocating brokerage to other brokers on the basis of seeking
the most favorable price and efficient execution. Therefore, the Subadviser is
authorized to place orders for the purchase and sale of securities for the Fund
with such brokers consistent with the requirements of Section 28(e) of the
Securities Exchange Act of 1934, subject to review by the Trust's Trustees from
time to time with respect to the extent and continuation of this practice. It is
understood that the services provided by such brokers may be useful to the
Subadviser in connection with its services (and the services of the Subadviser's
affiliates) to other clients.
(b) On occasions when the Subadviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients, the
Subadviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased in order to obtain the best
execution and lower brokerage commissions, if any. In such event, allocation of
the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner it considers to be the
most equitable and consistent with its fiduciary obligations to the Fund and to
such clients.
3. Other Agreements, etc. It is understood that any of the
shareholders, Trustees, officers and employees of the Trust may be a
shareholder, director, officer or employee of, or be otherwise interested in,
the Subadviser, any interested person (as defined in the 1940 Act) of the
Subadviser, any organization in which the Subadviser may have an interest or any
organization which may have an interest in the Subadviser and that the
Subadviser, any such interested person or any such organization may have an
interest in the Trust. It is also understood that the Subadviser, the Manager
and the Trust may have advisory, management, service or other contracts with
other individuals or entities, and may have other interests and businesses. When
a security proposed to be purchased or sold for the Trust is also to be
purchased or sold for other accounts managed by the Subadviser at the same time,
the Subadviser shall make such purchases or sales on a pro rata, rotating or
other equitable basis so as to avoid any one account being preferred over any
other account.
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4. Subadviser's Compensation. The Manager shall pay to the Subadviser
for services hereunder a fee at the annual rate provided in the following
schedule based on the Fund's net assets under the Subadviser's management:
Percent Net Assets
0.85% Up to and including $50 million
0.80% Over $50 million
Such fee shall be calculated and accrued on a monthly basis as a percentage of
the Fund's month end net assets under the Subadviser's management, and shall be
payable quarterly after the end of each calendar quarter on or before the 15th
day of January, April, July and October of each year with respect to the
preceding quarter. If this Contract shall be effective for only a portion of a
calendar quarter, the aforesaid fee shall be prorated for that portion of such
calendar quarter during which this Contract is in effect.
5. Assignment and Amendment. This Contract shall automatically
terminate, without the payment of any penalty, in the event of its assignment
(as defined in the 1940 Act) or in the event of the termination of the
Management Contract between the Trust and the Manager insofar as it applies to
the Fund; provided, that such termination shall not relieve either party of any
liability incurred hereunder. The terms of this Contract shall not be changed
unless such change is approved in accordance with the requirements of the 1940
Act, and as such requirements may be modified by rule, regulation or order of
the Securities and Exchange Commission ("SEC").
6. Effective Period and Termination of this Contract.
(a) This Contract shall become effective on the date hereof and shall
remain in full force and effect until two years from the date hereof and from
year to year thereafter, but only so long as its continuance is approved
annually in accordance with the requirements of the 1940 Act, and as such
requirements may be modified by rule, regulation or order of the SEC.
(b) The Trust or the Manager may at any time terminate this Contract by
not more than sixty (60) days' nor less than thirty (30) days' written notice
given to the Subadviser.
(c) The Subadviser may at any time terminate this Contract by not less
than one hundred twenty (120) days' written notice given to the Trust and the
Manager.
7. Complete Agreement. This Contract states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with Section 5 hereof and the applicable requirements of the 1940
Act.
8. Nonliability of the Subadviser. In the absence of willful
misfeasance, bad faith or gross negligence on the part of the Subadviser, or of
reckless disregard of its obligations and
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duties hereunder, the Subadviser shall not be subject to any liability to the
Manager or the Trust, to any shareholder of the Fund, or to any person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder. Nothing herein, however, shall derogate from the
Subadviser's obligations under applicable federal and state securities laws.
9. Limitation of Liability of the Trustees, Officers and Shareholders.
A copy of the Declaration of Trust of the Trust is on file with the Secretary of
State of The Commonwealth of Massachusetts, and notice is hereby given that this
Contract is executed on behalf of the Trustees of the Trust as Trustees and not
individually and that the obligations under this Contract are not binding upon
any of the Trustees, officers or shareholders of the Trust but are binding only
upon the assets and property of the Fund.
10. Notices. Any notice, instruction, request or other communications
required or contemplated by this Contract shall be in writing and shall be duly
given when deposited by first class mail, postage prepaid, addressed to (or
delivered by hand with confirmation to) the Trust, the Manager or the Subadviser
at the applicable address set forth below:
If to Subadviser:
Kennedy Capital Management
10829 Olive Boulevard
St. Louis, Missouri 63141
If to Trust:
Clearwater Investment Trust
332 Minnesota Street, Suite 2100
St. Paul, Minnesota 55101
If to Manager:
Clearwater Management Co., Inc.
332 Minnesota Street, Suite 2100
St. Paul, Minnesota 55101
11. Disclosure Statement. The Manager and the Trust acknowledge receipt
of the Subadviser's written disclosure statement required by Rule 204-3 under
the Investment Advisers Act of 1940 not less than 48 hours prior to entering
into this Contract.
12. Governing Law. This Contract and all performance hereunder shall be
governed by, interpreted, construed and enforced in accordance with the laws of
the State of Minnesota.
13. Any term or provision of this Contract which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms or provisions of
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<PAGE>
this Contract or affecting the validity or enforceability of any of the terms or
provisions of this Contract in any other jurisdiction.
14. This Contract may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their duly authorized officers and as of the day and year first
written above.
CLEARWATER INVESTMENT TRUST
By:__________________________________
Name: Philip W. Pascoe
Title: Chairman
CLEARWATER MANAGEMENT CO., INC.
By:__________________________________
Name: Philip W. Pascoe
Title: Chairman
KENNEDY CAPITAL MANAGEMENT
By:__________________________________
Name: Richard Sinese
Title: Chief Investment Officer and
Vice President
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<PAGE>
CLEARWATER INVESTMENT TRUST
Clearwater Small Cap Fund
332 Minnesota Street, Suite 2100
St. Paul, Minnesota 55101
This proxy is solicited on behalf of the board of trustees of Clearwater
Investment Trust for the special meeting of shareholders of Clearwater Small Cap
Fund (meeting). The undersigned hereby appoints Frederick T. Weyerhaeuser and
Daniel C. Titcomb and each of them, attorneys and proxies for the undersigned,
with full power of substitution and revocation to represent the undersigned and
to vote on behalf of the undersigned those shares of the fund which the
undersigned is entitled to vote at the meeting to be held at the offices of the
trust, 332 Minnesota Street, Suite 2100, St. Paul, Minnesota 55101 on June 24,
1999, at 8:30 a.m., Central time, and at any adjournment of the meeting. The
undersigned hereby acknowledges receipt of the Notice of the Special Meeting of
Shareholders and the accompanying proxy statement and hereby instructs the
attorneys and proxies to vote the shares as indicated on this proxy card. In
their discretion, the proxies are authorized to vote upon other business that
may properly come before the meeting. The undersigned hereby revokes any proxy
previously given.
Please sign and date the proxy card and return it with your vote in the enclosed
envelope.
Please indicate your vote by an "X" in the appropriate box, below. This proxy,
if properly executed, will be voted in the manner directed by the shareholder.
If no direction is made, this proxy will be voted FOR the proposal. Please refer
to the proxy statement for a discussion of the proposal.
PLEASE MARK VOTE For Against Abstain
AS IN THIS EXAMPLE [X]
1. Approve subadvisory contract [ ] [ ] [ ]
with Kennedy Capital
Management.
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Please be sure to sign and date this proxy card. Date:
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<TABLE>
<CAPTION>
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<S> <C> <C>
Please sign your full name. If joint owners,
Shareholder sign here Co-owner sign here EITHER may sign this proxy. When signing
as attorney, executor, administrator, trustee,
guardian or corporate officer, please give your
full title.
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</TABLE>
