As filed with the Securities and Exchange Commission on July 2, 1998
Registration No. 33-
811-5159
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No.
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[ ] Post-Effective Amendment No.
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ROBERTSON STEPHENS INVESTMENT TRUST
(Exact name of Registrant as Specified in Charter)
555 California Street
San Francisco, California 94104
(Address of Principal Executive Offices)
(800) 766-3863
(Area Code and Telephone Number)
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Andrew P. Pilara, Jr.
c/o BancAmerica Robertson Stephens
555 California Street
San Francisco, California 94104
(Name and Address of Agent for Service)
Copies to:
Timothy W. Diggins, Esq.
Ropes & Gray
One International Place
Boston, MA 02110-2624
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Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
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It is proposed that this filing will become effective on August 1, 1998
pursuant to Rule 488.
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The Registrant has registered an indefinite number of its shares of
beneficial interest, pursuant to Rule 24f-2 under the Investment Company Act of
1940. In reliance upon Rule 24f-2, no filing fee is being paid at this time. The
Registrant filed a Form 24f-2 in March 1998 for the fiscal year ended
December 31, 1997.
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
Cross-Reference Sheet
as required by Rule 481(a)
FORM N-14 ITEM CAPTION IN PROSPECTUS/PROXY STATEMENT
1 Cross-Reference Sheet; Outside Front Cover of Prospectus
2 Outside Back Cover Page of Prospectus; Table of Contents
3 Overview of the Merger; Risk Factors
4 Approval or Disapproval of Agreement and Plan of
Reorganization
5, 6 Information about the Funds
7 Voting Information
8, 9 Not Applicable
FORM N-14 ITEM CAPTION IN STATEMENT OF ADDITIONAL INFORMATION
10 Cover Page
11 Table of Contents
12, 13 Additional Information about the Acquiring and Acquired
Funds
14 Financial Statements
FORM N-14 ITEM CAPTION IN PART C
15 Indemnification
16 Exhibits
17 Undertakings
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
555 California Street
San Francisco, California 94104
August , 1998
Dear Shareholder:
You are cordially invited to attend a Meeting of shareholders of the
Robertson Stephens Developing Countries Fund, a series of Robertson Stephens
Investment Trust, to be held on [day,]August , 1998, at 9:00 a.m., San
Francisco time, at the offices of the Trust at 555 California Street, 26th
Floor, San Francisco, California. At the Meeting, shareholders will be asked to
vote on a proposed merger of the Developing Countries Fund into the Robertson
Stephens Partners Fund, also a series of the Trust. Each share of the
Developing Countries Fund would be exchanged at net asset value for shares of
the Partners Fund.
Although the Trustees would like very much to have each shareholder attend
the Meeting, they realize that this is not possible. Whether or not you plan to
be present at the Meeting, your vote is needed. Please complete, sign, and
return the enclosed proxy card promptly. A postage-paid envelope is enclosed
for this purpose.
We look forward to seeing you at the Meeting or receiving your proxy card
so your shares may be voted at the Meeting.
Sincerely yours,
Andrew P. Pilara, Jr.
President
SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE
ENCLOSED ENVELOPE SO AS TO BE REPRESENTED AT THE MEETING.
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
Robertson Stephens Developing Countries Fund
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Notice of Meeting of Shareholders
August , 1998
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To the Shareholders:
Notice is hereby given that a Meeting of shareholders of the Robertson
Stephens Developing Countries Fund, (the "Developing Countries Fund"), a series
of Robertson Stephens Investment Trust (the "Trust"), will be held at 555
California Street, 26th Floor, San Francisco, California, on August , 1998 at
9:00 a.m., San Francisco time, for the following purposes:
1. To approve or disapprove an Agreement and Plan of Reorganization
providing for the transfer of all of the assets of the Developing
Countries Fund to the Robertson Stephens Partners Fund (the "Partners
Fund"), another series of the Trust, in exchange for shares of the
Partners Fund and the assumption by the Partners Fund of all of the
liabilities of the Developing Countries Fund, and the distribution of such
shares to the shareholders of the Developing Countries Fund in complete
liquidation of the Developing Countries Fund.
2. To consider such other business as may properly come before the meeting.
Shareholders of record as of the close of business on July , 1998 are
entitled to notice of, and to vote at, the Meeting.
By order of the Board of Trustees
Dana K. Welch
Secretary
August , 1998
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
PROSPECTUS/PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Overview of the Merger ................................................... 3
Risk Factors ............................................................. 8
Meeting of Shareholders .................................................. 12
Approval or Disapproval of Agreement and Plan of Reorganization .......... 12
Information About the Funds .............................................. 19
Voting Information ....................................................... 19
</TABLE>
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
555 California Street
San Francisco, California 94104
1-800-766-FUND
Robertson Stephens Developing Countries Fund
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Prospectus/Proxy Statement
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August , 1998
This Prospectus/Proxy Statement relates to the proposed merger (the
"Merger") of the Robertson Stephens Developing Countries Fund (the "Developing
Countries Fund"), a series of Robertson Stephens Investment Trust (the
"Trust"), into Robertson Stephens Partners Fund (the "Partners Fund"), another
series of the Trust. The Merger is to be effected through the transfer of all
of the assets of the Developing Countries Fund to the Partners Fund in exchange
for shares of beneficial interest of the Partners Fund (the "Merger Shares")
and the assumption by the Partners Fund of all of the liabilities of the
Developing Countries Fund, followed by the distribution of the Merger Shares to
the shareholders of the Developing Countries Fund in liquidation of the
Developing Countries Fund. As a result of the proposed Merger, each shareholder
of the Developing Countries Fund will receive in exchange for his or her
Developing Countries Fund shares a number of Partners Fund shares equal in
value at the date of the exchange to the aggregate value of the shareholder's
Developing Countries Fund shares.
Because shareholders of the Developing Countries Fund are being asked to
approve a transaction which will result in their receiving shares of the
Partners Fund, this Proxy Statement also serves as a Prospectus for the Merger
Shares of the Partners Fund.
The Partners Fund's investment objective is long-term growth. It pursues
this objective by employing a value methodology to invest in equity securities
primarily of companies with market capitalizations of up to $1 billion. The
Partners Fund is a "non-diversified" mutual fund.
THIS PROSPECTUS/PROXY STATEMENT EXPLAINS CONCISELY WHAT YOU SHOULD KNOW
BEFORE INVESTING IN THE PARTNERS FUND. PLEASE READ IT AND KEEP IT FOR FUTURE
REFERENCE.
This Prospectus/Proxy Statement is accompanied by a current Prospectus of
the Trust dated March 1, 1998 for the Fund's Class A or Class C Shares, as
amended or supplemented from time to time (each, a "Prospectus"). The
information regarding the Developing Countries Fund and the Partners Fund
contained in the Prospectus accompanying this Prospectus/Proxy Statement is
incorporated into this Prospectus/Proxy Statement by reference. Each of the
Developing Countries Fund and the Partners Fund is sometimes referred to in
this Prospectus/ Proxy Statement as a "Fund."
1
<PAGE>
The following documents have been filed with the Securities and Exchange
Commission (the "SEC") and are also incorporated into this Prospectus/Proxy
Statement by reference: (i) the financial statements and report of independent
accountants contained in the Annual Report to Shareholders of the Developing
Countries Fund for the year ended December 31, 1997 and the financial statements
and report of independent accountants contained in the Annual Report to
Shareholders of the Partners Fund for the year ended December 31, 1997
(collectively, the "Annual Reports"); (ii) the current Statement of Additional
Information of the Trust, dated March 1, 1998, as amended or supplemented from
time to time (the "SAI"); and (iii) a Statement of Additional Information dated
August , 1998 relating to the transaction described in this Prospectus/Proxy
Statement (the "Merger SAI").
For a free copy of any or all of the Prospectus, Annual Reports, SAI, or
Merger SAI referred to above, please call 1-800-766-FUND or write to the Trust
at the address appearing above.
THE SECURITIES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, BANK OF AMERICA OR ANY OF ITS AFFILIATES AND ARE NOT FEDERALLY
INSURED BY, GUARANTEED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE
U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY. INVESTMENT IN THE FUNDS
INVOLVES INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
2
<PAGE>
OVERVIEW OF THE MERGER
Proposed Transaction
The Trustees of the Trust have unanimously approved an Agreement and Plan
of Reorganization between the Developing Countries Fund and the Partners Fund
(the "Agreement"), which is attached to this Prospectus/ Proxy statement as
Appendix A. Pursuant to the terms of the Agreement, the Developing Countries
Fund will receive a number of Class A and Class C shares of the Partners Fund
(the "Merger Shares") equal in value to the value of the net assets of the
Developing Countries Fund being transferred and attributable to the Class A and
Class C shares, respectively, of the Developing Countries Fund. Following the
transfer, (i) the Developing Countries Fund will distribute to each of its
Class A and Class C shareholders a number of full and fractional Class A and
Class C Merger Shares of the Partners Fund equal in value to the aggregate
value of that shareholder's Class A and/or Class C Developing Countries Fund
shares, as the case may be, and (ii) the Developing Countries Fund will be
liquidated.
The Class A and Class C shares of the Partners Fund have substantially
identical characteristics to the corresponding classes of shares of the
Developing Countries Fund. Class A shares are sold at net asset value, without
an initial sales charge imposed by the Fund, and are subject to a distribution
fee at an annual rate of 0.25% of the average daily net assets attributable to
the Fund's Class A shares. (The Developing Countries Fund may make payments
under its Class A share distribution plan at an annual rate of up to 0.50% of
the Fund's average daily net assets; the Trustees have currently limited
payments under the plan to an annual rate of 0.25% of the Funds; average daily
net assets.) Class A shares are not subject to a contingent deferred sales
charge (a "CDSC"). Class C shares are sold at net asset value, without an
initial sales charge imposed by the Fund, but are subject to a 1.00% CDSC if
redeemed within one year after purchase. In addition, Class C shares of a Fund
are subject to a distribution fee at an annual rate of 0.75% of the average
daily net assets of the Fund attributable to its Class C shares. The Class C
Distribution Plan for each Fund permits payment under the Plan at an annual rate
of up to 1.00% of the Fund's average daily net assets attributable to its Class
C shares. The Class C shares of each Fund are also subject to a shareholder
servicing fee at an annual rate of 0.25% of the Fund's average daily net assets
attributable to its Class C shares. No CDSC will apply in connection with the
Merger. However, the Class C Merger Shares will be subject to a CDSC to the same
extent as were the Class C Developing Countries Fund shares in respect of which
they are issued. For the purposes of computing the CDSC, if any, payable on
redemption of Class C Merger Shares, the Merger Shares will be treated as having
been purchased as of the same date as the Class C Developing Countries Fund
shares in respect of which the Merger Shares were issued.
[The Trustees unanimously recommend that shareholders of the Developing
Countries Fund approve the Merger because it offers shareholders the
opportunity to pursue a similar investment program in a larger fund, with
potentially reduced operating expenses. See "Operating Expenses" below and
"Approval or Disapproval of Agreement and Plan of Reorganization -- Background
and Reasons for the Proposed Merger."]
3
<PAGE>
Operating Expenses
The following tables summarize a shareholder's maximum transaction costs
from investing in shares of each Fund and expenses incurred by each Fund based
on its fiscal year ended December 31, 1997. The expenses shown for the Partners
Fund are based on the expenses the Partners Fund incurred in its fiscal year
ended December 31, 1997, but have been restated to give effect on a pro forma
combined basis to the proposed Merger, as if the Merger had occurred as of
January 1, 1998. Expenses shown for the Developing Countries Fund reflect an
expense limitation currently in effect; there is no assurance that the
limitation will continue in effect in the future. The tables are provided to
help explain a shareholder's share of the operating expenses which each Fund
incurs. The examples which follow show the estimated cumulative expenses
attributable to a hypothetical $1,000 investment in the Developing Countries
Fund and the Partners Fund, over specified periods.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses Developing Countries Fund Partners Fund
- -------------------------------------------------- --------------------------- ------------------------
<S> <C>
Class A Shares
Maximum Sales Load Imposed on Purchases ......... None None
Maximum Sales Load Imposed on Reinvested
Dividends ..................................... None None
Deferred Sales Load ............................. None None
Redemption Fee* ................................. None None
Exchange Fee .................................... None None
Class C Shares
Maximum Sales Load Imposed on Purchases ......... None None
Maximum Sales Load Imposed on Reinvested
Dividends ..................................... None None
Redemption Fee* ................................. None None
Exchange Fee .................................... None None
Contingent Deferred Sales Charge 1.0% in the first year; 1.0% in the first year;
(as a percentage of offering price) ........... eliminated thereafter eliminated thereafter
</TABLE>
- ----------
* A $9.00 fee is charged for redemptions made by bank wire.
4
<PAGE>
<TABLE>
<CAPTION>
Annual Fund Operating Expenses
(as a percentage of net assets) Developing Countries Fund Partners Fund
- ---------------------------------------- --------------------------- --------------
<S> <C>
Class A Shares
Management Fees ....................... 1.25% 1.25%
Rule 12b-1 Expenses ................... 0.25% 0.25%
Other Expenses ........................ .60%* 0.28%
----- ----
Total Fund Operating Expenses ......... 2.10%* 1.78%
Class C Shares
Management Fees ....................... 1.25% 1.25%
Rule 12b-1 Expenses ................... 0.75% 0.75%
Shareholder Service Fee ............... 0.25% 0.25%
Other Expenses ........................ .60%* 0.28%
----- ----
Total Fund Operating Expenses ......... 2.85%* 2.53%
</TABLE>
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* Reflecting voluntary expense limitations.
An investment of $1,000 would incur the following expenses, assuming 5%
annual return and redemption at the end of each period:
<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------- -------- --------- --------- ---------
<S> <C>
Class A
Developing Countries Fund ..................... $21 $66 $113 $243
Partners Fund ................................. $18 $56 $ 96 $209
Class C (assuming redemption at end of period)(1)
Developing Countries Fund ..................... $39 $88 $150 $316
Partners Fund ................................. $36 $79 $134 $285
</TABLE>
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(1) Assumes deduction of applicable CDSC.
This information is provided to help investors understand the operating
expenses of the Funds. The example should not be considered a representation of
future performance. Actual expenses may be more or less than those shown. Other
Expenses and Total Fund Operating Expenses for the Developing Countries Fund
reflect voluntary expense limitations currently in effect. In the absence of
those limitations, Other Expenses and Total Fund Operating Expenses,
respectively, of the Developing Countries Fund would be 1.03% and 2.53% for the
Fund's Class A shares and 1.04% and 3.29% for the Fund's Class C shares. The
Management Fees paid by the Funds are higher than those paid by most other
mutual funds. Because of Rule 12b-1 fees paid by the Funds, long-term
shareholders may pay more than the economic equivalent of the maximum front-end
sales load permitted under applicable broker-dealer sales rules.
5
<PAGE>
Federal Income Tax Consequences
The Developing Countries Fund expects that the Merger will be a tax-free
reorganization for federal income tax purposes, and consequently that no gain
or loss will be recognized by the Developing Countries Fund or its shareholders
as a result of the Merger, and the tax basis of the Merger Shares received by
each Developing Countries Fund shareholder will be the same as the tax basis of
the shareholder's Developing Countries Fund shares. The Federal income tax
treatment of the Merger is not clear, however, and the Internal Revenue Service
may assert that the Merger is a taxable reorganization. If the Merger were
treated as a taxable event, the Developing Countries Fund would recognize gain
or loss on the sale of its assets to the Partners Fund, and shareholders of the
Developing Countries Fund would recognize taxable gain or loss on receipt of
the Merger Shares equal to the difference between the net asset value of the
Partners Fund shares received and the shareholder's tax basis in his or her
Developing Countries Fund shares. See "Information About the Merger -- Federal
Income Tax Consequences."
Comparison of Investment Objectives, Policies, and Restrictions
Robertson Stephens Investment Management, L.P. ("RSIM") currently serves
as investment advisor to both Funds. The investment objectives, policies, and
restrictions of the Funds and certain differences between them are summarized
below. For a more detailed description of the investment techniques used by the
Funds, please see the accompanying Prospectus, as well as the SAI and the
Merger SAI.
The Partners Fund's investment objective is long-term growth. The Partners
Fund employs a value methodology to invest in equity securities primarily of
companies with market capitalizations of up to $1 billion. This traditional
value methodology combines Graham & Dodd balance sheet analysis with cash flow
analysis. In selecting investments for the Partners Fund, RSIM: (i) performs
fundamental research focusing on business analysis; (ii) observes how
management allocates capital; (iii) strives to understand the unit economics of
the business of the company; (iv) keys on the cash flow rate of return on
capital employed; (v) discerns the sources and uses of cash; (vi) considers how
management is compensated; and (vii) asks how the stock market is pricing the
entire company. The Partners Fund may invest without limit in foreign
securities, and may, at times, invest all or most of its assets in securities
of U.S. issuers. See "Risk Factors -- Foreign securities," below.
The Developing Countries Fund's investment objective is long-term capital
appreciation. The Developing Countries Fund invests primarily in a
non-diversified portfolio of publicly traded developing country equity
securities. The Developing Countries Fund may also, to a lesser degree, invest
in private placements of developing country equity securities. Developing
country equity securities are securities which are principally traded in the
capital markets of a developing country; securities of companies that derive at
least 50% of their total revenues from either goods produced or services
performed in developing countries or from sales made in developing countries,
regardless of where the securities of such companies are principally traded;
securities of companies organized under the laws of, and with a principal
office in, a developing country; securities of investment companies (such as
country funds) that principally invest in developing country securities; and
American Depository Receipts (ADRs) and Global Depository Receipts (GDRs) with
respect to the securities of such companies. Developing Countries are countries
that in the opinion of RSIM are generally considered to be developing countries
by the international financial community. Examples of countries that might
constitute developing countries
6
<PAGE>
include: Argentina, Brazil, China, the Czech Republic, Egypt, Indonesia,
Israel, Korea, Malaysia, Mexico, Philippines, Romania, Russia, South Africa,
Taiwan, Thailand and Turkey. The Developing Countries Fund will normally invest
at least 65% of its assets in developing country equity securities. See "Risk
Factors -- Foreign Securities," below for a description of certain
characteristics of developing countries and related risks.
In selecting investments for the Developing Countries Fund, RSIM may
consider a number of factors in evaluating potential investments, including
political risks, classic macroeconomic variables, and equity market valuations.
RSIM may also focus on the quality of a company's management, the company's
growth prospects, and the financial well being of the company. The Developing
Countries Fund's investments generally will reflect a broad cross-section of
countries, industries, and companies, in order to limit risk. In situations
where the market for a particular security is determined by RSIM to be
sufficiently liquid, the Developing Countries Fund may engage in short sales.
See "Risk Factors -- Short Sales," below for a discussion of certain
characteristics of short sales. The Developing Countries Fund may also borrow
money to purchase additional portfolio securities. See "Risk Factors --
Borrowing and Leverage," below for a discussion of certain characteristics of
such borrowing.
The Developing Countries Fund may invest up to 10% of its total assets in
shares of other investment companies. Such other investment companies would
likely pay expenses similar to those paid by the Developing Countries Fund,
including, for example, advisory and administrative fees. RSIM will waive its
investment advisory fees on the Developing Countries Fund's assets invested in
other open-end investment companies, to the extent of the advisory fees of
those investment companies attributable to the Developing Countries Fund's
investment.
Both Funds are non-diversified mutual funds, which entails certain risks.
See "Risk Factors -- Non-Diversification and Sector Concentration," below.
Although both Funds seek to invest principally in common stock, they may also
invest in preferred stocks, warrants, and debt securities if RSIM believes they
would help achieve the Fund's objective. Both Funds may also invest in options
and futures, index options and futures, and a variety of other derivative
instruments. See the Prospectus, the SAI, and the Merger SAI. See also "Risk
Factors -- Options and Futures," "Risk Factors -- Index Futures and Options,"
and "Risk Factors -- Risks Related to Options and Futures Strategies," below.
Both Funds invest in smaller companies, which may present greater opportunities
for investment return than do larger companies, but may also involve greater
risks. Such companies may have limited product lines, markets, or financial
resources, or may depend on a limited management group. Their securities may
trade less frequently and in limited volume. As a result, the prices of these
securities may fluctuate more than prices of securities of larger, more widely
traded companies. See "Risk Factors -- Investments in Smaller Companies," below.
The Developing Countries Fund is managed by a team of professionals at
RSIM. Andrew P. Pilara, Jr., the President and Trustee of the Trust, is
primarily responsible for the day-to-day management of the Partners Fund.
Comparison of Distribution Policies and Purchase, Exchange, and Redemption
Procedures
The Funds have substantially the same procedures for purchasing shares.
The Funds offer two classes of shares, Classes A and C, to the general public.
See "Overview of the Merger -- Proposed Transaction," above, for a description
of each Class.
Shares of each Fund can be exchanged at net asset value for shares of the
same class of any other fund offered by the Trust, subject to certain
investment minimums and less any applicable CDSC.
7
<PAGE>
Redemption procedures for the Funds are also substantially identical.
Shares of a Fund may be redeemed on any day the New York Stock Exchange is open
at their net asset value next determined after receipt of the redemption
request, less any applicable CDSC. Shares can be redeemed through participating
financial institutions, by calling or submitting a written redemption request
directly to the Fund's transfer agent (for non-broker accounts) or through
Autosell (an automated system enabling electronic fund transfers to be made
directly between a shareholder's Fund account and bank account). Shares may
also be sold directly to a Fund by mail, by telephone or by wire transfer.
RISK FACTORS
Certain risks associated with an investment in the Partners Fund and of the
Developing Countries Fund are summarized below. The Partners Fund shares a
number of investment policies with the Developing Countries Fund as described
more fully above under "Overview of the Merger -- Comparison of Investment
Objectives, Policies, and Restrictions." Many of the risks of an investment in
the Partners Fund are substantially similar to the risks of an investment in the
Developing Countries Fund. A more detailed description of certain of the risks
associated with an investment in the Partners Fund may be found in the
Prospectus under the caption "Other Investment Practices and Risk
Considerations" and in the SAI.
The values of all securities and other instruments held by the Partners
Fund vary from time to time in response to a wide variety of market factors.
Consequently, the net asset value per share of the Partners Fund will vary so
that an investor's shares, when redeemed, may be worth more or less than the
amount invested.
Investments in Smaller Companies. Each Fund may invest a substantial
portion of its assets in securities issued by small companies. Such companies
may offer greater opportunities for capital appreciation than larger companies,
but investments in such companies may involve certain special risks. Such
companies may have limited product lines, markets, or financial resources and
may be dependent on a limited management group. While the markets in securities
of such companies have grown rapidly in recent years, such securities may trade
less frequently and in smaller volume than more widely held securities. The
values of these securities may fluctuate more sharply than those of other
securities, and a Fund may experience some difficulty in establishing or
closing out positions in these securities at prevailing market prices. There
may be less publicly available information about the issuers of these
securities or less market interest in such securities than in the case of
larger companies, and it may take a longer period of time for the prices of
such securities to reflect the full value of their issuers' underlying earnings
potential or assets.
Some securities of smaller issuers may be restricted as to resale or may
otherwise be highly illiquid. The ability of a Fund to dispose of such
securities may be greatly limited, and a Fund may have to continue to hold such
securities during periods when RSIM would otherwise have sold the security. It
is possible that RSIM or its affiliates or clients may hold securities issued
by the same issuers, and may in some cases have acquired the securities at
different times, on more favorable terms, or at more favorable prices, than a
Fund.
Short Sales. The Developing Countries Fund, but not the Partners Fund, may
engage in short sales on securities with a value of up to 25% of the Fund total
assets. When RSIM anticipates that the price of a security will decline, it may
sell the security short and borrow the same security from a broker or other
institution to complete the sale. The Developing Countries Fund may make a
profit or incur a loss depending upon whether the market price of the security
decreases or increases between the date of the short sale and the date on which
the Fund must replace the borrowed security. An increase in the value of a
security sold short by the Developing
8
<PAGE>
Countries Fund over the price at which it was sold short will result in a loss
to the Fund, and there can be no assurance that the Fund will be able to close
out the position at any particular time or at an acceptable price. The Partners
Fund does not engage in short sales.
Foreign Securities. Both Funds may invest in securities principally traded
in foreign markets. Because foreign securities are normally denominated and
traded in foreign currencies, the value of a Fund's assets may be affected
favorably or unfavorably by currency exchange rates and exchange control
regulations. There may be less information publicly available about a foreign
company than about a U.S. company, and foreign companies are not generally
subject to accounting, auditing, and financial reporting standards and
practices comparable to those in the United States. The securities of some
foreign companies are less liquid and at times more volatile than securities of
comparable U.S. companies. Foreign brokerage commissions and other fees are
also generally higher than in the United States. Foreign settlement procedures
and trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of a Fund's assets held abroad) and
expenses not present in the settlement of domestic investments.
In addition, there may be a possibility of nationalization or
expropriation of assets, imposition of currency exchange controls, confiscatory
taxation, political or financial instability, and diplomatic developments that
could affect the value of a Fund's investments in certain foreign countries.
Legal remedies available to investors in certain foreign countries may be more
limited than those available with respect to investments in the United States
or in other foreign countries. In the case of securities issued by a foreign
governmental entity, the issuer may in certain circumstances be unable or
unwilling to meet its obligations on the securities in accordance with their
terms, and a Fund may have limited recourse available to it in the event of
default. The laws of some foreign countries may limit a Fund's ability to
invest in securities of certain issuers located in those foreign countries.
Special tax considerations apply to foreign securities. A Fund may buy or sell
foreign currencies and options and futures contracts on foreign currencies for
hedging purposes in connection with its foreign investments. Except as
otherwise provided in the Prospectus, there is no limit on the amount of a
Fund's assets that may be invested in foreign securities.
Each of the Funds may invest in securities of issuers in developing
countries. Investments in developing countries are subject to the same risks
applicable to foreign investments generally, although those risks may be
increased due to conditions in such countries. For example, the securities
markets and legal systems in developing countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed countries.
Although many of the securities in which the Funds may invest are traded on
securities exchanges, they may trade in limited volume, and the exchanges may
not provide all of the conveniences or protections provided by securities
exchanges in more developed markets. The Funds may also invest a substantial
portion of their assets in securities traded in the over-the-counter markets in
such countries and not on any exchange, which may affect the liquidity of the
investment and expose the Funds to the credit risk of their counterparties in
trading those investments. The prices of securities of issuers in developing
countries are subject to greater volatility than those of issuers in many more
developed countries.
Debt Securities. Each of the Funds may invest in debt securities from time
to time, if RSIM believes investing in such securities might help achieve the
Fund's objective. The Partners Fund may invest without limit in debt securities
and other fixed-income securities. The Developing Countries Fund may invest in
debt securities to the extent consistent with its investment policies, although
RSIM expects that under normal circumstances the Developing Countries Fund
would not likely invest a substantial portion of its assets in debt securities.
9
<PAGE>
The Funds will invest only in securities rated "investment grade" or
considered by RSIM to be of comparable quality. Investment grade securities are
rated Baa or higher by Moody's Investors Service, Inc. or BBB or higher by
Standard & Poor's. Securities rated Baa or BBB lack outstanding investment
characteristics, have speculative characteristics, and are subject to greater
credit and market risks than higher-rated securities. Descriptions of the
securities ratings assigned by Moody's and Standard & Poor's are set out in the
SAI.
Both Funds may at times invest in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from face value and pay interest only at maturity rather than at intervals
during the life of the security. Payment-in-kind bonds allow the issuer, at its
option, to make current interest payments on the bonds either in cash or in
additional bonds. The values of zero-coupon bonds and payment-in-kind bonds are
subject to greater fluctuation in response to changes in market interest rates
than bonds which pay interest currently, and may involve greater credit risk
than such bonds.
A Fund will not necessarily dispose of a security when its debt rating is
reduced below its rating at the time of purchase, although RSIM will monitor
the investment to determine whether continued investment in the security will
assist in meeting the Fund's investment objective. If a security's rating is
reduced below investment grade, an investment in that security may entail the
risks of lower-rated securities described below:
Borrowing and leverage. The Developing Countries Fund may borrow money to
invest in additional portfolio securities. This practice, known as "leverage,"
increases the Fund's market exposure and its risk. In addition, use of short
sales by the Developing Countries Fund may provide the economic equivalent of
the Fund's borrowing money. When the Fund has borrowed money for leverage and
its investments increase or decrease in value, the Fund's net asset value will
normally increase or decrease more than if it had not borrowed money. The
interest the Fund must pay on borrowed money will reduce the amount of any
potential gains or increase any losses. The extent to which the Developing
Countries Fund will borrow money, and the amount it may borrow, depend on
market conditions and interest rates. Successful use of leverage depends on
RSIM's ability to predict market movements correctly. The Developing Countries
Fund may at times borrow money by means of reverse repurchase agreements.
Reverse repurchase agreements generally involve the sale by a Fund of
securities held by it and an agreement to repurchase the securities at an
agreed-upon price, date, and interest payment. Reverse repurchase agreements
will increase a Fund's overall investment exposure and may result in losses.
The amount of money borrowed by the Developing Countries Fund for leverage may
generally not exceed one-third of the Fund's assets (including the amount
borrowed).
Options and Futures. Both Funds may buy and sell call and put options to
hedge against changes in net asset value or to attempt to realize a greater
current return. In addition, through the purchase and sale of futures contracts
and related options, a Fund may at times seek to hedge against fluctuations in
net asset value and to attempt to increase its investment return.
A Fund's ability to engage in options and futures strategies will depend
on the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that a Fund will
be able to utilize these instruments effectively for the purposes stated above.
Options and futures transactions involve certain risks which are described
below and in the SAI.
Transactions in options and futures contracts involve brokerage costs and
may require a Fund to segregate assets to cover its outstanding positions. For
more information, see the SAI.
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<PAGE>
Index Futures and Options. The Funds may buy and sell index futures
contracts ("index futures") and options on index futures and on indices (or may
purchase investments whose values are based on the value from time to time of
one or more securities indices) for hedging purposes. An index future is a
contract to buy or sell units of a particular bond or stock index at an agreed
price on a specified future date. Depending on the change in value of the index
between the time when the Fund enters into and terminates an index futures or
option transaction, the Fund realizes a gain or loss. A Fund may also buy and
sell index futures and options to increase its investment return.
Risks Related to Options and Futures Strategies. Options and futures
transactions involve costs and may result in losses. Certain risks arise
because of the possibility of imperfect correlations between movements in the
prices of futures and options and movements in the prices of the underlying
security or index of the securities held by a Fund that are the subject of a
hedge. The successful use by a Fund of the strategies described above further
depends on the ability of RSIM to forecast market movements correctly. Other
risks arise from a Fund's potential inability to close out futures or options
positions. Although a Fund will enter into options or futures transactions only
if RSIM believes that a liquid secondary market exists for such option or
futures contract, there can be no assurance that a Fund will be able to effect
closing transactions at any particular time or at an acceptable price.
Each Fund expects that its options and futures transactions generally will
be conducted on recognized exchanges. A Fund may in certain instances purchase
and sell options in the over-the-counter markets. A Fund's ability to terminate
options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. A Fund will, however, engage in over-the-counter
transactions only when appropriate exchange-traded transactions are unavailable
and when, in the opinion of RSIM, the pricing mechanism and liquidity of the
over-the-counter markets are satisfactory and the participants are responsible
parties likely to meet their obligations.
A Fund will not purchase futures or options on futures or sell futures if,
as a result, the sum of the initial margin deposits on the Fund's existing
futures positions and premiums paid for outstanding options on futures
contracts would exceed 5% of the Fund's assets. (For options that are
"in-the-money" at the time of purchase, the amount by which the option is
"in-the-money" is excluded from this calculation.)
Non-Diversification and Sector Concentration. The Partners Fund and the
Developing Countries Fund are "non-diversified" investment companies, and each
may invest its assets in a more limited number of issuers than may other
investment companies. Under the Internal Revenue Code, an investment company,
including a non-diversified investment company, generally may not invest more
than 25% of its assets in obligations of any one issuer other than U.S.
Government obligations and, with respect to 50% of its total assets, a Fund may
not invest more than 5% of its total assets in the securities of any one issuer
(except U.S. Government securities). Thus, each Fund may invest up to 25% of
its total assets in the securities of each of any two issuers. This practice
involves an increased risk of loss to the Fund if the market value of a
security should decline or its issuer were otherwise not to meet its
obligations.
At times a Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. A Fund would only concentrate its investments in a particular
market sector if RSIM were to believe the investment return available from
concentration in that sector justifies any additional risk associated
11
<PAGE>
with concentration in that sector. When a Fund concentrates its investments in
a market sector, financial, economic, business, and other developments
affecting issuers in that sector will have a greater effect on the Fund than if
it had not concentrated its assets in that sector.
Securities Loans and Repurchase Agreements. Both Funds may lend portfolio
securities to broker-dealers and may enter into repurchase agreements. These
transactions must be fully collateralized at all times, but involve some risk
to a Fund if the other party should default on its obligations and the Fund is
delayed or prevented from recovering the collateral.
Defensive Strategies. At times, RSIM may judge that market conditions make
pursuing a Fund's basic investment strategy inconsistent with the best
interests of its shareholders. At such times, RSIM may temporarily use
alternative strategies, primarily designed to reduce fluctuations in the values
of the Fund's assets. In implementing these "defensive" strategies, a Fund may
invest in U.S. Government securities, other high-quality debt instruments, and
other securities RSIM believes to be consistent with the Fund's best interests.
Portfolio Turnover. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by a Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. The portfolio turnover rate for the
Developing Countries Fund during its fiscal year ended December 31, 1997 was
148% and the rate for the Partners Fund for the year was 78%.
MEETING OF SHAREHOLDERS
This Prospectus/Proxy Statement is furnished in connection with a meeting
of Developing Countries Fund shareholders to be held on August , 1998 or at
such later time as may be made necessary by adjournment (the "Meeting"), and
the solicitation of proxies by and on behalf of the Board of Trustees of the
Trust for use at the Meeting. The Meeting is being held to consider the
proposed Merger of the Developing Countries Fund and the Partners Fund by the
transfer of all of the Developing Countries Fund's assets and liabilities to
the Partners Fund. This Prospectus/Proxy Statement and the enclosed form of
proxy are being mailed to shareholders on or about August , 1998.
The Board of Trustees of the Trust knows of no matters other than those
set forth herein to be brought before the Meeting. If, however, any other
matters properly come before the Meeting, it is the Board's intention that
proxies will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
APPROVAL OR DISAPPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION
Summary of Proposal
The shareholders of the Developing Countries Fund are being asked to
approve or disapprove the Merger between the Developing Countries Fund and the
Partners Fund. The Merger is proposed to take place pursuant to the Agreement
and Plan of Reorganization between the Developing Countries Fund and the
Partners Fund (the "Agreement"), the form of which is attached to this
Prospectus/Proxy Statement as Appendix A.
12
<PAGE>
The Agreement provides, among other things, for the transfer of all of the
assets of the Developing Countries Fund to the Partners Fund in exchange for
(i) the assumption by the Partners Fund of all of the liabilities of the
Developing Countries Fund and (ii) the issuance to the Developing Countries
Fund of the Class A and Class C Merger Shares, the number of which will be
calculated based upon the value of the net assets attributable to the Class A
and Class C shares, respectively, of the Developing Countries Fund acquired by
the Partners Fund and the net asset value per Class A and Class C share of the
Partners Fund, all as more fully described below under "Information About the
Merger."
After receipt of the Merger Shares, the Developing Countries Fund will
cause the Class A Merger Shares to be distributed to its Class A shareholders
and the Class C Merger Shares to be distributed to its Class C shareholders in
complete liquidation of the Developing Countries Fund. Each shareholder of the
Developing Countries Fund will receive a number of full and fractional Class A
or Class C Merger Shares equal in value at the date of the exchange to the
aggregate value of the shareholder's Class A or Class C Developing Countries
Fund shares, as the case may be.
Trustees' Recommendation. [The Trustees of the Trust have voted unanimously
to approve the proposed Merger by and between the Developing Countries Fund and
the Partners Fund and to recommend that shareholders of the Developing Countries
Fund also approve the Merger for such Fund.]
Required Shareholder Vote. Approval of the proposed Merger will require
the affirmative vote of a majority of the shares of the Developing Countries
Fund voted at the Meeting if a quorum is present. Shares of the Developing
Countries Fund shall vote together as a single class.
A shareholder of the Developing Countries Fund objecting to the proposed
Merger is not entitled under either Massachusetts law or the Trust's Agreement
and Declaration of Trust (the "Declaration of Trust") to demand payment for or
an appraisal of his or her Developing Countries Fund shares if the Merger is
consummated over his or her objection. Shareholders may, however, redeem their
shares at any time prior to the Merger, and if the Merger is consummated,
shareholders will still be free at any time to redeem their Merger Shares, in
each case for cash at net asset value at the time of such redemption, less any
applicable CDSC, or to exchange their Merger Shares for shares of the same
class of other funds offered by the Trust.
Background and Reasons for the Proposed Merger
[The Trustees of the Trust, including the Trustees who are not "interested
persons" of the Trust within the meaning of the Investment Company Act of 1940,
as amended (the "Independent Trustees"), have determined that the Merger would
be in the best interests of each Fund, and that the interests of each Fund's
shareholders would not be diluted as a result of effecting the Merger. In
evaluating the proposed Merger, the Trustees considered the investment
objectives and policies, the asset sizes, the fee structures, and the operating
histories of both Funds. The Trustees also consulted with RSIM concerning the
anticipated impact that the Merger would have on the Funds and their
shareholders with respect to a variety of factors, including tax considerations.
In addition, the Trustees considered that the Developing Countries Fund had
experienced significant redemptions during the past year, and that, in light of
its investment policies and its investment performance to date, the Fund was
unlikely under current market conditions to experience any substantial increase
in its size.]
[The principal reasons why the Trustees are recommending the Merger are as
follows:
Economies of Scale at Fund Level. The Trustees have determined that it is
in the best interests of the Developing Countries Fund's shareholders to
combine the Developing Countries Fund with the Partners Fund in order
13
<PAGE>
to increase the asset base over which the Developing Countries Fund's expenses
will be spread. The increased asset base is expected to result in aggregate
operating expenses that would be lower than those that would otherwise be borne
by the Developing Countries Fund.
Appropriate Investment Objectives. The Trustees considered that, in light
of the Developing Countries Fund's performance to date and the fact that the
Fund was unlikely to experience any substantial increase in size under current
market conditions, the Partners Fund may provide a desirable alternative
investment opportunity for Developing Countries shareholders. The Trustees
considered that, although the Partners Fund is not required to invest any
portion of its assets in developing countries, it nonetheless provides investors
with a long-term investment in a portfolio of equity securities selected by RSIM
based on fundamental analysis, with the capability to invest any part of its
assets in foreign countries, including developing countries. (Under current
market conditions, most of the Partners Fund's assets are invested in securities
of issuers located in the United States.) The Trustees also considered that,
although the Developing Countries Fund is not required to invest in securities
of smaller companies, it has typically invested a substantial portion of its
assets in companies with market capitalizations of less than $1 billion. (The
Partners Fund invests in equity securities primarily of companies with market
capitalizations of up to $1 billion.)]
Information about the Merger
Agreement and Plan of Reorganization. The proposed Agreement provides that
the Partners Fund will acquire all of the assets of the Developing Countries
Fund in exchange for (i) the assumption by the Partners Fund of all of the
liabilities of the Developing Countries Fund and (ii) the issuance of the Class
A and Class C Merger Shares, all as of the Exchange Date (defined in the
Agreement to be August , 1998 or such other date as may be agreed upon by the
Funds). The following discussion of the Agreement is qualified in its entirety
by the full text of the Agreement, the form of which is attached as Appendix A
to this Prospectus/Proxy Statement.
The Developing Countries Fund will transfer all of its assets to the
Partners Fund. In exchange, the Partners Fund will assume all of the
liabilities of the Developing Countries Fund and deliver to the Developing
Countries Fund (i) a number of full and fractional Class A Merger Shares having
an aggregate net asset value equal to the value of the assets of the Developing
Countries Fund attributable to its Class A shares, less the value of the
liabilities of the Developing Countries Fund assumed by the Partners Fund
attributable to the Class A shares of the Developing Countries Fund, and (ii) a
number of full and fractional Class C Merger Shares having an aggregate net
asset value equal to the value of the assets of the Developing Countries Fund
attributable to its Class C shares, less the value of the liabilities of the
Developing Countries Fund assumed by the Partners Fund attributable to the
Class C shares of the Developing Countries Fund.
Immediately following the Exchange Date, the Developing Countries Fund
will distribute pro rata to its shareholders of record as of the close of
business on the Exchange Date the full and fractional Merger Shares received by
the Developing Countries Fund, with Class A Merger Shares being distributed to
holders of Class A shares of the Developing Countries Fund and Class C Merger
Shares being distributed to holders of
14
<PAGE>
Class C shares of the Developing Countries Fund. As a result of the proposed
transaction, each holder of Class A and Class C shares of the Developing
Countries Fund will receive a number of Class A and Class C Merger Shares equal
in aggregate value at the Exchange Date to the value of the Class A and Class C
shares, respectively, of the Developing Countries Fund held by the shareholder.
This distribution will be accomplished by the establishment of accounts on the
share records of the Partners Fund in the names of the Developing Countries
Fund shareholders, each account representing the number of full and fractional
Class A and Class C Merger Shares due such shareholder. Certificates for Merger
Shares will not be issued.
The consummation of the Merger is subject to the conditions set forth in
the Agreement, any of which may be waived. The Agreement may be terminated and
the Merger abandoned at any time before or after approval by the shareholders
of the Developing Countries Fund, prior to the Exchange Date, by mutual consent
of the Funds or, if any condition set forth in the Agreement has not been
fulfilled and has not been waived by the party entitled to its benefits, by
such party. The Agreement provides that the Merger need not be consummated if
the Trustees of the Trust shall have concluded in good faith, prior to the
Exchange Date, that the Merger would not be in the best interests of the
Developing Countries Fund's shareholders.
All legal and accounting fees and expenses, printing, filing and proxy
solicitation expenses, portfolio transfer taxes (if any), brokerage and similar
expenses and other fees and expenses incurred in connection with the
consummation of the transactions contemplated by the Agreement will be borne by
the Developing Countries Fund and the Partners Fund in the same proportions as
their respective aggregate net asset values bear to each other.
Notwithstanding any of the foregoing, expenses will in any event be paid
by the party directly incurring such expenses if and to the extent that the
payment by any other party of such expenses would result in the
disqualification of the first party as a "regulated investment company" within
the meaning of Section 851 of the Internal Revenue Code of 1986, as amended
(the "Code").
Description of the Merger Shares. Full and fractional Merger Shares will be
issued to the Developing Countries Fund's shareholders in accordance with the
procedure under the Agreement as described above. The Merger Shares are Class A
and Class C shares of the Partners Fund, which have characteristics
substantially identical to those of the corresponding class of the Developing
Countries Fund with respect to sales charges, CDSCs, and Rule 12b-1 fees, and
shareholder servicing fees.
The Partners Fund and the Developing Countries Fund each pays a management
fee at an annual rate of 1.25% of average daily net assets.
Class A shares of the Partners Fund are sold at net asset value, without an
initial sales charge imposed by the Fund, and are subject to a distribution fee
at an annual rate of 0.25% of the Fund's average daily net assets attributable
to its Class A shares. (The Developing Countries Fund may make payments under
its Class A shares distribution plan at an annual rate of up to 0.50% of the
Fund's average daily net assets; the Trustees have currently limited payments
under the plan to an annual rate of 0.25% of the Fund's average daily net
assets.) Class A shares are not subject to a CDSC. Class C shares of the
Partners Fund are sold at net asset value, without an initial sales charge
imposed by the Fund, but are subject to a 1.00% CDSC if redeemed within one year
after purchase. In addition, Class C shares of the Partners Fund are subject to
a distribution fee paid by the Fund at an annual rate of 0.75% of the average
daily net assets of the Fund attributable to its Class C shares. The
Distribution Plan relating to the Fund's Class C shares permits payment under
the Plan at an annual rate of up to 1.00% of the average daily net assets of the
Fund attributable to the Fund's Class C shares. The Class C shares of the Fund
are also subject to a shareholder servicing fee at an annual rate of 0.25% of
the average daily net assets of the Fund attributable to its Class C shares.
Class C shares of the
15
<PAGE>
Partners Fund are subject to a 1.00% CDSC if redeemed within one year after
purchase. Shareholders redeeming Class C shares have a one-time right, however,
to reinvest within 90 days the redemption proceeds plus the CDSC paid, if any,
at the next determined net asset value. For the purposes of computing the CDSC,
if any, payable on redemption of Class C Merger Shares, the Merger Shares will
be treated as having been purchased as of the date that, and for the price at
which, the Class C Developing Countries Fund shares exchanged for such Merger
Shares were purchased.
Both Class A and Class C shares of the Partners Fund are subject to a
$9.00 fee charged for redemptions made by bank wire. In addition, shares of
both classes of the Partners Fund can be exchanged at net asset value for
shares of the same class of any other fund offered by the Trust, subject to
certain limitations set forth in the Prospectus.
Federal Income Tax Consequences. The Merger is expected to be a tax-free
reorganization, in which case (i) under Section 361 of the Code, no gain or
loss will be recognized by the Developing Countries Fund as a result of the
reorganization; (ii) under Section 354 of the Code, no gain or loss will be
recognized by shareholders of the Developing Countries Fund on the distribution
of Merger Shares to them in exchange for their shares of the Developing
Countries Fund; (iii) under Section 358 of the Code, the tax basis of the
Merger Shares that the Developing Countries Fund's shareholders receive in
place of their Developing Countries Fund shares will be the same as the basis
of the Developing Countries Fund shares exchanged; (iv) under Section 1223(1)
of the Code, a shareholder's holding period for the Merger Shares received
pursuant to the Agreement will be determined by including the holding period
for the Developing Countries Fund shares exchanged for the Merger Shares,
provided that the shareholder held the Developing Countries Fund shares as a
capital asset; (v) under Section 1032 of the Code, no gain or loss will be
recognized by the Partners Fund as a result of the reorganization; (vi) under
Section 362(b) of the Code, the Partners Fund's tax basis in the assets that
the Partners Fund receives from the Developing Countries Fund will be the same
as the Developing Countries Fund's basis in such assets; and (vii) under
Section 1223(2) of the Code, the Partners Fund's holding period in such assets
will include the Developing Countries Fund's holding period in such assets. The
treatment of the Merger as a tax-free reorganization is based in part on the
circumstances prevailing at the time of the Merger.
The federal income tax treatment of the Merger is not clear, however, and
the Internal Revenue Service may assert that the Merger is a taxable
reorganization. If the Merger were treated as a taxable event, the Developing
Countries Fund would recognize gain or loss on the sale of its assets to the
Partners Fund, and shareholders of the Developing Countries Fund would
recognize taxable gain or loss on receipt of the Merger Shares equal to the
difference between the net asset value of the Partners Fund shares received and
the shareholder's tax basis in his or her Developing Countries Fund shares. In
particular, in such a case, the Partners Fund's cost basis for each security
acquired from the Developing Countries Fund in the Merger would be the fair
market value of such
16
<PAGE>
security at the time of the Merger (rather than the Developing Countries Fund's
cost basis), and as a result of the Merger the Developing Countries Fund's net
unrealized losses and capital loss carryforwards would not be available for use
by either Fund. In addition, "individuals" (as defined in the Code) would be
able to use any capital losses arising from the Merger to offset other realized
capital gains or to offset ordinary income in the current year up to $3,000,
and would also be able carry forward losses indefinitely to offset future
realized capital gains, and shareholders who are not "individuals" would be
able to use realized capital losses to offset realized capital gains in the
current year and would also be able to carry forward or carry back losses to
offset future or past realized gains. There can be no assurance that the
Internal Revenue Service would not prevail in the assertion that the Merger is
a taxable transaction.
Because the Developing Countries Fund's belief that the reorganization
will be tax-free is based in part on certain factors beyond its control and
which cannot yet be determined (including in particular shareholder redemption
levels prior to the Merger), it is possible that the Developing Countries Fund
itself will take the position that the reorganization is taxable. You should
consult your tax adviser as to your precise tax consequences arising from the
Merger. To receive a written summary of your investment history call the Funds
at 1-800-766-FUND.
At July , 1998, the Developing Countries Fund had an unrealized capital
loss of approximately , or approximately per Class A and Class C
share of that Fund. As of the same date, the Partners Fund had an unrealized
capital gain of approximately or approximately per Class A share
and per Class C share. If the Merger had been effected at that date, the
unrealized capital gain per Class A share of the Partners Fund (including Class
A Merger Shares) would have been approximately per share, and the
unrealized capital gain per Class C share of the Partners Fund (including Class
C Merger Shares) would have been approximately per share. At December 31,
1997, the Developing Countries Fund had a tax loss carryforward of
approximately .
Declaration of Trust. Each of the Merger Shares will be fully paid and
nonassessable by the Partners Fund when issued, will be transferable without
restriction, and will have no preemptive or conversion rights.
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust disclaims
shareholder liability for claims against the Trust and contemplates that notice
of such disclaimer be given in any note, bond, contract, instrument,
certificate, or undertaking made or issued on behalf of the Trust or the Board
of Trustees. The Declaration of Trust provides for indemnification out of the
Trust property for all loss and expense of any shareholder held personally
liable solely by reason of his or her being or having been a shareholder. Thus,
the risk of a shareholder's incurring financial loss from shareholder liability
is limited to circumstances in which the Trust would be unable to meet its
obligations. The likelihood of such a circumstance is considered remote. The
shareholders of the Developing Countries Fund are currently subject to the same
risk of shareholder liability under Massachusetts law and the Declaration of
Trust.
A Trustee may be removed from office by vote of shareholders holding at
least two-thirds of the outstanding shares of the Trust.
The Declaration of Trust provides that any fund, including the Developing
Countries Fund, may be terminated at any time by the affirmative vote of a
"majority of the outstanding voting securities" of that fund (as the quoted
phrase is defined in the 1940 Act) or by the Trustees by written notice to the
shareholders of that fund. The Declaration of Trust provides that the Trust may
be terminated at any time by the affirmative vote of a
17
<PAGE>
"majority of the outstanding voting securities" of each series of the Trust (as
the quoted phrase is defined in the 1940 Act), voting separately by series, or
by the Trustees by written notice to the shareholders of the Trust.
The Declaration of Trust provides that 40% of the shares entitled to vote
at the Meeting will constitute a quorum for the Meeting.
Capitalization. The following table shows the capitalizations of the
Partners Fund and the Developing Countries Fund as of December 31, 1997 and of
the Partners Fund on a pro forma basis as of that date, giving effect to the
proposed acquisition by the Partners Fund of the assets and liabilities of the
Developing Countries Fund at net asset value:
<TABLE>
<CAPTION>
December 31, 1997
-------------------------------------------------------------
Partners Fund:
Developing Countries Pro Forma
Partners Fund Fund Combined
------------------ ---------------------- ---------------
<S> <C>
Net Assets
Class A ................. $ 194,133,477 $29,430,602 $223,563,779
Class C ................. $ 1,000,192 $ 75,333 $ 1,075,525
Shares Outstanding
Class A ................. 11,772,955 3,670,815 15,943,770
Class C ................. 60,977 9,497 70,474
Net Asset Value Per Share
Class A ................. $ 16.49 $ 8.02 $ 14.48
Class C* ................ $ 16.40 $ 7.93 $ 15.26
</TABLE>
- ----------
* Redemption price per share is equal to net asset value less any applicable
CDSC.
18
<PAGE>
INFORMATION ABOUT THE FUNDS
Other information regarding the Developing Countries Fund and the Partners
Fund, including information with respect to their investment objectives,
policies, and restrictions and financial histories may be found in the Merger
SAI, the Prospectuses, the SAI, and the Annual Reports, which are available
upon request by calling 1-800-766-FUND. To the extent any information in
respect of the Developing Countries Fund or the Partners Fund found in any such
document is inconsistent with the information contained in this
Prospectus/Proxy Statement, this Prospectus/Proxy Statement should be deemed to
supersede such other document.
Proxy materials, reports, proxy and information statements, and other
information filed by the Trust with respect to the Funds can be inspected and
copied at the Public Reference Facilities maintained by the Securities and
Exchange Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World
Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also
be obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549 at prescribed rates.
VOTING INFORMATION
Record Date, Quorum, and Method of Tabulation. Shareholders of record of
the Developing Countries Fund at the close of business on July , 1998 (the
"Record Date") will be entitled to notice of and to vote at the Meeting or any
adjournment thereof. The holders of 40% of the Class A and Class C shares of
the Developing Countries Fund outstanding at the close of business on the
Record Date present in person or represented by proxy will constitute a quorum
for the Meeting. Shareholders are entitled to one vote for each share held,
with fractional shares voting proportionally. Only shareholders of the
Developing Countries Fund will vote on the approval or disapproval of the
Merger.
Votes cast by proxy or in person at the Meeting will be counted by persons
appointed by the Trust to act as tellers for the Meeting. The tellers will
count the total number of votes cast "for" approval of the proposal for
purposes of determining whether sufficient affirmative votes have been cast.
The tellers will count shares represented by proxies that withold authority to
vote or that reflect abstentions or "broker non-votes" (i.e., shares held by a
broker or nominee as to which (i) instructions have not been received from the
beneficial owners or the persons entitled to vote and (ii) the broker or
nominee does not have the discretionary voting power on a particular matter) as
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. Abstentions and broker non-votes will
have no effect on the proposal to approve the Merger.
Other Business.The Board of Trustees knows of no other business to be
brought before the Meeting. However, if any other matters properly come before
the Meeting, it is the Board's intention that proxies which do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named as proxies in the enclosed
form of proxy.
Shares Outstanding and Beneficial Ownership. As of the Record Date, as
shown on the books of the Trust, there were issued and outstanding
Class A shares and Class C shares of the Developing Countries Fund.
19
<PAGE>
As of the Record Date, to the Trust's knowledge, the shareholders who
owned of record or beneficially 5% or more of the outstanding shares of either
Fund were as follows:
<TABLE>
<CAPTION>
Percentage Percentage of Fund's
Shareholder Shares Owned of Class Outstanding Shares
- ------------------------------ -------------- ------------ ---------------------
<S> <C>
Developing Countries Fund
Class A Shares
Charles Schwab & Company
Inc.
Reinvest Account
Attn. Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA
94104-4122
National Financial Services
Corp.
FBO The Exclusive Benefit
of our Customers
#4402087521
P.O. Box 3908 Church Street
Station
New York, NY 10008-3908
Class C Shares
(To Be Supplied) .............
Partners Fund
Class A Shares
Charles Schwab & Company
Inc.
Reinvest Account
Attn. Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA
94104-4122
National Financial Services
Corp.
FBO The Exclusive Benefit
of our Customers
#4402087521
P.O. Box 3908 Church Street
Station
New York, NY 10008-3908
Class C Shares
(To be supplied) .............
</TABLE>
As of the Record Date, the officers and Trustees of the Trust as a group
beneficially owned less than 1% of the outstanding shares of each Class of the
Developing Countries Fund and the Partners Fund.
Solicitation of Proxies. The costs of solicitation of proxies will be
borne by the Developing Countries Fund and the Partners Fund in the same
proportions as their respective aggregate net asset values bear to each other.
20
<PAGE>
Solicitation of proxies by personal interview, mail, telephone, and telegraph
may be made by officers and Trustees of the Trust and employees of RSIM and its
affiliates (who will receive no compensation therefor in addition to their
regular salaries).
The Trust may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their instructions have
been properly recorded. The Trust has been advised by counsel that these
procedures are consistent with the requirements of applicable law. If these
procedures were subject to a successful legal challenge, such votes would not
be counted at the Meeting. The Trust is unaware of any such challenge at this
time. Shareholders would be called at the phone number the Trust (or a
shareholder's financial institution) has in its records for their accounts, and
would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the Meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been recorded
correctly, they will also receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the information is incorrect.
Revocation of Proxies. Any shareholder giving a proxy has the power to
revoke it at any time before it is exercised by sending or delivering a written
revocation to the Secretary of the Trust (which will be effective when it is
received by the Secretary), by properly executing a later-dated proxy, or by
attending the Meeting, requesting return of such proxy, and voting in person.
All properly executed proxies received in time for the Meeting will be voted in
accordance with the specification made, or, if no specification is made, FOR
the proposal to implement the Merger.
Shareholder Proposals at Future Meetings of Shareholders. The Declaration
of Trust does not provide for annual meetings of shareholders, and the Trust
does not currently intend to hold such a meeting in 1998. Shareholder proposals
for inclusion in a proxy statement for any subsequent meeting of the Trust's
shareholders must be received by the Trust a reasonable period of time prior to
any such meeting. If the Merger is consummated, the Developing Countries Fund's
existence will terminate in August , 1998 or shortly thereafter, after which
there would be no meetings of the shareholders of the Developing Countries Fund
Adjournment. In the event that sufficient votes in favor of the Merger
proposal are not received by the time scheduled for the Meeting, the persons
named as proxies may propose one or more adjournments of the Meeting for a
period or periods of not more than 60 days in the aggregate to permit further
solicitation of proxies. In addition, if, in the judgment of the persons named
as proxies, subsequent developments make it advisable to defer action on the
Merger, the persons named as proxies may propose one or more adjournments of
the Meeting for a reasonable period of time in order to defer action of the
Merger. Any adjournment will require the affirmative vote of a majority of the
votes cast on the question in person or by proxy at the session of the Meeting
to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies which they are entitled to vote in favor of the
Merger. They will vote against any such adjournment those proxies which they
have been instructed to vote against the Merger, and they will vote to abstain
any such proxies which they are required to abstain from voting on the Merger.
The costs of any such additional solicitation and of any adjourned session will
be borne by the Developing Countries Fund and the Partners Fund in the same
proportions as their respective aggregate net asset values bear to each other.
August , 1998
21
<PAGE>
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan or Reorganization (the "Agreement") is made as of
July , 1998 in San Francisco, California, by and between Robertson Stephens
Investment Trust, a Massachusetts business trust (the "Robertson Stephens
Trust"), on behalf of its Robertson Stephens Developing Countries Fund series
(the "Acquired Fund"), and the Robertson Stephens Trust, on behalf of its
Robertson Stephens Partners Fund series (the "Acquiring Fund").
Plan of Reorganization
(a) The Acquired Fund will sell, assign, convey, transfer, and deliver to
the Acquiring Fund on the Exchange Date (as defined in Section 6) all of its
properties and assets. In consideration therefor, the Acquiring Fund will, on
the Exchange Date, assume all of the liabilities of the Acquired Fund existing
at the Valuation Time (as defined in Section 3(c)) and deliver to the Acquired
Fund (i) a number of full and fractional Class A shares of beneficial interest
of the Acquiring Fund (the "Class A Merger Shares") having an aggregate net
asset value equal to the value of the assets of the Acquired Fund attributable
to Class A shares of the Acquired Fund transferred to the Acquiring Fund on
such date less the value of the liabilities of the Acquired Fund attributable
to Class A shares of the Acquired Fund assumed by the Acquiring Fund on that
date, and (ii) a number of full and fractional Class C shares of beneficial
interest of the Acquiring Fund (the "Class C Merger Shares") having an
aggregate net asset value equal to the value of the assets of the Acquired Fund
attributable to Class C shares of the Acquired Fund transferred to the
Acquiring Fund on such date less the value of the liabilities of the Acquired
Fund attributable to Class C shares of the Acquired Fund assumed by the
Acquiring Fund on that date. (The Class A Merger Shares and the Class C Merger
Shares are referred to collectively herein as the "Merger Shares.")
(b) Upon consummation of the transactions described in paragraph (a) of
this Agreement, the Acquired Fund shall distribute in complete liquidation to
its Class A and Class C shareholders of record as of the Exchange Date the
Class A and Class C Merger Shares of the Acquiring Fund, each such shareholder
being entitled to receive that proportion of such Class A and Class C Merger
Shares which the number of Class A and Class C shares of beneficial interest of
the Acquired Fund held by such shareholder bears to the number of Class A and
Class C shares of the Acquired Fund outstanding on such date. Certificates
representing the Merger Shares will not be issued. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books of the
Acquired Fund.
(c) As promptly as practicable after the liquidation of the Acquired Fund
as aforesaid, the Acquired Fund shall be dissolved pursuant to the provisions
of the Agreement and Declaration of Trust of the Robertson Stephens Trust, as
amended, and applicable law, and its legal existence terminated. Any reporting
responsibility of the Acquired Fund is and shall remain the responsibility of
the Acquired Fund up to and including the Exchange Date and, if applicable,
such later date on which the Acquired Fund is liquidated.
Agreement
The Acquiring Fund and the Acquired Fund agree as follows:
1. Representations, Warranties, and Agreements of the Acquiring Fund. The
Acquiring Fund represents and warrants to and agrees with the Acquired Fund
that:
A-1
<PAGE>
a. The Acquiring Fund is a series of shares of the Robertson Stephens
Trust, a Massachusetts business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts, and has power to own
all of its properties and assets and to carry out its obligations under
this Agreement. The Robertson Stephens Trust is qualified as a foreign
association in every jurisdiction where required, except to the extent that
failure so to qualify would not have a material adverse effect on the
Robertson Stephens Trust. Each of the Robertson Stephens Trust and the
Acquiring Fund has all necessary federal, state, and local authorizations
to carry on its business as now being conducted and to carry out this
Agreement.
b. The Robertson Stephens Trust is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end management
investment company, and such registration has not been revoked or rescinded
and is in full force and effect.
c. A statement of assets and liabilities, statements of operations,
statements of changes in net assets, and a schedule of investments
(indicating their market values) of the Acquiring Fund as of and for the
year ended December 31, 1997 have been furnished to the Acquired Fund. Such
statement of assets and liabilities and schedule fairly present the
financial position of the Acquiring Fund as of their date and such
statements of operations and changes in net assets fairly reflect the
results of its operations and changes in net assets for the period covered
thereby in conformity with generally accepted accounting principles.
d. The current prospectuses and statement of additional information of
the Robertson Stephens Trust, each dated March 1, 1998, as revised or
supplemented to this date (collectively, the "Robertson Stephens
Prospectus"), which have previously been furnished to the Acquired Fund,
did not as of such date and do not contain as of the date hereof, with
respect to the Robertson Stephens Trust and the Acquiring Fund, any untrue
statements of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
e. There are no material legal, administrative, or other proceedings
pending or, to the knowledge of the Robertson Stephens Trust or the
Acquiring Fund, threatened against the Robertson Stephens Trust or the
Acquiring Fund, which assert liability on the part of the Robertson
Stephens Trust or the Acquiring Fund. The Acquiring Fund knows of no facts
which might form the basis for the institution of such proceedings and is
not a party to or subject to the provisions of any order, decree, or
judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein
contemplated.
f. To the best of its knowledge and except as previously disclosed to
the Acquired Fund by the Acquiring Fund, the Acquiring Fund has no known
liabilities of a material nature, contingent or otherwise, other than those
shown belonging to it on its statement of assets and liabilities as of
December 31, 1997, those incurred in the ordinary course of its business as
an investment company since December 31, 1997 and those to be assumed
pursuant to this Agreement. Prior to the Exchange Date, the Acquiring Fund
will endeavor to quantify and to reflect on its balance sheet all of its
material known liabilities and will advise the Acquired Fund of all
material liabilities, contingent or otherwise, incurred by it subsequent to
December 31, 1997, whether or not incurred in the ordinary course of
business.
g. As of the Exchange Date, the Acquiring Fund will have filed all
federal and other tax returns and reports which, to the knowledge of the
Robertson Stephens Trust's officers, are required to be filed by the
Acquiring Fund and has paid or will pay all federal and other taxes shown
to be due on said returns or on any assessments received by the Acquiring
Fund. All tax liabilities of the Acquiring Fund have been adequately
A-2
<PAGE>
provided for on its books, and no tax deficiency or liability of the
Acquiring Fund has been asserted, and no question with respect thereto has
been raised or is under audit, by the Internal Revenue Service or by any
state or local tax authority for taxes in excess of those already paid.
h. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated by this Agreement, except such as may
be required under the Securities Act of 1933, as amended (the "1933 Act"),
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940
Act, and state securities or blue sky laws (which term as used herein shall
include the laws of the District of Columbia and of Puerto Rico).
i. The registration statement (the "Registration Statement") filed with
the Securities and Exchange Commission (the "Commission") by the Robertson
Stephens Trust on Form N-14 on behalf of the Acquiring Fund and relating to
the Merger Shares issuable hereunder and the proxy statement of the
Acquired Fund relating to the meeting of the Acquired Fund's shareholders
referred to in Section 7(a) herein (together with the documents
incorporated therein by reference, the "Acquired Fund Proxy Statement"), on
the effective date of the Registration Statement, (i) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the rules and regulations thereunder and (ii) will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders meeting
referred to in Section 7(a) and on the Exchange Date, the prospectuses
which are contained in the Registration Statement, as amended or
supplemented by any amendments or supplements filed with the Commission by
the Robertson Stephens Trust, and the Acquired Fund Proxy Statement will
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements
in or omissions from the Registration Statement or the Acquired Fund Proxy
Statement made in reliance upon and in conformity with information
furnished in writing by the Acquired Fund to the Acquiring Fund or the
Robertson Stephens Trust specifically for use in the Registration Statement
or the Acquired Fund Proxy Statement.
j. There are no material contracts outstanding to which the Acquiring
Fund is a party, other than as are or will be disclosed in the Robertson
Stephens Prospectus, the Registration Statement, or the Acquired Fund Proxy
Statement.
k. The Acquiring Fund qualifies and will at all times through the
Exchange Date qualify for taxation as a "regulated investment company"
under Sections 851 and 852 of the Internal Revenue Code of 1986, as amended
(the "Code").
l. The issuance of the Merger Shares pursuant to this Agreement will be
in compliance with all applicable federal and state securities laws.
m. The Merger Shares to be issued to the Acquired Fund have been duly
authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and non-assessable by
the Acquiring Fund, and no shareholder of the Acquiring Fund will have any
preemptive right of subscription or purchase in respect thereof.
n. All issued and outstanding shares of the Acquiring Fund are, and at
the Exchange Date will be, duly authorized, validly issued, fully paid, and
non-assessable by the Acquiring Fund. The Acquiring Fund does
A-3
<PAGE>
not have outstanding any options, warrants, or other rights to subscribe
for or purchase any of the Acquiring Fund shares, nor is there outstanding
any security convertible into any Acquiring Fund shares.
2. Representations, Warranties, and Agreements of the Acquired Fund. The
Acquired Fund represents and warrants to and agrees with the Acquiring Fund
that:
a. The Acquired Fund is a series of shares of the Robertson Stephens
Trust, a Massachusetts business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts, and has power to own
all of its properties and assets and to carry out this Agreement. The
Robertson Stephens Trust is qualified as a foreign association in every
jurisdiction where required, except to the extent that failure to so
qualify would not have a material adverse effect on the Robertson Stephens
Trust. Each of the Robertson Stephens Trust and the Acquired Fund has all
necessary federal, state, and local authorizations to own all of its
properties and assets and to carry on its business as now being conducted
and to carry out this Agreement.
b. The Robertson Stephens Trust is registered under the 1940 Act as an
open-end management investment company, and such registration has not been
revoked or rescinded and is in full force and effect.
c. A statement of assets and liabilities, statement of operations,
statement of changes in net assets, and a schedule of investments
(indicating their market values) of the Acquired Fund as of and for the
fiscal year ended December 31, 1997 have been furnished to the Acquiring
Fund. Such statement of assets and liabilities and schedule fairly present
the financial position of the Acquired Fund as of their date, and such
statements of operations and changes in net assets fairly reflect the
results of its operations and changes in net assets for the period covered
thereby, in conformity with generally accepted accounting principles.
d. The Robertson Stephens Prospectus, which has been previously
furnished to the Acquiring Fund, did not contain as of March 1, 1998 and
does not contain, with respect to the Robertson Stephens Trust and the
Acquired Fund, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
e. There are no material legal, administrative, or other proceedings
pending or, to the knowledge of the Robertson Stephens Trust or the
Acquired Fund, threatened against the Robertson Stephens Trust or the
Acquired Fund, which assert liability on the part of the Robertson Stephens
Trust or the Acquired Fund. The Acquired Fund knows of no facts which might
form the basis for the institution of such proceedings and is not a party
to or subject to the provisions of any order, decree, or judgment of any
court or governmental body which materially and adversely affects its
business or its ability to consummate the transactions herein contemplated.
f. There are no material contracts outstanding to which the Acquired
Fund is a party, other than as are or will be disclosed in the Robertson
Stephens Trust's registration statement on Form N-1A or the Robertson
Stephens Prospectus.
g. To the best of its knowledge and except as previously disclosed to
the Acquiring Fund by the Acquired Fund, the Acquired Fund has no known
liabilities of a material nature, contingent or otherwise, other than those
shown on the Acquired Fund's statement of assets and liabilities as of
December 31, 1997 referred to above and those incurred in the ordinary
course of its business as an investment company since such date. Prior to
the Exchange Date, the Acquired Fund will endeavor to quantify and to
reflect on its
A-4
<PAGE>
balance sheet all of its material known liabilities and will advise the
Acquiring Fund of all material liabilities, contingent or otherwise,
incurred by it subsequent to December 31, 1997, whether or not incurred in
the ordinary course of business.
h. As of the Exchange Date, the Acquired Fund will have filed all
federal and other tax returns and reports which, to the knowledge of the
Robertson Stephens Trust's officers, are required to be filed by the
Acquired Fund and has paid or will pay all federal and other taxes shown to
be due on said returns or on any assessments received by the Acquired Fund.
All tax liabilities of the Acquired Fund have been adequately provided for
on its books, and no tax deficiency or liability of the Acquired Fund has
been asserted, and no question with respect thereto has been raised or is
under audit, by the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid.
i. At the Exchange Date, the Robertson Stephens Trust, on behalf of the
Acquired Fund, will have full right, power, and authority to sell, assign,
transfer, and deliver the Investments (as defined below) and any other
assets and liabilities of the Acquired Fund to be transferred to the
Acquiring Fund pursuant to this Agreement. At the Exchange Date, subject
only to the delivery of the Investments and any such other assets and
liabilities as contemplated by this Agreement, the Acquiring Fund will
acquire the Investments and any such other assets and liabilities subject
to no encumbrances, liens, or security interests whatsoever and without any
restrictions upon the transfer thereof. As used in this Agreement, the term
"Investments" shall mean the Acquired Fund's investments shown on the
schedule of its investments as of December 31, 1997 referred to in Section
2(c) hereof, as supplemented with such changes in the portfolio as the
Acquired Fund shall make, and changes resulting from stock dividends, stock
split-ups, mergers, and similar corporate actions through the Exchange
Date.
j. No registration under the 1933 Act of any of the Investments would be
required if they were, as of the time of such transfer, the subject of a
public distribution by either of the Acquiring Fund or the Acquired Fund,
except as previously disclosed to the Acquiring Fund by the Acquired Fund.
k. No consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated by this Agreement, except such as may
be required under the 1933 Act, 1934 Act, the 1940 Act, or state securities
or blue sky laws.
l. The Registration Statement and the Acquired Fund Proxy Statement, on
the effective date of the Registration Statement, (i) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act, and
the 1940 Act and the rules and regulations thereunder and (ii) will not
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and at the time of the shareholders meeting
referred to in Section 7(a) and on the Exchange Date, the Acquired Fund
Proxy Statement and the Registration Statement will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions
from the Registration Statement or the Acquired Fund Proxy Statement made
in reliance upon and in conformity with information furnished in writing by
the Acquiring Fund to the Acquired Fund or the Robertson Stephens Trust
specifically for use in the Registration Statement or the Acquired Fund
Proxy Statement.
m. The Acquired Fund qualifies and will at all times through the
Exchange Date qualify for taxation as a "regulated investment company"
under Section 851 and 852 of the Code.
A-5
<PAGE>
n. All issued and outstanding shares of the Acquired Fund are, and at
the Exchange Date will be, duly authorized, validly issued, fully paid, and
nonassessable by the Acquired Fund. The Acquired Fund does not have
outstanding any options, warrants, or other rights to subscribe for or
purchase any of the Acquired Fund shares, nor is there outstanding any
security convertible into any of the Acquired Fund shares.
3. Reorganization.
a. Subject to the requisite approval of the shareholders of the Acquired
Fund and to the other terms and conditions contained herein (including the
Acquired Fund's obligation to distribute to its shareholders all of its
investment company taxable income and net capital gain as described in
Section 8(k) hereof), the Acquired Fund agrees to sell, assign, convey,
transfer, and deliver to the Acquiring Fund, and the Acquiring Fund agrees
to acquire from the Acquired Fund, on the Exchange Date all of the
Investments and all of the cash and other properties and assets of the
Acquired Fund, whether accrued or contingent (including cash received by
the Acquired Fund upon the liquidation by the Acquired Fund of any
investments), in exchange for that number of shares of beneficial interest
of the Acquiring Fund provided for in Section 4 and the assumption by the
Acquiring Fund of all of the liabilities of the Acquired Fund, whether
accrued or contingent, existing at the Valuation Time (as defined below)
except for the Acquired Fund's liabilities, if any, arising in connection
with this Agreement. Pursuant to this Agreement, the Acquired Fund will, as
soon as practicable after the Exchange Date, distribute all of the Merger
Shares received by it to the shareholders of the Acquired Fund in exchange
for their Class A and Class C shares of the Acquired Fund.
b. The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any interest, cash, or such dividends, rights, and other payments received
by it on or after the Exchange Date with respect to the Investments and
other properties and assets of the Acquired Fund, whether accrued or
contingent, received by it on or after the Exchange Date. Any such
distribution shall be deemed included in the assets transferred to the
Acquiring Fund at the Exchange Date and shall not be separately valued
unless the securities in respect of which such distribution is made shall
have gone "ex" such distribution prior to the Valuation Time, in which case
any such distribution which remains unpaid at the Exchange Date shall be
included in the determination of the value of the assets of the Acquired
Fund acquired by the Acquiring Fund.
c. The Valuation Time shall be 4:30 p.m. Eastern time on the Exchange
Date or such earlier or later day as may be mutually agreed upon in writing
by the parties hereto (the "Valuation Time").
4. Exchange Date: Valuation Time. On the Exchange Date, the Acquiring Fund
will deliver to the Acquired Fund (i) a number of full and fractional Class A
Merger Shares having an aggregate net asset value equal to the value of the
assets of the Acquired Fund attributable to Class A shares of the Acquired Fund
transferred to the Acquiring Fund on such date less the value of the
liabilities of the Acquired Fund attributable to Class A shares of the Acquired
Fund assumed by the Acquiring Fund on that date and (ii) a number of full and
fractional Class C Merger Shares having an aggregate net asset value equal to
the value of the assets of the Acquired Fund attributable to Class C shares of
the Acquired Fund transferred to the Acquiring Fund on such date less the value
of the liabilities of the Acquired Fund attributable to Class C shares of the
Acquired Fund assumed by the Acquiring Fund on that date, determined as
hereinafter provided in this Section 4.
a. The net asset value of the Merger Shares to be delivered to the
Acquired Fund, the value of the assets attributable to the Class A and
Class C shares of the Acquired Fund, and the value of the liabilities
attributable to the Class A and Class C shares of the Acquired Fund to be
assumed by the Acquiring Fund, shall in each case be determined as of the
Valuation Time.
A-6
<PAGE>
b. The net asset value of the Class A and Class C Merger Shares shall be
computed in the manner set forth in the Robertson Stephens Prospectus. The
value of the assets and liabilities of the Class A and Class C shares of
the Acquired Fund shall be determined by the Acquiring Fund, in cooperation
with the Acquired Fund, pursuant to procedures which the Acquiring Fund
would use in determining the fair market value of the Acquiring Fund's
assets and liabilities.
c. No adjustments shall be made in the net asset value of either the
Acquired Fund or the Acquiring Fund to take into account differences in
realized and unrealized gains and losses.
d. The Acquired Fund shall distribute the Class A Merger Shares to the
Class A shareholders of the Acquired Fund by furnishing written
instructions to the Acquiring Fund's transfer agent, which will as soon as
practicable set up open accounts for each Class A Acquired Fund shareholder
in accordance with such written instructions. The Acquired Fund shall
distribute the Class C Merger Shares to the Class C shareholders of the
Acquired Fund by furnishing written instructions to the Acquiring Fund's
transfer agent, which will as soon as practicable set up open accounts for
each Class C Acquired Fund shareholder in accordance with such written
instructions.
e. The Acquiring Fund shall assume all liabilities of the Acquired Fund,
whether accrued or contingent, in connection with the acquisition of assets
and subsequent dissolution of the Acquired Fund or otherwise, except for
the Acquired Fund's liabilities, if any, pursuant to this Agreement.
5. Expenses, Fees, Etc.
a. All legal and accounting fees and expenses, printing, filing, and
proxy solicitation expenses, portfolio transfer taxes (if any), brokerage,
and similar expenses incurred in connection with the transactions
contemplated by the Agreement will be borne by the Acquiring Fund and the
Acquired Fund in the same proportion as their respective aggregate net
asset values bear to each other, whether or not such transactions are
consummated. Notwithstanding any of the foregoing, expenses will in any
event be paid by the party directly incurring such expenses if and to the
extent that the payment by the other party of such expenses would result in
the disqualification of such party as a "regulated investment company"
within the meaning of Section 851 of the Code.
b. Notwithstanding any other provision of this Agreement, if for any
reason the transactions contemplated by this Agreement are not consummated,
no party shall be liable to the other party for any damages resulting
therefrom, including, without limitation, consequential damages, except as
specifically set forth above.
6. Exchange Date. Delivery of the assets of the Acquired Fund to be
transferred, assumption of the liabilities of the Acquired Fund to be assumed,
and the delivery of the Merger Shares to be issued shall be made at the offices
of Ropes & Gray, One International Place, Boston, Massachusetts 02110 as of
August , 1998, or at such other date agreed to by the Acquiring Fund and the
Acquired Fund, the date and time upon which such delivery is to take place
being referred to herein as the "Exchange Date."
7. Meetings of Shareholders; Dissolution.
a. The Robertson Stephens Trust, on behalf of the Acquired Fund, agrees
to call a meeting of the Acquired Fund's shareholders as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of its assets to and the assumption
of all of its liabilities by
A-7
<PAGE>
the Acquiring Fund as herein provided, adopting this Agreement, and
authorizing the liquidation and dissolution of the Acquired Fund.
b. The Acquired Fund agrees that the liquidation and dissolution of the
Acquired Fund will be effected in the manner provided in the Robertson
Stephens Trust's Agreement and Declaration of Trust in accordance with
applicable law and that on and after the Exchange Date, the Acquired Fund
shall not conduct any business except in connection with its liquidation
and dissolution.
c. The Acquiring Fund has, in consultation with the Acquired Fund and
based in part on information furnished by the Acquired Fund, filed the
Registration Statement with the Commission. The Acquired Fund and the
Acquiring Fund will cooperate with each other and will furnish to each
other the information relating to itself required by the 1933 Act, the 1934
Act, and the 1940 Act and the rules and regulations thereunder to be set
forth in the Registration Statement.
8. Conditions to the Acquiring Fund's Obligations. The obligations of the
Acquiring Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of the Acquired
Fund entitled to vote.
b. That the Acquired Fund shall have furnished to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, with values
determined as provided in Section 4 of this Agreement, together with a list
of Investments with their respective tax costs, all as of the Valuation
Time, certified on the Acquired Fund's behalf by the Robertson Stephens
Trust's President (or any Vice President) and Treasurer (or any Assistant
Treasurer), and a certificate of both such officers, dated the Exchange
Date, that there has been no material adverse change in the financial
position of the Acquired Fund since December 31, 1997, other than changes
in the Investments and other assets of the Acquired Fund, or changes due to
dividends paid or losses from operations.
c. That the Acquired Fund shall have furnished to the Acquiring Fund a
statement, dated the Exchange Date, signed by the Robertson Stephens
Trust's President (or any Vice President) and Treasurer (or any Assistant
Treasurer) certifying that as of the Valuation Time and as of the Exchange
Date all representations and warranties of the Acquired Fund made in this
Agreement are true and correct in all material respects as if made at and
as of such dates and the Acquired Fund has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such dates.
d. That the Acquired Fund shall have delivered to the Acquiring Fund a
letter from Price Waterhouse LLP dated the Exchange Date reporting on the
results of applying certain procedures agreed upon by the Acquiring Fund
and described in such letter, which limited procedures relate to schedules
of the tax provisions and qualifying tests for regulated investment
companies as prepared for the fiscal year ended December 31, 1997 and the
period from December 31, 1997 to the Exchange Date (the latter period being
based on unaudited data).
e. That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement.
A-8
<PAGE>
f. That the Acquiring Fund shall have received an opinion of Ropes &
Gray dated the Exchange Date, to the effect that (i) this Agreement has
been duly authorized, executed, and delivered by the Robertson Stephens
Trust on behalf of the Acquired Fund and, assuming that the Registration
Statement, the Robertson Stephens Prospectus, and the Acquired Fund Proxy
Statement comply with the 1933 Act, the 1934 Act, and the 1940 Act and
assuming due authorization, execution, and delivery of this Agreement by
the Robertson Stephens Trust on behalf of the Acquiring Fund, is a valid
and binding obligation of the Robertson Stephens Trust and the Acquired
Fund; (ii) the Robertson Stephens Trust, on behalf of the Acquired Fund,
has power to sell, assign, convey, transfer, and deliver the assets
contemplated hereby and, upon consummation of the transactions contemplated
hereby in accordance with the terms of this Agreement, the Acquired Fund
will have duly sold, assigned, conveyed, transferred, and delivered such
assets to the Acquiring Fund; (iii) the execution and delivery of this
Agreement did not, and the consummation of the transactions contemplated
hereby will not, violate the Robertson Stephens Trust's Agreement and
Declaration of Trust or By-Laws or any provision of any agreement know to
such counsel to which the Robertson Stephens Trust or the Acquired Fund is
a party or by which it is bound; and (iv) no consent, approval,
authorization, or order of any court or governmental authority is required
for the consummation by the Robertson Stephens Trust on behalf of the
Acquired Fund of the transactions contemplated hereby, except such as have
been obtained under the 1933 Act, the 1934 Act, and the 1940 Act and such
as may be required under state securities or blue sky laws.
g. That the assets of the Acquired Fund to be acquired by the Acquiring
Fund will include no assets which the Acquiring Fund, by reason of charter
limitations or of investment restrictions disclosed in the Registration
Statement in effect on the Exchange Date, may not properly acquire.
h. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Robertson Stephens Trust or the
Acquiring Fund, threatened by the Commission.
i. That the Robertson Stephens Trust shall have received from the
Commission and any relevant state securities administrator such order or
orders as are reasonably necessary or desirable under the 1933 Act, the
1934 Act, the 1940 Act, and any applicable state securities or blue sky
laws in connection with the transactions contemplated hereby, and that all
such orders shall be in full force and effect.
j. That all actions taken by the Robertson Stephens Trust on behalf of
the Acquired Fund in connection with the transactions contemplated by this
Agreement and all documents incidental thereto shall be satisfactory in
form and substance to the Acquiring Fund and its counsel.
k. That, prior to the Exchange Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders of the
Acquired Fund (i) all of the excess of (x) the Acquired Fund's investment
income excludable from gross income under Section 103(a) of the Code over
(y) the Acquired Fund's deductions disallowed under Sections 265 and
171(a)(2) of the Code, (ii) all of the Acquired Fund's investment company
taxable income (as defined in Section 852 of the Code) for its taxable
years ending on or after December 31, 1997 and on or prior to the Exchange
Date (computed in each case without regard to any deduction for dividends
paid) in each case for its taxable years ending on or after December 31,
1997 and on or prior to the Exchange Date, and (iii) all of the Acquired
Fund's net capital gain realized (after reduction for any capital loss
A-9
<PAGE>
carryover), in each case for the taxable year ending on December 31, 1997
and all subsequent taxable periods ending on or prior to the Exchange Date.
l. That the Acquired Fund's custodian shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of the Acquired
Fund held or maintained by such custodian as of the Valuation Time.
m. That the Acquired Fund's transfer agent shall have provided to the
Acquiring Fund (i) the originals or true copies of all of the records of
the Acquired Fund in the possession of such transfer agent as of the
Exchange Date, (ii) a certificate setting forth the number of shares of the
Acquired Fund outstanding as of the Valuation Time, and (iii) the name and
address of each holder of record of any shares and the number of shares
held of record by each such shareholder.
n. That the Acquiring Fund shall have received from Price Waterhouse LLP
a letter addressed to the Acquiring Fund dated as of the Exchange Date
satisfactory in form and substance to the Acquiring Fund reporting on the
results of applying limited procedures agreed upon by the Acquiring Fund
and described in such letter (but not an examination in accordance with
generally accepted auditing standards), which limited procedures relate as
of the Valuation Time to the procedure customarily utilized by the Acquired
Fund in valuing its assets and issuing its shares.
9. Conditions to the Acquired Fund's Obligations. The obligations of the
Acquired Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite vote of the
holders of the outstanding shares of beneficial interest of the Acquired
Fund entitled to vote.
b. That the Acquiring Fund shall have furnished to the Acquired Fund a
statement of the Acquiring Fund's net assets, together with a list of
portfolio holdings with values determined as provided in Section 4, all as
of the Valuation Time, certified on the Acquiring Fund's behalf by the
Robert Stephens Trust's President (or any Vice President) and Treasurer (or
any Assistant Treasurer), and a certificate of both such officers, dated
the Exchange Date, to the effect that as of the Valuation Time and as of
the Exchange Date there has been no material adverse change in the
financial position of the Acquiring Fund since December 31, 1997, other
than changes in its portfolio securities since that date, changes in the
market value of the portfolio securities or changes due to net redemptions,
dividends paid or losses from operations.
c. That the Robertson Stephens Trust, on behalf of the Acquiring Fund,
shall have executed and delivered to the Acquired Fund an Assumption of
Liabilities dated as of the Exchange Date pursuant to which the Acquiring
Fund will assume all of the liabilities of the Acquired Fund existing at
the Valuation Time in connection with the transactions contemplated by this
Agreement, other than liabilities arising pursuant to this Agreement.
d. That the Acquiring Fund shall have furnished to the Acquired Fund a
statement, dated the Exchange Date, signed by the Robertson Stephens
Trust's President (or any Vice President) and Treasurer (or any Assistant
Treasurer) certifying that as of the Valuation Time and as of the Exchange
Date all representations and warranties of the Acquiring Fund made in this
Agreement are true and correct in all material respects as if made at and
as of such dates, and that the Acquiring Fund has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or satisfied at or prior to each of such dates.
A-10
<PAGE>
e. That there shall not be any material litigation pending or threatened
with respect to the matters contemplated by this Agreement.
f. That the Acquired Fund shall have received an opinion of Ropes & Gray
dated the Exchange Date, to the effect that (i) the Merger Shares to be
delivered to the Acquired Fund as provided for by this Agreement are duly
authorized and upon such delivery will be validly issued and will be fully
paid and non-assessable by the Robertson Stephens Trust and the Acquiring
Fund and no shareholder of the Acquiring Fund has any preemptive right to
subscription or purchase in respect thereof; (ii) this Agreement has been
duly authorized, executed, and delivered by the Robertson Stephens Trust on
behalf of the Acquiring Fund and, assuming that the Robertson Stephens
Prospectus, the Registration Statement, and the Acquired Fund Proxy
Statement comply with the 1933 Act, the 1934 Act, and the 1940 Act and
assuming due authorization, execution, and delivery of this Agreement by
the Robertson Stephens Trust on behalf of the Acquired Fund, is a valid and
binding obligation of the Robertson Stephens Trust and the Acquiring Fund;
(iii) the execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, violate the
Robertson Stephens Trust's Agreement and Declaration of Trust or By-Laws,
or any provision of any agreement known to such counsel to which the
Robertson Stephens Trust or the Acquiring Fund is a party or by which it is
bound; (iv) no consent, approval, authorization, or order of any court or
governmental authority is required for the consummation by the Robertson
Stephens Trust on behalf of the Acquiring Fund of the transactions
contemplated herein, except such as have been obtained under the 1933 Act,
the 1934 Act, and the 1940 Act and such as may be required under state
securities or blue sky laws; and (v) the Registration Statement has become
effective under the 1933 Act, and to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the 1933 Act.
g. That all actions taken by the Robertson Stephens Trust on behalf of
the Acquiring Fund in connection with the transactions contemplated by this
Agreement and all documents incidental thereto shall be satisfactory in
form and substance to the Acquired Fund and its counsel.
h. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Robertson Stephens Trust or the
Acquiring Fund, threatened by the Commission.
i. That the Robertson Stephens Trust shall have received from the
Commission and any relevant state securities administrator such order or
orders as are reasonably necessary or desirable under the 1933 Act, the
1934 Act, the 1940 Act, and any applicable state securities or blue sky
laws in connection with the transactions contemplated hereby, and that all
such orders shall be in full force and effect.
j. The Board of Trustees of the Trust shall not have concluded in the
good faith exercise of its fiduciary duty that the transactions
contemplated hereby would not be in the best interests of the shareholders
of the Acquired Fund.
10. Indemnification.
a. The Acquired Fund will indemnify and hold harmless, out of the assets
of the Acquired Fund (which shall be deemed to include the assets of the
Acquiring Fund represented by the Merger Shares following the Exchange
Date) but no other assets, the Acquiring Fund and the trustees and officers
of the Robertson
A-11
<PAGE>
Stephens Trust (for purposes of this subparagraph, the "Indemnified
Parties") against any and all expenses, losses, claims, damages, and
liabilities at any time imposed upon or reasonably incurred by any one or
more of the Indemnified Parties in connection with, arising out of, or
resulting from any claim, action, suit, or proceeding in which any one or
more of the Indemnified Parties may be involved or with which any one or
more of the Indemnified Parties may be threatened by reason of any untrue
statement or alleged untrue statement of a material fact relating to the
Acquired Fund contained in the Registration Statement, the Robertson
Stephens Prospectus, the Acquired Fund Proxy Statement, or any amendment or
supplement to any of the foregoing, or arising out of or based upon the
omission or alleged omission to state in any of the foregoing a material
fact relating to the Acquired Fund required to be stated therein or
necessary to make the statements relating to the Acquired Fund therein not
misleading, including, without limitation, any amounts paid by any one or
more of the Indemnified Parties in a reasonable compromise or settlement of
any such claim, action, suit, or proceeding, or threatened claim, action,
suit, or proceeding made with the consent of the Robertson Stephens Trust
or the Acquired Fund. The Indemnified Parties will notify the Robertson
Stephens Trust and the Acquired Fund in writing within ten days after the
receipt by any one or more of the Indemnified Parties of any notice of
legal process or any suit brought against or claim made against such
Indemnified Party as to any matters covered by this Section 10(a). The
Acquired Fund shall be entitled to participate at its own expense in the
defense of any claim, action, suit, or proceeding covered by this Section
10(a), or, if it so elects, to assume at its expense by counsel
satisfactory to the Indemnified Parties the defense of any such claim,
action, suit, or proceeding, and if the Acquired Fund elects to assume such
defense, the Indemnified Parties shall be entitled to participate in the
defense of any such claim, action, suit, or proceeding at their expense.
The Acquired Fund's obligation under Section 10(a) to indemnify and hold
harmless the Indemnified Parties shall constitute a guarantee of payment so
that the Acquired Fund will pay in the first instance any expenses, losses,
claims, damages, and liabilities required to be paid by it under this
Section 10(a) without the necessity of the Indemnified Parties' first
paying the same.
b. The Acquiring Fund will indemnify and hold harmless, out of the
assets of the Acquiring Fund but no other assets, the Acquired Fund and the
trustees and officers of the Robertson Stephens Trust (for purposes of this
subparagraph, the "Indemnified Parties") against any and all expenses,
losses, claims, damages, and liabilities at any time imposed upon or
reasonably incurred by any one or more of the Indemnified Parties in
connection with, arising out of, or resulting from any claim, action, suit,
or proceeding in which any one or more of the Indemnified Parties may be
involved or with which any one or more of the Indemnified Parties may be
threatened by reason of any untrue statement or alleged untrue statement of
a material fact relating to the Acquiring Fund contained in the
Registration Statement, the Robertson Stephens Prospectus, the Acquired
Fund Proxy Statement, or any amendment or supplement to any of the
foregoing, or arising out of or based upon, the omission or alleged
omission to state in any of the foregoing a material fact relating to the
Acquiring Fund required to be stated therein or necessary to make the
statements relating to the Acquiring Fund therein not misleading,
including, without limitation, any amounts paid by any one or more of the
Indemnified Parties in a reasonable compromise or settlement of any such
claim, action, suit, or proceeding, or threatened claim, action, suit, or
proceeding, made with the consent of the Robertson Stephens Trust or the
Acquiring Fund. The Indemnified Parties will notify the Robertson Stephens
Trust and the Acquiring Fund in writing within ten days after the receipt
by any one or more of the Indemnified Parties of any notice of legal
process or any suit brought against or claim made against such Indemnified
Party as to any matters covered by this Section 10(b). The Acquiring Fund
shall be entitled to participate at its own expense in the defense of any
claim, action, suit, or proceeding covered by this Section
A-12
<PAGE>
10(b), or, if it so elects, to assume at its expense by counsel
satisfactory to the Indemnified Parties the defense of any such claim,
action, suit, or proceeding, and, if the Acquiring Fund elects to assume
such defense, the Indemnified Parties shall be entitled to participate in
the defense of any such claim, action, suit, or proceeding at their own
expense. The Acquiring Fund's obligation under this Section 10(b) to
indemnify and hold harmless the Indemnified Parties shall constitute a
guarantee of payment so that the Acquiring Fund will pay in the first
instance any expenses, losses, claims, damages, and liabilities required to
be paid by it under this Section 10(b) without the necessity of the
Indemnified Parties' first paying the same.
11. No Broker, Etc. Each of the Acquired Fund and the Acquiring Fund
represents that there is no person who has dealt with it or the Robertson
Stephens Trust who by reason of such dealings is entitled to any broker's or
finder's or other similar fee or commission arising out of the transactions
contemplated by this Agreement.
12. Termination. The Acquired Fund and the Acquiring Fund may, by mutual
consent of the trustees of the Robertson Stephens Trust on behalf of each fund,
terminate this Agreement, and the Acquired Fund or the Acquiring Fund, after
consultation with counsel and by consent of their respective trustees or an
officer authorized by such trustees, may waive any condition to their
respective obligations hereunder. If the transactions contemplated by this
Agreement have not been substantially completed by October 31, 1998, this
Agreement shall automatically terminate on that date unless a later date is
agreed to by the Acquired Fund and the Acquiring Fund.
13. Rule 145. Pursuant to Rule 145 under the 1933 Act, the Acquiring Fund
will, in connection with the issuance of any Merger Shares to any person who at
the time of the transaction contemplated hereby is deemed to be an affiliate of
a party to the transaction pursuant to Rule 145(c), cause to be affixed upon
the certificates issued to such person (if any) a legend as follows:
"THESE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO THE
PARTNERS FUND OR ITS PRINCIPAL UNDERWRITER UNLESS (I) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (II) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE FUND SUCH REGISTRATION IS NOT REQUIRED."
and, further, the Acquiring Fund will issue stop transfer instructions to the
Acquiring Fund's transfer agent with respect to such shares. The Acquired Fund
will provide the Acquiring Fund on the Exchange Date with the name of any
Acquired Fund shareholder who is to the knowledge of the Acquired Fund an
affiliate of the Acquired Fund on such date.
14. Covenants, Etc. Deemed Material. All covenants, agreements,
representations, and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, notwithstanding an investigation made by
them or on their behalf.
15. Sole Agreement; Amendments; Governing Law. This Agreement supersedes
all previous correspondence and oral communications between the parties
regarding the subject matter hereof, constitutes the only understanding with
respect to such subject matter, may not be changed except by a letter of
agreement signed by each party hereto, and shall be construed in accordance
with and governed by the laws of The Commonwealth of Massachusetts.
16. Declaration of Trust. A copy of the Agreement and Declaration of Trust
of the Robertson Stephens Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts, and notice is hereby given
A-13
<PAGE>
that this instrument is executed on behalf of the trustees of the Robertson
Stephens Trust on behalf of the Acquired Fund and on behalf of the Acquiring
Fund, as trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees, officers, or shareholders
of the Robertson Stephens Trust individually but are binding only upon the
assets and property of the Acquired Fund and the Acquiring Fund, as the case
may be.
ROBERTSON STEPHENS INVESTMENT TRUST,
on behalf of its Robertson Stephens
Developing Countries Fund
By:
-------------------------
Name: Andrew P. Pilara, Jr.
Title: President
ROBERTSON STEPHENS INVESTMENT TRUST,
on behalf of its Robertson Stephens
Partners Fund
By:
-------------------------
Name: Andrew P. Pilara, Jr.
Title: President
A-14
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
FORM N-14
PART B
STATEMENT OF ADDITIONAL INFORMATION
August __, 1998
This Statement of Additional Information (the "SAI") relates to the
proposed merger (the "Merger") of the Robertson Stephens Developing
Countries Fund (the "Acquired Fund"), a series of Robertson Stephens Investment
Trust, a Massachusetts business trust (the "Trust"), into the Robertson Stephens
Partners Fund (the "Acquiring Fund"), another series of the Trust.
This SAI contains information which may be of interest to shareholders but
which is not included in the Prospectus/Proxy Statement dated August __, 1998
(the "Prospectus/Proxy Statement") of the Trust which relates to the Merger. As
described in the Prospectus/Proxy Statement, the Merger would involve the
transfer of all the assets of the Acquired Fund to the Acquiring Fund in
exchange for shares of the Acquiring Fund and the assumption of all the
liabilities of the Acquired Fund. The Acquired Fund would distribute the
Acquiring Fund shares it receives to its shareholders in complete liquidation of
the Acquired Fund.
This SAI is not a prospectus and should be read in conjunction with the
Prospectus/Proxy Statement. The Prospectus/Proxy Statement has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by writing to the Trust at 555 California Street, San Francisco,
California 94104 or by calling 1-800-766-3863.
<PAGE>
TABLE OF CONTENTS
Item Page
- ---- ----
I. Additional Information about the Acquiring and Acquired Funds. . 3
II. Financial Statements . . . . . . . . . . . . . . . . . . . . . . 3
SAI-2
<PAGE>
I. ADDITIONAL INFORMATION ABOUT THE ACQUIRING AND ACQUIRED FUNDS.
This SAI is accompanied by the current Statement of Additional Information
of the Trust, dated March 1, 1998, which provides further information relating
to the Acquired and Acquiring Funds, including information in respect of their
investment objectives, policies, and financial histories.
The following documents, which have previously been filed with the
Securities and Exchange Commission, have been incorporated by reference into
Part A of this Registration Statement:
(1) Prospectus relating to Class A shares of the Trust dated March 1, 1998
(Registration Nos. 33-16439 and 811-5159).
(2) Prospectus relating to Class C shares of the Trust dated March 1, 1998
(Registration Nos. 33-16439 and 811-5159).
(3) Statement of Additional Information of the Trust dated March 1, 1998
(Registration Nos. 33-16439 and 811-5159).
(4) The financial statements and report of independent accountant contained in
the Annual Report to Shareholders of the Robertson Stephens Developing
Countries Low-Priced Stock Fund for the year ended December 31, 1997
(Registration Nos. 33-16439 and 811-5159).
(5) The financial statements and report of independent accountant contained in
the Annual Report to Shareholders of the Robertson Stephens Partners Fund
for the year ended December 31, 1997 (Registration Nos. 33-16439 and
811-5159).
II. FINANCIAL STATEMENTS.
This SAI is accompanied by the Annual Reports of the Acquired and Acquiring
Funds for the year ended December 31, 1997, each of which contains historical
financial information regarding such Funds. Such reports have been filed with
the Securities and Exchange Commission and the financial statements and report
of independent accountant contained in each report are incorporated herein by
reference.
SAI-3
<PAGE>
DEVELOPING COUNTRIES FUND
ROBERTSON STEPHENS INVESTMENT TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
AUGUST ___, 1998
The undersigned hereby appoints G. Randall Hecht, Terry R. Otton, and Dana K.
Welch, and each of them separately, proxies, with power of substitution to each,
and hereby authorizes them to represent and to vote, as designated below, at the
Meeting of Shareholders of the Trust, on August ___, 1998 at 9:00 a.m., San
Francisco time, and at any adjournments thereof, all of the shares of the
Developing Countries Fund which the undersigned would be entitled to vote if
personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD OF TRUSTEES RECOMMENDS A
VOTE FOR THE PROPOSAL.
<TABLE>
<CAPTION>
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [ ] KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
DEVELOPING COUNTRIES FUND
<S> <C>
FOR AGAINST ABSTAIN
Proposal to approve Agreement and Plan of Reorganization. [ ] [ ] [ ]
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
- - - ---------------------------------- ------------- ------------------------ -------------
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
Form N-14
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Under the terms of Registrant's By-laws, Article VI, Registrant is
required, subject to certain exceptions and limitations, to indemnify and insure
its trustees, officers, employees, agents and other persons who may be
indemnified by Registrant under the Investment Company Act of 1940 (the "1940
Act").
Insofar as indemnification for liabilities arising under the Securities Act
is permitted to trustees and officers and controlling persons of Registrant
pursuant to the foregoing provisions, or otherwise, Registrant has been advised
that, in the opinion of the Securities and Exchange Commission, such
indemnification by Registrant is against public policy as expressed in the
Securities Act, and therefore may be unenforceable. In the event that a claim
for such indemnification (except insofar as it provides for the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
against Registrant by any trustee, officer or controlling person and the
Securities and Exchange Commission is still of the same opinion, Registrant
will, unless in the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act, and will be governed by the final adjudication
of such issue.
The Trust, at its expense, provides liability insurance for the benefit of
its Trustees and officers.
ITEM 16. EXHIBITS.
1.(a) Form of Amended and Restated Agreement and Declaration of Trust
of Registrant.(C)
2. Copy of By-Laws of Registrant as amended through July 22,
1997.(D)
3. Inapplicable.
4. Form of Agreement and Plan of Reorganization is filed herewith as
Appendix to the Prospectus/Proxy Statement set forth as Part A
hereof.
5. Inapplicable.
<PAGE>
6. Investment Advisory Agreement dated October 1, 1997 between
Robertson Stephens & Company Investment Management, L.P. and
Registrant (on behalf of Robertson Stephens Partners Fund).(D)
7. Distribution Agreement with Edgewood Services, Inc.(D)
8. Inapplicable.
9. Custodian Agreement between Registrant and State Street Bank and
Trust.(A)
10.(a) Distribution Plan Pursuant to Rule 12b-1 dated September 30, 1997
(for Class A shares).(D)
10.(b) Distribution Plan Pursuant to Rule 12b-1 dated September 30, 1997
(for Class C shares).(D)
11. Opinion and Consent of Counsel.*
12. Form of Opinion and Consent of Counsel regarding certain tax
matters.*
13.(a) Inapplicable.
13.(b) Form of Shareholder Service Plan.(B)
14. Consent of Independent Accountants.*
15. Inapplicable.
16. Powers of attorney for Messrs. Auerbach, Otton, Peterson and
Pilara.*
17. Inapplicable.
Incorporated by a reference to like-numbered exhibits:
(A) Previously filed as part of the Post-Effective Amendment No.
8 to the Trust's Registration Statement on Form N-1A (SEC
File Nos. 33-16439 and 811-5159) on June 30, 1992
(hereinafter, the "Registration Statement").
(B) Previously filed as part of the Post-Effective Amendment No.
26 to the Registration Statement on January 21, 1996.
(C) Previously filed as part of the Post-Effective Amendment No.
28 to the Registration Statement on March 24, 1997.
(D) Previously filed as part of the Post-Effective Amendment No.
30 to the Registration Statement on December 29, 1997.
* Filed herewith
<PAGE>
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
a part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) under
the Securities Act of 1933, the reoffering prospectus will contain the
information called for by the applicable registration form for the
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
this Registration Statement and will not be used until the amendment
is effective, and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment shall be deemed
to be a new Registration Statement for the securities offered therein,
and the offering of the securities at that time shall be deemed to be
the initial bona fide offering of them.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has
been signed on behalf of the Registrant, in the City of San Francisco in the
State of California on the 2nd day of July, 1998.
ROBERTSON STEPHENS INVESTMENT TRUST
By: Andrew P. Pilara, Jr.*
----------------------------------------
President and Principal Executive Officer
As required by the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
ANDREW P. PILARA, JR.* President, Principal Executive
- - - --------------------------- Officer and Trustee July 2, 1998
Andrew P. Pilara, Jr.
TERRY R. OTTON* Treasurer, Chief Financial Officer,
- - - --------------------------- and Principal Accounting Officer July 2, 1998
Terry R. Otton
LEONARD B. AUERBACH* Trustee July 2, 1998
- - - ---------------------------
Leonard B. Auerbach
Trustee July 2, 1998
- - - ---------------------------
John W. Glynn, Jr.
JAMES K. PETERSON* Trustee July 2, 1998
- - - ---------------------------
James K. Peterson
</TABLE>
*By /s/ Dana K. Welch
-------------------------------------
Dana K. Welch, Attorney-in-Fact pursuant to the Powers of Attorney filed
herewith.
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- - - ----------- ------------
11 Opinion and Consent of Counsel
12 Form of Opinion of Cousel regarding certain tax matters
14 Consent of Independent Accountants
16 Powers of Attorney
EXHIBIT 11
ROPES & GRAY
One International Place
Boston, Massachusetts 02110-2624
July 2, 1998
Robertson Stephens Investment Trust
555 California Street
San Francisco, California 94104
Ladies and Gentlemen:
We are furnishing this opinion in connection with the Registration
Statement on Form N-14 (the "Registration Statement") of Robertson Stephens
Investment Trust (the "Trust") relating to the registration of an indefinite
number of shares of beneficial interest of the Robertson Stephens Partners Fund
(the "Fund"), a series of shares of beneficial interest of the Trust
(collectively, the "Shares").
In connection with this opinion, we have examined such records, documents,
and certificates of public officials and the Trust as we have deemed necessary
for the purpose of giving this opinion. We have assumed the genuineness of all
items submitted to us as originals and the conformity with originals of all
items submitted to us as copies.
We were not involved in the organization of the Trust, and understand that
in connection with the filing of the original registration statement of the
Trust under the Securities Act of 1933, as amended, you received an opinion of
other Massachusetts counsel to the effect that the Trust is an entity of the
type commonly known as a "Massachusetts business trust". We have not examined
independently the question of what law would govern the interpretation or
enforcement of any provision of the Agreement and Declaration of Trust and have
for this purpose assumed that the Trust is a duly established and validly
existing unincorporated voluntary association with transferable shares under
Massachusetts law (commonly known as a "Massachusetts business trust") and that
the interpretation and enforcement of each provision of the Agreement and
Declaration of Trust will be governed by the laws of The Commonwealth of
Massachusetts.
We have made such examination of Massachusetts law as we have deemed
relevant for purposes of this opinion. We express no opinion as to the effect of
laws, rules, and regulations of any state or jurisdiction other than The
Commonwealth of Massachusetts. We understand that the Shares are to be issued in
accordance with the terms of an Agreement and Plan of Reorganization (the
"Agreement") between the Trust on behalf of the Fund and the Trust on behalf of
the Robertson Stephens Developing Countries Fund, another series of shares of
the Trust. We assume that the Board of Trustees of the Trust will have duly
adopted and approved the Agreement, in the form or in substantially the form
filed as part of the Registration Statement, in respect of each such Fund prior
to the time of the issuance of the Shares.
Based upon and subject to the foregoing, we are of the opinion that the
Shares, upon delivery thereof and payment therefor in accordance with the
Registration Statement, will be duly authorized, validly issued, fully paid, and
nonassessable by the Trust.
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Agreement and Declaration
<PAGE>
Roberston Stephens Investment Trust July 2, 1998
of Trust disclaims liability of any shareholder for payment under any credit,
contract, or claim against the Trust or any series of the Trust. The Agreement
and Declaration of Trust provides for indemnification by the Trust of any
shareholder or former shareholder held liable solely by reason of his or her
being or having been a shareholder and not because of his or her acts or
omissions or for some other reason. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to circumstances
in which the Trust itself would be unable to meet its obligations.
This opinion is intended only for your use in connection with the offering
of Shares and may not be relied upon by any other person.
We hereby consent to the inclusion of this opinion as an exhibit to the
Trust's Registration Statement to be filed with the Securities and Exchange
Commission.
Very truly yours,
/s/ ROPES & GRAY
-----------------
ROPES & GRAY
EXHIBIT 12
[FORM OF OPINION]
___________, 1998
Robertson Stephens Developing Countries Fund
Robertson Stephens Partners Fund
Robertson Stephens Investment Trust
555 California Street
San Francisco, CA 94104
Ladies and Gentlemen:
We have acted as counsel in connection with the Agreement and Plan of
Reorganization (the "Agreement") dated as of _________, 1998, between the
Robertson Stephens Partners Fund ("Acquiring Fund"), a series of Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust, and the
Robertson Stephens Developing Countries Fund ("Target Fund"), another series of
the Trust. The Agreement describes a proposed transaction (the "Transaction")
to occur on __________, 1998 (the "Exchange Date"), pursuant to which Acquiring
Fund will acquire substantially all of the assets of Target Fund in exchange for
shares of beneficial interest in Acquiring Fund (the "Acquiring Fund Shares")
and the assumption by Acquiring Fund of all of the liabilities of Target Fund
following which the Acquiring Fund Shares received by Target Fund will be
distributed by Target Fund to its shareholders in liquidation and termination of
Target Fund. Capitalized terms not defined herein are used herein as defined in
the Agreement.
Target Fund is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end non-diversified management investment
company. Shares of Target Fund are redeemable at net asset value at each
shareholder's option. Target Fund has elected to be a regulated investment
company for federal income tax purposes under Section 851 of the Internal
Revenue Code of 1986, as amended (the "Code").
Acquiring Fund is registered under the 1940 Act as an open-end
non-diversified management investment company. Shares of Acquiring Fund are
redeemable at net asset value at each shareholder's option. Acquiring Fund has
elected to be a regulated investment company for federal income tax purposes
under Section 851 of the Code.
For purposes of this opinion, we have considered the Agreement, the
Proxy Statement, the Registration Statement (including the items incorporated by
reference therein), and such other items as we have deemed necessary to render
this opinion. In addition, you have represented to us the following facts,
occurrences and information upon which you have indicated we may rely in
rendering this opinion (whether or not contained or reflected in the documents
and items referred to above):
<PAGE>
Robertson Stephens Developing Countries Fund
Robertson Stephens Partners Fund -2- ___________, 1998
1. Target Fund will transfer to Acquiring Fund all of its assets, and
Acquiring Fund will assume all of the liabilities of Target Fund, as of the
Exchange Date.
2. The fair market value of the Acquiring Fund Shares received by
each Target Fund shareholder will be approximately equal to the fair market
value of the Target Fund shares surrendered in exchange therefor. Target Fund
shareholders will receive no consideration other than Acquiring Fund Shares
(which may include fractional shares) in exchange for their shares of beneficial
interest in Target Fund (the "Target Fund Shares").
3. None of the compensation received by any shareholder-employees of
Target Fund, if any, will be separate consideration for, or allocable to, any of
their Target Fund Shares; none of the Acquiring Fund Shares received by any
Target Fund shareholder-employees will be separate consideration for, or
allocable to, any employment; and the compensation paid to any Acquiring Fund or
Target Fund shareholder-employees, if any, will be for services actually
rendered and will be commensurate with amounts paid to third parties bargaining
at arm's length for similar services.
4. There is no plan or intention by any Target Fund shareholder who
owns 5% or more of the total outstanding Target Fund Shares, and to the best of
the knowledge of the management of Target Fund, there is no plan or intention on
the part of the remaining Target Fund shareholders to sell, exchange, or
otherwise dispose of a number of Acquiring Fund Shares received in the
Transaction that would reduce Target Fund shareholders' ownership of Acquiring
Fund Shares to a number of Acquiring Fund Shares having a value, as of the date
of the Transaction, of less than 50 percent of the value of all of the formerly
outstanding Target Fund Shares as of the same date. For purposes of this
representation, Acquiring Fund Shares or Target Fund Shares surrendered by
Target Fund shareholders in redemption or otherwise disposed of, where such
dispositions, if any, appear to be initiated by Target Fund shareholders in
connection with or as a result of the Agreement or the Transaction, will be
treated as outstanding Target Fund Shares on the date of the Transaction.
5. Acquiring Fund has no plan or intention to reacquire any of the
Acquiring Fund Shares issued in the Transaction, except for Acquiring Fund
Shares reacquired in the ordinary course of its business as an open-end
investment company.
6. Acquiring Fund will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value of the
gross assets held by Target Fund immediately prior to the Transaction. For
purposes of this representation, (a) amounts paid by Target Fund, out of the
assets of Target Fund, to Target Fund shareholders in redemption of Target Fund
Shares, where such redemptions, if any, appear to be initiated by Target Fund
shareholders in connection with or as a result of the Agreement or the
Transaction, (b) amounts used by Target Fund to pay expenses of the Transaction,
and (c) amounts used to effect all redemptions and distributions (except for
regular, normal dividends declared and paid in order to ensure Target Fund's
continued qualification as a regulated investment company and to avoid
fund-level income tax and excise tax (including for this purpose any dividends
referred to in representation 12 herein)) made by Target Fund immediately
preceding the transfer will be included as assets of Target Fund held
immediately prior to the Transaction. Further, to the best of the knowledge of
the managements of each of Acquiring Fund and Target Fund, this representation
will remain true even if the amounts, if any, that Acquiring Fund pays after the
Transaction to Acquiring Fund shareholders who are former Target Fund
shareholders in redemption of Acquiring Fund Shares received in exchange for
Target Fund Shares, where such redemptions, if any, appear to be initiated by
such shareholders in connection with or as a result of the Agreement or the
Transaction, are considered to be assets of Target Fund that were not
transferred to Acquiring Fund.
<PAGE>
Robertson Stephens Developing Countries Fund
Robertson Stephens Partners Fund -3- ________, 1998
7. The fair market value of the assets transferred to Acquiring Fund
by Target Fund will equal or exceed the sum of the liabilities to be assumed by
Acquiring Fund.
8. Following the Transaction, Acquiring Fund will continue the
historic business of Target Fund as an open-end investment company that seeks
long-term growth by investing in, among other things, foreign common stocks,
preferred stocks, warrants and debt securities.
9. The liabilities of Target Fund to be assumed by Acquiring Fund
were incurred by Target Fund in the ordinary course of its business and are
associated with the assets transferred to Acquiring Fund. For purposes of this
paragraph, expenses of the Transaction are not treated as liabilities.
10. The Transaction will offer shareholders of Target Fund an
opportunity to pursue an investment program with a similar investment objective
and investment policies that are similar in many respects, in a larger fund with
potentially reduced operating expenses.
11. The costs, including all fees and expenses, incurred directly in
connection with the Transaction will be borne by Acquiring Fund and Target Fund
in the same proportions as their respective net asset values bear to each other.
The Target Fund and the Acquiring Fund agree to pay the expenses preliminarily
allocated to them. All such fees and expenses incurred by either of Acquiring
Fund and Target Fund shall be solely and directly related to the Transaction and
shall be paid directly by Acquiring Fund or Target Fund, as the case may be, to
the relevant providers of services or other payees, in accordance with the
principles set forth in Rev. Rul. 73-54, 1973-1 C.B. 187.
<PAGE>
Robertson Stephens Developing Countries Fund
Robertson Stephens Partners Fund -4- ________, 1998
Target Fund shareholders will pay their respective expenses, if any,
incurred in connection with the Transaction.
12. For federal income tax purposes, Target Fund qualifies as a
regulated investment company, and the provisions of Sections 851 through 855 of
the Code apply to Target Fund for its current taxable year beginning January 1,
1998 and will continue to apply to it through the Exchange Date.
In that regard, Target Fund will declare to Target Fund shareholders of
record on or prior to the Exchange Date a dividend or dividends which together
with all such previous dividends shall have the effect of distributing (a) all
of the excess of (i) Target Fund's investment income excludable from gross
income under Section 103(a) of the Code over (ii) Target Fund's deductions
disallowed under Sections 265 and 171(a)(2) of the Code, (b) all of Target
Fund's investment company taxable income (see Code Section 852) (computed in
each case without regard to any deduction for dividends paid) and (c) all of
Target Fund's net realized capital gain (after reduction for any capital loss
carryover) in each case for both the taxable year ending December 31, 1997 and
the short taxable year beginning on January 1, 1998 and ending on the Exchange
Date. Such dividends will be made to ensure continued qualification of Target
Fund as a regulated investment company for tax purposes and to eliminate
fund-level tax.
13. For federal income tax purposes, Acquiring Fund qualifies as a
regulated investment company, and the provisions of Sections 851 through 855 of
the Code apply to Acquiring Fund for its current taxable year beginning January
1, 1998 and will continue to apply to it through the Exchange Date.
14. Acquiring Fund does not own, directly or indirectly, nor has it
owned during the past five years, directly or indirectly, any Target Fund
Shares.
15. There is no intercorporate indebtedness existing between Target
Fund and Acquiring Fund.
16. Target Fund will distribute the Acquiring Fund Shares it receives
in the Transaction to its shareholders as provided in the Agreement.
17. Target Fund is not under the jurisdiction of a court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
Based on the foregoing representations and our review of the documents
and items referred to above, we are of the opinion that for federal income tax
purposes it is more likely than not that:
<PAGE>
Robertson Stephens Developing Countries Fund
Robertson Stephens Partners Fund -5- ________, 1998
(i) No gain or loss will be recognized by Acquiring Fund upon the receipt
of the assets of Target Fund in exchange for Acquiring Fund Shares and
the assumption by Acquiring Fund of the liabilities of Target Fund;
(ii) The basis in the hands of Acquiring Fund of the assets of Target Fund
transferred to Acquiring Fund in the Transaction will be the same as
the basis of such assets in the hands of Target Fund immediately prior
to the transfer;
(iii) The holding periods of the assets of Target Fund in the hands of
Acquiring Fund will include the periods during which such assets were
held by Target Fund;
(iv) No gain or loss will be recognized by Target Fund upon the transfer of
Target Fund's assets to Acquiring Fund in exchange for Acquiring Fund
Shares and the assumption by Acquiring Fund of the liabilities of
Target Fund, or upon the distribution of Acquiring Fund Shares by
Target Fund to its shareholders in liquidation;
(v) No gain or loss will be recognized by Target Fund shareholders upon the
exchange of their Target Fund Shares for Acquiring Fund Shares;
(vi) The basis of Acquiring Fund Shares a Target Fund shareholder receives
in connection with the Transaction will be the same as the basis of his
or her Target Fund Shares exchanged therefor; and
(vii) A Target Fund shareholder's holding period for his or her Acquiring
Fund Shares will be determined by including the period for which he or
she held the Target Fund Shares exchanged therefor, provided that he or
she held such Target Fund Shares as capital assets.
Very truly yours,
Ropes & Gray
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus/Proxy
Statement and Statement of Additional Information constituting part of this
Registration Statement on Form N-14 of our reports dated February 7, 1998,
relating to the financial statements and financial highlights appearing in the
December 31,1997 Annual Reports to Shareholders of The Robertson Stephens
Partners Fund and The Robertson Stephens Developing Countries Fund. We also
consent to the references to us under the heading "Independent Accountants" in
the Statement of Additional Information and to the references to us under the
headings "Financial Highlights" in the Prospectuses (each in the Registration
Statement on Form N-1A dated March 1, 1998), which are incorporated by reference
in the Registration Statement on Form N-14.
/s/ PRICE WATERHOUSE LLP
- ------------------------
San Francisco, California
June 30, 1998
POWER OF ATTORNEY
We, the undersigned Trustees and/or Officers of ROBERTSON STEPHENS
INVESTMENT TRUST (the "Trust"), hereby severally constitute and appoint Dana K.
Welch and Terry R. Otton, and each of them singly, our true and lawful
attorneys, with full power to them and each of them, to sign for us, and in our
name and in the capacities indicated below, the Registration Statement on Form
N-14 of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, with the securities commissioner of any
state, or with other regulatory authorities, granting unto them, and each of
them acting alone, full power and authority to do and perform each and every act
and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he or she might or could do in person, and hereby ratify
and confirm all that said attorneys or any of them may lawfully do or cause to
be done by virtue thereof.
WITNESS my hand on the date set forth below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
/S/ ANDREW P. PILARA, JR. President, Principal Executive Officer July 2, 1998
- - - -------------------------- and Trustee
Andrew P. Pilara, Jr.
Treasurer, Chief Financial Officer, June __, 1998
- - - -------------------------- and Principal Accounting Officer
Terry R. Otton
Trustee June __, 1998
- - - --------------------------
Leonard B. Auerbach
Trustee June __, 1998
- - - --------------------------
John W. Glynn, Jr.
Trustee June __, 1998
- - - --------------------------
James K. Peterson
</TABLE>
<PAGE>
POWER OF ATTORNEY
We, the undersigned Trustees and/or Officers of ROBERTSON STEPHENS
INVESTMENT TRUST (the "Trust"), hereby severally constitute and appoint Dana K.
Welch and Terry R. Otton, and each of them singly, our true and lawful
attorneys, with full power to them and each of them, to sign for us, and in our
name and in the capacities indicated below, the Registration Statement on Form
N-14 of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, with the securities commissioner of any
state, or with other regulatory authorities, granting unto them, and each of
them acting alone, full power and authority to do and perform each and every act
and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he or she might or could do in person, and hereby ratify
and confirm all that said attorneys or any of them may lawfully do or cause to
be done by virtue thereof.
WITNESS my hand on the date set forth below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
President, Principal Executive Officer June __, 1998
- - - -------------------------- and Trustee
Andrew P. Pilara, Jr.
/S/ TERRY R. OTTON Treasurer, Chief Financial Officer, July 2, 1998
- - - -------------------------- and Principal Accounting Officer
Terry R. Otton
Trustee June __, 1998
- - - --------------------------
Leonard B. Auerbach
Trustee June __, 1998
- - - --------------------------
John W. Glynn, Jr.
Trustee June __, 1998
- - - --------------------------
James K. Peterson
</TABLE>
<PAGE>
POWER OF ATTORNEY
We, the undersigned Trustees and/or Officers of ROBERTSON STEPHENS
INVESTMENT TRUST (the "Trust"), hereby severally constitute and appoint Dana K.
Welch and Terry R. Otton, and each of them singly, our true and lawful
attorneys, with full power to them and each of them, to sign for us, and in our
name and in the capacities indicated below, the Registration Statement on Form
N-14 of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, with the securities commissioner of any
state, or with other regulatory authorities, granting unto them, and each of
them acting alone, full power and authority to do and perform each and every act
and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he or she might or could do in person, and hereby ratify
and confirm all that said attorneys or any of them may lawfully do or cause to
be done by virtue thereof.
WITNESS my hand on the date set forth below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
President, Principal Executive Officer June __, 1998
- - - -------------------------- and Trustee
Andrew P. Pilara, Jr.
Treasurer, Chief Financial Officer, June __, 1998
- - - -------------------------- and Principal Accounting Officer
Terry R. Otton
/S/ LEONARD B. AUERBACH Trustee June 24, 1998
- - - --------------------------
Leonard B. Auerbach
Trustee June __, 1998
- - - --------------------------
John W. Glynn, Jr.
Trustee June __, 1998
- - - --------------------------
James K. Peterson
</TABLE>
<PAGE>
POWER OF ATTORNEY
We, the undersigned Trustees and/or Officers of ROBERTSON STEPHENS
INVESTMENT TRUST (the "Trust"), hereby severally constitute and appoint Dana K.
Welch and Terry R. Otton, and each of them singly, our true and lawful
attorneys, with full power to them and each of them, to sign for us, and in our
name and in the capacities indicated below, the Registration Statement on Form
N-14 of the Trust and any and all amendments (including post-effective
amendments) to said Registration Statement and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, with the securities commissioner of any
state, or with other regulatory authorities, granting unto them, and each of
them acting alone, full power and authority to do and perform each and every act
and thing requisite or necessary to be done in the premises, as fully to all
intents and purposes as he or she might or could do in person, and hereby ratify
and confirm all that said attorneys or any of them may lawfully do or cause to
be done by virtue thereof.
WITNESS my hand on the date set forth below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C>
President, Principal Executive Officer June __, 1998
- - - -------------------------- and Trustee
Andrew P. Pilara, Jr.
Treasurer, Chief Financial Officer, June __, 1998
- - - -------------------------- and Principal Accounting Officer
Terry R. Otton
Trustee June __, 1998
- - - --------------------------
Leonard B. Auerbach
Trustee June __, 1998
- - - --------------------------
John W. Glynn, Jr.
/S/ JAMES K. PETERSON Trustee July 1, 1998
- - - --------------------------
James K. Peterson
</TABLE>
