ROBERTSON STEPHENS INVESTMENT TRUST
555 California Street
San Francisco, California 94104
June 5, 1998
Dear Shareholder:
You are cordially invited to attend a Meeting of shareholders of the
Robertson Stephens Global Low-Priced Stock Fund, a series of Robertson Stephens
Investment Trust, to be held on Friday, July 8, 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 Global Low-Priced Stock Fund into the
Robertson Stephens Partners Fund, also a series of the Trust. Each share of the
Global Low-Priced Stock 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,
/s/ Andrew P. Pilara, Jr.
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 Global Low-Priced Stock Fund
---------------------
Notice of Meeting of Shareholders
July 8, 1998
---------------------
To the Shareholders:
Notice is hereby given that a Meeting of shareholders of the Robertson
Stephens Global Low-Priced Stock Fund (the "Low-Priced Stock Fund"), a series
of Robertson Stephens Investment Trust (the "Trust"), will be held at 555
California Street, 26th Floor, San Francisco, California, on July 8, 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 Low-Priced Stock
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
Low-Priced Stock Fund, and the distribution of such shares to the
shareholders of the Low-Priced Stock Fund in complete liquidation of the
Low-Priced Stock Fund.
2. To consider such other business as may properly come before the meeting.
Shareholders of record as of the close of business on May 22, 1998 are
entitled to notice of, and to vote at, the Meeting.
By order of the Board of Trustees
Dana K. Welch
Secretary
June 5, 1998
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
PROSPECTUS/PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
Overview of the Merger ................................................... 3
Risk Factors ............................................................. 7
Meeting of Shareholders .................................................. 11
Approval or Disapproval of Agreement and Plan of Reorganization .......... 12
Information About the Funds .............................................. 18
Voting Information ....................................................... 18
</TABLE>
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
555 California Street
San Francisco, California 94104
1-800-766-FUND
Robertson Stephens Global Low-Priced Stock Fund
---------------------
Prospectus/Proxy Statement
---------------------
June 5, 1998
This Prospectus/Proxy Statement relates to the proposed merger (the
"Merger") of the Robertson Stephens Global Low-Priced Stock Fund (the
"Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced
Stock Fund, followed by the distribution of the Merger Shares to the
shareholders of the Low-Priced Stock Fund in liquidation of the Low-Priced
Stock Fund. As a result of the proposed Merger, each shareholder of the
Low-Priced Stock Fund will receive in exchange for his or her Low-Priced Stock
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 Low-Priced Stock Fund
shares.
Because shareholders of the Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock
Fund and the Partners Fund is sometimes referred to in this Prospectus/ Proxy
Statement as a "Fund."
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
1
<PAGE>
of independent accountants contained in the Annual Report to Shareholders of
the Low-Priced Stock 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 June 5, 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 Low-Priced Stock 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 Low-Priced Stock 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
Low-Priced Stock Fund being transferred and attributable to the Class A and
Class C shares, respectively, of the Low-Priced Stock Fund. Following the
transfer, (i) the Low-Priced Stock 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 Low-Priced Stock Fund shares, as the
case may be, and (ii) the Low-Priced Stock 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
Low-Priced Stock 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. 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 Low-Priced Stock 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 Low-Priced
Stock Fund shares in respect of which the Merger Shares were issued.
The Trustees unanimously recommend that shareholders of the Low-Priced
Stock 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 Low-Priced Stock 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 Low-Priced Stock Fund
and the Partners Fund, over specified periods.
<TABLE>
<CAPTION>
Shareholder Transaction Expenses Low-Priced Stock Fund Partners Fund
- -------------------------------------------------- ------------------------- ------------------------
<S> <C> <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) Low-Priced Stock Fund Partners Fund
- ---------------------------------------- ----------------------- --------------
<S> <C> <C>
Class A Shares
Management Fees ....................... 1.00 % 1.25%
Rule 12b-1 Expenses ................... 0.25 % 0.25%
Other Expenses ........................ 0.70%* 0.28%
----- ----
Total Fund Operating Expenses ......... 1.95%* 1.78%
Class C Shares
Management Fees ....................... 1.00 % 1.25%
Rule 12b-1 Expenses ................... 0.75 % 0.75%
Shareholder Service Fee ............... 0.25 % 0.25%
Other Expenses ........................ 0.70%* 0.28%
----- ----
Total Fund Operating Expenses ......... 2.70%* 2.53%
</TABLE>
- ----------
* 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> <C> <C> <C>
Class A
Low-Priced Stock Fund ......................... $ 20 $ 61 $ 105 $ 227
Partners Fund ................................. $ 18 $ 56 $ 96 $ 209
Class C (assuming redemption at end of period)(1)
Low-Priced Stock Fund ......................... $ 37 $ 84 $ 143 $ 302
Partners Fund ................................. $ 36 $ 79 $ 134 $ 285
</TABLE>
- ----------
(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 Low-Priced Stock Fund
reflect voluntary expense limitations currently in effect. In the absence of
those limitations, Other Expenses and Total Fund Operating Expenses,
respectively, of the Low-Priced Stock Fund would be 1.35% and 2.60% for the
Fund's Class A shares and 1.35% and 3.35% for the Fund's Class C shares
(without giving effect, in each case, to the reduction in administrative
service fees described below). Until May 26, 1998, the Low-Priced Stock Fund
paid fees under an Administrative Services Agreement with Robertson, Stephens &
Company Investment Management, L.P., at an annual rate of 0.25% of its average
daily net assets; the Agreement was amended on that date to provide that no fee
would be payable by the Fund for services under the Agreement. 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 Low-Priced Stock 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 Low-Priced Stock Fund or its shareholders as
a result of the Merger, and the tax basis of the Merger Shares received by each
Low-Priced Stock Fund shareholder will be the same as the tax basis of the
shareholder's Low-Priced Stock 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 Low-Priced Stock Fund would recognize gain or loss on the
sale of its assets to the Partners Fund, and shareholders of the Low-Priced
Stock 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 Low-Priced Stock Fund
shares. See "Information About the Merger -- Federal Income Tax Consequences."
Comparison of Investment Objectives, Policies, and Restrictions
The investment objective of both Funds is long-term growth. Robertson,
Stephens Investment Management, L.P. ("RSIM") currently serves as investment
adviser 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 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 is a
non-diversified mutual fund, which entails ceratin risks. See "Risk Factors --
Non-Diversification and Sector Concentration".
The Low-Priced Stock Fund is a diversified mutual fund that invests in
"low-priced" stocks (prices no greater than $10 per share) of companies
worldwide that have future growth potential, but are overlooked or
underappreciated by other investors. In selecting investments for the
Low-Priced Stock Fund, RSIM searches for undervalued companies that have
long-term growth prospects. Such companies include attractively priced
businesses that have not yet been discovered by other investors, previously
out-of-favor companies with growth potential due to changing circumstances,
companies that have declined in value and no longer command an investor
following, and companies temporarily out of favor due to short-term factors. In
selecting securities for the Low-Priced Stock Fund's portfolio, RSIM uses a
"bottom-up" analysis, looking at companies of all sizes, and in all industries
and geographic markets. RSIM focuses on a company's financial condition,
profitability prospects, and capital needs going forward. The Low-Priced Stock
Fund may engage in short sales, subject to certain limitations. See "Risk
Factors -- Short Sales."
Although both Funds seek to invest principally in common stocks, they may
also invest any portion of their assets 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. Both Funds invest in smaller companies, which may present greater
opportunities for investment return than do larger companies, but may also
6
<PAGE>
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 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. The
Low-Priced Stock Fund may also invest without limit in foreign securities and
will normally invest in securities of issuers located in at least three
countries, one of which may be the United States.
The Low-Priced Stock Fund is managed by a team of professionals at RSIM.
Andrew P. Pilara, Jr., the President and a 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.
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).
RISK FACTORS
Certain risks associated with an investment in the Partners Fund are
summarized below. The Partners Fund shares a number of investment policies with
the Low-Priced Stock 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 Low-Priced Stock 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.
7
<PAGE>
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 Low-Priced Stock Fund, but not the Partners Fund, may
engage in short sales. 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 Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock Fund will only
enter into short sales on securities which it owns, for hedging purposes. 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.
8
<PAGE>
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 Low-Priced Stock Fund may invest in debt
securities to the extent consistent with its investment policies, although RSIM
expects that under normal circumstances the Low-Priced Stock Fund would not
likely invest a substantial portion of its assets in debt securities.
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.
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
9
<PAGE>
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.
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 is a
"non-diversified" investment company, and may invest its assets in a more
limited number of issuers than may other investment companies (including the
Low-Priced Stock Fund). 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, the Partners Fund may invest up to
25% of its total assets in the securities of each of any two issuers. This
10
<PAGE>
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 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
Low-Priced Stock Fund during its fiscal year ended December 31, 1997 was 65%
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 Low-Priced Stock Fund shareholders to be held on July 8, 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 Low-Priced Stock Fund and the Partners Fund by the transfer of
all of the Low-Priced Stock 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 June 5, 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.
11
<PAGE>
APPROVAL OR DISAPPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION
Summary of Proposal
The shareholders of the Low-Priced Stock Fund are being asked to approve
or disapprove the Merger between the Low-Priced Stock Fund and the Partners
Fund. The Merger is proposed to take place pursuant to the Agreement and Plan
of Reorganization between the Low-Priced Stock Fund and the Partners Fund (the
"Agreement"), the form of which is attached to this Prospectus/Proxy Statement
as Appendix A.
The Agreement provides, among other things, for the transfer of all of the
assets of the Low-Priced Stock Fund to the Partners Fund in exchange for (i)
the assumption by the Partners Fund of all of the liabilities of the Low-Priced
Stock Fund and (ii) the issuance to the Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock Fund. Each shareholder of the Low-Priced
Stock 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 Low-Priced Stock 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 Low-Priced Stock Fund and the
Partners Fund and to recommend that shareholders of the Low-Priced Stock 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 Low-Priced Stock Fund
voted at the Meeting if a quorum is present. Shares of the Low-Priced Stock
Fund shall vote together as a single class.
A shareholder of the Low-Priced Stock 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 Low-Priced Stock 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
12
<PAGE>
have on the Funds and their shareholders with respect to a variety of factors,
including tax considerations. In addition, the Trustees considered that the
Low-Priced Stock 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 Low-Priced Stock Fund's shareholders to combine
the Low-Priced Stock Fund with the Partners Fund in order to increase the asset
base over which the Low-Priced Stock 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 Low-Priced Stock
Fund.
Appropriate Investment Objectives, Diversification, etc. The investment
objective and policies of the Partners Fund are similar to those of the
Low-Priced Stock Fund, and the Trustees believe that an investment in shares of
the Partners Fund (whose portfolio will have been combined with that of the
Low-Priced Stock Fund) will provide shareholders an investment opportunity
comparable to that currently afforded by the Low-Priced Stock Fund. Although
the Partners Fund may invest in companies without regard to their absolute
share prices, it invests primarily in smaller companies (with market
capitalizations of up to $1 billion); the Low-Priced Stock Fund, though not
required to invest in smaller companies, itself invests most of its assets in
companies with market capitalizations of less than $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 Low-Priced Stock Fund
in exchange for (i) the assumption by the Partners Fund of all of the
liabilities of the Low-Priced Stock 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 July 10, 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 Low-Priced Stock Fund will transfer all of its assets to the Partners
Fund. In exchange, the Partners Fund will assume all of the liabilities of the
Low-Priced Stock Fund and deliver to the Low-Priced Stock 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 Low-Priced Stock Fund attributable to
its Class A shares, less the value of the liabilities of the Low-Priced Stock
Fund assumed by the Partners Fund attributable to the Class A shares of the
Low-Priced Stock 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 Low-Priced Stock Fund attributable to its Class C shares, less the value of
the liabilities of the Low-Priced Stock Fund assumed by the Partners Fund
attributable to the Class C shares of the Low-Priced Stock Fund.
Immediately following the Exchange Date, the Low-Priced Stock 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
Low-Priced Stock Fund, with Class A Merger Shares being distributed to holders
of Class A shares of the Low-Priced Stock Fund and Class C Merger Shares being
distributed to holders of Class C shares of the Low-Priced Stock Fund. As a
result of the proposed transaction, each holder of Class A and Class C shares
of the Low-Priced Stock Fund will receive a number of Class A and Class C
Merger Shares equal in aggregate value
13
<PAGE>
at the Exchange Date to the value of the Class A and Class C shares,
respectively, of the Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock 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
Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock 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 identical
to those of the corresponding class of the Low-Priced Stock Fund with respect
to sales charges, CDSCs, and Rule 12b-1 fees, and shareholder servicing fees.
The Partners Fund pays a management fee at an annual rate of 1.25% of
average daily net assets, compared with the 1.00% management fee of the
Low-Priced Stock Fund.
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. 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 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
14
<PAGE>
as of the date that, and for the price at which, the Class C Low-Priced Stock
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.
Administrative Arrangements. The Low-Priced Stock Fund has entered into an
Administrative Services Agreement with RSIM pursuant to which RSIM continuously
provides business management services to the Fund and generally manages all of
the business and affairs of the Fund, subject to the general oversight of the
Trustees. The Fund does not currently pay any fees under the Administrative
Services Agreement. Until May 26, 1998, the Fund paid fees to RSIM under the
Administrative Services Agreement at an annual rate of 0.25% of the Fund's
average daily net assets. During the 1997 fiscal year, the Low-Priced Stock
Fund paid RSIM $67,074, for services under the Administrative Services
Agreement. The Partners Fund receives administrative services from RSIM
pursuant to its Investment Advisory Agreement and is not subject to a separate
administrative services arrangement.
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 Low-Priced Stock 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 Low-Priced Stock Fund on the distribution of
Merger Shares to them in exchange for their shares of the Low-Priced Stock
Fund; (iii) under Section 358 of the Code, the tax basis of the Merger Shares
that the Low-Priced Stock Fund's shareholders receive in place of their
Low-Priced Stock Fund shares will be the same as the basis of the Low-Priced
Stock 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 Low-Priced
Stock Fund shares exchanged for the Merger Shares, provided that the
shareholder held the Low-Priced Stock 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 Low-Priced Stock Fund will be the same as the Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced
Stock Fund would recognize gain or loss on the sale of its assets to the
Partners Fund, and shareholders of the Low-Priced Stock 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 Low-Priced Stock Fund shares. In
particular, in such a case, the Partners Fund's cost basis for each security
acquired from the Low-Priced Stock Fund in the Merger would be the fair market
value of such security at the time of the Merger (rather than the Low-Priced
Stock Fund's cost basis), and as a result of the Merger the Low-Priced Stock
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
15
<PAGE>
$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 Low-Priced Stock 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 Low-Priced Stock 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 May 31, 1998, the Low-Priced Stock Fund had an unrealized capital loss
of approximately $38,000, or approximately $0.07 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 $16,517,000 or approximately $1.91 per Class A share and
$1.89 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 $1.83 per share, and the
unrealized capital gain per Class C share of the Partners Fund (including Class
C Merger Shares) would have been approximately $1.81 per share. At December 31,
1997, the Low-Priced Stock Fund had a tax loss carryforward of approximately
$1,600,000.
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 Low-Priced Stock 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 Low-Priced
Stock 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 "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.
16
<PAGE>
Capitalization. The following table shows the capitalizations of the
Partners Fund and the Low-Priced Stock 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
Low-Priced Stock Fund at net asset value:
<TABLE>
<CAPTION>
December 31, 1997
-----------------------------------------------------------
Partners Fund:
Low-Priced Por Forma
Partners Fund Stock Fund Combined
------------------ ----------------- ------------------
<S> <C> <C> <C>
Net Assets
Class A ................. $ 194,133,477 $ 13,370,575 $ 207,504,052
Class C ................. $ 1,000,192 $ 51,304 $ 1,051,496
Shares Outstanding
Class A ................. 11,772,955 1,197,410 12,583,784
Class C ................. 60,977 4,646 64,105
Net Asset Value Per Share
Class A ................. $ 16.49 $ 11.17 $ 16.49
Class C* ................ $ 16.40 $ 11.04 $ 16.40
</TABLE>
- ----------
* Redemption price per share is equal to net asset value less any applicable
CDSC.
17
<PAGE>
INFORMATION ABOUT THE FUNDS
Other information regarding the Low-Priced Stock 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 Low-Priced Stock 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 Low-Priced Stock Fund at the close of business on May 22, 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 Low-Priced Stock 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 Low-Priced
Stock 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 560,434.594
Class A shares and 3,917.745 Class C shares of the Low-Priced Stock Fund.
18
<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> <C> <C>
Global Low-Priced Stock Fund
Class A Shares
Charles Schwab & Company Inc. 119,045.520 shares 21.24% 21.09%
Reinvest Account
Attn. Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 59,088.594 shares 10.54% 10.47%
FBO The Exclusive Benefit of our Customers
#4402087521
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
Class C Shares
Jeffery H. Smythe 1,963.961 shares 50.13% 0.35%
16725 Shaker Blvd.
Shaker Heights, OH 44120-1628
Alfred G. Corrado 1,946.164 shares 49.67% 0.34%
24050 Commerce Park Drive
Cleveland, OH 44122
Partners Fund
Class A Shares
Charles Schwab & Company Inc. 3,184,434.040 shares 36.63% 36.41%
Reinvest Account
Attn. Mutual Funds Dept.
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 987,047.256 shares 11.36% 11.28%
FBO The Exclusive Benefit of our Customers
#4402087521
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
Class C Shares
Robert G. Moulton TTEE 3,581.894 shares 6.63% 0.04%
Robert G. Moulton DDS SC PSP
U/A 6/1/88
504 S. Main
Jefferson, WI 53549-1736
NFSC FEBO # 0C8-861570 3,322.539 shares 6.15% 0.04%
NFSC/FMTC IRA Rollover
FBO Stephen A. Pierce
3909 SE Quanset Terr.
Stuart, FL 34997-5472
NFSC FEBO # 0C8-861847 3,322.539 shares 6.15% 0.04%
NFSC/FMTC IRA Rollover
FBO John Falk
9202 Curtis Court
Upper Marlboro, MD 20772-5209
</TABLE>
19
<PAGE>
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
Low-Priced Stock Fund and the Partners Fund.
Solicitation of Proxies. The costs of solicitation of proxies will be
borne by the Low-Priced Stock Fund and the Partners Fund in the same
proportions as their respective aggregate net asset values bear to each other.
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 Low-Priced Stock Fund's
existence will terminate in June, 1998 or shortly thereafter, after which there
would be no meetings of the shareholders of the Low-Priced Stock Fund.
20
<PAGE>
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 Low-Priced Stock Fund and the Partners Fund in the same
proportions as their respective aggregate net asset values bear to each other.
June 5, 1998
21
<PAGE>
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan or Reorganization (the "Agreement") is made as of
May 21, 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 Global Low-Priced Stock 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:
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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. To the best of its knowledge and except as previously disclosed to
the Acquired Fund by the Acquiring Fund, all of the issued and outstanding
shares of beneficial interest of the Acquiring Fund have been offered for
sale and sold in conformity with all applicable federal and state
securities laws (including any applicable exemptions therefrom), or the
Acquiring Fund has taken any action necessary to remedy any prior failure
to have offered for sale and sold such shares in conformity with such laws.
l. 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").
m. The issuance of the Merger Shares pursuant to this Agreement will be
in compliance with all applicable federal and state securities laws.
A-3
<PAGE>
n. 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.
o. 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 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.
A-4
<PAGE>
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 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
A-5
<PAGE>
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.
n. To the best of its knowledge and except as previously disclosed to
the Acquiring Fund by the Acquired Fund, all of the issued and outstanding
shares of beneficial interest of the Acquired Fund have been offered for
sale and sold in conformity with all applicable federal and state
securities laws (including any applicable exemptions therefrom), or the
Acquired Fund has taken any action necessary to remedy any prior failure to
have offered for sale and sold such shares in conformity with such laws.
o. 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").
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<PAGE>
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.
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.
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<PAGE>
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
July 10, 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 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
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<PAGE>
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.
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.
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<PAGE>
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
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 all of the issued and outstanding shares of beneficial interest
of the Acquired Fund shall, to the best of the Acquired Fund's knowledge
and except as previously disclosed to the Acquiring Fund, have been offered
for sale and sold in conformity with all applicable state securities or
blue sky laws (including any applicable exemptions therefrom).
o. 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
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<PAGE>
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.
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.
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<PAGE>
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 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.
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<PAGE>
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 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 August 1, 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:
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"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 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
Global Low-Priced Stock Fund
By: /s/ Andrew P. Pilara, Jr.
Name: Andrew P. Pilara, Jr.
Title: President
ROBERTSON STEPHENS INVESTMENT TRUST,
on behalf of its Robertson Stephens
Partners Fund
By: /s/ Andrew P. Pilara, Jr.
Name: Andrew P. Pilara, Jr.
Title: President
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