<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
</TABLE>
<TABLE>
<C> <S>
RS INVESTMENT TRUST
- ------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- ------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) 1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
RS INVESTMENT TRUST
388 MARKET STREET, SUITE 200
SAN FRANCISCO, CALIFORNIA 94111
January 6, 2000
Dear Shareholder:
You are cordially invited to attend a Meeting of Shareholders of RS Emerging
Growth Fund, a series of shares of RS Investment Trust, to be held on
February 23, 2000 at 8:30 a.m., San Francisco time, at the Mandarin Oriental
Hotel, Board Room, 222 Sansome Street, San Francisco, California. At the
Meeting, shareholders will be asked to approve certain changes to the
fundamental investment restrictions of the 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(s) promptly. A postage-paid envelope is enclosed
for this purpose.
We look forward to seeing you at the Meeting or receiving your proxy card(s)
so your shares may be voted at the Meeting.
Sincerely yours,
/s/ G. RANDALL HECHT
G. RANDALL HECHT
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>
RS INVESTMENT TRUST
RS EMERGING GROWTH FUND
------------------------
NOTICE OF MEETING OF SHAREHOLDERS
------------------------
A Meeting of shareholders of RS Emerging Growth Fund will be held at the
Mandarin Oriental Hotel, Board Room, 222 Sansome Street, San Francisco,
California, on February 23, 2000 at 8:30 a.m., San Francisco time, for the
following purposes:
1. To approve or disapprove certain changes to the fundamental investment
restrictions of the Fund.
2. To consider and act upon such other matters as may properly come before
the Meeting.
Shareholders of record as of the close of business on December 15, 1999 are
entitled to notice of and to vote at the Meeting.
By order of the Trustees
SUZANNE DUFRANE
SECRETARY
January 6, 2000
<PAGE>
RS INVESTMENT TRUST
388 MARKET STREET, SUITE 200
SAN FRANCISCO, CALIFORNIA 94111
------------------------
PROXY STATEMENT
---------------------
The enclosed proxy is solicited by the Board of Trustees of RS Investment
Trust (the "Trust") for use at the Meeting of shareholders of the RS Emerging
Growth Fund to be held at the Mandarin Oriental Hotel, Board Room, 222 Sansome
Street, San Francisco, California, at 8:30 a.m., San Francisco time, on
February 23, 2000, and at any adjournment thereof. Shareholders of record at the
close of business on December 15, 1999 (the "Record Date") are entitled to vote
at the Meeting or any adjourned session. These proxy materials are first being
made available to shareholders on or about January 6, 2000.
Shares represented by duly executed proxies will be voted in accordance with
the specification made. If no specification is made, shares will be voted in
accordance with the recommendation of the Board of Trustees. You may revoke a
proxy 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 your proxy, and voting in person.
THE TRUST WILL FURNISH TO YOU UPON REQUEST, WITHOUT CHARGE, A COPY OF THE
FUND'S ANNUAL REPORT FOR 1998 AND A COPY OF THE FUND'S SEMI-ANNUAL REPORT FOR
ANY SUBSEQUENT SEMI-ANNUAL PERIOD. PLEASE DIRECT ANY SUCH REQUESTS BY TELEPHONE
TO THE TRUST AT 1-800-766-3836 OR BY WRITING TO THE SECRETARY OF THE TRUST AT
388 MARKET STREET, SUITE 200, SAN FRANCISCO, CALIFORNIA 94111.
1
<PAGE>
I. ADOPTION OF STANDARDIZED INVESTMENT RESTRICTIONS
As described in the following proposals, the Trustees recommend that
shareholders approve the elimination of or revisions to certain fundamental
investment restrictions of the Fund. The purpose of these proposed changes is to
increase the Fund's investment flexibility and reduce administrative and
compliance burdens by: (1) eliminating restrictive policies that various state
securities authorities formerly imposed on certain types of mutual funds, (2)
simplifying and modernizing those investment restrictions that are still
required under applicable law and (3) bringing the Fund's investment
restrictions more closely in line with the investment restrictions of the
majority of other series of the Trust. It is not anticipated that any of the
proposed changes will substantially affect the way the Fund is currently
managed, except that the Fund expects to implement a securities lending program
if Proposal 7 is adopted.
BACKGROUND
The Investment Company Act of 1940, as amended (the "1940 Act"), requires a
registered investment company like the Trust, and each series of the Trust, to
have "fundamental" investment restrictions governing certain of its investment
practices. Investment companies may also voluntarily designate restrictions
relating to other investment practices as fundamental. "Fundamental" investment
restrictions can be changed only by a shareholder vote. The Fund is currently
subject to certain fundamental investment restrictions adopted in the past in
response to regulatory, business, or industry requirements and conditions that
in many cases no longer prevail. For example, the National Securities Markets
Improvement Act of 1996 eliminated many restrictions then required under state
law by preempting state securities ("Blue Sky") regulations for many investment
companies.
The proposed elimination of and revisions to certain of the fundamental
investment restrictions of the Fund are discussed below. By eliminating those
fundamental investment restrictions that are not required and revising those
fundamental investment restrictions that are required, the Trustees believe that
the Fund's investment adviser, RS Investment Management, Inc. ("RSIM"), will be
better able to manage the Fund's portfolio in a changing regulatory or
investment environment. In addition, the process of monitoring the Fund's
compliance with its investment restrictions will be simplified because the
Fund's investment restrictions will be brought more closely in line with those
of most of the other series of the Trust. PLEASE REFER TO APPENDIX A FOR A
COMPLETE DESCRIPTION OF THE CURRENT AND PROPOSED FUNDAMENTAL INVESTMENT
RESTRICTIONS FOR THE FUND.
PROPOSALS
1. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN COMMODITIES.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in commodities will be revised. The investment
restriction relating to investments in commodities will be replaced with the
following fundamental restriction:
The Fund may not:
Purchase or sell commodities or commodity contracts, except that the Fund
may purchase or sell financial futures contracts, options on financial
futures contracts, and futures contracts, forward contracts, and options
with respect to foreign currencies, and may enter into swap transactions or
other financial transactions, and except as required in connection with
otherwise permissible options, futures, and commodity activities as
described elsewhere in the Fund's Prospectus or Statement of Additional
Information at the time.
DISCUSSION.
The current investment restriction is similar to the restriction being
proposed. The 1940 Act requires an investment company to provide a recital of
the policy of the investment company as to, among other things,
2
<PAGE>
the purchase and sale of commodities. Both the current and proposed restrictions
provide the Fund substantial flexibility to engage in financial futures
contracts and other futures contracts. Under the revised restriction, the Fund
will continue to be able to engage in a variety of transactions involving the
use of financial futures and options and foreign currencies, as well as various
other financial transactions which do not involve physical commodities. The Fund
has no current intention of altering its investment policies related to such
activities.
The current restriction also limits the Fund's ability to purchase and sell
interests in oil, gas or other mineral leases or other mineral exploration or
development programs. That language is no longer required by applicable law and
has been deleted, though the Fund has no current intention of purchasing or
selling these interests. Investments in oil, gas and other mineral leases,
rights or royalty contracts and in securities which derive their value in part
from such instruments, entail certain risks, including price volatility, risks
of political and social disturbances and foreign risks such as the existence of
multinational cartels and competition.
2. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN REAL ESTATE.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in real estate will be revised. The investment
restriction relating to investments in real estate will be replaced with the
following fundamental restriction:
The Fund may not:
Purchase or sell real estate or interests in real estate, including real
estate mortgage loans, although it may purchase and sell securities which
are secured by real estate and securities of companies, including limited
partnership interests, that invest or deal in real estate and it may
purchase interests in real estate investment trusts. (For purposes of this
restriction, investments by the Fund in mortgage-backed securities and other
securities representing interests in mortgage pools shall not constitute the
purchase or sale of real estate or interests in real estate or real estate
mortgage loans.)
DISCUSSION.
The 1940 Act also requires an investment company to recite its policy as to
the purchase and sale of real estate. The revised investment restriction is
intended to standardize the language of the Fund's policy concerning real
estate. It also makes clear that the Fund may invest in mortgage-backed
securities and pools, though the Fund has no current intention to invest any
substantial part of its assets in such securities or pools.
3. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO SHORT SALES AND PURCHASING
SECURITIES ON MARGIN.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to short sales and purchasing securities on margin will be
eliminated.
DISCUSSION.
The Fund currently has a fundamental investment restriction prohibiting it
from making short sales or purchasing securities on margin. This restriction had
been adopted in response to requirements imposed under certain states' Blue Sky
laws. Eliminating this restriction will enhance investment flexibility and could
in the future assist the Fund in achieving its investment objective. The Fund
does not, however, currently intend to engage in short sales or to purchase
securities on margin.
In a typical short sale, the Fund borrows from a broker a security that it
anticipates will decline in value in order to sell the security to a third
party. The Fund is then obligated to return a security of the same issue and
quantity at some future date, and it realizes a loss to the extent that the
security increases in value or a
3
<PAGE>
profit to the extent the security declines in value (after taking into account
any associated costs). If the Fund engages in short sales, it may have to pay a
premium to borrow the securities and must pay to the lender any dividends or
interest paid on the securities while they are borrowed. All short sales must be
fully collateralized.
Short sales "against the box" are those where the Fund owns or has the right
to acquire at no added cost a security identical to that sold short. Short sales
"against the box" may protect the Fund against the risk of losses in the value
of a portfolio security because any decline in value of the security should be
wholly or partially offset by a corresponding gain in the short position.
However, any potential gains in such security would be wholly or partially
offset by a corresponding loss in the short position.
Purchases on margins are a type of borrowing, and will be restricted by
applicable law and the Fund's fundamental investment restriction related to
borrowings (see Proposal 8).
4. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN ONE ISSUER.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in one issuer will be revised. The investment
restriction relating to investments in one issuer will be replaced with the
following fundamental restriction (in italics):
The Fund may not:
(i) AS TO 75% OF THE FUND'S TOTAL ASSETS, PURCHASE ANY SECURITY (OTHER THAN
U.S. GOVERNMENT SECURITIES), IF AS A RESULT MORE THAN 5% OF THE FUND'S TOTAL
ASSETS (TAKEN AT CURRENT VALUE) WOULD THEN BE INVESTED IN SECURITIES OF A
SINGLE ISSUER, or (ii) purchase any security if as a result 25% or more of
the Fund's total assets (taken at current value) would be invested in a
single industry.
DISCUSSION.
The 1940 Act places certain limits on the amount of an investment company's
assets that may be invested in securities of a single issuer. Under the 1940
Act, the Fund, as a diversified investment company, generally may not, with
respect to 75% of its total assets, invest more than 5% of its total assets in
the securities of any one issuer (except U.S. Government securities). The
remaining 25% of the Fund's total assets is not subject to this restriction.
This revised investment restriction is intended to clarify and standardize the
language of the Fund's policy as to diversification. The restriction will also
be combined with the restriction as to the Fund's concentration of investments
in one industry (see Proposal 5), as is the case for the majority of the other
Funds.
5. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO CONCENTRATION OF INVESTMENTS
IN ONE INDUSTRY.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to concentration of investments in one industry will be revised.
The investment restriction relating to concentration of investments in one
industry will be replaced with the following fundamental restriction (in
italics):
The Fund may not:
(i) As to 75% of the Fund's total assets, purchase any security (other than
U.S. Government securities) if as a result more than 5% of the Fund's total
assets (taken at current value) would then be invested in securities of a
single issuer, or (ii) PURCHASE ANY SECURITY IF AS A RESULT 25% OR MORE OF
THE FUND'S TOTAL ASSETS (TAKEN AT CURRENT VALUE) WOULD BE INVESTED IN A
SINGLE INDUSTRY.
DISCUSSION.
The 1940 Act limits an investment company's ability to concentrate its
investments in securities of any particular industry. The staff of the
Securities and Exchange Commission takes the position that a mutual fund
"concentrates" its investments in a particular industry if, in general, more
than 25% of the fund's
4
<PAGE>
assets are invested in the securities of issuers in such industry. This revised
investment restriction is intended to standardize the language of the Fund's
policies as to concentration. The restriction will also be combined with the
restriction limiting the portion of the Fund's assets invested in a single
issuer (see Proposal 4) as is the case for most of the other Funds.
6. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO PLEDGING ASSETS.
If this proposal is approved, the existing fundamental investment
restriction of the Fund relating to pledging assets will be eliminated.
DISCUSSION.
The Fund currently has a fundamental investment restriction prohibiting it
from pledging its assets. This restriction had been adopted in response to
requirements in certain states' Blue Sky laws. The elimination of this
restriction is being proposed because the restriction is not required by any
applicable law, and in order to bring the Fund's fundamental investment
restrictions more closely in line with most of the other Funds. The Fund does
not expect to change its current practices as to the pledging of assets.
Pledging assets entails certain risks. For example, the Fund could encounter
costs or delays in recovering the amounts pledged or, in the event of the
insolvency of the pledgee, the Fund might be unable to recover the pledged
assets from the pledgee.
7. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO MAKING LOANS.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to making loans will be revised. The investment restriction
relating to making loans will be replaced with the following fundamental
restriction:
The Fund may not:
Make loans, except by purchase of debt obligations or other financial
instruments in which the Fund may invest consistent with its investment
policies, by entering into repurchase agreements, or through the lending of
its portfolio securities.
DISCUSSION.
This proposed new restriction would standardize the language with that of
most of the other series of the Trust, and would permit the Fund to lend
securities. The Fund is not currently permitted to lend securities. It is
expected that the Fund will engage in securities lending transactions if the
proposed change is approved.
When it lends its portfolio securities, the Fund has the potential to
increase its current income while retaining the securities' potential for
capital appreciation. Such loans are at all times secured by cash or other
collateral. Such a loan involves some risk to the Fund if the other party should
default on its obligation to return the securities or to make related payments.
If the other party should become involved in bankruptcy proceedings, it is
possible that the Fund may encounter a delay in recovery of or even a loss of
rights in the collateral.
5
<PAGE>
8. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO BORROWINGS.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to borrowings will be revised. The investment restriction relating
to borrowings will be replaced with the following fundamental restriction:
The Fund may not:
Borrow money, except to the extent permitted by applicable law.
DISCUSSION.
The Fund's current investment restriction permits the Fund to borrow only in
an amount not in excess of 5% of the value of the Fund's total assets. The 1940
Act generally permits mutual funds to borrow from banks an amount equal to
one-third of their assets, including the amount borrowed. Accordingly, the
revised policy on borrowing would provide the Fund with authority to borrow up
to that higher limit.
The Fund currently borrows money to fund substantial shareholder redemptions
or exchange requests or for the clearance of transactions when available cash is
not sufficient for these needs. The proposed change would afford the Fund
increased capacity to satisfy net redemptions of its shares on a temporary basis
without having to resort to sales of portfolio securities at possibly
disadvantageous prices.
This proposal, if adopted, would also allow the Fund to borrow money to
invest in additional securities. This practice, known as "leverage," increases
the Fund's market exposure and its risk. When the Fund has borrowed money for
leverage and its investments increase or decrease in value, the Fund's net asset
value will normally increase or decrease more than if it had not borrowed money.
The interest the Fund must pay on borrowed money will reduce the amount of any
potential gains or increase any losses. The extent to which the Fund will borrow
money, and the amount it may borrow, depend on market conditions and interest
rates. Successful use of leverage depends on RSIM's ability to predict market
movements correctly. The Fund does not currently intend to borrow money for
leverage.
9. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO UNDERWRITING OF SECURITIES.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to underwriting of securities will be revised. The investment
restriction relating to underwriting of securities will be replaced with the
following fundamental restriction:
The Fund may not:
Act as underwriter of securities of other issuers except to the extent that,
in connection with the disposition of portfolio securities, it may be deemed to
be an underwriter under certain federal securities laws.
DISCUSSION.
The federal securities laws regulate an investment company's ability to act
as an underwriter of securities issued by others. This investment restriction is
intended to state clearly and simply that the limits set forth in those laws
will apply to the Fund. It is not currently expected that the proposed change
would result in any change in the Fund's investment strategy.
6
<PAGE>
10. REVISE THE FUNDAMENTAL RESTRICTION RELATING TO ISSUANCE OF SENIOR
SECURITIES.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to issuance of senior securities will be revised. The investment
restriction relating to issuance of senior securities will be replaced with the
following fundamental restriction:
The Fund may not:
Issue any class of securities which is senior to the Fund's shares of
beneficial interest, except to the extent the Fund is permitted to borrow
money or otherwise to the extent consistent with applicable law.
DISCUSSION.
This revised investment restriction is intended to simplify the language of
the Fund's policy concerning senior securities, and to permit the Fund to take
full advantage of all investment flexibility permitted under applicable law,
subject to the Fund's investment restriction relating to borrowings (see
Proposal 8). It is not currently expected that the proposed change would result
in any change in the Fund's investment strategy.
11. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS MADE FOR THE
PURPOSE OF EXERCISING CONTROL OR MANAGEMENT.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments made for the purpose of exercising control or
management will be eliminated.
DISCUSSION.
Eliminating this investment restriction would permit the Fund to exercise
its rights as shareholder in the various companies in which it can invest,
consistent with any limitation imposed from time to time by applicable law or
RSIM's internal code of conduct and proxy voting policies. These rights may
include the active opposition or support of such companies' management.
Although the Fund does not currently intend to invest in a company for the
purpose of exercising control over the company, the proposed change would
provide the Fund with the additional capability to protect the value of its
investments through the exercise of influence, in appropriate circumstances, on
the management of the companies in which it invests. Activities in which the
Fund would then be able to engage include seeking changes in a company's goals,
management, or board of directors, seeking the sale of some or all of a
company's assets, or voting to participate in or oppose a takeover effort with
respect to the company.
12. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO THE PURCHASE OF MORE THAN
10% OF THE SECURITIES OF ANY ONE ISSUER.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to the purchase of more than 10% of the securities of any one
issuer would be eliminated.
DISCUSSION.
The Fund is classified as a "diversified" investment company under the 1940
Act, which means that the Fund must comply with, among other requirements, the
investment restriction set forth in Proposal 4 above, which limits, as to 75% of
the Fund's assets, the percentage of the Fund's assets invested in a single
issuer. As to the remaining 25% of the Fund's assets, the Fund may concentrate
its investment in securities of a single issuer although it currently has no
intention to do so. The proposed change eliminates any redundancy in the policy
and enhances the Fund's ability in the future to make substantial investments in
a limited number of issuers.
7
<PAGE>
13. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN OTHER
INVESTMENT COMPANIES.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in other investment companies will be eliminated.
DISCUSSION.
The 1940 Act imposes limitations on an investment company's ability to
purchase and sell securities of other investment companies. For instance, the
1940 Act generally prohibits the Fund from investing in another registered
investment company if, as a result, the Fund and its affiliates would own more
than 3% of the voting stock of such company, more than 5% of the Fund's assets
would be invested in the other investment company, or more than 10% of the
Fund's assets would be invested in other investment companies in the aggregate.
If this proposal is approved, the Fund will be able to invest in other
investment companies to the extent allowed by the 1940 Act and the Fund's
investment policies. Investment in other investment companies may involve
duplication of certain fees and expenses. It is not currently expected that the
proposed change would result in any change to the Fund's investment strategy.
14. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN BUSINESSES
LESS THAN THREE YEARS OLD.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in businesses less than three years old will be
eliminated.
DISCUSSION.
The restriction limits to 5% the portion of the Fund's assets that may be
invested in companies which have been in operation for less than three years.
This restriction had been adopted in response to requirements imposed under
certain states' Blue Sky laws.
Elimination of this investment restriction will increase RSIM's flexibility
in managing the Fund's assets by permitting investments by the Fund in
unseasoned issuers that might otherwise be permissible and appropriate under the
investment objective and policies of the Fund. While securities of these issuers
may be subject to greater risk, RSIM believes that the increasing prevalence of
unseasoned issuers, the investment opportunities offered by such issuers, and
the fact that any such investments would be subject to the other investment
policies of the Fund, warrants the elimination of the current investment
restriction.
15. ELIMINATE THE FUNDAMENTAL RESTRICTION RELATING TO INVESTMENTS IN ILLIQUID
SECURITIES. REPLACE WITH A NON-FUNDAMENTAL RESTRICTION RELATING TO
INVESTMENTS IN ILLIQUID SECURITIES.
If this proposal is approved, the fundamental investment restriction of the
Fund relating to investments in illiquid securities will be eliminated. It will
be replaced by the following non-fundamental restriction:
The Fund may not:
Invest more than 15% of its net assets in securities which are not readily
marketable, including securities restricted as to resale (other than securities
restricted as to resale but determined by the Trustees, or persons designated by
the Trustees to make such determinations, to be readily marketable).
DISCUSSION.
There is no legal requirement that the Fund adopt a fundamental investment
restriction limiting its investments in illiquid securities; the Securities and
Exchange Commission however, takes the position that open-end investment
companies should not invest more that 15% of their net assets in such
securities. By
8
<PAGE>
eliminating the current fundamental restriction and implementing the proposed
non-fundamental restriction, the Fund's policies as to investments in illiquid
securities will be brought more closely in line with the SEC position.
Elimination of this investment restriction will increase the flexibility of
RSIM in managing the Fund's assets by permitting investments in illiquid
securities that are otherwise permissible and appropriate under the investment
objective and policies of the Fund. It is not expected, however, that the
proposed change will result in any material change to the Fund's investment
strategy.
Investments in illiquid securities involve risks. For example, the Fund may
not be able to dispose of such securities at any given time, or it may not be
able to sell them at the prices at which it has valued them. To the extent that
the Fund invests in illiquid securities, the Fund may encounter difficulty in
determining the fair value of such securities for purposes of computing net
asset value. In addition, the Fund could encounter difficulty satisfying
redemption requests within seven days if it could not readily dispose of its
illiquid securities.
TRUSTEE RECOMMENDATION
THE TRUSTEES OF THE TRUST UNANIMOUSLY RECOMMEND THAT THE SHAREHOLDERS OF THE
FUND VOTE TO APPROVE THE PROPOSED ELIMINATION OF AND REVISIONS TO THE
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE FUND.
The required vote for approval of the proposed elimination of or revisions
to each of the fundamental investment policies is the lesser of (1) 67% of the
shares of the Fund represented at the Meeting and entitled to vote, if more than
50% of the shares of the Fund are represented at the Meeting, or (2) more than
50% of the outstanding shares of the Fund. If the shareholders of the Fund do
not approve these proposals, the Trustees of the Trust will consider such
alternate actions as may be in the best interest of the Fund.
II. ADDITIONAL INFORMATION
OWNERSHIP OF SHARES. As of the Record Date, the number of outstanding
shares of the Fund was 56,206,503.844. As of the Record Date, Trustees and
Officers of the Trust, as a group, owned less than 1% of the Fund's outstanding
shares.To the Trust's knowledge, no persons owned beneficially more than 5% of
the outstanding shares of the Fund as of the Record Date.
CERTAIN SERVICE PROVIDERS. RSIM, located at 388 Market Street, Suite 200,
San Francisco, California, 94111 acts as investment advisor and administrator to
the Fund. Provident Distributors, Inc., located at Four Falls Corporate Center,
6th Floor, West Conshohocken, PA, is the Fund's distributor.
SOLICITATION OF PROXIES. The costs of solicitation of proxies will be borne
by the Fund. Solicitation of proxies by personal interview, mail, telephone, and
telegraph may be made by officers and Trustees of the Trust (who will receive no
compensation therefor in addition to their regular salaries). In addition, the
firm of D.F. King & Co., Inc. has been retained to assist in the solicitation of
proxies at a cost which is not expected to exceed $60,000, although actual costs
may be substantially higher.
The Trust may also arrange to have votes recorded by telephone. These
telephonic voting procedures are 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
9
<PAGE>
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 confirmation is incorrect.
QUORUM. The Agreement and Declaration of Trust provides that forty percent
(40%) of the shares entitled to vote on a matter shall constitute a quorum for
the transaction of business on that matter at a meeting. However, approval of
the proposed changes to the fundamental investment restrictions of the Fund will
require the presence of a greater percentage of the Fund's shares at the meeting
in person or by proxy.
ADJOURNMENT. In the event that sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting with respect to those proposals for a period or
periods of not more than 60 days in the aggregate to permit further solicitation
of proxies with respect to those proposals. In addition, if, in the judgment of
the persons named as proxies, subsequent developments make it advisable to defer
action on one or more proposals, but not all proposals, the persons named as
proxies may propose one or more adjournments of the Meeting with respect to
those proposals for a reasonable time in order to defer action on such proposals
as they deem advisable. Any such adjournments 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, as required by the Trust's Agreement and
Declaration of Trust and By-laws. The persons named as proxies will vote in
favor of such adjournment with respect to a proposal those proxies which they
are entitled to vote in favor of the proposal. They will vote against any such
adjournment those proxies which they have been instructed to vote against such
proposal, and they will vote to abstain any such proxies which they are required
to abstain from voting on such proposal. The costs of any such additional
solicitation and of any adjourned session will be borne by the Fund. Any
proposals for which sufficient favorable votes have been received by the time of
the Meeting may be acted upon and considered final regardless of whether the
Meeting is adjourned to permit additional solicitation with respect to any other
proposal.
TABULATION OF VOTES. Votes cast by proxy or in person at the Meeting will
be counted by one or more 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 each proposal for purposes of determining whether sufficient
affirmative votes have been cast. The tellers will count shares represented by
proxies that withhold 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 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 the effect of negative votes on the
proposals to approve the changes to the fundamental investment restrictions of
the Fund.
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.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR SUBSEQUENT MEETINGS OF
SHAREHOLDERS. The Trust's Agreement and Declaration of Trust does not provide
for annual meetings of shareholders, and the Trust does not currently intend to
hold such a meeting in 2000. Shareholder proposals for inclusion in the Trust's
proxy statement for any subsequent meeting must be received by the Trust a
reasonable period of time prior to any such meeting.
10
<PAGE>
APPENDIX A
RS EMERGING GROWTH FUND
FUNDAMENTAL INVESTMENT RESTRICTIONS
<TABLE>
<S> <C>
CURRENT RESTRICTIONS PROPOSED RESTRICTIONS
The Fund may not:
(1) Purchase or sell commodities or commodity Eliminate. Replace with the following
contracts, or interests in oil, gas, or other fundamental restriction:
mineral leases, or other mineral exploration PURCHASE OR SELL COMMODITIES OR COMMODITY CON-
or development programs, although it may TRACTS, EXCEPT THAT THE FUND MAY PURCHASE OR
invest in companies that engage in such SELL FINANCIAL FUTURES CONTRACTS, OPTIONS ON
businesses to the extent otherwise permitted FINANCIAL FUTURES CONTRACTS, AND FUTURES
by a Fund's investment policies and CONTRACTS, FORWARD CONTRACTS, AND OPTIONS WITH
restrictions and by applicable law, except as RESPECT TO FOREIGN CURRENCIES, AND MAY ENTER
required in connection with otherwise INTO SWAP TRANSACTIONS OR OTHER FINANCIAL
permissible options, futures and commodity TRANSACTIONS, AND EXCEPT AS REQUIRED IN
activities as described elsewhere in the CONNECTION WITH OTHERWISE PERMISSIBLE OPTIONS,
[Fund's] Prospectus and this Statement [of FUTURES, AND COMMODITY ACTIVITIES AS DESCRIBED
Additional Information]. ELSEWHERE IN THE FUND'S PROSPECTUS OR THE
STATEMENT OF ADDITIONAL INFORMATION AT THE
TIME.
(2) Purchase or sell real estate, although it Eliminate. Replace with the following
may invest in securities secured by real fundamental restriction:
estate or real estate interests, or issued by PURCHASE OR SELL REAL ESTATE OR INTERESTS IN
companies, including real estate investment REAL ESTATE, INCLUDING REAL ESTATE MORTGAGE
trusts, that invest in real estate or real LOANS, ALTHOUGH IT MAY PURCHASE AND SELL
estate interests. SECURITIES WHICH ARE SECURED BY REAL ESTATE
AND SECURITIES OF COMPANIES, INCLUDING LIMITED
PARTNERSHIP INTERESTS, THAT INVEST OR DEAL IN
REAL ESTATE AND IT MAY PURCHASE INTERESTS IN
REAL ESTATE INVESTMENT TRUSTS. (FOR PURPOSES
OF THIS RESTRICTION, INVESTMENTS BY THE FUND
IN MORTGAGE-BACKED SECURITIES AND OTHER
SECURITIES REPRESENTING INTERESTS IN MORTGAGE
POOLS SHALL NOT CONSTITUTE THE PURCHASE OR
SALE OF REAL ESTATE OR INTERESTS IN REAL
ESTATE OR REAL ESTATE MORTGAGE LOANS.)
(3) Make short sales or purchases on margin, Eliminate.
although it may obtain short-term credit
necessary for the clearance of purchases and
sales of its portfolio securities and except
as required in connection with permissible
options, futures, short selling and leverage
activities as described elsewhere in the
Prospectus and this Statement [of Additional
Information].
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(4) With respect to 75% of its total assets, Eliminate fundamental restrictions 4 and 5.
invest in the securities of any one issuer Replace both with the following single
(other than the U.S. Government and its fundamental restriction:
agencies and instrumentalities), if (i) AS TO 75% OF THE FUND'S TOTAL ASSETS,
immediately after and as a result of such PURCHASE ANY SECURITY (OTHER THAN U.S.
investment more than 5% of the total assets of GOVERNMENT SECURITIES), IF AS A RESULT MORE
the Fund would be invested in such issuer (the THAN 5% OF THE FUND'S TOTAL ASSETS (TAKEN AT
remaining 25% of its total assets may be CURRENT VALUE) WOULD THEN BE INVESTED IN
invested without restriction except to the SECURITIES OF A SINGLE ISSUER, OR (ii) PUR-
extent other investment restrictions may be CHASE ANY SECURITY IF AS A RESULT 25% OR MORE
applicable). OF THE FUND'S TOTAL ASSETS (TAKEN AT CURRENT
(5) Invest more than 25% of the value of the VALUE) WOULD BE INVESTED IN A SINGLE INDUSTRY.
Fund's total assets in the securities of
companies engaged in any one industry (except
securities issued by the U.S. Government its
agencies or instrumentalities).
(6) Mortgage, hypothecate, or pledge any of Eliminate.
its assets as security for any of its
obligations, except as required for otherwise
permissible borrows (including reverse
repurchase agreements), short sales, financial
options and other hedging activities.
(7) Make loans of the Fund's assets, including Eliminate. Replace with the following
loans of securities (although it may, subject fundamental restriction:
to the other restrictions or policies stated MAKE LOANS, EXCEPT BY PURCHASE OF DEBT OBLIGA-
herein, purchase debt securities or enter into TIONS OR OTHER FINANCIAL INSTRUMENTS IN WHICH
repurchase agreements with banks or other THE FUND MAY INVEST CONSISTENT WITH ITS
institutions to the extent a repurchase INVESTMENT POLICIES, BY ENTERING INTO
agreement is deemed to be a loan). REPURCHASE AGREEMENTS, OR THROUGH THE LENDING
OF ITS PORTFOLIO SECURITIES.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
(8) Borrow money, except from banks for tempo- Eliminate. Replace with the following
rary or emergency purposes or in connection fundamental restriction:
with otherwise permissible leverage BORROW MONEY, EXCEPT TO THE EXTENT PERMITTED
activities, and then only in an amount not in BY APPLICABLE LAW.
excess 5% of the Fund's total assets (in any
case as determined at the lesser of
acquisition cost or current market value and
excluding collateralized reverse repurchase
agreements).
(9) Underwrite securities of any other Eliminate. Replace with the following
company, although it may invest in companies fundamental restriction:
that engage in such businesses if it does so ACT AS UNDERWRITER OF SECURITIES OF OTHER
in accordance with policies established by the ISSUERS EXCEPT TO THE EXTENT THAT, IN
Trust's Board of Trustees (the Board's current CONNECTION WITH THE DISPOSITION OF PORTFOLIO
policy permits a Fund to invest in companies SECURITIES, IT MAY BE DEEMED TO BE AN
that directly or through subsidiaries execute UNDERWRITER UNDER CERTAIN FEDERAL SECURITIES
portfolio transactions for a Fund or have LAWS.
entered into selling agreements with the
Distributor to sell Fund shares, to the extent
permitted by applicable law), and except to
the extent that the Fund may be considered an
underwriter within the meaning of the
Securities Act of 1933, as amended, in the
disposition of restricted securities.
(10) Issue senior securities, as defined in Eliminate. Replace with the following
the 1940 Act, except that this restriction fundamental restriction:
shall not be deemed to prohibit the Fund from ISSUE ANY CLASS OF SECURITIES WHICH IS SENIOR
making any otherwise permissible borrowings, TO THE FUND'S SHARES OF BENEFICIAL INTEREST,
mortgages or pledges, or entering into EXCEPT TO THE EXTENT THE FUND IS PERMITTED TO
permissible reverse repurchase agreements, and BORROW MONEY OR OTHERWISE TO THE EXTENT
options and futures transactions. CONSISTENT WITH APPLICABLE LAW.
(11) Purchase the securities of any company Eliminate.
for the purpose of exercising management or
control.
(12) Purchase more than 10% of the outstanding Eliminate.
voting securities of any one issuer.
(13) Purchase the securities of any registered Eliminate.
investment company, except as part of a merger
or similar reorganization transaction.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(14) Invest more than 5% of the value of its Eliminate.
total assets in securities of any issuer which
has not had a record, together with its
predecessors, of at least three years of
continuous operations.
(15) Invest more than 10% of the value of its Eliminate. Replace with the following
total assets in securities that are not non-fundamental restriction:
readily marketable or that would require INVEST MORE THAN 15% OF ITS NET ASSETS IN
registration under the Securities Act of 1933, SECURITIES WHICH ARE NOT READILY MARKETABLE,
as amended, upon disposition (as a matter of INCLUDING SECURITIES RESTRICTED AS TO RESALE
operating policy, the Fund interprets this (OTHER THAN SECURITIES RESTRICTED AS TO RESALE
restriction as including venture capital BUT DETERMINED BY THE TRUSTEES, OR PERSONS
investments such as venture capital partner- DESIGNATED BY THE TRUSTEE'S TO MAKE SUCH
ships whose securities are not registered DETERMINATIONS, TO BE READILY MARKETABLE).
under the Securities Act of 1933 and
unregistered securities of companies which are
not yet publicly held; furthermore, and as an
additional matter of operating policy, the
Board of Trustees has adopted a further
restriction that no more than 5% of the Fund's
total assets may be held in such restricted
securities).
</TABLE>
4
<PAGE>
[LOGO]
[RS INVESTMENT
MANAGEMENT]
RS INVESTMENT MANAGEMENT
388 MARKET STREET, SUITE 200
SAN FRANCISCO, CA 94111
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
YOU MAY ALSO VOTE YOUR SHARES BY TOUCHTONE PHONE BY CALLING 1-800-690-6903 OR
THROUGH THE INTERNET AT www.proxyvote.com
RS EMERGING GROWTH FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
February 23, 2000
The undersigned hereby appoints G. Randall Hecht, Suzanne DuFrane, and
Steve Cohen, and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of shareholders of RS Emerging Growth Fund, on February
23, 2000 at 8:30 a.m., San Francisco time, and at any adjournments thereof,
all of the shares of RS Emerging Growth Fund which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED FOR PROPOSALS 1 THROUGH 15.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD OF TRUSTEES RECOMMENDS A VOTE
FOR EACH PROPOSAL.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
RSEMER KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
RS EMERGING GROWTH FUND
To vote FOR all 15 proposals, mark this box [ ]
and sign and date below.
(No additional vote is necessary.)
<TABLE>
<CAPTION>
VOTE ON PROPOSALS FOR AGAINST ABSTAIN
<S> <C> <C> <C>
1. Revise the fundamental restriction relating to investments in commodities. [ ] [ ] [ ]
2. Revise the fundamental restriction relating to investments in real estate. [ ] [ ] [ ]
3. Eliminate the fundamental restriction relating to short sales and purchasing
securities on margin. [ ] [ ] [ ]
4. Revise the fundamental restriction relating to investments in one issuer. [ ] [ ] [ ]
5. Revise the fundamental restriction relating to investments in one industry. [ ] [ ] [ ]
6. Eliminate the fundamental restriction relating to pledging assets. [ ] [ ] [ ]
7. Revise the fundamental restriction relating to making loans. [ ] [ ] [ ]
8. Revise the fundamental restriction relating to borrowings. [ ] [ ] [ ]
9. Revise the fundamental restriction relating to underwriting of securities. [ ] [ ] [ ]
10. Revise the fundamental restriction relating to issuance of senior
securities. [ ] [ ] [ ]
11. Eliminate the fundamental restriction relating to investments made for the
purpose of exercising control or management. [ ] [ ] [ ]
12. Eliminate the fundamental restriction relating to the purchase of more than
10% of the securities of any one issuer. [ ] [ ] [ ]
13. Eliminate the fundamental restriction relating to investments in other
investment companies. [ ] [ ] [ ]
14. Eliminate the fundamental restriction relating to investments in businesses
less than three years old. [ ] [ ] [ ]
15. Eliminate the fundamental restriction relating to investments in
illiquid securities. [ ] [ ] [ ]
</TABLE>
- --------------------------------------- --------------
Signature [PLEASE SIGN WITHIN BOX] Date
- --------------------------------------- --------------
Signature (Joint Owners) Date
<PAGE>
- --------------------------------------------------------------------------------
TWO NEW LOW-COST WAYS TO VOTE YOUR PROXY
- --------------------------------------------------------------------------------
[GRAPHIC of the word "Save!" followed by a dollar sign.]
[GRAPHIC of the word "Save!" followed by a clock.]
IT'S FAST AND CONVENIENT.
The accompanying PROXY STATEMENT outlines important issues affecting RS Emerging
Growth Fund. Help us save time and postage costs--savings we pass along to
you--by voting through the Internet or by telephone. Each method is generally
available 24 hours a day and will ensure that your vote is confirmed and posted
immediately.
DO NOT MAIL THE Proxy Card IF YOU ARE VOTING BY INTERNET OR TELEPHONE.
[GRAPHIC of a computer.]
TO VOTE BY INTERNET:
- --------------------
1. Read the PROXY STATEMENT and have your PROXY CARD at hand.
2. Go to website www.proxyvote.com.
3. Enter the 12-digit CONTROL NUMBER found on your PROXY CARD.
[GRAPHIC of a telephone.]
TO VOTE BY TELEPHONE:
- ---------------------
1. Read the PROXY STATEMENT and have your PROXY CARD at hand.
2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit CONTROL NUMBER found on your PROXY CARD.
4. Follow the simple recorded instructions.
Provident Distributors, Inc., distributor
YOUR PROXY VOTE IS IMPORTANT!
[RS Investment Management Company LOGO]
