UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant[]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE OF THE
[x] Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED BY
[ ] Definitive Additional Materials RULE 14A-6(E)(2))
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HT INSIGHT FUNDS, INC. d/b/a/ HARRIS INSIGHT FUNDS
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[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:
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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):
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[ ] 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) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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HT INSIGHT FUNDS, INC.
(THE "COMPANY")
Harris Insight Equity Fund
Harris Insight Short/Intermediate Bond Fund
Harris Insight Tax-Exempt Money Market Fund
Harris Insight Money Market Fund
Harris Insight Government Money Market Fund
(each a "Fund" and collectively, the "Funds")
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 29, 1999
A special meeting of shareholders of each Fund of the Company (the
"Meeting") will be held at Harris Trust and Savings Bank, 8th floor, 111 West
Monroe Street, Chicago, Illinois 60603 on November 29, 1999 at 10:00 a.m.
Chicago time, for the following purposes:
1. To approve or disapprove a proposed reorganization of the Funds, as
described in the accompanying proxy statement (the "Reorganization"),
in which:
(a) each Fund will be succeeded by a newly created series (a "New
Fund") of Harris Insight Funds Trust, a business trust organized
under the laws of the Commonwealth of Massachusetts (the "Trust"),
pursuant to an Agreement and Plan of Reorganization whereby:
(i) each Fund will transfer all of its assets to its
corresponding New Fund and the New Fund will (x) assume all
of the liabilities of the Fund and (y) issue directly to
each shareholder of the Fund shares of the New Fund in a
number equal to the number of shares (including any
fractional share) of the Fund then owned by such
shareholder, in exchange for and in cancellation of the
shareholder's shares of the Fund; and
(ii) the Fund will be liquidated and dissolved (and, if the
shareholders of all Funds approve their respective
reorganizations and the Reorganization becomes effective,
the Company will be liquidated and dissolved).
(b) the adoption by the Funds (but not by the New Funds) of temporary
amendments to certain investment restrictions, solely for the
purpose of the Reorganization, to eliminate several restrictions
that would otherwise present obstacles to the Reorganization as
proposed; and
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(c) each Fund would be authorized to vote, prior to the effectiveness
of the Reorganization, its share of its corresponding New Fund to:
(i) approve an amended investment advisory agreement between the
Trust and Harris Trust and Savings Bank (the "Adviser") and
an amended portfolio management contract between the Adviser
and Harris Investment Management, Inc. providing for the
management of the New Fund on substantially the same terms
set forth in the Fund's current agreements;
(ii approve certain changes to the Fund's fundamental investment
restrictions;
(iii) approve a Rule 12b-1 Service Plan on behalf of the A Shares
of the New Equity and New Short/Intermediate Bond Funds and
a Rule 12b-1 Service Plan on behalf of the N Shares of the
New Tax-Exempt Money Market, New Money Market and New
Government Money Market Funds;
(iv) elect a Board of Trustees of the Trust; and
(v) ratify the selection of PricewaterhouseCoopers LLP as the
Fund's independent public accountants for the fiscal year
ended December 31, 1999.
2. To transact such other business as may properly come before the
Meeting.
By order of the Board of Directors
Gary M. Gardner
Secretary
PLEASE VOTE. YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU OWN. IN ORDER
TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION, WE ASK YOU TO SIGN AND
MAIL YOUR PROXY PROMPTLY.
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
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HT INSIGHT FUNDS, INC.
(THE "COMPANY")
Harris Insight Equity Fund
Harris Insight Short/Intermediate Bond Fund
Harris Insight Tax-Exempt Money Market Fund
Harris Insight Money Market Fund
Harris Insight Government Money Market Fund
(each a "Fund" and collectively, the "Funds")
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 29, 1999
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PROXY STATEMENT
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GENERAL INFORMATION
WHO IS ASKING FOR MY VOTE?
The Board of Directors of the Company is soliciting proxies from the
shareholders for use at a special meeting of shareholders of the Company (the
"Meeting") called to be held on November 29, 1999, and at any adjournment of the
Meeting, for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders. This proxy statement and the accompanying form of proxy
are first being mailed to shareholders on or about October 26, 1999.
WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on October 1, 1999 are
entitled to vote at the Meeting and any adjournment thereof. The Company is
composed of five separate Funds. Each of the Equity and Short/Intermediate Bond
Funds offers three classes of shares, N Shares, A Shares and Institutional
Shares. Each of the Tax-Exempt Money Market, Money Market and Government Money
Market Funds offers two classes of shares, N Shares and Institutional Shares. N
Shares, A Shares and Institutional Shares are collectively referred to as
"Shares." As of October 1, 1999, there were 3,905,503,501 shares of beneficial
interest of the Company outstanding, comprised of the following Shares:
Equity Fund - 43,722,863
Short/Intermediate Bond Fund - 31,975,467
Tax-Exempt Money Market Fund - 714,399,312
Money Market Fund - 2,568,560,473
Government Money Market Fund - 546,845,386
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HOW DO I VOTE?
You may vote in person at the Meeting or by proxy. Each whole Share is
entitled to one vote and each fractional Share is entitled to a proportionate
fractional vote. Your properly executed proxy received prior to the Meeting will
be voted at the Meeting and any adjournment thereof, in accordance with your
instructions marked on the proxy. If there are no voting instructions on a
proxy, your proxy will be voted FOR the approval of the Proposal described in
this Proxy Statement. You may revoke your proxy at any time prior to the Meeting
by giving written notice to PFPC Inc., the Company's sub-transfer agent, at 400
Bellevue Parkway, Wilmington, Delaware 19809, by signing and mailing another
proxy of a later date or by personally casting a vote at the Meeting.
If a quorum of shareholders of any Fund is not present or represented
at the Meeting, or if sufficient votes to approve the Proposal are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. Any adjournment will require the
affirmative vote of a majority of Shares of such Fund represented in person or
by proxy at the Meeting. In that case, the persons named as proxies will vote
all proxies that they are entitled to vote FOR such an adjournment; provided,
however, any proxies required to be voted against the Proposal will be voted
AGAINST such adjournment. A shareholder vote may be taken on the Proposal prior
to such adjournment if sufficient votes have been received and it is otherwise
appropriate. In the event of any adjournment, the Company will continue to
solicit proxies.
Abstentions and broker non-votes will be counted as Shares present for
purposes of determining whether a quorum is present but will not be voted FOR or
AGAINST any adjournment. Accordingly, abstentions and broker non-votes
effectively will be votes AGAINST adjournment. Broker non-votes are Shares held
in a broker's name for which the broker indicates that instructions have not
been received from the beneficial owners or other persons entitled to vote and
the broker does not have discretionary voting authority. Abstentions and broker
non-votes will not be counted, however, as votes cast for purposes of
determining whether sufficient votes have been received to approve the Proposal.
In completing proxies, shareholders should be aware that checking the box
labeled ABSTAIN will result in the Shares covered by the proxy being treated as
if they were voted AGAINST the Proposal.
PROPOSAL 1: APPROVAL OF THE PROPOSED REORGANIZATION
Each Fund is a separate mutual fund that is an investment portfolio of
the Company, which is a Maryland business corporation. On October 18, 1999, the
Board of Directors of the Company unanimously approved an Agreement and Plan of
Reorganization (the "Plan") in the form attached to this proxy statement as
Exhibit A. The Plan provides for the reorganization (the "Reorganization") of
each Fund into a separate portfolio series of Harris Insight Funds Trust, a
Massachusetts business trust (the "Trust").
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Reasons for the Reorganization. The purpose of the Reorganization is to
combine into a single business trust the Funds, which are managed by Harris
Trust and Savings Bank (the "Adviser"), and the thirteen mutual funds that are
currently investment portfolios of the Trust, which are also managed by the
Adviser. The Adviser believes that having all of the funds it advises in the
same Massachusetts business trust would result in various operating
efficiencies, including a single registration statement and a single report to
the Securities and Exchange Commission (the "SEC") and that the elimination of
the dual structure within the same fund family would also alleviate shareholder
confusion. The Board of Directors also concluded that the proposed trust format
provides the most economical method of providing different investment vehicles
to current and prospective shareholders.
Principal Features of the Reorganization. The Trust is registered under
the Investment Company Act of 1940 (the "1940 Act") as an open-end management
investment company. Because the Trust offers multiple portfolios, it is referred
to as a "series" company. The Trust may issue an unlimited number of shares in
one or more series as the Board of Trustees may authorize. Currently the Board
of Trustees has authorized thirteen series, shares of each of which are
currently outstanding. The Reorganization contemplates that each Fund of the
Company will transfer all of its assets to a newly created series of the Trust
with the same name as the Fund (each a "New Fund" and collectively, the "New
Funds"). The liabilities of each Fund will also be assumed by its corresponding
New Fund, and each shareholder of the Funds will receive for his Fund shares an
equal number of shares (including any fractional shares) of the corresponding
New Fund. Upon consummation of the Reorganization, an open account will be
established on the records of the Trust in the name of each shareholder of the
Funds. As promptly as practicable after the Reorganization, the Company will be
terminated pursuant to the laws of the State of Maryland. After the closing date
of the Reorganization of all Funds, the Company will not conduct any business
except in connection with the liquidation and dissolution of the Funds. (See
"Procedures for Reorganization" and "Federal Income Tax Consequences" below.)
Procedures for the Reorganization. If the Plan is approved by
shareholders of a Fund, it is anticipated that the procedure for the
Reorganization under the Plan will be as follows:
o The Fund will transfer all of its assets to its corresponding
New Fund.
o The New Fund, in exchange for those assets transferred to it,
will assume all the liabilities and obligations of the Fund and
will issue to the Fund a number of full and fractional shares of
beneficial interest in the New Fund equal to the number of shares
of the Fund then outstanding.
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o The Fund will distribute to its shareholders a number of full and
fractional shares of the corresponding New Fund equal to the
number of full and fractional Fund shares held by that
shareholder, and all shares of the Fund will be cancelled.
o If the Reorganization of all the Funds becomes effective, the
Company will dissolve and liquidate.
If the Plan is approved by shareholders of a Fund, it is expected that
the Reorganization with respect to that Fund will be made effective on April 30,
2000 (the "Closing Date"). At any time before the Reorganization is effective,
the Trust and the Company may agree to terminate the Plan, and, if the
Reorganization has not been made effective by May 31, 2000, the Plan will
automatically terminate on that date unless a later date is agreed to by both
the Trust and the Company.
Temporary Amendment to Investment Restrictions. The following
fundamental investment restrictions of each Fund, which may not be changed
without shareholder approval, might be construed as restricting the Fund's
ability to carry out the Reorganization:
No Fund may:
(1) make investments for the purpose of exercising control or
management; or
(2) own more than 3% of the voting stock of another investment company.
Such restrictions may prohibit the purchase by a Fund of the initial
share of its corresponding New Fund as is contemplated by the Reorganization.
Accordingly, a vote for the Reorganization will be deemed also to be a vote to
amend temporarily the investment restrictions to the extent necessary to carry
out the Reorganization in the manner described above, by the addition to each of
the above restrictions of the following clause:
"except solely for the purchase of a share or shares of a series of
Harris Insight Funds Trust, in connection with the Agreement and Plan
of Reorganization of the Company and Harris Insight Funds Trust
approved by the Board of Directors of the Company on October 18, 1999."
Such amendment will be only for purposes of completing the
Reorganization. The amendment will not be adopted by any New Fund and will have
no effect thereafter.
Voting of Initial Shares of the New Funds. As set forth below, if
approved by shareholders, the Reorganization will result in several other
changes concerning the structure and operations of the Funds as the New Funds.
Because of the manner in which the transfer of assets from the Funds to the New
Funds will take place under the Reorganization, you are not being asked to
approve directly or adopt those additional matters. Specifically, after
shareholder approval of the Reorganization but prior to the issuance of the
shares of the New Funds to the
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shareholders of the Funds, one share of each New Fund will be issued to
the corresponding Fund, which will vote that Share to:
o Approve an amended investment advisory contract between the Trust
and the Adviser and an amended portfolio management contract
between the Adviser and Harris Investment Management, Inc.
("HIM") with respect to the management of the New Fund. (See
"Approval of the Amended Trust Advisory Agreement and Amended
Trust Management Contract" below);
o Approve certain changes to the Funds' fundamental investment
restrictions (see "Approval of Certain Changes to the Funds'
Fundamental Investment Restrictions" below);
o Approve a Rule 12b-1 Service Plan on behalf of the A Shares of
the New Equity and New Short/Intermediate Bond Funds and a Rule
12b-1 Service Plan on behalf of the N Shares of the New
Tax-Exempt Money Market, New Money Market and New Government
Money Market Funds (see "Approval of Rule 12b-1 Service Plans"
below);
o Elect a Board of Trustees of the Trust (see "Election of
Trustees" below); and
o Ratify the selection of PricewaterhouseCoopers LLP as the
independent public accountants for the New Fund (see
"Ratification of the Selection of PricewaterhouseCoopers LLP as
the Trust's Independent Public Accountants" below).
Federal Income Tax Consequences. It is anticipated that the
transactions contemplated by the Plan will be tax-free for federal income tax
purposes. The Company and the Trust have received an opinion of their counsel,
Bell, Boyd & Lloyd, that under the Internal Revenue Code of 1986 the
Reorganization of each Fund into a New Fund pursuant to the Plan will not give
rise to the recognition of income, deductions, gain or loss for federal income
tax purposes by the Fund, the New Fund or the shareholders of the Fund. A
shareholder's adjusted basis for tax purposes in shares of a New Fund after the
Reorganization will be the same as his or her adjusted basis for tax purposes in
the shares of the Fund immediately before the Reorganization. The holding period
of the shares of the New Fund received by the shareholders of the Fund will
include the holding period of shares for the Fund exchanged therefor, provided
that at the time of the exchange the shares of the Fund were held as capital
assets. Although the Company is not aware of any state or local tax consequences
of the proposed Reorganization, it has not made any investigation as to such
consequences, and shareholders should consult their own tax advisors with
respect to such matters.
CERTAIN COMPARATIVE INFORMATION ON THE COMPANY AND THE TRUST.
As a Massachusetts business trust, the Trust's operations are governed
by its Declaration of Trust and Bylaws and by Massachusetts law, rather than by
the
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Articles of Incorporation and Bylaws of the Company and Maryland corporation
law. Certain differences between the two forms of organization are summarized
below. Shareholders of any Fund entitled to vote at the Meeting may obtain
copies of the Trust's Declaration of Trust and Bylaws, and the Company's
Articles of Incorporation and Bylaws, without charge upon written request to the
Secretary of the Company or the Trust or through the Public Reference Room of
the SEC. The Trust and the Company are each subject to the 1940 Act and the
rules and regulations thereunder.
Shares. The shares of beneficial interest of the authorized series of
the Trust are transferable shares, with $.001 par value. The Declaration of
Trust permits the trustees to issue an unlimited number of shares and to divide
such shares into an unlimited number of series, each with one or more classes,
all without shareholder approval. Each share of any series of the Trust
represents a beneficial interest in the assets owned by, and the liabilities of,
that series. As such, each share of a series or class is entitled to dividends
and distributions when and as declared on shares of that series or class by the
Board of Trustees. Under the Articles of Incorporation of the Company, the
Company is currently authorized to issue up to 10 billion shares, $.001 par
value, in an unlimited number of series each with one or more classes. However,
the Company's Board of Directors may increase or decrease the number of
authorized shares.
Shareholder Voting Rights. Neither the Company nor the Trust is
required to hold annual shareholder meetings. Under the Declaration of Trust and
the 1940 Act, however, shareholder meetings are required to be called for
various purposes, such as electing or removing trustees of the Trust (subject to
certain restrictions in the 1940 Act, trustees may be elected to fill vacancies
or be removed by the Board of Trustees without a vote of shareholders), changing
fundamental investment policies, approving or disapproving an investment
advisory contract for the series, and ratifying or rejecting a selection of
different auditors of the series. The Trust's Declaration of Trust grants
shareholders the power to vote only with respect to: (i) the election or removal
of trustees; (ii) the approval of any investment advisory contract; (iii) the
termination of the Trust or any series thereof; (iv) any amendments to the
Declaration of Trust; (v) any merger, consolidation or sale of assets; (vi)
incorporation of the Trust; (vii) whether or not a court action, proceeding or
claim should or should not be brought or maintained derivatively or as a class
action on behalf of the Trust or a series thereof; (viii) any plan adopted
pursuant to Rule 12b-1 under the 1940 Act, and related matters; and (ix) any
matters relating to the Trust as may be required by the 1940 Act, the
Declaration of Trust, the Bylaws, or any registration of the Trust with the SEC,
or as the Board of Trustees may consider necessary or desirable. The Company's
Bylaws do not specify instances under which shareholders have the right to vote,
but as a Maryland corporation that is a registered investment company pursuant
to the 1940 Act, shareholders have the right to vote with respect to
substantially the same items as is the case for the Trust.
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Special Meetings of Shareholders. The Company's Bylaws provide that the
Company's Secretary must call a shareholder meeting: (i) when one or more
matters are required to be acted on by shareholders under the 1940 Act or the
General Corporation Law of the State of Maryland; and (ii) at the request in
writing of the Chairman of the Board, the President, the Board of Directors or
shareholders holding at least 25 percent of the shares of stock of the Company
outstanding and entitled to vote at a meeting.
The Declaration of Trust of the Trust provides that shareholder
meetings of the Trust or of any series or class may be called by the Chairman of
the Board or the President at: (i) the request in writing or by resolution of a
majority of the trustees; (ii) the written request of the holders of ten percent
or more of the total number of shares then issued and outstanding of the Trust
entitled to vote at a meeting; or (iii) the written request of the holder or
holders of ten percent of the total number of shares then issued and outstanding
of a series of the Trust entitled to vote at a meeting. On any matter submitted
to a vote of shareholders, shares are voted in the aggregate and not by
individual series except that shares are voted by individual series when
required by the 1940 Act or other applicable law, or when the Board of Trustees
determines that the matter affects only the interests of one or more series, in
which case, shareholders of the unaffected series are not entitled to vote on
such matters. All shares of all series of the Trust are voted together in the
election of trustees.
Termination. The Declaration of Trust specifically authorizes the Board
of Trustees to terminate the Trust (or any series or class) by notice to the
shareholders without shareholder approval, although the Trust would comply with
any provision of the 1940 Act that might require shareholder approval before
termination. The dissolution of any Fund or the Company is subject to
shareholder approval under Maryland law.
Liability of Shareholders. 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 acts or obligations of the Trust, and
provides that notice of such disclaimer may be given in each agreement,
obligation, or instrument entered into or executed by the Trust or the trustees.
Moreover, the Declaration of Trust provides for indemnification out of Trust
property for all losses and expenses of any shareholder held personally liable
for the obligations of the Trust. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is considered by the Trust to
be remote, since it is limited to circumstances in which the disclaimer is
inoperative and the Trust itself is unable to meet its obligations. Under the
current form of organization of the Company as a Maryland corporation, its
shareholders have no personal liability for its acts or obligations, except that
a shareholder may be liable to the extent that: (i) the purchase price of his or
her shares has not been received by the Fund in the amount or manner required by
Maryland law; (ii) he or she receives a dividend or distribution made contrary
to Maryland law; or (iii) he or she received redemption proceeds in violation of
Maryland law.
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Removal of Board Members. Under the Trust's Declaration of Trust, a
trustee may be removed (provided the aggregate number of trustees shall not be
less than one), with cause, by: (i) the action of two-thirds of the remaining
trustees; or (ii) the action of the holders of two-thirds of the Trust's
outstanding shares at a meeting called for that purpose. Under the Company's
Bylaws, directors hold office until the next meeting of shareholders, subject to
the right of removal granted by Maryland law.
Liability of Trustees and Officers; Indemnification. The Company's
Bylaws provide that, to the full extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the Company will have any liability to the Company or its
shareholders for damages. The charter further provides that the limitation on
liability applies to events occurring at the time a person serves as a director
or officer of the Company whether or not that person is a director or officer at
the time of any proceeding in which liability is asserted. The Trust's
Declaration of Trust, like the Bylaws of the Company, provides for trustee
indemnification, except that a trustee (or director in the case of the Company)
is not protected in either case against any liability arising out of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
AMENDED TRUST ADVISORY CONTRACT AND AMENDED TRUST MANAGEMENT CONTRACT
By voting in favor of Proposal 1, shareholders of each Fund will be
voting to authorize the Fund to vote its initial share of its corresponding New
Fund to approve the investment advisory contract and portfolio management
contract described below relating to the Fund. Harris Trust and Savings Bank
(the "Adviser") serves as the investment adviser to the Equity,
Short/Intermediate Bond, Government Money Market, Money Market and Tax-Exempt
Money Market Funds of the Company pursuant to Investment Advisory Contracts
dated May 1, 1990, April 1, 1991, October 20, 1993, October 20, 1993 and October
20, 1993, respectively (the "Advisory Agreements"). The Adviser also serves as
the investment adviser to the Trust pursuant to an Investment Advisory Contract
dated February 23, 1996 (the "Trust Advisory Agreement"). If the Reorganization
is approved by the shareholders of a Fund and that Fund is reorganized into a
New Fund, the Trust Advisory Agreement will be amended to include that New Fund
(the "Amended Trust Advisory Agreement").
The terms of the Amended Trust Advisory Agreement and the present Trust
Advisory Agreement are essentially identical except for two changes. First, the
Amended Trust Advisory Agreement authorizes the Adviser (with the approval of
the Board of Trustees of the Trust) to enter into Subadvisory Contracts with one
or more Subadvisers to act as a portfolio manager with respect to all or a
portion of the assets of any Fund. Second, the Amended Trust Advisory Agreement
authorizes the Adviser to authorize a Subadviser (with the approval of the Board
of Trustees of the Trust) to enter a sub-portfolio management contract with one
or more Sub-subadvisers on behalf of any Fund managed by the Subadviser. The
Adviser would continue to be
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responsible for the supervision and oversight of a Subadviser's performance
under a Subadvisory Contract and a Sub-subadviser's performance under a
sub-portfolio management contract. At its meeting on October 18, 1999, the Board
of Trustees of the Trust voted to approve the Amended Trust Advisory Agreement.
Harris Investment Management, Inc. ("HIM") serves as the portfolio
management agent for the Equity, Short/Intermediate Bond, Government Money
Market and Money Market Funds of the Company pursuant to Portfolio Management
Contracts dated May 1, 1990, April 1, 1991, October 20, 1993 and October 20,
1993, respectively (the "Management Contracts"). HIM also serves as portfolio
management agent for the Trust pursuant to a Portfolio Management Contract dated
February 23, 1996 (the "Trust Management Contract"). As portfolio management
agent for the Company and the Trust, HIM is responsible for all purchase and
sales transactions and for providing all daily management services. The Adviser
pays the portfolio management fees of HIM. If the Reorganization is approved by
the shareholders of a Fund and that Fund is reorganized into a New Fund, the
Trust Management Contract will be amended to include that New Fund (the "Amended
Trust Management Contract").
The terms of the Amended Trust Management Contract and the Trust
Management Contract are essentially identical except for one change. The Amended
Trust Management Contract expressly authorizes HIM (with the approval of the
Board of Trustees of the Trust) to delegate to one or more Sub-subadvisers its
portfolio management responsibilities under that Contract with respect to all or
a portion of the assets of any Fund. The Adviser and HIM would continue to be
responsible for the supervision and oversight of a Sub-subadviser's performance
under a sub-portfolio management contract. At its meeting on October 18, 1999,
the Board of Trustees of the Trust voted to approve the Amended Trust Management
Contract.
Currently, there is no portfolio management contract in place with HIM
with respect to the Tax-Exempt Money Market Fund. If the Reorganization is
approved by shareholders of the Company, the Amended Trust Advisory Agreement
would allow the Adviser to enter into such an arrangement with HIM. The Adviser
believes that consolidating the portfolio management of the Company and the
Trust with HIM would be more efficient and result in certain economies of scale.
Accordingly, if the Reorganization is approved by the shareholders of the
Tax-Exempt Money Market Fund, the sole-shareholder of the New Tax-Exempt Money
Market Fund of the Trust will approve the Amended Trust Advisory Agreement and
the Amended Portfolio Management Contract.
The Trust and the Adviser have applied to the SEC for an exemption from
the shareholder approval requirement with respect to new and amended
sub-advisory agreements entered into from time to time by the Adviser and a
sub-adviser with respect to the New Funds, under certain circumstances and
subject to certain conditions (the "Exemption Application"). If the SEC grants
an exemptive order as sought in the Exemption Application or any amendment
thereto (the
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"Exemptive Order"), the Adviser would be permitted, under certain conditions, to
enter into new or amended sub-advisory agreements, including agreements with new
sub-advisers (including, if permitted by the Exemptive Order, a sub-adviser that
is affiliated with the Trust or the Adviser), and agreements with existing
sub-advisers if there is an "assignment," as defined in the 1940 Act, or other
event causing termination of an existing sub-advisory agreement. Nonetheless,
under the 1940 Act, even if the Exemptive Order is granted, any sub-advisory
agreement would be subject to approval by a majority of the Trustees of the
Trust who are not parties to or interested persons of any party to the
agreement. Furthermore, the Trust would still require shareholder approval to
amend the Amended Trust Advisory Agreement (including any amendment to raise the
management fee rate payable under such agreement) or to enter into a new
advisory agreement with the Adviser or any other investment adviser that is not
a sub-adviser.
It is expected that, if the Exemptive Order is granted, it will be a
condition to such exemption that, among other things, a majority of the
outstanding voting securities of the Funds of the Trust first approve the
operation of the Funds as proposed in the Exemption Application, i.e.,
permitting the Adviser to enter into sub-advisory agreements with sub-advisers
in the future without obtaining shareholder approval of each agreement. The
Amended Trust Advisory Agreement has been modified in anticipation of the
granting of the Exemptive Order and Trust shareholder approval of the proposal.
With the exception of the change in day-to-day responsibility for the
management of the Tax-Exempt Money Market Fund, the above noted changes will not
alter the manner in which the Funds are managed. The Amended Trust Advisory
Agreement and Amended Trust Management Contract are substantially identical to
the current Advisory Agreements and Management Contracts and the duties and
responsibilities of the Adviser and HIM would also be substantially identical.
Additionally, the fees payable to the Adviser will not increase and will remain
as follows:
ANNUAL RATE OF
ADVISORY FEE
(AS A PERCENTAGE AGGREGATE ADVISORY
HARRIS INSIGHT FUND OF NET ASSETS) FEES FOR 1998
- ----------------------------------------------------------------------------
Equity Fund 0.70% $ 360,398
Short/Intermediate Bond Fund 0.70% 1,191,917
Tax-Exempt Money Market Fund * 818,579
Money Market Fund * 2,858,643
Government Money Market Fund * 887,045
* The Adviser is entitled to receive 0.14% of the Fund's first $100 million of
net assets plus 0.10% of the Fund's remaining net assets.
12
<PAGE>
The Amended Trust Advisory Agreement and Amended Trust Management
Contract will remain in force with respect to a New Fund until May 1, 2001, and
from year to year thereafter, subject to annual approval by (i) the Board of
Trustees of the Trust or (ii) a vote of a majority (as defined in the 1940 Act)
of the outstanding shares of that New Fund; provided that in either event
continuance is also approved by a majority of the Independent Trustees, by a
vote cast in person at a meeting called for the purpose of voting such approval.
The Amended Trust Advisory Agreement and Amended Trust Management Contract may
be terminated at any time, on 60 days' written notice, without the payment of
any penalty, by the Board of Trustees, by a vote of a majority of the
outstanding shares of the applicable New Fund, or by the Adviser or, in the case
of the Amended Trust Management Contract, by HIM. The Amended Trust Advisory
Agreement and Amended Trust Management Contract automatically terminate in the
event of their assignment, as defined by the 1940 Act and the rules thereunder.
A form of the Amended Trust Advisory Agreement and Amended Trust
Management Contract are attached as Appendix B and Appendix C, respectively. The
descriptions set forth in this proxy statement are qualified in their entirety
by reference to Appendices B and C.
Information Concerning the Adviser and HIM. The Adviser, an
Illinois-state chartered bank and a member of the Federal Reserve System, is the
successor to the investment banking firm of N.W. Harris & Co., which was
organized in 1882 and incorporated in 1907. As of June 30, 1999, the Adviser had
total discretionary assets under management of approximately $29.9 billion and
was the largest of 28 banks owned by Harris Bankcorp, Inc., 111 West Monroe
Street, Chicago, Illinois 60603. Harris Bankcorp, Inc. is a wholly-owned
subsidiary of Bankmont Financial Corp., 111 West Monroe Street, Chicago,
Illinois 60603, which is a wholly-owned subsidiary of Bank of Montreal, First
Canadian Place, 100 King Street West, Toronto Ontario M5X1A1, Canada, a
publicly-traded Canadian banking institution. The directors and principal
executive officers of the Adviser are:
DIRECTORS
Pastora San Juan Cafferty, Professor, University of Chicago
F. Anthony Comper, President and CEO, Bank of Montreal
Susan T. Congalton, Managing Director, Lupine Partners
Wilbur H. Gantz, Chairman of the Board and CEO, PathoGenesis Corporation
James J. Glasser, Chairman Emeritus, GATX Corporation
Leo M. Henikoff, President and CEO, Rush-Presbyterian-St. Luke's Medical Center
EXECUTIVE OFFICERS
Alan G. McNally, Chairman of the Board and CEO
Edward W. Lyman, Jr., Vice Chair of the Board
Jeffrey D. Butterfield, Executive Vice President
Dennis L. Dean, Executive Vice President
Emilia G. DiMenco, Executive Vice President
Louis F. Lanwermeyer, Executive Vice President
13
<PAGE>
DIRECTORS
Richard M. Jaffee, Chairman, Oil-Dri Corporation of America
Edward W. Lyman, Jr., Vice Chair of the Board, Harris Bank
Alan G. McNally, Chairman of the Board and CEO, Harris Bank
Charles H. Shaw, Chairman, The Shaw Company
Richard E. Terry, Chairman and CEO, Peoples Energy Corporation
James O. Webb, President, James O. Webb & Associates, Inc.
EXECUTIVE OFFICERS
Michael W. Lewis, Executive Vice President
Erin E. McInerney, Executive Vice President
Peter B. McNitt, Executive Vice President
Charles Piermarini, Executive Vice President
Steven R. Rothbloom, Executive Vice President
Randall W. Teteak, Executive Vice President
William E. Thonn, Executive Vice President
Charles R. Tonge, Executive Vice President
Philip A. Washburn, Executive Vice President and Chief Credit Officer
William W. Whipple, Executive Vice President
Edward J. Williams, Executive Vice President
Michael E. Godwin, Senior Vice President
Pierre O. Greffe, Senior Vice President and CFO
Michael B. Lowe, Senior Vice President
Paul V. Reagan, Senior Vice President and U.S. General Counsel
Michael D. Williams, Senior Vice President
Sohrab Zargharn, Senior Vice President and Auditor
Yasmin T. Bates, Regional President
The address of each director and principal executive officer is 111
West Monroe Street, Chicago, Illinois 60603.
HIM is a wholly-owned subsidiary of Harris Bankcorp, Inc. As of June
30, 1999, HIM managed approximately $14.1 billion in assets. The directors and
principal executive officers of HIM are:
DIRECTORS EXECUTIVE OFFICERS
Peter P. Capaccio Donald G. M. Coxe, Chairman of the Board
Donald G. M. Coxe William O. Leszinske, President
William O. Leszinske Randall J. Johnson, Treasurer
14
<PAGE>
DIRECTORS EXECUTIVE OFFICERS
Edward W. Lyman, Jr. Blanche O. Hurt, Secretary
Brian J. Steck Robert K. McKiddy, Assistant Treasurer
Wayne W. Thomas Andrea J. Torok, Assistant Secretary
William E. Thonn
Each director's principal occupation is as an employee of the Adviser
or HIM. The address of each director and principal executive officer is 190
South LaSalle Street, Chicago, Illinois 60690.
CERTAIN CHANGES TO THE FUNDS' FUNDAMENTAL INVESTMENT RESTRICTIONS
By voting in favor of Proposal 1, shareholders of each Fund will be
voting to authorize the Fund to vote its initial share of its corresponding New
Fund for approval of certain changes to the fundamental investment restrictions
of the Funds once they are reorganized into New Funds. The Adviser and HIM
conducted an analysis of each Fund's fundamental investment restrictions and,
where practical and consistent with a Fund's investment objective, recommended
certain changes in the restrictions to the Board of Directors of the Company in
order to provide greater investment flexibility and to increase standardization
among the Funds and thereby promote operating efficiencies and facilitate
compliance monitoring.
Those specific investment restrictions that are designated
"fundamental" can be changed only by shareholder vote. Accordingly, the Board of
Directors of the Company has approved amendments to certain of the Funds'
fundamental investment restrictions, which will be effective upon consummation
of the Reorganization.
Elimination of the limitation regarding investments in Puts, Calls, Warrants and
Options by the Tax-Exempt Money Market, Money Market and Government Money Market
Funds (the "Money Market Funds")
It is proposed that the following current fundamental investment
restriction applicable to the Money Market Funds be deleted:
In addition, the Money Market Funds may not write, purchase, or
sell puts, calls, warrants or options or any combinations thereof,
except that these Funds may purchase securities with put rights in
order to maintain liquidity, nor may they purchase equity securities or
securities convertible into equity securities, except as provided in
investment restriction number 9.
Discussion. The deletion of this restriction is proposed because this
restriction is adequately addressed in Rule 2a-7 of the 1940 Act, which governs
the operation of money market funds.
Elimination of the prohibition against investing in unseasoned issuers [Equity
Fund and Short/Intermediate Bond Fund]
15
<PAGE>
It is proposed that the following current fundamental investment
restrictions with respect to the Equity Fund and Short/Intermediate Bond Fund be
deleted:
The Equity Fund may not invest in securities of companies that
have been in business less than three years.
The Short/Intermediate Bond Fund may not invest more than 5% in
securities of issuers that have been in business less than three years.
(For purposes of the above-described investment limitation, issuers
include predecessors, sponsors, controlling persons, general partners,
guarantors and originators of underlying assets which have less than
three years of continuous operation or relevant business experience.)
Discussion. When the current restriction was adopted, the Company was
subject to the laws of certain states which required these specific policies on
investment in securities of unseasoned issuers. Since the enactment of the
National Securities Markets Improvement Act, the states no longer have
jurisdiction over the policy of the Company with regard to investment in the
securities of unseasoned issuers.
The 1940 Act does not prohibit the Company from investment in
unseasoned issuers; accordingly, the Board of Directors believes that the
removal of this prohibition would provide for increased investment flexibility.
Unseasoned issuers, however, have less of a track record, and less financial and
other information is available concerning these types of issuers.
RULE 12B-1 SERVICE PLANS
By voting in favor of Proposal 1, shareholders of each of the Equity
Fund and Short/Intermediate Bond Fund will be voting to authorize the respective
Fund to vote its initial share of its corresponding New Fund for approval of a
Rule 12b-1 Service Plan on behalf of the A Shares of each New Fund (the "A
Shares New Service Plan") and shareholders of each Money Market Fund will be
voting to authorize the respective Fund to vote its initial share of its
corresponding New Fund for approval of a Rule 12b-1 Service Plan on behalf of
the N Shares of each New Money Market Fund (the "N Shares New Service Plan" and,
together with the A Shares New Service Plan, the "New Service Plans"). At its
meeting on October 18, 1999, the Board of Trustees of the Trust voted to approve
each of the New Service Plans. The New Service Plans are substantially identical
to the Rule 12b-1 Service Plans for the A Shares of the Equity and
Short/Intermediate Bond Funds and the N Shares of the Money Market Funds,
respectively, which were last approved by the Board of Directors of the Company
on February 18, 1999.
The New Service Plans authorize the Trust to enter into Shareholder
Servicing Agreements on behalf of the A Shares of the New Equity and New
Short/Intermediate Bond Funds and the N Shares of the New Money Market Funds
with financial institutions such as banks, securities dealers or other industry
professionals, such as investment advisers, accountants and estate planning
firms
16
<PAGE>
(a "Service Organization"). Pursuant to the Shareholder Servicing Agreements, a
Service Organization provides support services to its customers who beneficially
own either A Shares of the New Equity Fund or the New Short/Intermediate Bond
Fund or N Shares of a New Money Market Fund in consideration for the payment of
0.35% of the average daily net asset value of A Shares held by the Service
Organization on behalf of its customers and 0.10% of the average daily net asset
value of N Shares held by the Service Organization on behalf of its customers.
Under the New Service Plans, the fees to be paid to Service Organizations will
not increase. The support services to be provided by a Service Organization will
include one or more of the following: (i) establishing and maintaining
shareholder accounts and records; (ii) processing purchase and redemption
transactions; (iii) providing periodic statements showing a shareholder's
account balance and integrating such statements with those of other transactions
and balances in the shareholder's other accounts serviced by the Service
Organization; (iv) arranging for bank wires; (v) responding to shareholder
inquiries relating to A Shares or N Shares; (vi) performing subaccounting with
respect to A Shares or N Shares beneficially owned by the shareholder; (vii)
investing shareholder cash account balances automatically in A Shares or N
Shares; (viii) assisting shareholders in changing dividend options, account
designations and addresses; and (ix) distribution and such other services to the
extent the Service Organization is permitted by applicable statute, rule or
regulation.
The descriptions of the New Service Plans are qualified in their
entirety by reference to the Service Plans, which are attached as Exhibits D-1
and D-2 to this Proxy Statement. If the Reorganization is approved by
shareholders, the New Service Plans will become effective on May 1, 2000 and
will remain in effect for one year thereafter, subject to continuation by the
Board of Trustees.
ELECTION OF TRUSTEES
By voting in favor of Proposal 1, shareholders of each Fund will be
voting to authorize the Fund to vote its initial share of its corresponding New
Fund for the election of the persons named below as trustees of the Trust:
NAME AND AGE AT TRUSTEE PRINCIPAL OCCUPATION DURING
SEPTEMBER 1, 1999 SINCE PAST FIVE YEARS AND DIRECTORSHIPS
- --------------------------------------------------------------------------------
Edgar R. Fiedler 1995 Senior Fellow and Economic Counselor, The
70 Conference Board; and Director or Trustee,
The Stanley Works (tool manufacturer), AARP-
Income Trust, Scudder Institutional Funds,
Scudder Pathway Series, Farmer's Investment
Trust, Brazil Fund and PEG Capital Management
(investment companies).
17
<PAGE>
NAME AND AGE AT TRUSTEE PRINCIPAL OCCUPATION DURING
SEPTEMBER 1, 1999 SINCE PAST FIVE YEARS AND DIRECTORSHIPS
- --------------------------------------------------------------------------------
C. Gary Gerst 1995 Chairman Emeritus, Jones Lang LaSalle,
60 formerly LaSalle Partners Ltd. (real estate
investment manager and consulting firm); and
Director, Nonlinear Dynamics, Inc.
(applications software producer)and Florida
Office Property Company, Inc. (real estate
investment fund).
Valerie B. Jarrett ---- Executive Vice President, The Habitat Company
43 (residential property developer) since 1995;
and Chairman and Chief Executive Officer,
Chicago Transit Authority since 1995;
Commissioner, City of Chicago, Department of
Planning and Development prior thereto; and
Director, USG Corporation (building materials
manufacturer).
John W. McCarter, Jr. 1995 President and Chief Executive Officer, The
61 Field Museum of Natural History since 1996;
Senior Vice President and Director, Booz-Allen
& Hamilton, Inc. (consulting firm) prior
thereto; and Director of W. W. Grainger, Inc.
(industrial distributor), A. M. Castle, Inc.
(metal distributor), Pittway Corporation (alarm
manufacturer and distributor), and LaSalle
Partners U.S. Real Estate Fund (investment
company).
Ernest M. Roth 1995 Consultant; Retired Senior Vice President and
72 Chief Financial Officer, Commonwealth Edison
Company (electric utility); Director, LaRabida
Children's Hospital; and Chairman, LaRabida
Children's Foundation.
Paula Wolff 1998 President, Governors State University;
54 Trustee, University of Chicago; Chair,
University of Chicago Hospitals; and Director,
Ariel Capital Management, Inc. (investment
manager).
The following table shows certain information regarding the beneficial
ownership of shares of each Fund of Harris Insight Funds Trust and each Fund of
HT Insight Funds, Inc. as of October 18, 1999 by the nominees, the directors,
and all directors and officers of each Fund as a group. The information in the
table is based on information obtained from the nominees, directors and
officers, as determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934. Accordingly, all of the shares over which such person,
directly or indirectly, had or shared voting or investment power have been
deemed beneficially owned.
18
<PAGE>
NAME FUND NUMBER OF SHARES
Edgar R. Fiedler Short/Intermediate Bond Fund 871
C. Gary Gerst Equity Fund 640
Emerging Markets Fund (1) 1,319
Valerie B. Jarrett None
John W. McCarter, Jr. Equity Fund 1,478
Equity Income Fund (1) 1,368
International Fund (1) 1,532
Convertible Securities Fund (1) 857
Ernest M. Roth Tax-Exempt Money Market Fund 120,000
Government Money Market Fund 69,098
Paula Wolff International Fund (1) 697
Emerging Markets Fund (1) 1,399
All directors and Equity Fund 2,118
officers as a group (2) Short/Intermediate Bond Fund 871
Tax-Exempt Money Market Fund 120,000
Government Money Market Fund 69,098
Equity Income Fund (1) 1,368
International Fund (1) 2,229
Convertible Securities Fund (1) 857
Emerging Markets Fund (1) 2,718
(1) A series of the Harris Insight Funds Trust
(2) The directors and officers as a group did not own beneficially more than 1%
of the shares of any Fund
Mr. Gerst is Chairman of the Board of Trustees. The Board of Trustees
has an Audit Committee, Nominating Committee and Pricing Committee. Each member
of the Board of Trustees is also a member of each committee. The Audit Committee
is responsible for recommending independent public accountants to audit
financial statements of the Funds and reviewing the scope and results of the
audit. The Nominating Committee is responsible for recommending nominees for
election as Trustees. The Pricing Committee determines a fair value of portfolio
securities in cases when a market quotation is not readily available or a Fund's
investment adviser believes that a market quotation or valuation provided by an
approved pricing methodology does not represent a fair value.
Each trustee also serves as a director of the Company. For his or her
services to the Trust and the Company, each trustee/director receives aggregate
19
<PAGE>
compensation of an annual retainer of $15,000 ($22,500 in the case of the
Chairman of the Board), a fee for attendance at meetings of one or both boards
of $3,500 (or $500 if attendance is by telephone) and a fee for attendance at a
meeting of any committee of one or both boards of $1,000 (or $250 if attendance
is by telephone). During the fiscal year ended December 31, 1998, the Board of
Trustees met five times, the Audit Committee met twice, the Nominating Committee
did not meet and the Pricing Committee met once. Each of the current trustees
attended 75% or more of the meetings of the Board of Trustees and committees of
the Board. The following table shows the aggregate compensation received by the
trustees for 1998:
FROM THE FUND COMPLEX(1)
------------------------
FROM THE TRUST AVERAGE
NAME OF TRUSTEE (13 FUNDS) PER FUND TOTAL
- --------------- ----------- ------------------------
C. Gary Gerst, Chairman $12,450 $2,306 $41,500
Edgar R. Fiedler 10,200(2) 1,889(2) 34,000(2)
John W. McCarter, Jr. 10,200 1,889 34,000
Ernest M. Roth 10,200 1,889 34,000
Paula Wolff(3) 5,100 944 17,000
(1) "Fund Complex" includes the Trust (which has 13 Funds) and the Company
(which has five Funds). Trustees fees are borne by the respective Funds in
proportion to their respective net assets.
(2) For the period June 1988 through December 31, 1998, the total amount of
compensation (including interest) payable or accrued for Mr. Fiedler was
$208,083 pursuant to the Deferred Compensation Plan of the Fund Complex for
its independent directors/trustees.
(3) Became a trustee on July 16, 1998.
SELECTION OF PRICEWATERHOUSECOOPERS LLP AS THE TRUST'S INDEPENDENT PUBLIC
ACCOUNTANTS
By voting in favor of Proposal 1, shareholders of each Fund will be
voting to authorize the Fund to vote its initial share of its corresponding New
Fund for ratification of the selection of PricewaterhouseCoopers LLP ("PWC") as
the Fund's independent public accountants. The Board of Trustees of the Trust
has selected PWC to serve as independent public accountants to audit the
financial statements of each Fund for the fiscal year ending December 31, 1999.
PWC has advised the Trust that neither it, nor any of its members, has any other
relationship with the Trust, and that none of them has any direct or indirect
material financial interest in the Trust. PWC has served as the auditor for the
Trust since its inception.
EVALUATION BY THE BOARD OF DIRECTORS
On October 18, 1999, the Board of Directors, including a majority of
the Independent Directors, by vote cast in person, unanimously approved, subject
to the required shareholder approval described herein, the Reorganization and
the Plan. Prior to such approval, the Independent Directors met separately with
their counsel for the purpose of assisting them in reaching a determination with
respect to the Reorganization and the Plan.
20
<PAGE>
In considering approval of the Reorganization and the Plan, the Board
of Directors carefully evaluated information they deemed necessary to enable
them to determine whether the Reorganization and the Plan will be in the best
interests of each Fund and its shareholders. In making this recommendation, the
Board of Directors considered the fact that the Reorganization does not
contemplate any changes in the manner in which the Funds' investments are
managed and that the primary investment personnel responsible for providing the
day-to-day investment management on behalf of the Funds will not change as a
result of the Reorganization.
Additionally, because each shareholder of a Fund will receive shares of
the corresponding New Fund having an equal aggregate net asset value to his or
her Fund shares and will not directly or indirectly bear any costs of the
Reorganization, the Board of Directors determined that the shareholders will not
suffer any dilution as a result of the Reorganization.
The Board of Directors, including a majority of the Independent
Directors, by vote cast in person on October 18, 1999, also unanimously approved
the Amended Trust Advisory Agreement, the Amended Trust Management Contract and
the New Service Plans. In considering the Amended Trust Advisory Agreement and
Amended Trust Management Contract, the Board of Directors re-evaluated the
experience of the key personnel of the Adviser and HIM in investing, the quality
of services the Adviser and HIM are expected to provide to the Funds and the
compensation proposed to be paid. The Directors have given careful consideration
to all factors deemed to be relevant to the Company, including, but not limited
to: (i) the fees and expense ratios of comparable mutual funds; (ii) the
performance of the Funds as compared to similar mutual funds; (iii) the nature
and quality of the services expected to be rendered to the Funds by the Adviser
and HIM; (iv) the distinct investment objective and policies of each Fund; (v)
the fact that the compensation payable under the Amended Trust Advisory
Agreement and Amended Trust Management Contract will be at the same rate as the
compensation now payable under the current Advisory Agreements and Portfolio
Management Contracts; (vi) the fact that the terms of the Amended Trust Advisory
Agreement and Amended Trust Management Contract are substantially identical in
all material respects as the terms of the current Advisory Agreements and
Portfolio Management Contracts except for the ability of the Adviser to contract
with HIM with respect to the daily management of the Tax-Exempt Money Market
Fund; and (vii) the history, reputation, qualification and background of the
Adviser and HIM and their respective financial conditions, as well as the
qualifications of their personnel. In considering the adoption of the New
Service Plans, the Board of Directors considered, among other things: (i) the
potential costs and benefits of the New Service Plans to shareholders, including
the fact that the adoption of the New Service Plans provides that the expenses
associated with the New Service Plans will be paid by the holders of A Shares of
the New Equity and New Short/Intermediate Bond Funds and the holders of N Shares
of the New Money Market Funds; (ii) whether the New Service Plans could be
expected to assist in the marketing of A Shares of the New Equity and New
Short/Intermediate Bond Funds and N Shares of the New Money Market Funds and
reduce the level of A Shares and N Shares
21
<PAGE>
redemptions; (iii) the advantages to the A Shares of the New Equity and New
Short/Intermediate Bond Funds and N Shares of the New Money Market Funds that
might result from growth in the assets of the New Equity, New Short/Intermediate
Bond and New Money Market Funds, including economies of scale and reduced
expense ratios; and (iv) the competitive situation in the industry involving the
adoption of Rule 12b-1 plans by an increasing number of funds, making the New
Service Plans reasonable measures to encourage additional sales and discourage
redemptions. The Board of Directors determined that the ability to compensate
Service Organizations for distribution and service related activities is likely
to result in higher levels of sales and lower levels of redemptions of A Shares
of the New Equity and New Short/Intermediate Bond Funds and N Shares of the New
Money Market Funds.
REQUIRED VOTE
Approval of Proposal 1 by a Fund requires the affirmative vote of a
"majority of the outstanding voting securities" of that Fund as that term is
defined under the 1940 Act. The term "majority of the outstanding voting
securities" is defined to mean the lesser of (a) 67% or more of the outstanding
shares of the Fund present at the Meeting, if the holders of more than 50% of
the outstanding shares of the Fund entitled to vote are present or represented
by proxy, or (b) more than 50% of the shares of the Fund entitled to vote. In
the event that shareholders of one or more of the Funds do not approve the
Reorganization, the Board of Directors will determine what further action, if
any, to take, including the possibility of resubmitting the proposal at a later
time to the shareholders of such Fund or Funds.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL 1.
PROPOSAL 2: OTHER MATTERS THAT MAY COME BEFORE THE MEETING
The Board of Directors does not know of any other business to be
brought before the Meeting. If any other matters properly come before the
Meeting, the persons named on the proxy card will vote in accordance with their
judgment.
22
<PAGE>
ADDITIONAL INFORMATION
Other Shareholder Information. The following persons were known by the Company
to own beneficially (with sole or shared voting or investment power) more than
5% of any class of shares of any Fund as of October 1, 1999:
CLASS AMOUNT PERCENT
OF NAME AND ADDRESS OF BENEFICIAL OF FUND
FUND SHARES BENEFICIAL OWNER OWNERSHIP CLASS *
- --------------------------------------------------------------------------------
Equity Fund N Harris Trust and 115,465 8.47%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
Glynn M Rossa 88,218 6.47%
3500 Corben Court
Madison, WI 53704
Inst Harris Trust and 40,109,682 94.71%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
A Carol J Turner IRA 1,066 14.02%
125 E San Miguel
Phoenix, AZ 85012
James Mueller IRA 934 12.28%
6 W Blackberry Ct
Streamwood, IL 60107
Lori A Schrall IRA 896 11.78%
234 Iroquois Ave
Pittsburgh, PA 15237
Robert R Schuelke IRA 544 7.16%
512 Tadmore
Schaumburg, IL 60194
James and Paula S Marcoux 455 5.98%
Revocable Tr
84 Salt River Court
Naperville, IL 60540
23
<PAGE>
CLASS AMOUNT PERCENT
OF NAME AND ADDRESS OF BENEFICIAL OF FUND
FUND SHARES BENEFICIAL OWNER OWNERSHIP CLASS *
- --------------------------------------------------------------------------------
Marietta Imaging Inc 433 5.69%
Pension Plan
Marietta, OH 45750
Dolores R Hathaway 408 5.37%
108 N Reuter Ave
Arlington Heights, IL 60004
Short/ N Alpine Associates LP 357,173 46.43%
Intermediate 100 Union Avenue
Bond Fund Cresskill, NJ 07626
Harris Trust and 43,558 5.66%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
Inst Harris Trust and 30,876,252 98.99%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
A Alfred G Tackla IRA 14,081 99.99%
8653 Bradford Lane
Brecksville, OH 44141
Tax-Exempt N Harris Trust and 42,582,401 19.51%
Money Market Savings Bank
Fund Trust Customers
PO Box 755
Chicago, IL 60690
Merle L Lahti 11,688,913 5.36%
1950 Pratt Blvd
Elk Grove Village, IL 60007
Marcia S Cohn 11,496,029 5.27%
175 E Delaware Place
Chicago, IL 60611
24
<PAGE>
CLASS AMOUNT PERCENT
OF NAME AND ADDRESS OF BENEFICIAL OF FUND
FUND SHARES BENEFICIAL OWNER OWNERSHIP CLASS *
- --------------------------------------------------------------------------------
Inst Harris Trust and 495,823,097 99.94%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
Money Market N Harris Trust and 108,236,870 11.17%
Fund Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
Allstate Life Insurance 75,000,000 7.74%
Company
Short Term Pooled
Investment Account
Allstate Plaza South
Northbrook, IL 60062
Blackburn Marketing 49,582,410 5.12%
Services (US) Inc
10304 Eaton Place
Suite 500
Fairfax, VA 22030
Inst Harris Trust and 1,090,175,212 68.17%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
Starwood Hotels & 115,000,000 7.19%
Resorts WW
2231 E Camelback Rd
Suite 400
Phoenix, AZ 85016
Government N Harris Trust and 77,465,319 27.29%
Money Market Savings Bank
Fund Trust Customers
PO Box 755
Chicago, IL 60690
25
<PAGE>
CLASS AMOUNT PERCENT
OF NAME AND ADDRESS OF BENEFICIAL OF FUND
FUND SHARES BENEFICIAL OWNER OWNERSHIP CLASS *
- --------------------------------------------------------------------------------
Inst Harris Trust and 252,691,160 96.08%
Savings Bank
Trust Customers
PO Box 755
Chicago, IL 60690
*To the extent that a shareholder is the beneficial owner of more than
25% of the outstanding shares of a Fund, that shareholder may be deemed
to be a "control person" of that Fund for purposes of the 1940 Act.
Officers. Officers of the Company are elected by the Board and hold
office until they resign, are removed or are otherwise disqualifed to serve. The
following table sets forth certain information about the Company's officers:
<TABLE>
<CAPTION>
NAME AND AGE POSITION HELD PRINCIPAL OCCUPATION(S)
AT OCTOBER 1, 1999 WITH THE COMPANY DURING THE PAST 5 YEARS
- -------------------------------------------------------------------
<S> <C> <C>
Philip H. Rinnander President President and Chief Executive Officer
55 (June, 1999-Present) and Managing
Director and Chief Financial Officer
(1995-1999), Provident Distributors,
Inc. (mutual fund distributor);
President of NAVAID Financial
Services (1995-1999) (broker-dealer);
and Executive Vice-President of Core
States Financial Corp. (banking) prior
thereto.
Jason A. Greim Vice President Vice President (June 1999-Present)
24 and Director of Mutual Fund
Operations (1998-1999), Provident
Distributors, Inc.; and Student,
Drexel University prior thereto.
Gary M. Gardner Secretary Senior Vice President, PFPC Inc.;
48 (mutual fund administrator); and Officer
of certain investment companies.
Thomas J. Ryan Treasurer and Chief Vice President and Director of
58 Financial Officer Accounting, PFPC Inc.; and Officer
of certain investment companies.
26
<PAGE>
<CAPTION>
NAME AND AGE POSITION HELD PRINCIPAL OCCUPATION(S)
AT OCTOBER 1, 1999 WITH THE COMPANY DURING THE PAST 5 YEARS
- -------------------------------------------------------------------
<S> <C> <C>
David C. Lebisky Assistant Secretary Administrative Officer, PFPC Inc.;
27 Officer of certain investment
companies; and Legal Assistant,
Drinker Biddle & Reath, LLP (law
firm) prior thereto.
Linn Solano Assistant Treasurer Assistant Vice President and Senior
47 Investment Accounting Manager,
PFPC Inc.
</TABLE>
Proxy Solicitation. The Company has retained Alamo Direct to solicit
proxies for the Meeting. Alamo Direct is responsible for printing proxy cards,
mailing proxy material to shareholders, soliciting brokers, custodians, nominees
and fiduciaries, tabulating the returned proxies and performing other proxy
solicitation services. The anticipated cost of such services is approximately
$14,000, and will be paid by the Company. The Company will also pay the printing
and postage costs of the solicitation.
In addition to solicitation through the mail, proxies may be solicited
by officers and agents of the Company without cost to the Company. Such
solicitation may be by telephone, facsimile or otherwise. The Company will
reimburse Alamo Direct, brokers, custodians, nominees and fiduciaries for the
reasonable expenses incurred by them in connection with forwarding solicitation
material to the beneficial owner of shares held of record by such persons.
Reports to Shareholders and Financial Statements. The Company's annual
report for the fiscal year ended December 31, 1998 is available at no charge by
writing to the Company at HT Insight Funds, Inc., 400 Bellevue Parkway,
Wilmington, Delaware 19809, or by calling the Company toll-free at
1-800-982-8782.
Shareholder Proposals. The Company is not required to hold annual
meetings of shareholders and currently does not intend to hold such meetings
unless shareholder action is required in accordance with the 1940 Act or the
Company's Bylaws. A shareholder proposal to be considered for inclusion in the
proxy statement at any subsequent meeting of shareholders must be submitted a
reasonable time before the proxy statement for that meeting is mailed. Whether a
proposal submitted will be included in the proxy statement will be determined in
accordance with applicable federal and state laws.
By Order of the Board of Directors
Gary M. Gardner
Secretary
27
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
HT INSIGHT FUNDS, INC. (the "Company"), a Maryland corporation that
issues its shares in five series (Harris Insight Insight Equity Fund, Harris
Insight Short/Intermediate Bond Fund, Harris Insight Tax-Exempt Money Market
Fund, Harris Insight Money Market Fund and Harris Insight Government Money
Market Fund (each a "Fund" and collectively, the "Funds")), and HARRIS INSIGHT
FUNDS TRUST (the "Trust"), a Massachusetts business trust consisting of thirteen
active investment portfolios and five newly created investment portfolios, each
of which bears the same name as the corresponding Fund (the "New Funds"), agree
upon the following plan of reorganization (the "Plan"):
1. Each Fund shall transfer to the corresponding New Fund all of its
assets (including one share of the New Fund owned by the Fund, which
share shall thereupon be canceled), in exchange for which each New Fund
shall simultaneously assume all of the liabilities of the corresponding
Fund and shall issue to that Fund a number of New Fund shares equal in
number and net asset value to the number and net asset value of shares
(including fractional shares) of the Fund then outstanding. Each Fund
will then distribute to each of its registered shareholders shares of
the New Fund in a number and net asset value equal to the number and
net asset value of shares (including any fractional shares) of the Fund
then owned by the shareholder, in exchange for and cancellation of that
shareholder's shares of the Fund.
2. The distribution to the shareholders of each Fund shall be accomplished
by establishing an account on the share records of the corresponding
New Fund in the name of each registered shareholder of the Fund, and
crediting that account with a number of shares of the New Fund equal to
the number of shares (including any fractional shares) of the Fund
owned of record by the shareholder at the time of the distribution.
3. Promptly thereafter, each Fund shall be completely liquidated and the
Company shall be terminated.
4. The closing of the transaction in section 1 above shall occur at the
close of business on [April 30, 2000], at the offices of [Harris Trust
and Savings Bank] (the "Closing"), or at such other date, time or place
as may be agreed upon by the parties.
5. The obligations of the Company and the Trust to effect the transactions
contemplated hereunder shall be subject to the satisfaction of each of
the following conditions:
(a) All necessary filings shall have been made with the Securities and
Exchange Commission and any applicable state securities
A-1
<PAGE>
commissions and no order or directive shall have been received
that any other or further action is required to permit the parties
to carry out the transactions contemplated by the Plan.
(b) The Company and the Trust shall have received from the Securities
and Exchange Commission any required exemptive relief under
Section 17 (a) of the Investment Company Act of 1940, as amended.
(c) The Company and the Trust each shall have received an opinion from
legal counsel substantially to the effect that for federal income
tax purposes: (i) no gain or loss will be recognized by the Funds
upon the transfer of their assets and liabilities to the New
Funds or upon the distribution to their shareholders of shares of
the New Funds received as a result of such transfer; (ii) the tax
basis of the assets of the Funds in the hands of the New Funds
will be the same as the tax basis of such assets in the hands of
the Funds immediately prior to the transfer; (iii) the holding
period of the assets of the Funds transferred to the New Funds
will include the period during which such assets were held by the
Funds; (iv) no gain or loss will be recognized by the New Funds
upon the receipt of the assets of the Funds in exchange for
shares of the New Funds and the assumption by the New Funds of
the liabilities and obligations of the Funds; (v) no gain or loss
will be recognized by the shareholders of the Funds upon receipt
of the shares of the New Funds; (vi) the basis of the shares of
the New Funds received by the shareholders of the Funds will be
the same as the basis of the shares of the Funds exchanged
therefor; and (vii) the holding period of shares of the New Funds
received by the shareholders of the Funds will include the
holding period of the shares of the Funds exchanged therefor,
provided that at the time of the exchange the shares of the Funds
were held as capital assets; and as to such other matters as it
may reasonably request. The Company and the Trust will cooperate
in providing legal counsel with reasonable and customary
representations regarding the Funds, the actions of the New Funds
contemplated by this Plan, and such other matters as reasonably
requested.
(d) The Plan and the reorganization contemplated hereby shall have
been adopted and approved by the affirmative vote of the holders
of the requisite number of the outstanding shares of the Company
entitled to vote thereon as required by law at the time such vote
is taken.
(e) The New Funds will have been formed for the sole purpose of
effecting the actions contemplated by the Plan and will conduct no
business other than that which is necessary to effect the Plan.
(f) The trustees of the Trust shall have authorized, and the New Funds
shall have issued, one share of each New Fund to the corresponding
Fund in consideration of the payment equal to the net asset value
of one share of each Fund on the day of the Closing for the
purpose of enabling the
A-2
<PAGE>
Funds to approve as sole shareholders of the New Funds the
amended investment advisory contract between the Trust and Harris
Trust and Savings Bank (the "Adviser") and the amended portfolio
management contract between the Adviser and Harris Investment
Management, Inc., which provide for the investment advisory
services and day-to-day portfolio management of the New Funds.
At any time prior to the Closing, any of the foregoing conditions may be waived
by the Company and the Trust if such a waiver will not have a material adverse
effect on the interests of the shareholders of the Funds or the New Funds, as
the case may be.
1. The Plan may be amended or terminated by agreement of the Company and
the Trust at any time before the completion of the transaction
described in Section 1 above, whether or not the Plan has been approved
by the shareholders of the Funds, provided that no amendment shall have
a material adverse effect upon the interests of shareholders of the
Funds. In any case, the Plan may be terminated by either the Company or
the Trust, if the transaction described in Section 1 has not occurred
by the close of business on [May 31, 2000].
2. A copy of the Trust's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the trustees of the
Trust as the trustees of the Trust and not individually and that the
obligations under this instrument are not binding upon any of the
trustees, officers or shareholders of the Trust individually, but
binding only upon the assets and property of the New Funds.
3. At any time after the completion of the transaction described in
Section 1, the Company acting through its officers, or if then
dissolved through its last officers, shall execute and deliver to the
Trust, such additional instruments of transfer or other written
assurances as the Trust may reasonably request in order to vest in the
Trust, acting for the New Funds, title to the assets transferred by the
Funds under the Plan.
4. The Plan shall be construed in accordance with applicable federal law
and the laws of the State of Illinois, except as to the provisions of
section 7 hereof, which shall be construed in accordance with the laws
of the Commonwealth of Massachusetts.
Dated: [November 29, 1999] HT INSIGHT FUNDS, INC.
By:__________________________
HARRIS INSIGHT FUNDS TRUST
By:__________________________
A-3
<PAGE>
APPENDIX B
INVESTMENT ADVISORY CONTRACT
Harris Insight Funds Trust (the "Trust"), a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end diversified management investment company, and Harris
Trust and Savings Bank, an Illinois bank (the "Adviser"), agree as follows:
1. APPOINTMENT OF ADVISER. The Trust appoints the Adviser to furnish
investment advisory and other services to the Trust for each of its series
listed on Exhibit A hereto (the "Funds"), and the Adviser accepts that
appointment, for the period and on the terms set forth below. In the event that
the Trust establishes one or more portfolios other than the Funds named above
with respect to which it desires to retain the Adviser to act as investment
adviser hereunder, it shall notify the Adviser in writing. If the Adviser is
willing to render such services under this Agreement, it shall so notify the
Trust in writing, whereupon Exhibit A shall be amended to include such portfolio
as a Fund hereunder, and such portfolio shall be subject to the provisions of
this Agreement to the same extent as the Funds named above except to the extent
that said provisions (including those relating to the compensation payable by
the Fund to the Adviser) are modified with respect to such Fund in writing by
the Trust and the Adviser at the time.
2. SERVICES OF ADVISER.
(a) INVESTMENT MANAGEMENT. Subject to the overall supervision and
control of the Board of Trustees of the Trust (the "Board of Trustees"), the
Adviser shall have supervisory responsibility for the general management and
investment of the Funds' assets, giving due consideration to the investment
policies and restrictions, portfolio transaction policies and the other
statements concerning the respective Funds in the Trust's Declaration of Trust,
Bylaws and registration statements under the 1940 Act and the Securities Act of
1933, as amended (the "1933 Act"), to the provisions of the 1933 Act and the
1940 Act and rules and regulations thereunder, to the provisions of the Internal
Revenue Code applicable to the Funds as regulated investment companies and to
other applicable law (the "Investment Policies and Restrictions"). It is
understood that the Adviser may enter into portfolio management contracts (each,
a "Subadvisory Contract") on behalf of any or all Funds with one or more
portfolio managers (each, a "Subadviser"). Any Subadviser, with the approval of
the Adviser and of the Board of Trustees, may enter into sub-portfolio
management contracts (each, a "Sub-subadvisory Contract") on behalf of any or
all Funds with one or more other portfolio managers (each, a "Sub-subadviser").
Each Subadviser or Sub-subadviser or any successor to any of them shall have the
responsibilities and duties set forth in Section 3 below and in its respective
Subadvisory Contract or Sub-subadvisory Contract. As long as a Subadvisory
Contract is in effect with respect to all or a portion of the assets
B-1
<PAGE>
of any Fund, the services provided by the Adviser with respect to those assets
will be limited to the supervision and oversight of the performance of any
Subadviser or Sub-subadviser under the Subadvisory Contract and any related
Sub-subadvisory Contract.
(b) MONITORING SUBADVISER. The Adviser shall monitor and evaluate the
investment performance of the Subadviser and of any Sub-subadviser, and shall
monitor the investment activities of the Subadviser and of any Sub-subadviser to
ensure compliance with the Investment Policies and Restrictions.
(c) REPORTS AND INFORMATION. The Adviser shall furnish to the Board of
Trustees periodic reports on the investment strategy and performance of the
Funds and such additional reports and information as the Board of Trustees or
the officers of the Trust may reasonably request.
(d) CUSTOMERS OF FINANCIAL INSTITUTIONS. It is understood that the
Adviser may, but shall not be obligated to, provide, either directly or through
agents, administrative and other services with respect to shareholders who are
customers of the Adviser or its affiliates, including establishing shareholder
accounts, assisting the Trust's transfer agent with respect to recording
purchase and redemption transactions, advising shareholders about the status of
their accounts, current yield and dividends declared and such related services
as the shareholders or the Funds may request. It is further understood that the
Adviser may, but shall not be obligated to, make payments from its own resources
to other financial institutions that provide similar services to shareholders of
the Funds that are customers of such institutions. Notwithstanding the
foregoing, the Adviser shall not provide any distribution services to the Trust
that the Adviser is legally precluded from providing under the Glass-Steagall
Act or other applicable law.
(e) UNDERTAKINGS OF ADVISER. The Adviser further agrees that it will:
(i) Comply with the 1940 Act and with all applicable rules and
regulations of the Securities and Exchange Commission, the provisions of the
Internal Revenue Code relating to regulated investment companies, applicable
banking laws and regulations, and policy decisions and procedures adopted by the
Board of Trustees from time to time;
(ii) Select broker-dealers in accordance with guidelines established by
the Board of Trustees from time to time and in accordance with applicable law
(consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Adviser with research advice and other services);
(iii) Maintain books and records with respect to the securities
transactions of the Funds; and
(iv) Treat confidentially and as proprietary information of the Trust
all records and other information relative to the Trust or to prior, present or
potential
B-2
<PAGE>
shareholders, and will not use such records or information for any purpose other
than in the performance of its responsibilities and duties hereunder, except (A)
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld, (B) when so requested by the Trust, (C) as
required by tax authorities or (D) pursuant to a judicial request, requirement
or order, provided that the Adviser takes reasonable steps to provide the Trust
with prior notice in order to allow the Trust to contest such request,
requirement or order.
(f) BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser agrees that all records that it maintains
for the Trust are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records upon the Trust's request. The Adviser
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.
(g) INDEPENDENT CONTRACTOR. The Adviser shall for all purposes herein
be deemed to be an independent contractor and not an agent of the Trust and
shall, unless otherwise expressly provided or authorized, have no authority to
act for or represent the Trust in any way.
3. SERVICES OF SUBADVISERS AND SUB-SUBADVISERS. Subject to the overall
supervision and control of the Board of Trustees and the Adviser, any Subadviser
or Sub-subadviser shall manage the investment and reinvestment of the assets of
any Fund for which it has responsibility in accordance with the terms of a
Subadvisory Contract or Sub-subadvisory Contract, giving due consideration to
the Investment Policies and Restrictions applicable to the Fund. The Adviser
shall not be responsible or liable for the investment merits of any decision by
a Subadviser or Sub-subadviser to purchase, hold or sell a security for the
portfolio of a Fund.
4. EXPENSES BORNE BY TRUST. Except as otherwise provided in this
Agreement or any other contract to which the Trust is a party, the Trust shall
pay all expenses incidental to its organization, operations and business
including, without limitation: all charges of depositories, custodians,
sub-custodians and other agencies for the safekeeping and servicing of its cash,
securities and other property, and of its transfer, shareholder recordkeeping,
dividend disbursing and redemption agents, if any; all charges for equipment or
services used for obtaining price quotations; all charges for accounting
services provided to the Trust by the custodian, the Adviser or any other
provider of accounting services; all expenses of portfolio pricing, net asset
value computation and reporting portfolio information to the Adviser or
Subadviser; all charges for services of administration; all charges of
independent auditors and legal counsel; all compensation of the Trustees other
than those affiliated with any entity providing advisory or administrative
services to the Trust, and all expenses incurred in connection with their
services to the Trust; all expenses of preparing, printing and distributing
notices, proxy solicitation material and reports to shareholders of the Funds;
all expenses of meetings of shareholders; all expenses of preparation and
printing of annual or
B-3
<PAGE>
more frequent revisions of the Funds' prospectus(es) and of supplying each then
existing shareholder or beneficial owner of shares of the Funds with a copy of
such revised prospectus(es); all expenses related to preparing and transmitting
certificates representing shares of the Funds, if any; all expenses of bond and
insurance coverage required by law or deemed advisable by the Board of Trustees;
all costs of borrowing money; all taxes and corporate fees payable to Federal,
state or other governmental agencies, domestic or foreign; all stamp or other
transfer taxes; all expenses of registering and maintaining the registration of
the Trust under the 1940 Act and of shares of the Funds under the 1933 Act, of
qualifying and maintaining qualification of the Trust and of shares of the Funds
for sale under securities laws of various states or other jurisdictions and of
registration and qualification of the Trust under all other laws applicable to
the Trust or its business activities; all payments pursuant to a plan adopted on
behalf of the Funds pursuant to Rule 12b-1 under the 1940 Act; all fees, dues
and other expenses incurred by the Trust in connection with membership of the
Trust in any trade association or other investment company organization; and
extraordinary expenses. In addition the Funds shall pay all broker's commissions
and other charges relating to the purchase and sale of portfolio securities or
other assets of the Funds.
5. ALLOCATION OF EXPENSES BORNE BY TRUST. Any expenses borne by the
Trust that are attributable solely to the organization, operation or business of
the Funds shall be paid solely out of assets of the Funds. Any expense borne by
the Trust that is not solely attributable to the Funds, nor solely to any other
portfolio of the Trust, shall be apportioned in such manner as the Trust or an
administrator for the Trust determines is fair and appropriate, or as otherwise
specified by the Board of Trustees.
6. EXPENSES BORNE BY ADVISER. The Adviser at its own expense shall
furnish personnel, office space and office facilities and equipment required to
render its services pursuant to this Agreement and shall be responsible for
payment of the fees of the Subadviser pursuant to the Subadvisory Contract (but
the Adviser shall not be responsible for any expenses such Subadviser may incur
in connection with their performance of services for the Trust).
7. COMPENSATION OF ADVISER. For the services to be rendered and the
expenses to be assumed and to be paid by the Adviser under this Agreement, the
Trust shall pay to the Adviser a fee, computed and accrued daily and payable on
the first business day of each month, at the annual rates set forth on Exhibit A
hereto for each Fund considered separately on a portfolio-by-portfolio basis.
8. NON-EXCLUSIVITY. The services of the Adviser to the Trust under this
Agreement are not to be deemed exclusive and the Adviser shall be free to render
similar services to others so long as its services under this Agreement are not
impaired by such other activities.
9. STANDARD OF CARE. Neither the Adviser, nor any Subadviser, nor any
of their respective directors, officers, agents or employees shall be liable or
responsible to the Trust or its shareholders for any error of judgment, or any
loss
B-4
<PAGE>
arising out of any investment, or for any other act or omission in the
performance by the Adviser or a Subadviser of its duties under this Agreement or
a Subadvisory Contract, respectively, except for liability resulting from
willful misfeasance, bad faith or gross negligence on the part of the Adviser or
Subadviser, respectively, or from reckless disregard by the Adviser or the
Subadviser of its obligations and duties under this Agreement or the Subadvisory
Contract, respectively.
10. AMENDMENT. This Agreement may not be amended with respect to a
particular Fund without the affirmative votes (a) of a majority of the Directors
of the Trustees, including a majority of those Trustees who are not "interested
persons" of the Trust or the Adviser and (b) of a "majority of the outstanding
shares" of such Fund. The terms "interested person" and "vote of a majority of
the outstanding shares" shall be construed in accordance with their respective
definitions in Sections 2(a)(19) and 2(a)(42) of the 1940 Act and, with respect
to the latter term, in accordance with Rule 18f-2 under the 1940 Act.
11. TERMINATION. This Agreement may be terminated as to any Fund, at
any time, without payment of any penalty, by the Board of Trustees, or by a vote
of a majority of the outstanding shares of the Fund, upon at least 60 days'
written notice to the Adviser. This Agreement may be terminated by the Adviser
at any time upon at least 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its "assignment" (as defined in
Section 2(a)(4) of the 1940 Act). Unless terminated as hereinbefore provided,
this Agreement shall continue in effect with respect to a particular Fund for a
period of two years from the date hereof and thereafter from year to year only
so long as such continuance is specifically approved at least annually (a) by a
majority of those Trustees who are not interested persons of the Trust or of the
Adviser, voting in person at a meeting called for the purpose of voting on such
approval, and (b) by either the Board of Trustees or by a vote of a majority of
the outstanding shares of such Fund.
12. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS. The names "Harris
Insight Funds Trust" and "Trustees of Harris Insight Funds Trust" refer
respectively to the Trust created and the Trustees as trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated December 6, 1995 which is hereby referred to and a copy of which is
on file at the office of the Secretary of State of the Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Harris Insight Funds Trust" entered into in the name or on behalf thereof by
any of the Trustees, officers, representatives or agents are not made
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property, and all persons dealing with any
class of shares of the Trust must look solely to the Trust Property belonging to
such class for the enforcement of any claims against the Trust.
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<PAGE>
13. NOTICE. Any notice, demand, change of address or other
communication to be given in connection with this Agreement shall be given in
writing and shall be given by personal delivery, by registered or certified mail
or by transmittal by facsimile or other electronic medium addressed to the
recipient as follows:
To the Adviser: Harris Trust and Savings Bank
111 W. Monroe Street, 6W
Chicago, IL 60603
Telephone: 312.461.4088 Fax: 312.293.4291
To the Trust: Harris Insight Funds Trust
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428
Telephone: 610.260.6533 Fax: 610.260.6535
All notices shall be conclusively deemed to have been given on the day
of actual delivery thereof and, if given by registered or certified mail, on the
fifth business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof.
14. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois and the laws of the United
States of America applicable to contracts executed and to be performed therein.
15. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as "herein,"
"hereof," and "under this Agreement" shall be deemed to refer to this Agreement
or this Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
Agreement. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
Dated: [November 29, 1999]
HARRIS INSIGHT FUNDS TRUST
ATTEST: By __________________________
Name:
______________________, Secretary Title:
HARRIS TRUST AND SAVINGS BANK
ATTEST: By __________________________
Name:
______________________, Secretary Title:
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<PAGE>
EXHIBIT A
HARRIS INSIGHT FUNDS TRUST
INVESTMENT ADVISER COMPENSATION
- -----------------------------------------------------------------------------
FUND (SERIES) FEE(1)
- -----------------------------------------------------------------------------
Equity Fund 0.70
- -----------------------------------------------------------------------------
Equity Income Fund 0.70
- -----------------------------------------------------------------------------
Growth Fund 0.90
- -----------------------------------------------------------------------------
Index Fund 0.25
- -----------------------------------------------------------------------------
Small-Cap Opportunity Fund 1.00
- -----------------------------------------------------------------------------
Small-Cap Value Fund 0.80
- -----------------------------------------------------------------------------
International Fund 1.05
- -----------------------------------------------------------------------------
Emerging Markets Fund 1.25
- -----------------------------------------------------------------------------
Balanced Fund 0.60
- -----------------------------------------------------------------------------
Convertible Securities Fund 0.70
- -----------------------------------------------------------------------------
Bond Fund 0.65
- -----------------------------------------------------------------------------
Short-Intermediate Bond Fund 0.70
- -----------------------------------------------------------------------------
Intermediate Government Bond Fund 0.65
- -----------------------------------------------------------------------------
Tax-Exempt Bond Fund 0.60
- -----------------------------------------------------------------------------
Intermediate Tax-Exempt Bond Fund 0.60
- -----------------------------------------------------------------------------
Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
Tax-Exempt Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
Government Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
- -----------------
(1) Calculated as a percentage of average daily net assets for each portfolio.
B-7
<PAGE>
APPENDIX C
PORTFOLIO MANAGEMENT CONTRACT
Harris Trust and Savings Bank (the "Adviser"), an Illinois bank and
Harris Investment Management, Inc., (the "Subadviser") a Delaware corporation
registered under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), agree as follows:
1. APPOINTMENT OF SUBADVISER. The Adviser appoints the Subadviser to
furnish investment advisory and other services to the Harris Insight Funds Trust
(the "Trust") for its series listed on Exhibit A hereto (the "Funds") and the
Subadviser accepts that appointment for the period and on the terms set forth
below.
2. SERVICES OF SUBADVISER.
(a) INVESTMENT MANAGEMENT. Subject to the overall control of the Board
of Trustees of the Trust (the "Board of Trustees") and the Adviser, the
Subadviser shall have supervisory responsibility for the general management and
investment of the assets of the Funds giving due consideration to the investment
policies and restrictions, portfolio transaction policies and the other
statements concerning the respective Funds in the Trust's Declaration of Trust,
by-laws and registration statements under the Investment Company Act of 1940, as
amended (the "1940 Act"), and the Securities Act of 1933, as amended (the "1933
Act"), to the provisions of the 1933 Act and the 1940 Act and rules and
regulations thereunder, to the provisions of the Internal Revenue Code
applicable to the Funds as regulated investment companies and to other
applicable law (the "Investment Policies and Restrictions"). It is understood
that the Subadviser, with the approval of the Adviser and the Board of Trustees,
may enter into sub-portfolio management contracts (each, a Contract") on behalf
of any or all Funds with one or more other portfolio managers (each, a
"Sub-subadviser"). Each Sub-subadviser or any successor to a Sub-subadviser
shall have the responsibilities and duties set forth in Section 3 below and in
its respective Sub-subadvisory Contract. As long as a Sub-subadvisory Contract
is in effect with respect to all or a portion of the assets of any Fund, the
services provided by the Subadviser with respect to those assets will be limited
to the supervision and oversight of the Sub-subadviser's performance under the
Sub-subadvisory Contract.
(b) MONITORING SUB-SUBADVISER. The Subadviser shall monitor and
evaluate the investment performance of any Sub-subadviser, and shall monitor the
investment activities of any Sub-subadviser to ensure compliance with the
Investment Policies and Restrictions.
(c) REPORTS AND INFORMATION. The Subadviser shall furnish to the
Adviser periodic reports on the investment strategy and performance of the Funds
and such additional reports and information as the Adviser or the Board of
Trustees or the officers of the Trust may reasonably request.
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<PAGE>
(d) UNDERTAKINGS OF SUBADVISER. The Subadviser further agrees that it
will:
(i) At all times be duly registered as an investment adviser
under the Investment Advisers Act of 1940 and be duly registered and qualified
under other securities legislation in each jurisdiction where such registration
or qualification is required, whether as portfolio manager, investment counsel
or such other category as may be required;
(ii) Comply with the 1940 Act and with all applicable rules and
regulations of the Securities and Exchange Commission, the provisions of the
Internal Revenue Code relating to regulated investment companies, applicable
banking laws and regulations, and policy decisions and procedures adopted by the
Board of Trustees from time to time;
(iii) Select broker-dealers in accordance with guidelines
established by the Board of Trustees from time to time and in accordance with
applicable law (consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the Subadviser may, in
its discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Subadviser with research advice and other services);
(iv) Maintain books and records with respect to the securities
transactions of the Funds;
(v) Treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust or to prior,
present or potential shareholders, and will not use such records or information
for any purpose other than in the performance of its responsibilities and duties
hereunder, except (A) after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld, (B) when so requested
by the Trust, (C) as required by tax authorities or (D) pursuant to a judicial
request, requirement or order, provided that the Subadviser takes reasonable
steps to provide the Trust with prior notice in order to allow the Trust to
contest such request, requirement or order.
(e) BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Subadviser agrees that all records that it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Subadviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
(f) INDEPENDENT CONTRACTOR. The Subadviser shall for all purposes
herein be deemed to be an independent contractor and not an agent of the Trust
and shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way.
C-2
<PAGE>
3. SERVICES OF SUB-SUBADVISER. Subject to the overall supervision and
control of the Board of Trustees, the Adviser and the Subadviser, any
Sub-subadviser shall manage the investment and reinvestment of the assets of any
Fund for which it has responsibility in accordance with the terms of its
Sub-subadvisory Contract, giving due consideration to the Investment Policies
and Restrictions applicable to the Fund. Neither the Adviser nor the Subadviser
shall be responsible or liable for the investment merits of any decision by a
Sub-subadviser to purchase, hold or sell a particular security for the portfolio
of a Fund.
4. UNDERTAKINGS OF ADVISER. The Adviser will:
(a) Furnish to the Subadviser promptly a copy of each amendment to the
registration statement of the Trust under the 1940 Act and the 1933 Act and of
each prospectus and statement of additional information relating to the Fund and
any supplement thereto;
(b) Inform the principal custodian of the Funds (the "Custodian")
(currently PFPC Trust Company) of the appointment of the Subadviser as
investment subadviser and portfolio manager of the Funds;
(c) Instruct the Custodian to cooperate with the Subadviser in the
provision of custodial services to the Funds; and
(d) Provide the Subadviser with all information that the Subadviser may
reasonably require insofar as it relates to the custodial arrangements in
connection with this Agreement.
5. EXPENSES BORNE BY SUBADVISER. The Subadviser at its own expense
shall furnish personnel, office space and office facilities and equipment
required to render its services pursuant to this Agreement.
6. COMPENSATION OF SUBADVISER. For the services to be rendered and the
expenses to be assumed and to be paid by the Adviser under this Agreement, the
Adviser shall pay to the Subadviser a fee, computed and accrued daily and
payable on the first business day of each month, at the annual rates set forth
on Exhibit A hereto for each Fund considered separately on a
portfolio-by-portfolio basis.
7. NON-EXCLUSIVITY. The services of the Subadviser to the Trust under
this Agreement are not to be deemed exclusive and the Subadviser shall be free
to render similar services to others so long as its services under this
Agreement are not impaired by such other activities.
8. STANDARD OF CARE. Neither the Subadviser, nor any of its directors,
officers, agents or employees shall be liable or responsible to the Trust or its
shareholders for any error of judgment, or any loss arising out of any
investment, or for any other act or omission in the performance by the
Subadviser of its duties under this Agreement, except for liability resulting
from willful misfeasance, bad faith or gross negligence on its part or from
reckless disregard of its obligations and duties under this Agreement.
C-3
<PAGE>
9. INSPECTION. The Adviser (or any authorized agent of the Adviser as
advised in writing to the Subadviser) shall have a right to audit, inspect and
photocopy documents (and remove such photocopies) relating to investment
subadvisory and portfolio management services performed under this Agreement,
during normal business hours of the Subadviser.
10. AUTHORIZED PERSONS.
(a) The Subadviser is authorized to accept instructions and directions
with respect to this Agreement signed by any one of ______________ of the
Adviser. The Adviser will notify the Subadviser of any changes in its officers
empowered to act under this Agreement.
(b) The Adviser is authorized to accept instructions and directions
with respect to this Agreement signed by any Senior Partner or Partner of the
Subadviser. The Subadviser will notify the Adviser of any changes in its
officers empowered to act under this Agreement.
(c) The Subadviser will advise the Custodian of the names of persons
from whom the Custodian is authorized to accept instructions regarding
investment transactions.
11. USE OF SUBADVISER'S NAME AND MARKS. The Subadviser grants to the
Adviser and the Trust the right to use, in marketing, promotional and
advertising materials of the Adviser or the Trust, any registered trademarks,
logos or other marks that the Subadviser uses in advertising and publicizing
itself and its services as a portfolio manager or investment counsel. Any such
material shall be subject to the approval by the Subadviser as to form and
content prior to its use by the Adviser or the Trust. The Subadviser consents to
the disclosure, in documents relating to the Funds, of its name as the
investment sub-adviser and portfolio manager of the assets of the Funds.
12. AMENDMENT. This Agreement may not be amended with respect to a
particular Fund without the affirmative votes (a) of a majority of the Directors
of the Trustees, including a majority of those Trustees who are not "interested
persons" of the Trust, the Adviser or the Subadviser and (b) of a "majority of
the outstanding shares" of such Fund. The terms "interested person" and "vote of
a majority of the outstanding shares" shall be construed in accordance with
their respective definitions in Sections 2(a)(19) and 2(a)(42) of the 1940 Act
and, with respect to the latter term, in accordance with Rule 18f-2 under the
1940 Act.
13. TERMINATION. This Agreement may be terminated as to any Fund, at
any time, without payment of any penalty, by the Board of Trustees, or by a vote
of a majority of the outstanding shares of the Fund, upon at least 60 days'
written notice to the Adviser. This Agreement may be terminated by the Adviser
at any time upon at least 60 days' written notice to the Trust. This Agreement
shall terminate automatically in the event of its "assignment" (as defined in
Section 2(a)(4) of the 1940 Act). Unless terminated as hereinbefore provided,
this Agreement shall continue in effect with respect to a particular Fund for a
period of two years from
C-4
<PAGE>
the date hereof and thereafter from year to year only so long as such
continuance is specifically approved at least annually (a) by a majority of
those Trustees who are not interested persons of the Trust, the Adviser or the
Subadviser, voting in person at a meeting called for the purpose of voting on
such approval, and (b) by either the Board of Trustees or by a vote of a
majority of the outstanding shares of such Fund.
14. NOTICE. Any notice, demand, change of address or other
communication to be given in connection with this Agreement shall be given in
writing and shall be given by personal delivery, by registered or certified mail
or by transmittal by facsimile or other electronic medium addressed to the
recipient as follows:
To the Subadviser: Harris Investment Management, Inc.
190 S. LaSalle Street, 4th Floor
Chicago, IL 60603
Telephone: 312.461.7699 Fax: 312.461.6268
To the Adviser: Harris Trust and Savings Bank
111 W. Monroe Street, 6W
Chicago, IL 60603
Telephone: 312.461.4088 Fax: 312.293.4291
To the Trust: Harris Insight Funds Trust
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428
Telephone: 610.260.6533 Fax: 610.260.6535
All notices shall be conclusively deemed to have been given on the day
of actual delivery thereof and, if given by registered or certified mail, on the
fifth business day following the deposit thereof in the mail and, if given by
facsimile or other electronic medium, on the day of transmittal thereof.
15. THIRD PARTY BENEFICIARIES. This Agreement is intended for the
benefit of the Trust, which shall have all rights against the Subadviser as
would pertain to it if this Agreement were directly between the Trust and the
Subadviser.
16. GOVERNING LAW. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Illinois and the laws of the United
States of America applicable to contracts executed and to be performed therein.
17. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as "herein,"
"hereof," and "under this Agreement" shall be deemed to refer to this Agreement
or this Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a part
hereof or control or affect the meaning, construction or effect of this
Agreement. This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
C-5
<PAGE>
Dated: [November 29, 1999]
HARRIS TRUST AND SAVINGS BANK
ATTEST: By __________________________
Name:
______________________, Secretary Title:
HARRIS INVESTMENT
MANAGEMENT, INC.
ATTEST: By __________________________
Name:
______________________, Secretary Title:
C-6
<PAGE>
EXHIBIT A
HARRIS INSIGHT FUNDS TRUST
PORTFOLIO MANAGER COMPENSATION
- -----------------------------------------------------------------------------
FUND (SERIES) FEE(1)
- -----------------------------------------------------------------------------
Equity Fund 0.70
- -----------------------------------------------------------------------------
Equity Income Fund 0.70
- -----------------------------------------------------------------------------
Growth Fund 0.90
- -----------------------------------------------------------------------------
Index Fund 0.25
- -----------------------------------------------------------------------------
Small-Cap Opportunity Fund 1.00
- -----------------------------------------------------------------------------
Small-Cap Value Fund 0.80
- -----------------------------------------------------------------------------
International Fund 1.05
- -----------------------------------------------------------------------------
Emerging Markets Fund 1.25
- -----------------------------------------------------------------------------
Balanced Fund 0.60
- -----------------------------------------------------------------------------
Convertible Securities Fund 0.70
- -----------------------------------------------------------------------------
Bond Fund 0.65
- -----------------------------------------------------------------------------
Short-Intermediate Bond Fund 0.70
- -----------------------------------------------------------------------------
Intermediate Government Bond Fund 0.65
- -----------------------------------------------------------------------------
Tax-Exempt Bond Fund 0.60
- -----------------------------------------------------------------------------
Intermediate Tax-Exempt Bond Fund 0.60
- -----------------------------------------------------------------------------
Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
Tax-Exempt Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
Government Money Market Fund 1st $100 million: 0.14
> $100 million: 0.10
- -----------------------------------------------------------------------------
- --------------------
1 Calculated as a percentage of average daily net assets for each portfolio.
C-7
<PAGE>
APPENDIX D-1
HARRIS INSIGHT FUNDS TRUST
SERVICE PLAN - A SHARES
[adopted pursuant to Rule 12b-1]
This Service Plan (the "Service Plan") is adopted by Harris Insight
Funds Trust, a Massachusetts business trust, (the "Company"), on behalf of the A
Shares class of the Harris Insight Equity Fund, Harris Insight
Short/Intermediate Bond Fund, Harris Insight Equity Income Fund, Harris Insight
Growth Fund, Harris Insight Small-Cap Opportunity Fund, Harris Insight
International Fund, Harris Insight Emerging Markets Fund, Harris Insight
Balanced Fund, Harris Insight Convertible Securities Fund, Harris Insight Bond
Fund, Harris Insight Intermediate Government Bond Fund, Harris Insight
Intermediate Tax-Exempt Bond Fund, Harris Insight Tax-Exempt Bond Fund, and
Harris Insight Small-Cap Value Fund (each, a "Fund" and collectively, the
"Funds"), each of which is a portfolio of the Company, pursuant to Rule 12b-1
(the "Rule") under the Investment Company Act of 1940, as amended (the "1940
Act"), subject to the following terms and conditions:
SECTION 1. COMPENSATION.
Any officer of the Company is authorized to execute and deliver, in the
name and on behalf of the Company and of each Fund's A Shares class, written
agreements in substantially the form attached hereto or in any other form duly
approved by the Board Members of the Company ("Servicing Agreements") with
financial institutions such as banks, securities dealers or other industry
professionals, such as investment advisers, accountants, and estate planning
firms ("Service Organizations"). Such Servicing Agreements shall require the
Service Organizations to provide services on behalf of the applicable Fund as
set forth therein to their customers who beneficially own A Shares in
consideration of fees, computed daily and paid monthly in the manner set forth
in the Servicing Agreements, at an annual rate of up to 0.35% of the average
daily net asset value of A Shares held by a Service Organization on behalf of
its customers. All expenses incurred by the Company in connection with a
Servicing Agreement and the implementation of this Service Plan with respect to
a particular class of shares of a Fund shall be borne entirely by the holders of
that class of shares of that Fund.
SECTION 2. PAYMENTS BY THE FUNDS' DISTRIBUTOR, INVESTMENT ADVISER
AND/OR PORTFOLIO MANAGEMENT AGENT.
Pursuant to the Service Plan, the Funds' distributor, investment
adviser and/or portfolio management agent may provide payments (i) to Service
Organizations for providing the various services described in Servicing
Agreements and (ii) for sales, marketing and distribution services and expenses,
including the distribution of sales literature and advertising provided by the
D-1
<PAGE>
distributor of Fund shares. Payments made by the Funds' distributor, investment
adviser and/or portfolio management agent, respectively, shall be made from
their own resources without reimbursement by the Funds.
SECTION 3. APPROVAL BY SHAREHOLDERS.
The Service Plan will not take effect with respect to a Fund, and no
fee will be payable in accordance with Section 1 of the Service Plan, until the
Service Plan has been approved by a vote of at least a majority of the
outstanding voting securities of the Fund except as provided in the Rule.
SECTION 4. APPROVAL BY DIRECTORS.
Neither the Service Plan nor any related agreements will take effect
with respect to a Fund until approved by a majority vote of both (a) the full
Board Members of the Company and (b) those Board Members who are not interested
persons of the Company and who have no direct or indirect financial interest in
the operation of the Service Plan or in any agreements related to it (the
"Independent Board Members"), cast in person at a meeting called for the purpose
of voting on the Service Plan and the related agreements.
SECTION 5. CONTINUANCE OF THE SERVICE PLAN.
The Service Plan will continue in effect from year to year with respect
to a Fund, so long as its continuance is specifically approved annually by vote
of the Company's Board Members in the manner described in Section 4 above.
SECTION 6. TERMINATION.
The Service Plan may be terminated with respect to a Fund at any time,
without penalty, by vote of a majority of the Independent Board Members or by a
vote of a majority of the outstanding voting securities of the Fund.
SECTION 7. AMENDMENTS.
The Service Plan may not be amended with respect to a Fund to increase
materially the amount of the fees described in Section 1 above, unless the
amendment is approved by a vote of a majority of the outstanding voting
securities of the Fund, and all material amendments to the Service Plan must
also be approved by the Company's Board Members in the manner described in
Section 4 above.
SECTION 8. SELECTION OF CERTAIN BOARD MEMBERS.
While the Service Plan is in effect, the selection and nomination of
the Company's Board Members who are not interested persons of the Company will
be committed to the discretion of the Board Members then in office who are not
interested persons of the Company.
D-2
<PAGE>
SECTION 9. WRITTEN REPORTS.
In each year during which the Service Plan remains in effect with
respect to a Fund, the Company's administrator or co-administrator will prepare
and furnish to the Company's Board Members, and the Board will review, at least
quarterly, written reports, complying with the requirements of the Rule, that
set out the amounts expended under the Service Plan relating to the Fund and the
purposes for which those expenditures were made.
SECTION 10. PRESERVATION OF MATERIALS.
The Company will preserve copies of the Service Plan, any agreement
relating to the Service Plan and any report made pursuant to Section 9 above,
for a period of not less than six years (the first two years in an easily
accessible place) from the date of the Service Plan, agreement or report.
SECTION 11. MEANINGS OF CERTAIN TERMS.
As used in the Service Plan, the terms "interested person" and
"majority of the outstanding voting securities" will be deemed to have the same
meaning that those terms have under the 1940 Act and the rules and regulations
under the 1940 Act, subject to any exemption that may be granted to the Company
under the 1940 Act by the Securities and Exchange Commission.
Dated: [November 29, 1999]
D-3
<PAGE>
APPENDIX D-2
HARRIS INSIGHT FUNDS TRUST
SERVICE PLAN
N SHARES--MONEY MARKET FUNDS
[adopted pursuant to Rule 12b-1]
This Service Plan (the "Service Plan") is adopted by Harris Insight
Funds Trust, a Massachusetts business trust (the "Company"), on behalf of the N
Shares class of the Harris Insight Money Market Fund, Harris Insight Government
Money Market Fund and Harris Insight Tax-Exempt Money Market Fund (each, a
"Fund" and collectively, the "Funds"), each of which is a portfolio of the
Company, pursuant to Rule 12b-1 (the "Rule") under the Investment Company Act of
1940, as amended (the "1940 Act"), subject to the following terms and
conditions:
SECTION 1. COMPENSATION.
Any officer of the Company is authorized to execute and deliver, in the
name and on behalf of the Company and of each Fund's N Shares class, written
agreements in substantially the form attached hereto or in any other form duly
approved by the Board of Trustees of the Company ("Servicing Agreements") with
financial institutions such as banks, securities dealers or other industry
professionals, such as investment advisers, accountants, and estate planning
firms ("Service Organizations"). Such Servicing Agreements shall require the
Service Organizations to provide services on behalf of the applicable Fund as
set forth therein to their customers who beneficially own N Shares in
consideration of fees, computed daily and paid monthly in the manner set forth
in the Servicing Agreements, at an annual rate of 0.10% of the average daily net
asset value of N Shares held by a Service Organization on behalf of its
customers. Such Servicing Agreements shall also require a Service Organization
to agree that it would waive such portion of any payments made to it pursuant to
the relevant Servicing Agreement to the extent necessary to assure that
payments, if any, required to be accrued by any class of Fund shares on any day
do not exceed the income to be accrued to such class on that day. All expenses
incurred by the Company in connection with a Servicing Agreement and the
implementation of this Service Plan with respect to a particular class of shares
of a Fund shall be borne entirely by the holders of that class of shares of that
Fund.
SECTION 2. PAYMENTS BY THE FUNDS' DISTRIBUTOR, INVESTMENT ADVISER
AND/OR PORTFOLIO MANAGEMENT AGENT.
Pursuant to the Service Plan, the Funds' distributor, investment
adviser and/or portfolio management agent may provide payments (i) to Service
Organizations for providing the various services described in Servicing
Agreements and (ii) for sales, marketing and distribution services and expenses,
D-4
<PAGE>
including the distribution of sales literature and advertising provided by the
distributor of Fund shares. Payments made by the Funds' distributor, investment
adviser and/or portfolio management agent, respectively, shall be made from
their own resources without reimbursement by the Funds.
SECTION 3. APPROVAL BY SHAREHOLDERS.
The Service Plan will not take effect with respect to a Fund, and no
fee will be payable in accordance with Section 1 of the Service Plan, until the
Service Plan has been approved by a vote of at least a majority of the
outstanding voting securities of the Fund.
SECTION 4. APPROVAL BY TRUSTEES.
Neither the Service Plan nor any related agreements will take effect
with respect to a Fund until approved by a majority vote of both (a) the full
Board of Trustees of the Company and (b) those Trustees who are not interested
persons of the Company and who have no direct or indirect financial interest in
the operation of the Service Plan or in any agreements related to it (the
"Independent Trustees"), cast in person at a meeting called for the purpose of
voting on the Service Plan and the related agreements.
SECTION 5. CONTINUANCE OF THE SERVICE PLAN.
The Service Plan will continue in effect from year to year with respect
to a Fund, so long as its continuance is specifically approved annually by vote
of the Company's Board of Trustees in the manner described in Section 4 above.
SECTION 6. TERMINATION.
The Service Plan may be terminated with respect to a Fund at any time,
without penalty, by vote of a majority of the Independent Trustees or by a vote
of a majority of the outstanding voting securities of the Fund.
SECTION 7. AMENDMENTS.
The Service Plan may not be amended with respect to a Fund to increase
materially the amount of the fees described in Section 1 above, unless the
amendment is approved by a vote of a majority of the outstanding voting
securities of the Fund, and all material amendments to the Service Plan must
also be approved by the Company's Board of Trustees in the manner described in
Section 4 above.
SECTION 8. SELECTION OF CERTAIN TRUSTEES.
While the Service Plan is in effect, the selection and nomination of
the Company's Trustees who are not interested persons of the Company will be
committed to the discretion of the Trustees then in office who are not
interested persons of the Company.
D-5
<PAGE>
SECTION 9. WRITTEN REPORTS.
In each year during which the Service Plan remains in effect with
respect to a Fund, the Company's administrator or co-administrator will prepare
and furnish to the Company's Board of Trustees, and the Board will review, at
least quarterly, written reports, complying with the requirements of the Rule,
that set out the amounts expended under the Service Plan relating to the Fund
and the purposes for which those expenditures were made.
SECTION 10. PRESERVATION OF MATERIALS.
The Company will preserve copies of the Service Plan, any agreement
relating to the Service Plan and any report made pursuant to Section 9 above,
for a period of not less than six years (the first two years in an easily
accessible place) from the date of the Service Plan, agreement or report.
SECTION 11. MEANINGS OF CERTAIN TERMS.
As used in the Service Plan, the terms "interested person" and
"majority of the outstanding voting securities" will be deemed to have the same
meaning that those terms have under the 1940 Act and the rules and regulations
under the 1940 Act, subject to any exemption that may be granted to the Company
under the 1940 Act by the Securities and Exchange Commission.
Dated: [November 29, 1999]
D-6
<PAGE>
PROXY CARD PROXY CARD
HT INSIGHT FUNDS, INC
HARRIS INSIGHT EQUITY FUND
This proxy is solicited by the Board of Directors of HT Insight Funds, Inc. (the
"Company") for use at a special meeting of shareholders of each of the Harris
Insight Equity, Harris Insight Short/Intermediate Bond, Harris Insight
Tax-Exempt Money Market, Harris Insight Money Market and Harris Insight
Government Money Market Funds (each a "Fund" and collectively, the "Funds")
called to be held on November 29, 1999.
The undersigned hereby appoints David C. Lebisky, Thomas J. Ryan, and Raymond H.
Werkmeister, and each of them, attorneys and proxies of the undersigned, each
with the power of substitution and resubstitution, to attend, and to vote all
shares of the Funds at the above-referenced Meeting of Shareholders and any
adjournment or adjournments thereof and to vote all shares of the Fund that the
undersigned may be entitled to vote with respect to the following proposal, in
accordance with the specifications indicated, if any, and with all the powers
which the undersigned would possess if personally present, hereby revoking any
prior proxy to vote at such Meeting. The undersigned hereby acknowledges receipt
of the notice of special meeting of shareholders of the Fund and the proxy
statement dated October 1, 1999.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. CORPORATE OR PARTNERSHIP PROXIES
SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
EACH JOINT OWNER SHOULD SIGN PERSONALLY.
WHEN SIGNING AS A FIDUCIARY, PLEASE GIVE
FULL TILTLE AS SUCH.
______________________________________________
Signature
______________________________________________
Signature of joint owner, if any
, 1999
______________________________________________
Date 10009A
VOTE THIS PROXY CARD TODAY!
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposal. In the absence of any specification, this proxy
will be voted in favor of the proposal. The Board of Directors recommends that
you vote FOR the proposal set forth below.
TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:
1. To approve the proposed Reorganization of each Fund and take certain FOR AGAINST ABSTAIN
actions in connection therewith as set forth in the notice of meeting and o o o
proxy statement.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
10009A
<PAGE>
PROXY CARD PROXY CARD
HT INSIGHT FUNDS, INC
HARRIS INSIGHT SHORT/INTERMEDIATE BOND FUND
This proxy is solicited by the Board of Directors of HT Insight Funds, Inc. (the
"Company") for use at a special meeting of shareholders of each of the Harris
Insight Equity, Harris Insight Short/Intermediate Bond, Harris Insight
Tax-Exempt Money Market, Harris Insight Money Market and Harris Insight
Government Money Market Funds (each a "Fund" and collectively, the "Funds")
called to be held on November 29, 1999.
The undersigned hereby appoints David C. Lebisky, Thomas J. Ryan, and Raymond H.
Werkmeister, and each of them, attorneys and proxies of the undersigned, each
with the power of substitution and resubstitution, to attend, and to vote all
shares of the Funds at the above-referenced Meeting of Shareholders and any
adjournment or adjournments thereof and to vote all shares of the Fund that the
undersigned may be entitled to vote with respect to the following proposal, in
accordance with the specifications indicated, if any, and with all the powers
which the undersigned would possess if personally present, hereby revoking any
prior proxy to vote at such Meeting. The undersigned hereby acknowledges receipt
of the notice of special meeting of shareholders of the Fund and the proxy
statement dated October 1, 1999.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. CORPORATE OR PARTNERSHIP PROXIES
SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
EACH JOINT OWNER SHOULD SIGN PERSONALLY.
WHEN SIGNING AS A FIDUCIARY, PLEASE GIVE
FULL TILTLE AS SUCH.
______________________________________________
Signature
______________________________________________
Signature of joint owner, if any
, 1999
______________________________________________
Date 10009A
VOTE THIS PROXY CARD TODAY!
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposal. In the absence of any specification, this proxy
will be voted in favor of the proposal. The Board of Directors recommends that
you vote FOR the proposal set forth below.
TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:
1. To approve the proposed Reorganization of each Fund and take certain FOR AGAINST ABSTAIN
actions in connection therewith as set forth in the notice of meeting and o o o
proxy statement.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
10009A
<PAGE>
PROXY CARD PROXY CARD
HT INSIGHT FUNDS, INC
HARRIS INSIGHT TAX-EXEMPT MONEY MARKET FUND
This proxy is solicited by the Board of Directors of HT Insight Funds, Inc. (the
"Company") for use at a special meeting of shareholders of each of the Harris
Insight Equity, Harris Insight Short/Intermediate Bond, Harris Insight
Tax-Exempt Money Market, Harris Insight Money Market and Harris Insight
Government Money Market Funds (each a "Fund" and collectively, the "Funds")
called to be held on November 29, 1999.
The undersigned hereby appoints David C. Lebisky, Thomas J. Ryan, and Raymond H.
Werkmeister, and each of them, attorneys and proxies of the undersigned, each
with the power of substitution and resubstitution, to attend, and to vote all
shares of the Funds at the above-referenced Meeting of Shareholders and any
adjournment or adjournments thereof and to vote all shares of the Fund that the
undersigned may be entitled to vote with respect to the following proposal, in
accordance with the specifications indicated, if any, and with all the powers
which the undersigned would possess if personally present, hereby revoking any
prior proxy to vote at such Meeting. The undersigned hereby acknowledges receipt
of the notice of special meeting of shareholders of the Fund and the proxy
statement dated October 1, 1999.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. CORPORATE OR PARTNERSHIP PROXIES
SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
EACH JOINT OWNER SHOULD SIGN PERSONALLY.
WHEN SIGNING AS A FIDUCIARY, PLEASE GIVE
FULL TILTLE AS SUCH.
______________________________________________
Signature
______________________________________________
Signature of joint owner, if any
, 1999
______________________________________________
Date 10009A
VOTE THIS PROXY CARD TODAY!
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposal. In the absence of any specification, this proxy
will be voted in favor of the proposal. The Board of Directors recommends that
you vote FOR the proposal set forth below.
TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:
1. To approve the proposed Reorganization of each Fund and take certain FOR AGAINST ABSTAIN
actions in connection therewith as set forth in the notice of meeting and o o o
proxy statement.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
10009A
<PAGE>
PROXY CARD PROXY CARD
HT INSIGHT FUNDS, INC
HARRIS INSIGHT MONEY MARKET FUND
This proxy is solicited by the Board of Directors of HT Insight Funds, Inc. (the
"Company") for use at a special meeting of shareholders of each of the Harris
Insight Equity, Harris Insight Short/Intermediate Bond, Harris Insight
Tax-Exempt Money Market, Harris Insight Money Market and Harris Insight
Government Money Market Funds (each a "Fund" and collectively, the "Funds")
called to be held on November 29, 1999.
The undersigned hereby appoints David C. Lebisky, Thomas J. Ryan, and Raymond H.
Werkmeister, and each of them, attorneys and proxies of the undersigned, each
with the power of substitution and resubstitution, to attend, and to vote all
shares of the Funds at the above-referenced Meeting of Shareholders and any
adjournment or adjournments thereof and to vote all shares of the Fund that the
undersigned may be entitled to vote with respect to the following proposal, in
accordance with the specifications indicated, if any, and with all the powers
which the undersigned would possess if personally present, hereby revoking any
prior proxy to vote at such Meeting. The undersigned hereby acknowledges receipt
of the notice of special meeting of shareholders of the Fund and the proxy
statement dated October 1, 1999.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. CORPORATE OR PARTNERSHIP PROXIES
SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
EACH JOINT OWNER SHOULD SIGN PERSONALLY.
WHEN SIGNING AS A FIDUCIARY, PLEASE GIVE
FULL TILTLE AS SUCH.
______________________________________________
Signature
______________________________________________
Signature of joint owner, if any
, 1999
______________________________________________
Date 10009A
VOTE THIS PROXY CARD TODAY!
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposal. In the absence of any specification, this proxy
will be voted in favor of the proposal. The Board of Directors recommends that
you vote FOR the proposal set forth below.
TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:
1. To approve the proposed Reorganization of each Fund and take certain FOR AGAINST ABSTAIN
actions in connection therewith as set forth in the notice of meeting and o o o
proxy statement.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
10009A
<PAGE>
PROXY CARD PROXY CARD
HT INSIGHT FUNDS, INC
HARRIS INSIGHT GOVERNMENT MONEY MARKET FUND
This proxy is solicited by the Board of Directors of HT Insight Funds, Inc. (the
"Company") for use at a special meeting of shareholders of each of the Harris
Insight Equity, Harris Insight Short/Intermediate Bond, Harris Insight
Tax-Exempt Money Market, Harris Insight Money Market and Harris Insight
Government Money Market Funds (each a "Fund" and collectively, the "Funds")
called to be held on November 29, 1999.
The undersigned hereby appoints David C. Lebisky, Thomas J. Ryan, and Raymond H.
Werkmeister, and each of them, attorneys and proxies of the undersigned, each
with the power of substitution and resubstitution, to attend, and to vote all
shares of the Funds at the above-referenced Meeting of Shareholders and any
adjournment or adjournments thereof and to vote all shares of the Fund that the
undersigned may be entitled to vote with respect to the following proposal, in
accordance with the specifications indicated, if any, and with all the powers
which the undersigned would possess if personally present, hereby revoking any
prior proxy to vote at such Meeting. The undersigned hereby acknowledges receipt
of the notice of special meeting of shareholders of the Fund and the proxy
statement dated October 1, 1999.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
NOTE: PLEASE SIGN EXACTLY AS NAME(S) APPEAR(S)
HEREON. CORPORATE OR PARTNERSHIP PROXIES
SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
EACH JOINT OWNER SHOULD SIGN PERSONALLY.
WHEN SIGNING AS A FIDUCIARY, PLEASE GIVE
FULL TILTLE AS SUCH.
______________________________________________
Signature
______________________________________________
Signature of joint owner, if any
, 1999
______________________________________________
Date 10009A
VOTE THIS PROXY CARD TODAY!
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposal. In the absence of any specification, this proxy
will be voted in favor of the proposal. The Board of Directors recommends that
you vote FOR the proposal set forth below.
TO VOTE, MARK A BLOCK BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example:
1. To approve the proposed Reorganization of each Fund and take certain FOR AGAINST ABSTAIN
actions in connection therewith as set forth in the notice of meeting and o o o
proxy statement.
</TABLE>
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Special Meeting or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
10009A
