<PAGE>
As filed with the Securities and Exchange Commission on October 31, 1997
Registration Nos. 33-22884
811-5577
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 24 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 26 /X/
----------------------------
The Glenmede Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
One South Street
Baltimore, Maryland 21202
(Address of Principal Executive Offices)
Registrant's Telephone Number:
1-800-442-8299
Michael P. Malloy, Esq.
Secretary
Drinker Biddle & Reath LLP
1100 Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[X] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Small Capitalization Equity
Portfolio-Institutional Series.
==============================================================================
<PAGE>
THE GLENMEDE FUND, INC.
Equity Portfolio
International Portfolio
Small Capitalization Equity Portfolio
Large Cap Value Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
<S> <C>
Form N-1A Item Number Location
- --------------------- ---------
Part A Prospectus Caption
- ------ ------------------
1. Cover Page........................................... Cover Page
2. Synopsis............................................. Expenses of the Portfolios
3. Condensed Financial Information...................... Financial Highlights; Performance
Calculations
4. General Description of Registrant.................... Cover Page; Investment
Policies and Risk Factors;
Common Investment Policies and Risk
Factors; Investment Limitations;
General Information
5. Management of the Fund............................... Investment Advisor; Administrative,
Transfer Agency and Dividend Paying
Services; Board Members and
Officers; Purchase of Shares;
Redemption of Shares; Shareholder
Servicing Plan
6. Capital Stock and Other Securities................... Purchase of Shares; Redemption of
Shares; Dividends, Capital Gains
Distributions and Taxes;
General Information
7. Purchase of Securities Being Offered................. Valuation of Shares; Purchase of
Shares; Redemption of Shares
8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares
9. Pending Legal Proceedings............................ Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
- ------------------------------------------------------------------------------
(800) 442-8299
- ------------------------------------------------------------------------------
Prospectus-- January __, 1998
INVESTMENT OBJECTIVES
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund") is an
open-end management investment company. The Glenmede Fund consists of ten
series of shares, each of which has different investment objectives and
policies. The securities offered hereby are shares of the Equity Portfolio,
International Portfolio and Large Cap Value Portfolio and Advisor Shares
(collectively with the other securities offered hereby, "shares") of the Small
Capitalization Equity Portfolio (each Portfolio referenced herein as a
"Portfolio") of the Glenmede Fund.
Equity Portfolio. The objective of the Equity Portfolio is to provide maximum
long-term total return consistent with reasonable risk to principal. The
Equity Portfolio seeks to achieve its objective by investing, under normal
market conditions, primarily in common stocks. The net asset value of this
Portfolio will fluctuate.
International Portfolio. The objective of the International Portfolio is to
provide maximum long-term total return consistent with reasonable risk to
principal. The International Portfolio seeks to achieve its objective by
investing, under normal market conditions, primarily in common stocks and
other equity securities of companies located outside the United States. The
net asset value of this Portfolio will fluctuate.
Small Capitalization Equity Portfolio. The objective of the Small
Capitalization Equity Portfolio is to provide long-term appreciation
consistent with reasonable risk to principal. The Small Capitalization Equity
Portfolio seeks to achieve its investment objective by investing, under normal
market conditions, at least 65% of the value of its total assets in equity
securities of companies with market capitalizations, at the time of purchase,
that are below the maximum capitalization permitted for a stock in the Russell
2000 Index.
Large Cap Value Portfolio. The objective of the Large Cap Value Portfolio is
to provide maximum long-term total return consistent with reasonable risk to
principal. The Large Cap Value Portfolio seeks to achieve its objective by
investing primarily in common stocks using The Glenmede Trust Company's (the
"Advisor") proprietary equity computer model as an investment guide. The net
asset value of this Portfolio will fluctuate. The Large Cap Value Portfolio
seeks to achieve its objective by investing, under normal market conditions,
at least 65% of the value of its total assets in equity securities of
companies with market capitalizations, at the time of purchase, of greater
than $5 billion.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolios are subject to investment risks, including
the possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank.
- -------------------------------------------------------------------------------
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets
forth certain information that you should know before you invest. A Statement
of Additional Information ("SAI") containing additional information about
Glenmede Fund has been filed with the Securities and Exchange Commission. Such
SAI, dated January __, 1998, as amended or supplemented from time to time,
is incorporated by reference into this Prospectus. The ____ Annual Report to
Shareholders contains additional investment and performance information about
the Portfolios. A copy of the SAI and the ____ Annual Report may be obtained,
without charge, by writing to Glenmede Fund at the address shown above or by
calling Glenmede Fund at the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
EXPENSES OF THE PORTFOLIOS
The following table illustrates the expenses and fees: 1) incurred by
the Equity, International and Large Cap Value Portfolios for the fiscal year
ended October 31, 1997; and 2) incurred by Advisor Shares of the Small
Capitalization Equity Portfolio for the fiscal year ended October 31, 1997 as
restated to reflect current fees.
<TABLE>
<CAPTION>
Small
Capitalization
Equity Large Cap
Equity International Portfolio Value
Portfolio Portfolio (Advisor Shares) Portfolio
--------- ------------- ---------------- ---------
<S> <C> <C> <C> <C>
Shareholder Transaction Expenses*.................... None None None None
Maximum Annual Client Fee............................ 1.00% 1.00% 1.00%** 1.00%
Annual Portfolio Operating Expenses
(as a percentage of net assets)
Investment Advisory Fees(1)....................... .00% .00% .__% .00%
====
Administration Fees............................... .__% .__% .__% .__%
==== ==== ==== ====
Other Expenses.................................... .__% .__% .__% .__%
==== ==== ==== ====
Total Operating Expenses.......................... .__% .__% .__% .__%
==== ==== ==== ====
</TABLE>
- ---------------------
* A transaction charge may be imposed by broker-dealers or others that
make shares of the Portfolio available. There is no transaction charge for
shares purchased directly from the Portfolio.
** The Advisor currently intends to exclude the portion of its clients'
assets invested in the Small Capitalization Equity Portfolio when calculating
Client Fees.
(1) The Equity, International and Large Cap Value Portfolios do not pay any
advisory fees to the Advisor, or its affiliates ("Affiliates"). However,
investors in these Portfolios must be clients of the Advisor or Affiliates.
The "Maximum Annual Client Fee" in the above table is the current maximum fee
that the Advisor or an Affiliate would charge its clients directly for
fiduciary, trust and/or advisory services (e.g., personal trust, estate,
advisory, tax and custodian services). The actual annual fees ("Client Fees")
charged by the Advisor and its Affiliates directly to their clients for such
services vary depending on a number of factors, including the particular
services provided to the client, but are generally under 1% of the client's
assets under management. Investors also may have to pay various fees to
-2-
<PAGE>
others to become clients of the Advisor or an Affiliate. See "Investment
Advisor."
The purpose of the above table is to assist an investor in
understanding the various estimated costs and expenses that an investor in a
Portfolio will bear directly or indirectly. Actual expenses may be greater or
lesser than such estimates. For further information concerning the Portfolios'
expenses see "Investment Advisor," "Administrative, Transfer Agency and
Dividend Paying Services" and "Board Members and Officers."
The following example illustrates the estimated expenses that an
investor would pay on a $1,000 investment over various time periods assuming
(i) a 5% annual rate of return and (ii) redemption at the end of each time
period. The example does not include fees for fiduciary and investment
services which investors pay the Advisor or Affiliates as clients. See
"Investment Advisor." As noted in the above table, Glenmede Fund charges no
redemption fees of any kind.
<TABLE>
<CAPTION>
1 Year* 3 Years* 5 Years* 10 Years*
------- -------- -------- ---------
<S> <C> <C> <C> <C>
Equity Portfolio........................................ $__ $__ $__ $__
=== === === ===
International Portfolio................................. $__ $__ $__ $__
=== === === ===
Small Capitalization Equity Portfolio...................
Advisor Shares...................................... $__ $__ $__ $__
=== === === ===
Large Cap Value Portfolio............................... $__ $__ $__ $__
=== === === ===
</TABLE>
* You would pay the same expenses on the same investment, assuming no
redemption at the end of the period.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
-3-
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables provide financial highlights of each Portfolio
for the respective periods presented and includes data derived from Glenmede
Fund's Financial Statements included in Glenmede Fund's ____ Annual Report to
Shareholders, which Financial Statements and report thereon of ___________,
Glenmede Fund's independent accountants, are incorporated by reference in the
SAI. The following information should be read in conjunction with those
Financial Statements. Glenmede Fund's Financial Statements for the periods
ended October 31, 1991, 1990 and 1989 were audited by Glenmede Fund's previous
independent accountants, _______________.
<TABLE>
<CAPTION>
Equity Portfolio
------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year....................... $ $14.67 $12.56 $13.23 $11.84
------ ------ ------ ------- ------
Income from investment operations:
Net investment income.................................. ______ 0.41 0.32 0.31 0.32
======
Net realized and unrealized gain/(loss)
on investments....................................... ______ 3.73 2.64 (0.17) 1.63
====== ------ ------ ------ ------
Total from investment operations..................... ______ 4.14 2.96 0.14 1.95
====== ------ ------ ------ ------
Less Distributions:
Distributions from net investment
income............................................... ______ (0.40) (0.33) (0.29) (0.32)
======
Distributions from net realized capital
gains................................................ ______ (1.62) (0.52) (0.52) (0.24)
======
Distributions from capital............................. ______ -- -- -- --
====== ------ ------ ------ ------
Total Distributions.................................. ______ (2.02) (0.85) (0.81) (0.56)
====== ------ ------ ------ ------
Net asset value, end of year............................. $ $16.79 $14.67 $12.56 $13.23
====== ====== ====== ====== ======
Total return++........................................... % 28.65% 23.78% 1.21% 16.60%
====== ===== ===== ===== =====
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)................... $ $94,185 $80,157 $64,046 $43,611
------
Ratio of operating expenses to average
net assets.......................................... % 0.15% 0.14% 0.16% 0.20%
------
Ratio of net investment income to average
net assets.......................................... % 2.26% 2.32% 2.40% 2.61%
------
Portfolio turnover rate.............................. % 36% 70% 109% 61%
------
Average Commission per share**....................... $ $0.07 N/A N/A N/A
------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Equity Portfolio
----------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
1992 1991 1990 1989+
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year....................... $11.21 $ 8.57 $10.04 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income.................................. 0.31 0.29 0.34 0.14
Net realized and unrealized gain/(loss)
on investments....................................... 0.65 2.66 (1.44) (0.01)
------ ------ ------ ------
Total from investment operations..................... 0.96 2.95 (1.10) 0.13
------ ------ ------ ------
Less Distributions:
Distributions from net investment
income............................................... (0.33) (0.31) (0.34) (0.09)
Distributions from net realized capital
gains................................................ -- -- -- --
Distributions from capital............................. -- -- -- (0.03)
------ ------ ------ ------
Total Distributions.................................. (0.33) (0.31) (0.37) (0.09)
------ ------ ------ ------
Net asset value, end of year............................. $11.84 $11.21 $ 8.57 $10.04
====== ====== ====== ======
Total return++........................................... 8.62% 34.81% (11.34)% 1.27%
===== ===== ====== =====
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)................... $18,049 $9,135 $5,903 $6,523
Ratio of operating expenses to average
net assets.......................................... 0.24% 0.22% 0.24% 0.42%*
Ratio of net investment income to average
net assets.......................................... 2.91% 2.89% 3.59% 5.39%*
Portfolio turnover rate.............................. 30% 86% 91% --
Average Commission per share**....................... N/A N/A N/A N/A
</TABLE>
- -------------------------
+ The Portfolio commenced operations on July 20, 1989.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Represents average commission rate per share charged to the Portfolio
on purchases and sales of investments during the period. Such information is
only required for fiscal years beginning on or after September 1, 1995.
-4-
<PAGE>
<TABLE>
<CAPTION>
International Portfolio
-------------------------------------------------------------------
Year Year Year Year Year
Ended Ended Ended Ended Ended
October 31, October 31, October 31, October 31, October 31,
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year....................... $ $12.70 $13.04 $12.69 $ 9.84
------ ------ ------ ------ ------
Income from investment operations:
Net investment income.................................. ______ 0.40 0.32 0.27 0.27
======
Net realized and unrealized gain/(loss)
on investments........................................ ______ 1.29 0.23 1.50 2.98
====== ------ ------ ------ ------
Total from investment operations..................... ______ 1.69 0.55 1.77 3.25
====== ------ ------ ------ ------
Less Distributions:
Distributions from net investment
income................................................ ______ (0.43) (0.32) (0.25) (0.26)
======
Distributions from net realized gains.................. ______ (0.04) (0.57) (1.16) (0.14)
======
Distributions in excess of net realized
gains .......................................... -- (0.05) -- (0.01) --
Distributions from capital............................. ______ -- -- -- --
====== ------ ------ ------ ------
Total Distributions.................................. ______ (0.52) (0.89) (1.42) (0.40)
====== ------ ------ ------ ------
Net asset value, end of year............................. $ $13.87 $12.70 $13.04 $12.69
====== ====== ====== ====== ======
Total return++........................................... % 13.47% 4.23% 14.26% 33.47%
======= ===== ====== ====== ======
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)................... $ $643,459 $343,209 $292,513 $221,515
-------
Ratio of operating expenses to average
net assets.......................................... % 0.18% 0.18% 0.16% 0.17%
-------
Ratio of net investment income to
average net assets.................................. % 3.05% 2.61% 2.11% 2.31%
-------
Portfolio turnover rate.............................. % 6% 24% 39% 34%
-------
Average Commissions per share**...................... $ $0.02 N/A N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
International Portfolio
----------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
October 31, October 31, October 31, October 31,
1992 1991 1990 1989+
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year....................... $10.89 $10.48 $11.20 $10.00
------ ------ ------ ------
Income from investment operations:
Net investment income.................................. 0.26 0.21 0.30 0.40
Net realized and unrealized gain/(loss)
on investments........................................ (0.51) 1.00 0.22 0.81
------ ------ ------ ------
Total from investment operations..................... (0.25) 1.21 0.52 1.21
------ ------ ------ ------
Less Distributions:
Distributions from net investment
income................................................ (0.26) (0.28) (0.42) (0.01)
Distributions from net realized gains.................. (0.54) (0.52) -- --
Distributions in excess of net realized
gains .......................................... -- -- -- --
Distributions from capital............................. -- -- (0.82) --
------ ------ ------ ------
Total Distributions.................................. (0.80) (0.80) (1.24) (0.01)
------ ------ ------ ------
Net asset value, end of year............................. $ 9.84 $10.89 $10.48 $11.20
====== ====== ====== ======
Total return++........................................... (2.73)% 12.12% 4.27% 12.07%
====== ====== ====== ======
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)................... $167,191 $176,397 $107,690 $91,181
Ratio of operating expenses to average
net assets.......................................... 0.23% 0.23% 0.22% 0.20%*
Ratio of net investment income to
average net assets.................................. 2.47% 2.99% 3.84% 3.84%*
Portfolio turnover rate.............................. 40% 46% 44% 47%
Average Commissions per share**...................... N/A N/A N/A N/A
</TABLE>
- -------------------------------
+ The Portfolio commenced operations on November 17, 1988.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Represents average commission rate per share charged to the Portfolio on
purchases and sales of investments during the period. Such information is
only required for fiscal years beginning on or after September 1, 1995.
-5-
<PAGE>
<TABLE>
<CAPTION>
Small Capitalization Equity Portfolio (Advisor Shares)
------------------------------------------------------------------
Year ended Year ended Year ended Year ended Year ended
October 31, October 31, October 31, October 31, October 31,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year....................... $ $14.98 $13.95 $13.97 $11.12
------- ------ ------ ------ ------
Income from investment operations:
Net investment income.................................. 0.33 0.28 0.16 0.14
-------
Net realized and unrealized gain
on investments........................................ 2.38 2.69 0.23 3.60
------- ------ ------ ------ ------
Total from investment operations..................... 2.71 2.97 0.39 3.74
------- ------ ------ ------ ------
Less Distributions:
Distributions from net investment
income................................................ (0.33) (0.26) (0.15) (0.15)
-------
Distributions from net realized
capital gains......................................... (1.24) (1.68) (0.26) (0.74)
------- ------ ------- ------ ------
Total Distributions................................. (1.57) (1.94) (0.41) (0.89)
------- ------ ------- ------ ------
Net asset value, end of year............................. $ $16.12 $14.98 $13.95 $13.97
------- ====== ====== ====== ======
Total return++........................................... % 18.22% 21.15% 2.85% 33.86%
======== ====== ====== ====== ======
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)..................... $ $308,415 $170,969 $109,872 $68,418
--------
Ratio of operating expenses to
average net assets.................................... % 0.17% 0.14% 0.14% 0.14%
--------
Ratio of net investment income to
average net assets.................................... % 2.15% 1.92% 1.18% 1.08%
--------
Portfolio turnover rate................................ % 37% 57% 31% 63%
--------
Average Commission per share**......................... $ $0.07 N/A N/A N/A
</TABLE>
- -------------------------
+ The Portfolio commenced operations on March 1, 1991.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Represents average commission rate per share charged to the Portfolio on
purchases and sales of investments during the period. Such information is
only required for fiscal years beginning on or after September 1, 1995.
<PAGE>
<TABLE>
<CAPTION>
Small Capitalization Equity Portfolio (Advisor Shares)
------------------------------------------------------
Year ended Period ended
October 31, October 31,
1992 1991+
--------- --------
<S> <C> <C>
Net asset value, beginning of year....................... $11.02 $10.00
------ ------
Income from investment operations:
Net investment income.................................. 0.16 0.16
Net realized and unrealized gain
on investments........................................ 0.09 1.02
------ ------
Total from investment operations..................... 0.25 1.18
------ ------
Less Distributions:
Distributions from net investment
income................................................ (0.15) (0.16)
Distributions from net realized
capital gains......................................... -- --
------ ------
Total Distributions................................. (0.15) (0.16)
------ ------
Net asset value, end of year............................. $11.12 $11.02
====== ======
Total return++........................................... 2.32% 11.84%
====== ======
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's)..................... $39,728 $39,631
Ratio of operating expenses to
average net assets.................................... 0.19% 0.20%*
Ratio of net investment income to
average net assets.................................... 1.44% 2.24%*
Portfolio turnover rate................................ 56% 29%
Average Commission per share**......................... N/A N/A
</TABLE>
- -------------------------
+ The Portfolio commenced operations on March 1, 1991.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Represents average commission rate per share charged to the Portfolio on
purchases and sales of investments during the period. Such information is
only required for fiscal years beginning on or after September 1, 1995.
-6-
<PAGE>
<TABLE>
<CAPTION>
Large Cap Value Portfolio+
----------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Period Ended
October 31, October 31, October 31, October 31, October 31,
1997 1996 1995 1994 1993++
---------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period................. $ $10.34 $10.62 $10.92 $10.00
------ ------ ------ ------ ------
Income from investment operations:
Net investment income.............................. 0.26 0.32 0.21 0.21
------
Net realized and unrealized gain on
investments....................................... 1.49 1.38 (0.31) 2.06
------ ------ ------ ------ ------
Total from investment operations................. 1.75 1.70 (0.10) 2.27
------ ------ ------ ------ ------
Less Distributions:
Distributions from net investment
income........................................... (0.27) (0.31) (0.20) (0.20)
------
Distributions from net realized
capital gains.................................... (0.14) (1.67) -- (1.15)
------ ------ ------ ------ ------
Total Distributions.............................. (0.41) (1.98) (0.20) (1.35)
------ ------ ------ ------ ------
Net asset value, end of year..................... $ $11.68 $10.34 $10.62 $10.92
====== ====== ====== ====== ======
Total return+++.................................. % 17.13% 16.01% (0.91)% 23.05%
====== ===== ===== ====== ======
Ratios to average net assets/Supplemental
data:
Net assets, end of year (in 000's)................. $ $50,131 $15,981 $20,654 $13,969
------
Ratio of operating expenses to
average net assets............................... % 0.15% 0.20% 0.24% 0.24%*
------
Ratio of net investment income to
average net assets............................... % 2.62% 2.80% 2.04% 2.47%*
------
Portfolio turnover rate............................ 104% 227% 287% 230%
Average Commissions per share**.................... $ $0.07 N/A N/A N/A
</TABLE>
- ------------------------------
+ The Portfolio's name was changed from Model Equity Portfolio to Large
Cap Value Portfolio on February 27, 1997.
++ The Portfolio commenced operations on December 31, 1992.
+++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Represents average commission rate per share charged to the Portfolio
on purchases and sales of investments during the period. Such
information is only required for fiscal years beginning on or after
September 1, 1995.
-7-
<PAGE>
PERFORMANCE CALCULATIONS
Each of the Equity, International, Small Capitalization Equity and
Large Cap Value Portfolios may advertise or quote total return data from time
to time for the shares. Total return for the shares will be calculated on an
average annual total return basis, and may also be calculated on an aggregate
total return basis, for various periods. Average annual total return reflects
the average annual percentage change in value of an investment in the
particular Portfolio over the measuring period. Aggregate total return
reflects the total percentage change in value over the measuring period. Both
methods of calculating total return assume that dividends and capital gains
distributions made by the Portfolio with respect to the shares during the
period are reinvested in additional Portfolio shares.
As of ____________, 1998, the Small Capitalization Equity Portfolio
began to offer Institutional Shares. Institutional Shares are subject to an
annual .05% fee payable pursuant to the Amended and Restated Shareholder
Servicing Plan ("Shareholder Servicing Fee"). Prior to __________, 1998,
Advisor Shares were subject to a .05% Shareholder Servicing Fee. Performance
of the Institutional Shares prior to __________, 1998, is represented by
performance of Advisor Shares.
Each of the Equity, International, Small Capitalization Equity and
Large Cap Value Portfolios may compare their total returns for the shares to
that of other investment companies with similar investment objectives and to
stock and other relevant indices such as the Standard & Poor's 500 Composite
Stock Price Index ("S&P 500"), the Dow Jones Industrial Average, the Russel
2000 Index or the National Association of Securities Dealers, Inc.'s National
Market and Automated Quotations Systems ("NASDAQ") Composite Index or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
total return of the shares of the Equity, International, Small Capitalization
Equity or Large Cap Value Portfolios may also be compared to data prepared by
Lipper Analytical Services, Inc. In addition, the International Portfolio's
total return may be compared to the Morgan Stanley Capital International EAFE
Index. Total return and other performance data as reported in national
financial publications such as Money Magazine, Forbes, Barron's, The Wall
Street Journal and The New York Times, or in publications of a local or
regional nature, may also be used in comparing the performance of the shares
of the Equity, International, Small Capitalization Equity or Large Cap Value
Portfolios.
Performance quotations represent a Portfolio's past performance, and
should not be considered as representative of future results. Since
performance will fluctuate, performance data for a Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in a Portfolio, portfolio maturity,
operating expenses and market conditions. Any management fees charged by the
Advisor or institutions to their respective clients will not be included in
the Portfolio's calculations of total return. See "Investment Advisor."
INVESTMENT POLICIES AND RISK FACTORS
The investment objective of each Portfolio is not fundamental and may
be changed by the Board members without shareholder approval.
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EQUITY PORTFOLIO
The objective of the Equity Portfolio is to provide maximum long-term
total return consistent with reasonable risk to principal. The Portfolio seeks
to achieve its objective by investing primarily in common stocks selected on
the basis of fundamental investment value. Crucial to the valuation process is
a systematic examination of the earning and dividend paying ability of
companies and denominating these characteristics by the market value of the
underlying stock. Stocks purchased by the Portfolio will be primarily those
traded on the various stock exchanges and the NASDAQ.
Under normal circumstances, at least 65% of the Equity Portfolio's
total assets will be invested in equity securities such as common and
preferred stock and securities convertible into such stock. Factors considered
in the selection of securities include, without limitation, price to earnings
ratios, price-to-cash flow ratios, reinvestment rates, dividend yields, payout
ratios and earnings growth rates.
The Portfolio's holdings will tend to be characterized by relatively
low price-to-earnings ratios. There is no mandated income requirement for
securities held by the Portfolio.
The Equity Portfolio intends to remain, for the most part, fully
invested in equity securities, which may include securities of companies
located outside the United States, and will not engage in "market timing"
transactions. See "Investment Policies and Risk Factors--International
Portfolio" for a discussion of special risks and considerations involved in
investing in securities of foreign companies. However, the Portfolio may
invest a portion of its assets (up to 20% under normal circumstances) in
preferred stocks, convertible debentures, and the following fixed income and
money market securities: obligations of the U.S. Government and its guaranteed
or sponsored agencies, including shares of open-end or closed-end investment
companies which invest in such obligations (such shares will be purchased
within the limits prescribed by the Investment Company Act of 1940, as amended
(the "1940 Act") and would subject a shareholder of the Portfolio to
expenses of the other investment company in addition to the expenses of the
Portfolio); short-term money market instruments issued in the U.S. or abroad,
denominated in dollars or any foreign currency, including short-term
certificates of deposit (including variable rate certificates of deposit),
time deposits with a maturity no greater than 180 days, bankers acceptances,
commercial paper rated A-1 by Standard & Poor's Ratings Group, Division of
McGraw Hill ("S&P") or Prime-1 by Moody's Investors Service, Inc. ("Moody's"),
or in equivalent money market securities; and high quality fixed income
securities denominated in U.S. dollars, any foreign currency, or a
multi-national currency unit such as the European Currency Unit.
For a description of other securities in which the Equity Portfolio
may invest, see "Common Investment Policies and Risk Factors."
INTERNATIONAL PORTFOLIO
The objective of the International Portfolio is to provide maximum,
long-term total return consistent with reasonable risk to principal. The
International Portfolio seeks to achieve its objective by investing primarily
in common stocks and other equity securities of companies located outside the
United States. The Portfolio is expected to diversify its investments across
companies located in a number of foreign countries, which may include, but
are not limited to, Japan, the United Kingdom, Germany, France, Switzerland,
the Netherlands, Sweden, Australia, Hong Kong and Singapore. The Portfolio
will invest an aggregate of at least 65% of its total assets in the securities
of companies (other than investment companies) in at least three different
countries, other than the United States.
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The securities which the Portfolio may purchase include the
following: common stocks of companies located outside the U.S.; shares of
closed-end investment companies which invest chiefly in the shares of
companies located outside the U.S. (such shares will be purchased by the
Portfolio within the limits prescribed by the 1940 Act and would subject a
shareholder of the Portfolio to the expenses of the other investment company
in addition to the expenses of the Portfolio); U.S. or foreign securities
convertible into foreign common stock; and American Depository Receipts, which
are U.S. domestic securities representing ownership rights in foreign
companies.
The International Portfolio also may enter into forward foreign
currency exchange contracts in connection with the purchase and sale of
investment securities; such contracts may not be used for speculative
purposes. A forward foreign currency exchange contract involves an obligation
to purchase or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract agreed upon by the parties,
at a price set at the time of the contract. These contracts may be bought or
sold to protect the Portfolio, to some degree, against a possible loss
resulting from an adverse change in the relationship between foreign
currencies and the U.S. dollar. This method of protecting the value of the
Portfolio's investment securities against a decline in the value of a currency
does not eliminate fluctuations in the underlying prices of the securities. It
simply establishes a rate of exchange at some future point in time.
Additionally, although such contracts tend to minimize the risk of loss due to
a decline in the value of the hedged currency, at the same time they tend to
limit any potential gain which might result should the value of such currency
increase.
Investors should recognize that investing in the securities of
foreign companies and the utilization of forward foreign currency contracts
involve special risks and considerations not typically associated with
investing in U.S. companies. These risks and considerations include
differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investment in foreign countries and potential restrictions on the
flow of international capital. Moreover, the dividends payable on the
Portfolio's foreign portfolio securities may be subject to foreign withholding
taxes, thus reducing the net amount of income available for distribution to
the Portfolio's shareholders. Further, foreign securities often trade with
less frequency and volume than domestic securities and, therefore, may exhibit
greater price volatility. Also, changes in foreign exchange rates will affect,
favorably or unfavorably, the value of those securities in a portfolio which
are denominated or quoted in currencies other than the U.S. dollar. In
addition, in many countries there is less publicly available information about
issuers than is available in reports about companies in the United States.
Foreign companies are not generally subject to uniform accounting, auditing
and financial reporting standards, and auditing practices and requirements may
not be comparable to those applicable to U.S. companies. Further, a Portfolio
may encounter difficulties or be unable to pursue legal remedies and obtain
judgments in foreign courts.
Brokerage commissions, custodial services, and other costs relating
to investment in foreign securities markets are generally more expensive than
in the United States. Foreign securities markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to settlement problems could cause the
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Portfolio to miss attractive investment opportunities. Inability to dispose
of portfolio securities due to settlement problems could result either in
losses to the Portfolio due to subsequent declines in value of the portfolio
security or, if the Portfolio has entered into a contract to sell the
security, could result in possible liability to the purchaser.
There are further risk factors, including possible losses through the
holding of securities in domestic and foreign custodian banks and
depositories.
The International Portfolio intends to remain, for the most part,
fully invested in equity securities of companies located outside of the United
States. However, the Portfolio may invest a portion of its assets (up to 35%
under normal circumstances) in the following fixed income and money market
securities: obligations of the U.S. Government and its guaranteed or sponsored
agencies, including shares of open-end or closed-end investment companies
which invest in such obligations (such shares will be purchased within the
limits prescribed by the 1940 Act and would subject a shareholder of the
Portfolio to expenses of the other investment company in addition to the
expenses of the Portfolio); short-term money market instruments issued in the
U.S. or abroad, denominated in dollars or any foreign currency, including
short-term certificates of deposit (including variable rate certificates of
deposit), time deposits with a maturity no greater than 180 days, bankers
acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in
equivalent money market securities; and high quality fixed income securities
denominated in U.S. dollars, any foreign currency, or a multi-national
currency unit such as the European Currency Unit.
For a description of other securities in which the International
Portfolio may invest, see "Common Investment Policies and Risk Factors."
SMALL CAPITALIZATION EQUITY PORTFOLIO
The objective of the Small Capitalization Equity Portfolio is to
provide long-term appreciation consistent with reasonable risk to principal.
The Small Capitalization Equity Portfolio seeks to achieve its objective by
investing primarily in equity securities with market capitalizations, at the
time of purchase, that are below the maximum capitalization permitted for a
stock in the Russell 2000 Index. Crucial to this valuation process is a
systematic examination of the earning and dividend paying ability of companies
and denominating these characteristics by the market value of the underlying
equity securities. Equity securities purchased by the Portfolio will be
primarily those traded on the various stock exchanges and NASDAQ, however, the
Portfolio may purchase unlisted securities and penny stocks. Many different
company types and industries may be represented by the securities purchased by
the Portfolio.
Factors considered by the Advisor in the selection of securities
include, but are not limited to, price-to-earnings ratios, price-to-cash flow
ratios, reinvestment rates, dividend yields, expected growth rates, and
balance sheet quality. The Small Capitalization Equity Portfolio may invest in
securities located outside the United States. Investors in the Portfolio
should recognize that securities denominated in foreign currencies or a
multi-national currency unit involve special risks. The Portfolio may be
affected favorably or unfavorably by changes in currency rates and in exchange
control regulations, and may incur costs in connection with conversions
between various currencies. See "Investment Policies and Risk
Factors--International Portfolio" for a discussion of special risks and
considerations involved in investing in securities of foreign companies.
The Portfolio's holdings will tend to be characterized by relatively
low price-to-earnings ratios. There is no mandated income requirement for
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securities held by the Portfolio. The Portfolio generally will be more
volatile and have a higher expected growth rate than the overall market. In
certain periods, the Portfolio may fluctuate independently of broad, larger
capitalization indices such as the S&P 500.
Under normal market conditions, at least 65% of the Portfolio's total
assets will be invested in equity securities of companies with market
capitalizations, at the time of purchase, that are below the maximum
capitalization permitted for a stock in the Russell 2000 Index. However, if
warranted in the judgement of the Advisor, the Portfolio may invest a portion
of its assets (up to 20% under normal circumstances) in preferred stocks and
convertible debentures with a minimum rating of BBB by S&P or Baa by Moody's,
and the following fixed income and money market securities: obligations of the
U.S. Government and its guaranteed or sponsored agencies, including shares of
open-end or closed-end investment companies which invest in such obligations
(such shares will be purchased within the limits prescribed by the 1940 Act
and would subject a shareholder of the Portfolio to expenses of the other
investment company in addition to the expenses of the Portfolio, as more fully
described under "Investment Limitations" in the SAI); short-term money market
instruments issued in the U.S. or abroad, denominated in dollars or any
foreign currency, including short-term certificates of deposit (including
variable rate certificates of deposit), time deposits with a maturity no
greater than 180 days, bankers acceptances, commercial paper rated A-1 by
S&P or Prime-1 by Moody's, or in equivalent money market securities; and high
quality fixed income securities denominated in U.S. dollars, any foreign
currency, or a multi-national currency unit such as the European Currency
Unit.
For a description of other securities in which the Small
Capitalization Equity Portfolio may invest, see "Common Investment Policies
and Risk Factors."
LARGE CAP VALUE PORTFOLIO
The objective of the Large Cap Value Portfolio is to provide maximum
long-term total return consistent with reasonable risk to principal. The Large
Cap Value Portfolio seeks to achieve its objective by investing, under normal
market conditions, at least 65% of the value of its total assets in equity
securities of companies with market capitalizations, at the time of purchase,
of greater than $5 billion.
As stated above, the Portfolio seeks to achieve its objective by
investing primarily in equity securities. Although the Advisor will actively
manage this Portfolio based upon ongoing analysis of economic, financial and
market developments, the Advisor will use its proprietary equity computer
model, which ranks stocks, as an investment guide. The Advisor currently
anticipates that its proprietary equity computer model will be run at least
weekly.
Other factors considered by the Advisor in the selection of
securities include, but are not limited to, price-to-book value ratios,
earnings-to-yields ratios, price-to-cash flow ratios, return on equity ratios,
debt-to-equity ratios, dividend yields, earnings growth rates and historic
price patterns.
From time to time, the Advisor may revise its proprietary equity
computer model programs to maintain or enhance performance. Although the
Advisor's proprietary equity computer model is a disciplined model, the
Advisor is permitted to use its investment judgment in seeking to achieve the
Portfolio's objective.
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The Large Cap Value Portfolio intends to remain, for the most part,
fully invested in equity securities which may include American Depository
Receipts which are listed on the New York Stock Exchange, and will not engage
in "market timing" transactions. See "Investment Policies and Risk
Factors--International Portfolio" for a discussion of special risks and
considerations involved in investing in securities of foreign companies.
However, for temporary purposes this Portfolio may invest a portion of its
assets (up to 20%) in short-term money market instruments issued by U.S. or
foreign issuers, denominated in dollars or any foreign currency, including
short-term certificates of deposit (including variable rate certificates of
deposit), time deposits with a maturity no greater than 180 days, bankers
acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in
similar money market securities.
For a description of other securities in which the Large Cap Value
Portfolio may invest, see "Common Investment Policies and Risk Factors."
COMMON INVESTMENT POLICIES AND RISK FACTORS
There can be no assurance that any of the Portfolios will achieve its
stated investment objective. There are a number of investment policies common
to the Portfolios.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements with qualified
brokers, dealers, banks and other financial institutions deemed creditworthy
by the Advisor. Under normal circumstances, however, each of the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios will
not enter into repurchase agreements if entering into such agreements would
cause, at the time of entering into such agreements, more than 20% of the
value of the total assets of the particular Portfolio to be subject to
repurchase agreements. The International Portfolio would generally enter into
repurchase transactions to invest cash reserves and for temporary defensive
purposes.
In a repurchase agreement, a Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Advisor currently expects that repurchase agreements with respect to the
Equity, International, Small Capitalization Equity and Large Cap Value
Portfolios will mature in less than 13 months. The seller under a repurchase
agreement will be required to maintain the value of the securities subject to
the agreement at not less than 101% of the repurchase price including accrued
interest. Glenmede Fund's administrator and the Advisor will mark-to-market
daily the value of the securities purchased, and the Advisor will, if
necessary, require the seller to deposit additional securities to ensure that
the value is in compliance with the 101% requirement stated above. The Advisor
will consider the creditworthiness of a seller in determining whether a
Portfolio should enter into a repurchase agreement, and the Portfolios will
only enter into repurchase agreements with banks and dealers which are
determined to present minimal credit risk by the Advisor under procedures
adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, a Portfolio is
lending its funds to the seller at the agreed upon interest rate, and
receiving securities as collateral for the loan. Such agreements can be
entered into for periods of one day (overnight repo) or for a fixed term (term
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repo). Repurchase agreements are a common way to earn interest income on
short-term funds.
The use of repurchase agreements involves certain risks. For example,
if the seller of a repurchase agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, a Portfolio may incur a loss upon disposition of
them. Default by the seller would also expose a Portfolio to possible loss
because of delays in connection with the disposition of the underlying
obligations. If the seller of an agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are collateral
not within the control of a Portfolio and therefore subject to sale by the
trustee in bankruptcy. Further, it is possible that a Portfolio may not be
able to substantiate its interest in the underlying securities.
BORROWING
The Portfolios may purchase securities on a "when-issued," "delayed
settlement" or "forward delivery" basis. As a temporary measure for
extraordinary or emergency purposes, a Portfolio may borrow money from banks.
However, none of the Portfolios will borrow money for speculative purposes.
See "Common Investment Policies--`When-Issued,' `Delayed Settlement' and
`Forward Delivery' Securities."
LENDING OF SECURITIES
Each Portfolio may lend its portfolio securities with a value up to
one-third of its total assets to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing additional net investment
income through the receipt of interest on the loan. Such loans would involve
risks of delay in receiving additional collateral in the event the value of
the collateral decreased below the value of the securities loaned or of delay
in recovering the securities loaned or even loss of rights in the collateral
should the borrower of the securities fail financially. Loans will be made
only to borrowers deemed by the Advisor to be of good standing.
"WHEN-ISSUED," "DELAYED SETTLEMENT" AND "FORWARD DELIVERY" SECURITIES
The Portfolios may purchase and sell securities on a "when-issued,"
"delayed settlement" or "forward delivery" basis. "When-issued" or "forward
delivery" refer to securities whose terms and indenture are available and
for which a market exists, but which are not available for immediate delivery.
when-issued or forward delivery transactions may be expected to occur one
month or more before delivery is due. Delayed settlement is a term used to
describe settlement of a securities transaction in the secondary market which
will occur sometime in the future. No payment or delivery is made by a
Portfolio in a when-issued, delayed settlement or forward delivery transaction
until the Portfolio receives payment or delivery from the other party to the
transaction. A Portfolio will maintain a separate account of cash, U.S.
Government securities or other high grade debt obligations at least equal to
the value of purchase commitments until payment is made. Such segregated
securities will either mature or, if necessary, be sold on or before the
settlement date. Although a Portfolio receives no income from the above
described securities prior to delivery, the market value of such securities is
still subject to change.
A Portfolio will engage in when-issued transactions to obtain what is
considered to be an advantageous price and yield at the time of the
transaction. When a Portfolio engages in when-issued, delayed settlement or
forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
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the purposes of speculation. Each Portfolio's when-issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market circumstances, and each Portfolio will only sell
securities on such a basis to offset securities purchased on such a basis.
INVESTMENT COMPANY SECURITIES
In connection with the management of their daily cash positions, the
Portfolios may each invest in securities issued by other open-end investment
companies with investment objectives and policies that are consistent with
those of the investing portfolio. Each Portfolio limits its investments so
that, as determined immediately after a securities purchase is made: (a) not
more than 5% of the value of its total assets will be invested in the
securities of any one investment company; (b) not more than 10% of the value
of its total assets will be invested in the aggregate in the securities of
investment companies as a group; and (c) not more than 3% of the outstanding
voting stock of any one investment company will be owned by the Portfolio. As
a shareholder of another investment company, the Portfolio would bear its pro
rata portion of the other investment company's advisory fees and other
expenses, in addition to the expenses the Portfolio bears directly in
connection with its own operations.
ILLIQUID SECURITIES
No Portfolio will invest more than 10% of its net assets in
securities that are illiquid.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
PURCHASE OF SHARES
Shares of each Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its clients or the clients
of its Affiliates ("Clients") and to other institutions (the "Institutions"),
at the net asset value per share next determined after receipt of the purchase
order by the transfer agent. See "Valuation of Shares." There are no minimum
initial or minimum subsequent investment requirements for the Equity,
International or Large Cap Value Portfolios or for Advisor Shares of the Small
Capitalization Equity Portfolio. Beneficial ownership of shares will be
reflected on books maintained by the Advisor or the Institutions. The Advisor
has informed Glenmede Fund that neither it nor its Affiliates currently have
any minimum or subsequent investment requirements for their Clients'
investments in the Portfolios. Other Institutions may have such requirements.
A prospective investor wishing to purchase shares in the Glenmede Fund should
contact the Advisor or his or her Institution.
It is the responsibility of the Advisor to transmit orders for share
purchases to Investment Company Capital Corp. ("ICC"), Glenmede Fund's
transfer agent, and deliver required funds to The Chase Manhattan Bank, N.A.,
Brooklyn, New York, Glenmede Fund's custodian, on a timely basis. [Glenmede
Trust Company to confirm whether all orders (including those for investors
that are not Glenmede Trust Company's clients) will continue to be transmitted
through Glenmede Trust Company.]
Glenmede Fund reserves the right, in its sole discretion, to suspend
the offering of shares of its Portfolios or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best
interests of Glenmede Fund.
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Purchases of a Portfolio's shares will be made in full and fractional
shares of the Portfolio calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will not be issued except
upon the written request of the shareholder. Certificates for fractional
shares, however, will not be issued.
REDEMPTION OF SHARES
Shares of each Portfolio may be redeemed at any time, without cost,
at the net asset value of the particular shares of the Portfolio next
determined after receipt of the redemption request by the transfer agent.
Generally, a properly signed written request is all that is required. Any
redemption may be more or less than the purchase price of the shares depending
on the market value of the investment securities held by the Portfolio. An
investor wishing to redeem shares should contact the Advisor or his or her
Institution. It is the responsibility of the Advisor to transmit promptly
redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper
form by the transfer agent. Glenmede Fund may suspend the right of redemption
or postpone the date of payment at times when the New York Stock Exchange (the
"Exchange") is closed, or under any emergency circumstances as determined by
the Securities and Exchange Commission (the "Commission"). See "Valuation of
Shares" for the days on which the Exchange is closed.
If the Board determines that it would be detrimental to the best
interests of the remaining shareholders of Glenmede Fund to make payment
wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in
whole or in part by a distribution in-kind of securities held by a Portfolio
in lieu of cash in conformity with applicable rules of the Commission.
Investors may incur brokerage charges on the sale of portfolio securities
received as a redemption in kind.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES OF THE PORTFOLIOS
Glenmede Fund may, from time to time, in its sole discretion appoint
one or more entities as its agent to receive purchase and redemption orders of
shares of the Portfolios and cause these orders to be transmitted, on a net
basis, to Glenmede Fund's transfer agent. In these instances, orders are
effected at the net asset value per share next determined after receipt of
that order by the entity, if the order is actually received by Glenmede Fund's
transfer agent not later than the next business morning. The Advisor does
receive shareholder servicing fees for shareholder support services. See
"Shareholder Servicing Plan."
VALUATION OF SHARES
The net asset value per share of the Portfolios is determined by
dividing the total market value of each Portfolio's investments and other
assets attributable to the shares, less any liabilities of that Portfolio
attributable to the shares, by the total outstanding shares of that Portfolio.
For the Equity, International, Small Capitalization Equity and Large Cap Value
Portfolios, net asset value per share is determined as of the close of regular
trading hours of the Exchange on each day that the Exchange is open for
business. Currently the Exchange is closed on weekends and the customary
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national business holidays of New Year's Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day
(or the days on which they are observed). One or more pricing services may
be used to provide securities valuations in connection with the determination
of the net asset value of each Portfolio.
EQUITY, SMALL CAPITALIZATION EQUITY AND LARGE CAP VALUE PORTFOLIOS
Equity securities listed on a U.S. securities exchange for which
market quotations are readily available are valued at the last quoted sale
price as of the close of the Exchange's regular trading hours on the day the
valuation is made. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted equity securities
and listed securities not traded on the valuation date for which market
quotations are readily available are valued not exceeding the asked prices nor
less than the bid prices. The value of securities for which no quotations are
readily available (including restricted securities) is determined in good
faith at fair value using methods determined by the Board. For the Equity,
Small Capitalization Equity and Large Cap Value Portfolios, securities listed
on a foreign exchange and unlisted foreign securities are valued as described
below under "International Portfolio."
INTERNATIONAL PORTFOLIO
Equity securities listed on a U.S. securities exchange for which
market quotations are available are valued at the last quoted sale price as of
the close of that exchange's regular trading hours on the day the valuation is
made. Securities listed on a foreign exchange and unlisted foreign securities
are valued at the latest quoted sales price available before the time when
assets are valued. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted U.S. equity
securities and listed securities not traded on the valuation date for which
market quotations are readily available are valued not in excess of the asked
prices or less than the bid prices. The value of securities for which no
quotations are readily available (including restricted securities) is
determined in good faith at fair value using methods determined by the Board.
Foreign currency amounts are translated into U.S. dollars at the bid prices of
such currencies against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The International, Equity, Small Capitalization Equity and Large Cap
Value Portfolios normally distribute substantially all of their net investment
income to shareholders in the form of a quarterly dividend.
If any net capital gains are realized, the Portfolios normally
distribute such gains at least once a year. However, see "Dividends, Capital
Gains Distributions and Taxes--Federal Taxes--Miscellaneous," for a discussion
of the Federal excise tax applicable to certain regulated investment
companies.
Undistributed net investment income is included in a Portfolio's net
assets for the purpose of calculating net asset value per share. Therefore, on
the Equity, International, Small Capitalization Equity and Large Cap Value
Portfolios' "ex-dividend" date, the net asset value per share excludes the
dividend (i.e., is reduced by the per share amount of the dividend). Dividends
paid shortly after the purchase of shares of the Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios by
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an investor, although in effect a return of capital, are taxable to the
investor.
FEDERAL TAXES
Each Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves a Portfolio of liability for Federal income
taxes to the extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that a taxable Portfolio distribute
to its shareholders an amount at least equal to 90% of its investment company
taxable income and 90% of its net exempt interest income, if any, for such
taxable year. In general, a Portfolio's investment company taxable income will
be the sum of its net investment income, including interest and dividends,
subject to certain adjustments, and net short-term capital gain over net
long-term capital loss, if any, for such year. Each Portfolio intends to
distribute as dividends substantially all of its investment company taxable
income each year. Such dividends will be taxable as ordinary income to each
Portfolio's shareholders who are not currently exempt from Federal income
taxes, whether such income or gain is received in cash or reinvested in
additional shares. The dividends received deduction for corporations will
apply to such ordinary income distributions to the extent the total qualifying
dividends received by a Portfolio are from domestic corporations for the
taxable year. It is anticipated that only a small part, if any, of the
dividends paid by the International Portfolio will be eligible for the
dividends received deduction.
Substantially all of each Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. A
Portfolio generally will have no tax liability with respect to such gains and
the distributions will be taxable as long-term capital gains to the
shareholders who are not currently exempt from Federal income taxes,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
A shareholder considering buying shares of a Portfolio on or just
before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon
redemption or transfer of shares of each Portfolio, depending upon the tax
basis of such shares and their price at the time of redemption or transfer.
International Portfolio. It is expected that dividends and certain
interest income earned by the International Portfolio from foreign securities
will be subject to foreign withholding taxes or other taxes. So long as more
than 50% of the value of the Portfolio's total assets at the close of any
taxable year consists of stocks or securities of foreign corporations, the
Portfolio may elect, for U.S. Federal income tax purposes, to treat certain
foreign taxes paid by it, including generally any withholding taxes and other
foreign income taxes, as paid by its shareholders. If the Portfolio makes this
election, the amount of such foreign taxes paid by the Portfolio will be
included in its shareholders' income pro rata (in addition to taxable
distributions actually received by them), and each shareholder will be
entitled (a) to credit his proportionate amount of such taxes against his U.S.
Federal income tax liabilities, or (b) if he itemizes his deductions, to
deduct such proportionate amount from his U.S. income, should he so choose.
-18-
<PAGE>
To the extent that dividends paid to shareholders are derived from
taxable interest or from long-term or short-term capital gains, such dividends
will be subject to Federal income tax (whether such dividends are paid in cash
or additional shares) and also may be subject to state and local taxes.
Miscellaneous. Dividends declared in October, November or December of
any year payable to shareholders of record on a specified date in such months
will be deemed to have been received by the shareholders and paid by a
Portfolio on December 31, in the event such dividends are paid during January
of the following year.
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and net capital gain (excess of capital gains over
capital losses). Each Portfolio intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any net capital gain
prior to the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolios and their shareholders and is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Portfolios should consult their tax advisers with specific reference to
their own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.
Each Portfolio will be required in certain cases to withhold and
remit to the United States Treasury 31% of taxable dividends or gross proceeds
realized upon sale paid to shareholders who have failed to provide a correct
tax identification number in the manner required, or who are subject to
withholding by the IRS for failure properly to include on their return
payments of taxable interest or dividends, or who have failed to certify to
the Portfolio that they are not subject to backup withholding when required to
do so or that they are "exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on
distributions from Glenmede Fund. A shareholder should consult with his or her
tax adviser with respect to the tax status of distributions from Glenmede Fund
in a particular state and locality.
Glenmede Fund has obtained a Certificate of Authority to do business
as a foreign corporation in Pennsylvania, and currently does business in that
state. Accordingly, the shares of Glenmede Fund will be exempt from
Pennsylvania Personal Property Taxes.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956,
provides fiduciary and investment services to endowment funds, foundations,
employee benefit plans and other institutions and individuals. The Advisor is
a wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At September 30, 1997, the Advisor had over $__ billion in assets
-19-
<PAGE>
in the accounts for which it serves in various capacities including as
executor, trustee or investment advisor.
Under Investment Advisory Agreements (the "Investment Advisory
Agreements") with Glenmede Fund, the Advisor, subject to the control and
supervision of Glenmede Fund's Board and in conformance with the stated
investment objective and policies of each Portfolio, manages the investment
and reinvestment of the assets of each Portfolio. It is the responsibility of
the Advisor to make investment decisions for each Portfolio and to place each
Portfolio's purchase and sell orders.
The Advisor does not receive any fee from Glenmede Fund for its
investment services provided to the Equity, International and Large Cap
Value Portfolios. Prior to _______, 1998, the Advisor did not receive any fee
from Glenmede Fund for its investment services. Effective _____, 1998, the
Advisor is entitled to receive a fee from the Small Capitalization Equity
Portfolio for its investment services computed daily and payable monthly, at
an annual rate of .55% of that Portfolio's average daily net assets.
Additionally, Shareholders in Glenmede Fund who are clients of the Advisor, or
an affiliate of the Advisor, pay fees which vary, depending on the capacity in
which the Advisor or its affiliate provides fiduciary and investment services
to the particular client (e.g., personal trust, estate settlement, advisory
and custodian services).
________________, _________________ of the Advisor, is the portfolio
manager primarily responsible for the management of the Equity Portfolio.
______________ has been responsible for the management of the Equity
Portfolio since _____________ and has been employed by the Advisor since
____.
Andrew B. Williams, Senior Vice President of the Advisor, is the
portfolio manager primarily responsible for the management of the
International Portfolio. Mr. Williams has been responsible for the management
of the International Portfolio since November 17, 1988. Mr. Williams has been
employed by the Advisor since May 1985.
Robert J. Mancuso is the portfolio manager primarily responsible for
the management of the Small Capitalization Equity Portfolio. Mr. Mancuso has
been primarily responsible for the management of that Portfolio since February
27, 1996. Mr. Mancuso has been employed by the Advisor since November 1992.
Prior to joining the Advisor, he was responsible for leading the equity research
function at Penn Mutual Life Insurance Company.
All investment decisions with respect to the Large Cap Value
Portfolio are made by a team and no one person is responsible for making
recommendations to that team.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and
dividend paying agent pursuant to a Master Services Agreement, and in those
capacities supervises all aspects of the Funds' day-to-day operations, other
than management of Glenmede Funds' investments. ICC is an indirect
subsidiary of Bankers Trust New York Corporation. For its services as
administrator, transfer agent and dividend paying agent, ICC is entitled to
receive fees from Glenmede Fund equal to .12% of the first $100 million of the
combined net assets of Glenmede Fund and The Glenmede Portfolios, an
investment company with the same officers, Board and service providers as
Glenmede Fund (the "Funds"); .08% of the next $150 million of the combined net
assets of the Funds; .04% of the next $500 million of the combined net assets
of the Funds; and .03% of the combined net assets of the Funds over $750
million. ICC is entitled to an additional .10% of the net assets of Class A
Shares of the
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<PAGE>
Institutional International Portfolio, which shares are offered through a
separate prospectus. For the fiscal year ended October 31, 1997, ICC
received fees at the rate of .__% of the Equity Portfolio's average net
assets; .__% of the International Portfolio's average net assets; .__% of
the Small Capitalization Equity Portfolio's average net assets; and .__% of
the Large Cap Value Portfolio's average net assets.
SHAREHOLDER SERVICING PLAN
Glenmede Fund has adopted an Amended and Restated Shareholder
Servicing Plan (the "Plan") effective October __, 1997 under which each
Portfolio may pay a fee to broker/dealers, banks and other financial
institutions (including the Advisor and its affiliates) that are dealers of
record or holders of record or which have a servicing relationship ("Servicing
Agents") with the beneficial owners of shares in any of the Portfolios. Under
the Plan, Servicing Agents enter into Shareholder Servicing Agreements (the
"Agreements") with the Glenmede Fund. Pursuant to such Agreements, Servicing
Agents provide shareholder support services to investors ("Customers") who
beneficially own shares of the Portfolios. The fee, which is at an annual rate
of .05% for the Equity, International and Large Cap Value Portfolios, and .25%
for Advisor Shares of the Small Capitalization Equity Portfolio, is computed
monthly and is based on the average daily net assets of the shares
beneficially owned by Customers of such Servicing Agents. All expenses
incurred by the Portfolios in connection with the Agreements and the
implementation of the Plan shall be borne entirely by the holders of the
shares of the particular Portfolio involved and will result in an equivalent
increase to such shares' Total Portfolio Operating Expenses. The Advisor has
entered into an Agreement with Glenmede Fund.
The services provided by the Servicing Agents under the Agreements
may include: aggregating and processing purchase and redemption requests from
Customers and transmitting purchase and redemption orders to the transfer
agent; providing Customers with a service that invests the assets of their
accounts in shares pursuant to specific or pre-authorized instructions;
processing dividend and distribution payments from the Glenmede Fund on behalf
of Customers; providing information periodically to Customers showing their
positions; arranging for bank wires; responding to Customers' inquiries
concerning their investments; providing sub-accounting with respect to shares
beneficially owned by Customers or the information necessary for
sub-accounting; if required by law, forwarding shareholder communications
(such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Customers; and
providing such other similar services as may be reasonably requested.
INVESTMENT LIMITATIONS
Each Portfolio will not:
(a) With respect to 75% of its total assets, invest more than
5% of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities);
(b) Purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(c) Acquire any securities of companies within one industry if,
as a result of such acquisition, more than 25% of the value
of the Portfolio's total assets would be invested in
securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase
of obligations issued or
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<PAGE>
guaranteed by the U.S. Government, its agencies, enterprises
or instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to an
extent greater than 10% of its total assets at fair market
value, except as described in this Prospectus and the
Statement of Additional Information and in connection with
entering into futures contracts, but the deposit of assets
in a segregated account in connection with the writing of
covered put and call options and the purchase of securities
on a when-issued, delayed settlement or forward delivery
basis and collateral arrangements with respect to initial or
variation margin for futures contracts will not be deemed to
be pledges of a Portfolio's assets or the purchase of any
securities on margin for purposes of this investment
limitation;
(e) Issue senior securities, except that a Portfolio may borrow
money in accordance with investment limitation (f),
purchase securities on a when-issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements; and
(f) Borrow money except as a temporary measure for extraordinary
or emergency purposes, and then not in excess of 10% of its
total assets at the time of borrowing (entering into reverse
repurchase agreements and purchasing securities on a
when-issued, delayed settlement or forward delivery basis are
not subject to this investment limitation).
With respect to investment limitation (c), (a) there is no
limitation with respect to (i) instruments issued or guaranteed by the United
States, any state, territory or possession of the United States, the District
of Columbia or any of their authorities, agencies, instrumentalities or
political subdivisions, and (ii) repurchase agreements secured by the
instruments described in clause (i); (b) wholly-owned finance companies will
be considered to be in the industries of their parents if their activities are
primarily related to financing the activities of the parents; and (c)
utilities will be divided according to their services; for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered
a separate industry.
If a percentage restriction for a Portfolio is adhered to at the time
an investment is made, a later increase in percentage resulting from a change
in value or assets will not constitute a violation of such restriction. If a
Portfolio's borrowings are in excess of 5% (excluding overdrafts) of its total
net assets, additional portfolio purchases will not be made until the amount
of such borrowing is reduced to 5% or less. A Portfolio's borrowings including
reverse repurchase agreements and securities purchased on a when-issued,
delayed settlement or forward delivery basis may not exceed 33 1/3% of its
total net assets.
The investment limitations (other than the second sentence of the
preceding paragraph) described here and in the SAI are fundamental policies of
the Portfolios and may be changed only with the approval of the holders of a
majority of the outstanding shares (as defined in the 1940 Act) of the
affected Portfolio.
-22-
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30,
1988. Glenmede Fund's Articles of Incorporation authorize the Board members to
issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board
has the power to designate one or more classes ("Portfolios") of shares of
common stock and to classify or reclassify any unissued shares with respect to
such Portfolios. The Board also has the power to designate separate classes of
shares within the same Portfolio. Currently, Glenmede Fund is offering shares
of ten Portfolios. Glenmede Fund has classified Institutional Shares,
described in a separate prospectus, and Advisor Shares of the Small
Capitalization Equity Portfolio.
The shares of each Portfolio have no preference as to conversion,
exchange, dividends, retirement or other rights, and, when-issued and paid for
as provided in this Prospectus, will be fully paid and non-assessable. The
shares of each Portfolio have no pre-emptive rights and do not have cumulative
voting rights, which means that the holders of more than 50% of the shares of
Glenmede Fund voting for the election of its Board members can elect 100% of
the Board of Glenmede Fund if they choose to do so. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his or her name on the books of
Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders
except as required by the 1940 Act, the next sentence and other applicable
law. Glenmede Fund has undertaken that its Board will call a meeting of
shareholders for the purpose of voting upon the question of removal of a Board
member or members if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of Glenmede Fund. To the extent
required by the undertaking, Glenmede Fund will assist shareholder
communication in such matters.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively
acted upon unless approved by a majority of the outstanding shares of each
Portfolio or class affected by the matter. A Portfolio or class is affected by
a matter unless it is clear that the interests of each Portfolio or class in
the matter are substantially identical or that the matter does not affect any
interest of the Portfolio or class. Under Rule 18f-2, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to a Portfolio only if approved
by a majority of the outstanding shares of such Portfolio. However, the rule
also provides that the ratification of independent public accountants and the
election of directors may be effectively acted upon by shareholders of
Glenmede Fund voting without regard to particular Portfolios.
Notwithstanding any provision of Maryland law requiring a greater
vote of the Fund's common stock (or of the shares of a Portfolio or class
voting separately as a class) in connection with any corporate action, unless
otherwise provided by law (for example by Rule 18f-2 discussed above) or by
Glenmede Fund's Articles of Amendment and Restatement, Glenmede Fund may take
or authorize such action upon the favorable vote of the holders of more than
50% of the outstanding common stock of Glenmede Fund entitled to vote thereon.
At _________, 1997, the Advisor was the record owner of 100% of the
outstanding shares of each Portfolio.
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<PAGE>
DISTRIBUTOR
ICC Distributors, Inc., located at P.O. Box 7558, Portland, Maine,
04101, serves as Glenmede Fund's distributor.
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, located at One South Street, Baltimore, Maryland 21202, acts
as Glenmede Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
________________________________, serves as independent accountants
for Glenmede Fund and will audit its financial statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as
counsel to Glenmede Fund.
-------------------------
Shareholder inquiries regarding the Portfolios should be addressed to
Glenmede Fund at the address or telephone number stated on the cover page.
Shareholder inquiries regarding Institutional Shares of the Small
Capitalization Equity Portfolio should be addressed to Glenmede Fund at the
address or telephone number stated on the cover page.
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<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the
direction of its Board. The following is a list of the Board members and
officers of Glenmede Fund and a brief statement of their principal occupations
during the past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
- --------------------------------------- --- ----------------------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and
The Wharton School Economics; Professor of Finance and Economics from 1990-
University of Pennsylvania 1996; Vice Dean and Director of Wharton Doctoral Programs
Philadelphia, PA 19104-6367 from 1990-1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 75 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director, Penn Engineering & Manufacturing
Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; Former
Managing Director of Paine Webber, Inc.
John W. Church, Jr.* 64 Chairman, President and Director of Glenmede Fund;
One Liberty Place Chairman, President and Trustee of The Glenmede
1650 Market Street, Suite 1200 Portfolios; Executive Vice President and Chief Investment
Philadelphia, PA 19103 Officer of The Glenmede Trust Company. He has been
employed by The Glenmede Trust Company since 1979.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund; Director of XTRA
Phoenix, AZ 85064-4024 Corporation; Former Executive Vice President--Finance of
ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of The Glenmede Trust Company;
Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.; Former
Co-Director, Principal and Officer of Philadelphia Investment
Banking Co.; Former Director and Officer of Valley Forge
Administrative Services Company.
Mary Ann B. Wirts 46 Executive Vice President of Glenmede Fund; Vice President
One Liberty Place and Manager of The Fixed Income Division of The Glenmede
1650 Market Street, Suite 1200 Trust Company. She has been employed by The Glenmede
Philadelphia, PA 19103 Trust Company since 1982.
Kimberly C. Osborne 31 Vice President of Glenmede Fund; Assistant Vice President
One Liberty Place of The Glenmede Trust Company. She has been employed by
1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993,
Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service
Company and from 1987-1992, a Client Administrator with The
Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of
Philadelphia National Bank Building Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex.
One South Street Brown; President, ICC and Armata Financial Corp.
Baltimore, MD 21202
Joseph A. Finelli 40 Treasurer of Glenmede Fund. He has been a Vice President
One South Street of B.T. Alex. Brown since 1995. Prior thereto, he was
Baltimore, MD 21202 Vice President and Treasurer of The Delaware Group.
</TABLE>
- --------------
*Board members Church and Pew are "interested persons" of Glenmede Fund as
that term is defined in the 1940 Act.
-25-
<PAGE>
For additional information concerning remuneration of Board members
see "Management of the Funds" in the SAI.
-26-
<PAGE>
THE GLENMEDE FUND, INC.
1 South Street, Baltimore, Maryland 21202
Prospectus
Dated January __, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place 1 South Street
1650 Market Street, Suite 1200 Baltimore, Maryland 21202
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
- --------------------------------------------------------------------------------
Table of Contents
Page
----
Expenses of the Portfolios.............................................
Financial Highlights...................................................
Performance Calculations...............................................
Investment Policies and Risk
Factors..............................................................
Common Investment Policies and
Risk Factors.........................................................
Purchase of Shares.....................................................
Redemption of Shares...................................................
Additional Information on the Purchase and Redemption of
Shares of the Portfolios.............................................
Valuation of Shares....................................................
Dividends, Capital Gains Distributions and Taxes.......................
Investment Advisor ....................................................
Administrative, Transfer Agency and Dividend Paying Services...........
Shareholder Servicing Plan.............................................
Investment Limitations.................................................
General Information....................................................
Board Members and Officers.............................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by Glenmede Fund
or the Distributor in any jurisdiction in which such offering may not lawfully
be made.
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<PAGE>
THE GLENMEDE FUND, INC.
Small Capitalization Equity Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
<S> <C>
Form N-1A Item Number Location
- --------------------- ---------
Part A Prospectus Caption
- ------ ------------------
1. Cover Page........................................... Cover Page
2. Synopsis............................................. Expenses of the Portfolios
3. Condensed Financial Information...................... None
4. General Description of Registrant.................... Cover Page; Investment
Policies and Risk Factors;
Investment Limitations;
General Information
5. Management of the Fund............................... Investment Advisor; Administrative,
Transfer Agency and Dividend Paying
Services; Board Members and
Officers; Purchase of Shares;
Redemption of Shares; Shareholder
Servicing Plan
6. Capital Stock and Other Securities................... Purchase of Shares; Redemption of
Shares; Dividends, Capital Gains
Distributions and Taxes;
General Information
7. Purchase of Securities Being Offered................. Valuation of Shares; Purchase of
Shares; Redemption of Shares
8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares
9. Pending Legal Proceedings............................ Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
------------------------------------------------------------------------------
(800) 442-8299
------------------------------------------------------------------------------
Prospectus--January __, 1998
INVESTMENT OBJECTIVE
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund") is an
open-end management investment company. The Glenmede Fund consists of ten
series of shares, each of which has different investment objectives and
policies. The securities offered hereby are shares of one class of these
series, Institutional Shares (sometimes referred to as "shares") of the Small
Capitalization Equity Portfolio (the "Portfolio").
Small Capitalization Equity Portfolio. The objective of the Small
Capitalization Equity Portfolio is to provide long-term appreciation
consistent with reasonable risk to principal. The Small Capitalization Equity
Portfolio seeks to achieve its investment objective by investing, under normal
market conditions, at least 65% of the value of its total assets in equity
securities of companies with market capitalizations, at the time of purchase,
that are below the maximum capitalization permitted for a stock in the Russell
2000 Index.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Institutional Shares of the Portfolio are subject to investment
risks, including the possible loss of principal, are not bank deposits and are
not endorsed by, insured by, guaranteed by, obligations of or otherwise
supported by the U.S. Government, the Federal Deposit Insurance Corporation,
the Federal Reserve Board, The Glenmede Corporation or any of its affiliates
or any other governmental agency or bank.
- --------------------------------------------------------------------------------
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets
forth certain information that you should know before you invest. A Statement
of Additional Information ("SAI") containing additional information about
Glenmede Fund has been filed with the Securities and Exchange Commission. Such
SAI, dated January ___, 1998, as amended or supplemented from time to time,
is incorporated by reference into this Prospectus. The ____ Annual Report to
Shareholders contains additional investment and performance information about
the Portfolios. A copy of the SAI and the ____ Annual Report may be obtained,
without charge, by writing to Glenmede Fund at the address shown above or by
calling Glenmede Fund at the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
EXPENSES OF THE PORTFOLIO
The following table illustrates the expenses and fees expected to be
incurred by Institutional Shares of the Portfolio for the fiscal year
ending October 31, 1997.
Small
Capitalization
Equity
Portfolio
(Institutional Shares)
======================
Shareholder Transaction Expenses*.................... None
=
Maximum Annual Client Fee............................ 1.00%**
==
Annual Portfolio Operating Expenses
(as a percentage of net assets)
Investment Advisory Fees1......................... ___%
====
Administration Fees............................... ___%
====
Other Expenses.................................... ___%
====
Total Operating Expenses.......................... %
====
- ---------------------
* A transaction charge may be imposed by broker-dealers or others that make
shares of the Portfolio available. There is no transaction charge for shares
purchased directly from the Portfolio.
** The Advisor currently intends to exclude the portion of its clients' assets
invested in the Small Capitalization Equity Portfolio when calculating Client
Fees.
(1) Investors in the Portfolio may be clients of the Advisor or its affiliates
("Affiliates"). The "Maximum Annual Client Fee" in the above table is the
current maximum fee that the Advisor or an Affiliate would charge its clients
directly for fiduciary, trust and/or advisory services (e.g., personal trust,
estate, advisory, tax and custodian services). The actual annual fees ("Client
Fees") charged by the Advisor and its Affiliates directly to their clients for
such services vary depending on a number of factors, including the particular
services provided to the client, but are generally under 1% of the client's
assets under management. Investors also may have to pay various fees to others
to become clients of the Advisor or an Affiliate.
See "Investment Advisor."
The purpose of the above table is to assist an investor in
understanding the various estimated costs and expenses that an investor in
the Portfolio will bear directly or indirectly. Actual expenses may be greater
or lesser than such estimates. For further information concerning the
Portfolio's expenses see "Investment Advisor," "Administrative, Transfer
Agency and Dividend Paying Services" and "Board Members and Officers."
The following example illustrates the estimated expenses that an
investor would pay on a $1,000 investment over various time periods assuming
(i) a 5% annual rate of return and (ii) redemption at the end of each time
period. The example does not include fees for fiduciary and investment
services which investors pay the Advisor or Affiliates as clients. See
"Investment Advisor." As noted in the above table, Glenmede Fund charges no
redemption fees of any kind.
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<PAGE>
<TABLE>
<CAPTION>
1 Year* 3 Years* 5 Years* 10 Years*
------- -------- -------- ---------
<S> <C> <C> <C> <C>
Small Capitalization Equity Portfolio...................
Institutional Shares................................ $__ $__ $__ $__
==================== === === === ===
</TABLE>
* You would pay the same expenses on the same investment, assuming no
redemption at the end of the period.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
-3-
<PAGE>
PERFORMANCE CALCULATIONS
The Portfolio may advertise or quote total return data from time to
time for the shares. Total return for the shares will be calculated on an
average annual total return basis, and may also be calculated on an aggregate
total return basis, for various periods. Average annual total return reflects
the average annual percentage change in value of an investment in the
Portfolio over the measuring period. Aggregate total return reflects the total
percentage change in value over the measuring period. Both methods of
calculating total return assume that dividends and capital gains
distributions made by the Portfolio with respect to the shares during the
period are reinvested in additional Portfolio shares.
As of ____________, 1998, the Portfolio began to offer Institutional
Shares. Institutional Shares are subject to an annual .05% fee payable
pursuant to the Amended and Restated Shareholder Servicing Plan ("Shareholder
Servicing Fee"). Prior to __________, 1998, Advisor Shares were subject to a
.05% Shareholder Servicing Fee. Performance of the Institutional Shares prior
to __________, 1998, is represented by performance of Advisor Shares.
The Portfolio may compare its total return with respect to the shares
to that of other investment companies with similar investment objectives and
to stock and other relevant indices such as the Russel 2000 Index or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
total return of the shares of the Portfolio may also be compared to data
prepared by Lipper Analytical Services, Inc. Total return and other
performance data as reported in national financial publications such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or
in publications of a local or regional nature, may also be used in comparing
the performance of the shares of the Portfolio.
Performance quotations represent the Portfolio's past performance,
and should not be considered as representative of future results. Since
performance will fluctuate, performance data for the Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in the Portfolio, portfolio
maturity, operating expenses and market conditions. Any management fees
charged by the Advisor or institutions to their respective clients will not be
included in the Portfolio's calculations of total return. See "Investment
Advisor."
INVESTMENT POLICIES AND RISK FACTORS
The investment objective of the Portfolio is not fundamental and
may be changed by the Board members without shareholder approval.
The objective of the Portfolio is to provide long-term appreciation
consistent with reasonable risk to principal. The Portfolio seeks to achieve
its objective by investing primarily in equity securities with market
capitalizations, at the time of purchase, that are below the maximum
capitalization permitted for a stock in the Russell 2000 Index. Crucial to
this valuation process is a systematic examination of the earning and dividend
paying ability of companies and denominating these characteristics by the
market value of the underlying equity securities. Equity securities purchased
by the Portfolio will be primarily those traded on the various stock exchanges
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<PAGE>
and NASDAQ, however, the Portfolio may purchase unlisted securities and penny
stocks. Many different company types and industries may be represented by the
securities purchased by the Portfolio.
Factors considered by the Advisor in the selection of securities
include, but are not limited to, price-to-earnings ratios, price-to-cash flow
ratios, reinvestment rates, dividend yields, expected growth rates, and
balance sheet quality. The Portfolio may invest in securities located
outside the United States. Investors in the Portfolio should recognize that
securities denominated in foreign currencies or a multi-national currency unit
involve special risks. The Portfolio may be affected favorably or unfavorably
by changes in currency rates and in exchange control regulations, and may
incur costs in connection with conversions between various currencies.
The Portfolio's holdings will tend to be characterized by relatively
low price-to-earnings ratios. There is no mandated income requirement for
securities held by the Portfolio. The Portfolio generally will be more
volatile and have a higher expected growth rate than the overall market. In
certain periods, the Portfolio may fluctuate independently of broad, larger
capitalization indices such as the S&P 500.
Under normal market conditions, at least 65% of the Portfolio's total
assets will be invested in equity securities of companies with market
capitalizations, at the time of purchase, that are below the maximum
capitalization permitted for a stock in the Russell 2000 Index. However, if
warranted in the judgement of the Advisor, the Portfolio may invest a portion
of its assets (up to 20% under normal circumstances) in preferred stocks and
convertible debentures with a minimum rating of BBB by S&P or Baa by Moody's,
and the following fixed income and money market securities: obligations of the
U.S. Government and its guaranteed or sponsored agencies, including shares of
open-end or closed-end investment companies which invest in such obligations
(such shares will be purchased within the limits prescribed by the 1940 Act
and would subject a shareholder of the Portfolio to expenses of the other
investment company in addition to the expenses of the Portfolio, as more fully
described under "Investment Limitations" in the SAI); short-term money market
instruments issued in the U.S. or abroad, denominated in dollars or any
foreign currency, including short-term certificates of deposit (including
variable rate certificates of deposit), time deposits with a maturity no
greater than 180 days, bankers acceptances, commercial paper rated A-1 by
S&P or Prime-1 by Moody's, or in equivalent money market securities; and high
quality fixed income securities denominated in U.S. dollars, any foreign
currency, or a multi-national currency unit such as the European Currency
Unit.
Foreign Securities. Investors should recognize that investing in
the securities of foreign companies and the utilization of forward foreign
currency contracts involve special risks and considerations not typically
associated with investing in U.S. companies. These risks and considerations
include differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investment in foreign countries and potential restrictions on the
flow of international capital. Moreover, the dividends payable on the
Portfolio's foreign portfolio securities may be subject to foreign withholding
taxes, thus reducing the net amount of income available for distribution to
the Portfolio's shareholders. Further, foreign securities often trade with
less frequency and volume than domestic securities and, therefore, may exhibit
greater price volatility. Also, changes in foreign exchange rates will affect,
favorably or unfavorably, the value of those securities in a portfolio which
are denominated or quoted in currencies other than the U.S. dollar. In
addition, in many countries there is less publicly available information about
-5-
<PAGE>
issuers than is available in reports about companies in the United States.
Foreign companies are not generally subject to uniform accounting, auditing
and financial reporting standards, and auditing practices and requirements may
not be comparable to those applicable to U.S. companies. Further, the
Portfolio may encounter difficulties or be unable to pursue legal remedies and
obtain judgments in foreign courts.
Brokerage commissions, custodial services, and other costs relating
to investment in foreign securities markets are generally more expensive than
in the United States. Foreign securities markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to settlement problems could cause the
Portfolio to miss attractive investment opportunities. Inability to dispose of
portfolio securities due to settlement problems could result either in losses
to the Portfolio due to subsequent declines in value of the portfolio security
or, if the Portfolio has entered into a contract to sell the security, could
result in possible liability to the purchaser.
There are further risk factors, including possible losses through
the holding of securities in domestic and foreign custodian banks and
depositories.
There can be no assurance that the Portfolio will achieve its
stated investment objective.
REPURCHASE AGREEMENTS
The Portfolio may enter into repurchase agreements with qualified
brokers, dealers, banks and other financial institutions deemed creditworthy
by the Advisor. Under normal circumstances, however, the Portfolio will not
enter into repurchase agreements if entering into such agreements would cause,
at the time of entering into such agreements, more than 20% of the value of
the total assets of the Portfolio to be subject to repurchase agreements.
In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Advisor currently expects that repurchase agreements with respect to the
Portfolio will mature in less than 13 months. The seller under a repurchase
agreement will be required to maintain the value of the securities subject to
the agreement at not less than 101% of the repurchase price including accrued
interest. Glenmede Fund's administrator and the Advisor will mark-to-market
daily the value of the securities purchased, and the Advisor will, if
necessary, require the seller to deposit additional securities to ensure that
the value is in compliance with the 101% requirement stated above. The Advisor
will consider the creditworthiness of a seller in determining whether the
Portfolio should enter into a repurchase agreement, and the Portfolio will
only enter into repurchase agreements with banks and dealers which are
determined to present minimal credit risk by the Advisor under procedures
adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, the Portfolio
is lending its funds to the seller at the agreed upon interest rate, and
receiving securities as collateral for the loan. Such agreements can be
entered into for periods of one day (overnight repo) or for a fixed term (term
-6-
<PAGE>
repo). Repurchase agreements are a common way to earn interest income on
short-term funds.
The use of repurchase agreements involves certain risks. For example,
if the seller of a repurchase agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, the Portfolio may incur a loss upon disposition of
them. Default by the seller would also expose the Portfolio to possible loss
because of delays in connection with the disposition of the underlying
obligations. If the seller of an agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are collateral
not within the control of the Portfolio and therefore subject to sale by the
trustee in bankruptcy. Further, it is possible that the Portfolio may not be
able to substantiate its interest in the underlying securities.
BORROWING
The Portfolio may purchase securities on a "when-issued," "delayed
settlement" or "forward delivery" basis. As a temporary measure for
extraordinary or emergency purposes, the Portfolio may borrow money from
banks. However, the Portfolio will not borrow money for speculative
purposes. See "Common Investment Policies--`When-Issued,' `Delayed Settlement'
and `Forward Delivery' Securities."
LENDING OF SECURITIES
The Portfolio may lend its portfolio securities with a value up to
one-third of its total assets to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing additional net investment
income through the receipt of interest on the loan. Such loans would involve
risks of delay in receiving additional collateral in the event the value of
the collateral decreased below the value of the securities loaned or of delay
in recovering the securities loaned or even loss of rights in the collateral
should the borrower of the securities fail financially. Loans will be made
only to borrowers deemed by the Advisor to be of good standing.
"WHEN-ISSUED," "DELAYED SETTLEMENT" AND "FORWARD DELIVERY" SECURITIES
The Portfolio may purchase and sell securities on a "when-issued,"
"delayed settlement" or "forward delivery" basis. "When-issued" or "forward
delivery" refer to securities whose terms and indenture are available and
for which a market exists, but which are not available for immediate delivery.
When-issued or forward delivery transactions may be expected to occur one
month or more before delivery is due. Delayed settlement is a term used to
describe settlement of a securities transaction in the secondary market which
will occur sometime in the future. No payment or delivery is made by the
Portfolio in a when-issued, delayed settlement or forward delivery transaction
until the Portfolio receives payment or delivery from the other party to the
transaction. The Portfolio will maintain a separate account of cash, U.S.
Government securities or other high grade debt obligations at least equal to
the value of purchase commitments until payment is made. Such segregated
securities will either mature or, if necessary, be sold on or before the
settlement date. Although the Portfolio receives no income from the above
described securities prior to delivery, the market value of such securities is
still subject to change.
The Portfolio will engage in when-issued transactions to obtain
what is considered to be an advantageous price and yield at the time of the
transaction. When the Portfolio engages in when-issued, delayed settlement
or forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
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<PAGE>
the purposes of speculation. The Portfolio's when-issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market circumstances, and each Portfolio will only sell
securities on such a basis to offset securities purchased on such a basis.
INVESTMENT COMPANY SECURITIES
In connection with the management of its daily cash position, the
Portfolio may invest in securities issued by other open-end investment
companies with investment objectives and policies that are consistent with
those of the investing portfolio. The Portfolio limits its investments so
that, as determined immediately after a securities purchase is made: (a) not
more than 5% of the value of its total assets will be invested in the
securities of any one investment company; (b) not more than 10% of the value
of its total assets will be invested in the aggregate in the securities of
investment companies as a group; and (c) not more than 3% of the outstanding
voting stock of any one investment company will be owned by the Portfolio. As
a shareholder of another investment company, the Portfolio would bear its pro
rata portion of the other investment company's advisory fees and other
expenses, in addition to the expenses the Portfolio bears directly in
connection with its own operations.
ILLIQUID SECURITIES
The Portfolio will not invest more than 10% of its net assets in
securities that are illiquid.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
PURCHASE OF SHARES
Institutional Shares of the Portfolio are sold without a sales
commission on a continuous basis to the Advisor acting on behalf of its
clients or the clients of its Affiliates ("Clients") and to other institutions
(the "Institutions"), at the net asset value per share next determined after
receipt of the purchase order by the transfer agent. See "Valuation of
Shares." The minimum initial investment for Institutional Shares of the
Portfolio is $10,000,000 or any lesser amount if, in the Advisor's opinion,
the investor has adequate intent and availability of funds to reach a future
level of investment of $10,000,000. There is no minimum for subsequent
investments. Glenmede Fund reserves the right to reduce or waive the minimum
initial and subsequent investment requirements from time to time. Beneficial
ownership of shares will be reflected on books maintained by the Advisor or
the Institutions. The Advisor has informed Glenmede Fund that it and its
Affiliates' minimum and subsequent investment requirements for their Clients'
investments in the Portfolio are the same as those for Glenmede Fund. Other
Institutions may have such requirements. A prospective investor wishing to
purchase shares in the Portfolio should contact the Advisor or his or her
Institution.
It is the responsibility of the Advisor to transmit orders for share
purchases to Investment Company Capital Corp. ("ICC"), Glenmede Fund's
transfer agent, and deliver required funds to The Chase Manhattan Bank, N.A.,
Brooklyn, New York, Glenmede Fund's custodian, on a timely basis. [Glenmede
Trust Company to confirm whether all orders (including those for investors
that are not Glenmede Trust Company's clients) will continue to be transmitted
through Glenmede Trust Company.]
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<PAGE>
Glenmede Fund reserves the right, in its sole discretion, to suspend
the offering of shares of the Portfolio or reject purchase orders when, in
the judgment of management, such suspension or rejection is in the best
interests of Glenmede Fund.
Purchases of Portfolio's shares will be made in full and fractional
shares of the Portfolio calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will not be issued except
upon the written request of the shareholder. Certificates for fractional
shares, however, will not be issued.
REDEMPTION OF SHARES
Institutional Shares of Portfolio may be redeemed at any time,
without cost, at the net asset value of the Institutional Shares next
determined after receipt of the redemption request by the transfer agent.
Generally, a properly signed written request is all that is required. Any
redemption may be more or less than the purchase price of the shares depending
on the market value of the investment securities held by the Portfolio. An
investor wishing to redeem shares should contact the Advisor or his or her
Institution. It is the responsibility of the Advisor to transmit promptly
redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper
form by the transfer agent. Glenmede Fund may suspend the right of redemption
or postpone the date of payment at times when the New York Stock Exchange (the
"Exchange") is closed, or under any emergency circumstances as determined by
the Securities and Exchange Commission (the "Commission"). See "Valuation of
Shares" for the days on which the Exchange is closed.
If the Board determines that it would be detrimental to the best
interests of the remaining shareholders of Glenmede Fund to make payment
wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in
whole or in part by a distribution in-kind of securities held by the
Portfolio in lieu of cash in conformity with applicable rules of the
Commission. Investors may incur brokerage charges on the sale of portfolio
securities received as a redemption in kind.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES OF THE PORTFOLIO
Glenmede Fund may, from time to time, in its sole discretion appoint
one or more entities as its agent to receive purchase and redemption orders of
shares of the Portfolio and cause these orders to be transmitted, on a net
basis, to Glenmede Fund's transfer agent. In these instances, orders are
effected at the net asset value per share next determined after receipt of
that order by the entity, if the order is actually received by Glenmede Fund's
transfer agent not later than the next business morning. The Advisor does
receive shareholder servicing fees for shareholder support services. See
"Shareholder Servicing Plan."
VALUATION OF SHARES
The net asset value per share of the Portfolio is determined by
dividing the total market value of the Portfolio's investments and other
assets attributable to Institutional Shares, less any liabilities of the
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Portfolio attributable to Institutional Shares, by the total outstanding
Institutional Shares of the Portfolio. Net asset value per share is determined
as of the close of regular trading hours of the Exchange on each day that the
Exchange is open for business. Currently the Exchange is closed on weekends
and the customary Memorial Day, Independence Day, Labor Day, Thanksgiving
Day and Christmas Day (or the days on which they are observed). One or more
pricing services may be used to provide securities valuations in connection
with the determination of the net asset value of the Portfolio.
Equity securities listed on a U.S. securities exchange for which
market quotations are readily available are valued at the last quoted sale
price as of the close of the Exchange's regular trading hours on the day the
valuation is made. Securities listed on a foreign exchange and unlisted
foreign securities are valued at the latest quoted sales price available
before the time when assets are valued. Price information on listed securities
is taken from the exchange where the security is primarily traded. Unlisted
U.S. equity securities and listed securities not traded on the valuation date
for which market quotations are readily available are valued not in excess of
the asked prices or less than the bid prices. The value of securities for
which no quotations are readily available (including restricted securities) is
determined in good faith at fair value using methods determined by the Board.
Foreign currency amounts are translated into U.S. dollars at the bid prices of
such currencies against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio normally distributes substantially all of its net
investment income to shareholders in the form of a quarterly dividend.
If any net capital gains are realized, the Portfolio normally
distributes such gains at least once a year. However, see "Dividends, Capital
Gains Distributions and Taxes--Federal Taxes--Miscellaneous," for a discussion
of the Federal excise tax applicable to certain regulated investment
companies.
Undistributed net investment income is included in the Portfolio's
net assets for the purpose of calculating net asset value per share.
Therefore, on the Portfolio's "ex-dividend" date, the net asset value per
share excludes the dividend (i.e., is reduced by the per share amount of the
dividend). Dividends paid shortly after the purchase of shares of the
Portfolio by an investor, although in effect a return of capital, are taxable
to the investor.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code").
Such qualification generally relieves the Portfolio of liability for Federal
income taxes to the extent its earnings are distributed in accordance with the
Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that a taxable Portfolio distribute
to its shareholders an amount at least equal to 90% of its investment company
taxable income and 90% of its net exempt interest income, if any, for such
taxable year. In general, the Portfolio's investment company taxable income
will be the sum of its net investment income, including interest and
dividends, subject to certain adjustments, and net short-term capital gain,
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<PAGE>
over net long-term capital loss, if any, for such year. The Portfolio
intends to distribute as dividends substantially all of its investment company
taxable income each year. Such dividends will be taxable as ordinary income to
the Portfolio's shareholders who are not currently exempt from Federal
income taxes, whether such income or gain is received in cash or reinvested in
additional shares. The dividends received deduction for corporations will
apply to such ordinary income distributions to the extent the total qualifying
dividends received by the Portfolio are from domestic corporations for the
taxable year.
Substantially all of the Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders.
The Portfolio generally will have no tax liability with respect to such gains
and the distributions will be taxable as long-term capital gains to the
shareholders who are not currently exempt from Federal income taxes,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
A shareholder considering buying shares of the Portfolio on or just
before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon
redemption or transfer of shares of the Portfolio, depending upon the tax
basis of such shares and their price at the time of redemption or transfer.
Miscellaneous. Dividends declared in October, November or December of
any year payable to shareholders of record on a specified date in such months
will be deemed to have been received by the shareholders and paid by a
Portfolio on December 31, in the event such dividends are paid during January
of the following year.
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and net capital gain (excess of capital gains over
capital losses). The Portfolio intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any net capital gain
prior to the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolio and their shareholders and is not intended
as a substitute for careful tax planning. Accordingly, potential investors in
the Portfolio should consult their tax advisers with specific reference to
their own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.
The Portfolio will be required in certain cases to withhold and
remit to the United States Treasury 31% of taxable dividends or gross proceeds
realized upon sale paid to shareholders who have failed to provide a correct
tax identification number in the manner required, or who are subject to
withholding by the IRS for failure properly to include on their return
payments of taxable interest or dividends, or who have failed to certify to
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the Portfolio that they are not subject to backup withholding when required to
do so or that they are "exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on
distributions from Glenmede Fund. A shareholder should consult with his or her
tax adviser with respect to the tax status of distributions from Glenmede Fund
in a particular state and locality.
Glenmede Fund has obtained a Certificate of Authority to do business
as a foreign corporation in Pennsylvania, and currently does business in that
state. Accordingly, the shares of Glenmede Fund will be exempt from
Pennsylvania Personal Property Taxes.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956,
provides fiduciary and investment services to endowment funds, foundations,
employee benefit plans and other institutions and individuals. The Advisor is
a wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At September 30, 1997, the Advisor had over $___ billion in assets
in the accounts for which it serves in various capacities including as
executor, trustee or investment advisor.
Under Investment Advisory Agreements (the "Investment Advisory
Agreements") with Glenmede Fund, the Advisor, subject to the control and
supervision of Glenmede Fund's Board and in conformance with the stated
investment objective and policies of the Portfolio, manages the investment
and reinvestment of the assets of the Portfolio. It is the responsibility of
the Advisor to make investment decisions for the Portfolio and to place
the Portfolio's purchase and sell orders.
Prior to ______, 1998, the Advisor did not receive any fee from
Glenmede Fund for its investment services. Effective _______, 1998, the
Advisor is entitled to receive a fee from the Portfolio for its investment
services computed daily and payable monthly, at an annual rate of .55% of the
Portfolio's average daily net assets. Additionally, shareholders in Glenmede
Fund who are clients of the Advisor, or an affiliate of the Advisor, pay fees
which vary, depending on the capacity in which the Advisor or its affiliate
provides fiduciary and investment services to the particular client (e.g.,
personal trust, estate settlement, advisory and custodian services).
__________, _______________ of the Advisor, is the portfolio manager
primarily responsible for the management of the Equity Portfolio. _________
has been responsible for the management of the Equity Portfolio since ______
and has been employed by the Advisor since ______.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and
dividend paying agent pursuant to a Master Services Agreement, and in those
capacities supervises all aspects of the Funds' day-to-day operations, other
than management of Glenmede Funds' investments. ICC is an indirect
subsidiary of Bankers Trust New York Corporation. For its services as
administrator, transfer agent and dividend paying agent, ICC is entitled to
receive fees from Glenmede Fund equal to .12% of the first $100 million of the
combined net assets of Glenmede Fund and The Glenmede Portfolios, an
investment company with the same officers, Board and service providers as
Glenmede Fund (the "Funds"); .08% of the next $150 million of the combined net
assets of the
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Funds; .04% of the next $500 million of the combined net assets of the Funds;
and .03% of the combined net assets of the Funds over $750 million. ICC is
entitled to an additional .10% of the net assets of Class A Shares of the
Institutional International Portfolio, which shares are offered through a
separate prospectus. For the fiscal year ended October 31, 1997, ICC
received fees at the rate of .___% of the Portfolio's average net assets.
SHAREHOLDER SERVICING PLAN
Glenmede Fund has adopted an Amended and Restated Shareholder
Servicing Plan (the "Plan") effective ________ , 1998 under which the
Portfolio may pay a fee to broker/dealers, banks and other financial
institutions (including the Advisor and its affiliates) that are dealers of
record or holders of record or which have a servicing relationship ("Servicing
Agents") with the beneficial owners of shares in the Portfolio. Under the
Plan, Servicing Agents enter into Shareholder Servicing Agreements (the
"Agreements") with the Glenmede Fund. Pursuant to such Agreements, Servicing
Agents provide shareholder support services to investors ("Customers") who
beneficially own Institutional Shares of the Portfolio. The fee, which is
at an annual rate of .05% for Institutional Shares of the Portfolio, is
computed monthly and is based on the average daily net assets of the
Institutional Shares beneficially owned by Customers of such Servicing Agents.
All expenses incurred by the Portfolio in connection with the Agreements and
the implementation of the Plan for Institutional Shares of the Portfolio shall
be borne entirely by the holders of those Shares of the Portfolio and
will result in an equivalent increase to the Total Portfolio Operating
Expenses of Institutional Shares of the Portfolio. The Advisor has entered
into an Agreement with Glenmede Fund.
The services provided by the Servicing Agents under the Agreements
may include: aggregating and processing purchase and redemption requests from
Customers and transmitting purchase and redemption orders to the transfer
agent; providing Customers with a service that invests the assets of their
accounts in shares pursuant to specific or pre-authorized instructions;
processing dividend and distribution payments from the Glenmede Fund on behalf
of Customers; providing information periodically to Customers showing their
positions; arranging for bank wires; responding to Customers' inquiries
concerning their investments; providing sub-accounting with respect to shares
beneficially owned by Customers or the information necessary for
sub-accounting; if required by law, forwarding shareholder communications
(such as proxies, shareholder reports, annual and semi-annual financial
statements and dividend, distribution and tax notices) to Customers; and
providing such other similar services as may be reasonably requested.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) With respect to 75% of its total assets, invest more than
5% of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities);
(b) Purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(c) Acquire any securities of companies within one industry if,
as a result of such acquisition, more than 25% of the value
of the Portfolio's total assets would be invested in
securities of companies within such industry; provided,
however, that there shall be no limitation on the purchase
of obligations issued or
-13-
<PAGE>
guaranteed by the U.S. Government, its agencies, enterprises
or instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to an
extent greater than 10% of its total assets at fair market
value, except as described in this Prospectus and the
Statement of Additional Information and in connection with
entering into futures contracts, but the deposit of assets
in a segregated account in connection with the writing of
covered put and call options and the purchase of securities
on a when-issued, delayed settlement or forward delivery
basis and collateral arrangements with respect to initial or
variation margin for futures contracts will not be deemed to
be pledges of a Portfolio's assets or the purchase of any
securities on margin for purposes of this investment
limitation;
(e) Issue senior securities, except that a Portfolio may borrow
money in accordance with investment limitation (f),
purchase securities on a when-issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements; and
(f) Borrow money except as a temporary measure for extraordinary
or emergency purposes, and then not in excess of 10% of its
total assets at the time of borrowing (entering into reverse
repurchasing agreements and purchasing securities on a when
issued, delayed settlement or forward delivery basis are not
subject to this investment limitation).
With respect to investment limitation (c), (a) there is no
limitation with respect to (i) instruments issued or guaranteed by the United
States, any state, territory or possession of the United States, the District
of Columbia or any of their authorities, agencies, instrumentalities or
political subdivisions, and (ii) repurchase agreements secured by the
instruments described in clause (i); (b) wholly-owned finance companies will
be considered to be in the industries of their parents if their activities are
primarily related to financing the activities of the parents; and (c)
utilities will be divided according to their services; for example, gas, gas
transmission, electric and gas, electric and telephone will each be considered
a separate industry.
If a percentage restriction for the Portfolio is adhered to at the
time an investment is made, a later increase in percentage resulting from a
change in value or assets will not constitute a violation of such restriction.
If the Portfolio's borrowings are in excess of 5% (excluding overdrafts) of
its total net assets, additional portfolio purchases will not be made until
the amount of such borrowing is reduced to 5% or less. The Portfolio's
borrowings including reverse repurchase agreements and securities purchased on
a when-issued, delayed settlement or forward delivery basis may not exceed
33 1/3% of its total net assets.
The investment limitations (other than the second sentence of the
preceding paragraph) described here and in the SAI are fundamental policies of
the Portfolio and may be changed only with the approval of the holders of a
majority of the outstanding shares (as defined in the 1940 Act) of the
Portfolio.
-14-
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30,
1988. Glenmede Fund's Articles of Incorporation authorize the Board members to
issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board
has the power to designate one or more classes ("Portfolios") of shares of
common stock and to classify or reclassify any unissued shares with respect to
such Portfolios. The Board has the power to designate separate classes of
shares within the same Portfolio. Currently, Glenmede Fund is offering shares
of ten Portfolios. Glenmede Fund has classified Institutional Shares and
Advisor Shares, described in a separate prospectus, of the Portfolio.
The shares of the Portfolio have no preference as to conversion,
exchange, dividends, retirement or other rights, and, when-issued and paid for
as provided in this Prospectus, will be fully paid and non-assessable. The
shares of the Portfolio have no pre-emptive rights and do not have
cumulative voting rights, which means that the holders of more than 50% of the
shares of Glenmede Fund voting for the election of its Board members can elect
100% of the Board of Glenmede Fund if they choose to do so. A shareholder is
entitled to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his or her name on the books of
Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders
except as required by the 1940 Act, the next sentence and other applicable
law. Glenmede Fund has undertaken that its Board will call a meeting of
shareholders for the purpose of voting upon the question of removal of a Board
member or members if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of Glenmede Fund. To the extent
required by the undertaking, Glenmede Fund will assist shareholder
communication in such matters.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively
acted upon unless approved by a majority of the outstanding shares of the
Portfolio or class affected by the matter. The Portfolio or class is affected
by a matter unless it is clear that the interests of the Portfolio or class in
the matter are substantially identical or that the matter does not affect any
interest of the Portfolio or class. Under Rule 18f-2, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to the Portfolio only if approved
by a majority of the outstanding shares of the Portfolio. However, the rule
also provides that the ratification of independent public accountants and the
election of directors may be effectively acted upon by shareholders of the
Glenmede Fund voting without regard to the Portfolio.
Notwithstanding any provision of Maryland law requiring a greater
vote of Glenmede Fund's common stock (or of the shares of the Portfolio or
class voting separately as a class) in connection with any corporate action,
unless otherwise provided by law (for example by Rule 18f-2 discussed above)
or by Glenmede Fund's Articles of Amendment and Restatement, Glenmede Fund may
take or authorize such action upon the favorable vote of the holders of more
than 50% of the outstanding common stock of Glenmede Fund entitled to vote
thereon.
At ________________, the Advisor was the record owner of 100% of the
outstanding shares of each Portfolio.
DISTRIBUTOR
ICC Distributors, Inc., located at P.O. Box 7558, Portland, Maine,
04101, serves as Glenmede Fund's distributor.
-15-
<PAGE>
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, located at One South Street, Baltimore, Maryland 21202, acts
as Glenmede Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
____________, Philadelphia, Pennsylvania, serves as independent
accountants for Glenmede Fund and will audit its financial statements
annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as
counsel to Glenmede Fund.
-------------------------------------------
Shareholders inquiries regarding Institutional and Advisor Shares of
the Portfolio should be addressed to Glenmede Fund at the address or telephone
number stated on the cover page.
-16-
<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the
direction of its Board. The following is a list of the Board members and
officers of Glenmede Fund and a brief statement of their principal occupations
during the past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
- ------------------------------- --- ----------------------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and
The Wharton School Economics; Professor of Finance and Economics from 1990-
University of Pennsylvania 1996; Vice Dean and Director of Wharton Doctoral Programs
Philadelphia, PA 19104-6367 from 1990-1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 75 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director, Penn Engineering & Manufacturing
Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; Former
Managing Director of Paine Webber, Inc.
John W. Church, Jr.* 64 Chairman, President and Director of Glenmede Fund;
One Liberty Place Chairman, President and Trustee of The Glenmede
1650 Market Street, Suite 1200 Portfolios; Executive Vice President and Chief Investment
Philadelphia, PA 19103 Officer of The Glenmede Trust Company. He has been
employed by The Glenmede Trust Company since 1979.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund; Director of XTRA
Phoenix, AZ 85064-4024 Corporation; Former Executive Vice President--Finance of
ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of The Glenmede Trust Company; Former
Bryn Mawr, PA 19010 Director of Brown & Glenmede Holdings, Inc.; Former
Co-Director, Principal and Officer of Philadelphia
Investment Banking Co.; Former Director and Officer of
Valley Forge Administrative Services Company.
Mary Ann B. Wirts 46 Executive Vice President of Glenmede Fund; Vice President
One Liberty Place and Manager of The Fixed Income Division of The Glenmede
1650 Market Street, Suite 1200 Trust Company. She has been employed by The Glenmede
Philadelphia, PA 19103 Trust Company since 1982.
Kimberly C. Osborne 31 Vice President of Glenmede Fund; Assistant Vice President
One Liberty Place of The Glenmede Trust Company. She has been employed by
1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993,
Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service
Company and from 1987-1992, a Client Administrator with
The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of
Philadelphia National Bank Building Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex.
One South Street Brown; President, ICC and Armata Financial Corp.
Baltimore, MD 21202
Joseph A. Finelli 40 Treasurer of Glenmede Fund. He has been a Vice President
One South Street of BT Alex. Brown since 1995. Prior thereto, he was Vice
Baltimore, MD 21202 President and Treasurer of The Delaware Group.
</TABLE>
- --------------
*Board members Church and Pew are "interested persons" of Glenmede Fund as
that term is defined in the 1940 Act.
For additional information concerning remuneration of Board members
see "Management of the Funds" in the SAI.
-17-
<PAGE>
THE GLENMEDE FUND, INC.
1 South Street, Baltimore, Maryland 21202
Prospectus
Dated January __, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place 1 South Street
1650 Market Street, Suite 1200 Baltimore, Maryland 21202
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
- --------------------------------------------------------------------------------
Table of Contents
Page
----
Expenses of the Portfolio....................................................
Performance Calculations.....................................................
Investment Policies and Risk
Factors....................................................................
Purchase of Shares...........................................................
Redemption of Shares.........................................................
Additional Information on the Purchase and Redemption of
Shares of the Portfolio..................................................
Valuation of Shares..........................................................
Dividends, Capital Gains Distributions and Taxes.............................
Investment Advisor ..........................................................
Administrative, Transfer Agency and Dividend Paying Services.................
Shareholder Servicing Plan...................................................
Investment Limitations.......................................................
General Information..........................................................
Board Members and Officers...................................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by Glenmede Fund
or the Distributor in any jurisdiction in which such offering may not lawfully
be made.
-18-
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
(800) 442-8299
STATEMENT OF ADDITIONAL INFORMATION
January __, 1998
This Statement of Additional Information is not a prospectus but
should be read in conjunction with The Glenmede Fund, Inc.'s ("Glenmede Fund")
and The Glenmede Portfolios' ("Glenmede Portfolios" and collectively with
Glenmede Fund, the "Funds") Prospectuses dated January __, 1998 and February
27, 1997, respectively, as amended or supplemented from time to time (the
"Prospectuses"). This Statement of Additional Information is for the
Government Cash, Tax-Exempt Cash, Core Fixed Income, International, Equity,
Small Capitalization Equity, Large Cap Value, Muni Intermediate and New Jersey
Muni Portfolios. To obtain any of the Prospectuses, please call the Funds at
the above telephone number.
Capitalized terms used in this Statement of Additional Information
and not otherwise defined have the same meanings given to them in the Funds'
Prospectuses.
Table of Contents Page
THE FUNDS..............................................................
INVESTMENT OBJECTIVES AND POLICIES.....................................
PURCHASE OF SHARES.....................................................
REDEMPTION OF SHARES...................................................
SHAREHOLDER SERVICES...................................................
PORTFOLIO TURNOVER.....................................................
INVESTMENT LIMITATIONS.................................................
MANAGEMENT OF THE FUNDS................................................
INVESTMENT ADVISORY AND OTHER SERVICES.................................
DISTRIBUTOR............................................................
PORTFOLIO TRANSACTIONS.................................................
ADDITIONAL INFORMATION CONCERNING TAXES................................
PERFORMANCE CALCULATIONS...............................................
GENERAL INFORMATION....................................................
FINANCIAL STATEMENTS...................................................
OTHER INFORMATION......................................................
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS......................
<PAGE>
THE FUNDS
On February 27, 1997, the Model Equity Portfolio changed its name to
the Large Cap Value Portfolio. On September 25, 1997, the Intermediate
Government Portfolio changed its name to the Core Fixed Income Portfolio.
References in this Statement of Additional Information are to a Portfolio's
current name.
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and
policies set forth in the Funds' Prospectuses:
Repurchase Agreements
Repurchase agreements that do not provide for payment to a Portfolio
within seven days after notice without taking a reduced price are considered
illiquid securities.
Forward Foreign Exchange Contracts
The International Portfolio may enter into forward foreign exchange
contracts. A forward foreign currency exchange contract involves an obligation
to purchase or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract as agreed by the parties,
at a price set at the time of the contract. In the case of a cancelable
forward contract, the holder has the unilateral right to cancel the contract
at maturity by paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades. A
foreign currency futures contract is a standardized contract for the future
delivery of a specified amount of a foreign currency at a future date at a
price set at the time of the contract. Foreign currency futures contracts
traded in the United States are designed by and traded on exchanges regulated
by the CFTC such as the New York Mercantile Exchange. The International
Portfolio would enter into foreign currency futures contracts solely for
hedging or other appropriate investment purposes as defined in CFTC
regulations.
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in any
given month. Forward contracts may be in any amounts agreed upon by the
parties rather than predetermined amounts. Also, forward foreign exchange
contracts are traded directly between currency traders
-2-
<PAGE>
so that no intermediary is required. A forward contract generally requires no
margin or other deposit.
At the maturity of a forward contract, the International Portfolio
may either accept or make delivery of the currency specified in the contract,
or at or prior to maturity enter into a closing transaction involving the
purchase or sale of an offsetting contract. Closing transactions with respect
to forward contracts are usually effected with the currency trader who is a
party to the original forward contract.
Securities Lending
Each Portfolio may lend its investment securities to qualified
institutional investors who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to
deliver securities or completing arbitrage operations. By lending its
investment securities, a Portfolio attempts to increase its income through the
receipt of interest on the loan. Any gain or loss in the market price of the
securities loaned that might occur during the term of the loan would be for
the account of the Portfolio. Each Portfolio may lend its investment
securities to qualified brokers, dealers, domestic and foreign banks or other
financial institutions, so long as the terms, the structure and the aggregate
amount of such loans are not inconsistent with the Investment Company Act of
1940 (the "1940 Act") or the rules and regulations or interpretations of the
Securities and Exchange Commission (the "Commission") thereunder. The
Portfolios may, from time to time, pay negotiated fees in connection with the
lending of securities.
PURCHASE OF SHARES
The purchase price of shares of each Portfolio is the net asset value
next determined after receipt of the purchase order by the particular Fund.
Each Portfolio reserves the right in its sole discretion (i) to
suspend the offering of its shares, (ii) to reject purchase orders when in the
judgment of management such rejection is in the best interest of the
particular Fund, and (iii) to reduce or waive the minimum for initial and
subsequent investments from time to time.
At the discretion of the Funds, investors may be permitted to
purchase Portfolio shares by transferring securities to the Portfolio that
meet the Portfolios investment objectives and policies.
-3-
<PAGE>
REDEMPTION OF SHARES
Each Portfolio may suspend redemption privileges or postpone the date
of payment (i) during any period that the Exchange is closed, or trading on
the Exchange is restricted as determined by the Commission, (ii) during any
period when an emergency exists as defined by the rules of the Commission as a
result of which it is not reasonably practicable for a Portfolio to dispose of
securities owned by it, or fairly to determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by any Portfolio for redemptions. Any redemption
may be more or less than the shareholder's initial cost depending on the
market value of the securities held by the Portfolio.
SHAREHOLDER SERVICES
Shareholders may transfer shares of the Portfolios to another person.
An investor wishing to transfer shares should contact the Advisor.
PORTFOLIO TURNOVER
The Portfolios will not normally engage in short-term trading, but
reserve the right to do so. A high portfolio turnover rate can result in
corresponding increases in brokerage commissions; however, the Advisor will
not consider turnover rate a limiting factor in making investment decisions
consistent with that Portfolio's investment objectives and policies. The
Portfolios' portfolio turnover rates for each of the past fiscal years are set
forth under "Financial Highlights" in the Funds' Prospectuses. Changes in the
Portfolios' turnover rates were due to market fluctuations and investment
opportunities.
INVESTMENT LIMITATIONS
Each Portfolio is subject to the following restrictions which are
fundamental policies and may not be changed without the approval of the lesser
of: (1) 67% of the voting securities of the affected Portfolio present at a
meeting if the holders of more than 50% of the outstanding voting securities
of the affected Portfolio are present or represented by proxy, or (2) more
than 50% of the outstanding voting securities of the affected Portfolio. Each
Portfolio will not:
(1) invest in commodities or commodity contracts, except that
each Portfolio may invest in futures contracts and options;
-4-
<PAGE>
(2) purchase or sell real estate, although it may purchase and
sell securities of companies which deal in real estate and
may purchase and sell securities which are secured by
interests in real estate;
(3) make loans, except (i) by purchasing bonds, debentures
or similar obligations (including repurchase
agreements, subject to the limitation described in
investment limitation (9) below, and money market
instruments, including bankers acceptances and
commercial paper, and selling securities on a when
issued, delayed settlement or forward delivery basis)
which are publicly or privately distributed, and (ii)
by lending its portfolio securities to banks, brokers,
dealers and other financial institutions so long as
such loans are not inconsistent with the 1940 Act or
the rules and regulations or interpretations of the
Commission thereunder;
(4) purchase on margin or sell short, except as specified above
in investment limitation (1);
(5) purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(6) issue senior securities, except that a Portfolio may borrow
money in accordance with investment limitation (7) below,
purchase securities on a when-issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements;
(7) borrow money, except as a temporary measure for
extraordinary or emergency purposes, and then not in
excess of 10% of its total assets at the time of the
borrowing (entering into reverse repurchase agreements
and purchasing securities on a when-issued, delayed
settlement or forward delivery basis are not subject to
this investment limitation);
(8) pledge, mortgage, or hypothecate any of its assets to
an extent greater than 10% of its total assets at fair
market value, except as described in the Prospectus and
this Statement of Additional Information and in
connection with entering into futures contracts, but
the deposit of assets in a segregated account in
connection with the writing of covered put and call
options and the purchase of securities on a when
issued, delayed settlement or forward delivery basis
and collateral arrangements with respect to initial or
variation margin for futures contracts will not be
deemed to be pledges of a Portfolio's assets or the
-5-
<PAGE>
purchase of any securities on margin for purposes of
this investment limitation;
(9) underwrite the securities of other issuers or invest
more than an aggregate of 10% of the total assets of
the Portfolio, at the time of purchase, in securities
subject to legal or contractual restrictions on resale
or securities for which there are no readily available
markets, including repurchase agreements which have
maturities of more than seven days;
(10) invest for the purpose of exercising control over
management of any company;
(11) invest its assets in securities of any investment company,
except in connection with mergers, acquisitions of assets or
consolidations and except as may otherwise be permitted by
the 1940 Act;
(12) acquire any securities of companies within one industry
if, as a result of such acquisition, more than 25% of
the value of the Portfolio's total assets would be
invested in securities of companies within such
industry; provided, however, that there shall be no
limitation on the purchase of obligations issued or
guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities, or instruments issued
by U.S. banks; and
(13) write or acquire options or interests in oil, gas or other
mineral exploration or development programs.
Each Portfolio, with the exception of the Muni Intermediate and New
Jersey Muni Portfolios, also will not:
(1) with respect as to 75% of its total assets, invest more than
5% of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities).
Although not a matter of fundamental policy, pursuant to Rule 2a-7
under the 1940 Act, the Government Cash Portfolio will limit its purchases of
any one issuer's securities (other than U.S. Government Securities) to 5% of
the Portfolio's total assets at the time of purchase, except that it may
invest more than 5% (but no more than 25%) of its total assets in First Tier
Securities of one issuer for a period of up to three business days.
-6-
<PAGE>
Each of the Muni Intermediate and New Jersey Muni Portfolios is
classified as a "non-diversified" investment company under the 1940 Act, which
means the Portfolio is not limited by the 1940 Act in the proportion of its
assets that it may invest in the securities of a single issuer. However, each
Portfolio intends to conduct its operations so as to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986, as
amended, which generally will relieve the Portfolio of any liability for
federal income tax to the extent its earnings are distributed to shareholders.
In order to qualify as a regulated investment company for federal income tax
purposes, the Portfolio generally will limit its investments such that at the
close of each quarter of the taxable year it will not, with respect to 50% of
its total assets, invest more than 5% of its total assets at the time of
purchase in the securities of any single issuer (other than obligations issued
or guaranteed by the U.S. Government, its agencies, enterprises or
instrumentalities).
If a percentage restriction is adhered to at the time an investment
is made, a later increase in percentage resulting from a change in value or
assets will not constitute a violation of such restriction.
With regard to limitation (11), the 1940 Act currently prohibits an
investment company from acquiring securities of another investment company if,
as a result of the transaction, the acquiring company and any company or
companies controlled by it would own in the aggregate: (i) more than 3% of the
total outstanding voting stock of the acquired company, (ii) securities issued
by the acquired company having an aggregate value in excess of 5% of the value
of the total assets of the acquiring company, or (iii) securities issued by
the acquired company and all other investment companies (other than treasury
stock of the acquired company) having an aggregate value in excess of 10% of
the value of the total assets of the acquiring company. In addition to the
advisory fees and other expenses that a Portfolio bears directly in connection
with its own operations, as a shareholder of another investment company, such
Portfolio would bear its "pro rata" portion of the other investment company's
advisory fees and other expenses. Therefore, to the extent that a Portfolio is
invested in shares of other investment companies, such Portfolio's
shareholders will be subject to expenses of such other investment companies,
in addition to expenses of the Portfolio.
As a matter of policy which may be changed by the particular Fund's
Board without shareholder approval, with respect to limitation (12),
Portfolios other than the Government Cash Portfolio and the Tax-Exempt Cash
Portfolio will not invest more than 25% of the value of their respective total
assets in instruments issued by U.S. banks.
-7-
<PAGE>
In addition, with respect to investment limitation (12), (a) there is
no limitation with respect to (i) instruments issued or guaranteed by the
United States, any state, territory or possession of the United States, the
District of Columbia or any of their authorities, agencies, instrumentalities
or political subdivisions, and (ii) repurchase agreements secured by the
instruments described in clause (i); (b) wholly-owned finance companies will
be considered to be in the industries of their parents if their activities are
primarily related to financing the activities of the parents; and (c)
utilities will be divided according to their services; for example, gas, gas
transaction, electric and gas, electric and telephone will each be considered
a separate industry.
With regard to limitation (13), the purchase of securities of a
corporation, a subsidiary of which has an interest in oil, gas or other
mineral exploration or development programs shall not be deemed to be
prohibited by the limitation.
MANAGEMENT OF THE FUNDS
Each Fund's officers, under the supervision of the particular Board,
manage the day-to-day operations of the Fund. The Board members set broad
policies for each Fund and choose its officers. A list of the Board members
and officers and a brief statement of their current positions and principal
occupations during the past five years is set forth in the Funds'
Prospectuses.
Remuneration of Board Members
Effective June 12, 1996, Glenmede Fund pays each Board member, other
than Mr. Church, an annual fee of $8,000 plus $1,250 for each Board meeting
attended and each Board Valuation Committee meeting attended (unless such
meeting was held in conjunction with a Board meeting) and out-of-pocket
expenses incurred in attending Board meetings. Prior to June 12, 1996,
Glenmede Fund paid each Director, other than Mr. Church, an annual fee of
$6,000 plus $1,250 for each Board meeting attended and out-of-pocket expenses
incurred in attending Board meetings. Glenmede Portfolios pays each Board
member, other than Mr. Church, an annual fee of $1,000 per year and
out-of-pocket expenses incurred in attending Board meetings. Officers of the
Funds receive no compensation as officers from the Funds.
Set forth in the table below is the compensation received by Board
members for the fiscal year ended October 31, 1997.
-8-
<PAGE>
<TABLE>
<CAPTION>
Pension or
Retirement
Aggregate Aggregate Benefits Estimated
Compensation Compensation Total Annual
from from Part of Benefits Compensation
Name of Glenmede Glenmede the Funds' Upon from the
Person, Position Fund Portfolios Expense Retirement Funds
---------------- ------------- ------------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Dr. H. Franklin Allen, Ph.D., _______ _______ None None _______
Director/Trustee
Willard S. Boothby, Jr., _______ _______ None None _______
Director/Trustee
John W. Church, Jr. None None None None None
Director/Trustee
Francis J. Palamara, _______ _______ None None _______
Director/Trustee
G. Thompson Pew, Jr., _______ _______ None None _______
Director/Trustee
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor, The Glenmede Trust Company, is the wholly-owned
subsidiary of The Glenmede Corporation (the "Corporation") whose shares are
closely held by 73 shareholders. The Corporation has a nine person Board of
Directors which, at September 30, 1997, collectively, owned _____% of the
Corporation's voting shares and _____% of the Corporation's total outstanding
shares. The members of the Board and their respective interests in the
Corporation at September 30, 1997 are as follows:
The Glenmede Corporation Percent of Percent of
Board of Directors Voting Shares Total Shares
- ------------------------ ------------- ------------
Susan W. Catherwood.................... _____% _____%
Richard F. Pew......................... _____% _____%
Thomas W. Langfitt, M.D................ _____% _____%
Arthur E. Pew III...................... _____% _____%
J. Howard Pew, II...................... _____% _____%
J. N. Pew, III......................... _____% _____%
J. N. Pew, IV.......................... _____% _____%
R. Anderson Pew........................ _____% _____%
Ethel Benson Wister.................... _____% _____%
----- -----
% %
===== =====
As noted in the Prospectuses, the Advisor does not receive any fee
from the Government Cash, Tax-Exempt Cash, Core Fixed Income, International,
Equity, Large Cap Value, Muni Intermediate and New Jersey Muni Portfolios for
its investment services. Prior to ___________, 1998, the Advisor did not
receive any fee
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from The Small Capitalization Equity Portfolio for its investment services.
Effective _________, 1998, the Advisor is entitled to receive a fee from the
Small Capitalization Equity Portfolio for its investment services computed
daily and payable monthly, at an annual rate of .55% of that Portfolio's
average daily net assets. Additionally, all shareholders in the Portfolios are
clients of the Advisor or an Affiliate and, as clients, pay fees which vary
depending on the capacity in which the Advisor or Affiliate provides fiduciary
and investment services to the particular client. Such services may include
personal trust, estate settlement, advisory and custodian services. For
example, for advisory services, the Advisor charges its clients up to 1% on
the first $1 million of principal, .60% on the next $1 million of principal,
.50% on the next $3 million of principal and .40% on the next $5 million of
principal, with a minimum annual fee of $10,000. For accounts in excess of $10
million of principal, the fee would be determined by special analysis.
Since July 1, 1995, administrative, transfer agency and dividend
paying services have been provided to each of the Funds by ICC, pursuant to a
Master Services Agreement between each of the Funds and ICC. See
"Administrative, Transfer Agency and Dividend Paying Services" in the
Prospectuses for information concerning the substantive provisions of each
Master Services Agreement. For the fiscal year ended October 31, 1997, the
Funds paid ICC fees of $_______ for the Government Cash Portfolio,
$________ for the Tax-Exempt Cash Portfolio, $_________ for the Core Fixed
Income Portfolio, $________ for the International Portfolio, $______ for
the Equity Portfolio, $_________ for the Small Capitalization Equity
Portfolio, $_______ for the Large Cap Value Portfolio, $_______ for the
Muni Intermediate Portfolio and $_________ for the New Jersey Muni
Portfolio.
For the fiscal year ended October 31, 1996, the Funds paid ICC
fees of $183,151 for the Government Cash Portfolio, $95,073 for the
Tax-Exempt Cash Portfolio, $110,811 for the Core Fixed Income Portfolio,
$216,069 for the International Portfolio, $33,415 for the Equity Portfolio,
$101,413 for the Small Capitalization Equity Portfolio, $12,716 for the
Large Cap Value Portfolio, $7,474 for the Muni Intermediate Portfolio and
$2,571 for the New Jersey Muni Portfolio.
For the period July 1, 1995 to October 31, 1995, the Funds paid ICC
fees of $59,300 for the Government Cash Portfolio, $30,104 for the Tax-Exempt
Cash Portfolio, $48,906 for the Core Fixed Income Portfolio, $55,781 for the
International Portfolio, $11,445 for the Equity Portfolio, $24,932 for the
Small Capitalization Equity Portfolio, $2,615 for the Large Cap Value
Portfolio, $2,663 for the Muni Intermediate Portfolio and $808 for the New
Jersey Muni Portfolio.
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From the close of business on May 6, 1994 to the close of business on
June 30, 1995, administrative services were provided to each Fund by The
Shareholder Services Group, Inc. ("TSSG"), pursuant to Administration
Agreements. For the period November 1, 1994 to June 30, 1995, the Funds paid
TSSG administrative fees of $238,455 for the Government Cash Portfolio,
$126,195 for the Tax-Exempt Cash Portfolio, $193,903 for the Core Fixed Income
Portfolio, $172,504 for the International Portfolio, $38,056 for the Equity
Portfolio, $76,001 for the Small Capitalization Equity Portfolio, $11,371 for
the Large Cap Value Portfolio, $11,012 for the Muni Intermediate Portfolio and
$2,829 for the New Jersey Muni Portfolio. For the period May 6, 1994 through
October 31, 1994, the Funds paid TSSG administrative fees of $138,505 for the
Government Cash Portfolio, $96,424 for the Tax-Exempt Cash Portfolio, $166,354
for the Core Fixed Income Portfolio, $126,733 for the International Portfolio,
$28,783 for the Equity Portfolio, $44,272 for the Small Capitalization Equity
Portfolio, $9,019 for the Large Cap Value Portfolio, $13,154 for the Muni
Intermediate Portfolio and $1,858 for the New Jersey Muni Portfolio.
As described more fully in the Prospectuses, the Advisor provides
shareholder support services to their clients who beneficially own shares of
the Portfolios pursuant to a Shareholder Servicing Agreement ("Agreement")
with each of the Funds. Shareholder servicing fees payable for the fiscal year
ended October 31, 1997 for the Government Cash, Tax-Exempt Cash, Core Fixed
Income, Muni Intermediate, New Jersey Muni, Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios were $_______,
$_______, $_______, $________, $______, $_______, $________, $________ and
$________, respectively.
Shareholder servicing fees payable for the fiscal year ended October
31, 1996 for the Government Cash, Tax-Exempt Cash, Core Fixed Income, Muni
Intermediate, New Jersey Muni, Equity, International, Small Capitalization
Equity and Large Cap Value Portfolios were $226,624, $117,082, $136,249,
$9,135, $3,168, $42,934, $265,082, $125,390 and $15,789, respectively.
Shareholder servicing fees payable for the period January 1, 1995 to
October 31, 1995 for the Government Cash, Tax-Exempt Cash, Core Fixed Income,
Muni Intermediate, New Jersey Muni, Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios were $179,403, $88,295,
$137,633, $7,721, $2,177, $29,441, $130,533, $ 61,932, and $7,699,
respectively.
Custody services are provided to each Portfolio by The Chase
Manhattan Bank, N.A., Brooklyn, New York.
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DISTRIBUTOR
Shares of the Funds are distributed continuously and are offered
without a sales load by ICC Distributors, Inc. ("ICC Distributors"), pursuant
to a Distribution Agreement between the Funds and ICC Distributors. ICC
Distributors receives no fee from the Funds for its distribution services.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Advisor to select
the brokers or dealers that will execute the purchases and sales of investment
securities for each of the Portfolios and direct the Advisor to use its best
efforts to obtain the best available price and most favorable execution with
respect to all transactions for the Portfolios. The Advisor may, however,
consistent with the interests of a Portfolio, select brokers on the basis of
the research, statistical and pricing services they provide to a Portfolio.
Information and research received from such brokers will be in addition to,
and not in lieu of, the services required to be performed by the Advisor under
the Investment Advisory Agreements. A commission paid to such brokers may be
higher than that which another qualified broker would have charged for
effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Advisor determines in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Advisor to a
Portfolio and the Advisor's other clients.
During the fiscal year ended October 31, 1997, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$______, $_______, $_______ and $_________ in brokerage commissions,
respectively. During the fiscal year ended October 31, 1996, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$99,329, $726,803, $487,995 and $165,881 in brokerage commissions,
respectively. During the fiscal year ended October 31, 1995, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$157,547, $453,721, $343,683 and $165,103 in brokerage commissions,
respectively.
The Government Cash, Core Fixed Income, Muni Intermediate and New
Jersey Muni Portfolios do not currently expect to incur any brokerage
commission expense on transactions in their portfolio securities because debt
instruments are generally
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<PAGE>
traded on a "net" basis with dealers acting as principal for their own
accounts without a stated commission. The price of the security, however,
usually includes a profit to the dealer.
Because shares of the Portfolios are not marketed through
intermediary brokers or dealers, it is not the Funds' practice to allocate
brokerage or effect principal transactions with dealers on the basis of sales
of shares which may be made through such firms. However, the Advisor may place
portfolio orders with qualified broker-dealers who refer clients to the
Advisor.
Some securities considered for investment by each Portfolio may also
be appropriate for other clients served by the Advisor. If purchase or sale of
securities is consistent with the investment policies of a Portfolio and one
or more of these other clients served by the Advisor and is considered at or
about the same time, transactions in such securities will be allocated among
the Portfolio and clients in a manner deemed fair and reasonable by the
Advisor. While in some cases this practice could have a detrimental effect on
the price, value or quantity of the security as far as a Portfolio is
concerned, in other cases it is believed to be beneficial to the Portfolios.
ADDITIONAL INFORMATION CONCERNING TAXES
General. The following summarizes certain additional tax
considerations generally affecting the Portfolios and their shareholders that
are not described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Portfolios or their shareholders, and
the discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Potential investors should consult their tax advisers
with specific reference to their own tax situation.
Each Portfolio is treated as a separate corporate entity under the
Internal Revenue Code of 1986, as amended (the "Code"), and intends to qualify
as a regulated investment company. Qualification as a regulated investment
company under the Code requires, among other things, that each Portfolio
distribute to its shareholders an amount equal to at least the sum of 90% of
its investment company taxable income and 90% of its tax-exempt income (if
any) net of certain deductions for a taxable year. In addition, each Portfolio
must satisfy certain requirements with respect to the source of its income for
a taxable year. At least 90% of the gross income of each Portfolio must be
derived from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities or foreign
currencies, and other income (including, but not limited to, gains from
options, futures, or forward contracts) derived with respect to the
Portfolio's business of investing in such stock, securities or currencies. The
Treasury Department may by
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<PAGE>
regulation exclude from qualifying income foreign currency gains which are not
directly related to a Portfolio's principal business of investing in stock or
securities, or options and futures with respect to stock or securities. Any
income derived by a Portfolio from a partnership or trust is treated for this
purpose as derived with respect to the Portfolio's business of investing in
stock, securities or currencies only to the extent that such income is
attributable to items of income which would have been qualifying income if
realized by the Portfolio in the same manner as by the partnership or trust.
Any distribution of the excess of net long-term capital gain over net
short-term capital loss is taxable to a shareholder as long-term capital gain,
regardless of how long the shareholder has held the distributing Portfolio's
shares and whether such distribution is received in cash or additional
Portfolio shares. Each Portfolio will designate such distributions as capital
gain dividends in a written notice mailed to shareholders within 60 days after
the close of the Portfolio's taxable year. Shareholders should note that, upon
the sale or exchange of Portfolio shares, if the shareholder has not held such
shares for more than six months, any loss on the sale or exchange of those
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<PAGE>
shares will be treated as long-term capital loss to the extent of the capital
gain dividends received with respect to the shares.
Under the Taxpayer Relief Act of 1997, for capital gains on securities
recognized after July 28, 1997, the maximum tax rate for individuals is 20% if
the property was held more than 18 months; for property held for more than 12
months, but no longer than 18 months, the maximum tax rate on capital gains
continues to be 28%. For sales or exchanges on or before July 28, 1997, an
individual's net capital gains are still taxable at a maximum rate of 28%.
Ordinary income of individuals is taxable at a maximum marginal rate of 39.6%,
but because of limitations on itemized deductions otherwise allowable and the
phase-out of personal exemptions, the maximum effective marginal rate of tax for
some taxpayers may be higher. For corporations, long-term capital gains and
ordinary income are both taxable at a maximum nominal rate of 35% (although
surtax provisions apply at certain income levels to result in marginal rates as
high as 39%).
If for any taxable year a Portfolio does not qualify for the special
Federal income tax treatment afforded regulated investment companies, all of
its taxable income will be subject to Federal income tax at regular corporate
rates (without any deduction for distributions to its shareholders). In such
event, dividend distributions (including amounts derived from interest on
tax-exempt obligations in the case of the Tax-Exempt Cash, Muni Intermediate
and New Jersey Muni Portfolios) would be taxable as ordinary income to
shareholders to the extent of the Portfolio's current and accumulated earnings
and profits, and would be eligible for the dividends received deduction for
corporations.
Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios. As
described in the Prospectus, these Portfolios are designed to provide
investors with current tax-exempt interest income. Shares of the Portfolios
would not be suitable for tax-exempt institutions and may not be suitable for
retirement plans qualified under Section 401 of the Code, H.R. 10 plans and
individual retirement accounts since such plans and accounts are generally
tax-exempt and, therefore, would not only fail to gain any additional benefit
from each such Portfolio's dividends being tax-exempt, but such dividends
would be ultimately taxable to the beneficiaries when distributed to them. In
addition, the Portfolios may not be an appropriate investment for entities
which are "substantial users" of facilities financed by private activity bonds
or "related persons" thereof. "Substantial user" is defined under U.S.
Treasury Regulations to include a non-exempt person who regularly uses a part
of such facilities in his trade or business and whose gross revenues derived
with respect to the facilities financed by the issuance of bonds are more than
5% of the total revenues derived by all users of such facilities, who occupies
more than 5% of the usable area of such facilities or for whom such facilities
or a part thereof were specifically constructed, reconstructed or acquired.
"Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners and an S corporation and its
shareholders.
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<PAGE>
The percentage of total dividends paid by each Portfolio with respect
to any taxable year which qualify as Federal exempt-interest dividends will be
the same for all shareholders receiving dividends for such year. In order for
each Portfolio to pay exempt-interest dividends with respect to any taxable
year, at the close of each quarter of its taxable year at least 50% of the
aggregate value of each Portfolio's assets must consist of exempt-interest
obligations. After the close of its taxable year, each Portfolio will notify
its shareholders of the portion of the dividends paid by it which constitutes
an exempt-interest dividend with respect to such year. However, the aggregate
amount of dividends so designated by each Portfolio cannot exceed the excess
of the amount of interest exempt from tax under Section 103 of the Code
received by the particular Portfolio for the taxable year over any amounts
disallowed as deductions under Sections 265 and 171(a)(2) of the Code.
Interest on indebtedness incurred by a shareholder to purchase or
carry such a Portfolio's shares generally is not deductible for Federal income
tax purposes if the Portfolio distributes exempt-interest dividends during the
shareholder's taxable year.
While each Portfolio will seek to invest substantially all of its
assets in tax-exempt obligations (except on a temporary basis or for temporary
defensive periods), any investment company taxable income earned by a
Portfolio will be distributed. In general, each Portfolio's investment company
taxable income will be its taxable income (including taxable interest received
from temporary investments and any net short-term capital gains realized by a
Portfolio) subject to certain adjustments and excluding the excess of any net
long-term capital gains for the taxable year over the net short-term capital
loss, if any, for such year.
Federal Taxation of Certain Financial Instruments. Generally, certain
foreign currency contracts entered into and held by the International
Portfolio at the close of the Fund's taxable year may be treated for Federal
income tax purposes as sold for their fair market value on the last business
day of such year, a process known as "mark-to-market." Forty percent of any
gain or loss resulting from such constructive sale will be treated as
short-term capital gain or loss and sixty percent of such gain or loss will be
treated as long-term capital gain or loss without regard to the length of time
the Portfolio holds the foreign currency contract ("the 40-60 rule"). To
receive such Federal income tax treatment, a foreign currency contract must
meet the following conditions: (1) the contract must require delivery of a
foreign currency of a type in which regulated futures contracts are traded or
upon which the settlement value of the contract depends; (2) the contract must
be entered into at arm's length at a price determined by reference to the
price in
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the interbank market; and (3) the contract must be traded in the interbank
market. The amount of any capital gain or loss actually realized by the
Portfolio in a subsequent sale or other disposition of those foreign currency
contracts will be adjusted to reflect any capital gain or loss taken into
account by the Portfolio in a prior year as a result of the constructive sale
of the contracts. The Treasury Department has broad authority to issue
regulations under the provisions respecting foreign currency contracts. As of
the date of this Statement of Additional Information, the Treasury has not
issued any such regulations. Other foreign currency contracts entered into by
the International Portfolio may result in the creation of one or more
straddles for Federal income tax purposes, in which case certain loss
deferral, short sales, and wash sales rules and the requirement to capitalize
interest and carrying charges may apply.
With respect to foreign currency contracts and other financial
instruments subject to the mark-to-market rules, the Internal Revenue Service
has ruled in private letter rulings that a gain realized from such a foreign
currency contract or financial instrument will be treated as being derived from
a security held for three months or more (regardless of the actual period for
which the contract or instrument is held) if the gain arises as a result of a
constructive sale under the mark-to-market rules, and will be treated as being
derived from a security held for less than three months only if the contract or
instrument is terminated (or transferred) during the taxable year (other than by
reason of mark-to-market) and less than three months have elapsed between the
date the contract or instrument is acquired and the termination date. In
determining whether the 30% test is met for a taxable year, increases and
decreases in the value of a Portfolio's contracts and other investments that
qualify as part of a "designated hedge," as defined in the Code, may be netted.
Special rules govern the Federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules include
the following: (i) the acquisition of, or becoming the obligor under, a bond
or other debt instrument (including, to the extent provided in Treasury
regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instrument if such
instrument is not marked to market. The disposition of a currency other than
the
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U.S. dollar by a U.S. taxpayer is also treated as a transaction subject to the
special currency rules. However, foreign currency-related regulated futures
contracts and non-equity options are generally not subject to the special
currency rules if they are or would be treated as sold for their fair market
value at year-end under the mark-to-market rules, unless an election is made
to have such currency rules apply. With respect to transactions covered by the
special rules, foreign currency gain or loss is calculated separately from any
gain or loss on the underlying transaction and is normally taxable as ordinary
gain or loss. A taxpayer may elect to treat as capital gain or loss foreign
currency gain or loss arising from certain identified forward contracts,
futures contracts and options that are capital assets in the hands of the
taxpayer and which are not part of a straddle. In accordance with Treasury
regulations under which certain transactions that are part of a "section 988
hedging transaction" (as defined in the Code and the Treasury regulations)
will be integrated and treated as a single transaction or otherwise treated
consistently for purposes of the Code. Any gain or loss attributable to the
foreign currency component of a transaction engaged in by a Portfolio which is
not subject to the special currency rules (such as foreign equity investments
other than certain preferred stocks) will be treated as capital gain or loss
and will not be segregated from the gain or loss on the underlying
transaction. It is anticipated that some of the non-U.S. dollar denominated
investments and foreign currency contracts the International Portfolio may
make or enter into will be subject to the special currency rules described
above.
Special Considerations Regarding Investment In Pennsylvania
Municipal Obligations.
The concentration of investments in Pennsylvania Municipal Obligations
by the Muni Intermediate Portfolio raises special investment considerations. In
particular, changes in the economic condition and governmental policies of the
Commonwealth of Pennsylvania (the "Commonwealth") and its municipalities could
adversely affect the value of the Portfolio and its portfolio securities. This
section briefly describes current economic trends in Pennsylvania.
Pennsylvania's economy historically has been dependent on heavy
industry although recent declines in the coal, steel and railroad industries
have led to diversification of the Commonwealth's economy. Recent sources of
economic growth in Pennsylvania are in the service sector, including trade,
medical and health services, education and financial institutions. Agriculture
continues to be an important component of the Commonwealth's economic structure,
with nearly one-third of the Commonwealth's total land area devoted to cropland,
pasture and farm woodlands.
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The Commonwealth utilizes the fund method of accounting and over 120
funds have been established for purposes of recording receipts and
disbursements of the Commonwealth, of which the General Fund is the largest.
Most of the Commonwealth's operating and administrative expenses are payable
from the General Fund. The major tax sources for the General Fund are the
sales tax, the personal income tax and the corporate net income tax. Major
expenditures of the Commonwealth include funding for education, public health
and welfare, transportation, and economic development.
The constitution of the Commonwealth provides that operating budget
appropriations of the Commonwealth may not exceed the estimated revenues and
available surplus in the fiscal year for which funds are appropriated. Annual
budgets are enacted for the General Fund and for certain special revenue funds
which together represent the majority of expenditures of the Commonwealth.
Although the balance in the General Fund of the Commonwealth (the principal
operating fund of the Commonwealth) experienced deficits in fiscal 1990 and
1991, tax increases and spending decreases have resulted in surpluses the last
four years; as of June 30, 1996, the General Fund had a surplus of $635.2
million.
Current constitutional provisions permit the Commonwealth to issue the
following types of debt: (i) electorate approved debt, (ii) debt for capital
projects subject to an aggregate debt limit of 1.75 times the annual average tax
revenues of the preceding five fiscal years, (iii) tax anticipation notes
payable in the fiscal year of issuance and (iv) debt to suppress insurrection or
rehabilitate areas affected by disaster. Certain state-created agencies issue
debt supported by assets of, or revenues derived from, the various projects
financed and the debt of such agencies is not an obligation of the Commonwealth
although some of the agencies are indirectly dependent on Commonwealth
appropriations.
Certain litigation is pending against the Commonwealth that could
adversely affect the ability of the Commonwealth to pay debt service on its
obligations including suits relating to the following matters: (a) the ACLU
has filed suit in federal court demanding additional funding for child welfare
services; the Commonwealth settled a similar suit in the Commonwealth Court of
Pennsylvania and is seeking the dismissal of the federal suit,
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inter alia, because of that settlement. After its earlier denial was reversed by
the Third Circuit Court of Appeals, the district court granted class
certification to the ACLU, and the parties are proceeding with discovery (no
available estimates of potential liability); (b) in 1987, the Supreme Court of
Pennsylvania held that the statutory scheme for county funding of the judicial
system to be in conflict with the constitution of the Commonwealth, but stayed
judgment pending enactment by the legislature of funding consistent with the
opinion and the legislature has yet to consider legislation implementing the
judgment. In 1992, a new action in mandamus was filed seeking to compel the
Commonwealth to comply with the original decision. The court issued a writ in
mandamus and appointed a special master in 1996 to submit a plan for
implementation, which it intended to acquire by January 1, 1998. In January
1997, the Court established a committee, consisting of the special master and
representatives of the Executive and Legislature, to develop an implementation
plan; (c) litigation has been filed in both state and federal court by an
association of rural and small schools and several individual school districts
and parents challenging the constitutionality of the Commonwealth's system for
funding local school districts -- the federal case has been stayed pending
resolution of the state case; in the state case, the trial, briefing and
argument has been completed as of September 1997, and the presiding judge has
taken the case under advisement (no available estimate of potential liability);
(d) Envirotest/Synterra Partners ("Envirotest") filed suit against the
Commonwealth asserting that it sustained damages in excess of $350 million as a
result of investments it made in reliance on a contract to conduct emissions
testing before the emissions testing program was suspended. Envirotest has
entered into a Settlement Agreement to resolve Envirotest's claims that will pay
Envirotest a conditional sum of $195 million over four years (e) in litigation
brought by the Pennsylvania Human Relations Commission to remedy unintentional
conditions of segregation in the Philadelphia public schools, the School
District of Philadelphia filed a third-party complaint against the Commonwealth
asking the Commonwealth Court to require the Commonwealth to supply funding
necessary for the District to comply with orders of the court; the Commonwealth
Court found that the School District was entitled to receive an additional $45.1
million for the 1996-97 school year, but the Pennsylvania Supreme Court vacated
this decision in September 1996; in January 1997, the Supreme Court ordered the
parties to brief certain issues, but no further decision by the Supreme Court
has been issued (no available estimate of potential liability); and (f) in
February 1997, five residents of the City of Philadelphia, joined by the City,
the School District and others, filed a civil action in the Commonwealth Court
for declaratory judgment against the Commonwealth and certain Commonwealth
officers and officials that the defendants had failed to provide an adequate
quality of education in Philadelphia, as required by the Pennsylvania
Constitution (no available estimate of potential liability).
Local government units in the Commonwealth of Pennsylvania (which
include, among other things, counties, cities, boroughs, towns, townships,
school districts and other municipally created units such as industrial
development authorities and municipality authorities, including water and
sewer authorities) are permitted to issue debt for capital projects: (i) in
any amount so long as the debt has been approved by the voters of the local
government unit; or (ii) without electoral approval if the aggregate
outstanding principal amount of debt of the local government unit is not in
excess of 100% of its borrowing base (in the case of a school district of the
first class), 300% of its borrowing base (in the case of a county) or 250% of
its borrowing base (in the case of all other local government units); or (iii)
without electoral approval and without regard to the limit described in (ii)
in any amount in the case of certain subsidized debt and self-liquidating debt
(defined to be debt with no claim on taxing power, secured solely by revenues
from a specific source which have been projected to be sufficient to pay debt
service on the
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related debt). Lease rental debt may also be issued, in which case the total
debt limits described in section (ii) (taking into account all existing lease
rental debt in addition to all other debt) are increased. The borrowing base
for a local government unit is the average of total revenues for the three
fiscal years preceding the borrowing. The risk of investing in debt issued by
any particular local government unit depends, in the case of general
obligation bonds secured by tax revenues, on the creditworthiness of that
issuer or, in the case of revenue bonds, on the revenue producing ability of
the project being financed, and not directly on the credit-worthiness of the
Commonwealth of Pennsylvania as a whole.
The City of Philadelphia (the "City") experienced a series of General
Fund deficits for Fiscal Years 1988 through 1992 and, while its general
financial situation has improved, the City is still seeking a long-term solution
for its economic difficulties. The City has no legal authority to issue deficit
reduction bonds on its own behalf, but state legislation has been enacted to
create an Intergovernmental Cooperation Authority (the "Authority") to provide
fiscal oversight for Pennsylvania cities (primarily Philadelphia) suffering
recurring financial difficulties. The Authority is broadly empowered to assist
cities in avoiding defaults and eliminating deficits by encouraging the adoption
of sound budgetary practices and issuing bonds. In order for the Authority to
issue bonds on behalf of the City, the City and the Authority entered into an
intergovernmental cooperative agreement providing the Authority with certain
oversight powers with respect to the fiscal affairs of the City, and in recent
years, the Authority has issued approximately $1.76 billion of Special Revenue
Bonds on behalf of the City. The City currently is operating under a five year
plan approved by the Authority in 1996, with technical amendments officially
incorporated on July 18, 1995. The audited balance of the City's General Fund as
of June 30, 1996 showed a surplus of approximately $118.5 million, up from
approximately $80.5 million as of June 30, 1995.
The Authority's power to issue further bonds to finance capital
projects or deficit expired on December 31, 1994. The Authority's power to issue
debt to finance a cash flow deficit expired on December 31, 1996, but its
ability to refund outstanding bonds is unrestricted. The Authority had
approximately $1.1 billion in Special Revenue Bonds outstanding as of June 30,
1996.
The foregoing information as to certain Pennsylvania risk factors
constitutes only a brief summary, does not purport to be a complete
description of Pennsylvania risk factors and is principally drawn from
official statements relating to securities offerings of the Commonwealth of
Pennsylvania that have come to the Funds' attention and were available as of
the date of this Statement of Additional Information.
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<PAGE>
Special Considerations Regarding Investment in New Jersey
Municipal Obligations
The State of New Jersey and its political subdivisions, agencies and
public authorities are authorized to issue two general classes of indebtedness;
general obligation bonds and revenue bonds. Both classes of bonds may be
included in the New Jersey Muni Portfolio. The repayment of principal and
interest on general obligation bonds is secured by the full faith and credit of
the issuer, backed by the issuer's taxing authority, without recourse to any
special project or source of revenue. Special obligation or revenue bonds may be
repaid only from revenues received in connection with the project for which the
bonds are issued, special excise taxes, or other special revenue sources and
generally are issued by entities without taxing power. Neither the State of New
Jersey nor any of its subdivisions is liable for the repayment of principal or
interest on revenue bonds except to the extent stated in the preceding
sentences.
General obligation bonds of the state are repaid from revenues
obtained through the state's general taxing authority. An inability to
increase taxes may adversely affect the state's ability to authorize or repay
debt.
Public authorities, private non-profit corporations, agencies and
similar entities of New Jersey ("Authorities") are established for a variety
of beneficial purposes, including economic development, housing and mortgage
financing, health care facilities and public transportation. The Authorities
are not operating entities of the State of New Jersey, but are separate legal
entities that are managed independently. The state oversees the Authorities by
appointing the governing boards, designating management, and by significantly
influencing operations. The Authorities are not subject to New Jersey
constitutional restrictions on the incurrence of debt, applicable to the State
of New Jersey itself, and may issue special obligation or private activity
bonds in legislatively authorized amounts.
An absence or reduction of revenue will affect a bond-issuing
Authority's ability to repay debt on special obligation bonds and no assurance
can be given that sufficient revenues will be obtained to make such payments,
although in some instances repayment may be guaranteed or otherwise secured.
Various Authorities have issued bonds for the construction of health
care facilities, transportation facilities, office buildings and related
facilities, housing facilities, pollution control facilities, water and
sewerage facilities and power and electric facilities. Each of these
facilities may incur different difficulties in meeting its debt repayment
obligations.
-22-
<PAGE>
Hospital facilities, for example, are subject to changes in Medicare and
Medicaid reimbursement regulations, attempts by Federal and state legislatures
to limit the costs of health care and management's ability to complete
construction projects on a timely basis as well as to maintain projected rates
of occupancy and utilization. At any given time, there are several proposals
pending on a Federal and state level concerning health care which may further
affect a hospital's debt service obligation.
Housing facilities may be subject to increases in operating costs,
management's ability to maintain occupancy levels, rent restrictions and
availability of Federal or state subsidies, while power and electric
facilities may be subject to increased costs resulting from environmental
restrictions, fluctuations in fuel costs, delays in licensing procedures and
the general regulatory framework in which these facilities operate. All of
these entities are constructed and operated under rigid regulatory guidelines.
Some entities which financed facilities with proceeds of private
activity bonds issued by the New Jersey Economic Development Authority, a
major issuer of special obligation bonds, have defaulted on their debt service
obligations. Because these special obligation bonds were repayable only from
revenue received from the specific projects which they funded, the New Jersey
Economic Development Authority was unable to repay the debt service to
bondholders for such facilities. Each issue of special obligation bonds,
however, depends on its own revenue for repayment, and thus these defaults
should not affect the ability of the New Jersey Economic Development Authority
to repay obligations on other bonds that it issues in the future.
The state has experienced a gradual economic recovery since hitting a
recessionary peak during 1992. Recently, the state's unemployment rate has
fallen, and job growth has been experienced in several sectors of the state's
economy. To the extent that any adverse conditions exist in the future which
affect the obligor's ability to repay debt, the value of the Portfolio may be
immediately and substantially affected.
The following are cases presently pending or threatened in which the
State has a potential for either a significant loss of revenue or a
significant unanticipated expenditure: (i) several labor unions have
challenged 1994 legislation mandating a revaluation of several public employee
pension funds which resulted in a refund of millions of dollars in public
employer contributions to the State and significant ongoing annual savings to
the State; (ii) several cases filed in the State courts challenged the basis
on which recoveries of certain costs for residents in State psychiatric
hospitals and other facilities are shared between the State Department of
Human Services and the State's county governments, and certain counties are
seeking the
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<PAGE>
recovery from the Department of costs they have incurred for the maintenance of
such residents; (iii) the County of Passaic and other parties have filed suit
alleging the State violated a 1984 consent order concerning the construction of
a resource recovery facility in that county; (iv) several Medicaid eligible
children and the Association for Children of New Jersey have filed suit claiming
the Medicaid reimbursement rates for services rendered to such children are
inadequate under federal law; (v) a coalition of churches and church leaders in
Hudson County have filed suit asserting the State-owned Liberty State Park in
Jersey City violates environmental standards; (vi) Waste Management of
Pennsylvania, Inc. and an affiliate have filed suit alleging their
constitutional rights were violated by the State's issuance of two emergency
redirection orders and a draft permit; (vii) representatives of the trucking
industry have filed a constitutional challenge to annual hazardous and solid
waste licensure renewal fees; (viii) the New Jersey Hospital Association has
filed a constitutional challenge to the State's failure to provide funding for
charity care costs, while requiring hospitals to treat all patients without
ability to pay; (ix) the Education Law Center filed a motion compelling the
State to close the spending gap between poor urban school districts and wealthy
rural school districts; (x) a group of insurance companies have filed a
constitutional challenge to the challenge to the State's assessment of monies
pursuant to the Fair Automobile Insurance Reform Act of 1990; (xi) a class
action consisting of prisoners with serious mental disorders has been filed
against officers of the Department of Corrections, alleging sex discrimination,
violation of the Americans with Disabilities Act of 1990, and constitutional
violations; (xii) a class action has been brought in federal court challenging
the State's method of determining the monthly needs of a spouse of an
institutionalized person under the Medicare Catastrophic Act; (xiii) several
suits have been filed against the State in federal court alleging that the State
committed securities fraud and environmental violations in the financing of a
new Atlantic City highway and tunnel; (xiv) a class action has been filed
against the State alleging the State's breach of contract for not paying certain
Medicare co-insurance and deductibles; and (xv) an action has been filed
challenging the State's issuance of bonds to fund the accrued liability in its
pension funds under the Pension Bond Financing Act of 1997.
Although the Portfolio generally intends to invest its assets
primarily in New Jersey Municipal Obligations rated no lower than A, MIG2 or
Prime-1 by Moody's or A SP-1 or A-1 by S&P, there can be no assurance that
such ratings will remain in effect until the bond matures or is redeemed or
will not be revised downward or withdrawn. Such a revision or withdrawal may
have an adverse affect on the market price of such securities.
PERFORMANCE CALCULATIONS
The "yield" and "effective yield" of the Government Cash and
Tax-Exempt Cash Portfolios (the "Cash Portfolios"), and the "tax-equivalent
yield" of the Tax-Exempt Cash Portfolio, are calculated according to formulas
prescribed by the Commission. The standardized seven-day yield of each of
these Portfolios is computed by determining the net change, exclusive of
capital changes, in the value of a hypothetical pre-existing account in the
particular Portfolio having a balance of one share at the beginning of the
period, dividing the net change in account value by the value of the account
at the beginning of the base period to obtain the base period return, and
multiplying the base period return by (365/7). The net change in the value of
an account in the Cash Portfolios includes the value of additional shares
purchased with dividends from the original share, and dividends declared on
both the original share and any such additional shares, net of all fees, other
than nonrecurring account or sales charges, that are charged by the Fund to
all shareholder accounts in proportion to the length of the base period and
the
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<PAGE>
Portfolio's average account size. The capital changes to be excluded from the
calculation of the net change in account value are realized gains and losses
from the sale of securities and unrealized appreciation and depreciation. An
effective annualized yield for the Cash Portfolios may be computed by
compounding the unannualized base period return (calculated as above) by
adding 1 to the base period return, raising the sum to a power equal to 365
divided by 7, and subtracting 1 from the result.
The Tax-Exempt Cash Portfolio's "7-day tax-equivalent yield" may be
computed by dividing the tax-exempt portion of the Portfolio's yield
(calculated as above) by one minus a stated Federal income tax rate and adding
the product to that portion, if any, of the Portfolio's yield that is not
tax-exempt. The Tax-Exempt Cash Portfolio's tax-equivalent yield, and the Cash
Portfolios' yield and effective yield, do not reflect any fees charged by the
Advisor to its clients. See "Investment Advisor."
Set forth below is an example, for purposes of illustration only, of
the current yield calculations for each of the Cash Portfolios for the seven
day period ended October 31, 1997.
Government Cash Tax-Exempt
Portfolio Cash Portfolio
10/31/97 10/31/97
--------------- --------------
7-Day Yield (Net Change
X 365/7 average net
asset value) ____% ____%
7-Day Effective Yield ____% ____%
7-Day Tax-Equivalent Yield ____% ____%*
- -------------
* Assumes an effective Federal income tax rate of 31%
The Commission yield of the Core Fixed Income Portfolio, Muni
Intermediate Portfolio and the New Jersey Muni Portfolio for the 30-day period
ended October 31, 1997 was ____%, ____% and ____%, respectively. These
yields were calculated by dividing the net investment income per share (as
described below) earned by the Portfolio during a 30-day (or one month) period
by the maximum offering price per share on the last day of the period and
annualizing the result on a semi-annual basis by adding one to the quotient,
raising the sum to the power of six, subtracting one from the result and then
doubling the difference. The Portfolio's net investment income per share
earned during the period is based on the average daily number of shares
outstanding during the period entitled to receive dividends and includes
dividends and interest earned during the period minus expenses accrued for the
period, net of reimbursements. This calculation can be expressed as follows:
-25-
<PAGE>
Yield = 2 [( a-b + 1)(6) - 1]
---
cd
Where: a = dividends and interest earned during the period.
b = expenses accrued for the period net of reimbursements.
c = the average daily number of shares outstanding during
the period that were entitled to receive dividends.
d = maximum offering price per share on the last day of the
period.
For the purpose of determining net investment income earned during
the period (variable "a" in the formula), interest earned on any debt
obligations held by the Core Fixed Income, Muni Intermediate or New Jersey
Muni Portfolios is calculated by computing the yield to maturity of each
obligation held by the Portfolio based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day of each month, or, with respect to obligations purchased during
the month, the purchase price (plus actual accrued interest) and dividing the
result by 360 and multiplying the quotient by the market value of the
obligation (including actual accrued interest) in order to determine the
interest income on the obligation for each day of the subsequent month that
the obligation is held by the particular Portfolio. For purposes of this
calculation, it is assumed that each month contains 30 days. The maturity of
an obligation with a call provision is the next call date on which the
obligation reasonably may be expected to be called or, if none, the maturity
date. With respect to debt obligations purchased at a discount or premium, the
formula generally calls for amortization of the discount or premium. The
amortization schedule will be adjusted monthly to reflect changes in the
market values of such debt obligations.
Undeclared earned income will be subtracted from the maximum offering
price per share (variable "d" in the formula). Undeclared earned income is the
net investment income which, at the end of the base period, has not been
declared as a dividend, but is reasonably expected to be and is declared and
paid as a dividend shortly thereafter. The Core Fixed Income, Muni
Intermediate and New Jersey Muni Portfolios' yields do not reflect any fees
charged by the Advisor or an Affiliate to its clients. See "Investment
Advisor."
-26-
<PAGE>
The Muni Intermediate and New Jersey Muni Portfolios'
"tax-equivalent" yield is computed by dividing the portion of the yield that
is exempt from Federal and/or State income taxes by one minus a stated Federal
income tax rate and/or the State income tax rate and by adding that figure to
that portion, if any, of the yield that is not tax-exempt. The 30 day
tax-equivalent yield for the Muni Intermediate Portfolio and New Jersey
Portfolio for the 30-day period ended October 31, 1997 was ____% and
____%, respectively (assuming a marginal Federal income tax rate of 31% and
marginal Pennsylvania and New Jersey income tax rates of ____ and ____%,
respectively).
The Core Fixed Income, Equity, International, Small Capitalization
Equity, Muni Intermediate, New Jersey Muni and Large Cap Value Portfolios each
compute their respective average annual total returns separately for each
class by determining the average annual compounded rates of return during
specified periods that equate the initial amount invested to the ending
redeemable value of such investment. This is done by dividing the ending
redeemable value of a hypothetical $1,000 initial payment by $1,000 and
raising the quotient to a power equal to one divided by the number of years
(or fractional portion thereof) covered by the computation and subtracting one
from the result. This calculation can be expressed as follows:
T = [( ERV )(1/n) - 1]
---
P
Where: T = average annual total return.
ERV = ending redeemable value at the end of the period
covered by the computation of a hypothetical $1,000
payment made at the beginning of the period.
P = hypothetical initial payment of $1,000.
n = period covered by the computation, expressed in
terms of years.
The Core Fixed Income, Equity, International, Small Capitalization
Equity, Muni Intermediate, New Jersey Muni and Large Cap Value Portfolios
compute their aggregate total returns separately for each class by determining
the aggregate rates of return during specified periods that likewise equate
the initial amount invested to the ending redeemable value of such investment.
The formula for calculating aggregate total return is as follows:
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<PAGE>
T = [( ERV ) - 1]
---
P
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain
distributions. The ending redeemable value (variable "ERV" in each formula) is
determined by assuming complete redemption of the hypothetical investment and
the deduction of all nonrecurring charges at the end of the period covered by
the computations. Each Portfolio's average annual total return and aggregate
total return do not reflect any fees charged by the Advisor to its clients.
See "Investment Advisor."
As of ____________, 1998, the Small Capitalization Equity Portfolio
began to offer Institutional Shares. Institutional Shares are subject to an
annual .05% fee payable pursuant to the Amended and Restated Shareholder
Servicing Plan ("Shareholder Servicing Fee"). Prior to _________, 1998,
Advisor Shares were subject to a .05% Shareholder Servicing Fee. Performance
of the Institutional Shares prior to __________, 1998, is represented by
performance of the Advisor Shares.
Set forth below are the average annual total return figures for the
Core Fixed Income, Equity, International, Small Capitalization Equity, Muni
Intermediate, Large Cap Value and New Jersey Muni Portfolios since inception and
for the one year and five year periods ended October 31, 1997.
<TABLE>
<CAPTION>
Small
Core Fixed Capitalization Muni
Income Equity International Equity Intermediate
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- --------- ------------- --------------- ------------
Advisor Institutional
Shares Shares
------- -------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Ended 10/31/97 _____ _____ _____ _____ ______ _____
5 Years Ended 10/31/97 _____ _____ _____ _____ ______ _____
Inception to 10/31/97 _____ _____ _____ _____ ______ _____
</TABLE>
Large Cap New
Value Jersey Muni
Portfolio Portfolio
--------- -----------
1 Year Ended 10/31/97 _____ _____
Inception to 10/31/97 _____ _____
Inception Dates:
Core Fixed Income Portfolio.................................. 11/17/88
Equity Portfolio............................................. 07/20/89
International Portfolio...................................... 11/17/88
Small Capitalization Equity Portfolio........................ 03/01/91
Muni Intermediate Portfolio.................................. 06/05/92
Large Cap Value Portfolio.................................... 12/31/92
New Jersey Muni Portfolio.................................... 11/01/93
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<PAGE>
Set forth below are the aggregate total return figures for the Core
Fixed Income, Equity, International, Small Capitalization Equity, Muni
Intermediate, Large Cap Value and New Jersey Muni Portfolios from inception
to October 31, 1997.
Portfolio Inception Date Aggregate Total Return
- --------- -------------- ----------------------
Core Fixed Income 11/17/88 ________
Equity 07/20/89 ________
International 11/17/88 ________
Small Capitalization Equity 03/01/91 ________
Muni Intermediate 06/05/92 ________
Large Cap Value 12/31/92 ________
New Jersey Muni 11/01/93 ________
GENERAL INFORMATION
Dividends and Capital Gains Distributions
Each Portfolio's policy is to distribute substantially all of its net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes on it and the imposition of the Federal excise tax on undistributed
income and gains (see discussion under "Dividends, Capital Gains Distributions
and Taxes" in the Prospectus). As set forth in the Prospectuses, the
Government Cash and the Tax-Exempt Cash Portfolios declare dividends daily and
normally distribute substantially all of their net investment income to
shareholders monthly; the International, Equity, Small Capitalization Equity
and Large Cap Value Portfolios normally distribute substantially all of their
net investment income to shareholders in the form of a quarterly dividend and
the Core Fixed Income, Muni Intermediate and New Jersey Muni Portfolios
normally distribute substantially all of their net investment income to
shareholders in the form of a monthly dividend. If any net capital gains are
realized by a Portfolio, that Portfolio normally distributes such gains at
least once a year. The amounts of any income dividends or capital gains
distributions for a Portfolio cannot be predicted.
Any dividend or distribution paid shortly after the purchase of
shares of a Portfolio by an investor may have the effect of reducing the per
share net asset value of that Portfolio by the per share amount of the
dividend or distribution. Furthermore, such dividends or distributions,
although in effect a return of capital, are subject to income taxes as set
forth in the Prospectus.
Certain Record Holders
As of September 30, 1997, the Advisor held of record all of the
outstanding shares of each Portfolio. For more information about the Advisor,
see "Investment Advisor" in the Prospectus. As of September 30, 1997 the
directors/trustees and officers of the Funds collectively owned less than 1%
of the outstanding shares of each of the Funds' Portfolios.
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<PAGE>
FINANCIAL STATEMENTS
The Funds' Financial Statements for the year ended October 31, ____
and the financial highlights for each of the respective periods presented,
appearing in the ____ Annual Report to Shareholders, and the reports thereon
of _________________, the Funds' independent accountants, also appearing
therein, are incorporated by reference in this Statement of Additional
Information.
-30-
<PAGE>
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the Commission under the 1933 Act with respect to the securities offered by
the Prospectus. Certain portions of the Registration Statement have been
omitted from the Prospectus and this Statement of Additional Information
pursuant to the rules and regulations of the SEC. The Registration Statement,
including the exhibits filed therewith, may be examined at the office of the
SEC in Washington, D.C.
Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other documents
referred to are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectus and this Statement of
Additional Information form a part, each such statement being qualified in all
respects by such reference.
-31-
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. Description of Bond Ratings
Excerpts from Moody's description of its highest bond ratings: Aaa
- -- judged to be the best quality; carry the smallest degree of investment risk;
Aa -- judged to be of high quality by all standards; A -- judged to be of
upper medium quality; factors giving security to principal and interest
considered adequate but elements may be present which suggest a susceptibility
to impairment sometime in the future; Baa -- judged to be of medium quality;
lacking outstanding investment characteristics and in fact having speculative
characteristics.
Excerpts from S&P description of its highest bond ratings: AAA
- -- highest grade obligations; indicates an extremely strong capacity to pay
interest and repay principal; AA -- also qualify as high grade obligations;
indicates a very strong capacity to pay interest and repay principal and
differs from AAA issues only in small degree; A -- qualifies as upper medium
grade obligations; have strong capacity to pay interest and repay principal,
although somewhat more susceptible to adverse effects of change in
circumstances and economic conditions than higher rated bonds; BBB -- indicates
adequate capacity to pay interest and repay principal, although adverse
economic conditions are likely to weaken such capacity.
Description of Moody's ratings of state and municipal notes: Moody's
ratings for state and municipal notes, other short-term obligations and
variable rate demand obligations are as follows: MIG-1/VMIG-1 -- Best quality,
enjoying strong protection by established cash flows, superior liquidity
support or demonstrated broadbased access to the market for refinancing;
MIG-2/VMIG-2 -- High quality with margins of protection ample although not so
large as in the preceding group.
Description of Moody's highest commercial paper rating: Prime-1 ("P-
1") -- judged to be of the best quality. Issuers rated P-1 (or related
supporting institutions) are considered to have a superior capacity for
repayment of short-term promissory obligations.
Excerpt from S&P rating of municipal note issues: SP-1+
- -- overwhelming capacity to pay principal and interest; SP-1 -- very strong or
strong capacity to pay principal and interest.
Description of S&P highest commercial papers ratings: A-1+ -- this
designation indicates the degree of safety regarding timely payment is
overwhelming. A-1 -- this designation indicates the degree of safety regarding
timely payment is either overwhelming or very strong.
II. Description of Mortgage-Backed Securities
Mortgage-backed securities represent an ownership interest in a pool
of residential mortgage loans. These securities are designed to provide
monthly payments of interest and principal to the investor. The
A-1
<PAGE>
mortgagor's monthly payments to his/her lending institution are
"passed-through" to an investor such as the Government Cash Portfolio and the
Core Fixed Income Portfolio. Most issuers or poolers provide guarantees of
payments, regardless of whether or not the mortgagor actually makes the
payment. The guarantees made by issuers or poolers are supported by various
forms of credit, collateral, guarantees or insurance, including individual
loan, title, pool and hazard insurance purchased by the issuer. There can be
no assurance that the private issuers or poolers can meet their obligations
under the policies. Mortgage-backed securities issued by private issuers or
poolers, whether or not such securities are subject to guarantees, may entail
greater risk than securities directly or indirectly guaranteed by the U.S.
Government.
About Mortgage-Backed Securities. Interests in pools of
mortgage-backed securities differ from other forms of debt securities, which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment which consists of both interest and
principal payments. In effect, these payments are a "pass-through" of the
monthly payments made by the individual borrowers on their residential
mortgage loans, net of any fees paid. Additional payments are caused by
repayments resulting from the sale of the underlying residential property,
refinancing or foreclosure net of fees or costs which may be incurred. Some
mortgage-backed securities are described as "modified pass-through." These
securities entitle the holders to receive all interest and principal payments
owed on the mortgages in the pool, net of certain fees, regardless of whether
or not the mortgagors actually make the payments.
Residential mortgage loans are pooled by the Federal Home Loan
Mortgage Corporation (FHLMC). FHLMC is a corporate instrumentality of the U.S.
Government and was created by Congress in 1970 for the purpose of increasing
the availability of mortgage credit for residential housing. Its stock is
owned by the twelve Federal Home Loan Banks. FHLMC issues Participation
Certificates ("PC's") which represent interests in mortgages from FHLMC's
national portfolio. FHLMC guarantees the timely payment of interest and
ultimate collection of principal.
The Federal National Mortgage Association (FNMA) is a Government
sponsored corporation owned entirely by private stockholders. It is subject to
general regulation by the Secretary of Housing and Urban Development. FNMA
purchases residential mortgages from a list of approved seller/servicers which
include state and federally-chartered savings and loan associations, mutual
savings banks, commercial banks and credit unions and mortgage bankers.
Pass-through securities issued by FNMA are guaranteed as to timely payment of
principal and interest by FNMA.
The principal Government guarantor of mortgage-backed securities is
the Government National Mortgage Association (GNMA). GNMA is a wholly-owned
U.S. Government corporation within the Department of Housing and Urban
Development. FNMA is authorized to guarantee, with the full faith and credit
of the U.S. Government, the timely payment of principal and interest
A-2
<PAGE>
on securities issued by approved institutions and backed by pools of
FHA-insured or VA-guaranteed mortgages.
Commercial banks, savings and loan institutions, private mortgage
insurance companies, mortgage bankers and other secondary market issuers also
create pass-through pools of conventional residential mortgage loans. Pools
created by such non-governmental issuers generally offer a higher rate of
interest than Government and Government-related pools because there are no
direct or indirect Government guarantees of payments in the former pools.
However, timely payment of interest and principal of these pools is supported
by various forms of insurance or guarantees, including individual loan, title,
pool and hazard insurance purchased by the issuer. The insurance and
guarantees are issued by Governmental entities, private insurers and the
mortgage poolers. There can be no assurance that the private insurers or
mortgage poolers can meet their obligations under the policies.
The Funds expect that Governmental or private entities may create
mortgage loan pools offering pass-through investments in addition to those
described above. The mortgages underlying these securities may be alternative
mortgage instruments, that is, mortgage instruments whose principal or
interest payment may vary or whose terms to maturity may be shorter than
previously customary. As new types of mortgage-backed securities are developed
and offered to investors, each of the Government Cash Portfolio and the Core
Fixed Income Portfolio will, consistent with its investment objective and
policies, consider making investments in such new types of securities.
Underlying Mortgages. Pools consist of whole mortgage loans or
participations in loans. The majority of these loans are made to purchasers of
1-4 family homes. The terms and characteristics of the mortgage instruments
are generally uniform within a pool but may vary among pools. For example, in
addition to fixed-rate, fixed-term mortgages, the Core Fixed Income Portfolio
may purchase pools of variable rate mortgages (VRM), growing equity mortgages
(GEM), graduated payment mortgages (GPM) and other types where the principal
and interest payment procedures vary. VRMs are mortgages which reset the
mortgage's interest rate periodically with changes in open market interest
rates. To the extent that the Portfolio is actually invested in VRMs, the
Portfolio's interest income will vary with changes in the applicable interest
rate on pools of VRMs. GPM and GEM pools maintain constant interest rates,
with varying levels of principal repayment over the life of the mortgage.
These different interest and principal payment procedures should not impact
the Portfolio's net asset value since the prices at which these securities are
valued will reflect the payment procedures.
All poolers apply standards for qualification to local lending
institutions which originate mortgages for the pools. Poolers also establish
credit standards and underwriting criteria for individual mortgages included
in the pools. In addition, some mortgages included in pools are insured
through private mortgage insurance companies.
A-3
<PAGE>
Average Life. The average life of pass-through pools varies with the
maturities of the underlying mortgage instruments. In addition, a pool's term
may be shortened by unscheduled or early payments of principal and interest on
the underlying mortgages. The occurrence of mortgage prepayments is affected
by factors including the level of interest rates, general economic conditions,
the location and age of the mortgage and other social and demographic
conditions.
As prepayment rates of individual pools vary widely, it is not
possible to accurately predict the average life of a particular pool. For
pools of fixed rate 30 year mortgages, common industry practice is to assume
that prepayments will result in a 12-year average life. Pools of mortgages
with other maturities or different characteristics will have varying
assumptions for average life.
Returns on Mortgage-Backed Securities. Yields on mortgage-backed
pass-through securities are typically quoted based on the maturity of the
underlying instruments and the associated average life assumption. Actual
prepayment experience may cause the yield to differ from the assumed average
life yield.
Reinvestment of prepayments may occur at higher or lower interest
rates than the original investment, thus affecting the yields of the
Portfolios which invest in them. The compounding effect from reinvestments of
monthly payments received by a Portfolio will increase its yield to
shareholders, compared to bonds that pay interest semi-annually.
III. Description of U.S. Government Securities and Certain Other
Securities
The term "U.S. Government securities" refers to a variety of
securities which are issued or guaranteed by the United States Government, and
by various instrumentalities which have been established or sponsored by the
United States Government.
U.S. Treasury securities are backed by the "full faith and credit" of
the United States. Securities issued or guaranteed by Federal agencies and
U.S. Government sponsored enterprises or instrumentalities may or may not be
backed by the full faith and credit of the United States. In the case of
securities not backed by the full faith and credit of the United States, an
investor must look principally to the agency, enterprise or instrumentality
issuing or guaranteeing the obligation for ultimate repayment, and may not be
able to assert a claim against the United States itself in the event the
agency, enterprise or instrumentality does not meet its commitment. Agencies
which are backed by the full faith and credit of the United States include the
Export Import Bank, Farmers Home Administration, Federal Financing Bank and
others. Certain agencies, enterprises and instrumentalities, such as the
Government National Mortgage Association are, in effect, backed by the full
faith and credit of the United States through provisions in their charters
that they may make "indefinite and unlimited" drawings on the Treasury, if
needed to service its debt. Debt from certain other agencies, enterprises and
A-4
<PAGE>
instrumentalities, including the Federal Home Loan Bank and Federal National
Mortgage Association, are not guaranteed by the United States, but those
institutions are protected by the discretionary authority for the U.S.
Treasury to purchase certain amounts of their securities to assist the
institution in meeting its debt obligations. Finally, other agencies,
enterprises and instrumentalities, such as the Farm Credit System and the
Federal Home Loan Mortgage Corporation, are federally chartered institutions
under Government supervision, but their debt securities are backed only by the
creditworthiness of those institutions, not the U.S.
Government.
Some of the U.S. Government agencies that issue or guarantee
securities include the Export-Import Bank of the United States, Farmers
Home Administration, Federal Housing Administration, Maritime
Administration, Small Business Administration and The Tennessee Valley
Authority.
An instrumentality of the U.S. Government is a Government agency
organized under Federal charter with Government supervision. Instrumentalities
issuing or guaranteeing securities include, among others, Overseas Private
Investment Corporation, Federal Home Loan Banks, the Federal Land Banks,
Central Bank for Cooperatives, Federal Intermediate Credit Banks and the
Federal National Mortgage Association.
International institutions that issue securities which the Core Fixed
Income Portfolio may purchase include the Asian Development Bank,
Inter-American Development Bank and the International Bank for Reconstruction
and Development (the "World Bank").
IV. Description of Municipal Obligations
Municipal Obligations generally include debt obligations issued by
states and their political subdivisions, and duly constituted authorities and
corporations, to obtain funds to construct, repair or improve various public
facilities such as airports, bridges, highways, hospitals, housing, schools,
streets and water and sewer works. Municipal Obligations may also be issued to
refinance outstanding obligations as well as to obtain funds for general
operating expenses and for loan to other public institutions and facilities.
The two principal classifications of Municipal Obligations are
"general obligation" and "revenue" or "special tax" bonds. General obligation
bonds are secured by the issuer's pledge of its full faith, credit and taxing
power for the payment of principal and interest. Revenue or special tax bonds
are payable only from the revenues derived from a particular facility or class
of facilities or, in some cases, from the proceeds of a special excise or
other tax, but not from general tax revenues. The Tax-Exempt Cash Portfolio
may also invest in tax-exempt industrial development bonds, short-term
municipal obligations (rated SP-1+ or SP-1 by S&P or MIG-1/VMIG-1 by Moody's),
project notes, demand notes and tax-exempt commercial paper (rated A-1+ or A-1
by S&P or P-1 by Moody's),
A-5
<PAGE>
and municipal bonds with a remaining effective maturity of 13 months or less
(rated AA or better by S&P or Aa or better by Moody's).
Industrial revenue bonds in most cases are revenue bonds and
generally do not have the pledge of the credit of the issuer. The payment of
the principal and interest on such industrial revenue bonds is dependent
solely on the ability of the user of the facilities financed by the bonds to
meet its financial obligations and the pledge, if any, of real and personal
property so financed as security for such payment. Short-term municipal
obligations issued by states, cities, municipalities or municipal agencies,
include Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation
Notes, Construction Loan Notes and Short-Term Discount Notes. Project Notes
are instruments guaranteed by the Department of Housing and Urban Development
but issued by a state or local housing agency. While the issuing agency has
the primary obligation on Project Notes, they are also secured by the full
faith and credit of the United States.
Municipal Obligations may also include "moral obligation" bonds,
which are normally issued by special purpose public authorities. If the issuer
of moral obligation bonds is unable to meet its debt service obligations from
current revenues, it may draw on a reserve fund, the restoration of which is a
moral commitment but not a legal obligation of the state or municipality which
created the issuer.
Note obligations with demand or put options may have a stated
maturity in excess of 13 months, but permit any holder to demand payment of
principal plus accrued interest upon a specified number of days' notice.
Frequently, such obligations are secured by letters of credit or other credit
support arrangements provided by banks. The issuer of such notes normally has
a corresponding right, after a given period, to repay in its discretion the
outstanding principal of the note plus accrued interest upon a specific number
of days' notice to the bondholders. The interest rate on a demand note may be
based upon a known lending rate, such as a bank's prime rate, and be adjusted
when such rate changes, or the interest rate on a demand note may be a market
rate that is adjusted at specified intervals. The demand notes in which the
Tax-Exempt Cash Portfolio will invest are payable on not more than thirteen
months notice.
The yields of Municipal Obligations depend on, among other things,
general money market conditions, conditions in the Municipal Obligation
market, the size of a particular offering, the maturity of the obligation, and
the rating of the issue. The ratings of Moody's and S&P represent their
opinions of the quality of the Municipal Obligations rated by them. It should
be emphasized that such ratings are general and are not absolute standards of
quality. Consequently, Municipal Obligations with the same maturity, coupon
and rating may have different yields, while Municipal Obligations of the same
maturity and coupon, but with different ratings may have the same yield. It
will be the responsibility of the Advisor to appraise independently the
fundamental quality of the bonds held by the Tax-Exempt Cash Portfolio.
A-6
<PAGE>
Municipal Obligations are sometimes purchased on a "when-issued"
basis, which means the buyer has committed to purchase certain specified
securities at an agreed upon price when they are issued. The period between
commitment date and issuance date can be a month or more. It is possible that
the securities will never be issued and the commitment cancelled.
From time to time proposals have been introduced before Congress to
restrict or eliminate the Federal income tax exemption for interest on
Municipal Obligations. Similar proposals may be introduced in the future. If
any such proposal were enacted, it might restrict or eliminate the ability of
the Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios to
achieve their investment objectives. In that event the Funds' Board members
and officers would reevaluate the Tax-Exempt Cash, Muni Intermediate and New
Jersey Muni Portfolios' investment objectives and policies and consider
recommending to their shareholders changes in such objectives and policies.
V. Foreign Investments
Investors should recognize that investing in foreign companies
involves certain special considerations which are not typically associated
with investing in U.S. companies. Because the stocks of foreign companies are
frequently denominated in foreign currencies, and because the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios may
temporarily hold uninvested reserves in bank deposits in foreign currencies,
the Equity, International, Small Capitalization Equity and Large Cap Value
Portfolios may be affected favorably or unfavorably by changes in currency
rates and in exchange control regulations, and may incur costs in connection
with conversions between various currencies. The investment policies of the
International Portfolio permit the Portfolio to enter into forward foreign
currency exchange contracts in order to hedge the Portfolio's holdings and
commitments against changes in the level of future currency rates. Such
contracts involve an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more
volatile than securities of comparable domestic companies. There is generally
less government supervision and regulation of stock exchanges, brokers and
listed companies than in the U.S. In addition, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect U.S. investments in foreign
countries.
Although the Equity, International, Small Capitalization Equity and
Large Cap Value Portfolios will endeavor to achieve most favorable execution
costs in its portfolio transactions, fixed commissions on many
A-7
<PAGE>
foreign stock exchanges are generally higher than negotiated commissions on
U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and
interest income. Although in some countries a portion of these taxes are
recoverable, the non-recovered portion of foreign withholding taxes will
reduce the income received from the foreign companies comprising the Equity,
International, Small Capitalization Equity and Large Cap Value
Portfolios.
A-8
<PAGE>
THE GLENMEDE FUND, INC.
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
None.
Included in Part B:
None.
(b) Exhibits
1. (a) Articles of Amendment and Restatement dated October
12, 1988 is hereby incorporated by reference to
Exhibit 1(a) to Post-Effective Amendment No. 17 to
the Registration Statement ("Post-Effective Amendment
No. 17").
(b) Articles Supplementary dated August 16, 1989 to
Articles of Incorporation is hereby incorporated by
reference to Exhibit 1(b) to Post-Effective Amendment
No. 17.
(c) Articles Supplementary dated February 28, 1991 to
Articles of Incorporation is hereby incorporated by
reference to Exhibit 1(c) to Post-Effective
Amendment No. 17.
(d) Articles Supplementary dated March 3, 1992 to
Articles of Incorporation is hereby incorporated by
reference to Exhibit 1(d) to Post-Effective Amendment
No. 17.
(e) Articles Supplementary dated June 2, 1992 to Articles
of Incorporation is hereby incorporated by reference
to Exhibit 1(e) to Post-Effective Amendment No. 17.
(f) Articles Supplementary dated September 30, 1994 to
Articles of Incorporation is hereby incorporated by
reference to Exhibit 1(f) to Post-Effective
Amendment No. 17.
(g) Articles Supplementary dated December 30, 1994 to
Articles of Incorporation is hereby incorporated by
reference to Exhibit 1(g) to Post-Effective
Amendment No. 17.
(h) Articles Supplementary dated February 26, 1997 to
Articles of Incorporation is hereby incorporated by
reference to exhibit 1(h) to Post-Effective
Amendment No. 21.
(i) Articles Supplementary dated September 24, 1997 to
Articles of Incorporation.
(j) Articles of Amendment dated September 24, 1997 to
Articles of Incorporation.
(k) Articles of Amendment dated September 24, 1997 to
Articles of Incorporation.
<PAGE>
(l) Articles Supplementary dated September 26, 1997 to
Articles of Incorporation.
(m) Form of Articles of Amendment to Articles of
Incorporation.
(n) Form of Articles Supplementary to Articles of
Incorporation.
2. By-Laws of Registrant are hereby incorporated by reference to
Exhibit 2 to Post-Effective Amendment No. 17.
3. Not applicable.
4. See: Article Fifth, Articles of Amendment and Restatement
dated October 12, 1988 which are incorporated by reference to
Exhibit 1(a) to Post-Effective Amendment No. 17; Articles
Supplementary dated August 16, 1989 to Articles of
Incorporation which are incorporated by reference to 1(b) to
Post-Effective Amendment No. 17; Articles Supplementary dated
February 28, 1991 to Articles of Incorporation which are
incorporated by reference to 1(c) to Post-Effective Amendment
No. 17; Articles Supplementary dated March 3, 1992 to Articles
of Incorporation which are incorporated by reference to 1(d)
to Post-Effective Amendment No. 17; Articles Supplementary
dated June 2, 1992 to Articles of Incorporation which are
incorporated by reference to Exhibit 1(e) to Post-Effective
Amendment No. 17; Articles Supplementary dated September 30,
1994 to Articles of Incorporation which are incorporated by
reference to Exhibit 1(f) to Post-Effective Amendment No. 17;
Articles Supplementary dated December 30, 1994 to Articles of
Incorporation which are incorporated by reference to Exhibit
1(g) to Post-Effective Amendment No. 17; and Sections (7) and
(11) of Article II, Article VII and Section (3) of Article
VIII of By-Laws which are incorporated by reference to Exhibit
2 to Post-Effective Amendment No. 17.
5. (a) Investment Advisory Agreement between Registrant
and The Glenmede Trust Company dated October 25, 1988
is hereby incorporated by reference to Exhibit 5(a)
to Post-Effective Amendment No. 17.
(b) Investment Advisory Agreement between Registrant and
The Glenmede Trust Company dated July 31, 1992 is
hereby incorporated by reference to Exhibit 5(b) to
Post-Effective Amendment No. 17.
(c) Amendment No. 1, dated September 13, 1994, to
Investment Advisory Agreement between Registrant and
The Glenmede Trust Company is hereby incorporated by
reference to Exhibit 5(c) to Post-Effective Amendment
No. 17.
(d) Supplement dated November 1, 1992, to Investment
Advisory Agreement between Registrant and The
Glenmede Trust Company, relating to the International
Fixed Income and Large Cap Value (formerly, the Model
Equity Portfolio) Portfolios is hereby incorporated
by reference to Exhibit 5(d) to Post-Effective
Amendment No. 17.
(e) Investment Advisory Agreement between Registrant and
The Glenmede Trust Company relating to Emerging
Markets Portfolio dated December 12, 1994 is hereby
incorporated by reference to Exhibit 5(e) to
Post-Effective Amendment No. 17.
(f) Sub-Investment Advisory Agreement among the
Registrant, The Glenmede Trust Company and Pictet
International Management Limited relating to the
Emerging Markets Portfolio dated December 12, 1994 is
hereby incorporated by reference to Exhibit 5(f) to
Post-Effective Amendment No. 17.
(g) Amendment No. 1, dated December 12, 1994, to the
Investment Advisory Agreement for the Emerging
Markets Portfolio between the Registrant and
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<PAGE>
the Glenmede Trust Company is hereby incorporated by
reference to Exhibit 5(g) to Post-Effective Amendment
No. 18.
(h) Amendment No. 1, dated September 11, 1996, to the
Investment Advisory Agreement for the Emerging
Markets Portfolio between Registrant and the Glenmede
Trust Company is hereby incorporated by reference to
Exhibit 5(h) to Post-Effective Amendment No. 21.
(i) Amendment No. 1, dated September 11, 1996, to the
Sub-Investment Advisory Agreement among the
Registrant, The Glenmede Trust Company and Pictet
International Management Limited relating to the
Emerging Markets Portfolio is hereby incorporated by
reference to Exhibit 5(i) to Post-Effective
Amendment No. 21.
(j) Form of Investment Advisory Agreement for the Small
Capitalization Equity Portfolio between the
Registrant and The Glenmede Trust Company.
6. Distribution Agreement dated September 10, 1997, between
Registrant and ICC Distributors, Inc.
7. Not Applicable.
8. (a) Custody Agreement dated December 13, 1994, as
amended and restated May 1, 1995 between Registrant
and The Chase Manhattan Bank, N.A. is hereby
incorporated by reference to Exhibit 8(a) to
Post-Effective Amendment No. 17.
(b) Amendment dated May 1, 1995 to Custody Agreement
between Registrant and The Chase Manhattan Bank, N.A.
dated May 1, 1995 is hereby incorporated by reference
to Exhibit 8(b) to Post-Effective Amendment No. 17.
9. (a) Master Services Agreement between Registrant and
Investment Company Capital Corp. dated July 1, 1995
is hereby incorporated by reference to Exhibit 9(a)
to Post-Effective Amendment No. 17.
(b) Form of Amended Fee Schedule to the Master Services
Agreement is incorporated herein by reference to
Exhibit 9(b) to Post-Effective Amendment No. 21.
(c) Amended and Restated Shareholder Servicing Plan dated
October 24, 1997.
(d) Form of Amended and Restated Shareholder Servicing
Agreement.
10. Opinion of Counsel as to Legality of Securities Being Registered.
11. (a) Consent of Drinker Biddle & Reath LLP.
12. Not Applicable.
13. (a) Purchase Agreement between Registrant and The
Glenmede Trust Company relating to the Institutional
International Portfolio is hereby incorporated by
reference to Exhibit 13 to Post-Effective Amendment
No. 7 to the Registration Statement.
(b) Purchase Agreement between Registrant and The
Glenmede Trust Company relating to the International
Fixed Income Portfolio dated October 21, 1992 is
hereby incorporated by reference to Exhibit 13(b) to
Post-Effective Amendment No. 17.
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<PAGE>
(c) Purchase Agreement between Registrant and The
Glenmede Trust Company relating to the Large Cap
Value Portfolio (formerly, the Model Equity
Portfolio) is hereby incorporated by reference to
Exhibit 13 to Post-Effective Amendment No. 9 to the
Registration Statement.
(d) Purchase Agreement between Registrant and The
Glenmede Trust Company relating to the Emerging
Markets Portfolio dated December 12, 1994 is hereby
incorporated by reference to Exhibit 13(d) to
Post-Effective Amendment No. 17.
14. Not Applicable.
15. Distribution Plan between Registrant and ICC Distributors,
Inc. relating to Class A Shares of the Institutional
International Portfolio.
16. Not Applicable.
17. Not Applicable.
18. Amended and Restated Plan Pursuant to Rule 18f-3 for Operation
of a Multi-Class System dated October 24, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant
Registrant is not controlled by or under common control with
any person. Registrant is controlled by its Board of
Directors.
Item 26. Number of Holders of Securities
As of September 30, 1997, the number of record holders of
securities was:
Government Cash Portfolio - 2
Emerging Markets Portfolio - 3
Core Fixed Income Portfolio (formerly, the Intermediate
Government Portfolio)-2
Equity Portfolio - 1
Large Cap Value Portfolio (formerly,
the Model Equity Portfolio) - 1
Small Capitalization Portfolio - 4
Institutional International Portfolio - 4
International Portfolio - 7
Tax-Exempt Cash Portfolio - 2
Item 27. Indemnification
Reference is made to Article Ten of the Registrant's
Amended and Restated Article of Incorporation herein by
reference to Exhibit 1. Insofar as indemnification for
liability arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event a claim for
indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
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<PAGE>
Item 28 Business and Other Connections of Investment Advisor
(a) The Glenmede Trust Company
Reference is made to the caption of "Investment Advisor" in
the Prospectus and in Part A of this Registration Statement
and "Investment Advisory and Other Services" in Part B of this
Registration Statement.
Set forth below is a list of all of the directors, senior
officers and those officers primarily responsible for
Registrant's affairs and, with respect to each such person,
the name and business address of the Company (if any) with
which such person has been connected at any time since May 31,
1995, as well as the capacity in which such person was
connected.
-5-
<PAGE>
<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
----------------------- ------------------- -----------------
<S> <C> <C>
Susan W. Catherwood Trustee Board of Chairman
the Medical Center
of the University
of Pennsylvania
PECO Energy Board Member
University of Pennsylvania Vice Chairman,
Board of Trustees
The World Affairs Council
of Philadelphia Board Member
Monell Chemical Senses Center Director
The Ludwick Institute Vice Chairman, Member
of The Board of Trustees
Executive Service Corps Vice Chairman, Board
of the Delaware Valley of Directors
Montessori Genesis II Advisory Board Member
United Way of Southeastern Director
Pennsylvania
Richard F. Pew North Ridge Owner/Operator
Ranches, Montana
and Wyoming
Yellowstone Center Board Member
for Mountain Environments
Mountain Research Center, Montana Director
State University
Teton Science School; Kelly Wyoming Director
Thomas W. Langfitt, M.D. Management Department, Senior Fellow
The Wharton School of
the University of
Pennsylvania
New York Life Insurance Board Member
Company
Committee on Automotive Chairman
Safety, General Motors
Corporation
University of Pennsylvania Board Member
Medical Center Trustee
Board
Institute of Medicine Member
of the National Academy
of Sciences
Sun Company Former Board
Member
SmithKline Beecham Former Board
Corporation Member
Princeton University Former Member,
Board of Trustees
Harvard Medical Former Member,
Board of Overseers
The American Philosophical Former Secretary
Society
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
----------------------- ------------------- -----------------
<S> <C> <C>
Thomas W. Langitt, M.D. Greater Philadelphia Urban Board Member
Affairs Coalition
The Philadelphia Public School/ Board Member
Business Partnership for Reform
Governing Board
Secretary's Advisory Committee Board Member
on Infant Mortality,
Department of Health and Human
Services
Community College of Philadelphia Director
Arthur E. Pew, III Burlington Northern Retired Director of
Railroad Administration,
Purchasing & Material
Management Department
Minnesota Transportation Board Member
Museum
Museum of Transportation Chairman of the
Development Corporation, Board
St. Paul
Manitow Island Association Board Member
(White Bear, Minnesota)
Osceola and St. Croix Board Member
Valley Railway (Osceola, Wisconsin)
J. Howard Pew, II None None
J.N. Pew, III None None
J.N. Pew, IV, M.D. Private Practice None
of Internal Medicine
Flying Hills Self Storage, Inc. President
American Red Cross, Berks County Director
Alvernia College Trustee
French and Pickering Creek Director
Conservation Trust, Inc.
R. Anderson Pew Radnor Corp., a Sun Retired Chief
Company subsidiary Executive Officer
Bryn Mawr College Vice Chairman
Children's Hospital of Vice Chairman of
Philadelphia the Board of Trustees
Alex. Brown Advisory & Chairman of the Audit
Trust Company, Baltimore Committee
Development Committee, Trustee & Chairman
Curtis Institute of
Music, Philadelphia
AOPA (a private pilot's Chairman
association)
Academy of Music Philadelphia Inc. Board Member,
AOM Committee
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
----------------------- ------------------- -----------------
<S> <C> <C>
Ethel Benson Wister None None
Lincoln University Board of Board Member
Trustees
Academy of Music Philadelphia, Inc. Committee Member
Biotechnology Foundation Board Member
(at Jefferson University)
Peoples' Night and Theater Company Honorary Board Member
Concerto Soloists Orchestra Arts Award 1997
Recipient
</TABLE>
(b) Sub-Investment Advisor - Pictet International
Management Limited
Pictet International Management Limited (the "Sub-Advisor") is
an affiliate of Pictet & Cie (the "Bank"), a Swiss private bank, which was
founded in 1805. The Bank manages the accounts for institutional and private
clients and is owned by seven partners. The Sub-Advisor, established in 1980,
manages the investment needs of clients seeking to invest in the international
fixed revenue and equity markets.
The list required by this Item 28 of officers and directors of
Pictet International Management Limited, together with the information as to any
other business, profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the past two years, is
incorporated by reference to Schedules A and D of Form ADV filed by Pictet
International Management Limited pursuant to the Investment Advisers Act of 1940
(SEC File No. 801-15143).
Item 29. Principal Underwriters
(a) In addition to The Glenmede Fund, Inc., ICC Distributors,
Inc. ("ICC Distributors") currently acts as distributor for The Glenmede
Portfolios, Total Return U.S. Treasury Fund, Inc., Managed Municipal Fund, Inc.
and North American Government Bond Fund, Inc. ICC Distributors is registered
with the Securities and Exchange Commission as a broker-dealer and is a member
of the National Association of Securities Dealers.
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<PAGE>
(b)
<TABLE>
<CAPTION>
Name and Principal Position and Offices Position and Offices
Business Address with Principal Underwriter with Registrant
- ------------------- --------------------------- -------------------------
<S> <C> <C>
John Y. Keffer President None
Sara M. Morris Treasurer None
David I. Goldstein Secretary None
Richard C. Butt Vice President None
Margaret J. Fenderson Assistant Treasurer None
Dana L. Lukens Assistant Secretary None
Nanette K. Chern Chief Compliance Officer None
</TABLE>
(c) Not Applicable.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940 and
the Rules thereunder will be maintained at the offices of:
The Glenmede Trust Company
One Liberty Place
1650 Market Street, Suite 1200
Philadelphia, Pennsylvania 19103
(records relating to its function as investment
advisor)
Pictet International Management Limited
Cutlers Garden
5 Devonshire Square
London, United Kingdom EC2M 4LD
(records relating to its function as sub-investment
advisor of Emerging Market Portfolio)
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
(records relating to its function as custodian)
Investment Company Capital Corp.
One South Street
Baltimore, Maryland 21202
(records relating to its functions as administrator,
transfer agent and dividend disbursing agent)
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
(records relating to its functions as distributor)
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Registrant's minute books)
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<PAGE>
Item 31. Management Services
Not applicable.
Item 32. Undertakings.
(a) Registrant undertakes to comply with the provisions
of Section 16(c) of the 1940 Act in regard to
shareholders' rights to call a meeting of
shareholders for the purpose of voting on the removal
of directors and to assist in shareholder
communications in such matters, to the extent
required by law. Specifically, the Registrant will,
if requested to do so by the holders of at least 10%
of the Registrant's outstanding shares, call a
meeting of shareholders for the purpose of voting
upon the question of the removal of directors, and
the Registrant will assist in shareholder
communications as required by Section 16(c) of the
Act.
(b) Registrant undertakes to furnish to each person to
whom a prospectus is delivered, a copy of
Registrant's latest annual report to shareholders,
upon request and without charge.
-10-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
and the Investment Company Act of 1940, as amended, The Glenmede Fund, Inc. has
duly caused this Post-Effective Amendment No. 24 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Philadelphia, and Commonwealth of Pennsylvania on the 31st day of
October, 1997.
THE GLENMEDE FUND, INC.
By *John W. Church, Jr.
-------------------------
John W. Church, Jr.
Chairman and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment No. 24 to the Registration Statement
of The Glenmede Fund, Inc. has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ------ -----
<S> <C> <C>
* John W. Church Chairman, Chief Executive October 31, 1997
- --------------------------- Officer
John W. Church, Jr.
* H. Franklin Allen Director October 31, 1997
- ---------------------------
H. Franklin Allen, Ph.D.
* Willard S. Boothby Director October 31, 1997
- ---------------------------
Willard S. Boothby, Jr.
* Francis J. Palamara Director October 31, 1997
- ---------------------------
Francis J. Palamara
* G. Thompson Pew, Jr. Director October 31, 1997
- ---------------------------
G. Thompson Pew, Jr.
/s/ Joseph A. Finelli Treasurer October 31, 1997
- ---------------------------
Joseph A. Finelli
*By: /s/ Michael P. Malloy
-----------------------------------
Michael P. Malloy, Attorney-in-fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
1(i) Articles Supplementary dated September 24, 1997 to
Articles of Incorporation.
1(j) Articles of Amendment dated September 24, 1997 to
Articles of Incorporation.
1(k) Articles of Amendment dated September 24, 1997 to
Articles of Incorporation.
1(l) Articles Supplementary dated September 26, 1997 to
Articles of Incorporation.
1(m) Form of Articles of Amendment to Articles of
Incorporation.
1(n) Form of Articles Supplementary to Articles of
Incorporation.
5(j) Form of Investment Advisory Agreement for the Small
Capitalization Equity Portfolio between the Registrant
and The Glenmede Trust Company.
6 Distribution Agreement dated September 10, 1997, between
Registrant and ICC Distributors, Inc.
9(c) Amended and Restated Shareholder Servicing Plan dated October
24, 1997.
9(d) Form of Amended and Restated Shareholder Servicing Agreement
dated October 24, 1997.
10 Opinion of Counsel as to Legality of Securities Being
Registered.
11(a) Consent of Drinker Biddle & Reath, LLP
15 Distribution Plan between Registrant and ICC
Distributors, Inc. relating to Class A Shares of the
Institutional International Portfolio.
18 Amended and Restated Plan Pursuant to Rule 18f-3 for
Operation of a Multi-Class System dated October 24,
1997.
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law, the Board of Directors of Glenmede Fund has
reclassified all one hundred and fifty million (150,000,000) unissued shares of
the International Fixed Income Fund as unclassified shares, pursuant to the
following resolution adopted by unanimous written consent of the Board of
Directors of Glenmede Fund on March 4, 1997:
RESOLVED, that following the liquidation of the International
Fixed Income Fund, all shares of the International Fixed Income Fund
shall be reclassified as authorized, unissued, and unclassified shares
and that, to the extent necessary, Glenmede Fund's Charter shall be
amended to effect such cancellation and reclassification; and
FURTHER RESOLVED, that the appropriate officers of Glenmede
Fund be, and each hereby is, authorized to execute and deliver, on
behalf of Glenmede Fund, such further instruments, certificates and
other documents and to perform such other acts as they determine, with
the advice of counsel, to be necessary or desirable to carry out such
cancellation and reclassification, such determination to be
conclusively evidenced by such actions.
SECOND: The shares of capital stock hereby reclassified shall be
unclassified, and shall have all the rights and privileges and characteristics
as set forth in Glenmede Fund's Articles of Incorporation with respect to
unclassified shares.
THIRD: The shares of capital stock of Glenmede Fund reclassified
pursuant to the resolution set forth in Article FIRST have been reclassified by
Glenmede Fund's Board of Directors under the authority contained in the Charter
of Glenmede Fund.
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf
this 22nd day of September, 1997.
Attest: THE GLENMEDE FUND, INC.
/s/ Michael P. Malloy /s/ John W. Church, Jr.
- ---------------------- --------------------------
Michael P. Malloy John W. Church, Jr.
Secretary President
<PAGE>
THE UNDERSIGNED, President of Glenmede Fund, who executed on behalf of
said Glenmede Fund the foregoing Articles Supplementary to the Articles of
Incorporation, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said Glenmede Fund, the foregoing Articles
Supplementary to the Articles of Incorporation to be the corporate act of said
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
/s/ John W. Church, Jr.
---------------------------
John W. Church, Jr.
President
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-605 of
the Maryland General Corporation Law, the Board of Directors of Glenmede Fund,
pursuant to resolutions approved at a regular meeting of the Board of Directors
held on June 9, 1997, has amended the Charter of Glenmede Fund, as previously
amended and restated, as follows:
RESOLVED, that effective upon making any necessary filing with
the Maryland Department of Assessments and Taxation, the Charter of Glenmede
Fund be, and hereby is, amended to rename the authorized issued and unissued
shares of Glenmede Fund classified as the "Institutional International
Portfolio" to shares of the "Institutional International Portfolio Institutional
Series" of Glenmede Fund.
SECOND: The foregoing amendment to the Charter has been duly
approved by a majority of the entire Board of Directors of Glenmede Fund. The
amendment is limited to a change expressly permitted to be made without action
of the stockholders under Section 2-605(a)(4) of the Maryland General
Corporation Law and Glenmede Fund is an open-end company under the Investment
Company Act of 1940.
THIRD: The Articles of Amendment will become effective at
12:01 a.m. on September 25, 1997.
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these
Articles of Amendment to be signed in its name and on its behalf as of this
22nd day of September, 1997.
Attest: THE GLENMEDE FUND, INC.
/s/ Michael P. Malloy /s/ John W. Church, Jr.
- ---------------------------- -------------------------------
Michael P. Malloy John W. Church, Jr.
Secretary President
<PAGE>
THE UNDERSIGNED, President of Glenmede Fund, who executed on
behalf of said Glenmede Fund the foregoing Articles of Amendment to the Articles
of Incorporation, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said Glenmede Fund, the foregoing Articles of
Amendment to the Articles of Incorporation to be the corporate act of said
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
/s/ John W. Church, Jr.
-------------------------------
John W. Church, Jr.
President
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-605 of
the Maryland General Corporation Law, the Board of Directors of Glenmede Fund
pursuant to resolutions approved at a regular meeting of the Board of Directors
held on September 10, 1997, has amended the Charter of Glenmede Fund as
previously amended and restated, as follows:
The name of the Intermediate Government Portfolio is changed
to the Core Fixed Income Portfolio.
SECOND: The foregoing amendment to the Charter has been duly
approved by a majority of the entire Board of Directors of Glenmede Fund. The
amendment is limited to a change expressly permitted to be made without action
of the stockholders under Section 2-605(a)(4) of the Maryland General
Corporation Law and Glenmede Fund is an open-end company under the Investment
Company Act of 1940.
THIRD: The Articles of Amendment will become
effective at 12:01 a.m. on September 25, 1997.
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused
these Articles of Amendment to be signed in its name and on its
behalf as of this 22nd day of September, 1997.
Attest: THE GLENMEDE FUND, INC.
/s/ Michael P. Malloy /s/ John W. Church, Jr.
- ---------------------------- -----------------------------
Michael P. Malloy John W. Church, Jr.
Secretary President
<PAGE>
THE UNDERSIGNED, President of Glenmede Fund, who executed on
behalf of said Glenmede Fund the foregoing Articles of Amendment to the Articles
of Incorporation, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said Glenmede Fund, the foregoing Articles of
Amendment to the Articles of Incorporation to be the corporate act of said
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
/s/ John W. Church, Jr.
-----------------------------
John W. Church, Jr.
President
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law, the Board of Directors of Glenmede Fund has
reclassified Five Million (5,000,000) authorized and unissued shares of the
Institutional International Portfolio Institutional Series Shares of the par
value of $.001 per share, as Institutional International Portfolio -- Flag
Investors Series Class A Shares, pursuant to the following resolution adopted by
the Board of Directors of Glenmede Fund on June 9, 1997:
RESOLVED, that effective upon making any necessary
filings with the Maryland Department of Assessments and Taxation,
pursuant to Article Fifth of Glenmede Fund's Articles of Amendment and
Restatement: Five Million (5,000,000) authorized and unissued shares of
capital stock of Glenmede Fund previously classified as Institutional
International Portfolio - Institutional Series Shares (of the par value
of $.001 per share and of the aggregate par value of Five Thousand
Dollars ($5,000)) be, and hereby are, reclassified as Institutional
International Portfolio-Flag Investors Series Class A Shares (the
"Class A Shares");
FURTHER RESOLVED, that all consideration received by
Glenmede Fund for the issue or sale of all shares of the Institutional
International Portfolio - Institutional Series (the "Institutional
Series") and of the Class A Shares, irrespective of series/class
designation (collectively, a "Share Group"), shall be invested and
reinvested with the consideration received by Glenmede Fund for the
issue and sale of all other shares of that Share Group, together with
all income, earnings, profits and proceeds thereof, including: (i) any
proceeds derived from the sale, exchange or liquidation thereof, (ii)
any funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, and (iii) any general assets of the
Glenmede Fund allocated to shares of that Share Group by the Board of
Directors in accordance with Glenmede Fund's Charter and applicable
provisions of law; and each share of that Share Group shall share on
the basis of relative net asset values with such other shares of that
Share Group in such consideration and other assets, income, earnings,
profits and proceeds thereof, including any proceeds derived from the
<PAGE>
sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that the proceeds of the redemption
of a Class A Share (including a fractional share) shall be reduced by
the amount of any contingent deferred sales charge, redemption fee or
other amount payable on such redemption pursuant to the terms of
issuance of such share or provided for in the Charter of Glenmede Fund;
FURTHER RESOLVED, that each share of the Share Group
shall be charged on the basis of relative net asset values with each
other share now or hereafter designated as a share of said Share Group
(irrespective of whether said share has been designated as part of a
series of said Share Group and, if so designated as part of a series,
irrespective of the particular series designation) with the expenses
and liabilities of Glenmede Fund in respect of all shares of that Share
Group and in respect of any general expenses and liabilities of
Glenmede Fund allocated by the Board of Directors to that Share Group,
except that:
(a) shares of each class and/or series (each a
"Series" irrespective of whether designated as such) of the
Share Group shall bear the expenses and liabilities relating
to any plans, agreements or arrangements entered into by or on
behalf of the Glenmede Fund pursuant to which an organization
or other person agrees to provide services with respect to
such Series but not with respect to another Series of the
Share Group ("Other Series"), as well as any other expenses
and liabilities directly attributable to such Series which the
Board of Directors determines should be borne solely by such
Series; and
(b) shares of a Series of the Share Group shall not
bear the expenses and liabilities relating to any plans,
agreements or arrangements entered into by or on behalf of the
Glenmede Fund pursuant to which an organization or other
person agrees to provide services with respect to an Other
Series, but not with respect to such Series of the Share Group
as well as any other expenses and liabilities directly
attributable to shares of the Share Group which the Board of
Directors determines should be borne solely by such Other
Series;
FURTHER RESOLVED, that pursuant to Article Fifth of
the Articles of Amendment and Restatement and except as otherwise
provided by these resolutions, each share of a Share Group shall have
all the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption as set forth in Glenmede Fund's Articles of
-2-
<PAGE>
Amendment and Restatement and shall also have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as a share of the Share
Group (irrespective of whether said share has been designated as part
of a series of said Share Group and, if so designated as part of a
series, irrespective of the particular series designation), except
that:
(i) on any matter that pertains to the
plans, agreements, arrangements, expenses and
liabilities described in clauses (a) and (b) of the
immediately preceding resolution (or to any plan or
other document adopted by Glenmede Fund relating to
said plans, agreements, arrangements, expenses and
liabilities) or that otherwise only affects the
particular Series and is submitted to a vote of
shareholders of Glenmede Fund, only shares of the
Series affected shall be entitled to vote, except
that: (x) if said matter affects shares of an Other
Series, such other affected shares shall also be
entitled to vote, and in such case the shares shall
be voted in the aggregate together with such other
affected shares and not by Series except where
otherwise required by law or permitted by the Board
of Directors; and (y) if said matter or any other
matters submitted to a vote of shareholders does not
affect shares of a Series, said shares shall not be
entitled to vote (except where otherwise required by
law or permitted by the Board of Directors) even
though the matter is submitted to a vote of the
holders of shares of capital stock of Glenmede Fund
other than the shares of that Series.
SECOND: In accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law, the Board of Directors of Glenmede Fund has
reclassified Twenty-Five Million (25,000,000) authorized and unissued shares of
the Small Capitalization Equity Portfolio of a par value of $.001 per share as
Global Equity Portfolio shares, pursuant to the following resolution adopted by
the Board of Directors of Glenmede Fund on June 9, 1997:
-3-
<PAGE>
RESOLVED, that effective upon making any necessary
filings with the Maryland Department of Assessments and Taxation,
pursuant to Article Fifth of Glenmede Fund's Articles of Amendment and
Restatement: Twenty-Five Million (25,000,000) authorized and unissued
shares of capital stock of Glenmede Fund previously classified as Small
Capitalization Equity Portfolio Shares (of the par value of $.001 per
share and the aggregate par value of Twenty-Five Thousand Dollars
($25,000) be, and hereby are, reclassified as Global Equity Portfolio
shares;
FURTHER RESOLVED, that Global Equity Portfolio shares
shall have all the rights and privileges as set forth in Glenmede
Fund's Articles of Amendment and Restatement.
General
THIRD: The shares of capital stock of Glenmede Fund reclassified
pursuant to the resolutions set forth in Articles FIRST and SECOND of these
Articles Supplementary have been reclassified by Glenmede Fund's Board of
Directors under the authority contained in the Articles of Amendment and
Restatement of Glenmede Fund.
FOURTH: These Articles Supplementary do not increase the authorized
number of shares of Glenmede Fund or the aggregate par value thereof. The total
number of shares of capital stock which Glenmede Fund is presently authorized to
issue remains Two Billion Five Hundred Million (2,500,000,000) shares (of the
par value of One Mill ($.001) each) and of the aggregate par value of Two
Million Five Hundred Thousand ($2,500,000) of Common Stock classified as
follows:
Number of Shares of
Name of Class Common Stock Allocated
------------- ----------------------
Government Cash Portfolio..................... 700,000,000
Tax-Exempt Cash Portfolio..................... 500,000,000
Core Fixed Income Portfolio................... 250,000,000
International Portfolio....................... 225,000,000
Equity Portfolio.............................. 125,000,000
Small Capitalization Equity Portfolio......... 200,000,000
Institutional International Portfolio -
Institutional Shares........................ 145,000,000
Institutional International Portfolio -
Flag Investors Series Class A Share......... 5,000,000
Large Cap Value Portfolio..................... 125,000,000
Emerging Markets Portfolio.................... 50,000,000
Global Equity Portfolio....................... 25,000,000
Unclassified.................................. 150,000,000
-----------
Total............................... 2,500,000,000
-4-
<PAGE>
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these
Articles Supplementary to be signed in its name and on its behalf
this 25th day of September, 1997.
Attest: THE GLENMEDE FUND, INC.
/s/ Michael P. Malloy /s/ John W. Church, Jr.
- ----------------------------- ---------------------------
Michael P. Malloy John W. Church, Jr.
Secretary President
THE UNDERSIGNED, President of Glenmede Fund, who executed on behalf of
said Glenmede Fund the foregoing Articles Supplementary to the Articles of
Incorporation, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said Glenmede Fund, the foregoing Articles
Supplementary to the Articles of Incorporation to be the corporate act of
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
/s/ John W. Church, Jr.
---------------------------
John W. Church, Jr.
President
-5-
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its
principal office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies
to the State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-605 of
the Maryland General Corporation Law, the Board of Directors of Glenmede Fund,
pursuant to resolutions approved at a special meeting of the Board of Directors
held on October 24, 1997, has amended the Charter of Glenmede Fund, as
previously amended and restated, as follows:
RESOLVED, that effective upon making any necessary filing with
the Maryland Department of Assessments and Taxation, the Charter of Glenmede
Fund be, and hereby is, amended to rename the authorized issued and unissued
shares of Glenmede Fund classified as the "Small Capitalization Equity
Portfolio" to shares of the "Small Capitalization Equity Portfolio - Advisory
Series" of Glenmede Fund.
SECOND: The foregoing amendment to the Charter has been duly
approved by a majority of the entire Board of Directors of Glenmede Fund. The
amendment is limited to a change expressly permitted to be made without action
of the stockholders under Section 2-605(a)(4) of the Maryland General
Corporation Law and Glenmede Fund is an open-end company under the Investment
Company Act of 1940.
THIRD: The Articles of Amendment will become
effective at 12:01 a.m. on November __, 1997.
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused
these Articles of Amendment to be signed in its name and on its
behalf as of this ____ day of November, 1997.
Attest: THE GLENMEDE FUND, INC.
_________________________________ ____________________________
Michael P. Malloy John W. Church, Jr.
Secretary President
<PAGE>
THE UNDERSIGNED, President of Glenmede Fund, who executed on
behalf of said Glenmede Fund the foregoing Articles of Amendment to the Articles
of Incorporation, of which this certificate is made a part, hereby acknowledges,
in the name and on behalf of said Glenmede Fund, the foregoing Articles of
Amendment to the Articles of Incorporation to be the corporate act of said
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
________________________
John W. Church, Jr.
President
<PAGE>
THE GLENMEDE FUND, INC.
ARTICLES SUPPLEMENTARY TO
ARTICLES OF INCORPORATION
THE GLENMEDE FUND, INC., a Maryland corporation having its principal
office in Baltimore City, Maryland ("Glenmede Fund"), hereby certifies to the
State Department of Assessments and Taxation of Maryland that:
FIRST: In accordance with the requirements of Section 2-208 of the
Maryland General Corporation Law, the Board of Directors of Glenmede Fund has
reclassified ____ Million (_________) authorized and unissued shares of the
Small Capitalization Equity Portfolio Advisory Series shares of the par value of
$.001 per share, as Small Capitalization Equity Portfolio - Institutional Series
shares, pursuant to the following resolution adopted by the Board of Directors
of Glenmede Fund on October 24, 1997:
RESOLVED, that effective upon making any necessary
filings with the Maryland Department of Assessments and Taxation,
pursuant to Article Fifth of Glenmede Fund's Articles of Amendment and
Restatement: ____ Million (_________) authorized and unissued shares of
capital stock of Glenmede Fund previously classified as Small
Capitalization Equity Portfolio - Advisory Series shares (of the par
value of $.001 per share and of the aggregate par value of ____
Thousand Dollars ($_______) be, and hereby are, reclassified as Small
Capitalization Equity Portfolio - Institutional Series shares (the
"Institutional Series");
FURTHER RESOLVED, that all consideration received by
Glenmede Fund for the issue or sale of all shares of the Small
Capitalization Equity Portfolio - Advisory Series (the "Advisory
Series") and of the Institutional Series shares, irrespective of
series/class designation (collectively, a "Share Group"), shall be
invested and reinvested with the consideration received by Glenmede
Fund for the issue and sale of all other shares of that Share Group,
together with all income, earnings, profits and proceeds thereof,
including: (i) any proceeds derived from the sale, exchange or
liquidation thereof, (ii) any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and
(iii) any general assets of Glenmede Fund allocated to shares of that
Share Group by the Board of Directors in accordance with Glenmede
Fund's Charter and applicable provisions of law; and each share of that
Share Group shall share on the basis of relative net asset values with
such other shares of that Share Group in such consideration and other
assets, income, earnings, profits and proceeds thereof, including any
proceeds derived from the
<PAGE>
sale, exchange or liquidation thereof, and any assets derived from any
reinvestment of such proceeds in whatever form;
FURTHER RESOLVED, that each share of the Share Group
shall be charged on the basis of relative net asset values with each
other share now or hereafter designated as a share of said Share Group
(irrespective of whether said share has been designated as part of a
series of said Share Group and, if so designated as part of a series,
irrespective of the particular series designation) with the expenses
and liabilities of Glenmede Fund in respect of all shares of that Share
Group and in respect of any general expenses and liabilities of
Glenmede Fund allocated by the Board of Directors to that Share Group,
except that:
(a) shares of each class and/or series (each a
"Series" irrespective of whether designated as such) of the
Share Group shall bear the expenses and liabilities relating
to any plans, agreements or arrangements entered into by or on
behalf of Glenmede Fund pursuant to which an organization or
other person agrees to provide services with respect to such
Series but not with respect to another Series of the Share
Group ("Other Series"), as well as any other expenses and
liabilities directly attributable to such Series which the
Board of Directors determines should be borne solely by such
Series; and
(b) shares of a Series of the Share Group shall not
bear the expenses and liabilities relating to any plans,
agreements or arrangements entered into by or on behalf of
Glenmede Fund pursuant to which an organization or other
person agrees to provide services with respect to an Other
Series, but not with respect to such Series of the Share Group
as well as any other expenses and liabilities directly
attributable to shares of the Share Group which the Board of
Directors determines should be borne solely by such Other
Series;
FURTHER RESOLVED, that pursuant to Article Fifth of
the Articles of Amendment and Restatement and except as otherwise
provided by these resolutions, each share of a Share Group shall have
all the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms and
conditions of redemption as set forth in Glenmede Fund's Articles of
Amendment and Restatement and shall also have the same preferences,
conversion and other rights, voting powers, restrictions, limitations
as to dividends, qualifications and terms and conditions of redemption
as each other share now or hereafter designated as a share of the Share
Group (irrespective of whether said share has been designated as part
of a series of said Share Group and, if so designated as
-2-
<PAGE>
part of a series, irrespective of the particular series designation),
except that:
(i) on any matter that pertains to the
plans, agreements, arrangements, expenses and
liabilities described in clauses (a) and (b) of the
immediately preceding resolution (or to any plan or
other document adopted by Glenmede Fund relating to
said plans, agreements, arrangements, expenses and
liabilities) or that otherwise only affects the
particular Series and is submitted to a vote of
shareholders of Glenmede Fund, only shares of the
Series affected shall be entitled to vote, except
that: (x) if said matter affects shares of an Other
Series, such other affected shares shall also be
entitled to vote, and in such case the shares shall
be voted in the aggregate together with such other
affected shares and not by Series except where
otherwise required by law or permitted by the Board
of Directors; and (y) if said matter or any other
matters submitted to a vote of shareholders does not
affect shares of a Series, said shares shall not be
entitled to vote (except where otherwise required by
law or permitted by the Board of Directors) even
though the matter is submitted to a vote of the
holders of shares of capital stock of Glenmede Fund
other than the shares of that Series.
General
SECOND: The shares of capital stock of Glenmede Fund reclassified
pursuant to the resolutions set forth in Article FIRST of these Articles
Supplementary have been reclassified by Glenmede Fund's Board of Directors under
the authority contained in the Articles of Amendment and Restatement of Glenmede
Fund.
THIRD: These Articles Supplementary do not increase the authorized
number of shares of Glenmede Fund or the aggregate par value thereof. The total
number of shares of capital stock which Glenmede Fund is presently authorized to
issue remains Two Billion Five Hundred Million (2,500,000,000) shares (of the
par value of One Mill ($.001) each) and of the aggregate par value of Two
Million Five Hundred Thousand ($2,500,000) of Common Stock classified as
follows:
-3-
<PAGE>
Number of Shares of
Name of Class Common Stock Allocated
------------- ----------------------
Government Cash Portfolio.................. 700,000,000
Tax-Exempt Cash Portfolio.................. 500,000,000
Core Fixed Income Portfolio................ 250,000,000
International Portfolio.................... 225,000,000
Equity Portfolio........................... 125,000,000
Small Capitalization Equity Portfolio...... 200,000,000
Institutional International Portfolio -
Institutional Shares..................... 145,000,000
Institutional International Portfolio -
Flag Investors Series Class A Share...... 5,000,000
Large Cap Value Portfolio.................. 125,000,000
Emerging Markets Portfolio................. 50,000,000
Global Equity Portfolio.................... 25,000,000
Unclassified............................... 150,000,000
-----------
Total............................. 2,500,000,000
IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles
Supplementary to be signed in its name and on its behalf this ____ day of
November, 1997.
Attest: THE GLENMEDE FUND, INC.
_____________________________ _______________________________
Michael P. Malloy John W. Church, Jr.
Secretary President
THE UNDERSIGNED, President of Glenmede Fund, who executed on behalf of
said Glenmede Fund the foregoing Articles Supplementary to the Articles of
Incorporation, of which this certificate is made a part, hereby acknowledges, in
the name and on behalf of said Glenmede Fund, the foregoing Articles
Supplementary to the Articles of Incorporation to be the corporate act of
Glenmede Fund and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all material respects, under the penalties of
perjury.
_______________________________
John W. Church, Jr.
President
-4-
<PAGE>
INVESTMENT ADVISORY AGREEMENT
Agreement made this ____ day of December, 1997 by and between The
Glenmede Fund, Inc., a Maryland corporation (the "Company"), and The Glenmede
Trust Company, a Pennsylvania corporation (the "Adviser").
1. Duties of Adviser. The Company hereby appoints the Adviser to act as
investment adviser to its Small Capitalization Equity Portfolio (the
"Portfolio") for the period and on such terms set forth in this Agreement. The
Company employs the Adviser to manage the investment and reinvestment of the
assets of the Portfolio to continuously review, supervise and administer the
investment program of the Portfolio, to determine in its discretion the
securities to be purchased or sold and the portion of the Portfolio's assets to
be held uninvested, to provide the Company with records concerning the Adviser's
activities which the Company is required to maintain, and to render regular
reports to the Company's officers and Board of Directors concerning the
Adviser's discharge of the foregoing responsibilities. The Adviser shall
discharge the foregoing responsibilities subject to the control of the officers
and the Board of Directors of the Company and in compliance with the objectives,
policies and limitations set forth in the Portfolio's prospectus and applicable
laws and regulations. The Adviser
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accepts such employment and agrees to render the services and to provide, at its
own expense, the office space, furnishings and equipment and the personnel
required by it to perform the services on the terms and for the compensation
provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the
brokers that will execute the purchases and sales of securities for the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of Directors of the Company, the Adviser may
also be authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Company and other
accounts as to which the Adviser exercises investment discretion. The execution
of such transactions shall not be deemed to represent an unlawful act or breach
of any duty by this Agreement or otherwise. The Adviser will promptly
communicate to the officers and Directors of the Company such information
relating to portfolio transactions as they may reasonably request.
3. Compensation of the Adviser. For the services provided and the
expenses assumed pursuant to this Agreement, effective as
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of the date hereof, the Portfolio will pay the Adviser and the Adviser will
accept as full compensation therefor, a fee computed daily and paid monthly (in
arrears), at an annual rate of .55% of the average daily net assets held in the
Portfolio.
If in any fiscal year the aggregate expenses of the Portfolio
exceed the expense limitations of any state having jurisdiction over the
Portfolio, the Adviser will reimburse the Portfolio for such excess expenses.
The obligation of the Adviser to reimburse the Portfolio hereunder is limited in
any fiscal year to the amount of its fee hereunder for such fiscal year,
provided however, that notwithstanding the foregoing, the Adviser shall
reimburse the Portfolio for such excess expenses regardless of the amount of
fees paid to it during such fiscal year to the extent that the securities
regulations of any state having jurisdiction over the Portfolio so requires.
Such expense reimbursement, if any, will be estimated, reconciled and paid on a
monthly basis.
4. Other Services. At the request of the Company, the Adviser in its
discretion may make available to the Company office facilities, equipment, and
other services. Such office facilities, equipment, and services shall be
provided for or rendered by the Adviser and billed to the Company at the
Adviser's cost. The Adviser further agrees to assume the cost of printing and
mailing prospectuses to persons other than current shareholders of the Company
and the cost of any other activities primarily intended to result in the sale of
the Company's shares.
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5. Reports. The Company and the Adviser agree to furnish to
each other current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the
Company are not to be deemed exclusive, and the Adviser shall be free to render
similar services to others so long as its services to the Company are not
impaired thereby.
7. Liability of Adviser. In the absence of (i) wilful
misfeasance, bad faith or gross negligence on the part of the Adviser in
performance of its obligations and duties hereunder, (ii) reckless disregard by
the Adviser of its obligations and duties hereunder, or (iii) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services (in which case any award of damages shall be limited to the period and
the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940
("1940 Act"), the Adviser shall not be subject to any liability whatsoever to
the Company or to any shareholder of the Company, for any error or judgment,
mistake of law or any other act or omission in the course of, or connected with,
rendering services hereunder including without limitation, for any losses that
may be sustained in connection with the purchase, holding redemption or sale of
any security on behalf of the Portfolio.
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8. Permissible Interests. Subject to and in accordance with the
Articles of Amendment and Restatement of the Company and the Articles of
Incorporation of the Adviser, Directors, officers, agents and shareholders of
the Company are or may be interested in the Adviser (or any successor thereof)
as Directors, officers, agents, shareholders or otherwise; Directors, officers,
agents and shareholders of the Adviser are or may be interested in the Company
as Directors, officers, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Company as a shareholder or otherwise;
and that the effect of any such interrelationships shall be governed by said
Articles of Amendment and Restatement or Articles of Incorporation (as
applicable) and the provisions of the 1940 Act.
9. Corporate Name. The Company acknowledges that it has obtained its
corporate name by consent of the Adviser, which consent was given in reliance
and upon the provisions hereafter contained. The Company agrees that if the
Adviser should cease to be the investment adviser of the Company, the Company
will, upon written demand of the Adviser forthwith (a) for a period of two years
after such written demand, state in all prospectuses, advertising material,
letterheads and other material designed to be read by investors or prospective
investors, in a prominent position and in prominent type (as may be reasonably
approved by the Adviser), that The Glenmede Trust Company no longer serves as
the investment adviser of the Company, and (b) delete from its
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name the word "Glenmede" or any approximation thereof. The Company further
agrees that the Adviser may permit other persons, partnerships (general or
limited), associations, trusts, corporations or other incorporated or
unincorporated groups of persons, including without limitation any investment
company or companies of any type which may be initially sponsored or organized
by the Adviser in the future, to use the word "GLENMEDE" or any approximation
thereof as part of their names. As used in this section, "The Glenmede Trust
Company" and "Adviser" shall include any successor corporation, partnership,
limited partnership, trust or person.
10. Duration and Termination. This Agreement, unless sooner
terminated as provided herein, shall continue until October 31, 1998 and
thereafter shall continue for periods of one year so long as such continuance is
specifically approved at least annually (a) by the vote of a majority of those
members of the Board of Directors of the Company who are not parties to this
Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Board of
Directors of the Company or by vote of a majority of the outstanding voting
securities of the Portfolio; provided however, that if the holders of the
Portfolio fail to approve the Agreement as provided herein, the Adviser may
continue to serve the Portfolio in such capacity in the manner and to the extent
permitted by the Company's Board of Directors and the 1940 Act and Rules
thereunder. This Agreement may be
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terminated by the Company at any time, without the payment of any penalty, by
vote of a majority of the entire Board of Directors of the Company or by vote of
a majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser. This Agreement may be terminated by the Adviser
at any time, without the payment of any penalty, upon 90 days' written notice to
the Company. This Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed postpaid, to the other party at any
office of such party.
As used in this Section 10, the terms "assignment",
"interested persons", and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in Section 2(a)(4),
Section 2(a)(19) and Section 2(a)(42) of the 1940 Act.
11. Books and Records. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records which
it maintains for the Portfolio are the property of the Company and further
agrees to surrender promptly to the Company any of such records upon the
Company's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records which it maintains for
the Company and are required to be maintained by Rule 31a-1 under the 1940 Act.
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12. Governing Law. This Agreement shall be governed
by and construed and enforced in accordance with the laws of the
Commonwealth of Pennsylvania.
13. Amendment of Agreement. This Agreement may be
amended by mutual consent, subject to the applicable requirements
of the 1940 Act.
14. Severability. If any provisions of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, intending to be legally bound hereby, the
parties hereto have caused this Agreement to be executed as of this ____ day of
December, 1997.
ATTEST: THE GLENMEDE FUND, INC:
---------------------- -------------------------
Michael P. Malloy John W. Church, Jr.
Secretary Chairman
THE GLENMEDE TRUST COMPANY:
---------------------- -------------------------
By: By:
Title: Title:
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<PAGE>
THE GLENMEDE FUND, INC.
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 10th day of September, 1997, by and between
The Glenmede Fund, Inc., a Maryland corporation, with its principal office and
place of business at One South Street, Baltimore, Maryland 21202 (the
"Company"), and ICC Distributors, Inc., a Delaware corporation with its
principal office and place of business at Two Portland Square, Portland, Maine
04101 (the "Distributor").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
may issue its shares of common stock (the "Shares") in separate series and
classes and continuously offers for sale its Shares to the public; and
WHEREAS, the Distributor is registered under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), as a broker-dealer and is engaged in
the business of selling shares of registered investment companies either
directly to purchasers or through other securities dealers;
WHEREAS, the Company offers Shares in one or more series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Company and made subject to this Agreement in accordance with
Section 16, being herein referred to as a "Fund," and collectively as the
"Funds") and the Company offers shares of one or more classes of each Fund as
listed in Appendix A hereto (each such class together with all other classes
subsequently established by the Company in a Fund being herein referred to as a
"Class," and collectively as the "Classes");
WHEREAS, the Company desires that the Distributor offer the Shares of
each Fund and Class thereof to the public and the Distributor is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Company and the Distributor hereby agree as
follows:
SECTION 1. DELIVERY OF DOCUMENTS AND APPOINTMENT
(a) The Company has delivered to the Distributor properly certified or
authenticated copies of its Articles of Incorporation, Declaration of Trust and
Bylaws, or similar documents (collectively, as amended from time to time,
"Organic Documents"), the Company's Notification of Registration filed with the
U.S. Securities and Exchange Commission ("SEC") pursuant to Section 8(a) of the
1940 Act on Form N-8A under the 1940 Act, the Company's Registration Statement
and all amendments thereto filed with the SEC pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration
Statement") and the current Prospectus and Statement of Additional Information
<PAGE>
of each Fund (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and shall promptly furnish the Distributor with
all amendments of or supplements to the foregoing, each properly certified or
authenticated. In addition, the Company shall furnish the Distributor with
properly certified or authenticated copies of all documents, notices and reports
filed with the SEC.
(b) The Company has delivered to the Distributor certified resolutions
of the Company's Board of Directors (the "Board") of the resolutions of its
Board authorizing the appointment of the Distributor as distributor and
approving this Agreement.
(b) The Company hereby appoints the Distributor as the principal
underwriter and distributor of its Funds to sell the Shares of the Funds to the
public and hereby agrees during the term of this Agreement to sell Shares of its
Funds to the Distributor upon the terms and conditions herein set forth.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
The Distributor shall be the exclusive representative of the Company to
act as principal underwriter and distributor of the Company's Funds except that
the rights given under this Agreement to the Distributor shall not apply to
Shares issued in connection with the merger, consolidation or reorganization of
any other investment company with a Fund; a Fund's acquisition by purchase or
otherwise of all or substantially all of the assets or stock of any other
investment company; or the reinvestment in Shares by a Fund's shareholders of
dividends or other distributions or any other offering by the Company of
securities to its shareholders.
SECTION 3. PURCHASE OF SHARES; OFFERING OF SHARES
(a) The Distributor shall act as the Company's agent, to offer, and to
solicit offers to subscribe to, unsold Shares of the Funds as shall then be
effectively registered under the Securities Act. The Distributor will promptly
forward all orders and subscriptions for Shares of the Company to the Company.
The price that the Distributor shall offer Shares shall be the net asset value,
determined as set forth in Section 3(c) hereof, used in determining the public
offering price on which the orders are based. The Company reserves the right to
sell Shares of its Funds directly to investors through subscriptions received by
the Company, but no such direct sales shall affect the sales charges due to the
Distributor hereunder.
(b) The public offering price of the Shares of a Fund, i.e., the price
per Share at which the Distributor or selected dealers or selected agents (each
as defined in Section 11 hereof) may sell Shares to the public or to those
persons eligible to invest in Shares as described in the applicable Prospectus,
shall be the net asset value determined in accordance with the then currently
effective Prospectus of the Fund or Class thereof under the Securities Act,
relating to such Shares, plus, in the case of Shares for which an initial sales
charge is assessed, an initial charge equal to a specified percentage or
percentages of the public offering price of the Shares as set forth in the
current Prospectus relating to the Shares. In the case of Shares for which an
initial sales charge may be assessed, Shares may be sold to certain classes of
persons at reduced sales charges or without any sales charge as from time to
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<PAGE>
time set forth in the current Prospectus relating to the Shares. The Company
will advise the Distributor of the net asset value per Share at each time as the
net asset value per Share shall have been determined by the Company.
(c) The net asset value per Shares of each Fund or Class thereof shall
be determined by the Company, or an agent of the Company, as of such time and on
such days as set forth in the applicable Prospectus in accordance with the
method set forth in the Prospectus and guidelines established by the Board.
(d) The Company reserves the right to suspend the offering of Shares of
any or all of its Funds or of any class thereof at any time in the absolute
discretion of the Board, and upon notice of such suspension the Distributor
shall cease to offer Shares of the Funds or Classes thereof specified in the
notice.
(e) All subscriptions for Shares obtained by the Distributor as agent
shall be directed to the Company for acceptance and shall not be binding until
accepted by the Company. Any subscription may be rejected by the Company in its
sole discretion. The Company (or its agent) will confirm subscriptions upon
their receipt, will make appropriate book entries and, upon receipt by the
Company (or its agent) of payment thereof, will issue such Shares in
certificated or uncertificated form pursuant to the instructions of the
Distributor. The Distributor agrees to cause such payment and such instructions
to be delivered promptly to the Company (or its agent).
SECTION 4. REDEMPTION OF SHARES
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Company agrees to redeem or
repurchase the Shares so tendered, as set forth in the Company's Organic
Documents and the Prospectus relating to the Shares. The price to be paid to
redeem the Shares of a Fund shall be equal to the net asset value calculated in
accordance with the provisions of Section 3(b) hereof less, in the case of
Shares for which a deferred sales charge is assessed, a deferred sales charge
equal to a specified percentage or percentages of the net asset value of those
Shares as from time to time set forth in the Prospectus relating to those Shares
or their cost, whichever is less. Shares of a Fund or Class thereof for which a
deferred sales charge may be assessed and that have been outstanding for a
specified period of time may be redeemed without payment of a deferred sales
charge as from time to time set forth in the Prospectus relating to those
Shares.
(b) The Company or its designated agent shall pay (i) the total amount
of the redemption price consisting of the redemption price less any applicable
deferred sales charge to the redeeming shareholder or its agent and (ii) except
as may be otherwise required by the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. (the "NASD") and any interpretations
thereof, any applicable deferred sales charges to the Distributor in accordance
with the Distributor's instructions on or before the third business day
subsequent to the Company or its agent having received the notice of redemption
in proper form.
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(c) The Company may suspend redemption privileges or postpone the date
of payment (i) during any period that the New York Stock Exchange (the
"Exchange") is closed, or trading on the Exchange is restricted as determined by
the SEC, (ii) during any period when an emergency exists as defined by the rules
of the SEC as a result of which it is not reasonably practicable for a Fund to
dispose of securities owned by it, or fairly to determine the value of its
assets, and (iii) for such other periods as the SEC may permit.
SECTION 5. DUTIES AND REPRESENTATIONS OF THE DISTRIBUTOR
(a) The Distributor shall use reasonable efforts to sell Shares of the
Funds upon the terms and conditions contained herein and in the then current
Prospectus. The Distributor shall devote reasonable time and effort to effect
sales of Shares but shall not be obligated to sell any specific number of
Shares. The services of the Distributor to the Company hereunder are not to be
deemed exclusive, and nothing herein contained shall prevent the Distributor
from entering into like arrangements with other investment companies so long as
the performance of its obligations hereunder is not impaired thereby.
(b) In selling Shares of the Funds, the Distributor shall comply with
the requirements of all federal and state laws relating to the sale of the
Shares. None of the Distributor, any selected dealer, any selected agent or any
other person is authorized by the Company to give any information or to make any
representations other than as is contained in a Fund's Prospectus or any
advertising materials or sales literature specifically approved in writing by
the Company.
(c) The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers or selected agents, the
collection of amounts payable by investors and selected dealers or selected
agents on such sales, and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the NASD and any other applicable
self-regulatory organization.
(d) The Distributor will perform its duties hereunder under the
supervision of and in accordance with the directives of the Board. The
Distributor will perform its duties hereunder in accordance with the Company's
Organic Documents and Prospectuses and with the instructions and directions of
the Boards and will conform to and comply with the requirements of the 1940 Act,
the Securities Act and other applicable laws.
(e) The Distributor shall provide the Board with a written report of
the amounts expended in connection with this Agreement as requested by the
applicable Board.
(f) The Distributor represents and warrants to the Company that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware and it is duly
qualified to carry on its business in the State of Maine;
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(ii) It is empowered under applicable laws and by its Articles of
Incorporation to enter into and perform this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(iv) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement;
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Distributor, enforceable
against the Distributor in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties;
(vi) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the NASD, it will
abide by the rules and regulations of the NASD, and it will notify the
Company if its membership in the NASD is terminated or suspended; and
(vii) The performance by the Distributor of its obligations hereunder
does not and will not contravene any provision of its Articles of
Incorporation or any applicable laws.
(g) Notwithstanding anything in this Agreement, including the
Appendices, to the contrary, the Distributor makes no warranty or representation
as to the number of selected dealers or selected agents with which it has
entered into agreements in accordance with Section 11 hereof, as to the
availability of any Shares to be sold through any selected dealer, selected
agent or other intermediary or as to any other matter not specifically set forth
herein.
(h) The Distributor agrees to obtain and maintain at all times an
insurance policy sufficient in coverage and amount to cover any obligations and
amounts owing to the Company relating to or arising in connection with any bad
faith, willful misfeasance or gross negligence in the performance of the
Distributor's duties or obligations under this Agreement or by reason of the
Distributor's reckless disregard of its duties and obligations under this
Agreement.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE COMPANY
(a) The Company shall furnish to the Distributor copies of all
financial statements and other documents to be delivered to shareholders or
investors and shall furnish the Distributor copies of all other financial
statements, documents and other papers or information which the Distributor may
reasonably request for use in connection with the distribution of Shares. The
Company shall make available to the Distributor the number of copies of the
Prospectuses of the Fund's of the Company as the Distributor shall reasonably
request.
(b) The Company shall take, from time to time, subject to the approval
of its Board and any required approval of the shareholders of the Company, all
action necessary to fix the number of authorized Shares (if such number is not
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limited) and to register the Shares under the Securities Act, to the end that
there will be available for sale the number of Shares as reasonably may be
expected to be sold pursuant to this Agreement.
(c) The Company shall execute any and all documents, furnish to the
Distributor any and all information and otherwise take all actions that may be
reasonably necessary and cooperate with the Distributor and all other parties in
taking any action as may be reasonably necessary to register or qualify the
Company's Shares for sale under the securities laws of the various states of the
United States and other jurisdictions ("States"). Any registration or
qualification may be withheld, terminated or withdrawn by the Company at any
time in its discretion. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the
Company in connection with such registration or qualification.
(d) The Company represents and warrants to the Distributor that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the State of Maryland;
(ii) It is empowered under applicable laws and by its Organic Documents
to enter into and perform this Agreement;
(iii) All proceedings required by the Organic Documents have been taken
to authorize it to enter into and perform its duties under this
Agreement;
(iv) It is registered as an open-end management investment company with
the SEC under the 1940 Act;
(v) All Shares, when issued in accordance with the Organic Documents
and the relevant prospectus, shall be validly issued, fully paid and
non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties;
(vii) The performance by the Company of its obligations hereunder does
not and will not contravene any provision of its Articles of
Incorporation.
(viii) The Company's Registration Statement is currently effective and,
unless the Company gives the Distributor notice to the contrary, will
remain effective with respect to all Shares of the Company's Funds and
Classes thereof being offered for sale;
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(ix) It will use its best efforts to ensure that its Registration
Statement and Prospectuses have been or will be, as the case may be,
carefully prepared in conformity with the requirements of the
Securities Act and the rules and regulations thereunder;
(x) It will use its best efforts to ensure that (A) its Registration
Statement and Prospectuses contain or will contain all material
statements required to be stated therein in accordance with the
Securities Act and the rules and regulations thereunder, (B) all
statements of fact contained or to be contained in the Registration
Statement or Prospectuses are or will be true and correct in all
material respects at the time indicated or on the effective date as the
case may be and (C) neither the Registration Statement nor any
Prospectus, when they shall become effective or be authorized for use,
will include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares;
(xi) It will from time to time file such amendment or amendments to its
Registration Statement and Prospectuses as, in the light of
then-current and then-prospective developments, shall, in the opinion
of its counsel, be necessary in order to have the Registration
Statement and Prospectuses at all times contain all material facts
required to be stated therein or necessary to make any statements
therein not misleading to a purchaser of Shares ("Required
Amendments");
(xii) It shall not file any amendment to its Registration Statement or
Prospectuses without giving the Distributor reasonable advance notice
thereof (which shall be at least three Fund business days); provided,
however, that nothing contained in this Agreement shall in any way
limit the Company's right to file at any time such amendments to its
Registration Statement or Prospectuses, of whatever character, as the
Company may deem advisable, such right being in all respects absolute
and unconditional; and
(xiii) It will use its best efforts to ensure that (A) any amendment to
its Registration Statement or Prospectuses hereafter filed will, when
it becomes effective, contain all material statements required to be
stated therein in accordance with the 1940 Act and the rules and
regulations thereunder, (B) all statements of fact contained in the
Registration Statement or Prospectuses will be true and correct in all
material respects at the time indicated or on the effective date as the
case may be and (C) no such amendment, when it becomes effective, will
include an untrue statement of a material fact or will omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of the Shares.
SECTION 7. STANDARD OF CARE
(a) The Distributor shall use its best judgment and efforts in
rendering services to the Company under this Agreement but shall be under no
duty to take any action except as specifically set forth herein or as may be
specifically agreed to by the Distributor in writing. The Distributor shall not
be liable to the Company or any of the Company's shareholders for any error of
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<PAGE>
judgment or mistake of law, for any loss arising out of any investment, or for
any action or inaction of the Distributor in the absence of bad faith, willful
misfeasance or gross negligence in the performance of the Distributor's duties
or obligations under this Agreement or by reason of the Distributor's reckless
disregard of its duties and obligations under this Agreement.
(b) Subject to Section 7(a), the Distributor shall not be liable to the
Company for any action taken or failure to act in good faith reliance upon:
(i) the advice of the Company or of counsel, who may be counsel to
the Company or counsel to the Distributor;
(ii) any oral instruction which the Distributor receives and which it
reasonably believes in good faith was transmitted by the person or
persons authorized by the Board to give such oral instruction (the
Distributor shall have no duty or obligation to make any inquiry or
effort of certification of such oral instruction);
(iii) any written instruction or certified copy of any resolution of
the Board, and the Distributor may rely upon the genuineness of any
such document or copy thereof reasonably believed in good faith by the
Distributor to have been validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report, notice,
consent, order, or other document reasonably believed in good faith by
the Distributor to be genuine and to have been signed or presented by
the Company or other proper party or parties;
and the Distributor shall not be under any duty or obligation to inquire into
the validity or invalidity or authority or lack thereof of any statement, oral
or written instruction, resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice, consent, order, or
any other document or instrument which the Distributor reasonably believes in
good faith to be genuine.
(c) Subject to Section 7(a), the Distributor shall not be responsible
or liable for any failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control including, without limitation, acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power supply. In
addition, subject to Section 7(a), to the extent the Distributor's obligations
hereunder are to oversee or monitor the activities of third parties, the
Distributor shall not be liable for any failure or delay in the performance of
the Distributor's duties caused, directly or indirectly, by the failure or delay
of such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with the Distributor.
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SECTION 8. INDEMNIFICATION
(a) The Company will indemnify, defend and hold the Distributor, its
employees, agents, directors and officers and any person who controls the
Distributor within the meaning of section 15 of the Securities Act or section 20
of the 1934 Act ("Distributor Indemnities") free and harmless from and against
any and all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other expenses of every
nature and character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable counsel fees
incurred in connection therewith) which any Distributor Indemnitee may incur,
under the Securities Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Company's Registration Statement or Prospectuses or arising out of or based upon
any alleged omission to state a material fact required to be stated in any one
thereof or necessary to make the statements in any one thereof not misleading,
unless such statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Company in connection with the
preparation of the Registration Statement or exhibits to the Registration
Statement by or on behalf of the Distributor ("Distributor Claims").
(b) The Company may assume the defense of any suit brought to enforce
any Distributor Claim and may retain counsel of good standing chosen by the
Company and approved by the Distributor, which approval shall not be withheld
unreasonably. The Company shall advise the Distributor that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Company assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel that they retain. If the Company does not assume the defense
of any such suit, or if Distributor does not approve of counsel chosen by the
Company or has been advised that it may have available defenses or claims that
are not available to or conflict with those available to the Company, the
Company will reimburse any Distributor Indemnitee named as defendant in such
suit for the reasonable fees and expenses of any counsel that person retains. A
Distributor Indemnitee shall not settle or confess any claim without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed.
(c) The Distributor will indemnify, defend and hold the Company and its
several agents, officers and directors and any person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the 1934
Act (collectively, the "Company Indemnitees"), free and harmless from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or defending
such claims, demands, actions, suits or liabilities and any reasonable counsel
fees incurred in connection therewith), but only to the extent that such claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses result from, arise out of or
are based upon:
(i) any alleged untrue statement of a material fact contained in the
Company's Registration Statement or Prospectus or any alleged omission
of a material fact required to be stated or necessary to make the
statements therein not misleading, if such statement or omission was
made in reliance upon, and in conformity with, information furnished to
the Company in writing in connection with the preparation of the
Registration Statement or Prospectus by or on behalf of the
Distributor; or
-9-
<PAGE>
(ii) any act of, or omission by, Distributor, its sales representatives
or its agents that does not conform to the standard of care set forth
in Section 7 of this Agreement (collectively, "Company Claims").
(d) The Distributor may assume the defense of any suit brought to
enforce any Company Claim and may retain counsel of good standing chosen by the
Distributor and approved by the Company, which approval shall not be withheld
unreasonably. The Distributor shall advise the Company that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Distributor assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel that they retain. If the Distributor does not assume the
defense of any such suit, or if Company does not approve of counsel chosen by
the Distributor or has been advised that it may have available defenses or
claims that are not available to or conflict with those available to the
Distributor, the Distributor will reimburse any Company Indemnitee named as
defendant in such suit for the reasonable fees and expenses of any counsel that
person retains. The Company Indemnitee shall not settle or confess any claim
without the prior written consent of the Distributor, which consent shall not be
unreasonably withheld or delayed.
(e) The Company's and the Distributor's obligations to provide
indemnification under this Section is conditioned upon the Company or the
Distributor receiving notice of any action brought against a Distributor
Indemnitee or Company Indemnitee, respectively, by the person against whom such
action is brought within twenty (20) days after the summons or other first legal
process is served. Such notice shall refer to the person or persons against whom
the action is brought. The failure to provide such notice shall not relieve the
party entitled to such notice of any liability that it may have to any
Distributor Indemnitee or Company Indemnitee except to the extent that the
ability of the party entitled to such notice to defend such action has been
materially adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Distributor
Indemnitee or Company Indemnitee and shall survive the sale and redemption of
any Shares made pursuant to subscriptions obtained by the Distributor. The
indemnification provisions of this Section will inure exclusively to the benefit
of each person that may be a Distributor Indemnitee or Company Indemnitee at any
time and their respective successors and assigns (it being intended that such
persons be deemed to be third party beneficiaries under this Agreement).
(g) The Distributor agrees promptly to notify the Company of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of Shares. The Company
agrees promptly to notify the Distributor of the commencement of any litigation
or proceeding of which it becomes aware arising out of or in any way connected
with the issuance or sale of its Shares.
-10-
<PAGE>
(h) Nothing contained herein shall require the Company to take any
action contrary to any provision of its Organic Documents or any applicable
statute or regulation or shall require the Distributor to take any action
contrary to any provision of its Articles of Incorporation or Bylaws or any
applicable statute or regulation; provided, however, that neither the Company
nor the Distributor may amend their Organic Documents or Articles of
Incorporation and Bylaws, respectively, in any manner that would result in a
violation of a representation or warranty made in this Agreement, except if
required by any applicable statute or regulation.
(i) Nothing contained in this section shall be construed to protect the
Distributor against any liability to the Company or the security holders of the
Company to which the Distributor would otherwise be subject by reason of its
failure to satisfy the standard of care set forth in Section 7 of this
Agreement.
SECTION 9. NOTIFICATION TO THE DISTRIBUTOR
The Company shall advise the Distributor immediately: (i) of any
request by the SEC for amendments to the Company's Registration Statement or
Prospectus or for additional information; (ii) in the event of the issuance by
the SEC of any stop order suspending the effectiveness of the Company's
Registration Statement or any Prospectus or the initiation of any proceedings
for that purpose; (iii) of the happening of any material event which makes
untrue any statement made in the Company's then current Registration Statement
or Prospectus or which requires the making of a change in either thereof in
order to make the statements therein not misleading; and (iv) of all action of
the SEC with respect to any amendments to the Company's Registration Statement
or Prospectus which may from time to time be filed with the Commission under the
1940 Act or the Securities Act.
SECTION 10. COMPENSATION; EXPENSES
(a) In consideration of the Distributor's services in connection with
the distribution of Shares of each Fund and Class thereof, the Distributor shall
receive: (i) any applicable sales charge assessed upon investors in connection
with the purchase of Shares; (ii) from the Company, any applicable contingent
deferred sales charge ("CDSC") assessed upon investors in connection with the
redemption of Shares; and (iii) from the Company, the distribution service fees
with respect to the Shares of those Classes as designated in Appendix A for
which a plan under Rule 12b-1 under the 1940 Act (a "Plan") is effective (the
"Distribution Fee"). The Distribution Fee be accrued daily by each applicable
Fund or Class thereof and shall be paid monthly as promptly as possible after
the last day of each calendar month at the rate or in the amounts set forth in
Appendix A and, as applicable, the Plan(s).
(b) The Company shall cause its transfer agent (the "Transfer Agent")
to withhold, from redemption proceeds payable to holders of Shares of the Funds
and the Classes thereof, all CDSCs properly payable by the shareholders in
accordance with the terms of the applicable Prospectus and shall cause the
Transfer Agent to pay such amounts over to the Distributor as promptly as
possible after the settlement date for each redemption of Shares.
-11-
<PAGE>
(c) Except as specified in Sections 8 and 10(a), the Distributor shall
be entitled to no compensation by the Company or reimbursement of expenses from
the Company for the services provided by the Distributor pursuant to this
Agreement.
(d) The Company shall be responsible and assumes the obligation for
payment of all the expenses of the Company's Funds, including fees and
disbursements of its counsel and auditors, in connection with the preparation
and filing of the Registration Statement and Prospectuses (including but not
limited to the expense of setting in type the Registration Statement and
Prospectuses and printing sufficient quantities for internal compliance,
regulatory purposes and for distribution to current shareholders).
(e) The Company shall bear the cost and expenses (i) of the
registration of its Shares for sale under the Securities Act; (ii) of the
registration or qualification of its Shares for sale under the securities laws
of the various States; (iii) if necessary or advisable in connection therewith,
of qualifying the Company, or its the Funds or the Classes thereof (but not the
Distributor) as an issuer or as a broker or dealer, in such States as shall be
selected by the Company and the Distributor pursuant to Section 6(c) hereof; and
(iv) payable to each State for continuing registration or qualification therein
until the Company decides to discontinue registration or qualification pursuant
to Section 6(c) hereof. The Distributor shall pay all expenses relating to the
Distributor's broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
(a) The Distributor shall have the right to enter into sub-distribution
agreements with securities dealers of its choice ("selected dealers") and with
depository institutions and other financial intermediaries of its choice
("selected agents") for the sale of Shares and to fix therein the portion of the
sales charge, if any, that may be allocated to the selected dealers or selected
agents; provided, that all such agreements shall be in substantially the form of
agreement as set forth in Appendix B hereto. Shares of each Fund or Class
thereof shall be resold by selected dealers or selected agents only at the
public offering price(s) set forth in the Prospectus relating to the Shares. The
Distributor shall offer and sell Shares of the Funds only to such selected
dealers as are members in good standing of the NASD.
(b) The Distributor will supervise each Fund's relationship with
selected dealers and agents and may make payments to those selected dealers and
agents in such amounts as the Distributor may determine from time to time in its
sole discretion. The amount of payments to selected dealers and agents by the
Distributor may be reviewed by the Board from time to time; provided, however,
that no payment by the Distributor to any selected dealer or agent with respect
to a Share shall exceed the amount of payments made to the Distributor hereunder
with respect to that Share.
-12-
<PAGE>
SECTION 12. CONFIDENTIALITY
The Distributor agrees to treat all records and other information
related to the Company as proprietary information of that Company and, on behalf
of itself and its employees, to keep confidential all such information, except
that the Distributor may:
(i) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or other
information regarding investment companies; and
(iii) release such other information as approved in writing by the
Company, which approval shall not be unreasonably withheld;
provided, however, that the Distributor may release any information regarding
the Company without the consent of the Company if the Distributor reasonably
believes that it may be exposed to civil or criminal legal proceedings for
failure to comply, when requested to release any information by duly constituted
authorities or when so requested by the Company.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each series
or class listed in Appendix A on the later of (i) September 10, 1997 or (ii) the
date on which the Company's Registration Statement relating to Shares of the
Fund becomes effective. Upon effectiveness of this Agreement, it shall supersede
all previous agreements between the parties hereto covering the subject matter
hereof insofar as such Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund
until October 31, 1998 and thereafter shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Directors of
the Company (I) who are not parties to this Agreement or interested persons of
any such party (other than as Directors of the Company) and (II) with respect to
each Class of a Fund for which there is an effective Plan, who do not have any
direct or indirect financial interest in any such Plan applicable to the Class
or in any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a
series or class, without the payment of any penalty, (i) by the Board or by a
vote of a majority of the outstanding voting securities of the Fund or, with
respect to each Class of a Fund for which there is an effective Plan, a majority
of Directors of the Company who do not have any direct or indirect financial
interest in any such Plan or in any agreements related to the Plan, on 60 days'
written notice to the Distributor or (ii) by the Distributor on 60 days' written
notice to the applicable Company.
-13-
<PAGE>
(d) This Agreement shall automatically terminate upon its assignment.
(e) The obligations of Sections 5(e), 5(f), 6(d), 7, 8 and 10 shall
survive any termination of this Agreement with respect to a Fund or
Company.
SECTION 14. NOTICES
Any notice required or permitted to be given hereunder by the
Distributor to the Company or the Company to the Distributor shall be deemed
sufficiently given if personally delivered or sent by telegram, facsimile or
registered, certified or overnight mail, postage prepaid, addressed by the party
giving such notice to the other party at the last address furnished by the other
party to the party giving such notice, and unless and until changed pursuant to
the foregoing provisions hereof each such notice shall be addressed to the
Company or the Distributor, as the case may be, at their respective principal
places of business.
SECTION 15. ACTIVITIES OF THE DISTRIBUTOR
Except to the extent necessary to perform the Distributor's obligations
hereunder, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of the Distributor's employees, agents, officers or
directors who may also be a director, officer or employee of the Company, or
affiliated persons of the Company to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
SECTION 16. ADDITIONAL FUNDS AND CLASSES
In the event that the Company establishes one or more series of Shares
or one or more classes of Shares after the effectiveness of this Agreement, such
series of Shares or classes of Shares, as the case may be, shall become Funds
and Classes under this Agreement upon approval of this Agreement by the Company
with respect to the series of Shares or class of Shares and the execution of an
amended Appendix A reflecting the applicable names and terms. The Distributor
may elect not to make any such series or classes subject to this Agreement.
SECTION 17. MISCELLANEOUS
(a) The Distributor shall not be liable to the Company and the Company
shall not be liable to the Distributor for consequential damages under any
provision of this Agreement.
(b) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
Distributor and the Company.
-14-
<PAGE>
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Maryland.
(d) This Agreement constitutes the entire agreement between the
Distributor and the Company and supersedes any prior agreement with respect to
the subject matter hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) Notwithstanding any other provision of this Agreement, the
Distributor and the Company agree that the assets and liabilities of each Fund
are separate and distinct from the assets and liabilities of each other Fund and
that no Fund shall be liable or shall be charged for any debt, obligation or
liability of any other Fund, whether arising under this Agreement or otherwise.
(i) No affiliated person, employee, agent, officer or director of the
Distributor shall be liable at law or in equity for the Distributor's
obligations under this Agreement.
(j) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof.
(k) The terms "vote of a majority of the outstanding voting
securities," "interested person," "affiliated person" and "assignment" shall
have the meanings ascribed thereto in the 1940 Act.
-15-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
THE GLENMEDE FUND, INC.
By:/s/ John W. Church
-------------------------------
John W. Church
President
ICC DISTRIBUTORS, INC.
By:/s/ John Y. Keffer
-------------------------------
John Y. Keffer
President
-16-
<PAGE>
THE GLENMEDE FUND, INC.
DISTRIBUTION AGREEMENT
Appendix A
as of August 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Distribution
Funds of The Glenmede Fund, Inc. Class Fee
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Government Cash Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Tax-Exempt Cash Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Intermediate Government Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Equity Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Institutional International Portfolio Institutional Shares
Flag Investor Series Class A None
Shares 0.25%
- -------------------------------------------------------------------------------------------------------------------
International Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Small Capitalization Equity Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Large Cap Value Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
Emerging Market Portfolio Single class of shares None
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
-A1-
<PAGE>
THE GLENMEDE FUND, INC.
DISTRIBUTION AGREEMENT
Appendix B
[Form of Sub-Distribution Agreement]
[Date]
Ladies and Gentlemen:
ICC Distributors, Inc. ("ICC"), a Delaware corporation, serves as
Distributor (the "Distributor") of various series of The Glenmede Fund, Inc.
(the "Fund"). The Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). The
Fund offers its shares ("Shares") to the public in accordance with the terms and
conditions contained in the Prospectus of the Fund. The term "Prospectus" as
used herein refers to each prospectus on file with the Securities and Exchange
Commission which is part of the registration statement of the Fund under the
Securities Act of 1933 (the "Securities Act"). In connection with the foregoing
you may serve as a participating dealer (and, therefore, accept orders for the
purchase or redemption of Shares, respond to shareholder inquiries and perform
other related functions) on the following terms and conditions:
1. Participating Dealer. You are hereby designated a Participating
Dealer and as such are authorized (i) to accept orders for the purchase of
Shares and to transmit to the Fund such orders and the payment made therefore,
(ii) to accept orders for the redemption of Shares and to transmit to the Fund
such orders and all additional material, including any certificates for Shares,
as may be required to complete the redemption and (iii) to assist shareholders
with the foregoing and other matters relating to their investments in the Fund,
in each case subject to the terms and conditions set forth in the Prospectus of
the Fund. You are to review each Share purchase or redemption order submitted
through you or with your assistance for completeness and accuracy. You further
agree to undertake from time to time certain shareholder servicing activities
for customers of yours who have purchased Shares and who use your facilities to
communicate with the Fund or to effect redemptions or additional purchases of
the Shares.
2. Limitation of Authority. No person is authorized to make any
representations concerning the Fund or the Shares except those contained in the
Prospectuses of the Fund and in such printed information as the Distributor may
subsequently prepare. No person is authorized to distribute any sales material
relating to the Fund without the prior written approval of the Distributor.
-C1-
<PAGE>
3. Compensation. As compensation for such services, you will look
solely to the Distributor, and you acknowledge that the Fund shall have no
direct responsibility for any compensation. In addition to any sales charge
payable to you by your customer pursuant to a Prospectus, the Distributor will
pay you no less often than annually a shareholder processing service fee (as we
may determine from time to time in writing) computed as a percentage of the
average daily net assets maintained with the Fund during the preceding period by
shareholders who purchase their shares through you or with your assistance,
provided that said assets are at least $25,000 for the fund family for which you
are to be compensated, and provided that in all cases your name is transmitted
with each shareholder's purchase order.
4. Prospectus and Reports. You agree to comply with the provisions
contained in the Securities Act governing the distribution of prospectuses to
persons to whom you offer Shares. You further agree to deliver, upon our
request, copies of any amended Prospectus of the relevant Fund to purchasers
whose Shares you are holding as record owner and to deliver to such persons
copies of the annual and interim reports and proxy solicitation materials of the
Fund. We agree to furnish to you as many copies of each Prospectus, annual and
interim reports and proxy solicitation materials as you may reasonably request.
5. Qualification to Act. You represent that you are a member in good
standing of National Association of Securities Dealers, Inc. (the "NASD"). Your
expulsion or suspension from the NASD will automatically terminate this
Agreement on the effective date of such expulsion or suspension. You agree that
you will not offer Shares to persons in any jurisdiction in which you may not
lawfully make such offer due to the fact that you have not registered under, or
are not exempt from, the applicable registration or licensing requirements of
such jurisdiction. You agree that in performing the services under this
Agreement, you at all times, will comply with the Conduct Rules (formerly the
Rules of Fair Practice) of the NASD, including, without limitation, the
provisions of Rule 2830 (formerly Section 26) of such Rules. You agree that you
will not combine customer orders to reach breakpoints in commission for any
purposes whatsoever unless authorized by the then current Prospectus in respect
of a particular class of Shares or by us in writing. You also agree that you
will place orders immediately upon their receipt and will not withhold any order
so as to profit therefrom. In determining the amount payable to you hereunder,
we reserve the right to exclude any sales which we reasonably determine are not
made in accordance with the terms of the relevant prospectus and provisions of
the Agreement.
6. Blue Sky. The Fund has registered an indefinite number of Shares
under the Securities Act. The Fund intends to make appropriate notice filings in
certain states where such filing is required. We will inform you as to the
states or other jurisdictions in which we believe the Shares are eligible for
sale under the respective securities laws of such states. You agree that you
will offer Shares to your customers only in those states where such Shares are
eligible to be sold. We assume no responsibility or obligation as to your right
to sell Shares in any jurisdiction.
-C2-
<PAGE>
7. Authority of Fund. The Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining to the
offering of its Shares, including the right in its sole discretion to not accept
any order for the purchase of Shares.
8. Record Keeping. You will (i) maintain all records required by law to
be kept by you relating to transactions in Shares and, upon request by the Fund,
promptly make such of these records available to the Fund as the Fund may
reasonably request in connection with its operations and (ii) promptly notify
the Fund if you experience any difficulty in maintaining the records described
in the foregoing clauses in an accurate and complete manner.
9. Liability. The Distributor shall be under no liability to you except
for lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out your obligations, you agree to act in good faith and without
negligence. Nothing contained in this Agreement is intended to operate as a
waiver by the Distributor or you of compliance with any provisions of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
10. Termination. This Agreement may be terminated by either party,
without penalty, upon ten days' notice to the other party and shall
automatically terminate in the event of its assignment, as defined in the
Investment Company Act. This Agreement may also be terminated upon notice to you
at any time for any particular Fund without penalty by the vote of a majority of
the members of the Board of Directors of the Fund who are not "interested
persons" (as such phrase is defined in the Investment Company Act) and who have
no direct or indirect financial interest in the operation of the Distribution
Agreement between the Fund and the Distributor or by the vote of a majority of
the outstanding voting securities of the Fund.
11. Communications. All communications to us should be sent to the
address listed below. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us both copies of this Agreement to:
The Glenmede Fund, Inc.
c/o ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
Attn: Dealer Services
------------------------------
ICC Distributors, Inc.
By: Richard C. Butt
Vice President
-C3-
<PAGE>
Confirmed and accepted:
Firm Name:_________________________________________________________
By:________________________________________________________________
Signature
________________________________________________________________
Printed Name and Title
Date:_______________________________________________________________
Address:____________________________________________________________
____________________________________________________________________
____________________________________________________________________
Clears Through:_____________________________________________________
Phone No.:__________________________________________________________
<PAGE>
THE GLENMEDE FUND, INC.
AMENDED AND RESTATED
SHAREHOLDER SERVICING PLAN
Section 1. Each of the proper officers of The Glenmede Fund, Inc. (the
"Company") is authorized to execute and deliver, in the name and on behalf of
the Company, written agreements based substantially on the form attached hereto
as Appendix A or any other form duly-approved by the Company's Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of shares in any of
the Company's series listed on Exhibit I hereto (the "Portfolios"). Pursuant to
such Agreements, Servicing Agents shall provide shareholder support services as
set forth therein to their clients who beneficially own shares of the Portfolios
in consideration of a fee, computed monthly in the manner set forth in the
applicable Portfolio's then current prospectus, at an annual rate specified on
Exhibit I hereto as a percentage of the average daily net asset value of the
shares beneficially owned by or attributable to such clients. Affiliates of the
Company's distributor, administrator and adviser are eligible to become
Servicing Agents and to receive fees under this Plan. All expenses incurred by
the Portfolios in connection with the Agreements and the implementation of this
Plan shall be borne entirely by the holders of the shares of the particular
Portfolio involved. If more than one Portfolio is involved and expenses are not
directly attributable to shares of a particular Portfolio, then the expenses may
be allocated between or among the shares of the Portfolios in a manner
determined by the Board.
Section 2. The Company's administrator shall monitor the arrangements
pertaining to the Company's Agreements with Servicing Agents. The Company's
administrator shall not, however, be obligated by this Plan to recommend, and
the Company shall not be obligated to execute, any Agreement with any qualifying
Servicing Agents.
Section 3. So long as this Plan is in effect, the Company's
administrator shall provide to the Company's Board of Trustees, and the Trustees
shall review, at least quarterly, a written report of the amounts expended
pursuant to this Plan and the purposes for which such expenditures were made.
Section 4. This Plan shall become effective on October ___, 1997 and
unless sooner terminated, this Plan shall continue in effect thereafter for
successive annual periods, provided that such continuance is specifically
approved by a majority of the Board of Trustees, including a majority of the
Trustees who are
<PAGE>
not "interested persons," as defined in the Investment Company Act of 1940, of
the Company and have no direct or indirect financial interest in the operation
of this Plan or in any Agreement related to this Plan (the "Disinterested
Trustees") pursuant to a vote cast in person at a meeting called for the purpose
of voting on this Plan.
Section 5. This Plan may be amended at any time with respect to any
Portfolio by the Company's Board of Trustees, provided that any material
amendment of the terms of this Plan (including a material increase of the fee
payable hereunder) shall become effective only upon the approvals set forth in
Section 4.
Section 6. This Plan is terminable at any time with respect to any
Portfolio by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and nomination
of those Trustees who are not "interested persons (as defined in the Investment
Company Act of 1940) of the Company shall be committed to the discretion of such
non-interested Trustees.
Section 8. The Company will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
Dated: October 24, 1997
-2-
<PAGE>
EXHIBIT I
THE GLENMEDE FUND, INC.
Portfolio Fee
- --------- ------------------
(as a percentage of
average daily net
assets)
Government Cash Portfolio .05%
Tax-Exempt Cash Portfolio .05%
Core Fixed Income Portfolio .05%
International Portfolio .05%
Equity Portfolio .05%
Small Capitalization Equity Portfolio
Institutional shares .05%
Advisor shares .25%
Large Cap Value Portfolio .05%
<PAGE>
APPENDIX A
THE GLENMEDE FUND, INC.
AMENDED AND RESTATED
SHAREHOLDER SERVICING AGREEMENT
Ladies and Gentlemen:
We wish to enter into this Shareholder Servicing Agreement
("Agreement") with you concerning the provision of administrative support
services to your clients ("Customers") who may from time to time beneficially
own shares in one or more series listed on Exhibit I hereto (the "Portfolios")
of The Glenmede Fund, Inc.
(the "Company").
The terms and conditions of this Agreement are as follows:
Section 1. You agree to provide the following administrative support
services to your Customers who may from time to time beneficially own shares of
one or more Portfolios:1 (i) aggregating and processing purchase and redemption
requests from Customers and transmitting promptly net purchase and redemption
orders to our distributor or transfer agent; (ii) providing Customers with a
service that invests the assets of their accounts in shares pursuant to specific
or pre-authorized instructions; (iii) processing dividend and distribution
payments from the Company on behalf of Customers; (iv) providing information
periodically to Customers showing their positions; (v) arranging for bank wires;
(vi) responding to Customers' inquiries concerning their investment; (vii)
providing subaccounting with respect to shares beneficially owned by Customers
or the information necessary for subaccounting; (viii) if required by law,
forwarding shareholder communications from us (such as proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices) to Customers; and (ix) providing such other similar services as
we may reasonably request to the extent you are permitted to do so under
applicable statutes, rules or regulations. All services rendered hereunder by
you shall be performed in a professional, competent and timely manner.
Section 2. You will perform only those activities which are consistent
with statutes and regulations applicable to you. You will act solely as agent
or, upon the order of, and for the account of, your Customers.
- --------
1 Services may be modified or omitted in the particular case and items
relettered or renumbered.
-1-
<PAGE>
Section 3. You will provide such office space and equipment, telephone
facilities and personnel (which may be any part of the space, equipment and
facilities currently used in your business, or any personnel employed by you) as
may be reasonably necessary or beneficial in order to provide the administrative
support services contemplated hereby.
Section 4. Neither you nor any of your officers, employees or agents
are authorized to make any representations concerning us or the shares except
those contained in our then current prospectuses and statements of additional
information, as amended or supplemented from time to time, copies of which will
be supplied by us to you, or in such supplemental literature or advertising as
may be authorized by our distributor or us in writing.
Section 5. For all purposes of this Agreement you will be deemed to be
an independent contractor, and will have no authority to act as agent for us in
any matter or in any respect. By your written acceptance of this Agreement, you
agree to and do release, indemnify and hold us harmless from and against any and
all direct or indirect liabilities or losses resulting from requests,
directions, actions or inactions of or by you or your officers, employees or
agents regarding your responsibilities hereunder or the purchase, redemption,
transfer or registration of shares (or orders relating to the same) by or on
behalf of Customers. You and your employees will, upon request, be available
during normal business hours to consult with us or our designees concerning the
performance of your responsibilities under this Agreement.
Section 6. In consideration of the services and facilities provided by
you hereunder, we will pay to you, and you will accept as full payment therefor,
a fee as described in Exhibit I hereto, as amended from time to time. The fee
rate payable to you may be prospectively increased or decreased by us, in our
sole discretion, at any time upon notice to you. Further, we may, in our
discretion and without notice, suspend or withdraw the sale of shares of any and
all Portfolios, including the sale of shares to you for the account of any
Customer or Customers. Compensation payable under this Agreement may be subject
to, among other things, the National Association of Securities Dealers, Inc.
("NASD") Rules of Fair Practice governing receipt by NASD members of shareholder
servicing plan fees from registered investment companies (the "NASD Servicing
Plan Rule"), which became effective on July 7, 1993. Such compensation shall
only be paid if permissible under the NASD Servicing Plan Rule and shall not be
payable for services that are deemed to be distribution-related services.
Section 7. You will furnish us or our designees with such information
as we or they may reasonably request (including,
-2-
<PAGE>
without limitation, periodic certifications confirming the provision to
Customers of the services described herein), and will otherwise cooperate with
us and our designees (including, without limitation, any auditors or legal
counsel designated by us), in connection with the preparation of reports to our
Board of Trustees concerning this Agreement and the monies paid or payable by us
pursuant hereto, as well as any other reports or filings that may be required by
law.
Section 8. We may enter into other similar Agreements with any other
person or persons without your consent.
Section 9. By your written acceptance of this Agreement, you represent,
warrant and agree that: (i) in no event will any of the services provided by you
hereunder be primarily intended to result in the sale of any shares issued by
us; and (ii) the compensation payable to you hereunder, together with any other
compensation you receive in connection with the investment of your Customers'
assets in shares of the Portfolios, will be disclosed by you to your Customers
to the extent required by applicable laws or regulations, will be authorized by
your Customers and will not result in an excessive or unreasonable fee to you.
Section 10. This Agreement will become effective on the date a fully
executed copy of this Agreement is received by us or our designee. Unless sooner
terminated, this Agreement will continue until ________________ and thereafter
will continue automatically for successive annual periods provided such
continuance is specifically approved at least annually by us in the manner
described in Section 11. This Agreement is terminable with respect to shares of
any Portfolio, without penalty, at any time by us (which termination may be by a
vote of a majority of our Disinterested Trustees as defined below) or by you
upon written notice to the other party hereto.
Section 11. This Agreement has been approved by vote of a majority of
(1) our Board of Trustees and (ii) those Trustees who are not "interested
persons" (as defined in the Investment Company Act of 1940) of us and have no
direct or indirect financial interest in the operation of the Shareholder
Servicing Plan adopted by us regarding the provision of support services to the
beneficial owners of shares of the Portfolios or in any agreement related
thereto cast in person at a meeting called for the purpose of voting on such
approval ("Disinterested Trustees").
Section 12. All notices and other communications to either you or us
will be duly given if mailed, telegraphed, telexed or transmitted by similar
telecommunications device to the appropriate address or number stated herein
(with a confirming
-3-
<PAGE>
copy by mail), or to such other address as either party shall so provide in
writing to the other.
Section 13. This Agreement will be construed in accordance with the
internal laws of The Commonwealth of Pennsylvania without giving effect to
principles of conflict of laws, and is nonassignable by the parties hereto.
If you agree to be legally bound by the provisions of this Agreement,
please sign a copy of this letter where indicated below and promptly return it
to us, at the following address: Investment Company Capital Corp., 135 East
Baltimore Street, Baltimore, Maryland 21202; fax number (410) 637-6875;
Attention: _______________.
Very truly yours,
The Glenmede Fund, Inc.
Date: _______________________ By: ______________________________
Name: ____________________________
Title: ___________________________
Accepted and Agreed to:
Servicing Agent
__________________________________
(Firm Name)
__________________________________
(Address)
__________________________________
(City) (State)
Fax #: ___________________________
Attention: _______________________
Date: _______________________ By: ______________________________
Name: ____________________________
Title: ___________________________
-4-
<PAGE>
EXHIBIT I
THE GLENMEDE FUND, INC.
Portfolio Fee
- --------- -------------------
(as a percentage of
average daily net
assets)
Government Cash Portfolio .05%
Tax-Exempt Cash Portfolio .05%
Core Fixed Income Portfolio .05%
International Portfolio .05%
Equity Portfolio .05%
Small Capitalization Equity Portfolio
Institutional shares .05%
Advisor shares .25%
Large Cap Value Portfolio .05%
<PAGE>
LAW OFFICES
Drinker Biddle & Reath LLP
1345 Chestnut Street
Philadelphia, PA 19107-3496
Telephone: (215) 988-2700
Fax: (215) 988-2757
Exhibit 10
October 31, 1997
The Glenmede Fund, Inc.
One South Street
Baltimore, MD 21202
Re: Shares Registered by Post-Effective Amendment No. 24 to
Registration Statement on Form N-1A (File Nos. 33-22884
and 811-5577)
--------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to The Glenmede Fund, Inc. (the "Company") in
connection with the preparation and filing with the Securities and Exchange
Commission of Post-Effective Amendment No. 24 (the "Amendment") to the Company's
Registration Statement on Form N-1A under the Securities Act of 1933, as
amended, registering Institutional Shares ("Shares") representing interests in
the Small Capitalization Equity Portfolio. The Amendment seeks to register an
indefinite number of Shares.
We have reviewed the Company's Certificate of Incorporation, By-Laws,
resolutions of its Board of Directors and such other legal and factual matters
as we have deemed appropriate.
We assume that, prior to the effectiveness of the Amendment under the
Securities Act of 1933, the Company will have filed with the Maryland Department
of Assessments and Taxation all necessary documents (the "Documents") to
authorize, classify and establish the Shares.
This opinion is based exclusively on the Maryland General Corporation
Law and the federal law of the United States of America.
<PAGE>
The Glenmede Fund, Inc.
October 31, 1997
Page 2
Based upon the foregoing, it is our opinion that the Shares, when
issued for payment as described in the Company's Prospectus and in accordance
with the Company's Articles of Incorporation and the Documents for not less than
$.001 per share, will be legally issued, fully paid and non-assessable by the
Company.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment to the Company's Registration Statement.
Very truly yours,
/s/ Drinker Biddle & Reath LLP
-------------------------------
DRINKER BIDDLE & REATH LLP
<PAGE>
Exhibit 11(a)
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference
to our Firm under the caption "Counsel" in the Prospectus that is included in
Post-Effective Amendment No. 24 to the Registration Statement (No. 33-22884) on
Form N-1A under the Securities Act of 1933, as amended, and Post-Effective
Amendment No. 26 to the Registration Statement (No. 811-5577) on Form N-1A under
the Investment Company Act of 1940, as amended, of The Glenmede Fund, Inc. This
consent does not constitute a consent under section 7 of the Securities Act of
1933, and in consenting to the use of our name and the references to our Firm
under such caption we have not certified any part of the Registration Statement
and do not otherwise come within the categories of persons whose consent is
required under said section 7 or the rules and regulations of the Securities and
Exchange Commission thereunder.
/s/ Drinker Biddle & Reath LLP
--------------------------------
DRINKER BIDDLE & REATH LLP
Philadelphia, Pennsylvania
October 31, 1997
<PAGE>
Exhibit 15
THE GLENMEDE FUND, INC.
FLAG INVESTORS SERIES CLASS A SHARES OF THE
INSTITUTIONAL INTERNATIONAL PORTFOLIO
DISTRIBUTION PLAN
1. The Plan. This Plan (the "Plan") is a written plan as
described in Rule 12b-1 (the "Rule") under the Investment Company Act of 1940,
as amended (the "1940 Act") for Flag Investors Series Class A Shares (the "Class
A Shares") of the Institutional International Portfolio ("Portfolio") of The
Glenmede Fund, Inc. (the "Fund"). Other capitalized terms herein have the
meaning given to them in the Portfolio's prospectus.
2. Payments Authorized. (a) ICC Distributors, Inc. ("ICC
Distributors") is authorized, pursuant to the Plan, to make payments to any
Participating Dealer under a Sub-Distribution Agreement, to accept payments made
to it under the Distribution Agreement and to make payments on behalf of the
Class A Shares to Shareholder Servicing Agents under Shareholder Servicing
Agreements.
(b) ICC Distributors may make payments in any
amount, provided that the total amount of all payments made during a fiscal year
of the Class A Shares do not exceed, in any fiscal year of the Portfolio, the
amount paid to ICC Distributors under the Distribution Agreement which is an
annual fee, calculated on an average daily net basis and paid monthly, equal to
.25% of the average daily net asset value of the Class A Shares.
3. Expenses Authorized. ICC Distributors is authorized,
pursuant to the Plan, from sums paid to it under the Distribution Agreement, to
purchase advertising for the Class A Shares, to pay for promotional or sales
literature and to make payments to sales personnel affiliated with it for their
efforts in connection with sales of Class A Shares. Any such advertising and
sales material may include references to other open-end investment companies or
other investments, provided that expenses relating to such advertising and sales
material will be allocated among such other investment companies or investments
in an equitable manner, and any sales personnel so paid are not required to
devote their time solely to the sale of Class A Shares.
4. Certain Other Payments Authorized. As set forth in the
Distribution Agreement, the Class A Shares assume certain expenses, which ICC
Distributors and the Fund's Advisor are
<PAGE>
authorized to pay or cause to be paid on its behalf and such payments shall not
be included in the limitations contained in this Plan. These expenses include:
the fees of the Fund's Advisor and ICC Distributors; the charges and expenses of
any registrar, any custodian or depository appointed by the Fund for the
safekeeping of its cash, portfolio securities and other property, and any
transfer, dividend or accounting agent or agents appointed by the Fund; brokers'
commissions chargeable to the Fund in connection with portfolio securities
transactions to which the Fund is a party; all taxes, including securities
issuance and transfer taxes, and fees payable by the Fund to federal, state or
other governmental agencies; the costs and expenses of engraving or printing of
certificates representing shares of the Class A Shares; all costs and expenses
in connection with maintenance of registration of the Class A Shares with the
Securities and Exchange Commission (the "SEC") and various states and other
jurisdictions (including filing fees and legal fees and disbursement of
counsel); the costs and expenses of printing, including typesetting and
distributing prospectuses and statements of additional information of the Class
A Shares and supplements thereto to the Class A Share's shareholders; all
expenses of shareholders' and Directors' meetings and of preparing, printing and
mailing of proxy statements and reports to shareholders; fees and travel
expenses of Directors or Director members of any advisory board or committee;
all expenses incident to the payment of any dividend, distribution, withdrawal
or redemption, whether in shares or in cash; charges and expenses of any outside
service used for pricing of the Class A Shares; charges and expenses of legal
counsel including counsel to the Directors of the Fund who are not interested
persons (as defined in the 1940 Act) of the Fund and of independent certified
public accountants, in connection with any matter relating to the Fund;
membership dues of industry associations; interest payable on Fund borrowings;
postage; insurance premiums on property or personnel (including officers and
Directors) of the Fund which inure to its benefit; extraordinary expenses
(including, but not limited to, legal claims and liabilities and litigation
costs and any indemnification related thereto); and all other charges and costs
of the Fund's operation unless otherwise explicitly provided herein.
5. Other Distribution Resources. ICC Distributors and
Participating Dealers may expend their own resources separate and apart from
amounts payable under the Plan to support the Class A Shares's distribution
effort. ICC Distributors will report to the Board of Directors on any such
expenditures as part of its regular reports pursuant to Section 6 of this Plan.
6. Reports. While this Plan is in effect, ICC Distributors
shall report in writing at least quarterly to the Fund's Board of Directors, and
the Board shall review, the following: (i) the amounts of all payments under the
Plan, the
-2-
<PAGE>
identity of the recipients of each such payment; (ii) the basis on which the
amount of the payment to such recipient was made; (iii) the amounts of expenses
authorized under this Plan and the purpose of each such expense; and (iv) all
costs of each item specified in Section 4 of this Plan (making estimates of such
costs where necessary or desirable), in each case during the preceding calendar
or fiscal quarter.
7. Effectiveness, Continuation, Termination and Amendment.
This Plan has been approved (i) by a vote of the Board of Directors of the Fund
and of a majority of the Directors who are not interested persons (as defined in
the 1940 Act), cast in person at a meeting called for the purpose of voting on
this Plan; and (ii) by a vote of holders of at least a majority of the Fund's
outstanding voting securities (as defined in the 1940 Act). This Plan shall
unless terminated as hereinafter provided, continue in effect from year to year
only so long as such continuance is specifically approved at least annually by
the vote of the Fund's Board of Directors and by the vote of a majority of the
Directors of the Fund who are not interested persons (as defined in the 1940
Act), cast in person at a meeting called for the purpose of voting on such
continuance. This Plan may be terminated at any time by a vote of a majority of
the Directors who are not interested persons (as defined in the 1940 Act) or by
the vote of the holders of a majority of the Fund's outstanding voting
securities (as defined in the 1940 Act). This Plan may not be amended to
increase materially the amount of payments to be made without shareholder
approval, as set forth in (ii) above, and all amendments must be approved in the
manner set forth under (i) above.
-3-
<PAGE>
THE GLENMEDE FUND, INC.
(the "Company")
AMENDED AND RESTATED PLAN
PURSUANT TO RULE 18f-3 FOR OPERATION OF
A MULTI-CLASS SYSTEM
I. INTRODUCTION
Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act") permits the creation and operation of a multi-class
distribution structure without the need to obtain an exemptive order under
Section 18 of the 1940 Act. Rule 18f-3, requires an investment company to file
with the Commission a written plan specifying all of the differences among the
classes, including the various services offered to shareholders, the different
distribution arrangements for each class, the methods for allocating expenses
relating to those differences and any conversion features or exchange
privileges. On June 9, 1997, the Board of Trustees of the Company authorized the
Company to implement a multi-class distribution structure in compliance with
Rule 18f-3. This Plan pursuant to Rule 18f-3 for operation of a multi-class
system shall become effective immediately after the close of business on the
business day immediately preceding the day on which the Company begins operation
of its multi-class distribution structure (the "Effective Date"), provided that
such Plan has previously been filed with the Securities and Exchange Commission
(the "Commission").
II. ATTRIBUTES OF CLASSES
A. Generally
Institutional International Portfolio
The Company shall offer two classes of shares --Institutional
Shares and Flag Investors Class A Shares ("Class A" Shares) -- in the
Institutional International Portfolio.
Small Capitalization Equity Portfolio
The Company shall offer two classes of shares --Institutional
Shares and Advisor Shares -- in the Small Capitalization Equity Portfolio
("Small Cap Portfolio").
<PAGE>
In general, shares of each class shall be identical except for
different expense variables (which will result in different returns for each
class), certain related rights and certain shareholder services. More
particularly, the Class A Shares and the Institutional Shares of the
Institutional International Portfolio shall represent interests in the same
portfolio of investments of the Institutional International Portfolio, and shall
be identical in all respects, except for: (a) the impact of (i) expenses
assessed to Class A Shares pursuant to the Distribution Plan, the Distribution
Agreement with Alex. Brown and Sons Incorporated ("Alex. Brown"), and the Master
Services Agreement (collectively, the "Agreement") and (ii) any other
incremental expenses identified from time to time that should be properly
allocated to one class so long as any subsequent changes in expense allocations
are reviewed and approved by a vote of the Board of Directors, including a
majority of the independent Directors; (b) the fact that (i) the Class A Shares
shall vote separately on any matter submitted to holders of Class A Shares that
pertains to an Agreement that affects only that class; and (ii) each class shall
vote separately on any matter submitted to shareholders that pertains to the
class expenses borne by that class only; (c) the exchange privileges of each
class of shares; (d) the designation of each class of shares; and (e) the
different shareholder services relating to a class of shares.
The Institutional Shares and the Advisor Shares of the Small
Cap Portfolio shall represent interests in the same portfolio of investments of
the Small Cap Portfolio, and shall be identical in all respects, except for: (a)
the impact of (i) expenses assessed to Institutional Shares and Advisor Shares
pursuant to the Shareholder Services Plan (the "Service Plan") and (ii) any
other incremental expenses identified from time to time that should be properly
allocated to one class so long as any subsequent changes in expense allocations
are reviewed and approved by a vote of the Board of Directors, including a
majority of the independent Directors; (b) the fact that (i) each class shall
vote separately on any matter submitted to shareholders that pertains to the
Service Plan for that class only; and (ii) each class shall vote separately on
any matter submitted to shareholders that pertains to the class expenses borne
by that class only; and (c) the designation of each class of shares; and (d) the
different shareholder services relating to a class of shares.
-2-
<PAGE>
B. Distribution Arrangements, Expenses and Sales Charges
1. Institutional International Portfolio
Class A Shares
Class A Shares shall be offered to the general
public and shall be subject to a front-end sales charge which shall not
initially exceed 4.50% of the offering price of Class A Shares of the Portfolio.
A reduced sales charge may be obtained through a right of accumulation.
Purchases of $1 million or more by persons not otherwise eligible for sales load
waivers are not subject to an initial sales charge; however, a contingent
deferred sales charge of .50% may be imposed upon redemption.
Class A Shares shall be further subject to (a) a
distribution fee payable pursuant to a Distribution Plan adopted for the class
which shall not initially exceed 0.25% (on an annual basis) of the average daily
net asset value of the Portfolio's outstanding Class A Shares, and (b) a
separate fee payable pursuant to the Master Services Agreement.
Institutional Shares
Institutional Shares shall be offered to the
public generally.
Institutional Shares shall not be subject to a
front-end sales charge.
2. Small Cap Portfolio
Institutional and Advisor Shares of the Small Cap
Portfolio shall be offered to the public generally. Institutional and Advisor
Shares are not be subject to a sales load, but are subject to a fee payable
pursuant to the Services Plan at an annual rate of .05% and .25%, respectively,
of the average daily net asset value of the shares beneficially owned by or
attributable to clients of certain institutions ("Servicing Agents").
Shareholder services covered by the Services Plan
initially shall consist of: (i) aggregating and processing purchase and
redemption requests from customers and transmitting promptly net purchase and
redemption orders to the distributor or transfer agent; (ii) providing customers
with a service that invests the assets of their accounts in shares pursuant to
specific or pre-authorized instructions; (iii) processing dividend and
distribution payments from the Company on behalf of customers; (iv) providing
information periodically to customers showing their positions; (v) arranging for
bank wires; (vi) responding to customers' inquiries concerning their investment;
(vii) providing subaccounting with respect to shares beneficially owned by
customers or the information to the Company necessary for subaccounting; (viii)
if required by law,
-3-
<PAGE>
forwarding shareholder communications from the Company (such as proxies,
shareholder reports, annual and semi-annual financial statements and dividend,
distribution and tax notices) to customers; and (ix) providing such other
similar services as the Company may reasonably request.
The Institutional Shares have a $10 million minimum initial investment
requirement. The Advisor Shares have no minimum initial investment requirement.
C. Exchange Privileges
1. Institutional International Portfolio
Class A Shares
Holders of Class A Shares generally shall be
permitted to exchange their shares for Class A Shares of another Flag Investors
Fund. No additional sales charge will be incurred when exchanging Class A Shares
of the Portfolio for Class A Shares of another Flag Investors Fund.
Institutional Shares
The Company shall not offer exchange privileges to
holders of Institutional Shares of the Institutional International Portfolio.
2. Small Cap Portfolio
The Company shall not offer exchange privileges to
holders of Institutional or Advisor Shares of the Small Cap Portfolio.
D. Shareholder Services
1. Telephone Transaction Privilege
Institutional International Portfolio
Class A Shares
The Company shall initially offer a telephone
transaction privilege to holders of Class A Shares of the Portfolio whereby a
shareholder may exercise the exchange privilege with respect to other Flag
Investors Funds or redeem Class A Shares up to $50,000 from an established
account by telephone.
Institutional Shares
The Company shall not offer a telephone transaction
privilege to holders of Institutional Shares of the Institutional International
Portfolio.
-4-
<PAGE>
Small Cap Portfolio
The Company shall not offer a telephone transaction
privilege to holders of Institutional or Advisor Shares of the Small Cap
Portfolio.
2. Dividend Reinvestment
Institutional International Portfolio
Class A Shares
The Company shall initially offer a dividend
reinvestment option whereby holders of Class A Shares may elect to have their
dividends, capital gain distributions, or both received from another Flag
Investors Fund account automatically invested in additional Class A Shares of
the portfolio of the Company or in any Class A Shares of other Flag Investors
Funds in which they currently maintain an account.
Institutional Shares
The Company shall not offer a Dividend Reinvestment
feature to holders of Institutional Shares of the Institutional International
Portfolio.
Small Cap Portfolio
The Company shall not offer a Dividend Reinvestment
feature to holders of Institutional or Advisor Shares of the Small Cap
Portfolio.
3. Systematic Withdrawal Feature
Institutional International Portfolio
Class A Shares
The Company shall initially offer a systematic
withdrawal feature whereby an investor may automatically redeem Class A Shares
on a monthly or quarterly basis.
Institutional Shares
The Company shall not offer a systematic withdrawal
feature to holders of Institutional Shares of the Institutional International
Portfolio.
Small Cap Portfolio
The Company shall not offer a systematic withdrawal
feature to holders of Institutional or Advisor Shares of the Small Cap
Portfolio.
-5-
<PAGE>
4. Automatic Investment Program
Institutional International Portfolio
Class A Shares
The Company shall initially offer an automatic
investment program whereby an investor generally may purchase Class A Shares of
the Portfolio on a regular basis by having a specific amount of money debited
from his/her checking account.
Institutional Shares
The Company shall not offer an automatic investment
program to holders of Institutional Shares of the Institutional International
Portfolio.
Small Cap Portfolio
The Company shall not offer an automatic investment program to
holders of Institutional or Advisor Shares of the Small Cap Portfolio.
E. Methodology for Allocating Expenses Between Classes
Expenses of the Portfolio are apportioned to each class of
shares depending upon the nature of the expense item.
1. General Expenses
General Expenses are expenses that are attributable to both
classes of shares and are allocated between the classes of shares based on the
relative net asset values of their respective outstanding shares. General
Expenses include advisory fees payable to the investment adviser under the
investment advisory agreement and other expenses such as custody and
professional fees.
2. Class-Specific Expenses
Class-Specific Expenses are expenses that are attributable to
a specific class of shares and are allocated to the class of shares to which
they relate. Such expenses include distribution expenses and for the Class A
Shares, fees under the Master Services Agreement. Class-specific expenses that
are based on a percentage of average daily net assets are calculated by
multiplying the appropriate daily rate by the value of the outstanding shares of
the respective class. Other class-specific expenses, which may include printing,
postage, share certificates and other charges, are calculated based upon daily
accrual rates furnished by the administrator which are based upon estimates of
such expenses for the year.
Approved: October 24, 1997
-6-
