<PAGE> 1
SCHEDULE 14A INFORMATION
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
HEITMAN SECURITIES TRUST
(Name of Registrant as Specified In Its Charter)
HEITMAN SECURITIES TRUST
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[HEITMAN SECURITIES LOGO]
Dear Shareholder:
On behalf of the Board of Trustees of Heitman Securities Trust, we are
pleased to invite you to a special meeting of shareholders of the Heitman Real
Estate Fund to be held on February 27, 1998. At the meeting you will be asked to
approve a proposed reorganization in which the Fund would become part of the UAM
family of funds, which currently consists of 44 mutual funds with assets in
excess of $3.2 billion. In the reorganization, your Fund shares will be
exchanged for shares of a new portfolio series of UAM Funds Trust, the
UAM/Heitman Real Estate Portfolio, that has been created for the purpose of
continuing the Fund's operations following the reorganization.
The reorganization will not alter the day-to-day management of the Fund's
investments. Heitman/PRA Advisors will continue as the investment adviser under
the overall supervision of the Board of Trustees of UAM Funds Trust. Dean
Sotter, Timothy Pire and Randy Newsome will continue to have primary
responsibility for managing the investment portfolio. The investment objective
and policies of the UAM/Heitman Real Estate Portfolio will be substantially the
same as those of the Fund.
We believe that the reorganization will benefit the Fund's shareholders. In
considering the proposed reorganization you should note the following:
- Following the reorganization, shareholders are expected to experience
lower operating expenses on a per share basis.
- Chase Manhattan Bank and its affiliated companies, which have
significant experience as a service provider to the mutual fund
industry, will provide sub-transfer agency, sub-administrative,
sub-fund accounting and custody services to the UAM/Heitman Real
Estate Portfolio.
- The reorganization offers the potential for future expense reductions
resulting from sharing fixed expenses across the larger asset base of
the UAM family of funds.
- Shareholders will gain access to a broader array of investor services
provided by the UAM Funds, including exchange privileges offered to
Institutional Class shareholders.
- The reorganization will be tax-free for federal income tax purposes
and no sales charge will be imposed in connection with the
reorganization.
We anticipate that the reorganization will take place on February 27, 1998.
The attached Proxy Statement describes the proposed reorganization in detail. If
you have any questions about the reorganization, please feel free to call us at
1-800-435-1405.
We look forward to seeing you at the meeting or receiving your proxy so
that your shares may be voted.
Sincerely,
William L. Ramseyer
Chairman and Chief Executive Officer
<PAGE> 3
HEITMAN REAL ESTATE FUND,
A SERIES OF HEITMAN SECURITIES TRUST
------------------------
NOTICE OF MEETING OF SHAREHOLDERS
------------------------
To the Shareholders:
A meeting of shareholders of Heitman Securities Trust (the "Heitman
Trust"), which consists of one investment portfolio, the Heitman Real Estate
Fund (the "Fund"), will be held at 2:00 p.m. on February 27, 1998, at the
offices of Goodwin, Procter & Hoar LLP, Exchange Place, Boston, Massachusetts
02109-2881. The meeting will be held for the following purposes:
1. To approve an Agreement and Plan of Reorganization providing for
(i) the transfer of all of the assets of the Fund to the UAM/Heitman Real
Estate Portfolio (the "UAM Heitman Portfolio"), a newly-created series of
UAM Funds Trust, in exchange for delivery to the Fund of shares of the UAM
Heitman Portfolio (the "UAM Heitman Shares") and the assumption by the UAM
Heitman Portfolio of the liabilities of the Fund; and (ii) the distribution
of the UAM Heitman Shares to the shareholders of the Fund in liquidation of
the Fund.
2. To transact such other business as may properly come before the
meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on January 6, 1998 will be
entitled to receive notice of and vote at the meeting.
By Order of the Trustees
Timothy J. Pire
Secretary
Chicago, Illinois
January 13, 1998
WE NEED YOUR PROXY VOTE IMMEDIATELY
YOUR VOTE IS IMPORTANT. BY LAW, THE MEETING OF SHAREHOLDERS OF THE FUND WILL
HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM IS
REPRESENTED. IN THAT EVENT, THE FUND WOULD CONTINUE TO SOLICIT VOTES IN AN
ATTEMPT TO ACHIEVE A QUORUM. YOUR VOTE COULD BE CRITICAL TO ENABLE THE FUND TO
HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD IMMEDIATELY. YOU
AND ALL OTHER SHAREHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
<PAGE> 4
HEITMAN REAL ESTATE FUND,
A SERIES OF HEITMAN SECURITIES TRUST
PROXY STATEMENT
MEETING OF SHAREHOLDERS
This proxy statement is furnished in connection with a solicitation of
proxies by the trustees of Heitman Securities Trust (the "Heitman Trust") to be
used at a meeting (the "Meeting") of the shareholders of Heitman Real Estate
Fund (the "Fund"), the sole investment portfolio of the Trust. At the Meeting,
shareholders of the Fund will be asked to vote to approve a proposed Agreement
and Plan of Reorganization between the Heitman Trust and UAM Funds Trust
("Proposal One"). The meeting will be held at 2:00 p.m. on February 27, 1998, at
the offices of Goodwin, Procter & Hoar LLP, Exchange Place, Boston,
Massachusetts 02109-2881. Shareholders of record at the close of business on
January 6, 1998 (the "Record Date") are entitled to notice of and to vote at the
meeting. Each share of the Fund is entitled to one vote. Shareholders of the
Fund will vote together as a single class on Proposal One. Shares represented by
executed and unrevoked proxies will be voted in accordance with the
specifications made thereon. If the enclosed form of proxy is executed and
returned, it nevertheless may be revoked by another proxy or by letter or
telegram directed to the Fund, which must indicate the shareholder's name and
account number. To be effective, such revocation must be received prior to the
Meeting. In addition, any shareholder who attends the Meeting in person may vote
by ballot at the Meeting, thereby canceling any proxy previously given. As of
January 6, 1998, the Fund had an aggregate of 20,953,621 shares outstanding,
consisting of 12,841,657 Heitman/PRA Institutional Class shares and 8,111,964
Advisor Class shares (together, the "Fund Shares").
It is estimated that proxy materials will be mailed to shareholders of
record on or about January 13, 1998. Copies of the Fund's annual report for the
fiscal year ended December 31, 1996 were previously mailed to shareholders.
Additional copies of the annual report and most recent semiannual report
succeeding the annual report may be obtained by writing to the principal
executive offices of the Fund at 180 North LaSalle Street, Suite 3600, Chicago,
Illinois 60601, or by calling (800) 435-1405.
The holders of 30% of the shares of the Fund entitled to vote outstanding
at the close of business on the Record Date present in person or by proxy
constitute a quorum for the Meeting. However, the approval of Proposal One will
require the vote of a majority of the outstanding voting securities of the Fund
(within the meaning of the Investment Company Act of 1940, as amended (the "1940
Act")), which means the vote of the lesser of (i) 67% or more of the voting
shares present at the Meeting if the holders of more than 50% of the outstanding
voting shares are present or represented by proxy or (ii) more than 50% of
outstanding voting shares. If a quorum is not present at the Meeting, or if a
quorum is present but sufficient votes to approve Proposal One are not received,
the persons named as proxies may propose one or more adjournments of the Meeting
to permit further solicitation of proxies. In determining whether to adjourn the
Meeting, the following factors may be considered: the percentage of votes then
cast, the percentage of negative votes actually cast, the nature of any further
solicitation and the information to be provided to shareholders with respect to
the reasons for the further solicitation. Any adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting in
person or by proxy.
Abstentions and "broker non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
with respect to which brokers or nominees do not have, or choose not to
exercise, discretionary power) will not be counted as voted for or against any
proposal to which they relate, but will be counted for purposes of determining
whether a quorum is present. For this reason, abstentions and broker non-votes
will assist the Fund in obtaining a quorum but will have the practical effect of
a no vote for purposes of obtaining the requisite vote for approval of Proposal
One.
<PAGE> 5
PROPOSAL ONE
AGREEMENT AND PLAN OF REORGANIZATION
SUMMARY OF THE PLAN OF REORGANIZATION
At a meeting held on October 22, 1997, the Board of Trustees of the Heitman
Trust approved the Agreement and Plan of Reorganization (the "Plan of
Reorganization"), a copy of which is attached to this Proxy Statement as Exhibit
A. The Plan of Reorganization provides for a reorganization of the Fund (the
"Reorganization") pursuant to which all of the assets of the Fund will be
transferred to the UAM/Heitman Real Estate Portfolio, a newly-created portfolio
series (the "UAM Heitman Portfolio") of UAM Funds Trust (the "UAM Trust"), in
exchange for (i) delivery to the Fund by the UAM Trust of a number of UAM
Institutional Class shares and UAM Advisor Class shares of the UAM Heitman
Portfolio (together, the "UAM Heitman Shares"), equivalent to the number of
Heitman Institutional Class shares and Advisor Class shares, respectively,
outstanding at the effective time of the Reorganization and (ii) the assumption
by the UAM Heitman Portfolio of all liabilities of the Fund. Immediately
following this exchange, the Fund will distribute the UAM Heitman Shares to its
shareholders in liquidation of the Fund. Each shareholder of the Fund will
receive a number of UAM Heitman Shares of each class equal to the number of Fund
Shares of the corresponding class of the Fund held by such shareholder at the
effective time of the Reorganization. The Reorganization will be effected at net
asset value without the imposition of a sales charge. The effective time of the
Reorganization will occur at the close of business on February 27, 1998, or such
later date as the UAM Trust and the Heitman Trust may agree (the "Effective
Time").
The UAM Heitman Portfolio is being established solely for the purpose of
effecting the Reorganization and has no prior operating history. The UAM Heitman
Portfolio will have the same investment objective as the Fund and substantially
the same investment policies as the Fund. The Reorganization will have no effect
on the day-to-day management of the Fund's investments. After the Effective
Time, the Fund's investment adviser, Heitman/PRA Advisors, will continue to
serve as the investment adviser for the UAM Heitman Portfolio and the fees
payable to Heitman/PRA Advisors for these services will remain the same. The
persons that are primarily responsible for the day-to-day management of the
Fund's investment portfolio will continue to act in the same capacity following
the Reorganization. Following the Reorganization, the Trustees of the UAM Trust
will be responsible for the overall supervision of the business and affairs of
the UAM Heitman Portfolio. The UAM Trust intends to engage UAM Fund Services,
Inc., Chase Global Funds Services Company and Chase Manhattan Bank N.A., the
current service providers for the other portfolio series of the UAM Trust, to
provide administrative, transfer agency, and accounting and custody services to
the UAM Heitman Portfolio.
The obligations of the Heitman Trust and the UAM Trust under the Plan of
Reorganization are subject to the satisfaction (or waiver prior to the Effective
Time) of various conditions, including approval of the Plan of Reorganization by
shareholders of the Fund at the Meeting. The Plan of Reorganization may be
amended, modified or supplemented in such manner as may be mutually agreed upon
by the Heitman Trust and the UAM Trust. However, following the Meeting, no such
amendment, modification or supplement may have the effect of changing the
provision for determining the number of UAM Heitman Shares to be issued to the
Fund shareholders without their further approval. The Plan of Reorganization may
be terminated at any time prior to the Effective Time by affirmative vote of
each of the Board of Trustees of the Heitman Trust and the Board of Trustees of
the UAM Trust, notwithstanding the approval of the Plan of Reorganization by the
shareholders of the Fund. Following the Effective Time, the Heitman Trust will
be deregistered as an investment company under the 1940 Act and will be
terminated under Massachusetts law. By approving the Reorganization,
shareholders will also be agreeing to waive any investment restrictions which
could be deemed to prohibit the Reorganization to the extent necessary to effect
the Reorganization.
The liquidation of the Fund and distribution of the UAM Heitman Portfolio
shares to shareholders of the Fund will be accomplished by the establishment of
shareholder accounts on the share records of the UAM Heitman Portfolio in the
name of each such shareholder of the Fund, representing the respective number of
full and fractional UAM Heitman Shares due such shareholder. All of the UAM
Heitman Portfolio's future distributions attributable to the shares issued in
the Reorganization will be paid to shareholders in cash or
2
<PAGE> 6
invested in additional shares of the UAM Heitman Portfolio at the price in
effect as described in the UAM Heitman Portfolio's prospectus on the respective
payment dates in accordance with instructions previously given by the
shareholder to the Fund's transfer agent. As of the Effective Time, each
outstanding certificate which, prior to the Effective Time, represented shares
of the Fund will be deemed for all purposes to evidence ownership of the number
of UAM Heitman Shares issuable with respect thereto pursuant to the
Reorganization. After the Effective Time, certificates originally representing
Heitman Institutional Class Shares will be rendered nonnegotiable. Upon special
request and surrender of such certificates to UAM Fund Services, Inc. ("UAM Fund
Services"), 211 Congress Street, Boston, Massachusetts 02110, as transfer agent,
holders of these nonnegotiable certificates shall be entitled to receive
certificates representing the number of UAM Institutional Class Shares issuable
with respect thereto. Each share of the UAM Heitman Portfolio issued in the
Reorganization will be fully paid and nonassessable by the UAM Trust when
issued, will be transferable without restrictions, will have no preemptive or
cumulative voting rights and will have only such conversion or exchange rights
as the Board of Trustees of the UAM Trust may grant in its discretion.
Heitman/PRA Advisors has agreed to pay all costs associated with holding
the meeting and obtaining shareholder approval of the Reorganization, including
the cost of preparing and mailing this Proxy Statement to shareholders and the
cost of soliciting proxies. In addition to solicitation of proxies by mail,
officers, regular employees or other representatives of Heitman/PRA Advisors or
ACG Capital Corporation, the distributor of the Heitman Advisor Class shares,
may also solicit proxies by telephone or telegram. The Heitman Trust may also
retain a proxy solicitation firm to assist with the mailing and tabulation
effort and any special, personal solicitation of proxies, the cost of which will
be borne by Heitman/PRA Advisors.
The Plan of Reorganization provides that the UAM Trust will indemnify each
trustee of the Heitman Trust who is not an "interested person" of the Heitman
Trust, as defined under the 1940 Act (the "Independent Trustees"), under
substantially identical terms as the Heitman Trust Agreement. The Plan of
Reorganization also provides that the Heitman Trust will procure a liability
insurance policy providing insurance for such Trustees and for the UAM Trust
with respect to any indemnification by the UAM Trust of such Trustees pursuant
to the Plan of Reorganization, the cost of which is estimated to be $80,000.
All information in this Proxy Statement regarding the UAM Trust, the UAM
Heitman Portfolio, their operations and the various agreements between the UAM
Trust and its several service providers has been supplied by the UAM Trust and
neither the Heitman Trust not any of its trustees or officers has independently
verified the accuracy of such information.
REASONS FOR THE REORGANIZATION; BOARD CONSIDERATIONS
The proposed Reorganization of the Fund with UAM Trust is the outcome of
deliberations by the Board of Trustees dating to March 1997. In March 1997,
Heitman/PRA Advisors recommended that the Trustees consider the benefits that
would be realized by shareholders if the Fund were to be operated as a series of
the UAM family of mutual funds. In response to this recommendation, the
Independent Trustees requested that management outline a specific reorganization
proposal for their consideration and, in connection therewith, that management
provide the Independent Trustees with an analysis of the specific benefits to be
realized by shareholders from the proposal. In addition, the Independent
Trustees submitted to management a request for specific information concerning a
variety of matters necessary to evaluate the proposal, including a comparison of
the expenses of operating the Fund before and after the reorganization,
information concerning the qualifications of the various service providers that
would be responsible for providing administrative, accounting, transfer agency
and custody services for the Fund, information concerning the structure and
operations of the UAM family of funds and information concerning the
qualifications of the individuals currently serving as trustees of the UAM
Trust.
In September 1997, after receiving a specific reorganization proposal from
Heitman/PRA Advisors, the Independent Trustees met separately with independent
counsel and Fund counsel to review the information provided by management and to
consider the benefits of the proposed Reorganization. Following this meeting,
the Independent Trustees met with management to discuss various factors bearing
on the proposal. In
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<PAGE> 7
addition, the Independent Trustees met with each of the existing trustees of the
UAM Trust and obtained further information concerning their qualifications and
the manner in which they oversee the operations of the UAM Trust. Following the
meetings with management and the trustees of the UAM Trust, the Independent
Trustees requested additional information from management and requested that an
agreement and plan of reorganization be prepared and presented for consideration
by the Board of Trustees of the Heitman Trust at the meeting of the Board to be
held on October 22, 1997.
Immediately prior to the October Board meeting, the Independent Trustees
met separately with independent counsel and Fund counsel to review the
information provided by management, including the terms of the proposed Plan of
Reorganization, and to consider the effect on shareholders of the Fund of the
proposed transaction. In the course of their review, the Independent Trustees
considered the lower expenses on a per share basis that the Fund was projected
to experience following the Reorganization as a result of lower aggregate fee
rates for administrative, transfer agency, fund accounting and custody services.
In addition, on a per share basis, the Fund is expected to bear lower fixed
expenses for professional and trustee services as a result of operating as part
of the UAM family of funds because these expenses will be shared among a larger
asset base consisting of numerous funds. In addition, as one of many funds
within the UAM family of funds after the Reorganization, the Fund could be
expected to realize any additional cost benefits that result from sharing fixed
expenses among a larger asset base to the extent the assets of other funds
within the UAM family of funds increase. The Independent Trustees also
considered the comparability of the quality of the services to be provided by
UAM Fund Services and Chase Global Fund Services for administration, accounting,
transfer agency and custody with the quality of the services currently being
provided to the Heitman Trust by other organizations.
In the course of their review, the Independent Trustees also considered the
fact that Heitman/PRA Advisors would continue to serve as the investment adviser
following the Reorganization and that the same individuals would continue to
manage the Fund's investment portfolio. The Independent Trustees also considered
the fact that the Reorganization will provide holders of the Heitman
Institutional Class shares with the ability to exchange their shares for UAM
Institutional Class shares of other portfolio series within the UAM family of
funds and that similar exchange privileges may be made available to holders of
the Heitman Advisor Class shares in the future. The Independent Trustees also
considered the Fund's potential access as a result of the Reorganization to
additional marketing opportunities with respect to the distribution of the UAM
Institutional Class shares through UAM Fund Distributors. Finally, the Trustees
noted that the Reorganization will not be a taxable event for federal income tax
purposes and that Heitman/PRA Advisors has agreed to pay all costs associated
with holding the meeting and obtaining shareholder approval of the
Reorganization, including the cost of preparing and mailing this Proxy Statement
to shareholders and the cost of soliciting proxies.
After considering these and other factors, on October 22, 1997 the Board of
Trustees unanimously voted to approve the Plan of Reorganization and authorized
the officers of the Trust to submit the Plan of Reorganization to shareholders
for consideration. The Board of Trustees recommends that shareholders of the
Fund vote FOR Proposal One.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Plan of Reorganization is subject to receipt of an
opinion of Drinker, Biddle & Reath, L.L.P., counsel to the UAM Trust, that (i)
the Reorganization will constitute a tax-free reorganization within the meaning
of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended; (ii)
shareholders of the Fund will not realize any gain or loss for federal income
tax purposes on the exchange of their Fund Shares for UAM Heitman Shares; (iii)
the basis of the UAM Heitman Shares received by shareholders of the Fund will be
the same as the basis of the Fund Shares exchanged therefor and (iv) the holding
period of the UAM Heitman Shares received by shareholders of the Fund will
include the holding period of the Fund Shares surrendered therefor, provided
that the Fund Shares were held as a capital asset at the Effective Time. The UAM
Trust has not obtained an Internal Revenue Service ("IRS") private letter ruling
regarding the federal income tax consequences of the Reorganization, and the IRS
is not bound by advice of counsel.
4
<PAGE> 8
COMPARATIVE OPERATING EXPENSES
The following table provides a comparative analysis of the fees and
expenses of each class of the Fund with the estimated fees and expenses of the
corresponding class of the UAM Heitman Portfolio on a pro forma basis after
giving effect to the proposed Reorganization. For these purposes, the average
daily net assets of the Institutional Class and the Advisor Class are assumed to
be $129 million and $80 million, respectively, for both the Fund and the UAM
Heitman Portfolio. Other fees and expenses of the Fund are based on actual
expenses of each class of the Fund for the 12-month period ended September 30,
1997; other fees and expenses of the UAM Heitman Portfolio are based on
estimates, after giving effect to the Reorganization.
<TABLE>
<CAPTION>
INSTITUTIONAL CLASSES ADVISOR CLASSES
---------------------------- -----------------------------
HEITMAN UAM HEITMAN HEITMAN UAM HEITMAN
REAL HEITMAN PORTFOLIO REAL ESTATE PORTFOLIO
FUND PRO FORMA FUND PRO FORMA
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average daily net
assets)
Management Fees................... 0.70% 0.70% 0.70% 0.70%
---- ---- ---- ----
Rule 12b-1 Fees................... None None 0.25% 0.25%
Other Expenses:
Shareholder Servicing
Expenses................... None None 0.25% 0.25%
Other Fees and Expenses...... 0.42% 0.25% 0.37% 0.25%
---- ---- ---- ----
Total Other Expenses......... 0.42% 0.25% 0.64% 0.50%
---- ---- ---- ----
Total Fund Operating Expenses.......... 1.12% 0.95% 1.57% 1.45%
==== ==== ==== ====
</TABLE>
OBJECTIVES AND POLICIES
The investment objectives of the UAM Heitman Portfolio and the Fund are
identical; namely, to obtain high total return consistent with reasonable risk
by investing primarily in equity securities of public companies principally
engaged in the real estate business. In addition, the UAM Heitman Portfolio has
substantially the same investment policies as the Fund. The investment policies
differ in that: (1) the Fund may not invest more than 10% of its net assets in
illiquid securities; the UAM Heitman Portfolio may not invest more than 15% of
its net assets in illiquid securities; (2) the UAM Heitman Portfolio may not
pledge, mortgage, or hypothecate any of its assets to an extent greater than
33 1/3% of its total assets at fair market value; the Fund may pledge all or any
portion of its assets in connection with its ability to borrow up to 33% of its
total assets for temporary administrative purposes.
CHANGE OF FUND SERVICE PROVIDERS
Rodney Square Management Corporation ("Rodney Square"), a wholly-owned
subsidiary of Wilmington Trust Company ("WTC"), currently provides
administrative, accounting and transfer agency services to the Fund. WTC
currently serves as custodian of the Fund's assets. Following the
Reorganization, the UAM Portfolio will use the same service providers for
administrative, fund accounting, dividend disbursing, transfer agency and
custody services that are currently used by the other portfolio series of the
UAM Trust. Based on estimates provided by the UAM Trust, the change in service
providers will result in a reduction in the total operating expenses of the Fund
on a per share basis following the Reorganization. UAM Fund Services will be
responsible for performing and overseeing administrative, fund accounting,
dividend disbursing and transfer agency services for the UAM Heitman Portfolio.
Chase Global Funds Services Company ("Chase Global Fund Services"), an affiliate
of The Chase Manhattan Bank, N.A. ("Chase"), will provide administrative,
accounting, and transfer agency services to the UAM Trust with respect to the
UAM Heitman Portfolio through a sub-contract with UAM Fund Services. The UAM
Heitman Portfolio will pay UAM Fund Services a two-part monthly fee for its
services which consists of (i) a portfolio specific fee which is retained by UAM
Funds Services and (ii) a sub-administrative fee which UAM Fund Services in turn
pays to Chase Global Funds Services. The sub-administrative fee is based on the
combined assets of the portfolio series of the UAM Trust and UAM Funds, Inc.
(the "UAM family of funds") and is then allocated to each portfolio series of
the UAM Trust based on the relative net assets of each series. Fees are
allocated among the portfolios of the
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<PAGE> 9
UAM family of funds on the basis of their relative assets and are subject to a
graduated minimum fee schedule per portfolio. Chase Global Funds Services is
located at 73 Tremont Street, Boston, MA 02108. Chase will serve as the UAM
Heitman Portfolio's custodian. As compensation for its services, Chase will
receive a fee based on the average net assets of each class of the UAM Heitman
Portfolio, plus a fee for each portfolio securities transaction. Chase is
located at Four Chase MetroTech Center, Brooklyn, NY 11245.
Price Waterhouse LLP currently serves as the Fund's independent accountants
and will also serve as independent accountants of the UAM Heitman Portfolio. The
Plan of Reorganization authorizes the Heitman Trust (in its capacity as the sole
shareholder of the UAM Heitman Portfolio prior to the distribution of the UAM
Heitman Shares) to ratify the selection of Price Waterhouse LLP as the UAM
Portfolio's independent accountants.
MULTIPLE CLASS STRUCTURE; DISTRIBUTION ARRANGEMENTS
The Fund offers two classes of shares, the Heitman Institutional Class
shares and the Heitman Advisor Class shares. The Heitman Advisor Class shares
are available only to investors purchasing directly from ACG Capital Corporation
("ACG") or through brokers and dealers that have entered into sales agreements
with ACG and registered investment advisers and other service organizations that
have entered into shareholder servicing agreements with the Fund. The purchase
price for the Heitman Advisor Class shares is the per share net asset value plus
the applicable sales charge, next determined after the order is received.
Heitman Advisor Class shares may also be purchased without a sales charge as
described in the prospectus for such class. The Heitman Institutional Class
shares may be purchased directly from Rodney Square Distributors, Inc. ("RSD")
at the net asset value next determined after receipt of the order by Rodney
Square and after acceptance by RSD. There is no sales load in connection with
the purchase of Heitman Institutional Class shares.
The UAM Heitman Portfolio will issue two classes of shares: the UAM
Institutional Class shares and the UAM Advisor Class shares. The UAM
Institutional Class shares and UAM Advisor Class shares will have identical
arrangements with respect to the imposition of initial sales charges and
distribution and service fees as the corresponding class of shares of the Fund.
The UAM Heitman Portfolio will be subject to the same procedures with respect to
minimum account size as the Fund. UAM Advisor Class shares of other mutual funds
in the UAM family of funds are not currently offered. The UAM family of funds
currently offers an Institutional Service Class of shares and may offer one or
more additional classes of shares without further action by shareholders.
RSD provides distribution services to the Fund with respect to the Heitman
Institutional Class shares of the Fund. RSD receives no compensation from the
Fund for its services. Upon the consummation of the Reorganization, UAM Fund
Distributors, Inc., a wholly-owned subsidiary of UAM with its principal office
located at 211 Congress Street, Boston, MA 02110 ("UAM Fund Distributors"), will
act as distributor of the UAM Institutional Class shares. UAM Fund Distributors
will not receive any fees or other compensation from the UAM Heitman Portfolio
for such services.
The Fund has adopted a Plan of Distribution Pursuant to Rule 12b-1 (the
"Heitman Distribution Plan") under the 1940 Act. Pursuant to the provisions of
the Heitman Distribution Plan and a related distribution agreement, ACG provides
distribution services to the Fund with respect to the Heitman Advisor Class
shares. In connection with the services to be provided by ACG, ACG receives from
the Fund an amount equal to an annual rate of .25% of the average daily value of
net assets represented by the Advisor Class shares. The UAM Trust has adopted a
distribution plan pursuant to Rule 12b-1 under the 1940 Act (the "UAM
Distribution Plan") which is similar to the Heitman Distribution Plan and has
approved a distribution agreement with ACG on substantially identical terms and
conditions as the current distribution agreement with ACG. The Plan of
Reorganization authorizes the Heitman Trust (in its capacity as the sole
shareholder of the UAM Heitman Portfolio prior to the distribution of the UAM
Heitman Shares) to adopt the UAM Distribution Plan.
The Heitman Trust has also adopted a Shareholder Servicing Plan with
respect to the Heitman Advisor Class shares (the "Heitman Shareholder Servicing
Plan"). Pursuant to the Heitman Shareholder Servicing Plan, the Heitman Trust
contracts with service organizations to provide a variety of shareholder
services, such
6
<PAGE> 10
as maintaining shareholder accounts and records, answering inquiries regarding
the Fund, and processing purchase and redemption orders. The Fund pays fees to
service organizations (which vary depending upon the services provided) in
amounts up to an annual rate of 0.25% of the daily net asset value of Heitman
Advisor Class shares owned by shareholders with whom the service organization
has a servicing relationship. The Heitman Trust has also agreed to pay certain
service organizations that maintain omnibus shareholder accounts an additional
amount equal to the savings realized by the Fund from lower transfer agency
costs attributable to the omnibus account arrangements. The UAM Trust has
adopted a shareholder servicing plan (the "UAM Shareholder Servicing Plan")
which is similar to the Heitman Shareholder Servicing Plan and intends to enter
into substantially identical contracts with the service organizations that
currently have contracts with the Heitman Trust. The Plan of Reorganization
authorizes the Heitman Trust (in its capacity as the sole shareholder of the UAM
Heitman Portfolio prior to the distribution of the UAM Heitman Shares) to adopt
the UAM Shareholder Servicing Plan.
SHAREHOLDER SERVICES
Following the Effective Time, holders of the UAM Institutional Class shares
may exchange their shares for shares of the corresponding UAM Institutional
Class shares of other portfolio series within the UAM family of funds.
Shareholders of the UAM Advisor Class shares will not have any exchange
privileges immediately following the Reorganization, although the UAM Trust may
offer such privileges in the future. UAM Institutional Class shareholders of
other portfolio series of the UAM Funds may similarly exchange their shares for
UAM Institutional Class shares of the UAM Heitman Portfolio.
The UAM Heitman Portfolio will offer the same redemption features as the
Fund, including the acceptance of redemption requests by mail or telephone
provided that applicable conditions are met. Any request to redeem shares of the
Fund received and processed prior to the Reorganization will be treated as a
redemption of shares of the Fund. Any request to redeem shares received or
processed after the Reorganization will be treated as a request to redeem shares
of the UAM Heitman Portfolio.
DIVIDENDS AND DISTRIBUTIONS
The UAM Heitman Portfolio will have the same dividend and distribution
policy as the Fund. The Fund's policy is to declare and distribute dividends
consisting of substantially all of the Fund's net investment income quarterly
and to distribute dividends of short-term capital gains, if any, annually. Net
capital gains will be declared and distributed annually. After the Effective
Time, Fund shareholders who currently have dividends reinvested will continue to
have dividends reinvested in the UAM Heitman Portfolio and those shareholders
who currently have capital gains reinvested will continue to have capital gains
reinvested in the UAM Heitman Portfolio. The number of shares received in
connection with any such reinvestment will be based upon the net asset value per
share of the applicable class of shares of the UAM Heitman Portfolio in effect
on the Record Date.
ADVISORY ARRANGEMENTS
Heitman/PRA Advisors, the Fund's current investment adviser, will continue
to serve as the investment adviser of the UAM Heitman Portfolio following the
Reorganization. Heitman/PRA Advisors is a registered investment adviser under
the Investment Advisers Act of 1940, as amended. As of November 30, 1997,
Heitman/PRA Advisors managed investment portfolios of publicly traded REITs
totaling approximately $600 million. Heitman/PRA Advisors is a wholly owned
subsidiary of Heitman Financial Ltd. ("Heitman") which is a wholly owned
subsidiary of United Asset Management Corporation. Established in 1913, Heitman
is one of the nation's largest institutional real estate advisers with over 1600
real estate professionals in 92 offices throughout the United States, currently
managing $9.5 billion in real estate.
Heitman/PRA Advisors serves as investment advisor to the Fund pursuant to
an current investment management agreement by and between the Heitman Trust and
Heitman/PRA Advisors, Inc. dated January 31, 1995 (the "Heitman Advisory
Agreement"). The Heitman Advisory Agreement was last approved by the Board of
Trustees of Heitman Trust, including the Independent Trustees on March 10, 1997.
At a meeting of the UAM Trustees on September 9, 1997, a majority of the
Trustees of the UAM Trust,
7
<PAGE> 11
including a majority of the independent Trustees, approved an agreement (the
"UAM Advisory Agreement"), with Heitman/PRA Advisors under which Heitman/PRA
Advisors will be responsible for providing substantially the same services to
the UAM Heitman Portfolio that it now provides to the Fund under the Heitman
Advisory Agreement. Under both the Heitman Advisory Agreement and the UAM
Advisory Agreement, Heitman/PRA Advisors is entitled to an advisory fee at an
annual rate equal to 0.75% of the first $100 million of the average daily net
assets of the Fund and 0.65% of the average daily net assets of the Fund in
excess of $100 million.
The Heitman Advisory Agreement provides that Heitman/PRA will pay or
reimburse the Fund if the total expenses of the Fund for any fiscal year exceed
(i) 1.75% of the first $50 million of the Fund's average net assets and (ii)
1.50% of the Fund's average net assets in excess of $50 million. The Heitman
Advisory Agreement also provides that the advisory fee paid to Heitman/PRA
Advisors will be reduced by the excess of certain defined operating expenses of
the Fund (including such advisory fee) for any fiscal year over the limits set
by applicable regulations in states where the Fund's shares are registered or
qualified for sale. Such fee limitation provisions did not result in any
reduction in the advisory fees payable by the Fund during the fiscal year ended
December 31, 1996. The UAM Advisory Agreement does not contain comparable fee
limitation provisions.
The UAM Advisory Agreement and the Heitman Advisory Agreement are
terminable on 60 days' notice to Heitman/PRA Advisors. The UAM Advisory
Agreement provides that Heitman/PRA Advisors may terminate the agreement on 90
days' notice to the UAM Heitman Portfolio. The Heitman Advisory Agreement
provides for termination by Heitman/PRA Advisors on not more than 60 days'
notice to the Fund.
The Plan of Reorganization authorizes the Fund (as the sole shareholder of
the UAM Heitman Portfolio prior to the distribution of the UAM Heitman Shares to
Fund shareholders) to approve the UAM Advisory Agreement.
OTHER INFORMATION
The following is a summary of certain differences between Heitman Trust and
the UAM Trust. Shareholders should refer directly to the trust agreements and
provisions of Massachusetts and Delaware law for a more thorough comparison.
Copies of the UAM Declaration of Trust and By-Laws are available to shareholders
without charge upon written request to the UAM Trust at: UAM Funds Service
Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston,
Massachusetts 02108-2798.
General. The Heitman Trust and the UAM Trust are each open-end management
investment companies registered under the 1940 Act. The UAM Trust is organized
as a business trust under the laws of Delaware. The Heitman Trust is organized
as a business trust under the laws of the Commonwealth of Massachusetts. The
Heitman Trust is governed by a First Amended and Restated Master Trust Agreement
(the "Heitman Trust Agreement") and By-laws and the UAM Trust by an Agreement
and Declaration of Trust (the "UAM Trust Agreement", and together with the
Heitman Trust Agreement, the "Trust Agreements") and By-Laws. The Trustees of
the Heitman Trust are responsible for overall supervision of the business and
affairs of the Fund. The Trustees of the UAM Trust are responsible for overall
supervision of the business and affairs of the UAM Trust, including its multiple
portfolio series. Certain biographical information regarding the Trustees of the
UAM Trust is attached to this Proxy Statement as Exhibit B.
Term of Trustees. The term of office of each Trustee of the Fund and UAM
Trust is unlimited as to duration unless the Trustees themselves adopt a limited
term. Assuming that the term remains of unlimited duration, a person serving as
a Trustee of the Heitman Trust or the UAM Trust will continue as Trustee until
the person resigns, dies or is removed by a written instrument signed by at
least two-thirds of the Trustees. The Heitman Trust Agreement also provides for
the removal of Trustees by vote of the shareholders holding not less than
two-thirds of the shares then outstanding in person or by proxy at any meeting
called for the purpose, or by a written declaration signed by shareholders
holding not less than two-thirds of the shares then outstanding. Subject to the
1940 Act, vacancies on either Board may be filled by a majority of the Trustees
remaining in office.
8
<PAGE> 12
Liability of Trustees. A Trustee of the Heitman Trust or the UAM Trust
will be personally liable only for his or her own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee. Under the Trust Agreements, Trustees and
officers will be indemnified for the expenses of litigation against them unless
it is determined that his or her conduct constitutes willful misfeasance, bad
faith, gross negligence or reckless disregard of his or her duties.
Shareholder Liability. Under Delaware law, shareholders are entitled to
limitations on liability for actions of the business trust; under Massachusetts
law, no such limitations exists. However, both of the Trust Agreements contain
disclaimers of shareholder liability for acts or obligations of the respective
Trust and require that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by the respective Trust or its
Trustees. The Trust Agreements also provide for indemnification out of Trust
property for all losses and expenses of any shareholder held personally liable
for the obligations of the respective Trust. The risk of a shareholder incurring
financial loss on account of shareholder liability is considered remote since it
is limited to circumstances in which a disclaimer is inoperative, the Trust
itself would be unable to meet its obligations and in the case of the UAM Trust,
a court refuses to apply the limited liability provided by Delaware law.
Voting. On each matter submitted to a vote of the shareholders of the
Heitman Trust or the UAM Trust, each holder of a share of a portfolio series is
entitled to one vote for each whole share and a proportionate fractional vote
for each fractional share outstanding in the shareholder's name on the books of
the respective Trusts. Each Trust Agreement provides that the shares of all
portfolio series and classes thereof vote together except (1) as to matters
affecting only the interests of one or more of the series or classes, in which
case only shares of the affected series or classes would be entitled to vote or
(2) when the 1940 Act requires that shares of a portfolio series or class vote
separately.
Liquidation or Dissolution. In the event of the liquidation or dissolution
of a Trust, the shareholders of each portfolio series or class thereof are
entitled to receive, when, and as declared by the Trustees, the excess of the
assets belonging to the series (or in the case of a class, belonging to a series
and allocated to that class) over the liabilities belonging to the series or
class. In either case, the assets so distributable to shareholders will be
distributed among the shareholders in proportion to the number of shares of the
series or class held by them and recorded on the books of the Trust. Under each
Trust Agreement, any proposal to liquidate a particular series or class may be
authorized by a vote of a majority of the Trustees then in office.
Shareholder Meetings. Neither the Heitman Trust nor the UAM Trust are
required to hold annual meetings of their shareholders. Special meetings of the
Heitman Trust may be called upon written request of shareholders owning at least
10% of the outstanding shares. Under the 1940 Act, special meetings of the UAM
Trust for the limited purpose of removing a Trustee may be called upon written
request of shareholders owning at least 10% of the outstanding shares.
Rights of Inspection. Shareholders of the Heitman Trust have the same
rights to inspect the records, accounts and books of the Heitman Trust as are
permitted shareholders of a Massachusetts corporation under the Massachusetts
corporation law. Currently, each shareholder of a Massachusetts corporation is
permitted to inspect the articles, bylaws, stock records, and minutes of
shareholder meetings. Shareholders of the UAM Trust have the same rights to
inspect the records of the UAM Trust as are permitted stockholders of a Delaware
corporation under Delaware law. Under Delaware law, a shareholder is entitled to
inspect all books and records including stock records. In either jurisdiction a
court may order discovery of all information relevant to a litigation claim.
9
<PAGE> 13
INFORMATION ABOUT CERTAIN OWNERS
As of January 6, 1998, the following shareholders were known to own
beneficially or of record more than 5% of the outstanding shares of the Fund:
<TABLE>
<CAPTION>
NUMBER AND
NUMBER AND NUMBER AND PERCENTAGE PERCENTAGE
PERCENTAGE OWNERSHIP OWNERSHIP OF OWNERSHIP
OF HEITMAN INSTITUTIONAL HEITMAN ADVISOR OF ALL
NAME AND ADDRESS CLASS SHARES CLASS SHARES FUND SHARES
- -------------------------------------- ------------------------ --------------------- -----------------
<S> <C> <C> <C>
United Nations Joint Staff Pension 3,149,425/24.53% --/-- 3,149,425/15.03%
Fund
c/o Henry Louma
Chief Investment Management Service
United Nations Room S-0702
New York, NY 10017
Charles Schwab & Company Inc. 3,047,966/23.73% 3,026,545/37.31% 6,074,511/28.99%
101 Montgomery Street
San Francisco, CA 94104
Hawco 986,443/7.68% --/-- 986,443/4.71%
c/o Hawaiian Trust Co.
Client Mutual Funds 769
P.O. Box 1930
Honolulu HI 96805-1930
National Finance Securities Corp. 898,504/7.00% --/-- 898,504/4.29%
For Exclusive Benefit of LCM
5th Floor
200 Liberty Street
New York, NY 10281
Donaldson Lufkin & Jenrette 785,801/6.12% --/-- 785,801/3.75%
Cash Account
1 Pershing Plaza
Jersey City, NJ 07399
</TABLE>
As of January 6, 1998, the officers and trustees of the Heitman Trust, as a
group, beneficially owned less than 1% of the outstanding shares of the Fund.
10
<PAGE> 14
OTHER MATTERS
The Trustees are not aware of any other matters which may come before the
Meeting. However, should any such matters with respect to the Fund properly come
before the Meeting, it is the intention of the persons named in the accompanying
form of proxy to vote the proxy in accordance with their judgment on such
matters.
The Heitman Trust does not hold annual meetings of shareholders. There will
normally be no meeting of shareholders for the purpose of electing Trustees of
the Heitman Trust unless and until such time as less than a majority of the
Trustees holding office have elected by the shareholders, at which time the
Trustees then in office will call a shareholders' meeting for the election of
Trustees. Shareholders wishing to submit proposals for inclusion in the Fund's
proxy statement for subsequent shareholder meeting should send their written
submissions to the principal executive offices of the Fund at 180 North LaSalle
Street, Suite 3600, Chicago, Illinois 60601, Attention: Secretary.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY, THEREFORE, SHAREHOLDERS
WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXY CARD IN THE ENCLOSED STAMPED ENVELOPE.
January 13, 1998
11
<PAGE> 15
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated as of January 6, 1998 (the
"Agreement") between HEITMAN SECURITIES TRUST, a Massachusetts business trust
(the "Heitman Trust"), and UAM FUNDS TRUST, a Delaware business trust (the "UAM
Trust").
WHEREAS, the Heitman Trust was organized under Massachusetts law as a
business trust and operates under a First Amended and Restated Master Trust
Agreement dated February 28, 1995, as amended (the "Heitman Trust Agreement").
The Heitman Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the UAM Trust has been organized under Delaware law as a business
trust under an Agreement and Declaration of Trust dated May 19, 1994 (the "UAM
Trust Agreement"). The UAM Trust is an open-end, management investment company
registered under the 1940 Act.
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree to effect the reorganization of Heitman Real Estate
Fund (the "Fund"), the sole series of the Heitman Trust which offers shares of
beneficial interest of two classes, the Heitman/PRA Institutional Class (the
"Heitman Institutional Class") and the Advisor Class (the "Heitman Advisor
Class" and together with the Heitman Institutional Class, the "Acquired Fund
Shares"), into the UAM/Heitman Real Estate Portfolio (the "UAM Heitman
Portfolio"), a newly-created shell series of the UAM Trust which offers shares
of beneficial interest of the UAM Heitman Class (the "UAM Institutional Class")
and the UAM Advisor Class (the "UAM Advisor Class" and together with the UAM
Institutional Class, the "UAM Heitman Shares") as follows:
1. Plan of Reorganization. Subject to the terms and conditions herein set
forth and on the basis of the representations and warranties contained herein,
at the Effective Time of the Reorganization (as defined in Section 12), the
Heitman Trust, on behalf of the Fund, shall transfer all of the assets of the
Fund, and assign all of the Fund's liabilities, to the UAM Trust, on behalf of
the UAM Heitman Portfolio, and the UAM Trust, on behalf of the UAM Heitman
Portfolio, shall acquire all such assets, and shall assume all such liabilities
of the Fund, in exchange for delivery to the Heitman Trust, on behalf of the
Fund by the UAM Trust, on behalf of the UAM Heitman Portfolio, of a number of
UAM Institutional Class Shares and UAM Advisor Class Shares (both full and
fractional) equivalent to the number of Heitman Institutional Class Shares and
Heitman Advisor Class Shares, respectively, outstanding immediately prior to the
Effective Time of the Reorganization. Promptly after the Effective Time of the
Reorganization, the Fund shall distribute such UAM Heitman Shares to the
shareholders of the Fund. (The foregoing transactions are collectively referred
to as the "Reorganization"). This Agreement is intended to be and is adopted as
a plan of reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Assumption of Liabilities. All debts, liabilities, obligations and
duties of the Fund existing at the Effective Time of the Reorganization, shall
be assumed by the UAM Trust, on behalf of the UAM Heitman Portfolio, at the
Effective Time of the Reorganization.
3. Transfer of Assets. The assets of the Fund to be acquired by the UAM
Trust on behalf of the UAM Heitman Portfolio and allocated thereto shall
include, without limitation, all cash, cash equivalents, securities, receivables
(including interest and dividends receivable), any claims or rights of action or
rights to register shares under applicable securities laws, any books or records
of the Fund and other property owned by the Fund on the books of the Fund at the
Effective Time of the Reorganization.
4. Shareholder Actions. Immediately upon delivery to the Fund of the UAM
Heitman Shares, the Fund, as the then sole shareholder of the UAM Heitman
Portfolio, shall (i) approve an Investment Management Agreement (the "New
Investment Management Agreement") between the UAM Trust, on behalf of the UAM
Heitman Portfolio, and Heitman/PRA Advisors, Inc. ("Heitman/PRA"), (ii) approve
a Plan of Distribution pursuant to Rule 12b-1 with respect to the UAM Advisor
Class Shares, (iii) approve a Shareholder Servicing Plan with respect to the UAM
Advisor Class Shares and (iv) ratify the selection of Price Waterhouse LLP as
the independent accountants of the Fund.
A-1
<PAGE> 16
5. Liquidation of the Fund. At the Effective Time of the Reorganization,
the Fund will liquidate and the UAM Heitman Shares (both full and fractional)
received by the Fund will be distributed to the shareholders of record as of the
Effective Time of the Reorganization of the Fund in exchange for their
respective Acquired Fund Shares. Each shareholder of the Fund shall receive a
number of UAM Heitman Shares of the corresponding class equal to the number of
Acquired Fund Shares of the particular class held by that shareholder at the
Effective Time of the Reorganization. UAM Trust shall establish an open account
on the share records of the UAM Heitman Portfolio in the name of each
shareholder of the Fund and representing the respective number of UAM Heitman
Shares of each class due such shareholder. At the Effective Time of the
Reorganization, the net asset value per share of each class of the UAM Heitman
Portfolio shall be deemed to be the same as the net asset value per share of
each corresponding class of the Fund. As soon as practicable after the Effective
Time of the Reorganization, the Heitman Trust shall take, in accordance with
Massachusetts law, all steps as shall be necessary and proper to effect a
complete dissolution and deregistration of the Heitman Trust.
6. Representations, Warranties and Covenants of the UAM Trust. The UAM
Trust represents and warrants to the Fund and the Heitman Trust as follows:
(a) Organization, Existence, etc. The UAM Trust is validly existing
under the laws of the State of Delaware as a voluntary association with
transferable shares of beneficial interest commonly known as a Delaware
business trust, and at the Effective Time of the Reorganization the UAM
Heitman Portfolio will have the power to carry on its business as set forth
in its prospectus and statement of additional information.
(b) Registration as an Investment Company. The UAM Trust is
registered under the 1940 Act as an open-end management investment company;
such registration has not been revoked or rescinded and is in full force
and effect.
(c) Shares to be Issued Upon Reorganization. The UAM Heitman Shares
to be issued in connection with the Reorganization have been duly
authorized and upon consummation of the Reorganization will be validly
issued, fully paid and nonassessable. There shall be no issued and
outstanding UAM Heitman Shares or any other securities issued by the UAM
Heitman Portfolio prior to the Effective Time of the Reorganization.
(d) Authority Relative to this Agreement. The UAM Trust, on behalf of
the UAM Heitman Portfolio, has the power to enter into this Agreement and
to carry out its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by the UAM Trust's Board of Trustees, no other
proceedings by the UAM Trust or the UAM Heitman Portfolio are necessary to
authorize its officers to effectuate this Agreement and the transactions
contemplated hereby and this Agreement constitutes a valid and binding
obligation of the UAM Trust, enforceable in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other laws relating to or affecting creditors
rights and to general principles of equity. The UAM Trust is not a party to
or obligated under the UAM Trust Agreement, its by-laws, any indenture or
contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by its executing and carrying out
this Agreement.
(e) Liabilities. There are no material liabilities of the UAM Trust,
whether or not determined or determinable, otherwise than as previously
disclosed to the Fund in writing. There are no liabilities of the UAM Trust
of any kind for which the holders of the Acquired Fund Shares shall become
responsible as the result of this Agreement or the consummation of the
transactions contemplated hereby or otherwise.
(f) Litigation. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the UAM Trust, threatened which would
adversely affect the UAM Trust or its assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby or
which upon such consummation would adversely affect the UAM Heitman
Portfolio.
A-2
<PAGE> 17
(g) Contracts. Except for this Agreement, the UAM Trust is not a
party to or subject to any material contract, debt instrument, plan, lease,
franchise, license or permit of any kind or nature whatsoever specifically
with respect to the UAM Heitman Portfolio.
(h) Taxes. As of the Effective Time of the Reorganization, all
Federal and other tax returns and reports of the UAM Trust required by law
to have been filed shall have been filed, and all taxes shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the UAM Trust's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to
any of such returns.
(i) Formation of UAM Heitman Portfolio. Prior to the Effective Time
of the Reorganization, the UAM Trust shall take all steps necessary to
cause the formation of the UAM Heitman Portfolio. The UAM Heitman Portfolio
shall have substantially the same investment objective and policies, and
the same investment adviser as the Fund.
(j) Proxy Statement. The UAM Trust shall cooperate with all
reasonable requests for information and other material by the Fund and the
Fund's counsel in connection with the preparation of the Proxy Materials
(as defined below) and related materials contemplated hereby. All
information contained in the proxy statement to be supplied to shareholders
of the Fund in connection with the Special Meeting that relates to the UAM
Trust, the UAM Heitman Portfolio, the New Investment Management Agreement,
agreements between the UAM Trust and other service providers, the effects,
tax and otherwise, of the Reorganization on Fund shareholders and other
matters known primarily to UAM Trust (i) is true and correct in all
material respects and (ii) will not contain at the time the Proxy Materials
are mailed to Fund shareholders and at the Effective Time of the
Reorganization any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
(k) Regulatory Actions. UAM Trust, on behalf of the UAM Heitman
Portfolio, agrees to use all reasonable efforts to obtain the approvals and
authorizations required by the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and such of the state Blue Sky or securities laws
as it may deem appropriate in order for the UAM Heitman Portfolio to
commence operations at the Effective Time of the Reorganization, including,
without limitation, to prepare and file a Post-Effective Amendment (the
"Post-Effective Amendment") to the Registration Statement on Form N-1A of
UAM Trust (the "Registration Statement") that includes a prospectus and
statement of additional information for the UAM Heitman Portfolio.
7. Representations, Warranties and Covenants of the Heitman Trust. The
Heitman Trust represents and warrants to the UAM Trust as follows:
(a) Organization, Existence, etc. The Heitman Trust is validly
existing under the laws of the Commonwealth of Massachusetts as a voluntary
association with transferable shares of beneficial interest commonly known
as a "Massachusetts business trust" and has the power to carry on its
business as set forth in the prospectus and statement of additional
information of the Fund.
(b) Registration as Investment Company. The Heitman Trust is
registered under the 1940 Act as an open-end management investment company;
such registration has not been revoked or rescinded and is in full force
and effect. The Fund is a separate series of the Heitman Trust. All
registration statements and filings required to be filed with any state
securities commission has been filed and are effective.
(c) Financial Statements. The financial statements of the Fund for
the fiscal year ended December 31, 1996 (the "Fund Financial Statements")
were audited by Price Waterhouse LLP, the Fund's independent accountants
whose report dated February 14, 1997 expressed an unqualified opinion
thereon.
(d) Authority Relative to this Agreement. The Heitman Trust on behalf
of the Fund has the power to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by
A-3
<PAGE> 18
the Heitman Trust's Board of Trustees, and, except for approval by the
shareholders of the Fund, no other proceedings by the Heitman Trust or the
Fund are necessary to authorize its officers to effectuate this Agreement
and the transactions contemplated hereby and this Agreement constitutes a
valid and binding obligation of the Heitman Trust, enforceable in
accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other laws relative
to or affecting creditors rights and to general principles of equity. The
Fund is not in material violation of, and the execution and the performance
of this Agreement by the Heitman Trust for itself and on behalf of the Fund
does not and will not (i) violate the Heitman Trust Agreement and By-laws,
or (ii) result in a breach or violation of, or constitute a default under,
any term of any material agreement or material instrument to which the
Heitman Trust is a party or by which its properties or assets are bound,
except as otherwise previously disclosed in writing to the UAM Trust.
(e) Liabilities. There are no material liabilities of the Fund known
to the Heitman Trust whether or not determined or determinable, other than
liabilities disclosed or provided for in the Fund Financial Statements and
liabilities incurred in the ordinary course of business subsequent to
December 31, 1996.
(f) Litigation. There are no claims, actions, suits or proceedings
pending or, to the knowledge of the Heitman Trust, threatened which would
adversely affect the Fund or its assets or business or which would prevent
or hinder consummation of the transactions contemplated hereby or which
upon such consummation would adversely affect the Fund.
(g) Contracts. Except for contracts and agreements disclosed on
Schedule 7(g) hereto, under which no default exists, the Fund is not a
party to or, as a series of Heitman Trust or otherwise, subject to any
material contract, debt instrument, plan, lease, franchise, license or
permit of any kind or nature whatsoever.
(h) Taxes. As of the Effective Time of the Reorganization, all
Federal and other tax returns and reports of the Fund required by law to
have been filed shall have been filed, and all taxes of the Fund shall have
been paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Heitman Trust's knowledge, no such return
is currently under audit and no assessment has been asserted with respect
to any of such returns.
(i) Proxy Materials. The Heitman Trust has prepared or will prepare
the notice of meeting, form of proxy and a proxy statement of the Fund
relating to the Reorganization and the other transactions contemplated by
this Agreement (the "Proxy Materials"). All information contained in the
proxy statement to be supplied to shareholders of the Fund in connection
with the Special Meeting that relates to the Heitman Trust, the Fund, the
Investment Advisory Agreement between the Heitman Trust and Heitman/PRA
Advisors, the agreements between the Heitman Trust and other service
providers, and other matters known primarily to Heitman Trust (i) is true
and correct in all material respects and (ii) will not contain at the time
the proxy statement is mailed to Fund shareholders and at the Effective
Time of the Reorganization any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading.
8. Conditions Precedent to Obligations of the Heitman Trust. The
obligations of the Heitman Trust on behalf of the Fund to effectuate this
Agreement shall be subject to the satisfaction (or waiver by the Heitman Trust
prior to the Effective Time of the Reorganization) of the following conditions:
(a) All representations and warranties of the UAM Trust contained in
this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time of the
Reorganization, with the same force and effect as if made on and as of the
Effective Time of the Reorganization.
A-4
<PAGE> 19
(b) Heitman Trust shall have received an opinion of Drinker, Biddle &
Reath, L.L.P., counsel to the UAM Trust (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as
such counsel may deem appropriate or necessary), dated as of the Effective
Time of the Reorganization, in a form (including the representations,
assumptions, limitations or opinions of local counsel upon which it is
based or to which it is subject) reasonably satisfactory to the Heitman
Trust and the Fund, substantially to the effect that:
(1) The UAM Trust is duly registered with the Securities and
Exchange Commission ("SEC") under the 1940 Act as an open-end,
management investment company, and such registration is in full force
and effect;
(2) the UAM Heitman Portfolio is a portfolio of the UAM Trust,
which is a business trust duly created and operating pursuant to the UAM
Trust Agreement, is validly existing and in good standing under the laws
of the state of Delaware, and the UAM Trust Agreement directs the
Trustees to manage the affairs of the UAM Trust and grants them all
powers necessary or desirable to carry out such responsibility,
including administering the UAM Trust's business as described in the
current prospectuses and statement of additional information of the UAM
Trust;
(3) this Agreement has been duly authorized, executed and delivered
by UAM Trust on behalf of UAM Heitman Portfolio and, assuming due
authorization, execution and delivery of this Agreement by the Heitman
Trust on behalf of the Fund, is a valid and binding obligation of the
UAM Trust enforceable against the UAM Trust in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and
(4) the UAM Heitman Shares to be issued to the Fund's shareholders
pursuant to this Agreement are duly registered under the 1933 Act on the
appropriate form, and are duly authorized and upon such issuance will be
validly issued and outstanding and fully paid and non-assessable, and no
shareholder of the Fund has any preemptive rights to subscription or
purchase in respect thereof.
9. Conditions Precedent to Obligations of the UAM Trust. The obligations
of the UAM Trust on behalf of the UAM Heitman Portfolio to effectuate this
Agreement shall be subject to the satisfaction (or waiver by the UAM Trust prior
to the Effective Time of the Reorganization) of the following conditions:
(a) All representations and warranties of the Heitman Trust contained
in this Agreement shall be true and correct in all material respects as of
the date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Effective Time of the
Reorganization, with the same force and effect as if made on and as of the
Effective Time of the Reorganization.
(b) The UAM Trust shall have received an opinion of Goodwin, Procter &
Hoar LLP, counsel to the Heitman Trust (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as
such counsel may deem appropriate or necessary), dated as of the Effective
Time of the Reorganization, in a form (including the representations,
assumptions, limitations or opinions of local counsel upon which it is
based or to which it is subject) reasonably satisfactory to the UAM Trust
and the UAM Heitman Portfolio, substantially to the effect that:
(1) The Heitman Trust is duly registered with the SEC under the
1940 Act as an open-end, management investment company, and such
registration is in full force and effect;
(2) the Fund is a portfolio of the Heitman Trust, which is a
business trust duly created and operating pursuant to the Heitman Trust
Agreement, is validly existing and in good standing under the laws of
the Commonwealth of Massachusetts, and the Heitman Trust Agreement
directs the Trustees to manage the affairs of the Heitman Trust and
grants them all powers necessary or desirable to carry out such
responsibility, including administering the Heitman Trust's business as
described in the current prospectuses and statement of additional
information of the Heitman Trust; and
A-5
<PAGE> 20
(3) this Agreement has been duly authorized, executed and delivered
by the Heitman Trust on behalf of the Fund and, assuming due
authorization, execution and delivery of this Agreement by the UAM Trust
on behalf of the UAM Heitman Portfolio, is a valid and binding
obligation of the Heitman Trust enforceable against the Heitman Trust in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other similar
laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
10. Further Conditions Precedent to Obligations of the Heitman Trust and
the UAM Trust. The obligations of the Heitman Trust and the UAM Trust to
effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) The Post-Effective Amendment and all other necessary state filings
with respect to the UAM Heitman Portfolio shall have been filed with the
SEC and all necessary state securities commissions and shall have become
effective, and no stop order suspending the effectiveness the Registration
Statement or amendment thereto shall have been issued, and no proceeding
for that purpose shall have been initiated or threatened by the SEC or any
state securities commission (and not withdrawn or terminated).
(b) The UAM Heitman Shares shall have been duly qualified for offering
to the public in all states or jurisdictions of the United States where
required to permit the transfer contemplated by this Agreement to be
consummated.
(c) The UAM Trust and the Heitman Trust shall have received an opinion
of Drinker, Biddle & Reath, L.L.P. (based upon or subject to such
representations, assumptions, limitations or opinions of local counsel as
such counsel may deem appropriate or necessary) addressed to both parties
on or before the Effective Time of the Reorganization substantially to the
effect that for federal income tax purposes:
(1) The Reorganization will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(F) of the Code and the Fund and
the UAM Heitman Portfolio will each be a party to the reorganization
within the meaning of Section 368(b) of the Code.
(2) No gain or loss will be recognized by the Fund upon the
transfer of all of its assets to and assumption of the liabilities by
the UAM Heitman Portfolio in exchange solely for shares of the UAM
Heitman Portfolio pursuant to Section 361(a) and Section 357(a) of the
Code.
(3) No gain or loss will be recognized by the UAM Heitman Portfolio
upon the receipt by it of all of the assets of the Fund in exchange
solely for shares of the UAM Heitman Portfolio pursuant to Section
1032(a) of the Code.
(4) The basis of the assets of the Fund received by the UAM Heitman
Portfolio will be the same as the basis of such assets to the Fund
immediately prior to the exchange pursuant to Section 362(b) of the
Code.
(5) The holding period of the assets of the Fund received by the
UAM Heitman Portfolio will include the period during which such assets
were held by the Fund pursuant to Section 1223(2) of the Code.
(6) No gain or loss will be recognized by the shareholders of the
Fund upon the exchange of their shares in the Fund for shares of
beneficial interest in the UAM Heitman Portfolio (including fractional
shares to which they may be entitled), pursuant to Section 354(a) of the
Code.
(7) The basis of the shares of the UAM Heitman Portfolio received
by the shareholders of the Fund (including fractional shares to which
they may be entitled) will be the same as the basis of the shares of the
Fund exchanged therefor pursuant to Section 358(a)(1) of the Code.
(8) The holding period of the shares of the UAM Heitman Portfolio
received by the shareholders of the Fund (including fractional shares to
which they may be entitled) will include the holding period of the
shares of the Fund surrendered in exchange therefor, provided that the
shares of the Fund were held as a capital asset on the effective date of
the Reorganization, pursuant to Section 1223(1) of the Code.
A-6
<PAGE> 21
(9) The UAM Heitman Portfolio will succeed to and take into account
as of the date of the proposed transfer (as defined in Section
1.381(b)-1(b) of the Income Tax Regulations) the items of Fund described
in Section 381(c) of the Code, subject to the conditions and limitations
specified in Sections 381(b) and (c), 382, 383 and 384 of the Code.
(d) This Agreement and the Reorganization contemplated hereby shall
have been approved by the affirmative vote of holders of at least a
majority of the outstanding shares of the Fund, as defined in the 1940 Act,
entitled to vote at the special meeting (the "Special Meeting") called for
such purpose.
(e) A liability insurance policy (the "Trustee Insurance Policy")
providing insurance for the Trustees of Heitman Trust who are not
"interested persons" (within the meaning of the 1940 Act) of Heitman Trust
(the "Heitman Independent Trustees") and for the UAM Trust with respect to
any indemnification by the UAM Trust of the Heitman Independent Trustees
pursuant to this Agreement satisfactory to the Heitman Trust and the
Heitman Independent Trustees shall have been procured by the Heitman Trust
on or before the Effective Time of the Reorganization, such policy to have
an aggregate limit of liability of $5.0 million to be for a period of 5
years from the Effective Time of the Reorganization.
At any time prior to the Effective Time of the Reorganization, any of the
foregoing conditions may be waived by affirmative vote of each of the Boards of
Trustees of the Heitman Trust and the UAM Trust.
11. Indemnification of Heitman Independent Trustees.
(a) The UAM Trust shall indemnify (from the assets of the UAM Heitman
Portfolio) each of the Heitman Independent Trustees (each such person
hereinafter referred to as a "Covered Person") against all liabilities,
including but not limited to amounts paid in satisfaction of judgments, in
compromise or as fines and penalties, and expenses, including reasonable
accountants' and counsel fees, incurred by any Covered Person in connection
with the defense or disposition of any action, suit or other proceeding,
whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such person may be or may
have been threatened, while in office or thereafter, by reason of being or
having been a Trustee of the Heitman Trust, except with respect to any
matter as to which it has been determined that such Covered Person had
acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such Covered Person's
office (such conduct referred to hereafter as "Disabling Conduct"). A
determination that the Covered Person is entitled to indemnification may be
made by (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that the person to be indemnified was not
liable by reason of Disabling Conduct, (ii) dismissal of a court action or
an administrative proceeding against a Covered Person for insufficiency of
evidence of Disabling Conduct or (iii) a reasonable determination, based
upon a review of the facts, that the Covered Person was not liable by
reason of Disabling Conduct by (x) a vote of a majority of a quorum of the
trustees of the UAM Trust who are neither "interested persons" of the UAM
Trust as defined in the 1940 Act nor parties to the proceeding ("Trustee
Approval"), (y) an independent legal counsel in a written opinion ("Legal
Opinion") or (z) a binding arbitration in accordance with the applicable
rules of the American Arbitration Association before a single arbitrator
selected in accordance with Section 12 of the American Arbitration
Association Commercial Arbitration Rules with substantial business
experience in the investment company industry and held in The Commonwealth
of Massachusetts ("Arbitration").
(b) Expenses, including accountants' and counsel fees so incurred by
any such Covered Person (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), shall be paid from time
to time by the UAM Heitman Portfolio in advance of the final disposition of
any such action, suit or proceeding, provided that (i) the Covered Person
shall have undertaken to repay the amounts so paid if it is ultimately
determined that indemnification of such expenses is not authorized under
this Section 11 and (ii) either (w) the Covered Person shall have provided
security for such undertaking, (x) the UAM Trust shall be insured against
losses arising by reason of any lawful advances or (y) a reasonable
determination is made, based upon a review of the facts, that the Covered
Person was not liable by reason of Disabling Conduct by (A) Trustee
Approval, (B) Legal Opinion or (C) Arbitration.
A-7
<PAGE> 22
(c) As to any matter disposed of by a compromise payment by any such
Covered Persons referred to in Section 11(a), pursuant to a consent decree
or otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved by (A) Trustee Approval, (B) Legal Opinion or (C) Arbitration.
Such approval by a Trustee Approval, a Legal Opinion, or an Arbitration
shall not prevent the recovery from any Covered Person of any amount paid
to such Covered Person in accordance with any of such clauses as
indemnification if such Covered Person is subsequently adjudicated by a
court of competent jurisdiction to have acted with willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office.
(d) At any time after notice of a claim for indemnification under this
Agreement has been asserted by a Covered Person, such Covered Person or the
UAM Trust may initiate Arbitration for determination of any matter relating
to the parties' rights under Sections 11(a), (b) or (c) of this Agreement.
(e) A Covered Person shall not be entitled to indemnification pursuant
to this Section 11 with respect to any action, suit or other proceeding
unless the Covered Person shall have promptly submitted a claim for
recovery under the Trustee Insurance Policy with respect to such action,
suit or other proceeding.
(f) The right of indemnification provided by this Section 11 shall not
be exclusive of or affect any other rights to which any such Covered Person
may be entitled. As used in this Section 11, "Covered Person" shall include
such person's heirs, executors and administrators, an "interested Covered
Person" is one against whom the action, suit or other proceeding in
question or another action, suit or other proceeding on the same or similar
grounds is then or had been pending or threatened, and a "disinterested"
person is a person against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or
similar grounds is then or has been pending or threatened.
(g) The UAM Trust agrees that in the event it or the UAM Heitman
Portfolio is subsequently acquired by merger, acquisition or the sale of
all or substantially all of its assets (each such event being a "Subsequent
Merger"), or it reorganizes or changes its domicile (each such event being
a "Subsequent Redomestication"), it will provide under the terms of such
Subsequent Merger or Subsequent Redomestication that the indemnification
provided for under this Section 11 shall continue in full force and effect.
In the event that the UAM Trust enters into negotiation for a Subsequent
Merger or Subsequent Redomestication, the UAM Trust shall promptly notify
the Covered Person of such intended Subsequent Merger or Subsequent
Redomestication.
12. Effective Time of the Reorganization. The Reorganization shall be
effective as of the close of business on February 27, 1998 or at such other time
as fixed by the mutual consent of the parties (the "Effective Time of the
Reorganization"). Prior to the Effective Time of the Reorganization, the Heitman
Trust shall notify the shareholders of the Fund that the Reorganization and
related transactions are occurring. Further, the Heitman Trust shall cause
appropriate notice of such approval to be placed upon the Institutional Class
and Advisor Class prospectuses.
13. Termination. This Agreement and the transactions contemplated hereby,
whether or not they have been approved by the shareholders of the Fund, may be
terminated and abandoned:
(a) by mutual written consent of the Heitman Trust and the UAM Trust,
at any time prior to the Effective Time of the Reorganization;
(b) by either the Heitman Trust or the UAM Trust, by notice to the
other, without liability to the terminating party on account of such
termination (provided any such termination shall not excuse the terminating
party from any liability arising out of a default or breach of this
Agreement by such terminating party) if the Effective Time of the
Reorganization shall not have occurred on or before June 30, 1998; or
A-8
<PAGE> 23
(c) by either the Heitman Trust or the UAM Trust, by notice to the
other, without liability to the terminating party on account of such
termination (provided any such termination shall not excuse the terminating
party from any liability arising out of a default or breach of this
Agreement by such terminating party), if (i) the other party shall fail to
perform in any material respect its agreements contained herein required to
be performed prior to the Effective Time of the Reorganization, (ii) the
other party materially breaches any of its representations, warranties or
covenants contained herein or (iii) any other express condition precedent
to the obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met.
14. Amendment. This Agreement may be amended, modified or supplemented in
such manner as may be mutually agreed upon in writing by the parties; provided,
however, that following the Special Meeting, no such amendment may have the
effect of changing the provisions for determining the number of UAM Heitman
Shares to be paid to the Fund shareholders under this Agreement to the detriment
of the Fund shareholders without their further approval.
15. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
16. Headings, Counterparts, Assignments.
(a) The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of
parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder
shall be made by any party without the written consent of the other party.
Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm or corporation other than the parties
hereto and their respective successors and assigns any rights or remedies
under or by reason of this Agreement.
17. Entire Agreement. This Agreement constitutes the entire agreement of
the parties as to the subject matter hereof. The representations, warranties and
covenants contained herein or in any document delivered pursuant hereto or in
connection herewith, including without limitation the indemnification
obligations of Section 11, shall survive the consummation of the transactions
contemplated hereunder.
18. Further Assurances. The UAM Trust and the Heitman Trust shall take
such further action as may be necessary or desirable and proper to consummate
the transactions contemplated hereby.
19. Binding Nature of Agreement.
(a) As provided in the Heitman Trust Agreement on file with the
Secretary of the Commonwealth of Massachusetts, it is expressly agreed that
the obligations of the Heitman Trust hereunder shall not be binding upon
any of the Trustees, shareholders, nominees, officers, agents, or employees
of the Heitman Trust personally, but shall bind only the assets and
property of the Fund. The execution and delivery by such officers shall not
be deemed to have been made by any of them individually or to impose any
liability upon any of them personally, but shall bind only the assets and
property of the Fund.
(b) As provided in the UAM Trust's Agreement and Declaration of Trust,
it is expressly agreed that the obligations of the UAM Trust hereunder
shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the UAM Trust personally, but shall bind
only the assets and property of the UAM Heitman Portfolio. The execution
and delivery by such officers shall not be deemed to have been made by any
of them individually or to impose any liability upon any of them
personally, but shall bind only the assets and property of the UAM Heitman
Portfolio.
20. Covenants of the Heitman Trust. The Heitman Trust shall deliver to
the UAM Trust prior to noon on the first business day after the Effective Time
of the Reorganization a statement of the Fund's assets and
A-9
<PAGE> 24
liabilities as of the close of business on the day prior to the Effective Time
of the Reorganization as reflected on the books of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
HEITMAN SECURITIES TRUST on
behalf of the HEITMAN REAL ESTATE
FUND
/s/ WILLIAM L. RAMSEYER
By: William L. Ramseyer
Title: Chairman and Chief Executive
Officer of the Heitman
Securities Trust
UAM FUNDS TRUST on behalf of the
UAM/HEITMAN REAL ESTATE PORTFOLIO
/s/ NORTON H. REAMER
By: Norton H. Reamer
Title: Trustee, President and Chairman
of the UAM Funds Trust
A-10
<PAGE> 25
SCHEDULE 7(g)
Investment Advisory Contract between the Heitman Trust on behalf of the
Fund and Heitman/PRA Advisors, Inc.
Custody Agreement between the Heitman Trust on behalf of the Fund and
Wilmington Trust Company.
Administration Agreement between the Heitman Trust on behalf of the Fund
and Rodney Square Management Corporation.
Amended and Restated Accounting Services Agreement between Heitman Trust on
behalf of the Fund and Rodney Square Management Corporation.
Amended and Restated Transfer Agency Agreement between the Heitman Trust on
behalf of the Fund and Rodney Square Management Corporation.
Plan of Distribution Pursuant to Rule 12b-1 with respect to the Advisor
Class of the Fund.
Distribution Agreement between the Heitman Trust on behalf of the Advisor
Class of the Fund and ACG Capital Corporation.
Distribution Agreement between the Heitman Trust on behalf of the
Institutional Class of the Fund and Rodney Square Distributors.
Shareholder Servicing Plan with respect to the Advisor Class of the Fund.
Shareholder Servicing Agreements with parties listed on APPENDIX A with
respect to the Advisor Class shares.
Shareholder Servicing Agreements with the parties listed on APPENDIX B with
respect to the Institutional Class shares.
Multiple Class Expense Allocation Plan Adopted Pursuant to Rule 18f-3.
Operating Agreement between the Heitman Trust and Charles Schwab & Co.,
Inc., dated August 30, 1995, as amended.
Institutional Services Agreement between the Heitman Trust and Charles
Schwab & Co., Inc., dated August 30, 1995, as amended.
A-11
<PAGE> 26
EXHIBIT B
INFORMATION REGARDING OFFICERS AND TRUSTEES OF THE UAM TRUST
Information regarding the Trustees and officers of the UAM Trust, including
his or her position with the UAM Trust, is set forth in the table below.
<TABLE>
<S> <C>
John T. Bennett, Jr. Trustee of the UAM Trust; President of Squam Investment
College Road-RFD 3 Management Company, Inc. and Great Island Investment Company,
Meredith, NH 03253 Meredith, NH 03253 Inc.; President of Bennett Management
Age 68 Company from 1988 to 1993.
Philip D. English Trustee of the UAM Trust; President and Chief Executive
16 West Madison Street Officer of Broventure Company, Inc.; Chairman of the Board of
Baltimore, MD 21201 Chektec Corporation and Cyber Scientific, Inc.
Age 49
William A. Humenuk Trustee of the UAM Trust; Partner in the Philadelphia office
4000 Bell Atlantic Tower of the law firm Dechert Price & Rhoads; Director, Hofler
1717 Arch Street Corp.
Philadelphia, PA 19103
Age 55
Norton H. Reamer* Trustee, President and Chairman of the UAM Trust; President,
One International Place Chief Executive Officer and a Director of United Asset
Boston, MA 02110 Management Corporation; Director, Partner or Trustee of each
Age 62 of the Investment Companies of Eaton Vance Group of Mutual
Funds
Peter M. Whitman, Jr.* Trustee of the UAM Trust; President and Chief Investment
One Financial Center Officer of Dewey Square Investors Corporation ("DSI") since
Boston, MA 02111 1988; Director and Chief Executive Officer of H.T. Investors,
Age 54 Inc. formerly a subsidiary of DSI.
Nancy J. Dunn Trustee of the UAM Trust; Vice President of Finance and
10 Garden Street Administration and Treasurer of Radcliff College since 1991.
Cambridge, MA 02138
Age 46
Charles H. Salisbury, Jr.* Trustee of the UAM Trust; Executive Vice President of United
One Financial Center Asset Management Corporation; formerly an executive officer
Boston, MA 02110 and Director of T. Rowe Price and President and Chief
Age 57 Investment Officer of T. Rowe Price Trust Company.
William H. Park* Vice President of the UAM Trust; Executive Vice President and
One International Place Chief Financial Officer of United Asset Management
Boston, MA 02110 Corporation.
Age 50
Gary L. French* Treasurer of the UAM Trust; President and Chief Executive
211 Congress Street Officer of UAM Fund Services, Inc.; formerly Vice President
Boston, MA 02110 -- Operations Development and Control of Fidelity Investments
Age 46 in 1995; Treasurer of the Fidelity Group of Funds from 1991
to 1995.
Michael E. DeFao* Secretary of the UAM Trust, Vice President and General
211 Congress Street Counsel to UAM Fund Services, Inc. and UAM Fund Distributors,
Boston, MA 02110 Inc.; Associate Attorney of Ropes & Gray (a law firm) from
Age 29 1993 to 1995.
Robert R. Flaherty* Assistant Treasurer of the UAM Trust; formerly Manager of
211 Congress Street Fund Administration and Compliance of Chase Global Fund
Boston, MA 02110 Services Company from 1995 to 1996; Senior Manager of
Age 34 Deloitte & Touche LLP from 1985 to 1995.
</TABLE>
B-1
<PAGE> 27
<TABLE>
<S> <C>
Karl O. Hartmann* Assistant Secretary of the UAM Trust; Senior Vice President
73 Tremont Street and General Counsel of Chase Global Funds Services Company.
Boston, MA 02108
Age 42
Gordon M. Shone* Assistant Treasurer; Vice President of Fund Administration
73 Tremont Street and Compliance of Chase Global Funds Services Company;
Boston, MA 02108 formerly Senior Audit Manager of Coopers & Lybrand LLP from
Age 41 1983 to 1996.
</TABLE>
- ---------------
* These people are deemed to be "interested persons" of the UAM Trust as that
term is defined in the 1940 Act.
B-2
<PAGE> 28
HEITMAN REAL ESTATE FUND,
A SERIES OF HEITMAN SECURITIES TRUST
MEETING OF SHAREHOLDERS - FEBRUARY 27, 1998
The undersigned shareholder of Heitman Real Estate Fund, a series of Heitman
Securities Trust, hereby appoints William L. Ramseyer, Dean A. Sotter and
Timothy J. Pire, and each of them, the attorneys and proxies of the undersigned,
with full power of substitution, to vote, as indicated herein, all of the shares
of the Heitman Real Estate Fund standing in the name of the undersigned at the
close of business on January 6, 1998, at a Meeting of Shareholders to be held at
Goodwin, Proctor & Hoar LLP, Exchange Place, Boston, Massachusetts 02109-2881,
commencing at 2:00 p.m. on February 27, 1998, and at any and all adjournments
thereof, with all of the powers the undersigned would possess if then and there
personally present and especially (but without limiting the general
authorization and power hereby given) to vote as indicated on the Proposal, as
more fully described in the Proxy Statement for the meeting. In their
discretion, the proxies as appointed hereby are each authorized to vote upon
such other business as may properly come before the meeting and any adjournments
or postponements thereof.
THIS PROXY IS SOLICITED BY THE FUND'S TRUSTEES AND WILL BE VOTED FOR THE
PROPOSAL UNLESS OTHERWISE INDICATED.
------------------------------------
SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
------------------------------------
- ----------------------------------------------------------------------------
Signature(s) should be exactly as name or names appearing on this proxy. If
shares are held jointly, each holder should sign. If signing is by attorney,
executor, administrator, trustee or guardian, please give full title.
- ----------------------------------------------------------------------------
<PAGE> 29
<TABLE>
<CAPTION>
HEITMAN REAL ESTATE FUND PLEASE MARK VOTES AS IN THIS EXAMPLE [X]
Your Trustees unanimously recommend a vote FOR the following proposal For Against Abstain
<C> <S> <C> <C> <C> <C>
To approve an Agreement and Plan of Reorganization providing [ ] [ ] [ ]
for (i) the transfer of all of the assets of the Heitman
Real Estate Fund (the "Fund") to UAM/Heitman Real Estate
Portfolio (the "UAM Heitman Portfolio"), a newly-created
series of UAM Funds Trust, in exchange for shares of the UAM
Heitman Portfolio (the "UAM Heitman Shares") and the
assumption by the UAM Heitman Portfolio of the liabilities
of the Fund and (ii) the distribution of the UAM Heitman
Shares to the shareholders of the Fund in liquidation of the
Fund.
Please be sure to sign and date this Proxy. Date
------------- ------------------------------- -------------------------
Co-owner (if any) sign
Shareholder sign here here
</TABLE>
- -------------------------------------- --------------------------------------
Affix Mailing Label Here PLEASE ACT PROMPTLY
- -------------------------------------- SIGN, DATE & MAIL IN ENCLOSED ENVELOPE
YOUR PROXY CARD TODAY
No matter how many shares you own,
your vote is important. A majority is
required by law. Therefore, it is
important that you vote NOW in order
to avoid the unnecessary expense of
another solicitation of proxies.
Accordingly, please sign, date and
mail your proxy card in the return
envelope provided.
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