<PAGE>
MARKED TO INDICATE CHANGES FROM PEA #43 AND PEA #45
As filed with the Securities and Exchange Commission on May 30, 1997
- --------------------------------------------------------------------------------
Investment Company Act of 1940 File No. 811-5683
Securities Act File No. 33-25355
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / /
POST-EFFECTIVE AMENDMENT NO. 46 /X/
and
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 / /
AMENDMENT NO. 48 /X/
--------------
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
(Exact Name of Registrant as Specified in Charter)
One International Place, Boston, MA 02110
(Address of Principal Executive Office)
Registrant's Telephone Number 1 (617) 330-8900
Karl O. Hartmann, Assistant Secretary
c/o Chase Global Funds Services Company
73 Tremont Street
Boston, Massachusetts 02108
(Name and Address of Agent for Service)
--------------
Copy to:
Audrey C. Talley, Esq.
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, PA 19103-7098
--------------
It is proposed that this filing become effective:
(check appropriate box)
[X] immediately upon filing pursuant to Paragraph (b)
[_] on (date) pursuant to Paragraph (b)
[_] 60 days after filing pursuant to Paragraph (a)
[_] 75 days after filing pursuant to Paragraph (a)
[_] on (date) pursuant to Paragraph (a) of Rule 485
Registrant has previously elected to and hereby continues its
election to register an indefinite number of shares pursuant to Rule 24f-2 under
the Investment Company Act of 1940, as amended. Registrant filed its Rule 24f-2
Notice for the fiscal year ended October 31, 1996 on December 27, 1996.
<PAGE>
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
CROSS REFERENCE SHEET
FILE NOS. 33-25355/811-5683
<TABLE>
<CAPTION>
PART A OF FORM N-1A LOCATION IN PROSPECTUS
- ------------------- ----------------------
<S> <C>
Item 1. Cover Page...................................... Cover Page
Item 2. Synopsis........................................ Fund Expenses; Prospectus Summary
Item 3. Condensed Financial Information................. Financial Highlights
Item 4. General Description of Registrant............... Prospectus Summary; Investment Objectives;
Investment Policies; Other Investment Policies;
Investment Limitations
Item 5. Management of the Fund.......................... Investment Adviser; Administrative Services;
Distributor; Portfolio Transactions
Item 5A. Management's Discussion
of Fund Performance............................. Included in the Registrant's Annual Report to
Shareholders dated October 31, 1996
Item 6. Capital Stock and Other Securities.............. Purchase of Shares; Redemption of Shares;
Valuation of Shares; Dividends, Capital Gains
Distributions and Taxes; General Information
Item 7. Purchase of Securities
Being Offered................................... Cover Page; Purchase of Shares
Item 8. Redemption or Repurchase........................ Redemption of Shares
Item 9. Pending Legal Proceedings....................... Not Applicable
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PART B OF FORM N-1A LOCATION IN STATEMENT
- ------------------- OF ADDITIONAL INFORMATION
-------------------------
<S> <C>
Item 10. Cover Page...................................... Cover Page
Item 11. Table of Contents............................... Cover Page
Item 12. General Information and History................. General Information
Item 13. Investment Objective and Policies............... Investment Objective and Policies; Investment
Limitations
Item 14. Management of the Fund.......................... Management of the Fund; Investment Adviser
Item 15. Control Persons and Principal
Holders of Securities .......................... Management of the Fund
Item 16. Investment Advisory and
Other Services.................................. Investment Adviser
Item 17. Brokerage Allocation and
Other Practices................................. Portfolio Transactions
Item 18. Capital Stock and Other
Securities...................................... General Information
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered..................... Purchase of Shares; Redemption of Shares
Item 20. Tax Status...................................... General Information
Item 21. Underwriters.................................... Not Applicable
Item 22. Calculation of Performance Data................. Performance Calculations
Item 23. Financial Statements............................ Financial Statements
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
item so numbered in Part C to this Registration Statement.
<PAGE>
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
POST-EFFECTIVE AMENDMENT NO. 46
PART A
The following Prospectus is incorporated herein by reference to Post-Effective
Amendment No. 45 filed on February 5, 1997:
. TS&W Portfolios Institutional Class Shares
The following Prospectus is also incorporated herein by reference to Post-
Effective Amendment No. 44 filed on January 24, 1997:
. McKee Portfolios Institutional Class Shares
The following Prospectuses are also incorporated herein by reference to Post-
Effective Amendment No. 43 filed on January 3, 1997:
. Acadian Portfolios Institutional Class Shares
. C&B Portfolios Institutional Class Shares
. DSI Portfolios Institutional Class Shares
. DSI Disciplined Value Portfolio Institutional Service Class
Shares
. FMA Small Company Portfolio Institutional Class Shares
. FMA Small Company Portfolio Institutional Service Class
Shares
. ICM Fixed Income Portfolio Institutional Class Shares
. ICM Equity and ICM Small Company Portfolios Institutional
Class Shares
. NWQ Portfolios Institutional Class Shares
. NWQ Portfolios Institutional Service Class Shares
. Rice, Hall, James Portfolios Institutional Class Shares
. SAMI Preferred Stock Income Portfolio Institutional Class
Shares
. Sirach Portfolios Institutional Class Shares
. Sirach Portfolios Institutional Service Class Shares
. Sterling Partners' Portfolios Institutional Class Shares
. Sterling Partners' Portfolios Institutional Service Class
Shares
The following Prospectus is also incorporated herein by reference to Post-
Effective Amendment No. 25 filed on December 23, 1993:
. Cambiar Anticipation Portfolio Institutional Class Shares
(This Portfolio and class of shares is not yet
operational.)
The following Prospectus is also incorporated herein by reference to Post-
Effective Amendment No. 21 filed on August 30, 1993:
. HJMC Equity Portfolio Institutional Class Shares (This
Portfolio and class of shares is not yet operational.)
<PAGE>
UAM FUNDS, INC. (THE "FUND")
PART A
The Prospectus for the Rice, Hall, James Portfolios Institutional
Class Shares dated January 3, 1997 is incorporated herein by reference to
Post-Effective Amendment No. 43 to the Registrant's Registration Statement on
Form N-1A (File No. 33-25355) filed with the Securities and Exchange Commission
on January 3, 1997. The Prospectus is supplemented by the Financial Highlights
as of April 30, 1997 filed herein to comply with the Fund's undertaking to file
a post-effective amendment containing reasonably current financial statements
which need not be audited within four to six months of the commencement of the
Rice, Hall, James Small/Mid Cap Portfolio.
<PAGE>
UAM FUNDS, INC.
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
INSTITUTIONAL CLASS SHARES
SUPPLEMENT DATED MAY 30, 1997 TO THE PROSPECTUS DATED JANUARY 3, 1997
FINANCIAL HIGHLIGHTS
(Unaudited)
The following table provides financial highlights for the Rice, Hall,
James Small/Mid Cap Portfolio (the "Portfolio") throughout the period presented
and is part of the Portfolio's unaudited financial statements for the period
ended April 30, 1997 which are included in the Portfolio's Statement of
Additional Information. The Statement of Additional Information and the
financial statements therein are available at no cost and can be requested by
writing to the address or calling the telephone number on the cover of the
Prospectus. The following should be read in conjunction with the financial
statements including the notes thereto.
<TABLE>
<CAPTION>
Period from
November 1, 1996***
to April 30, 1997
(Unaudited)
- -----------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period....................... $10.00
- -----------------------------------------------------------------------------------------------
Income from Investment Operations
Net Investment Income................................ 0.02
Net Realized and Unrealized Gain++................... 0.21
- -----------------------------------------------------------------------------------------------
Total From Investment Operations................... 0.23
- -----------------------------------------------------------------------------------------------
Distributions
Net Investment Income................................ (0.02)
- -----------------------------------------------------------------------------------------------
Total Distributions................................ (0.02)
- -----------------------------------------------------------------------------------------------
Net Asset Value, End of Period............................. $10.21
===============================================================================================
Total Return............................................... 2.30%+**
===============================================================================================
Ratios and Supplemental Data
Net Assets, End of Period (Thousands)...................... $4,365
Ratio of Expenses to
Average Net Assets..................................... 1.25%*
Ratio of Net Investment
Income to Average Net Assets........................... 0.39%*
Portfolio Turnover Rate.................................... 49%**
Average Commission Rate.................................... $0.0778
- -----------------------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share $0.09
Ratio of Expenses to Average Net
Assets Including Expense Offsets...................... 1.25%*
- -----------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
++ The amount shown for the period ended April 30, 1997 for a share
outstanding throughout that period does not accord with the aggregate net
losses on investments for that period because of the timing of sales and
repurchases of the Portfolio shares in relation to fluctuating market
value of the investments of the Portfolio.
<PAGE>
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
POST-EFFECTIVE AMENDMENT NO. 46
PART B
The following Statement of Additional Information is included in this Post-
Effective Amendment No. 46:
. Rice, Hall, James Portfolios Institutional Class Shares
The following Statement of Additional Information is incorporated herein by
reference to Post-Effective Amendment No. 45 filed on February 5, 1997.
. TS&W Portfolios Institutional Class Shares
The following Statement of Additional Information is also incorporated herein by
reference to Post-Effective Amendment No. 44:
. McKee Portfolios Institutional Class Shares
The following Statements of Additional Information are also incorporated herein
by reference to Post-Effective Amendment No. 43:
. Acadian Portfolios Institutional Class Shares
. C&B Portfolios Institutional Class Shares
.
. DSI Portfolios Institutional Class Shares and DSI
Disciplined Value Portfolio Institutional Service Class
Shares
. FMA Small Company Portfolio Institutional Class Shares and
Institutional Service Class Shares
. ICM Fixed Income Portfolio Institutional Class Shares
. ICM Equity and ICM Small Company Portfolios Institutional
Class Shares
.
. NWQ Portfolios Institutional Class Shares and Institutional
Service Class Shares
.
. SAMI Preferred Stock Income Portfolio Institutional Class
Shares
. Sirach Portfolios Institutional Class Shares and Sirach
Strategic Balanced, Growth, Special Equity and Equity
Portfolios Institutional Service Class Shares
. Sterling Partners' Portfolios Institutional Class Shares
and Institutional Service Class Shares
.
The following Statement of Additional Information is also incorporated herein by
reference to Post-Effective Amendment No. 25 filed on December 23, 1993:
. Cambiar Anticipation Portfolio Institutional Class Shares
(This Portfolio and class of shares is not yet
operational.)
The following Statement of Additional Information is also incorporated herein by
reference to Post-Effective Amendment No. 21 filed on August 30, 1993:
. HJMC Equity Portfolio Institutional Class Shares (This
Portfolio and class of shares is not yet operational.)
<PAGE>
PART B
UAM FUNDS
- --------------------------------------------------------------------------------
RICE, HALL, JAMES SMALL CAP PORTFOLIO
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION -- May 30, 1997
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds, Inc. (the "UAM Fund" or the "Fund") for the
Rice, Hall, James Small Cap and Rice, Hall, James Small/Mid Cap Portfolios'
Institutional Class Shares dated January 3, 1997. To obtain the Prospectus,
please call the UAM Funds Service Center:
1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<S> <C>
Investment Objectives and Policies.........................................2
Purchase of Shares.........................................................9
Redemption of Shares.......................................................9
Shareholder Services......................................................10
Investment Limitations....................................................11
Management of the Fund....................................................12
Investment Adviser........................................................14
Portfolio Transactions....................................................15
Administrative Services...................................................15
Performance Calculations..................................................16
General Information.......................................................19
Financial Statements......................................................20
Appendix -- Description of Securities and Ratings........................A-1
</TABLE>
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and policies
of the Rice, Hall, James Small Cap and Rice, Hall, James Small/Mid Cap
Portfolios (the "Portfolios") as set forth in the Rice, Hall, James Portfolios'
Prospectus:
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers,
dealers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, as amended, (the "1940
Act") or the Rules and Regulations or interpretations of the Securities and
Exchange Commission (the "SEC") thereunder, which currently require that (a) the
borrower pledge and maintain with the Portfolio collateral consisting of cash,
an irrevocable letter of credit issued by a domestic U.S. bank or securities
issued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e., the
borrower "marks to the market" on a daily basis), (c) the loan be made subject
to termination by the Portfolio at any time, and (d) the Portfolio receives
reasonable interest on the loan (which may include the Portfolio investing any
cash collateral in interest bearing short-term investments). As with other
extensions of credit, there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails
financially. These risks are similar to the ones involved with repurchase
agreements as discussed in the Prospectus.
SHORT-TERM INVESTMENTS
(1) Time deposits, certificates of deposit (including marketable variable
rate certificates of deposit) and bankers' acceptances issued by a commercial
bank or savings and loan association. Time deposits are non-negotiable deposits
maintained in a banking institution for a specified period of time at a stated
interest rate. Time deposits maturing in more than seven days will not be
purchased by a Portfolio, and time deposits maturing from two business days
through seven calendar days will not exceed 10% of the total assets of a
Portfolio.
Certificates of deposit are negotiable short-term obligations issued by
commercial banks or savings and loan associations collateralized by the funds
deposited in the issuing institution. Variable rate certificates of deposit are
certificates of deposit on which the interest rate is periodically adjusted
prior to their stated maturity based upon a specified market rate. A banker's
acceptance is a time draft drawn on a commercial bank by a borrower, usually in
connection with an international commercial transaction (to finance the import,
export, transfer or storage of goods).
Each Portfolio will not invest in any security issued by a commercial bank
unless (i) the bank has total assets of at least $1 billion, or the equivalent
in other currencies, (ii) in the case of U.S. banks, it is a member of the
Federal Deposit Insurance Corporation, and (iii) in the case of foreign branches
of U.S. banks, the security is, in the opinion of the Adviser, of an investment
quality comparable with other debt securities which may be purchased by each
Portfolio;
(2) Commercial paper and A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's or, if not rated, issued by a corporation having an outstanding
unsecured debt issue rated A or better by Moody's or by S&P;
(3) Short-term corporate obligations rated BBB or better by S&P or Baa by
Moody's;
(4) U.S. Government obligations including bills, notes, bonds and other
debt securities issued by the U.S. Treasury. These are direct obligations of the
U.S. Government and differ mainly in interest rates, maturities and dates of
issue;
(5) U.S. Government agency securities issued or guaranteed by U.S.
Government sponsored instrumentalities and Federal agencies. These include
securities issued by the Federal Home Loan Banks, Federal Land Bank,
2
<PAGE>
Farmers Home Administration, Federal Farm Credit Banks, Federal Intermediate
Credit Bank, Federal National Mortgage Association, Federal Financing Bank, the
Tennessee Valley Authority, and others; and
(6) Repurchase agreements collateralized by securities listed above.
INVESTMENTS IN FOREIGN SECURITIES
Investors in the Portfolios should recognize that investing in foreign
companies involves certain special considerations which are not typically
associated with investing in U.S. companies. Since the securities of foreign
companies are frequently denominated in foreign currencies, the Portfolios may
be affected favorably or unfavorably by changes in currency rates and in
exchange control regulations, and may incur costs in connection with conversions
between various currencies.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers and listed
companies than in the U.S. In addition, with respect to certain foreign
countries, there is the possibility of expropriation or confiscatory taxation,
political or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Although the Portfolios will endeavor to achieve the most favorable
execution costs in their portfolio transactions, fixed commissions on many
foreign stock exchanges are generally higher than negotiated commissions on U.S.
exchanges.
Certain foreign governments levy withholding taxes on dividend and
interest income. Although in some countries a portion of these taxes are
recoverable, the non-recoverable portion of foreign withholding taxes will
reduce the income received from the companies comprising the Portfolios'
investments. However, these foreign withholding taxes are not expected to have a
significant impact.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
The U.S. dollar value of the assets of each Portfolio may be affected
favorably or unfavorably by changes in foreign currency exchange rates and
exchange control regulations, and a Portfolio may incur costs in connection with
conversions between various currencies. Each Portfolio will conduct their
foreign currency exchange transactions either on a spot (i.e., cash) basis at
the spot rate prevailing in the foreign currency exchange market, or through
entering into forward foreign currency exchange contracts ("forward contracts")
to purchase or sell foreign currencies. A forward contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts are traded
in the interbank market conducted directly between currency traders (usually
large commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for such
trades.
Each Portfolio may enter into forward contracts in several circumstances.
When a Portfolio enters into a contract for the purchase or sale of a security
denominated in a foreign currency, or when a Portfolio anticipates the receipt
in a foreign currency of dividends or interest payments on a security which it
holds, a Portfolio may desire to "lock-in" the U.S. dollar price of the security
or the U.S. dollar equivalent of such dividend or interest payment, as the case
may be. By entering into a forward contract for a fixed amount of dollars, for
the purchase or sale of the amount of foreign currency involved in the
underlying transactions, such Portfolio will be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the subject foreign currency during the period between the date
on which the security is purchased or sold, or on which the dividend or interest
payment is declared, and the date on which such payments are made or received.
3
<PAGE>
Additionally, when a Portfolio anticipates that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, it may enter into a forward contract for a fixed amount of dollars, to
sell the amount of foreign currency approximating the value of some or all of
such Portfolio's securities denominated in such foreign currency. The precise
matching of the forward contract amounts and the value of the securities
involved will not generally be possible since the future value of securities in
foreign currencies will change as a consequence of market movements in the value
of these securities between the date on which the forward contract is entered
into and the date it matures. The projection of short-term currency market
movement is extremely difficult, and the successful execution of a short-term
hedging strategy is highly uncertain. The Portfolios do not intend to enter into
such forward contracts to protect the value of portfolio securities on a regular
or continuous basis. The Portfolios will not enter into such forward contracts
or maintain a net exposure to such contracts where the consummation of the
contracts would obligate such Portfolio to deliver an amount of foreign currency
in excess of the value of such Portfolio securities or other assets denominated
in that currency.
Under normal circumstances, consideration of the prospect for currency
parities will be incorporated into the long-term investment decisions made with
regard to overall diversification strategies. However, the Adviser believes that
it is important to have the flexibility to enter into such forward contracts
when it determines that the best interests of the performance of each Portfolio
will thereby be served. The Fund's Custodian will place cash or liquid
securities into a segregated account of each Portfolio in an amount equal to the
value of each Portfolio's total assets committed to the consummation of forward
contracts. If the value of the securities placed in the segregated account
declines, additional cash or securities will be placed in the account on a daily
basis so that the value of the account will be equal to the amount of such
Portfolio's commitments with respect to such contracts.
The Portfolios generally will not enter into a forward contract with a
term of greater than one year. At the maturity of a forward contract, a
Portfolio may either sell the security and make delivery of the foreign
currency, or it may retain the security and terminate its contractual obligation
to deliver the foreign currency by purchasing an "offsetting" contract with the
same currency trader obligating it to purchase, on the same maturity date, the
same amount of the foreign currency.
It is impossible to forecast with absolute precision the market value of a
particular portfolio security at the expiration of the contract. Accordingly, it
may be necessary for a Portfolio to purchase additional foreign currency on the
spot market (and bear the expense of such purchase) if the market value of the
security is less than the amount of foreign currency that such Portfolio is
obligated to deliver and if a decision is made to sell the security and make
delivery of the foreign currency.
If a Portfolio retains the portfolio security and engages in an offsetting
transaction, such Portfolio will incur a gain or loss (as described below) to
the extent that there has been movement in forward contract prices. Should
forward prices decline during the period between a Portfolio entering into a
forward contract for the sale of a foreign currency and the date it enters into
an offsetting contract for the purchase of the foreign currency, such Portfolio
will realize a gain to the extent that the price of the currency it has agreed
to sell exceeds the price of the currency it has agreed to purchase. Should
forward prices increase, such Portfolio would suffer a loss to the extent that
the price of the currency it has agreed to purchase exceeds the price of the
currency it has agreed to sell.
Each Portfolio's dealings in forward contracts will be limited to the
transactions described above. Of course, the Portfolios are not required to
enter into such transactions with regard to their foreign currency-denominated
securities. It also should be realized that this method of protecting the value
of portfolio securities against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange which one can achieve at some future point in
time. Additionally, although such contracts tend to minimize the risk of loss
due to a decline in the value of the hedged currency, at the same time, they
tend to limit any potential gain which might result should the value of such
currency increase.
4
<PAGE>
FUTURES CONTRACTS
The Portfolios may enter into futures contracts for the purposes of
hedging, remaining fully invested and reducing transactions costs. Futures
contracts provide for the future sale by one party and purchase by another party
of a specified amount of a specific security at a specified future time and at a
specified price. Futures contracts which are standardized as to maturity date
and underlying financial instrument are traded on national futures exchanges.
Futures exchanges and trading are regulated under the Commodity Exchange Act by
the Commodity Futures Trading Commission ("CFTC"), a U.S. Government Agency.
Although futures contracts by their terms call for actual delivery or
acceptance of the underlying securities, in most cases the contracts are closed
out before the settlement date without the making or taking of delivery. Closing
out an open futures position is done by taking an opposite position ("buying" a
contract which has previously been "sold" or "selling" a contract previously
"purchased") in an identical contract to terminate the position. Brokerage
commissions are incurred when a futures contract is bought or sold.
Futures traders are required to make a good faith margin deposit in cash
or acceptable securities with a broker or custodian to initiate and maintain
open positions in futures contracts. A margin deposit is intended to assure
completion of the contract (delivery or acceptance of the underlying security)
if it is not terminated prior to the specified delivery date. Minimal initial
margin requirements are established by the futures exchange and may be changed.
Brokers may establish deposit requirements which are higher than the exchange
minimums. Generally, margin deposits are structured as percentages (e.g., 5%) of
the market value of the contracts being traded. After a futures contract
position is opened, the value of the contract is marked to market daily. If the
futures contract price changes to the extent that the margin on deposit does not
satisfy margin requirements, payment of additional "variation" margin will be
required. Conversely, change in the contract value may reduce the required
margin, resulting in a repayment of excess margin to the contract holder.
Variation margin payments are made to and from the futures broker for as long as
the contract remains open. The Portfolios expect to earn interest income on
their margin deposits.
Traders in futures contracts may be broadly classified as either "hedgers"
or "speculators." Hedgers use the futures markets primarily to offset
unfavorable changes in the value of securities otherwise held for investment
purposes or expected to be acquired by them. Speculators are less inclined to
own the securities underlying the futures contracts which they trade and use
futures contracts with the expectation of realizing profits from a fluctuation
in interest rates. Each Portfolio intends to use futures contracts only for
hedging purposes.
Regulations of the CFTC applicable to the Fund require that all of its
futures transactions constitute bona fide hedging transactions or that the
Fund's commodity futures and option positions be for other purposes, to the
extent that the aggregate initial margins and premiums required to establish
such non-hedging positions do not exceed 5% of the liquidation value of each
Portfolio. The Portfolios will only sell futures contracts to protect securities
they own against price declines or purchase contracts to protect against an
increase in the price of securities they intend to purchase. As evidence of this
hedging interest, each Portfolio expects that approximately 75% of its futures
contracts purchases will be "completed;" that is, equivalent amounts of related
securities will have been purchased or are being purchased by a Portfolio upon
sale of open futures contracts.
Although techniques other than the sale and purchase of futures contracts
could be used to control the Portfolios' exposure to market fluctuations, the
use of futures contracts may be a more effective means of hedging this exposure.
While the Portfolios will incur commission expenses in both opening and closing
out future positions, these costs are lower than transaction costs incurred in
the purchase and sale of the underlying securities.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS
Each Portfolio will not enter into futures contract transactions to the
extent that, immediately thereafter, the sum of its initial margin deposit on
open contracts exceeds 5% of the market value of its total assets. In addition,
a Portfolio will not enter into futures contracts to the extent that its
outstanding obligations to purchase securities under these contracts would
exceed 20% of its total assets.
5
<PAGE>
RISK FACTORS IN FUTURES TRANSACTIONS
Each Portfolio will minimize the risk that it will be unable to close out
a futures contract by only entering into futures which are traded on national
futures exchanges and for which there appears to be a liquid secondary market.
However, there can be no assurance that a liquid secondary market will exist for
any particular futures contract at any specific time. Thus, it may not be
possible to close a futures position. In the event of adverse price movements, a
Portfolio would continue to be required to make daily cash payments to maintain
its required margin. In such situations, if a Portfolio has insufficient cash,
it may have to sell securities to meet daily margin requirements at a time when
it may be disadvantageous to do so. In addition, a Portfolio may be required to
make delivery of the instruments underlying futures contracts it holds. The
inability to close futures positions also could have an adverse impact on a
Portfolio's ability to effectively hedge.
The risk of loss in trading futures contracts in some strategies can be
substantial due both to the low margin deposits required and the extremely high
degree of leverage involved in futures pricing. As a result, a relatively small
price movement in a futures contract may result in immediate and substantial
loss (as well as gain) to the investor. For example, if at the time of purchase,
10% of the value of the futures contract is deposited as margin, a subsequent
10% decrease in the value of the futures contract would result in a total loss
of the margin deposit, before any deduction for the transaction costs, if the
account were then closed out. A 15% decrease would result in a loss equal to
150% of the original margin deposit if the contract were closed out. Thus, a
purchase or sale of a futures contract may result in excess of the amount
invested in the contract. However, because the futures strategies of each
Portfolio is engaged in only for hedging purposes, the Adviser does not believe
that a Portfolio is subject to the risks of loss frequently associated with
futures transactions. A Portfolio would presumably have sustained comparable
losses if, instead of the futures contract, it had invested in the underlying
financial instrument and sold it after the decline.
Utilization of futures transactions by a Portfolio does involve the risk
of imperfect or no correlation where the securities underlying the futures
contracts have different maturities than such Portfolio's securities being
hedged. It is also possible that a Portfolio could lose money on futures
contracts and also experience a decline in value of portfolio securities. There
is also the risk of loss by a Portfolio of margin deposits in the event of
bankruptcy of a broker with whom such Portfolio has an open position in a
futures contract or related option.
Most futures exchanges limit the amount of fluctuation permitted in
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of a trading session.
Once the daily limit has been reached in a particular type of contract, no
trades may be made on that day at a price beyond that limit. The daily limit
governs only price movement during a particular trading day and, therefore, does
not limit potential losses because the limit may prevent the liquidation of
unfavorable positions. Futures contract prices have occasionally moved to the
daily limit for several consecutive trading days, with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses.
OPTIONS
Each Portfolio may purchase and sell put and call options on futures
contracts for hedging purposes. Investments in options involve some of the same
considerations that are involved in connection with investments in futures
contracts (e.g., the existence of a liquid secondary market). In addition, the
purchase of an option also entails the risk that changes in the value of the
underlying security or contract will not be fully reflected in the value of the
option purchased. Depending on the pricing of the option compared to either the
futures contract on which it is based or the price of the securities being
hedged, an option may or may not be less risky than ownership of the futures
contract or such securities. For example, there are significant differences
between the securities, futures and options markets that could result in an
imperfect correlation between these markets, causing a given transaction not to
achieve its objective. A decision as to whether, when, and how to use options
involves the exercise of skill and judgement by the Adviser, and even a
well-conceived transaction may be unsuccessful because of market behavior or
unexpected events.
6
<PAGE>
OPTIONS ON FOREIGN CURRENCIES
Each Portfolio may purchase and write options on foreign currencies for
hedging purposes in a manner similar to that in which futures contracts on
foreign currencies, or forward contracts, will be utilized. For example, a
decline in the dollar value of a foreign currency in which portfolio securities
are denominated will reduce the dollar value of such securities, even if their
value in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, a Portfolio may purchase put
options on the foreign currency. If the value of the currency does decline, a
Portfolio will have the right to sell such currency for a fixed amount in
dollars and will thereby offset, in whole or in part, the adverse effect on its
portfolio which otherwise would have resulted.
Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Portfolio may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to a Portfolio deriving from purchases of foreign currency
options will be reduced by the amount of the premium and related transaction
costs. In addition, where currency exchange rates do not move in the direction
or to the extent anticipated, a Portfolio could sustain losses on transaction in
foreign currency options which would require it to forego a portion or all of
the benefits of advantageous changes in such rates.
Each Portfolio may write options on foreign currencies for the same types
of hedging purposes. For example, where a Portfolio anticipates a decline in the
dollar value of foreign currency denominated securities due to adverse
fluctuations in exchange rates it could, instead of purchasing a put option,
write a call option on the relevant currency. If the anticipated decline occurs,
the option will most likely not be exercised, and the diminution in value of
portfolio securities will be offset by the amount of the premium received.
Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a
Portfolio could write a put option on the relevant currency which, if rates move
in the manner projected, will expire unexercised and allow the Portfolio to
hedge such increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may be
exercised and the Portfolio would be required to purchase or sell the underlying
currency at a loss which may not be offset by the amount of the premium. Through
the writing of options on foreign currencies, a Portfolio also may be required
to forego all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.
Each Portfolio intends to write covered call options on foreign
currencies. A call option written on a foreign currency by a Portfolio is
"covered" if the Portfolio owns the underlying foreign currency covered by the
call or has an absolute and immediate right to acquire that foreign currency
without additional cash consideration (or for additional cash consideration held
in a segregated account by the Custodian) upon conversion or exchange of other
foreign currency held in its portfolio. A call option is also covered if a
Portfolio has a call on the same foreign currency and in the same principal
amount as the call written where the exercise price of the call held (a) is
equal to or less than the exercise price of the call written of (b) is greater
than the exercise price of the call written if the difference is maintained by
the Portfolio in cash or liquid securities in a segregated account with the
Custodian.
Each Portfolio also intends to write call options on foreign currencies
that are not covered for cross-hedging purposes. A call option on a foreign
currency is for cross-hedging purposes if it is not covered, but is designed to
provide a hedge against a decline in the U.S. dollar value of a security which a
Portfolio owns or has the right to acquire and which is denominated in the
currency underlying the option due to an adverse change in the exchange rate. In
such circumstances, a Portfolio collateralizes the option by maintaining in a
segregated account with the Custodian, cash or liquid securities in an amount
not less than the value of the underlying foreign currency in U.S. dollars
marked to market daily.
7
<PAGE>
RISKS OF OPTIONS ON FUTURES CONTRACTS, FORWARD CONTRACTS AND OPTIONS ON FOREIGN
CURRENCIES
Options on foreign currencies and forward contracts are not traded on
contract markets regulated by the CFTC or (with the exception of certain foreign
currency options) by the Commission. To the contrary, such instruments are
traded through financial institutions acting as market-makers, although foreign
currency options are also traded on certain national securities exchanges, such
as the Philadelphia Stock Exchange and the Chicago Board Options Exchange,
subject to the regulation of the Commission. Similarly, options on currencies
may be traded over-the-counter. In an over-the-counter trading environment, many
of the protection afforded to exchange participants will not be available. For
example, there are no daily price fluctuation limits, and adverse market
movements could therefore continue to an unlimited extent over a period of time.
Although the purchase of an option cannot lose more than the amount of the
premium plus related transaction costs, this entire amount could be lost.
Moreover, the option writer and a trader of forward contracts could lose amounts
substantially in excess of their initial investments, due to the margin and
collateral requirements associated with such positions.
Options on foreign currencies traded on national securities exchanges are
within the jurisdiction of the Commission, as are other securities traded on
such exchanges. As a result, many of the protections provided to traders on
organized exchanges will be available with respect to such transactions. In
particular, all foreign currency option positions entered into on a national
securities exchange are cleared and guaranteed by the Options Clearing
Corporation ("OCC"), thereby reducing the risk of counterparty default.
Furthermore, a liquid secondary market in options traded on a national
securities exchange may be more readily available than in the over-the-counter
market, potentially permitting a Portfolio to liquidate open positions at a
profit prior to exercise or expiration, or to limit losses in the event of
adverse market movements.
The purchase and sale of exchange-traded foreign currency options,
however, is subject to the risks of the availability of a liquid secondary
market described above, as well as the risks regarding adverse market movements,
margining of options written, the nature of the foreign currency market,
possible intervention by governmental authorities and the effect of other
political and economic events. In addition, exchange-traded options of foreign
currencies involve certain risks not presented by the over-the-counter market.
For example, exercise and settlement of such options must be made exclusively
through the OCC, which has established banking relationships in applicable
foreign countries for this purpose. As a result, the OCC may, if it determines
that foreign governmental restrictions or taxes would prevent the orderly
settlement of foreign currency option exercises, or would result in undue
burdens on the OCC or its clearing member, impose special procedures on exercise
and settlement, such as technical changes in the mechanics of delivery of
currency, the fixing of dollar settlement prices or prohibitions, on exercise.
In addition, futures contracts, options on futures contracts, forward
contracts and options of foreign currencies may be traded on foreign exchanges.
Such transactions are subject to the risk of governmental actions affecting
trading in or the prices of foreign currencies or securities. The value of such
positions also could be adversely affected by (1) other complex foreign
political and economic factors, (2) lesser availability than in the United
States of data on which to make trading decisions, (3) delays in a Portfolio's
ability to act upon economic events occurring in foreign markets during
nonbusiness hours in the United States, (4) the imposition of different exercise
and settlement terms and procedures and margin requirements than in the United
States, and (5) lesser trading volume.
FEDERAL TAX TREATMENT OF FORWARD CURRENCY AND FUTURES CONTRACTS
Except for transactions the Portfolios have identified as hedging
transactions, each Portfolio is required for Federal income tax purposes to
recognize as income for each taxable year its net unrealized gains and losses on
regulated futures contracts as of the end of each taxable year as well as those
actually realized during the year. In most cases, any such gain or loss
recognized with respect to a regulated futures contract is considered to be 60%
long-term capital gain or loss and 40% short-term capital gain or loss without
regard to the holding period of the contract.
8
<PAGE>
In order for each Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), at least 90% of its gross income for a taxable
year must be derived from certain qualifying income, i.e., dividends, interest,
income derived from loans of securities and gains from the sale or other
disposition of stock, securities or foreign currencies, or other related income,
including gains from options, futures and forward contracts, derived with
respect to its business investing in stock, securities or currencies. Any net
gain realized from the closing out of futures contracts will, therefore,
generally be qualifying income for purposes of the 90% requirement.
Qualification as a regulated investment company also requires that less than 30%
of a Portfolio's gross income be derived from the sale or other disposition of
stock, securities, options, futures or forward contracts (including certain
foreign currencies not directly related to the Fund's business of investing in
stock or securities) held less than three months. In order to avoid realizing
excessive gains on securities held for less than three months, a Portfolio may
be required to defer the closing out of futures contracts beyond the time when
it would otherwise be advantageous to do so. It is anticipated that unrealized
gains on futures contracts which have been open for less than three months as of
the end of a Portfolio's taxable year, and which are recognized for tax
purposes, will not be considered gains on securities held for less than three
months for the purposes of the 30% test.
Each Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes (including
unrealized gains at the end of a Portfolio's taxable year) on futures
transactions. Such distribution will be combined with distributions of capital
gains realized on a Portfolio's other investments, and shareholders will be
advised on the nature of the payment.
PURCHASE OF SHARES
Shares of each Portfolio may be purchased without a sales commission at
the net asset value per share next determined after an order is received in
proper form by the Fund and payment is received by the Fund's Custodian. The
minimum initial investment required for each Portfolio is $2,500 with certain
exceptions as may be determined from time to time by the officers of the Fund.
Other investment minimums are: initial IRA investment, $500; initial spousal IRA
investment, $250; minimum additional investment for all accounts, $100. An order
received in proper form prior to the 4:00 p.m. close of the New York Stock
Exchange ("Exchange") will be executed at the price computed on the date of
receipt; and an order received not in proper form or after the 4:00 p.m. close
of the Exchange will be executed at the price computed on the next day the
Exchange is open after proper receipt. The Exchange will be closed on the
following days: Memorial Day, May 26, 1997; Independence Day, July 4, 1997;
Labor Day, September 1, 1997; Thanksgiving Day, November 27, 1997; Christmas
Day, December 25, 1997; and New Year's Day, January 1, 1998.
Each Portfolio reserves the right in its sole discretion (1) to suspend
the offering of its shares, (2) to reject purchase orders when in the judgement
of management such rejection is in the best interests of the Fund, and (3) to
reduce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts, such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of a Portfolio's shares.
REDEMPTION OF SHARES
Each Portfolio may suspend redemption privileges or postpone the date of
payment (1) during any period that either the Exchange or custodian bank is
closed or trading on the Exchange is restricted as determined by the Commission,
(2) during any period when an emergency exists as defined by the rules of the
Commission as a result of which it is not reasonably practicable for a Portfolio
to dispose of securities owned by it or to fairly determine the value of its
assets, and (3) for such other periods as the Commission may permit. The Fund
has made an election with the Commission to pay in cash all redemptions
requested by any shareholder of record limited in amount during any 90-day
period to the lesser of $250,000 or 1% of the net assets of the Fund at the
beginning of such period. Such commitment is irrevocable without the prior
approval of the Commission. Redemptions in excess of the above limits may be
paid, in whole or in part, in investment securities or in cash as the Directors
may deem advisable; however, payment will be made wholly in cash unless the
Directors believe that economic or market conditions exist which would make such
a practice detrimental to the best interests of the Fund. If redemptions are
paid in investment securities, such securities will be valued as set forth in
the Prospectus under "Valuation of
9
<PAGE>
Shares" and a redeeming shareholder would normally incur brokerage expenses if
these securities were converted to cash.
No charge is made by a Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by a Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and Chase Global Funds Services Company
("CGFSC") from fraud, signature guarantees are required for certain redemptions.
Signature guarantees are required for (1) redemptions where the proceeds are to
be sent to someone other than the registered shareowner(s) and/or the registered
address or (2) share transfer requests.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. A complete definition of eligible guarantor institution is
available from CGFSC. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees. Signature guarantees
will be accepted from any eligible guarantor institution which participates in a
signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
SHAREHOLDER SERVICES
The following supplements the shareholder services information set forth
in the Rice, Hall, James Portfolios' Prospectus:
EXCHANGE PRIVILEGE
Institutional Class Shares of each Rice, Hall, James Portfolio may be
exchanged for Institutional Class Shares of the other Rice, Hall, James
Portfolio. In addition, Institutional Class Shares of each Rice, Hall, James
Portfolio may be exchanged for any other Institutional Class Shares of a
Portfolio included in the UAM Funds which is comprised of the Fund and UAM Funds
Trust. (See the list of Portfolios of the UAM Funds -- Institutional Class
Shares at the end of the Prospectus.) Exchange requests should be made by
calling the Fund (1-800-638-7983) or by writing to UAM Funds, UAM Funds Service
Center, c/o Chase Global Funds Services Company, P.O. Box 2798, Boston, MA
02208-2798. The exchange privilege is only available with respect to Portfolios
that are registered for sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sale commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives of the Portfolio to be purchased. You may
obtain a Prospectus for the Portfolio(s) you are interested in by calling the
UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone
exchanges will be accepted only if the certificates for the shares to be
exchanged are held by the Fund for the account of the shareholder and the
registration of the two accounts will be identical. Requests for exchanges
received prior to 4:00 p.m. (Eastern Time) will be processed as of the close of
business on the same day. Requests received after 4:00 p.m. will be processed on
the next business day. Neither the Fund nor CGFSC, the Fund's Transfer Agent,
will be responsible for the authenticity of the exchange instructions received
by telephone. Exchanges may also be subject to limitations as to
10
<PAGE>
amounts or frequency and to other restrictions established by the Board of
Directors to assure that such exchanges do not disadvantage the Fund and its
shareholders.
For Federal income tax purposes an exchange between Portfolios is a
taxable event, and, accordingly, a capital gain or loss may be realized. In a
revenue ruling relating to circumstances similar to the Fund's, an exchange
between series of a Fund was also deemed to be a taxable event. It is likely,
therefore, that a capital gain or loss would be realized on an exchange between
Portfolios; you may want to consult your tax adviser for further information in
this regard. The exchange privilege may be modified or terminated at any time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Fund's Portfolios to another
person or entity by making a written request to the Fund. The request should
clearly identify the account and number of shares to be transferred, and include
the signature of all registered owners and all stock certificates, if any, which
are subject to the transfer. The signature on the letter of request, the stock
certificate or any stock power must be guaranteed in the same manner as
described under "Redemption of Shares." As in the case of redemptions, the
written request must be received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus.
Whenever an investment limitation sets forth a percentage limitation on
investment or utilization of assets, such limitation shall be determined
immediately after and as a result of a Portfolio's acquisition of such security
or other asset. Accordingly, any later increase or decrease resulting from a
change in values, net assets or other circumstances will not be considered when
determining whether the investment complies with a Portfolio's investment
limitations. Investment limitations (1), (2), (3), (4) and (5) are classified as
fundamental. The Portfolios' fundamental investment limitations cannot be
changed without approval by a "majority of the outstanding shares" (as defined
in the 1940 Act) of each Portfolio. The Portfolios will not:
(1) invest in physical commodities or contracts on physical
commodities;
(2) purchase or sell real estate or real estate limited partnerships,
although it may purchase and sell securities of companies which
deal in real estate and may purchase and sell securities which are
secured by interests in real estate;
(3) make loans except (i) by purchasing debt securities in accordance
with its investment objectives and (ii) by lending its portfolio
securities to banks, brokers, dealers and other financial
institutions so long as such loans are not inconsistent with the
1940 Act or the rules and regulations or interpretations of the
Commission thereunder;
(4) underwrite the securities of other issuers;
(5) issue senior securities, as defined in the 1940 Act, except that
this restriction shall not be deemed to prohibit the Portfolio from
(i) making any permitted borrowings, mortgages or pledges, or (ii)
entering into options, futures or repurchase transactions;
(6) invest in stock or bond futures and/or options on futures unless
(i) not more than 5% of the Portfolio's assets are required as
deposit to secure obligations under such futures and/or options on
futures contracts provided, however, that in the case of an option
that is in-the-money at the time of purchase, the in-the-money
amount may be excluded in computing such 5% and (ii) not more than
20% of the Portfolio's assets are invested in stock or bond futures
and options;
(7) purchase on margin or sell short except as specified in (6) above;
11
<PAGE>
(8) purchase or retain securities of an issuer if those officers and
Directors of the Fund or its investment adviser owning more than
1/2 of 1% of such securities together own more than 5% of such
securities;
(9) invest for the purpose of exercising control over management of any
company.
MANAGEMENT OF THE FUND
OFFICERS AND DIRECTORS
The Officers of the Fund manage its day-to-day operations and are
responsible to the Fund's Board of Directors. The Directors set broad policies
for the Fund and elect its Officers. The following is a list of the Directors
and Officers of the Fund and a brief statement of their present positions and
principal occupations during the past five years. As of April 30, 1997, the
Directors and officers of the Fund owned less than 1% of the Fund's outstanding
shares.
<TABLE>
<S> <C>
John T. Bennett, Jr. Director of the Fund; President of Squam Investment Management Company, Inc. and Great Island
College Road-RFD 3 Investment Company, Inc.; President of Bennet Management Company from 1988 to 1993.
Meredith, NH 03253
Age: 67
Philip D. English Director of the Fund; President and Chief Executive Officer of Broventure Company, Inc.;
16 West Madison Street Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc.
Baltimore, MD 21201
Age: 47
William A. Humenuk Director of the Fund; Partner in the Philadelphia office of the law firm Dechert Price & Rhoads;
4000 Bell Atlantic Tower Director, Hofler Corp.
1717 Arch Street
Philadelphia, PA 19103
Age: 54
Norton H. Reamer* Director, President and Chairman of the Fund; President, Chief Executive Officer and a Director of
One International Place United Asset Management Corporation; Director, Partner or Trustee of each of the Investment
Boston, MA 02110 Companies of the Eaton Vance Group of Mutual Funds.
Age: 60
Peter M. Whitman, Jr.* Director of the Fund; President and Chief Investment Officer of Dewey Square Investors Corporation
One Financial Center since 1988; Director and Chief Executive Officer of H.T. Investors, Inc., formerly a subsidiary of
Boston, MA 02111 Dewey Square.
Age: 52
William H. Park* Vice President of the Fund; Executive Vice President and Chief Financial Officer of United Asset
One International Place Management Corporation.
Boston, MA 02110
Age: 49
Gary L. French* Treasurer of the Fund; President of UAM Fund Services, Inc. and UAM Fund Distributors, Inc.; Vice
211 Congress Street President of Operations, Development and Control of Fidelity Investments in 1995; Treasurer of the
Boston, MA 02110 Fidelity Group of Mutual Funds from 1991 to 1995.
Age: 45
- ----------
</TABLE>
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
12
<PAGE>
<TABLE>
<S> <C>
Robert R. Flaherty* Assistant Treasurer of the Fund; Vice President of UAM Fund Services, Inc.; former
211 Congress Street Manager of Fund Administration and Compliance of Chase Global Fund Services
Boston, MA 02110 Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995, formerly
Age: 32 Senior Manager.
Gordon M. Shone* Assistant Treasurer of the Fund; Vice President of Fund Administration and
73 Tremont Street Compliance of Chase Global Funds Services Company; formerly Senior Audit
Boston, MA 02108 Manager of Coopers & Lybrand L.L.P. from 1983 to 1996.
Age: 40
Michael DeFao* Secretary of the Fund; Vice President and General Counsel of UAM Fund Services,
211 Congress Street Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law
Boston, MA 02110 firm) from 1993 to 1995.
Age: 28
Karl O. Hartmann* Assistant Secretary of the Fund; Senior Vice President and General Counsel of Chase
73 Tremont Street Global Funds Services Company.
Boston, MA 02108
Age: 41
</TABLE>
- ----------
* These people are deemed to be "interested persons" of the Fund as that term
is defined in the 1940 Act.
REMUNERATION OF DIRECTORS AND OFFICERS
The Fund pays each Director, who is not also an officer or affiliated
person, a $150 quarterly retainer fee per active Portfolio which currently
amounts to $6,300 per quarter. In addition, each unaffiliated Director receives
a $2,000 meeting fee which is aggregated for all of the Directors and allocated
proportionately among the Portfolios of the Fund and UAM Funds Trust and
reimbursement for travel and other expenses incurred while attending Board
meetings. Directors who are also officers or affiliated persons receive no
remuneration for their service as Directors. The Fund's officers and employees
are paid by either the Adviser, United Asset Management Corporation ("UAM"), the
Administrator or CGFSC and receive no compensation from the Fund. The following
table shows aggregate compensation paid to each of the Fund's unaffiliated
Directors by the Fund and total compensation paid by the Fund, UAM Funds Trust
and AEW Commercial Mortgage Securities Fund, Inc. (collectively the "Fund
Complex") in the fiscal year ended October 31, 1996.
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
Pension or Total Compensation
Aggregate Retirement Benefits Estimated Annual from Registrant and
Name of Person, Compensation Accrued as Part of Benefits Upon Fund Complex
Position From Registrant Fund Expenses Retirement Paid to Directors
-------- --------------- ------------- ---------- -----------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. ..... $ 25,643 0 0 $ 30,500
Director
J. Edward Day............. $ 25,643 0 0 $ 30,500
Former Director
Philip D. English......... $ 25,643 0 0 $ 30,500
Director
William A. Humenuk........ $ 25,643 0 0 $ 30,500
Director
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of April 30, 1997, the following persons or organizations held of record
or beneficially 5% or more of the shares of the Portfolios:
Rice, Hall, James Small Cap Portfolio: Charles Schwab & Co., Inc., FBO
Reinvest Account, Attn: Mutual Funds, 101 Montgomery Street, San Francisco, CA,
14.9%*; Hartnat and Co., NANA Regional, Attn: 0173440 070, P.O. Box 92800,
Rochester, NY, 7.0%.
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<PAGE>
Rice, Hall, James Small/Mid Cap Portfolio: Charles Schwab & Co., Inc., FBO
Reinvestment Account, Attn. Mutual Funds, 101 Montgomery Street, San Francisco,
CA, 11.5%*; UMBSCO & Co., FBO ACC Salaried, P.O. Box 419260, Kansas City, MO,
7.9%*; Jean Hahn, GST Exemption Trust under Trustee, Hahn Family Trust,
P.O. Box 2009, Rancho Santa Fe, CA, 7.8%*; Thomas J. Jamieson and Thomas Werdel,
Trustees, FBO Virginia Trust 1, FBO William B. Colm, P.O. Box 1807, Bakersfield,
CA, 7.4%*; Ronald E. Hahn, Trustee, FBO Jean E. Hardy 1996-2 Charitable
Remainder Annuity Trust, P.O. Box 2526, Rancho Santa Fe, CA, 6.4%*; Catherine
Thrower Ponder, P.O. Box 8330, Palm Springs, CA, 6.3%; Bank of America,
Custodian, Helen A. Clarke & C. Dixon Clarke Trustees, Clarke Family Trust,
Mutual Fund Dept., P.O. Box 3577, Termonlay Annex, Los Angeles, CA, 5.2%*.
- --------
* Denotes shares held by a trustee or other fiduciary for which beneficial
ownership is disclaimed or presumed disclaimed.
The persons or organizations owning 25% or more of the outstanding shares
of a Portfolio may be presumed to "control" (as that term is defined in the 1940
Act) such Portfolio. As a result, those persons or organizations could have the
ability to vote a majority of the shares of the Portfolio on any matter
requiring the approval of shareholders of such Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Rice, Hall, James & Associates (the "Adviser") is a wholly-owned
subsidiary of UAM, a holding company incorporated in Delaware in December, 1980,
for the purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August, 1983, UAM has
acquired or organized approximately 47 such wholly-owned affiliated firms (the
"UAM Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to
retain control over their investment advisory decisions is necessary to allow
them to continue to provide investment management services that are intended to
meet the particular needs of their respective clients.
Accordingly, after acquisition by UAM, UAM Affiliated Firms continue to
operate under their own firm name, with their own leadership and individual
investment philosophy and approach. Each UAM Affiliated Firm manages its own
business independently on a day-to-day basis. Investment strategies employed and
securities selected by UAM Affiliated Firms are separately chosen by each of
them.
PHILOSOPHY AND STYLE
Rice, Hall, James Small Cap Portfolio
The Adviser applies a value oriented approach to small capitalization
growth stocks. The Rice, Hall, James Small Cap Portfolio is constructed through
bottom up research where stocks selected must possess catalysts -- positive
fundamental changes which the Adviser believes should lead to greater investor
recognition and, subsequently, higher stock prices. The Price Earnings ratios of
selected stocks are typically lower than the projected 3 to 5 year earnings
growth rates. Stocks are sold when they reach preset upside targets, violate
preset downside price limits or when a deterioration of the fundamentals or the
catalyst occur.
Rice, Hall, James Small/Mid Cap Portfolio
The Adviser practices a fundamentally driven bottom up research approach.
This approach focuses on identifying stocks of growth companies that are selling
at a discount to the companies' projected earnings growth rates. Specifically,
the Adviser requires that candidates for inclusion in the Portfolio have
price/earnings ratios that are lower than the 3 to 5 year projected earnings
growth rate. In addition, the stocks must possess catalysts, which are defined
by the Adviser as fundamental events that ultimately lead to increases in
revenue growth rates, expanding profit margins and/or increases in earnings
growth rates that are generally not anticipated by the market. Such events can
include new product introductions or applications, discovery of niche markets,
new management,
14
<PAGE>
corporate or industry restructures, regulatory change, end market expansion,
etc. Most importantly, the Adviser must be convinced that such change will lead
to greater investor recognition and a subsequent rise in the stock prices within
a 12 to 24 month period. Stocks are sold when they reach their upside target,
violate the present downside limit or when a deterioration of the fundamental
assumptions or catalysts occurs.
REPRESENTATIVE INSTITUTIONAL CLIENTS
As of the date of this Statement of Additional Information, the Adviser's
representative institutional clients included: University of Kansas Endowment,
San Diego Society of Natural History, American Business Products, City of San
Diego and California Western School of Law.
In compiling this client list, the Adviser used objective criteria such as
account size, geographic location and client classification. The Adviser did not
use any performance based criteria. It is not known whether these clients
approve or disapprove of the Adviser or the advisory services provided.
ADVISORY FEES
As compensation for services rendered by the Adviser under the Investment
Advisory Agreements, the Portfolios pay the Adviser an annual fee in monthly
installments, calculated by applying the following annual percentage rate to
each Portfolio's average daily net assets for the month:
Rate
----
Rice, Hall, James Small Cap Portfolio..................... 0.75%
Rice, Hall, James Small/Mid Cap Portfolio................. 0.80%
For the period from July 1, 1994 (commencement of operations) to October
31, 1994, the Rice, Hall, James Small Cap Portfolio paid advisory fees of
$10,000 which the Adviser waived. For the fiscal years ended October 31, 1995
and 1996, the Portfolio paid advisory fees of approximately $85,000 and
$197,797, respectively. During this period, the Adviser voluntarily waived
advisory fees of approximately $15,000 and $0, respectively.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Adviser to select the
brokers or dealers that will execute the purchases and sales of investment
securities for the Portfolios and directs the Adviser to use its best efforts to
obtain the best execution with respect to all transactions for the Portfolios.
In doing so, a Portfolio may pay higher commission rates than the lowest rate
available when the Adviser believes it is reasonable to do so in light of the
value of the research, statistical, and pricing services provided by the broker
effecting the transaction. It is not the Fund's practice to allocate brokerage
or effect principal transactions with dealers on the basis of sales of shares
which may be made through broker-dealer firms. However, the Adviser may place
portfolio orders with qualified broker-dealers who recommend the Fund's
Portfolios or who act as agents in the purchase of shares of the Portfolios for
their clients. During the fiscal years ended October 31, 1994, 1995 and 1996,
the entire Fund paid brokerage commissions of approximately $2,402,000,
$2,983,000 and $2,887,884 respectively.
Some securities considered for investment by a Portfolio may also be
appropriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of a Portfolio and one or
more of these other clients served by the Adviser is considered at or about the
same time, transactions in such securities will be allocated among the
Portfolios and clients in a manner deemed fair and reasonable by the Adviser.
Although there is no specified formula for allocating such transactions, the
various allocation methods used by the Adviser, and the results of such
allocations, are subject to periodic review by the Fund's Directors.
ADMINISTRATIVE SERVICES
The Board of Directors of the Fund approved a new Fund Administration
Agreement, effective April 15, 1996, between UAM Fund Services, Inc., a
wholly-owned subsidiary of UAM, and the Fund. The Fund's Directors also
15
<PAGE>
approved a Mutual Funds Service Agreement between UAM Fund Services, Inc.
("UAMFSI") and CGFSC dated April 15, 1996. The services provided by UAMFSI and
CGFSC and the basis of the fees payable by the Fund under the Fund
Administration Agreement are described in the Portfolios' Prospectus. Prior to
April 15, 1996, CGFSC or its predecessor, Mutual Funds Services Company,
provided certain administrative services to the Fund under an Administration
Agreement between the Fund and U.S. Trust Company of New York. The basis of the
fees paid to CGFSC for the most recent fiscal period to April 14, 1996 was as
follows: the Fund paid a monthly fee for its services which on an annualized
basis equaled 0.20% of the first $200 million in combined assets; plus 0.12% of
the next $800 million in combined assets; plus 0.08% on assets over $1 billion
but less than $3 billion; plus 0.06% on assets over $3 billion. The fees were
allocated among the Portfolios on the basis of their relative assets and were
subject to a designated minimum fee schedule per Portfolio, which ranged from
$2,000 per month upon inception of a Portfolio to $70,000 annually after two
years.
For the period from July 1, 1994 (commencement of operation) to October
31, 1994 and for the fiscal years ended October 31, 1995 and 1996,
administrative fees paid by Rice, Hall, James Small Cap Portfolio totaled
approximately $9,000, $52,000 and $88,251, respectively. Of the fees paid during
the year ended October 31, 1996, Rice, Hall, James Small Cap Portfolio paid
$81,427 to CGFSC and $6,824 to UAMFSI. The services provided by the
Administrator and the basis of the current fees payable to the Administrator are
described in the Portfolios' Prospectus.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolios may from time to time quote various performance figures to
illustrate past performance. Performance quotations by investment companies are
subject to rules adopted by the Commission, which require the use of
standardized performance quotations or, alternatively, that every
non-standardized performance quotation furnished by the Fund be accompanied by
certain standardized performance information computed as required by the
Commission. Average annual compounded total return quotations used by the Fund
are based on the standardized methods of computing performance mandated by the
Commission. An explanation of the method used to compute or express performance
follows.
TOTAL RETURN
The average annual total return of a Portfolio is determined by finding
the average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeemable
value. The calculation assumes that all dividends and distributions are
reinvested when paid. The quotation assumes the amount was completely redeemed
at the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis.
The average annual total rates of return for the Institutional Class
Shares of the Rice, Hall, James Small Cap Portfolio from inception and for the
one year period ended on the date of the Financial Statements included herein
are as follows:
<TABLE>
<CAPTION>
Since Inception
Through
One Year Year
Ended Ended
October 31, October 31, Inception
1996 1996 Date
---- ---- ----
<S> <C> <C> <C>
Rice, Hall, James Small Cap Portfolio..... 19.43% 31.52% 7/1/94
</TABLE>
16
<PAGE>
The cumulative total rate of return for the Institutional Class
Shares of the Rice, Hall, James Small/Mid Cap Portfolio from inception, November
1, 1996, through the period ended on the date of the Financial Statements
included herein is as follows:
<TABLE>
<CAPTION>
Since Inception
Through
Period Ended Inception
April 30, 1997 Date
--------------- ----
<S> <C> <C>
Rice, Hall, James Small/Mid Cap Portfolio ...... 2.38% 11/1/96
</TABLE>
These figures are calculated according to the following formula:
P(1+T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of the 1, 5 or 10 year periods at
the end of the 1, 5 or 10 year periods (or fractional
portion thereof).
COMPARISONS
To help investors better evaluate how an investment in the Portfolio of
the Fund might satisfy their investment objective, advertisements regarding the
Fund may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices and
averages. The following publications, indices and averages may be used:
(a) Dow Jones Composite Average or its component averages -- an unmanaged
index composed of 30 blue-chip industrial corporation stocks (Dow
Jones Industrial Average), 15 utilities company stocks and 20
transportation stocks. Comparisons of performance assume reinvestment
of dividends.
(b) Standard & Poor's 500 Stock Index or its component indices -- an
unmanaged index composed of 400 industrial stocks, 40 financial
stocks, 40 utilities stocks and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividend.
(c) S&P Midcap 400 Index -- consists of 400 domestic stocks chosen for
market size (medium market capitalization of $993 million as of
February 1995), liquidity and industry group representation. It is a
market-weighted index with each stock affecting the index in
proportion to its market value.
(d) The New York Stock Exchange composite or component indices --
unmanaged indices of all industrial, utilities, transportation and
finance stocks listed on the New York Stock Exchange.
(e) Wilshire 5000 Equity index or its component indices -- represents
the return on the market value of all common equity securities for
which daily pricing is available. Comparisons of performance assume
reinvestment of dividends.
(f) Lipper--Mutual Fund Performance Analysis and Lipper -- Fixed Income
Fund Performance Analysis--measure total return and average current
yield for the mutual fund industry. Rank individual mutual fund
17
<PAGE>
performance over specified time periods, assuming reinvestment of
all distributions, exclusive of any applicable sales charges.
(g) Morgan Stanley Capital International EAFE Index and World Index --
respectively, arithmetic, market value-weighted averages of the
performance of over 900 securities listed on the stock exchanges of
countries in Europe, Australia and the Far East, and over 1,400
securities listed on the stock exchanges of these continents,
including North America.
(h) Goldman Sachs 100 Convertible Bond Index -- currently includes 67
bonds and 33 preferred. The original list of names was generated by
screening for convertible issues of 100 million or greater in market
capitalization. The index is priced monthly.
(i) Salomon Brothers GNMA Index -- includes pools of mortgages
originated by private lenders and guaranteed by the mortgage pools
of the Government National Mortgage Association.
(j) Salomon Brothers High Grade Corporate Bond Index -- consists of
publicly issued, non-convertible corporate bonds rated AA or AAA. It
is a value-weighted, total return index, including approximately 800
issues with maturities of 12 years or greater.
(k) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted
index that contains approximately 4,700 individually priced
investment grade corporate bonds rated BBB or better, U.S.
Treasury/agency issues and mortgage pass through securities.
(l) Lehman Brothers LONG-TERM Treasury Bond -- is composed of all bonds
covered by the Lehman Brothers Treasury Bond Index with maturities
of 10 years or greater.
(m) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only
and does not include income.
(n) Value Line -- composed of over 1,600 stocks in the Value Line
Investment Survey.
(o) Russell 2000 Index -- consists of the smallest 2,000 companies in the
Russell 3000 Index, a U.S. equity index of the 3,000 large U.S.
companies, with an average market capitalization of $1.74 billion.
(p) Russell Midcap Index -- consists of the smallest 800 companies in
the Russell 1000 Index, a U.S. equity index of the 1,000 largest
companies in the Russell 3000 Index, with an average capitalization
of $1.96 billion.
(q) Callan Micro 1000 Index -- is an unmanaged index composed of the
1,000 smallest companies in the 3,000 equity universe. Callan's
universe encompasses the 3,000 largest-capitalized companies across
the Nasdaq, NYSE, and ASE exchanges. The index includes domestic and
Canadian companies, but excludes companies in European, Japanese and
emerging markets as well as ADR's.
(r) Composite indices -- 70% Standard & Poor's 500 Stock Index and 30%
NASDAQ Industrial Index; 35% Standard & Poor's 500 Stock Index and
65% Salomon Brothers High Grade Bond Index; all stocks on the NASDAQ
system exclusive of those traded on an exchange; 65% Standard &
Poor's 500 Stock Index and 35% Salomon Brothers High Grade Bond
Index; and 50% Russell MidCap Index and 50% Russell 2000 Index.
(s) CDA Mutual Fund Report published by CDA Investment Technologies,
Inc. -- analyzes price, current yield, risk, total return and
average rate of return (average compounded growth rate) over
specified time periods for the mutual fund industry.
(t) Mutual Fund Source Book published by Morningstar, Inc. -- analyzes
price, yield, risk and total return for equity funds.
(u) Financial publications: Business Week, Changing Times, Financial
World, Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial
Times, Global Investor, Wall Street Journal and Weisenberger
Investment Companies Service -- publications that rate fund
performance over specified time periods.
18
<PAGE>
(v) Consumer Price Index (or Cost of Living Index), published by the
U.S. Bureau of Labor Statistics -- a statistical measure of change
over time in the price of goods and services in major expenditure
groups.
(w) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates
-- historical measure of yield, price and total return for common
and small company stock, long-term government bonds, U.S. Treasury
bills and inflation.
(x) Savings and Loan Historical Interest Rates -- as published by the
U.S. Savings & Loan League Fact Book.
(y) Historical data supplied by the research departments of First Boston
Corporation; the J.P. Morgan companies; Salomon Brothers; Merrill
Lynch, Pierce, Fenner & Smith; Lehman Brothers, Inc.; and Bloomberg
L.P.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the composition of investments in the Portfolio,
that the averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Fund will continue this performance as compared to such other averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name "ICM Fund, Inc." as a Maryland
corporation on October 11, 1988. On January 18, 1989, the name of the Fund was
changed to "The Regis Fund, Inc." On October 31, 1995, the name of the Fund was
changed to "UAM Funds, Inc." The Fund's principal executive office is located at
One International Place, Boston, MA 02110; however, all investor correspondence
should be directed to the Fund at UAM Funds Service Center, c/o Chase Global
Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The Fund's
Articles of Incorporation, as amended, authorize the Directors to issue
3,000,000,000 shares of common stock, $.001 par value. The Board of Directors
has the power to designate one or more series ("Portfolios") or classes of
common stock and to classify or reclassify any unissued shares with respect to
such Portfolios, without further action by shareholders.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of a Portfolio's net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes on it and the imposition of the Federal excise tax on undistributed income
and capital gains. (See discussion under "Dividends, Capital Gains Distributions
and Taxes" in the Prospectus.) The amounts of any income dividends or capital
gains distributions cannot be predicted.
Any dividend or distribution paid shortly after the purchase of shares of
a Portfolio by an investor may have the effect of reducing the per share net
asset value of the Portfolio by the per share amount of the dividend or
distribution. Furthermore, such dividends or distributions, although in effect a
return of capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically received
in additional shares of a Portfolio at net asset value (as of the business day
following the record date). This will remain in effect until the Fund is
notified by the shareholder in writing at least three days prior to the record
date that either the Income Option (income dividends in cash and capital gains
distributions in additional shares at net asset value) or the Cash Option (both
income dividends and capital gains
19
<PAGE>
distributions in cash) has been elected. An account statement is sent to
shareholders whenever an income dividend or capital gains distribution is paid.
Each Portfolio will be treated as a separate entity (and hence as a
separate "regulated investment company") for Federal tax purposes. Any net
capital gains recognized by a Portfolio will be distributed to its investors
without need to offset (for Federal income tax purposes) such gains against any
net capital losses of another Portfolio.
FEDERAL TAXES
In order for a Portfolio to continue to qualify for Federal income tax
treatment as a regulated investment company under the Code, at least 90% of its
gross income for a taxable year must be derived from qualifying income, i.e.,
dividends, interest, income derived from loans of securities, and gains from the
sale of securities or foreign currencies or other income derived with respect to
its business of investing in such securities or currencies. In addition, gains
realized on the sale or other disposition of securities held for less than three
months must be limited to less than 30% of a Portfolio's annual gross income.
Each Portfolio will distribute to shareholders annually any net capital
gains which have been recognized for Federal income tax purposes. Shareholders
will be advised on the nature of the payments.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain
disclosure and reporting obligations.
FINANCIAL STATEMENTS
The Financial Statements of the Rice, Hall, James Small Cap Portfolio for
the fiscal year ended October 31, 1996 and the Financial Highlights for the
respective periods presented, which appear in the Portfolio's 1996 Annual Report
to Shareholders, and the report of Price Waterhouse LLP, the Fund's
independent accountants, on the Financial Statements of the Rice, Hall, James
Small Cap Portfolio also appearing therein, are attached to this SAI.
Also attached to this SAI are the unaudited Financial Statements of
the Rice, Hall, James Small/Mid Cap Portfolio for the period from inception on
November 1, 1996 through April 30, 1997 and the Financial Highlights for the
period presented.
20
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's") description of
its highest bond ratings: Aaa--judged to be the best quality; carry the smallest
degree of investment risk: Aa--judged to be of high quality by all standards;
A--possess many favorable investment attributes and are to be considered as
higher medium grade obligations; Baa--considered as lower medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Excerpts from Standard & Poor's Corporation ("S&P") description of its
highest bond ratings: AAA--highest grade obligations; possess the ultimate
degree of protection as to principal and interest; AA--also qualify as high
grade obligations, and in the majority of instances differs from AAA issues only
in small degree; A--regarded as upper medium grade; have considerable investment
strength but are not entirely free from adverse effects of changes in economic
and trade conditions. Interest and principal are regarded as safe; BBB--regarded
as borderline between definitely sound obligations and those where the
speculative element begins to predominate; this group is the lowest which
qualifies for commercial bank investment.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term "U.S. Government Securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment,
and may not be able to assess a claim against the United States itself in the
event the agency or instrumentality does not meet its commitment. Agencies which
are backed by the full faith and credit of the United States include the
Export-Import Bank, Farmers Home Administration, Federal Financing Bank, and
others. Certain agencies and instrumentalities, such as the GNMA are, in effect,
backed by the full faith and credit of the United States through provisions in
their charters that they may make "indefinite and unlimited" drawings on the
U.S. Treasury, if needed to service its debt. Debt from certain other agencies
and instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies and instrumentalities, such as the Farm Credit System
and the FHLMC, are federally chartered institutions under Government
supervision, but their debt securities are backed only by the credit worthiness
of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities
include the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. As
variable
A-1
<PAGE>
amount master demand notes are direct lending arrangements between a lender and
a borrower, it is not generally contemplated that such instruments will be
traded, and there is no secondary market for these notes, although they are
redeemable (and thus immediately repayable by the borrower) at face value, plus
accrued interest, at any time. In connection with a Portfolio's investment in
variable amount master demand notes, the Adviser's investment management staff
will monitor, on an ongoing basis, the earning power, cash flow and other
liquidity ratios of the issuer and the borrower's ability to pay principal and
interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is
the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and the appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's products in relation to
completion and customer acceptance; (4) liquidity; (5) amount and quality of
long term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
and (8) recognition by the management of issuer of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Certificates of deposit are negotiable short-term obligations of commercial
banks. Variable rate certificates of deposit are certificates of deposit on
which the interest rate is periodically adjusted prior to their stated maturity
based upon a specified market rate. As a result of these adjustments, the
interest rate on these obligations may increase or decrease periodically.
Frequently, dealers selling variable rate certificates of deposit to the
Portfolios will agree to repurchase such instruments, at the Portfolios' option,
at par on or near the coupon dates. The dealers' obligations to repurchase these
instruments are subject to conditions imposed by various dealers. Such
conditions typically are the continued credit standing of the issuer and the
existence of reasonably orderly market conditions. The Portfolios are also able
to sell variable rate certificates of deposit in the secondary market. Variable
rate certificates of deposit normally carry a higher interest rate than
comparable fixed rate certificates of deposit. A banker's acceptance is a time
draft drawn on a commercial bank by a borrower usually in connection with an
international commercial transaction to finance the import, export, transfer or
storage of goods. The borrower is liable for payment as well as the bank which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
the secondary markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves
certain special considerations which are not typically associated with investing
in U.S. companies. Since the securities of foreign companies are frequently
denominated in foreign currencies, a Portfolio may be affected favorably or
unfavorably by changes in currency rates and in exchange control regulations,
and may incur costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers and listed
companies than in the U.S. In addition, with respect to certain foreign
countries, there is the possibility of expropriation or confiscatory
A-2
<PAGE>
taxation, political or social instability, or diplomatic developments which
could affect U.S. investments in those countries.
Although the Fund will endeavor to achieve the most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable, the
non-recoverable portion of foreign withholding taxes will reduce the income
received from the companies comprising the Fund's Portfolios. However, these
foreign withholding taxes are not expected to have a significant impact.
A-3
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
October 31, 1996
<TABLE>
<CAPTION>
Shares Value+
- --------------------------------------------------------------------------------
COMMON STOCKS (93.8%)
- --------------------------------------------------------------------------------
<S> <C> <C>
Banks (10.6%)
*AmeriCredit Corp. ................................. 30,000 $ 570,000
Bank of Commerce/San Diego.......................... 10,000 200,000
Cole Taylor Financial Group, Inc. .................. 25,000 750,000
Granite Financial, Inc. ............................ 35,000 280,000
IMC Mortgage Co. ................................... 10,000 370,000
*Jayhawk Acceptance Corp. .......................... 27,500 381,562
*Surety Capital Corp. .............................. 100,000 456,250
UnionBancorp, Inc. ................................. 48,000 564,000
--------
3,571,812
- --------------------------------------------------------------------------------
Basic Resources (6.5%)
Harmon Industries, Inc. ............................ 37,000 629,000
Layne, Inc. ........................................ 45,000 551,250
*Park-Ohio Industries............................... 25,000 375,000
Universal Stainless & Alloy Products, Inc. ......... 30,000 247,500
*Whitehall Corp. ................................... 10,000 390,000
--------
2,192,750
- --------------------------------------------------------------------------------
Construction (2.0%)
Cavalier Homes, Inc. ............................... 18,937 352,702
Diamond Home Services, Inc. ........................ 15,000 330,000
--------
682,702
- --------------------------------------------------------------------------------
Consumer Durables (4.3%)
Keystone Automotive Industries, Inc. ............... 45,000 590,625
RockShox, Inc. ..................................... 31,800 401,475
*TurboChef, Inc. ................................... 40,000 445,000
--------
1,437,100
- --------------------------------------------------------------------------------
Consumer Non-Durables (1.1%)
Carson, Inc. ....................................... 10,000 162,500
Unimark Group, Inc. ................................ 20,000 190,000
--------
352,500
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-1
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS--(Continued)
October 31, 1996
<TABLE>
<CAPTION>
Shares Value+
- --------------------------------------------------------------------------------
COMMON STOCKS--(continued)
- --------------------------------------------------------------------------------
<S> <C> <C>
Energy (11.2%)
3-D Geophysical, Inc. ............................. 18,000 $ 144,000
*Belden & Blake Corp. ............................. 33,500 862,625
*Cairn Energy USA, Inc. ........................... 75,000 778,125
Dreco Energy Services Ltd.--Series A............... 28,500 748,125
HS Resources, Inc. ................................ 57,000 855,000
Midcoast Energy Resources, Inc. ................... 35,000 350,000
--------
3,737,875
- --------------------------------------------------------------------------------
Health Care (14.6%)
*Alcide Corp....................................... 5,000 98,750
Algos Pharmaceutical Corp.......................... 3,000 37,500
Alkermes, Inc...................................... 10,000 132,500
Alternative Living Services, Inc................... 40,000 575,000
Andrx Corp......................................... 20,000 270,000
*Biomira, Inc...................................... 70,000 468,125
Cardiovascular Diagnostics, Inc.................... 25,000 106,250
Cohr, Inc.......................................... 17,000 416,500
Curative Health Services, Inc...................... 20,000 455,000
Global Pharmaceutical Corp......................... 35,000 301,875
LanVision Systems, Inc............................. 37,000 305,250
Life Medical Sciences, Inc......................... 40,000 205,000
Meridian Diagnostics, Inc.......................... 40,000 410,000
ResMed, Inc. ...................................... 30,000 487,500
Sterile Recoveries, Inc............................ 20,000 285,000
Tri-Point Medical Corp............................. 15,000 101,250
*UROHEALTH Systems, Inc., Class A.................. 22,000 217,250
--------
4,872,750
- --------------------------------------------------------------------------------
Industrial (8.1%)
*ABC Rail Products Corp............................ 20,000 295,000
Advanced Lighting Technologies, Inc................ 31,000 581,250
*Benchmark Electronics, Inc........................ 23,000 681,375
Bonded Motors, Inc................................. 25,000 181,250
Excel Industries, Inc.............................. 27,000 408,375
*Intelect Communications Systems Ltd............... 50,000 306,250
Meadow Valley Corp................................. 70,000 253,750
--------
2,707,250
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-2
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS--(Continued)
October 31, 1996
<TABLE>
<CAPTION>
Shares Value+
- --------------------------------------------------------------------------------
COMMON STOCKS--(continued)
- --------------------------------------------------------------------------------
<S> <C> <C>
Insurance (4.9%)
Chartwell Re Corp................................. 15,000 $ 380,625
E. W. Blanch Holdings, Inc........................ 20,000 412,500
Meadowbrook Insurance Group, Inc.................. 10,000 255,000
Superior National Insurance Group, Inc............ 50,000 593,750
--------
1,641,875
- --------------------------------------------------------------------------------
Retail (8.5%)
CML Group, Inc.................................... 53,000 258,375
Garden Fresh Restaurant Corp...................... 28,000 259,000
*Kenneth Cole Productions, Inc., Class A.......... 25,000 412,500
Marks Bros. Jewelers, Inc......................... 10,000 222,500
Piercing Pagoda, Inc.............................. 25,000 550,000
Rock Bottom Restaurants, Inc...................... 23,500 243,813
*Sports & Recreation, Inc......................... 20,000 172,500
Stage Stores, Inc................................. 40,000 730,000
--------
2,848,688
- --------------------------------------------------------------------------------
Services (7.0%)
*Daisytek International Corp...................... 7,000 267,750
Dynamex, Inc. .................................... 50,000 537,500
Rental Service Corp............................... 20,000 445,000
Source Services Corp.............................. 35,000 577,500
StaffMark, Inc.................................... 40,000 520,000
--------
2,347,750
- --------------------------------------------------------------------------------
Technology (9.3%)
Affinity Technology Group, Inc.................... 25,000 181,250
*Boca Research, Inc............................... 35,000 424,375
*Butler International, Inc........................ 55,000 570,625
Cybex Computer Products Corp...................... 30,000 510,000
*Identix, Inc..................................... 40,000 325,000
*Insituform Technologies, Inc., Class A........... 50,000 331,250
Qlogic Corp....................................... 30,000 461,250
*Southern Electronics Corp........................ 20,000 187,500
TALX Corp......................................... 15,000 108,750
--------
3,100,000
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS--(Continued)
October 31, 1996
<TABLE>
<CAPTION>
Shares Value+
- ------------------------------------------------------------------------------
COMMON STOCKS--(continued)
- ------------------------------------------------------------------------------
<S> <C> <C>
Telecommunications (5.7%)
*Coherent Communications Systems Corp......... 30,000 $ 581,250
*Comarco, Inc................................. 46,000 741,750
Metro One Telecommunications................... 26,400 257,400
*World Access, Inc............................ 45,000 337,500
-------
1,917,900
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $28,451,861)............................. 31,410,952
- ------------------------------------------------------------------------------
<CAPTION>
Face
Amount
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (4.8%)
- ------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement (4.8%)
Chase Securities, Inc., 5.58%, dated 10/31/96,
due 11/1/96, to be repurchased at
$1,597,248, collateralized by $1,543,677 of
various U.S. Treasury Notes, 5.875%-
7.75%, due 3/31/99-11/30/99, valued at
$1,597,004 (Cost $1,597,000)................ $1,597,000 1,597,000
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.6%)
(Cost $30,048,861) (a)......................... 33,007,952
- ------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES
(1.4%)......................................... 480,439
- ------------------------------------------------------------------------------
NET ASSETS (100%)................................. $33,488,391
==============================================================================
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
(a) The cost for federal income tax purposes was $30,049,810. At October 31,
1996, net unrealized appreciation for all securities based on tax cost was
$2,958,142. This consisted of aggregate gross unrealized appreciation for
all securities of $4,346,870 and aggregate gross unrealized depreciation
for all securities of $1,388,728.
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Assets
Investments, at Cost........................................ $30,048,861
===========
Investments, at Value....................................... $33,007,952
Cash........................................................ 464
Receivable for Investments Sold............................. 563,125
Receivable for Portfolio Shares Sold........................ 68,841
Dividends Receivable........................................ 1,510
Interest Receivable......................................... 248
Other Assets................................................ 1,043
- --------------------------------------------------------------------------------
Total Assets............................................. 33,643,183
- --------------------------------------------------------------------------------
Liabilities
Payable for Investments Purchased........................... 90,150
Payable for Investment Advisory Fees........................ 20,981
Payable for Administrative Fees............................. 8,159
Payable for Custodian Fees.................................. 5,753
Payable for Directors' Fees................................. 691
Other Liabilities........................................... 29,058
- --------------------------------------------------------------------------------
Total Liabilities........................................ 154,792
- --------------------------------------------------------------------------------
Net Assets..................................................... $33,488,391
================================================================================
Net Assets Consist of:
Paid in Capital............................................. $27,348,382
Accumulated Net Realized Gain............................... 3,180,918
Unrealized Appreciation..................................... 2,959,091
- --------------------------------------------------------------------------------
Net Assets..................................................... $33,488,391
================================================================================
Institutional Class Shares
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000).................................. 2,128,582
Net Asset Value, Offering and Redemption Price Per Share.... $ 15.73
================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-5
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Year Ended
October 31,
1996
- --------------------------------------------------------------------------
<S> <C>
Investment Income
Interest............................................... $ 92,600
Dividends.............................................. 63,144
- --------------------------------------------------------------------------
Total Income........................................ 155,744
- --------------------------------------------------------------------------
Expenses
Investment Advisory Fees--Note B....................... 197,797
Administrative Fees--Note C............................ 88,251
Registration and Filing Fees........................... 21,202
Printing Fees.......................................... 18,773
Custodian Fees--Note D................................. 14,239
Audit Fees............................................. 12,286
Directors' Fees--Note G................................ 2,958
Other.................................................. 7,264
- --------------------------------------------------------------------------
Total Expenses...................................... 362,770
Expense Offset--Note A................................. (1,900)
- --------------------------------------------------------------------------
Net Expenses........................................ 360,870
- --------------------------------------------------------------------------
Net Investment Loss....................................... (205,126)
- --------------------------------------------------------------------------
Net Realized Gain on Investments.......................... 3,396,281
Net Change in Unrealized Appreciation/Depreciation
on Investments......................................... 733,634
- --------------------------------------------------------------------------
Total Net Gain on Investments............................. 4,129,915
- --------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations...... $ 3,924,789
==========================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, October 31,
1996 1995
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Loss..................................... $ (205,126) $ (84,315)
Net Realized Gain....................................... 3,396,281 3,474,879
Net Change in Unrealized
Appreciation/Depreciation............................ 733,634 1,698,396
- -------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from
Operations........................................ 3,924,789 5,088,960
- -------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income................................... -- (4,212)
In Excess of Net Investment Income...................... -- (4,272)
Net Realized Gain....................................... (3,317,853) --
- -------------------------------------------------------------------------------------------------
Total Distributions.................................. (3,317,853) (8,484)
- -------------------------------------------------------------------------------------------------
Capital Share Transactions: (1)
Issued--Regular......................................... 13,453,557 5,696,673
--In Lieu of Cash Distributions......................... 3,273,715 8,484
Redeemed................................................ (2,755,914) (162,961)
- -------------------------------------------------------------------------------------------------
Net Increase from Capital Share
Transactions...................................... 13,971,358 5,542,196
- -------------------------------------------------------------------------------------------------
Total Increase.......................................... 14,578,294 10,622,672
Net Assets:
Beginning of Period..................................... 18,910,097 8,287,425
- -------------------------------------------------------------------------------------------------
End of Period (including undistributed net
investment income of $0 and $0,
respectively)........................................ $33,488,391 $18,910,097
=================================================================================================
(1) Shares Issued and Redeemed:
Shares Issued........................................ 865,521 458,928
In Lieu of Cash Distributions........................ 242,677 794
Shares Redeemed...................................... (171,457) (11,639)
- -------------------------------------------------------------------------------------------------
936,741 448,083
=================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Years Ended July 1,
October 31, 1994** to
------------ October 31,
1996 1995 1994
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period................. $ 15.87 $ 11.14 $10.00
- -----------------------------------------------------------------------------------------------------------
Income From Investment Operations
Net Investment Income (Loss)...................... (0.10) (0.07) 0.01
Net Realized and Unrealized Gain.................. 2.73 4.81 1.13
- -----------------------------------------------------------------------------------------------------------
Total From Investment Operations............... 2.63 4.74 1.14
- -----------------------------------------------------------------------------------------------------------
Distributions
Net Investment Income............................. -- (0.01) --
In Excess of Net Investment Income................ -- (0.00)# --
Net Realized Gain................................. (2.77) -- --
- -----------------------------------------------------------------------------------------------------------
Total Distributions............................ (2.77) (0.01) --
- -----------------------------------------------------------------------------------------------------------
Net Asset Value, End of Period....................... $ 15.73 $ 15.87 $11.14
===========================================================================================================
Total Return......................................... 19.43 % 42.59 %+ 11.40%+
===========================================================================================================
Ratios and Supplemental Data
Net Assets, End of Period (Thousands)................ $33,488 $ 18,910 $8,287
Ratio of Expenses to Average Net
Assets............................................ 1.37 % 1.40 % 1.40%*
Ratio of Net Investment Income (Loss) to
Average Net Assets................................ (0.78)% (0.63)% 0.30%*
Portfolio Turnover Rate.............................. 181 % 180 % 5%
Average Commission Rate##............................ $0.0509 N/A N/A
- -----------------------------------------------------------------------------------------------------------
Voluntary Waived Fees and Expenses
Assumed by the Adviser Per Share.................. N/A $ 0.01 $ 0.05
Ratio of Expenses to Average Net Assets
Including Expense Offsets......................... 1.37 % 1.40 % N/A
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the periods indicated.
# Value is less than 0.01 per share.
## For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
F-8
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
UAM Funds, Inc., and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Rice, Hall,
James Small Cap Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is
a diversified, open-end management investment company. At October 31, 1996, the
UAM Funds were composed of forty active portfolios. The financial statements of
the remaining portfolios are presented separately. The objective of the Rice,
Hall, James Small Cap Portfolio is to provide maximum capital appreciation,
consistent with reasonable risk to principal by investing primarily in small
market capitalization companies.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. Security Valuation: Securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid price on
such day. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued not exceeding the current asked prices nor
less than the current bid prices. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are valued
at amortized cost, if it approximates market value. The value of other
assets and securities for which no quotations are readily available is
determined in good faith at fair value using methods determined by the
Board of Directors.
2. Federal Income Taxes: It is the Portfolio's intention to qualify
as a regulated investment company under Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. Repurchase Agreements: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreements. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. Distributions to Shareholders: The Portfolio will normally
distribute substantially all of its net investment income quarterly. Any
realized net capital gains will be distributed annually. All distributions
are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to
be paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments of net
operating losses.
F-9
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(Continued)
Permanent book and tax basis differences relating to shareholder
distributions resulted in reclassifications of $205,126 to increase net
operating losses, with a decrease to accumulated net realized gain of
$205,126.
Current year permanent book-tax differences are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
5. Other: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets.
Additionally, certain expenses are apportioned among the portfolios of the
UAM Funds and AEW Commercial Mortgage Securities Fund, Inc. ("AEW"), an
affiliated closed-end management investment company, based on their
relative net assets. Custodian fees for the Portfolio have been increased
to include expense offsets for custodian balance credits.
B. Advisory Services: Under the terms of an investment advisory agreement,
Rice, Hall, James & Associates (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.75% of
average daily net assets. The Adviser has voluntarily agreed to waive a portion
of its advisory fees and to assume expenses, if necessary, in order to keep the
Portfolio's total annual operating expenses, after the effect of expense offset
arrangements, from exceeding 1.40% of average daily net assets.
C. Administration Services: Effective April 15, 1996, UAM Fund Services,
Inc. (the "Administrator"), a wholly-owned subsidiary of UAM, provides and
oversees administrative, fund accounting, dividend disbursing and transfer agent
services to the UAM Funds and AEW under a Fund Administration Agreement (the
"Agreement"). Pursuant to the Agreement, the Administrator is entitled to
receive annual fees, computed daily and payable monthly, of 0.19% of the first
$200 million of the combined aggregate net assets; plus 0.11% of the next $800
million of the combined aggregate net assets; plus 0.07% of the next $2 billion
of the combined aggregate net assets; plus 0.05% of the combined aggregate net
assets in excess of $3 billion. The fees are allocated among the portfolios of
the UAM Funds and AEW on the basis of their relative net assets and are subject
to a graduated minimum fee schedule per portfolio which rises from $2,000 per
month, upon inception of a portfolio, to $70,000 annually after two years. For
portfolios with more than one class of shares, the minimum annual fee increases
to $90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee of 0.04% of average daily net assets of the Portfolio. Also effective April
15, 1996, the Administrator has entered into a Mutual Funds Service Agreement
with Chase Global Funds Services Company ("CGFSC"), an affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services, including
but not limited to, administration, fund accounting, dividend disbursing and
transfer agent services. Pursuant to the Mutual Funds Service Agreement, the
Administrator pays CGFSC a monthly fee. For the period April 15, 1996 to October
31, 1996, UAM Fund Services, Inc. earned $54,066 from the Portfolio as
Administrator of which $47,242 was paid to CGFSC for their services.
Prior to April 15, 1996, CGFSC, served as the administrator to the
UAM Funds and AEW. For its services as administrator CGFSC received annual fees,
computed daily and payable monthly, based on the combined aggregate average
daily net assets of the UAM Funds and AEW, as follows: 0.20% of the first $200
million of the combined aggregate net assets; plus 0.12% of the next $800
million of the combined aggregate net assets; plus 0.08% of the combined
aggregate net assets in excess of $1 billion but less than $3 billion; plus
0.06% of the combined aggregate net assets in excess of $3 billion. The fees
were allocated among the portfolios of the UAM Funds and AEW on the basis of
their relative net assets and were subject to a graduated minimum fee schedule
per portfolio which rose
F-10
<PAGE>
RICE, HALL, JAMES SMALL CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS--(Continued)
from $2,000 per month, upon inception of a portfolio, to $70,000 annually after
two years. For the period November 1, 1995 to April 15, 1996, CGFSC earned
$34,185 from the Portfolio as Administrator.
D. Custodian: Effective July 17, 1996, The Chase Manhattan Bank (the
"Bank"), an affiliate of CGFSC, is custodian for the Portfolio's assets held in
accordance with the custodian agreement. For the period July 17, 1996 to October
31, 1996, the amount charged to the Portfolio by the Bank aggregated $4,122, all
of which is unpaid at October 31, 1996.
E. Distribution Services: UAM Fund Distributors, Inc. (the "Distributor"),
a wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. Purchases and Sales: For the year ended October 31, 1996, the Portfolio
made purchases of $54,572,752 and sales of $44,756,659 of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.
G. Directors' Fees: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds and AEW, plus a quarterly retainer of
$150 for each active portfolio of the UAM Funds and AEW, and reimbursement of
expenses incurred in attending Board meetings.
H. Line of Credit: The Portfolio, along with certain other portfolios of
UAM Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of Capital
shares. Interest is charged to each participating Portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.75%. In
addition, a commitment fee of 1/10th of 1% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the year ended
October 31, 1996, the Portfolio had no borrowings under the agreement.
F-11
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of
UAM Funds, Inc. and Shareholders of
Rice, Hall, James Small Cap Portfolio
In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Rice, Hall, James Small Cap
Portfolio (the "Portfolio"), a Portfolio of UAM Funds, Inc., at October 31,
1996, and the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Portfolio's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at October 31, 1996 by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
December 9, 1996
- --------------------------------------------------------------------------------
Federal Income Tax Information: (Unaudited)
For the year ended October 31, 1996, the percentage of dividends that
qualify for the 70% dividend received deduction for corporate shareholders is
1.1%.
F-12
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
PORTFOLIO OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Shares Value+
- ----------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS (85.6%)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Banks (4.3%)
Barnett Banks, Inc. 1 $ 27
National Commerce Bancorp. 4,400 185,900
-----------------------------
185,927
- ----------------------------------------------------------------------------------------------------------------------------
Basic Industries (18.8%)
Dexter Corp. 5,100 152,362
* Hexcel Corp. 8,100 144,788
Interpool, Inc. 7,050 89,888
* Jacobs Engineering Group, Inc. 6,000 153,000
Mark IV Industries, Inc. 6,405 148,916
* Philip Environmental, Inc. 8,400 132,300
-----------------------------
821,254
- ----------------------------------------------------------------------------------------------------------------------------
Consumer Durables (3.4%)
International Game Technology 9,200 146,050
- ----------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables (15.0%)
* Harrah's Entertainment, Inc. 9,300 148,800
Royal Carribbean Cruises Ltd. 5,300 168,937
Sysco Corp. 4,000 142,000
Warnaco Group, Inc. 6,800 193,800
-----------------------------
653,537
- ----------------------------------------------------------------------------------------------------------------------------
Energy Related (4.2%)
* Swift Energy Co. 1,400 29,575
* Weatherford Enterra, Inc. 4,900 155,575
-----------------------------
185,150
- ----------------------------------------------------------------------------------------------------------------------------
Health Care (13.8%)
* Acuson Corp. 6,900 167,325
* Alza Corp. 5,000 146,250
* HEALTHSOUTH Corp. 5,800 114,550
* Sofamor Danek Group, Inc. 4,500 175,500
-----------------------------
603,625
- ----------------------------------------------------------------------------------------------------------------------------
Insurance (13.7%)
Horace Mann Educators Corp. 4,400 206,250
Mercury General Corp. 1,700 105,400
Mutual Risk Management Ltd. 3,400 124,950
USF&G Corp. 8,100 162,000
-----------------------------
598,600
- ----------------------------------------------------------------------------------------------------------------------------
Retail (4.9%)
* Cole National Corp., Class A 2,600 85,800
* Zale Corp. 6,900 127,650
-----------------------------
213,450
- ----------------------------------------------------------------------------------------------------------------------------
Service (3.8%)
* Concord EFS, Inc. 4,500 88,875
Lesco, Inc. 4,500 77,625
-----------------------------
166,500
- ----------------------------------------------------------------------------------------------------------------------------
Technology (3.7%)
* Technical Data Corp. 6,700 163,313
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $3,744,755) 3,737,406
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-13
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Face
Amount
- ----------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (13.6%)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreement (13.6%)
Chase Securities, Inc. 5.20%, dated 4/30/97, due
05/01/97, to be repurchased at $592,086,
collateralized by $595,389 of various U.S.
Treasury Notes, 4.75%-6.125% due 8/31/98-
10/31/98, valued at $592,476 (Cost $592,000) $ 592,000 $ 592,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.2%) (Cost $4,336,755) (a) 4,329,406
- ----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (NET) (0.8%) 35,890
- ----------------------------------------------------------------------------------------------------------------------------
NET ASSETS (100%) $4,365,296
============================================================================================================================
</TABLE>
+ See Note A to Financial Statements.
* Non - Income Producing Security.
(a) The cost for federal income tax purposes was $4,336,755. At April 30,
1997, net unrealized depreciation for all securities based on tax was
$7,349. This consisted of aggregate gross unrealized appreciation for
all securities of $140,182 and aggregate gross unrealized depreciation
for all securities of $147,531.
The accompanying notes are an integral part of the financial statements.
F-14
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
Assets
Investments, at Cost............................................. $ 4,336,755
==================
Investments, at Value
(Including Repurchase Agreement of $592,000,000)............... $ 4,329,406
Cash............................................................. 456
Receivable for Investments Sold.................................. 56,191
Dividends Receivable............................................. 276
Interest Receivable.............................................. 86
Receivable from Investment Adviser- Note B....................... 4,209
- ------------------------------------------------------------------------------------------------
Total Assets................................................... 4,390,624
- ------------------------------------------------------------------------------------------------
Liabilities
Payable for Administrative Fees- Note C.......................... 3,982
Payable for Custodian Fees- Note D............................... 6,097
Payable for Directors' Fees- Note G.............................. 1,123
Other Liabilities................................................ 14,126
- -----------------------------------------------------------------------------------------------------
Total Liabilities.............................................. 25,328
- -----------------------------------------------------------------------------------------------------
Net Assets............................................................... $ 4,365,296
=====================================================================================================
Net Assets Consist Of:
Paid in Capital.................................................. $ 4,470,481
Undistributed Net Investment Income.............................. 1,847
Accumulated Net Realized Loss.................................... (99,683)
Unrealized Depreciation.......................................... (7,349)
- -----------------------------------------------------------------------------------------------------
Net Assets............................................................... $ 4,365,296
=====================================================================================================
Institutional Class Shares
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)........................................ 427,609
Net Asset Value, Offering and Redemption Price
Per Share...................................................... $ 10.21
=====================================================================================================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-15
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Period from
November 1, 1996*
to April 30, 1997
(Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
Investment Income
Interest .......................................... $15,754
Dividends ......................................... 8,238
- -------------------------------------------------------------------------------
Total Income ..................................... 23,992
- -------------------------------------------------------------------------------
Expenses
Investment Advisory Fees - Note B
Basic Fees........................................ $11,625
Less Fees Waived.................................. (11,625) -
Administrative Fees - Note C....................... 14,800
Registration and Filing Fees....................... 4,952
Printing Fees...................................... 9,948
Custodian Fees-Note D.............................. 6,097
Audit Fees......................................... 6,332
Legal Fees......................................... 1,537
Directors' Fees - Note G........................... 1,580
Other.............................................. 683
Expenses Assumed by the Adviser-Note B............. (27,649)
- -------------------------------------------------------------------------------
Net Expenses ..................................... 18,280
- -------------------------------------------------------------------------------
Net Investment Income .............................. 5,712
- -------------------------------------------------------------------------------
Net Realized Loss on Investments ................... (99,683)
Net Change in Unrealized Appreciation/Depreciation
on Investments .................................... (7,349)
- -------------------------------------------------------------------------------
Total Net Loss on Investments ...................... (107,032)
- -------------------------------------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ......................... $ (101,320)
===============================================================================
</TABLE>
* For the period November 1, 1996(Commencement of Operations) to April 30,
1997.
The accompanying notes are an integral part of the financial statements.
F-16
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Period from
November 1, 1996*
to April 30, 1997
(Unaudited)
- ---------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income.............................................. $ 5,712
Net Realized Loss ................................................ (99,683)
Net Change in Unrealized Appreciation/Depreciation ................ (7,349)
- ---------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Operation ............. (101,320)
- ---------------------------------------------------------------------------------------
Distributions:
Net Investment Income.............................................. (3,865)
- ---------------------------------------------------------------------------------------
Capital Share Transactions: (1)
Issued - Regular .................................................. 5,438,371
- In Lieu of Cash Distributions ............................ 3,433
Redeemed .......................................................... (971,323)
- ---------------------------------------------------------------------------------------
Net Increase from Capital Share Transactions..................... 4,470,481
- ---------------------------------------------------------------------------------------
Total Increase ................................................... 4,365,296
Net Assets:
Beginning of Period ............................................... -
- ---------------------------------------------------------------------------------------
End of Period (including undistributed net investment
income of $1,847)................................................. $ 4,365,296
=======================================================================================
(1) Shares Issues and Redeemed:
Shares Issued ................................................... 519,454
In Lieu of Cash Distributions .................................. 340
Shares Redeemed ................................................. (92,185)
- ---------------------------------------------------------------------------------------
427,609
=======================================================================================
</TABLE>
* Commencement of Operations.
The accompanying notes are an integral part of the financial statements.
F-17
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected Per Share Data & Ratios
For a Share Outstanding Throughout the Period
<TABLE>
<CAPTION>
Period from
November 1, 1996***
to April 30, 1997
(Unaudited)
- ------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period............... $10.00
- ------------------------------------------------------------------
Income From Investment Operations
Net Investment Income......................... 0.02
Net Realized and Unrealized Gain++............ 0.21
- ------------------------------------------------------------------
Total From Investment Operations........... 0.23
- ------------------------------------------------------------------
Distributions
Net Investment Income......................... (0.02)
- ------------------------------------------------------------------
Total Distributions........................ (0.02)
- ------------------------------------------------------------------
Net Asset Value, End of Period .................... $10.21
==================================================================
Total Return....................................... 2.30% + **
==================================================================
Ratios and Supplemental Data
Net Assets, End of Period (Thousands).............. $4,365
Ratio of Expenses to
Average Net Assets............................. 1.25% *
Ratio of Net Investment
Income to Average Net Assets................... 0.39% *
Portfolio Turnover Rate............................ 49% **
Average Commission Rate ........................... $0.0778
- ------------------------------------------------------------------
Voluntarily Waived Fees and Expenses
Assumed by the Adviser Per Share $0.09
Ratio of Expenses to Average Net
Assets Including Expense Offsets............... 1.25% *
- ------------------------------------------------------------------
</TABLE>
* Annualized
** Not Annualized
***Commencement of Operations.
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
++ The amount shown for the period ended April 30, 1997 for a share outstanding
throughout that period does not accord with the aggregate net losses on
investments for that period because of the timing of sales and repurchases of
the Portfolio shares in relation to fluctuating market value of the
investments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
F-18
<PAGE>
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO
NOTES TO FINANCIAL STATEMENTS (Unaudited)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Rice,
Hall, James Small/Mid Cap Portfolio (the "Portfolio"), a portfolio of UAM Funds,
Inc., is a diversified, open-end management investment company. At April 30,
1997, the UAM Funds were composed of forty-two active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Rice, Hall, James Small/Mid Cap Portfolio is to provide maximum capital
appreciation, consistent with reasonable risk to principal by investing
primarily in small/mid market capitalization companies.
A. Significant Accounting Policies: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. Security Valuation: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid price
on such day. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued not exceeding the current asked prices
nor less than the current bid prices. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are
valued at amortized cost, if it approximates market value. The value of
other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. Federal Income Taxes: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. Repurchase Agreements: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession
of the underlying securities, the value of which exceeds the principal
amount of the repurchase transaction, including accrued interest. To
the extent that any repurchase transaction exceeds one business day,
the value of the collateral is monitored on a daily basis to determine
the adequacy of the collateral. In the event of default on the
obligation to repurchase, the Portfolio has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreements. This joint repurchase agreement is covered by
the same collateral requirements as discussed above.
4. Distributions to Shareholders: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized
net capital gains will be distributed annually. All distributions are
recorded on ex-dividend date.
F-19
<PAGE>
5. Other: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses
of the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets.
Custodian fees for the Portfolio have been increased to include expense
offsets for custodian balance credits.
B. Advisory Services: Under the terms of an investment advisory agreement,
Rice, Hall, James & Associates (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio at a fee calculated at an annual rate of 0.80% of
average daily net assets. The Adviser has voluntarily agreed to waive a portion
of its advisory fees and to assume expenses, if necessary, in order to keep the
Portfolio's total annual operating expenses, after the effect of expense offset
arrangements, from exceeding 1.25% of average daily net assets.
C. Administration Services: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed daily
and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in excess
of $3 billion. The fees are allocated among the portfolios of the UAM Funds on
the basis of their relative net assets and are subject to a graduated minimum
fee schedule per portfolio which rises from $2,000 per month, upon inception of
a portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee of 0.04% of average
daily net assets of the Portfolio. The Administrator has entered into a Mutual
Funds Service Agreement with Chase Global Funds Services Company ("CGFSC"), an
affiliate of The Chase Manhattan Bank, under which CGFSC agrees to provide
certain services, including but not limited to, administration, fund accounting,
dividend disbursing and transfer agent services. Pursuant to the Mutual Funds
Service Agreement, the Administrator pays CGFSC a monthly fee. For the period
ended April 30, 1997, UAM Fund Services, Inc. earned $14,800 from the Portfolio
as Administrator of which $14,219 was paid to CGFSC for their services.
D. Custodian: The Chase Manhattan Bank, an affiliate of CGFSC, is custodian for
the Portfolio's assets held in accordance with the custodian agreement.
E. Distribution Services: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. Account Services: Effective February 28, 1997, the UAM Funds entered into an
Account Services Agreement (the "Services Agreement") with UAM Retirement Plan
Services, Inc. (the "Service Provider"), a wholly-owned subsidiary of UAM. Under
the Services Agreement, the Service Provider agrees to perform certain services
for participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services.
G. Directors' Fees: Each Director, who is not an officer or affiliated person,
receives $2,000 per meeting attended, which is allocated proportionally among
the active portfolios of UAM Funds, plus a quarterly retainer of $150 for each
active portfolio of the UAM Funds and reimbursement of expenses incurred in
attending Board meetings.
F-20
<PAGE>
H. Purchases and Sales: For the period ended April 30, 1997, the Portfolio
made purchases of $5,035,758 and sales of $1,191,321 of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.
I. Line of Credit: The Portfolio, along with certain other portfolios of UAM
Funds, collectively entered into an agreement which enables them to participate
in a $100 million unsecured line of credit with several banks. Borrowings will
be made solely to temporarily finance the repurchase of Capital shares. Interest
is charged to each participating Portfolio based on its borrowings at a rate per
annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment fee
of 1/10th of 1% per annum, payable at the end of each calendar quarter, is
accrued by each participating Portfolio based on its average daily unused
portion of the line of credit. During the period ended April 30, 1997, the
Portfolio had no borrowings under the agreement.
J. Other: At April 30, 1997, there was one shareholder owning 12% of the
aggregate total shares outstanding of the Portfolio.
F-21
<PAGE>
PART C
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
POST-EFFECTIVE AMENDMENT NO.46
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(A) Financial Statements
Incorporated by reference to Post-Effective Amendment No.43 (in
Part A) for the classes of shares listed below are "Financial
Highlights" for the period from the date indicated to the fiscal
year ended October 31, 1996:
Acadian International Equity Portfolio Institutional Class Shares
(March 29, 1993)
Acadian Emerging Markets Portfolio Institutional Class Shares
(June 17, 1993)
C & B Balanced Portfolio Institutional Class Shares
(December 29, 1989)
C & B Equity Portfolio Institutional Class Shares (May 15, 1990)
DSI Disciplined Value Portfolio Institutional Class Shares
(December 12, 1989)
DSI Limited Maturity Bond Portfolio Institutional Class Shares
(December 18, 1989)
DSI Money Market Portfolio Institutional Class Shares
(December 28, 1989)
FMA Small Company Portfolio Institutional Class Shares
(July 31, 1991)
ICM Equity Portfolio Institutional Class Shares (October 1, 1993)
ICM Fixed Income Portfolio Institutional Class Shares
(November 3, 1992)
ICM Small Company Portfolio Institutional Class Shares
(April 19, 1989)
McKee U.S. Government Portfolio Institutional Class Shares
(March 2, 1995)
McKee Domestic Equity Portfolio Institutional Class Shares
(March 2, 1995)
McKee International Equity Portfolio Institutional Class Shares
(May 26, 1994)
NWQ Balanced Portfolio Institutional Class Shares
(August 2, 1994)
NWQ Value Equity Portfolio Institutional Class Shares
(September 21, 1994)
NWQ Balanced Portfolio Institutional Service Class Shares
(January 22, 1996)
Rice, Hall, James Small Cap Portfolio Institutional Class Shares
(July 1, 1994)
Sirach Fixed Income Portfolio Institutional Class Shares
(December 1, 1993)
Sirach Growth Portfolio Institutional Class Shares
(December 1, 1993)
Sirach Short-Term Reserves Portfolio Institutional Class Shares
(December 1, 1993)
Sirach Strategic Balanced Portfolio Institutional Class Shares
(December 1, 1993)
Sirach Special Equity Portfolio Institutional Class Shares
(October 2, 1989)
Sirach Equity Portfolio Institutional Class Shares (July 1, 1996)
Sirach Growth Portfolio Institutional Service Class Shares
(March 22, 1996)
Sirach Special Equity Portfolio Institutional Service Class
Shares (March 22, 1996)
SAMI Preferred Stock Income Portfolio Institutional Class Shares
(June 23, 1992)
Sterling Partners' Balanced Portfolio Institutional Class Shares
(March 15, 1991)
Sterling Partners' Equity Portfolio Institutional Class Shares
(March 15, 1991)
Sterling Partners' Short-Term Fixed Income Portfolio
Institutional Class Shares (February 10, 1992)
TS&W Equity Portfolio Institutional Class Shares (July 17, 1992)
TS&W Fixed Income Portfolio Institutional Class Shares
(July 17, 1992)
TS&W International Equity Portfolio Institutional Class Shares
(December 18, 1992)
<PAGE>
Included in Part B:
The following audited Financial Statements for the Rice, Hall, James Small Cap
Portfolio are included in Part B of this Post-Effective Amendment:
(a) Statement of Net Assets as of October 31, 1996;
(b) Statement of Operations for the period ended October 31, 1996;
(c) Statement of Changes in Net Assets for the period ended
October 31, 1996;
(d) Financial Highlights as of October 31, 1996;
(e) Notes to Financial Statements; and
(f) Report of Independent Accountants.
The following unaudited Financial Statements for the Rice, Hall, James Small/Mid
Cap Portfolio are also included in Part B of this Post-Effective Amendment:
(a) Statement of Net Assets as of April 30, 1997;
(b) Statement of Operations for the period ended April 30, 1997;
(c) Statement of Changes in Net Assets for the period ended
April 30, 1997;
(d) Financial Highlights as of April 30, 1997; and
(e) Notes to Financial Statements.
The Financial Statements for the following portfolios are incorporated by
reference to Post-Effective Amendment No. 45 filed on February 5, 1997.
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
The Financial Statements for the following Portfolios are also incorporated
herein by reference to Post-Effective Amendment No. 44 filed on
January 24, 1997:
McKee U.S. Government Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
The Financial Statements for the following Portfolios are also incorporated
herein by reference to the Annual Reports for the Fund each dated
October 31, 1996, filed electronically pursuant to Section 30(b)(2) of the
Investment Company Act of 1940, as amended, (Accession Number: 0000950109-96-
008722):
Acadian International Equity Portfolio
Acadian Emerging Markets Portfolio
C & B Balanced Portfolio
C & B Equity Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
<PAGE>
DSI Money Market Portfolio
FMA Small Company Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
Sirach Fixed Income Portfolio
Sirach Growth Portfolio
Sirach Short-Term Reserves
Sirach Strategic Balanced Portfolio
Sirach Special Equity Portfolio
Sirach Equity Portfolio
SAMI Preferred Stock Income Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity
Sterling Partners' Short-Term Fixed Income Portfolio
The Financial Statements for the above-referenced Portfolios for the time
periods set forth in each Portfolio's Annual Report dated October 31, 1996
include:
(a) Statement of Net Assets as of October 31, 1996;
(b) Statement of Operations for the period ended October 31, 1996;
(c) Statement of Changes in Net Assets for the period ended October 31, 1996;
(d) Financial Highlights as of October 31, 1996;
(e) Notes to Financial Statements; and
(f) Report of Independent Accountants.
<PAGE>
(B) EXHIBITS
Exhibits previously filed by the Fund are incorporated by
reference to such filings. The following table describes the location of
all exhibits. In the table, the following references are used: RS =
original Registration Statement on Form N-1A filed October 31, 1988; Pre
EA = Pre-Effective Amendment No. 1 filed March, 1989; PEA = Post-
Effective Amendment (pertinent numbers for each PEA are included after
"PEA", e.g., PEA #3 means the third PEA under the Securities Act of
1933.)
<TABLE>
<CAPTION>
INCORPORATED BY
EXHIBIT REFERENCE TO (LOCATION):
------- ------------------------
<S> <C> <C>
1. Articles of Incorporation PEA#37
A. Amendments PEA#37
B. Articles Supplementary PEA#37, PEA#41, PEA#42, PEA#44.
PEA#45
2. By-Laws Pre EA
3. Voting Trust Agreement Not Applicable
4. Specimen of Securities PEA #1, PEA #2, PEA #12, PEA #13,
PEA #16, PEA #19, PEA #21, PEA
#24, PEA# 25, PEA#33, PEA#37,
PEA#39, PEA#40, PEA#41, PEA#42,
PEA#45
5. Investment Advisory Agreements RS, Pre EA, PEA #1, PEA #2, PEA
#5, PEA #7, PEA #12, PEA #13, PEA
#16, PEA #19, PEA #21, PEA #24,
PEA# 25, PEA#31, PEA#33, PEA#37,
PEA#40, PEA#41, PEA#42, PEA#44,
PEA#45
6. Distribution Agreement PEA #2
Form of Amended and Restated
Distribution Agreement between
RFI Distributors and The Regis
Fund, Inc. PEA #28
7. Directors' and Officers'
Contracts and Programs Not Applicable
8. Custody Agreements
A. Custodian Agreement Pre EA
B. Corporate Custody Agreement PEA#2
C. Global Custody Agreement PEA#44
9. Other Material Contracts
A. Fund Administration
Agreement between UAM
Funds, Inc. and UAM Fund
Services, Inc. PEA#40
B. Mutual Funds Service Agreement
between UAM Fund Services, Inc.
and Chase Global Funds Services
Company PEA#40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INCORPORATED BY
EXHIBIT REFERENCE TO (LOCATION):
------- ------------------------
<S> <C> <C>
10. Opinion and Consent of Counsel Pre EA
11. Other Opinions and Consents
A. Consent of Independent Accountants
with respect to 1996 Annual Reports PEA#43
B. Consent of Independent Accountants
with respect to 1996 Annual Report
for the McKee Portfolios PEA#44
C. Consent of Independent Accountants
with respect to 1996 Annual Report
for the TS&W Portfolios PEA#45
D. Consent of Independent Accountants
with respect to 1996 Annual Report
for the Rice, Hall, James Small Cap
Portfolio Filed herewith
12. Other Financial Statements
A. 1996 Annual Reports PEA#43
13. Agreements relating to Initial
Capital
A. Purchase Agreement Pre EA
14. Model Retirement Plans Not Applicable
15. 12b-1 Plans
A. Form of Distribution Plan PEA #28
B. Form of Selling Dealer Agreement PEA #28
C. Form of Shareholder Services Plan PEA #28
D. Form of Service Agreement
(12b-1 Plan) PEA #28
E. Form of Service Agreement
(Shareholder Services Plan) PEA #28
16. Performance Quotation Schedules
for the period ended:
A. October 31, 1996 PEA#43
B. October 31, 1996 (for McKee Portfolios) PEA#44
C. October 31, 1996 (for TS&W Portfolios) PEA#45
D. October 31, 1996 (for Rice, Hall, James
Small Cap Portfolio) and April 30, 1997
(for Rice, Hall, James Small/Mid Cap
Portfolio) Filed herewith
18. Rule 18f-3 Multiple Class Plan PEA #36
24. Powers of Attorney PEA #5, PEA #8, PEA #35
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
27. Financial Data Schedules
for the period ended:
<S> <C> <C>
A. October 31, 1996 PEA #43
B. October 31, 1996 (for McKee Portfolios) PEA #44
C. October 31, 1996 (for TS&W Portfolios) PEA #45
D. October 31, 1996 (for Rice, Hall, James
Small Cap Portfolio) and April 30, 1997
(for Rice, Hall, James Small/Mid Cap
Portfolio) Filed Herewith
</TABLE>
<TABLE>
<CAPTION>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES (MARCH 31, 1997).
<S> <C>
Acadian Emerging Markets Portfolio Institutional Class Shares................................... 39
Acadian International Equity Portfolio Institutional Class Shares............................... 17
C&B Balanced Portfolio Institutional Class Shares............................................... 48
C&B Equity Portfolio Institutional Class Shares................................................. 188
C&B Equity Portfolio for Taxable Investors Institutional Class Shares........................... 8
DSI Disciplined Value Portfolio Institutional Class Shares...................................... 78
DSI Limited Maturity Bond Portfolio Institutional Class Shares.................................. 41
DSI Money Market Portfolio Institutional Class Shares........................................... 72
FMA Small Company Portfolio Institutional Class Shares.......................................... 46
ICM Equity Portfolio Institutional Class Shares................................................. 75
ICM Fixed Income Portfolio Institutional Class Shares........................................... 36
ICM Small Company Portfolio Institutional Class Shares.......................................... 331
McKee Domestic Equity Portfolio Institutional Class Shares...................................... 26
McKee International Equity Portfolio Institutional Class Shares................................. 41
McKee U.S. Government Portfolio Institutional Class Shares...................................... 22
NWQ Balanced Portfolio Institutional Class Shares............................................... 20
NWQ Balanced Portfolio Institutional Service Class Shares....................................... 17
NWQ Value Equity Portfolio Institutional Class Shares........................................... 22
Rice, Hall, James Small Cap Portfolio Institutional Class Shares................................ 375
Rice, Hall, James Small\Mid Cap Portfolio Institutional Class Shares............................ 79
SAMI Preferred Stock Income Portfolio Institutional Class Shares................................ 20
Sirach Equity Portfolio Institutional Class Shares ............................................. 30
Sirach Fixed Income Portfolio Institutional Class Shares........................................ 41
Sirach Growth Portfolio Institutional Class Shares.............................................. 135
Sirach Growth Portfolio Institutional Service Class Shares...................................... 12
Sirach Short-Term Reserves Portfolio Institutional Class Shares................................. 34
Sirach Special Equity Portfolio Institutional Class Shares...................................... 190
Sirach Special Equity Portfolio Institutional Service Class Shares.............................. 7
Sirach Strategic Balanced Portfolio Institutional Class Shares.................................. 71
Sirach Strategic Balanced Portfolio Institutional Service Class Shares.......................... 2
Sterling Partners' Balanced Portfolio Institutional Class Shares................................ 137
Sterling Partners' Equity Portfolio Institutional Class Shares.................................. 111
Sterling Partners' Short-Term Fixed-Income Portfolio Institutional Class Shares................. 68
Sterling Partners' Small Cap Portfolio Institutional Class Shares............................... 61
TS&W Equity Portfolio Institutional Class Shares................................................ 260
TS&W Fixed Income Portfolio Institutional Class Shares.......................................... 170
TS&W International Equity Portfolio Institutional Class Shares.................................. 384
HJMC Equity Portfolio Institutional Class Shares *.............................................. 0
McKee Small Cap Equity Portfolio Institutional Class Shares*.................................... 0
NWQ Value Equity Portfolio Institutional Service Class Shares *................................. 0
Sterling Partners' Balanced Portfolio Institutional Service Class Shares*....................... 0
Sterling Partners' Equity Portfolio Institutional Service Class Shares*......................... 0
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Sterling Partners' Short-Term Fixed-Income Portfolio Institutional Service Class Shares*........ 0
TS&W Balanced Portfolio Institutional Class Shares*............................................. 0
TOTAL........................................................................................... 3,314
</TABLE>
* Portfolio has been authorized for sale of shares but has yet to begin
operations.
ITEM 27. INDEMNIFICATION
Reference is made to Article NINTH of the Registrant's Articles of
Incorporation, which was filed as Exhibit No. 1 to the Registrant's initial
registration statement. Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provision, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefor, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
Reference is made to the captions "Investment Adviser" and "Administrative
Services" in the Prospectuses constituting Part A of this Registration Statement
and "Management of the Fund" and "Investment Adviser" in Part B of this
Registration Statement.
Acadian Asset Management, Inc.
Listed below are the executive officers and directors of Acadian Asset
Management, Inc. ("AAM"). The business address of AAM is Two International Place
- - 26th Floor, Boston, Massachusetts 02110. No officer or director of AAM has any
other affiliation with the Registrant.
Dr. Gary L. Bergstrom, President and Director
Ronald D. Frashure, Executive Vice President and Director
John R. Chisholm, Senior Vice President
Stella M. Hammond, Senior Vice President
Churchill G. Franklin, Senior Vice President
Richard O. Michaud, Senior Vice President
Matthew V. Pierce, Senior Vice President
James W. Graves, Senior Vice President
Cooke & Bieler, Inc.
Listed below are the executive officers and directors of Cooke & Bieler,
Inc. ("C&B"). The business address of C&B is 1700 Market Street, Philadelphia,
Pennsylvania 19103. No officer or Director of C&B has any other affiliation with
the Registrant.
James C. A. McClennon, Partner and Director
Robert B. Arthur, Partner and Director
Walter W. Grant, Partner and Director
Charles E. Haldeman, Partner and Director
John J. Medveckis, Partner and Director
Russell G. Redenbaug, Partner and Director
<PAGE>
Ronald D. Henrikisen, Director
Robert R. Glauber, Director
R. James O'Neil, Vice President
Bruce A. Smith, Vice President
Peter A. Thompson, Vice President
Kermit S. Eck, Vice President
Michael M. Meyer, Vice President
Dewey Square Investors Corporation
Listed below are the executive officers and directors of Dewey Square
Investors Corporation ("DSI"). The business address of DSI is One Financial
Center, Boston, Massachusetts 02111. Mr. Whitman is a director of the
Registrant. No other officer or director of DSI has any other affiliation with
the Registrant.
Peter M. Whitman, Jr., President
Ronald L. McCullough, Vice President
G.A. David Gray, Vice President
Eva S. Dewitz, Vice President
Marilyn R. Stegner, Secretary and Treasurer
Fiduciary Management Associates, Inc.
Listed below are the executive officers and directors of Fiduciary
Management Associates, Inc. ("FMA"). The business address of FMA is 55 West
Monroe Street, Suite No. 2550, Chicago, Illinois 60603. No officer or director
of FMA has any other affiliation with the Registrant.
Robert F. Carr III, Director, Chairman and Secretary
Patricia A. Falkowski, President & Chief Investment Officer
Robert W. Thornburgh, Jr., Executive Vice President and Treasurer
Philip E. Arnold, Chairman of Executive Committee
Lloyd J. Spicer, Senior Vice President
Albert W. Gustafson, Senior Vice President
Investment Counselors of Maryland, Inc.
Listed below are the executive officers and directors of Investment
Counselors of Maryland, Inc. ("ICM"). The business address of ICM is 803
Cathedral Street, Baltimore, Maryland 21201. No officer or director of ICM has
any other affiliation with the Registrant.
Craig Lewis, Principal and Director
Linda W. McCleary, Principal and Director
Robert D. McDorman, Jr., Principal and Director
Stephen T. Scott, Principal and Director
David E. Nelson, Principal and Director
Paul L. Borssuck, Principal
Charles W. Neuhauser, Senior Vice President
Daniel O. Shackelford, Senior Vice President
Robert F. Boyd, Executive Vice President
<PAGE>
C.S. McKee & Company, Inc.
Listed below are the executive officers and directors of C.S. McKee &
Company, Inc. ("C.S. McKee"). The business address of C.S. McKee is One Gateway
Center, Pittsburgh, Pennsylvania 15222. No officer or director of C.S. McKee has
any other affiliation with the Registrant.
Charles E. Jacobs, Chairman
James H. Hanes, President and Director
Joseph F. Bonomo, Jr., Senior Vice President
Walter C. Bean, Senior Vice President
William J. Andrews, Vice President
Kathryn J. Murin, Senior Vice President
Joseph A. Murvar, Portfolio Manager
Malcolm G. Nimick, Portfolio Manager
Norman S. Allan, Senior Vice President
Bradford J. Hanes, Assistant Vice President
Lloyd F. Stamy, Jr., Senior Vice President
William Vescio, Vice President
Susan A. Darragh, Treasurer
NWQ Investment Management Company
Listed below are the executive officers and directors of NWQ
Investment Management Company, Inc. ("NWQ"). The business address of NWQ is 655
South Hope Street, 11th Floor, Los Angeles, California 90017. No officer or
director of NWQ has any other affiliation with the Registrant.
David A. Polak, President and Director
Edward C. Friedel, Jr., Director and Managing Director
James P. Owen, Managing Director
James H. Galbreath, Director and Managing Director
Mary-Gene Slaven, Clerk, CFO, COO and Managing Director
Michael C. Mendez, Managing Director
Phyllis G. Thomas, Managing Director
Paul R. Guastamacchio, Vice President and Portfolio Manager
Martin Pollack, Vice President and Portfolio Manager
Thomas J. Laird, Vice President and Portfolio Manager
Justin T. Clifford, Vice President
Jeffrey M. Cohen, Vice President and Portfolio Manager
Karen S. McCue, Vice President and Director of Institutional
Marketing
Ronald R. Sternal, Vice President
Ronald R. Halverson, Vice President
Kathy Seraff, Vice President
Rice, Hall, James & Associates
Listed below are the executive officers and directors of Rice, Hall,
James & Associates ("RHJ"). The business address of RHJ is 600 West Broadway,
Suite 1000, San Diego, California 92101. No officer or director of RHJ has any
other affiliation with the Registrant.
Walter H. Beck, Director and Partner
Charles G. King, Partner and Portfolio Manager
Thomas W. McDowell, Director, President, Chief Executive Officer
and Portfolio Manager
Gary S. Rice, Partner and Portfolio Manager
<PAGE>
David P. Tessmer, Director, Partner and Portfolio Manager
Timothy A. Todaro, Partner and Portfolio Manager
Samuel R. Trozzo, Chairman and Portfolio Manager
Mitchell S. Little, Partner
Michelle P. Connell, Partner and Portfolio Manager
James Dickinson, Partner and Portfolio Manager
Patricia A. Urbonya, Partner and Operations Manager
Sirach Capital Management, Inc.
Listed below are the executive officers and directors of Sirach
Capital Management, Inc. ("Sirach"). The business address of Sirach is 3323 One
Union Square, 600 University Street, Seattle, Washington 98101. No officer or
director of Sirach has any other affiliation with the Registrant.
Harvey G. Bateman, Treasurer and Director
Barry E. Fetterman, Secretary and Director
Thomas Gillespie, Vice President and Director
George B. Kauffman, Chairman of the Board and Director
William B. Sanders, President and Director
Spectrum Asset Management, Inc.
Listed below are the executive officers and directors of Spectrum
Asset Management, Inc. ("SAMI"). The business address of SAMI is 4 High Ridge
Park, Stamford, Connecticut 06905. No officer or director of SAMI has any other
affiliation with the Registrant.
Scott T. Fleming, Chairman of the Board and Chief Financial
Officer
Bernard M. Sussman, Senior Vice President
L. Phillip Jacoby, IV, Vice President - Portfolio Management
Margaret S. Gilliland, Vice President
Patrick G. Hurley, Hedge Manager
Sterling Capital Management Company
Listed below are the executive officers and directors of Sterling
Capital Management Company ("Sterling"). The business address of Sterling is One
First Union Center, 301 S. College Street, Suite 3200, Charlotte, NC 28246. No
officer or director of Sterling has any other affiliation with the Registrant.
W. Olin Nisbet, III, Chairman and Chief Executive Officer
Mark W. Whalen, President
David M. Ralston, Chief Investment Officer
J. Calvin Rivers, Executive Vice President
Harry F. Wolfe, Jr., Senior Vice President
Alexander W. McAlister, Senior Vice President
James R. Norris, Senior Vice President
Brian R. Walton, Senior Vice President
Eduardo A. Brea, Vice President
Mary D. Chaney, Vice President and Secretary/Treasurer
Rebecca G. Douglass, Vice President
Mary Weeks Frutain, Vice President
Esther L. Glenn Vice President
Thompson, Siegel & Walmsley, Inc.
<PAGE>
Listed below are the executive officers and directors of Thompson,
Siegel and Walmsley, Inc. ("TS&W"). The business address of TS&W is 5000
Monument Avenue, Richmond, Virginia 23230. No officer or director of TS&W has
any other affiliation with the Registrant.
John T. Siegel, President, Treasurer and Director
Matthew G. Thompson, Senior Vice President and Director
S. Pierce Walmsley, IV, Senior Vice President and Director
Kathleen M. Blanton, Vice President
Lori N. Anderson, Vice President
Charles A. Gomer, III, Vice President
Paul A. Ferwerda, Vice President
Peter D. Hartman, Vice President
G.D. Rothenberg, Vice President
Horace P. Whitworth, II, Vice President and Secretary
Elizabeth Cabell Jennings, Vice President
Alan C. Ashworth, Vice President
AAM, C&B, DSI, FMA, ICM, C.S. McKee, NWQ, RHJ, Sirach, SAMI, Sterling
and TS&W are each wholly-owned affiliates of United Asset Management Corporation
("UAM"), a Delaware corporation acquiring and owning firms engaged primarily in
institutional investment management.
ITEM 29. PRINCIPAL UNDERWRITERS
(a) UAM Fund Distributors, Inc., the firm which acts as sole
distributor of the Registrant's shares, also acts as
distributor for UAM Funds Trust (formerly The Regis Fund
II).
(b) Not applicable.
(c) Not applicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The books, accounts and other documents required by Section 3(a)
under the Investment Company Act of 1940, as amended (the "1940 Act") and rules
promulgated thereunder will be maintained in the physical possession of the
Registrant, the Registrant's Advisers, the Registrant's Sub-Transfer and
Sub-Administrative Agent (Chase Global Funds Services Company, 73 Tremont
Street, Boston, Massachusetts 02108) and the Registrant's Custodian Bank (The
Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, New York 11245.)
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable
(b) (i) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified for the TS&W Balanced Portfolio within four to six months of the
effective date of such Portfolio or the commencement of operations of the
Portfolio, whichever is later.
(ii) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified for the McKee Small Cap Equity Portfolio within four to six months of
the effective date of such Portfolio or the commencement of operations of the
Portfolio, whichever is later.
<PAGE>
(iii) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified for the Sterling Partners' Small Cap Value Portfolio within four to
six months of the effective date of such Portfolio or the commencement of
operations of the Portfolio, whichever is later.
(iv) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified for the C & B Equity Portfolio for Taxable Investors and C & B Mid Cap
Equity Portfolio within four to six months of the effective date of such
Portfolios or the commencement of operations of each Portfolio, whichever is
later.
(v) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified, for the DSI Balanced Portfolio Institutional Class Shares within four
to six months of the commencement of operations of the Portfolio.
(vi) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified, for the HJMC Equity Portfolio Institutional Class Shares within four
to six months of the commencement of operations of such Portfolio.
(vii) Registrant undertakes to file a post-effective
amendment containing reasonably current financial statements, which need not be
certified, for the Cambiar Anticipation Portfolio Institutional Class Shares
within four to six months of the commencement of operations of the Portfolio.
(c) Registrant undertakes to comply with the provisions of
Section 16(c) of the 1940 Act in regard to shareholders' rights to call a
meeting of shareholders for the purpose of voting on the removal of Directors
and to assist in shareholder communications in such matters, to the extent
required by law. Specifically, the Registrant will, if requested to do so by the
holders of at least 10% of the Registrant's outstanding shares, call a meeting
of shareholders for the purpose of voting upon the question of the removal of a
Director and the Registrant will assist in shareholder communications as
required by Section 16(c) of the 1940 Act.
(d) Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the city of Boston and Commonwealth of
Massachusetts on the 30th day of May, 1997.
UAM FUNDS, INC.
*
----------------------
Norton H. Reamer
Chairman and President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
* , Chairman and President May 30, 1997
- ---------------------------
Norton H. Reamer
* , Director May 30, 1997
- ---------------------------
John T. Bennett, Jr.
* , Director May 30, 1997
- ---------------------------
Philip D. English
* , Director May 30, 1997
- ---------------------------
William A. Humenuk
* , Director May 30, 1997
- ---------------------------
Peter M. Whitman, Jr.
/s/ Gary L. French , Treasurer and Principal May 30, 1997
- --------------------------- Financial and Accounting
Gary L. French Officer
/s/ Karl O. Hartmann May 30, 1997
- ---------------------------
* Karl O. Hartmann
(Attorney-in-Fact)
<PAGE>
UAM FUNDS, INC.
(FORMERLY THE REGIS FUND, INC.)
FILE NOS. 811-5683/33-25355
POST-EFFECTIVE AMENDMENT #46
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
11(D) Consent of Independent Accountants with respect to
1996 Annual Report for the Rice, Hall, James Small
Cap Portfolio
16 Performance Quotations Schedules
27 Financial Data Schedules for the periods ended
October 31, 1996 and April 30, 1997
</TABLE>
<PAGE>
Exhibit 11(D)
Consent of Independent Accountants
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 46 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
December 9, 1996, relating to the financial statements and financial highlights
appearing in the October 31, 1996 Annual Report to the Shareholders of the Rice,
Hall, James Small Cap Portfolio which appears in such Statement of Additional
Information and to the incorporation by reference of our report into the
Prospectus which constitutes part of this Registration Statement.
We also consent to the incorporation by reference into the Registration
Statement of our reports dated December 9, 1996 relating to the financial
statements of the remaining 29 portfolios of the UAM Funds, Inc. which are
incorporated by reference under Item 24 of Part C of such Registration
Statement.
We also consent to the references to us under the headings "Financial
Highlights," "Independent Accountants" and "Reports" in the Prospectuses and
under the heading "Financial Statements" in the Statement of Additional
Information.
/s/ Price Waterhouse LLP
- ---------------------------
Price Waterhouse LLP
Boston, Massachusetts
May 28, 1997
<PAGE>
Schedule or Computation of Performance Quotations
Rice, Hall, & James Small Cap Portfolio
Exhibit 16
1. Average Annual Return (As of October 31, 1996)
P (1 + T)/N/ = ERV
WHERE: P = A hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at end of the period
Since Inception
One Year 07/01/94
-------- --------
P = $1,000 $1,000
T = 19.434% 31.524%
N = 1.00 years 2.34 years
ERV = $1,194 $1,897
<PAGE>
Schedule or Computation of Performance Quotations
Rice, Hall, James Small/Mid Cap Portfolio
Exhibit 16
1. Cumulative Total Return (November 1, 1996 - April 30, 1997)
P(1+T)/N/=ERV
Where: P = a hypothetical initial payment of $1,000
T = average annual total return
N = number of years
ERV = ending redeemable value at the end of the period
Since Inception
-----------------------
11/01/96
------------
P =$1,000
T =2.382%
N =1 year*
ERV =$1,024
* Total Return for periods of less than one year is not annualized.
<TABLE> <S> <C>
<PAGE>
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<SERIES>
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<NAME> Rice, Hall, James Small Cap Portfolio
</SERIES>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 30,049
<INVESTMENTS-AT-VALUE> 33,008
<RECEIVABLES> 634
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 33,643
<PAYABLE-FOR-SECURITIES> 90
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<OTHER-ITEMS-LIABILITIES> 65
<TOTAL-LIABILITIES> 199
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<PAID-IN-CAPITAL-COMMON> 27,348
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<OVERDISTRIBUTION-GAINS> 0
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<DIVIDEND-INCOME> 63
<INTEREST-INCOME> 93
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<DISTRIBUTIONS-OF-INCOME> 0
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<NUMBER-OF-SHARES-SOLD> 866
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<PER-SHARE-NAV-BEGIN> 15.87
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> 2.73
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<TABLE> <S> <C>
<PAGE>
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<NAME> Rice, Hall, James Small/Mid Cap Portfolio
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
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<PERIOD-START> NOV-01-1995
<PERIOD-END> OCT-31-1996
<INVESTMENTS-AT-COST> 4,337
<INVESTMENTS-AT-VALUE> 4,329
<RECEIVABLES> 60
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<OTHER-ITEMS-ASSETS> 1
<TOTAL-ASSETS> 4,390
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25
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<PAID-IN-CAPITAL-COMMON> 4,470
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<ACCUMULATED-NET-GAINS> (100)
<OVERDISTRIBUTION-GAINS> 0
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<INTEREST-INCOME> 16
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<EXPENSES-NET> (18)
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<NET-CHANGE-FROM-OPS> (101)
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<NUMBER-OF-SHARES-SOLD> 520
<NUMBER-OF-SHARES-REDEEMED> (92)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,365
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<GROSS-EXPENSE> 58
<AVERAGE-NET-ASSETS> 2,957
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> 0.21
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<EXPENSE-RATIO> 1.25
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</TABLE>
