<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
UAM Funds, Inc. - SEC File Nos. 33-25355, 811-5683
(Name of Registrant as Specified In Its Charter)
............................................................
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
UAM Funds, Inc. II - SEC File Nos. 333-44193, 811-08605
(Name of Registrant as Specified In Its Charter)
............................................................
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
2
<PAGE>
SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
UAM Funds Trust - SEC File Nos. 33-79858, 811-8544
(Name of Registrant as Specified In Its Charter)
............................................................
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
3
<PAGE>
UAM(R) Funds
Funds for the Informed Investor sm
September 15, 2000
Dear Shareholder:
I am writing to all shareholders of the UAM Funds to inform you of a meeting
of shareholders to be held October 27, 2000. Before that joint meeting, I
would like your vote on the important issues affecting your fund as described
in the attached proxy statement. This is a very important meeting that has
been called to consider six proposals requiring your vote as a shareholder.
The proxy statement includes proposals relating to the election of
directors/trustees, the reclassification of the investment objectives of
certain of the UAM Funds, the adoption of standardized fundamental investment
restrictions for each of the funds and the approval of investment advisory
agreements for each fund. More specific information about all the proposals is
contained in the proxy statement, which you should consider carefully.
The respective Board of Directors/Trustees of your fund have unanimously
approved the proposals and recommend that you vote FOR all of the proposals
described within this document.
I realize that this proxy statement will take time to review, but your vote is
very important. Please familiarize yourself with the proposals presented and
vote by either signing and returning your proxy card(s) in the enclosed
postage-paid envelope today, using the internet as described in the proxy card
or voting over the phone as described below. You may receive more than one
proxy card if you own shares in more than one UAM Fund. Please sign and return
each card you receive.
If we do not receive your completed proxy card(s) after several weeks, you may
be contacted by the UAM Funds' proxy solicitor, Shareholder Communications
Corporation, who will remind you to vote your shares or will record your vote
over the phone if you choose to vote in that manner. You may also call the
Shareholder Communications Corporation directly at [insert phone number] and
vote by phone.
We thank you for taking this matter seriously and participating in this
important process.
Sincerely,
Norton H. Reamer
Chairman
<PAGE>
IMPORTANT NEWS FOR SHAREHOLDERS OF UAM FUNDS
While we encourage you to read the full text of the enclosed Proxy Statement,
here is a brief overview of some matters affecting your UAM Funds that require
a shareholder vote.
Q & A: QUESTIONS AND ANSWERS
Q. What Is Happening?
A. United Asset Management Corporation ("UAM"), the parent company of your UAM
Fund's adviser, has entered into an agreement with Old Mutual plc ("Old
Mutual") and OM Acquisition Corp. ("OMAC"), a wholly owned subsidiary of
Old Mutual, pursuant to which Old Mutual will make a tender offer for the
outstanding shares of UAM, and OMAC will merge with UAM. Old Mutual is a
United Kingdom-based financial services group with a substantial life
assurance business in South Africa and an integrated, international
portfolio of activities in asset management, banking and general insurance.
As a result of the proposed Transaction, there will be a change in
ownership of UAM, and indirectly the adviser to your Fund. The following
pages give you additional information about Old Mutual, the proposed
acquisition and the matters on which you are being asked to vote. The
Directors/Trustees of your UAM Funds, including those who are not
affiliated with UAM or its affiliates, Old Mutual or its affiliates or the
UAM Funds, unanimously recommend that you vote FOR these proposals.
Q. Why Did You Send Me This Booklet?
A. You are receiving these proxy materials--a booklet that includes the Proxy
Statement and one or more proxy cards--because you have the right to vote
on the important proposals concerning your investment in one or more of the
UAM Funds, i.e., a portfolio of UAM Funds, Inc., UAM Funds Trust or UAM
Funds, Inc. II.
Q. Why Are Multiple Cards Enclosed?
A. If you own shares of more than one of the UAM Funds, you will receive a
proxy card for each fund you own.
Q. Why Am I Being Asked To Vote On Interim and Proposed New Advisory
Agreements In Proposal Nos. 5 and 6?
A. The Investment Company Act of 1940, which regulates investment companies
such as your UAM Funds, requires a vote whenever there is a change in
control of an investment company's adviser. Upon a change of control, the
advisory agreement between the investment adviser and the investment
company terminates. UAM's Transaction with Old Mutual will result in a
change of control of UAM and its affiliated advisers and therefore requires
shareholder approval of interim advisory agreements to operate until the
closing of the transaction and new advisory agreements between your UAM
Funds and UAM affiliated advisers effective upon closing of the
transaction. The new advisory agreements are identical in all material
respects to the existing advisory agreements.
Q. What Else Am I Being Asked To Vote On?
A. You are being asked to elect a Board of Directors/Trustees. Each of the
nominees, with the exception of James F. Orr, III, the new president of
UAM, currently serves on the Board of Directors/Trustees. Also, in order to
save the expense of a subsequent meeting, you are being asked to vote to
reclassify the investment objectives of the Funds to non-fundamental and to
change certain of the fundamental investment restrictions of the funds.
Additionally, you are being asked to vote to ratify the Board's selection
of your funds' independent accountants.
<PAGE>
Q. How Will The UAM/Old Mutual Transaction Affect Me?
A. UAM has assured the Board that there will be no reduction in the nature or
quality of its services to the UAM Funds as a result of the Transaction,
and in fact anticipates that its resources may be enhanced.
Q. How Does The Respective UAM Funds' Board Of Trustees/Directors Recommend
That I Vote?
A. After careful consideration, each Board of the UAM Funds, including those
Directors/Trustees who are not affiliated with the UAM Funds, UAM or its
affiliated companies and Old Mutual and its affiliated companies, recommend
that you vote FOR all of the proposals on the enclosed proxy card.
Q. Whom Do I Call For More Information Or To Place My Vote?
A. You may provide the UAM Funds with your vote via mail. If you need more
information on how to vote, or if you have any questions, please call your
funds' information agent at [insert 1-800- ].
Your Vote Is Important And Will Help Avoid The Additional Expense Of Another
Solicitation.
Thank You For Promptly Recording Your Vote.
<PAGE>
UAM Funds
211 Congress Street, 4th Floor
Boston, MA 02110
1-877-826-5465
NOTICE OF JOINT MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 27, 2000
NOTICE IS HEREBY GIVEN that a joint meeting (the "Meeting") of shareholders of
each series of UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds Trust will be
held at [Time and Place] for the following purposes:
1. To elect a Board of Directors/Trustees.
2. To approve the proposed reclassification of the investment objective of
each Fund other than Analytic International Fund, Clipper Focus Portfolio,
IRA Capital Preservation Portfolio, Pell Rudman Mid-Cap Growth Portfolio
and PIC Twenty Portfolio from fundamental to non-fundamental.
3. To approve the adoption of standardized fundamental investment restrictions
by amending, reclassifying or eliminating some or all of the current
fundamental investment restrictions of each Fund.
4. To ratify the selection of PricewaterhouseCoopers LLP as independent
auditors of the Funds.
5. To approve an interim investment advisory agreement for each Fund.
6. To approve a new investment advisory agreement for each Fund.
7. To transact any other business that may properly come before the Meeting or
any adjournments thereof.
Shareholders of record at the close of business on August 21, 2000 are
entitled to notice of, and to vote at the Meeting or any adjournments thereof.
You are invited to attend the Meeting, but if you cannot do so, please
complete and sign the enclosed proxy and return it in the accompanying
envelope as promptly as possible. Your vote is important no matter how many
shares you own. You can vote easily and quickly at the proxy solictors' web
site, by toll-free telephone, by mail, by facsimile or in person. You may
change your vote even though a proxy has already been returned by written
notice to the Company, by mail, submitting a subsequent proxy, or by voting in
person at the meeting.
By Order of the Board of Directors of UAM Funds, Inc. and UAM Funds, Inc. II,
and the Board of Trustees of UAM Funds Trust
Linda T. Gibson
Secretary
Boston, Massachusetts
September 15, 2000
<PAGE>
UAM Funds
211 Congress Street, 4th Floor
Boston, MA 02110
1-877-826-5465
PROXY STATEMENT
JOINT MEETING OF SHAREHOLDERS OF
UAM FUNDS, INC.
UAM FUNDS, INC. II
UAM FUND TRUST
TO BE HELD ON OCTOBER 27, 2000
This proxy statement is furnished in connection with the solicitation by
the respective Board of UAM Funds, Inc., UAM Funds, Inc. II and UAM Funds
Trust (each a "Company," and collectively the "Companies") for the joint
meeting of shareholders of Acadian Emerging Markets Portfolio, Analytic
Defensive Equity Fund, Analytic Enhanced Equity Fund, Analytic
International Fund, Analytic Master Fixed Income Fund, Analytic Short-Term
Government Fund, C&B Balanced Portfolio, C&B Equity Portfolio, C&B Equity
Portfolio for Taxable Investors, C&B Mid Cap Equity Portfolio, Cambiar
Opportunity Portfolio, Chicago Asset Management Intermediate Bond
Portfolio, Chicago Asset Management Value/Contrarian Portfolio, Clipper
Focus Portfolio, FMA Small Company Portfolio, FPA Crescent Portfolio,
Heitman Real Estate Portfolio, ICM Small Company Portfolio, IRA Capital
Preservation Portfolio, McKee Domestic Equity Portfolio, McKee
International Equity Portfolio, McKee Small Cap Equity Portfolio, McKee U.
S. Government Portfolio, MJI International Equity Portfolio, NWQ Special
Equity Portfolio, Pell Rudman Mid-Cap Growth Portfolio, PIC Twenty
Portfolio, Rice, Hall James Small Cap Portfolio, Rice, Hall James Small/Mid
Cap Portfolio, Sirach Bond Portfolio, Sirach Equity Portfolio, Sirach
Growth Portfolio, Sirach Growth II Portfolio (Hanson Equity Portfolio),
Sirach Special Equity Portfolio, Sirach Strategic Balanced Portfolio,
Sterling Partners' Balanced Portfolio, Sterling Partners' Equity Portfolio,
Sterling Partners' Small Cap Value Portfolio, TJ Core Equity Portfolio,
TS&W Equity Portfolio, TS&W Fixed Income Portfolio, TS&W International
Octagon Portfolio (formerly Jacobs International Octagon Portfolio), and
TS&W International Equity Portfolio (each a "Fund") to be held at [Place]
on Friday, October 27, 2000 at [Time], and all adjournments thereof (the
"Meeting"). Shareholders of record at the close of business on Monday,
August 21, 2000 (the "Record Date"), are entitled to notice of, and to vote
at, the Meeting. This proxy statement and the accompanying notice of
meeting and proxy card(s) are first being mailed to shareholders on or
about September 15, 2000.
As used in this proxy statement, each Company's board of directors or
trustees is referred to as a "Board," and the term "Director" includes each
trustee of UAM Funds Trust. A Director that is an interested person of the
Company is referred to in this proxy statement as an "Interested Director."
A Director may by an interested person of the Company because they are
affiliated with one of the Company's investment advisers, United Asset
Management Corporation or the Company's principal underwriter. Directors
that are not interested persons of a Company are referred to in this proxy
statement as "Independent Directors."
<PAGE>
SUMMARY OF PROPOSALS REQUIRING SHAREHOLDER VOTE
-------------------------------------------------------------------------------
The Board intends to bring before the Meeting the matters set forth in the
foregoing notice. If you wish to participate in the Meeting you may submit
the proxy card(s) included with this proxy statement or attend in person.
Your vote is important no matter how many shares you own. You can vote
easily and quickly at the proxy solictors' web site, by toll-free
telephone, by mail, by facsimile or in person. At anytime before the
Meeting, you may change your vote even though a proxy has already been
returned by written notice to the Company, by mail, submitting a subsequent
proxy, or by voting in person at the meeting. Should shareholders require
additional information regarding the Proxy or replacement proxy cards, they
may contact the Funds at 1-877-826-5465.
The Funds expect that the solicitation of proxies from shareholders will be
made by mail, but solicitation also may be made by telephone communications
from officers or employees of UAM or it affiliates, who will not receive
any compensation therefore from the Funds. In addition, the Funds may
engage a professional proxy solicitation firm to assist in the solicitation
of proxies.
As the Meeting date approaches, certain shareholders of a Fund may receive
a telephone call if their vote has not yet been received. Authorization to
permit a telephone solicitor to execute proxies may be obtained by
telephonically transmitted instructions from shareholders of a Fund.
Proxies that are obtained telephonically will be recorded in accordance
with the procedures set forth below. The Directors believe that these
procedures are reasonably designed to ensure that the identity of the
shareholder casting the vote is accurately determined and that the voting
instructions of the shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the telephone solicitor
will ask for each shareholder's full name, address, social security or
taxpayer identification number, title (if the shareholder is authorized to
act on behalf of an entity, such as a corporation), and the number of
shares owned. The telephone solicitor will also confirm that the
shareholder has received the Proxy Statement and proxy card in the mail. If
the information provided by the shareholder agrees with the record
information, the telephone solicitor will explain the process, read the
proposals listed on the proxy card, and ask for the shareholder's
instructions on each proposal. The telephone solicitor, although permitted
to answer questions about the process, is not permitted to recommend to the
shareholder how to vote, other than to read any recommendation set forth in
the Proxy Statement. The telephone solicitor will record the shareholder's
instructions on the card. Within 72 hours, the telephone solicitor will
send the shareholder a letter or mailgram to confirm his or her vote and
ask the shareholder to call the telephone solicitor immediately if his or
her instructions are not correctly reflected in the confirmation.
All proxy cards solicited that are properly executed and received in time
to be voted at the Meeting will be voted at the Meeting or any adjournment
thereof according to the instructions on the proxy card. If no
specification is made on a proxy card, it will be voted FOR the matters
specified on the proxy card. For purposes of determining the presence of a
quorum, abstentions, broker non-votes or withheld votes will be counted as
present; however, they will have no effect on the outcome of the vote to
approve any Proposal requiring a vote based on the percentage of shares
actually voted. Shareholders should note that while votes to ABSTAIN will
count toward establishing a quorum, passage of any Proposal being
considered at the Meeting will occur only if a sufficient number of votes
are cast FOR the Proposal. Accordingly, votes to ABSTAIN and votes AGAINST
will have the same effect in determining whether the Proposal is approved.
Unmarked voting instructions will be voted in favor of the proposals.
If a quorum is not present at the Meeting, or if a quorum is present at the
Meeting but sufficient votes to approve one or more of the proposed items
are not received, or if other matters arise requiring
2
<PAGE>
shareholder attention, the persons named as proxy agents may propose one or
more adjournments of the Meeting to permit further solicitation of proxies.
Any such adjournment will require the affirmative vote of a majority of
those shares present at the Meeting or represented by proxy. A shareholder
vote may be taken on one or more of the items in this Proxy Statement prior
to such adjournment if sufficient votes have been received and it is
otherwise appropriate. The persons named as proxies will vote those proxies
that they are entitled to vote FOR any such proposal in favor of such an
adjournment, and will vote those proxies required to be voted AGAINST any
such proposal, against any such adjournment.
Required Vote
The following table summarizes those proposals, the shareholders eligible
to vote on the proposals and the vote required to approve each proposal.
<TABLE>
<CAPTION>
Proposal Shareholders
Number Proposal Description Entitled to Vote Vote Required for Approval
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect Directors for Shareholders of each For UAM Funds Trust and UAM
each Company Company vote together Funds, Inc. II, each nominee
(if a Company has must be elected by a plurality
several Funds, of the shares voting at the
shareholders of all meeting. For UAM Funds, Inc.,
Funds vote together as a each nominee must be elected
single class) by a majority of the shares
voting at the meeting.
-------------------------------------------------------------------------------------------
2. To reclassify the Shareholders of each Approval of this proposal
investment objective Fund (except Analytic requires the affirmative vote
of certain Funds from International Fund, of a "majority of the
fundamental to non- Clipper Focus, IRA outstanding voting securities"
fundamental Capital Preservation, of the Fund.*
Pell Rudman Mid-Cap
Growth and PIC Twenty
Portfolios) will vote
separately
-------------------------------------------------------------------------------------------
3. To adopt standardized Shareholders of each Approval of this proposal
fundamental investment Fund will vote requires the affirmative vote
restrictions for each separately of a "majority of the
Fund by amending, outstanding voting securities"
reclassifying or of the Fund.*
eliminating some or
all of the Fund's
current fundamental
investment
restrictions as listed
below:
-------------------------------------------------------------------------------------------
4. To ratify selection of Shareholders of each Approval of this proposal
PricewaterhouseCoopers Fund will vote requires a majority of all
LLP as independent separately votes of a Fund cast at the
auditors of the Funds meeting.
---------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Proposal
Number Proposal Description Shareholders Entitled to Vote Vote Required for Approval
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5. To approve an interim Shareholders of each Approval of this proposal
investment advisory Fund will vote requires the affirmative vote
agreement separately of a "majority of the
outstanding voting securities"
of the Fund.*
------------------------------------------------------------------------------------------------
6. To approve a new Shareholders of each Approval of this proposal
investment advisory Fund will vote requires the affirmative vote
agreement separately of a "majority of the
outstanding voting securities"
of the Fund.*
</TABLE>
* Under the Investment Company Act of 1940 (the "1940 Act"), the vote of a
"majority of the outstanding voting securities" means the affirmative vote
of the lesser of (a) 67% or more of the voting securities present at the
meeting or represented by proxy if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy or (b)
more than 50% of the outstanding voting securities.
PROPOSAL 1: ELECTION OF DIRECTORS
-------------------------------------------------------------------------------
The purpose of this Proposal is to elect Directors for the Company. Except
for James F. Orr, III, all nominees named below are currently Directors and
have served in that capacity since originally elected or appointed. None of
the nominees are related to any other nominee. The term of office for a
Director will be until the next meeting of shareholders, if any, called for
the purpose of electing Directors and until the election and qualification
of a successor or until such Director sooner dies, resigns or is removed as
provided in the governing documents of the Company. In case of a vacancy,
the remaining Directors will appoint another Director. The Company will not
hold a shareholder meeting for the purpose of electing Directors unless
required to do so by applicable law.
Each of the nominees has indicated that he or she is willing to serve as a
Director. It is intended that the voting instructions/proxies will be voted
for the election of the nominees as Directors described in the table below.
However, if any or all of the nominees should unexpectedly become
unavailable for election, the persons named as proxies will vote for such
other nominee or nominees as the current Directors may recommend.
Nominees for the Company's Board
The following table lists the nominees for Director and provides
information regarding their age, address and business experience during the
past five years. Those nominees with an asterisk (*) by their names are
Interested Directors. Mr. English has an investment advisory relationship
with Investment Counselors of Maryland, an investment adviser to one of the
Funds in the UAM Funds Complex. However, the Company does not believe that
the relationship is a material business relationship, and, therefore, does
not consider him to be an Interested Director. If these circumstances
change, the Board will determine whether any action is required to change
the composition of the Board.
4
<PAGE>
<TABLE>
<CAPTION>
Business Experience for Year of Election or
Name and Age Past Five Years Appointment
------------------------------------------------------------------------------
<C> <S> <C>
John T. Bennett, Jr. Mr. Bennett is President of Elected by shareholders
RR2 Box 700 Squam Investment Management in 1986
Center Harbor, NH 03226 Company, Inc. and Great
71 Island Investment Company,
Inc. (investment
management). From 1988 to
1993, Mr. Bennett was
President of Bennett
Management Company. Mr.
Bennett serves on the Board
of each Company in the UAM
Funds Complex.
------------------------------------------------------------------------------
Nancy J. Dunn Ms. Dunn has been Financial Appointed by Directors
1250 24th St., NW Officer of World Wildlife in 1997
Washington, DC 20037 Fund (nonprofit), since
49 January 1999. From 1991 to
1999, Ms. Dunn was Vice
President for Finance and
Administration and
Treasurer of Radcliffe
College (Education). Ms.
Dunn serves on the Board of
each Company in the UAM
Funds Complex.
------------------------------------------------------------------------------
William A. Humenuk Mr. Humenuk has been Senior Elected by shareholders
7620 Lincoln Drive Vice President in 1986
Philadelphia, PA 19118 Administration, General
58 Counsel and Secretary of
Lone Star Industries Inc.
(cement and ready-mix
concrete) since March 2000.
From June 1998 to March
2000 he was Executive Vice
President and Chief
Administrative Officer of
Philip Services Corp.
(ferrous scrap processing,
brokerage and industrial
outsourcing services). Mr.
Humenuk was a Partner in
the Philadelphia office of
the law firm Dechert Price
& Rhoads from July 1976 to
June 1998. He was also
formerly a Director of
Hofler Corp. (manufacturer
of gear grinding machines).
Mr. Humenuk serves on the
Board of each Company in
the UAM Funds Complex.
------------------------------------------------------------------------------
Philip D. English Mr. English is President Elected by shareholders
16 West Madison Street and Chief Executive Officer in 1986
Baltimore, MD 21201 of Broventure Company,
52 Inc., a company engaged in
the investment management
business. He is also
Chairman of the Board of
Chektec Corporation (Drugs)
and Cyber Scientific, Inc.
(computer mouse company).
Mr. English serves on the
Board of each Company in
the UAM Funds Complex.
------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
Business Experience for Past Year of Election or
Name and Age Five Years Appointment
------------------------------------------------------------------------------
<C> <S> <C>
James F. Orr, III* Mr. Orr has been President, Nominated by Directors
One International Place Chief Executive Officer and in 2000
Boston, MA 02110 Director of UAM since May
57 2000. From 1988-1999, he was
Chairman and Chief Executive
Officer and from 1986-1988,
President and Chief
Executive Officer of UNUM
Corporation; prior to that,
Executive Vice President of
Connecticut Bank & Trust
Company. He is a past
Chairman of the American
Council of Life Insurers. He
is currently a trustee of
Bates College and the
Committee for Economic
Development. He is Chairman-
elect of the Board of
Trustees of the Rockefeller
Foundation. Mr. Orr is a
member of The Business
Roundtable, the Harvard
Center for Society, and the
Health Advisory Council at
the Harvard School of Public
Health. He is a director of
the Nashua Corporation and a
director of the National
Alliance of Business, and
past Chair.
</TABLE>
Responsibilities of the Board
The Board manages the business of the Company and elects officers to manage
the day-to-day operations of the Company and to execute policies the Board
has formulated. The Board that is proposed for shareholder voting at the
Meeting is comprised of one Interested Director and four Independent
Directors. The Securities and Exchange Commission (the "SEC") has recently
proposed a rule that would require a majority of the Board to be
Independent Directors in order for a Fund to take advantage of certain
exemptive rules under the 1940 Act. On the Company's proposed board, if
approved by shareholders, 80% of the Board will be Independent Directors.
The Independent Directors review the fees paid to the each investment
adviser and its affiliates for investment advisory services and other
administrative and shareholder services, and, in general, have primary
responsibility for assuring that the Company is managed in the best
interests of its shareholders. The Independent Directors have been
nominated solely by the current Independent Directors, a practice also
favored by the SEC.
The Directors meet several times during the year to review the investment
performance of each Fund and other operational matters, including policies
and procedures designed to assure compliance with regulatory and other
requirements. During the fiscal year ended October 31, 1999, the Directors
of UAM Funds, Inc. held four regular meetings and two special meetings
(including meetings of the Independent Directors of the Board). During the
fiscal year ended December 31, 1999, UAM Funds, Inc. II held four regular
meetings of the Board and one special meeting (including meetings of the
Independent Directors of the Board). During the fiscal year ended April 30,
2000, the Directors of UAM Funds Trust held four regular meetings of the
Board and two special meetings (including meetings of the Independent
Directors of the Board).
Committees
The Board has an Audit Committee, a Fund Governance Committee and a
Valuation Committee. The Board's Audit Committee is composed of only
Independent Directors (all of whom serve on the committee). The Audit
Committee oversees and monitors the Company's internal control structure,
its auditing function and its financial reporting process, including the
resolution of any material
6
<PAGE>
reporting issues. The Audit Committee meets privately with each Company's
independent auditors and receives annual representations from the auditors
as to their independence. The Audit Committee also recommends the
appointment of auditors for the Company and reviews audit plans, fees and
other material arrangements concerning the appointment of auditors. The
Audit Committee normally meets twice a year and met twice during each
Company's most recent fiscal year.
The Board's Fund Governance Committee is composed of only Independent
Directors (all of whom serve on the committee). The Fund Governance
Committee makes nominations for independent Board membership to the full
Board and Company shareholders, if necessary. The Fund Governance Committee
also monitors and oversees all matters affecting governance of the Company,
including review of Company policies and procedures, the composition of
Board members, compensation paid to the Board members, and appropriate
committees delegated by the Board. The Fund Governance Committee has been
given appropriate authority and resources necessary to discharge its
responsibilities, including authority to retain special counsel and other
experts or consultants at the expense of the Company. The Fund Governance
Committee normally meets once a year; however, since it is new, the Fund
Governance Committee has held no meetings each Company's most recent fiscal
year.
Compensation of Directors and Officers
The Company pays each Independent Director the following fees:
. A $200 quarterly retainer fee per active Fund;
. $3,000 for each meeting of the Board other than a private meeting or
telephonic meeting;
. $1,500 for each private meeting of the Board;
. $1,000 for each telephonic meeting of the Board; and
. $1,000 per day for attending seminars, up to a maximum of three events
per year.
In addition, the Company reimburses each Independent Director for travel
and other expenses incurred while attending board meetings. The $3,000
meeting fee and expense reimbursements are aggregated for all of the
Directors and allocated proportionately among all Funds. The Company does
not pay its Interested Directors or officers for their services as
Directors or officers.
The following table provides information on all Directors who received
compensation from the Companies and the aggregate compensation received by
each Director during calendar year 1999 from the UAM Funds Complex. The UAM
Funds Complex is currently comprised of 49 Funds.
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation from the UAM Funds
Aggregate Compensation from UAM Funds, Inc. Aggregate Compensation Complex for
from UAM Funds, Inc. II for Fiscal Year from UAM Funds Trust Calendar Year
for Fiscal Year Ended Ended December 31, for Fiscal Year Ended Ended
Trustee October 31, 1999 1999 April 30, 2000 December 31, 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr. $7,137 $4,309 $9,380 $40,500
-------------------------------------------------------------------------------------------------------------
Nancy J. Dunn $7,137 $4,309 $9,380 $40,500
-------------------------------------------------------------------------------------------------------------
William A. Humenuk $7,137 $4,309 $9,380 $40,500
-------------------------------------------------------------------------------------------------------------
Philip D. English $7,137 $4,309 $9,380 $40,500
-------------------------------------------------------------------------------------------------------------
James F. Orr, III* $ 0 $ 0 $ 0 $ 0
</TABLE>
* Interested Director
7
<PAGE>
Officers of the Company
<TABLE>
<CAPTION>
Position
with
Name and Age Company Principal Occupation Year of Appointment
------------------------------------------------------------------------------
<C> <C> <S> <C>
James F. Orr, III President Mr. Orr is President and 2000*
57 Chief Executive Officer
of United Asset
Management Corporation,
the parent company to
each investment adviser
of the Funds and the
administrator,
distributor and sub-
shareholder servicing
agent of the Funds.
------------------------------------------------------------------------------
Linda T. Gibson Secretary Ms. Gibson is Senior 2000
35 Vice President and
General Counsel of UAM
Fund Services, Inc.,
administrator to the
Funds, and UAM Fund
Distributors, Inc.,
distributor for the
Funds. Ms. Gibson is
also Managing Director
and General Counsel of
UAM Investment Services,
Inc.
------------------------------------------------------------------------------
Gary L. French Treasurer Mr. French is President 1995 UAM Funds, Inc.
49 of UAM Fund Services, and UAM Funds Trust;
Inc., administrator to 1999 UAM Funds,
the Funds and President Inc. II
of UAM Fund
Distributors, Inc.,
distributor for the
Funds, and UAM
Shareholder Services
Center, Inc., each
Fund's sub-shareholder
servicing agent.
------------------------------------------------------------------------------
Theresa DelVecchio Assistant Ms. DelVecchio is 2000
36 Secretary Secretary of UAM Fund
Services, Inc.,
administrator to the
Funds and Compliance
Officer of UAM Fund
Distributors, Inc.,
distributor for the
Funds.
------------------------------------------------------------------------------
Martin J. Wolin Assistant Mr. Wolin is Vice 2000
32 Secretary President and Associate
General Counsel of UAM
Fund Services, Inc.,
administrator to the
Funds.
------------------------------------------------------------------------------
Robert J. Assistant Mr. DellaCroce is 1999
DellaCroce Treasurer Director, Mutual Fund
36 Operations for SEI
Investments, the sub-
administrator for the
Funds.
------------------------------------------------------------------------------
Robert R. Flaherty Assistant Mr. Flaherty is Senior 1996 UAM Funds, Inc.
36 Treasurer Vice President of UAM and UAM Funds Trust;
Fund Services, Inc., 1999 UAM Funds
administrator to the Inc. II
Funds
</TABLE>
--------
* Mr. Orr's selection as President is contingent upon his election as a
Director.
The Directors Unanimously Recommend That The Shareholders Of
Each Fund Vote For Each Nominee.
8
<PAGE>
PROPOSAL 2 -- RECLASSIFICATION AS NON-FUNDAMENTAL OF THE INVESTMENT OBJECTIVE
OF THOSE FUNDS WHOSE INVESTMENT OBJECTIVE IS CURRENTLY CLASSIFIED AS
FUNDAMENTAL
-------------------------------------------------------------------------------
Reclassification Of Fundamental Investment Objectives As Non-fundamental (each
Fund except Analytic International Fund, Clipper Focus Portfolio, IRA Capital
Preservation Portfolio, Pell Rudman Mid-Cap Growth Portfolio and PIC Twenty
Portfolio)
The 1940 Act does not require a Fund's investment objective to be
classified as "fundamental." A fundamental investment objective may be
changed only by vote of a Fund's shareholders. In order to provide each
Fund's investment adviser with enhanced investment management flexibility
to respond to market, industry or regulatory changes, the Directors have
approved the reclassification from fundamental to non-fundamental of each
Fund's investment objective (except for the five Funds named above). The
Directors may change a non-fundamental investment objective at any time
without approval by a Fund's shareholders.
Exhibit A to this Proxy Statement lists each Fund's (except for the five
Funds named above) current fundamental investment objective. The
reclassification from fundamental to non-fundamental will not alter any
Fund's investment objective. If, at any time in the future, the Directors
approve a change in a Fund's non-fundamental investment objective,
shareholders of such Fund will be given notice of such change prior to its
implementation; however, if such a change were to occur, shareholders would
not be asked to approve such change.
If the reclassification of any Fund's investment objective from fundamental
to non-fundamental is not approved by shareholders of a particular Fund,
such Fund's investment objective will remain fundamental and shareholder
approval (and its attendant costs and delays) will continue to be required
prior to any change in investment objective.
Recommendation of Directors
The Directors have considered the enhanced management flexibility to
respond to market, industry or regulatory changes that would accrue to the
Funds' investment advisers if each Fund's fundamental investment objectives
were reclassified as non-fundamental. At a meeting of the Directors held on
August 4, 2000, the Directors voted to approve the reclassification of the
investment objective of each Fund currently classified as fundamental to
non-fundamental.
The Directors Recommend That Shareholders Vote To Approve Proposal 2.
PROPOSAL 3 -- CHANGES TO FUNDAMENTAL INVESTMENT RESTRICTIONS
-------------------------------------------------------------------------------
Adoption of Standardized Investment Restrictions (Proposals 3A-3H) (All Funds)
The 1940 Act requires an investment company to have adopted certain
specified investment policies ("Restrictions"), which can be changed only
by a shareholder vote. Those policies are often referred to as
"fundamental" policies. In the past, fundamental policies were adopted by
the Funds to reflect regulatory, business or industry conditions that were
in effect at the time the particular action was taken. Many fundamental
policies with respect to particular matters differ from one Fund to the
next. Because of the opportunity afforded by this Meeting, there has been a
review of each Fund's fundamental policies with the goal of simplifying,
modernizing and making consistent as far as possible the fundamental
policies of all of the Funds. It has been recommended to the Board that the
fundamental restrictions listed below be amended to make them uniform among
all of the Funds:
9
<PAGE>
(A) Diversification of investments;
(B) Borrowing;
(C) Issuing of senior securities;
(D) Underwriting;
(E) Industry concentration (except for the Heitman Real Estate Portfolio);
(F) Investment in real estate;
(G) Commodities; and
(H) Lending.
In addition, shareholders of certain Funds are being asked to change
certain fundamental Restrictions to non-fundamental and to eliminate
certain fundamental Restrictions altogether. Unlike a fundamental
Restriction, a non-fundamental Restriction may be changed without the
approval of shareholders. The reclassification/elimination of certain of
the Funds' other current fundamental Restrictions will enhance the Funds'
ability to achieve their objectives by offering greater flexibility to
respond to changed market, industry or regulatory conditions without the
delay and expense of the solicitation of shareholder approval.
The following table summarizes those fundamental Restrictions that are
being proposed to be eliminated and the Funds that currently have certain
of these fundamental Restrictions. Funds that are not listed here currently
do not have these Restrictions. An "X" in the table indicates that the
Restriction is a fundamental Restriction of the Fund, a "--" indicates that
it is not a fundamental Restriction of the Fund and "None" indicates that
the Fund does not have the indicated Restriction:
<TABLE>
<CAPTION>
Buying When
Control or Unseasoned Borrowings
Name of Fund Management Issuers Exceed 5% Pledging
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C&B Balanced Portfolio X X X X
-----------------------------------------------------------------------------
C&B Equity Portfolio X X X X
-----------------------------------------------------------------------------
C&B Equity Portfolio for
Taxable Investors X X X X
-----------------------------------------------------------------------------
C&B Mid Cap Equity Portfolio X X X X
-----------------------------------------------------------------------------
FMA Small Company Portfolio X X X X
-----------------------------------------------------------------------------
FPA Crescent Portfolio None None X X
-----------------------------------------------------------------------------
Heitman Real Estate Portfolio None -- None X
-----------------------------------------------------------------------------
ICM Small Company Portfolio X X X X
-----------------------------------------------------------------------------
The McKee Domestic Equity
Portfolio X -- -- --
-----------------------------------------------------------------------------
The McKee International Equity
Portfolio X -- -- --
-----------------------------------------------------------------------------
The McKee Small Cap Equity
Portfolio X -- -- --
-----------------------------------------------------------------------------
The McKee U. S. Government
Portfolio X -- -- --
-----------------------------------------------------------------------------
NWQ Special Equity Portfolio X -- -- --
-----------------------------------------------------------------------------
Sirach Special Equity Portfolio X X X X
-----------------------------------------------------------------------------
The Sterling Partners' Balanced
Portfolio X X X X
-----------------------------------------------------------------------------
The Sterling Partners' Equity
Portfolio X X X X
-----------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Buying When
Control or Unseasoned Borrowings
Name of Fund Management Issuers Exceed 5% Pledging
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Sterling Partners'
Small Cap Value
Portfolio X X X X
--------------------------------------------------------------------
TS&W Equity Portfolio None X X X
--------------------------------------------------------------------
TS&W Fixed Income
Portfolio None X X X
--------------------------------------------------------------------
TS&W International
Equity Portfolio None X X X
</TABLE>
<TABLE>
<CAPTION>
Interests in Oil,
Gas or
Margin Other Mineral
Purchases Directors' Exploration or Futures
and Short Ownership Development and
Name of Fund Sales of Shares Programs Options
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
C&B Balanced Portfolio X X X X
-----------------------------------------------------------------------------
C&B Equity Portfolio X X X X
-----------------------------------------------------------------------------
C&B Equity Portfolio for
Taxable Investors X X X X
-----------------------------------------------------------------------------
C&B Mid Cap Equity
Portfolio X X X X
-----------------------------------------------------------------------------
FMA Small Company Portfolio X X X --
-----------------------------------------------------------------------------
FPA Crescent Portfolio X None None None
-----------------------------------------------------------------------------
Heitman Real Estate
Portfolio -- None None --
-----------------------------------------------------------------------------
ICM Small Company Portfolio X X X None
-----------------------------------------------------------------------------
The McKee Domestic Equity
Portfolio X X X --
-----------------------------------------------------------------------------
The McKee International
Equity Portfolio X X X --
-----------------------------------------------------------------------------
The McKee Small Cap Equity
Portfolio X X X --
-----------------------------------------------------------------------------
The McKee U. S. Government
Portfolio X X X --
-----------------------------------------------------------------------------
NWQ Special Equity
Portfolio X X X --
-----------------------------------------------------------------------------
Sirach Special Equity
Portfolio X X None None
-----------------------------------------------------------------------------
The Sterling Partners'
Balanced Portfolio X X X --
-----------------------------------------------------------------------------
The Sterling Partners'
Equity Portfolio X X X --
-----------------------------------------------------------------------------
The Sterling Partners'
Small Cap Value Portfolio X X X --
-----------------------------------------------------------------------------
TS&W Equity Portfolio -- None None None
-----------------------------------------------------------------------------
TS&W Fixed Income Portfolio -- None None None
-----------------------------------------------------------------------------
TS&W International Equity
Portfolio -- None None None
</TABLE>
In addition, all of the above Funds in the tables except the FPA Crescent
Portfolio have an "Illiquid or Restricted Securities" fundamental
Restriction which is being proposed to be redesignated as non-fundamental
and restated as follows: "The Fund will not invest more than 15% of its net
assets in illiquid securities."
The Board has concurred with management's efforts to analyze the
fundamental and non-fundamental investment restrictions of the Funds and,
where practicable and appropriate to a Fund's investment objective and
policies, propose to shareholders the adoption of standardized
Restrictions.
It is not anticipated that any of the changes will substantially affect the
way the Funds are currently managed. This Proposal is being presented to
shareholders for approval because it is believed that
11
<PAGE>
increased standardization will help to promote operational efficiencies and
facilitate monitoring of compliance with the Restrictions. Since the
proposed standardized fundamental Restrictions in general are phrased more
broadly than many Funds' current fundamental Restrictions, the Funds will
be able to respond more expeditiously to changed market, industry or
regulatory developments. You will only be given the option to approve all
or none of the proposed changes on the proxy card enclosed with this proxy
statement.
A listing of the proposed standardized fundamental Restrictions to be
adopted by each Fund is set forth in Exhibit B to this proxy statement.
Attached as Exhibit C to this proxy statement are charts for each Fund
listing the Fund's current fundamental Restriction and the proposed
replacement restrictions. If approved by shareholders, the revised
fundamental Restrictions described above will remain fundamental and, as
such, cannot be changed without a further shareholder vote. If the proposed
standardized fundamental Restrictions are not approved by shareholders of a
particular Fund, the current Restrictions will remain fundamental and
shareholder approval (and its attendant costs and delays) will continue to
be required prior to any change in a Restriction.
Recommendation of Directors
The Directors have reviewed the potential benefits associated with the
proposed:
. Standardization of the Funds' fundamental Restrictions (Proposals 3A
through 3H);
. Reclassification to non-fundamental and restatement of fundamental
Restriction concerning illiquid securities for certain of the Funds'
(Proposal 3I); and
. Elimination of certain of the Funds' fundamental Restrictions (Proposal
3J through 3Q).
The Directors voted to approve each of these Proposals at a meeting held
for that purpose on August 4, 2000.
The Directors Unanimously Recommend that Shareholders of Each Fund Vote to
Approve Proposal 3.
PROPOSAL 4: RATIFICATION INDEPENDENT AUDITORS
-------------------------------------------------------------------------------
The Directors, including a majority of the Independent Directors, have
selected PricewaterhouseCoopers LLP to act as independent auditors for each
of the Funds for each Fund's current fiscal year. In its capacity as
independent auditors, PricewaterhouseCoopers LLP performs a variety of
functions, including signing or certifying any financial statements to be
filed with the SEC or any state. PricewaterhouseCoopers LLP are independent
auditors and have advised the Funds that they have no direct financial
interest or material indirect financial interest in the Funds.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Meeting and will have an opportunity to make a statement if they so
desire.
The Directors Unanimously Recommend that Shareholders of Each Fund Vote to
Approve Proposal 4.
12
<PAGE>
PROPOSAL 5 AND PROPOSAL 6: APPROVAL OF INTERIM INVESTMENT ADVISORY AGREEMENT
AND NEW INVESTMENT MANAGEMENT AGREEMENT
-------------------------------------------------------------------------------
Introduction
On June 16, 2000, Old Mutual plc, a public limited company based in the
United Kingdom, ("Old Mutual"), OM Acquisition Corp., a Delaware
corporation and a wholly-owned subsidiary of Old Mutual ("OMAC") and United
Asset Management Corporation, the parent company of each investment adviser
to the Funds, the distributor and the administrator to the Funds, ("UAM")
entered into an Agreement and Plan of Merger (the "Agreement") for Old
Mutual to acquire UAM for $25 per share ("Offer Price") in cash (subject to
possible downward adjustment, as described below) through a tender offer
and merger (the "Transaction"). The transaction values the equity of UAM at
approximately $1.46 billion.
The price to be paid in the Transaction is subject to downward adjustment
in the event that UAM's revenues from assets under management, excluding
the effects of market movements, decline below a specified level prior to
the consummation of the offer. The Transaction is subject to a number of
conditions, including (but not limited to): (i) tender by holders of a
majority of UAM's outstanding shares; (ii) the absence of any legal
restraint or prohibition preventing the Transaction; (iii) expiration of
any waiting period required by antitrust laws; and (iv) approval of the
Transaction by fund and non-fund clients representing specified percentages
of UAM. The Agreement provides that, subject to the satisfaction or waiver
of certain conditions, following completion of the tender offer, OMAC will
be merged with and into UAM and each UAM share outstanding (other than
certain dissenting shareholders) will be converted into the right to
receive the tender offer price, as adjusted, or any greater amount per
share paid pursuant to the tender offer. Each of the conditions may be
waived in whole or in part in connection with the consummation of the
Transaction. The Transaction is expected to close prior to the end of 2000,
although there is no assurance that it will be consummated.
Old Mutual plc is a United Kingdom-based financial services group with a
substantial life assurance business in South Africa and other southern
African countries and an integrated, international portfolio of activities
in asset management, banking and general insurance. UAM has approximately
$188 billion in assets under management in institutional and individual
private accounts and mutual funds. The acquisition of UAM will increase Old
Mutual's assets under management to approximately $275 billion.
Upon approval of the Agreement by UAM's Board of Directors, all options to
purchase Shares granted to employees and directors of UAM vested. The
Agreement provides that, except as otherwise agreed by Old Mutual and the
option holder, all such options that are outstanding immediately before the
effective time of the transaction will be canceled in exchange for a cash
payment by UAM equal to the number of Shares subject to the option times
the excess, if any, of the Offer Price over the exercise price per-Share of
the option, less applicable withholding taxes.
The Transaction will constitute a "change of control" for purposes of the
change-of-control employment agreements that UAM has entered into with
certain senior officers of UAM. The agreements provide generally that the
officer's terms and conditions of employment (including position, location,
compensation and benefits) will not be adversely changed during the two-
year period after the change of control. If UAM terminates the executive's
employment (other than for cause, death or disability), or (in certain
circumstances) the officer terminates his or her employment for any reason
during the 30-day period following the first anniversary of the change of
control, the officer is generally entitled to receive a multiple of the
officer's annual base salary and annual bonus and UAM contributions made to
the officer's defined contribution plan accounts for the most recent plan
year, and continued welfare benefits for a number of years equal to the
same multiple. In
13
<PAGE>
addition, the agreements provide that certain officers are entitled to
receive payment in an amount sufficient to make the officers whole for any
excise tax excess parachute payments imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended, provided such parachute payments
exceed 110% of the maximum amount that could be paid without incurring any
excise tax on the excess parachute payment, in which case the parachute
payments would be reduced to prevent the imposition of the excise tax.
Certain agreements provide for a reduction in payments if necessary to
prevent imposition of the excise tax.
Consummation of the Transaction would constitute an "assignment," as that
term is defined in the 1940 Act, of each Fund's current Investment Advisory
Agreement. As required by the 1940 Act, each Fund's current Investment
Advisory Agreement automatically terminates in the event of its assignment.
In anticipation of the Transaction, the Board has proposed continuation of
the advisory services under a new investment advisory agreement between
each Fund and its current investment adviser for approval by shareholders
of each Fund. The Board has also approved continuation of the advisory
services until the closing of the Transaction under an interim advisory
agreement between each Fund and its current investment adviser for approval
by shareholders of each Fund. Compensation earned by an investment adviser
under an interim investment advisory agreement is held in an interest-
bearing escrow account pending shareholder approval of a new investment
advisory agreement for a period of up to 150 days from the termination of
the current investment advisory agreement. If shareholders approve the
proposed investment advisory agreements, the amount held in the escrow
account, plus interest, will be paid to the investment adviser. If
shareholders do not approve the proposed investment advisory agreement, the
investment adviser will be paid the lesser of the costs incurred in
performing its services under the interim agreement or the total amount in
the escrow account, plus interest earned. Forms of the interim investment
advisory agreement and new investment advisory agreement are attached to
this proxy statement as Exhibits D and E, respectively. The new investment
advisory agreement will be identical in all material respects to the Fund's
the current investment advisory agreement. In addition, each Fund's
advisory fee rate will remain unchanged.
Special Information for Shareholders of Sirach Growth II Portfolio
On August 4, 2000, the Directors, including a majority of the Independent
Directors, approved a change in adviser for the Sirach Growth II Portfolio
from Hanson Investment Management Company ("Hanson") to Sirach Capital
Management Company, Inc. ("Sirach"). Since that meeting, Sirach has been
serving as the Fund's investment adviser on the same terms as Hanson was
serving pursuant to an interim investment advisory agreement. At the
Meeting, shareholders of the Fund will be asked to approve the interim
investment advisory agreement with Sirach and a new advisory agreement with
Sirach. Hanson and Sirach are both affiliates of UAM. In addition, all of
the investment professionals currently employed by Hanson, including those
responsible for the day-to-day management of the Sirach Growth II
Portfolio, are also currently employees of Sirach. Consequently, the change
in adviser is not expected to result in any change in the actual investment
management services, administrative functions, supervisory responsibilities
or fee arrangements for the Fund. UAM proposed this change to the Board as
part of its effort to consolidate the investment advisory operations of
Hanson into those of Sirach. Sirach has provided investment management
services to corporations, pension and profit sharing plans, 401(k) and
thrift plans, trusts, estates and other institutions and individuals since
1970.
Special Information for Shareholders of MJI International Equity Portfolio
On August 1, 2000 it was reported in the news media that Old Mutual plans
to sell Murray Johnstone International, Ltd., the investment adviser for
the MJI International Equity Portfolio, upon consummation of the
Transaction. While the press release indicates that a number of parties
have expressed an interest in buying Murray Johnstone, the Company is
currently not aware of any
14
<PAGE>
agreement between Old Mutual and a third party to sell to Murray Johnstone.
The Fund will, however, notify its shareholders should such an agreement be
reached.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that a manager or investment adviser
(such as the investment advisers to the Funds) to a registered investment
company, and the affiliates of such adviser (such as UAM), may receive any
amount or benefit in connection with a sale of any interest in such manager
or investment adviser which results in an assignment of an investment
advisory contract if the following two conditions are satisfied: (1) for a
period of three years after such assignment, at least 75% of the board of
directors or trustees of the investment company cannot be "interested
persons" (within the meaning of Section 2(a)(19) of the 1940 Act) of the
new investment adviser or its predecessor, and (2) no "unfair burden" (as
defined in the 1940 Act) may be imposed on the investment company as a
result of the assignment or any express or implied terms, conditions or
understandings applicable thereto.
Consistent with the first condition of Section 15(f), Old Mutual and UAM
have agreed in the Agreement that, for a period of three years after the
Closing, they will not take or recommend any action that would cause more
than 25% of the Directors to be interested persons of the entity acting as
each Fund's investment adviser.
With respect to the second condition of Section 15(f), an unfair burden on
an investment company is defined in the 1940 Act to include any arrangement
during the two-year period after any such transaction occurs whereby the
manager or investment adviser or its predecessor or successor, or any
interested person of such adviser, predecessor or successor, receives or is
entitled to receive any compensation of two types, either directly or
indirectly. The first type is compensation from any person in connection
with the purchase or sale of securities or other property to, from or on
behalf of the investment company, other than bona fide ordinary
compensation as principal underwriter for such company. The second type is
compensation from the investment company or its security holders for other
than bona fide investment advisory or other services.
In the Agreement, Old Mutual and UAM have agreed not to take or recommend
any action that would constitute an unfair burden on any Fund within the
meaning of Section 15(f). In this regard, UAM and its affiliates have
agreed to maintain the maximum expense ratio disclosed in the current
prospectus of each Fund for a period of two years from the date of the
consummation of the Transaction, consistent with and subject to the
existing conditions of any voluntary fee waivers unrelated to the
Transaction.
Description of the Investment Advisory Agreements
Pursuant to each Fund's proposed investment advisory agreement, each Fund's
current investment adviser will continue to act as its investment adviser.
Each Fund's current and proposed investment advisory agreement requires the
investment adviser to
. Manage the investment and reinvestment of the Fund's assets;
. Continuously review, supervise and administer the investment program of
the Fund; and
. Determine what portion of the Fund's assets will be invested in
securities and what portion will consist of cash.
Each investment adviser is also required to render regular reports to the
Fund's officers and Board concerning the adviser's discharge of its
responsibilities.
15
<PAGE>
The current and proposed investment advisory agreements also authorize the
investment adviser to select the brokers or dealers that will execute the
purchases and sales of securities of the Fund and directs the adviser to
use its best efforts to obtain the best available price and most favorable
execution. Subject to policies established by the Board, the adviser may
also effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if the adviser determines
in good faith that such amount of commission is reasonable in relation to
the value of the brokerage or research services provided by such broker or
dealer, viewed in terms of either that particular transaction or the
adviser's overall responsibilities with respect to the Fund.
The current and the proposed investment advisory agreement of each Fund
obligates the adviser to discharge its responsibilities subject to the
control of the officers and the Board, and in compliance with the
objectives, policies and limitations set forth in the Fund's prospectus and
applicable laws and regulations. Under the terms of the current investment
advisory agreements, each adviser has agreed to render its services and to
provide, at its own expense, the office space, furnishings and equipment
and the personnel required by it to perform the services on the terms and
for the compensation provided herein.
Each Fund's current and proposed investment advisory agreement, except as
stated below, provides that the Fund's investment adviser shall have no
liabilities in connection with rendering services thereunder, other than
liabilities resulting from the adviser's willful misfeasance, bad faith,
gross negligence or reckless disregard of its duties. Each current
investment advisory agreement also provides that each Fund will indemnify
its investment adviser against liabilities, losses and expenses incurred in
connection with all liabilities, except those stated above and liabilities
involving breach of the adviser's fiduciary duties in respect of receipt of
compensation for its services.
Each current investment advisory agreement was approved at the Fund's
inception by the Fund's initial shareholders. Exhibit F lists the following
information for each Fund's investment adviser:
. The date of the contract and the date on which it was last approved by
Directors;
. The rate of compensation of the investment adviser; and
. The name, address and principal occupation of the principal executive
officer and each director or general partner of the investment adviser.
Recommendation of Directors
On August 4, 2000, representatives of UAM advised the Independent Directors
that UAM had entered into the Transaction Agreement. At that time,
representatives of UAM described the general terms of the proposed
Transaction and the perceived benefits for the UAM organization and for its
investment advisory clients. The Independent Directors discussed the
transaction with representatives of UAM. They were assisted in their review
of this information by their independent legal counsel. UAM has advised the
Independent Directors that that it did not expect that the proposed
Transactions to have an immediate material effect on the operations of the
Funds or their shareholders. UAM has also advised the Independent Directors
that the Transaction Agreement, by its terms, does not contemplate any
changes in the structure or operations of the Funds.
On August 4, 2000, the Board, including a majority of the Independent
Directors, voted to approve the Interim Investment Advisory Agreements and
the New Investment Advisory Agreements and to recommend their approval to
shareholders.
The Directors Unanimously Recommend that Shareholders of Each Fund Vote to
Approve Proposal 5.
16
<PAGE>
ADDITIONAL INFORMATION
-------------------------------------------------------------------------------
UAM Fund Services, Inc. is each Fund's administrator, UAM Shareholder
Services Center, Inc. is each Fund's sub-shareholder servicing agent and
UAM Fund Distributors, Inc. is each Fund's principal underwriter. UAM Fund
Services, Inc., UAM Shareholder Services Center, Inc. and UAM Fund
Distributors, Inc. are affiliates of United Asset Management Corporation.
UAM Fund Services, Inc. and UAM Fund Distributors, Inc. are located at 211
Congress Street, 4th Floor, Boston, Massachusetts 02110 and UAM Shareholder
Services, Inc. is located at 825 Duportail Road, Wayne, Pennsylvania 19087.
Exhibit G lists the following information:
. Fees paid to UAM Funds Services, Inc. during each Fund's last fiscal
year for services rendered as administrator;
. Fees paid to UAM Shareholder Services Center, Inc. during each Fund's
last fiscal year services rendered as sub-shareholder servicing agent;
. Fees paid to each Fund's investment adviser without waivers during the
Fund's last fiscal year;
. Fees paid to each Fund's investment adviser with waivers during the
Fund's last fiscal year; and
. Each Fund's net assets on August 21, 2000.
The Funds do not pay UAM Fund Distributors, Inc. for its services as
principal underwriter to the Funds.
Payment of Expenses
United Asset Management Corporation or its affiliated companies will pay
the expenses of the preparation, printing and mailing of this proxy
statement and its enclosures and of all solicitations, including telephone
or internet voting.
Beneficial Ownership of Shares
Exhibit H contains information about the beneficial ownership by
shareholders of five percent or more of each Fund's outstanding Shares as
of August 14, 2000. On that date, the existing nominees and officers of the
Funds, together as a group, "beneficially owned" less than one percent of
each Fund's outstanding Shares.
Exhibit I contains information on the total number of outstanding shares of
each Fund as of August 21, 2000.
The term "beneficial ownership" is as defined under Section 13(d) of the
Securities and Exchange Act of 1934. The information as to beneficial
ownership is based on statements furnished to each Fund by the existing
Directors and officers of the Company, and/or on the records of Company's
transfer agent.
Annual and Semi-Annual Reports to Shareholders
For a free copy of each Fund's most recent annual report (and most recent
semi-annual report succeeding the annual report, if any) shareholders of
the Fund may call 1-877-826-5465 or write to the UAM Funds at PO Box
219081, Kansas City, MO 64121.
17
<PAGE>
Other Business
The Board does not intend to present any other business at the Meeting.
Other matters will be considered if notice is given within a reasonable
amount of time prior to the meeting. If any other matter may properly come
before the meeting, or any adjournment thereof, the persons named in the
accompanying proxy card(s) intend to vote, act, or consent thereunder in
accordance with their best judgment at that time with respect to such
matters. Any shareholder wishing to present a proposal at a future meeting
of shareholders of a Fund will be required to submit such proposal in
writing so that it is received by the Fund at least 120 days before the
date of the meeting. No annual or other special meeting is currently
scheduled for a Fund. Mere submission of a shareholder proposal does not
guarantee the inclusion of the proposal in the proxy statement or
presentation of the proposal at the meeting since inclusion and
presentation are subject to compliance with certain federal regulations.
The Directors, Including the Independent Directors, Recommend Approval of each
Proposal. Any Unmarked Proxies without Instructions to the Contrary will be
Voted in Favor of Approval of the Proposals.
18
<PAGE>
EXHIBIT A -- FUNDAMENTAL INVESTMENT OBJECTIVES OF CERTAIN OF THE UAM FUNDS
PROPOSED TO BE RECLASSIFIED AS NON-FUNDAMENTAL
<TABLE>
<CAPTION>
Name of Fund Investment Objective
-------------------------------------------------------------------------------
<C> <S>
Acadian Emerging Markets Portfolio Seeks long term capital appreciation by
investing primarily in common stocks of
emerging country issuers.
-------------------------------------------------------------------------------
Analytic Enhanced Equity Fund Seeks above average-average total
returns through investments in equity
securities.
-------------------------------------------------------------------------------
Analytic Defensive Equity Fund Seeks to obtain a greater long-term
total return and smaller fluctuations in
quarterly total return from a
diversified, hedged common stock fund
than would be realized from the same
fund unhedged.
-------------------------------------------------------------------------------
Analytic Master Fixed Income Fund Seeks above average total returns
through investments in a diversified
bond fund consisting primarily of U.S.
government, corporate, and mortgage-
related fixed income securities.
-------------------------------------------------------------------------------
Analytic Short-Term Government Fund Seeks to provide a high level of income
consistent with both low fluctuations in
market value and low credit risk.
-------------------------------------------------------------------------------
C&B Equity Portfolio Seeks maximum long-term total return
with minimal risk to principal by
investing in common stocks which have a
consistency and predictability in their
earnings growth.
-------------------------------------------------------------------------------
C&B Equity Portfolio for Taxable Seeks maximum long-term, after-tax total
Investors return, consistent with minimizing risk
to principal.
-------------------------------------------------------------------------------
C&B Mid-Cap Equity Portfolio Seeks maximum long-term total return,
consistent with minimizing risk to
principal.
-------------------------------------------------------------------------------
C&B Balanced Portfolio Seeks maximum long-term total return
with minimal risk to principal by
investing in a combined portfolio of
common stocks which have a consistency
and predictability in their earnings
growth and investment grade debt
securities.
-------------------------------------------------------------------------------
Cambiar Opportunity Portfolio Seeks capital growth and preservation by
investing primarily in common stocks.
The portfolio seeks to provide above-
average performance in both rising and
falling market periods by investing in
stocks that have limited downside and
with positive upside potential.
-------------------------------------------------------------------------------
Chicago Asset Management Seeks a high level of current income
Intermediate Bond Portfolio consistent with moderate interest rate
exposure by investing primarily in
investment-grade bonds with an average
weighted maturity between 3 and 10
years.
-------------------------------------------------------------------------------
Chicago Asset Management Seeks capital appreciation by investing
Value/Contrarian Portfolio in the common stock of large companies.
-------------------------------------------------------------------------------
FMA Small Company Portfolio Seeks maximum, long-term total return,
consistent with reasonable risk to
principal, by investing in common stocks
of smaller companies in terms of
revenues and/or market capitalization.
-------------------------------------------------------------------------------
FPA Crescent Portfolio Seeks to provide, through a combination
of income and capital appreciation, a
total return consistent with reasonable
investment risk.
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
Name of Fund Investment Objective
-------------------------------------------------------------------------------
<C> <S>
Heitman Real Estate Portfolio Seeks high total return consistent with
reasonable risk by investing primarily
in equity securities of public companies
principally engaged in the real estate
business.
-------------------------------------------------------------------------------
ICM Small Company Portfolio Seeks maximum, long-term total return
consistent with reasonable risk to
principal, by investing primarily in
common stocks of smaller companies
measured in terms of revenues and assets
and, more importantly, in terms of
market capitalization.
-------------------------------------------------------------------------------
McKee Domestic Equity Portfolio Seeks a superior long-term total return
over a market cycle by investing
primarily in equity securities of U.S.
issuers.
-------------------------------------------------------------------------------
McKee International Equity Portfolio Seeks a superior long-term total return
over a market cycle by investing
primarily in the equity securities of
non-U.S. issuers.
-------------------------------------------------------------------------------
McKee Small Cap Equity Portfolio Seeks a superior long-term total return
by investing primarily in the equity
securities of small companies.
-------------------------------------------------------------------------------
McKee U.S. Government Portfolio Seeks a high level of current income
consistent with preservation of capital
by investing primarily in U.S. Treasury
and Government agency securities.
-------------------------------------------------------------------------------
MJI International Equity Portfolio Seeks to maximize total return,
including both capital appreciation and
current income, by investing primarily
in the common stocks of companies based
outside of the United States.
-------------------------------------------------------------------------------
NWQ Special Equity Portfolio Seeks long-term capital appreciation by
investing primarily in the common stock
and other equity securities of
companies, which in the adviser's
opinion, are undervalued at the time of
purchase and offer the potential for
above-average appreciation.
-------------------------------------------------------------------------------
RHJ Small Cap Portfolio Seeks maximum capital appreciation,
consistent with reasonable risk to
principal by investing primarily in
small market capitalization companies.
-------------------------------------------------------------------------------
RHJ Small/Mid Cap Portfolio Seeks maximum capital appreciation,
consistent with reasonable risk to
principal by investing primarily in
small/mid market capitalization
(small/mid cap) companies.
-------------------------------------------------------------------------------
Sirach Bond Portfolio Seeks to achieve above-average total
return, consistent with reasonable risk
to principal, by investing primarily in
dollar-denominated, investment-grade
fixed-income securities.
-------------------------------------------------------------------------------
Sirach Growth Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing primarily in
common stocks of companies that offer
long-term growth potential.
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
Name of Fund Investment Objective
-------------------------------------------------------------------------------
<C> <S>
Sirach Growth II Portfolio Seeks maximum long-term total return,
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of equity securities,
primarily the common stocks of large,
United States--based companies with
outstanding financial characteristics
and strong growth prospects that can be
purchased at reasonable valuations.
-------------------------------------------------------------------------------
Sirach Equity Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing, under normal
circumstances, at least 90% of its total
assets in common stocks of companies
that offer long-term growth potential.
-------------------------------------------------------------------------------
Sirach Special Equity Portfolio Seeks to provide maximum long-term
growth of capital, consistent with
reasonable risk to principal, by
investing in small to medium capitalized
companies with particularly attractive
financial characteristics.
-------------------------------------------------------------------------------
Sirach Strategic Balanced Portfolio Seeks to provide long-term capital
growth, consistent with reasonable risk
to principal, by investing in a
diversified portfolio of common stocks
and fixed income securities.
-------------------------------------------------------------------------------
Sterling Partners' Equity Portfolio Seeks to provide maximum long-term total
return consistent with reasonable risk
to principal, by investing primarily in
common stocks.
-------------------------------------------------------------------------------
Sterling Partners' Balanced Seeks to provide maximum long-term
Portfolio return consistent with reasonable risk
to principal, by investing in a balanced
portfolio of common stocks and fixed-
income securities.
-------------------------------------------------------------------------------
Sterling Partners' Small Cap Value Seeks to provide maximum long-term total
Portfolio return consistent with reasonable risk
to principal by investing primarily in
equity securities of smaller companies,
in terms of market capitalization.
-------------------------------------------------------------------------------
TJ Core Equity Portfolio Seeks maximum total return consistent
with reasonable risk to principal by
investing in the common stock of quality
companies with lower valuations in
sectors of the economy exhibiting
strong, or improving, relative
performance.
-------------------------------------------------------------------------------
TS&W Equity Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of common stocks of relatively
large companies.
-------------------------------------------------------------------------------
TS&W Fixed Income Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing primarily in
investment grade debt securities of
varying maturities.
-------------------------------------------------------------------------------
TS&W International Equity Portfolio Seeks maximum long-term total return
consistent with reasonable risk to
principal, by investing in a diversified
portfolio of common stocks of primarily
non-United States (U.S.) issuers on a
worldwide basis.
-------------------------------------------------------------------------------
TS&W International Octagon Portfolio Seeks to provide long-term capital
(formerly, Jacobs International appreciation by investing in equity
Octagon Portfolio) securities of companies in developed and
emerging markets.
</TABLE>
A-3
<PAGE>
EXHIBIT B -- PROPOSED NEW STANDARDIZED FUNDAMENTAL RESTRICTIONS
DIVERSIFICATION OF INVESTMENTS (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not make any investment inconsistent with the Fund's
classification as a diversified series of an open-end investment company
under the Investment Company Act of 1940 (the "1940 Act"). This restriction
does not, however, apply to any Fund classified as non-diversified series
of an open-end investment company under the 1940 Act.
Note: The 1940 Act currently prohibits a diversified fund from
investing more than 5% of the value of its total assets, determined at
market or other fair value at the time of purchase. The 1940 Act also
currently prohibits diversified funds from investing in more than 10%
of the outstanding voting securities of any one issuer, determined at
the time of purchase. These limitations only apply to 75% of the fund's
assets and do not apply to investment in securities issued or
guaranteed by the U. S. Government or its agencies or
instrumentalities. The 1940 Act does not impose any investment
limitations on a non-diversified fund. However, non-diversified funds
must comply with the diversification requirements of the Internal
Revenue Code. Currently, the Internal Revenue Code permits a fund to
invest 50% of its total assets in to issuers (i.e., 25% each) and, with
respect to 50% of its total assets, requires the fund to be diversified
under the 5% of assets and 10% of voting security tests described
above.
BORROWING (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not borrow money, except to the extent permitted by applicable
law, as amended and interpreted or modified from time to time by any
regulatory authority having jurisdiction and the guidelines set forth in
the Fund's prospectus and statement of additional information as they may
be amended from time to time.
Note: Under the 1940 Act, a fund may borrow from banks (as defined in
the 1940 Act) or enter into reverse repurchase agreements, in amounts
up to 33 1/3% of its total assets (including the amount borrowed). The
fund may also borrow up to an additional 5% of its total assets for
temporary purposes. The 1940 Act prohibits an investment company from
purchasing securities on margin, participating in a joint trading
account or effecting a short sale of any security in contravention of
SEC rules, regulations or orders. The SEC has issued no rules,
regulations or orders. The SEC staff, however, has taken the position
that opening a margin account, which is required to effect the short
sales, is a borrowing by an investment company and not from a bank, as
is required by the 1940 Act. Therefore, it is proposed that the fund
preserve the right to margin, participate in joint trading accounts and
engage in short sales to the extent permitted by SEC staff
interpretations and subject to any guidelines adopted by the Board.
ISSUING OF SENIOR SECURITIES (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not issue senior securities, except to the extent permitted by
applicable law, as amended and interpreted or modified from time to time by
any regulatory authority having jurisdiction.
Note: Section 18(f) of the 1940 Act limits the ability of mutual funds
to issue or sell any senior security. Generally, a senior security
means any bond, debenture , note or similar obligation or instrument
evidencing indebtedness. The SEC has interpreted Section 18 also to
include any instrument that creates a risk of leverage. Under current
SEC interpretations, however, a fund may engage in certain leveraged
transactions if it covers the transaction by segregating an appropriate
amount of liquid assets. The following is a list of permissible
transactions for which
B-1
<PAGE>
the SEC requires the establishment of a segregated account: purchasing
securities on a when-issued basis (also known as firm commitments);
selling (writing) of put and call options; futures contracts; buying
and selling options on future contracts; forward foreign currency
exchange transactions; short sales; reverse repurchase agreement, short
sales, except short sales against the box.
UNDERWRITING (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not underwrite securities of other issuers, except insofar as
the Fund may technically be deemed to be an underwriter under the
Securities Act of 1933 in connection with the purchase or sale of its
portfolio securities.
INDUSTRY CONCENTRATION (ALL FUNDS OTHER THAN HEITMAN REAL ESTATE PORTFOLIO)
-------------------------------------------------------------------------------
The Fund may not concentrate its investments in the securities of one or
more issuers conducting their principal business activities in the same
industry (other than securities issued or guaranteed by the U.S. government
or its agencies or instrumentalities [or in the case of Money Market Funds
instruments issued by U.S. banks]).
Note: The 1940 Act currently defines concentration as investing more
than 25% of a fund's total assets, taken at market value, in the
securities of issuers primarily engaged in any particular industry
(other than securities issued or guaranteed by the U. S. Government or
its agencies or instrumentalities.
INDUSTRY CONCENTRATION (HEITMAN REAL ESTATE PORTFOLIO ONLY)
-------------------------------------------------------------------------------
The Fund will concentrate its investments in the real estate industry.
INVESTMENT IN REAL ESTATE (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not purchase or sell real estate, except (1) to the extent
permitted by applicable law, as amended and interpreted or modified from
time to time by any regulatory authority having jurisdiction, (2) that the
Fund may invest in securities of issuers that deal or invest in real
estate, and (3) that the Fund may purchase securities secured by real
estate or interests therein.
COMMODITIES (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not purchase or sell commodities or contracts on commodities
except that the Fund may engage in financial futures contracts, and related
options and currency contracts and related options, and may otherwise do so
in accordance with applicable law and without registering as a commodity
pool operator under the Commodity Exchange Act.
LENDING (ALL FUNDS)
-------------------------------------------------------------------------------
The Fund may not make loans to other persons, except that the Fund may lend
its portfolio securities in accordance with applicable law, as amended and
interpreted or modified from time to time by any regulatory authority
having jurisdiction and the guidelines set forth in the Fund's prospectus
and statement of additional information as they may be amended from time to
time. The acquisition of investment securities or other investment
instruments shall not be deemed to be the making of a loan.
Note: Under SEC policy, a Fund may lend its portfolio securities to
registered broker-dealers or other institutional investors. However,
these loans may not exceed 33 1/3% of the Fund's total assets taken at
market value. In addition, the Fund must receive at least 100%
collateral.
B-2
<PAGE>
EXHIBIT C--CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS
INDEX
<TABLE>
<CAPTION>
UAM FUND PAGE C-
-------- -------
<S> <C>
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund.......................................... 5
Analytic Enhanced Equity Fund........................................... 8
Analytic International Fund............................................. 11
Analytic Master Fixed Income Fund....................................... 8
Analytic Short-Term Government Fund..................................... 8
Cambiar Opportunity Portfolio........................................... 14
Chicago Asset Management Company Intermediate Bond Portfolio............ 17
Chicago Asset Management Company Vale/Contrarian Portfolio.............. 17
C&B Balanced Portfolio.................................................. 20
C&B Equity Portfolio.................................................... 20
C&B Equity Portfolio for Taxable Investors.............................. 20
C&B Mid Cap Equity Portfolio............................................ 20
Clipper Focus Portfolio................................................. 24
FMA Small Company Portfolio............................................. 26
FPA Crescent Portfolio.................................................. 30
Heitman Real Estate Portfolio........................................... 34
ICM Small Company Portfolio............................................. 38
IRA Capital Preservation Portfolio...................................... 11
MJI International Equity Portfolio...................................... 42
McKee Domestic Equity Portfolio......................................... 45
McKee International Equity Portfolio.................................... 45
McKee Small Cap Equity Portfolio........................................ 49
McKee U. S. Government Portfolio........................................ 45
NWQ Special Equity Portfolio............................................ 49
Pell Rudman Mid-Cap Growth Portfolio.................................... 53
PIC Twenty Portfolio.................................................... 11
Rice, Hall James Small Cap Portfolio.................................... 56
Rice, Hall James Small/Mid Cap Portfolio................................ 56
Sirach Bond Portfolio................................................... 59
Sirach Equity Portfolio................................................. 59
Sirach Growth Portfolio................................................. 59
Sirach Growth II Portfolio.............................................. 62
Sirach Special Equity Portfolio......................................... 65
Sirach Strategic Balanced Portfolio..................................... 59
Sterling Partners' Balanced Portfolio................................... 69
Sterling Partners' Equity Portfolio..................................... 69
Sterling Partners' Small Cap Value Portfolio............................ 73
TJ Core Equity Portfolio................................................ 77
TS&W Equity Portfolio................................................... 80
TS&W Fixed Income Portfolio............................................. 80
TS&W International Equity Portfolio..................................... 84
TS&W International Octagon Portfolio.................................... 88
</TABLE>
C-1
<PAGE>
The tables below describe each Fund's current fundamental investment
Restrictions and their proposed replacements or elimination.
ACADIAN EMERGING MARKETS PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund is a non-diversified None
Investments investment company and, therefore,
does not have a fundamental
Restriction concerning
diversification.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
--------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Issuing of Senior Section 18 also to include any
Securities--(continued) instrument that creates a risk of
leverage. Under current SEC
interpretations, however, a fund
may engage in certain leveraged
transactions if it covers the
transaction by segregating an
appropriate amount of liquid
assets. The following is a list of
permissible transactions for which
the SEC requires the establishment
of a segregated account:
purchasing securities on a when-
issued basis (also known as firm
commitments); selling (writing) of
put and call options; futures
contracts; buying and selling
options on future contracts;
forward foreign currency exchange
transactions; reverse repurchase
agreements; short sales, except
short sales against the box.
-------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
-------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its total assets in investments in the securities of
companies within a single one or more issuers conducting
industry; however, there are no their principal business
limitations on investments made in activities in the same industry
instruments issued or guaranteed (other than securities issued or
by the U.S. government and its guaranteed by the U.S. government
agencies when the Fund adopts a or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. Government or its
agencies or instrumentalities.
-------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
-------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and
</TABLE>
C-3
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Commodities--(continued) may otherwise do so in accordance
with applicable law and without
registering as a commodity pool
operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-4
<PAGE>
ANALYTIC DEFENSIVE EQUITY FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund may not purchase more The Fund may not make any
Investments than 10% of the voting securities investment inconsistent with the
of any one issuer or purchase Fund's classification as a
securities of any one issuer if, diversified series of an open-end
at the time of purchase, more than investment company under the
5% of its total assets will be Investment Company Act of 1940
invested in that issuer except up (the "1940 Act"). This restriction
to 25% of its assets may be does not, however, apply to any
invested without regard to these Fund classified as non-diversified
limits. For purposes of this series of an open-end investment
investment limitation, the term company under the 1940
"issuer" does not include Act.
obligations issued or guaranteed
by the U.S. government, its Note: The 1940 Act currently
agencies or instrumentalities and prohibits a diversified fund from
repurchase agreements investing more than 5% of the
collateralized by such value of its total assets,
obligations. determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund may not borrow money The Fund may not borrow money,
(other than pursuant to reverse except to the extent permitted by
repurchase agreements) except for applicable law, as amended and
temporary or emergency purposes interpreted or modified from time
and then only in amounts up to 10% to time by any regulatory
of its total assets. The temporary authority having jurisdiction and
borrowing will include, for the guidelines set forth in the
example, borrowing to facilitate Fund's prospectus and statement of
the orderly sale of portfolio additional information as they may
securities to accommodate be amended from time to
substantial redemption requests if time. .
they should occur, to facilitate
the settlement of securities Note: Under the 1940 Act, a fund
transactions, and is not for may borrow from banks (as defined
investment purposes. All in the 1940 Act) or enter into
borrowings in excess of 5% of the reverse repurchase agreements, in
Fund's total assets will be repaid amounts up to 33 1/3 % of its
before making additional total assets (including the amount
investments. The foregoing borrowed). The fund may also
percentages will apply at the time borrow up to an additional 5% of
of each purchase of a security. its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
</TABLE>
C-5
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund may not issue senior The Fund may not issue senior
Securities securities (as defined in the 1940 securities, except to the extent
Act) except as permitted in permitted by applicable law, as
connection with the Fund's amended and interpreted or
policies on borrowing and modified from time to time by any
pledging, or as permitted by rule, regulatory authority having
regulation or order of the SEC. jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund may not Act as an The Fund may not underwrite
underwriter of securities of other securities of other issuers,
issuers, except as it may be except insofar as the Fund may
deemed to be an underwriter under technically be deemed to be an
the 1933 Act in connection with underwriter under the Securities
the purchase and sale of portfolio Act of 1933 in connection with the
securities. purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund may not invest 25% or The Fund may not concentrate its
more of its total assets at the investments in the securities of
time of purchase in securities of one or more issuers conducting
issuers (other than obligations their principal business
</TABLE>
C-6
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- issued or guaranteed by the U.S. activities in the same industry
(continued) government, its agencies or (other than securities issued or
instrumentalities and repurchase guaranteed by the U.S. government
agreements collateralized by such or its agencies or
obligations) whose principal instrumentalities).
business activities are in the
same industry. For purposes of Note: The 1940 Act currently
this investment limitation, state defines concentration as investing
and municipal governments and more than 25% of a fund's total
their agencies and authorities are assets, taken at market value, in
not deemed to be industries; the securities of issuers
utility companies will be divided primarily engaged in any
according to their services (e.g., particular industry (other than
gas, gas transmission, electric, securities issued or guaranteed by
electric and gas, and telephone), the U. S. Government or its
and financial service companies agencies or instrumentalities.
will be classified according to
end use of their service (e.g.,
automobile finance, bank finance,
and diversified finance).
--------------------------------------------------------------------------------------------------
Investment in Real The Fund may not purchase or sell The Fund may not purchase or sell
Estate real estate, or real estate real estate, except (1) to the
partnership interests, except that extent permitted by applicable
this limitation shall not prevent law, as amended and interpreted or
the Fund from investing directly modified from time to time by any
or indirectly in readily regulatory authority having
marketable securities of issuers jurisdiction (2) that the Fund may
which can invest in real estate, invest in, securities of issuers
institutions that issue mortgages, that deal or invest in real
or real estate investment trusts estate, and (3) that the Fund may
which deal with real estate or purchase securities secured by
interests therein. real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund may not purchase or sell The Fund may not purchase or sell
commodities or commodity commodities or contracts on
contracts, except that the Fund, commodities except that the Fund
in accordance with its investment may engage in financial futures
objective and policies, may: (i) contracts and related options and
invest in readily marketable currency contracts and related
securities of issuers which invest options and may otherwise do so in
or engage in such activities; and accordance with applicable law and
(ii) enter into forward contracts, without registering as a commodity
futures contracts and options pool operator under the Commodity
thereon. Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund may not make loans except The Fund may not make loans to
that the Fund, in accordance with other persons, except that the
its investment objective and Fund may lend its portfolio
policies, may (i) purchase debt securities in accordance with
obligations, (ii) enter into applicable law, as amended and
repurchase agreements and (iii) interpreted or modified from time
lend its portfolio securities. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-7
<PAGE>
ANALYTIC ENHANCED EQUITY FUND
ANALYTIC MASTER FIXED INCOME FUND
ANALYTIC SHORT-TERM GOVERNMENT FUND
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not purchase more The Fund may not make any
Investments than 10% of the voting securities investment inconsistent with the
of any one issuer or purchase Fund's classification as a
securities of any one issuer if, diversified series of an open-end
at the time of purchase, more than investment company under the
5% of its total assets will be Investment Company Act of 1940
invested in that issuer except up (the "1940 Act"). This restriction
to 25% of its assets may be does not, however, apply to any
invested without regard to these Fund classified as non-diversified
limits. For purposes of this series of an open-end investment
investment limitation, the term company under the 1940 Act.
"issuer" does not include
obligations
issued or guaranteed by the U.S.
government, its agencies or Note: The 1940 Act currently
instrumentalities and repurchase prohibits a diversified fund from
agreements collateralized by such investing more than 5% of the
obligations. value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund may not borrow money The Fund may not borrow money,
(other than pursuant to reverse except to the extent permitted by
repurchase agreements) except for applicable law, as amended and
temporary or emergency purposes interpreted or modified from time
and then only in amounts up to 15% to time by any regulatory
of its total assets. The temporary authority having jurisdiction and
borrowing will include, for the guidelines set forth in the
example, borrowing to facilitate Fund's prospectus and statement of
the orderly sale of portfolio additional information as they may
securities to accommodate be amended from time to
substantial redemption requests if time.
they should occur, to facilitate
the settlement of securities Note: Under the 1940 Act, a fund
transactions, and is not for may borrow from banks (as defined
investment purposes. All in the 1940 Act) or enter into
borrowings in excess of 5% of the reverse repurchase agreements, in
Fund's total assets will be repaid amounts up to 331/3 % of its total
before making additional assets (including the amount
investments. The foregoing borrowed). The fund may also
percentages will apply at the time borrow up to an additional
of each purchase of a security.
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) 5% of its total assets for
temporary purposes. The 1940 Act
prohibits an investment company
from purchasing securities on
margin, participating in a joint
trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund may not issue senior The Fund may not issue senior
Securities securities (as defined in the 1940 securities, except to the extent
Act) except as permitted in permitted by applicable law, as
connection with the Fund's amended and interpreted or
policies on borrowing and modified from time to time by any
pledging, or as permitted by rule, regulatory authority having
regulation or order of the SEC. jurisdiction
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund may not act as an The Fund may not underwrite
underwriter of securities of other securities of other issuers,
issuers, except as it may be except insofar as the Fund may
deemed to be an underwriter under technically be deemed to be an
the 1933 Act in connection with underwriter under the Securities
the purchase and sale of portfolio Act of 1933 in connection with the
securities. purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund may not invest 25% or The Fund may not concentrate its
more of its total assets at the investments in the securities of
time of purchase in securities of one or more issuers conducting
issuers (other than obligations their principal business
issued or guaranteed by the U.S. activities in the same industry
government, its agencies or (other than securities issued or
instrumentalities and repurchase guaranteed by the U.S. government
agreements collateralized by such or its agencies or
obligations) whose principal instrumentalities).
business activities are in the
same industry. For purposes of Note: The 1940 Act currently
this investment limitation, state defines concentration as investing
and municipal governments and more than 25% of a fund's total
their agencies and authorities are assets, taken at market value, in
not deemed to be industries; the securities of issuers
utility companies will be divided primarily engaged in any
according to their services (e.g., particular industry (other than
gas, gas transmission, electric, securities issued or guaranteed by
electric and gas, and telephone), the U. S. Government or its
and financial service companies agencies or instrumentalities.
will be classified according to
end use of their service (e.g.,
automobile finance, bank finance,
and diversified finance).
------------------------------------------------------------------------------------------------
Investment in Real The Fund may not purchase or sell The Fund may not purchase or sell
Estate real estate, or real estate real estate, except (1) to the
partnership interests, except that extent permitted by applicable
this limitation shall not prevent law, as amended and interpreted or
the Fund from investing directly modified from time to time by any
or indirectly in readily regulatory authority having
marketable securities of issuers jurisdiction (2) that the Fund may
which can invest in real estate, invest in, securities of issuers
institutions that issue mortgages, that deal or invest in real
or real estate investment trusts estate, and (3) that the Fund may
which deal with real estate or purchase securities secured by
interests therein. real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund may not purchase or sell The Fund may not purchase or sell
commodities or commodity commodities or contracts on
contracts, except that the commodities except that the Fund
portfolio, in accordance with its may engage in financial futures
investment objective and policies, contracts and related options and
may: (i) invest in readily currency contracts and related
marketable securities of issuers options and may otherwise do so in
which invest or engage in such accordance with applicable law and
activities; and (ii) enter into without registering as a commodity
forward contracts, futures pool operator under the Commodity
contracts and options thereon. Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund may not make loans except The Fund may not make loans to
that the Fund, in accordance with other persons, except that the
its investment objective and Fund may lend its portfolio
policies, may (i) purchase debt securities in accordance with
obligations, (ii) enter into applicable law, as amended and
repurchase agreements and (iii) interpreted or modified from time
lend its portfolio securities. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-10
<PAGE>
ANALYTIC INTERNATIONAL FUND
IRA CAPITAL PRESERVATION PORTFOLIO
PIC TWENTY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not make any The Fund may not make any
Investments investment that is inconsistent investment inconsistent with the
with its classification as a non- Fund's classification as a
diversified investment management diversified series of an open-end
company under the 1940 Act. investment company under the
Investment Company Act of 1940
(the "1940 Act"). This restriction
does not, however, apply to any
Fund classified as non-diversified
series of an open-end investment
company under the 1940
Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except to the extent permitted by except to the extent permitted by
applicable law and the guidelines applicable law, as amended and
set forth in the Fund's prospectus interpreted or modified from time
and statement of additional to time by any regulatory
information, as they may be authority having jurisdiction and
amended from time to time. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
</TABLE>
C-11
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, except as permitted by securities, except to the extent
the 1940 Act. permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not concentrate its The Fund may not concentrate its
investments in securities of investments in the securities of
issuers primarily one or more
</TABLE>
C-12
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- engaged in any particular industry issuers conducting their principal
(continued) (other than securities issued or business activities in the same
guaranteed by the United States industry (other than securities
government or its agencies or issued or guaranteed by the U.S.
instrumentalities or when the Fund government or its agencies or
adopts a temporary defensive instrumentalities).
position).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (i) by that the acquisition other persons, except that the
of investment securities or other Fund may lend its portfolio
investment instruments in securities in accordance with
accordance with the portfolio's applicable law, as amended and
prospectus and statement of interpreted or modified from time
additional information shall not to time by any regulatory
be deemed to be the making of a authority having jurisdiction and
loan; and (ii) that the Fund may the guidelines set forth in the
lend its portfolio securities in Fund's prospectus and statement of
accordance with applicable law and additional information as they may
the guidelines set forth in the be amended from time to time. The
Fund's prospectus and statement of acquisition of investment
additional information, as they securities or other investment
may be amended from time to time. instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-13
<PAGE>
CAMBIAR OPPORTUNITY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940
securities of any issuer. Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in two issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
</TABLE>
C-14
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
</TABLE>
C-15
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund will not invest more than he Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies. guaranteed by the U.S. government
or its agencies or
instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective, entering securities in accordance with
into repurchase agreements, or by applicable law, as amended and
lending its portfolio securities interpreted or modified from time
to banks, brokers, dealers and to time by any regulatory
other financial institutions so authority having jurisdiction and
long as the loans are made in the guidelines set forth in the
compliance with the 1940 Act or Fund's prospectus and statement of
the rules and regulations or additional information as they may
interpretations of the SEC. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-16
<PAGE>
CHICAGO ASSET MANAGEMENT COMPANY INTERMEDIATE BOND PORTFOLIO
CHICAGO ASSET MANAGEMENT COMPANY VALUE/CONTRARIAN PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940
securities of any issuer. Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
</TABLE>
C-17
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more
</TABLE>
C-18
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- industry; however, there are no issuers conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies. government or its agencies or
instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities).
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-19
<PAGE>
C&B BALANCED PORTFOLIO
C&B EQUITY PORTFOLIO
C&B EQUITY PORTFOLIO FOR TAXABLE INVESTORS
C&B MID CAP EQUITY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940
securities of any issuer. Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for
</TABLE>
C-20
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) temporary purposes. The 1940 Act
prohibits an investment company
from purchasing securities on
margin, participating in a joint
trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
</TABLE>
C-21
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities except that the Fund commodities or contracts on
may invest in futures contracts commodities except that the Fund
and options to the extent that not may engage in financial futures
more than 5% of the Fund's assets contracts and related options and
are required as a deposit to currency contracts and related
secure obligations under futures options and may otherwise do so in
contracts. accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-22
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, in will not invest more than 15% of
securities subject to legal or its net assets in illiquid
contractual restrictions on resale securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
--------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short, except as eliminated.
specified above.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
Futures and Options The Fund will not invest in stock This investment limitation will be
or bond futures and/or options on eliminated.
futures unless not more than 20%
of the Fund's assets are invested
in stock or bond futures and
options
--------------------------------------------------------------------------------------------------
</TABLE>
C-23
<PAGE>
CLIPPER FOCUS PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
-------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
-------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
</TABLE>
C-24
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Issuing of Senior establishment of a segregated
Securities--(continued) account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
-------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
-------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
-------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
-------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund
may lend its portfolio securities
to registered broker-dealers or
other institutional investors.
However, these loans may not
exceed 33 1/3% of the Fund's total
assets taken at market value. In
addition, the Fund must receive at
least 100% collateral.
-------------------------------------------------------------------------------------------------
</TABLE>
C-25
<PAGE>
FMA SMALL COMPANY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (except investment company under the
obligations issued by the U.S. Investment Company Act of 1940
government or its (the "1940 Act"). This restriction
instrumentalities) or (2) purchase does not, however, apply to any
more than 10% of any class of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any issuer. company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules,
</TABLE>
C-26
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
short sales; reverse repurchase
agreement, short sales
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
</TABLE>
C-27
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and securities in accordance with
policies, or entering into applicable law, as amended and
repurchase agreements or (2) by interpreted or modified from time
lending its portfolio securities to time by any regulatory
to banks, brokers, dealers and authority having jurisdiction and
other financial institutions so the guidelines set forth in the
long as these loans are not Fund's prospectus and statement of
inconsistent with the 1940 Act or additional information as they may
the rules and regulations or be amended from time to time. The
interpretations of the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, in will not invest more than 15% of
securities subject to legal or its net assets in illiquid
contractual restrictions on resale securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
</TABLE>
C-28
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
--------------------------------------------------------------------------------------------------
Buying The Fund will not purchase This investment limitation will be
Securities When additional securities when eliminated.
Borrowings Exceed 5% borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
--------------------------------------------------------------------------------------------------
Margin The Fund will not purchase on This investment limitation will be
Purchases and Short margin or sell short. eliminated.
Sales
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 1/2 of 1% of such
securities together own more than
5% of such securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-29
<PAGE>
FPA CRESCENT PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) own more investment inconsistent with the
than 5% of the securities of any Fund's classification as a
single issuer (other than diversified series of an open-end
investments issued or guaranteed investment company under the
by the U.S. government or any of Investment Company Act of 1940
its agencies or instrumentalities) (the "1940 Act"). This restriction
or (2) own more than 10% of the does not, however, apply to any
outstanding voting securities of Fund classified as non-diversified
any one issuer. The Fund will not series of an open-end investment
purchase the securities of any company under the 1940 Act.
issuer, if as a result more than
5% of the total assets of the Fund Note: The 1940 Act currently
would be invested in the prohibits a diversified fund from
securities of that issuer, other investing more than 5% of the
than obligations of the U.S. value of its total assets,
government, its agencies or determined at market or other fair
instrumentalities, provided that value at the time of purchase. The
up to 25% of the value of the 1940 Act also currently prohibits
Fund's assets may be invested diversified funds from investing
without regard to this limitation. in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not (1) borrow The Fund may not borrow money,
money, except as stated in the except to the extent permitted by
prospectus and the SAI (any such applicable law, as amended and
borrowing will be made only if interpreted or modified from time
immediately thereafter there is an to time by any regulatory
asset coverage of at least 300% of authority having jurisdiction and
all borrowings. The portfolio may statement of additional
not borrow except from banks for information as they may be amended
temporary or emergency purposes from time to time.
and in connection with short sales
of securities. In these Note: Under the 1940 Act, a fund
situations, the Fund will limit may borrow from banks (as defined
borrowings to no more than 33 1/3% in the 1940 Act) or enter into
of the portfolio's assets. reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-30
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite The Fund may not underwrite
securities (does not preclude the securities of other issuers,
Fund from obtaining such short- except insofar as the Fund may
term credit as may be necessary technically be deemed to be an
for the clearance of purchases and underwriter under the Securities
sales of its portfolio Act of 1933 in connection with the
securities). purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of the market value of its investments in the securities of
assets in the securities of one or more issuers conducting
companies engaged in any one their principal business
industry activities in
</TABLE>
C-31
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- (does not apply to investment in the same industry (other than
(continued) the securities of the U.S. securities issued or guaranteed by
government, its agencies or the U.S. government or its
instrumentalities). agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate; however, the real estate, except (1) to the
portfolio may invest in debt extent permitted by applicable
securities secured by real estate law, as amended and interpreted or
or interests therein or issued by modified from time to time by any
companies which invest in real regulatory authority having
estate or interests therein, jurisdiction (2) that the Fund may
including real estate investment invest in securities of issuers
trusts. that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities Purchase or sell commodities or The Fund may not purchase or sell
commodity contracts (other than commodities or contracts on
futures transactions for the commodities except that the Fund
purposes and under the conditions may engage in financial futures
described in the prospectuses and contracts and related options and
in the SAI). currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending Make loans to others, except (1) The Fund may not make loans to
through the purchase of debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
and (2) to the extent the entry applicable law, as amended and
into a repurchase agreement is interpreted or modified from time
deemed to be a loan. to time by any regulatory
authority having jurisdiction and
the guidelines set forth in the
Fund's prospectus and statement of
additional information as they may
be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
</TABLE>
C-32
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
----------------------------------------------------------------------------------------------
<S> <C> <C>
Pledging The Fund will not mortgage, This investment limitation will be
pledge, or hypothecate any of its eliminated.
assets except in connection with
any borrowings.
----------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase This investment limitation will be
Short Sales securities on margin, or eliminated.
participate on a joint or joint
and several basis in any
securities trading account.
----------------------------------------------------------------------------------------------
</TABLE>
C-33
<PAGE>
HEITMAN REAL ESTATE PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not as to 75% of the The Fund may not make any
Investments total assets of the portfolio, investment inconsistent with the
purchase securities for the Fund Fund's classification as a
of any issuer, if immediately diversified series of an open-end
thereafter (1) more than 5% of the investment company under the
Fund's total assets (taken at Investment Company Act of 1940
market value) would be invested in (the "1940 Act"). This restriction
the securities of such issuer, or does not, however, apply to any
(2) more than 10% of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any class of such issuer would be company under the 1940 Act.
held by the Fund, provided that
this limitation does not apply to Note: The 1940 Act currently
U.S. government securities. prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
that (1) the Fund may borrow money except to the extent permitted by
for temporary administrative applicable law, as amended and
purposes provided that the interpreted or modified from time
aggregate of all such borrowings to time by any regulatory
does not exceed 33 1/3% of the authority having jurisdiction and
value of the Fund's total assets statement of additional
and is not for more than 60 days, information as they may be amended
and (2) the Fund may enter into from time to time.
interest-rate futures contracts.
The fund may not borrow for the Note: Under the 1940 Act, a fund
purpose of leveraging its may borrow from banks (as defined
investment portfolio. The fund may in the 1940 Act) or enter into
not purchase additional securities reverse repurchase agreements, in
while outstanding borrowings amounts up to 33 1/3% of its total
exceed 5% of the value of its assets (including the amount
assets. borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-34
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
---------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
---------------------------------------------------------------------------------------------
Issuing of Senior None The Fund may not issue senior
Securities securities, except to the extent
permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except shart sales
against the box.
---------------------------------------------------------------------------------------------
Underwriting The Fund will not act as a The Fund may not underwrite
securities underwriter. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
---------------------------------------------------------------------------------------------
Industry Concentration None The Fund will concentrate its
investments in the real estate
industry.
</TABLE>
C-35
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The fund may not make investments The Fund may not purchase or sell
Estate in real estate (including real real estate, except (1) to the
estate limited partnership extent permitted by applicable
interests, but excluding readily law, as amended and interpreted or
marketable interest in real estate modified from time to time by any
investment trusts ("REITs") or regulatory authority having
readily marketable securities of jurisdiction (2) that the Fund may
companies which invest in real invest in, securities of issuers
estate) or commodities or that deal or invest in real
commodity contracts, although the estate, and (3) that the Fund may
Fund may purchase securities of purchase securities secured by
issuers which deal in real estate real estate or interests therein.
and may purchase securities which
are secured by interests in real
estate, and the Fund may invest in
futures contracts and related
options.
--------------------------------------------------------------------------------------------------
Commodities None The Fund may not purchase or sell
commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans, The Fund may not make loans to
except that the Fund may (1) other persons, except that the
purchase bonds, debentures and Fund may lend its portfolio
other publicly-distributed securities in accordance with
securities of a like nature, (2) applicable law, as amended and
make loans in the form of call interpreted or modified from time
loans or loans maturing in not to time by any regulatory
more than one year which are authority having jurisdiction and
secured by marketable collateral the guidelines set forth in the
and are in amounts and on terms Fund's prospectus and statement of
similar to those currently in additional information as they may
effect in the case of loans made be amended from time to time. The
by national banks, (3) enter into acquisition of investment
repurchase agreements with respect securities or other investment
to portfolio securities, and (4) instruments shall not be deemed to
lend the portfolio securities of be the making of a loan.
the Fund. The fund may not lend
the portfolio securities of the Note: Under SEC policy, a Fund may
Fund in an amount in excess of 33% lend its portfolio securities to
of the total assets of the Fund, registered broker-dealers or other
taken at market value. Any loans institutional investors. However,
of portfolio securities will be these loans may not exceed 33 1/3%
made according to guidelines of the Fund's total assets taken
established by the SEC and the at market value. In addition, the
Directors, including the Fund must receive at least 100%
borrower's maintaining collateral collateral.
equal at all times to the value of
the securities loaned.
--------------------------------------------------------------------------------------------------
Pledging While the Fund has the power to This investment limitation will be
pledge its assets to secure eliminated.
borrowings, the Fund has no
intention of pledging the assets
of the
</TABLE>
C-36
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
----------------------------------------------------------------------------------------------
<S> <C> <C>
Pledging--(continued) portfolio taken at market value in
any amount in excess of 33 1/3 of
the Fund's total assets taken at
market value. The deposit of
assets in escrow in connection
with the writing of covered put or
call options and the purchase of
securities on a when-issued or
delayed-delivery basis, and
collateral arrangements with
respect to the purchase and sale
of stock options and stock index
options and initial and variation
margin for futures contracts, are
not deemed to be pledges of assets
of the portfolio. Also, although
the Fund has the power to make
call loans, it has no intention to
do so.
----------------------------------------------------------------------------------------------
</TABLE>
C-37
<PAGE>
ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 10% of the Fund's gross authority having jurisdiction and
assets valued at the lower of statement of additional
market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-38
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
</TABLE>
C-39
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities.
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate, although it may real estate, except (1) to the
purchase and sell securities of extent permitted by applicable
companies which deal in real law, as amended and interpreted or
estate and may purchase and sell modified from time to time by any
securities which are secured by regulatory authority having
interests in real estate. jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities except that the Fund commodities or contracts on
may invest in futures contracts commodities except that the Fund
and options to the extent that not may engage in financial futures
more than 5% of the Fund's assets contracts and related options and
are required as deposit to secure currency contracts and related
obligations under futures options and may otherwise do so in
contracts. accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and securities in accordance with
policies, or entering into applicable law, as amended and
repurchase agreements or (2) by interpreted or modified from time
lending its portfolio securities to time by any regulatory
to banks, brokers, dealers and authority having jurisdiction and
other financial institutions so the guidelines set forth in the
long as these loans are made in Fund's prospectus and statement of
compliance with the 1940 Act or additional information as they may
the rules and regulations or be amended from time to time. The
interpretations of the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, will not invest
</TABLE>
C-40
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted in securities subject to legal or more than 15% of its net assets in
Securities--(continued) contractual restrictions on resale illiquid securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than
3 years.
--------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short except as eliminated.
provided herein.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-41
<PAGE>
MJI INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
</TABLE>
C-42
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
</TABLE>
C-43
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not invest, purchase The Fund may not purchase or sell
Estate or sell real estate or real estate real estate, except (1) to the
limited partnerships, although it extent permitted by applicable
may purchase and sell securities law, as amended and interpreted or
of companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time. The
acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-44
<PAGE>
MCKEE DOMESTIC EQUITY PORTFOLIO
MCKEE INTERNATIONAL EQUITY PORTFOLIO
MCKEE U.S. GOVERNMENT PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investment 50% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes.
</TABLE>
C-45
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) The 1940 Act prohibits an
investment company from purchasing
securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
</TABLE>
C-46
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-47
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 15% of the assets redesignated as non-fundamental
of the Fund, determined at the and restated as follows: The Fund
time of investment, in securities will not invest more than 15% of
subject to legal or contractual its net assets in illiquid
restrictions on resale or securities.
securities for which there are no
readily available markets.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-48
<PAGE>
MCKEE SMALL CAP EQUITY PORTFOLIO
NWQ SPECIAL EQUITY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment
</TABLE>
C-49
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) company from purchasing securities
on margin, participating in a
joint trading account or effecting
a short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
</TABLE>
C-50
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-51
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 15% of the assets redesignated as non-fundamental
of the Fund, determined at the and restated as follows: The Fund
time of investment, in securities will not invest more than 15% of
subject to legal or contractual its net assets in illiquid
restrictions on resale or securities.
securities for which there are no
readily available markets.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-52
<PAGE>
PELL RUDMAN MID-CAP GROWTH PORTFOLIO
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets Fund's classification as a
securities of any single issuer diversified series of an open-end
(other than obligations issued or investment company under the
guaranteed by the U.S. government Investment Company Act of 1940
or any of its agencies or (the "1940 Act"). This restriction
instrumentalities) or (2) own more does not, however, apply to any
than 10% of any class of the Fund classified as non-diversified
outstanding voting securities of series of an open-end investment
any one issuer. company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of
</TABLE>
C-53
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) any security in contravention of
SEC rules, regulations or orders.
The SEC has issued no rules,
regulations or orders. The SEC
staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued (other than securities issued
</TABLE>
C-54
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- or guaranteed by the U.S. or guaranteed by the U.S.
(continued) government and its agencies when government or its agencies or
the Fund adopts a temporary instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or other similar Fund may lend its portfolio
obligations which are publicly securities in accordance with
distributed (including repurchase applicable law, as amended and
agreements provided however, that interpreted or modified from time
repurchase agreements maturing in to time by any regulatory
more than seven days, together authority having jurisdiction and
with securities which are not the guidelines set forth in the
readily marketable, will not Fund's prospectus and statement of
exceed 15% of the Fund's total additional information as they may
assets) and (2) by lending its be amended from time to time. The
portfolio securities to banks, acquisition of investment
brokers, dealers and other securities or other investment
financial institutions so long as instruments shall not be deemed to
such loans are not inconsistent be the making of a loan.
with the 1940 Act or the rules and
regulations or interpretations of Note: Under SEC policy, a Fund may
the SEC thereunder. lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-55
<PAGE>
RICE, HALL JAMES SMALL CAP PORTFOLIO
RICE, HALL JAMES SMALL/MID CAP PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing
</TABLE>
C-56
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single one or more issuers
</TABLE>
C-57
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- industry; however, there are no conducting their principal
(continued) limitations on investments made in business activities in the same
instruments issued or guaranteed industry (other than securities
by the U.S. government and its issued or guaranteed by the U.S.
agencies when the Fund adopts a government or its agencies or
temporary defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-58
<PAGE>
SIRACH BOND PORTFOLIO
SIRACH EQUITY PORTFOLIO
SIRACH GROWTH PORTFOLIO
SIRACH STRATEGIC BALANCED PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3 % of its
total assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes.
</TABLE>
C-59
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) The 1940 Act prohibits an
investment company from purchasing
securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
</TABLE>
C-60
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies, securities in accordance with
entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are made in compliance Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-61
<PAGE>
SIRACH GROWTH II PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U. S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the Fund's authority having jurisdiction and
gross assets valued at the lower statement of additional
of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-62
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond, debenture
, note or similar obligation or
instrument evidencing
indebtedness. The SEC has
interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
</TABLE>
C-63
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies. the U.S. government or its
agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives (2) entering securities in accordance with
nto repurchase agreements and (3) applicable law, as amended and
by lending its portfolio interpreted or modified from time
securities to banks, brokers, to time by any regulatory
dealers and other financial authority having jurisdiction and
institutions so long as the loans the guidelines set forth in the
are not inconsistent with the 1940 Fund's prospectus and statement of
Act or the rules and regulations additional information as they may
or interpretations of the SEC be amended from time to time. The
thereunder. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-64
<PAGE>
SIRACH SPECIAL EQUITY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
</TABLE>
C-65
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
</TABLE>
C-66
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- Note: The 1940 Act currently
(continued) defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities or contracts on commodities or contracts on
physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC thereunder. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, in will not invest more than 15% of
securities subject to legal or its net assets in illiquid
contractual restrictions on resale securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
</TABLE>
C-67
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
-------------------------------------------------------------------------------------------------
<S> <C> <C>
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
-------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
-------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
-------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
-------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
-------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
-------------------------------------------------------------------------------------------------
</TABLE>
C-68
<PAGE>
STERLING PARTNERS' BALANCED PORTFOLIO
STERLING PARTNERS' EQUITY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
</TABLE>
C-69
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales; except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
</TABLE>
C-70
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-71
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, in will not invest more than 15% of
securities subject to legal or its net assets in illiquid
contractual restrictions on resale securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
--------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-72
<PAGE>
STERLING PARTNERS' SMALL CAP VALUE PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any agency does not, however, apply to any
or instrumentality thereof) or (2) Fund classified as non-diversified
purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
Government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of
</TABLE>
C-73
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) any security in contravention of
SEC rules, regulations or orders.
The SEC has issued no rules,
regulations or orders. The SEC
staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
</TABLE>
C-74
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
commodities. commodities or contracts on
commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are in compliance with Fund's prospectus and statement of
the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
Illiquid or Restricted The Fund will not invest more than The investment limitation will be
Securities an aggregate of 10% of the net redesignated as non-fundamental
assets of the Fund, determined at and restated as follows: The Fund
the time of investment, will not invest
</TABLE>
C-75
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Illiquid or Restricted in securities subject to legal or more than 15% of its net assets in
Securities--(continued) contractual restrictions on resale illiquid securities.
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
--------------------------------------------------------------------------------------------------
Control or Management The Fund will not invest for the This investment limitation will be
purpose of exercising control over eliminated.
management of any company.
--------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
--------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
--------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 33 1/3% of its total assets
at fair market value.
--------------------------------------------------------------------------------------------------
Margin Purchases and The Fund will not purchase on This investment limitation will be
Short Sales margin or sell short. eliminated.
--------------------------------------------------------------------------------------------------
Directors' Ownership of The Fund will not purchase or This investment limitation will be
Shares retain securities of an issuer if eliminated.
those officers and Directors or
its investment adviser owning more
than 1/2 of 1% of such securities
together own more than 5% of such
securities.
--------------------------------------------------------------------------------------------------
Interests In Oil, Gas Or The Fund will not write or acquire This investment limitation will be
Other Mineral options or interests in oil, gas eliminated.
Exploration Or or other mineral exploration or
Development Programs development programs.
--------------------------------------------------------------------------------------------------
</TABLE>
C-76
<PAGE>
TJ CORE EQUITY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) own more investment inconsistent with the
than 5% of the securities of any Fund's classification as a
single issuer (other than diversified series of an open-end
investments issued or guaranteed investment company under the
by the U.S. government or any of Investment Company Act of 1940
its agencies or instrumentalities) (the "1940 Act"). This restriction
or (2) own more than 10% of the does not, however, apply to any
outstanding voting securities of Fund classified as non-diversified
any one issuer. series of an open-end investment
company under the 1940 Act.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow money, The Fund may not borrow money,
except from banks and as a except to the extent permitted by
temporary measure for applicable law, as amended and
extraordinary or emergency interpreted or modified from time
purposes and then, in no event, in to time by any regulatory
excess of 33 1/3% of the authority having jurisdiction and
portfolio's gross assets valued at statement of additional
the lower of market or cost. information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-77
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the portfolio from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options, futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
</TABLE>
C-78
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies. the U.S. government or its
agencies or instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objective and policies securities in accordance with
or entering into repurchase applicable law, as amended and
agreements, or by lending its interpreted or modified from time
portfolio securities to banks, to time by any regulatory
brokers, dealers and other authority having jurisdiction and
financial institutions so long as the guidelines set forth in the
the loans are not inconsistent Fund's prospectus and statement of
with the 1940 Act or the rules and additional information as they may
regulations or interpretations of be amended from time to time. The
the SEC. acquisition of investment
securities or other investment
instruments shall not be deemed to
be the making of a loan.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-79
<PAGE>
TS&W EQUITY PORTFOLIO
TS&W FIXED INCOME PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the U.S.
government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
</TABLE>
C-80
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) an investment company from
purchasing securities on margin,
participating in a joint trading
account or effecting a short sale
of any security in contravention
of SEC rules, regulations or
orders. The SEC has issued no
rules, regulations or orders. The
SEC staff, however, has taken the
position that opening a margin
account, which is required to
effect the short sales, is a
borrowing by an investment company
and not from a bank, as is
required by the 1940 Act.
Therefore, it is proposed that the
fund preserve the right to margin,
participate in joint trading
accounts and engage in short sales
to the extent permitted by SEC
staff interpretations and subject
to any guidelines adopted by the
Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
repurchase transactions.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund currently has the The Fund may not underwrite
following non-fundamental securities of other issuers,
Restriction: The Fund will not except insofar as the Fund may
underwrite the securities of other technically be deemed to be an
issuers or invest more than an underwriter under the Securities
aggregate of 10% of the net assets Act of 1933 in connection with the
of the portfolio, determined at purchase or sale of its portfolio
the time of investment, in securities.
securities subject to legal or
contractual restrictions on resale
or securities for which there are
no readily
</TABLE>
C-81
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Underwriting-- available markets, including
(continued) repurchase agreements having
maturities of more than seven
days.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real None The Fund may not purchase or sell
Estate real estate, except (1) to the
extent permitted by applicable
law, as amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund currently has the The Fund may not purchase or sell
following non-fundamental commodities or contracts on
Restriction: The Fund will not commodities except that the Fund
invest in commodities. may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or similar obligations Fund may lend its portfolio
which are publicly distributed, securities in accordance with
including repurchase agreements; applicable law, as amended and
provided however, that repurchase interpreted or modified from time
agreements maturing in more than to time by any regulatory
seven days, together with authority having jurisdiction and
securities which are not readily the guidelines set forth in the
marketable, will not exceed 10% of Fund's prospectus and statement of
the Fund's total assets, or (2) by additional information as they may
lending its portfolio securities be amended from time to time. The
to banks, brokers, dealers and acquisition of investment
other financial institutions so securities or other investment
long as such loans are not instruments shall not be deemed to
inconsistent with the 1940 Act, be the making of a loan.
and the Rules and Regulations or
interpretations of the SEC. Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
</TABLE>
C-82
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Lending--(continued) of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
------------------------------------------------------------------------------------------------
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
gross assets.
------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
------------------------------------------------------------------------------------------------
</TABLE>
C-83
<PAGE>
TS&W INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 10% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-84
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior The Fund will not issue senior The Fund may not issue senior
Securities securities, as defined in the 1940 securities, except to the extent
Act, except that this restriction permitted by applicable law, as
shall not be deemed to prohibit amended and interpreted or
the Fund from (1) making any modified from time to time by any
permitted borrowings, mortgages or regulatory authority having
pledges, or (2) entering into jurisdiction.
options and futures or repurchase
transactions. Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund currently has the The Fund may not underwrite
following non-fundamental securities of other issuers,
Restriction: The Fund will not except insofar as the Fund may
underwrite the securities of other technically be deemed to be an
issuers or invest more than an underwriter under the Securities
aggregate of 10% of the net assets Act of 1933 in connection with the
of the portfolio, determined at purchase or sale of its portfolio
the time of investment, in securities.
securities subject to legal or
contractual restrictions on resale
or securities for which there are
no readily available markets,
including repurchase agreements
having maturities of more than
seven days.
------------------------------------------------------------------------------------------------
</TABLE>
C-85
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations on their principal business
investments made in instruments activities in the same industry
issued or guaranteed by the U.S. (other than securities issued or
government and its agencies when guaranteed by the U.S. government
the Fund adopts a temporary or its agencies or
defensive position. instrumentalities).
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U.S. government or its
agencies or instrumentalities.
------------------------------------------------------------------------------------------------
Investment in Real None The Fund may not purchase or sell
Estate real estate, except (1) to the
extent permitted by applicable
law, as amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction (2) that the Fund may
invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
------------------------------------------------------------------------------------------------
Commodities The Fund currently has the The Fund may not purchase or sell
following non-fundamental commodities or contracts on
Restriction: The Fund will not commodities except that the Fund
invest in commodities except that may engage in financial futures
the Fund may invest in futures contracts and related options and
contracts and options to the currency contracts and related
extent that not more than 5% of options and may otherwise do so in
the Fund's assets is required as accordance with applicable law and
deposit to secure obligations without registering as a commodity
under futures contracts and the pool operator under the Commodity
entry into forward foreign Exchange Act.
currency exchange contracts is not
and shall not be deemed to involve
investing in commodities.
------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing bonds, other persons, except that the
debentures or similar obligations Fund may lend its portfolio
which are publicly distributed, securities in accordance with
including repurchase agreements; applicable law, as amended and
provided however, that repurchase interpreted or modified from time
agreements maturing in more than to time by any regulatory
seven days, together with authority having jurisdiction and
securities which are not readily the guidelines set forth in the
marketable, will not exceed 10% of Fund's prospectus and statement of
the Fund's total assets, or (2) by additional information as they may
lending its portfolio securities be amended from time to time. The
to banks, brokers, dealers and acquisition of investment
other financial institutions so securities or other investment
long as such loans are not instruments shall not be deemed to
inconsistent with the 1940 Act, be the making of a loan.
and the Rules and Regulations or
interpretations of the SEC. Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
------------------------------------------------------------------------------------------------
</TABLE>
C-86
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Unseasoned Issuers The Fund will not invest more than This investment limitation will be
5% of its assets at the time of eliminated.
purchase in the securities of
companies that have (with
predecessors) a continuous
operating history of less than 3
years.
------------------------------------------------------------------------------------------------
Buying Securities When The Fund will not purchase This investment limitation will be
Borrowings Exceed 5% additional securities when eliminated.
borrowings exceed 5% of total
assets.
------------------------------------------------------------------------------------------------
Pledging The Fund will not pledge, This investment limitation will be
mortgage, or hypothecate any of eliminated.
its assets to an extent greater
than 10% of its total assets at
fair market value.
------------------------------------------------------------------------------------------------
</TABLE>
C-87
<PAGE>
TS&W INTERNATIONAL OCTAGON PORTFOLIO
<TABLE>
--------------------------------------------------------------------------------------------
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------
<S> <C> <C>
Diversification of The Fund will not with respect to The Fund may not make any
Investments 75% of its assets, (1) invest more investment inconsistent with the
than 5% of its total assets at the Fund's classification as a
time of purchase in securities of diversified series of an open-end
any single issuer (other than investment company under the
obligations issued or guaranteed Investment Company Act of 1940
as to principal and interest by (the "1940 Act"). This restriction
the U.S. government or any of its does not, however, apply to any
agencies or instrumentalities) or Fund classified as non-diversified
(2) purchase more than 10% of any series of an open-end investment
class of the outstanding voting company under the 1940 Act.
securities of any one issuer.
Note: The 1940 Act currently
prohibits a diversified fund from
investing more than 5% of the
value of its total assets,
determined at market or other fair
value at the time of purchase. The
1940 Act also currently prohibits
diversified funds from investing
in more than 10% of the
outstanding voting securities of
any one issuer, determined at the
time of purchase. These
limitations only apply to 75% of
the fund's assets and do not apply
to investment in securities issued
or guaranteed by the
U.S. government or its agencies or
instrumentalities. The 1940 Act
does not impose any investment
limitations on a non-diversified
fund. However, non-diversified
funds must comply with the
diversification requirements of
the Internal Revenue Code.
Currently, the Internal Revenue
Code permits a fund to invest 50%
of its total assets in to issuers
(i.e., 25% each) and, with respect
to 50% of its total assets,
requires the fund to be
diversified under the 5% of assets
and 10% of voting security tests
described above.
--------------------------------------------------------------------------------------------
Borrowing The Fund will not borrow, except The Fund may not borrow money,
from banks and as a temporary except to the extent permitted by
measure for extraordinary or applicable law, as amended and
emergency purposes and then, in no interpreted or modified from time
event, in excess of 33 1/3% of the to time by any regulatory
Fund's gross assets valued at the authority having jurisdiction and
lower of market or cost. statement of additional
information as they may be amended
from time to time.
Note: Under the 1940 Act, a fund
may borrow from banks (as defined
in the 1940 Act) or enter into
reverse repurchase agreements, in
amounts up to 33 1/3% of its total
assets (including the amount
borrowed). The fund may also
borrow up to an additional 5% of
its total assets for temporary
purposes. The 1940 Act prohibits
an investment company from
purchasing securities on margin,
participating in a joint
</TABLE>
C-88
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
------------------------------------------------------------------------------------------------
<S> <C> <C>
Borrowing--(continued) trading account or effecting a
short sale of any security in
contravention of SEC rules,
regulations or orders. The SEC has
issued no rules, regulations or
orders. The SEC staff, however,
has taken the position that
opening a margin account, which is
required to effect the short
sales, is a borrowing by an
investment company and not from a
bank, as is required by the 1940
Act. Therefore, it is proposed
that the fund preserve the right
to margin, participate in joint
trading accounts and engage in
short sales to the extent
permitted by SEC staff
interpretations and subject to any
guidelines adopted by the Board.
------------------------------------------------------------------------------------------------
Issuing of Senior None The Fund may not issue senior
Securities securities, except to the extent
permitted by applicable law, as
amended and interpreted or
modified from time to time by any
regulatory authority having
jurisdiction.
Note: Section 18(f) of the 1940
Act limits the ability of mutual
funds to issue or sell any senior
security. Generally, a senior
security means any bond,
debenture, note or similar
obligation or instrument
evidencing indebtedness. The SEC
has interpreted Section 18 also to
include any instrument that
creates a risk of leverage. Under
current SEC interpretations,
however, a fund may engage in
certain leveraged transactions if
it covers the transaction by
segregating an appropriate amount
of liquid assets. The following is
a list of permissible transactions
for which the SEC requires the
establishment of a segregated
account: purchasing securities on
a when-issued basis (also known as
firm commitments); selling
(writing) of put and call options;
futures contracts; buying and
selling options on future
contracts; forward foreign
currency exchange transactions;
reverse repurchase agreements;
short sales, except short sales
against the box.
------------------------------------------------------------------------------------------------
Underwriting The Fund will not underwrite the The Fund may not underwrite
securities of other issuers. securities of other issuers,
except insofar as the Fund may
technically be deemed to be an
underwriter under the Securities
Act of 1933 in connection with the
purchase or sale of its portfolio
securities.
------------------------------------------------------------------------------------------------
Industry Concentration The Fund will not invest more than The Fund may not concentrate its
25% of its assets in companies investments in the securities of
within a single industry; however, one or more issuers conducting
there are no limitations their principal business
activities in
</TABLE>
C-89
<PAGE>
<TABLE>
<CAPTION>
Current Fundamental Investment Proposed Fundamental Investment
Topic Restrictions Restrictions
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Industry Concentration-- on investments made in instruments the same industry (other than
(continued) issued or guaranteed by the U.S. securities issued or guaranteed by
government and its agencies when the U.S. government or its
the Fund adopts a temporary agencies or instrumentalities).
defensive position.
Note: The 1940 Act currently
defines concentration as investing
more than 25% of a fund's total
assets, taken at market value, in
the securities of issuers
primarily engaged in any
particular industry (other than
securities issued or guaranteed by
the U. S. Government or its
agencies or instrumentalities.
--------------------------------------------------------------------------------------------------
Investment in Real The Fund will not purchase or sell The Fund may not purchase or sell
Estate real estate or real estate limited real estate, except (1) to the
partnerships, although it may extent permitted by applicable
purchase and sell securities of law, as amended and interpreted or
companies which deal in real modified from time to time by any
estate and may purchase and sell regulatory authority having
securities which are secured by jurisdiction (2) that the Fund may
interests in real estate. invest in, securities of issuers
that deal or invest in real
estate, and (3) that the Fund may
purchase securities secured by
real estate or interests therein.
--------------------------------------------------------------------------------------------------
Commodities The Fund will not invest in The Fund may not purchase or sell
physical commodities or contracts commodities or contracts on
on physical commodities. commodities except that the Fund
may engage in financial futures
contracts and related options and
currency contracts and related
options and may otherwise do so in
accordance with applicable law and
without registering as a commodity
pool operator under the Commodity
Exchange Act.
--------------------------------------------------------------------------------------------------
Lending The Fund will not make loans The Fund may not make loans to
except (1) by purchasing debt other persons, except that the
securities in accordance with its Fund may lend its portfolio
investment objectives and (2) by securities in accordance with
lending its portfolio securities applicable law, as amended and
to banks, brokers, dealers and interpreted or modified from time
other financial institutions so to time by any regulatory
long as the loans are not authority having jurisdiction and
inconsistent with the 1940 Act or the guidelines set forth in the
the rules and regulations or Fund's prospectus and statement of
interpretations of the SEC additional information as they may
thereunder. be amended from time to time.
Note: Under SEC policy, a Fund may
lend its portfolio securities to
registered broker-dealers or other
institutional investors. However,
these loans may not exceed 33 1/3%
of the Fund's total assets taken
at market value. In addition, the
Fund must receive at least 100%
collateral.
--------------------------------------------------------------------------------------------------
</TABLE>
C-90
<PAGE>
Exhibit D -- Interim Investment Advisory Agreement
INTERIM INVESTMENT ADVISORY AGREEMENT
UAM FUNDS [, INC./, INC. II/ TRUST]
[NAME OF PORTFOLIO]
INTERIM ADVISORY AGREEMENT by and between UAM Funds [,Inc./, Inc. II/
Trust], a [state and form of organization] (the "Fund"), and [investment
adviser], a [state and form of organization] (the "Adviser"). Pursuant to an
Agreement and Plan of Merger Old Mutual plc, an English public limited company
has agreed to acquire United Asset Management Corporation ("UAM"), the parent
company of the Adviser (the "Acquisition"). The Fund and the Adviser desire to
enter into this interim advisory agreement pursuant to the terms of Rule 15a-4
under the Investment Company Act of 1940, as amended (the "1940 Act"), pending
approval of a final investment advisory agreement by a majority of the
Portfolio's outstanding shares, as that term is defined in the 1940 Act. This
agreement shall take effect on a change in control of the Adviser in
connection with the Acquisition and, unless sooner terminated as provided
herein, shall continue for a period of not more than 150 days thereafter.
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's [Portfolio Name] (the "Portfolio") for the
period and on such terms as set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets of the
Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular
reports to the Fund's officers and Board concerning the Adviser's discharge of
the foregoing responsibilities. The Adviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Board of the
Fund, and in compliance with the objectives, policies and limitations set
forth in the Portfolio's prospectus and applicable laws and regulations. The
Adviser accepts such employment and agrees to render the services and to
provide, at its own expense, the office space, furnishings and equipment and
the personnel required by it to perform the services on the terms and for the
compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities of the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of the Fund, the Adviser may also be
authorized to effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if the Adviser determines in
good faith that such amount of commission is reasonable in relation to the
value of the brokerage or research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Adviser's overall
responsibilities with respect to the Fund. The execution of such transactions
shall not be deemed to represent an unlawful act or breach of any duty created
by this Agreement or otherwise. The Adviser will promptly communicate to the
officers and Trustees of the Fund such information relating to portfolio
transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets
for the month: %.
The compensation earned under this Agreement will be held in an interest-
bearing escrow account with the Fund's custodian or a bank mutually agreed
upon by the Adviser and the Fund. If a majority of the Portfolio's outstanding
voting securities approves the agreement before the end of the Agreement's
D-1
<PAGE>
150-day term, the amount in the escrow account (including interest earned)
will be paid to the Adviser. If a majority of the Portfolio's outstanding
voting securities do not approve this Agreement, the Adviser will be paid, out
of the escrow account, the lesser of (1) any costs incurred in performing the
interim contract (plus interest earned on that amount while in escrow); or (2)
the total amount in the escrow account (plus interest earned).
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal month as
a percentage of the total number of days in such month.
4. Other Services. At the request of the Fund, the Adviser in its discretion
may make available to the Fund office facilities, equipment, personnel and
other services. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Adviser and billed to the Fund at the
Adviser's cost.
5. Reports. The Fund and the Adviser agree to furnish to each other current
prospectuses, proxy statements, reports to shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of
its obligations and duties hereunder, or (iii) a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as
amended ("1940 Act"), the Adviser shall not be subject to any liability
whatsoever to the Fund, or to any shareholder of the Fund, for any error or
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Portfolio.
8. Permissible Interests. Subject to and in accordance with the Declaration
of Trust of the Fund and the Articles of Incorporation of the Adviser,
Trustees, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and
shareholders of the Adviser are or may be interested in the Fund as Trustees,
officers, agents, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Fund as a shareholder or otherwise;
and the effect of any such interrelationships shall be governed by said
Declaration of Trust or Articles of Incorporation and the provisions of the
1940 Act.
9. Termination. The Fund's board of directors or a majority of the
Portfolio's outstanding voting securities may terminate this Agreement at any
time, without the payment of any penalty, on 10 calendar days' written notice
to the Adviser. This Agreement will automatically and immediately terminate in
the event of its assignment. Any notice under this Agreement shall be given in
writing, addressed and delivered or mailed postpaid, to the other party at the
principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
D-2
<PAGE>
10. Amendment of Agreement. This Agreement may be amended by mutual consent,
but the consent of the Fund must be approved (a) by vote of a majority of
those members of the Board of the Fund who are not parties to this Agreement
or interested persons of any such party, cast in person at a meeting called
for the purpose of voting on such amendment, and (b) for changes or amendments
requiring shareholder approval pursuant to the 1940 Act or other applicable
law, by vote of a majority of the outstanding voting securities of the
Portfolio.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this day of , 200 .
[INVESTMENT ADVISER] UAM FUNDS [,INC./, INC. II/ TRUST]
By ____________________ By ____________________
Name: Name:
Title: Title:
D-3
<PAGE>
Exhibit E -- New Investment Advisory Agreement
INVESTMENT ADVISORY AGREEMENT
UAM FUNDS [, INC./, INC. II/ TRUST]
[NAME OF PORTFOLIO]
AGREEMENT made this day of , 200 by and UAM Funds [,Inc./, Inc. II/
Trust], a [state and form of organization] (the "Fund"), and [investment
adviser], a [state and form of organization] (the "Adviser").
1. Duties of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund's [Portfolio Name] (the "Portfolio") for the
period and on such terms as set forth in this Agreement. The Fund employs the
Adviser to manage the investment and reinvestment of the assets of the
Portfolio, to continuously review, supervise and administer the investment
program of the Portfolio, to determine in its discretion the securities to be
purchased or sold and the portion of the Portfolio's assets to be held
uninvested, to provide the Fund with records concerning the Adviser's
activities which the Fund is required to maintain, and to render regular
reports to the Fund's officers and Board of Trustees concerning the Adviser's
discharge of the foregoing responsibilities. The Adviser shall discharge the
foregoing responsibilities subject to the control of the officers and the
Board of Trustees of the Fund, and in compliance with the objectives, policies
and limitations set forth in the Portfolio's prospectus and applicable laws
and regulations. The Adviser accepts such employment and agrees to render the
services and to provide, at its own expense, the office space, furnishings and
equipment and the personnel required by it to perform the services on the
terms and for the compensation provided herein.
2. Portfolio Transactions. The Adviser is authorized to select the brokers
or dealers that will execute the purchases and sales of securities of the
Portfolio and is directed to use its best efforts to obtain the best available
price and most favorable execution, except as prescribed herein. Subject to
policies established by the Board of Trustees of the Fund, the Adviser may
also be authorized to effect individual securities transactions at commission
rates in excess of the minimum commission rates available, if the Adviser
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage or research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Adviser's overall responsibilities with respect to the Fund. The execution of
such transactions shall not be deemed to represent an unlawful act or breach
of any duty created by this Agreement or otherwise. The Adviser will promptly
communicate to the officers and Trustees of the Fund such information relating
to portfolio transactions as they may reasonably request.
3. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 1 of this Agreement, the Fund shall pay to the
Adviser in monthly installments, an advisory fee calculated by applying the
following annual percentage rate to the Portfolio's average daily net assets
for the month: %.
In the event of termination of this Agreement, the fee provided in this
Section shall be computed on the basis of the period ending on the last
business day on which this Agreement is in effect subject to a pro rata
adjustment based on the number of days elapsed in the current fiscal month as
a percentage of the total number of days in such month.
4. Other Services. At the request of the Fund, the Adviser in its discretion
may make available to the Fund office facilities, equipment, personnel and
other services. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Adviser and billed to the Fund at the
Adviser's cost.
E-1
<PAGE>
5. Reports. The Fund and the Adviser agree to furnish to each other current
prospectuses, proxy statements, reports to shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs as each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services to
others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of (i) willful misfeasance, bad
faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (ii) reckless disregard by the Adviser of
its obligations and duties hereunder, or (iii) a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the Investment Company Act of 1940, as
amended ("1940 Act"), the Adviser shall not be subject to any liability
whatsoever to the Fund, or to any shareholder of the Fund, for any error or
judgment, mistake of law or any other act or omission in the course of, or
connected with, rendering services hereunder including, without limitation,
for any losses that may be sustained in connection with the purchase, holding,
redemption or sale of any security on behalf of the Portfolio.
8. Permissible Interests. Subject to and in accordance with the Declaration
of Trust of the Fund and the Articles of Incorporation of the Adviser,
Trustees, officers, agents and shareholders of the Fund are or may be
interested in the Adviser (or any successor thereof) as Directors, officers,
agents, shareholders or otherwise; Directors, officers, agents and
shareholders of the Adviser are or may be interested in the Fund as Trustees,
officers, agents, shareholders or otherwise; and the Adviser (or any
successor) is or may be interested in the Fund as a shareholder or otherwise;
and the effect of any such interrelationships shall be governed by said
Declaration of Trust or Articles of Incorporation and the provisions of the
1940 Act.
9. Duration and Termination. This Agreement, unless sooner terminated as
provided herein, shall continue until the earlier of December 29, 2001 or the
date of the first annual or special meeting of the shareholders of the
Portfolio and, if approved by a majority of the outstanding voting securities
of the Portfolio, thereafter shall continue for periods of one year so long as
such continuance is specifically approved at least annually (a) by the vote of
a majority of those members of the Board of Trustees of the Fund who are not
parties to this Agreement or interested persons of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Trustees of the Fund or (c) by vote of a majority of the
outstanding voting securities of the Portfolio; provided however, that if the
shareholders of the Portfolio fail to approve the Agreement as provided
herein, the Adviser may continue to serve in such capacity in the manner and
to the extent permitted by the 1940 Act and rules thereunder. This Agreement
may be terminated by the Portfolio at any time, without the payment of any
penalty, by vote of a majority of the entire Board of Trustees of the Fund or
by vote of a majority of the outstanding voting securities of the Portfolio on
60 days' written notice to the Adviser. This Agreement may be terminated by
the Adviser at any time, without the payment of any penalty, upon 90 days'
written notice to the Fund. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this Agreement
shall be given in writing, addressed and delivered or mailed postpaid, to the
other party at the principal office of such party.
As used in this Section 9, the terms "assignment", "interested persons", and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section
2(a)(42) of the 1940 Act.
10. Amendment of Agreement. This Agreement may be amended by mutual consent,
but the consent of the Fund must be approved (a) by vote of a majority of
those members of the Board of Trustees of the Fund who are not parties to this
Agreement or interested persons of any such party, cast in person
E-2
<PAGE>
at a meeting called for the purpose of voting on such amendment, and (b) for
changes or amendments requiring shareholder approval pursuant to the 1940 Act
or other applicable law, by vote of a majority of the outstanding voting
securities of the Portfolio.
11. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of this day of , 200 .
[INVESTMENT ADVISER] UAM FUNDS [,INC./, INC. II/ TRUST]
By ____________________ By ____________________
Name: Name:
Title: Title:
E-3
<PAGE>
EXHIBIT F--INFORMATION ON INVESTMENT ADVISERS
INDEX
<TABLE>
<CAPTION>
UAM FUND PAGE F-
-------- -------
<S> <C>
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund.......................................... 2
Analytic Enhanced Equity Fund........................................... 2
Analytic International Fund............................................. 2
Analytic Master Fixed Income Fund....................................... 2
Analytic Short-Term Government Fund..................................... 2
C&B Balanced Portfolio.................................................. 3
C&B Equity Portfolio.................................................... 3
C&B Equity Portfolio for Taxable Investors.............................. 3
C&B Mid Cap Equity Portfolio............................................ 3
Cambiar Opportunity Portfolio........................................... 4
Chicago Asset Management Company Intermediate Bond Portfolio............ 5
Chicago Asset Management Company Vale/Contrarian Portfolio.............. 5
Clipper Focus Portfolio................................................. 6
FMA Small Company Portfolio............................................. 7
FPA Crescent Portfolio.................................................. 7
Heitman Real Estate Portfolio........................................... 8
ICM Small Company Portfolio............................................. 9
IRA Capital Preservation Portfolio...................................... 10
McKee Domestic Equity Portfolio......................................... 11
McKee International Equity Portfolio.................................... 11
McKee Small Cap Equity Portfolio........................................ 11
McKee U.S. Government Portfolio......................................... 11
MJI International Equity Portfolio...................................... 12
NWQ Special Equity Portfolio............................................ 13
Pell Rudman Mid-Cap Growth Portfolio.................................... 14
PIC Twenty Portfolio.................................................... 15
Rice, Hall James Small Cap Portfolio.................................... 16
Rice, Hall James Small/Mid-Cap Portfolio................................ 16
Sirach Bond Portfolio................................................... 17
Sirach Equity Portfolio................................................. 17
Sirach Growth Portfolio................................................. 17
Sirach Growth II Portfolio.............................................. 17
Sirach Special Equity Portfolio......................................... 17
Sirach Strategic Balanced Portfolio..................................... 17
Sterling Partners' Balanced Portfolio................................... 19
Sterling Partners' Equity Portfolio..................................... 19
Sterling Partners' Small Cap Value Portfolio............................ 19
TJ Core Equity Portfolio................................................ 20
TS&W Equity Portfolio................................................... 20
TS&W Fixed Income Portfolio............................................. 20
TS&W International Equity Portfolio..................................... 20
TS&W International Octagon Portfolio.................................... 20
</TABLE>
F-1
<PAGE>
ACADIAN EMERGING MARKETS PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Acadian Asset Management, Inc.
Two International Place--26th Floor
Boston, MA 02110
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 2.50%
Date of Current Investment Advisory Agreement: February 19, 1993
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Gary L. Bergstrom, Chairman Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
Directors
Gary L. Bergstrom, Chairman Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
Ronald D. Frashure, President Acadian Asset Management, Inc. Two
International Place - 26th Floor Boston, MA 02110
ANALYTIC DEFENSIVE EQUITY FUND, ANALYTIC ENHANCED EQUITY FUND, ANALYTIC
INTERNATIONAL EQUITY FUND, ANALYTIC MASTER FIXED INCOME FUND AND ANALYTIC
SHORT-TERM GOVERNMENT FUND
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Analytic Investors, Inc.
700 South Flower Street, Suite 2400
Los Angeles, CA 90017
F-2
<PAGE>
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Analytic Defensive Equity
Fund 0.60% 0.99% April 6, 1999
-----------------------------------------------------------------------------
Analytic Enhanced Equity
Fund 0.60% 0.99% April 6, 1999
-----------------------------------------------------------------------------
Analytic International
Equity Fund 1.00% 1.30% September 15, 1999
-----------------------------------------------------------------------------
Analytic Master Fixed Income
Fund 0.45% 0.80% April 6, 1999
-----------------------------------------------------------------------------
Analytic Short-Term
Government Fund 0.30% 0.60% April 6, 1999
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Harindra de Silva, CPA, President Analytic Investors, Inc. 700 South Flower
Street, Suite 2400 Los Angeles, CA 90017
Directors
Harindra de Silva, CPA, President Analytic Investors, Inc. 700 South Flower
Street, Suite 2400 Los Angeles, CA 90017
Roger Clark, Chairman Analytic Investors, Inc. 700 South Flower Street,
Suite 2400 Los Angeles, CA 90017
Susan B. Hunter, Vice President United Asset Management Corporation One
International Place - 44th Floor Boston, MA 02110
Franklin H. Kettle, Executive Vice President United Asset Management
Corporation One International Place - 44th Floor Boston, MA 02110
C&B BALANCED PORTFOLIO, C&B EQUITY PORTFOLIO, C&B EQUITY PORTFOLIO FOR TAXABLE
INVESTORS AND C&B MID CAP EQUITY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
F-3
<PAGE>
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
-----------------------------------------------------------------------------
<S> <C> <C> <C>
C&B Balanced Portfolio 0.625% 1.00% July 3, 1989
-----------------------------------------------------------------------------
C&B Equity Portfolio 0.625% 1.00% July 3, 1989
-----------------------------------------------------------------------------
C&B Equity Portfolio for
Taxable Investors 0.625% 1.00% September 30, 1996
-----------------------------------------------------------------------------
C&B Mid-Cap Equity Portfolio 0.625% 1.00% September 30, 1996
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert B. Arthur, Partner & Director
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Directors
Robert B. Arthur, Partner & Director
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
John J. Medveckis, Partner & Director Cooke & Bieler, Inc.
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
CAMBIAR OPPORTUNITY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.30%
Date of Current Investment Advisory Agreement: June 18, 1998
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Brian M. Barish, President
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
F-4
<PAGE>
Directors
Michael S. Barish, Chairman
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
Brian M. Barish, President
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
Terrell J. Butz, Executive Vice President
Cambiar Investors, Inc.
8400 East Prentice Avenue,
Suite 460
Englewood, CO 80111
CHICAGO ASSET MANAGEMENT COMPANY INTERMEDIATE BOND PORTFOLIO AND CHICAGO ASSET
MANAGEMENT COMPANY VALUE/CONTRARIAN PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
---------------------------------------------------------------------------
<S> <C> <C> <C>
Chicago Asset Management
Company Intermediate Bond
Portfolio 0.48% 0.80% August 26, 1994
---------------------------------------------------------------------------
Chicago Asset Management
Company Value/Contrarian
Portfolio 0.625% 1.25% August 26, 1994
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Jon F. Holsteen, Chairman, Chief Investment Officer
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
Directors
Jon F. Holsteen, Chairman, Chief Investment Officer
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
F-5
<PAGE>
William W. Zimmer, President, Chief Operating Officer
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
Donna L. Minnich, Executive Vice President, Chief Administrative Officer
Chicago Asset Management Company
70 West Madison Street, 56th Floor
Chicago, IL 60602
CLIPPER FOCUS PORTFOLIO
-------------------------------------------------------------------------------
Name and Address of Investment Adviser
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00% on the first $500 million, 0.95% of the next $500
million and 0.90% on the excess of $1 billion
Expense Limit: 1.40%
Date of Current Investment Advisory Agreement: August 31, 1998
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
James H. Gipson, President, Chief Executive Officer
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Directors
James H. Gipson, President, Chief Executive Officer
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Michael C. Sandler, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Douglas W. Crey, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
Bruce C. Veuco, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
F-6
<PAGE>
Peter J. Quinn, Vice President
Pacific Financial Research, Inc.
9601 Wilshire Blvd. Suite 800
Beverly Hills, CA 90210
FMA SMALL COMPANY PORTFOLIO
-------------------------------------------------------------------------------
Name and Address of Investment Adviser
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.20% for the Institutional Class Shares and 1.60% for the
Institutional Service Class Shares.
Date of Current Investment Advisory Agreement: October 8, 1990
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert F. Carr, III, Chairman, President, Chief Executive Officer
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Directors
Robert F. Carr, III, Chairman, President, Chief Executive Officer
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Robert W. Thornburgh, Jr., Executive Vice President
Fiduciary Management Associates, Inc.
55 W. Monroe Street--Suite 2550
Chicago, IL 60603
Kevin P. O'Brien, Senior Vice President
United Asset Management Corporation
One International Place--44th Floor
Boston, MA 02110
FPA CRESCENT PORTFOLIO
-------------------------------------------------------------------------------
Name and Address of Investment Adviser
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
F-7
<PAGE>
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: None
Date of Current Investment Advisory Agreement: September 30, 1996
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Julio J. de Puzo, Jr., Chief Executive Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
Directors
Julio J. de Puzo, Jr., Chief Executive Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
William M. Sams, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
Robert L. Rodriguez, Chief Investment Officer, Principal
First Pacific Advisors, Inc.
11400 West Olympic Boulevard, Suite 1200
Los Angeles, CA 90064
HEITMAN REAL ESTATE PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75% on the first $100 million and 0.65% on the excess of
$100 million
Expense Limit: None
Date of Current Investment Advisory Agreement: March 2, 1998
F-8
<PAGE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
William L. Ramseyer, Chairman, Chief Executive Officer
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Directors
Maury R. Toguarelli, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Jerome J. Claeys, II, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
Roger E. Smith, Manager, Heitman Financial LLC
Heitman/PRA Securities Advisors LLC
180 North LaSalle Street
Chicago, IL 60601-2886
ICM SMALL COMPANY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.70%
Expense Limit: None
Date of Current Investment Advisory Agreement: March 20, 1989
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Rober D. McDorman, Jr., Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
F-9
<PAGE>
Directors
Robert D. McDorman, Jr., Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Stephen T. Scott, President, Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Andrew L. Gilchrist, Treasurer, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Paul L. Borssuck, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Robert F. Boyd, Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Stuart M. Christhilf, III, Chief Executive Officer, Managing Principal
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
IRA CAPITAL PRESERVATION PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.50%
Expense Limit: 1.00%
Date of Current Investment Advisory Agreement: February 1, 1999
F-10
<PAGE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
John K. Dwight, President, Chief Executive Officer
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
Directors
John K. Dwight, President, Chief Executive Officer
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
Laura Dagan, Managing Director
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
David W. Richardson, Managing Director
Dwight Asset Management Company
125 College Street
P.O. Box 1590
Burlington, VT 05402-1590
MCKEE DOMESTIC EQUITY PORTFOLIO, MCKEE INTERNATIONAL EQUITY PORTFOLIO, MCKEE
SMALL CAP EQUITY PORTFOLIO AND MCKEE U. S. GOVERNMENT PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Investment Advisory
Fund Advisory Fee Expense Limit Agreement
---------------------------------------------------------------------------
<S> <C> <C> <C>
McKee Domestic Equity
Portfolio 0.65% None January 24, 1994
---------------------------------------------------------------------------
McKee International Equity
Portfolio 0.70% None January 24, 1994
---------------------------------------------------------------------------
McKee Small Cap Equity
Portfolio 1.00% None April 9, 1997
---------------------------------------------------------------------------
McKee U. S. Government
Portfolio 0.45% None January 24, 1994
</TABLE>
F-11
<PAGE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
James H. Hanes, Chairman
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Directors
Eugene Natali, President, Chief Executive Officer
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Norman S. Allen, Senior Vice President
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
James H. Hanes, Chairman
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Walter C. Bean, Executive Vice President, Chief Compliance Officer
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
Joseph F. Bunomo, Jr., Director of Fixed Income
C.S. McKee Company, Inc.
One Gateway Center
Pittsburgh, PA 15222
MJI INTERNATIONAL EQUITY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Murray Johnstone International Limited
John Hancock Center
875 N. Michigan Avenue, Suite 3640
Chicago, IL 60611
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75%
Expense Limit: 1.50%
Date of Current Investment Advisory Agreement: August 26, 1995
F-12
<PAGE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
C. Giles H. Weaver, Executive Chairman
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
Directors
C. Giles H. Weaver, Executive Chairman
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
A. David MacLellan, Managing Director
Murray Johnstone International Limited
John Hancock Center
875 No. Michigan Avenue, Suite 3640
Chicago, IL 60611
NWQ SPECIAL EQUITY PORTFOLIO
-------------------------------------------------------------------------------
Name and Address of Investment Adviser
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.85%
Expense Limit: 1.25% for the Institutional Class Shares and 1.65% for the
Institutional Service Class Shares.
Date of Current Investment Advisory Agreement: August 18, 1997
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Michael C. Mendez, President
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
F-13
<PAGE>
Directors
Michael C. Mendez, President
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
David A. Polak, Chief Executive Officer
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Edward C. Friedel, Managing Director
NWQ Investment Management Company
2049 Century Park East--4th Floor
Los Angeles, CA 90067
Kevin P. O'Brien, Senior Vice President
United Asset Management Corporation
One International Place--44th Floor
Boston, MA 02110
PELL RUDMAN MID-CAP GROWTH PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Pell Rudman Trust Company
100 Federal Street
Boston, Ma 02110
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 1.00%
Expense Limit: 1.30%
Date of Current Investment Advisory Agreement: August 31, 1998
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Edward I. Rudman, Chairman
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
Directors
Edward I. Rudman, Chairman
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
F-14
<PAGE>
James S. McDonald, Chief Executive Officer, President
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
Jeffrey S. Thoman, Chief Investment Officer
Pell Rudman Trust Company
100 Federal Street
Boston, MA 02110
PIC TWENTY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasedena, CA 91101
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.90%
Annual Expense Limitation, if any, as a Percentage of Average Daily Net
Assets: 1.30%
Date of Current Investment Advisory Agreement: December 29, 1999
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Directors
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Thomas J. Condon, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Jeffrey J. Miller, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
F-15
<PAGE>
Robert M. Kommerstad, Chairman
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Larry D. Tashjian, Executive Managing Director, Chief Executive Officer
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
George E. Handtmann, III, Executive Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Harlan H. Thompson, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Andrew J. Pearl, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
F. Brown Windle, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
Thomas M. Mitchell, Managing Director
Provident Investment Counsel, Inc.
300 North Lake Avenue--Penthouse Suite
Pasadena, CA 91101
RICE, HALL JAMES SMALL CAP PORTFOLIO AND RICE, HALL JAMES SMALL/MID CAP
PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Rice, Hall James Small Cap Portfolio.. 0.75% None January 24, 1994
-----------------------------------------------------------------------------
Rice, Hall James Small/Mid Cap
Portfolio............................ 0.85% 1.25% September 16, 1996
</TABLE>
F-16
<PAGE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Thomas W. McDowell, Jr., President, Chief Executive Officer,
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Directors
Thomas W. McDowell, Jr., President, Chief Executive Officer,
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Charles C. King, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, Ca 92101
David P. Tesstner, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Timothy A. Todaro, Partner
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
Patricia A. Urbonya, Partner, Chief Operating Officer
Rice, Hall, James & Associates
600 West Broadway Street--Suite 1000
San Diego, CA 92101
SIRACH BOND PORTFOLIO, SIRACH EQUITY PORTFOLIO, SIRACH GROWTH PORTFOLIO, SIRACH
GROWTH II PORTFOLIO, SIRACH SPECIAL EQUITY PORTFOLIO AND SIRACH STRATEGIC
BALANCED PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
F-17
<PAGE>
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Advisory Investment Advisory
Fund Fee Expense Limit Agreement
----------------------------------------------------------------------------------
<S> <C> <C> <C>
0.50% for the Institutional
Class and 0.75% for the
Sirach Bond Portfolio... 0.35% Institutional Service Class November 3, 1997
----------------------------------------------------------------------------------
Sirach Equity
Portfolio.............. 0.65% None June 26, 1996
----------------------------------------------------------------------------------
Sirach Growth
Portfolio.............. 0.65% None October 29, 1993
----------------------------------------------------------------------------------
Sirach Growth Portfolio
II..................... 0.70% None August 4, 2000
----------------------------------------------------------------------------------
Sirach Special Equity
Portfolio.............. 0.70% 0.90% September 27, 1989
----------------------------------------------------------------------------------
Sirach Strategic
Balanced Portfolio..... 0.65% None October 29, 1993
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Harvey C. Bateman, Principal, Director of Equities
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Directors
Harvey C. Bateman, Principal, Director of Equities
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Craig F. Hintze Principal, Director of Fixed Income
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
Barry Fetterman Principal
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
David A. Anderson, Principal
Sirach Capital Management, Inc.
600 University Street
3323 One Union Square
Seattle, WA 98101
F-18
<PAGE>
STERLING PARTNERS' BALANCED PORTFOLIO, STERLING PARTNERS' EQUITY PORTFOLIO AND
STERLING PARTNERS' SMALL CAP VALUE PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
----------------------------------------------------------------------------
<S> <C> <C> <C>
Sterling Partners' Balanced
Portfolio............................ 0.75% 1.11% March 8, 1991
----------------------------------------------------------------------------
Sterling Partners' Equity Portfolio... 0.75% 0.99% March 8, 1991
----------------------------------------------------------------------------
Sterling Partners' Small Cap Value
Portfolio............................ 1.00% 1.25% January 7, 1997
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Mark W. Whalen, President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Directors
W. Olin Nisbet, III, Chairman
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
David M. Ralston, Executive Vice President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
J. Calvin Rivers, Jr., Executive Vice President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
Mark W. Whalen, President
Sterling Capital Management Company
301 S. College Street--Suite 3200
Charlotte, NC 28202
F-19
<PAGE>
TJ CORE EQUITY PORTFOLIO
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
Advisory Fee: 0.75%
Expense Limit: 1.25%
Date of Current Investment Advisory Agreement: January 29, 1995
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
Thomas E. Johnson, CFA, Chairman, Chief Investment Officer
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Directors
Thomas E. Johnson, CFA, Chairman, Chief Investment Officer
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
Jerry I. Wise, President
Tom Johnson Investment Management, Inc.
2 Leadership Square
211 North Robinson, Suite 450
Oklahoma City, OK 73102
TS&W EQUITY PORTFOLIO, TS&W FIXED INCOME PORTFOLIO, TS&W INTERNATIONAL EQUITY
PORTFOLIO AND TS&W INTERNATIONAL OCTAGON PORTFOLIO (FORMERLY, JACOBS
INTERNATIONAL OCTAGON PORTFOLIO)
--------------------------------------------------------------------------------
Name and Address of Investment Adviser
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
F-20
<PAGE>
Annual Investment Advisory Fee, Annual Expense Limitation, if any, as a
Percentage of Average Daily Net Assets and Date of Current Investment Advisory
Agreement
<TABLE>
<CAPTION>
Date of Current
Advisory Expense Investment Advisory
Fund Fee Limit Agreement
------------------------------------------------------------------------------
<S> <C> <C> <C>
TS&W Equity Portfolio................ 0.75% None November 25, 1991
------------------------------------------------------------------------------
TS&W Fixed Income Portfolio.......... 0.45% None November 25, 1991
------------------------------------------------------------------------------
TS&W International Equity Portfolio.. 1.00% None November 3, 1992
------------------------------------------------------------------------------
TS&W International Octagon Portfolio
(Formerly Jacobs International December 2, 1996, as
Octagon Portfolio).................. 1.00% None amended June 27, 2000
</TABLE>
The Name, Address And Principal Occupation Of The Principal Executive Officer
And Each Director Or General Partner Of The Investment Adviser
Principal Executive Officer
John T. Siegel, President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Directors
Matthew G. Thompson, Senior Vice President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Sylvester P. Walmsley, IV, Director
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
John T. Siegel, President
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
Horace P. Whitworth, Secretary
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230
F-21
<PAGE>
Exhibit G --Fees Paid to Investment Advisers and their Affiliated Companies
<TABLE>
<CAPTION>
Fiscal Net Assets Advisory Fees without Administration Fees Paid
Year as of 8/21/00 Expense Limitation Net Advisory Fee to UAM Fund Services, Inc.
Fund Name Ended (Thousands) for Last Fiscal Year for Last Fiscal Year for Last Fiscal Year
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Acadian Emerging
Markets Fund 12/31/99 $1,274,940 $1,274,940 $ 89,112
--------------------------------------------------------------------------------------------------------------
Analytic
Defensive Equity
Fund 12/31/99 $ 396,366 $ 302,138 $ 55,449
--------------------------------------------------------------------------------------------------------------
Analytic
Enhanced Equity
Fund 12/31/99 $ 359,313 $ 289,086 $ 41,853
--------------------------------------------------------------------------------------------------------------
Analytic
International
Equity Fund 12/31/99 $ 3,652 $ 0 $ 5,145
--------------------------------------------------------------------------------------------------------------
Analytic Master
Fixed Income
Fund 12/31/99 $ 23,789 $ 0 $ 16,555
--------------------------------------------------------------------------------------------------------------
Analytic Short-
Term Government
Fund 12/31/99 $ 13,250 $ 0 $ 15,744
--------------------------------------------------------------------------------------------------------------
C&B Balanced
Portfolio 4/30/00 $ 22,155 $ 0 $ 11,341
--------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio 10/31/99 $ 677,029 $ 677,029 $ 54,969
--------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio for
Taxable
Investors 10/31/99 $ 23,723 $ 0 $ 6,592
--------------------------------------------------------------------------------------------------------------
C&B Mid Cap
Equity Portfolio 10/31/99 $ 8,217 $ 0 $ 8,500
--------------------------------------------------------------------------------------------------------------
Cambiar
Opportunity
Portfolio 4/30/00 $ 31,375 $ 0 $ 18,251
--------------------------------------------------------------------------------------------------------------
Chicago Asset 4/30/00 $ 67,388 $ 0 $ 49,053
Management
Company
Intermediate
Bond Portfolio
--------------------------------------------------------------------------------------------------------------
Chicago Asset 4/30/00 $ 226,918 $ 172,108 $ 39,446
Management
Company
Value/Contrarian
Portfolio
--------------------------------------------------------------------------------------------------------------
Clipper Focus
Portfolio 4/30/00 $ 851,713 $ 797,126 $ 52,328
--------------------------------------------------------------------------------------------------------------
FMA Small
Company
Portfolio 10/31/99 $1,340,556 $1,029,996 $ 87,089
--------------------------------------------------------------------------------------------------------------
FPA Crescent
Portfolio 3/31/00 $1,202,114 $1,202,114
--------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio II(1) 4/30/00 $ 171,247 $ 171,247
--------------------------------------------------------------------------------------------------------------
Heitman Real
Estate Portfolio 12/31/99 $ 858,702 $ 858,702 $ 86,942
--------------------------------------------------------------------------------------------------------------
ICM Small
Company
Portfolio 10/31/99 $4,391,761 $4,391,761 $251,348
--------------------------------------------------------------------------------------------------------------
IRA Capital
Preservation
Portfolio 10/31/99 $ 410 $ 0 $ 2,472
--------------------------------------------------------------------------------------------------------------
McKee Domestic
Equity Portfolio 10/31/99 $ 302,449 $ 302,449 $ 27,987
--------------------------------------------------------------------------------------------------------------
McKee
International
Equity Portfolio 10/31/99 $1,051,174 $1,051,174 $104,039
--------------------------------------------------------------------------------------------------------------
McKee Small Cap
Equity Portfolio 10/31/99 $ 824,282 $ 824,282 $ 43,277
--------------------------------------------------------------------------------------------------------------
McKee U. S.
Government
Portfolio 10/31/99 $ 104,458 $ 104,458 $ 18,087
--------------------------------------------------------------------------------------------------------------
MJI
International
Equity Portfolio 4/30/00 $ 253,648 $ 205,888 $ 41,178
--------------------------------------------------------------------------------------------------------------
<CAPTION>
Fees Paid to UAM
Shareholder
Services Center, Inc.
Fund Name for Last Fiscal Year
--------------------------------------------------------------------------------------------------------------
<S> <C>
Acadian Emerging
Markets Fund $ 9,649
--------------------------------------------------------------------------------------------------------------
Analytic
Defensive Equity
Fund $28,920
--------------------------------------------------------------------------------------------------------------
Analytic
Enhanced Equity
Fund $12,554
--------------------------------------------------------------------------------------------------------------
Analytic
International
Equity Fund $ 2,647
--------------------------------------------------------------------------------------------------------------
Analytic Master
Fixed Income
Fund $ 6,531
--------------------------------------------------------------------------------------------------------------
Analytic Short-
Term Government
Fund $ 6,102
--------------------------------------------------------------------------------------------------------------
C&B Balanced
Portfolio $ 4,486
--------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio $11,968
--------------------------------------------------------------------------------------------------------------
C&B Equity
Portfolio for
Taxable
Investors $ 8,794
--------------------------------------------------------------------------------------------------------------
C&B Mid Cap
Equity Portfolio $ 8,057
--------------------------------------------------------------------------------------------------------------
Cambiar
Opportunity
Portfolio $ 9,455
--------------------------------------------------------------------------------------------------------------
Chicago Asset $ 8,590
Management
Company
Intermediate
Bond Portfolio
--------------------------------------------------------------------------------------------------------------
Chicago Asset $ 9,252
Management
Company
Value/Contrarian
Portfolio
--------------------------------------------------------------------------------------------------------------
Clipper Focus
Portfolio $20,970
--------------------------------------------------------------------------------------------------------------
FMA Small
Company
Portfolio $80,734
--------------------------------------------------------------------------------------------------------------
FPA Crescent
Portfolio
--------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio II(1)
--------------------------------------------------------------------------------------------------------------
Heitman Real
Estate Portfolio $93,767
--------------------------------------------------------------------------------------------------------------
ICM Small
Company
Portfolio $16,153
--------------------------------------------------------------------------------------------------------------
IRA Capital
Preservation
Portfolio $ 1,454
--------------------------------------------------------------------------------------------------------------
McKee Domestic
Equity Portfolio $13,408
--------------------------------------------------------------------------------------------------------------
McKee
International
Equity Portfolio $14,850
--------------------------------------------------------------------------------------------------------------
McKee Small Cap
Equity Portfolio $13,780
--------------------------------------------------------------------------------------------------------------
McKee U. S.
Government
Portfolio $13,295
--------------------------------------------------------------------------------------------------------------
MJI
International
Equity Portfolio $13,982
--------------------------------------------------------------------------------------------------------------
</TABLE>
G-1
<PAGE>
<TABLE>
<CAPTION>
Fiscal Net Assets Advisory Fees without Administration Fees Paid
Year as of 8/21/00 Expense Limitation Net Advisory Fee to UAM Fund Services, Inc.
Fund Name Ended (Thousands) for Last Fiscal Year for Last Fiscal Year for Last Fiscal Year
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NWQ Special
Equity Portfolio 10/31/99 $ 185,627 $ 80,890 $16,236
---------------------------------------------------------------------------------------------------------------
Pell Rudman Mid-
Cap Growth
Portfolio 4/30/00 $ 113,575 $ 0
---------------------------------------------------------------------------------------------------------------
PIC Twenty
Portfolio 4/30/00 $ 86,370 $ 29,137 $10,578
---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small Cap
Portfolio 10/31/99 $ 344,628 $ 0 $27,603
---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small/Mid Cap
Portfolio 10/31/99 $ 176,486 $ 105,299 $17,445
---------------------------------------------------------------------------------------------------------------
Sirach Bond
Portfolio 10/31/99 $ 243,816 $ 0 $39,507
---------------------------------------------------------------------------------------------------------------
Sirach Equity
Portfolio 10/31/99 $ 294,707 $ 139,131 $27,368
---------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio 10/31/99 $ 571,110 $ 571,110 $47,716
---------------------------------------------------------------------------------------------------------------
Sirach Growth II
Portfolio 4/30/00 $ 203,641 $ 203,641 $64,083
---------------------------------------------------------------------------------------------------------------
Sirach Special
Equity Portfolio 10/31/99 $1,177,517 $1,177,517 $81,073
---------------------------------------------------------------------------------------------------------------
Sirach Strategic
Balanced
Portfolio 10/31/99 $ 508,834 $ 508,834 $58,484
---------------------------------------------------------------------------------------------------------------
Sterling
Partners'
Balanced
Portfolio 10/31/99 $ 558,088 $ 493,540 $56,040
---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Small
Cap Value
Portfolio 10/31/99 $ 411,436 $ 306,848 $25,532
---------------------------------------------------------------------------------------------------------------
TJ Core Equity
Portfolio 4/30/00 $ 265,424 $ 127,887 $31,764
---------------------------------------------------------------------------------------------------------------
TS&W Equity
Portfolio 10/31/99 $ 682,600 $ 682,600 $66,475
---------------------------------------------------------------------------------------------------------------
TS&W Fixed
Income Portfolio 10/31/99 $ 312,298 $ 312,298 $36,892
---------------------------------------------------------------------------------------------------------------
TS&W
International
Equity Portfolio 10/31/99 $1,145,893 $1,145,893 $81,536
---------------------------------------------------------------------------------------------------------------
TS&W
International
Octagon
Portfolio(2) 4/30/00 $ 677,348 $ 677,348 $49,824
---------------------------------------------------------------------------------------------------------------
<CAPTION>
Fees Paid to UAM
Shareholder
Services Center, Inc.
Fund Name for Last Fiscal Year
---------------------------------------------------------------------------------------------------------------
<S> <C>
NWQ Special
Equity Portfolio $11,647
---------------------------------------------------------------------------------------------------------------
Pell Rudman Mid-
Cap Growth
Portfolio $ 9,407
---------------------------------------------------------------------------------------------------------------
PIC Twenty
Portfolio $ 2,840
---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small Cap
Portfolio $16,292
---------------------------------------------------------------------------------------------------------------
Rice, Hall James
Small/Mid Cap
Portfolio $12,701
---------------------------------------------------------------------------------------------------------------
Sirach Bond
Portfolio $12,187
---------------------------------------------------------------------------------------------------------------
Sirach Equity
Portfolio $ 9,576
---------------------------------------------------------------------------------------------------------------
Sirach Growth
Portfolio $14,622
---------------------------------------------------------------------------------------------------------------
Sirach Growth II
Portfolio $10,454
---------------------------------------------------------------------------------------------------------------
Sirach Special
Equity Portfolio $14,767
---------------------------------------------------------------------------------------------------------------
Sirach Strategic
Balanced
Portfolio $11,213
---------------------------------------------------------------------------------------------------------------
Sterling
Partners'
Balanced
Portfolio $11,834
---------------------------------------------------------------------------------------------------------------
Sterling
Partners' Small
Cap Value
Portfolio $15,263
---------------------------------------------------------------------------------------------------------------
TJ Core Equity
Portfolio $15,011
---------------------------------------------------------------------------------------------------------------
TS&W Equity
Portfolio $16,765
---------------------------------------------------------------------------------------------------------------
TS&W Fixed
Income Portfolio $13,939
---------------------------------------------------------------------------------------------------------------
TS&W
International
Equity Portfolio $20,036
---------------------------------------------------------------------------------------------------------------
TS&W
International
Octagon
Portfolio(2) $29,982
---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Investment Advisory fees paid during the most recent fiscal year, were
paid to Hanson Investment Management Company, the Fund's previous
investment Adviser.
(2) Investment Advisory fees paid during the most recent fiscal year, were
paid to Jacobs Asset Management, the Fund's previous investment Adviser.
G-2
<PAGE>
EXHIBIT H--INFORMATION ON BENEFICIAL OWNERSHIP BY SHAREHOLDERS
AS OF AUGUST 14, 2000
INDEX
<TABLE>
<CAPTION>
UAM FUND PAGE H-
-------- -------
<S> <C>
Acadian Emerging Markets Portfolio...................................... 2
Analytic Defensive Equity Fund..........................................
Analytic Enhanced Equity Fund...........................................
Analytic International Fund.............................................
Analytic Master Fixed Income Fund.......................................
Analytic Short-Term Government Fund.....................................
C&B Balanced Portfolio..................................................
C&B Equity Portfolio....................................................
C&B Equity Portfolio for Taxable Investors..............................
C&B Mid Cap Equity Portfolio............................................
Cambiar Opportunity Portfolio...........................................
Chicago Asset Management Company Intermediate Bond Portfolio............
Chicago Asset Management Company Vale/Contrarian Portfolio..............
Clipper Focus Portfolio.................................................
FMA Small Company Portfolio.............................................
FPA Crescent Portfolio..................................................
Heitman Real Estate Portfolio...........................................
ICM Small Company Portfolio.............................................
IRA Capital Preservation Portfolio......................................
McKee Domestic Equity Portfolio.........................................
McKee International Equity Portfolio....................................
McKee Small Cap Equity Portfolio........................................
McKee U. S. Government Portfolio........................................
MJI International Equity Portfolio......................................
NWQ Special Equity Portfolio............................................
Pell Rudman Mid-Cap Growth Portfolio....................................
PIC Twenty Portfolio....................................................
Rice, Hall James Small Cap Portfolio....................................
Rice, Hall James Small/Mid Cap Portfolio................................
Sirach Bond Portfolio...................................................
Sirach Equity Portfolio.................................................
Sirach Growth Portfolio.................................................
Sirach Growth II Portfolio..............................................
Sirach Special Equity Portfolio.........................................
Sirach Strategic Balanced Portfolio.....................................
Sterling Partners' Balanced Portfolio...................................
Sterling Partners' Equity Portfolio.....................................
Sterling Partners' Small Cap Value Portfolio............................
TJ Core Equity Portfolio................................................
TS&W Equity Portfolio...................................................
TS&W Fixed Income Portfolio.............................................
TS&W International Equity Portfolio.....................................
TS&W International Octagon Portfolio....................................
</TABLE>
H-1
<PAGE>
Exhibit H -- Shareholders of the Funds as of August 21, 2000
[pages to follow]
H-2
<PAGE>
Exhibit I -- Outstanding Shares of the Funds as of August 21, 2000
I-1
<PAGE>
UAM Funds
211 Congress Street, 4th Floor
Boston, MA 02110
1-877-826-5465
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
JOINT MEETING OF SHAREHOLDERS TO BE HELD ON OCTOBER 27, 2000
The undersigned hereby appoints Gary L. French, Linda T. Gibson and Martin J.
Wolin and each of them, attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to vote
on behalf of the undersigned all shares of the Fund referenced hereon (the
"Fund"), which the undersigned is entitled to vote at a Joint Meeting of
Shareholders of the Fund to be held at [Place] on October 27, 2000, at [Time]
and any adjournments thereof (the "Meeting"). The undersigned hereby
acknowledges receipt of the Notice of Meeting and Proxy Statement, and hereby
instructs said attorneys and proxies to vote said shares as indicated hereon.
Unless indicated to the contrary, this proxy shall be voted "For" all proposals
relating to the Fund. The proxies are hereby authorized to vote in their
discretion on any matter that may properly come before the meeting or any
adjournment thereof. The undersigned hereby revokes any proxy previously given.
Note: Please sign exactly as your name appears on this
proxy. If joint owners, both should sign this proxy. An
authorized individual should sign corporate or partnership
proxies in full corporate or partnership name. When signing
as attorney, executor, administrator, trustee, guardian, or
corporate officer, please give your full title.
DATE_______________________________, 2000
______________________________________________
______________________________________________
______________________________________________
______________________________________________
Signature(s) and Title(s), If Applicable
THE BOARD, INCLUDING THOSE WHO ARE NOT AFFILIATED WITH THE FUND OR UNITED
ASSET MANAGEMENT CORPORATION, RECOMMENDS A VOTE "FOR" EACH PROPOSAL.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT! PLEASE VOTE, SIGN, DATE
AND PROMPTLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE TODAY!
<PAGE>
This proxy will be voted as specified below with respect to the action to be
taken on the following proposals. In the absence of any specification, this
proxy will be voted IN FAVOR of the proposals. Please mark your vote below in
blue or black ink. Do not use red ink.
1. To elect the trustees/directors.
[ ] For all nominees listed below (except as marked to the contrary below)
[ ] Withhold authority to vote for all nominees listed below
Nominees: John T. Bennett, Jr., Nancy J. Dunn, William A. Humenuk,
Philip D. English and James F. Orr, III
(Instruction: To withhold authority to vote for any individual nominee,
please write his or her name below:)
---------------------------------------------------------------------------
2. To approve the proposed change of the investment objective of each Fund
from fundamental to non-fundamental.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve the proposed changes to the Fund's fundamental investment
restrictions.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To ratify the selection of PricewaterhouseCoopers LLP as the independent
auditors.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. To approve an Interim Investment Advisory Agreement between each Fund and
its investment adviser, substantially as described in the Proxy Statement.
(Advisory fee rates will not change.)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. To approve an Investment Advisory Agreement between each Fund and its
investment adviser, subject to completion of the merger between United
Asset Management Corporation and Old Mutual Plc, substantially as described
in the Proxy Statement. (Advisory fee rates will not change from those
under the current agreement.)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
