<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
THE ACHIEVEMENT FUNDS TRUST
- --------------------------------------------------------------------------------
(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:
1
<PAGE> 2
THE ACHIEVEMENT FUNDS TRUST
IMPORTANT SHAREHOLDER INFORMATION
The document you hold in your hands contains your proxy statement and proxy
card. A proxy card is, in essence, a ballot. When you vote your proxy, it
tells us how to vote on your behalf on important issues relating to your
mutual fund. If you simply sign the proxy card without specifying a vote,
your shares will be voted in accordance with the recommendations of the Board
of Trustees.
We urge you to spend a few minutes with the proxy statement, fill out the
proxy card, and return it to us. Voting your proxy, and doing so promptly,
ensures that the trust will not need to conduct additional mailings. When
shareholders do not return their proxies in sufficient numbers, we have to
incur the expense of follow-up solicitations, which may cost your trust
money.
Please take a few moments to exercise your right to vote. Thank you.
<PAGE> 3
THE ACHIEVEMENT FUNDS TRUST
Dear Shareholder,
The attached proxy statement solicits your vote as a shareholder of
The Achievement Funds Trust on important proposals being recommended by the
Board of Trustees. Even if you are not currently a shareholder of The
Achievement Funds, you are still eligible to vote. Votes are solicited from
shareholders of record as of September 24, 1999.
A Special Meeting of the shareholders of The Achievement Funds has
been scheduled for October 29,1999. While you are, of course, welcome to join us
at the meeting, most shareholders cast their vote by filling out and signing the
proxy card that accompanies the attached proxy statement.
The attached proxy statement is designed to give you further
information relating to the proposals on which you are asked to vote. We
encourage you to support the Trustees' recommendations. The proposals described
in the proxy statement relate to the following matters:
1. First Security Corporation plans to merge with Zions
Bancorporation on or about November 1, 1999. As a result of the merger, we are
asking shareholders of each of the investment portfolios of The Achievement
Funds to vote upon a proposal to approve a new investment advisory agreement
between First Security Investment Management, Inc., an indirect wholly-owned
subsidiary of First Security Corporation, and The Achievement Funds.
2. We are asking the shareholders of the Equity Fund portfolio within
The Achievement Funds to vote upon a proposal to change the investment objective
of the Equity Fund.
3. We are asking all of the shareholders to vote to elect Trustees of
The Achievement Funds Trust.
Your vote is important to us. Please mark, sign, and date the
enclosed proxy card and return it to us as soon as possible. For your
convenience, we have enclosed a self-addressed stamped envelope. If you have
questions about the proposals please call 1-800-472-0577. Thank you for taking
the time to consider these important proposals and for your investment in The
Achievement Funds.
Sincerely,
Robert Nesher
President
The Achievement Funds Trust
October __, 1999
<PAGE> 4
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 29, 1999
To The Shareholders of The Achievement Funds Trust:
Notice is hereby given that a Special Meeting of shareholders of The
Achievement Funds Trust will be held on October 29, 1999, at 3:00 p.m. Eastern
time, at the offices of The Achievement Funds, One Freedom Valley Drive, Oaks,
Pennsylvania 19456, for the following purposes:
1. For the shareholders of each of the investment portfolios of The
Achievement Funds to vote upon a proposal to approve a new
investment advisory agreement between First Security Investment
Management, Inc. and The Achievement Funds;
2. For the shareholders of the Equity Fund portfolio within The
Achievement Funds to vote upon a proposal to change the
investment objective of the Equity Fund;
3. For all of the shareholders to vote to elect Trustees of The
Achievement Funds Trust; and
4. To transact any other business, not currently contemplated, that
may properly come before the meeting, in the discretion of the
proxies or their substitutes.
Shareholders of record at the close of business on September 24, 1999,
are entitled to notice of, and to vote at, the Special Meeting or any
adjournments thereof.
Shareholders are requested to execute and return promptly in the
enclosed postage paid return envelope the accompanying proxy which is being
solicited by the management of The Achievement Funds. This is important for the
purpose of ensuring a quorum at the Special Meeting. Proxies may be revoked at
any time before they are exercised by the subsequent execution and submission of
a revised proxy, by giving written notice of revocation to The Achievement Funds
at any time before the proxy is exercised or by voting in person at the Special
Meeting.
By Order of the Board of Trustees,
Lynda J. Striegel
Secretary
October __, 1999
<PAGE> 5
QUESTIONS AND ANSWERS
ABOUT THE PROXY MATERIALS AND THE SPECIAL MEETING
Shown below is a brief overview of some matters affecting The
Achievement Funds Trust that require a shareholder vote. We encourage you to
read the full text of the enclosed proxy statement and to vote your shares.
Q. What has happened to require a shareholder vote?
A. First Security Corporation plans to merge with Zions Bancorporation in
November, 1999. To ensure that First Security Investment Management,
Inc., an indirect wholly-owned subsidiary of First Security Corporation,
may continue to serve as investment adviser of The Achievement Funds, we
are asking the shareholders of each investment portfolio of The
Achievement Funds to approve a new investment advisory agreement between
First Security Investment Management and The Achievement Funds.
We are also asking the shareholders of the Equity Fund portfolio within
The Achievement Funds to approve a change to the investment objective of
the Equity Fund.
Finally, all shareholders are being asked to vote on the election of
Trustees for the Achievement Funds Trust.
Q. Am I being asked to approve the merger between First Security
Corporation and Zions Bancorporation?
A. No.
Q. Why am I being asked to vote on a new investment advisory agreement?
A. The Investment Company Act of 1940, which regulates investment companies
in the United States such as The Achievement Funds, requires a
shareholder vote to approve a new investment advisory agreement
following certain types of business combinations involving investment
advisers or their parent corporations. The new investment advisory
agreement will become effective for an investment portfolio immediately
upon consummation of the merger if it is approved by the shareholders of
that portfolio.
Q. How does the merger affect my portfolio?
A. Your portfolio within The Achievement Funds and its respective
investment objectives and policies will not change as a result of the
merger. We are, however, asking the shareholders of the Equity Fund to
approve a change to the investment objective of the Equity Fund. That
matter is discussed elsewhere in this proxy statement. You still own the
same shares in the same portfolio as you did prior to the merger. The
new investment advisory agreement contains substantially the same terms
and conditions as the investment advisory agreement in effect prior to
the merger, except for the dates of execution and termination. If
shareholders do not approve the new investment advisory agreement, the
existing investment advisory
2
<PAGE> 6
agreement might automatically terminate and the Board of Trustees will
take such action as they deem to be in the best interests of The
Achievement Funds.
Q. Will the investment advisory fees remain the same under the new
investment advisory agreement?
A. Yes.
Q. Why are the shareholders of the Equity Fund being asked to vote on a
change to the investment objective of the Equity Fund?
A. The investment objective of the Equity Fund currently is long-term
capital appreciation with current income as a secondary consideration in
selecting securities. The investment adviser has recommended that the
investment objective be changed to long-term capital appreciation. The
investment adviser believes that the changes in investment objective
will provide greater flexibility in selecting securities for purchase by
the Equity Fund.
Q. What action is to be taken concerning the Trustees?
A. In connection with the Special Meeting all shareholders are being asked
to vote on the election of Trustees for The Achievement Funds Trust. All
of the candidates currently serve as Trustees and have agreed to
continue to serve if elected by shareholders.
Q. How does the Board of Trustees of The Achievement Funds recommend that I
vote?
A. After careful consideration, the Board of Trustees recommends that the
shareholders of each investment portfolio of The Achievement Funds vote
in favor of the new investment advisory agreement and that the
shareholders of the Equity Fund vote in favor of the change to the
investment objective of the Equity Fund. The Board of Trustees also
recommends that all of the shareholders vote for the election of the
nominees for Trustee.
Q. Whom do I call for more information?
A. If you need more information, please call The Achievement Funds at
1-800-472-0577.
Q. How can I vote my shares?
A. You may choose from one of the following options to vote your shares:
- By mail, with the enclosed proxy card and return envelope.
- In person at the shareholder meeting (see details in the proxy
statement).
Q. Will my portfolio pay for the proxy solicitation and legal costs
associated with the Special Meeting?
A. First Security Investment Management will bear the costs associated with
the proposal to approve a new investment advisory agreement. The
Achievement Funds will bear a portion of
3
<PAGE> 7
the costs of the Special Meeting associated with the election of
Trustees and the Equity Fund will bear a portion of the costs associated
with the proposal to change the investment objective of the Equity Fund.
Q. What if I am not a shareholder of the Equity Fund?
A. Each shareholder of The Achievement Funds will receive one proxy card
for each investment portfolio that the shareholder owns on which to vote
on the proposals that apply to the shareholder. If you do not own shares
of the Equity Fund, your proxy card will not include the proposal to
change the investment objective of the Equity Fund.
Please vote on all issues that apply to you on the enclosed proxy card.
Thank you for mailing your proxy card(s) promptly.
4
<PAGE> 8
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 29, 1999
INTRODUCTION
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of The Achievement Funds Trust, a Massachusetts
business trust, for use at the Special Meeting of shareholders of The
Achievement Funds to be held on October 29, 1999 and at any adjourned session
thereof. Even though you sign and return the accompanying proxy, you may revoke
it by giving written notice of such revocation to the Secretary of The
Achievement Funds prior to the meeting or by delivering a subsequently dated
proxy or by attending and voting at the meeting in person.
The Achievement Funds expects to solicit proxies principally by mail,
but The Achievement Funds may also solicit proxies by telephone or personal
interview. This proxy statement was first mailed to shareholders on or about
October __, 1999.
The Board of Trustees has fixed the close of business on September 24,
1999, as the record date for the determination of the shareholders entitled to
notice of, and to vote at, the meeting. As of that date, there were
_______________________ outstanding shares of common stock of The Achievement
Funds, with each share being entitled to one vote on each matter to come
properly before the meeting for all of the shareholders of The Achievement
Funds. As of that date, the following number of shares of each investment
portfolio of The Achievement Funds were outstanding, with each share being
entitled to one vote on each matter to come properly before the meeting:
<TABLE>
<CAPTION>
Investment Portfolio Shares
- -------------------- ------
<S> <C>
Equity Fund
Balanced Fund
Intermediate Term Bond Fund
Short Term Bond Fund
Municipal Bond Fund
Idaho Municipal Bond Fund
</TABLE>
5
<PAGE> 9
All of the shareholders of The Achievement Funds will vote on the proposal to
elect Trustees. The shareholders of each investment portfolio of The Achievement
Funds will vote separately to approve the new investment advisory agreement. The
shareholders of the Equity Fund will vote separately on the proposal to approve
a change to the investment objective of the Equity Fund.
Unless specific instructions are given to the contrary, the persons
named in the accompanying proxy will vote the number of shares represented
thereby as directed by the proxy or, in the absence of such direction, FOR the
approval of the new investment advisory agreement, FOR the election of Trustees
and FOR the approval of the change to the investment objective of the Equity
Fund.
A majority of the shares of The Achievement Funds entitled to vote
present in person or represented by proxy constitutes a quorum for the
transaction of business at the meeting relating to all of the shareholders of
The Achievement Funds. On proposals for which shareholders of an investment
portfolio vote separately, a majority of the shares of the portfolio entitled to
vote at the meeting present in person or represented by proxy constitutes a
quorum of that portfolio. Assuming a quorum is present at the meeting for the
matters to be voted upon, the affirmative vote of a plurality of all votes cast
at the meeting is required to elect Trustees. The affirmative vote of 67 percent
of the shares of each investment portfolio present at the Special Meeting if a
quorum is present, or a vote of more than 50 percent of the outstanding shares
of the investment portfolio, whichever is less, is required to approve the new
investment advisory agreement and a similar vote by the shareholders of the
Equity Fund is required to approve the change to the investment objective of the
Equity Fund. Abstentions and broker non-votes will be counted as shares present
at the meeting for quorum purposes, but will not be counted as votes cast and
will have no effect on the results of the vote for the election of Trustees but
will be treated as votes against approval of the investment advisory agreement
and change in the investment objective of the Equity Fund.
If a quorum is not present by the time scheduled for the meeting for a
matter to be voted upon, or if a quorum is present but sufficient votes in favor
of any of the proposals described in this proxy statement are not received, the
persons named as proxies may propose one or more adjournments of the meeting to
permit further solicitations of proxies. Any such adjournment will require the
affirmative vote of a majority of the shares required to vote on a proposal
present in person or by proxy at the session of the meeting to be adjourned. The
persons named as proxies will vote in favor of any such adjournment those
proxies which instruct them to vote in favor of any of the proposals to be
considered at the adjourned meeting and will vote against any such adjournment
those proxies which instruct them to vote against or to abstain from voting on
all of the proposals to be considered at the adjourned meeting.
The following table summarizes each proposal to be presented at the
meeting and the investment portfolios to be solicited pursuant to this proxy
statement with respect to such proposal:
<TABLE>
<CAPTION>
PROPOSAL AFFECTED PORTFOLIOS
<S> <C>
1. Approval of new investment advisory agreement All portfolios
2. Approval of a change to the investment
objective of the Equity Fund Equity Fund
3. Election of Trustees All portfolios
</TABLE>
6
<PAGE> 10
The most recent annual report for The Achievement Funds and its
unaudited semi-annual report for the six-month period ended July 31, 1999 are
available at no cost to The Achievement Funds shareholders, upon written or oral
request by contacting The Achievement Funds at One Freedom Valley Drive, Oaks,
Pennsylvania 19456, or by calling 1-800-472-0577.
7
<PAGE> 11
PROPOSAL 1: NEW INVESTMENT ADVISORY AGREEMENT BETWEEN THE ACHIEVEMENT FUNDS
AND FIRST SECURITY INVESTMENT MANAGEMENT.
Shareholders of The Achievement Funds are being asked to approve a new
investment advisory agreement between First Security Investment Management and
The Achievement Funds that has no material changes in its terms and conditions,
no changes in fees, and no material changes in the way The Achievement Funds are
managed, advised or operated. You should note that the same personnel who are
currently making the portfolio management determinations for the all of the
portfolios within The Achievement Funds will continue to make such
determinations upon the implementation of the new investment advisory agreement.
BACKGROUND OF PROPOSAL 1
Currently, First Security Investment Management, Inc. acts as the
investment adviser to The Achievement Funds under an investment advisory
agreement dated as of February 1, 1989 and amendments to the investment advisory
agreement dated as of December 27, 1994 and November 1, 1996. The existing
investment advisory agreement is attached to this proxy statement as Annex A.
The existing investment advisory agreement was approved by the initial
shareholders of each investment portfolio of The Achievement Funds.
First Security Investment Management is a wholly-owned subsidiary of
First Security Investment Services, Inc., which is a wholly-owned subsidiary of
First Security Corporation. First Security Corporation plans to merge with Zions
Bancorporation. Pursuant to an Agreement and Plan of Merger dated as of June 6,
1999, between Zions and First Security Corporation, Zions will merge with and
into First Security Corporation, with First Security Corporation being the
surviving corporation. After the merger, former shareholders of Zions will hold
approximately 49% of the voting securities of the surviving corporation and the
former shareholders of First Security Corporation will hold 51% of the voting
securities of the surviving corporation. The surviving corporation will retain
the First Security Corporation name and will be headquartered in Salt Lake City,
Utah. The merger is expected to be completed in November, 1999.
Section 15(a) of the Investment Company Act of 1940 provides, in
pertinent part, that "[i]t shall be unlawful for any person to serve or act as
investment adviser of a registered investment company, except pursuant to a
written contract, which contract, whether with such registered company or with
an investment adviser of such registered company, has been approved by the vote
of a majority of the outstanding voting securities of such registered company .
. . ." Section 15(a)(4) of the Investment Company Act further requires that such
written contract provide for automatic termination in the event of its
assignment. The existing investment advisory agreement for The Achievement Funds
contains such a provision. Section 2(a)(4) of the Investment Company Act defines
"assignment" to include any direct or indirect transfer of a contract by the
assignor, or the transfer of a controlling block of the voting securities of an
investment adviser. While it may be argued otherwise, consummation of the merger
may result in an "assignment" of the existing advisory agreement between First
Security Investment Management and The Achievement Funds within the meaning of
the Investment Company Act, terminating the agreement according to its terms as
of the date of the merger.
8
<PAGE> 12
If the conditions to the merger are not met or waived or if the merger
agreement between First Security Corporation and Zions is terminated, the merger
will not be consummated, and the existing investment advisory agreement between
The Achievement Funds and First Security Investment Management will remain in
effect. If the new investment advisory agreement is approved and the merger is
thereafter consummated, the new investment advisory agreement will be executed
and become effective on the closing date of the merger. In the event that the
new investment advisory agreement is not approved, or is approved by
shareholders of some investment portfolios but not others, and the merger is
consummated, the Board of Trustees of The Achievement Funds will determine what
action to take, in any event subject to the approval of affected shareholders of
The Achievement Funds as required by law.
SHAREHOLDER APPROVAL OF THE NEW INVESTMENT ADVISORY AGREEMENT
At the meeting, shareholders of The Achievement Funds will vote on a
proposal to approve or disapprove a new investment advisory agreement between
The Achievement Funds and First Security Investment Management, pursuant to
which First Security Investment Management will serve as the investment adviser
of The Achievement Funds. The new investment advisory agreement is attached to
this proxy statement as Annex B. The new investment advisory agreement was
approved by the Board of Trustees of The Achievement Funds, including all
Trustees who are not interested persons of The Achievement Fund or First
Security Investment Management, as that term is defined in the Investment
Company Act, at a meeting held on September 24, 1999. The new investment
advisory agreement must be approved by the shareholders of each investment
portfolio of The Achievement Funds before the new agreement may be implemented
for that portfolio on the effective date of the merger between First Security
Corporation and Zions.
The shareholders of The Achievement Funds are not being asked to approve
or disapprove the merger or the merger agreement between First Security
Corporation and Zions.
EVALUATION BY THE TRUSTEES
Representatives of First Security Corporation attended the regular
quarterly meeting of the Board of Trustees held on August 5, 1999, and made a
presentation to the Trustees on the proposed merger with Zions. The structure of
the transaction was described in general terms. First Security Corporation
indicated that the merger was not expected to have a material impact on First
Security Investment Management or its operations. The Trustees directed
management to review the proposed merger with counsel to determine what effect
the merger might have on The Achievement Funds.
A special telephonic meeting of the Board of Trustees was held on
September 2, 1999, to consider the question of whether the merger of First
Security and Zions could be deemed to effect an assignment of the existing
investment advisory agreement so as to cause its termination. At that meeting,
counsel reviewed with the Trustees the structure of the merger transaction and
relevant pronouncements by the Securities and Exchange Commission. Counsel
concluded that although there was support for a conclusion that the merger would
not result in a termination of the existing investment advisory agreement,
arguments to the contrary could be asserted in litigation brought by
shareholders. First Security Investment Management recommended that shareholder
approval of a new investment advisory be sought to assure that there would be no
disruption in the advisory services
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<PAGE> 13
provided to The Achievement Funds. First Security Investment Management agreed
that it would reimburse The Achievement Funds for costs incurred in connection
with obtaining shareholder approval of a new investment advisory agreement. The
Board of Trustees determined that it would be in the best interests of the
shareholders of The Achievement Funds to convene a special meeting of
shareholders to obtain approval of a new investment advisory agreement.
At an in person meeting held on September 24, 1999, the Board of
Trustees considered the new investment advisory agreement. Counsel to The
Achievement Funds requested from First Security Investment Management, and First
Security Investment Management provided to the Trustees, information necessary
to enable the Trustees to evaluate the new investment advisory agreement. The
Trustees noted that there are no material differences between the terms of the
new investment advisory agreement and the existing investment advisory
agreement. There will be no change in the fees paid by The Achievement Funds to
First Security Investment Management. The Trustees considered information
comparing those fees to fees paid for investment advisory service by other
mutual funds having investment objectives and an asset size similar to those of
The Achievement Funds.
The Trustees also considered the past performance of The Achievement
Funds and the investment advisory services provided by First Security Investment
Management. Information was provided to the Trustees concerning the educational
and professional background of the individuals who provide investment advisory
services to The Achievement Funds. First Security Investment Management reported
to the Trustees that the merger with Zions is not expected to result in any
changes in the personnel providing advisory services to The Achievement Funds.
Based upon the foregoing, the Board of Trustees, including the Trustees
having no financial interest in the investment adviser or the new investment
advisory agreement, unanimously approved the new investment advisory agreement.
INFORMATION CONCERNING THE EXISTING AND NEW INVESTMENT ADVISORY AGREEMENTS
First Security Investment Management's advisory experience includes the
management of various collective and common investment funds and the provision
of investment management services to banks and thrift institutions, corporate
and profit-sharing trusts, Taft-Hartley organizations, municipal and state
retirement funds, charitable foundations, endowments and individual investors
throughout the United States. As of January 31, 1999, First Security Investment
Management had approximately $5 billion in assets under management. First
Security Investment Management is an indirect wholly-owned subsidiary of First
Security Corporation, a financial services organization and registered bank
holding company. The headquarters of First Security Investment Management, First
Security Investment Services and First Security Corporation are at 61 South Main
Street, Salt Lake City, Utah 84111.
Although the exiting investment advisory agreement has not terminated
and the new investment advisory agreement has not become effective, they are
described below as if they were both in effect. That description is only a
summary and is qualified by reference to the attached Annexes A and B. There are
no material differences between the provisions of the existing investment
advisory agreement and the new investment advisory agreement.
10
<PAGE> 14
Under the investment advisory agreements, First Security Investment
Management will, subject to the supervision of the Board of Trustees, provide a
continuous investment program for The Achievement Funds investment portfolios,
including investment research and management with respect to all securities and
investments and cash equivalents in the investment portfolios. First Security
Investment Management will determine from time to time what securities and other
investments will be purchased, retained or sold by The Achievement Funds
portfolios. The investment advisory agreements provide that First Security
Investment Management, as the adviser of The Achievement Funds, shall not be
protected against any liability to The Achievement Funds or its shareholders by
reason of a breach of fiduciary duty willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations or duties thereunder.
The continuance of the investment advisory agreements must be
specifically approved at least annually (i) by the vote of the Board of Trustees
of The Achievement Funds or by vote of a majority of the outstanding voting
securities of each portfolio, and (ii) by the vote of a majority of the Board of
Trustees who are not parties to the agreements or "interested persons" of any
party thereto, cast in person at a meeting called for the purpose of voting on
such approval. The investment advisory agreements will terminate automatically
in the event of their assignment, and are terminable at any time without penalty
by the Board of Trustees or, with respect to a portfolio by a majority of the
outstanding shares of that portfolio, on not less than 30 days nor more than 60
days written notice to the adviser, or by the adviser on 90 days written notice
to The Achievement Funds.
For the fiscal years ended January 31, 1999, January 31, 1998, and
January 31, 1997 the portfolios paid the adviser the following fees:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Equity Fund $1,371,071 $1,240,547 $933,172
Balanced Fund 1,103,136 1,039,727 853,068
Intermediate Term Bond Fund 725,043 708,954 499,628
Short Term Bond Fund 158,011 227,276 276,620
Municipal Bond Fund 291,720 201,286 38,264
Idaho Municipal Bond Fund 127,298 106,646 76,325
</TABLE>
The advisory fees paid by the portfolios for periods indicated were
allocated between the Institutional, Class A and Class B classes of shares based
upon the total assets of the respective classes.
Under the investment advisory agreements, the adviser is entitled to
receive a fee for the services it provides, which is calculated daily and paid
monthly, at an annual rate of 0.74% of the average daily net assets of the
Equity Fund and the Balanced Fund, and at an annual rate of 0.60% of the average
daily net assets of the Intermediate Term Bond Fund, the Short Term Bond Fund,
the Municipal Bond Fund, and the Idaho Municipal Bond Fund. The adviser has
voluntarily waived a portion of its fee for the current fiscal year of The
Achievement Fund so that total operating expenses for the Equity Fund and the
Balanced Fund (excluding 12b-1 fees) will not exceed 0.90%, and the total
operating expenses for the Intermediate Term Bond Fund, the Short Term Bond
Fund, the Municipal
11
<PAGE> 15
Bond Fund, and the Idaho Municipal Bond Fund (excluding 12b-1 fees) will not
exceed 0.75%. The adviser may revoke its fee waivers at any time at its sole
discretion without notice to any current or prospective shareholder. For the
fiscal year ended January 31, 1999, the adviser received advisory fees in
amounts equal to the following annual percentage rates applied to the average
daily net assets of the portfolios indicated:
- 0.58% for the Equity Fund;
- 0.59% for the Balanced Fund;
- 0.44% for the Intermediate Term Bond Fund;
- 0.34% for the Short Term Bond Fund;
- 0.40% for the Municipal Bond Fund; and
- 0.34% for the Idaho Municipal Bond Fund.
For the fiscal years ended January 31, 1999, January 31, 1998 and
January 31, 1997, the adviser waived advisory fees for each portfolio as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Equity Fund $371,735 $198,551 $280,554
Balanced Fund 282,755 212,761 262,295
Intermediate Term Bond Fund 272,430 179,395 244,008
Short Term Bond Fund 117,254 115,375 150,021
Municipal Bond Fund 141,103 204,756 43,574
Idaho Municipal Bond Fund 95,170 100,062 102,410
</TABLE>
First Security Investment Management may, when consistent with the
interests of The Achievement Funds, select brokers to effect securities
transactions for The Achievement Funds on the basis of research services
provided to First Security Investment Management. Those services may include
analysis of the business or prospects of a company, industry or economic sector,
or statistical or pricing services. Research services furnished by brokers
through whom The Achievement Funds effect securities transactions may be used by
First Security Investment Management in the servicing of its other accounts.
12
<PAGE> 16
DIRECTORS AND EXECUTIVE OFFICERS OF FIRST SECURITY INVESTMENT MANAGEMENT
The following table shows the name of each principal executive officer
and director of First Security Investment Management and their principal
occupations.
<TABLE>
<CAPTION>
Position Held Principal Occupation or Principal Occupation
With The or Other Employment of a Substantial
Name and Address Adviser Nature During the Past Two Years
---------------- ------- --------------------------------
<S> <C> <C>
Sterling K. Jenson President and CEO President and CEO.
A. Robert Thorup Secretary Shareholder & Director, Ray, Quinney &
Nebeker, P.C. (law firm);
Secretary and General Counsel,
First Security Investment
Services (retail securities
brokerage); President, ICHA
Management Corporation (hotel
ownership and management);
General Partner, Ken Rey
Associates, Ltd. (private
investment partnership);
Secretary and Trustee, East High
School Foundation; Vice
President and Director, Toma
Corporation (real property
development); Director, Utah
Medical Association Financial
Insurance Services, Inc.
(non-profit service company).
Curtis J. Anderson Senior Vice President Senior Portfolio Manager.
Mark L. Anderson Senior Vice President Senior Portfolio Manager.
John B. Tousley Vice President Senior Portfolio Manager.
</TABLE>
INFORMATION CONCERNING COMMISSIONS PAID TO AFFILIATED BROKERS
For the fiscal year ended January 31, 1999, the following portfolios
paid brokerage commissions to Pershing, a broker affiliated with the
administrator and distributor of The Achievement Funds:
<TABLE>
<CAPTION>
Brokerage
Commission
----------
<S> <C>
Equity Fund $29,296
Balanced Fund 14,107
</TABLE>
For the fiscal year ended January 31, 1999, 6.5% of the brokerage
commissions paid by the Equity Fund, and 5.8% of the brokerage commissions paid
by the Balanced Fund, were paid to the affiliated broker.
13
<PAGE> 17
RECOMMENDATION OF THE TRUSTEES
The Board of Trustees recommends that you vote FOR the approval of the
new investment advisory agreement.
14
<PAGE> 18
PROPOSAL 2: CHANGE TO THE INVESTMENT OBJECTIVE OF THE EQUITY FUND.
The Board of Trustees of The Achievement Funds proposes to change the
investment objective of the Equity Fund. This proposal does not apply to any
other portfolio within The Achievement Funds.
The Equity Fund's current investment objective is long-term capital
appreciation with current income as a secondary consideration in selecting
securities. At a Special Meeting of the Board of Trustees held on September 24,
1999, First Security Investment Management recommended that the investment
objective of the Equity Fund be changed to that of seeking long-term capital
appreciation.
First Security Investment Management believes that the proposed change
in investment objective will provide greater flexibility in managing the
investment portfolio of the Equity Fund. Under the current investment objective,
First Security Investment Management must consider current income when selecting
stocks for purchase by the Equity Fund. Dividend paying stocks have recently
been out of favor in the market, and consideration of current income as a
secondary factor in selecting stocks may have negatively impacted the Equity
Fund's performance. Investors who are looking for current income as well as
capital appreciation may make an investment in the Balanced Fund portfolio of
The Achievement Funds. If the change in investment objective is approved, First
Security Investment Management will continue to apply its investment approach
referred to as "Growth at Price," which emphasizes investments in securities of
companies that are experiencing growth in earnings and whose securities appear
attractively priced. A wider range of securities will be available for purchase
by the Equity Fund if the additional consideration of payment of current income
is no longer required.
After considering First Security Investment Management's
recommendations, the Board of Trustees determined that the change in the
investment objective of the Equity Fund to long-term capital appreciation would
serve the best interests of the shareholders of the Equity Fund.
The change in the investment objective of the Equity Fund would become
effective upon approval by shareholders of the Equity Fund at the Special
Meeting. The change in the investment objective of the Equity Fund is not
related to the approval of the new investment advisory agreement described in
Proposal 1.
RECOMMENDATION OF TRUSTEES
The Board of Trustees recommends that the shareholders of the Equity
Fund vote FOR the proposal to change the investment objective of the Equity
Fund.
15
<PAGE> 19
PROPOSAL 3: ELECTION OF TRUSTEES.
In connection with the Special Meeting, all shareholders are being asked
to vote on the election of nine Trustees for The Achievement Funds Trust. All of
the candidates currently serve as Trustees and have agreed to continue to serve
if elected by shareholders.
Under the terms of The Achievement Funds's Master Trust Agreement dated
December 16, 1988, which was amended and restated on October 7, 1994 and was
further amended on December 1, 1994 (the "Master Trust Agreement"), each Trustee
who is elected at the meeting will serve during the lifetime of The Achievement
Funds or until the Trustee sooner dies, resigns or is removed. If any of the
nominees is unable to serve for any reason, the persons named as proxies will
vote for such other nominee or nominees as the Trustees who are not "interested
persons" of The Achievement Funds, as defined in the Investment Company Act, may
recommend. It is the intention of the persons named in the enclosed form of
proxy, unless otherwise directed by shareholders executing proxies, to vote all
proxies FOR the election of the nine nominees listed below.
Under Massachusetts law, and the Investment Company Act, The Achievement
Funds is not required to hold an annual meeting of shareholders. The Achievement
Funds does not hold annual shareholder meetings so as to achieve cost savings by
eliminating printing costs, mailing charges and other expenses involved in
routine annual meetings. Since The Achievement Funds must hold the Special
Meeting at this time for the approval of the new investment advisory agreement
described in Proposal 1, the Board of Trustees believes it is appropriate for
you to have the opportunity to elect the Trustees of The Achievement Funds at
this time.
INFORMATION REGARDING NOMINEES
The following schedule sets forth certain information concerning each of
the nominees.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION SHARES OF TRUST
NAME AND POSITION WITH AND AFFILIATIONS BENEFICIALLY OWNED
THE ACHIEVEMENT FUNDS AGE DURING THE PAST FIVE YEARS AS OF SEPTEMBER __, 1999
---------------------- --- -------------------------- ------------------------
<S> <C> <C>
James H. Gardner 52 Professor, University of Utah,
Trustee (retired 1996). Director, Steiner
Corp. (industrial services). Adviser,
American Stores (retail).
Blaine Huntsman 63 Principal, Teton Creek Management
Trustee Co. (consulting) 1995 - present.
Chairman & CEO, Olympus Capital
Corp. (bankholding company) 1988 -
1995. Director, Zions Cooperative
Mercantile Institution (retail stores).
Kent H. Murdock 52 President & CEO, O.C. Tanner
Trustee Company 1991 - present (corporate
recognition awards).
</TABLE>
16
<PAGE> 20
<TABLE>
<S> <C> <C>
John L. Rudisill* 43 Senior Vice President and Manager,
Trustee; Executive First Security Corporation (bank
Vice President holding company) 1994 - present.
Executive Vice President, First
National Bank in Albuquerque - 1990
to 1994.
Frederick A. Moreton, Jr.* 59 Vice President, PaineWebber,
Trustee and Incorporated
Chairman
Robert G. Love 75 Consultant, Harris & Love
Trustee Advertising (retired 1998)
August Glissmeyer, Jr. 73 Retired
Trustee
Carl S. Minden 76 Retired
Trustee
George L. Denton, Jr.*
Trustee 79 Retired
</TABLE>
- ------------------------
* Interested person of The Achievement Funds
BOARD APPROVAL OF THE ELECTION OF TRUSTEES
The Board of Trustees evaluated candidates for nomination at an
in-person meeting on September 24, 1999 and nominated and recommended the
nominees on that date, including those Trustees who are not interested persons
of The Achievement Funds. Under the terms of The Achievement Funds's
Distribution Plan for its Retail Class shares, the selection and nomination of
Trustees who are not interested persons of The Achievement Funds is committed to
the discretion of the Trustees then in office who are not interested persons of
The Achievement Funds.
SHAREHOLDER APPROVAL OF THE ELECTION OF TRUSTEES
The favorable vote of a plurality of shares represented at the meeting
at which a majority of shareholders entitled to vote is present is required for
the election of Trustees. If the nominees are not approved by the shareholders
of The Achievement Funds, the current Board of Trustees will consider
alternative nominations.
RECOMMENDATION OF TRUSTEES
The Board of Trustees recommends that you vote FOR the election of all
nine of the nominees for Trustees for The Achievement Funds Trust.
17
<PAGE> 21
GENERAL INFORMATION
THE ADVISER AND ITS AFFILIATES
First Security Investment Management, Inc., 61 South Main Street, Salt
Lake City, UT 84111, an indirect wholly-owned subsidiary of First Security
Corporation, as previously discussed, serves as the investment adviser to The
Achievement Funds pursuant to an investment advisory agreement with The
Achievement Funds.
DISTRIBUTOR
SEI Investments Distribution Co., One Freedom Valley Drive, Oaks,
Pennsylvania 19456, a wholly-owned subsidiary of SEI Investments Company, acts
as the distributor of the shares of The Achievement Funds pursuant to a
distribution agreement with The Achievement Funds.
ADMINISTRATOR
SEI Investments Mutual Funds Services, One Freedom Valley Drive, Oaks,
Pennsylvania 19456, acts as the administrator for The Achievement Funds,
providing administrative services, accounting services, regulatory reporting and
all necessary office space, equipment, personnel and facilities, pursuant to an
administration agreement with The Achievement Funds. SEI Investments Mutual
Funds Services is a wholly-owned subsidiary of SEI Investments Management
Corporation, which is a wholly-owned subsidiary of SEI Investments Company.
BENEFICIAL OWNERS
Equity Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional, Class A
and Class B shares of the Equity Fund as of September __, 1999, and the amount
of the outstanding shares held of record by such holders are set forth below.
The Achievement Funds have no knowledge of whether all or any portion of the
shares owned are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 72.26% 0%
Trust Groups - Cash Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
</TABLE>
18
<PAGE> 22
<TABLE>
<S> <C> <C>
First Security Corporation 16.81% 0%
Trust Groups - Reinvest Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
First Security Bank N.A. TR 10.92% 0%
For the First Security Incentive
Savings Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
RETAIL CLASS A SHARES
- ---------------------
BHC Securities Inc. 72.64% 0%
Trade House Acct.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
</TABLE>
19
<PAGE> 23
<TABLE>
RETAIL CLASS B SHARES
- ---------------------
<S> <C> <C>
BHC Securities Inc. 8.07% 0%
FAO 18915437
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19105-7084
BHC Securities Inc.
FAO 18259458
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084 5.50% 0%
</TABLE>
Balanced Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional, Class A
and Class B shares of the Balanced Fund as of September __, 1999, and the amount
of the outstanding shares held of record and beneficially owned by such holders
are set forth below. The Achievement Funds have no knowledge of whether all or
any portion of the shares owned of record are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 69.25% 0%
Trust Groups-Reinvest Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
First Security Bank N.A. TR 30.48% 0%
For the First Security Incentive
Savings Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
</TABLE>
20
<PAGE> 24
<TABLE>
<CAPTION>
RETAIL CLASS A SHARES
- ---------------------
<S> <C> <C>
BHC Securities Inc. 82.53% 0%
Trade House Acct.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
RETAIL CLASS B SHARES
BHC Securities Inc.
FAO 15844317
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084 5.71% 0%
</TABLE>
Intermediate Term Bond Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional and
Class A shares of the Intermediate Term Bond Fund as of September __, 1999, and
the amount of the outstanding shares held of record by such holders are set
forth below. The Achievement Funds have no knowledge of whether all or any
portion of the shares owned of record are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 85.64% 0%
Trust Groups-Cash Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
First Security Corporation 14.36% 0%
Trust Groups - Reinvest Account
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
</TABLE>
21
<PAGE> 25
<TABLE>
<CAPTION>
RETAIL CLASS A SHARES
<S> <C> <C>
BHC Securities Inc. 77.44% 0%
Trade House Acct.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
Marcella Dupler Henkels
7540 NE Pettibone Drive
Corvallis, OR 97330-9641 7.89% 0%
</TABLE>
Short Term Bond Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional and
Class A shares of Short Term as of September __, 1999, and the amount of the
outstanding shares held of record by such holders are set forth below. The
Achievement Funds have no knowledge of whether all or any portion of the shares
owned of record are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 41.05% 0%
Trust Groups-Cash Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
First Security Corporation 31.28% 0%
Trust Groups-Reinvest Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
First Security Bank N.A. TR 27.67% 0%
For the First Security Incentive
Savings Plan
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
</TABLE>
22
<PAGE> 26
<TABLE>
<CAPTION>
RETAIL CLASS A SHARES
<S> <C> <C>
BHC Securities Inc. 32.74% 0%
Trade House Acct.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
Keith W. Slater & Gwen S. Rhodes 20.75% 0%
& Myrl L. Slater TR
U/A 01/12/1981
Nevada W. Slater Trust
4554 S. 2350 W.
Roy, UT 84067-1964
Honey J. Larson 22.42% 0%
1798 Millbrook Road
Salt Lake City, UT 84106-3227
Marilee A. Kohtz
3614 Wilson Lane
Nampa, ID 83686-8665 18.86% 0%
</TABLE>
Municipal Bond Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional, Class A
and Class B shares of the Municipal Bond Fund as of September __, 1999, and the
amount of the outstanding shares held of record by such holders are set forth
below. The Achievement Funds have no knowledge of whether all or any portion of
the shares owned of record are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 97.41% 0%
Trust Groups-Cash Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
</TABLE>
23
<PAGE> 27
<TABLE>
<CAPTION>
RETAIL CLASS A SHARES
<S> <C> <C>
BHC Securities Inc. 99.16% 0%
Trade House Acct.
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
RETAIL CLASS B SHARES
BHC Securities Inc. 32.70% 0%
FAO 18421643
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
BHC Securities Inc. 7.86% 0%
FAO 18279885
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
BHC Securities Inc. 10.10% 0%
FAO 18117949
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
BHC Securities Inc. 7.36% 0%
FAO 18429314
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
BHC Securities Inc.
FAO 18264365
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084 6.50% 0%
</TABLE>
24
<PAGE> 28
Idaho Municipal Bond Fund
To the best of the knowledge of The Achievement Funds, the names and
addresses of the holders of 5% or more of the outstanding Institutional, Class A
and Class B shares of the Idaho Municipal Bond Fund as of September __, 1999,
and the amount of the outstanding shares held of record by such holders are set
forth below. The Achievement Funds have no knowledge of whether all or any
portion of the shares owed of record are also owned beneficially.
<TABLE>
<CAPTION>
PERCENT PERCENT OWNED
NAME AND ADDRESS OWNED OF OF RECORD AND
OF RECORD OWNER RECORD ONLY BENEFICIALLY
- --------------- ----------- ------------
INSTITUTIONAL CLASS SHARES
<S> <C> <C>
First Security Corporation 97.70% 0%
Trust Groups-Cash Account
First Security Bank of Utah N.A.
Trust Securities Admin. Dept.
P.O. Box 25297
Salt Lake City, UT 84125-0297
RETAIL CLASS A SHARES
BHC Securities Inc. 91.80% 0%
Trade House Acct.
Attn: Mutual Funds
One Commerce Square
2005 Market Street
Philadelphia, PA 19103-7042
RETAIL CLASS B SHARES
BHC Securities Inc. 19.07% 0%
FAO 18432161
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
BHC Securities Inc. 5.86% 0%
FBO 18042685
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7042
BHC Securities Inc. 10.39% 0%
FAO 18209519
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084
</TABLE>
25
<PAGE> 29
<TABLE>
<S> <C> <C>
BHC Securities Inc.
FAO 18513647
One Commerce Square
2005 Market Street, Suite 1200
Philadelphia, PA 19103-7084 9.50% 0%
</TABLE>
SHAREHOLDER PROPOSALS
As a Massachusetts business trust, The Achievement Funds Trust is not
required to hold annual shareholder meetings. Any shareholder who wishes to
submit proposals for consideration at a shareholders' meeting should send such
proposal to The Achievement Funds at the address set forth on the first page of
this proxy statement. To be considered for presentation at a shareholders'
meeting, proposals must be received a reasonable time before a solicitation is
made and must comply with applicable law.
OTHER MATTERS
The Board of Trustees do not know of any matters to be presented at the
meeting other than those set forth in this proxy statement. If any other
business should come before the meeting, the persons named in the accompanying
proxy will vote thereon in accordance with their best judgment and in the best
interests of shareholders.
By Order of the Board of Trustees,
Lynda J. Striegel
Secretary
October ____, 1999
26
<PAGE> 30
Annex A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of February 1, 1989 between The FSB FUNDS, a business
trust organized under the laws of the Commonwealth of Massachusetts (herein
called the "Company"), and First Security Investment Management, Inc. ("FSIM"),
which is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended, and is a subsidiary of First Security Investment Services,
Inc., which is in turn a wholly-owned subsidiary of First Security Corporation.
WHEREAS, the Company is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act"); and
WHEREAS, the Company has three investment portfolios: The Cash
Management Fund, The Government Money Fund and The Money Market Fund (the
"Portfolios"); and
WHEREAS, the Company desires to retain FSIM to furnish investment
advisory services to the Portfolios, and FSIM is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FSIM to act as investment
adviser to the Company's Portfolios for the period and on the terms set forth in
this Agreement. FSIM accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided.
2. Delivery of Documents. The Company has furnished FSIM with properly
certified or authenticated copies of each of the following:
(a) The Company's Master Trust Agreement dated December 16, 1988
as amended from time to time (the "Master Trust Agreement");
(b) The Company's By-Laws as currently in effect (such By-Laws,
and any amendments thereto made from time to time, are herein called the
By-Laws");
(c) Resolutions of the Company's Board of Trustees authorizing
the appointment of FSIM as investment adviser and approving this
Agreement;
(d) The Company's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission (the
"SEC") on December 19, 1988 and all amendments thereto;
1
<PAGE> 31
(e) The Company's Registration Statement on Form N-1A under the
Securities Act of 1933 as amended ("1933 Act") (SEC File No. 33-26205) and under
the 1940 Act as filed with the SEC on December 19, 1988 and all amendments
thereto; and
(f) The Company's most recent prospectus (such prospectus and all
amendments and supplements thereto are herein called "the Prospectus").
The Fund will furnish FSIM from time to time with copies of all
amendments of or supplements to the foregoing.
3. Management.
(a) Subject to the supervision of the Company's Board of
Trustees, FSIM will provide a continuous investment program for the
Company's Portfolios, including investment research and management with
respect to all securities and investments and cash equivalents in said
Portfolios. FSIM will determine from time to time what securities and
other investments will be purchased, retained or sold by the Company
with respect to the Portfolios; and shall execute or direct the
execution of all such transactions with the issuer of such securities,
with brokers and dealers, and in any other manner permitted by law that
is in the best interest of the Company and its shareholders.
(b) FSIM will provide the services under this Agreement in
accordance with the Portfolios investment objective, policies and
restrictions as stated in the Prospectus and resolutions of the
Company's Board of Trustees.
(c) In the event that the Company establishes additional
portfolios with respect to which it desires to retain FSIM to act as
investment adviser hereunder, it shall notify FSIM in writing. If FSIM
is willing to render such services it shall notify the Company in
writing whereupon such portfolio shall become a "Portfolio" hereunder.
(d) FSIM further agrees that it:
(i) will comply with all applicable Rules and Regulations
of the SEC, the provisions of the Internal Revenue Code relating
to regulated investment companies, applicable banking laws and
regulations, and policy decisions adopted by the Company's
Trustees as made from time to time;
(ii) pursuant to its investment determination for the
Company, in placing orders with brokers and dealers, FSIM will
attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when
the execution and price offered by two or more brokers or dealers
are comparable, FSIM may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide
the Company with research advice and other services.
2
<PAGE> 32
(iii) will maintain books and records with respect to the
securities transactions of the Company's Portfolios, and will
furnish the Company's Board of Trustees such periodic, regular
and special reports as the Board may request; and
(iv) will treat confidentially and as proprietary
information of the Company all records and other information
relative to the Company and prior, present or potential
shareholders; and will not use such records and information for
any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval
in writing by the Company, which approval shall not be
unreasonably withheld and such records may not be withheld where
FSIM may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the
Company.
4. Services Not Exclusive. The investment management services furnished
by FSIM hereunder are not to be deemed exclusive, and FSIM shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
5. Upon expiration or earlier termination of this Agreement, the Company
shall, if reference to "FSB" is made in the corporate name of the Company or in
the name of the Portfolios and if FSIM requests in writing, as promptly as
practicable change its corporate name and the name of the Portfolios so as to
eliminate all reference to "FSB", and thereafter the Company and the Portfolios
shall cease transacting business in any corporate name using the word "FSB" or
any other reference to FSIM or "FSB". The foregoing rights of FSIM and
obligations of the Company shall not deprive FSIM, or any affiliate thereof
which has "FSB" in its name, of, but shall be in addition to, any other rights
or remedies to which FSIM and any such affiliate may be entitled in law or
equity by reason of any breach of this Agreement by the Company, and the failure
or omission of FSIM to request a change of the Company's or the Portfolio's
names or a cessation of the use of the name "FSB" as described in this paragraph
5 shall not under any circumstances be deemed a waiver of the right to require
such change or cessation at any time thereafter for the same or any subsequent
breach.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, FSIM hereby agrees that all records which it maintains for
the Company are the property of the Company and further agrees to surrender
promptly to the Company any of such records upon the Company's request. FSIM
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.
7. Expenses. During the term of this Agreement, FSIM will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Company.
3
<PAGE> 33
8. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, effective as of the date hereof, the Company will
pay FSIM and FSIM will accept as full compensation therefor, subject to the
provisions of paragraph 6, above, a fee, computed daily and paid monthly (in
arrears), at an annual rate of .30% of the average net assets held in each
Portfolio.
If in any fiscal year the aggregate expenses of any Portfolio exceeds
the expense limitations of any state having jurisdiction over a Portfolio, FSIM
will reimburse the Company for such excess expenses. The obligation of FSIM to
reimburse the Company hereunder is limited in any fiscal year to the amount of
its fee hereunder for such fiscal year, provided, however, that notwithstanding
the foregoing, FSIM shall reimburse the Company for such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
such Portfolio so requires. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
9. Limitation of Liability. FSIM shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith, reckless disregard of gross
negligence on the part of FSIM in the performance of its obligations and duties
under this Agreement.
10. Duration and Termination.
(a) This Agreement shall continue in effect until two years from
the date hereof with respect to shares of the Portfolios and, with
respect to each investment portfolio established after the date hereof,
for twelve months from the date on which such portfolio becomes a
portfolio hereunder, and shall continue thereafter in full force and
effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by the vote of a majority of
those members of the Company's Board of Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the
Company's Board of Trustees or by vote of a majority of the outstanding
voting securities of such Portfolio.
(b) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the
Company (by vote of the Company's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Company's
Portfolios, or by FSIM on sixty days' written notice.
(c) This Agreement will immediately terminate in the event of its
assignment.
4
<PAGE> 34
(d) As used in this agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment"
shall have the same meaning of such terms in the 1940 Act.
(e) Any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of any Portfolio
shall be effective to continue this Agreement with respect to any such
Portfolio notwithstanding (a) that this Agreement has not been approved
by the holders of a majority of the outstanding shares of any other
Portfolio affected thereby, and (b) that this Agreement has not been
approved by vote of a majority of the outstanding shares of the Company,
unless such approval shall be required by applicable law or otherwise.
11. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective with respect to any Portfolio until approved by vote of a majority of
the outstanding voting securities of such Portfolio.
12. Limitation of Liability. The term "The FSB Funds" means and refers
to the Trustees from time to time serving under the Declaration of Trust of the
Company dated December 16, 1988 as the same may subsequently thereto have been,
or subsequently hereto be, amended. It is expressly agreed that the obligations
of the Company hereunder shall not be binding upon any of the Trustees,
shareholders, nominees, officers, agents or employees of the Company,
personally, but bind only the trust property of the Company, as provided in the
Declaration of Trust of the Company. The execution and delivery of this
Agreement have been authorized by the Trustees and shareholders of the Funds and
signed by the President of the Company, acting as such, and neither such
authorization by such Trustees and shareholders nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on any of them personally, but shall bind only the trust
property of the Company as provided in the Master Trust Agreement.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
5
<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE FSB FUNDS
By signature illegible
----------------------
FIRST SECURITY INVESTMENT
MANAGEMENT, INC.
By /s/ James Darcy
----------------------
6
<PAGE> 36
FIRST AMENDMENT TO
INVESTMENT ADVISORY AGREEMENT
(Corrected Version)*
This First Amendment to Investment Advisory Agreement is made as of the
27th day of December, 1994 by and between The Achievement Funds Trust, a
Massachusetts business trust (the "Trust"), and First Security Investment
Management, Inc. (the "Adviser").
WHEREAS, the Trust and Adviser entered into an Investment
Advisory Agreement as of February 1, 1989 (the "Advisory Agreement") with
respect to the provision of investment advisory services by the Adviser to the
Trust's three then existing portfolios (the "Current Portfolios");
WHEREAS, the Trust and the Adviser now desire to amend the
Advisory Agreement to include six new portfolios;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Addition of Certain Portfolios. The definition of Portfolios
as used in the Advisory Agreement shall be amended effective on the date hereof
to include six newly created investment portfolios of the Trust: Equity Fund,
Balanced Fund, Short-Term Bond Fund, Intermediate-Term Bond Fund, Idaho Tax-Free
Fond Fund and Short-Term Municipal Bond Fund.
2. Compensation. The first paragraph of Section 8 Compensation of
the Advisory Agreement is hereby deleted in its entirety and replaced with the
following paragraph:
"For the services provided and the expense assumed pursuant to
the Agreement, effective as of the date hereof, the Trust will pay to the
Adviser and the Adviser will accept as full compensation therefor, subject to
the provision of paragraph 7 above, a fee, computed daily and paid monthly (in
arrears), at the annual rates for each Portfolio as set forth below:
<TABLE>
<CAPTION>
Maximum Fee
Portfolio (as percentage of Net Assets)
--------- -----------------------------
<S> <C>
Equity Fund .74%
Balanced Fund .74%
Short Term Bond Fund .60%
Intermediate Term Bond Fund .60%
Idaho Municipal Bond Fund .60%
Short Term Municipal Bond Fund .60%
</TABLE>
3. Effect of Amendment. Except as expressly set forth herein, the
Advisory Agreement shall remain in full force and effect and shall not be
amended in any way.
<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE ACHIEVEMENT FUNDS TRUST
By: /s/ Kathryn L. Stanton
--------------------------
Title: VP
FIRST SECURITY INVESTMENT MANAGEMENT, INC.
By: /s/ Sterling K. Jenson
--------------------------
Title: Pres + CEO
- ---------
* This corrected version of the First Amendment to Investment
Advisory Agreement corrects the cross-reference and Portfolio
names appearing in paragraph 2 and inserts the year of original
execution.
2
<PAGE> 38
SECOND AMENDMENT TO
INVESTMENT ADVISORY AGREEMENT
(Corrected Version)*
This Second Amendment to Investment Advisory Agreement is made as of the
1st day of November, 1996 by and between The Achievement Funds Trust, a
Massachusetts business trust (the "Trust"), and First Security Investment
Management, Inc. (the "Adviser").
WHEREAS, the Trust and Adviser entered into an Investment
Advisory Agreement as of February 1, 1989 (the "Advisory Agreement") with
respect to the provision of investment advisory services by the Adviser to the
Trust's three then existing portfolios (the "Current Portfolios");
WHEREAS, the Trust and the Adviser now desire to amend the
Advisory Agreement to include one new portfolio;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Addition of Certain Portfolios. The definition of Portfolios
as used in the Advisory Agreement shall be amended effective on the date hereof
to include a newly created investment portfolio of the Trust: Municipal Bond
Fund.
2. Compensation. The first paragraph of Section 8 Compensation of
the Advisory Agreement is hereby deleted in its entirety and replaced with the
following paragraph:
"For the services provided and the expense assumed pursuant to
the Agreement, effective as of the date hereof, the Trust will pay to the
Adviser and the Adviser will accept as full compensation therefor, subject to
the provisions of paragraph 7 above, a fee, computed daily and paid monthly (in
arrears), at the annual rates for each Portfolio as set forth below:
<TABLE>
<CAPTION>
Maximum Fee
Portfolio (as percentage of Net Assets)
--------- -----------------------------
<S> <C>
Equity Fund .74%
Balanced Fund .74%
Short Term Bond Fund .60%
Intermediate Term Bond Fund .60%
Idaho Municipal Bond Fund .60%
Short Term Municipal Bond Fund .60%
Municipal Bond Fund .60%
</TABLE>
1
<PAGE> 39
3. Effect of Amendment. Except as expressly set forth herein, the
Advisory Agreement shall remain in full force and effect and shall not be
amended in any way.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE ACHIEVEMENT FUNDS TRUST
By: /s/ Kathryn L. Stanton
--------------------------
Title: VP
FIRST SECURITY INVESTMENT MANAGEMENT, INC.
By: /s/ Sterling K. Jenson
--------------------------
Title: Pres + CEO
- ---------
* This corrected version of the Second Amendment to Investment
Advisory Agreement corrects the cross-reference and Portfolio
names appearing in paragraph 2.
2
<PAGE> 40
Annex B
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of ______, 1999 between The Achievement Funds Trust, a
business trust organized under the laws of the Commonwealth of Massachusetts
(herein called the "Company"), and First Security Investment Management, Inc.
("FSIM"), which is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended, and is a subsidiary of First Security
Investment Services, Inc., which is in turn a wholly-owned subsidiary of First
Security Corporation.
WHEREAS, the Company is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act"); and
WHEREAS, the Company has six investment portfolios: Equity Fund,
Balanced Fund, Intermediate Term Bond Fund, Short Term Bond Fund, Municipal Bond
Fund, and Idaho Municipal Bond Fund (the "Portfolios"); and
WHEREAS, the Company desires to retain FSIM to furnish investment
advisory services to the Portfolios, and FSIM is willing to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Company hereby appoints FSIM to act as investment
adviser to the Company's Portfolios for the period and on the terms set forth in
this Agreement. FSIM accepts such appointment and agrees to furnish the services
herein set forth for the compensation herein provided.
2. Delivery of Documents. The Company has furnished FSIM with properly
certified or authenticated copies of each of the following:
(a) The Company's Master Trust Agreement dated December 16, 1988
as amended from time to time (the "Master Trust Agreement");
(b) The Company's By-Laws as currently in effect (such By-Laws,
and any amendments thereto made from time to time, are herein called the
By-Laws");
(c) Resolutions of the Company's Board of Trustees authorizing
the appointment of FSIM as investment adviser and approving this
Agreement;
1
<PAGE> 41
(d) The Company's Notification of Registration on Form N-8A under
the 1940 Act as filed with the Securities and Exchange Commission (the
"SEC") on December 19, 1988 and all amendments thereto;
(e) The Company's Registration Statement on Form N-1A under the
Securities Act of 1933 as amended ("1933 Act") (SEC File No. 33-26205) and under
the 1940 Act as filed with the SEC on December 19, 1988 and all amendments
thereto; and
(f) The Company's most recent prospectus (such prospectus and all
amendments and supplements thereto are herein called "the Prospectus")
and the Company's most recent statement of additional information (such
statement of additional information and all amendments and supplements
thereto are herein called the "Statement of Additional Information").
The Fund will furnish FSIM from time to time with copies of all
amendments of or supplements to the foregoing.
3. Management.
(a) Subject to the supervision of the Company's Board of
Trustees, FSIM will provide a continuous investment program for the
Company's Portfolios, including investment research and management with
respect to all securities and investments and cash equivalents in said
Portfolios. FSIM will determine from time to time what securities and
other investments will be purchased, retained or sold by the Company
with respect to the Portfolios; and shall execute or direct the
execution of all such transactions with the issuer of such securities,
with brokers and dealers, and in any other manner permitted by law that
is in the best interest of the Company and its shareholders.
(b) FSIM will provide the services under this Agreement in
accordance with the Portfolios investment objective, policies and
restrictions as stated in the Prospectus, the Statement of Additional
Information and resolutions of the Company's Board of Trustees.
(c) In the event that the Company desires to retain FSIM to act
as investment adviser hereunder for additional Portfolios, it shall
notify FSIM in writing. If FSIM is willing to render such services it
shall notify the Company in writing whereupon such portfolio shall
become a "Portfolio" hereunder.
(d) FSIM further agrees that it:
(i) will comply with all applicable Rules and Regulations
of the SEC, the provisions of the Internal Revenue Code relating
to regulated investment companies, applicable banking laws and
regulations, and policy decisions adopted by the Company's
Trustees as made from time to time;
2
<PAGE> 42
(ii) pursuant to its investment determination for the
Company, in placing orders with brokers and dealers, FSIM will
attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when
the execution and price offered by two or more brokers or dealers
are comparable, FSIM may, in its discretion, purchase and sell
portfolio securities to and from brokers and dealers who provide
the Company with research advice and other services.
(iii) will maintain books and records with respect to the
securities transactions of the Company's Portfolios, and will
furnish the Company's Board of Trustees such periodic, regular
and special reports as the Board may request; and
(iv) will treat confidentially and as proprietary
information of the Company all records and other information
relative to the Company and prior, present or potential
shareholders; and will not use such records and information for
any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval
in writing by the Company, which approval shall not be
unreasonably withheld and such records may not be withheld where
FSIM may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the
Company.
4. Services Not Exclusive. The investment management services furnished
by FSIM hereunder are not to be deemed exclusive, and FSIM shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, FSIM hereby agrees that all records which it maintains for
the Company are the property of the Company and further agrees to surrender
promptly to the Company any of such records upon the Company's request. FSIM
further agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records required to be maintained by Rule 31a-1 under the 1940 Act.
6. Expenses. During the term of this Agreement, FSIM will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities (including brokerage commissions, if any)
purchased for the Company.
7. Compensation. For the services provided and the expense assumed
pursuant to the Agreement, effective as of the date hereof, the Company will pay
to FSIM and FSIM will accept as full compensation therefor, subject to the
provisions of Paragraph 6 above, a fee, computed daily and paid monthly (in
arrears), at the annual rates for each Portfolio as set forth below:
<TABLE>
<CAPTION>
Maximum Fee
Portfolio (as percentage of Net Assets)
--------- -----------------------------
<S> <C>
</TABLE>
3
<PAGE> 43
<TABLE>
<S> <C>
Equity Fund .74%
Balanced Fund .74%
Short Term Bond Fund .60%
Intermediate Term Bond Fund .60%
Idaho Municipal Bond Fund .60%
Municipal Bond Fund .60%
</TABLE>
If in any fiscal year the aggregate expenses of any Portfolio exceeds
the expense limitations of any state having jurisdiction over a Portfolio, FSIM
will reimburse the Company for such excess expenses. The obligation of FSIM to
reimburse the Company hereunder is limited in any fiscal year to the amount of
its fee hereunder for such fiscal year, provided, however, that notwithstanding
the foregoing, FSIM shall reimburse the Company for such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over
such Portfolio so requires. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
8. Limitation of Liability. FSIM shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in connection
with the performance of this Agreement, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith, reckless disregard of gross
negligence on the part of FSIM in the performance of its obligations and duties
under this Agreement.
9. Duration and Termination.
(a) This Agreement shall continue in effect until two years from
the date hereof with respect to shares of the Portfolios and, with
respect to each investment portfolio established after the date hereof,
for twelve months from the date on which such portfolio becomes a
portfolio hereunder, and shall continue thereafter in full force and
effect for successive annual periods, provided that such continuance is
specifically approved at least annually (i) by the vote of a majority of
those members of the Company's Board of Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the
Company's Board of Trustees, or by vote of a majority of the outstanding
voting securities of such Portfolio.
(b) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by the
Company, by vote of the Company's Board of Trustees or by vote of a
majority of the outstanding voting securities of the Company's
Portfolios, or by FSIM on sixty days' written notice.
(c) This Agreement will immediately terminate in the event of its
assignment.
4
<PAGE> 44
(d) As used in this agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment"
shall have the same meaning of such terms in the 1940 Act.
(e) Any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of any Portfolio
shall be effective to continue this Agreement with respect to any such
Portfolio notwithstanding (a) that this Agreement has not been approved
by the holders of a majority of the outstanding shares of any other
Portfolio affected thereby, and (b) that this Agreement has not been
approved by vote of a majority of the outstanding shares of the Company,
unless such approval shall be required by applicable law or otherwise.
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement shall be
effective with respect to any Portfolio until approved by vote of a majority of
the outstanding voting securities of such Portfolio.
11. Limitation of Liability. The term "The Achievement Funds Trust"
means and refers to the Trustees from time to time serving under the Declaration
of Trust of the Company dated December 16, 1988 as the same may subsequently
thereto have been, or subsequently hereto be, amended. It is expressly agreed
that the obligations of the Company hereunder shall not be binding upon any of
the Trustees, shareholders, nominees, officers, agents or employees of the
Company, personally, but bind only the trust property of the Company, as
provided in the Declaration of Trust of the Company. The execution and delivery
of this Agreement have been authorized by the Trustees and shareholders of the
Portfolios and signed by the President of the Company, acting as such, and
neither such authorization by such Trustees and shareholders nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Company as provided in the Master Trust
Agreement.
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision 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. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by Delaware law.
5
<PAGE> 45
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
THE ACHIEVEMENT FUNDS TRUST
By:
---------------------------------
Name and Title:
-----------------------
FIRST SECURITY INVESTMENT MANAGEMENT, INC.
By:
---------------------------------
Name and Title:
-----------------------
6
<PAGE> 46
[PORTFOLIO: EQUITY FUND]
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 29, 1999
The undersigned hereby appoints each of Kevin P. Robins and Lynda J.
Striegel, individually, as proxy and attorney-in-fact for the undesigned with
full power of substitution to vote on behalf of the undersigned at the Special
Meeting of Shareholders of The Achievement Funds Trust to be held on October 29,
1999, and at any adjournment or postponement thereof, all shares of the
portfolio indicated above within The Achievement Funds standing in the name of
the undersigned or which the undersigned may be entitled to vote as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" EACH OF THE PROPOSALS SET FORTH BELOW. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the Special Meeting or any adjournments or postponements thereof, hereby
revoking any proxy or proxies heretofore given by the undersigned.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
Proposal 1. Approval of new investment advisory agreement.
FOR [ ] WITHHOLD [ ] ABSTAIN [ ]
Proposal 2. Approval of a change to the investment objective of the Equity Fund.
FOR [ ] WITHHOLD [ ] ABSTAIN [ ]
Proposal 3. The election of trustees for the term set forth in the Proxy
Statement.
FOR [ ] WITHHOLD [ ] ABSTAIN [ ]
James H. Gardner Blaine Huntsman Kent H. Murdock
John L. Rudisill Frederick A. Moreton, Jr. Robert G. Love
August Glissmeyer, Jr. Carl S. Minden George L. Denton, Jr.
If you do not wish to vote "FOR" a particular nominee for trustee, mark
the "FOR ALL EXCEPT" box and strike a line through the name of that nominee.
Your shares will be voted "FOR" the remaining nominees.
Please sign:
Date:
-----------------------
----------------------------
Signature
----------------------------
Signature (if held jointly)
When shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
the corporate name by
president or other authorized
officer. If a partnership,
please sign in the
partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
7
<PAGE> 47
[PORTFOLIO: ____________]
THE ACHIEVEMENT FUNDS TRUST
ONE FREEDOM VALLEY DRIVE
OAKS, PENNSYLVANIA 19456
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 29, 1999
The undersigned hereby appoints each of Kevin P. Robins and Lynda J.
Striegel, individually, as proxy and attorney-in-fact for the undesigned with
full power of substitution to vote on behalf of the undersigned at the Special
Meeting of Shareholders of The Achievement Funds Trust to be held on October 29,
1999, and at any adjournment or postponement thereof, all shares of the
portfolio indicated above within The Achievement Funds standing in the name of
the undersigned or which the undersigned may be entitled to vote as follows:
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" EACH OF THE PROPOSALS SET FORTH BELOW. In their discretion, the
proxies are authorized to vote upon such other business as may properly come
before the Special Meeting or any adjournments or postponements thereof, hereby
revoking any proxy or proxies heretofore given by the undersigned.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES.
Proposal 1. Approval of new investment advisory agreement.
FOR [ ] WITHHOLD [ ] ABSTAIN [ ]
Proposal 2. Intentionally omitted.
Proposal 3. The election of trustees for the term set forth in the Proxy
Statement.
FOR [ ] WITHHOLD [ ] ABSTAIN [ ]
James H. Gardner Blaine Huntsman Kent H. Murdock
John L. Rudisill Frederick A. Moreton, Jr. Robert G. Love
August Glissmeyer, Jr. Carl S. Minden George L. Denton, Jr.
If you do not wish to vote "FOR" a particular nominee for trustee, mark
the "FOR ALL EXCEPT" box and strike a line through the name of that nominee.
Your shares will be voted "FOR" the remaining nominees.
Please sign:
Date:
-----------------------
----------------------------
Signature
----------------------------
Signature (if held jointly)
When shares are held by joint
tenants, both should sign.
When signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If a
corporation, please sign in
the corporate name by
president or other authorized
officer. If a partnership,
please sign in the
partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
8
