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
Filed by a Party other than the Registrant
Check the appropriate box:
[] Preliminary Proxy Statement [] Confidential, for use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[] Definitive Proxy Statement
[] Definitive additional materials
[] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
FFTW FUNDS, INC.
(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):
No fee required.
Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- ------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- ------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- ------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- ------------------------------------------------------
(5) Total fee paid:
- ------------------------------------------------------
Fee paid previously with preliminary materials:
- ------------------------------------------------------
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- ------------------------------------------------------
(2) Form, Schedule or Registration Statement no.:
- ------------------------------------------------------
(3) Filing Party:
- ------------------------------------------------------
(4) Date Filed:
- ------------------------------------------------------
<PAGE>
FFTW FUNDS, INC.
200 Park Avenue, New York, New York 10166
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on November 19, 1999
---------------------
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of the Worldwide Portfolio and the Worldwide-Hedged Portfolio (each
individually a "Portfolio" and collectively the "Portfolios"), will be held at
the offices of Fischer Francis Trees & Watts, Inc., 200 Park Avenue, New York,
New York 10166, on Friday, November 19, 1999 at 10:00 a.m., Eastern Time. The
purpose of the Special Meeting is to consider and act upon the following
proposals, all of which are more fully described in the accompanying Proxy
Statement dated October 28, 1999.
1. To approve revised Advisory Agreements between the Fund on
behalf of the Portfolios and Fischer Francis Trees & Watts,
Inc. (the "Investment Adviser");
2. To approve revised Sub-Advisory Agreements between the
Investment Adviser on behalf of the Portfolios and Fischer
Francis Trees & Watts (the "Investment Sub-Adviser");
3. To reclassify, revise or eliminate certain fundamental
investment restrictions of the Portfolios;
4. To transact such other business as may properly come before
the Special Meeting or any adjournments
thereof.
<PAGE>
The Board of Directors has fixed the close of business on October 18,
1999, as the record date for the determination of the shareholders entitled to
notice of and to vote at the Special Meeting or any adjournments thereof. The
enclosed proxy is being solicited on behalf of the Directors.
By order of the Board of Directors,
William E. Vastardis,
Secretary
New York, New York
October 25, 1999
- -----------------------------------------------------
YOUR VOTE IS IMPORTANT
- -----------------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
- -----------------------------------------------------
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD,
SIGN AND DATE IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH NEEDS NO POSTAGE
IF MAILED IN THE UNITED STATES. IN ORDER TO SAVE THE FUND ANY ADDITIONAL EXPENSE
OF FURTHER SOLICITATION, PLEASE MAIL YOUR PROXY PROMPTLY.
- -----------------------------------------------------
<PAGE>
PROXY STATEMENT
FFTW FUNDS, INC.
200 Park Avenue, New York, New York 10166
SPECIAL MEETING OF SHAREHOLDERS
To Be Held on November 19, 1999
---------------------
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
of proxies made by, and on behalf of, the Board of Directors of FFTW Funds,
Inc., a Maryland corporation (the "Fund"), to be used at a Special Meeting of
Shareholders of the Worldwide Portfolio and the Worldwide-Hedged Portfolio,
(each individually a "Portfolio" and collectively the "Portfolios"), each a
separate investment Portfolio of the Fund, to be held at the offices of the
Fund, 200 Park Avenue, New York, New York 10166 on Friday, November 19, 1999 at
10:00 a.m. Eastern Time, and at any adjournments thereof (the "Meeting"). The
cost of the solicitation (including printing and mailing this Proxy Statement,
Notice of Meeting and Proxy, as well as any necessary supplementary
solicitation) will be borne by the Portfolios in proportion to their average net
assets. The Notice of Meeting, Proxy Statement and Proxy are being mailed to
shareholders on or about October 28, 1999.
The presence in person or by proxy of the holders of record of a
majority of the shares of a Portfolio of the Fund entitled to vote thereat shall
constitute a quorum at the Meeting for that Portfolio. If, however, such quorum
shall not be present or represented at the Meeting or if fewer shares are
present in person or by proxy than the minimum required to take action with
respect to any proposal presented at the Meeting, the holders of a majority of
the shares of the Portfolio present in person or by proxy shall have the power
to adjourn the Meeting with respect to that Portfolio, from time to time,
without notice other than announcement at the Meeting, until the requisite
amount of shares entitled to vote at the Meeting shall be present. At any such
adjourned Meeting, if the relevant quorum is subsequently constituted, any
business may be transacted which might have been transacted at the Meeting as
originally called. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes" (that
is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated as shares that are present but
which have not been voted. For this reason, abstentions and broker non-votes
will have the effect of a "no" vote for purposes of obtaining the requisite
approval for Proposals One, Two and Three, for which the required vote is a
percentage of the shares either outstanding or present at the Meeting.
The Board of Directors has fixed the close of business on October 18,
1999 as the record date for the determination of shareholders entitled to notice
of and to vote at the Meeting and at any adjournments thereof. Each share is
entitled to one vote, and each fraction of a share is entitled to a
proportionate fractional vote. The numbers of outstanding voting shares of each
Portfolio as of October 18, 1999 are indicated in the following table:
------------------------------------------------- ---------------------
Outstanding Voting
Portfolios Shares
------------------------------------------------- ---------------------
------------------------------------------------- ---------------------
Worldwide Portfolio
------------------------------------------------- ---------------------
------------------------------------------------- ---------------------
Worldwide-Hedged Portfolio
------------------------------------------------- ---------------------
Additional information regarding share ownership of the Portfolios is
included as Exhibit A.
All properly executed proxies received prior to the Meeting will be
voted at the Meeting in accordance with the instructions marked thereon or as
otherwise provided therein. Accordingly, unless instructions to the contrary are
marked, proxies will be voted FOR the matters specified on the proxy card. Any
shareholder may revoke his or her proxy at any time prior to exercise thereof by
giving written notice to the Secretary of the Fund at FFTW Funds, Inc., c/o
Investors Capital Services, Inc., 600 Fifth Avenue, 26th Floor, New York, New
York 10020, or by signing another proxy of a later date or by personally casting
his or her vote at the Meeting.
The most recent annual and semi-annual reports of the Portfolios,
including financial statements, have been previously mailed to shareholders. If
you have not received these reports or would like to receive additional copies
free of charge, please either write to FFTW Funds, Inc., c/o Investors Capital
Services, Inc., 600 Fifth Avenue, 26th Floor, New York, New York 10020 or call
(800) 762-4848 and they will be sent promptly by first-class mail.
To obtain the necessary representation at the Meeting, supplementary
solicitations may be made by mail, telephone, telegraph, facsimile or personal
contact by (i) Directors and officers of the Fund, (ii) Fischer Francis Trees &
Watts, Inc. (the "Investment Adviser"), and/or (iii) Investors Capital Services,
Inc. (the "Administrator").
Votes Required
Approval of the revised Advisory Agreements, as set forth in Proposal
One, will require a majority vote of the outstanding voting securities of each
Portfolio. The approval of the revised Sub-Advisory Agreements, as set forth in
Proposal Two, requires a majority vote of the outstanding voting securities of
each Portfolio. The reclassification, revision or elimination of certain
fundamental investment restrictions of the Portfolios, as set forth in Proposal
Three, will require a majority vote of the outstanding voting securities of each
Portfolio. For purposes of Proposals One, Two and Three, a majority of the
outstanding voting securities of a Portfolio means the lesser of (1) 67% of the
shares of that Portfolio present at a meeting if the holders of more than 50% of
the outstanding shares of that Portfolio are present in person or by proxy, or
(2) more than 50% of the outstanding shares of that Portfolio.
<PAGE>
THE PROPOSALS
PROPOSAL 1: APPROVAL OF REVISED ADVISORY AGREEMENTS
Conform to Standard Advisory Agreement
Subject to shareholder approval, the Fund intends to have a separate
Advisory Agreement for the Worldwide and Worldwide-Hedged Portfolios. Currently
there is one Advisory Agreement, dated August 31, 1991, that applies to the
Worldwide Portfolio, the Worldwide-Hedged Portfolio, and one other portfolio of
the Fund. The Investment Adviser is Fischer Francis Trees & Watts, Inc. The
current Advisory Agreements for the Worldwide Portfolio and the Worldwide-Hedged
Portfolio were last approved by a majority of their respective shareholders on
December 31, 1992. Having a separate Advisory Agreement for each Portfolio will
make it easier and less costly for the Fund to revise either of the Advisory
Agreements, should it need to do so in the future. Each Advisory Agreement will
conform to the standard advisory agreements utilized by each of the other
portfolios in the Fund. Except as outlined below under "Removal of the Expense
Cap," there are no material changes between the current Advisory Agreement and
the standard advisory agreement utilized by each of the other portfolios in the
Fund. A copy of the two proposed Advisory Agreements are included as Exhibits B
and C.
Pursuant to the two proposed Advisory Agreements between the Investment
Adviser and the Fund on behalf of each of the Portfolios, respectively, the
Investment Adviser shall manage the investment operations of each Portfolio and
the composition of each Portfolio, including the purchase, retention and
disposition of each Portfolio's assets, in accordance with the investment
objectives, policies and restrictions of each Portfolio.
Organized in 1972, the Investment Adviser is a registered investment
adviser and is a New York corporation. The Investment Adviser and its affiliates
currently manage over $32 billion in assets for numerous fixed income
portfolios. The Investment Adviser currently advises over 90 major institutional
clients including banks, central banks, pension funds and other institutional
clients. The Investment Adviser, whose address is 200 Park Avenue, New York, New
York 10166, is directly wholly-owned by Charter Atlantic Corporation. Additional
information regarding the principal executive officer and directors of the
Investment Adviser is included as Exhibit D.
There are no comparable U.S. registered
mutual funds advised by the Investment Adviser.
Removal of the Expense Cap
In conjunction with having separate advisory agreements for the
Worldwide and Worldwide-Hedged Portfolios, the Fund, subject to shareholder
approval, also intends to eliminate a provision in the Advisory Agreement which
imposes a mandatory obligation on the Investment Adviser to cap the total
operating expenses of the Worldwide Portfolio and the Worldwide-Hedged
Portfolio. The Advisory Agreement currently states:
If the aggregate annual operating expenses, including the
Advisor's fee, of either Worldwide or Worldwide-Hedged exceed
0.60% of either Series' average daily net asset value, then
the Advisor shall reimburse such Series for any such excess.
The basis for removing the expense cap is to provide the Investment
Adviser flexibility in the event that economic conditions change to such levels
that such an expense cap would be unduly burdensome upon the Investment Adviser.
Although the Fund intends to remove this mandatory expense cap, each Portfolio
will still have a voluntary expense cap. The Investment Adviser intends to
voluntarily cap the total annual operating expenses of each Portfolio at 0.60%
for an indefinite period. This is a voluntary fee waiver, and although the
Investment Adviser has no current intention to terminate the fee waiver, it may
be terminated or changed at any time by the Investment Adviser. Shareholders
should note that even though the fee waiver may be discontinued in the future,
the Investment Adviser must provide notice to the Board prior to taking such
action. In addition, the Board has received assurances from the Investment
Adviser that should the Investment Adviser decide to remove this voluntary
expense cap, it would send a notice to all shareholders informing them that the
cap will be removed. Shareholders, upon receiving such notice from the
Investment Adviser, that disagree with the Investment Adviser's actions may
elect to redeem their shares out of the Fund since each of the Portfolios have
daily redemptions. Given the fact that there are daily redemptions in each of
the Portfolios, shareholders have an alternative course of action to pursue, and
may vote with their feet.
Absent the fee waiver, the current total operating expenses for the
Worldwide Portfolio and the Worldwide-Hedged Portfolio would be 0.61% and 0.58%,
respectively. Shareholders of the affected Portfolios may pay higher fees if the
Investment Adviser does not continue to maintain the voluntary operating fee
waiver.
As shown in the two charts below, the advisory fees paid to the
Investment Adviser and the total operating expenses for each of the Portfolios
for the fiscal year ended December 31, 1998 would not have been the same if the
total operating expense caps had not been in effect.
Current Investment Advisory Fees and Total Operating Expenses
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
Total Total
Advisory Fee Advisory Fee Operating Operating
Paid for Rate Paid for Total Expenses Paid Expenses Rate
the Year Ended the Year Operating for the Year Paid for the
Advisory 12/31/98 Ended Expenses Ended 12/31/981 Year Ended
Portfolios Fee Rate 12/31/98 Rate1 12/31/981
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
Worldwide Portfolio 0.40% $ ____% 0.60% $ ____%
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
Worldwide-Hedged Portfolio 0.25% $ ____% 0.60% $ ____%
- ------------------------------ ------------ --------------- -------------- ------------ ---------------- ---------------
</TABLE>
1 Includes investment advisory fees.
Hypothetical Investment Advisory Fees and Total
Operating Expenses (assuming the total operating expense
caps had not been in effect)
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------------ --------------- -------------- --------------- ----------------
Total Total
Advisory Fee Advisory Fee Operating Operating
Paid for Rate Paid for Expenses Paid Expenses Rate
the Year Ended the Year for the Year Paid for the
12/31/98 Ended Ended Year Ended
Portfolios 12/31/98 12/31/981 12/31/981
- ------------------------------ --------------- -------------- --------------- ----------------
- ------------------------------ --------------- -------------- --------------- ----------------
Worldwide Portfolio $ ____% $ ____%
- ------------------------------ --------------- -------------- --------------- ----------------
- ------------------------------ --------------- -------------- --------------- ----------------
Worldwide-Hedged Portfolio $ ____% $ ____%
- ------------------------------ --------------- -------------- --------------- ----------------
</TABLE>
1 Includes investment advisory fees.
Board Consideration
At a meeting held on February 19, 1999, the Board of Directors,
including the Directors who are not interested parties to the Advisory
Agreements or interested parties of such parties, considered the Advisory
Agreements in connection with the proposed revisions as outlined above and
determined that it would be in the best interests of both Portfolios to approve
the proposed Advisory Agreements. In coming to that conclusion, the Directors
examined the current and proposed Advisory Agreements for each Portfolio and
found no material changes between the agreements, except with respect to the
expense cap. The Directors also examined the fees and expenses of each Portfolio
and the fees paid to the Investment Adviser, noting in particular that the fees
to be paid to the Investment Adviser under the proposed Advisory Agreements
would not represent a significant increase from the current fee arrangements.
If approved by a majority vote of the outstanding shares of each
Portfolio, the Advisory Agreements will become effective on the first business
day following shareholder approval and will remain in force for a period of two
years, and from year to year thereafter, subject to approval annually by the
Board of Directors or by a majority vote of the outstanding shares of each
Portfolio, and also, in either event, approval by a majority of those Directors
who are not parties to the Advisory Agreements or interested persons of any such
party at a meeting called for the purpose of voting on such approval.
Accordingly, if the shareholders of one or both of the Portfolios should fail to
approve the Advisory Agreement for either of the two Portfolios, the proposed
Advisory Agreement will not be put into effect with respect to that Portfolio,
and the current Advisory Agreement, dated August 31, 1991, shall remain in
effect with respect to that Portfolio.
THE BOARD OF DIRECTORS OF THE FUND
UNANIMOUSLY RECOMMENDS APPROVAL OF PROPOSAL 1.
<PAGE>
PROPOSAL 2: APPROVAL OF REVISED SUB-ADVISORY
AGREEMENTS
Currently there is one Sub-Advisory Agreement, dated August 31, 1991,
that applies to the Worldwide Portfolio and the Worldwide-Hedged Portfolio. The
Investment Sub-Adviser is Fischer Francis Trees & Watts. The current
Sub-Advisory Agreements for the Worldwide Portfolio and the Worldwide-Hedged
Portfolio were last approved by a majority of their respective shareholders on
December 31, 1992. Subject to shareholder approval, the Fund intends to have a
separate Sub-Advisory Agreement for each of the Portfolios. Having a separate
Sub-Advisory Agreement for each Portfolio will make it easier and less costly
for the Fund to revise either of the Sub-Advisory Agreements, should it need to
do so in the future. Each Sub-Advisory Agreement will conform to the standard
sub-advisory agreements utilized by each of the other portfolios in the Fund.
There are no material changes between the current Sub-Advisory Agreement and the
standard sub-advisory agreement utilized by each of the other portfolios in the
Fund. A copy of the two proposed Sub-Advisory Agreements are included as
Exhibits E and F.
Pursuant to the two proposed Sub-Advisory Agreements between the
Investment Sub-Adviser and the Investment Adviser on behalf of each of the
Portfolios, respectively, the Investment Sub-Adviser shall coordinate with the
Investment Adviser in managing the investment of each of the Portfolio's foreign
assets, in accordance with the investment objectives, policies and restrictions
of each Portfolio.
The Investment Sub-Adviser, whose address is 3 Royal Court, The Royal
Exchange, London EC 3V 3RA, England, is a corporate partnership organized under
the laws of the United Kingdom, an affiliate of the Investment Adviser, and the
foreign sub-adviser to the Worldwide Portfolio, the Worldwide-Hedged Portfolio,
and eight other portfolios of the Fund. Organized in 1989, the Investment
Sub-Adviser is a U.S.-registered investment adviser and currently manages
approximately $6 billion in multi-currency fixed income portfolios for
institutional clients. The Investment Sub-Adviser is directly or indirectly
wholly-owned by Charter Atlantic Corporation. Additional information regarding
the principal executive officer and directors of the Investment Sub-Adviser is
included as Exhibit G.
There are no comparable funds advised by the Investment Sub-Adviser.
As shown below, the annual rates of sub-advisory fees to be paid to the
Investment Sub-Adviser under the proposed Sub-Advisory Agreements are equal to
the annual rates of investment sub-advisory fees which are currently in effect
for each of the Portfolios. The Investment Adviser pays the Investment
Sub-Adviser its advisory fee on a monthly basis from the Investment Adviser's
advisory fee. The Investment Sub-Adviser's advisory fee is equal to the
Investment Adviser's advisory fee for each of the Portfolios.
Current and Proposed Investment Sub-Advisory Fees
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
Sub-Advisory Fee Sub-Advisory Fee
Current Proposed Paid for the Year Rate Paid for the
Sub-Advisory Sub-Advisory Ended 12/31/98 Year Ended 12/31/98
Portfolios Fee Rate Fee Rate
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
Worldwide Portfolio 0.40% 0.40% $ ____%
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
Worldwide-Hedged Portfolio 0.25% 0.25% $ ____%
- ------------------------------------ ----------------- ------------------ -------------------- ----------------------
</TABLE>
Board Consideration
At a meeting held on February 19, 1999, the Board of Directors,
including the Directors who are not interested parties to the Sub-Advisory
Agreements or interested parties of such parties, considered the Sub-Advisory
Agreements in connection with the proposed revision as outlined above and
determined that it would be in the best interests of the two Portfolios to
approve the proposed Sub-Advisory Agreements. In coming to that conclusion, the
Directors examined the current and proposed Sub-Advisory Agreements for the two
Portfolios and found no material changes between the agreements. The Directors
also examined the fees and expenses of the two Portfolios and the fees paid to
the Investment Sub-Adviser, noting in particular that the fees to be paid to the
Investment Sub-Adviser under the proposed Advisory Agreements would not
represent a significant increase from the current fee arrangements.
If approved by a majority vote of the outstanding shares of each
Portfolio, the Sub-Advisory Agreements will become effective on the first
business day following shareholder approval and will remain in force for a
period of two years, and from year to year thereafter, subject to approval
annually by the Board of Directors or by a majority vote of the outstanding
shares of each Portfolio, and also, in either event, approval by a majority of
those Directors who are not parties to the Sub-Advisory Agreements or interested
persons of any such party at a meeting called for the purpose of voting on such
approval. Accordingly, if the shareholders of one or both of the Portfolios
should fail to approve the Sub-Advisory Agreement for either of the two
Portfolios, the proposed Sub-Advisory Agreement will not be put into effect with
respect to that Portfolio, and the current Sub-Advisory Agreement, dated August
31, 1991, shall remain in effect with respect to that Portfolio.
THE BOARD OF DIRECTORS OF THE FUND
UNANIMOUSLY RECOMMENDS APPROVAL OF PROPOSAL 2.
<PAGE>
PROPOSAL 3A and 3B: ELIMINATION OR CHANGE OF CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS OF THE PORTFOLIOS
Pursuant to the Investment Company Act of 1940 (the "1940 Act"), each
of the Portfolios has adopted certain fundamental investment restrictions
("fundamental restrictions"), which are set forth in the Fund's prospectus or
statement of additional information, and which may be changed only with
shareholder approval.
The purpose of these proposals is to remove the requirement of
shareholder approval to change those restrictions that are not required under
the 1940 Act to be fundamental restrictions and to provide the maximum permitted
flexibility in other restrictions that do require shareholder approval. Some of
the Portfolios' fundamental restrictions that are not required to be such under
the 1940 Act were adopted in the past as a result of now rescinded state
regulatory requirements and no longer serve any useful purpose. Other
fundamental restrictions are unnecessary because the provisions of the 1940 Act
and the disclosure requirements of the federal securities laws otherwise provide
adequate safeguards for a Portfolio and its shareholders.
Accordingly, the Board has approved revisions to the Portfolios'
fundamental restrictions in order to simplify, modernize and make more uniform
those restrictions that are required to be fundamental, and to reclassify those
fundamental restrictions that are not legally required as non-fundamental
restrictions. Non-fundamental restrictions require Board approval to be changed,
but not shareholder approval. By reducing to a minimum those policies that can
be changed only by shareholder vote, the Board believes that the Portfolios
would be able to minimize the costs and delay associated with holding future
shareholder meetings to revise fundamental policies that become outdated or
inappropriate. These proposed changes in investment restrictions reflect the
current industry custom and practice of placing authority over those investment
restrictions not required by the 1940 Act with the Board rather than with the
shareholders. Although the proposed changes in fundamental restrictions will
allow the Portfolios greater investment flexibility to respond to future
investment opportunities, the Board does not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
in the level of investment risk associated with an investment in any Portfolio.
If the proposed changes are approved by the shareholders of the
respective Portfolios at the Meeting, the Fund's prospectus and statement of
additional information will be revised to reflect those changes.
The text and a summary description of the proposed change to the
Portfolios' fundamental restrictions are set forth below.
<PAGE>
Proposal 3A: Repurchase Agreements
Under the following fundamental restriction, the Portfolio is
prohibited from holding more than 25% of its total assets in repurchase
agreements. Since the 1940 Act does not require that it be included as a
fundamental restriction, it is proposed that this fundamental restriction be
reclassifed as a non-fundamental restriction. The Board believes that the
Investment Adviser of the Portfolio should have the utmost flexibility that is
permitted under the 1940 Act in managing the Portfolio and should not be
constrained in its ability to utilize such investment strategy should such
strategy be warranted.
Current Text
The Portfolio may not enter into repurchase agreements if, as a result
thereof, more than 25% of its total assets would be subject to repurchase
agreements.
Proposal 3B: Purchasing or Selling of Commodities
Under the Portfolios' current fundamental restriction stated below, the
Portfolios are permitted to use up to 5% of total assets as margin and premiums
to purchase and sell futures and options contracts traded on CFTC-regulated
exchanges. In order for all Portfolios of the Fund to have a consistent policy
with respect to commodities and commodity contracts, the proposed text is
identical to the current policy of the other Portfolios of the Fund. The
proposed restriction would eliminate the limitation of utilizing 5% of total
assets as margin and premiums. In addition, each Portfolio would no longer be
limited to purchasing only exchange-traded futures and options. If a Portfolio
were to expand its futures and options trading in this manner, the volatility of
the Portfolio's net asset value might increase. In addition, non-exchange-traded
instruments may be less liquid than futures and options traded on exchanges.
Using futures and options instruments can involve substantial risks, and would
be utilized only if the Investment Adviser and/or the Investment Sub-Adviser
determined that such investments are advisable.
Current Text
Each Portfolio may not purchase or sell commodities or commodity
contracts, except that each Portfolio may utilize up to 5% of its total assets
as margin and premiums to purchase and sell futures and options contracts on
CFTC-regulated exchanges.
Proposed Text
Each Portfolio may not purchase or sell physical commodities or related
commodity contracts.
THE BOARD OF DIRECTORS OF THE FUND
UNANIMOUSLY RECOMMENDS APPROVAL OF PROPOSALS 3A and
3B.
<PAGE>
Other Matters
The Fund does not know of any matters to be presented at the Meeting
other than those mentioned in this Proxy Statement. If any of the persons listed
above is unavailable for election as Director, an event not now anticipated, or
if any other matters properly come before the Meeting, the shares represented by
proxies will be voted with respect thereto in accordance with the best judgment
of the person or persons voting the proxies.
The Fund does not usually hold annual meetings of its shareholders.
Shareholder proposals to be included in the proxy statement for any subsequent
meeting must be received at the Fund's offices, 200 Park Avenue, New York, New
York 10166, within a reasonable amount of time prior to the mailing of proxy
materials for a meeting of shareholders. The submission of a proposal by a
shareholder for inclusion in the proxy statement does not guarantee that it will
be included. Shareholder proposals are subject to certain regulations under the
federal securities laws. The Directors shall call a special meeting of the Fund
upon written request of shareholders owning at least 10% of the Fund's
outstanding shares.
If the accompanying form of proxy is executed properly and returned,
shares represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. However, if no instructions are specified, shares
will be voted for the election of the Directors and for the other proposals.
INFORMATION ABOUT THE FUND
The Independent Auditors. KPMG Peat Marwick LLP, 345 Park Avenue, New York, New
York 10154, are the independent auditors to the Fund. Ernst & Young LLP, 787
Seventh Avenue, New York, New York 10019, served as the independent auditors to
the Fund with respect to its financial statements for the fiscal year ending
December 31, 1998 and prior years. KPMG Peat Marwick LLP does not currently
provide accounting services to the Investment Adviser.
The Investment Adviser. The Investment Adviser of the Fund is Fischer Francis
Trees & Watts, Inc., located at 200 Park Avenue, New York, New York 10166.
Pursuant to an investment management advisory agreement, the Investment Adviser
manages the investment and reinvestment of the assets of the Portfolios. The
Investment Manager is directly wholly-owned by Charter Atlantic Corporation.
The Investment Sub-Adviser. Fischer Francis Trees & Watts is the Investment
Sub-Adviser to the Worldwide Portfolio, the Worldwide-Hedged Portfolio, and
eight other portfolios of the Fund. Their offices are located at 3 Royal Court,
The Royal Exchange, London EC 3V 3RA, England. Pursuant to an investment
management sub-advisory agreement, the Investment Sub-Adviser coordinates with
the Investment Adviser in managing the investment and reinvestment of the
foreign assets of the Portfolios. The Investment Sub-Adviser is an affiliate of
the Investment Adviser. The Investment Sub-Adviser is directly or indirectly
wholly-owned by Charter Atlantic Corporation.
The Administrator. The administrator of the Fund is
Investors Capital Services, Inc. with offices at 600
Fifth Avenue, New York, New York 10020. Pursuant to
an administration agreement, Investors Capital
assists in managing and supervising all aspects of
the general day-to-day business activities and
operations of the Fund other than the investment
advisory activities, including: custodial, transfer
agent, dividend disbursing, accounting, auditing,
compliance and related services.
The Principal Underwriter. The principal underwriter of the Fund is AMT Capital
Securities, LLC with offices at 600 Fifth Avenue, New York, New York 10020.
Pursuant to a distribution agreement, AMT Capital distributes shares of the
Fund.
By order of the Board of Directors,
William E. Vastardis
Secretary
New York, New York
________ ___, 1999
<PAGE>
TABLE OF EXHIBITS
<TABLE>
<S> <C>
- ------------------------------------------------------------ ---------------------------------------------------------
Exhibit Description
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
A Share Ownership of the Portfolios
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
B Proposed Advisory Agreement for the Worldwide Portfolio
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
C Proposed Advisory Agreement for the Worldwide-Hedged
Portfolio
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
D Additional Information Regarding Principal Executive
Officer and Directors of the Investment Adviser
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
E Proposed Sub-Advisory Agreement for the Worldwide
Portfolio
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
F Proposed Sub-Advisory Agreement for the
Worldwide-Hedged Portfolio
- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
G Additional Information Regarding Principal Executive
Officer and Directors of the Investment Sub-Adviser
- ------------------------------------------------------------ ---------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT A
Share Ownership of the Portfolios
The following table sets forth the information concerning beneficial
ownership, as of ________ ___, 1999, of the Portfolios' shares by each person
who beneficially owns more than five percent of the voting securities of each of
the Portfolios:
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------ ------------------------ --------------------- ----------------------
Number of Shares
Beneficially Owned Percentage of
Outstanding Shares
Name and Address of Shareholder Name of Portfolio Owned
- ------------------------------------------------ ------------------------ --------------------- ----------------------
- ------------------------------------------------ ------------------------ --------------------- ----------------------
- ------------------------------------------------ ------------------------ --------------------- ----------------------
- ------------------------------------------------ ------------------------ --------------------- ----------------------
- ------------------------------------------------ ------------------------ --------------------- ----------------------
</TABLE>
<PAGE>
EXHIBIT B
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated _______________, 1999, between FFTW
Funds, Inc., a Maryland corporation (the "Fund") and Fischer Francis Trees &
Watts, Inc., a New York corporation
(the "Adviser").
In consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Attorney-in-Fact. The Fund appoints the Adviser as its
attorney-in-fact to invest and reinvest the assets of the Worldwide Portfolio
(the "Portfolio"), as fully as the Fund itself could do. The Adviser hereby
accepts this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible
for managing the investment portfolio of the Portfolio, including, without
limitation, providing investment research, advice and supervision, determining
which portfolio securities shall be purchased or sold by the Portfolio,
purchasing and selling securities on behalf of the Portfolio and determining how
voting and other rights with respect to portfolio securities of the Portfolio
shall be exercised, subject in each case to the control of the Board of
Directors of the Fund (the "Board") and in accordance with the objectives,
policies and principles of the Portfolio set forth in the Registration
Statement, as amended, of the Fund, the requirements of the Investment Company
Act of 1940, as amended, (the "Act") and other applicable law. In performing
such duties, the Adviser shall provide such office space, and such executive and
other personnel as shall be necessary for the operations of the Portfolio. In
managing the Portfolio in accordance with the requirements set forth in this
paragraph 2, the Adviser shall be entitled to act upon advice of counsel to the
Fund or counsel to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be
liable to the Fund for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the management of
the Portfolio and the performance of its duties under this Agreement except for
losses arising out of the Adviser's bad faith, willful misfeasance or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information supplied by the Adviser for
inclusion therein about the Adviser. The Fund agrees to indemnify the Adviser
for any claims, losses, costs, damages, or expenses (including fees and
disbursements of counsel, but excluding the ordinary expenses of the Adviser
arising from the performance of its duties and obligations under this Agreement)
whatsoever arising out of the performance of this Agreement except for those
claims, losses, costs, damages and expenses resulting from the Adviser's bad
faith, willful misfeasance or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under this
Agreement.
(c) The Adviser and its officers may act and continue to act
as investment advisers and managers for others (including, without limitation,
other investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management or
other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Paragraph 5, nothing in this
Agreement will limit or restrict the Adviser or any of its officers, affiliates
or employees from buying, selling or trading in any securities for its or their
own account or accounts. The Fund acknowledges that the Adviser and its
officers, affiliates or employees, and its other clients may at any time have,
acquire, increase, decrease or dispose of positions in investments which are at
the same time being acquired or disposed of for the account of the Portfolio.
The Adviser will have no obligation to acquire for the Portfolio a position in
any investment which the Adviser, its officers, affiliates or employees may
acquire for its or their own accounts or for the account of another client, if
in the sole discretion of the Adviser, it is not feasible or desirable to
acquire a position in such investment for the account of the Portfolio.
3. Expenses. The Adviser shall pay all of its expenses arising
from the performance of its obligations under this Agreement and shall pay any
salaries, fees and expenses of the Directors and officers of the Fund who are
employees of the Adviser or its affiliates. Except as provided below, the
Adviser shall not be required to pay any other expenses of the Fund, including,
without limitation, organization expenses of the Fund (including out-of-pocket
expenses, but not including the Adviser's overhead or employee costs); brokerage
commissions; maintenance of books and records which are required to be
maintained by the Fund's custodian or other agents of the Fund; telephone,
telex, facsimile, postage and other communications expenses; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; indemnification
of Directors and officers of the Fund; travel expenses (or an appropriate
portion thereof) of Directors and officers of the Fund who are directors,
officers or employees of the Adviser to the extent that such expenses relate to
attendance at meetings of the Board of Directors of the Fund or any committee
thereof or advisors thereto held outside of New York, New York; interest, fees
and expenses of independent attorneys, auditors, custodians, accounting agents,
transfer agents, dividend disbursing agents and registrars; payment for
portfolio pricing or valuation service to pricing agents, accountants, bankers
and other specialists, if any; taxes and government fees; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and qualifying
shares of the Fund under Federal and state laws and regulations; expenses of
printing and distributing reports, notices, dividends and proxy materials to
existing stockholders; expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses; expenses of annual and special stockholders'
meetings; costs of stationery, fees and expenses (specifically including travel
expenses relating to Fund business) of Directors of the Fund who are not
employees of the Adviser or its affiliates; membership dues in the Investment
Company Institute; insurance premiums and extraordinary expenses such as
litigation expenses.
4. Compensation. (a) As compensation for the services
performed and the facilities and personnel provided by the Adviser pursuant to
this Agreement, the Fund will pay to the Adviser promptly at the end of each
calendar month, a fee, calculated on each day during such month, at an annual
rate of 0.40 % of the Portfolio's average daily net assets. The Adviser shall be
entitled to receive during any month such interim payments of its fee hereunder
as the Adviser shall request, provided that no such payment shall exceed 50% of
the amount of such fee then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the
whole of any month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net
assets" of the Portfolio shall mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the applicable provisions of the
Fund's Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser or an agent of
the Adviser shall purchase securities from or through and sell securities to or
through such persons, brokers or dealers as the Adviser shall deem appropriate
in order to carry out the policy with respect to the allocation of portfolio
transactions as set forth in the Registration Statement of the Fund, as amended,
or as the Board may direct from time to time. The Adviser will use its
reasonable best efforts to execute all purchases and sales with dealers and
banks on a best net price basis. Neither the Adviser nor any of its officers,
affiliates, or employees will act as principal or receive any compensation from
the Portfolio in connection with the purchase or sale of investments for the
Portfolio other than the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full
force and effect until two years from the date hereof, and will continue in
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, provided that this Agreement is not otherwise
terminated. The Adviser may terminate this Agreement at any time, without
payment of penalty, upon 60 days' written notice to the Fund. The Fund may
terminate this Agreement with respect to the Portfolio at any time, without
payment of penalty, on 60 days' written notice to the Adviser by vote of either
the Board or a majority of the outstanding stockholders of the Portfolio. This
Agreement will automatically terminate in the event of its assignment (as
defined by the Act).
7. Right of Adviser In Corporate Name. The Adviser and the
Fund each agree that the phrase "FFTW", which comprises a component of the
Fund's corporate name, is a property right of the Adviser. The Fund agrees and
consents that: (i) it will only use the phrase "FFTW" as a component of its
corporate name and for no other purpose; (ii) it will not purport to grant to
any third party the right to use the phrase "FFTW" for any purpose; (iii) the
Adviser or any corporate affiliate of the Adviser may use or grant to others the
right to use the phrase "FFTW" or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Adviser, the Fund will take such action as may be required to
provide its consent to such use or grant; and (iv) upon the termination of any
investment advisory agreement into which the Adviser and the Fund may enter, the
Fund shall, upon request by the Adviser, promptly take such action, at its own
expense, as may be necessary to change its corporate name to one not containing
the phrase "FFTW" and following such a change, shall not use the phrase "FFTW"
or any combination thereof, as part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its officers,
directors and stockholders to take any and all actions which the Adviser may
request to effect the foregoing and recovery to the Adviser any and all rights
to such phrase.
8. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed to
require or to impose any duty upon either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
ATTEST FFTW FUNDS, INC.
By: By:
Eric Nachimovsky William E. Vastardis
Secretary
ATTEST FISCHER FRANCIS TREES & WATTS, INC.
By: By:
Stephen Francis Stephen P. Casper
CFO
<PAGE>
EXHIBIT C
ADVISORY AGREEMENT
ADVISORY AGREEMENT, dated _______________, 1999, between FFTW
Funds, Inc., a Maryland corporation (the "Fund") and Fischer Francis Trees &
Watts, Inc., a New York corporation
(the "Adviser").
In consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Attorney-in-Fact. The
Fund appoints the Adviser as its attorney-in-fact to
invest and reinvest the assets of the
Worldwide-Hedged Portfolio (the "Portfolio"), as
fully as the Fund itself could do. The Adviser
hereby accepts this appointment.
2. Duties of the Adviser. (a) The Adviser shall be responsible
for managing the investment portfolio of the Portfolio, including, without
limitation, providing investment research, advice and supervision, determining
which portfolio securities shall be purchased or sold by the Portfolio,
purchasing and selling securities on behalf of the Portfolio and determining how
voting and other rights with respect to portfolio securities of the Portfolio
shall be exercised, subject in each case to the control of the Board of
Directors of the Fund (the "Board") and in accordance with the objectives,
policies and principles of the Portfolio set forth in the Registration
Statement, as amended, of the Fund, the requirements of the Investment Company
Act of 1940, as amended, (the "Act") and other applicable law. In performing
such duties, the Adviser shall provide such office space, and such executive and
other personnel as shall be necessary for the operations of the Portfolio. In
managing the Portfolio in accordance with the requirements set forth in this
paragraph 2, the Adviser shall be entitled to act upon advice of counsel to the
Fund or counsel to the Adviser.
(b) Subject to Section 36 of the Act, the Adviser shall not be
liable to the Fund for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in the management of
the Portfolio and the performance of its duties under this Agreement except for
losses arising out of the Adviser's bad faith, willful misfeasance or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement. It is agreed that
the Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information supplied by the Adviser for
inclusion therein about the Adviser. The Fund agrees to indemnify the Adviser
for any claims, losses, costs, damages, or expenses (including fees and
disbursements of counsel, but excluding the ordinary expenses of the Adviser
arising from the performance of its duties and obligations under this Agreement)
whatsoever arising out of the performance of this Agreement except for those
claims, losses, costs, damages and expenses resulting from the Adviser's bad
faith, willful misfeasance or gross negligence in the performance of its duties
or by reason of its reckless disregard of its obligations and duties under this
Agreement.
(c) The Adviser and its officers may act and continue to act
as investment advisers and managers for others (including, without limitation,
other investment companies), and nothing in this Agreement will in any way be
deemed to restrict the right of the Adviser to perform investment management or
other services for any other person or entity, and the performance of such
services for others will not be deemed to violate or give rise to any duty or
obligation to the Fund.
(d) Except as provided in Paragraph 5, nothing in this
Agreement will limit or restrict the Adviser or any of its officers, affiliates
or employees from buying, selling or trading in any securities for its or their
own account or accounts. The Fund acknowledges that the Adviser and its
officers, affiliates or employees, and its other clients may at any time have,
acquire, increase, decrease or dispose of positions in investments which are at
the same time being acquired or disposed of for the account of the Portfolio.
The Adviser will have no obligation to acquire for the Portfolio a position in
any investment which the Adviser, its officers, affiliates or employees may
acquire for its or their own accounts or for the account of another client, if
in the sole discretion of the Adviser, it is not feasible or desirable to
acquire a position in such investment for the account of the Portfolio.
3. Expenses. The Adviser shall pay all of its expenses arising
from the performance of its obligations under this Agreement and shall pay any
salaries, fees and expenses of the Directors and officers of the Fund who are
employees of the Adviser or its affiliates. Except as provided below, the
Adviser shall not be required to pay any other expenses of the Fund, including,
without limitation, organization expenses of the Fund (including out-of-pocket
expenses, but not including the Adviser's overhead or employee costs); brokerage
commissions; maintenance of books and records which are required to be
maintained by the Fund's custodian or other agents of the Fund; telephone,
telex, facsimile, postage and other communications expenses; expenses relating
to investor and public relations; freight, insurance and other charges in
connection with the shipment of the Fund's portfolio securities; indemnification
of Directors and officers of the Fund; travel expenses (or an appropriate
portion thereof) of Directors and officers of the Fund who are directors,
officers or employees of the Adviser to the extent that such expenses relate to
attendance at meetings of the Board of Directors of the Fund or any committee
thereof or advisors thereto held outside of New York, New York; interest, fees
and expenses of independent attorneys, auditors, custodians, accounting agents,
transfer agents, dividend disbursing agents and registrars; payment for
portfolio pricing or valuation service to pricing agents, accountants, bankers
and other specialists, if any; taxes and government fees; cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares; expenses of registering and qualifying
shares of the Fund under Federal and state laws and regulations; expenses of
printing and distributing reports, notices, dividends and proxy materials to
existing stockholders; expenses of printing and filing reports and other
documents filed with governmental agencies, expenses of printing and
distributing prospectuses; expenses of annual and special stockholders'
meetings; costs of stationery, fees and expenses (specifically including travel
expenses relating to Fund business) of Directors of the Fund who are not
employees of the Adviser or its affiliates; membership dues in the Investment
Company Institute; insurance premiums and extraordinary expenses such as
litigation expenses.
4. Compensation. (a) As compensation for the services
performed and the facilities and personnel provided by the Adviser pursuant to
this Agreement, the Fund will pay to the Adviser promptly at the end of each
calendar month, a fee, calculated on each day during such month, at an annual
rate of 0.40% of the Portfolio's average daily net assets. The Adviser shall be
entitled to receive during any month such interim payments of its fee hereunder
as the Adviser shall request, provided that no such payment shall exceed 50% of
the amount of such fee then accrued on the books of the Portfolio and unpaid.
(b) If the Adviser shall serve hereunder for less than the
whole of any month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net
assets" of the Portfolio shall mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the applicable provisions of the
Fund's Registration Statement, as amended.
5. Purchase and Sale of Securities. The Adviser or an agent of
the Adviser shall purchase securities from or through and sell securities to or
through such persons, brokers or dealers as the Adviser shall deem appropriate
in order to carry out the policy with respect to the allocation of portfolio
transactions as set forth in the Registration Statement of the Fund, as amended,
or as the Board may direct from time to time. The Adviser will use its
reasonable best efforts to execute all purchases and sales with dealers and
banks on a best net price basis.
Neither the Adviser nor any of its officers, affiliates, or
employees will act as principal or receive any compensation from the Portfolio
in connection with the purchase or sale of investments for the Portfolio other
than the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full
force and effect until two years from the date hereof, and will continue in
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, provided that this Agreement is not otherwise
terminated. The Adviser may terminate this Agreement at any time, without
payment of penalty, upon 60 days' written notice to the Fund. The Fund may
terminate this Agreement with respect to the Portfolio at any time, without
payment of penalty, on 60 days' written notice to the Adviser by vote of either
the Board or a majority of the outstanding stockholders of the Portfolio. This
Agreement will automatically terminate in the event of its assignment (as
defined by the Act).
7. Right of Adviser In Corporate Name. The Adviser and the
Fund each agree that the phrase "FFTW", which comprises a component of the
Fund's corporate name, is a property right of the Adviser. The Fund agrees and
consents that: (i) it will only use the phrase "FFTW" as a component of its
corporate name and for no other purpose; (ii) it will not purport to grant to
any third party the right to use the phrase "FFTW" for any purpose; (iii) the
Adviser or any corporate affiliate of the Adviser may use or grant to others the
right to use the phrase "FFTW" or any combination or abbreviation thereof, as
all or a portion of a corporate or business name or for any commercial purpose,
including a grant of such right to any other investment company, and at the
request of the Adviser, the Fund will take such action as may be required to
provide its consent to such use or grant; and (iv) upon the termination of any
investment advisory agreement into which the Adviser and the Fund may enter, the
Fund shall, upon request by the Adviser, promptly take such action, at its own
expense, as may be necessary to change its corporate name to one not containing
the phrase "FFTW" and following such a change, shall not use the phrase "FFTW"'
or any combination thereof, as part of its corporate name or for any other
commercial purpose, and shall use its best efforts to cause its officers,
directors and stockholders to take any and all actions which the Adviser may
request to effect the foregoing and recovery to the Adviser any and all rights
to such phrase.
8. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed to
require or to impose any duty upon either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Fund and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
written above.
ATTEST FFTW FUNDS, INC.
By: By:
Eric Nachimovsky William E. Vastardis
Secretary
ATTEST FISCHER FRANCIS TREES & WATTS,
INC.
By: By:
Stephen Francis Stephen P. Casper
CFO
<PAGE>
EXHIBIT D
Additional Information Regarding Principal Executive Officer
and Directors of the Investment Adviser
<TABLE>
<S> <C> <C>
- ------------------------------- ------------------------------------------------ ----------------------------
Name and Address Position with the Investment Adviser Principal Occupation
- ------------------------------- ------------------------------------------------ ----------------------------
- ------------------------------- ------------------------------------------------ ----------------------------
Richard Fischer Director
200 Park Avenue
New York, NY 10166
- ------------------------------- ------------------------------------------------ ----------------------------
- ------------------------------- ------------------------------------------------ ----------------------------
Stephen Francis Director
200 Park Avenue
New York, NY 10166
- ------------------------------- ------------------------------------------------ ----------------------------
- ------------------------------- ------------------------------------------------ ----------------------------
John Watts Director and Chief Executive Officer
200 Park Avenue
New York, NY 10166
- ------------------------------- ------------------------------------------------ ----------------------------
</TABLE>
<PAGE>
EXHIBIT E
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated _______________, 1999, between
Fischer Francis Trees & Watts, Inc., a New York corporation (the "Adviser") and
Fischer Francis Trees & Watts, a corporation organized under the laws of the
United
Kingdom (the "Sub-Adviser").
In consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Attorney-in-Fact. The Adviser appoints the Sub-Adviser as
its attorney-in-fact to invest and reinvest the assets of the Worldwide
Portfolio (the "Portfolio") of FFTW Funds, Inc. (the "Fund"), as fully as the
Adviser could do. The Sub-Adviser hereby accepts this appointment.
2. Duties of the Sub-Adviser. (a) The Sub-Adviser shall be
responsible for coordinating with the Adviser in managing the investment
portfolio of the Portfolio, including, without limitation, providing investment
research, advice and supervision, determining with the Adviser which portfolio
securities shall be purchased or sold by the Portfolio, purchasing and selling
securities on behalf of the Portfolio and determining with the Adviser how
voting and other rights with respect to portfolio securities of the Portfolio
shall be exercised, subject in each case to the control of the Board of
Directors of the Fund (the "Board") and in accordance with the objectives,
policies and principles of the Portfolio set forth in the Registration
Statement, as amended, of the Fund, the requirements of the Investment Company
Act of 1940, as amended, (the "Act") and other applicable law. In performing
such duties, the Sub-Adviser shall provide such office space, and such executive
and other personnel as shall be necessary for the operations of the Portfolio.
In managing the Portfolio in accordance with the requirements set forth in this
paragraph 2, the Sub-Adviser shall be entitled to act upon advice of counsel to
the Fund, counsel to the Adviser or counsel to the Sub-Adviser.
(b) Subject to Section 36 of the Act, the Sub-Adviser shall
not be liable to the Adviser or the Fund for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the management of the Portfolio and the performance of its duties under this
Agreement except for losses arising out of the Sub-Adviser's bad faith, willful
misfeasance or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement. It is
agreed that the Sub-Adviser shall have no responsibility or liability for the
accuracy or completeness of the Fund's Registration Statement under the Act and
the Securities Act of 1933 except for information supplied by the Sub-Adviser
for inclusion therein about the Sub-Adviser. The Adviser agrees to indemnify the
Sub-Adviser for any claims, losses, costs, damages, or expenses (including fees
and disbursements of counsel, but excluding the ordinary expenses of the
Sub-Adviser arising from the performance of its duties and obligations under
this Agreement) whatsoever arising out of the performance of this Agreement
except for those claims, losses, costs, damages and expenses resulting from the
Sub-Adviser's bad faith, willful misfeasance or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(c) The Sub-Adviser and its officers may act and continue to
act as investment advisers and managers for others (including, without
limitation, other investment companies), and nothing in this Agreement will in
any way be deemed to restrict the right of the Sub-Adviser to perform investment
management or other services for any other person or entity, and the performance
of such services for others will not be deemed to violate or give rise to any
duty or obligation to the Fund.
(d) Except as provided in Paragraph 5, nothing in this
Agreement will limit or restrict the Sub-Adviser or any of its officers,
affiliates or employees from buying, selling or trading in any securities for
its or their own account or accounts. The Adviser acknowledges that the
Sub-Adviser and its officers, affiliates or employees, and its other clients may
at any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of for the
account of the Portfolio. The Sub-Adviser will have no obligation to acquire for
the Portfolio a position in any investment which the Sub-Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Sub-Adviser, it is
not feasible or desirable to acquire a position in such investment for the
account of the Portfolio.
3. Expenses. The Sub-Adviser shall pay all of its expenses
arising from the performance of its obligations under this Agreement except as
provided in Section 2(b) of this Agreement.
4. Compensation. (a) As compensation for the services
performed and the facilities and personnel provided by the Sub-Adviser pursuant
to this Agreement, the Adviser will pay to the Sub-Adviser promptly at the end
of each calendar month, a fee, calculated on each day during such month, at an
annual rate of 0.40% of the Portfolio's average daily net assets. The
Sub-Adviser shall be entitled to receive during any month such interim payments
of its fee hereunder as the Sub-Adviser shall request, provided that no such
payment shall exceed 50% of the amount of such fee then accrued on the books of
the Adviser and unpaid.
(b) If the Sub-Adviser shall serve hereunder for less than the
whole of any month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net
assets" of the Portfolio shall mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the applicable provisions of the
Fund's Registration Statement, as amended.
5. Purchase and Sale of Securities. The Sub-Adviser shall
purchase securities from or through and sell securities to or through such
persons, brokers or dealers as the Sub-Adviser shall deem appropriate in order
to carry out the policy with respect to the allocation of portfolio transactions
as set forth in the Registration Statement of the Fund, as amended, or as the
Board may direct from time to time. The Sub-Adviser will use its reasonable best
efforts to execute all purchases and sales with dealers and banks on a best net
price basis. Neither the Sub-Adviser nor any of its officers, affiliates, or
employees will act as principal or receive any compensation from the Portfolio
in connection with the purchase or sale of investments for the Portfolio other
than the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full
force and effect until two years from the date hereof, and will continue in
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, provided that this Agreement is not otherwise
terminated. The Sub-Adviser and the Adviser may terminate this Agreement at any
time, without payment of penalty, upon 60 days' written notice to any other
party hereto. The Fund may terminate this Agreement with respect to the
Portfolio at any time, without payment of penalty, on 60 days' written notice to
the Sub-Adviser by vote of either the Board or a majority of the outstanding
stockholders of the Portfolio. This Agreement will automatically terminate in
the event of its assignment (as defined by the Act).
7. Fee Waivers. The Sub-Adviser agrees to waive all or a
portion of its fee to the extent necessary to meet the expense cap stated in the
Fund's Registration Statement, as amended, based on a formula whereby the
Adviser, Sub-Adviser and Administrator share in the waiving of fees on a pro
rata basis (based on their relative fee schedules) so long as the Adviser and
Administrator continues to voluntarily waive its fees.
8. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed to
require or to impose any duty upon either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have
caused this Agreement to be executed by their duly authorized officers as of the
date first written above.
ATTEST FISCHER FRANCIS TREES & WATTS
By: By:
Simon G. Hard
General Manager
ATTEST FISCHER FRANCIS TREES & WATTS, INC.
By: By:
Stephen Francis Stephen P. Casper
CFO
<PAGE>
EXHIBIT F
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated _______________, 1999, between
Fischer Francis Trees & Watts, Inc., a New York corporation (the "Adviser") and
Fischer Francis Trees & Watts, a corporation organized under the laws of the
United
Kingdom (the "Sub-Adviser").
In consideration of the mutual agreements herein made, the
parties hereto agree as follows:
1. Attorney-in-Fact. The Adviser appoints the Sub-Adviser as
its attorney-in-fact to invest and reinvest the assets of the Worldwide-Hedged
Portfolio (the "Portfolio") of FFTW Funds, Inc. (the "Fund"), as fully as the
Adviser could do. The Sub-Adviser hereby accepts this appointment.
2. Duties of the Sub-Adviser. (a) The Sub-Adviser shall be
responsible for coordinating with the Adviser in managing the investment
portfolio of the Portfolio, including, without limitation, providing investment
research, advice and supervision, determining with the Adviser which portfolio
securities shall be purchased or sold by the Portfolio, purchasing and selling
securities on behalf of the Portfolio and determining with the Adviser how
voting and other rights with respect to portfolio securities of the Portfolio
shall be exercised, subject in each case to the control of the Board of
Directors of the Fund (the "Board") and in accordance with the objectives,
policies and principles of the Portfolio set forth in the Registration
Statement, as amended, of the Fund, the requirements of the Investment Company
Act of 1940, as amended, (the "Act") and other applicable law. In performing
such duties, the Sub-Adviser shall provide such office space, and such executive
and other personnel as shall be necessary for the operations of the Portfolio.
In managing the Portfolio in accordance with the requirements set forth in this
paragraph 2, the Sub-Adviser shall be entitled to act upon advice of counsel to
the Fund, counsel to the Adviser or counsel to the Sub-Adviser.
(b) Subject to Section 36 of the Act, the Sub-Adviser shall
not be liable to the Adviser or the Fund for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
the management of the Portfolio and the performance of its duties under this
Agreement except for losses arising out of the Sub-Adviser's bad faith, willful
misfeasance or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement. It is
agreed that the Sub-Adviser shall have no responsibility or liability for the
accuracy or completeness of the Fund's Registration Statement under the Act and
the Securities Act of 1933 except for information supplied by the Sub-Adviser
for inclusion therein about the Sub-Adviser. The Adviser agrees to indemnify the
Sub-Adviser for any claims, losses, costs, damages, or expenses (including fees
and disbursements of counsel, but excluding the ordinary expenses of the
Sub-Adviser arising from the performance of its duties and obligations under
this Agreement) whatsoever arising out of the performance of this Agreement
except for those claims, losses, costs, damages and expenses resulting from the
Sub-Adviser's bad faith, willful misfeasance or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(c) The Sub-Adviser and its officers may act and continue to
act as investment advisers and managers for others (including, without
limitation, other investment companies), and nothing in this Agreement will in
any way be deemed to restrict the right of the Sub-Adviser to perform investment
management or other services for any other person or entity, and the performance
of such services for others will not be deemed to violate or give rise to any
duty or obligation to the Fund.
(d) Except as provided in Paragraph 5, nothing in this
Agreement will limit or restrict the Sub-Adviser or any of its officers,
affiliates or employees from buying, selling or trading in any securities for
its or their own account or accounts. The Adviser acknowledges that the
Sub-Adviser and its officers, affiliates or employees, and its other clients may
at any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of for the
account of the Portfolio. The Sub-Adviser will have no obligation to acquire for
the Portfolio a position in any investment which the Sub-Adviser, its officers,
affiliates or employees may acquire for its or their own accounts or for the
account of another client, if in the sole discretion of the Sub-Adviser, it is
not feasible or desirable to acquire a position in such investment for the
account of the Portfolio.
3. Expenses. The Sub-Adviser shall pay all of its expenses
arising from the performance of its obligations under this Agreement except as
provided in Section 2(b) of this Agreement.
4. Compensation. (a) As compensation for the services
performed and the facilities and personnel provided by the Sub-Adviser pursuant
to this Agreement, the Adviser will pay to the Sub-Adviser promptly at the end
of each calendar month, a fee, calculated on each day during such month, at an
annual rate of 0.40% of the Portfolio's average daily net assets. The
Sub-Adviser shall be entitled to receive during any month such interim payments
of its fee hereunder as the Sub-Adviser shall request, provided that no such
payment shall exceed 50% of the amount of such fee then accrued on the books of
the Adviser and unpaid.
(b) If the Sub-Adviser shall serve hereunder for less than the
whole of any month, the fee payable hereunder shall be prorated.
(c) For purposes of this Section 4, the "average daily net
assets" of the Portfolio shall mean the average of the values placed on the
Portfolio's net assets on each day pursuant to the applicable provisions of the
Fund's Registration Statement, as amended.
5. Purchase and Sale of Securities. The Sub-Adviser shall
purchase securities from or through and sell securities to or through such
persons, brokers or dealers as the Sub-Adviser shall deem appropriate in order
to carry out the policy with respect to the allocation of portfolio transactions
as set forth in the Registration Statement of the Fund, as amended, or as the
Board may direct from time to time. The Sub-Adviser will use its reasonable best
efforts to execute all purchases and sales with dealers and banks on a best net
price basis. Neither the Sub-Adviser nor any of its officers, affiliates, or
employees will act as principal or receive any compensation from the Portfolio
in connection with the purchase or sale of investments for the Portfolio other
than the fee referred to in Paragraph 4 hereof.
6. Term of Agreement. This Agreement shall continue in full
force and effect until two years from the date hereof, and will continue in
effect from year to year thereafter if such continuance is approved in the
manner required by the Act, provided that this Agreement is not otherwise
terminated. The Sub-Adviser and the Adviser may terminate this Agreement at any
time, without payment of penalty, upon 60 days' written notice to any other
party hereto. The Fund may terminate this Agreement with respect to the
Portfolio at any time, without payment of penalty, on 60 days' written notice to
the Sub-Adviser by vote of either the Board or a majority of the outstanding
stockholders of the Portfolio. This Agreement will automatically terminate in
the event of its assignment (as defined by the Act).
7. Fee Waivers. The Sub-Adviser agrees to waive all or a
portion of its fee to the extent necessary to meet the expense cap stated in the
Fund's Registration Statement, as amended, based on a formula whereby the
Adviser, Sub-Adviser and Administrator share in the waiving of fees on a pro
rata basis (based on their relative fee schedules) so long as the Adviser and
Administrator continues to voluntarily waive its fees.
8. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York. Anything herein
to the contrary notwithstanding, this Agreement shall not be construed to
require or to impose any duty upon either of the parties to do anything in
violation of any applicable laws or regulations.
IN WITNESS WHEREOF, the Adviser and the Sub-Adviser have
caused this Agreement to be executed by their duly authorized officers as of the
date first written above.
ATTEST FISCHER FRANCIS TREES & WATTS
By: By:
Simon G. Hard General Manager
ATTEST FISCHER FRANCIS TREES & WATTS, INC.
By: By:
Stephen Francis Stephen P. Casper
CFO
<PAGE>
EXHIBIT G
Additional Information Regarding Principal Executive
Officer
and Directors of the Investment Sub-Adviser
<TABLE>
<S> <C> <C>
- ------------------------------- ------------------------------------------------------ -----------------------------
Name and Address Position with the Investment Sub-Adviser Principal Occupation
- ------------------------------- ------------------------------------------------------ -----------------------------
- ------------------------------- ------------------------------------------------------ -----------------------------
- ------------------------------- ------------------------------------------------------ -----------------------------
- ------------------------------- ------------------------------------------------------ -----------------------------
- ------------------------------- ------------------------------------------------------ -----------------------------
</TABLE>
<PAGE>
FFTW FUNDS, INC.
Worldwide Portfolio
Worldwide-Hedged Portfolio
SPECIAL MEETING OF SHAREHOLDERS, NOVEMBER 19, 1999
PLEASE VOTE PROMPTLY
This Proxy is Solicited on behalf of the Board of
Trustees
The undersigned hereby appoints CARLA E. DEARING and WILLIAM E.
VASTARDIS, and each of them, with full power of substitution, as proxies to vote
for and in the name, place and stead of the undersigned at the Special Meeting
of Shareholders of FFTW Funds, Inc. (the "Fund") to be held at the offices of
Fischer Francis Trees & Watts, Inc., 200 Park Avenue, New York, New York 10166,
on Friday, November 19, 1999 at 10:00 a.m., Eastern Time, and at any adjournment
thereof, according to the number of votes and as fully as if personally present.
<PAGE>
Please mark boxes | or x in blue or black ink.
1. Approval of Revised Advisory Agreement
between FFTW Funds, Inc. and Fischer Francis Trees &
Watts, Inc.
FOR [] AGAINST [] ABSTAIN []
2. Approval of Revised Sub-Advisory Agreement
between Fischer Francis Trees & Watts, Inc. and
Fischer Francis Trees & Watts.
FOR [] AGAINST [] ABSTAIN []
3. Approval of all changes to the fundamental investment restrictions.
FOR [] AGAINST [] ABSTAIN []
(INSTRUCTION: To vote against the proposed changes to one or more of
the fundamental investment restrictions, but to approve all others,
indicate the proposal number(s) of the investment restriction(s) you do
not want to change on the line provided below. Please see Proposals 3A
and 3B of the proxy statement for a description of each proposal.)
-----------------------------------------------------------------------
This Proxy when properly executed will be voted in the manner (or not voted) as
specified. If no specification is made, the Proxy will be voted FOR Proposal 1,
2, 3A, and 3B.
Please sign personally and exactly as your name appears on the Proxy. If the
shares are registered in more than one name, each joint owner or each fiduciary
should sign personally. Only authorized officers should sign for corporations.
When signing as an attorney, administrator, trustee, or corporate officer,
please give your full title.
Dated ______________________________ ___________________________________
Signature and Title (if applicable)
-----------------------------------
Signature and Title (if applicable)
