<PAGE>
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
(Amendment No.______)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Information Statement [_] CONFIDENTIAL, FOR USE OF THE
[_] Definitive Information Statement COMMISSION ONLY (AS PERMITTED BY
[_] Definitive Additional Materials RULE 14c-5(d)(2))
North American Funds
- --------------------------------------------------------------------------------
(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)(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:
- --------------------------------------------------------------------------------
Notes:
<PAGE>
NORTH AMERICAN FUNDS
LARGE CAP GROWTH FUND
INTERNATIONAL EQUITY FUND
GROWTH & INCOME FUND
TAX-SENSITIVE EQUITY FUND
EQUITY-INCOME FUND
BALANCED FUND
MID CAP GROWTH FUND
SMALL CAP GROWTH FUND
INTERNATIONAL SMALL CAP FUND
GLOBAL EQUITY FUND
INFORMATION STATEMENT
Prior to March 10, 2000, the following entities (the "Previous
Subadvisers") acted as subadvisers to the ten funds (the "Funds") of the North
American Funds (the "Trust") listed next to their names:
Founders Asset Management LLC Large Cap Growth Fund; Balanced
Fund; International Small Cap Fund
Morgan Stanley Dean Witter Investment International Equity Fund; Global
Management, Inc. ("Morgan Stanley Equity Fund
Asset Management")
Wellington Management Company, LLP Growth & Income Fund
Standish, Ayer & Wood, Inc. Tax-Sensitive Equity Fund
Global Alliance Value Investors, Ltd. Equity-Income Fund
Fred Alger Management, Inc. Mid Cap Growth Fund
Credit Suisse Asset Management, LLC Small Cap Growth Fund
On March 10, 2000 CypressTree Investments, Inc. ("CypressTree") sold
substantially all of its assets, including all of the stock of CypressTree Asset
Management Corporation, Inc. ("CAM"), the Trust's investment adviser, to
American General Corporation ("American General"). The acquisition by American
General of CypressTree's assets (herein "the Acquisition") took place pursuant
to a Purchase Agreement dated February 25, 2000.
1
<PAGE>
The closing of the Acquisition on March 10, 2000 (the "Closing")
constituted an assignment of the investment advisory agreement between CAM and
the Trust with respect to the Funds. Under the Investment Company Act or 1940,
as amended (the "Investment Company Act"), the assignment operated to terminate
automatically the investment advisory agreement.
At a meeting of the Board of Trustees of the Trust (the "Board") on
February 27, 2000, the Board approved an interim investment advisory agreement
between CAM (operating under its new name of American General Asset Management
Corp. ("AGAM")) and the Trust with respect to the Funds in order to allow AGAM
to continue to serve as investment adviser after the Acquisition. Under the
Investment Company Act, however, AGAM may only continue to serve as the
investment adviser for each Fund beyond an interim period of 150 days if the
shareholders of such Fund approve a new advisory contract with AGAM. The Board
approved, and recommended shareholder approval of, such a new investment
advisory agreement on February 27, 2000. (Please see the proxy materials
relating to such shareholder approval that are included in the mailing with this
information statement.)
The subadvisory agreements with the Previous Subadvisers (the "Previous
Subadvisory Agreements"), terminated by their terms upon the assignment of the
investment advisory agreement with CAM. Therefore, on February 27, 2000 the
Board approved the New Subadvisory Agreements for the Funds to take effect upon
consummation of the Acquisition. Except as described below, the New Subadvisory
Agreements are substantially similar to the Previous Subadvisory Agreements.
Under an order the Trust has received from the Securities and Exchange
Commission, the Trust is permitted, upon approval of the Trustees, to appoint a
non-affiliated subadviser pursuant to a subadvisory agreement with the Trust's
investment adviser that has not been approved by shareholders. Accordingly, on
February 27, 2000 the Board appointed the following entities (the "New
Subadvisers") to act as subadvisers to the Funds, pursuant to new subadvisory
agreements (the "New Subadvisory Agreements") as listed below:
Founders Asset Management, LLC Large Cap Growth Fund; Global
Equity Fund; International Small
Cap Fund
Morgan Stanley Asset Management International Equity Fund
Wellington Management Company, LLP Growth & Income Fund; Tax-
Sensitive Equity Fund; Equity-
Income Fund
INVESCO Funds Group, Inc. Balanced Fund; Mid Cap Growth Fund
Credit Suisse Asset Management, Inc. Small Cap Growth Fund
2
<PAGE>
The Trust must provide notice to shareholders within 60 days of hiring a
new subadviser or the implementation of any material change in a subadvisory
contract. This Information Statement is being supplied to shareholders to
fulfill this notice requirement and will be mailed on or about April 12, 2000.
NO SHAREHOLDER VOTE WILL BE TAKEN WITH RESPECT TO THE MATTERS DESCRIBED IN
THIS INFORMATION STATEMENT. WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
The Adviser
Pursuant to the interim advisory agreement with the Trust, AGAM oversees
the administration of all aspects of the business and affairs of the Trust;
selects, contracts with and compensates subadvisers to manage the assets of the
Funds; and reimburses the Trust if the total of certain expenses allocated to
any Portfolio exceeds certain limitations. AGAM monitors the subadvisers for
compliance with the investment objectives and related policies of each Fund,
reviews the performance of the subadvisers, and periodically reports to the
Trustees of the Trust.
AGAM, located at 286 Congress Street, Boston, Massachusetts 02210, is a
wholly-owned subsidiary of American General.
Previous Subadvisory Agreements
Prior to March 10, 2000, CAM delegated its responsibility under the Trust's
Advisory Agreement for managing the assets of each of the Funds pursuant to the
Previous Subadvisory Agreements. The Previous Subadvisory Agreements required
the Previous Subadvisers to manage the investment and reinvestment of the assets
of the respective Funds, subject to the supervision of CAM. Under the terms of
the Previous Subadvisory Agreements, the Previous Subadvisers were authorized to
effect portfolio transactions for the Funds using their own discretion, and
without prior consultation with CAM. The Previous Subadvisers were also
required to report periodically to CAM and the Trustees of the Funds.
The Previous Subadvisory Agreements were approved by shareholders of the
Funds (except the Tax-Sensitive Equity Fund and the Small Cap Growth Fund), on
September 24, 1997. The Previous Subadvisory Agreements were submitted for
shareholder approval at that time because of CAM's replacement of NASL Financial
Services, Inc. as the Funds' investment adviser. The Previous Subadvisory
Agreements with respect to the Tax-Sensitive Equity Fund and the Small Cap
Growth Fund were approved by the initial shareholder of each Fund on
December 16, 1997.
3
<PAGE>
Under the Previous Subadvisory Agreements, the Previous Subadvisers were
each entitled to receive from CAM (but not from the Funds) a subadvisory fee
stated as an annual percentage of the current value of the net assets of each
Fund as set out below:
<TABLE>
<CAPTION>
Between Between
$50 million $200 million
First and and Excess Over
Fund $50 million $200 million $500 million $500 million
- ---- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Tax-Sensitive Equity Fund.......... .450% .400% .375% .300%
Small Cap Growth Fund.............. .550% .550% .550% .550%
International Small Cap Fund....... .650% .600% .500% .400%
Mid Cap Growth Fund................ .525% .500% .475% .450%
Global Equity Fund................. .500% .450% .375% .325%
Large Cap Growth Fund.............. .500% .450% .425% .400%
International Equity Fund.......... .500% .450% .400% .350%
Growth & Income Fund............... .325% .275% .225% .150%
Equity-Income Fund................. .400% .400% .400% .400%
Balanced Fund...................... .375% .325% .275% .225%
</TABLE>
For the fiscal year ended October 31, 1999, the aggregate subadvisory fees
paid by CAM to the Previous Subadvisers under the Previous Subadvisory
Agreements were as follows:
<TABLE>
<CAPTION>
Fund Aggregate Subadvisory Fees
- ---- --------------------------
<S> <C>
Mid Cap Growth Fund................. $221,855
International Small Cap Fund........ 98,810
Large Cap Growth Fund............... 186,543
Global Equity Fund.................. 500,828
Equity-Income Fund.................. 550,865
Growth & Income Fund................ 768,487
International Equity Fund........... 128,186
Balanced Fund....................... 319,497
Tax-Sensitive Equity Fund........... 46,643
Small Cap Growth Fund............... 5,910
</TABLE>
New Subadvisory Agreements
As in the Previous Subadvisory Agreements, the New Subadvisory Agreements
require the New Subadvisers to manage the investment and reinvestment of the
assets of the Funds, subject to the supervision of AGAM. Likewise, the New
Subadvisers are authorized to effect portfolio transactions for the Funds using
their own discretion, without prior consultation with AGAM, and are required to
report periodically to AGAM and the Trustees of the Funds.
4
<PAGE>
The New Subadvisory Agreements provide that they will continue in effect
for two years from their dates of execution, and thereafter from year to year if
their continuance is approved at least annually (i) by the Board of Trustees of
the Trust or by vote of a majority of the outstanding voting securities of the
relevant Fund, and (ii) by vote of a majority of the Trustees who are not
"interested persons," as that term is defined in the Investment Company Act, of
the Trust, AGAM or the relevant New Subadviser, cast in person at a meeting
called for the purpose of voting on such approval. Any amendment to a New
Subadvisory Agreement must be approved by AGAM and the New Subadviser, and, if
required by law, by vote of a majority of the outstanding voting securities of
the relevant Fund and by vote of a majority of Trustees of the Trust who are not
such interested persons, cast in person at a meeting called for the purpose of
voting on such approval.
A New Subadvisory Agreement may be terminated without penalty by vote of
the Board of Trustees of the Trust or by vote of a majority of the outstanding
voting securities of the relevant Fund, upon sixty days' written notice, or by
the New Subadviser or AGAM upon sixty days' written notice, and it will
terminate automatically in the event of its assignment. A New Subadvisory
Agreement will automatically terminate if the Advisory Agreement for the
relevant Fund is terminated. Like the Previous Subadvisory Agreements with the
Previous Subadvisers, the New Subadvisory Agreements provide that the New
Subadvisers will not be subject to any liability for any error of judgment, any
mistake of law or any loss arising out of any investment or other act or
omission in the course of, in connection with, or arising out of any service to
be rendered under the New Subadvisory Agreements, except by reason of a New
Subadviser's willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard by a New Subadviser
of its obligations and duties.
As compensation for their services under the New Subadvisory Agreements,
the New Subadvisers are entitled to receive from AGAM subadvisory fees
calculated at the rates described below.
International Small Cap Fund. The fee rates payable by AGAM to Founders
Asset Management under the New Subsidiary Agreement for the International Small
Cap Fund are listed below, and are lower than those paid under the Previous
Subadvisory Agreement:
Fee Fund Assets
--- -----------
0.500% $0-300 million
0.450% $300-500 million
0.400% over $500 million
Global Equity Fund. The fee rates payable to AGAM to Founders Asset
Management under the New Subadvisory Agreement for the Global Equity Fund are
listed below, and are higher than those paid under the Previous Subadvisory
Agreement. However, because the subadvisory fees are paid by AGAM out of its
advisory fee, which has not changed, the expenses of the Fund would not
increase.
5
<PAGE>
Fee Fund Assets
--- -----------
0.500% $0-50 million
0.450% $50-200 million
0.400% $200-500 million
0.350% over $500 million
Mid Cap Growth Fund. The fee rates payable by AGAM to INVESCO Funds Group
under the New Advisory Agreement for the Mid Cap Growth Fund are listed below,
and are lower than those paid under the Previous Subadvisory Agreement:
Fee Fund Assets
--- -----------
0.500% $0-100 million
0.450% $100-250 million
0.400% $250-500 million
0.350% over $500 million
Balanced Fund. The fee rates payable by AGAM to INVESCO under the New
Subadvisory Agreement to the Balanced Fund are listed below, and are higher than
those paid under the Previous Subadvisory Agreement. However, because the
subadvisory fees are paid by AGAM out of its advisory fee, which has not
changed, the expenses of the Fund would not increase:
Fee Fund Assets
--- -----------
0.450% $0-50 million
0.400% $50-100 million
0.350% $100-250 million
0.300% over $250 million
Equity-Income Fund. The fee rates payable by AGAM to Wellington Asset
Management under the New Subadvisory Agreement for the Equity-Income Fund are
listed below, and are lower than those paid under the Previous Subadvisory
Agreement:
Fee Fund Assets
--- -----------
0.375% $0-50 million
0.270% $50-200 million
0.200% $200-500 million
0.200% over $500 million
6
<PAGE>
The Trustees of the Trust believe that the terms of the New
Subadvisory Agreements are fair to, and in the best interest of, each of the
Funds and their shareholders.
In evaluating the New Subadvisory Agreements, the Board considered the
fact that the Previous Subadvisory Agreements and the corresponding New
Subadvisory Agreements are substantially identical to each other, including the
terms relating to the services to be provided and, except as described above,
the fees payable by AGAM to the Previous Subadvisers or New Subadvisers
thereunder. The Board considered the performance of the Previous Subadvisers in
providing services to the Trust and the skills and capabilities of the personnel
of the Previous Subadvisers.
In support of its recommendation to engage the New Subadvisers as
subadvisers to the Funds pursuant to the terms of the New Subadvisory
Agreements, AGAM informed the Board of its belief that appointment of the New
Subadvisers as subadvisers to the Funds would assist the Funds' efforts to
achieve their investment objectives. In evaluating the New Subadvisory
Agreements, the Board received information and reviewed materials furnished by
AGAM and the New Subadvisers, including information about the New Subadvisers'
personnel, operations and anticipated management of the Funds as well as
possible other subadvisers for the Funds.
In approving the New Subadvisory Agreements, the Board carefully
evaluated the experience of the key personnel of the New Subadvisers in
portfolio management, and the high quality of services the New Subadvisers are
expected to provide to the Funds, and gave careful consideration to all factors
deemed to be relevant to the Funds, including, but not limited to: (1) the
performance of the Funds since the Funds' commencement of operations; (2) the
research-intensive nature and quality of the services required to be rendered to
the Funds; (3) the importance of such research and services to the fulfillment
of the particular investment objective of each Fund and the investment policies
of the Funds; (4) the fees payable to the New Subadvisers by AGAM under the New
Subadvisory Agreements; (5) the substantially similar material terms of the New
Subadvisory Agreements (other than with respect to the fees as described above)
compared to the terms of the Previous Subadvisory Agreements; (6) the
reputations, qualifications and backgrounds of the New Subadvisers and their
respective financial conditions; (7) the New Subadvisers' brokerage policies and
practices, as described below; and (8) other factors they deemed relevant.
AGAM has advised the Board that it expects that there will be no
diminution in the scope and quality of subadvisory services provided to the
Funds as a result of the approval of the New Subadvisory Agreements.
Brokerage Policies
Transactions on stock exchanges and other agency transactions involve
the payment by the Funds of negotiated brokerage commissions. Such commissions
vary among different
7
<PAGE>
brokers. Also, a particular broker may charge different commissions for
different transactions according to such factors as the difficulty and size of
the transaction.
When AGAM or a Fund's Subadviser places an order for the purchase and sale
of portfolio securities for a Fund, it is anticipated that the transaction will
be effected through a number of brokers and dealers. In so doing, AGAM or the
Subadviser intends to use its best efforts to obtain for each Fund the most
favorable price and execution available, except to the extent it may be
permitted to pay higher brokerage commissions as described below. In seeking the
most favorable price and execution, AGAM or the Subadviser consider all factors
they deem relevant, including, by way of illustration, price, the size of the
transaction, the nature of the market for the security, the amount of
commission, the timing of the transactions taking into account market prices and
trends, the reputation, experience and financial stability of the broker-dealer
involved and the quality of service rendered by the broker-dealer in other
transactions.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive research, statistical and quotation services from broker-dealers
which execute portfolio transactions for the clients of such advisers.
Consistent with this practice, AGAM or the Subadviser may receive research,
statistical and quotation services from many of the broker-dealers with which
each Fund's portfolio transactions are placed. These services, which in some
instances could also be purchased for cash, include such matters as general
economic and security market reviews, industry and company reviews, evaluations
of securities and recommendations as to the purchase and sale of securities.
Some of these services are of value to AGAM or the Subadviser in advising its
other clients, although not all of these services are necessarily useful and of
value in advising each Fund. The fees paid to the Adviser or Subadviser are not
reduced because AGAM or the Subadviser receives such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), under the New Advisory Agreement and the New Subadvisory
Agreements, AGAM and/or a Subadviser may cause each Fund to pay a broker-dealer
which provides "brokerage and research services" (as defined by the 1934 Act) to
AGAM or the Subadviser an amount of disclosed commission for effecting a
securities transaction for each Fund in excess of the commission which another
broker-dealer would have charged for effecting the same transaction. The
authority of AGAM or the Subadviser to cause each Fund to pay any such greater
commission is subject to such policies as the Trustees may adopt from time to
time.
[During the fiscal year ended October 31, 1999, none of the Funds paid any
brokerage commission to any broker then affiliated with the Adviser or the New
Subadvisers.]
Information About The Fund
The Trust is a diversified, open-end management investment company
organized in 1988 as a business trust under the laws of Massachusetts, and is a
series type company with
8
<PAGE>
fifteen investment portfolios. The Funds are ten of those portfolios. The
address of the Trust is 286 Congress Street, Boston, Massachusetts 02210.
Information About The New Subadvisers
Founders Asset Management, LLC
- ------------------------------
Founders Asset Management LLC was organized as a Delaware limited liability
company on November 26, 1997. The Board of Managers of Founders Asset Management
consists of:
Name Position
---- --------
Christopher M. Condron Chairman
Stephen E. Canter Member, Board of Managers
Thomas F. Eggers, Member, Board of Managers
Richard W. Sabo President and Chief Executive Officer
and Member, Board of Managers
Gregory P. Contillo Executive Vice President and Chief
Marketing Officer, Member, Board of
Managers
Scott A. Chapman Vice President - Investments, Research
Director, Member, Board of Managers
The address of Founders Asset Management is: 2930 East Third Avenue,
Denver, Colorado 80206.
9
<PAGE>
Founders Asset Management acts as investment adviser (or, where indicated,
as subadviser) to the following other mutual funds which have a similar
objective to that of the Large Cap Growth Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate Net
Fee Rate (as a % of Assets as of
Fund net assets) February 29, 2000
---- ------------------- -----------------
<S> <C> <C>
Dreyfus Founders Growth 1.00% to $30 million $3,554,998,000
Fund 0.75% $30 million to $300 million
0.70% $300 million to $500 million
0.65% thereafter
Dreyfus Investment 0.25% to $100 million $ 10,238,252
Portfolios Founders 0.20% $100 million to $1 billion
Growth Portfolio* 0.16% $1 billion to $1.5 billion
0.10% thereafter
</TABLE>
*Founders Asset Management acts as subadviser.
Founders Asset Management acts as investment adviser or subadviser to the
following other mutual funds which have a similar objective to that of the
International Small Cap Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ------------------- -----------------
<S> <C> <C>
Dreyfus Founders Passport 1.00% to $250 million $458,521,028
Fund 0.80% $250 million to $500 million
0.70% thereafter
Dreyfus Investment Portfolios 0.35% to $100 million $ 31,732,015
- - Founders Passport 0.30% $200 million to $1 billion
Portfolio* 0.26% $1 billion to $1.5 billion
0.20% thereafter
Manufacturers International 0.65% to $50 million $418,901,554
Small Cap Trust 0.60% $50 million to $200 million
0.50% $200 million to $500 million
0.40% thereafter
ASAF Founders International 0.60% to $100 million $100,658,095
Small Capitalization Fund* 0.50% thereafter
American Skandia Trust - 0.60% to $100 million $435,607,245
Founders Passport Portfolio* 0.50% thereafter
</TABLE>
*Founders Asset Management acts as subadviser.
10
<PAGE>
Founders Asset Management acts as investment adviser to the following other
mutual fund which has a similar objective to that of the Global Equity Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ------------------- -----------------
<S> <C> <C>
Dreyfus Founders Worldwide 1.00% to $250 million $304,198,551
Growth Fund 0.80% $250 million to $500 million
0.70% thereafter
</TABLE>
Morgan Stanley Asset Management
- -------------------------------
Morgan Stanley Asset Managemen was organized as a Delaware corporation on
September 19, 1980. The board of directors of Morgan Stanley Asset Management
consists of Barton M. Briggs, Chairman and Richard B. Worley.
The address of Morgan Stanley Asset Management is 1221 Avenue of the
Americas, New York, NY 10022.
Morgan Stanley Asset Management acts as investment adviser or subadviser to
the following other mutual funds which have a similar objective to that of the
International Equity Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
----- ------------------- -----------------
<S> <C> <C>
Morgan Stanley Dean Witter 0.65% for all totals $580,534,623
Institutional Fund
Morgan Stanley Dean Witter 0.80% for the first $500 million $ 12,302,698
Universal Fund 0.75% for totals between $500 million-$1
billion
0.70% for totals exceeding $1 billion
Morgan Stanley Dean Witter 1.00% for all totals $775,638,821
International Fund*
Van Kemper Series Fund* 1.00% for all totals $634,302,497
Fifth Third Funds 0.45% for all totals $211,382,533
International Equity Fund*
</TABLE>
*Morgan Stanley Asset Management acts as subadviser.
11
<PAGE>
Wellington Management Company, LLP
- ----------------------------------
Wellington Management Company, LLP was organized as a Massachusetts limited
liability partnership in 1996. The Executive Committee of Wellington Management
Company consists of:
Name Position
---- --------
Duncan M. McFarland President and Partner
John R. Ryan Managing Partner
Laurie A. Gabriel Managing Partner
The address of Wellington Management Company is 75 State Street, Boston,
Massachusetts 02109.
Wellington Management Company acts as subadviser to the following other
mutual funds which have a similar objective to that of the Growth & Income Fund:
12
<PAGE>
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ----------- -----------------
<S> <C> <C>
Anchor Series Growth and 0.325% for the first $50 million $ 45,000,000
Income Fund 0.225% for the next $100 million
0.200% for the next $350 million
0.150% for totals exceeding $500 million
IRIS US Equity Fund 0.325% for the first $50 million $ 51,000,000
0.225% for the next $300 million
0.150% for totals exceeding $500 million
Hartford Growth and Income 0.325% for the first $50 million $ 401,600,000
Fund 0.250% for the next $100 million
0.200% for the next $350 million
0.150% for the next $500 million
0.125% for totals exceeding $1 billion
Horace Mann Growth Fund 0.325% for the first $50 million $ 156,900,000
0.275% for the next $150 million
0.225% for the next $300 million
0.175% for totals exceeding $500 million
Manulife Growth & Income 0.325% for the first $50 million $3,019,000,000
Fund 0.275% for the next $150 million
0.225% for the next $300 million
0.150% for totals exceeding $500 million
</TABLE>
13
<PAGE>
Wellington Management Company acts as subadviser to the following other
mutual funds which have a similar objective to that of the Equity-Income Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ----------- -----------------
<S> <C> <C>
Viscount US Equity 0.500% for the first $50 million $ 2,000,000
0.400% for the next $50 million
0.300% for totals exceeding $100 million
Vantagepoint Equity Income 0.400% for the first $50 million $127,300,000
0.300% for the next $50 million
0.250% for totals exceeding $100 million
Vanguard Equity Income 0.325% for the first $1 billion $411,100,000
0.100% for the next $4 billion
0.080% for totals exceeding $5 billion
</TABLE>
INVESCO Funds Group, Inc.
- ------------------------
INVESCO Funds Group, Inc. was organized as a Delaware corporation on
January 14, 1932. The board of directors of INVESCO Funds Group ("IFG")
consists of:
Board Member Position
------------ --------
Mark H. Williamson, Chairman President and CEO of IFG
Ronald L. Grooms, Director Senior VP and Treasurer of IFG
Richard W. Healey, Director Senior VP of Marketing of IFG
Charles P. Mayer, Director Senior VP of IFG
Timothy J. Miller, Director Senior VP of IFG
The address of INVESCO Funds Group is 7800 East Union Avenue, Denver,
Colorado 80237.
IFG acts as investment adviser to the following other mutual fund which has
a similar objective to that of the Balanced Fund:
14
<PAGE>
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ---------- -----------------
<S> <C> <C>
INVESCO Balanced Fund 0.60% for the first $350 million $513,000,000
0.55% for the next $350 million
0.50% for totals exceeding $700 million
0.45% for totals exceeding $2 billion
0.40% for totals exceeding $4 billion
0.375% for totals exceeding $6 billion
0.35% for totals exceeding $8 billion
</TABLE>
IFG acts as investment adviser to the following other mutual funds which
have a similar objective to that of the Mid Cap Growth Fund:
<TABLE>
<CAPTION>
Annual Management
(or Subadvisory) Approximate
Fee Rate (as a % of Net Assets as of
Fund net assets) February 29, 2000
---- ------------------- -----------------
<S> <C> <C>
INVESCO Dynamics Fund 0.60% for the first $350 million $7,000,000,000
0.55% for the next $350 million
0.50% for totals exceeding $700 million
0.45% for totals exceeding $2 billion
0.40% for totals exceeding $4 billion
0.375% for totals exceeding 6 billion
0.35% for totals exceeding $8 billion
VIF Dynamics Fund 0.75% for the first $1 billion $ 60,000,000
0.60% for the next $1 billion
0.45% for totals exceeding $2 billion
0.40% for totals exceeding $4 billion
0.375% for totals exceeding $6 billion
0.35% for totals exceeding 8 billion
</TABLE>
Credit Suisse Asset Management, Inc.
- -----------------------------------
Credit Suisse Asset Management, Inc. was organized as a Delaware
corporation on July 2, 1999. The Management Committee of Credit Suisse Asset
Management ("CSAM") consists of:
15
<PAGE>
Name Principal Occupation
---- --------------------
William W. Priest, Jr. Chief Executive Officer, Chairman of
Management Committee and Managing
Director
Michael E. Guarasci, Sr. Chief Financial Officer, Member of
Management Committee and Managing
Director CSAM
Laurence R. Smith Chief Investment Officer, Member of
Management Committee and Managing
Director, CSAM
Eugene Podsiadlo Head of Retail Distribution, Member of
Management Committee and Managing
Director, CSAM
Timothy T. Taussig Head of Institutional Distribution,
Member of Management Committee and
Managing Director, CSAM
Elizabeth B. Dater Member of Management Committee and
Managing Director, CSAM
Sheila N. Scott Member of Management Committee and
Managing Director, CSAM
CSAM acts as investment adviser or as subadviser to the following other
mutual funds which have a similar objective to that of the Small Cap Growth
Fund:
<TABLE>
<CAPTION>
Annual Management Approximate
(or Subadvisory) Net Assets as of
Fee Rate (as a % of February 29, 2000
Fund net assets)
---- --------- ----------
<S> <C> <C>
Warburg Pincus Emerging 0.90% for all totals $2,792,476,744
Growth Fund
Warburg Pincus 0.90% for all totals $ 16,525,150
Trust-Emerging Growth
Funds
Style Select 0.55% for all totals $ 481,206,555
Series-Aggressive Growth
Portfolio*
AUL American Series 0.65% for all totals $ 7,529,574
Fund-Aggressive Investor
</TABLE>
* CSAM acts as subadviser.
16
<PAGE>
Other Information
Ownership of Shares and Voting Information
As of March 20, 2000, the Trust believes that the Trustees and officers of
the Trust, as a group, owned less than one percent of each class of shares of
each Fund and of the Trust as a whole. As of March 20, 2000, the following
persons owned of record or beneficially 5% or more of the noted class of shares
of the noted Fund:
<TABLE>
<CAPTION>
Fund Shareholder % of Fund Held
- ---- ----------- --------------
<S> <C> <C>
Global Equity Fund
Class A Shares North American Life Assurance 22%
Co.
c/o Elliott & Page, Brett
Hyrb
393 University Ave., Suite
2100
Toronto, Ontario
Canada MSG 1E6
International Small Cap Fund
Class A Shares First Union Securities, Inc. 5%
A/C 7285-9625
Sitnasuak Native Corporation
111 East Kilbourn Avenue
Milwaukee, WI 53202-6611
National Investor Services 6%
FBO
514-90284-16
55 Water Street, 32nd Floor
New York, NY 10041-3299
International Small Cap Fund
Class B Shares Wexford Clearing Services 6%
Corp. FBO
Robert M. Freeman
14 Kanawha Road
Richmond, VA 23226-3308
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
Fund Shareholder % of Fund Held
---- ----------- --------------
<C> <S> <C>
Large Cap Growth Fund
Class A Shares Farmers State Bank Employees Pension 7%
C/O Farmers State Bank Trustee U/A
Carolyn Dickerson Tr. Officer
Carolyn Bollman Asst. Tr. Officer
P.O. Box 538
108 E. Adams Street
Pittsfield, IL 62363-0538
Balanced Fund
Class A Shares Farmers State Bank Employees Pension 9%
C/O Farmers State Bank Trustee U/A
Carolyn Dickerson Tr. Officer
Carolyn Bollman Asst. Tr. Officer
P.O. Box 538
108 E. Adams Street
Pittsfield, IL 62363-0538
Lewco Securities Corp. 8%
FBO A/C #W36-900262-1-04
34 Exchange Place, 4th Floor
Jersey City, NJ 07302-3885
Mark Meyer & Michelle McGuirk, Trustees for 5%
Meyers Campers Inc. PSP Trust
3338 State Road
Caledonic, NY 14423-9757
Small Cap Growth Fund
Class A Shares Phyllis Hilfiker 5%
8 Hasler Lane
Little Silver, NJ 07739-1650
North Pinnellas Anesthesia Association 10%
PA
William N. Hartenbach MD & Marvin
Sponaugle
MD, TTEES
1810 Alt 19 South, Suite N
Tarpon Springs, FL 34689-1954
Frances Katheryn King Eddy 8%
3 Obtuse Road South
Brookfield, CT 06804-3625
Wexford Clearing Services Corp. FBO 5%
Constance S. Brown
2800 Kellipe Road
Glen Allen, VA 23059-4712
Small Cap Growth Fund
Class C Shares First Union National Bank TTEE 9%
FBO Christian Barton PSP
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
Fund Shareholder % of Fund Held
---- ----------- --------------
<C> <S> <C>
FBO JE Betts P/S/P U/A/D 2/1/79
A/C #5041140787 Trust Operations
1525 West WT Harris Blvd. NC 1151
Charlotte, NC 28262-8522
Tax-Sensitive Equity Fund
Class A Shares Margaret M. Werner Family Trust 9%
3 Sweets View Lane
Fairport, NY 14450-8423
Donaldson Lufkin Jenrette 7%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303-2052
Wexford Clearing Services Corp. FBO 14%
Eloise C. Basler
10023 Willow Cove Road, SE
Huntsville, AL 35803-2623
Richard R. Irwin, Cust. 12%
Jennifer Irwin UTMA--PA
1269 Barnstaple Dr.
Library, PA 15129-8975
Tax-Sensitive Equity Fund
Class B Shares Joanne Cichanowicz 6%
7 Bay Point Circle
Rochester, NY 14622-3332
Tax-Sensitive Equity Fund
Class C Shares Doris J. Hoag, TTEE 34%
Robert A. Johnston Irrevocable
Trust DTD 1/4/90
2988 County House Woods Road
Bluff Point, NY 14478-9709
PaineWebber For the Benefit of 15%
Sheri Ellen Schwartz
Revocable Trust DTD 11-4-94
Managed Account Two
500 Duvall Drive
Greenville, SC 29607-3629
</TABLE>
[April 12, 2000]
19
<PAGE>
