<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (Amendment No. )
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))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
PIMCO Funds: Equity Advisors Series
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
PIMCO Funds: Equity Advisors Series
- --------------------------------------------------------------------------------
(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:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF PIMCO APPEARS HERE]
PIMCO ADVISORS L.P.
800 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
November 7, 1996
Dear PIMCO Funds: Equity Advisors Series Shareholder:
We are proposing to consolidate the PIMCO Funds: Equity Advisors Series
(your fund family) with the PIMCO Advisors Funds, an affiliated fund group,
into a single trust which will be called "PIMCO Funds: Multi-Manager Series."
This new fund group will be part of the PIMCO Funds, a single, integrated
mutual fund family serving both individual and institutional clients. The
PIMCO Funds will provide you with a number of potential benefits.
WHAT STAYS THE SAME
In many ways, the proposed consolidation will cause no significant changes
to your investment.
. Your Fund's management and investment objective remains the same. Following
the consolidation, your fund will have the same quality institutional
investment management team and the same investment objective.
. Fund operating expenses. The PIMCO Funds "unified fee" structure, which sets
fixed advisory and administration fees for the funds, will remain in place
after the consolidation. There will be no increase in fees. However, your
approval will be sought for a proposed change in the allocation of the
advisory fee between PIMCO Advisors and the sub-advisers of the funds.
. Commitment to client servicing. PIMCO Advisors and its sub-advisers
(including Pacific Investment Management Company, Blairlogie Capital
Management, Columbus Circle Investors, Cadence Capital Management, NFJ
Investment Group and Parametric Portfolio Associates) remain committed to
shareholders, including a commitment to high quality communications and
services.
. Strong performance records. While past performance is no guarantee of future
results, the PIMCO Funds which are available to you generally have strong
performance histories.
WHAT CHANGES
While the fundamental characteristics of your investment will remain the
same, the consolidation should also offer some additional benefits.
. Simplified PIMCO Funds structure. Having multiple fund complexes with the
PIMCO name may have caused confusion for some. The consolidation and name
changes should eliminate this confusion.
. A larger fund family. By combining your fund family with the PIMCO Advisors
Funds, you will become part of a fund family with approximately $24 billion
in assets (based on current values). This increase in size should provide
the funds with more visibility and presence in the marketplace, with the
potential for lower portfolio transaction costs.
. More funds to select. We will be able to offer you six additional funds--
resulting in a broader choice of investments. All of these funds will be
managed by PIMCO Advisors' institutional investment management firms (except
for one fund which will continue to be managed by a non-affiliated adviser).
<PAGE>
YOUR VOTE IS IMPORTANT
After reviewing the proposed transactions, your Board of Trustees
unanimously agreed that they are in the best interests of fund shareholders
and voted to approve the transactions, all as more fully set forth in the
accompanying proxy statement.
Now it is your turn to review the proposals for your Fund and vote. Specific
issues you are being asked to vote on include the following: amendments with
respect to most Funds' sub-advisory contracts; the adoption of a Distribution
Plan for the Administrative Class, at no additional cost to shareholders; the
election of eight new trustees, each of whom has served on the PIMCO Advisors
Funds' board; and changes to the Declaration of Trust to conform it to the
PIMCO Advisors Funds' form. Shareholders of the NFJ Diversified Low P/E Fund
and Cadence Mid Cap Growth Fund will each also be asked to vote on a merger
with a fund of PIMCO Advisors Funds with substantially similar investment
policies and the same portfolio manager. For more information about the issues
requiring your vote, please refer to the accompanying proxy statement.
A special meeting of the shareholders of PIMCO Funds: Equity Advisors Series
will be held at 8:00 a.m. Pacific time on December 20, 1996 to vote on the
specific issues of this proposed consolidation. The meeting will be held at
the offices of Pacific Investment Management Company at 840 Newport Center
Drive in Newport Beach, California 92660. If you are not able to attend the
meeting, then please use the enclosed proxy and envelope to cast your vote so
that you will be represented.
Thank you in advance for your participation in this important event.
Sincerely,
/s/ William D. Cvengros
William D. Cvengros,
Chief Executive Officer
P.S. Please make the effort to complete, sign, date and mail the enclosed
proxy promptly, in order to avoid the expense of additional mailings.
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
NFJ EQUITY INCOME FUND
NFJ DIVERSIFIED LOW P/E FUND
NFJ SMALL CAP VALUE FUND
CADENCE CAPITAL APPRECIATION FUND
CADENCE MID CAP GROWTH FUND
CADENCE MICRO CAP GROWTH FUND
CADENCE SMALL CAP GROWTH FUND
COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND
COLUMBUS CIRCLE INVESTORS MID CAP EQUITY FUND
PARAMETRIC ENHANCED EQUITY FUND
BLAIRLOGIE EMERGING MARKETS FUND
BLAIRLOGIE INTERNATIONAL ACTIVE FUND
BALANCED FUND
840 NEWPORT CENTER DRIVE, SUITE 360
NEWPORT BEACH, CALIFORNIA 92660
(800) 927-4648
----------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 20, 1996
----------------
To the Shareholders of PIMCO Funds: Equity Advisors Series (formerly "PIMCO
Advisors Institutional Funds"):
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of each Fund of PIMCO Funds: Equity Advisors Series (the "Trust"),
a Massachusetts business trust, will be held at 8:00 a.m., Pacific time, on
December 20, 1996 at 840 Newport Center Drive, Newport Beach, California 92660
for the following purposes:
I. TO BE VOTED UPON BY ALL SHAREHOLDERS: To elect eight Trustees.
II. To approve or disapprove the following:
A. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE CADENCE MID CAP GROWTH
FUND ONLY: A proposed transaction whereby the Cadence Mid Cap
Growth Fund of the Trust will acquire the assets (subject to the
liabilities) of the Discovery Fund, a series of PIMCO Advisors
Funds.
B. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE NFJ DIVERSIFIED LOW
P/E FUND ONLY: A proposed transaction whereby the NFJ Diversified
Low P/E Fund of the Trust will acquire the assets (subject to the
liabilities) of the Value Fund, a series of PIMCO Advisors Funds.
III. To approve or disapprove the following:
A. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE NFJ EQUITY INCOME FUND
ONLY: An Addendum to the Portfolio Management Agreement between
the Trust's investment adviser and NFJ Investment Group.
B. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE NFJ DIVERSIFIED LOW
P/E FUND ONLY: An Addendum to the Portfolio Management Agreement
between the Trust's investment adviser and NFJ Investment Group.
<PAGE>
C. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE NFJ SMALL CAP VALUE
FUND ONLY: An Addendum to the Portfolio Management Agreement
between the Trust's investment adviser and NFJ Investment Group.
D. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE CADENCE CAPITAL
APPRECIATION FUND ONLY: An Addendum to the Portfolio Management
Agreement between the Trust's investment adviser and Cadence
Capital Management.
E. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE CADENCE MID CAP GROWTH
FUND ONLY: An Addendum to the Portfolio Management Agreement
between the Trust's investment adviser and Cadence Capital
Management.
F. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE CADENCE MICRO CAP
GROWTH FUND ONLY: An Addendum to the Portfolio Management
Agreement between the Trust's investment adviser and Cadence
Capital Management.
G. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE CADENCE SMALL CAP
GROWTH FUND ONLY: An Addendum to the Portfolio Management
Agreement between the Trust's investment adviser and Cadence
Capital Management.
H. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE PARAMETRIC ENHANCED
EQUITY FUND ONLY: An Addendum to the Portfolio Management
Agreement between the Trust's investment adviser and Parametric
Portfolio Associates.
I. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE BLAIRLOGIE EMERGING
MARKETS FUND ONLY: An Addendum to the Portfolio Management
Agreement between the Trust's investment adviser and Blairlogie
Capital Management.
J. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE BLAIRLOGIE
INTERNATIONAL ACTIVE FUND ONLY: An Addendum to the Portfolio
Management Agreement between the Trust's investment adviser and
Blairlogie Capital Management.
K. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE BALANCED FUND ONLY: An
Addendum to the Portfolio Management Agreement between the Trust's
investment adviser and NFJ Investment Group.
L. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE BALANCED FUND ONLY: An
Addendum to the Portfolio Management Agreement between the Trust's
investment adviser and Cadence Capital Management.
M. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE COLUMBUS CIRCLE
INVESTORS CORE EQUITY FUND ONLY: An Addendum to the Portfolio
Management Agreement between the Trust's investment adviser and
Columbus Circle Investors.
N. TO BE VOTED UPON BY THE SHAREHOLDERS OF THE COLUMBUS CIRCLE
INVESTORS MID CAP EQUITY FUND ONLY: An Addendum to the Portfolio
Management Agreement between the Trust's investment adviser and
Columbus Circle Investors.
IV. TO BE VOTED UPON BY ALL SHAREHOLDERS: To approve or disapprove a
Second Amended and Restated Declaration of Trust.
V. TO BE VOTED UPON BY THE ADMINISTRATIVE CLASS SHAREHOLDERS ONLY: To
approve or disapprove the Administrative Class Distribution Plan (which
will not increase expenses of the Funds) to be adopted in accordance with
Rule 12b-1 under the Investment Company Act of 1940, as amended, with
respect to each Fund of the Trust that has Administrative Class shares
issued and outstanding.
VI. To transact such other business as may properly come before the
Meeting or any adjournment thereof.
<PAGE>
The Board of Trustees has fixed the close of business on October 18, 1996 as
the record date for the determination of shareholders entitled to notice of,
and to vote at, the Meeting or any adjournment thereof. You are cordially
invited to attend the Meeting. All shareholders are requested to complete,
sign and return the enclosed proxy promptly. The enclosed proxy is being
solicited on behalf of the Board of Trustees of the Trust.
By Order of the Board of Trustees,
Garlin G. Flynn, Secretary
Newport Beach, California
November 7, 1996
PLEASE RESPOND--YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE, SIGN AND MAIL THE PROXY IN THE ENVELOPE PROVIDED.
<PAGE>
[This page has been intentionally left blank.]
<PAGE>
----------------
PROXY STATEMENT
----------------
PIMCO FUNDS: EQUITY ADVISORS SERIES
840 NEWPORT CENTER DRIVE
NEWPORT BEACH, CALIFORNIA 92660
----------------
SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 20, 1996
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SOLICITATION OF PROXIES
This Proxy Statement and enclosed form of proxy are furnished in connection
with the solicitation of proxies on behalf of the Board of Trustees of PIMCO
Funds: Equity Advisors Series (formerly "PIMCO Advisors Institutional Funds")
(the "Trust"), a Massachusetts business trust, for use at a special meeting of
shareholders (the "Meeting") of the Trust to be held at 8:00 a.m., Pacific
time, on December 20, 1996 at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment of the Meeting, for the purposes set
forth in the accompanying Notice of Meeting (the "Notice"). The date of the
first mailing of this proxy statement was on or about November 7, 1996.
BACKGROUND: RESTRUCTURING OF THE TRUST AND PIMCO ADVISORS FUNDS
The matters to be voted on at the Meeting (the "Proposals"), which are set
forth herein, are being proposed in connection with an overall restructuring
of three of the mutual funds, including the Trust, advised by PIMCO Advisors
L.P. ("PIMCO Advisors" or the "Adviser") and its affiliates. It is proposed as
part of the restructuring that certain equity funds of PIMCO Advisors Funds
("PAF") be merged into the Trust. PAF is a series mutual fund sold primarily
to retail markets and having total assets of approximately $6.3 billion
(approximately $5.4 billion for its equity funds) as of September 30, 1996.
Certain funds of PAF would be combined with funds of the Trust that have
similar investment objectives and policies (which transactions are described
more fully in Sections II-A and II-B). The other equity funds of PAF (and
PAF's Tax Exempt Fund) are to be reorganized as new series of the Trust,
subject to the approval of the shareholders of those funds. In addition, to
more clearly reflect the management structure of the Trust, the name of the
Trust will be changed to "PIMCO Funds: Multi-Manager Series."
Each PAF Fund participating in the restructuring currently is authorized to
issue three separate classes of shares, offered principally to individual
investors, which classes differ with respect to whether they feature front end
or contingent deferred sales charges or whether they pay distribution fees.
Each Fund of the Trust participating in the restructuring currently is
authorized to issue two classes of shares, offered principally to
institutional investors, which classes differ only in that one class of shares
pays an administrative services fee for certain administrative and shareholder
services. Following each transaction, each participating Fund will be
authorized to issue its shares with respect to five separate classes,
differing with respect to the distribution options described above, but which
will nevertheless relate to the same underlying portfolio of assets.
<PAGE>
PROXY SOLICITATION INFORMATION
Shareholders of record at the close of business on October 18, 1996 (the
"Record Date") are entitled to notice of, and to vote at, the Meeting. The
Trust has thirteen different series that have shares issued and outstanding:
NFJ Equity Income Fund Columbus Circle Investors Core
NFJ Diversified Low P/E Fund Equity Fund
NFJ Small Cap Value Fund Columbus Circle Investors Mid Cap
Cadence Capital Appreciation Fund Equity Fund
Cadence Mid Cap Growth Fund Parametric Enhanced Equity Fund
Cadence Micro Cap Growth Fund Blairlogie Emerging Markets Fund
Cadence Small Cap Growth Fund Blairlogie Enhanced Equity Fund
Balanced Fund
Each of these series of the Trust is referred to herein as a "Fund." For
purposes of voting at the Meeting on all proposals except Proposal V, all
classes of shares of a particular Fund will be treated as one class. With
respect to Proposal V, the holders of Administrative Class shares only of each
Fund will be entitled to vote. Each whole share shall be entitled to one vote
as to any matter on which it is entitled to vote and each fractional share
shall be entitled to a proportionate fractional vote. Shares represented by
timely and properly executed proxies will be voted as specified. EXECUTED
PROXIES THAT ARE UNMARKED WILL BE VOTED IN FAVOR OF THE PROPOSALS SET FORTH IN
THE ATTACHED NOTICE. A proxy may be revoked at any time prior to its exercise
by written notice, by properly executing a later-dated proxy or by attending
the Meeting and voting in person. However, attendance at the Meeting alone
will not serve to revoke the proxy.
Shares held by shareholders present in person or represented by proxy at the
Meeting will be counted both for the purpose of determining the presence of a
quorum and for calculating the votes cast on the issues before the Meeting.
Thirty percent (30%) of the shares entitled to vote shall be a quorum for the
transaction of 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 counted for quorum purposes.
However, except with respect to Proposal I, so long as a quorum is present,
abstentions and non-votes will have the same effect as negative votes on the
issues presented for consideration. With respect to Proposal I, so long as a
quorum is present, neither abstentions nor broker non-votes will have any
effect on the outcome of the proposal.
In the event that a quorum is present at the Meeting, but sufficient votes
to approve a proposal are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of proxies. Any such adjournment will require the affirmative vote of a
majority of those shares represented at the Meeting in person or by proxy.
Unless otherwise instructed, the persons named as proxies will vote proxies in
favor of an adjournment. A shareholder vote may be taken on one or more of the
proposals in this proxy statement prior to any such adjournment if sufficient
votes have been received for approval.
As described above, the proposals to be voted on at the Meeting are being
undertaken contemporaneously with an overall restructuring of certain of the
other mutual funds advised by PIMCO Advisors and its affiliates. In connection
therewith, the costs of all such transactions, including the costs of the
Meeting and this solicitation of proxies, are being preliminarily allocated on
a basis approved by the Trustees, including the Trustees who are not
"interested persons" of the Trust, PIMCO Advisors, the Trust's principal
underwriter or any of the Portfolio Managers of the Funds, and will be paid in
part by PIMCO Advisors, and, in part by the mutual funds advised by PIMCO
Advisors that are involved with the restructuring. The amount of expenses to
be paid by the Trust will not exceed $20,000 for each Fund. Any expenses in
excess of such amount will be borne by PIMCO Advisors. The principal
solicitation of the proxies will be by mail, but proxies also may be solicited
by telephone or personal interview by officers or agents of the Trust, or by
proxy solicitation firms retained by the Adviser.
2
<PAGE>
A copy of the Annual Report of the Trust for its most recent fiscal year,
including financial statements, has previously been mailed to shareholders.
The Trust will furnish, without charge, to any of its shareholders upon
request, a copy of the Annual Report of the Trust. Such requests may be
directed to the Trust at 840 Newport Center Drive, Newport Beach, California
92660 (tel: 1-800-927-4648).
SUMMARY OF PROPOSALS AND FUNDS AFFECTED*
<TABLE>
<CAPTION>
II-A. PROPOSAL TO II-B. PROPOSAL TO
APPROVE APPROVE III-A-N. PROPOSALS IV. PROPOSAL TO
ACQUISITION BY ACQUISITION BY NFJ TO APPROVE APPROVE SECOND V. PROPOSAL TO
CADENCE MID CAP DIVERSIFIED LOW ADDENDA TO AMENDED AND APPROVE
GROWTH FUND OF P/E FUND OF PORTFOLIO RESTATED ADMINISTRATIVE
I. PROPOSAL TO THE ASSETS OF PAF THE ASSETS OF PAF MANAGEMENT DECLARATION OF CLASS SERVICING
NAME OF FUND ELECT TRUSTEES DISCOVERY FUND VALUE FUND AGREEMENTS TRUST PLAN
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NFJ Diversified
Low P/E Fund X X X X
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Cadence Mid Cap
Growth Fund X X X X X**
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Columbus Circle
Investors
Mid Cap Equity
Fund X X X
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Parametric
Enhanced Equity
Fund X X X
- --------------------------------------------------------------------------------------------------------------------------
Balanced Fund X X X
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ALL OTHER FUNDS X X X X**
</TABLE>
* An "X" denotes that the Fund is affected by the proposal and that the
Fund's shareholders are solicited with respect to that proposal.
** Only Administrative Class shareholders of each Fund are being solicited
with respect to Proposal V.
The Trustees know of no business to be brought before the Meeting other than
as set forth herein. If, however, any other matters properly come before the
Meeting, it is the intention of the persons named in the enclosed form of
proxy to vote on such matters in accordance with their best judgment.
PROPOSAL I.
ELECTION OF ADDITIONAL TRUSTEES
In connection with the restructuring of the Trust and PAF, the Trust's Board
of Trustees proposes that shareholders elect eight persons who currently serve
as trustees on PAF's Board of Trustees. These nominees are as follows: E.
Philip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light, Joel
Segall, W. Bryant Stooks, Gerald M. Thorne and Robert A. Prindiville
(collectively, the "Nominees").
In addition to serving as trustees of PAF, all of the Nominees serve as
trustees of Cash Accumulation Trust ("CAT"), a registered investment company
offering shares of a single money market series, for which PIMCO Advisors
serves as investment adviser. The Nominees are being nominated in connection
with the overall restructuring of the mutual funds advised by the Adviser and
its affiliates. As indicated above, the proposed restructuring includes, among
other things, the acquisition by certain Funds of the Trust of the assets of
certain PAF equity funds and the reorganization of certain PAF funds as new
series of the Trust. Many of the transactions that are part of the overall
restructuring described above are contingent on the election of the Nominees.
If approved by the Trust's shareholders, each of the Nominees would become a
trustee on the business day following the completion of the restructuring.
INFORMATION ABOUT NOMINEES
Information about the Nominees is presented below. Except as shown, each
Nominee's principal occupation and business experience for the last five years
have been with the employer(s) indicated, although in some cases the Nominee
may have held different positions with such employer(s). Unless otherwise
indicated, the business address of each Nominee is c/o PIMCO Advisors L.P.,
2178 Atlantic Street, Fl. 7, Stamford, CT 06902.
3
<PAGE>
<TABLE>
<CAPTION>
NAME, AGE AND ADDRESS PRINCIPAL OCCUPATION(S) DURING THE PAST FIVE YEARS
- -----------------------------------------------------------------------------------------
<S> <C>
E. Philip Cannon Trustee, PIMCO Advisors Funds; Headmaster, St. John's School,
Age 55 Houston, Texas. Formerly, General Partner, J.B. Poindexter &
Co., Houston, Texas (private partnership), and Partner, Iberia
Petroleum Company (oil and gas production). Mr. Cannon was a
director of WNS Inc., a retailing company which filed a
petition in bankruptcy within the last five years.
- -----------------------------------------------------------------------------------------
Donald P. Carter Trustee, PIMCO Advisors Funds. Formerly, Chairman, Executive
Age 69 Vice President and Director, Cunningham & Walsh, Inc., Chicago
(advertising agency).
- -----------------------------------------------------------------------------------------
Gary A. Childress Trustee, PIMCO Advisors Funds; Chairman and Director,
Age 62 Bellefonte Lime Company, Inc.; Chief Executive Officer,
Woodings & Verona Toolworks Inc. Mr. Childress is a partner in
GenLime, L.P., a private limited partnership, which filed a
petition in bankruptcy within the last five years.
- -----------------------------------------------------------------------------------------
Gary L. Light Trustee, PIMCO Advisors Funds; Partner, E.V.A. Investors Inc.
Age 59 (private investments); Consultant to and, prior to March,
1987, Executive Vice President, Mayflower Corporation
(trucking and transportation); Vice Chairman and Chief
Executive Officer, Sofamor Danek (medical devices).
- -----------------------------------------------------------------------------------------
Joel Segall Trustee, PIMCO Advisors Funds. Formerly, President and
Age 73 University Professor, Bernard M. Baruch College, The City
University of New York; Deputy Under Secretary for
International Affairs, United States Department of Labor;
Professor of Finance, University of Chicago; Board of
Managers, Coffee, Sugar and Cocoa Exchange.
- -----------------------------------------------------------------------------------------
W. Bryant Stooks Trustee, PIMCO Advisors Funds; President, Bryant Investments,
Age 56 Ltd. Formerly, President, Senior Vice President, Director and
Chief Executive Officer, Archirodon Group Inc. (heavy civil
construction and shipping); Partner, Arthur Andersen & Co.
- -----------------------------------------------------------------------------------------
Gerald M. Thorne Trustee, PIMCO Advisors Funds. Formerly President and
Age 58 Director, Firstar National Bank of Milwaukee; Chairman,
President and Director, Firstar National Bank of Sheboygan;
Director, Bando-McGlocklin (small business investment
company).
- -----------------------------------------------------------------------------------------
Robert A. Prindiville* Trustee and President, PIMCO Advisors Funds; Vice President,
Age 61 PIMCO Advisors; President and Trustee, Cash Accumulation
c/o PIMCO Advisors L.P. Trust. Formerly, President and Director, Thomson Advisory
2187 Atlantic Street, Group Inc.; Director and Chairman, PIMCO Advisors Distribution
Fl. 7 Company("PADCo"); Executive Vice President, PIMCO Advisors.
Stamford, CT 06902
</TABLE>
* Is or will be an "interested person" of the Trust (as defined in the
Investment Company Act of 1940, as amended (the "1940 Act") ). Mr.
Prindiville is an "interested person" of the Trust because of his
affiliation with PIMCO Advisors, as indicated in the above chart, and his
ownership interest in PIMCO Advisors and PADCo.
The term of office of each person elected as Trustee will be until his
successor is elected and qualified. Each of the Nominees has agreed to serve
as a Trustee if elected. If any of the Nominees should be unavailable for
election at the time of the Meeting (which is not presently anticipated), the
persons named as proxies may vote for other persons in their discretion, or
the Trustees may vote to fix the number of Trustees at fewer than twelve.
The Trust's Amended and Restated Agreement and Declaration of Trust (the
"Current Declaration") does not provide for the annual election of Trustees.
However, in accordance with the 1940 Act, (i) the Trust will hold a
shareholders' meeting for the election of Trustees at such time as less than a
majority of the Trustees holding office have been elected by shareholders, and
(ii) if, as a result of a vacancy in the Board of Trustees, less than two-
thirds of the Trustees holding office have been elected by the shareholders,
that vacancy may only be filled by a vote of the shareholders.
4
<PAGE>
INFORMATION ABOUT CURRENT TRUSTEES
Currently, four persons serve as Trustees on the Trust's Board of Trustees:
William D. Cvengros, Richard L. Nelson, Lyman W. Porter, and Alan Richards.
Shareholders are not being asked to elect the current Trustees, as each will
continue to serve under the terms of the Current Declaration. The Trustees,
their ages, their business addresses, their positions with the Trust, and a
description of their principal occupations are shown below. Except as shown,
each Trustee's principal occupation and business experience for the last five
years have been with the employer(s) indicated, although in some cases the
Trustee may have held different positions with such employer(s):
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING THE PAST
NAME, AGE AND ADDRESS POSITION WITH THE TRUST FIVE YEARS
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
William D. Cvengros* Chairman of the Board, President and Trustee Chief Executive Officer, President,
800 Newport Center Drive and member of the Operating Board,
Newport Beach, CA 92660 Operating Committee, and Equity Board,
Age 47 PIMCO Advisors; Trustee, PIMCO
Advisors Funds; Director, PADCo.
Formerly, Director, Vice Chairman, and
Chief Executive Officer, Pacific
Mutual Life Insurance Company.
- ----------------------------------------------------------------------------------------------------------------
Richard L. Nelson Trustee President, Nelson Financial
8 Cherry Hills Lane Consultants; Director, Wynn's
Newport Beach, CA 92660 International, Inc. (hardware
Age 66 supplier); Trustee, Pacific Select
Fund. Formerly, Partner, Ernst &
Young.
- ----------------------------------------------------------------------------------------------------------------
Lyman W. Porter Trustee Professor of Management at the
2639 Bamboo Street University of California, Irvine;
Newport Beach, CA 92660 Trustee, Pacific Select Fund.
Age 66
- ----------------------------------------------------------------------------------------------------------------
Alan Richards Trustee President, Alan Richards Consulting,
P.O. Box 675760 Inc.; Trustee, Pacific Select Fund;
15401 Pimlico Corte Director, Western National
Rancho Santa Fe, CA Corporation. Formerly, President,
92067 Chief Executive Officer and Director,
Age 66 E.F. Hutton Insurance Group, Inc.;
Chairman of the Board, Chief Executive
Officer and President, E.F. Hutton
Life Insurance Company; Director, E.F.
Hutton & Company Inc.
</TABLE>
* Is an "interested person" of the Trust (as defined in the 1940 Act). Mr.
Cvengros is an "interested person" of the Trust because of his affiliation
with PIMCO Advisors and the Trust's distributor, PADCo, as indicated in the
above chart, and his ownership interest in those entities.
In the fiscal year ended June 30, 1996,/1/ the Board of Trustees held three
meetings. Each of the Trustees attended all of the meetings.
COMMITTEES OF THE BOARD. The Trust's Board of Trustees had three standing
committees as of the fiscal year ended June 30, 1996: the Audit Committee, the
Nominating Committee and the Policy Committee. Richard L. Nelson, Lyman W.
Porter and Alan Richards are members of each Committee. Each of these Trustees
attended all of the meetings held by the Committees during the most recent
fiscal year.
The responsibilities of the Trust's Audit Committee include review of
financial and accounting controls and procedures, recommendations as to the
selection of the independent accountants, and review of the scope of the
audit. During the fiscal year ended June 30, 1996, the Audit Committee met two
times.
- --------
/1/ The most recent fiscal year of the Trust began on November 1, 1995 and ended
on June 30, 1996 as a result of a change in the Trust's fiscal year end from
October 31 to June 30. All references in this Proxy Statement to the Trust's
fiscal year ended June 30, 1996 refer to the period that began on November
1, 1995 and ended on June 30, 1996.
5
<PAGE>
The Nominating Committee did not hold any meetings during the fiscal year
ended June 30, 1996. The Nominating Committee's responsibilities include the
screening and nomination of candidates for election to the Board of Trustees
as independent trustees of the Trust.
The Trust's Policy Committee provides a forum for its members to deliberate
on certain matters to be presented to the Trust's full Board of Trustees for
their review and/or consideration, and to discuss other issues and concerns
that the members of the Committee deem appropriate. During the fiscal year
ended June 30, 1996, the Policy Committee met three times.
COMPENSATION AND INDEMNIFICATION. Trustees, other than those affiliated with
the Adviser, receive an annual retainer of $10,000, $1,000 for each Board of
Trustees meeting attended, and $1,000 for each Audit or Policy Committee
meeting attended, plus reimbursement of related expenses. The Chairmen of the
Audit and Policy Committees receive an additional annual retainer of $1,000.
Trustees do not receive any pension or retirement benefits from the Trust. The
following table sets forth information regarding compensation received by the
Trustees for the fiscal year ended June 30, 1996:
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM TRUST AND
NAME AND POSITION AGGREGATE COMPENSATION FROM TRUST FUND COMPLEX PAID TO TRUSTEES
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
William D. Cvengros $ 0 $ 0
Chairman, President and
Trustee
- ----------------------------------------------------------------------------------------------
Richard L. Nelson $14,333.33 $14,333.33
Trustee
- ----------------------------------------------------------------------------------------------
Lyman W. Porter $12,166.67 $12,166.67
Trustee
- ----------------------------------------------------------------------------------------------
Alan Richards $14,333.33 $14,333.33
Trustee
</TABLE>
The Current Declaration provides that the Trust will indemnify its Trustees
and officers against liabilities and expenses incurred in connection with
litigation in which they may be involved because of their offices with the
Trust, except with respect to any matter as to which it has been determined
that (i) they have not acted in good faith in the reasonable belief that their
actions were in or were not opposed to the best interests of the Trust or that
(ii) such indemnification would relieve any officer or Trustee of any
liability to the Trust or its shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of his or her duties. The
Trust's administrator, Pacific Investment Management Company, provides
liability insurance for the benefit of the Trustees and officers of the Trust.
REQUIRED VOTE. The election of the Trustees of the Trust will be by a
plurality of the shares of the Trust (all Funds of the Trust voting together
as a single class) present at the Meeting in person or by proxy. Votes cast by
proxy or in person at the Meeting will be counted by persons appointed as
tellers by the Trust.
THE TRUSTEES UNANIMOUSLY RECOMMEND A VOTE FOR EACH NOMINEE.
PROPOSAL II.
APPROVAL OR DISAPPROVAL OF CERTAIN TRANSACTIONS
The proposed transactions described in Part II-A and II-B below are part of
an overall restructuring of three of the mutual funds advised by PIMCO
Advisors and its affiliates, as described above under "Background:
Reorganization with PIMCO Advisors Funds." The restructuring involves, among
other components, two mergers between PAF Funds and Funds of the Trust which
are counterparts of each other in that they are managed by the same investment
adviser in accordance with similar investment objectives and policies. The
6
<PAGE>
mergers described below relate to two Funds of the Trust: the Cadence Mid Cap
Growth Fund and the NFJ Diversified Low P/E Fund.
II-A. ACQUISITION BY CADENCE MID CAP GROWTH FUND OF
THE ASSETS OF PAF DISCOVERY FUND
As part of the restructuring, the Trustees recommend approval of a
transaction whereby, among other things, the Trust's Cadence Mid Cap Growth
Fund (to be renamed the "PIMCO Mid Cap Growth Fund") (the "Cadence Fund") will
acquire the assets (subject to the liabilities) of the PAF Discovery Fund
(referred to in this Part II-A as the "Proposed Transaction"). Under the
Proposed Transaction, all of the PAF Discovery Fund's assets and liabilities
will be acquired by the Cadence Fund in exchange for shares of beneficial
interest of the Cadence Fund. The PAF Discovery Fund will then distribute
these shares to its shareholders in liquidation of their interests in the PAF
Discovery Fund. The description of the Proposed Transaction contained in this
Proxy Statement is qualified in its entirety by reference to the Agreement and
Plan of Reorganization dated November 1, 1996, a copy of which is attached
hereto as Exhibit A.
The PAF Discovery Fund currently offers its shares with respect to three
different classes: Class A, Class B and Class C shares. The classes, which are
offered principally to individual investors, differ with respect to whether
they feature front end or contingent deferred sales charges or whether they
pay distribution fees. In connection with the sale of Class B and Class C
shares, PAF's distributor, PADCo, pays commissions to broker-dealers from its
own assets that it expects to recover over time through the receipt of
distribution fees in connection with the Class B and Class C shares and the
receipt of any contingent deferred sales charges on the Class B and Class C
shares. The total amount of such commissions paid by PADCo before the
consummation of the Proposed Transaction will likely exceed the amount
recovered by the distributor by that time. The unrecovered amounts do not
represent a liability of the PAF Discovery Fund, and consequently, the Cadence
Fund will not assume any such liability in connection with the consummation of
the Proposed Transaction. However, to the extent that PADCo has not fully
recovered such commissions before the consummation of the Proposed
Transaction, it is anticipated that the Trust's Trustees will consider such
unrecovered amounts, among other factors, in determining whether to continue
payments of distribution fees in the future with respect to Class B and Class
C shares of the Cadence Fund. As of June 30, 1996, the expenses incurred by
PADCo were approximately $3,298,000 in excess of payments under PAF's
Distribution and Servicing Plan with respect to Class C shares of all PAF
Funds and $8,948,000 in excess of payments under PAF Distribution and
Servicing Plan with respect to Class B shares of all PAF Funds.
The completion of the Proposed Transaction is contingent upon the approval
of shareholders of both the PAF Discovery Fund and the Cadence Fund.
Shareholders of the PAF Discovery Fund will receive a prospectus/proxy
statement relating to the Proposed Transaction. The Proposed Transaction calls
for the acquisition of the assets (subject to the liabilities) of the PAF
Discovery Fund by the Cadence Fund. This transaction will not result in any
changes in the investment policies and objectives of the Cadence Fund.
INFORMATION ABOUT THE PROPOSED TRANSACTION. The Cadence Fund and the PAF
Discovery Fund have similar policies and objectives, the same investment
adviser, PIMCO Advisors, and the same sub-adviser, Cadence Capital Management
("Cadence"), a subsidiary partnership of PIMCO Advisors, which manages each
Fund's portfolio. In addition, the day-to-day management of each of the
Cadence Fund and the PAF Discovery Fund is handled by the same management team
at Cadence.
7
<PAGE>
The PAF Discovery Fund is a series of PAF, an open-end management investment
company offering sixteen portfolios with different investment objectives and
policies. The PAF Discovery Fund is a diversified portfolio that seeks capital
appreciation without any consideration given to income. It invests primarily
in common stocks of companies with equity capitalizations of $500 million to
$1 billion that exhibit favorable growth characteristics and reasonable
valuations. The Fund may also invest in convertible securities and, for
temporary defensive purposes, money market instruments.
The Cadence Fund seeks growth of capital. The Fund invests primarily in
common stocks of companies with market capitalizations in excess of $500
million that have improving fundamentals and whose stock is reasonably valued
by the market. The Fund may also invest in convertible securities, preferred
stock, warrants (subject to certain limitations) and American Depositary
Receipts.
The principal executive office of the Trust is located at 840 Newport Center
Drive, Newport Beach, California 92660 (tel: 1-800-927-4648). The principal
executive office of PAF is 2187 Atlantic Street, Stamford, Connecticut 06902
(tel: 1-800-426-0107).
REASONS FOR THE PROPOSED TRANSACTION. As required under relevant
regulations, the Trustees have determined that participation in the Proposed
Transaction is in the best interests of the Cadence Fund and its shareholders,
and have further determined that the interests of existing Cadence Fund
shareholders will not be diluted as a result of effecting the Proposed
Transaction.
The Trustees recommend approval of the Proposed Transaction because they
believe, among other things, that it offers shareholders the opportunity to
pursue a similar investment program in a larger fund, which should offer
opportunities for greater diversification of risk and opportunities to benefit
from savings in portfolio transaction costs. In addition, the Trustees believe
that the Proposed Transaction, as part of the overall restructuring, will (i)
improve the distribution of shares of each Fund through both retail and
institutional channels, (ii) enhance market presence and brand awareness, and
(iii) give shareholders broader exchange privileges among funds.
In reaching the conclusion that the interests of shareholders will not be
diluted, the Trustees have considered such factors as (i) that the Cadence
Fund shares issued will have the same aggregate net asset value as the assets
of the PAF Discovery Fund for which they are exchanged, determined in
accordance with the same valuation policies as are applied by the Cadence Fund
when valuing its own assets, (ii) the fact that there will be no material,
adverse tax consequences, including no imposition of taxes upon the Proposed
Transaction and a carry-over basis for the assets being acquired, and (iii)
that PIMCO Advisors will bear most of the expenses of the Proposed
Transaction.
FEDERAL INCOME TAX CONSEQUENCES. As a condition to its obligation to
consummate the Proposed Transaction, the Cadence Fund will receive an opinion
from Ropes & Gray, counsel to PAF, to the effect that, on the basis of the
existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), current administrative rules, and court decisions, for federal income
tax purposes (i) no gain or loss will be recognized by the Cadence Fund upon
receipt of the investments of the PAF Discovery Fund transferred to the
Cadence Fund in exchange for shares of the Cadence Fund, (ii) the basis of the
Cadence Fund of such investments will be the same as the basis of the
investments in the hands of the PAF Discovery Fund immediately prior to such
exchange, and (iii) the Cadence Fund's holding periods with respect to the
investments will include the respective periods for which the investments were
held by the PAF Discovery Fund. The opinion will be based on certain factual
representations and subject to certain qualifications.
OTHER INFORMATION. The most recent Annual Reports for each of the PAF
Discovery Fund and the Cadence Mid Cap Growth Fund are hereby incorporated by
reference into this Proxy Statement. In addition, pro
8
<PAGE>
forma financial statements of the PAF Discovery Fund and the Cadence Fund as
of and for the fiscal year ended June 30, 1996 are included in the Statement
of Additional Information to the prospectus/proxy statement relating to the
Proposed Transaction which has been provided to shareholders of the PAF
Discovery Fund and which are hereby incorporated by reference into this Proxy
Statement. Copies of each Annual Report and the pro forma financial statements
are available free of charge from either Fund upon request. Requests may be in
writing or by telephone, and should be communicated to the addresses or
telephone numbers listed above. As of June 30, 1996, the unrealized capital
appreciation in each of the Cadence Fund and the PAF Discovery Fund, as a
percentage of each Fund's total assets, was 13.4% and 10.3%, respectively.
The following table shows the capitalization of each of the Cadence Fund and
the PAF Discovery Fund as of June 30, 1996 and on a pro forma basis on that
date, giving effect to the proposed acquisition of assets at net asset value:
JUNE 30, 1996
<TABLE>
<CAPTION>
DISCOVERY CADENCE MID CAP PRO FORMA
FUND/1/ GROWTH FUND/2/ COMBINED/3/
--------- --------------- -----------
<S> <C> <C> <C>
Net assets (000's omitted)
Class A $10,369 $ -- $ 10,365
Class B 19,075 -- 19,068
Class C 38,501 -- 38,487
Institutional Class -- 231,011 230,930
Administrative Class -- 1,071 1,071
Shares outstanding (000's omitted)
Class A 928 -- 928
Class B 1,721 -- 1,721
Class C 3,474 -- 3,474
Institutional Class -- 11,881 11,881
Administrative Class -- 55 55
Net asset value per share
Class A $ 11.17 $ -- $ 11.17
Class B 11.08 -- 11.08
Class C 11.08 -- 11.08
Institutional Class -- 19.44 19.44
Administrative Class -- 19.44 19.44
</TABLE>
- --------
/1/ Unaudited.
/2/ Audited.
/3/ Pro Forma net assets have been reduced by merger-related legal and
accounting costs and certain other costs.
REQUIRED VOTE. Approval of the Proposed Transaction will require the
affirmative vote of the lesser of (A) 67% or more of the voting securities of
the Cadence Fund shareholders present at the Meeting, if the holders of more
than 50% of the outstanding voting securities of the Cadence Fund are present
or represented by proxy; or (B) more than 50% of the outstanding voting
securities of the Cadence Fund.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE THE
PROPOSED TRANSACTION.
9
<PAGE>
II-B. ACQUISITION BY NFJ DIVERSIFIED LOW P/E FUND OF
THE ASSETS OF PAF VALUE FUND
The Trustees recommend approval of a transaction whereby, among other
things, the NFJ Diversified Low P/E Fund (to be renamed the "PIMCO Value
Fund") (the "NFJ Fund") will acquire all of the assets (subject to the
liabilities) of the PAF Value Fund (referred to in this Part II-B as the
"Proposed Transaction"). Under the Proposed Transaction, all of the PAF Value
Fund's assets and liabilities will be acquired by the NFJ Fund in exchange for
shares of beneficial interest of the NFJ Fund. The PAF Value Fund will then
distribute these shares to its shareholders in liquidation of their interests
in the PAF Value Fund. The description of the Proposed Transaction contained
in this Proxy Statement is qualified in its entirety by reference to the
Agreement and Plan of Reorganization dated November 1, 1996, a form of which
is attached hereto as Exhibit A.
The PAF Value Fund currently offers its shares with respect to three
different classes: Class A, Class B and Class C shares. The classes, which are
offered principally to individual investors, differ with respect to whether
they feature front end or contingent deferred sales charges or whether they
pay distribution fees. In connection with the sale of Class B and Class C
shares, PAF's distributor, PADCo, pays commissions to broker-dealers from its
own assets that it expects to recover over time through the receipt of
distribution fees in connection with the Class B and Class C shares and the
receipt of any contingent deferred sales charges on the Class B and Class C
shares. The total amount of such commissions paid by PADCo before the
consummation of the Proposed Transaction will likely exceed the amount
recovered by the distributor by that time. The unrecovered amounts do not
represent a liability of the PAF Value Fund, and consequently, the NFJ Fund
will not assume any such liability in connection with the consummation of the
Proposed Transaction. However, to the extent that PADCo has not fully
recovered such commissions before the consummation of the Proposed
Transaction, it is anticipated that the Trust's Trustees will consider such
unrecovered amounts, among other factors, in determining whether to continue
payments of distribution fees in the future with respect to Class B and Class
C shares of the NFJ Fund. As of June 30, 1996, the expenses incurred by PADCo
were approximately $3,298,000 in excess of payments under PAF's Distribution
and Servicing Plan with respect to Class C shares of all PAF Funds and
$8,948,000 in excess of payments under PAF's Distribution and Servicing Plan
with respect to Class B shares of all PAF Funds.
The completion of the Proposed Transaction is contingent upon the approval
of shareholders of both the NFJ Fund and the PAF Value Fund. Shareholders of
the PAF Value Fund will receive a prospectus/proxy statement relating to the
transaction. The NFJ Fund will be acquiring the assets (subject to the
liabilities) of the PAF Value Fund. This transaction will not result in any
changes in the investment policies and objectives of the NFJ Fund.
INFORMATION ABOUT THE PROPOSED TRANSACTION. The NFJ Fund and the PAF Value
Fund have substantially similar policies and objectives, the same investment
adviser, PIMCO Advisors, and the same sub-adviser, NFJ Investment Group
("NFJ"), a subsidiary partnership of PIMCO Advisors, which manages each Fund's
portfolio. In addition, the day-to-day management of both the NFJ Fund and the
PAF Value Fund is handled by the same portfolio management team at NFJ.
As indicated above, the PAF Value Fund is a series of PAF, an open-end
management investment company composed of sixteen portfolios with different
investment objectives and policies. Both the PAF Value Fund and the NFJ Fund
are diversified portfolios that seek long-term growth of capital and current
income. The PAF Value Fund invests primarily in common stocks of companies
that are characterized by having below average price-to-earnings ratios and/or
higher dividend yields relative to their industry groups. It may also invest
in convertible securities and, for temporary defensive purposes, money market
instruments.
10
<PAGE>
The NFJ Fund invests primarily (normally at least 65% of its assets) in
common stocks characterized as having below average price-to-earnings ratios
relative to their industry groups. It may also invest in convertible
securities, preferred stocks, warrants (subject to certain limitations) and
American Depositary Receipts. The PAF Value Fund and the NFJ Fund are managed
in substantially the same manner.
The principal executive office of the Trust is located at 840 Newport Center
Drive, Newport Beach, California 92660 (tel: 1-800-927-4648). The principal
executive office of PAF is 2187 Atlantic Street, Stamford, Connecticut 06902
(tel: 1-800-426-0107).
REASONS FOR THE PROPOSED TRANSACTION. As required under relevant
regulations, the Trustees have determined that participation in the Proposed
Transaction is in the best interests of the NFJ Fund, and have further
determined that the interests of existing NFJ Fund shareholders will not be
diluted as a result of effecting the Proposed Transaction.
The Trustees recommend approval of the Proposed Transaction because they
believe, among other things, that it offers shareholders the opportunity to
pursue a substantially similar investment program in a larger fund, which may
offer potential for greater diversification of risk and opportunities to
benefit from savings in portfolio transaction costs. In addition, the Trustees
believe that the Proposed Transaction, as part of the overall restructuring,
(i) will improve the distribution of shares of each Fund through both
institutional and retail channels, (ii) will enhance market presence and brand
awareness, and (iii) give shareholders broader exchange privileges among
funds.
In reaching the conclusion that the interests of shareholders will not be
diluted, the Trustees considered such factors as (i) that the NFJ Fund shares
issued will have the same aggregate net asset value as the assets of the PAF
Value Fund for which they are exchanged, determined in accordance with the
same valuation policies as are applied by the NFJ Fund when valuing its own
assets, (ii) the fact that there will be no material, adverse tax
consequences, including no imposition of taxes upon the Proposed Transaction
and a carry-over basis for the assets being acquired, and (iii) that PIMCO
Advisors will bear most of the expenses of the Proposed Transaction.
FEDERAL INCOME TAX CONSEQUENCES. As a condition to its obligation to
consummate the Proposed Transaction, the NFJ Fund will receive an opinion from
Ropes & Gray, counsel to PAF, to the effect that, on the basis of the existing
provisions of the Code, current administrative rules, and court decisions, for
federal income tax purposes (i) no gain or loss will be recognized by the NFJ
Fund upon receipt of the investments of the PAF Value Fund transferred to the
NFJ Fund in exchange for shares of the NFJ Fund, (ii) the basis of the NFJ
Fund of such investments will be the same as the basis of the investments in
the hands of the PAF Value Fund immediately prior to such exchange, and (iii)
the NFJ Fund's holding periods with respect to the investments will include
the respective periods for which the investments were held by the PAF Value
Fund. The opinion will be based on certain factual representations and subject
to certain qualifications.
OTHER INFORMATION. The most recent Annual Reports for each of the PAF Value
Fund and the NFJ Fund are hereby incorporated by reference into this Proxy
Statement. In addition, pro forma financial statements for the PAF Value Fund
and the NFJ Fund as of and for the fiscal year ended June 30, 1996 are
included in the Statement of Additional Information to the prospectus/proxy
statement relating to the Proposed Transaction which has been provided to
shareholders of the PAF Value Fund and which are hereby incorporated by
reference into this Proxy Statement. Copies of each Annual Report and of the
pro forma financial statements are available free of charge from either Fund
upon request. Requests may be in writing or by telephone, and should be
communicated to the addresses or telephone numbers listed above. As of June
30, 1996, the unrealized capital appreciation in each of the NFJ Fund and the
PAF Value Fund, as a percentage of each Fund's total assets, was 7.0% and 6.0%
respectively.
11
<PAGE>
The following table shows the capitalization of each of the NFJ Fund and the
PAF Value Fund as of June 30, 1996 and on a pro forma basis on that date,
giving effect to the proposed acquisition of assets at net asset value:
JUNE 30, 1996
<TABLE>
<CAPTION>
VALUE NFJ DIVERSIFIED PRO FORMA
FUND/1/ LOW P/E FUND/2/ COMBINED/3/
------- --------------- -----------
<S> <C> <C> <C>
Net assets (000's omitted)
Class A $ 8,423 $ -- $ 8,414
Class B 14,386 -- 14,370
Class C 29,489 -- 29,457
Institutional Class -- 52,727 52,669
Administrative Class -- -- --
Shares outstanding (000's omitted)
Class A 692 -- 692
Class B 1,182 -- 1,182
Class C 2,424 -- 2,424
Institutional Class -- 4,232 4,232
Administrative Class -- -- --
Net asset value per share
Class A $ 12.17 $ -- $ 12.17
Class B 12.17 -- 12.17
Class C 12.17 -- 12.17
Institutional Class -- 12.46 12.46
Administrative Class -- -- --
</TABLE>
- --------
/1/ Audited.
/2/ Unaudited.
/3/ Pro Forma net assets have been reduced by merger-related legal and
accounting costs and certain other costs.
REQUIRED VOTE. Approval of the Proposed Transaction will require the
affirmative vote of the lesser of (A) 67% or more of the voting securities of
the NFJ Fund shareholders present at the Meeting, if the holders of more than
50% of the outstanding voting securities of the Fund are present or
represented by proxy; or (B) more than 50% of the outstanding voting
securities of the NFJ Fund.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE THE
PROPOSED TRANSACTION.
PROPOSALS III-A-N
APPROVAL OF ADDENDA TO THE PORTFOLIO MANAGEMENT AGREEMENTS ON BEHALF OF NFJ
EQUITY INCOME FUND, NFJ DIVERSIFIED LOW P/E FUND, NFJ SMALL CAP VALUE FUND,
CADENCE CAPITAL APPRECIATION FUND, CADENCE MID CAP GROWTH FUND, CADENCE MICRO
CAP GROWTH FUND, CADENCE SMALL CAP GROWTH FUND, PARAMETRIC ENHANCED EQUITY
FUND, BLAIRLOGIE EMERGING MARKETS FUND, BLAIRLOGIE INTERNATIONAL ACTIVE FUND,
BALANCED FUND, COLUMBUS CIRCLE INVESTORS CORE EQUITY FUND AND COLUMBUS CIRCLE
INVESTORS MID CAP EQUITY FUND
In connection with the restructuring described above under "Background:
Reorganization with PIMCO Advisors Funds," the Board of Trustees on September
17, 1996 approved Addenda to certain Portfolio Management Agreements between
the Adviser, on behalf of the Funds, and the Portfolio Managers for those
12
<PAGE>
Funds. The Addenda are being presented to shareholders of the pertinent Funds
for approval, and, if approved, will take effect upon the completion of the
restructuring. The purpose of the Addenda is to reallocate investment advisory
fees paid to the Adviser between the Adviser and each of the Portfolio
Managers in recognition of the increased cost of compliance and administrative
support activities assumed by the Adviser under the Investment Advisory
Agreement between the Adviser and the Trust. In the event that the Addenda are
not approved by any Fund, the restructuring will still take place, and the
Trustees will consider what, if any, actions the Trust will take with respect
to the Portfolio Management Agreements.
If the Addenda are approved, the Portfolio Managers' fees will be reduced;
however, because these fees are paid by the Adviser, this reduction will have
no effect on the expenses of the Funds. No other changes to the Portfolio
Management Agreements are made by the Addenda.
CURRENT PORTFOLIO MANAGEMENT AGREEMENTS
Pursuant to the Investment Advisory Agreement, dated November 15, 1994,
between the Trust and the Adviser, the Adviser, subject to the supervision of
the Board of Trustees, is responsible for providing advice and guidance with
respect to the Funds and for managing, either directly or through others
selected by the Adviser, the investments of the Funds. The Adviser also
furnishes to the Board of Trustees periodic reports on the investment
performance of each Fund. For all of the Funds, the Adviser has engaged
affiliates who are its subsidiary partnerships to serve as Portfolio Managers.
The Portfolio Managers engaged under the Portfolio Management Agreements to be
amended as described in this proposal are Blairlogie Capital Management
("Blairlogie"), Cadence, NFJ, Columbus Circle Investors ("Columbus Circle")
and Parametric Portfolio Associates ("Parametric").
Under the terms of the Portfolio Management Agreements, each Portfolio
Manager provides a continuous investment program for one or more Funds and
determines the composition of the assets of the Funds, including determination
of the purchase, retention, or sale of the securities, cash and other
investments for the Funds in accordance with each Fund's investment
objectives, policies, and restrictions. In addition, the Portfolio Managers
provide investment research and analysis, and conduct a continuous program of
evaluation, investment, sales, and reinvestment of the Funds' assets.
13
<PAGE>
Pursuant to Portfolio Management Agreements between the Adviser and each of
the Portfolio Managers, the following Portfolio Managers render advice to the
following Funds:
<TABLE>
<CAPTION>
DATE PORTFOLIO MANAGEMENT
AGREEMENT WAS
LAST SUBMITTED TO A
FUND PORTFOLIO MANAGER VOTE OF SHAREHOLDERS/1/
---- ----------------- -------------------------
<S> <C> <C>
NFJ Equity Income Fund NFJ October 26, 1994
NFJ Diversified Low P/E Fund NFJ October 26, 1994
NFJ Small Cap Value Fund NFJ October 26, 1994
Cadence Capital Appreciation
Fund Cadence October 26, 1994
Cadence Mid Cap Growth Fund Cadence October 26, 1994
Cadence Micro Cap Growth Fund Cadence October 26, 1994
Cadence Small Cap Growth Fund Cadence October 26, 1994
Parametric Enhanced Equity Fund Parametric October 26, 1994
Blairlogie Emerging Markets
Fund Blairlogie October 26, 1994
Blairlogie International Active
Fund Blairlogie October 26, 1994
Columbus Circle Investors Core
Equity Fund Columbus Circle December 28, 1994
Columbus Circle Investors Mid
Cap Equity Fund Columbus Circle December 28, 1994
Balanced Fund/2/
(common stock segment) Cadence July 22, 1996
Balanced Fund/2/
(common stock segment) NFJ July 22, 1996
</TABLE>
--------
/1/ The Portfolio Management Agreement for each Fund other than the Columbus
Circle Investors Funds and the Balanced Fund was approved by shareholders
in connection with a transaction involving the restructuring of the
Adviser. The Portfolio Management Agreement for the Columbus Circle
Investors Funds was approved by shareholders of those Funds in connection
with the organization of the Funds. The Addenda to the Portfolio
Management Agreements relating to the Balanced Fund were approved by
shareholders of the Balanced Fund in connection with a change in the
Portfolio Managers.
/2/ The Adviser determines the allocation of the Balanced Fund's assets among
various asset classes and manages the portion of the assets allocated for
investment in money market instruments. Pacific Investment Management
Company, an affiliate of the Adviser, renders advice regarding the fixed
income securities segment of the Balanced Fund.
The continuance of each Portfolio Management Agreement was last approved by
all of the Trustees, including the Trustees who are not interested persons of
the Adviser or the Portfolio Managers, on September 17, 1996. On May 10, 1996,
the Trustees approved Addenda to the Portfolio Management Agreements between
the Adviser and each of Cadence and NFJ, pursuant to which those Portfolio
Managers would render services with respect to the Balanced Fund.
Pursuant to each of the Portfolio Management Agreements, a Portfolio Manager
is not subject to liability for, or subject to any damages, expenses, or
losses in connection with, any act or omission connected with or arising out
of any services rendered under the applicable agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties under
the Agreement.
Each of the Portfolio Management Agreements provides that it will terminate
automatically in the event of its assignment, as that term is described in the
1940 Act. In addition, each such Agreement may be terminated by the Adviser or
by the pertinent Portfolio Manager upon 60 days' written notice to the other
party, and by the Trust upon the vote of a majority of the Trust's Board of
Trustees or a majority of the outstanding shares of the applicable Fund, upon
60 days' written notice to the Portfolio Manager.
THE ADDENDA TO THE PORTFOLIO MANAGEMENT AGREEMENTS
Each Addendum to a Portfolio Management Agreement was approved by the Board
of Trustees, including a majority of the Trustees who are not parties to the
Portfolio Management Agreements or interested parties of such parties, at a
meeting held on September 17, 1996. A form of Addendum is attached hereto as
Exhibit B.
14
<PAGE>
The Addenda to the Portfolio Management Agreements are now submitted for
approval by the shareholders of the Fund to which each Addendum applies. Each
Addendum provides for a reduction in the compensation payable to the
applicable Portfolio Manager. Because the portfolio management fees are paid
by the Adviser from the advisory fees it receives from the Funds, the only
effect of the Addenda will be to change the allocation of the fees between the
Portfolio Managers and the Adviser. A reduction in the portfolio management
fees will therefore increase the fees retained by the Adviser, but will not
result in an overall reduction in fees paid by the shareholders of the
affected Funds. As noted above, the change in allocation is being made to
reflect the increased cost of compliance and related administrative support
activities assumed by the Adviser with respect to each Fund.
The following table presents information regarding the current and proposed
fees to be paid to the Portfolio Managers and to the Adviser:
<TABLE>
<CAPTION>
AGGREGATE PROPOSED PROPOSED
PORTFOLIO AGGREGATE ADVISORY
AGGREGATE MANAGEMENT PORTFOLIO FEES
CURRENT ADVISORY FEES FEES PAID TO MANAGEMENT FEES RETAINED BY
AND RETAINED BY PORTFOLIO PAYABLE TO PIMCO
PROPOSED PIMCO MANAGERS PORTFOLIO ADVISORS
ADVISORY CURRENT PROPOSED ADVISORS FOR FOR FISCAL MANAGERS FOR FOR FISCAL
FEES TO PORTFOLIO PORTFOLIO FISCAL YEAR YEAR ENDED FISCAL YEAR YEAR ENDED
PORTFOLIO PIMCO MANAGEMENT MANAGEMENT ENDED JUNE 30, JUNE 30, ENDED JUNE 30, JUNE 30,
FUND MANAGER ADVISORS/1/ FEE FEE 1996/2/ 1996 1996/3/ 1996/3/
---- --------------- ----------- ---------- ---------- -------------- ------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NFJ Equity
Income Fund NFJ 0.45% 0.45% 0.35% $0 $425,899 $332,533 $93,366
NFJ Diversified
Low P/E Fund NFJ 0.45% 0.45% 0.35% 0 65,873 52,060 13,813
NFJ Small Cap
Value Fund NFJ 0.60% 0.60% 0.50% 0 156,721 130,979 25,742
Cadence Capital
Appreciation
Fund Cadence 0.45% 0.45% 0.35% 0 883,498 691,478 192,020
Cadence Mid Cap
Growth Fund Cadence 0.45% 0.45% 0.35% 0 617,546 482,602 134,944
Cadence Micro
Cap Growth Fund Cadence 1.25% 1.25% 1.15% 0 669,726 621,528 48,198
Cadence Small
Cap Growth Fund Cadence 1.00% 1.00% 0.90% 0 426,098 383,691 42,407
Columbus Circle
Investors Core
Equity Fund Columbus Circle 0.57% 0.57% 0.47% 0 145,931 120,926 25,005
Columbus Circle
Investors Mid
Cap Equity Fund Columbus Circle 0.63% 0.63% 0.53% 0 35,315 29,826 5,489
Parametric
Enhanced Equity
Fund Parametric 0.45% 0.45% 0.35% 0 274,512 213,537 60,975
Blairlogie
Emerging
Markets Fund Blairlogie 0.85% 0.85% 0.75% 0 440,978 390,804 50,174
Blairlogie
International
Active Fund Blairlogie 0.60% 0.60% 0.50% 0 294,777 245,534 49,243
Balanced Fund/4/
(common stock
segment) Cadence 0.45% 0.45% 0.35% N/A N/A N/A N/A
Balanced Fund/4/
(common stock
segment) NFJ 0.45% 0.45% 0.35% N/A N/A N/A N/A
<CAPTION>
% REDUCTION
IN PROPOSED
PORTFOLIO
MANAGEMENT
FEE FROM
FUND CURRENT FEE
---- -----------
<S> <C>
NFJ Equity
Income Fund (21.92%)
NFJ Diversified
Low P/E Fund (20.97%)
NFJ Small Cap
Value Fund (16.43%)
Cadence Capital
Appreciation
Fund (21.73%)
Cadence Mid Cap
Growth Fund (21.85%)
Cadence Micro
Cap Growth Fund (7.20%)
Cadence Small
Cap Growth Fund (9.95%)
Columbus Circle
Investors Core
Equity Fund (17.13%)
Columbus Circle
Investors Mid
Cap Equity Fund (15.54%)
Parametric
Enhanced Equity
Fund (22.21%)
Blairlogie
Emerging
Markets Fund (11.38%)
Blairlogie
International
Active Fund (16.71%)
Balanced Fund/4/
(common stock
segment) N/A
Balanced Fund/4/
(common stock
segment) N/A
</TABLE>
- -------
/1/ Aggregate advisory fees would not change under the proposed Addenda.
/2/ Reflects deduction of portfolio management fees paid by PIMCO Advisors to
the Portfolio Manager.
/3/ Estimated fees had the Addenda to the Portfolio Management Agreements been
in effect during the fiscal year ended June 30, 1996.
/4/ The Portfolio Management Agreements for the Balanced Fund did not go into
effect until August 1, 1996. Accordingly, no portfolio management fees were
received by Cadence and NFJ with respect to the Balanced Fund during the
fiscal year ended June 30, 1996.
15
<PAGE>
No other changes to the Portfolio Management Agreements are made in the
Addenda.
For the fiscal year ended June 30, 1996, the Funds paid the following
aggregate fees to the Funds' administrator, Pacific Investment Management
Company:
<TABLE>
<CAPTION>
FUND FEES PAID
---- ---------
<S> <C>
NFJ Equity Income Fund $236,611
NFJ Diversified Low P/E Fund $ 36,596
NFJ Small Cap Value Fund $ 65,176
Cadence Capital Appreciation Fund $490,803
Cadence Mid Cap Growth Fund $342,880
Cadence Micro Cap Growth Fund $133,934
Cadence Small Cap Growth Fund $106,715
Columbus Circle Investors Core Equity Fund $ 63,942
Columbus Circle Investors Mid Cap Equity Fund $ 14,011
Parametric Enhanced Equity Fund $151,842
Blairlogie Emerging Markets Fund $259,300
Blairlogie International Active Fund $244,350
Balanced Fund $130,017
</TABLE>
After the completion of the proposed restructuring, PIMCO Advisors will
serve as administrator to each Fund of the Trust.
INFORMATION ABOUT THE PORTFOLIO MANAGERS AND THE ADVISER
NFJ manages the NFJ Equity Income Fund, the NFJ Diversified Low P/E Fund,
the NFJ Small Cap Value Fund, and a portion of the Common Stock Segment of the
Balanced Fund (the "NFJ Funds"). NFJ is an investment management firm
organized as a general partnership. NFJ has two partners: PIMCO Advisors as
the supervisory partner, and NFJ Management, Inc. as the managing partner. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ, commenced
operations in 1989. Accounts managed by NFJ had combined assets as of
September 30, 1996 of approximately $1.7 billion. NFJ's address is 2121 San
Jacinto, Suite 1840, Dallas, Texas 75201. NFJ is registered as an investment
adviser with the Securities and Exchange Commission ("SEC").
Chris Najork is responsible for the day-to-day management of the NFJ Equity
Income Fund, the NFJ Diversified Low P/E Fund, and the portion of the Common
Stock Segment of the Balanced Fund allocated to NFJ. Mr. Najork is a Managing
Director and a founding partner of NFJ and has 27 years' experience
encompassing equity research and portfolio management. He received his
bachelor's degree and MBA from Southern Methodist University. Mr. Najork is a
Chartered Financial Analyst. Mr. Najork and Paul A. Magnuson are primarily
responsible for the day-to-day management of the NFJ Small Cap Value Fund. Mr.
Magnuson, a research analyst at NFJ, has 11 years' experience in equity
research and portfolio management. He received his bachelor's degree in
Finance from the University of Nebraska-Lincoln.
See Exhibit C of this proxy statement for a list of the principal executive
officers and directors of NFJ, and a table setting forth the other registered
investment companies with similar investment policies and objectives as some
or all of the NFJ Funds for which NFJ serves as an investment adviser,
including the fees payable by such investment companies and their approximate
net assets.
CADENCE manages the Cadence Capital Appreciation Fund, the Cadence Mid Cap
Growth Fund, the Cadence Micro Cap Growth Fund, the Cadence Small Cap Growth
Fund, and a portion of the Common Stock Segment of the Balanced Fund (the
"Cadence Funds"). Cadence is an investment management firm organized
16
<PAGE>
as a Delaware general partnership. Cadence has two partners: PIMCO Advisors as
the supervisory partner, and Cadence Capital Management, Inc. as the managing
partner. Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1989. Accounts managed by Cadence
had combined assets as of September 30, 1996 of approximately $3.0 billion.
Cadence's address is Exchange Place, 53 State Street, Boston, Massachusetts
02109. Cadence is registered as an investment adviser with the SEC.
David B. Breed, William B. Bannick, Katherine A. Burdon, Eric M. Wetlaufer,
and Peter B. McManus are primarily responsible for the day-to-day management
of the Cadence Funds. Mr. Breed is a Managing Director, Chief Executive
Officer, and founding partner of Cadence and has 23 years' investment
management experience. He has been the driving force in developing the firm's
growth-oriented stock screening and selection process and has been with
Cadence since its inception. Mr. Breed graduated from the University of
Massachusetts and received his MBA from the Wharton School of Business. He is
a Chartered Financial Analyst. Mr. Bannick is a Managing Director and
Executive Vice President of Cadence and has 11 years' investment management
experience. He previously served as Executive Vice President of George D.
Bjurman & Associates and as Supervising Portfolio Manager of Trinity
Investment Management Corporation. Mr. Bannick joined Cadence in 1992. He
graduated from the University of Massachusetts and received his MBA from
Boston University. Mr. Bannick is a Chartered Financial Analyst. Ms. Burdon is
a Managing Director and Portfolio Manager of Cadence and has nine years'
investment management experience. She previously served as a Vice President
and Portfolio Manager of The Boston Company. Ms. Burdon joined Cadence in
1993. She graduated from Stanford University and received a Master of Science
degree from Northeastern University. Ms. Burdon is a Chartered Financial
Analyst and Certified Public Accountant. Mr. Wetlaufer is a Managing Director
and Portfolio Manager of Cadence and has 11 years' investment management
experience. He previously served as Vice President of Northfield Information
Services. Mr. Wetlaufer joined Cadence in 1991. He graduated from Wesleyan
University and is a Chartered Financial Analyst. Mr. McManus is Director of
Fund Management of Cadence and has 19 years' investment management experience.
He previously served as a Vice President of Bank of Boston. Mr. McManus joined
Cadence in 1994. He graduated from the University of Massachusetts, and is
certified as a Financial Planner.
See Exhibit D of this proxy statement for a list of the principal executive
officers and the directors of Cadence, and a table setting forth the other
registered investment companies with similar investment policies and
objectives as some or all of the Cadence Funds for which Cadence serves as an
investment adviser, including the fees payable by such investment companies
and their approximate net assets.
COLUMBUS CIRCLE manages the Columbus Circle Investors Core Equity Fund and
the Columbus Circle Investors Mid Cap Equity Fund (the "Columbus Circle
Funds"). Columbus Circle is an investment management firm organized as a
general partnership. Columbus Circle has two partners: PIMCO Advisors as the
supervisory partner, and Columbus Circle Investors Management Inc. as the
managing partner. Columbus Circle Investors Division of Thomson Advisory Group
L.P. ("TAG"), the predecessor of Columbus Circle, commenced operations in 1975
as a division of Gulf + Western Industries (now Paramount Communications). In
1985, the business was acquired by Thomson McKinnon Asset Management, and in
1990, Irwin F. Smith and Donald A. Chiboucas, Chairman and Managing Director,
and President and Managing Director, respectively, of Columbus Circle,
participated in a management-led purchase of the controlling interest in TAG,
of which Columbus Circle was a division. Accounts managed by Columbus Circle
had combined assets as of September 30, 1996 of approximately $14.1 billion.
Columbus Circle's address is Metro Center, One Station Place, 8th Floor,
Stamford, Connecticut 06902. Columbus Circle is registered as an investment
adviser with the SEC.
17
<PAGE>
The investment decisions made by Columbus Circle with respect to the
Columbus Circle Funds are made by a committee rather than by a single person
acting as portfolio manager. No person is primarily responsible for making
recommendations to that committee.
See Exhibit E of this proxy statement for a list of the principal executive
officers and directors of Columbus Circle, and a table setting forth the other
registered investment companies with similar investment policies and
objectives as some or all of the Columbus Circle Funds for which Columbus
Circle serves as an investment adviser, including the fees payable by such
investment companies and their approximate net assets.
PARAMETRIC manages Parametric Enhanced Equity Fund and will manage, upon the
commencement of operations, the Parametric Structured Emerging Markets Fund
(the "Parametric Funds"). Parametric is an investment management firm
organized as a general partnership. Parametric has two partners: PIMCO
Advisors, as the supervisory partner, and Parametric Management, Inc., as the
managing partner. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987. Accounts
managed by Parametric had combined assets as of September 30, 1996 of
approximately $1.8 billion. Parametric's address is 7310 Columbia Center, 701
Fifth Avenue, Seattle, Washington 98104-7090. Parametric is registered as an
investment adviser with the SEC and as a commodity trading advisor with the
Commodity Futures Trading Commission (the "CFTC").
David Stein, Linda Mauzy, and Cliff Quisenberry are primarily responsible
for the day-to-day management of the Parametric Funds. Mr. Stein is a Managing
Director of Parametric and has been associated with Parametric since June,
1996. He also directs research and product development for Parametric. Mr.
Stein graduated with bachelor's and master's degrees in Applied Mathematics
from the University of Witwatersrand, South Africa, and received a Ph.D. in
Applied Mathematics from Harvard University. Prior to joining Parametric, Mr.
Stein served as the Director of Investment Research at GTE Investment
Management, Director of Active Equity Strategies at the Vanguard Group, and
Director of Quantitative Portfolio Management and Research at IBM. Ms. Mauzy
is a Senior Investment Manager of Parametric and has been with Parametric
since 1988. Ms. Mauzy graduated from the California State University with a
bachelor's degree in Chemistry, and from the University of California with a
master's degree in Economics. She is a Chartered Financial Analyst. Mr.
Quisenberry is a Senior Investment Manager and Research Manager of Parametric
and has been with Parametric since 1994. He previously served as a Vice
President and Portfolio Manager at Cutler & Co., and as a security analyst and
portfolio manager at Fred Alger Management. Mr. Quisenberry graduated from
Yale University with a bachelor's degree in Economics. He is a Chartered
Financial Analyst.
See Exhibit F of this proxy statement for a list of the principal executive
officers and directors of Parametric, and a table setting forth the other
registered investment companies with similar investment policies and
objectives as some or all of the Parametric Funds for which Parametric serves
as an investment adviser, including the fees payable by such investment
companies and their approximate net assets.
BLAIRLOGIE manages the Blairlogie Emerging Markets Fund and the Blairlogie
International Active Fund (the "Blairlogie Funds"). Blairlogie is an
investment management firm, organized as a limited partnership under the laws
of Scotland, United Kingdom, with two general partners and one limited
partner. The general partners are PIMCO Advisors, which serves as the
supervisory partner, and Blairlogie Holdings Limited, a wholly owned corporate
subsidiary of PIMCO Advisors, which serves as the managing partner. The
limited partner is Blairlogie Partners L.P., a limited partnership, the
general partner of which is Pacific Financial Asset Management Corporation,
and the limited partners of which are the principal executive officers of
Blairlogie Capital Management. Blairlogie Partners L.P. has agreed with PIMCO
Advisors that PIMCO Advisors will acquire one-
18
<PAGE>
fifth of its 25% interest annually, beginning December 31, 1997. Blairlogie
Capital Management Ltd., the predecessor investment adviser to Blairlogie,
commenced operations in 1992. Accounts managed by Blairlogie had combined
assets as of September 30, 1996 of approximately $.7 billion. Blairlogie's
address is 4th Floor, 125 Princes Street, Edinburgh EH2 4AD, Scotland.
Blairlogie is registered as an investment adviser with the SEC in the United
States and with the Investment Management Regulatory Organisation in the
United Kingdom.
James Smith is primarily responsible for the day-to-day management of the
Blairlogie Funds. Mr. Smith is a Managing Director and Chief Investment
Officer of Blairlogie and is responsible for managing an investment team of
seven professionals who, in turn, specialize in selection of stocks within
Europe, Asia, the Americas and in currency and derivatives. He previously served
as a senior portfolio manager at Murray Johnstone in Glasgow, Scotland,
responsible for international investment management for North American clients,
and at Schroder Investment Management in London. Mr. Smith received his
bachelor's degree in Economics from London University and his MBA from Edinburgh
University. He is an Associate of the Institute of Investment Management and
Research.
See Exhibit G of this proxy statement for a list of the principal executive
officers and directors of Blairlogie, and a table setting forth the other
registered investment companies with similar investment policies and
objectives as some or all of the Blairlogie Funds for which Blairlogie serves
as an investment adviser, including the fees payable by such investment
companies and their approximate net assets.
Registration as an investment adviser with the SEC does not involve
supervision by the SEC over investment advice, and registration with the CFTC
as a commodity trading advisor does not involve supervision by the CFTC over
commodities trading. The Portfolio Management Agreements are not exclusive,
and Parametric, NFJ, Cadence, Columbus Circle, and Blairlogie may provide, and
currently are providing, investment management services to other clients,
including other investment companies.
PIMCO ADVISORS serves as Investment Adviser to the Funds pursuant to an
investment advisory agreement with the Trust. PIMCO Advisors is a Delaware
limited partnership organized in 1987. PIMCO Advisors provides investment
management and advisory services to private accounts of institutional and
individual clients and to mutual funds. Total assets under management by PIMCO
Advisors and its subsidiary partnerships at September 30, 1996 were
approximately $104.5 billion. A portion of the units of the limited partner
interest in PIMCO Advisors is traded publicly on the New York Stock Exchange.
The general partner of PIMCO Advisors is PIMCO Partners, G.P. ("PIMCO GP").
PIMCO GP is a general partnership with two partners: (i) an indirect wholly
owned subsidiary of Pacific Mutual Life Insurance Company; and (ii) PIMCO
Partners, L.L.C. ("LLC"), a limited liability company, all of the interests of
which are held directly by the Managing Directors of Pacific Investment
Management Company ("PIMCO"), who are William H. Gross, Dean S. Meiling, James
F. Muzzy, William F. Podlich, III, Frank B. Rabinovitch, Brent R. Harris, John
L. Hague, William S. Thompson, Jr., William C. Powers, David H. Edington and
Benjamin L. Trosky (collectively, the "Managing Directors"). PIMCO GP has
substantially delegated its management and control of PIMCO Advisors to an
Equity Board and an Operating Board of PIMCO Advisors. The activities of PIMCO
Advisors are controlled by its Operating Board except that certain non-routine
or extraordinary actions may not be effected by the Operating Board without
the approval of PIMCO Advisors' Equity Board. The Operating Board has in turn
delegated the authority to manage day-to-day operations and policies to an
Operating Committee. The Operating Board is composed of 12 members, of which
seven (including the chairman) are designated by PIMCO, which is a subsidiary
general partnership of PIMCO Advisors. The Equity Board is composed of twelve
members including the chief executive officer of PIMCO Advisors, three members
designated by Pacific Financial Asset Management Corporation, the chairman of
the Operating Board, two members designated by LLC, two members designated by
holders of
19
<PAGE>
Series B Preferred Stock of Thomson Advisory Group Inc., the former general
partner of PIMCO Advisors, and three independent members. Because of the
ability to designate a majority of the Members of the Operating Board, PIMCO
and the Managing Directors could be said to control PIMCO Advisors, although
the Managing Directors disclaim such control. PIMCO Advisors and PIMCO GP are
located at 800 Newport Center Drive, Suite 100, Newport Beach, CA 92660.
CERTAIN TRUSTEES AND OFFICERS OF THE TRUST
The following paragraph names each current and proposed officer and Trustee
of the Trust who is an officer, employee, director, or shareholder of the
Adviser or any of the Portfolio Managers.
William D. Cvengros, the Chairman and a Trustee of the Trust, is the
President, Chief Executive Officer and member of the Equity and Operating
Boards of the Adviser. Mr. Robert A. Prindiville, a nominee, is a Vice
President of the Adviser. Stephen J. Treadway is an Executive Vice President
of the Adviser and is expected to be appointed President of the Trust on or
about the completion of the restructuring. John O. Leasure is a Senior Vice
President of the Adviser and is expected to become a Vice President of the
Trust on or about the completion of the restructuring. Newton B. Schott, Jr.
is a Senior Vice President and Secretary of the Adviser and the Secretary of
Columbus Circle and is expected to become the Vice President and Secretary of
the Trust upon completion of the restructuring.
Pursuant to the Adviser's restricted unit plan and subject to its vesting
provisions, Mr. Cvengros owns 100,000 Class A LP Units of the Adviser and
100,000 Class B LP Units of the Adviser, and Mr. Treadway owns 25,000 Class A
LP Units of the Adviser. Mr. Prindiville may be deemed to own 49,646 Class A
LP Units of the Adviser which may be acquired upon exchange of his Series A
Preferred Stock of Thomson Advisory Group Inc. ("TAG Inc."), the former
general partner of the Adviser, and 413,042 Class B LP Units of the Adviser
that may be acquired in limited circumstances upon exchange of Series B
Preferred Stock of TAG Inc. Mr. Prindiville disclaims beneficial ownership of
any Class B Units of the Adviser. Messrs. Cvengros, Schott, Leasure and
Treadway, R. Wesley Burns, Vice President of the Trust, John P. Hardaway,
Treasurer of the Trust, and Teresa A. Wagner, Vice President of the Trust, are
participants in one or more option plans currently maintained by the Adviser
and have been awarded options on Class A LP Units and/or Class B LP Units of
the Adviser thereunder. Options on Class A LP Units granted under one of the
plans vest over annual periods through December 31, 1998, and are divided into
Class I options, which have an exercise price of $2.425, and Class II options,
which have an exercise price of $4.855. Options on Class B LP Units generally
vest in five equal annual installments, and those issued to the persons listed
above have exercise prices ranging from $13.53 to $18.81. As of the Record
Date, the persons listed held, in the aggregate, options on 267,800 Class A LP
Units and 720,000 Class B LP Units.
By virtue of their holdings and/or their respective positions with the
Adviser or a Portfolio Manager, each of the persons listed in the preceding
two paragraphs may be deemed to have a substantial interest in the matters set
forth in this Proposal III.
BROKERAGE AND RESEARCH SERVICES
Transactions on stock exchanges and other agency transactions involve the
payment by the Funds of negotiated brokerage commissions. Such commissions
vary among different brokers. Also, a particular broker may charge different
commissions according to such factors as the difficulty and size of the
transaction.
When the Adviser or relevant Portfolio Manager places orders for the
purchase and sale of portfolio securities for a particular Fund, it is
anticipated that such transactions will be effected through a number of
brokers and dealers. In so doing, the Adviser or relevant Portfolio Manager
intends to use its best efforts to obtain
20
<PAGE>
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, the Adviser or
relevant Portfolio Manager considers all factors it deems 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
transaction 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, the Adviser and Portfolio Managers may receive
research, statistical and quotation services from many of the broker-dealers
with which the Funds' 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 the Adviser and Portfolio
Managers in advising various of their clients, although not all of these
services are necessarily useful and of value in advising any particular Fund.
The fees paid to the Adviser and Portfolio Managers are not reduced because
they receive such services.
As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), under the Investment Advisory Agreement and Portfolio Management
Agreements, the Adviser and each Portfolio Manager may cause a Fund to pay a
broker-dealer which provides "brokerage and research services" (as defined in
the 1934 Act) to the Adviser or that Portfolio Manager an amount of disclosed
commission for effecting a securities transaction for a Fund in excess of the
commission which another broker-dealer would have charged for effecting the
same transaction. The authority of the Adviser and Portfolio Manager to cause
the Trust to pay any such greater commission is subject to such policies as
the Trustees of the Trust may adopt from time to time.
THE EVALUATION BY THE TRUST'S BOARD OF TRUSTEES AND THE TRUSTEES'
RECOMMENDATION
In determining whether it was appropriate to approve each Addendum to the
Portfolio Management Agreements and to recommend approval to shareholders, the
Board of Trustees, including Trustees who are not interested persons of the
Adviser or the Portfolio Managers, considered various materials provided by
the Adviser and the Portfolio Managers. The information considered by the
Trustees included, among other things, the following: (1) the compensation to
be received by the Portfolio Managers for their investment advisory services
and the fairness of such compensation; (2) the compensation to be received by
the Adviser for its investment advisory services and the fairness of such
compensation; (3) the nature and quality of the investment advisory services
to be rendered and that have been rendered by the Portfolio Manager and the
Adviser to the pertinent Fund; and (4) the increased cost of compliance and
administrative support activities assumed by the Adviser.
In this regard, the Trustees noted that, other than with respect to the
fixed income segment of the Balanced Fund, the Adviser does not currently
retain a portion of the advisory fees received by it from the Funds. The
Trustees also noted that the Funds will continue to receive portfolio
management services from the Portfolio Managers, and that the expenses of the
Funds would not increase.
REQUIRED VOTE. Approval of the Addendum to the Portfolio Management
Agreement with respect to each Fund will require the affirmative vote of the
lesser of (A) 67% or more of the voting securities of the shareholders of the
pertinent Fund present at the Meeting, if the holders of more than 50% of the
outstanding voting securities of that Fund are present or represented by
proxy; or (B) more than 50% of the outstanding voting securities of that Fund.
21
<PAGE>
THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND:
A. APPROVAL BY THE SHAREHOLDERS OF THE NFJ EQUITY INCOME FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
NFJ;
B. APPROVAL BY THE SHAREHOLDERS OF THE NFJ DIVERSIFIED LOW P/E FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
NFJ;
C. APPROVAL BY THE SHAREHOLDERS OF THE NFJ SMALL CAP VALUE FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
NFJ;
D. APPROVAL BY THE SHAREHOLDERS OF THE CADENCE CAPITAL APPRECIATION FUND OF
THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER
AND CADENCE;
E. APPROVAL BY THE SHAREHOLDERS OF THE CADENCE MID CAP GROWTH FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
CADENCE;
F. APPROVAL BY THE SHAREHOLDERS OF THE CADENCE MICRO CAP GROWTH FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
CADENCE;
G. APPROVAL BY THE SHAREHOLDERS OF THE CADENCE SMALL CAP GROWTH FUND OF THE
ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND
CADENCE;
H. APPROVAL BY THE SHAREHOLDERS OF THE PARAMETRIC ENHANCED EQUITY FUND OF
THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER
AND PARAMETRIC;
I. APPROVAL BY THE SHAREHOLDERS OF THE BLAIRLOGIE EMERGING MARKETS FUND OF
THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER
AND BLAIRLOGIE;
J. APPROVAL BY THE SHAREHOLDERS OF THE BLAIRLOGIE INTERNATIONAL ACTIVE FUND
OF THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE
ADVISER AND BLAIRLOGIE;
K. APPROVAL BY THE SHAREHOLDERS OF THE BALANCED FUND OF THE ADDENDUM TO THE
PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND NFJ;
L. APPROVAL BY THE SHAREHOLDERS OF THE BALANCED FUND OF THE ADDENDUM TO THE
PORTFOLIO MANAGEMENT AGREEMENT BETWEEN THE ADVISER AND CADENCE;
M. APPROVAL BY THE SHAREHOLDERS OF THE COLUMBUS CIRCLE INVESTORS CORE
EQUITY FUND OF THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT
BETWEEN THE ADVISER AND COLUMBUS CIRCLE; AND
N. APPROVAL BY THE SHAREHOLDERS OF THE COLUMBUS CIRCLE INVESTORS MID CAP
EQUITY FUND OF THE ADDENDUM TO THE PORTFOLIO MANAGEMENT AGREEMENT
BETWEEN THE ADVISER AND COLUMBUS CIRCLE.
22
<PAGE>
PROPOSAL IV.
APPROVAL OR DISAPPROVAL OF THE SECOND AMENDED AND
RESTATED AGREEMENT AND DECLARATION OF TRUST
The Trust was organized as a Massachusetts business trust on August 24, 1990
pursuant to an Agreement and Declaration of Trust dated August 24, 1990. The
Agreement and Declaration of Trust was amended and restated pursuant to an
Amended and Restated Agreement and Declaration of Trust, dated May 7, 1993,
which has subsequently been amended on several occasions, most recently on
October 31, 1996 (as so amended, the "Current Declaration") for the purpose of
creating an additional series of the Trust.
As part of the overall restructuring of three of the mutual funds advised by
PIMCO Advisors or its affiliates, the Trustees of the Trust are proposing that
shareholders approve a Second Amended and Restated Declaration of Trust (the
"Proposed Declaration"). The provisions of the Proposed Declaration are
substantially identical to those of the current Agreement and Declaration of
Trust of PAF. The full text of the Proposed Declaration is attached as Exhibit
H to this Proxy Statement, and qualifies in its entirety the description of
the Proposed Declaration set forth in this Proxy Statement.
Because the Trust will remain a Massachusetts business trust, interpretation
of the Proposed Declaration will continue to be governed by Massachusetts law.
In addition, the Trust's operations will remain subject to the provisions of
the 1940 Act and the rules promulgated thereunder. Certain differences between
the Current Declaration and the Proposed Declaration are summarized below.
SHAREHOLDER VOTING REQUIREMENTS--GENERALLY. The Current Declaration sets
forth the specific matters on which shareholders are entitled to vote, the
size of vote required for approval of each such matter (i.e., plurality,
majority, super majority), the circumstances in which the shareholders may
call and hold meetings, and other information concerning shareholders' general
voting rights. The Proposed Declaration states that shareholders shall have
such power to vote as is provided for in, and may hold meetings and take
actions pursuant to, the provisions of the proposed Bylaws (the "Proposed
Bylaws"), which have been unanimously adopted by the Trustees contingent upon
a favorable vote of the shareholders of the Trust on this Proposal. The
Proposed Bylaws, which are substantially identical to those currently in
effect for PAF, in turn, provide all details regarding (i) the matters on
which shareholders are entitled to vote, (ii) the size of vote required for
approval of each matter, and (iii) the circumstances in which shareholders may
call and hold meetings. The Proposed Bylaws provide shareholders with voting
powers which, with certain exceptions as described in greater detail below,
are substantially similar to the powers provided for in the Current
Declaration. Under both the Current Declaration and the Proposed Bylaws,
shareholders have the power to vote (i) for the election of Trustees,
provided, however, that no meeting of shareholders is required to be called
for the purpose of electing Trustees unless and until such time as less than a
majority of the Trustees have been elected by the shareholders; (ii) with
respect to any manager or sub-adviser to the extent required by the 1940 Act;
(iii) with respect to the termination of the Trust; (iv) with respect to
amendments to the Declaration of Trust which may adversely affect the rights
of shareholders; (v) to the same extent as the stockholders of a Massachusetts
business corporation as to whether an action should be brought derivatively or
as a class action on behalf of the Trust and its shareholders; and (vi) with
respect to such additional matters relating to the Trust as may be required by
law, the relevant declaration of trust and by-laws or any registration
statement of the Trust, or as the Trustees consider necessary or desirable.
Both the Current Declaration and the Proposed Declaration provide that any
amendment thereto that adversely affects the rights of shareholders may be
adopted only by an instrument in writing signed by a majority of the then
Trustees when authorized to do so by the vote of a majority of the shares
entitled to vote. However,
23
<PAGE>
the Proposed Declaration also provides that if fewer than all shareholders are
affected by an amendment, only the vote of the shareholders of those series or
classes affected by the amendment shall be required to vote on the amendment.
The Proposed Bylaws may be amended or repealed, in whole or in part, by a
majority of the Trustees then in office at any meeting of the Trustees, or by
one or more writings signed by such a majority. Although no shareholder vote
would be required to amend any portion of the Proposed Bylaws, including
portions setting forth shareholder voting rights, the Trust would still be
subject to shareholder rights required by the 1940 Act and the rules and
regulations thereunder, the SEC, and/or any applicable state laws. Thus, under
current law, (i) Trustees must be elected by shareholders under certain
circumstances, (ii) investment advisory contracts must still be approved by a
vote of at least a majority of the Trust's outstanding voting securities,
(iii) distribution plans must still be approved by a vote of at least a
majority of outstanding voting securities, and (iv) auditors must still be
selected annually at an annual meeting of shareholders if such a meeting is
held.
It is expected that, by providing for shareholder voting and meeting rights
in the Bylaws rather than the Declaration of Trust, the Trustees will have
added flexibility in managing the Trust's affairs.
SHAREHOLDER VOTING REQUIREMENTS--REORGANIZATIONS. The Trust's Current
Declaration provides that shareholders shall have the power to vote with
respect to any proposed transaction in which the Trust, or any one or more of
its series, merges into or consolidates with one or more trusts, partnerships,
or associations. The term "merger" is in turn defined to include any purchase
or acquisition of any assets of another investment company. Under the Current
Declaration, any such consolidation or merger requires a Majority Shareholder
Vote of each Series affected thereby. As used in the Current Declaration, the
term "Majority Shareholder Vote" means, with respect to the Trust or any
series eligible to vote (as the case may be) the lesser of (A) 67% or more of
the voting securities present at a meeting, if the holders of more than 50% of
the outstanding voting securities of the Trust or such series as are present
or represented by proxy; or (B) more than 50% of the outstanding voting
securities of the Trust or such series.
Neither the Proposed Declaration nor the Proposed Bylaws requires any
shareholder vote with respect to any proposed transaction in which the Trust,
or any one or more series thereof, as successor, survivor, or non-survivor,
consolidates with, merges into, or has merged into it, one or more trusts,
partnerships or associations. Under the Proposed Declaration and Proposed
Bylaws, the shareholders would be entitled to vote if, and to the extent that,
the Trustees consider such a vote to be necessary or desirable.
It is expected that, by requiring the Trust to seek shareholder approval on
such consolidations or mergers only when the Trustees consider such a vote to
be necessary or desirable, the Trustees will have added flexibility in
managing the Trust's affairs. In particular, should a Fund seek to acquire
substantially all of the assets of another mutual fund, the Trust or its
Administrator would experience a savings with respect to certain expenses,
including the cost of preparing, printing, and mailing proxies and related
notices and proxy statements and other costs in connection with the
solicitation of proxies.
MULTI-CLASS STRUCTURE--PERMITTED DIFFERENCES BETWEEN CLASSES. The Current
Declaration provides that all shares of the Trust or of any series shall be
identical to all other shares of the Trust or the same series, as the case may
be, except that there may be variations between different classes as to
allocation of expenses, rights of redemption, special and relative rights as
to dividends, and on liquidation, conversion rights, and conditions under
which the several classes shall have separate voting rights. The Proposed
Declaration does not enumerate the permitted ways in which two or more classes
of shares may differ but affords to the Trustees the right to assign them such
preferences and special or relative rights and privileges (including
conversion rights, if any) as the Trustees may determine or as shall be set
forth in the Proposed Bylaws.
Most series of the Trust currently offer two classes of shares,
Institutional Class and Administrative Class shares. The primary difference
between the two classes is whether a service fee is charged. The Trust also
expects
24
<PAGE>
that, in connection with the overall reorganization of three of the mutual
funds advised by PIMCO Advisors and its affiliates, a number of its Funds will
offer three additional classes of shares, Class A, Class B and Class C shares,
beginning in mid-January, 1997. The primary differences among these additional
classes are whether the shares of a class are subject to a front end sales
load or a contingent deferred sales charge, the duration of any contingent
deferred sales charge, and whether the shares are subject to a distribution
fee. Although it is difficult at this time to anticipate what future
distinguishing characteristics of multi-class structures may arise, the
Trustees believe that the Proposed Declaration provides greater flexibility
for future situations.
Under the Proposed Declaration, the Trust would still be subject to the
multi-class requirements under the 1940 Act and the rules and regulations
thereunder. In particular, Rule 18f-3 under the 1940 Act currently provides,
inter alia, that each class (i) shall have a different arrangement for
shareholder services or the distribution of securities or both, and shall pay
all of the expenses of that arrangement; (ii) may pay a different share of
other expenses, not including advisory or custodial fees or other expenses
related to the management of that company's assets, if these expenses are
actually incurred in a different amount by that class, or if the class
receives services of a different kind or to a different degree than other
classes; (iii) may pay a different advisory fee to the extent that any
difference in amount paid is the result of the application of the same
performance fee provisions in the advisory contract of the company to the
different investment performance of each class; and (iv) shall have exclusive
voting rights of any matter submitted to shareholders that relates solely to
its arrangement.
STANDARDS IN RESPECT OF ADVISORY AND DISTRIBUTION CONTRACTS. The Current
Declaration provides all advisory and distribution contracts entered into with
certain interested persons of the Trust must, inter alia, be "reasonable and
fair" when entered into. It is unclear how this contractual provision would be
interpreted by a court of competent jurisdiction. Under precedent dealing with
Massachusetts corporations, a party defending the fairness of an interested
transaction has the burden of proof and the statute of limitations on a
contract is generally six years. While there is no comparable provision in the
Proposed Declaration, if the Proposed Declaration were approved all advisory
and distribution contracts entered into by the Trust would remain subject to
the requirements of the 1940 Act and the rules and regulations thereunder and
any applicable state laws. For example, Section 36 of the 1940 Act imposes a
fiduciary duty on advisers and their affiliates with respect to the
compensation for services that they receive from registered investment
companies such as the Funds. In a claim for excessive advisory or distribution
fees under Section 36 of the 1940 Act, the plaintiff bears the burden of proof
and the statute of limitations is one year. Appellate court precedent provides
that the principal factor to be considered in determining the reasonableness
of an advisory fee under the 1940 Act is whether the fee is "so
disproportionately large that it bears no relationship to the services
rendered and could not have been the product of arms-length bargaining."
INDEMNIFICATION OF TRUSTEES AND OFFICERS. The Proposed Declaration clarifies
the procedures for determining whether a trustee, officer, or other person
acting under his or her direction is entitled to indemnification by the Trust.
The Proposed Declaration provides in general that a trustee, officer or other
person acting under their direction is entitled to indemnification except with
respect to any matter as to which such person shall have been finally
adjudicated in any action, suit or other proceeding (a) not to have acted in
good faith in the reasonable belief that such person's action was in or not
opposed to the best interest of the Trust or (b) to be liable to the Trust or
its shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such person's
office.
REQUIRED VOTE. Approval of the Proposed Declaration will require a majority
vote of the outstanding shares of each Fund of the Trust, with each such Fund
voting separately for purposes of this Proposal.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE THE
PROPOSED DECLARATION OF TRUST.
25
<PAGE>
PROPOSAL V.
APPROVAL OR DISAPPROVAL OF AN ADMINISTRATIVE CLASS DISTRIBUTION
PLAN WITH RESPECT TO EACH FUND OF THE TRUST THAT HAS
ADMINISTRATIVE CLASS SHARES ISSUED AND OUTSTANDING
The Trustees are proposing that holders of Administrative Class shares of
each Fund that has Administrative Class shares issued and outstanding approve
an Administrative Class Distribution Plan (the "Plan") as it relates to each
such Fund. The Plan would supplement other arrangements under which
shareholder services are currently rendered to shareholders of the
Administrative Class, and would not increase the expenses of that class of
shares. The full text of the Plan is attached as Exhibit I to this Proxy
Statement and qualifies in its entirety the description of the Plan set forth
in this Proxy Statement.
The Plan, which was drafted pursuant to Section 12(b) of the 1940 Act and
Rule 12b-1 thereunder (the "Rule"), was approved with respect to each Fund on
September 17, 1996 by the Trustees, including those Trustees who are not
"interested persons" of the Trust or of the Trust's principal underwriter,
PIMCO Advisors Distribution Company (the "Distributor") and who have no direct
or indirect interest in the Plan or any related agreements (the "Qualified
Trustees"). The Plan is being submitted for shareholder approval pursuant to a
requirement in the Rule.
ADMINISTRATIVE CLASS DISTRIBUTION PLAN. Under the terms of the Plan, the
Trust (or the Distributor acting as agent of the Trust) will reimburse brokers
and other service organizations (each a "Service Organization") for costs and
expenses incurred in connection with the distribution and marketing of the
Administrative Class shares and/or the provision of shareholder services to
its customers that invest in the Funds, at an annual rate not to exceed 0.25%
of the average daily net assets attributable to each Fund's Administrative
Class shares. Any expense payable under the Plan may be carried forward for
reimbursement for up to twelve months beyond the date in which it is incurred,
but may never exceed 0.25% of average daily net assets in any month. Such
"carried forward" expenses may only be paid by the Trust under the Plan during
periods in which the Plan continues to be in effect. The services provided
under the Plan may include placing orders directly for the purchase of a
Fund's shares, providing facilities to answer questions from prospective
investors about the Funds, providing information about the Funds, receiving
and answering correspondence (including requests for prospectuses and
statements of additional information), preparing, printing and delivering
prospectuses and shareholder reports to prospective shareholders, complying
with federal and state securities laws pertaining to the sale of
Administrative Class shares, and assisting investors in completing application
forms and selecting dividend and other account options. Shareholder services
that may be provided under the Plan may include receiving, aggregating and
processing shareholder orders, furnishing shareholder sub-accounting,
providing and maintaining elective shareholder services such as check writing
and wire transfer services, providing and maintaining pre-authorized
investment plans, communicating periodically with shareholders, acting as the
shareholder of record and nominee for shareholders, maintaining accounting
records for shareholders, answering questions and handling correspondence from
shareholders about their accounts, issuing confirmations for transactions by
shareholders, and performing similar account administrative services. The Plan
requires the Trustees to review, at least quarterly, a written report of
expenditures under the Plan.
The Plan shall continue in effect so long as its continuance is specifically
approved at least annually by vote of both a majority of the Trustees and a
majority of the Qualified Trustees. The Plan and any related agreements
(including the Distributor's Contract described below) may be terminated as to
any Fund at any time by vote of a majority of the Qualified Trustees or by
vote of a majority of the outstanding shares of the Administrative Class
shares of such Fund. All agreements relating to the Plan must be in writing
and will terminate automatically if assigned. The Plan may not be amended to
increase materially the amount of the distribution fee permitted
26
<PAGE>
thereunder with respect to a Fund without a vote of a majority of the
outstanding shares of the Administrative Class of that Fund. In addition, the
Plan may not be materially amended in any way without a vote of the majority
of both the Trustees and the Qualified Trustees at a meeting called for that
purpose.
Pursuant to the terms of a multiple class plan (the "Multiple Class Plan"),
the Trust currently pays to the Administrator an amount equal to 0.25% on an
annual basis of the average daily net assets of a Fund attributable to its
Administrative Class shares. The Administrator in turn compensates financial
intermediaries that provide services in connection with the administration of
plans or programs that use Fund shares as their funding medium pursuant to
separate Administrative Services Agreements. For the fiscal year ended June
30, 1996, the aggregate fees paid under the Multiple Class Plan for the
Administrative Class shares of all Funds totaled $76,033.
Services provided under the Multiple Class Plan include one or more of the
following: receiving, aggregating and processing shareholder orders,
furnishing shareholder sub-accounting, providing and maintaining elective
shareholder services such as check writing and wire transfer services;
providing and maintaining preauthorized investment plans; communicating
periodically with shareholders; acting as the shareholder of record and
nominee for shareholders; maintaining accounting records for shareholders;
answering questions and handling correspondence from shareholders about their
accounts; issuing confirmations for transactions by shareholders; and
performing similar account administrative services.
If the Plan is adopted, any Service Organization entering into a
Distribution Agreement with the Trust (or with the Distributor) under the Plan
may also enter into an Administrative Services Agreement with the Trust. In
the event that a Service Organization enters into both types of agreements,
the Service Organization will not be eligible to receive fees under both
agreements with respect to the same assets. A Fund (or the Distributor, acting
as the Fund's agent) may enter into more than one Distribution and/or
Administrative Services Agreement for its Administrative Class shares, with
different Service Organizations providing services to different groups of
shareholders.
The Trustees believe that, in addition to using the financial intermediaries
currently engaged pursuant to the Multiple Class Plan, adoption of the Plan
would provide the Funds with the opportunity to engage and compensate
registered broker-dealers to aid in the sale of Administrative Class shares in
a manner consistent with regulatory requirements. Based upon information
provided to the Trustees by the Distributor and the Administrator, the
Trustees believe that the Plan may benefit the Trust by stimulating sales of
Fund shares or by reducing redemptions of Fund shares. Increased sales and/or
reduced redemptions may allow the Adviser to provide current and future
shareholders with the potential for greater diversification of their assets
and for an increase in investment opportunities for certain of the Funds. In
addition, the Trustees believe that the Plan, as part of the overall
restructuring, (i) will improve Fund distribution through institutional
channels, (ii) will enhance market presence and brand awareness and (iii) will
not result in any additional expense to the Trust or the Administrative Class
of the Trust's shares.
DISTRIBUTOR'S CONTRACT. The Distributor, a wholly-owned subsidiary of the
Adviser, acts as the principal underwriter of shares of each Fund of the Trust
pursuant to a Distributor's Contract with the Trust. Under the Distributor's
Contract, the Distributor is not obligated to sell any specific number of
shares, but only to sell Trust shares on a best efforts basis.
For the fiscal year ended June 30, 1996, no distribution fees were paid to
the Distributor by the Trust in connection with purchases of any Fund's
Administrative Class shares.
By virtue of their current positions with the Adviser, the Distributor and
their affiliates, the Chairman of the Board of the Trust, William D. Cvengros,
and Robert A. Prindiville, a nominee for Trustee, may be deemed to have a
material interest in the Distributor's Contract.
27
<PAGE>
The Trustees, including all of the Qualified Trustees, have determined that
there is a reasonable likelihood that the Plan will benefit the Trust, each
Fund and the Administrative Class shareholders of each Fund and unanimously
recommend that Administrative Class shareholders of each Fund approve the
Plan.
REQUIRED VOTE. Approval of the Plan as to each Fund that has Administrative
Class shares issued and outstanding will require a Majority Shareholder Vote
of the outstanding Administrative Class shares of each such Fund of the Trust,
with each Fund voting separately for purposes of this Proposal. Only holders
of Administrative Class shares shall be eligible to vote on this Proposal. The
Plan shall have been effectively approved with respect to a Fund if the Plan
is approved by a Majority Shareholder Vote of the outstanding Administrative
Class shares of the Fund, notwithstanding that the matter has not been
approved by the Administrative Class of any other Fund. If shareholders of the
Administrative Class shares of one or more Funds do not approve the Plan, the
Trustees will consider such further action as they may deem to be in the best
interests of Administrative Class shareholders of such Funds.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF ADMINISTRATIVE CLASS
SHARES VOTE TO APPROVE THE DISTRIBUTION PLAN.
OTHER MATTERS
OUTSTANDING SHARES AND SHAREHOLDERS
The number of shares of each class of each Fund issued and outstanding on
the Record Date was as follows:
<TABLE>
<CAPTION>
NUMBER OF ISSUED AND OUTSTANDING SHARES
- -------------------------------------------------------------------------------
NAME OF FUND INSTITUTIONAL ADMINISTRATIVE
- -------------------------------------------------------------------------------
<S> <C> <C>
NFJ Equity Income Fund 7,582,798.122 428,817.267
- -------------------------------------------------------------------------------
NFJ Diversified Low P/E Fund 4,407,113.884 0
- -------------------------------------------------------------------------------
NFJ Small Cap Value Fund 1,983,781.158 306,739.669
- -------------------------------------------------------------------------------
Cadence Capital Appreciation Fund 20,511,229.467 5,446.088
- -------------------------------------------------------------------------------
Cadence Mid Cap Growth Fund 10,345,617.362 57,825.948
- -------------------------------------------------------------------------------
Cadence Micro Cap Growth Fund 4,857,676.792 51,947.229
- -------------------------------------------------------------------------------
Cadence Small Cap Growth Fund 1,619,859.752 5,312.555
- -------------------------------------------------------------------------------
Columbus Circle Investors Core Eq-
uity Fund 779,209.116 2,639,527.817
- -------------------------------------------------------------------------------
Columbus Circle Investors Mid Cap
Equity Fund 576,318.940 0
- -------------------------------------------------------------------------------
Parametric Enhanced Equity Fund 4,624,998.771 0
- -------------------------------------------------------------------------------
Blairlogie Emerging Markets Fund 5,369,938.694 25,799.415
- -------------------------------------------------------------------------------
Blairlogie International Active
Fund 6,775,073.470 469,699.768
- -------------------------------------------------------------------------------
Balanced Fund 5,128,347.725 0
</TABLE>
Attached as Exhibit J to this Proxy Statement is a list of the persons who
beneficially owned 5% or more of the outstanding shares of a Fund as of the
close of business on the Record Date.
SHAREHOLDINGS OF TRUSTEES, NOMINEES, CERTAIN TRUST OFFICERS AND THE ADVISER
As a group, the current Trustees, Nominees and current and proposed officers
own less than 1% of the shares of the Funds.
28
<PAGE>
OFFICERS OF THE TRUST
The chart below sets forth the name, address, age, position with the Trust,
and principal occupation during the past five years of each current officer of
the Trust and each proposed officer of the Trust, effective upon the
completion of the restructuring (except for William D. Cvengros, the current
Chairman of the Board and President of the Trust, and proposed Chairman of the
Board, whose name, address and principal occupations during the past five
years are listed in Proposal I of this Proxy Statement). Unless otherwise
indicated, the business address of all persons listed below is 840 Newport
Center Drive, Suite 360, Newport Beach, California 92660:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S) DURING
NAME, ADDRESS AND AGE * POSITION(S) WITH THE TRUST THE PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Stephen J. Treadway President and Chief Executive Vice President, PIMCO
Age 49 Executive Officer Advisors; Director and Chairman,
PIMCO Advisors L.P. (proposed) PADCo. Formerly, Executive Vice
2187 Atlantic St., Floor President, Smith Barney Inc.
7
Stamford, CT 06902
- -----------------------------------------------------------------------------------------------
R. Wesley Burns Vice President (current); Executive Vice President, PIMCO.
Age 37 Executive Vice President Formerly, Vice President, PIMCO.
(proposed)
- -----------------------------------------------------------------------------------------------
Newton B. Schott, Jr. Vice President and Senior Vice President--Legal and
Age 54 Secretary (proposed) Secretary, PIMCO Advisors; Director,
PIMCO Advisors L.P. Senior Vice President and Secretary,
2187 Atlantic St., Floor PADCo. Formerly, Executive Vice
7 President, Secretary and General
Stamford, CT 06902 Counsel, Thomson Advisory Group and
PIMCO Advisors; Executive Vice
President, Secretary, General Counsel
and Director, Thomson McKinnon Inc.
- -----------------------------------------------------------------------------------------------
Sharon A. Cheever Vice President and General Vice President and Investment Counsel,
Age 41 Counsel (current) Pacific Mutual Life Insurance Company.
700 Newport Center Drive Formerly, Assistant Vice President and
Newport Beach, CA 92660 Associate Counsel, Pacific Mutual Life
Insurance Company.
- -----------------------------------------------------------------------------------------------
Garlin G. Flynn Secretary (current); Senior Fund Administrator, PIMCO.
Age 50 Assistant Secretary Formerly, Senior Mutual Fund Analyst,
(proposed) PIMCO Advisors Institutional Services;
Senior Mutual Fund Analyst, Pacific
Financial Asset Management Company
("PFAMCo").
- -----------------------------------------------------------------------------------------------
John P. Hardaway Treasurer (current and Vice President and Manager of Fund
Age 39 proposed) Operations, PIMCO.
- -----------------------------------------------------------------------------------------------
Joseph D. Hattesohl Assistant Treasurer Manager of Fund Taxation, PIMCO.
Age 32 (proposed) Formerly, Director of Financial
Reporting, Carl I. Brown & Co.; Tax
Manager, Price Waterhouse L.L.P.
- -----------------------------------------------------------------------------------------------
Jeffrey M. Sargent Vice President (current Vice President and Manager of Fund
Age 33 and proposed) Shareholder Servicing, PIMCO.
Formerly, Project Specialist, PIMCO.
- -----------------------------------------------------------------------------------------------
Teresa A. Wagner Vice President (current Vice President and Manager of Fund
Age 34 and proposed) Administration, PIMCO. Formerly, Vice
President, PIMCO Advisors
Institutional Services; Finance
Director, PFAMCo.
- -----------------------------------------------------------------------------------------------
John O. Leasure Vice President (proposed) Senior Vice President, PIMCO Advisors;
Age 56 President and Director, PADCo.
PIMCO Advisors L.P. Formerly, Executive Vice President,
2187 Atlantic St., Floor PIMCO Advisors.
7
Stamford, CT 06902
- -----------------------------------------------------------------------------------------------
Richard M. Weil Vice President (proposed) Senior Vice President--Legal, PIMCO
Age 33 Advisors. Formerly, Vice President,
PIMCO Advisors L.P. Bankers Trust Company; Associate,
800 Newport Center Simpson, Thatcher & Bartlett.
Drive, Newport Beach, CA
92660
</TABLE>
* The officers of the Trust whose title is designated above as "current" serve
the Trust in the capacity noted above and will continue to serve in such
capacity until the completion of the transactions contemplated by the
restructuring. The officers of the Trust whose title is designated above as
"proposed" will serve the Trust in the capacity noted above effective upon
the completion of such transactions.
29
<PAGE>
OTHER SERVICE PROVIDERS
PIMCO serves as administrator to each Fund of the Trust pursuant to an
Administration Agreement dated August 16, 1995. PIMCO provides administrative
services to the Funds, which include clerical help and accounting,
bookkeeping, internal audit services, and certain other services required by
the Funds, preparation of reports to the Funds' shareholders and regulatory
filings. In addition, PIMCO, at its own expense, arranges for the provision of
legal, audit, custody, transfer agency and other services for the Funds, and
is responsible for the costs of registration of the Trust's shares and the
printing of the prospectuses and shareholder reports for current shareholders.
The services provided pursuant to the administration agreement will not change
as a result of the restructuring; however, after the completion of the
restructuring, PIMCO Advisors will serve as administrator to each Fund of the
Trust, and PIMCO will provide administrative assistance to PIMCO Advisors.
PIMCO is located at 840 Newport Center Drive, Newport Beach, California 92660.
As noted above, PIMCO Advisors Distribution Company, 2187 Atlantic Street,
Stamford, Connecticut 06902, serves as Distributor to the Funds. It is
expected that the Distributor will change its name to "PIMCO Funds
Distribution Company" on or about the date of the proposed restructuring.
Representatives of the Trust's independent auditors for the current and most
recently completed year, Price Waterhouse LLP, are expected to be present at
the Meeting, and will have the opportunity to make a statement if they desire
to do so, and to respond to appropriate questions.
PROPOSALS FOR FUTURE SHAREHOLDER MEETINGS
The Trust does not intend to hold shareholder meetings each year, but
meetings may be called by the Trustees from time to time. Proposals of
shareholders that are intended to be presented at a future shareholder meeting
must be received by the Trust a reasonable time prior to the Trust's
solicitation of proxies relating to such meeting.
YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY
PROMPTLY.
November 7, 1996
30
<PAGE>
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of
November 1, 1996 by and between PIMCO Advisors Funds, a Massachusetts business
trust (the "PAF Trust"), on behalf of its [name of Acquired Fund] (the
"Acquired Fund"), and PIMCO Funds: Equity Advisors Series, a Massachusetts
business trust (the "PFEAS Trust"), on behalf of its [name of Acquiring Fund]
(the "Acquiring Fund").
PLAN OF REORGANIZATION
(a) The Acquired Fund will sell, assign, convey, transfer and deliver to the
Acquiring Fund on the Exchange Date (as defined in Section 6) all of its
properties and assets. In consideration therefor, the Acquiring Fund shall, on
the Exchange Date, assume all of the liabilities of the Acquired Fund existing
at the Valuation Time and deliver to the Acquired Fund (i) a number of full
and fractional Class A shares of beneficial interest of the Acquiring Fund
(the "Class A Merger Shares") having an aggregate net asset value equal to the
value of the assets of the Acquired Fund attributable to Class A shares of the
Acquired Fund transferred to the Acquiring Fund on such date less the value of
the liabilities of the Acquired Fund attributable to Class A shares of the
Acquired Fund assumed by the Acquiring Fund on that date, (ii) a number of
full and fractional Class B shares of beneficial interest of the Acquiring
Fund (the "Class B Merger Shares") having an aggregate net asset value equal
to the value of the assets of the Acquired Fund attributable to Class B shares
of the Acquired Fund transferred to the Acquiring Fund on such date less the
value of the liabilities of the Acquired Fund attributable to Class B shares
of the Acquired Fund assumed by the Acquiring Fund on that date, and (iii) a
number of full and fractional Class C shares of beneficial interest of the
Acquiring Fund (the "Class C Merger Shares") having an aggregate net asset
value equal to the value of the assets of the Acquired Fund attributable to
Class C shares of the Acquired Fund transferred to the Acquiring Fund on such
date less the value of the liabilities of the Acquired Fund attributable to
Class C shares of the Acquired Fund assumed by the Acquiring Fund on that
date. (The Class A Merger Shares, the Class B Merger Shares and the Class C
Merger Shares shall be referred to collectively as the "Merger Shares.") It is
intended that the reorganization described in this Plan shall be a
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code").
(b) Upon consummation of the transactions described in paragraph (a) of this
Plan of Reorganization, the Acquired Fund shall distribute in complete
liquidation to its Class A, Class B and Class C shareholders of record as of
the Exchange Date Class A, Class B and Class C Merger Shares, each shareholder
being entitled to receive that proportion of such Class A, Class B and Class C
Merger Shares which the number of Class A, Class B or Class C shares of
beneficial interest of the Acquired Fund held by such shareholder bears to the
number of Class A, Class B and Class C shares of the Acquired Fund outstanding
on such date. Certificates representing the Merger Shares will not be issued.
All issued and outstanding shares of the Acquired Fund will simultaneously be
cancelled on the books of the Acquired Fund.
(c) As promptly as practicable after the liquidation of the Acquired Fund as
aforesaid, the Acquired Fund shall be dissolved pursuant to the provisions of
the Declaration of Trust of the PAF Trust, as amended, and applicable law, and
its legal existence terminated. Any reporting responsibility of the Acquired
Fund is and shall remain the responsibility of the Acquired Fund up to and
including the Exchange Date and, if applicable, such later date on which the
Acquired Fund is liquidated.
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AGREEMENT
The Acquiring Fund and the Acquired Fund agree as follows:
1. Representations, Warranties and Agreements of the Acquiring Fund. The
Acquiring Fund represents and warrants to and agrees with the Acquired Fund
that:
a. The Acquiring Fund is a series of shares of the PFEAS Trust, a
Massachusetts business trust duly established and validly existing under
the laws of The Commonwealth of Massachusetts, and has power to own all of
its properties and assets and to carry out its obligations under this
Agreement. The PFEAS Trust is qualified as a foreign association in every
jurisdiction where required, except to the extent that failure to so
qualify would not have a material adverse effect on the PFEAS Trust. Each
of the PFEAS Trust and the Acquiring Fund has all necessary federal, state
and local authorizations to carry on its business as now being conducted
and to carry out this Agreement.
b. The PFEAS Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment
company, and such registration has not been revoked or rescinded and is in
full force and effect.
c. A statement of assets and liabilities, statements of operations,
statements of changes in net assets and a schedule of investments
(indicating their market values) of the Acquiring Fund as of and for the
year ended June 30, 1996 have been furnished to the Acquired Fund. Such
statement of assets and liabilities and schedule fairly present the
financial position of the Acquiring Fund as of their date and said
statements of operations and changes in net assets fairly reflect the
results of its operations and changes in net assets for the periods covered
thereby in conformity with generally accepted accounting principles.
d. The prospectus and statement of additional information of the PFEAS
Trust, each dated September 15, 1996, as supplemented September 27, 1996
and October 30, 1996 (collectively, the "PFEAS Prospectus"), previously
furnished to the Acquired Fund, did not as of such date and does not
contain, with respect to the PFEAS Trust or the Acquiring Fund, any untrue
statements of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading.
e. There are no material legal, administrative or other proceedings
pending or, to the knowledge of the PFEAS Trust or the Acquiring Fund,
threatened against the PFEAS Trust or the Acquiring Fund, which assert
liability on the part of the PFEAS Trust or the Acquiring Fund. The
Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability to
consummate the transactions herein contemplated.
f. The Acquiring Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown as belonging to it on its
statement of assets and liabilities as of June 30, 1996 and those incurred
in the ordinary course of business as an investment company since June 30,
1996. Prior to the Exchange Date, the Acquiring Fund will endeavor to
quantify and to reflect on its balance sheet all of its material known
liabilities and will advise the Acquired Fund of all material liabilities,
contingent or otherwise, incurred by it subsequent to June 30, 1996,
whether or not incurred in the ordinary course of business.
g. As of the Exchange Date, the Acquiring Fund will have filed all
federal and other tax returns and reports which, to the knowledge of the
PFEAS Trust's officers, are required to be filed by the Acquiring Fund and
has paid or will pay all federal and other taxes shown to be due on said
returns or on any assessments received by the Acquiring Fund. All tax
liabilities of the Acquiring Fund have been adequately provided for on its
books, and no tax deficiency or liability of the Acquiring Fund has been
asserted, and no
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question with respect thereto has been raised or is under audit, by the
Internal Revenue Service or by any state or local tax authority for taxes
in excess of those already paid.
h. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquiring
Fund of the transactions contemplated by this Agreement, except such as may
be required under the Securities Act of 1933, as amended (the "1933 Act"),
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the 1940
Act and state securities or blue sky laws (which term as used herein shall
include the laws of the District of Columbia and of Puerto Rico).
i. The registration statement (the "Registration Statement") filed with
the Securities and Exchange Commission (the "Commission") by the PFEAS
Trust on Form N-14 on behalf of the Acquiring Fund and relating to the
Merger Shares issuable hereunder, and the proxy statement of the Acquired
Fund relating to the meeting of the Acquired Fund's shareholders referred
to in Section 7(a) herein (together with the documents incorporated therein
by reference, the "Acquired Fund Proxy Statement"), on the effective date
of the Registration Statement (i) complied in all material respects with
the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder and (ii) did not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at
the time of the shareholders meeting referred to in Section 7(a) and on the
Exchange Date, the prospectus which is contained in the Registration
Statement, as amended or supplemented by any amendments or supplements
filed with the Commission by the PFEAS Trust and the Acquired Fund Proxy
Statement will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements
in or omissions from the Registration Statement or the Acquired Fund Proxy
Statement made in reliance upon and in conformity with information
furnished by the Acquired Fund for use in the Registration Statement or the
Acquired Fund Proxy Statement.
j. There are no material contracts outstanding to which the Acquiring
Fund is a party, other than as will be disclosed in the Registration
Statement, the PFEAS Prospectus or the Acquired Fund Proxy Statement.
k. To the best of its knowledge, all of the issued and outstanding shares
of beneficial interest of the Acquiring Fund have been offered for sale and
sold in conformity with all applicable federal and state securities laws
(including any applicable exemptions therefrom), or the Acquiring Fund has
taken any action necessary to remedy any prior failure to have offered for
sale and sold such shares in conformity with such laws.
l. The Acquiring Fund qualifies and will at all times through the
Exchange Date qualify for taxation as a "regulated investment company"
under Sections 851 and 852 of the Code.
m. The issuance of the Merger Shares pursuant to this Agreement will be
in compliance with all applicable federal and state securities laws.
n. The Merger Shares to be issued to the Acquired Fund have been duly
authorized and, when issued and delivered pursuant to this Agreement, will
be legally and validly issued and will be fully paid and nonassessable by
the Acquiring Fund, and no shareholder of the Acquiring Fund will have any
preemptive right of subscription or purchase in respect thereof.
o. All issued and outstanding shares of the Acquiring Fund are, and at
the Exchange Date will be, duly and validly issued and outstanding, fully
paid and non-assessable by the Acquiring Fund. The Acquiring Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Fund shares, nor is there outstanding any
security convertible into any of the Acquiring Fund shares.
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2. Representations, Warranties and Agreements of the Acquired Fund. The
Acquired Fund represents and warrants to and agrees with the Acquiring Fund
that:
a. The Acquired Fund is a series of shares of the PAF Trust, a
Massachusetts business trust duly established and validly existing under
the laws of The Commonwealth of Massachusetts, and has power to own all of
its properties and assets and to carry out this Agreement. The PAF Trust is
qualified as a foreign association in every jurisdiction where required,
except to the extent that failure to so qualify would not have a material
adverse effect on the PAF Trust. Each of the PAF Trust and the Acquired
Fund has all necessary federal, state and local authorizations to own all
of its properties and assets and to carry on its business as now being
conducted and to carry out this Agreement.
b. The PAF Trust is registered under the 1940 Act as an open-end
management investment company, and such registration has not been revoked
or rescinded and is in full force and effect.
c. A statement of assets and liabilities, statements of operations,
statements of changes in net assets and a schedule of investments
(indicating their market values) of the Acquired Fund as of and for the
fiscal year ended September 30, 1996 will be furnished to the Acquiring
Fund prior to the Exchange Date. Such statement of assets and liabilities
and schedule will fairly present the financial position of the Acquired
Fund as of their date and said statements of operations and changes in net
assets will fairly reflect the results of its operations and changes in net
assets for the periods covered thereby in conformity with generally
accepted accounting principles.
d. The prospectus and statement of additional information of the PAF
Trust dated February 1, 1996 and July 12, 1996, respectively, as
supplemented September 27, 1996 (collectively, the "PAF Prospectus"), which
has been previously furnished to the Acquiring Fund, did not contain as of
such dates and does not contain, with respect to the PAF Trust and the
Acquired Fund, any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.
e. There are no material legal, administrative or other proceedings
pending or, to the knowledge of the PAF Trust or the Acquired Fund,
threatened against the PAF Trust or the Acquired Fund, which assert
liability on the part of the PAF Trust or the Acquired Fund. The Acquired
Fund knows of no facts which might form the basis for the institution of
such proceedings and is not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental body which
materially and adversely affects its business or its ability to consummate
the transactions herein contemplated.
f. There are no material contracts outstanding to which the Acquired Fund
is a party, other than as will be disclosed in the Registration Statement,
the PAF Prospectus or the Acquired Fund Proxy Statement.
g. The Acquired Fund has no known liabilities of a material nature,
contingent or otherwise, other than those that will be shown on the
Acquired Fund's statement of assets and liabilities as of September 30,
1996 referred to above and those incurred in the ordinary course of its
business as an investment company since such date. Prior to the Exchange
Date, the Acquired Fund will endeavor to quantify and to reflect on its
balance sheet all of its material known liabilities and will advise the
Acquiring Fund of all material liabilities, contingent or otherwise,
incurred by it subsequent to September 30, 1996, whether or not incurred in
the ordinary course of business.
h. As of the Exchange Date, the Acquired Fund will have filed all federal
and other tax returns and reports which, to the knowledge of the PAF
Trust's officers, are required to be filed by the Acquired Fund and has
paid or will pay all federal and other taxes shown to be due on said
returns or on any assessments received by the Acquired Fund. All tax
liabilities of the Acquired Fund have been adequately provided for on its
books, and no tax deficiency or liability of the Acquired Fund has been
asserted, and no question with respect thereto has been raised or is under
audit, by the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid.
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i. At the Exchange Date, the PAF Trust, on behalf of the Acquired Fund,
will have full right, power and authority to sell, assign, transfer and
deliver the Investments (as defined below) and any other assets and
liabilities of the Acquired Fund to be transferred to the Acquiring Fund
pursuant to this Agreement. At the Exchange Date, subject only to the
delivery of the Investments and any such other assets and liabilities as
contemplated by this Agreement, the Acquiring Fund will acquire the
Investments and any such other assets and liabilities subject to no
encumbrances, liens or security interests whatsoever and without any
restrictions upon the transfer thereof. As used in this Agreement, the term
"Investments" shall mean the Acquired Fund's investments shown on the
schedule of its investments as of September 30, 1996 referred to in Section
2(c) hereof, as supplemented with such changes in the portfolio as the
Acquired Fund shall make, and changes resulting from stock dividends, stock
split-ups, mergers and similar corporate actions through the Exchange Date.
j. No registration under the 1933 Act of any of the Investments would be
required if they were, as of the time of such transfer, the subject of a
public distribution by either of the Acquiring Fund or the Acquired Fund,
except as previously disclosed to the Acquiring Fund by the Acquired Fund.
k. No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the Acquired
Fund of the transactions contemplated by this Agreement, except such as may
be required under the 1933 Act, 1934 Act, the 1940 Act or state securities
or blue sky laws.
l. The Registration Statement and the Acquired Fund Proxy Statement, on
the effective date of the Registration Statement, (i) will comply in all
material respects with the provisions of the 1933 Act, the 1934 Act and the
1940 Act and the rules and regulations thereunder and (ii) will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; and at the time of the shareholders meetings referred to in
Sections 7(a) and 7(c) and on the Exchange Date, the Acquired Fund Proxy
Statement and the Registration Statement will not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that none of the representations and
warranties in this subsection shall apply to statements in or omissions
from the Registration Statement, the Acquired Fund Proxy Statement or the
Acquiring Fund Proxy Statement made in reliance upon and in conformity with
information furnished by the Acquiring Fund for use in the Registration
Statement, the Acquired Fund Proxy Statement or the Acquiring Fund Proxy
Statement.
m. The Acquired Fund qualifies and will at all times through the Exchange
Date qualify for taxation as a "regulated investment company" under
Sections 851 and 852 of the Code.
n. At the Exchange Date, the Acquired Fund will have sold such of its
assets, if any, as are necessary to assure that, after giving effect to the
acquisition of the assets of the Acquired Fund pursuant to this Agreement,
the Acquiring Fund will remain a "diversified company" within the meaning
of Section 5(b)(1) of the 1940 Act and in compliance with such other
mandatory investment restrictions as are set forth in the PFEAS Prospectus,
as amended through the Exchange Date.
o. To the best of its knowledge, all of the issued and outstanding shares
of beneficial interest of the Acquired Fund shall have been offered for
sale and sold in conformity with all applicable federal and state
securities laws (including any applicable exemptions therefrom), or the
Acquired Fund has taken any action necessary to remedy any prior failure to
have offered for sale and sold such shares in conformity with such laws.
p. All issued and outstanding shares of the Acquired Fund are, and at the
Exchange Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by the Acquired Fund. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the
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Acquired Fund shares, nor is there outstanding any security convertible
into any of the Acquired Fund shares, except that Class B shares of the
Acquired Fund are convertible into Class A shares of the Acquired Fund in
the manner and on the terms described in the PAF Prospectus.
3. Reorganization.
a. Subject to the requisite approval of the shareholders of the Acquired
Fund and the shareholders of the Acquiring Fund and to the other terms and
conditions contained herein (including the Acquired Fund's obligation to
distribute to its shareholders all of its investment company taxable income
and net capital gain as described in Section 8(m) hereof), the Acquired
Fund agrees to sell, assign, convey, transfer and deliver to the Acquiring
Fund, and the Acquiring Fund agrees to acquire from the Acquired Fund, on
the Exchange Date all of the Investments and all of the cash and other
properties and assets of the Acquired Fund, whether accrued or contingent
(including cash received by the Acquired Fund upon the liquidation of the
Acquired Fund of any investments purchased by the Acquired Fund after
September 30, 1996 and designated by the Acquiring Fund as being unsuitable
for it to acquire), in exchange for that number of shares of beneficial
interest of the Acquiring Fund provided for in Section 4 and the assumption
by the Acquiring Fund of all of the liabilities of the Acquired Fund,
whether accrued or contingent, existing at the Valuation Time except for
the Acquired Fund's liabilities, if any, arising in connection with this
Agreement. The Acquired Fund will, as soon as practicable after the
Exchange Date, distribute all of the Merger Shares received by it to the
shareholders of the Acquired Fund in exchange for their Class A, Class B
and Class C shares of the Acquired Fund.
b. The Acquired Fund will pay or cause to be paid to the Acquiring Fund
any interest, cash or such dividends, rights and other payments received by
it on or after the Exchange Date with respect to the Investments and other
properties and assets of the Acquired Fund, whether accrued or contingent,
received by it on or after the Exchange Date. Any such distribution shall
be deemed included in the assets transferred to the Acquiring Fund at the
Exchange Date and shall not be separately valued unless the securities in
respect of which such distribution is made shall have gone "ex" such
distribution prior to the Valuation Time, in which case any such
distribution which remains unpaid at the Exchange Date shall be included in
the determination of the value of the assets of the Acquired Fund acquired
by the Acquiring Fund.
c. The Valuation Time shall be 4:00 p.m. Eastern time on the Exchange
Date or such earlier or later day as may be mutually agreed upon in writing
by the parties hereto (the "Valuation Time").
4. Exchange Date; Valuation Time. On the Exchange Date, the Acquiring Fund
will deliver to the Acquired Fund (i) a number of full and fractional Class A
Merger Shares having an aggregate net asset value equal to the value of the
assets of the Acquired Fund attributable to Class A shares of the Acquired
Fund transferred to the Acquiring Fund on such date less the value of the
liabilities of the Acquired Fund attributable to Class A shares of the
Acquired Fund assumed by the Acquiring Fund on that date, (ii) a number of
full and fractional Class B Merger Shares having an aggregate net asset value
equal to the value of the assets of the Acquired Fund attributable to Class B
shares of the Acquired Fund transferred to the Acquiring Fund on such date
less the value of the liabilities of the Acquired Fund attributable to Class B
shares of the Acquired Fund assumed by the Acquiring Fund on that date, and
(iii) a number of full and fractional Class C Merger Shares having an
aggregate net asset value equal to the value of the assets of the Acquired
Fund attributable to Class C shares of the Acquired Fund transferred to the
Acquiring Fund on such date less the value of the liabilities of the Acquired
Fund attributable to Class C shares of the Acquired Fund assumed by the
Acquiring Fund on that date, determined as hereinafter provided in this
Section 4.
a. The net asset value of the Merger Shares to be delivered to the
Acquired Fund, the value of the assets attributable to the Class A, Class B
and Class C shares of the Acquired Fund, and the value of the liabilities
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attributable to the Class A, Class B and Class C shares of the Acquired
Fund to be assumed by the Acquiring Fund, shall in each case be determined
as of the Valuation Time.
b. The net asset value of the Class A, Class B and Class C Merger Shares
shall be computed in the manner set forth in the PFEAS Prospectus. The
value of the assets and liabilities of the Class A, Class B and Class C
shares of the Acquired Fund shall be determined by the Acquiring Fund, in
cooperation with the Acquired Fund, pursuant to procedures which the
Acquiring Fund would use in determining the fair market value of the
Acquiring Fund's assets and liabilities.
c. No adjustment shall be made in the net asset value of either the
Acquired Fund or the Acquiring Fund to take into account differences in
realized and unrealized gains and losses.
d. The Acquiring Fund shall issue the Merger Shares to the Acquired Fund
in three certificates registered in the name of the Acquired Fund, one
representing Class A Merger Shares, one representing Class B Merger Shares
and one representing Class C Merger Shares. The Acquired Fund shall
distribute the Class A Merger Shares to the Class A shareholders of the
Acquired Fund by redelivering such certificate to the Acquiring Fund's
transfer agent, which will as soon as practicable set up open accounts for
each Class A Acquired Fund shareholder in accordance with written
instructions furnished by the Acquired Fund. The Acquired Fund shall
distribute the Class B Merger Shares to the Class B shareholders of the
Acquired Fund by redelivering such certificate to the Acquiring Fund's
transfer agent, which will as soon as practicable set up open accounts for
each Class B Acquired Fund shareholder in accordance with written
instructions furnished by the Acquired Fund. The Acquired Fund shall
distribute the Class C Merger Shares to the Class C shareholders of the
Acquired Fund by redelivering such certificate to the Acquiring Fund's
transfer agent, which will as soon as practicable set up open accounts for
each Class C Acquired Fund shareholder in accordance with written
instructions furnished by the Acquired Fund. With respect to any Acquired
Fund shareholder holding share certificates as of the Exchange Date, such
certificates will from and after the Exchange Date be deemed to be
certificates for the Merger Shares issued to each shareholder in respect of
the Acquired Fund shares represented by such certificates; certificates
representing the Merger Shares will not be issued to Acquired Fund
shareholders.
e. The Acquiring Fund shall assume all liabilities of the Acquired Fund,
whether accrued or contingent, in connection with the acquisition of assets
and subsequent dissolution of the Acquired Fund or otherwise, except for
the Acquired Fund's liabilities, if any, pursuant to this Agreement.
5. Expenses, Fees, etc.
a. The parties hereto understand and agree that the transactions
contemplated by this Agreement are being undertaken contemporaneously with
a general restructuring and consolidation of certain of the registered
investment companies advised by PIMCO Advisors L.P. and its affiliates; and
that in connection therewith the costs of all such transactions are being
preliminarily allocated on a basis approved, inter alia, by the Trustees of
both the PAF Trust and the PFEAS Trust. The Acquired Fund and the Acquiring
Fund agree to pay the expenses preliminarily allocated to them but not,
however, in an amount exceeding the Relevant Expense Caps. PIMCO Advisors
L.P., by countersigning this Agreement, agrees that PIMCO Advisors L.P.
will bear any and all expenses preliminarily allocated to the Acquired Fund
and the Acquiring Fund to the extent that they would otherwise exceed the
Relevant Expense Caps. For these purposes, the "Relevant Expense Caps"
shall be $20,000 for the Acquiring Fund and [$70,496--Value Fund]
[$46,355--Discovery Fund] for the Acquired Fund; provided, however, that
the Relevant Expense Caps for the Acquired Funds will be reduced, pursuant
to the conditions of the Trustee approval referred to above, to the extent
that expenses of the general restructuring and consolidation preliminarily
allocated to all the PAF Trust's funds would otherwise exceed $500,000.
Notwithstanding any of the foregoing, expenses will in
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any event be paid by the party directly incurring such expenses if and to
the extent that the payment by the other party of such expenses would
result in the disqualification of such party as a "regulated investment
company" within the meaning of Section 851 of the Code.
b. In the event the transactions contemplated by this Agreement are not
consummated by reason of the Acquiring Fund's being either unwilling or
unable to go forward other than by reason of the nonfulfillment or failure
of any condition to the Acquiring Fund's obligations referred to in Section
7(a) or Section 8, the Acquiring Fund shall pay directly all reasonable
fees and expenses incurred by the Acquired Fund in connection with such
transactions, including, without limitation, legal, accounting and filing
fees.
c. In the event the transactions contemplated by this Agreement are not
consummated by reason of the Acquired Fund's being either unwilling or
unable to go forward other than by reason of the nonfulfillment or failure
of any condition to the Acquired Fund's obligations referred to in Section
7(a) or Section 9, the Acquired Fund shall pay directly all reasonable fees
and expenses incurred by the Acquiring Fund in connection with such
transactions, including, without limitation, legal, accounting and filings
fees.
d. In the event the transactions contemplated by this Agreement are not
consummated for any reason other than (i) the Acquiring Fund's or the
Acquired Fund's being either unwilling or unable to go forward or (ii) the
nonfulfillment or failure of any condition to the Acquiring Fund's or the
Acquired Fund's obligations referred to in Section 7(a), Section 8 or
Section 9 of this Agreement, then each of the Acquiring Fund and the
Acquired Fund shall bear all of its own expenses incurred in connection
with such transactions.
e. Notwithstanding any other provisions of this Agreement, if for any
reason the transactions contemplated by this Agreement are not consummated,
no party shall be liable to the other party for any damages resulting
therefrom, including, without limitation, consequential damages, except as
specifically set forth above.
6. Exchange Date. Delivery of the assets of the Acquired Fund to be
transferred, assumption of the liabilities of the Acquired Fund to be assumed,
and the delivery of the Merger Shares to be issued shall be made at the
offices of Ropes & Gray, One International Place, Boston, Massachusetts 02110,
as of January 17, 1997, or at such other time and date agreed to by the
Acquiring Fund and the Acquired Fund, the date and time upon which such
delivery is to take place being referred to herein as the "Exchange Date."
7. Meetings of Shareholders; Dissolution.
a. The PAF Trust, on behalf of the Acquired Fund, agrees to call a
meeting of the Acquired Fund's shareholders as soon as is practicable after
the effective date of the Registration Statement for the purpose of
considering the sale of all of its assets to and the assumption of all of
its liabilities by the Acquiring Fund as herein provided, adopting this
Agreement, and authorizing the liquidation and dissolution of the Acquired
Fund.
b. The Acquired Fund agrees that the liquidation and dissolution of the
Acquired Fund will be effected in the manner provided in the PAF Trust's
Declaration of Trust in accordance with applicable law and that on and
after the Exchange Date, the Acquired Fund shall not conduct any business
except in connection with its liquidation and dissolution.
c. The PFEAS Trust, on behalf of the Acquiring Fund, agrees to call a
meeting of the Acquiring Fund's shareholders as soon as is practicable
after the effective date of the Registration Statement for the purpose of
considering the acquisition of all of the Acquired Fund's assets in
exchange for the assumption by the Acquiring Fund of all of the Acquired
Fund's liabilities and the issuance to the Acquired Fund of the Merger
Shares as herein provided, and adopting this Agreement.
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d. The Acquiring Fund has, after the preparation and delivery to the
Acquiring Fund by the Acquired Fund of a preliminary version of the
Acquired Fund Proxy Statement which was satisfactory to the Acquiring Fund
and to Dechert Price & Rhoads for inclusion in the Registration Statement,
filed the Registration Statement with the Commission, and, after the
preparation and delivery to the Acquired Fund by the Acquiring Fund of a
preliminary version of the Acquiring Fund Proxy Statement which was
satisfactory to the Acquired Fund and to Ropes & Gray, filed the Acquiring
Fund Proxy Statement and related materials with the Commission in
preliminary form. Each of the Acquired Fund and the Acquiring Fund will
cooperate with the other, and each will furnish to the other the
information relating to itself required by the 1933 Act, the 1934 Act and
the 1940 Act and the rules and regulations thereunder to be set forth in
the Registration Statement and the Acquiring Fund Proxy Statement.
8. Conditions to the Acquiring Fund's Obligations. The obligations of the
Acquiring Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite votes of (i)
the holders of the outstanding shares of beneficial interest of the
Acquired Fund entitled to vote and (ii) the holders of the outstanding
shares of beneficial interest of the Acquiring Fund entitled to vote; and
that shareholders of the PFEAS Trust shall have approved all of the matters
submitted to them at the meeting referred to in Section 7(c) hereof.
b. That the Acquired Fund shall have furnished to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities, with values
determined as provided in Section 4 of this Agreement, together with a list
of Investments with their respective tax costs, all as of the Valuation
Time, certified on the Acquired Fund's behalf by the PAF Trust's President
(or any Vice President) and Treasurer, and a certificate of both such
officers, dated the Exchange Date, that there has been no material adverse
change in the financial position of the Acquired Fund since September 30,
1996 other than changes in the Investments and other assets and properties
since that date or changes in the market value of the Investments and other
assets of the Acquired Fund, or changes due to dividends paid or losses
from operations, and a certificate of PIMCO Advisors L.P. representing and
warranting that there are no known liabilities, contingent or otherwise, of
the Acquired Fund required to be reflected on a balance sheet (including
notes thereto) in accordance with generally accepted accounting principles
that are not reflected in the Acquired Fund's statement of assets and
liabilities as of September 30, 1996 and in the Acquired Fund's statement
of assets and liabilities as of the Valuation Time.
c. That the Acquired Fund shall have furnished to the Acquiring Fund a
statement, dated the Exchange Date, signed by the PAF Trust's President (or
any Vice President) and Treasurer certifying that as of the Exchange Date
all representations and warranties as of the Acquired Fund made in this
Agreement are true and correct in all material respects as if made at and
as of such date and the Acquired Fund has complied with all the agreements
and satisfied all the conditions on its part to be performed or satisfied
at or prior to such date.
d. That the Acquired Fund shall have delivered to the Acquiring Fund a
letter from Coopers & Lybrand L.L.P. dated the Exchange Date stating that
such firm has employed certain procedures whereby it has obtained schedules
of the tax provisions and qualifying tests for regulated investment
companies as prepared for the fiscal year ended September 30, 1996 and the
period October 1, 1996 to the Exchange Date (the latter period being based
on unaudited data) and that, in the course of such procedures, nothing came
to their attention which caused them to believe that the Acquired Fund (i)
would not qualify as a regulated investment company for federal, state, or
local income tax purposes or (ii) would owe any federal, state or local
income tax or excise tax, for the tax year ended September 30, 1996, and
for the period from October 1, 1996 to the Exchange Date.
A-9
<PAGE>
e. That there shall not be any material litigation pending with respect
to the matters contemplated by this Agreement.
f. That the Acquiring Fund shall have received an opinion of Ropes &
Gray, in form satisfactory to Dechert Price & Rhoads, counsel to the
Acquiring Fund, and dated the Exchange Date, to the effect that (i) the PAF
Trust is a Massachusetts business trust duly formed and is validly existing
under the laws of The Commonwealth of Massachusetts and has the power to
own all its properties and to carry on its business as presently conducted;
(ii) this Agreement has been duly authorized, executed and delivered by the
PAF Trust on behalf of the Acquired Fund and, assuming that the
Registration Statement, the PFEAS Prospectus, the Acquired Fund Proxy
Statement and the Acquiring Fund Proxy Statement comply with the 1933 Act,
the 1934 Act and the 1940 Act and assuming due authorization, execution and
delivery of this Agreement by the PFEAS Trust on behalf of the Acquiring
Fund, is a valid and binding obligation of the PAF Trust and the Acquired
Fund; (iii) the PAF Trust, on behalf of the Acquired Fund, has power to
sell, assign, convey, transfer and deliver the assets contemplated hereby
and, upon consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement, the Acquired Fund will have
duly sold, assigned, conveyed, transferred and delivered such assets to the
Acquiring Fund; (iv) the execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby will not,
violate the PAF Trust's Declaration of Trust or By-Laws or any provision of
any agreement known to such counsel to which the PAF Trust or the Acquired
Fund is a party or by which it is bound, it being understood that with
respect to investment restrictions as contained in the PAF Trust's
Declaration of Trust, By-Laws or then-current prospectus or statement of
additional information, such counsel may rely upon a certificate of an
officer of the PAF Trust whose responsibility it is to advise the PAF Trust
and the Acquired Fund with respect to such matters; and (v) no consent,
approval, authorization or order of any court or governmental authority is
required for the consummation by the PAF Trust on behalf of the Acquired
Fund of the transactions contemplated hereby, except such as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act and such as may
be required under state securities or blue sky laws. In addition, such
counsel shall also state that they have participated in conferences with
officers and other representatives of the Acquired Fund at which the
contents of the Acquired Fund Proxy Statement and related matters were
discussed, and, although they are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Acquired Fund Proxy Statement, on the basis of the
foregoing (relying as to materiality to a large extent upon the opinions of
officers and other representatives of the Acquired Fund), no facts have
come to their attention that lead them to believe that the portions of the
Acquired Fund Proxy Statement relevant to the transfer of assets
contemplated by this Agreement as of its date, as of the date of the
Acquired Fund shareholders' meeting, or as of the Exchange Date, contained
an untrue statement of a material fact regarding the Acquired Fund or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein regarding the Acquired Fund, in light of the
circumstances under which they were made, not misleading. Such opinion may
state that such counsel does not express any opinion or belief as to the
financial statements or other financial data, or as to the information
relating to the Acquiring Fund, contained in the Acquired Fund Proxy
Statement or the Registration Statement, and that such opinion is solely
for the benefit of the Acquiring Fund, its Trustees and its officers.
g. That the Acquiring Fund shall have received an opinion of Ropes & Gray
(which opinion would be based upon certain factual representations and
subject to certain qualifications), in form satisfactory to Dechert Price &
Rhoads, with respect to the matters specified in Section 9(g) of this
Agreement.
h. That the Acquiring Fund shall have received an opinion of Ropes &
Gray, dated the Exchange Date, satisfactory to Dechert Price & Rhoads
(which opinion would be based upon certain factual representations and
subject to certain qualifications), to the effect that, on the basis of the
existing provisions of the Code,
A-10
<PAGE>
current administrative rules, and court decisions, for federal income tax
purposes (i) no gain or loss will be recognized by the Acquiring Fund upon
receipt of the Investments transferred to the Acquiring Fund pursuant to
this Agreement in exchange for the Merger Shares; (ii) the basis to the
Acquiring Fund of the Investments will be the same as the basis of the
Investments in the hands of the Acquired Fund immediately prior to such
exchange; and (iii) the Acquiring Fund's holding periods with respect to
the Investments will include the respective periods for which the
Investments were held by the Acquired Fund.
i. That the assets of the Acquired Fund to be acquired by the Acquiring
Fund will include no assets which the Acquiring Fund, by reason of charter
limitations or of investment restrictions disclosed in the Registration
Statement in effect on the Exchange Date, may not properly acquire.
j. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the PFEAS Trust or the Acquiring Fund,
threatened by the Commission.
k. That the PAF Trust and the PFEAS Trust shall have received from the
Commission and any relevant state securities administrator such order or
orders as are reasonably necessary or desirable under the 1933 Act, the
1934 Act, the 1940 Act, and any applicable state securities or blue sky
laws in connection with the transactions contemplated hereby, and that all
such orders shall be in full force and effect.
l. That all actions taken by the PAF Trust on behalf of the Acquired Fund
in connection with the transactions contemplated by this Agreement and all
documents incidental thereto shall be satisfactory in form and substance to
the Acquiring Fund and Dechert Price & Rhoads.
m. That, prior to the Exchange Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to the shareholders of the
Acquired Fund (i) all of the excess of (x) the Acquired Fund's investment
income excludable from gross income under Section 103 of the Code over (y)
the Acquired Fund's deductions disallowed under Sections 265 and 171 of the
Code, (ii) all of the Acquired Fund's investment company taxable income (as
defined in Section 852 of the Code) for its taxable years ending on or
after September 30, 1996 and on or prior to the Exchange Date (computed in
each case without regard to any deduction for dividends paid), and (iii)
all of the Acquired Fund's net capital gain realized (after reduction for
any capital loss carryover), in each case for both the taxable year ending
on September 30, 1996 and the short taxable period beginning on October 1,
1996 and ending on the Exchange Date.
n. That the Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President) and the
Treasurer of the PAF Trust, as to the tax cost to the Acquired Fund of the
securities delivered to the Acquiring Fund pursuant to this Agreement,
together with any such other evidence as to such tax cost as the Acquiring
Fund may reasonably request.
o. That the Acquired Fund's custodian shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of the Acquired
Fund held or maintained by such custodian as of the Valuation Time.
p. That the Acquired Fund's transfer agent shall have provided to the
Acquiring Fund (i) the originals or true copies of all of the records of
the Acquired Fund in the possession of such transfer agent as of the
Exchange Date, (ii) a certificate setting forth the number of shares of the
Acquired Fund outstanding as of the Valuation Time, and (iii) the name and
address of each holder of record of any shares and the number of shares
held of record by each such shareholder.
q. That all of the issued and outstanding shares of beneficial interest
of the Acquired Fund shall have been offered for sale and sold in
conformity with all applicable state securities or blue sky laws (including
any applicable exemptions therefrom) and, to the extent that any audit of
the records of the Acquired Fund
A-11
<PAGE>
or its transfer agent by the Acquiring Fund or its agents shall have
revealed otherwise, either (i) the Acquired Fund shall have taken all
actions that in the opinion of the Acquiring Fund or Dechert Price & Rhoads
are necessary to remedy any prior failure on the part of the Acquired Fund
to have offered for sale and sold such shares in conformity with such laws
or (ii) the Acquired Fund shall have furnished (or caused to be furnished)
surety, or deposited (or caused to be deposited) assets in escrow, for the
benefit of the Acquiring Fund in amounts sufficient and upon terms
satisfactory, in the opinion of the Acquiring Fund or Dechert Price &
Rhoads, to indemnify the Acquiring Fund against any expense, loss, claim,
damage or liability whatsoever that may be asserted or threatened by reason
of such failure on the part of the Acquired Fund to have offered and sold
such shares in conformity with such laws.
r. That the Acquiring Fund shall have received from Price Waterhouse LLP
a letter addressed to the Acquiring Fund dated as of the Exchange Date
satisfactory in form and substance to the Acquiring Fund to the effect
that, on the basis of limited procedures agreed upon by the Acquiring Fund
and described in such letter (but not an examination in accordance with
generally accepted auditing standards), as of the Valuation Time the value
of the assets and liabilities of the Acquired Fund to be exchanged for the
Merger Shares has been determined in accordance with the provisions of the
PFEAS Trust's Declaration of Trust, pursuant to the procedures customarily
utilized by the Acquiring Fund in valuing its assets and issuing its
shares.
9. Conditions to the Acquired Fund's Obligations. The obligations of the
Acquired Fund hereunder shall be subject to the following conditions:
a. That this Agreement shall have been adopted and the transactions
contemplated hereby shall have been approved by the requisite votes of (i)
the holders of the outstanding shares of beneficial interest of the
Acquired Fund entitled to vote and (ii) the holders of the outstanding
shares of beneficial interest of the Acquiring Fund entitled to vote; and
that shareholders of the PFEAS Trust shall have approved all of the matters
submitted to them at the meeting referred to in Section 7(c) hereof.
b. That the Acquiring Fund shall have furnished to the Acquired Fund a
statement of the Acquiring Fund's net assets, together with a list of
portfolio holdings with values determined as provided in Section 4, all as
of the Valuation Time, certified on the Acquiring Fund's behalf by the
PFEAS Trust's President (or any Vice President) and Treasurer (or any
Assistant Treasurer), and a certificate of both such officers, dated the
Exchange Date, to the effect that as of the Valuation Time and as of the
Exchange Date there has been no material adverse change in the financial
position of the Acquiring Fund since June 30, 1996, other than changes in
its portfolio securities since that date, changes in the market value of
the portfolio securities, changes due to net redemptions, dividends paid or
losses from operations.
c. That the PFEAS Trust, on behalf of the Acquiring Fund, shall have
executed and delivered to the Acquired Fund an Assumption of Liabilities
dated as of the Exchange Date pursuant to which the Acquiring Fund will
assume all of the liabilities of the Acquired Fund existing at the
Valuation Time in connection with the transactions contemplated by this
Agreement, other than liabilities arising pursuant to this Agreement.
d. That the Acquiring Fund shall have furnished to the Acquired Fund a
statement, dated the Exchange Date, signed by the PFEAS Trust's President
(or any Vice President) and Treasurer (or any Assistant Treasurer)
certifying that as of the Exchange Date all representations and warranties
of the Acquiring Fund made in this Agreement are true and correct in all
material respects as if made at and as of such date, and that the Acquiring
Fund has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied at or prior to each of
such date.
e. That there shall not be any material litigation pending or threatened
with respect to the matters contemplated by this Agreement.
A-12
<PAGE>
f. That the Acquired Fund shall have received an opinion of Dechert Price
& Rhoads, in form satisfactory to Ropes & Gray, counsel to the Acquired
Fund, and dated the Exchange Date, to the effect that (i) the PFEAS Trust
is a Massachusetts business trust duly formed and is validly existing under
the laws of The Commonwealth of Massachusetts and has the power to own all
its properties and to carry on its business as presently conducted; (ii)
the Merger Shares to be delivered to the Acquired Fund as provided for by
this Agreement are duly authorized and upon such delivery will be validly
issued and will be fully paid and nonassessable by the PFEAS Trust and the
Acquiring Fund and no shareholder of the Acquiring Fund has any preemptive
right to subscription or purchase in respect thereof; (iii) this Agreement
has been duly authorized, executed and delivered by the PFEAS Trust on
behalf of the Acquiring Fund and, assuming that the Registration Statement,
the Acquired Fund Proxy Statement and the Acquiring Fund Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and assuming due
authorization, execution and delivery of this Agreement by the PAF Trust on
behalf of the Acquired Fund, is a valid and binding obligation of the PFEAS
Trust and the Acquiring Fund; (iv) the execution and delivery of this
Agreement did not, and the consummation of the transactions contemplated
hereby will not, violate the PFEAS Trust's Declaration of Trust or By-Laws,
or any provision of any agreement known to such counsel to which the PFEAS
Trust or the Acquiring Fund is a party or by which it is bound, it being
understood that with respect to investment restrictions as contained in the
PFEAS Trust's Declaration of Trust, By-Laws or then-current prospectus or
statement of additional information, such counsel may rely upon a
certificate of an officer of the PFEAS Trust whose responsibility it is to
advise the PFEAS Trust and the Acquiring Fund with respect to such matters;
(v) no consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the PFEAS Trust
on behalf of the Acquiring Fund of the transactions contemplated herein,
except such as have been obtained under the 1933 Act, the 1934 Act and the
1940 Act and such as may be required under state securities or blue sky
laws; and (vi) the Registration Statement has become effective under the
1933 Act, and to best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or are pending or
contemplated under the 1933 Act. In addition, such counsel shall also state
that they have participated in conferences with officers and other
representatives of the Acquiring Fund at which the contents of the Acquired
Fund Proxy Statement and related matters were discussed, and, although they
are not passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Acquired Fund
Proxy Statement, on the basis of the foregoing (relying as to materiality
to a large extent upon the opinions of officers and other representatives
of the Acquiring Fund), no facts have come to their attention that lead
them to believe that the Acquired Fund Proxy Statement as of its date, as
of the date of the Acquired Fund shareholders' meeting, or as of the
Exchange Date, contained an untrue statement of a material fact regarding
the Acquiring Fund or omitted to state a material fact required to be
stated therein or necessary to make the statements therein regarding the
Acquiring Fund, in light of the circumstances under which they were made,
not misleading. Such opinion may state that such counsel does not express
any opinion or belief as to the financial statements or other financial
data, or as to the information relating to the Acquired Fund, contained in
the Acquired Fund Proxy Statement or the Registration Statement, and that
such opinion is solely for the benefit of the Acquired Fund, its Trustees
and its officers.
g. That the Acquired Fund shall have received an opinion of Ropes & Gray,
dated the Exchange Date (which opinion would be based upon certain factual
representations and subject to certain qualifications), in form
satisfactory to the Acquired Fund, to the effect that, on the basis of the
existing provisions of the Code, current administrative rules, and court
decisions, for federal income tax purposes: (i) no gain or loss will be
recognized by the Acquired Fund as a result of the reorganization; (ii) no
gain or loss will be recognized by shareholders of the Acquired Fund on the
distribution of Merger Shares to them in exchange for their shares
A-13
<PAGE>
of the Acquired Fund; (iii) the tax basis of the Merger Shares that the
Acquired Fund's shareholders receive in place of their Acquired Fund shares
will be the same as the basis of the Acquired Fund shares; and (iv) a
shareholder's holding period for the Merger Shares received pursuant to the
Agreement will be determined by including the holding period for the
Acquired Fund shares exchanged for the Merger Shares, provided that the
shareholder held the Acquired Fund shares as a capital asset.
h. That all actions taken by the PFEAS Trust on behalf of the Acquiring
Fund in connection with the transactions contemplated by this Agreement and
all documents incidental thereto shall be satisfactory in form and
substance to the Acquired Fund and Ropes & Gray.
i. That the Registration Statement shall have become effective under the
1933 Act, and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the PFEAS Trust or the Acquiring Fund,
threatened by the Commission.
j. That the PAF Trust and PFEAS Trust shall have received from the
Commission and any relevant state securities administrator such order or
orders as are reasonably necessary or desirable under the 1933 Act, the
1934 Act, the 1940 Act, and any applicable state securities or blue sky
laws in connection with the transactions contemplated hereby, and that all
such orders shall be in full force and effect.
10. Indemnification.
a. The Acquired Fund shall indemnify and hold harmless, out of the assets
of the Acquired Fund (which shall be deemed to include the assets of the
Acquiring Fund represented by the Merger Shares following the Exchange
Date) but no other assets, the trustees and officers of the PFEAS Trust
(for purposes of this subparagraph, the "Indemnified Parties") against any
and all expenses, losses, claims, damages and liabilities at any time
imposed upon or reasonably incurred by any one or more of the Indemnified
Parties in connection with, arising out of, or resulting from any claim,
action, suit or proceeding in which any one or more of the Indemnified
Parties may be involved or with which any one or more of the Indemnified
Parties may be threatened by reason of any untrue statement or alleged
untrue statement of a material fact relating to the PAF Trust or the
Acquired Fund contained in the Registration Statement, the PAF Prospectus,
the Acquired Fund Proxy Statement, the Acquiring Fund Proxy Statement or
any amendment or supplement to any of the foregoing, or arising out of or
based upon the omission or alleged omission to state in any of the
foregoing a material fact relating to the PAF Trust or the Acquired Fund
required to be stated therein or necessary to make the statements relating
to the PAF Trust or the Acquired Fund therein not misleading, including,
without limitation, any amounts paid by any one or more of the Indemnified
Parties in a reasonable compromise or settlement of any such claim, action,
suit or proceeding, or threatened claim, action, suit or proceeding made
with the consent of the PAF Trust or the Acquired Fund. The Indemnified
Parties will notify the PAF Trust and the Acquired Fund in writing within
ten days after the receipt by any one or more of the Indemnified Parties of
any notice of legal process or any suit brought against or claim made
against such Indemnified Party as to any matters covered by this Section
10(a). The Acquired Fund shall be entitled to participate at its own
expense in the defense of any claim, action, suit or proceeding covered by
this Section 10(a), or, if it so elects, to assume at its expense by
counsel satisfactory to the Indemnified Parties the defense of any such
claim, action, suit or proceeding, and if the Acquired Fund elects to
assume such defense, the Indemnified Parties shall be entitled to
participate in the defense of any such claim, action, suit or proceeding at
their expense. The Acquired Fund's obligation under Section 10(a) to
indemnify and hold harmless the Indemnified parties shall constitute a
guarantee of payment so that the Acquired Fund will pay in the first
instance any expenses, losses, claims, damages and liabilities required to
be paid by it under this Section 10(a) without the necessity of the
Indemnified Parties' first paying the same.
b. The Acquiring Fund shall indemnify and hold harmless, out of the
assets of the Acquiring Fund but no other assets, the trustees and officers
of the PAF Trust (for purposes of this subparagraph, the
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<PAGE>
"Indemnified Parties") against any and all expenses, losses, claims,
damages and liabilities at any time imposed upon or reasonably incurred by
any one or more of the Indemnified Parties in connection with, arising out
of, or resulting from any claim, action, suit or proceeding in which any
one or more of the Indemnified Parties may be involved or with which any
one or more of the Indemnified Parties may be threatened by reason of any
untrue statement or alleged untrue statement of a material fact relating to
the Acquiring Fund contained in the Registration Statement, the PFEAS
Prospectus, the Acquired Fund Proxy Statement, the Acquiring Fund Proxy
Statement or any amendment or supplement to any thereof, or arising out of,
or based upon, the omission or alleged omission to state in any of the
foregoing a material fact relating to the PFEAS Trust or the Acquiring Fund
required to be stated therein or necessary to make the statements relating
to the PFEAS Trust or the Acquiring Fund therein not misleading, including,
without limitation, any amounts paid by any one or more of the Indemnified
Parties in a reasonable compromise or settlement of any such claim, action,
suit or proceeding, or threatened claim, action, suit or proceeding made
with the consent of the PFEAS Trust or the Acquiring Fund. The Indemnified
Parties will notify the PFEAS Trust and the Acquiring Fund in writing
within ten days after the receipt by any one or more of the Indemnified
parties of any notice of legal process or any suit brought against or claim
made against such Indemnified Party as to any matters covered by this
Section 10(b). The Acquiring Fund shall be entitled to participate at its
own expense in the defense of any claim, action, suit or proceeding covered
by this Section 10(b), or, if it so elects, to assume at its expense by
counsel satisfactory to the Indemnified Parties the defense of any such
clam, action, suit or proceeding, and, if the Acquiring Fund elects to
assume such defense, the Indemnified Parties shall be entitled to
participate in the defense of any such claim, action, suit or proceeding at
their own expense. The Acquiring Fund's obligation under this Section 10(b)
to indemnify and hold harmless the Indemnified Parties shall constitute a
guarantee of payment so that the Acquiring Fund will pay in the first
instance any expenses, losses, claims, damages and liabilities required to
be paid by it under this Section 10(b) without the necessity of the
Indemnified Parties' first paying the same.
11. No Broker, etc. Each of the Acquired Fund and the Acquiring Fund
represents that there is no person who has dealt with it, the PAF Trust or the
PFEAS Trust who by reason of such dealings is entitled to any broker's or
finder's or other similar fee or commission arising out of the transactions
contemplated by this Agreement.
12. Termination. The Acquired Fund and the Acquiring Fund may, by mutual
consent of the trustees on behalf of each Fund, terminate this Agreement, and
the Acquired Fund or the Acquiring Fund, after consultation with counsel and
by consent of their trustees or an officer authorized by such trustees, may
waive any condition to their respective obligations hereunder. If the
transactions contemplated by this Agreement have not been substantially
completed by February 28, 1997, this Agreement shall automatically terminate
on that date unless a later date is agreed to by the Acquired Fund and the
Acquiring Fund.
13. Rule 145. Pursuant to Rule 145 under the 1933 Act, the Acquiring Fund
will, in connection with the issuance of any of any Merger Shares to any
person who at the time of the transaction contemplated hereby is deemed to be
an affiliate of a party to the transaction pursuant to Rule 145(c), cause to
be affixed upon the certificates issued to such person (if any) a legend as
follows:
"THESE SHARES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO [name of
Acquiring Fund] OR ITS PRINCIPAL UNDERWRITER UNLESS (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR (ii) IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE FUND SUCH REGISTRATION IS NOT REQUIRED."
A-15
<PAGE>
and, further, the Acquiring Fund will issue stop transfer instructions to the
Acquiring Fund's transfer agent with respect to such shares. The Acquired Fund
will provide the Acquiring Fund on the Exchange Date with the name of any
Acquired Fund shareholder who is to the knowledge of the Acquired Fund an
affiliate of the Acquired Fund on such date.
14. Covenants, etc. Deemed Material. All covenants, agreements,
representations and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, notwithstanding any investigation made by
them or on their behalf.
15. Sole Agreement; Amendments; Governing Law. This Agreement supersedes all
previous correspondence and oral communications between the parties regarding
the subject matter hereof, constitutes the only understanding with respect to
such subject matter, may not be changed except by a letter of agreement signed
by each party hereto, and shall be construed in accordance with and governed
by the laws of The Commonwealth of Massachusetts.
16. Declaration of Trust.
a. A copy of the Declaration of Trust of the PAF Trust is on file with
the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the trustees of
the PAF Trust on behalf of the Acquired Fund as trustees and not
individually and that the obligations of this instrument are not binding
upon any of the trustees, officers or shareholders of the PAF Trust
individually but are binding only upon the assets and property of the
Acquired Fund.
b. A copy of the Declaration of Trust of the PFEAS Trust is on file with
the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the trustees of
the PFEAS Trust on behalf of the Acquiring Fund as trustees and not
individually and that the obligations of this instrument are not binding
upon any of the trustees, officers or shareholders of the PFEAS Trust
individually but are binding only upon the assets and property of the
Acquiring Fund.
PIMCO ADVISORS FUNDS, on behalf of
its [name of Acquired Fund]
By: ____________________________
PIMCO FUNDS: EQUITY ADVISORS SERIES,
on behalf of its [name of Acquiring
Fund]
By: ____________________________
Accepted and Agreed as to Section 5(a) only by PIMCO ADVISORS L.P.
By: ____________________________
Title: _________________________
A-16
<PAGE>
EXHIBIT B
FORM OF
ADDENDUM TO PORTFOLIO MANAGEMENT AGREEMENT
The Portfolio Management Agreement, made the th day of , 199 between
PIMCO Advisors L.P. ("PIMCO Advisors" or "Adviser"), a limited partnership,
and (" " or "Portfolio Manager"), a general partnership, (the
"Agreement") is hereby amended by the addition of the provisions set forth in
this Addendum to the Agreement, which is made this day of , 199 .
WITNESSETH:
WHEREAS, PIMCO Funds: Multi-Manager Series (the "Trust"), formerly PIMCO
Funds: Equity Advisors Series and PIMCO Advisors Institutional Funds, is
authorized to issue shares of beneficial interest in separate series, with
each such series representing interests in separate portfolio of securities
and other assets; and
WHEREAS, the Trust currently consists of multiple separate series, including
those series designated as the PIMCO Equity Income Fund, PIMCO Value Fund,
PIMCO Small Cap Value Fund, PIMCO Capital Appreciation Fund, PIMCO Mid Cap
Growth Fund, PIMCO Small Cap Growth Fund, PIMCO Micro Cap Growth Fund, PIMCO
Enhanced Equity Fund, PIMCO Structured Emerging Markets Fund, PIMCO Emerging
Markets Fund, PIMCO International Developed Fund, PIMCO Balanced Fund, PIMCO
International Fund, PIMCO Renaissance Fund, PIMCO Growth Fund, PIMCO Target
Fund, PIMCO Core Equity Fund, PIMCO Mid Cap Equity Fund, PIMCO Opportunity
Fund, PIMCO Innovation Fund, PIMCO Tax Exempt Fund, and PIMCO Precious Metals
Fund (each a "Fund"); and
WHEREAS, the Trust has retained PIMCO Advisors to render management services
to the Funds pursuant to an Investment Advisory Agreement dated as of November
15, 1994, as amended and restated effective as of the date hereof, and such
agreement authorizes the Adviser to engage portfolio managers to discharge the
Adviser's responsibilities with respect to the management of the Funds; and
WHEREAS, the Adviser has retained [Portfolio Manager] to furnish investment
advisory services to the [Funds], pursuant to the agreement;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Addendum, it is agreed between the parties hereto as
follows:
1. Paragraph five (5) ("Compensation") of the Agreement is amended and
restated as follows:
"5. Compensation. For the services provided, the Adviser will pay the
Portfolio Manager a fee accrued and computed daily and payable monthly,
based on the average daily net assets of the [Fund(s)] at the annual
rate of % of the average daily net assets of [each of] the [Fund(s)],
and at the annual rate of % of the average daily net assets of [each
of] the [Fund(s)].
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be
executed by their officers designated below on the date written above.
PIMCO ADVISORS L.P.
Attest: _____________________________ By: _________________________________
NAME: NAME:
TITLE: TITLE:
[Portfolio Manager]
Attest: _____________________________
NAME: By: _________________________________
TITLE: NAME:
TITLE:
B-2
<PAGE>
EXHIBIT C
INFORMATION ABOUT
NFJ INVESTMENT GROUP
("NFJ")
DIRECTORS AND EXECUTIVE OFFICERS
NFJ's directors and principal executive officers and their principal
occupations are shown below. Unless otherwise indicated, the business address
of each such person is 2121 San Jacinto, Suite 1840, Dallas, Texas 75201.
<TABLE>
<CAPTION>
NAME POSITION WITH NFJ AND PRINCIPAL OCCUPATION(S)
---- ---------------------------------------------
<C> <S>
Chris Najork Managing Director, NFJ; Director, Managing Director and Chairman,
NFJ Management, Inc.
Ben J. Fischer Managing Director and Chief Financial Officer, NFJ; Director and Managing Director,
NFJ Management, Inc.
John L. Johnson Managing Director, NFJ; Director and Managing Director, NFJ Management, Inc.
</TABLE>
OTHER INVESTMENT COMPANY CLIENTS WITH SIMILAR INVESTMENT POLICIES AND
OBJECTIVES
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS
NAME OF INVESTMENT ANNUAL (IN MILLIONS)
COMPANY/FUND FEE RATE AS OF 9/30/96
------------------ -------- -------------
<S> <C> <C>
Aquinas Balanced Fund 0.45% $ 4.2
Aquinas Equity Income Fund 0.45% $ 25.0
The Common Fund 0.45% $184.2
PIMCO Advisors Balanced Fund 0.45% $ 22.5
PIMCO Advisors Value Fund 0.45% $ 61.4
S/B CGCM Small Cap Value Equity 0.30% $277.1
</TABLE>
<PAGE>
EXHIBIT D
INFORMATION ABOUT
CADENCE CAPITAL MANAGEMENT
("CADENCE")
DIRECTORS AND EXECUTIVE OFFICERS
Cadence's directors and principal executive officers and their principal
occupations are shown below. Unless otherwise indicated, the business address
of each such person is Exchange Place, 53 State Street, Boston, Massachusetts
02109.
<TABLE>
<CAPTION>
NAME POSITION WITH CADENCE AND PRINCIPAL OCCUPATION(S)
---- -------------------------------------------------
<C> <S>
David B. Breed Managing Director and Chief Financial Officer, Cadence; Director, Managing Director
and Chief Executive Officer, Cadence Capital Management, Inc.; Member of Operating
Board of PIMCO Advisors L.P.
William B. Bannick Managing Director and Executive Vice President, Cadence; Director and Managing
Director, Cadence Capital Management, Inc.
Eric M. Wetlaufer Managing Director, Cadence
Katherine A. Burdon Managing Director, Cadence
</TABLE>
OTHER INVESTMENT COMPANY CLIENTS WITH SIMILAR INVESTMENT POLICIES AND
OBJECTIVES
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS
NAME OF INVESTMENT ANNUAL (IN MILLIONS)
COMPANY/FUND FEE RATE AS OF 9/30/96
- ------------------ -------- -------------
<S> <C> <C>
PIMCO Advisors Discovery Fund 0.375% of first $200 million $70.0
0.35% of amounts over $200 million
</TABLE>
<PAGE>
EXHIBIT E
INFORMATION ABOUT
COLUMBUS CIRCLE INVESTORS
("COLUMBUS CIRCLE")
DIRECTORS AND EXECUTIVE OFFICERS
Columbus Circle's directors and principal executive officers and their
principal occupations are shown below. Unless otherwise indicated, the business
address of each such person is Metro Center, One Station Place, 8th floor,
Stamford, Connecticut 06902.
<TABLE>
<CAPTION>
POSITION WITH COLUMBUS CIRCLE AND PRINCIPAL
NAME OCCUPATION(S)
---- -------------------------------------------
<C> <S>
Irwin F. Smith Chairman and Managing Director, Columbus Circle;
Member of Equity and Operating Boards and Operating
Committee, PIMCO Advisors L.P.; Director and
Chairman, Columbus Circle Investors Management
Inc.; Director, Columbus Circle Trust Company
("CCTC")
Donald A. Chiboucas President and Managing Director, Columbus Circle;
Member of Operating Board, PIMCO Advisors L.P.;
Director and President, Columbus Circle Investors
Management Inc.
Louis P. Celentano Managing Director, Columbus Circle; Director and
Vice President, Columbus Circle Investors
Management Inc.; Chairman and Director, CCTC
Robert W. Fehrman Managing Director, Columbus Circle; Director,
440 South La Salle Street Columbus Circle Investors Management Inc.
One Financial Square
Suite 2450
Chicago, Illinois 60605
Marc S. Felman Managing Director, Columbus Circle
Amy M. Hogan Managing Director, Columbus Circle; Member of
Operating Board, PIMCO Advisors L.P.; Director,
Columbus Circle Investors Management Inc.
Daniel S. Pickett Managing Director, Columbus Circle; Director,
Columbus Circle Investors Management Inc.
Anthony Rizza Managing Director, Columbus Circle
C. Paul Tyborowski Managing Director, Columbus Circle
</TABLE>
<PAGE>
OTHER INVESTMENT COMPANY CLIENTS WITH SIMILAR INVESTMENT POLICIES AND
OBJECTIVES
<TABLE>
<CAPTION>
NET ASSETS
NAME OF INVESTMENT ANNUAL (IN MILLIONS)
COMPANY/FUND FEE RATE AS OF 9/30/96
- ------------------ -------- -------------
<S> <C> <C>
Liberty Asset Management Company 0.40% of the first $100 million $ 191.6
0.36% of amounts over $100
Liberty All-Star Equity million
Frank Russell Investment Management
Co.
Frank Russell Equity I 0.35% of the first $50 million $ 101.3
0.25% of the amounts over $50
million
Frank Russell Investment Management
Co.
Frank Russell Diversified Equity 0.35% of the first $50 million $ 71.5
0.25% of amounts over $50
million
Prudential Mutual Funds Management
Co.
0.30% of average daily net
Prudential Target Portfolio Trust: assets $ 108.5
Large Capitalization Growth
Portfolio
PIMCO Advisers Equity Income Fund 0.375% of first $200 million $ 266.4
0.350% of amounts over $200
million
PIMCO Advisors Growth Fund 0.350% of first $200 million $1,638.6
0.325% of amounts over $200
million
PIMCO Advisors Target Fund 0.375% of first $200 million $1,180.8
0.350% of amounts over $200
million
PIMCO Advisors Opportunity Fund 0.375% of first $200 million $ 935.1
0.350% of amounts over $200
million
</TABLE>
E-2
<PAGE>
EXHIBIT F
INFORMATION ABOUT PARAMETRIC
PORTFOLIO ASSOCIATES, INC.
("PARAMETRIC")
DIRECTORS AND EXECUTIVE OFFICERS
Parametric's directors and principal executive officers and their principal
occupations are shown below. Unless otherwise indicated, the business address
of each such person is 7310 Columbia Center, 701 Fifth Avenue, Seattle,
Washington 98104-7090.
<TABLE>
<CAPTION>
NAME POSITION WITH PARAMETRIC AND PRINCIPAL OCCUPATION(S)
---- ----------------------------------------------------
<C> <S>
Mark England-Markun Managing Director, Parametric; Director, Managing Director and Chief Executive
Officer, Parametric Management, Inc.
William Cornelius Managing Director, Parametric; Director and Managing Director, Parametric Management,
Inc.
David M. Stein Managing Director and Chief Financial Officer, Parametric; Director and Managing
Director, Parametric Management, Inc.
</TABLE>
OTHER INVESTMENT COMPANY CLIENTS WITH SIMILAR INVESTMENT POLICIES AND
OBJECTIVES
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS
NAME OF INVESTMENT ANNUAL (IN MILLIONS)
COMPANY/FUND FEE RATE AS OF 9/30/96
------------------ -------- -------------
<S> <C> <C>
Smith Barney TRAK 0.15% $1,255.0
Large Capitalization Value Portfolio
</TABLE>
<PAGE>
EXHIBIT G
INFORMATION ABOUT
BLAIRLOGIE CAPITAL MANAGEMENT, LIMITED
("BLAIRLOGIE")
DIRECTORS AND EXECUTIVE OFFICERS
Blairlogie's directors and principal executive officers and their principal
occupations are shown below. Unless otherwise indicated, the business address
of each such person is 4th Floor, 125 Princes Street, Edinburgh EH2 4AD,
Scotland.
<TABLE>
<CAPTION>
NAME POSITION WITH BLAIRLOGIE AND PRINCIPAL OCCUPATION(S)
---- ------------------------------------------------------------------------------
<C> <S>
Gavin R. Dobson Managing Director and Chief Executive Officer, Blairlogie; Director and Chief
Executive Officer, Blairlogie Holdings Limited (U.K.)
James G.S. Smith Managing Director and Chief Investment Officer, Blairlogie; Director and Chief
Investment Officer, Blairlogie Holdings Limited (U.K.)
Robert R.W. Stephens Managing Director and Chief Financial Officer, Blairlogie; Director and Chief
Financial Officer, Blairlogie Holdings Limited (U.K.)
</TABLE>
OTHER INVESTMENT COMPANY CLIENTS WITH SIMILAR INVESTMENT POLICIES AND
OBJECTIVES
<TABLE>
<CAPTION>
APPROXIMATE
NET ASSETS
NAME OF INVESTMENT ANNUAL (IN MILLIONS)
COMPANY/FUND FEE RATE AS OF 9/30/96
------------------ -------- -------------
<S> <C> <C>
Gradison McDonald International 0.8% $ 88.8
PIMCO Advisors International Fund 0.40% $229.5
</TABLE>
<PAGE>
EXHIBIT H
SECOND AMENDED AND RESTATED
AGREEMENT AND DECLARATION OF TRUST
OF
PIMCO FUNDS: MULTI-MANAGER SERIES
(FORMERLY PIMCO FUNDS: EQUITY ADVISORS SERIES)
This SECOND AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST made at
Boston, Massachusetts this day of January, 1997 (as so amended and
restated, the "Declaration of Trust") by the Trustees hereunder and by the
holders of shares of beneficial interest issued and to be issued hereunder as
hereinafter provided, amending and restating the Amended and Restated
Agreement and Declaration of Trust dated May 7, 1993 and amended July 15,
1993, October 29, 1993, March 4, 1994, August 12, 1994, November 7, 1994,
January 17, 1995, November 1, 1995, and February 2, 1996 (the "Amended
Declaration of Trust"), which itself amended and restated the Agreement and
Declaration of Trust of PFEACo Funds made on August 24, 1990 and amended on
October 24, 1990, November 16, 1990, November 29, 1990, December 14, 1990,
February 1, 1991, May 9, 1991, August 6, 1992, and February 26, 1993.
WHEREAS, pursuant to Section 10.4 of Article X of the Amended Declaration of
Trust the Trustees of the Trust have determined that the Amended Declaration
of Trust should be amended; and
WHEREAS, the shareholders have duly approved this Declaration of Trust;
NOW, THEREFORE, the Trustees of this Trust direct that this Declaration of
Trust be filed with the Secretary of State of The Commonwealth of
Massachusetts and that this Declaration of Trust shall take effect as of the
date of filing.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees hereby declare that they will hold all cash,
securities and other assets which they may from time to time acquire in any
manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the benefit of the holders from time to
time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
NAME
SECTION 1. This Trust shall be known as "PIMCO Funds: Multi-Manager Series",
and the Trustees shall conduct the business of the Trust under that name or
any other name as they may from time to time determine.
<PAGE>
DEFINITIONS
SECTION 2. Whenever used herein, unless otherwise required by the context or
specifically provided:
(a) The "Trust" refers to the Massachusetts business trust established by
this Declaration of Trust, as amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named herein or
elected in accordance with Article IV;
(c) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest in the Trust shall be divided from time
to time or, if more than one series or class of Shares is authorized by the
Trustees, the equal proportionate transferable units into which each series
or class of Shares shall be divided from time to time;
(d) "Shareholder" means a record owner of Shares;
(e) The "1940 Act" refers to the Investment Company Act of 1940 and the
Rules and Regulations thereunder, all as amended from time to time;
(f) The terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section 2(a)(42)
of the 1940 Act, whichever may be applicable) shall have the meanings given
them in the 1940 Act;
(g) "Declaration of Trust" shall mean this Declaration of Trust as
amended or restated from time to time;
(h) "Bylaws" shall mean the Bylaws of the Trust as amended from time to
time;
(i) The term "series" or "series of Shares" refers to the one or more
separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Shares of the Trust
representing the beneficial interest of Shareholders in such respective
portfolios; and
(j) The term "class" or "class of Shares" refers to the division of
Shares representing any series into two or more classes as provided in
Article III, Section 1 hereof.
ARTICLE II
Purpose of Trust
The purpose of the Trust is to provide investors a managed investment
primarily in securities, debt instruments and other instruments and rights of
a financial character and to carry on such other business as the Trustees may
from time to time determine pursuant to their authority under this Declaration
of Trust.
ARTICLE III
Shares
DIVISION OF BENEFICIAL INTEREST
SECTION 1. The Shares of the Trust shall be issued in one or more series as
the Trustees may, without Shareholder approval, authorize. Each series shall
be preferred over all other series in respect of the assets specifically
allocated to that series within the meaning of the 1940 Act and shall
represent a separate investment portfolio of the Trust. The beneficial
interest in each series shall at all times be divided into Shares, with a par
H-2
<PAGE>
value of $0.00001 or $0.001, as may be determined by the Trustees, each of
which shall, except as provided in the following sentence, represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. The Trustees may, without
Shareholder approval, divide the Shares of any series into two or more
classes, Shares of each such class having such preferences and special or
relative rights and privileges (including conversion rights, if any) as the
Trustees may determine or as shall be set forth in the Bylaws. The number of
Shares authorized shall be unlimited. The Trustees may from time to time
divide or combine the Shares of any series or class into a greater or lesser
number without thereby changing the proportionate beneficial interest in the
series or class.
OWNERSHIP OF SHARES
SECTION 2. The ownership of Shares shall be recorded on the books of the
Trust or a transfer or similar agent. No certificates certifying the ownership
of Shares shall be issued except as the Trustees may otherwise determine from
time to time. The Trustees may make such rules as they consider appropriate
for the issuance of Share certificates, the transfer of Shares and similar
matters. The record books of the Trust as kept by the Trust or any transfer or
similar agent, as the case may be, shall be conclusive as to who are the
Shareholders of each series and class and as to the number of Shares of each
series and class held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
SECTION 3. The Trustees shall accept investments in the Trust from such
persons and on such terms and for such consideration, which may consist of
cash or tangible or intangible property or a combination thereof, as they or
the Bylaws from time to time authorize.
All consideration received by the Trust for the issue or sale of Shares of
each series, together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by the Trust for
all purposes, subject only to the rights of creditors, and shall be so handled
upon the books of account of the Trust and are herein referred to as "assets
of" such series.
NO PREEMPTIVE RIGHTS
SECTION 4. Shareholders shall have no preemptive or other right to subscribe
to any additional Shares or other securities issued by the Trust.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
SECTION 5. Shares shall be deemed to be personal property giving only the
rights provided in this Declaration of Trust or the Bylaws. Every Shareholder
by virtue of having become a Shareholder shall be held to have expressly
assented and agreed to the terms of this Declaration of Trust and the Bylaws
and to have become a party hereto. The death of a Shareholder during the
continuance of the Trust shall not operate to terminate the same nor entitle
the representative of any deceased Shareholder to an accounting or to take any
action in court or elsewhere against the Trust or the Trustees, but only to
the rights of said decedent under this Trust. Ownership of Shares shall not
entitle the Shareholder to any title in or to the whole or any part of the
Trust property or right to call for a partition or division of the same or for
an accounting, nor shall the ownership of Shares constitute the Shareholders
partners. Neither the Trust nor the Trustees, nor any officer, employee or
H-3
<PAGE>
agent of the Trust, shall have any power to bind personally any Shareholder,
nor except as specifically provided herein to call upon any Shareholder for
the payment of any sum of money or assessment whatsoever other than such as
the Shareholder may at any time personally agree to pay.
ARTICLE IV
The Trustees
ELECTION
SECTION 1. A Trustee may be elected either by the Trustees or by the
Shareholders. There shall be not fewer than three Trustees. The number of
Trustees shall be as provided by the Bylaws or as fixed from time to time by
the Trustees. The Shareholders may elect Trustees at any meeting of
Shareholders called by the Trustees for that purpose. Each Trustee shall serve
until he or she retires, resigns, is removed or dies or until the next meeting
of Shareholders called for the purpose of electing Trustees and until the
election and qualification of his or her successor. Any Trustee may resign at
any time by written instrument signed by such Trustee and delivered to any
officer of the Trust, to each other Trustee or to a meeting of the Trustees.
Such resignation shall be effective upon receipt unless specified to be
effective at some other time. Except to the extent expressly provided in a
written agreement with the Trust, no Trustee resigning and no Trustee removed
shall have any right to any compensation for any period following his or her
resignation or removal, or any right to damages on account of such removal.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
SECTION 2. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
POWERS
SECTION 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have
all powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt Bylaws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the
Trust and may amend and repeal them to the extent that such Bylaws do not
reserve that right to the Shareholders; they may fill vacancies, including
vacancies caused by enlargement of their number, and may remove Trustees with
or without cause; they may elect and remove, with or without cause, such
officers and appoint and terminate such agents as they consider appropriate;
they may appoint from their own number, and terminate, any one or more
committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or
all of the power and authority of the Trustees as the Trustees may determine;
they may employ one or more custodians of the assets of the Trust and may
authorize such custodians to employ subcustodians and to deposit all or any
part of such assets in a system or systems for the central handling of
securities, retain a transfer agent or a Shareholder servicing agent, or both,
provide for the distribution of Shares by the Trust, through one or more
principal underwriters or otherwise, set record dates for the determination of
Shareholders with respect to various matters, and in general delegate such
authority as they consider desirable to any officer of the Trust, to any
committee of the Trustees and to any agent or employee of the Trust or to any
such custodian or underwriter.
H-4
<PAGE>
Without limiting the foregoing, the Trustees shall have power and authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write options
on and lease any or all of the assets of the Trust;
(c) To act as a distributor of Shares and as underwriter of, or broker or
dealer in, securities and other property;
(d) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver proxies or powers of attorney to such person or persons as the
Trustees shall deem proper, granting to such person or persons such power
and discretion with relation to securities or property as the Trustees
shall deem proper;
(e) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(f) To hold any security or property in a form not indicating any trust,
whether in bearer, unregistered or other negotiable form, or in the name of
the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(g) To allocate assets, liabilities, income and expenses of the Trust to
a particular series of Shares or to apportion the same among two or more
series, provided that any liabilities or expenses incurred by a particular
series of Shares shall be payable solely out of the assets of that series;
and, to the extent necessary or appropriate to give effect to the
preferences and special or relative rights and privileges of any classes of
Shares, to allocate assets, liabilities, income and expenses of a series to
a particular class of Shares of that series or to apportion the same among
two or more classes of Shares of that series;
(h) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security of which
is or was held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;
(i) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper;
(j) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited
to claims for taxes;
(k) To enter into joint ventures, general or limited partnerships and any
other combinations or associations;
(l) To borrow funds;
(m) To endorse or guarantee the payment of any notes or other obligations
of any person; to make contracts of guaranty or suretyship, or otherwise
assume liability for payment thereof; and to mortgage and pledge the Trust
property or any part thereof to secure any of or all such obligations;
(n) To purchase and pay for entirely out of Trust property such insurance
as they may deem necessary or appropriate for the conduct of the business,
including without limitation, insurance policies insuring the
H-5
<PAGE>
assets of the Trust and payment of distributions and principal on its
portfolio investments, and insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers or managers,
principal underwriters, or independent contractors of the Trust
individually against all claims and liabilities of every nature arising by
reason of holding, being or having held any such office or position, or by
reason of any action alleged to have been taken or omitted by any such
person as Shareholder, Trustee, officer, employee, agent, investment
adviser or manager, principal underwriter, or independent contractor,
including any action taken or omitted that may be determined to constitute
negligence, whether or not the Trust would have the power to indemnify such
person against such liability;
(o) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing,
share bonus, share purchase, savings, thrift and other retirement,
incentive and benefit plans, trusts and provisions, including the
purchasing of life insurance and annuity contracts as a means of providing
such retirement and other benefits, for any or all of the Trustees,
officers, employees and agents of the Trust; and
(p) To engage in any other lawful act or activity in which corporations
organized under the Massachusetts Business Corporation Act may engage.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by trustees.
Except as otherwise provided herein or from time to time in the Bylaws, any
action to be taken by the Trustees may be taken by a majority of the Trustees
present at a meeting of the Trustees (a quorum being present), within or
without Massachusetts, including any meeting held by means of a conference
telephone or other communications equipment by means of which all persons
participating in the meeting can hear each other at the same time and
participation by such means shall constitute presence in person at a meeting,
or by written consents of a majority of the Trustees then in office.
PAYMENT OF EXPENSES BY TRUST
SECTION 4. The Trustees are authorized to pay or to cause to be paid out of
the principal or income of the Trust, or partly out of principal and partly
out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, in connection
with the management thereof, or in connection with the financing of the sale
of Shares, including, but not limited to, the Trustees' compensation and such
expenses and charges for the services of the Trust's officers, employees, any
investment adviser, manager or sub-adviser, principal underwriter, auditor,
counsel, custodian, transfer agent, shareholder servicing agent, and such
other agents or independent contractors and such other expenses and charges as
the Trustees may deem necessary or proper to incur; provided, however, that
all expenses, fees, charges, taxes and liabilities incurred by or arising in
connection with a particular series of Shares, as determined by the Trustees,
shall be payable solely out of the assets of that series.
OWNERSHIP OF ASSETS OF THE TRUST
SECTION 5. Title to all of the assets of each series of Shares and of the
Trust shall at all times be considered as vested in the Trustees.
ADVISORY, MANAGEMENT AND DISTRIBUTION
SECTION 6. The Trustees may, at any time and from time to time, contract for
exclusive or nonexclusive advisory and/or management services with any
corporation, trust, association or other organization (the
H-6
<PAGE>
"Manager"), every such contract to comply with such requirements and
restrictions as may be set forth in the Bylaws; and any such contract may
provide for one or more sub-advisers who shall perform all or part of the
obligations of the Manager under such contract and may contain such other
terms interpretive of or in addition to said requirements and restrictions as
the Trustees may determine, including, without limitation, authority to
determine from time to time what investments shall be purchased, held, sold,
or exchanged and what portion, if any, of the assets of the Trust shall be
held uninvested and to make changes in the Trust's investments. The Trustees
may also, at any time and from time to time, contract with the Manager or any
other corporation, trust, association or other organization, appointing it
exclusive or nonexclusive distributor or principal underwriter for the Shares,
every such contract to comply with such requirements and restrictions as may
be set forth in the Bylaws; and any such contract may contain such other terms
interpretive of or in addition to said requirements and restrictions as the
Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, director, officer, partner, trustee, employee, manager,
adviser, principal underwriter or distributor or agent of or for any
corporation, trust, association or other organization, or of or for any
parent or affiliate of any organization, with which an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder servicing or other agency contract may have been
or may hereafter be made, or that any such organization, or any parent or
affiliate thereof, is a Shareholder or has an interest in the Trust, or
that
(ii) any corporation, trust, association or other organization with which
an advisory or management contract or principal underwriter's or
distributor's contract, or transfer, shareholder servicing or other agency
contract may have been or may hereafter be made also has an advisory or
management contract, or principal underwriter's or distributor's contract,
or transfer, shareholder servicing or other agency contract with one or
more other corporations, trusts, associations or other organizations, or
has other business or interests shall not affect the validity of any such
contract or disqualify any Shareholder, Trustee or officer of the Trust
from voting upon or executing the same or create any liability or
accountability to the Trust or its Shareholders.
ARTICLE V
Shareholders' Voting Powers and Meetings
Shareholders shall have such power to vote as is provided for in, and may
hold meetings and take actions pursuant to, the provisions of the Bylaws.
ARTICLE VI
Distributions, Redemptions and Repurchases
DISTRIBUTIONS
SECTION 1. The Trustees may each year, or more frequently if they so
determine, distribute to the Shareholders of each series out of the assets of
such series such amounts as the Trustees may determine. Any such distribution
to the Shareholders of a particular series shall be made to said Shareholders
pro rata in proportion to the number of Shares of such series held by each of
them, except to the extent otherwise required or permitted by the preferences
and special or relative rights and privileges of any classes of Shares of that
series, and any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion to the number
of Shares of such class held by each of them. Such distributions shall be made
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<PAGE>
in cash, Shares or other property, or a combination thereof, as determined by
the Trustees. Any such distribution paid in Shares will be paid at the net
asset value thereof as determined in accordance with the Bylaws.
REDEMPTIONS AND REPURCHASES
SECTION 2. The Trust shall purchase such Shares as are offered by any
Shareholder for redemption, upon the presentation of any certificate for the
Shares to be purchased, a proper instrument of transfer and a request directed
to the Trust or a person designated by the Trust that the Trust purchase such
Shares, or in accordance with such other procedures for redemption as the
Trustees may from time to time authorize; and the Trust will pay therefor the
net asset value thereof, as next determined in accordance with the Bylaws,
less any redemption charge or fee as the Trustees may from time to time
authorize. Payment for said Shares shall be made by the Trust to the
Shareholder within seven days after the date on which the request is made. The
obligation set forth in this Section 2 is subject to the provision that in the
event that any time the New York Stock Exchange is closed for other than
customary weekends or holidays, or, if permitted by rules of the Securities
and Exchange Commission, during periods when trading on the Exchange is
restricted or during any emergency which makes it impractical for the Trust to
dispose of its investments or to determine fairly the value of its net assets,
or during any other period permitted by order of the Securities and Exchange
Commission for the protection of investors, such obligation may be suspended
or postponed by the Trustees. The Trust may also purchase or repurchase Shares
at a price not exceeding the net asset value of such Shares in effect when the
purchase or repurchase or any contract to purchase or repurchase is made.
REDEMPTION AT THE OPTION OF THE TRUST
SECTION 3. The Trust shall have the right at its option and at any time to
redeem Shares of any Shareholder at the net asset value thereof as determined
in accordance with the Bylaws: (i) if at such time such Shareholder owns fewer
Shares than, or Shares having an aggregate net asset value of less than, an
amount determined from time to time by the Trustees; or (ii) to the extent
that such Shareholder owns Shares of a particular series of Shares equal to or
in excess of a percentage of the outstanding Shares of that series determined
from time to time by the Trustees; or (iii) to the extent that such
Shareholder owns Shares of the Trust representing a percentage equal to or in
excess of such percentage of the aggregate number of outstanding Shares of the
Trust or the aggregate net asset value of the Trust determined from time to
time by the Trustees.
ARTICLE VII
Compensation and Limitation of Liability of Trustees
COMPENSATION
SECTION 1. The Trustees as such shall be entitled to reasonable compensation
from the Trust; they may fix the amount of their compensation. Nothing herein
shall in any way prevent the employment of any Trustee for advisory,
management, legal, accounting, investment banking, underwriting, brokerage or
other services and payment for the same by the Trust.
LIMITATION OF LIABILITY
SECTION 2. The Trustees shall not be responsible or liable in any event for
any neglect or wrongdoing of any officer, agent, employee, manager or
principal underwriter of the Trust, nor shall any Trustee be responsible for
the act or omission of any other Trustee, but nothing herein contained shall
protect any Trustee against any
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liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
Every note, bond, contract, instrument, certificate or undertaking and every
other act or thing whatsoever executed or done by or on behalf of the Trust or
the Trustees or any of them in connection with the Trust shall be conclusively
deemed to have been executed or done only in or with respect to their or his
or her capacity as Trustees or Trustee, and such Trustees or Trustee shall not
be personally liable thereon.
ARTICLE VIII
Indemnification
TRUSTEES, OFFICERS, ETC.
SECTION 1. The Trust shall indemnify each of its Trustees and officers
(including persons who serve at the Trust's request as directors, officers or
trustees of another organization in which the Trust has any interest as a
shareholder, creditor or otherwise) (hereinafter referred to as a "Covered
Person") against all liabilities and expenses, including but not limited to
amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and counsel fees reasonably incurred by any Covered Person in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such Covered Person may be or may have been
involved as a party or otherwise or with which such Covered Person may be or
may have been threatened, while in office or thereafter, by reason of being or
having been such a Covered Person except with respect to any matter as to
which such Covered Person shall have been finally adjudicated in any such
action, suit or other proceeding (a) not to have acted in good faith in the
reasonable belief that such Covered Person's action was in or not opposed to
the best interest of the Trust or (b) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of such Covered
Person's office. Expenses, including counsel fees so incurred by any such
Covered Person (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by the
Trust in advance of the final disposition of any such action, suit or
proceeding upon receipt of any undertaking by or on behalf of such Covered
Person to repay amounts so paid to the Trust if it is ultimately determined
that indemnification of such expenses is not authorized under this Article,
provided, however, that either (a) such Covered Person shall have provided
appropriate security for such undertaking, (b) the Trust shall be insured
against losses arising from any such advance payments or (c) either a majority
of the disinterested Trustees acting on the matter (provided that a majority
of the disinterested Trustees then in office act on the matter), or
independent legal counsel in a written opinion, shall have determined, based
upon a review of readily available facts (as opposed to a full trial type
inquiry) that there is reason to believe that such Covered Person will be
found entitled to indemnification under this Article.
COMPROMISE PAYMENT
SECTION 2. As to any matter disposed of (whether by a compromise payment,
pursuant to a consent decree or otherwise) without an adjudication by a court,
or by any other body before which the proceeding was brought, that such
Covered Person either (a) did not act in good faith in the reasonable belief
that his or her action was in or not opposed to the best interests of the
Trust or (b) is liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office, indemnification shall be
provided if (a) approved as in or not opposed to the best interests of the
Trust by at least a majority of the disinterested Trustees acting on the
matter (provided that a
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majority of the disinterested Trustees then in office act on the matter) upon
a determination, based upon a review of readily available facts (as opposed to
a full trial type inquiry) that such Covered Person acted in good faith in the
reasonable belief that his or her action was in or not opposed to the best
interests of the Trust and is not liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his or her office, or (b)
there has been obtained an opinion in writing of independent legal counsel,
based upon a review of readily available facts (as opposed to a full trial
type inquiry) to the effect that such Covered Person appears to have acted in
good faith in the reasonable belief that his or her action was in the best
interests of the Trust and that such indemnification would not protect such
Covered Person against any liability to the Trust to which he or she would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
or her office. Any approval pursuant to this Section shall not prevent the
recovery from any Covered Person of any amount paid to such Covered Person in
accordance with this Section as indemnification if such Covered Person is
subsequently adjudicated by a court of competent jurisdiction not to have
acted in good faith in the reasonable belief that such Covered Person's action
was in the best interests of the Trust or to have been liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of such Covered
Person's office.
INDEMNIFICATION NOT EXCLUSIVE
SECTION 3. The right of indemnification hereby provided shall not be
exclusive of or affect any other rights to which such Covered Person may be
entitled. As used in this Article VIII, the term "Covered Person" shall
include such person's heirs, executors and administrators and a "disinterested
Trustee" is a Trustee who is not an "interested person" of the Trust as
defined in Section 2(a)(19) of the 1940 Act (or who has been exempted from
being an "interested person" by any rule, regulation or order of the
Securities and Exchange Commission) and against whom none of such actions,
suits or other proceedings or another action, suit or other proceeding on the
same or similar grounds is then or has been pending. Nothing contained in this
Article shall affect any rights to indemnification to which personnel of the
Trust, other than Trustees or officers, and other persons may be entitled by
contract or otherwise under law, nor the power of the Trust to purchase and
maintain liability insurance on behalf of any such person; provided, however,
that the Trust shall not purchase or maintain any such liability insurance in
contravention of applicable law, including without limitation the 1940 Act.
SHAREHOLDERS
SECTION 4. In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
Shareholder and not because of his or her acts or omissions or for some other
reason, the Shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representative or, in the case of a corporation
or other entity, its corporate or other general successor) shall be entitled
to be held harmless from and indemnified against all loss and expense arising
from such liability, but only out of the assets of the particular series of
Shares of which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
TRUSTEES, OFFICERS, SHAREHOLDERS, ETC. NOT PERSONALLY LIABLE; NOTICE
SECTION 1. All persons extending credit to, contracting with or having any
claim against the Trust or a particular series of Shares shall look only to
the assets of the Trust or the assets of that particular series of Shares
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<PAGE>
for payment under such credit, contract or claim, and neither the Shareholders
nor the Trustees, nor any of the Trust's officers, employees or agents,
whether past, present or future, shall be personally liable therefor. Nothing
in this Declaration of Trust shall protect any Trustee against any liability
to which such Trustee would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made or
issued by the Trustees or by any officer or officers shall give notice that
this Declaration of Trust is on file with the Secretary of State of The
Commonwealth of Massachusetts and shall recite that the same was executed or
made by or on behalf of the Trust or by them as Trustee or Trustees or as
officer or officers and not individually and that the obligations of such
instrument are not binding upon any of them or the Shareholders individually
but are binding only upon the assets and property of the Trust, and may
contain such further recital as he or she or they may deem appropriate, but
the omission thereof shall not operate to bind any Trustee or Trustees or
officer or officers or Shareholder or Shareholders individually.
TRUSTEES' AND OFFICERS' GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
SECTION 2. The exercise by the Trustees and officers of their powers and
discretions hereunder shall be binding upon everyone interested. A Trustee or
officer shall be liable for his or her own willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct
of the office of Trustee or officer, and for nothing else, and shall not be
liable for the errors of judgment or mistakes of fact or law. The Trustees or
officers may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration of Trust, and shall be under no
liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees and officers shall not be required
to give any bond as such, nor any surety if a bond is required.
LIABILITY OF THIRD PERSONS DEALING WITH TRUSTEE
SECTION 3. No person dealing with the Trustees shall be bound to make any
inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
DURATION AND TERMINATION OF TRUST
SECTION 4. Unless terminated as provided herein, the Trust shall continue
without limitation of time. The Trust may be terminated at any time by vote of
Shareholders holding at least 66 2/3% of Shares entitled to vote or by the
Trustees by written notice to the Shareholders. Any series or class of Shares
may be terminated at any time by vote of Shareholders holding at least 66 2/3%
of the Shares of such series or class entitled to vote or by the Trustees by
written notice to the Shareholders of such series. Upon termination of the
Trust or of any one or more series or classes of Shares, after paying or
otherwise providing for all charges, taxes, expenses and liabilities, whether
due or accrued or anticipated, of the Trust or of the particular series or
class as may be determined by the Trustees, the Trust shall in accordance with
such procedures as the Trustees consider appropriate reduce the remaining
assets to distributable form in cash or shares or other property, or any
combination thereof, and distribute the proceeds to the Shareholders of the
series involved, ratably according to the number of Shares of such series held
by the several Shareholders of such series on the date of termination, except
to the extent otherwise required or permitted by the preferences and special
or relative rights and privileges of any classes of Shares of that series,
provided that any distribution to the Shareholders of a particular class of
Shares shall be made to such Shareholders pro rata in proportion to the number
of Shares of such class held by each of them.
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<PAGE>
FILING AND COPIES, REFERENCES, HEADINGS
SECTION 5. The original or a copy of this instrument and of each amendment
hereto shall be kept at the office of the Trust where it may be inspected by
any Shareholder. A copy of this instrument and of each amendment hereto shall
be filed by the Trust with the Secretary of State of The Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other
governmental office where such filing may from time to time be required.
Anyone dealing with the Trust may rely on a certificate by an officer of the
Trust as to whether or not any such amendments have been made and as to any
matters in connection with the Trust hereunder, and, with the same effect as
if it were the original, may rely on a copy certified by an officer of the
Trust to be a copy of this instrument or of any such amendments. In this
instrument and in any such amendment, references to this instrument and all
expressions like "herein", "hereof", and "hereunder" shall be deemed to refer
to this instrument as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken as a
part hereof or control or affect the meaning, construction or effect of this
instrument. This instrument may be executed in any number of counterparts each
of which shall be deemed an original.
APPLICABLE LAW
SECTION 6. This Declaration of Trust is made in The Commonwealth of
Massachusetts, and it is created under and is to be governed by and construed
and administered according to the laws of the laws of said Commonwealth. The
Trust shall be of the type commonly called a Massachusetts business trust and,
without limiting the provisions hereof, the Trust may exercise all powers
which are ordinarily exercised by such a trust.
AMENDMENTS
SECTION 7. All rights granted to the Shareholders under this Declaration of
Trust are granted subject to the reservation of the right to amend this
Declaration of Trust as herein provided, except that no amendment shall repeal
the limitations on personal liability of any Shareholder, Trustee or officer
or repeal the prohibition of assessment upon the Shareholders without the
express consent of each Shareholder, Trustee or officer involved. Subject to
the foregoing, this Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees (or by an
officer of the Trust pursuant to a vote of a majority of such Trustees) when
authorized to do so by vote of Shareholders holding a majority of the Shares
entitled to vote, except that an amendment which in the determination of the
Trustees shall affect the holders of one or more series of classes of Shares
but not the holders of all outstanding series and classes shall be authorized
by vote of the Shareholders holding a majority of the Shares entitled to vote
of each series and class affected and no vote of Shareholder of a series or
class not affected shall be required. In addition to the foregoing, the
provisions of this Declaration of Trust (whether or not related to the rights
of Shareholders) may be amended for any other reason at any time without the
vote or consent of Shareholders, so long as such amendment does not materially
adversely affect the rights of any Shareholder with respect to which such
amendment is or purports to be applicable and so long as such amendment is not
in contravention of applicable law, including the 1940 Act, by an instrument
in writing signed by a majority of the then Trustees (or by an officer of the
Trust pursuant to a vote of a majority of such Trustees).
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her hand
and seal for himself or herself and his or her assigns, as of the day and year
first above written.
_____________________________________
E. Philip Cannon
_____________________________________
Donald P. Carter
_____________________________________
Gary A. Childress
_____________________________________
William D. Cvengros
_____________________________________
Gary L. Light
_____________________________________
Richard L. Nelson
_____________________________________
Lyman W. Porter
_____________________________________
Robert A. Prindiville
_____________________________________
Alan Richards
_____________________________________
Joel Segall
_____________________________________
W. Bryant Stooks
_____________________________________
Gerald M. Thorne
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EXHIBIT I
PIMCO FUNDS: MULTI-MANAGER SERIES
DISTRIBUTION PLAN
FOR ADMINISTRATIVE CLASS SHARES
WHEREAS, PIMCO Funds: Multi-Manager Series (the "Trust") is registered as an
open-end management investment company under the Investment Company Act of
1940, as amended (the "1940 Act");
WHEREAS, the Trust issues shares of beneficial interest ("shares") in
separate series ("Funds"), with each Fund representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Trust issues shares of the Funds in separate classes of shares,
one of which is designated the Administrative Class (the "Administrative
Class" shares);
WHEREAS, certain shareholders of the Trust may require distribution and
related services that are in addition to services required by other
shareholders, and the provision of such services to shareholders requiring
these services may benefit such shareholders and facilitate their ability to
invest in the Funds;
WHEREAS, issuance of shares of the Funds in a class subject to a fee for the
Funds' cost of providing distribution and related services would allocate the
Funds' expense of rendering such services to the shareholders who receive such
additional services;
WHEREAS, the Funds with respect to their Administrative Class shares intend
to enter into Distribution Agreements ("Agreements") pursuant to this
Distribution Plan (the "Plan") with various Service Organizations ("Service
Organizations"), either directly or through the Trust's distributor, PIMCO
Funds Distribution Company (the "Distributor"), pursuant to which the Service
Organization will make available or offer Administrative Class shares of the
Funds for sale to the public and/or provide certain shareholder services to
its customers that invest in the Funds;
WHEREAS, the Funds have adopted a multiple class plan pursuant to Rule 18f-3
under the 1940 Act to permit the issuance of shares in different classes;
WHEREAS, the Board of Trustees of the Trust has determined that there is a
reasonable likelihood that the Plan will benefit the Funds and their
shareholders;
NOW THEREFORE, the Trust hereby adopts this Distribution Plan on the
following terms and conditions:
1. The Trust (or the Distributor, acting as agent of the Trust) shall
reimburse a Service Organization with which the Trust (or the Distributor),
regarding the Administrative Class of a Fund, has an Agreement, for costs and
expenses incurred in connection with the distribution and marketing of shares
of that Class and/or the provision of certain shareholder services to its
customers that invest in the Funds, at a rate specified in paragraph 2 below,
based upon the average daily net assets of the Fund attributable to the
Administrative Class.
2. Subject to the limitations of applicable law and regulations, including
rules of the National Association of Securities Dealers, Inc. ("NASD"), the
Service Organization will be reimbursed quarterly for such costs, expenses or
payments at an annual rate of up to but not more than 0.25% of the average
daily net assets of the Fund attributable to the Administrative Class. Any
expense payable hereunder may be carried forward for reimbursement for up to
twelve months beyond the date in which it is incurred, subject always to the
limit that
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not more than 0.25% of the average daily net assets attributable to an
Administrative Class may be used in any month to pay expenses pursuant to the
Agreement. An Administrative Class shall incur no interest or carrying charges
for expenses carried forward. In the event the Plan is terminated as herein
provided, the Administrative Class shall have no liability for expenses that
were not reimbursed as of the date of termination.
3. The payment of fees to a Service Organization is subject to compliance by
the Service Organization with the terms of the Agreement between the Service
Organization and the Trust (or the Distributor). If an Administrative Class
shareholder ceases to be a client of a Service Organization that has entered
into an Agreement with the Trust (or the Distributor), but continues to hold
Administrative Class shares, the Service Organization will be entitled to
receive a similar payment in respect of the services provided to such
investors, except that the Distributor may determine that the Service
Organization shall no longer be entitled to such payment if the client becomes
a client of another Service Organization that has an Agreement with the Trust
(or the Distributor). For the purposes of determining the fees payable under
the Plan, the average daily net asset value of the Fund attributable to the
Administrative Class shares shall be computed in the manner specified in the
Trust's Declaration of Trust and current prospectus.
4. Services which a Service Organization will provide under an Agreement may
include, but are not limited to, the following functions: placing orders
directly for the purchase of a Fund's shares and tendering a Fund's shares for
redemption; engaging in advertising with respect to a Fund's shares; providing
information about the Funds; providing facilities to answer questions from
prospective investors about the Fund; receiving and answering correspondence,
including requests for prospectuses and statements of additional information;
preparing, printing and delivering prospectuses and shareholder reports to
prospective shareholders; complying with federal and state securities laws
pertaining to the sale of Administrative Class shares; and assisting investors
in applying to purchase Fund shares and selecting dividend and other account
options. Shareholder services which a Service Organization will provide under
an Agreement may include, but are not limited to, the following functions:
receiving, aggregating and processing shareholder orders; furnishing
shareholder sub-accounting; providing and maintaining elective shareholder
services such as check writing and wire transfer services; providing and
maintaining pre-authorized investment plans; communicating periodically with
shareholders; acting as the sole shareholder of record and nominee for
shareholders; maintaining accounting records for shareholders; answering
questions and handling correspondence from shareholders about their accounts;
issuing confirmations for transactions by shareholders; and performing similar
account administrative services. In addition, Service Organizations can
provide their endorsement of the Administrative Class shares of a Fund to
their clients, members or customers as an inducement to invest in the Fund.
5. Any Service Organization entering into an Agreement with a Fund (or with
the Distributor) under this Plan may also enter into an Administrative
Services Agreement with regard to its Administrative Class with that Fund (or
with the Distributor), pursuant to an Administrative Services Plan adopted by
the Trust, which will not be subject to the terms of this Plan. However, in
the event the Service Organization enters into both types of agreements, the
Service Organization shall not be eligible to receive fees under more than one
agreement with respect to the same assets. A Fund (or the Distributor, acting
as the Fund's agent) under this Plan may enter into more than one Distribution
Agreement for its Administrative Class shares, with different Service
Organizations providing services to different groups of shareholders.
6. For so long as required pursuant to Rule 12b-1 under the 1940 Act, the
Plan shall not take effect with respect to a Fund until it has been approved
by a vote of at least a majority (as defined in the 1940 Act) of the
outstanding voting securities of the Administrative Class of that Fund, which
may include the vote by an affiliated person of the Fund as the sole
shareholder of the Fund. With respect to the submission of the Plan for such a
vote, it shall have been effectively approved with respect to a Fund if a
majority of the outstanding voting
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securities of the Administrative Class of the Fund votes for approval of the
Plan, notwithstanding that the matter has not been approved by a majority of
the outstanding voting securities of the Administrative Class of any other
Fund.
7. The Plan shall not take effect until it has been approved, together with
any related agreements and supplements, by votes of a majority of both (a) the
Board of Trustees of the Trust, and (b) those Trustees of the Trust who are
not "interested persons" (as defined in the 1940 Act) and have no direct or
indirect financial interest in the operation of the Plan or any agreements
related to it (the "Plan Trustees"), cast in person at a meeting (or meetings)
called for the purpose of voting on the Plan and such related agreements.
8. The Plan shall continue in effect so long as such continuance is
specifically approved at least annually in the manner provided for approval of
the Plan in paragraph 7.
9. Any person authorized to direct the disposition of monies paid or payable
by an Administrative Class pursuant to the Plan or any related agreement shall
provide to the Trust's Board of Trustees, and the Board shall review, at least
quarterly, a written report of the amounts so expended and the purposes for
which such expenditures were made.
10. Any agreement related to the Plan, as such phrase is used is Rule 12b-1
under the 1940 Act, shall be in writing and shall provide: (a) that such
agreement may be terminated at any time as to a Fund, without payment of any
penalty, by vote of a majority of the Plan Trustees or by vote of a majority
of the outstanding voting securities of the Administrative Class of a Fund, on
not more than sixty (60) days' written notice to any other party to the
agreement; and (b) that such agreement shall terminate automatically in the
event of its assignment.
11. The Plan may be amended at any time with respect to a Fund by the Board
of Trustees, provided that (a) for so long as required pursuant to Rule 12b-1
under the 1940 Act, any amendment to increase materially the costs which the
Administrative Class shares may bear for distribution pursuant to the Plan
shall be effective only upon approval by a vote of a majority of the
outstanding voting securities of the Administrative Class of the Fund, and (b)
any material amendments of the terms of the Plan shall become effective only
upon approval as provided in paragraph 7 hereof.
12. While the Plan is in effect, the selection and nomination of Trustees
who are not interested persons (as defined in the 1940 Act) of the Trust shall
be committed to the discretion of the Trustees who are not interested persons
of the Trust.
13. The Trust shall preserve copies of the Plan, any related agreement and
any report made pursuant to paragraph 9 hereof, for a period of not less than
six (6) years from the date of the Plan, such agreement or report, as the case
may be, the first two (2) years of which shall be in an easily accessible
place.
14. It is understood and expressly stipulated that neither the holders of
shares of any Fund nor any Trustee, officer, agent or employee of the Trust
shall be personally liable hereunder, nor shall any resort be had to other
private property for the satisfaction of any claim or obligation hereunder,
but the Trust only shall be liable.
IN WITNESS WHEREOF, the Trust has adopted this Distribution Plan effective
as of the day of , 199 .
PIMCO Funds: Multi-Manager Series
By: _________________________________
Title:
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<PAGE>
EXHIBIT J
As of the close of business on the Record Date, the following persons owned
of record or beneficially 5% or more of the shares of a class of the following
Funds:
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
TITLE OF CLASS OWNED CLASS OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
NFJ EQUITY INCOME FUND
Pacific Mutual Life Insurance
Company Institutional 1,356,224.690 17.89%
FBO PM RISP
700 Newport Center Drive
Newport Beach, California 92660
NBD Bank NA as Trustee for Institutional 1,306,329.863 17.23%
AM Castle & Company Employee
Pension
P.O. Box 77975
Detroit, Michigan 48277-0975
Santa Barbara Foundation Institutional 787,412.509 10.38%
15 East Carrillo Street
Santa Barbara, California
93101-2780
First Union National Bank Administrative 418,547.222 97.60%
401 S. Tyron Street, FRB-3
Charlotte, North Carolina
28288-1151
Hazlehurst & Associates Institutional 413,436.145 5.45%
400 Perimeter Center Terrace,
Suite 850
Atlanta, Georgia 30346
NFJ DIVERSIFIED LOW P/E FUND
Pacific Mutual Life Insurance
Company Institutional 2,040,756.360 46.31%*
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
The Northern Trust Company as Institutional 863,461.875 19.59%
Trustee for Great Lakes
Chemical
Master Retirement Trust
P.O. Box 2200
West Lafayette, Indiana 47906
BAC Local 19 Pension Trust Fund Institutional 312,980.893 7.10%
777 Davis Street
San Francisco, California
94126-2500
PM Charitable Foundation Institutional 275,939.195 6.26%
700 Newport Center Drive
Newport Beach, California 92660
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
TITLE OF CLASS OWNED CLASS OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
NFJ SMALL CAP VALUE FUND
Pacific Mutual Life Insurance
Company Institutional 443,140.165 6.26%
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
First Union National Bank Administrative 306,739.669 100.00%
401 South Tyron Street, FRB-3
Charlotte, North Carolina
28202-1911
Sheet Metal Workers' Local
Unions Institutional 300,894.876 15.17%
and Councils Pension Fund
601 N. Fairfax Street, Suite
500
Alexandria, Virginia 22314-2054
Victoria Bank and Trust
Company, Institutional 228,491.233 11.52%
Structural Metals, Inc. Pension
Plan
One O'Connor Plaza, 6th Floor
Victoria, Texas 77901-65497
Mellon Bank, NA FBO Institutional 108,350.681 5.46%
Mac & Co. A/C 855-577
P.O. Box 320
Pittsburgh, Pennsylvania 15230-
0320
CADENCE CAPITAL APPRECIATION
FUND
Donaldson Lufkin & Jenrette** Institutional 3,979,488.471 19.40%
Pershing Division
P.O. Box 2052
Jersey City, New Jersey 07303-
2052
Bank of New York as Trustee for Institutional 2,999,866.508 14.63%
Coopers & Lybrand Retirement
Trust
One Wall Street
New York, New York 10286-0001
Pacific Mutual Life Insurance
Company Institutional 1,362,011.619 6.64%
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
Ingram Industries Inc. Institutional 1,098,303.191 5.35%
1 Belle Meade Plaza
P.O. Box 23049
Nashville, Tennessee 37202
Amsouth Bank as Trustee for Institutional 1,031,065.255 5.03%
Infirmary Health Systems
P.O. Box 11426
Birmingham, Alabama 35202-1426
</TABLE>
J-2
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
TITLE OF CLASS OWNED CLASS OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
FIIOC as Agent for Certain Administrative 4,559,856 83.73%
Employee
Benefits Plan
100 Magetian KWIC
Covington, Kentucky 41015
First Union National Bank Administrative 886.232 16.27%
401 S. Tyron Street, FRB-3
Charlotte, North Carolina
28288-1151
CADENCE MID CAP GROWTH FUND
First Trust as Trustee for Institutional 2,105,080.446 20.35%
Dayton Hudson Corporation
P.O. Box 64010
St. Paul, Minnesota 55164-0010
Caremark International, Inc. Institutional 883,887.454 8.54%
c/o State Street Bank & Trust
1 Enterprise Drive
North Quincy, Massachusetts
02171-2126
Fleet Bank for University of Institutional 718,798.331 6.95%
Massachusetts
10 Tremont Street, 4th Floor
Boston, Massachusetts 02108
Berklee College of Music, Inc. Institutional 637,636.681 6.16%
1140 Boylston Street
Boston, Massachusetts 02215-
3693
Staff Retirement Plan of the Institutional 535,575.625 5.18%
International
Telecommunications
Satellite Organization
3400 International Drive, N.W.
Washington, D.C. 20008-3006
First Interstate Bank FBO Administrative 48,900.607 84.57%
Choicemaster
5808 East Telephone Road, 2nd
Floor
Ventura, California 93003
Canterbury Consultant FBO Administrative 5,258.486 9.09%
Sandra Hogue Trust
660 Newport Center Drive
Newport Beach, California 92660
CADENCE MICRO CAP GROWTH FUND
Charles Schwab & Co., Inc.** Institutional 1,199,263.540 24.69%
101 Montgomery Street
San Francisco, California
94104-4122
</TABLE>
J-3
<PAGE>
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE OF
TITLE OF CLASS OWNED CLASS OWNED
-------------- ------------ -------------
<S> <C> <C> <C>
Dominion Resources, Inc. Institutional 854,664.929 17.59%
701 East Byrd Street
P.O. Box 26532
Richmond, Virginia 23261
University of Southern Institutional 812,844.768 16.73%
California
Treasurer's Office
University Park, BKS 402
Los Angeles, California 90089-
2541
The Northern Trust Company as Institutional 385,554.673 7.94%
Trustee
for Toyota Directed Retirement
Trust
P.O. Box 92956
Chicago, Illinois 60690
Pacific Mutual Life Insurance Institutional 361,010.830 7.43%
Company
700 Newport Center Drive
Newport Beach, California 92660-
6397
Northern Trust Company as Administrative 51,944.229 100%
Trustee
for Sunday School Board
P.O. Box 92956
Chicago, Illinois 60675
CADENCE SMALL CAP GROWTH FUND
The Jewish Federation of Institutional 423,780.013 26.16%*
Metropolitan Chicago
One South Franklin Street
Room 625
Chicago, Illinois 60606-4609
Pacific Mutual Life Insurance Institutional 260,281.104 16.07%
Company
700 Newport Center Drive
Newport Beach, California 92660
ESOR & Co. Institutional 197,355.259 12.18%
Associated Bank Green Bay
Trust Operations Department
P.O. Box 19006
Green Bay, Wisconsin 54307-9006
Pacific Mutual Life Insurance Institutional 151,823.341 9.37%
Company
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
Auburn Theological Seminary Institutional 145,018.519 8.95%
3041 Broadway
New York, New York 10027-5710
</TABLE>
J-4
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY CLASS
TITLE OF CLASS OWNED OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
Bessemer Trust Company for Institutional 99,453.008 6.14%
Naidot & Co.
100 Woodbridge Center Drive
Woodbridge, New Jersey 07095
FTC & Co. Administrative 5,312.555 100%
First Trust (Multi-Financial
Group)
P.O. Box 173736
Denver, Colorado 80217-3736
COLUMBUS CIRCLE INVESTORS CORE
EQUITY FUND
The Bank of New York as Administrative 2,203,401.359 83.47%*
Trustee for Melville
Corporation
One Theall Road
Rye, New York 10580-1404
Pacific Mutual Life Insurance Institutional 428,426.396 54.98%
Company
700 Newport Center Drive
Newport Beach, California 92660
The Bank of New York as Trustee Administrative 350,815.389 13.29%
for
Marshalls Association 401(k)
Trust
One Wall Street
MT/MC 12th Floor
New York, New York 10286-0001
Pacific Mutual Charitable Institutional 123,479.016 15.85%
Foundation
700 Newport Center Drive
Newport Beach, California 92660
Union Bank as Trustee for Institutional 94,328.867 12.11%
Pacific Corinthian Life
Insurance Company
Pension Plan
10241 Wateridge Circle
San Diego, California 92121-
2733
COLUMBUS CIRCLE INVESTORS MID
CAP
EQUITY FUND
Pacific Mutual Life Insurance Institutional 439,316.239 54.98%*
Company
700 Newport Center Drive
Newport Beach, California 92660
John W. Barnum Institutional 52,308.574 9.08%
5175 Tilden Street, N.W.
Washington, D.C. 20016-1961
Pacific Mutual Charitable Institutional 29,398.169 5.10%
Foundation
700 Newport Center Drive
Newport Beach, California 92660
</TABLE>
J-5
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY CLASS
TITLE OF CLASS OWNED OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
PARAMETRIC ENHANCED EQUITY FUND
First Interstate Bank of CA, Institutional 1,863,469.422 40.29%*
Custodian S.F. BART
P.O. Box 9800
Calabasas, California 91372-
0800
Pacific Mutual Life Insurance Institutional 841,703.411 18.20%
Company
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
Pacific Mutual Life Insurance Institutional 594,518.448 12.85%
Company
FBO CMTA-GMPP & Allied Workers
Pension
700 Newport Center Drive
Newport Beach, California 92260
Santa Clara Mission Institutional 299,385.088 6.47%
The Rector-Nobili Hall
Santa Clara University
Santa Clara, California 00009-
5053
BLAIRLOGIE EMERGING MARKETS FUND
Charles Schwab & Co., Inc.** Institutional 2,351,321.558 43.79%*
101 Montgomery Street
San Francisco, California
94104-4122
Donaldson Lufkin & Jenrette** Institutional 687,127.741 12.80%
Pershing Division
P.O. Box 2052
Jersey City, New Jersey 07303-
2052
Pacific Mutual Life Insurance Institutional 575,190.664 10.71%
Company
700 Newport Center Drive
Newport Beach, California 92660
Pacific Mutual Life Insurance Institutional 378,425.453 7.05%
Company
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
FTC & Co. Administrative 25,799.415 100.00%
First Trust (Multi Financial
Group)
P.O. Box 173736
Denver Colorado 80217-3736
BLAIRLOGIE INTERNATIONAL ACTIVE
FUND
Pacific Financial Asset Institutional 1,158,760.796 15.99%
Management Corporation
700 Newport Center Drive
Newport Beach, California 92660
</TABLE>
J-6
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
BENEFICIALLY CLASS
TITLE OF CLASS OWNED OWNED
-------------- ------------- -------------
<S> <C> <C> <C>
Wachovia Bank of N.C. as Institutional 1,016,260.163 14.03%
Trustee for
Atlanta Gas Light Co.
Retirement Plan
301 North Main Street
P.O. Box 3073
Winston-Salem, North Carolina
27150
Pacific Mutual Life Insurance Institutional 745,690.023 10.29%
Company
FBO PM Retirement Plan
700 Newport Center Drive
Newport Beach, California 92660
Nissan Motor Corporation USA Institutional 688,713.823 9.51%
P.O. Box 191
Gardena, California 90248-0191
Charles Schwab & Co., Inc.** Institutional 613,707.441 8.47%
101 Montgomery Street
San Francisco, California
94104-4122
First Interstate Bank as Institutional 533,712.057 7.37%
Trustee for
Cadence Design System Inc.
P.O. Box 9800
Calabasas, California 91372-
0800
Northern Trust Company as Administrative 209,428.808 44.59%
Trustee
for Sunday School Board
P.O. Box 92956
Chicago, Illinois 60675
FTC & Co. Administrative 257,125.357 54.74%
First Trust (Multi Financial
Group)
P.O. Box 173736
Denver, Colorado 80217-3736
BALANCED FUND
Pacific Mutual Life Insurance Institutional 1,139,129.985 22.21%
Company
FBO California Race Track
Association
700 Newport Center Drive
Newport Beach, California 92660
Pacific Mutual Life Insurance Institutional 987,578.620 19.26%
Company
FBO PM RISP
700 Newport Center Drive
Newport Beach, California 92660
</TABLE>
J-7
<PAGE>
<TABLE>
<CAPTION>
SHARES PERCENTAGE OF
TITLE OF BENEFICIALLY CLASS
CLASS OWNED OWNED
------------- ------------ -------------
<S> <C> <C> <C>
Trustees of the Redlands Institutional 630,292.357 12.29%
Community
Hospital Retirement Plan
350 Terracina Blvd.
Redlands, California 92373-4850
Pacific Mutual Life Insurance Institutional 624,999.431 12.19%
Company
FBO WESCOM Credit Union
700 Newport Center Drive
Newport Beach, California 92660
Pacific Mutual Life Insurance Institutional 607,667.327 11.85%
Company
FBO California Hardware Company
700 Newport Center Drive
Newport Beach, California 92660
Pacific Mutual Life Insurance Institutional 435,220.166 8.49%
Company
FBO Dominguez Water Corporation
Pension Plan
700 Newport Center Drive
Newport Beach, California 92660
</TABLE>
- --------
* Entity owned 25% or more of the outstanding shares of beneficial interest
of the Fund, and therefore may be presumed to "control" the Fund, as that
term is defined in the 1940 Act.
** Shares are held only as nominee.
J-8
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Blairlogie Emerging Markets Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Blairlogie
Emerging Markets Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For held Except
1. To elect the following persons to
serve as Trustees: [_] [_] [_]
E. Phillip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light, Joel
Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any individual, mark the
"For All Except" box and strike a line through the nominee's name in the
list above.)
RECORD DATE SHARES:
------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ------Shareholder sign here------------------------------Co-owner sign here-----
For Against Abstain
III.I. To approve an Addendum to the Portfolio
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and the Fund's Portfolio
Manager.
For Against Abstain
IV. To approve a Second Amended and
Restated Declaration of Trust. [_] [_] [_]
For Against Abstain
V. (With respect to Administrative Class Shares
only) To approve an Administrative Class [_] [_] [_]
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Blairlogie International Active Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Blairlogie
Internatial Active Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), on which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
I. To elect the following persons to For hold Except
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segall, W. Bryant Stooks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark this "For All Except" box and strike a
line through the nominee's name in the list above.)
RECORD DATE SHARES:
---------------
Please be sure to sign and date this Proxy. Date
- ----------------------------------------------------------------
- ----Shareholder sign here---------Co-owner sign here------------
For Against Abstain
III.J. To approve an Addendum to the Portfolio
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and the Fund's Portfolio
Manager
For Against Abstain
IV. To approve a Second Amended and
Restated Declaration of Trust [_] [_] [_]
V. (With respect to Administrative Class
Shares only) To approve an Administrative [_] [_] [_]
Class Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been
noted on the reverse side of this card. [_]
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Cadence Micro Cap Growth Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Cadence Micro
Cap Growth Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
1. To elect the following persons to For hold Except
serve as Trustees: [_] [_] [_]
E. Phillip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Josi Segall, W. Bryant Stocks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark the "For All Except" box and strike a line
through the nominee's name in the list above.)
RECORD DATE SHARES:
------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------
- ------Shareholder sign here----------------------Co-owner sign here-------
III.F. To approve an Addendum to the Portfolio For Against Abstain
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and the Fund's Portfolio
Manager.
IV. To approve a Second Amended and For Against Abstain
Restated Declaration of Trust. [_] [_] [_]
V. (With respect to Administrative Class
Shares only) To approve an Administrative For Against Abstain
Class Distribution Plan. [_] [_] [_]
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEFORE THE MEETING OR ANY
ADJOURNMENT THEREOF.
Mark box at right if comments or address changes have been
noted on the reverse side of this card. [_]
- -------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Cadence Mid Cap Growth Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Overgros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Cadence Mid
Cap Growth Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
1. To elect the following persons to [_] [_] [_]
serve as Trustees:
E. Philip Cannon, Donald P. Carter, Gary A Childress, Gary L. Light,
Joel Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A.
Prindiville
(INSTRUCTION: To withhold authority to vote for any individual, mark,
the "For All Except" box and strike a line through the nominee's name in
the list above.)
RECORD DATE SHARES:
--------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ------Shareholder sign here------------------Co-owner sign here-----------------
For Against Abstain
II.A. To approve the acquisition by the Fund of all of [_] [_] [_]
the assets (subject to the liabilities) of the
Discovery Fund, a series of PIMCO Advisors
Funds.
For Against Abstain
III.E To Approve an Addendum to the Portfolio [_] [_] [_]
Management Agreement between PIMCO Advisors LP.
and the Fund's Portfolio Manager.
For Against Abstain
IV. To approve a Second Amended and Restated [_] [_] [_]
Declaration of Trust.
V. (With respect to Administrative Class Shares [_] [_] [_]
only) To approve an Administrative Class
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been noted on [_]
the reverse side of this card.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Balanced Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Balanced
Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the "Fund"), which the
undersigned is entitled to vote at the Special Meeting of Shareholders of PIMCO
Funds: Equity Advisors Series to be held at 8:00 a.m., Pacific time, on December
20, 1996, at 840 Newport Center Drive, Newport Beach, California 92660, and at
any adjournment thereof, as fully as the undersigned would be entitled to vote
if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
I. To elect the following persons to [_] [_] [_]
serve as Trustees:
E. Philip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light,
Joel Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A.
Prindiville
(INSTRUCTION: To withhold authority to vote for any individual, mark the
"For All Except" box and strike a line through the nominee's name in the
list above.)
RECORD DATE SHARES:
---------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- -------Shareholder sign here-----------------------Co-owner sign here-----------
For Against Abstain
III.K. To approve an Addendum to the Portfolio
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and one of the Fund's
Portfolio Managers, NFJ Investment Group.
For Against Abstain
III.L. To approve an Addendum to the Portfolio
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and one of the Fund's
Portfolio Managers, Cadence Capital
Management.
For Against Abstain
IV. To approve a Second Amended and
Restated Declaration of Trust. [_] [_] [_]
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been noted on the reverse
side of this card. [_]
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Cadence Small Cap Growth Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Cadence Small
Cap Growth Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
I. To elect the following persons to For hold Except
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segall, W. Bryant Stooks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark the "For All Except" box and strike a
line through the nominee's name in the list above.)
RECORD DATE SHARES:
-------------------------
Please be sure to sign and date this Proxy. Date
- ----------------------------------------------------------------------------
- -----Shareholder sign here---------------------Co-owner sign here-----------
III.G. To approve an Addendum to the Portfolio
Management Agreement between PIMCO For Against Abstain
Advisors L.P. and the Fund's Portfolio [_] [_] [_]
Manager.
IV. To approve a Second Amended and For Against Abstain
Restated Declaration of Trust [_] [_] [_]
V. (With respect to Administrative Class
Shares only) To approve an Administrative
Class Distribution Plan. [_] [_] [_]
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been noted
on the reverse side of this card. [_]
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
NFJ Small Cap Value Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the NFJ Small Cap
Value Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the "Fund"),
which the undersigned is entitled to vote at the Special Meeting of Shareholders
of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m., Pacific time, on
December 20, 1996, at 840 Newport Center Drive, Newport Beach, California 92660,
and at any adjournment thereof, as fully as the undersigned would be entitled to
vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THE EXAMPLE
With- For All
For hold Except
l. To elect the following persons to
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light,
Joel Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A.
Prindiville.
(INSTRUCTION: To withhold authority to vote for any individual, mark the
"For All Except" box and strike a line through the nominee's name in the
list above.)
RECORD DATE SHARES:
------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- -------Shareholder sign here-------------------Co-owner sign here---------------
For Against Abstain
III.C. To approve an Addendum to the Portfolio [_] [_] [_]
Management Agreement between PIMCO
Advisors L.P. and the Fund's Portfolio
Manager.
For Against Abstain
IV. To approve a Second Amended and [_] [_] [_]
Restated Declaration of Trust.
V. (With respect to Administrative Class Shares [_] [_] [_]
only) To approve an Administrative Class
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Cadence Capital Appreciation Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Cadence
Capital Appreciation Fund, a portfolio of PIMCO Funds: Equity Advisors Series
(the "Fund"), which the undersigned is entitled to vote at the Special Meeting
of Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For held Except
1. To elect the following persons to [_] [_] [_]
serve as Trustees:
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segall, W. Bryant Stooks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark the "For All Except" box and strike a line
through the nominee's name in the list above.)
RECORD DATE SHARES:
--------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ----Shareholder sign here.--------------------------Co-owner sign here----------
For Against Abstain
III.D. To approve an Addendum to the Portolio [_] [_] [_]
Management Agreement between PIMCO
Advisors L.P. and the Fund's Portfolio
Manager.
For Against Abstain
IV. To approve a Second Amended and [_] [_] [_]
Restated Declaration of Trust.
V. (With respect to Administrative Class Shares [_] [_] [_]
only) To approve an Administrative Class
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEOFRE THE MEETING OR
ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Parametric Enhanced Equity Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Parametric
Enhanced Equity Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
I. To elect the following persons to [_] [_] [_]
serve as Trustees:
E. Philip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light, Joel
Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any individual, mark the
"For All Except" box and strike a line through the nominee's name in the
list above.)
RECORD DATE SHARES:
-------------------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- -------Shareholder sign here-------------------------Co-owner sign here --------
For Against Abstain
III.H. To approve an Addendum to the [_] [_] [_]
Portfolio Management Agreement between
PIMCO Advisors L.P. and the Fund's
Portfolio Manager.
For Against Abstain
IV. To approve a Second Amended and Restated [_] [_] [_]
Declaration of Trust.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been noted on [_]
the reverse side of this card.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
NFJ Diversified Low P/E Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the NFJ
Diversified Low P/E Fund, a portfolio of PIMCO Funds: Equity Advisors Series
(the "Fund"), which the undersigned is entitled to vote at the Special Meeting
of Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
I. To elect the following persons to
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress, Gary L. Light,
Joel Segall, W. Bryant Stooks, Gerald M. Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any individual, mark the "For
All Except" box and strike a line through the nominee's name in the list
above.
RECORD DATE SHARES:
-----------------------------
Please be sure to sign and date this Proxy. Date
- -----------------------------------------------------------------------------
- ----Shareholder sign here-------------------Co-owner sign here---------------
For Against Abstain
II.B. To approve the acquisition by the Fund of
all of the assets (subject to the liabilities) [_] [_] [_]
of the Value Fund, a series of PIMCO Advisors
Funds.
III.B. To approve an Addendum to the Portfolio For Against Abstain
Management Agreement between PIMCO
Advisors L.P. and the Fund's Portfolio [_] [_] [_]
Manager.
IV. To approve a Second Amended and Restated For Against Abstain
Declaration of Trust.
[_] [_] [_]
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH MATTERS AS MAY
COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been noted on the [_]
reverse side of this card.
- -------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
NFJ Equity Income Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the NJF Equity
Income Fund, a portfolio of PIMCO Funds: Equity Advisors Series (the
"Fund"), which the undersigned is entitled to vote at the Special Meeting of
Shareholders of PIMCO Funds: Equity Advisors Series to be held at 8:00 a.m.,
Pacific time, on December 20, 1996, at 840 Newport Center Drive, Newport Beach,
California 92660, and at any adjournment thereof, as fully as the undersigned
would be entitled to vote if personally present, as follows on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
1. To elect the following persons to [_] [_] [_]
serve as Trustees:
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segall, W. Bryant Stooks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
Individual, mark the "For All Except" box and strike a
line through the nominee's name in the list above.)
RECORD DATE SHARES:
---------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------------
- ------Shareholder sign here------------------Co-owner sign here----------------
For Against Abstain
III.A. To approve an Addendum to the Portfolio [_] [_] [_]
Management Agreement between PIMCO
Advisors L.P. and the Fund's Portfolio
Manager.
For Against Abstain
IV. To approve a Second Amended and [_] [_] [_]
Restated Declaration of Trust.
V. (With respect to Administrative Class Shares [_] [_] [_]
only) To approve and Administrative Class
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card.
- --------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Columbus Circle Investors Core Equity Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Columbus
Circle Investors Core Equity Fund, a portfolio of PIMCO Funds: Equity Advisors
Series (the "Fund"), which the undersigned is entitled to vote at the Special
Meeting of Shareholders of PIMCO Funds: Equity Advisors Series to be held at
8:00 a.m., Pacific time, on December 20, 1996, at 840 Newport Center Drive,
Newport Beach, California 92660, and at any adjournment thereof, as fully as the
undersigned would be entitled to vote if personally present, as follows on the
reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
----------------------------------------------------------------------------
- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
----------------------------------------------------------------------------
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
<PAGE>
[X] PLEASE MARK VOTES
AS IN THE EXAMPLE
With- For All
For hold Except
I. To elect the following persons to
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segali, W. Bryant Stooks, Gerald M.
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark the "For All Except" box and strike a line
through the nominee's in the list above.)
RECORD DATE SHARES:
---------------------
Please be sure to sign and date this Proxy. Date
- --------------------------------------------------------------------------
- ----Shareholder sign here-----------------------Co-owner sign here--------
DETACH CARD
For Against Abstain
III.M. To approve an Addendum to the Portfolio
Management Agreement between PIMCO [_] [_] [_]
Advisors L.P. and the Fund's Portfolio
Manager.
For Against Abstain
IV. To approve a Second Amended and
Restated Declaration of Trust. [_] [_] [_]
V. (With respect to Administrative Class Shares
only) To approve an Administrative Class [_] [_] [_]
Distribution Plan.
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card.
- -------------------------------------------------------------------------------
DETACH CARD
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Columbus Circle Investors Mid Cap Equity Fund
A Proxy for a Meeting
of Shareholders
to be held on December 20, 1996
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of R. Wesley Burns, William D. Cvengros, or Teresa A. Wagner, or any of
them as Proxies of the undersigned, with full power of substitution, to vote on
behalf of the undersigned all shares of beneficial interest of the Columbus
Circle Investors Mid Cap Equity Fund, a portfolio of PIMCO Funds: Equity
Advisors Series (the "Fund"), which the undersigned is entitled to vote at the
Special Meeting of Shareholders of PIMCO Funds: Equity Advisors Series to be
held at 8:00 a.m., Pacific time, on December 20, 1996, at 840 Newport Center
Drive, Newport Beach, California 92660, and at any adjournment thereof, as fully
as the undersigned would be entitled to vote if personally present, as follows
on the reverse side.
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE PROPOSALS SET FORTH ON THE
---
REVERSE SIDE.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR "FOR" ANY PROPOSALS
IN WHICH NO CHOICE IS INDICATED.
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- --PLEASE VOTE AND SIGN ON OTHER SIDE AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.--
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NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD. When signing as
attorney, executor, administrator, trustee, guardian or as custodian for a
minor, please sign your name and give your full title as such. If signing on
behalf of a corporation, please sign the full corporate name and your name and
indicate your title. If you are a partner signing for a partnership, please sign
the partnership name and your name. Joint owners should each sign this proxy.
Please sign, date and return in the enclosed envelope.
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HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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<PAGE>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
I. To elect the following persons to For hold Except
serve as Trustees: [_] [_] [_]
E. Philip Cannon, Donald P. Carter, Gary A. Childress,
Gary L. Light, Joel Segall, W. Bryant Stooks, Gerald
Thorne, and Robert A. Prindiville
(INSTRUCTION: To withhold authority to vote for any
individual, mark the "For All Except" box and strike a line
through the nominee's name in the list above.
RECORD DATE SHARES:
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Please be sure to sign and date this Proxy. Date
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- ----Shareholder sign holder--------------Co-owner sign here------------------
For Against Abstain
III.N. To Approve an Addendum to the Portfolio [_] [_] [_]
Management Agreement between PIMCO
Advisors L.P. and the Fund's Portfolio
Manager
For Against Abstain
IV. To approve a Second Amended and [_] [_] [_]
Restated Declaration of Trust
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE
UPON SUCH MATTERS AS MAY COME BEFORE THE MEETING OR
ANY ADJOURNMENT THEREOF.
Mark box at right if comments or address change have been [_]
noted on the reverse side of this card.
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DETACH CARD
