<PAGE>
As filed with the Securities and Exchange Commission on September 27, 1996
Registration No. ____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. __ [ ]
Post-Effective Amendment No. __ [ ]
PIMCO Funds: Equity Advisors Series
(Exact name of Registrant as Specified in Charter)
840 Newport Center Drive, Newport Beach, California 92660
(Address of Principal Executive Offices)
(714) 640-3593
(Area Code and Telephone Number)
----------
R. Wesley Burns
Pacific Investment Management Company
840 Newport Center Drive
Newport Beach, California 92660
(Name and Address of Agent for Service)
Copies to:
<TABLE>
<S> <C> <C>
Newton B. Schott, Jr., Esq. Jeffrey S. Puretz, Esq. Douglass N. Ellis, Jr., Esq.
c/o PIMCO Advisors L.P. Dechert Price & Rhoads Ropes & Gray
2187 Atlantic Street 1500 K Street, N.W., Suite 500 One International Place
Stamford, CT 06902 Washington, D.C. 20005 Boston, MA 02110
</TABLE>
----------
Approximate Date of Proposed Public Offering:
As soon as practicable after this Registration Statement becomes effective.
----------
It is proposed that this filing will become effective on October 28, 1996
pursuant to Rule 488.
----------
An indefinite amount of the Registrant's securities has been registered
under the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment
Company Act of 1940. In reliance upon Rule 24f-2, no filing fee is being paid
at this time. A Rule 24f-2 notice for the Registrant for the fiscal year ended
June 30, 1996 was filed on August 28, 1996.
<PAGE>
PIMCO Funds: Equity Advisors Series
Growth Fund and Target Fund
Cross-Reference Sheet
as required by Rule 481(a)
<TABLE>
<CAPTION>
Form N-14 Item Caption in Prospectus/Proxy Statement
<C> <S>
1 Cross-Reference Sheet; Outside Front Cover of Prospectus
2 Outside Back Cover Page of Prospectus; Table of Contents
3 Overview; Risk Factors
4 Approval or Disapproval of Agreement and Plan of Reorganization
5, 6 Information about the Acquired Funds and the Acquiring Funds;
Information about the PAF Funds
7 Voting Information
8,9 Not Applicable
Form N-14 Item Caption in Statement of Additional Information
10, 11 Cover Page; Table of Contents
12, 13 Additional Information about the Acquiring and
Acquired Funds
14 Financial Statements
Form N-14 Item Caption in Part C
15 Indemnification
16 Exhibits
17 Undertakings
</TABLE>
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Columbus Circle Investors Core Equity Fund
Columbus Circle Investors Mid Cap Equity Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
December __, 1996
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders of the
Columbus Circle Investors Core Equity Fund (the "Core Fund") and the Columbus
Circle Investors Mid Cap Equity Fund (the "Mid Cap Fund") will be held
_________, December ___, 1996 at ________ at the offices of the PIMCO Funds:
Equity Advisors Series (the "Trust") at 840 Newport Center Drive, Suite 360,
Newport Beach, California, to consider the following:
1. To approve or disapprove an Agreement and Plan of Reorganization
providing for the transfer of all of the assets of the Core Fund to
the Growth Fund, another series of the Trust, in exchange for
shares of the Growth Fund and the assumption by the Growth Fund of
all of the liabilities of the Core Fund, and the distribution of
such shares to the shareholders of the Core Fund in complete
liquidation of the Core Fund. (This proposal will be voted upon by
the shareholders of the Core Fund only.)
2. To approve or disapprove an Agreement and Plan of Reorganization
providing for the transfer of all of the assets of the Mid Cap Fund
to the Target Fund, another series of the Trust, in exchange for
shares of the Target Fund and the assumption by the Target Fund of
all of the liabilities of the Mid Cap Fund, and the distribution of
such shares to the shareholders of the Mid Cap Fund in complete
liquidation of the Mid Cap Fund. (This proposal will be voted upon
by the shareholders of the Mid Cap Fund only.)
3. To transact such other business as may properly come before the
meeting.
The Trustees have fixed the close of business on October ___, 1996 as the
record date for determination of shareholders entitled to notice of, and to vote
at, the Special Meeting.
By order of the Board of Trustees
Garlin G. Flynn, Secretary
- --------------------------------------------------------------------------------
WE URGE YOU TO MARK, SIGN, DATE, AND MAIL THE ENCLOSED PROXY IN THE
POSTAGE-PAID ENVELOPE PROVIDED SO THAT YOU WILL BE REPRESENTED AT THE
SPECIAL MEETING.
- --------------------------------------------------------------------------------
October ___, 1996
<PAGE>
PROSPECTUS/PROXY STATEMENT
October ___, 1996
Acquisition of the assets of: By and in exchange for shares of:
- ---------------------------- ---------------------------------
Columbus Circle Investors Core Equity Fund Growth Fund
Columbus Circle Investors Mid Cap Equity Fund Target Fund
each a series of: each a series of:
PIMCO Funds: Equity Advisors Series PIMCO Funds: Equity Advisors Series
840 Newport Center Drive, Suite 360 840 Newport Center Drive, Suite 360
Newport Beach, California 92660 Newport Beach, California 92660
1-800-927-4648 1-800-927-4648
This Prospectus/Proxy Statement relates to the proposed mergers (the
"Mergers") of the Columbus Circle Investors Core Equity Fund (the "Core Fund")
and the Columbus Circle Investors Mid Cap Equity Fund (the "Mid Cap Fund") (each
an "Acquired Fund"), series of PIMCO Funds: Equity Advisors Series (the
"Trust"), into, respectively, the Growth Fund (the "Growth Fund") and the Target
Fund (the "Target Fund") (each an "Acquiring Fund"), series of the Trust. The
Acquired Funds and the Acquiring Funds are referred to in this Prospectus/Proxy
Statement as the "Funds." The Mergers are to be effected through the transfer
of all of the assets of each Acquired Fund to the corresponding Acquiring Fund
in exchange for shares of beneficial interest of the Acquiring Fund (the "Merger
Shares") and the assumption by the Acquiring Fund of all of the liabilities of
the Acquired Fund, followed by the distribution of the Merger Shares to the
shareholders of the Acquired Fund in liquidation of the Acquired Fund. As a
result of each proposed transaction, each shareholder of the Acquired Fund will
receive in exchange for his or her Acquired Fund shares a number of Acquiring
Fund shares of the same class equal in value at the date of the exchange to the
aggregate value of the shareholder's Acquired Fund shares.
Because shareholders of the Acquired Funds are being asked to approve
transactions which will result in their holding shares of the Acquiring Funds,
this Proxy Statement also serves as a Prospectus for the Merger Shares of each
Acquiring Fund. The investment objective of each Acquiring Fund is as follows:
(1) The Growth Fund seeks long-term growth of capital, with income as
an incidental consideration. It invests primarily in common stocks of
companies that have medium to large equity capitalizations. The Growth Fund
is a newly organized, diversified series of the Trust which, immediately
prior and as a condition to the Merger with the Core Fund, will acquire the
assets and liabilities of and succeed to the
-1-
<PAGE>
business of the PIMCO Advisors Growth Fund (the "PAF Growth Fund"), a
series of PIMCO Advisors Funds (the "PAF Trust").
(2) The Target Fund seeks capital appreciation, with no consideration
given to income. It invests primarily in common stocks of companies with
medium equity capitalizations. The Target Fund is a newly organized,
diversified series of the Trust which, immediately prior and as a condition
to the merger with the Mid Cap Fund, will acquire the assets and
liabilities of and succeed to the business of the PIMCO Advisors Target
Fund (the "PAF Target Fund"), a series of the PAF Trust.
The Trust, formerly named PIMCO Advisors Institutional Funds, is an open-
end series management investment company, organized as a Massachusetts business
trust in 1990, that currently offers shares of 14 separate funds, not including
the Acquiring Funds. It is anticipated that, following the Mergers and similar
transactions, the Trust will change its name to "PIMCO Funds: Multi-Manager
Series" to better reflect its management structure. The PAF Trust is an open-
end series management investment company affiliated with the Trust.
This Prospectus/Proxy Statement explains concisely what you should know
before investing in each Acquiring Fund. Please read it and keep it for future
reference. This Prospectus/Proxy Statement is accompanied by the Prospectus
dated September 15, 1996 of the Trust (the "Trust Prospectus") and the
Prospectus dated February 1, 1996, as supplemented September 18, 1996, of the
PAF Trust (the "PAF Prospectus"). The Trust Prospectus and the PAF Prospectus
contain information about the Acquired Funds and the Acquiring Funds, as well as
the PAF Growth Fund and the PAF Target Fund (the "PAF Funds"), and are
incorporated into this Prospectus/Proxy Statement by reference.
The following documents have been filed with the Securities and Exchange
Commission (the "SEC") and are also incorporated into this Prospectus/Proxy
Statement by reference: (i) the current Statement of Additional Information of
the Trust, dated September 15, 1996, as amended or supplemented from time to
time (the "Trust Statement of Additional Information"), (ii) the current
Statement of Additional Information of the Trust, dated July 12, 1996 (including
the Report of Independent Accountants and financial statements in respect of
each PAF Fund included therein), as amended or supplemented from time to time
(the "PAF Statement of Additional Information"); (iii) the Report of Independent
Accountants and financial statements in respect of each Acquired Fund included
in the Trust's Annual Report to Shareholders for the fiscal year ended June 30,
1996 (the "Trust Annual Report"); (iv) the financial statements in respect of
each PAF Fund included in the PAF Trust's Semi-Annual Report to Shareholders for
the six months ended March 31, 1996 (the "PAF Semi-Annual Report"); (v) the
Trust's definitive Proxy Statement dated October __, 1996 in respect of its
Special Meeting of Shareholders to be held on December __, 1996; and (vi) a
Statement of Additional Information dated October ___, 1996 relating to the
transactions described in this Prospectus/Proxy Statement (the "Merger Statement
of Additional Information").
-2-
<PAGE>
For a free copy of any or all of the Prospectuses, Statements of Additional
Information, Annual Reports, Semi-Annual Reports or Proxy Statements referred to
in the foregoing paragraph, please call 1-800-927-4648 or write to the Trust at
the address appearing above.
THE SECURITIES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT HAVE NOT BEEN
APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
SHARES OF THE ACQUIRING FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION, ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY, AND INVOLVE RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
-3-
<PAGE>
OVERVIEW
Proposed Transactions
The transactions described on the first page of this Prospectus/Proxy
Statement are part of an overall restructuring of three of the registered
investment companies (the "PIMCO Mutual Funds") advised by PIMCO Advisors L.P.
("PIMCO Advisors") and its affiliates. The restructuring involves, among other
components, several mergers between Funds in the PIMCO family which are
counterparts of each other in that they are managed by the same investment
adviser in accordance with substantially similar investment objectives and
policies. The result of the restructuring will be a single, more integrated
mutual fund complex, with most PIMCO Mutual Funds offered to both retail and
institutional investors, and with broader exchange privileges for shareholders.
As part of the restructuring, the Trustees of each of the Trust and the PAF
Trust, both of which are open-end, series investment companies, have approved
transactions involving, for each Acquired Fund and the corresponding PAF Fund,
(i) the reorganization of the PAF Fund from a series of the PAF Trust into a
series of the Trust, i.e. the Acquiring Fund, followed immediately by (ii) the
Merger of the Acquired Fund into the Acquiring Fund. Each Merger is proposed to
be accomplished pursuant to an Agreement and Plan of Reorganization providing
for the transfer of all of the assets of the Acquired Fund to the Acquiring Fund
in exchange for the assumption by the Acquiring Fund of all of the liabilities
of the Acquired Fund and for shares of the Acquiring Fund. The completion of
these transactions will result in the liquidation of each Acquired Fund. Each
Merger is conditioned on the adoption by the PAF Fund of the fee structure
described below under "Expenses" and the reorganization of the PAF Fund as the
Acquiring Fund each having taken place, both of which are subject to approval of
the PAF Fund's shareholders. A meeting of each PAF Fund's shareholders will be
held on or about December __, 1996 to consider these matters.
PIMCO Advisors is the investment adviser to both Acquired Funds and to both
Acquiring Funds. PIMCO Advisors has delegated responsibility for managing each
Fund's portfolio to Columbus Circle Investors ("Columbus Circle"), a subsidiary
partnership of PIMCO Advisors, which serves as sub-adviser to both Acquired
Funds and both Acquiring Funds. The day-to-day operations of each Acquiring
Fund are handled by the same portfolio management committee at Columbus Circle
as those of the corresponding Acquired Fund. Furthermore, as explained further
below under "Comparison of Investment Objectives, Policies and Restrictions",
each Acquiring Fund is managed in a substantially similar manner to the
corresponding Acquired Fund.
As a result of each proposed transaction, each Acquired Fund will receive a
number of Institutional Class and Administrative Class shares of the relevant
Acquiring Fund equal in value to the value of the net assets of the Acquired
Fund being transferred and attributable to the Institutional Class and
Administrative Class shares, respectively, of the Acquired Fund.
-4-
<PAGE>
Following the transfer, (i) each Institutional Class and Administrative Class
shareholder of the relevant Acquired Fund will receive, on a tax-free basis, a
number of full and fractional Institutional Class or Administrative Class Merger
Shares of the relevant Acquiring Fund equal in value to the aggregate value of
the shareholder's Institutional Class or Administrative Class Acquired Fund
shares, as the case may be, and (ii) the Acquired Funds shall be liquidated.
Each Fund offers two classes of shares pursuant to this Prospectus: the
"Institutional Class" and the "Administrative Class," both of which are intended
primarily for institutional investors. Shares of each Class are offered for
investments of a minimum of [$5 million]. They may also be offered to clients of
Columbus Circle Investors and its affiliates. Shares of the Institutional Class
are offered primarily for direct investment by investors such as pension and
profit sharing plans, employee benefit trusts, endowments, foundations,
corporations, and other institutions. Shares of the Administrative Class are
offered primarily through employee benefit plan alliances and pay service fees
to such entities for services they provide to shareholders of that class.
Pension and profit-sharing plans, employee benefit trusts and employee benefit
plan alliances and "wrap account" programs established with broker-dealers of
financial intermediaries may purchase shares of either class only if the plan or
program for which the shares are being acquired will maintain an omnibus or
pooled account for each Fund and will not require a Fund to pay any type of
administrative payment per participant account to any third party.
Administrative Class shares directly or indirectly pay service fees, in the
amount of up to 0.25% per annum, to such entities for services they provide to
shareholders of that class. Shares of the Institutional and Administrative
Classes of the Acquiring Funds will be offered for sale at the relevant next
determined net asset value for that class with no sales charge, and are not
subject to any contingent deferred sales charge ("CDSC"). Neither the PAF Funds
nor the Acquiring Funds have previously offered Institutional Class or
Administrative Class shares, but the Acquiring Funds will begin offering such
shares to the classes of purchasers listed above at or before the time that the
Mergers are consummated.
The Trustees of the Trust unanimously recommend that shareholders of each
Acquired Fund approve the Merger for such Fund because it offers shareholders
the opportunity to pursue a substantially similar investment program in a larger
fund, which should offer opportunities for greater diversification of risk;
because the Mergers and the general restructuring of which they are a part will
offer broader exchange privileges; and because the Mergers will immediately
result in Fund operating expenses under the Acquiring Funds' fee structure
described below at lower levels than have historically been experienced. See
"Background and Reasons for the Proposed Mergers."
-5-
<PAGE>
Operating Expenses
The Trust's "unified" fee structure will, if approved by the PAF Funds'
shareholders (which approval is a condition to each Merger), apply to the
Acquiring Funds as well as to the Acquired Funds. Under the unified fee, both
the Acquiring Funds and the Acquired Funds pay an advisory fee, computed as a
percentage of Fund net assets, to their adviser, PIMCO Advisors. The advisory
fee paid by each Fund covers portfolio management only. Under the unified fee,
each Fund also pays a single administrative fee, computed as a percentage of
Fund net assets, to its administrator (currently Pacific Investment Management
Company ("PIMCO") and expected to become PIMCO Advisors at or about the time of
the Mergers), which bears the costs of various services reasonably necessary for
the ordinary operation of the Fund such as audit, custodial, portfolio
accounting, legal, transfer agency and printing costs, as well as itself
providing administrative services to the Fund, in exchange for the
administrative fee. The result is an expense level for each Acquiring Fund that
is precise and predictable under ordinary circumstances. Furthermore investors
in the Acquired Funds are insulated from price increases in third-party services
and from increased expense ratios arising from a decline in net assets because
the administrator, rather than the Acquiring Fund, bears these risks for a
period of at least one year. Administrative fee arrangements for the Funds are
discussed further in the "Administrative Arrangements" subsection on page ___.
For information about the expenses associated with the Mergers, see
"Background and Reasons for the Proposed Mergers."
As the following tables demonstrate, each Merger would result in
shareholders receiving an immediate and significant reduction in the level of
Fund expenses borne by such shareholders compared to historical periods. These
tables summarize, for Institutional Class and Administrative Class shares,
expenses (i) that each Acquired Fund incurred in its fiscal year ended June 30,
1996, and (ii) that each Acquiring Fund would have incurred in its most recent
fiscal year after giving effect to the proposed Merger on a pro forma combined
basis as if the Merger had occurred as of the beginning of the Acquiring Fund's
most recent fiscal year. The tables are provided to help you understand an
investor's share of the operating expenses which each Fund incurs. The examples
show the estimated cumulative expenses attributable to a hypothetical $1,000
investment in each Acquired Fund, and each Acquiring Fund on a pro forma basis,
over specified periods.
-6-
<PAGE>
<TABLE>
<CAPTION>
Historical Expenses
Core Fund Pro Forma
(for fiscal year Expenses
ended June 30, 1996) Growth Fund
==================================
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
(each class)
Sales Load Imposed on Purchases None None
Sales Load Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
----------------------------------
ANNUAL FUND OPERATING EXPENSES (as a
percentage of average net assets)
Institutional Class Shares
Advisory Fee 0.57% 0.50%
Administrative Fee 0.25% 0.25%
Other Expenses -- (1)
----------------------------------
Total Expenses 0.82% 0.75%
Administrative Class Shares
Advisory Fee 0.57% 0.50%
Administrative Fee 0.25% 0.25%
Service Fee 0.25% 0.25%
Other Expenses -- (1)
----------------------------------
Total Expenses 1.07% 1.00%
Historical Expenses
Mid Cap Fund Pro Forma
(for fiscal year Expenses
ended June 30, 1996) Target Fund
==================================
SHAREHOLDER TRANSACTION EXPENSES
(each class)
Sales Load Imposed on Purchases None None
Sales Load Imposed on Reinvested Dividends None None
Redemption Fee None None
Exchange Fee None None
----------------------------------
ANNUAL FUND OPERATING EXPENSES (as a
percentage of average net assets)
Institutional Class Shares
Advisory Fee 0.63% 0.55%
Administrative Fee 0.25% 0.25%
Other Expenses -- (1)
----------------------------------
Total Expenses 0.88% 0.80%
Administrative Class Shares
Advisory Fee 0.63% 0.55%
Administrative Fee 0.25% 0.25%
Service Fee 0.25% 0.25%
Other Expenses -- (1)
----------------------------------
Total Expenses 1.13% 1.05%
</TABLE>
(1) The Fund will incur certain expenses as identified in the section of this
Prospectus/Proxy Statement titled "Administrative Arrangements," but these
expenses are not currently expected to exceed .01%.
-7-
<PAGE>
Examples of Fund Expenses:
An investment of $1,000 would incur the following expenses, assuming
(1) 5% annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
1 3 5 10
year years years years
----- ----- ----- -----
<S> <C> <C> <C> <C>
Institutional Class shares:
Core Fund.................... $ 8 $26 $46 $101
Growth Fund (Pro Forma)...... $ 8 $24 $42 $ 93
Mid Cap Fund................. $ 9 $28 $49 $108
Target Fund (Pro Forma)...... $ 9 $27 $47 $105
Administrative Class shares:
Core Fund.................... $11 $34 $59 $131
Growth Fund (Pro Forma)...... $10 $32 $55 $122
Mid Cap Fund................. $12 $36 $62 $137
Target Fund (Pro Forma)...... $11 $33 $58 $128
</TABLE>
The above examples should not be considered a representation of past
or future expenses or performance. Actual expenses may be greater or less than
those shown. Federal regulations require the examples to assume a 5% annual
return, but actual annual return will vary.
Federal Income Tax Consequences
For federal income tax purposes no gain or loss will be recognized by
an Acquired Fund or its shareholders as a result of the Merger, and the tax
basis of the Merger Shares received by each Acquired Fund shareholder will be
the same as the tax basis of the shareholder's Acquired Fund shares. See
"Information about the Mergers - Federal Income Tax Consequences."
-8-
<PAGE>
Comparison of Investment Objectives, Policies and Restrictions
Each Acquiring Fund has investment objectives, policies and
restrictions that are substantially similar to those of the corresponding
Acquired Fund. The investment objectives, policies and restrictions of the
Acquired Funds and the Acquiring Funds, and certain differences between them,
are summarized below. For a more detailed description of the investment
techniques used by the Acquired Funds and the Acquiring Funds, please see the
accompanying Trust Prospectus and the PAF Prospectus, respectively.
Core Fund vs. Growth Fund
- -------------------------
The investment objective of the Growth Fund is long-term growth of
capital, with income as an incidental consideration. The Fund invests primarily
(normally at least 65% of its assets) in common stocks of companies that have
medium to large equity capitalizations. The Fund may also invest in convertible
securities and, for temporary defensive purposes, in money market instruments.
The investment objective of the Core Fund is long-term growth of
capital, with income as a secondary objective. In pursuing these objectives,
the Fund attempts to exceed the total return performance of the S&P 500 over a
reasonable measurement period. The Fund usually invests at least 65% of its
assets in approximately 40 to 50 common stocks of companies with market
capitalizations in excess of $3 billion. The Fund may also invest in
convertible securities, preferred stock, warrants subject to certain
limitations, American Depository Receipts ("ADRs"), European Depository Receipts
("EDRs") and Global Depository Receipts ("GDRs").
Both Funds may invest up to 15% of their net assets in the securities
of foreign issuers traded principally in securities markets outside of the
United States. However, the Growth Fund may also invest without limit in
securities of foreign issuers that are traded in U.S. securities markets.
Both Funds may purchase and sell call and put options on securities,
securities indices and foreign currencies; engage in transactions in foreign
currencies, foreign currency options, forward foreign currency contracts,
futures contracts and options on futures contracts; lend their portfolio
securities to brokers, dealers and other financial institutions; purchase
warrants subject to certain restrictions; and enter into repurchase and reverse
repurchase agreements. Each Fund can also invest up to 15% of its net assets in
illiquid securities. Both Funds may also make short sales "against the box."
Mid Cap Fund vs. Target Fund
- ----------------------------
The investment objective of the Target Fund is capital appreciation,
with no consideration given to income. The Fund invests primarily (normally at
least 65% of its
-9-
<PAGE>
assets) in common stocks of companies with medium equity capitalizations. The
Fund may also invest in convertible securities and, for temporary defensive
purposes, in money market instruments.
The investment objective of the Mid Cap Fund is long-term growth of
capital. In pursuing these objectives, the Fund usually invests at least 65% of
its assets in approximately 40 to 60 common stocks of companies with market
capitalizations between $800 million and $3 billion. The Fund may also invest
in convertible securities, preferred stock, warrants subject to certain
limitations, ADRs, EDRs and GDRs.
Both Funds may invest up to 15% of their net assets in the securities
of foreign issuers traded principally in securities markets outside of the
United States. The Target Fund, unlike the Mid Cap Fund, may also invest
without limit in securities of foreign issuers that are traded in U.S.
securities markets.
Both Funds may purchase and sell call and put options on securities,
securities indices and on foreign currencies; engage in transactions in foreign
currencies, foreign currency options, forward foreign currency contracts,
futures contracts and options on futures contracts; lend their portfolio
securities to brokers, dealers and other financial institutions; purchase
warrants subject to certain restrictions; and enter into repurchase and reverse
repurchase agreements. The two Funds can also invest up to 15% of their net
assets in illiquid securities. Both Funds may also make short sales "against the
box."
Comparison of Distribution Policies and Purchase, Exchange and Redemption
Procedures
Each Acquired Fund and each Acquiring Fund declares and pays dividends
annually and distributes any net realized capital gains annually.
The Acquired Funds and the Acquiring Funds have substantially the same
procedures for purchasing shares. Each Fund offers two classes of shares -
Institutional Class and Administrative Class shares. Institutional Class shares
are offered directly to certain types of institutional investors and high net
worth individuals. Shares of the Administrative Class are offered primarily to
the same types of investors to which the Institutional Class is offered, but use
brokers, retirement plan administrators and other financial intermediaries to
facilitate investment in the Trust. Administrative Class shares directly or
indirectly pay service fees to these financial intermediaries for the services
they provide to shareholders of that class. Shares of the Institutional Class
and the Administrative Class of the Funds can be purchased at their next-
determined net asset value without sales charge. The minimum initial investment
for shares of either class is $200,000. Shares of each class can be obtained
(i) by wiring federal funds to Investors Fiduciary Trust Company (the "Transfer
Agent") or (ii) without wiring federal funds if the proceeds of the investment
are derived from an advisory account maintained by the investor with PIMCO
Advisors or one of its affiliates; from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Mutual Life
-10-
<PAGE>
Insurance Company; or from an investment by brokers-dealers, institutional
clients or other financial intermediaries which have established a shareholder
servicing relationship with the Trust on behalf of their customers.
Shares of each Acquired Fund and each Acquiring Fund can be exchanged
for shares of the same class of any other fund offered by the Trust. Shares may
also be exchanged for shares of the same class of any fund offered by PIMCO
Funds (the "PIMS Trust"), a series investment company affiliated with the Trust
that currently offers 18 mostly fixed-income mutual funds.
Redemption procedures for the Acquired Funds and the Acquiring Funds
are substantially identical. Shares of a Fund may be redeemed without cost at
their net asset value next determined after receipt of the redemption request on
any day the New York Stock Exchange is open. Shares can be redeemed from either
the Trust or the Transfer Agent, by mail, by telephone or by other means of wire
communication.
RISK FACTORS
Because each Acquiring Fund shares similar investment objectives and
policies with the corresponding Acquired Fund, as well as the corresponding PAF
Fund, many of the risks of an investment in the Acquiring Fund are substantially
similar to the risks of an investment in the corresponding Acquired Fund or the
corresponding PAF Fund. Certain risks associated with an investment in the
Acquiring Funds are summarized below. A more detailed description of certain of
the risks associated with an investment in the Acquiring Funds may be found by
referring to the risks associated with an investment in the PAF Funds and the
Acquired Funds which are set forth, respectively, in the accompanying PAF
Prospectus under the caption "Description and Risks of Fund Investments" and the
accompanying Trust Prospectus under the caption "Characteristics and Risks of
Securities and Investment Techniques."
The values of all securities and other instruments held by the
Acquiring Funds vary from time to time in response to a wide variety of market
factors. Consequently, the net asset value per share of the Acquiring Funds
will vary. The net asset value per share of an Acquiring Fund may be less at
the time of redemption than it was at the time of investment.
It is the policy of the Acquired Funds to be as fully invested as
practicable in equity securities at all times. This policy precludes the
Acquired Funds from investing in money market securities as a defensive
investment posture (unlike the Acquiring Funds, which may invest defensively
when conditions warrant), although the Acquired Funds can invest in such
securities to provide for payment of expenses and to meet redemption requests.
Accordingly, investors in the Acquiring Funds may be exposed to less risk
associated with general declines in the prices of equity securities if or when
the Acquiring Fund invests defensively.
-11-
<PAGE>
Conversely, investors in the Acquiring Funds may not participate fully in
general increases in the prices of equity securities when a Fund has taken a
defensive position.
Companies with Small and Medium Equity Capitalizations. The Target
Fund, like the Mid Cap Fund, may invest in common stock of companies with small
and medium capitalizations. Some of the risks associated with such investments
are greater sensitivity to market movements than larger, more seasoned and
established companies; limited product lines, markets or financial resources;
and potential dependence upon a limited management group. The Growth Fund, like
the Core Fund, may invest in securities of companies with medium capitalization.
These securities share some of the risks associated with those of small
capitalization companies, but tend to be more liquid and less volatile than
those of small equity capitalization issuers.
Foreign Investments. The Acquiring Funds, like the Acquired Funds, may
invest in securities of foreign issuers, which may be subject to additional risk
factors, including foreign currency and political risks, not applicable to
securities of U.S. issuers. Some of the risks of investing in foreign
securities include adverse changes in foreign currency exchange rates and
restrictions, liquidity risks, tax liability, and risks of adverse political and
economic developments.
Other Foreign Currency Transactions. The Acquiring Funds, like the
Acquired Funds, are subject to the risk in foreign currency transactions that
currency exchange rates may fluctuate significantly and unpredictably over a
short period of time.
Derivative Instruments. The Acquiring Funds, like the Acquired Funds,
may use derivative instruments, consisting of futures, options, options on
futures and swap contracts, for hedging purposes or as part of their investment
strategies. Use of these instruments may involve certain costs and risks,
including the risk that the Fund could not close out a position when it would be
most advantageous to do so due to an illiquid market, the risk of an imperfect
correlation between the value of the securities being hedged and the value of
the particular derivative instrument, the risk of bankruptcy or default of
counterparties, and the risk that unexpected changes in interest rates or other
market movements may adversely affect the value of the Fund's investments in
particular derivative instruments.
Loans of Portfolio Securities. The Acquiring Funds and the Acquired
Funds may incur similar risks in lending their securities to broker-dealers if
they exercise their right to lend securities. These risks include the risk of
loss of rights in the collateral or delay in recovery of the collateral if the
borrower fails financially.
Short Sales. Short sales expose the Funds to the risk that they will
be required to purchase securities to cover their short positions at a time when
the securities have appreciated in value, thus resulting in a loss to a Fund.
-12-
<PAGE>
Forward Commitments, When-Issued and Delayed Delivery Transactions.
Engaging in delayed delivery, when-issued and forward commitment transactions
pose similar risks for both the Acquiring Funds and the Acquired Funds. These
transactions involve the risk of loss if the value of the securities declines
prior to the settlement date, which risk is in addition to the risk of decline
in the value of the Fund's other assets. In addition, no income accrues to the
purchaser of the securities prior to delivery.
Repurchase Agreements. Investing in repurchase agreements subjects
the Acquiring Funds, like the Acquired Funds, to the risk that the default or
bankruptcy of the seller of the repurchase agreement could subject the Fund to
expenses, delays and risk of loss on the securities. The Acquiring and Acquired
Funds, however, currently treat their investments in repurchase agreements
maturing in more than seven days as illiquid securities and limit those
investments accordingly. See "Illiquid Securities" below.
Reverse Repurchase Agreements and Other Borrowings. Reverse
repurchase agreements and borrowings subject the Acquiring Funds and the
Acquired Funds to the risk that changes in the value of the Fund's portfolio
securities may amplify changes in the Fund's net asset value per share and also
may cause the Fund to liquidate portfolio positions when it would not be
advantageous to do so. Each Acquired Fund subjects reverse repurchase
agreements to the Fund's overall borrowing limits.
Illiquid Securities. The Acquiring Funds and the Acquired Funds share
similar risks from investing in illiquid securities - specifically, higher
transaction costs. The Funds limit their investment in illiquid securities to
no more than 15% of their net assets.
SPECIAL MEETING OF SHAREHOLDERS
This Prospectus/Proxy Statement is furnished in connection with a
Special Meeting of Shareholders to be held on December __, 1996 or at such later
time made necessary by adjournment (the "Meeting") and the solicitation of
proxies by and on behalf of the Trustees of the Trust for use at the Meeting.
The Meeting is being held to consider the proposed Mergers of each Acquired Fund
with the corresponding Acquiring Fund by the transfer of all of the Acquired
Fund's assets and liabilities to the Acquiring Fund. This Prospectus/Proxy
Statement and the enclosed form of proxy are being mailed to shareholders on or
about October __, 1996.
The Trustees of the Trust know of no matters other than those set
forth herein to be brought before the Meeting. If, however, any other matters
properly come before the Meeting, it is the Trustees' intention that proxies
will be voted on such matters in accordance with the judgment of the persons
named in the enclosed form of proxy.
-13-
<PAGE>
PROPOSALS 1 AND 2:
APPROVAL OR DISAPPROVAL OF AGREEMENT AND PLAN OF
REORGANIZATION
The shareholders of the Core Fund are being asked to approve or
disapprove a Merger between the Core Fund and the Growth Fund (Proposal 1); and
the shareholders of the Mid Cap Fund are being asked to approve or disapprove a
Merger between the Mid Cap Fund and the Target Fund (Proposal 2). Each Merger
is proposed to take place pursuant to an Agreement and Plan of Reorganization
between the Acquired Fund and the Acquiring Fund, dated as of November __, 1996
(the "Agreement"), each of which is in the form attached to this
Prospectus/Proxy Statement as Appendix A.
Each Agreement provides, among other things, for the transfer of all
of the assets of the Acquired Fund to the Acquiring Fund in exchange for (i) the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund
and (ii) the issuance to the Acquired Fund of the Institutional Class and
Administrative Class Merger Shares, the number of which will be calculated based
on the value of the net assets attributable to the Institutional Class and
Administrative Class shares, respectively, of the Acquired Fund acquired by the
Acquiring Fund and the net asset value per Institutional Class and
Administrative Class share of the Acquiring Fund, all as more fully described
below under "Information About the Reorganization."
After receipt of the Merger Shares, the Acquired Fund will cause the
Institutional Class Merger Shares to be distributed to its Institutional Class
shareholders and the Administrative Class Merger Shares to be distributed to its
Administrative Class shareholders, in complete liquidation of the Acquired Fund.
Each shareholder of the Acquired Fund will receive a number of full and
fractional Institutional Class or Administrative Class Merger Shares equal in
value at the date of the exchange to the aggregate value of the shareholder's
Institutional Class or Administrative Class Acquired Fund shares, as the case
may be.
Trustees' Recommendations. The Trustees of the Trust have voted
unanimously to approve each proposed Merger and to recommend that shareholders
of each Acquired Fund also approve the Merger for such Fund.
Required Shareholder Vote. Approval of each proposed Merger for each
Acquired Fund will require the affirmative vote of the lesser of (A) 67% or more
of the Institutional Class and Administrative Class shares of the relevant
Acquired Fund present or represented by proxy at the Meeting, if the holders of
more than 50% of the outstanding Institutional Class and Administrative Class
shares are present or represented by proxy at the Meeting, or (B) more than 50%
of the outstanding Institutional Class and Administrative Class shares of the
relevant Acquired Fund.
-14-
<PAGE>
A shareholder of an Acquired Fund objecting to the proposed Merger is
not entitled under either Massachusetts law or the Trust's Agreement and
Declaration of Trust (the "Declaration of Trust") to demand payment for and an
appraisal of his, her or its Acquired Fund shares if the Merger is consummated
over his, her or its objection. Shareholders may, however, redeem their shares
at any time prior to the Merger and if the Merger is consummated, shareholders
will still be free at any time to redeem their merger Shares, for cash at net
asset value at the time of such redemption, or to exchange their Merger Shares
for shares of the same class of certain other funds offered by the Trust or
PIMCO Funds, at net asset value at the time of such exchange. See "Exchange
Privilege" in the Trust Prospectus.
Each proposed Merger is subject to both the approval of the
shareholders of the relevant Acquired Fund and the approval by the shareholders
of the corresponding PAF Fund of both (i) the reorganization of the PAF Fund
into the corresponding Acquiring Fund, and (ii) the Trust's "unified fee"
structure, both of which are conditions to the consummation of each Merger. A
meeting of shareholders of the PAF Funds will be held on or about December __,
1996 to vote on the approval of the reorganization of the PAF Funds as the
Acquiring Funds and the approval of the unified fee structure. In the event
that such reorganization or unified fee structure is not approved by the
shareholders of a PAF Fund or a Merger is not approved by the shareholders of
the Acquired Fund, the Acquired Fund will continue to be managed as a separate
series of the Trust in accordance with its current investment objective and
policies, and the Trust's Trustees may consider such alternatives as may be in
the best interests of shareholders.
Background and Reasons for the Proposed Mergers
The Trustees of the Trust, including the Trustees who are not
"interested persons" of the Trust (the "Independent Trustees"), have determined
that each Merger would be in the best interests of the relevant Acquired Fund
and the corresponding Acquiring Fund, and that the interests of the Acquired
Fund's shareholders and the Acquiring Fund's shareholders (including the PAF
Fund shareholders who become Acquiring Fund shareholders as a result of the
reorganization of the PAF Fund as the Acquiring Fund) would not be diluted as a
result of effecting the Merger. The Trustees have unanimously approved each
proposed Merger and have recommended its approval by shareholders. In addition
to the reasons for recommending the Mergers described below, the Trustees took
into account the fact that the Acquired Funds (and, indirectly, the Acquiring
Funds) will be bearing a portion of the expenses associated with the Mergers,
including those described under "Information about the Mergers." The Trustees
also considered the unrealized capital appreciation in each Acquiring Fund and
the unrealized capital appreciation in the corresponding Acquired Fund, in each
case as a percentage of the Fund's total net assets. Those percentages as of
June 30, 1996 were as follows:
-15-
<PAGE>
Unrealized Capital Appreciation
(as a percentage of total net assets)
Name of Fund on June 30, 1996
- ------------ -------------------------------------
Growth Fund 14.8%
Core Fund 9.4%
Target Fund 20.7%
Mid Cap Fund 22.8%
The principal reasons why the Trustees are recommending the Mergers,
and the overall restructuring of the PIMCO Mutual Funds of which the Mergers are
a part, are as follows:
(i) Economies of scale at Fund level. The Trustees have determined
that it is in the best interests of each Acquired Fund's shareholders to combine
the Acquired Fund with the corresponding Acquiring Fund (which will have
succeeded to the assets of the PAF Fund) in order to increase the asset base
over which the Acquired Fund's expenses will be spread, which, in part has
allowed the Trustees to approve agreements that provide total fees at more
favorable rates. As described more fully in the Overview under "Operating
Expenses," fees for each Acquired Fund will decline immediately following the
Mergers. Of course, there can be no assurance that the Mergers will continue to
result in savings in operating expenses to shareholders.
(ii) Unified Fee Structure. Pursuant to the Trust's unified fee
structure, Acquired Fund shareholders will continue to enjoy the benefits of a
level of Fund expenses that is, under ordinary circumstances, precise and
predictable. Acquired Fund shareholders will also continue to be insulated from
price increases in third-party services and from associated increased expense
ratios arising from a decline in net assets. However, there can be no assurance
that the Mergers will continue to result in savings in operating expenses to
shareholders. Information on each Fund's operating expenses is set out above in
the Overview under "Expenses."
(iii) Appropriate investment objectives, diversification, etc. The
investment objective, policies, and restrictions of each Acquiring Fund are
substantially similar to those of the corresponding Acquired Fund, and the
Trustees believe that an investment in shares of the Acquiring Fund will provide
shareholders with an investment opportunity comparable to that currently
afforded by the Acquired Fund, with the potential for reduced investment risk
because of the opportunities for additional diversification of portfolio
investments through increased Fund assets.
(iv) Continued investment in a mutual fund without recognition of
gain or loss for federal income tax purposes. The proposed reorganization will
permit Acquired Fund shareholders to keep their investment in an open-end mutual
fund, without recognition of gain
-16-
<PAGE>
or loss for federal income tax purposes. If the Acquired Funds were to
liquidate and shareholders were to receive the net asset value of their shares
in liquidating distributions, gain or loss would be recognized for federal
income tax purposes.
(v) Larger, more integrated fund complex. The restructuring of the
PIMCO Mutual Funds (which is subject to satisfaction of a number of conditions,
including shareholder approval of the Mergers) should reduce confusion for
shareholders between funds with similar names and/or investment objectives. It
will also give shareholders broader exchange privileges among Funds. The
restructuring may also allow the expansion of institutional and retail
distribution channels.
Information About the Mergers
Agreement and Plan of Reorganization. Each proposed Agreement and
Plan of Reorganization provides that the relevant Acquiring Fund will acquire
all of the assets of the corresponding Acquired Fund in exchange for the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund
and for the issuance of the Institutional Class and Administrative Class Merger
Shares, all as of the Exchange Date (defined in each Agreement to be January __,
1997 or such other date as may be agreed upon by the Acquiring Fund and the
Acquired Fund). The following discussion of the Agreements is qualified in its
entirety by the full text of each Agreement, the form of which is attached as
Appendix A to this Prospectus/Proxy Statement.
Each Acquired Fund will sell all of its assets to the corresponding
Acquiring Fund, and, in exchange, the Acquiring Fund will assume all of the
liabilities of the Acquired Fund and deliver to the Acquired Fund (i) a number
of full and fractional Institutional Class Merger Shares having an aggregate net
asset value equal to the value of the assets of the Acquired Fund attributable
to its Institutional Class shares, less the value of the liabilities of the
Acquired Fund assumed by the Acquiring Fund attributable to the Institutional
Class shares of the Acquired Fund, and (ii) a number of full and fractional
Administrative Class Merger Shares having a net asset value equal to the value
of assets of the Acquired Fund attributable to its Administrative Class shares,
less the value of the liabilities of the Acquired Fund assumed by the Acquiring
Fund attributable to the Administrative Class shares of the Acquired Fund.
Immediately following the Exchange Date, each Acquired Fund will
distribute pro rata to its shareholders of record as of the close of business on
the Exchange Date the full and fractional Merger Shares received by the Acquired
Fund, with Institutional Class Merger Shares being distributed to holders of
Institutional Class shares of the Acquired Fund and Administrative Class Merger
Shares being distributed to holders of Administrative Class shares of the
Acquired Fund. As a result of the proposed transaction, each holder of
Institutional Class and Administrative Class shares of the Acquired Fund will
receive a number of Institutional Class and Administrative Class Merger Shares
equal in aggregate value at the Exchange Date to the value of the Institutional
Class and Administrative Class shares,
-17-
<PAGE>
respectively, of the Acquired Fund held by the shareholder. This distribution
will be accomplished by the establishment of accounts on the share records of
the corresponding Acquiring Fund in the names of the Acquired Fund shareholders,
each account representing the respective number of full and fractional
Institutional Class or Administrative Class Merger Shares due such shareholder.
New certificates for Merger Shares will not be issued. Shareholders of the
Acquired Funds holding certificates for shares will be sent instructions on how
they will be able to exchange those certificates for certificates representing
shares of the Acquiring Funds.
The consummation of each Merger is subject to the conditions set forth
in the Agreement, any of which may be waived, which conditions include, among
others, the approval of the PFEAS Shareholders of (a) a Second Amended and
Restated Declaration of Trust, as described below in "Declaration of Trust", and
(b) the election of the Trustees of the PAF Trust to the Trust's Board of
Trustees. The Agreement may be terminated and the Merger abandoned at any time,
before or after approval by the shareholders of each Fund, prior to the Exchange
Date, by mutual consent of the relevant Funds or, if any condition set forth in
the Agreement has not been fulfilled and has not been waived by the party
entitled to its benefits, by such party.
All legal and accounting fees and expenses, printing and other fees
and expenses (other than portfolio transfer taxes (if any), brokerage and other
similar expenses, all of which will be borne by the relevant Fund) incurred in
connection with the consummation of the transactions contemplated by the
Agreement will be allocated in accordance with the following: First, the costs
of the overall restructuring of the PIMCO Mutual Funds referred to in the
Overview under " Proposed Transactions," including the costs of the Mergers and
this Prospectus/Proxy Statement, are being preliminarily allocated on a basis
approved by the Trustees, including the Independent Trustees, of the PFEAS
Trust. PIMCO Advisors will bear any and all expenses preliminarily allocated to
the Acquiring Fund and PIMCO Advisors will also bear any and all expenses
allocated to the Acquired Fund to the extent that they would otherwise exceed
the respective expense caps (the "Relevant Expense Caps") set forth below. The
Acquired Funds have agreed to pay the expenses preliminarily allocated to them
but not, however, in an amount exceeding the Relevant Expense Caps. The
Relevant Expense Caps represent a percentage (approximately 50%) of the
projected aggregate savings for shareholders of the Acquired Funds for the first
year following the Mergers. The currently estimated expenses to be borne by the
Funds and the Relevant Expense Caps are as follows:
<TABLE>
<CAPTION>
Name of Fund Current Expense Estimate Relevant Expense Cap
------------ ------------------------ --------------------
<S> <C> <C>
Core Fund $20,000 $20,000
Mid Cap Fund $20,000 $20,000
</TABLE>
Notwithstanding any of the foregoing, expenses will in any event be paid by the
party directly incurring such expenses if and to the extent that the payment by
any other party of such
-18-
<PAGE>
expenses would result in the disqualification of the first party as a "regulated
investment company" within the meaning of Section 851 of the Code.
Description of the Merger Shares. Full and fractional Merger Shares
will be issued to each Acquired Fund's shareholders in accordance with the
procedure under the Agreement as described above. The Merger Shares are
Institutional Class and Administrative Class shares of the Acquiring Fund, which
have identical characteristics to those of the corresponding class of Acquired
Fund shares with respect to sales charges, administrative fees and service fees.
Institutional Class and Administrative Class shares are sold at net asset value,
without a sales charge, and are not subject to any CDSC or 12b-1 fees. The
Institutional and Administrative classes pay an administrative fee at the annual
rate of up to 0.25% of its average daily net assets. Administrative Class
shares pay in addition a service fee at the annual rate of 0.25% of its average
daily net assets. These arrangements are identical to those currently in effect
for the Acquired Funds, as described in the Trust Prospectus at pages [_____].
Administrative Arrangements. PIMCO currently serves (and PIMCO
Advisors from and after the Mergers will serve) as administrator to the
Acquiring Funds pursuant to an administration agreement. The administrator will
provide administrative services to the Acquiring Funds, which includes clerical
help and accounting, bookkeeping, internal audit services, and certain other
services required by the Acquiring Funds, preparation of reports to the
Acquiring Funds' shareholders and regulatory filings. In addition, the
administrator, at its own expense, will arrange for the provision of legal,
audit, custody, portfolio accounting, transfer agency and other ordinary
services for the Acquiring Funds, and will be responsible for the costs of
registration of the Acquiring Funds' shares and the printing of prospectuses and
shareholder reports for current shareholders. For such services, each Acquiring
Fund pays the administrator an administrative fee at the annual rate of 0.25% of
the average daily net assets attributable to each Fund's Institutional and
Administrative Class shares.
Certain expenses of the Acquiring Funds are not borne by the
administrator. The Acquiring Funds are responsible for the following expenses:
(i) salaries and other compensation of any of the Trust's executive officers and
employees who are not officers, directors, stockholders, or employees of PIMCO
Advisors, PIMCO, or their subsidiaries or affiliates; (ii) taxes and
governmental fees; (iii) brokerage fees and commissions and other portfolio
transaction expenses; (iv) the costs of borrowing money, including interest
expenses; (v) fees and expenses of the Trustees who are not "interested persons"
of the Trust, the Adviser, PIMCO, the sub-advisers ("Portfolio Managers") to the
funds in the Trust, and any counsel retained exclusively for their benefit; (vi)
extraordinary expenses, including costs of litigation and indemnification
expenses; (vii) expenses which are capitalized in accordance with generally
accepted accounting principles; and (viii) any expenses allocated or allocable
to a specific class of shares, which include distribution and/or service fees
payable with respect to Institutional and Administrative Class shares and may
include certain other expenses as permitted by the Trust's Amended and Restated
Multi-Class Plan adopted pursuant to Rule
-19-
<PAGE>
18f-3 under the Investment Company Act of 1940, as amended (the "1940 Act") and
subject to review and approval by the Trustees.
Declaration of Trust. Each of the Merger Shares will be fully paid
and nonassessable by the Trust when issued, will be transferable without
restriction, and will have no preemptive or conversion rights. The Trust's
Declaration of Trust permits the Trust to divide its shares, without shareholder
approval, into two or more series of shares representing separate investment
portfolios and to further divide any such series, without shareholder approval,
into two or more classes of shares having such preferences and special or
relative rights and privileges as the Trustees may determine. Each Acquiring
Fund's shares are currently divided into five classes: the Institutional Class,
the Administrative Class, Class A, Class B and Class C.
Under Massachusetts law, shareholders of a Massachusetts business
trust could, under certain circumstances, be held personally liable for the
obligations of the trust. However, the Declaration of Trust disclaims
shareholder liability for acts or obligations of the Trust and/or the Acquiring
Funds and requires that notice of such disclaimer be given in each agreement,
undertaking, or obligation entered into or executed by the Trust, the Acquiring
Funds or the Trustees. The Declaration of Trust provides for indemnification
out of Acquiring Fund property for all loss and expense of any shareholder held
personally liable for the obligations of the Acquiring Fund. Thus, the risk of
a shareholder's incurring financial loss from shareholder liability is limited
to circumstances in which the Acquiring Fund would be unable to meet its
obligations. The likelihood of such a circumstance is considered remote. The
shareholders of the Acquired Fund are currently subject to this same risk of
shareholder liability, under Massachusetts law and the Declaration of Trust.
As part of the overall restructuring of the PIMCO Mutual Funds (of
which the proposed Mergers are a part), the Trust's Trustees have adopted and
have proposed to the Trust's shareholders (including shareholders of the
Acquired Funds) that they approve, a Second Amended and Restated Declaration of
Trust (the "Proposed Declaration of Trust"), which would take the place of the
Declaration of Trust. In all material respects, the provisions of the Trust's
Declaration of Trust described in the preceding paragraph are the same as the
corresponding provisions in the Proposed Declaration of Trust. If the Proposed
Declaration of Trust is approved by the Trust's shareholders, it will become
effective on or about the time of the effectiveness of the proposed Merger. The
Trust's shareholders will vote on the approval of the Proposed Declaration of
Trust on or about December __, 1996. You should have received, or will soon
receive, a Proxy Statement in respect of this proposal. Please refer to such
Proxy Statement for more information about, and a detailed comparison between,
the Declaration of Trust and the Proposed Declaration of Trust. Approval of the
Proposed Declaration of Trust is a condition to the consummation of the proposed
Mergers. Thus, the Merger Shares may be governed by the provisions of either
the Declaration of Trust or the Proposed Declaration of Trust, depending on
whether the Proposed Declaration of Trust is approved.
-20-
<PAGE>
Federal income tax consequences. As a condition to each Acquired
Fund's obligation to consummate the Merger, the Acquired Fund will receive an
opinion from Ropes & Gray, special counsel to the Trust, 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) under Section 361 of the Code, no gain or loss
will be recognized by the Acquired Fund as a result of the reorganization; (ii)
under Section 354 of the Code, 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 of the Acquired Fund; (iii) under Section 358 of
the Code, 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) under Section 1223(1) of the
Code, 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. The opinion will
be based on certain factual certifications made by officers of the Trust and
will also be based on customary assumptions.
Prior to the date of the Exchange Date, each Acquired Fund will
declare a distribution to shareholders which, together with all previous
distributions, will have the effect of distributing to shareholders all of its
investment company taxable income (computed without regard to the deduction for
dividends paid) and net realized capital gains, if any, through the Exchange
Date.
Capitalization. The following tables show the capitalization of each
PAF Fund, each Acquired Fund and each Acquiring Fund as of June 30, 1996 and on
a pro forma basis as of that date, giving effect to (i) the proposed
reorganization of the PAF Fund as the Acquiring Fund, and (ii) the proposed
acquisition by the Acquiring Fund of the assets and liabilities of the Acquired
Fund at net asset value:
-21-
<PAGE>
CAPITALIZATION TABLE
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PAF Growth PFEAS Core Pro Forma
Fund Equity Fund Combined
--------------------------------------------------
<S> <C> <C> <C>
Net assets (000's omitted)
Class A $ 146,719 $ - $ 146,719
Class B 28,735 - 28,735
Class C 1,412,397 - 1,412,397
Institutional Class - 10,452 10,452
Administrative Class - 33,575 33,575
Shares outstanding (000's omitted)
Class A 5,738 - 5,738
Class B 1,171 - 1,171
Class C 57,555 - 57,555
Institutional Class - 771 771
Administrative Class - 2,477 2,477
Net asset value per share
Class A $ 25.57 $ - $ 25.57
Class B 24.54 - 24.54
Class C 24.54 - 24.54
Institutional Class - 13.55 13.55
Administrative Class - 13.56 13.56
</TABLE>
-22-
<PAGE>
CAPITALIZATION TABLE
JUNE 30, 1996
(UNAUDITED)
<TABLE>
<CAPTION>
PFEAS CCI
PAF Target Mid Cap Pro Forma
Fund Equity Fund Combined
---------------------------------------------------------
<S> <C> <C> <C>
Net assets (000's omitted)
Class A $ 157,555 $ - $ 157,555
Class B 36,599 - 36,599
Class C 973,887 - 973,887
Institutional Class - 8,378 8,378
Administrative Class - - -
Shares outstanding (000's omitted)
Class A 9,160 - 9,160
Class B 2,191 - 2,191
Class C 58,320 - 58,320
Institutional Class - 571 571
Administrative Class - - -
Net asset value per share
Class A $ 17.20 $ - $ 17.20
Class B 16.70 - 16.70
Class C 16.70 - 16.70
Institutional Class - 14.66 14.66
Administrative Class - - -
</TABLE>
-23-
<PAGE>
Pro forma financial statements of the Funds as of and for the fiscal
year ended June 30, 1996 are included in the Merger Statement of Additional
Information. Because each Agreement provides that the Acquiring Fund will be
the surviving Fund following the reorganization and because the Acquiring Fund's
investment objective and policies will remain unchanged, the pro forma financial
statements reflect the transfer of the assets and liabilities of the Acquired
Fund to the Acquiring Fund as contemplated by the Agreement. Because the assets
of the Core Fund and the Mid Cap Fund each represent less than 10% of the assets
of their respective Acquiring Funds, pro forma financial statements for the
Acquiring Funds are not provided.
INFORMATION ABOUT THE ACQUIRED FUNDS AND THE ACQUIRING FUNDS
Other information regarding the Acquired Funds, including information
with respect to the Acquired Funds' investment objectives, policies and
restrictions may be found in the enclosed Trust Prospectus and in the Merger
Statement of Additional Information, the Trust Statement of Additional
Information and the Trust Annual Report, which are available upon request by
calling 1-800-927-4648.
The information in the Trust Prospectus regarding each Acquired Fund
(not including the information regarding such Fund's financial history and past
performance) is equally applicable to the corresponding Acquiring Fund, as
supplemented below:
PIMCO Advisors will serve as adviser to each Acquiring Fund (in
addition to all other funds in the Trust) pursuant to an investment advisory
agreement similar to the agreement described in the Trust Prospectus on page(s)
[___]. PIMCO Advisors will retain Columbus Circle as sub-adviser of each
Acquiring Fund. The investment decisions made by Columbus Circle with respect
to each Acquiring Fund will be 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. For providing investment advisory
services to the Growth Fund and the Target Fund, PIMCO Advisors will receive
monthly fees at the annual rates of 0.50% and 0.55%, respectively, of the Fund's
average daily net assets. Pursuant to the Portfolio Management Agreement
between PIMCO Advisors and Columbus Circle, PIMCO Advisors (not the Funds) will
pay Columbus Circle a fee at the annual rates of 0.34% and 0.36%, respectively,
of the Growth Fund's and the Target Fund's average daily net assets.
Certain differences between each Acquiring Fund and the corresponding
Acquired Fund with respect to investment policies, restrictions, risks are
discussed in this Prospectus/Proxy Statement in the Overview under the caption
"Comparison of Investment Objectives, Policies and Restrictions" and the Risk
Factors above.
Proxy materials, reports, proxy and information statements and other
information filed by the Trust with respect to the Acquiring and Acquired Funds
can be inspected and copied at the Public Reference Facilities maintained by the
Securities and Exchange Commission at 450
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<PAGE>
Fifth Street, N.W., Washington, D.C. 20549; 7 World Trade Center, Suite 1300,
New York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549 at prescribed rates.
INFORMATION ABOUT THE PAF FUNDS
Other information relating to the PAF Funds, including information in
respect of their investment objective and policies and financial history, may be
found in the enclosed PAF Prospectus and in the PAF Statement of Additional
Information and the PAF Semi-Annual Report, which are available upon request by
calling 1-800-927-4648. Certain information and commentary from the PAF Semi-
Annual Report relating to the PAF Funds' recent investment performance is set
forth in Appendix B to this Prospectus/Proxy Statement.
Proxy materials, reports, proxy and information statements and other
information filed by the PAF Trust with respect to the PAF Funds can be
inspected and copied at the Public Reference Facilities maintained by the
Securities and Exchange Commission at 450 Fifth Street, N.W., Washington, D.C.
20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material
can also be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates.
VOTING INFORMATION
Record date, quorum and method of tabulation. Shareholders of record
of each Acquired Fund at the close of business on October __, 1996 (the "Record
Date") will be entitled to notice of and to vote at the Meeting or any
adjournment thereof. The holders of more than 30% of each of the Institutional
Class and Administrative Class shares of each Acquired Fund outstanding at the
close of business on the Record Date present in person or represented by proxy
will constitute a quorum for the Meeting with respect to that Fund. Shareholders
are entitled to one vote for each share held, with fractional shares voting
proportionally. Shareholders of each Acquired Fund will vote only on the
approval or disapproval of that Fund's Merger.
Votes cast by proxy or in person at the Meeting will be counted by
persons appointed by the Trust as tellers for the Meeting. The tellers will
count the total number of votes cast "for" approval of the proposal for purposes
of determining whether sufficient affirmative votes have been cast. The tellers
will count shares represented by proxies that reflect abstentions and "broker
non-votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not have the discretionary
voting power on a particular matter) as
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<PAGE>
shares that are present and entitled to vote on the matter for purposes of
determining the presence of a quorum. So long as a quorum is present,
abstentions and broker non-votes have the effect of negative votes on the
proposal.
Shares outstanding and beneficial ownership. As of the Record Date,
as shown on the books of the Trust, there were issued and outstanding the
following number of shares of beneficial interest of each class of each Acquired
Fund:
Institutional Class Administrative Class
------------------- --------------------
Core Fund
Mid Cap Fund
As of the Record Date, the officers and Trustees of the Trust as a
group beneficially owned [less than 1%] of the outstanding shares of each class
of each Acquired Fund. As of the Record Date, to the best of the knowledge of
the Trust, the following persons owned beneficially 5% or more of the
outstanding shares of the indicated classes of the Acquired Funds:
[insert list of 5% shareholders and pro forma ownership of the 5%
shareholders following Mergers]
As of the Record Date, no shares of either of the Acquiring Funds were
issued and outstanding.
Solicitation of proxies. Solicitation of proxies by personal
interview, mail, and telephone, may be made by officers and Trustees of the
Trust and employees of the Adviser and its affiliates. In addition, the firm of
____________ has been retained to assist in the solicitation of proxies. The
costs for solicitation of proxies, like the other costs associated with the
general restructuring of the PIMCO Mutual Funds, will be only partially borne by
the Funds. See "Information About the Mergers."
Revocation of proxies. Any shareholder giving a proxy has the power
to revoke it by mail (addressed to the Trust's Secretary at the principal office
of the Trust at 840 Newport Center Drive, Suite 360, Newport Beach, California
92660) or in person at the Meeting, by executing a superseding proxy, or by
submitting a notice of revocation to the Secretary of the Trust. All properly
executed proxies received in time for the Meeting will be voted as specified in
the proxy, or, if no specification is made, FOR the proposal (set forth in
Proposals 1 and 2 of the Notice of Meeting) to implement the Merger with respect
to the relevant Acquired Fund.
Adjournment. If sufficient votes in favor of either proposal are not
received by the time scheduled for the Meeting, the persons named as proxies may
propose one or more
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<PAGE>
adjournments of the Meeting to permit further solicitation of proxies. Any
adjournment will require the affirmative vote of a plurality of the votes cast
on the question in person or by proxy at the session of the Meeting to be
adjourned. If the Meeting is adjourned only with respect to one proposal, any
other proposal may still be acted upon by the shareholders. The persons named
as proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of the proposal. They will vote against any such
adjournment those proxies required to be voted against the proposal. The
Acquired Funds will pay the costs of any additional solicitation and of any
adjourned session.
October __, 1996
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<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
(PFEAS Growth & Target Funds)
This Agreement and Plan of Reorganization (the "Agreement") is made as
of November __, 1996 in ______, ______, by and between the [Columbus Circle
Investors Core Equity][Columbus Circle Investors Mid-Cap Equity] Fund (the
"Acquired Fund"), a separate series of PIMCO Funds: Equity Advisors Series, a
Massachusetts business trust (the "PFEAS Trust"), and the [Growth][Target] Fund
(the "Acquiring Fund"), a separate series of the PFEAS Trust.
PLAN OF REORGANIZATION
----------------------
(a) Pursuant to an Agreement and Plan of Reorganization dated as of
November __, 1996 by and between the PFEAS Trust, on behalf of the Acquiring
Fund, and PIMCO Advisors Funds, a Massachusetts business trust, on behalf of its
____________ Fund series (the "PAF Fund"), the Acquiring Fund will, subject to
the conditions set forth in such Agreement and Plan of Reorganization, acquire
substantially all of the assets and properties of the PAF Fund in exchange for
which the Acquiring Fund will assume all of the liabilities of the PAF Fund and
will deliver to the PAF Fund Class A, Class B and Class C shares of beneficial
interest of the Acquiring Fund having the same aggregate net asset value as the
outstanding Class A, Class B and Class C shares of the PAF Fund. In connection
with the foregoing, the PAF Fund will distribute its shares in complete
liquidation of the PAF Fund. (The foregoing transaction is hereafter referred to
as the "PAF Reorganization".)
(b) Immediately following the PAF Reorganization, 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 Institutional
Class shares of beneficial interest of the Acquiring Fund (the "Institutional
Class Merger Shares") having an aggregate net asset value equal to the value of
the assets of the Acquired Fund attributable to Institutional Class 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 Institutional Class
shares of the Acquired Fund assumed by the Acquiring Fund on that date and (ii)
a number of full and fractional Administrative Class shares of beneficial
interest of the Acquiring Fund (the "Administrative Class Merger Shares") having
an aggregate net asset value equal to the value of the assets of the Acquired
Fund attributable to Administrative Class 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 Administrative Class shares of the Acquired
Fund assumed by the Acquiring Fund on that date. (The Institutional Class
Merger Shares and
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<PAGE>
the Administrative Class 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").
(c) Upon consummation of the transactions described in paragraph (b)
of this Plan of Reorganization, the Acquired Fund shall distribute in complete
liquidation to its Institutional Class and Administrative Class shareholders of
record as of the Exchange Date Institutional Class and Administrative Class,
each shareholder being entitled to receive that proportion of such Institutional
Class and Administrative Class Merger Shares which the number of Institutional
Class and Administrative Class shares of beneficial interest of the Acquired
Fund held by such shareholder bears to the number of Institutional Class and
Administrative Class 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 canceled on the
books of the Acquired Fund.
(d) 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 PFEAS 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.
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,
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<PAGE>
and such registration has not been revoked or rescinded and is in full force and
effect.
c. [Reserved.]
d. The prospectus and statement of additional information of the PFEAS Trust,
each dated September 15, 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, 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 liabilities to be assumed pursuant to the PAF
Reorganization.
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
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).
A-3
<PAGE>
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 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) 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 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. The Acquiring Fund has [no] shares of beneficial interest issued and
outstanding and all shares of beneficial interest to be issued and
outstanding at the consummation of the transaction contemplated herein will
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 will have 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.
A-4
<PAGE>
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. To the best of its knowledge, all of the 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.
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 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 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 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 PFEAS 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 six months ended June
30, 1996 have been furnished to the Acquiring Fund. Such statement of assets
and liabilities and schedule fairly present the financial position of the
Acquired 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 PFEAS 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
A-5
<PAGE>
PFEAS 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 PFEAS Trust or the Acquired Fund, threatened against
the PFEAS Trust or the Acquired Fund, which assert liability on the part of
the PFEAS 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
PFEAS 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 shown on the Acquired Fund's statement of
assets and liabilities as of June 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 June 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 PFEAS 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.
i. At both the Valuation Time (as defined in Section 3(c)) and the Exchange
Date, the PFEAS Trust, on behalf of the Acquired Fund, will have full right,
power and authority to sell, assign, transfer and deliver the Investments
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
A-6
<PAGE>
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
June 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 meeting referred
to in Section 7(a) 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 or the Acquired Fund Proxy Statement made in reliance
upon and in conformity with information furnished by the Acquiring
Fund for use in the Registration Statement or the Acquired 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 Section 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
A-7
<PAGE>
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 Acquired
Fund shares, nor is there outstanding any security convertible
into any of the Acquired Fund shares.
3. Reorganization.
--------------
a. Subject to the requisite approval of the shareholders of the
Acquired Fund and the consummation of the PAF Reorganization 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)), 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 June 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. Pursuant to 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 Institutional Class and
Administrative Class shares of the Acquired Fund.
A-8
<PAGE>
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 Institutional Class Merger Shares having an
aggregate net asset value equal to the value of the assets of the
Acquired Fund attributable to Institutional Class 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
Institutional Class shares of the Acquired Fund assumed by the
Acquiring Fund on that date, (ii) a number of full and fractional
Administrative Class Merger Shares having an aggregate net asset
value equal to the value of the assets of the Acquired Fund
attributable to Administrative Class 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
Administrative Class 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 shares
of the Acquired Fund, and the value of the liabilities
attributable to the Institutional Class and Administrative Class
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 Institutional Class and Administrative
Class Merger Shares shall be computed in the manner set forth in
the PFEAS Prospectus. The value of the assets and liabilities of
the Institutional Class and Administrative Class shares of the
Acquired Fund shall be determined by the Acquiring Fund, in
cooperation with the Acquired Fund, pursuant to procedures
A-9
<PAGE>
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 two certificates registered in the name of the Acquired
Fund, one representing Institutional Class Merger Shares and one
representing Administrative Class Merger Shares. The Acquired Fund
shall distribute the Institutional Class Merger Shares to the
Institutional Class 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 Institutional Class Acquired Fund shareholder in accordance
with written instructions furnished by the Acquired Fund. The
Acquired Fund shall distribute the Administrative Class Merger
Shares to the Administrative Class 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 Administrative Class 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 the
----------
PFEAS Trust. The Acquired Fund agrees to pay the expenses
preliminarily allocated to it but not, however, in an amount
exceeding $20,000 (the "Relevant Expense Cap"). PIMCO Advisors
L.P., by countersigning this Agreement, agrees that PIMCO
A-10
<PAGE>
Advisors L.P. will bear any and all expenses (1) preliminarily
allocated to Acquiring Fund and (2) preliminarily allocated to the
Acquired Fund to the extent that they would otherwise exceed the
Relevant Expense Cap. Notwithstanding any of the foregoing,
expenses will in 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 [place] at [time] as of [January___, 1997], or at
such other time and date agreed to by the Acquiring
A-11
<PAGE>
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 PFEAS 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
PFEAS 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. [Reserved.]
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. 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.
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 the holders of the outstanding shares of beneficial
interest of the Acquired Fund entitled to vote.
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 PFEAS Trust's President (or any Vice
President) and Treasurer, and a certificate of both such officers,
dated the Exchange Date, that
A-12
<PAGE>
there has been no material adverse change in the financial
position of the Acquired Fund since June 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.
c. That the Acquired Fund shall have furnished to the Acquiring Fund
a statement, dated the Exchange Date, signed by the PFEAS Trust's
President (or any Vice President) and Treasurer certifying that as
of the Valuation Time and as of the Exchange Date all
representations and warranties of the Acquired Fund made in this
Agreement are true and correct in all material respects as if made
at and as of such dates 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 dates.
d. That the Acquired Fund shall have delivered to the Acquiring Fund
a letter from Price Waterhouse LLP 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 June 30, 1996 and the period July 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 June 30,
1996, and for the period from July 1, 1996 to the Exchange Date.
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 Dechert
Price & Rhoads, counsel to the Acquiring 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) this Agreement has been duly authorized,
executed and delivered by the PFEAS Trust on behalf of the
Acquired Fund and, assuming that the Registration Statement, the
PFEAS Prospectus and the Acquired 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 PFEAS Trust and the Acquired Fund; (iii)
the PFEAS Trust, on behalf of the Acquired Fund, has power to
sell, assign, convey, transfer and deliver the
A-13
<PAGE>
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 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 Acquired 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 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 PFEAS 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, in form satisfactory to Dechert Price & Rhoads, with respect
to the matters specified in Section 9(g) of this Agreement, and
such other matters as the Acquiring Fund may reasonably deem
necessary or desirable.
A-14
<PAGE>
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,
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 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 PFEAS 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(a) of the Code over (y) the Acquired Fund's
deductions disallowed under Sections 265 and 171(a)(2) of the
Code,] (ii) all of the Acquired Fund's investment company taxable
income (as defined in Section
A-15
<PAGE>
852 of the Code) for its taxable years ending on or after June 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 June 30, 1996 and the short taxable period
beginning on July 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 PFEAS 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 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.
A-16
<PAGE>
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.
s. That the PAF Reorganization shall have been consummated.
t. That the PAF Fund's shareholders shall have approved the advisory and sub-
advisory agreements for the PAF Fund which were approved by the Board of
Trustees of the PAF Trust on September 17, 1996.
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 the
holders of the outstanding shares of beneficial interest of the Acquired
Fund entitled to vote.
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
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
A-17
<PAGE>
President) and Treasurer (or any Assistant Treasurer) certifying that as of
the Valuation Time and 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 dates, 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 dates.
e. That there shall not be any material litigation pending or threatened with
respect to the matters contemplated by this Agreement.
f. That the Acquired Fund shall have received an opinion of Dechert Price &
Rhoads 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 PFEAS Prospectus, the
Registration Statement and the Acquired 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
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
A-18
<PAGE>
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 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 Dechert Price & Rhoads.
A-19
<PAGE>
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 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.
k. That the PAF Reorganization shall have been consummated.
l. That the PAF Fund's shareholders shall have approved the advisory and sub-
advisory agreements for the PAF Fund which were approved by the Board of
Trustees of the PAF Fund on September 17, 1996.
10. Indemnification.
---------------
a. The Acquired Fund will 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 PFEAS Trust or the Acquired Fund contained
in the Registration Statement or the PFEAS Prospectus, the Acquired 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 PFEAS Trust or the
Acquired Fund required to be stated therein or necessary to make the
statements relating to the PFEAS 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 PFEAS Trust or the Acquired
Fund. The Indemnified Parties will notify the PFEAS 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
A-20
<PAGE>
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 will indemnify and hold harmless, out of the assets of
the Acquiring Fund 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 Acquiring Fund
contained in the Registration Statement, the PFEAS Prospectus, the Acquired
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 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
A-21
<PAGE>
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 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 [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."
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.
A-22
<PAGE>
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 an
investigation made by them or on their behalf.
15. Sole Agreement; Amendments. 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 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 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 PFEAS 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 FUNDS: EQUITY ADVISORS SERIES,
on behalf of its
[GROWTH] [TARGET] Fund series
By:________________________________
A-23
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES,
on behalf of its [CCI Core Equity]
[CCI Mid-Cap Equity] Fund series
By:_________________________________
Accepted and Agreed as to Section 5(a) only by PIMCO Advisors L.P.
By:______________________________
Title: ____________________________
A-24
<PAGE>
APPENDIX B
INFORMATION FROM PAF SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
PIMCO Advisors
Growth Fund March 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Objective: Portfolio: Total Net Assets: Number of Securities PIMCO Advisors
Long-term growth Primarily stocks of larger, $1,554 million in the Portfolio: Institutional Manager:
of capital. Income is an well-established 45 (not including short-term Columbus Circle
incidental consideration. companies. instruments) Investors
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 3/31/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares Lipper
(Incep. 10/26/90) (Incep. 5/23/95) (Incep. 2/24/84) Growth Fund
Adjusted Adjusted Adjusted S&P 500 Average
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
1 year 29.1% 22.0% -- -- 27.2% 32.1% 28.3%
5 years 13.8% 12.5% -- -- 13.0% 14.7% 13.4%
10 years -- -- -- -- 13.9% 14.0% 11.9%
Inception 17.0% 15.8% 19.9% 14.9% 16.3% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
B share returns are unannualized. The chart to the right reflects the
performance of PIMCO Advisors Growth Fund C through March 31, 1996. The
performance of Growth Fund A and B will be greater or less than the line
shown based on differences in inception dates, fees, and sales charges.
Past performance is not an indication of future results. See page 54 for
Footnotes, which should be read in connection with this material.
[GRAPHIC APPEARS HERE] GRAPHIC DEPICTS THAT THE VALUE OF $10,000 INVESTED AT THE
FUND'S INCEPTION IN CLASS C SHARES AND THE S&P 500 INDEX
THROUGH 3/31/96 WOULD BE WORTH $62,342 AND $61,557;
RESPECTIVELY.
GROWTH S&P 500
MONTH C INDEX
------ ------ -------
12/31/83 10000 10000
09/30/84 10986 10873
09/30/85 12628 12449
09/30/86 17409 16401
09/30/87 24641 23522
09/30/88 21007 20607
09/30/89 29903 27398
09/30/90 27508 24866
09/30/91 37155 32598
09/30/92 39722 36197
09/30/93 46416 40891
09/30/94 46650 42468
09/30/95 57281 55103
03/31/96 62342 61557
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Company Primary Business % of Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Kimberly-Clark Consumer paper products; newsprint 3.8%
- --------------------------------------------------------------------------------
Microsoft Corp. Software for microcomputers 3.8%
- --------------------------------------------------------------------------------
Boeing Co. Manufacturer jet airplanes: missiles 3.3%
- --------------------------------------------------------------------------------
Loral Corp. Military electronic systems 3.2%
- --------------------------------------------------------------------------------
Johnson & Johnson Healthcare products 3.1%
- --------------------------------------------------------------------------------
MCI Communications Telecommunications network, services 3.1%
- --------------------------------------------------------------------------------
Pepsico, Inc. Soft drink, snack food, food service 3.1%
- --------------------------------------------------------------------------------
Cisco Systems, Inc. Manufacturer of computer network products 3.0%
- --------------------------------------------------------------------------------
Merck & Co. Ethical drugs, specialty chemicals 2.9%
- --------------------------------------------------------------------------------
Columbia HCA Healthcare Healthcare facilities/services 2.9%
- --------------------------------------------------------------------------------
Top Ten Total 32.2%
</TABLE>
Investment Breakdown
[GRAPHIC APPEARS HERE] INFORMATION DEPICTED IN THE GRAPHIC IS SET FORTH IN THE
TABLE BELOW:
<TABLE>
<S> <C>
Common Stocks 91%
Cash Equivalents 9%
</TABLE>
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
<TABLE>
<CAPTION>
Top 5 Industries % of Net Assets
- --------------------------------------------------------------------------------
<S> <C>
Computers & Office Equip. 18.1%
- --------------------------------------------------------------------------------
Healthcare 10.8%
- --------------------------------------------------------------------------------
Insurance 7.2%
- --------------------------------------------------------------------------------
Utilities 7.1%
- --------------------------------------------------------------------------------
Pharmaceuticals 5.7%
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
The Growth Fund continued to outperform the Lipper Growth Fund Average, for both
the long- and short-term. Over the ten-year period ended March 31, 1996 the C
shares returned 13.9% annualized, outdistancing the Lipper Growth Fund Average,
while the six-month gain of 8.8% also surpassed its Lipper average.
Technology, finance, and healthcare were the Fund's largest three sectors
for the six-month period ended March 31, 1996, with their percentage of the
portfolio remaining relatively constant over that time.
The technology portion of the Fund performed well in the first three months
of 1996 after a weak fourth quarter of 1995. In the fourth quarter, excess
inventories in the semiconductor industry led to significant price declines for
many products as demand decelerated while capacity growth was accelerating. This
prompted the manager to decrease the Funds commodity oriented semiconductor
companies in favor of technology companies benefiting from strong long-term
trends. Examples included Microsoft and Cisco Systems, Inc.
In the finance sector, after bank takeovers dominated the fourth quarter
performance to the disadvantage of the Fund, emphasis shifted back to company
specific stories in the first quarter. Chemical Bank was a stellar performer,
benefiting from a growing awareness of significant cost savings due to its
merger with Chase Bank. Green Tree Financial's expansion into new markets and
market share gains in their core manufactured housing market also continued to
exceed investor expectations and were rewarded with strong stock price
performance.
Aided by an aging population, a shortening of approval process for new
products from the Federal Food & Drug Administration, and a rotation by
investors to defensive stocks, the healthcare sector played a major role in the
Growth Fund's success for the period. Examples included Columbia Healthcare (a
manager of healthcare facilities) and Merck & Co. (a pharmaceutical firm).
Late in the quarter evidence began pointing to a stronger than expected
economy and investors responded by focusing on cyclical companies. The Fund
participated in this trend to a modest degree as the stronger economy has led to
positive surprise in select cyclical industries. On balance though, the evidence
suggests that economic growth is only at a modest pace and the manager remains
weighted toward beneficiaries of longer-term trends and positively surprising
internal changes, such as consolidations and restructuring. By seeking good
companies that are surprising the market with positive results, the manager
feels the Fund could perform well in this type of economic environment.
Semi-Annual Report See accompanying notes/17
B-1
<PAGE>
- --------------------------------------------------------------------------------
PIMCO Advisors
Target Fund March 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Objective: Portfolio: Total Net Assets: Number of Securities PIMCO Advisors
Capital appreciation. Stocks of companies $1,033 million in the Portfolio: Institutional Manager:
with medium-sized 50 (not including short-term Columbus Circle
capitalizations. instruments) Investors
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE*
- --------------------------------------------------------------------------------
Average Annual Total Return For periods ended 3/31/96
<TABLE>
<CAPTION>
A Shares B Shares C Shares S&P Lipper
(Incep. 12/17/92) (Incep. 5/22/95) (Incep. 12/17/92) Mid-Cap Mid-Cap
Adjusted Adjusted Adjusted Index Fund Avg.
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 28.7% 21.6% -- -- 26.7% 28.6% 30.2%
3 years 19.5% 17.2% -- -- 18.6% 13.9% 15.4%
Inception 20.0% 17.9% 24.7% 19.7% 19.1% -- --
</TABLE>
* The adjusted returns above include the effects of applicable sales charges.
B share returns are unannualized. The chart to the right reflects the
performance of PIMCO Advisors Target Fund A and C through March 31, 1996.
The performance of Target Fund B will be greater or less than the lines
shown based on differences in inception dates, fees, and sales charges.
Past performance is not an indication of future results. See page 54 for
Footnotes, which should be read in connection with this material.
[GRAPHIC APPEARS HERE] GRAPHIC DEPICTS THE VALUE OF $10,000 INVESTED IN CLASS A
AND CLASS C SHARES AND THE S&P MID CAP INDEX AT THE
FUND'S INCEPTION THROUGH 3/31/96 WOULD BE WORTH $17,208;
$17,759 AND $15,274; RESPECTIVELY.
MONTH TARGET A TARGET C S&P MID CAP INDEX
----------- -------- -------- -----------------
09/30/92 9450 10000 10000
09/30/93 12020 12650 11100
09/30/94 12525 13074 11278
09/30/95 15846 16414 14185
3/31/96 17208 17759 15274
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Company Primary Business % of Net Assets
- ------------------------------------------------------------------------------------
<S> <C>
Guidant Corp. Designer/manufacturer cardiological equipment 5.0%
- ------------------------------------------------------------------------------------
HFS, Inc. Hotel franchise/services 4.4%
- ------------------------------------------------------------------------------------
Boston Chicken Operates franchise food service stores 4.1%
- ------------------------------------------------------------------------------------
HealthSouth Corp. Medical rehabilitation service 3.6%
- ------------------------------------------------------------------------------------
Prudential Reinsurance Hlds. Reinsurance property/casualty 3.5%
- ------------------------------------------------------------------------------------
Diebold, Inc. Record storage/bank security 3.0%
- ------------------------------------------------------------------------------------
Raychem Corp. Plastic & elastomeric insulation 2.8%
- ------------------------------------------------------------------------------------
Tenet Healthcare Corp. Specialty and general hospitals 2.5%
- ------------------------------------------------------------------------------------
Gartner Group Researcher/analysis of information and technology industries 2.3%
- ------------------------------------------------------------------------------------
Fore Systems, Inc. Manufacturer high-performance network products 2.3%
- ------------------------------------------------------------------------------------
Top Ten Total 33.5%
</TABLE>
Investment Breakdown
[GRAPHIC APPEARS HERE] INFORMATION DEPICTED IN THE GRAPHIC IS SET FORTH IN THE
TABLE BELOW:
<TABLE>
<S> <C>
Common Stocks 95%
Cash Equivalents 5%
</TABLE>
Cash Equivalents include short-term instruments, cash and other assets less
liabilities.
Top 5 Industries % of Net Assets
-------------------------------------
Computers & Office Equip. 14.4%
-------------------------------------
Healthcare 13.6%
-------------------------------------
Telecommunications 13.5%
-------------------------------------
Leisure Time 11.8%
-------------------------------------
Electronics and Electrical 7.0%
-------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO INSIGHTS
- --------------------------------------------------------------------------------
For the six-months ended March 31, 1996, the PIMCO Advisors Target Fund Class A
posted an 8.6% return and the B and C shares returned 8.1%. These results
outperformed the Lipper Mid-Cap Fund Average and the Standard & Poor's Mid-Cap
Index for that period. The Fund has also surpassed these benchmarks since its
December 17, 1992 inception, with an annualized return of 20%.
Performance for the fourth quarter of 1995 was affected by a slowing in the
Fund's largest sector, technology. This trend continued into the first quarter
due to a decreasing demand in the semiconductor industry. The overall weighting
in the technology sector was slightly reduced, and underperforming holdings
related to semiconductors, including MEMC Electronics and Vishay
Intertechnology, were deleted from the portfolio in the first quarter, with more
concentration being placed on Internet-related companies. Examples of these
networking holdings are Fore Systems (a high-performance network product
manufacturer), and Ascend Communications (a developer of network access
products).
The Fund's relative performance was also somewhat hurt by a "flight to
quality" in the financial markets. This occurs when investors look for stability
in company names that they recognize and feel comfortable with. Because the
majority of these are large capitalization companies, the small- and mid-cap
stocks are often negatively affected during these shifts. The first quarter was
an example of this movement, and as a result, the manager searched for more
"special situations", or companies whose prices are driven by company-specific
factors, not by industry or economic trends.
Several examples of "special situation" companies in the Target Fund that
were top contributors in the last six months were Harley Davidson (strong
performance following the announced sale of its troubled non-motorcycle
operations), HFS, Inc. (a hotel and real estate brokerage franchiser whose
string of positive announcements regarding new vendor programs were additive to
earnings), and Guidant Corp. (a medical device manufacturer that performed well
after several new product approvals).
One of the Target Fund's newest sectors, the oil service group, benefited
as strong demand and limited supply of drilling rigs and vessels pushed
utilization and rates to multi-year highs. Diamond Offshore Drilling and Ensco
International were two additions involved in offshore contract drilling.
Going forward, the manager believes its special situation and technology
holdings will continue to play an important part in the Fund's performance.
Also, in order to capitalize on what appears to be a moderately growing economy,
the manager intends to increase exposure to economically sensitive companies.
20/PIMCO Advisors Funds See accompanying notes
B-2
<PAGE>
- --------------------------------------------------------------------------------
PIMCO ADVISORS FUNDS FOOTNOTES
- --------------------------------------------------------------------------------
A few notes and definitions are needed for a complete understanding of the
performance figures.
Results represent past performance, not future results. Investment return will
fluctuate and the value of an investor's shares will fluctuate and may be worth
more or less than original cost when redeemed. Total return measures
performance, assuming that all dividends and capital gains distributions were
reinvested. Average annual total returns for more than one year assume a steady
compound rate of return.
Total return, both with and without a sales charge, has been presented. For
shareholders who have not bought or sold shares during the period quoted, the
non-adjusted figures are probably more meaningful than the adjusted figures. The
adjusted figures for Class A shares include the effect of paying the maximum
initial sales charge of either 5.5% (for all stock funds), 4.75% (Global Income,
High Income, Total Return Income, Tax Exempt and U.S. Government Funds), or
3.00% (Short-Intermediate Fund). The adjusted figures for Class B shares include
the effect of paying the 5% contingent deferred sales charge (CDSC), which
declines from 5% in the first year to 0% at the beginning of the seventh year.
The adjusted figures for Class C shares includes the effect of paying the 1%
CDSC which may apply to shares redeemed during the first year of ownership.
+ Yield is quoted in accordance with current Securities and Exchange Commission
regulations and is based on the one-month period ended March 31, 1996.
Line graphs have been included so an investor can compare a Fund's historical
performance to that of an appropriate broad based index. Each index reflects a
group of unmanaged securities, and it is not possible to invest in an unmanaged
index. The Standard & Poor's 500 and Standard & Poor's Mid-Cap are indices of
stocks of companies with larger- and medium-sized capitalizations, respectively.
The Russell 2000 is an index of stocks of companies with small capitalizations.
The MSCI EAFE is an index of foreign stocks. The Philadelphia Gold and Silver
Index is an index of stocks of companies in the gold and silver mining industry.
The Salomon Brothers Currency-Hedged World Government Bond Index is an index of
currency-hedged U.S. and foreign government bonds. The Lehman BB Intermediate
Bond Index is an index of intermediate-term bonds with a BB rating. The Lehman
Aggregate Bond Index is an index of a variety of bonds. The Lehman Municipal
Bond Index is an index of municipal securities rated Baa or better. The Lehman
Government Index is an index of various government securities and the Lehman
Government 1-3 year Index is an index of a variety of government securities with
1-3 year maturities. Duration is a measurement of a Fund's price sensitivity
expressed in years.
Lipper averages are calculated by Lipper Analytical Services, Inc., a nationally
recognized mutual fund performance evaluation firm. They are performance
averages of those funds that are tracked by Lipper, with the investment
objective noted. Lipper rankings are based on total returns, not adjusted for
sales charges.
The PIMCO Advisors stock funds can invest in foreign securities and the
International Fund invests primarily in these securities, which can involve
special risks due to foreign economic and political developments. The
Opportunity and Discovery Funds generally invest in small-cap stocks, which can
be riskier than the overall stock market. The Innovation and Precious Metals
Funds concentrate their portfolios thereby possibly making them more volatile
than a more diversified stock portfolio, and, therefore, should be considered as
only part of a diversified portfolio. The High Income, Total Return Income and
Short-Intermediate Funds can invest a portion of their assets in foreign bonds,
and the Global Income Fund invests primarily in these securities, which entails
special risks. These Funds and the Tax Exempt Fund can invest in high yield
bonds, which entail greater risk, such as less liquidity and possibility of
default. The U.S. Government Fund is not guaranteed by the U.S. government.
54/PIMCO Advisors Funds See accompanying notes
B-3
<PAGE>
[Outside Back Cover]
TABLE OF CONTENTS
OVERVIEW .................................................................. -4-
Proposed Transaction .................................................. -4-
Operating Expenses .................................................... -6-
Examples of Fund Expenses ............................................. -8-
Federal Income Tax Consequences ....................................... -8-
Comparison of Investment Objectives, Policies and Restrictions ........ -9-
Comparison of Distribution Policies and Purchase, Exchange and Redemption
Procedures ............................................................ -10-
RISK FACTORS .............................................................. -11-
SPECIAL MEETING OF SHAREHOLDERS ........................................... -13-
PROPOSALS 1 AND 2: APPROVAL OR DISAPPROVAL OF AGREEMENT AND
PLAN OF REORGANIZATION ................................................ -14-
Background and Reasons for the Proposed Mergers ....................... -15-
Information About the Mergers ......................................... -16-
INFORMATION ABOUT THE ACQUIRED FUNDS AND THE ACQUIRING
FUNDS ................................................................. -23-
INFORMATION ABOUT THE PAF FUNDS ........................................... -23-
VOTING INFORMATION ........................................................ -24-
APPENDIX A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
APPENDIX B
INFORMATION FROM PAF SEMI-ANNUAL REPORT
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
proposal.
Proposal to approve the merger of the [_] FOR [_] AGAINST [_] ABSTAIN
Fund named on the reverse side of this
card, as described in the Prospectus/
Proxy Statement and the relevant
Agreement and Plan of Reorganization.
PLEASE SIGN ON THE REVERSE SIDE AND
RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
- --------------------------------------------------------------------------------
______________ FUND PROXY SOLICITED BY THE BOARD OF TRUSTEES
A SERIES OF ______________
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS -- DECEMBER ___, 1996
The undersigned hereby appoints Robert A. Prindiville, Stephen J. Treadway and
Newton B. Schott, Jr., and each of them, proxies, with power of substitution to
each, and hereby authorizes them to represent and to vote, as designated below,
at the Special Meeting of Shareholders of the Fund indicated above, a series of
PIMCO Funds: Equity Advisors Series, on December ___, 1996 at _____ Eastern
time, and at any adjournments thereof, all of the shares of the Fund which the
undersigned would be entitled to vote if personally present.
NOTE: Please sign exactly as your name appears on
this card. All joint owners should sign. When
signing as executor, administrator, attorney,
trustee or guardian or as custodian for a minor,
please give full title as such. If a corporation,
please sign in full corporate name and indicate
the signer's office. If a partner, sign in the
partnership name.
Signature(s):
--------------------------------------------------
--------------------------------------------------
Date
--------------------------------------------------
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Growth Fund
Target Fund
FORM N-14
PART B
STATEMENT OF ADDITIONAL INFORMATION
October __, 1996
This Statement of Additional Information relates to proposed mergers (the
"Mergers") of the Columbus Circle Investors Core Equity Fund (the "Core Fund")
and the Columbus Circle Investors Mid Cap Equity Fund (the "Mid Cap Fund," and
together with the Core Fund, the "Acquired Funds"), each a series of PIMCO
Funds: Equity Advisors Series, a Massachusetts business trust (the "Trust"),
with and into, respectively, the Growth Fund (the "Growth Fund") and the Target
Fund (the "Target Fund," and together with the Growth Fund, the "Acquiring
Funds"), each of which is also a series of the Trust.
This Statement of Additional Information contains information which may be
of interest to shareholders but which is not included in the Prospectus/Proxy
Statement dated October __, 1996 (the "Prospectus/Proxy Statement") of the Trust
which relates to the Mergers. As described in the Prospectus/Proxy Statement,
the Mergers would involve the transfer of all the assets of each Acquired Fund
in exchange for shares of the corresponding Acquiring Fund and the assumption of
all the liabilities of the Acquired Fund. Each Acquired Fund would distribute
the Acquiring Fund shares it receives to its shareholders in complete
liquidation of the Acquired Fund.
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Prospectus/Proxy Statement. The Prospectus/Proxy
Statement has been filed with the Securities and Exchange Commission and is
available upon request and without charge by writing PIMCO Funds: Equity
Advisors Series, 840 Newport Center Drive, Suite 360, Newport Beach, CA 92660,
or by calling (800) 927-4648.
<PAGE>
Table of Contents
Item Page
- ---- ----
I. Additional Information about Acquiring and Acquired Funds..................
II. Financial Statements.......................................................
-2-
<PAGE>
I. Additional Information about Acquiring and Acquired Funds.
This Statement of Additional Information is accompanied by the
Statement of Additional Information of the Trust, dated September 15, 1996,
which provides further information relating to the Acquired Funds.
As described in the Prospectus/Proxy Statement, each of the Growth and
Target Funds is a newly organized series of the Trust which, immediately prior
to and as a condition to the Mergers, will acquire the assets and liabilities of
and succeed to the business of, respectively, the PIMCO Advisors Growth Fund and
the PIMCO Advisors Target Fund (the "PAF Funds"), each of which is a series of
PIMCO Advisors Funds, a Massachusetts business trust (the "PAF Trust"). This
Statement of Additional Information is accompanied also by the Statement of
Additional Information, dated July 12, 1996, of the PAF Trust, which provides
further information about the PAF Funds, including information in respect of
their investment objective and policies and financial history. The current
Prospectuses of the Trust and the PAF Trust accompanied the Prospectus/Proxy
Statement delivered to shareholders.
The following documents, which have previously been filed with the Securities
and Exchange Commission, have been incorporated by reference into Part A of this
Registration Statement:
(1) PIMCO Advisors Funds Prospectus dated February 1, 1996 (filed on
February 7, 1996 pursuant to Rule 497 under the Securities Act of 1933)
(Registration Nos. 2-87203 and 811-3881)
(2) PIMCO Advisors Funds Prospectus Supplement dated September 27, 1996
(filed on September 27, 1996 pursuant to Rule 497 under the Securities
Act of 1933)
(Registration Nos. 2-87203 and 811-3881)
(3) PIMCO Advisors Funds Statement of Additional Information dated July 12,
1996 (filed on July 16, 1996 pursuant to Rule 497 under the Securities
Act of 1933)
(Registration Nos. 2-87203 and 811-3881)
(4) PIMCO Funds: Equity Advisors Series Prospectus dated September 15, 1996
(filed on September 10, 1996 as part of Post-Effective Amendment No. 23
to Registration Statement on Form N-1A.)
(Registration Nos. 33-36528 and 811-06161)
(5) PIMCO Funds: Equity Advisors Series Statement of Additional Information
dated September 15, 1996 (filed on September 10, 1996 as part of Post-
Effective Amendment No. 23 to Registration Statement on Form N-1A.)
(Registration Nos. 33-36528 and 811-06161)
(6) PIMCO Advisors Funds Semi-Annual Report dated March 31, 1996 (filed on
May 30, 1996)
(Registration Nos. 2-87203 and 811-3881)
(7) PIMCO Funds: Equity Advisors Series Annual Report dated June 30, 1996
(filed on September 9, 1996)
(Registration Nos. 33-36528 and 811-06161)
II. Financial Statements.
This Statement of Additional Information is accompanied by the Trust's
Annual Report for the fiscal year ended June 30, 1996 and the PAF Trust's Semi-
Annual Report for the six-month period ended March 31, 1996 which contain
historical financial information regarding the Acquired Funds and the PAF Funds,
respectively. Such reports have been filed with the Securities and Exchange
Commission and are incorporated herein by reference. The PAF Trust's current
Statement of Additional Information which accompanies this Statement of
Additional Information includes financial statements for the PAF Funds from the
PAF Trust's Annual Report for the fiscal year ended September 30, 1995. Because
the assets of the Core Fund and the Mid Cap Fund each represent less than ten
percent of the assets of their respective Acquiring Funds, pro forma financial
statements for the Acquiring Funds are not provided.
-3-
<PAGE>
PIMCO FUNDS: EQUITY ADVISORS SERIES
Growth Fund and Target Fund
Form N-14
PART C
OTHER INFORMATION
Item 15. Indemnification.
Reference is made to Article 5, Section 5.4 of the Amended and
Restated Agreement and Declaration of Trust (the "Agreement and Declaration of
Trust") of PIMCO Funds: Equity Advisors Series (the "Registrant") which is
incorporated herein by reference.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers and
controlling persons of the Registrant by the Registrant pursuant to the
Agreement and Declaration of Trust, its By-Laws or otherwise, the Registrant is
aware that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and, therefore,
is unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by directors, officers or controlling persons of the Registrant in
connection with the successful defense of any action, suit or proceeding) is
asserted by such directors, officers or controlling persons in connection with
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issues.
Item 16. Exhibits.
(1) Form of Amended and Restated Agreement and Declaration of Trust dated as
of August 20, 1996/(5)/
(2) By-Laws/(1)/
(3) None
(4) Form of Agreement and Plan of Reorganization - filed as Appendix A to
Part A hereof
<PAGE>
(5) (a) Article VI (Shares of Beneficial Interest) and Article IX
(Shareholders) of the Agreement and Declaration of Trust/(5)/
(b) Article I (Shareholder Meetings) of the By-Laws/(1)/
(6) (a) Form of Investment Advisory Agreement/(5)/
(b) Form of Amended and Restated Investment Advisory Agreement is filed
herewith
(c) Form of Portfolio Management Agreement with Columbus Circle
Investors/(3)/
(d) Form of Portfolio Management Agreement with Columbus Circle Investors
is filed herewith
(7) (a) Distribution Agreement/(5)/
(b) Form of Distribution Contract is filed herewith
(8) None
(9) Form of Custody Agreement and Addenda/(5)/
(10) (a) Form of Distribution Plan for Administrative Class shares filed
herewith
(b) Amended and Restated Multi-Class Plan adopted pursuant to
Rule 18f-3 is filed herewith
(11) Opinion and consent of counsel as to legality of securities being
registered is filed herewith
(12) Opinion of counsel as to tax matters - to be filed by post-effective
amendment
(13) Material Contracts
(a) Form of Agency Agreement and Addenda/(5)/
(b) Form of Service Plan for Institutional Services Shares/(2)/
(c) Form of Sub-Administration Agreement/(4)/
-2-
<PAGE>
(d) Form of Administration Agreement/(5)/
(e) Form of Administration Agreement is filed herewith
(f) Form of Sub-Administration Agreement is filed herewith
(g) Form of Administrative Services Plan for Administrative Class
Shares is filed herewith
(14) (a) Consent of Price Waterhouse LLP is filed herewith
(b) Consent of Coopers & Lybrand LLP is filed herewith
(15) None
(16) Powers of Attorney for Messrs. Cvengros, Nelson, Porter and Richards are
filed herewith
(17) Copy of Registrant's Declaration under Rule 24f-2/(1)/
_______________________________________________________
/1/ Included in the Registrant's initial Registration Statement (the
"Registration Statement") on Form N-1A (File No. 33-36528), as filed on
August 24, 1990.
/2/ Included in Post-Effective Amendment No. 13 to the Registration
Statement on Form N-1A (File No. 33-36528), as filed on April 12, 1994.
/3/ Included in Post-Effective Amendment No. 15 to the Registration
Statement on Form N-1A (File No. 33-36528), as filed on October 14, 1994.
/4/ Included in Post-Effective Amendment No. 19 to the Registration
Statement on Form N-1A (File No. 33-36528), as filed on October 31, 1995.
/5/ Included in Post-Effective Amendment No. 22 to the Registration
Statement on Form N-1A (File No. 33-36528), as filed on July 1, 1996.
Item 17. Undertakings.
(a) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this Registration Statement by any person or party who is deemed to be
an
-3-
<PAGE>
underwriter within the meaning of Rule 145(c) under the Securities Act of
1933, the reoffering prospectus will contain the information called for by
the applicable registration form for the reofferings by persons who may be
deemed underwriters, in addition to the information called for by the other
items of the applicable form.
(b) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (a) above will be filed as a part of an amendment to this
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, each post-effective amendment shall be deemed to be a new
Registration Statement for the securities offered therein, and the offering
of the securities at that time shall be deemed to be the initial bona fide
offering of them.
(c) The undersigned Registrant agrees to file, by post-effective amendment, an
opinion of counsel or a copy of an Internal Revenue Service ruling
supporting the tax consequences of the proposed mergers described in this
Registration Statement within a reasonable time after receipt of such
opinion or ruling.
-4-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Newport Beach in the State
of California on the 27th day of September, 1996.
PIMCO Funds: Equity Advisors Series
WILLIAM D. CVENGROS*
-------------------------------------
William D. Cvengros, Chairman of the
Board, President and Trustee
*By: /s/ Teresa A. Wagner
---------------------------
Teresa A. Wagner as
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
Signature Title Date
/s/ John P. Hardaway September 27, 1996
- -----------------------------
John P. Hardaway Treasurer (Principal
Financial and
Accounting Officer)
RICHARD L. NELSON* September 27, 1996
- -----------------------------
Richard L. Nelson Trustee
LYMAN W. PORTER* September 27, 1996
- -----------------------------
Lyman W. Porter Trustee
-5-
<PAGE>
ALAN RICHARDS* September 27, 1996
- -----------------------------
Alan Richards Trustee
WILLIAM D. CVENGROS* September 27, 1996
- -----------------------------
William D. Cvengros Chairman of the Board,
President and Trustee
*By: /s/ Teresa A. Wagner
-----------------------------
Teresa A. Wagner as
Attorney-in-Fact
-6-
<PAGE>
EXHIBIT LIST
Exhibit No. Exhibit Name
- ----------- ------------
6(b) Form of Amended and Restated Investment Advisory Agreement
6(d) Form of Portfolio Management Agreement with Columbus Circle
Investors
7(b) Form of Distribution Contract
10(a) Form of Distribution Plan for Administrative Class Shares
10(b) Amended and Restated Multi-Class Plan
11 Opinion and Consent of Counsel as to legality of securities being
issued
13(e) Form of Administration Agreement
13(f) Form of Sub-Administration Agreement
13(g) Form of Administrative Services Plan for Administrative Class
Shares
14(a) Consent of Price Waterhouse LLP
14(b) Consent of Coopers & Lybrand LLP
16 Powers of Attorney
<PAGE>
EXHIBIT 6(b)
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, made the 15th day of November, 1994 and amended and
restated effective as of this ___ day of _________, 199__ between PIMCO
Funds: Multi-Manager Series ("Trust"), a Massachusetts business trust,
and PIMCO Advisors L.P. ("Adviser"), a limited partnership.
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate series with each such series representing
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust has established multiple series, including
operational series or series that are expected to be operational that are
designated as the PIMCO International Fund, PIMCO International Developed Fund,
PIMCO Emerging Markets Fund, PIMCO Capital Appreciation Fund, PIMCO Mid Cap
Growth Fund, PIMCO Small Cap Growth Fund, PIMCO Micro Cap Growth Fund, PIMCO
Renaissance Fund, PIMCO Growth Fund, PIMCO Target Fund, PIMCO Opportunity Fund,
PIMCO Innovation Fund, PIMCO Tax Exempt Fund, PIMCO Equity Income Fund, PIMCO
Value Fund, PIMCO Small Cap Value Fund, PIMCO Enhanced Equity Fund, PIMCO
Structured Emerging Markets Fund, PIMCO Balanced Fund and PIMCO Precious Metals
Fund, such series together with any other series subsequently established by the
Trust, with respect to which the Trust desires to retain the Adviser to render
investment advisory services hereunder, and with respect to which the Adviser is
willing to do so, being herein collectively referred to also as the "Funds"; and
WHEREAS, the Adviser is registered with the SEC as an investment
adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Adviser is the parent company or an affiliate of other
companies that render investment advisory services and are registered as
investment advisers under the Investment Advisers Act of 1940; and
<PAGE>
WHEREAS, the Trust desires to retain the Adviser so that it and its
subsidiaries and affiliates will render investment advisory services to the
Funds in the manner and on the terms hereinafter set forth; and
WHEREAS, the Adviser is willing to render such services and engage its
subsidiaries, affiliates, and others to render such services to the Trust;
NOW, THEREFORE, in consideration of the premises, the promises, and
mutual covenants herein contained, it is agreed between the parties as follows:
1. Appointment. The Trust hereby appoints the Adviser to provide
-----------
investment advisor services to the Trust with respect to the Funds for the
period and on the terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
In the event the Trust establishes and designates additional series
with respect to which it desires to retain the Adviser to render investment
advisory services hereunder, it shall notify the Adviser in writing. If the
Adviser is willing to render such services it shall notify the Trust in writing,
whereupon such additional series shall become a Fund hereunder.
2. Duties. Subject to the general supervision of the Board of
------
Trustees, the Adviser shall provide general, overall advice and guidance with
respect to the Funds and provide advice and guidance to the Trust's Trustees. In
discharging these duties the Adviser shall, either directly or indirectly
through others ("Portfolio Managers") engaged by it pursuant to Section 3 of
this Agreement, provide a continuous investment program for each Fund and
determine the composition of the assets of each Fund, including determination of
the purchase, retention, or sale of the securities, cash, and other investments
for the Fund. The Adviser (or Portfolio Manager) will provide investment
research and analysis, which may consist of a computerized investment
methodology, and will conduct a continuous program of evaluation, investment,
sales, and reinvestment of the Fund assets by determining the securities and
other investments that shall be
- 2 -
<PAGE>
purchased, entered into, sold, closed, or exchanged for the Fund, when these
transactions should be executed, and what portion of the assets of the Fund
should be held in the various securities and other investments in which it may
invest, and the Adviser (or Portfolio Manager) is hereby authorized to execute
and perform such services on behalf of the Fund. To the extent permitted by the
investment policies of the Fund, the Adviser (or Portfolio Manager) shall make
decisions for the Fund as to foreign currency matters and make determinations as
to the retention or disposition of foreign currencies or securities or other
instruments denominated in foreign currencies or derivative instruments based
upon foreign currencies, including forward foreign currency contracts and
options and futures on foreign currencies, and shall execute and perform the
same. The Adviser (or Portfolio Manager) will provide the services under this
Agreement for each Fund in accordance with the Fund's investment objective or
objectives, investment policies, and investment restrictions as stated in the
Trust's Registration Statement filed on Form N-1A with the SEC as supplemented
or amended from time to time.
In performing these duties, the Adviser, either directly or indirectly
through others selected by the Adviser:
(a) Shall conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws
and regulations, with any applicable procedures adopted by the Trust's
Board of Trustees, and with the provisions of the Trust's Registration
Statement filed on Form N-1A as supplemented or amended from time to
time.
(b) Shall use reasonable efforts to manage each Fund so that it
qualifies as a regulated investment company under Subchapter M of the
Internal Revenue Code.
(c) Is responsible, in connection with its responsibilities
under this Section 2, for decisions to buy and sell securities and
other investments for the Funds, for broker-dealer and futures
commission merchant ("FCM") selection, and for negotiation of
commission rates. The Adviser's (or Portfolio Manager's) primary
consideration in effecting a
- 3 -
<PAGE>
security or other transaction will be to obtain the best execution for
the Fund, taking into account the factors specified in the Prospectus
and Statement of Additional Information for the Trust, as they may be
amended or supplemented from time to time. Subject to such policies as
the Board of Trustees may determine and consistent with Section 28(e)
of the Securities Exchange Act of 1934, the Adviser (or Portfolio
Manager) shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by
reason of its having caused the Fund to pay a broker or dealer, acting
as agent, for effecting a portfolio transaction at a price in excess
of the amount of commission another broker or dealer would have
charged for effecting that transaction, if the Adviser (or Portfolio
Manager) determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either
that particular transaction or the Adviser's (or Portfolio Manager's)
overall responsibilities with respect to the Fund and to their other
clients as to which they exercise investment discretion. To the extent
consistent with these standards, and in accordance with Section 11(a)
of the Securities Exchange Act of 1934 and Rule 11a2-(T) thereunder,
and subject to any other applicable laws and regulations, the Adviser
(or Portfolio Manager) is further authorized to allocate the orders
placed by it on behalf of the Fund to the Adviser (or Portfolio
Manager) if it is registered as a broker or dealer with the SEC, to
its affiliate that is registered as a broker or dealer with the SEC,
or to such brokers and dealers that also provide research or
statistical research and material, or other services to the Fund or
the Adviser (or Portfolio Manager). Such allocation shall be in such
amounts and proportions as the Adviser shall determine consistent with
the above standards, and, upon request, the Adviser will report on
said allocation regularly to the Board of Trustees of the Trust
indicating the broker-dealers to which such allocations have been made
and the basis therefor.
(d) May, on occasions when the purchase or sale of a security
is deemed to be in the best interest of a Fund as well as any other
investment advisory clients,
- 4 -
<PAGE>
to the extent permitted by applicable laws and regulations, but shall
not be obligated to, aggregate the securities to be so sold or
purchased with those of its other clients where such aggregation is
not inconsistent with the policies set forth in the Registration
Statement. In such event, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be
made by the Adviser (or Portfolio Manager) in a manner that is fair
and equitable in the judgment of the Adviser (or Portfolio Manager) in
the exercise of its fiduciary obligations to the Trust and to such
other clients.
(e) Will, in connection with the purchase and sale of
securities for each Fund, arrange for the transmission to the
custodian for the Trust on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not
limited to, Cusip, Sedol, or other numbers that identify securities to
be purchased or sold on behalf of the Fund, as may be reasonably
necessary to enable the custodian to perform its administrative and
recordkeeping responsibilities with respect to the Fund, and, with
respect to portfolio securities to be purchased or sold through the
Depository Trust Company, will arrange for the automatic transmission
of the confirmation of such trades to the Trust's custodian.
(f) Will make available to the Trust, promptly upon request,
any of the Funds' investment records and ledgers as are necessary to
assist the Trust to comply with requirements of the 1940 Act and the
Investment Advisers Act of 1940, as well as other applicable laws, and
will furnish to regulatory authorities having the requisite authority
any information or reports in connection with such services which may
be requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and
regulations.
(g) Will regularly report to the Trust's Board of Trustees on
the investment program for each Fund and the issuers and securities
represented in each Fund's portfolio, and will furnish the Trust's
Board of
- 5 -
<PAGE>
Trustees with respect to the Funds such periodic and special reports
as the Trustees may reasonably request.
3. Appointment of Portfolio Managers. The Adviser may, at its
---------------------------------
expense and subject to its supervision, engage one or more persons, including,
but not limited to, subsidiaries and affiliated persons of the Adviser, to
render any or all of the investment advisory services that the Adviser is
obligated to render under this Agreement including, for one or more of the Funds
and, to the extent required by applicable law, subject to the approval of the
Trust's Board of Trustees and/or the shareholders of one or more of the Funds, a
person to render investment advisory services including the provision of a
continuous investment program and the determination of the composition of the
securities and other assets of such Fund or Funds.
4. Documentation. The Trust has delivered copies of each of the
-------------
following documents to the Adviser and will deliver to it all future amendments
and supplements thereto, if any:
(a) the Trust's Registration Statement as filed with the SEC
and any amendments thereto; and
(b) exhibits, powers of attorneys, certificates and any and
all other documents relating to or filed in connection with the
Registration Statement described above.
The Adviser has delivered to the Trust copies of the Adviser's and the
Portfolio Managers' Uniform Application for Investment Adviser Registration on
Form ADV, as filed with the SEC. The Adviser agrees to provide the Trust with
current copies of the Adviser's and the Portfolio Managers' Forms ADV, and any
supplements or amendments thereto, as filed with the SEC.
5. Records. The Adviser agrees to maintain and to preserve for the
-------
periods prescribed under the 1940 Act any such records as are required to be
maintained by the Adviser with respect to the Funds by the 1940 Act. The Adviser
further agrees that all records which it maintains for the Funds are the
- 6 -
<PAGE>
property of the Trust and it will promptly surrender any of such records upon
request.
6. Expenses. During the term of this Agreement, the Adviser will
--------
pay all expenses incurred by it in connection with its obligations under this
Agreement, except such expenses as are assumed by the Funds under this Agreement
and any expenses that are paid by a party other than the Trust under the terms
of any other agreement to which the Trust is a party or a third-party
beneficiary. The Adviser further agrees to pay or cause its subsidiaries or
affiliates to pay all salaries, fees, and expenses of any officer or Trustee of
the Trust who is an officer, director, or employee of the Adviser or a
subsidiary or affiliate of the Adviser. The Adviser assumes and shall pay for
maintaining its staff and personnel and shall, at its own expense provide the
equipment, office space, and facilities necessary to perform its obligations
under this Agreement. The Adviser shall not, under the terms of this Agreement,
bear the following expenses (although the Adviser or an affiliate may bear
certain of these expenses under one or more other agreements):
(a) Expenses of all audits by Trust's independent public
accountants;
(b) Expenses of the Trust's transfer agent(s), registrar,
dividend disbursing agent(s), and shareholder recordkeeping services;
(c) Expenses of the Trust's custodial services, including
recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value
of each Fund's net assets;
(e) Expenses of obtaining Portfolio Activity Reports for each
Fund;
(f) Expenses of maintaining the Trust's tax records;
- 7 -
<PAGE>
(g) Salaries and other compensation of any of the Trust's
executive officers and employees, if any, who are not officers,
directors, stockholders, or employees of the Adviser, its subsidiaries
or affiliates, or any Portfolio Manager of the Trust;
(h) Taxes, if any, levied against the Trust or any of its
Funds;
(i) Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for any of the Funds;
(j) Costs, including the interest expenses, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports
of the Trust to its shareholders, the filing of reports with
regulatory bodies, the maintenance of the Trust's existence and
qualification to do business, and the registration of shares with
federal and state securities authorities;
(l) The Trust's legal fees, including the legal fees related to
the registration and continued qualification of the Trust's shares for
sale;
(m) Costs of printing certificates representing shares of the
Trust;
(n) Trustees' fees and expenses to trustees who are not
officers, employees, or stockholders of the Adviser, its subsidiaries
or affiliates, or any Portfolio Manager of the Trust;
(o) The Trust's pro rata portion of the fidelity bond required
by Section 17(g) of the 1940 Act, or other insurance premiums;
- 8 -
<PAGE>
(p) Association membership dues;
(q) Extraordinary expenses as may arise, including expenses
incurred in connection with litigation, proceedings, other claims and
the legal obligations of the Trust to indemnify its trustees,
officers, employees, shareholders, distributors, and agents with
respect thereto; and
(r) Organizational and offering expenses and, if applicable,
reimbursement (with interest) of underwriting discounts and
commissions.
7. Liability. The Adviser shall give the Trust the benefit of the
---------
Adviser's best judgment and efforts in rendering services under this Agreement.
The Adviser may rely on information reasonably believed by it to be accurate and
reliable. As an inducement for the Adviser's undertaking to render services
unless this Agreement, the Trust agrees that neither the Adviser nor its
stockholders, partners, limited partners, officers, directors, employees, or
agents shall be subject to any liability for, or any damages, expenses or losses
incurred in connection with, any act or omission or mistake in judgment
connected with or arising out of any services rendered under this Agreement,
except by reason of willful misfeasance, bad faith, or gross negligence in
performance of the Adviser's duties, or by reason of reckless disregard of the
Adviser's investment advisory obligations and duties under this Agreement.
8. Independent Contractor. The Adviser shall for all purposes herein
----------------------
be deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board of Trustees of the Trust from time to
time, have no authority to act for or represent the Trust in any way or
otherwise be deemed its agent.
9. Compensation. As compensation for the services rendered under
------------
this Agreement, the Trust shall pay to the Adviser a fee at an annual rate of
the average daily net assets of each of the Funds as set forth on the Schedule
attached hereto. The fees payable to the Adviser for all of the Funds shall be
computed and accrued daily and paid monthly. If the Adviser
- 9 -
<PAGE>
shall serve for less than any whole month, the foregoing compensation shall be
prorated.
10. Non-Exclusivity. It is understood that the services of the
---------------
Adviser hereunder are not exclusive, and the Adviser shall be free to render
similar services to other investment companies and other clients whether or not
their investment objectives are similar to those of any of the Funds.
11. Term and Continuation. This Agreement shall take effect as of
---------------------
the date hereof, and shall remain in effect, unless sooner terminated as
provided herein, with respect to a Fund for a period of two years following the
date set forth on the attached Schedule. This Agreement shall continue
thereafter on an annual basis with respect to a Fund provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of the Board of Trustees of the Trust, or (b) by vote of a majority of
the outstanding voting shares of the Fund, and provided continuance is also
approved by the vote of a majority of the Board of Trustees of the Trust who are
not parties to this Agreement or "interested persons" (as defined in the 1940
Act) of the Trust, or the Adviser, cast in person at a meeting called for the
purpose of voting on such approval. This Agreement may not be materially amended
without a majority vote of the outstanding voting shares (as defined in the 1940
Act) of the pertinent Fund or Funds.
However, any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of a particular Fund
shall be effective to continue this Agreement with respect to such Fund
notwithstanding (a) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Fund or (b) that this
Agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. This Agreement will terminate automatically with
respect to the services provided by the Adviser in event of its assignment, as
that term is defined in the 1940 Act, by the Adviser.
- 10 -
<PAGE>
This Agreement may be terminated:
(a) by the Trust at any time with respect to the services
provided by the Adviser, without the payment of any penalty, by vote
of a majority of the entire Board of Trustees of the Trust or by a
vote of a majority of the outstanding voting shares of the Trust or,
with respect to a particular Fund, by vote of a majority of the
outstanding voting shares of such Fund, on 60 days' written notice to
the Adviser or, in the case of the PIMCO Growth Fund, PIMCO Target
Fund, PIMCO Opportunity Fund, PIMCO Innovation Fund, PIMCO Tax Exempt
Fund, PIMCO International Fund, PIMCO Precious Metals Fund and PIMCO
Renaissance Fund, by vote of a majority of the Trustees of the Trust
who are not "interested persons" (as such term is defined in the 1940
Act) of the Trust.
(b) by the Adviser at any time, without the payment of any
penalty, upon 60 days' written notice to the Trust.
12. Use of Name. It is understood that the name "PIMCO Advisors
-----------
L.P." or "PIMCO" or any derivative thereof or logo associated with those names
are the valuable property of the Adviser and its affiliates, and that the Trust
and/or the Funds have the right to use such names (or derivatives or logos) only
so long as this Agreement shall continue with respect to such Trust and/or
Funds. Upon termination of this Agreement, the Trust (or Fund) shall forthwith
cease to use such names (or derivatives or logos) and, in the case of the Trust,
shall promptly amend its Declaration of Trust to change its name.
13. Notices. Notices of any kind to be given to the Adviser by the
-------
Trust shall be in writing and shall be duly given if mailed or delivered to the
Adviser at 800 Newport Center Drive, Newport Beach, California 92660, or to such
other address or to such individual as shall be specified by the Adviser.
Notices of any kind to be given to the Trust by the Adviser shall be in writing
and shall be duly given if mailed or delivered to 840 Newport Center Drive,
Newport Beach, California 92660, or to such other address or to such individual
as shall be specified by the Trust.
14. Fund Obligation. A copy of the Trust's Second Amended and
---------------
Restated Agreement and Declaration of Trust is on file with the Secretary of the
Commonwealth of Massachusetts and notice is hereby given that the Agreement has
been executed on behalf of the Trust by a trustee of the Trust in his or her
- 11 -
<PAGE>
capacity as trustee and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Trust and shall not be
binding upon any trustee, officer, or shareholder of the Trust individually.
15. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original.
16. Miscellaneous. (a) This Agreement shall be governed by the laws
-------------
of California, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any rule
or order of the SEC thereunder.
(b) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby and, to this extent, the provisions
of this Agreement shall be deemed to be severable. To the extent that any
provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise with regard to any party hereunder,
such provisions with respect to other parties hereto shall not be affected
thereby.
(c) The captions in this Agreement are included for convenience only
and in no way define any of the provisions hereof or otherwise affect their
construction or effect.
- 12 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
PIMCO FUNDS: MULTI-MANAGER
SERIES
Attest: By:
------------------------- ---------------------------
Title: Title:
PIMCO ADVISORS L.P.
Attest: By:
------------------------- ---------------------------
Title: Title:
Attest: By:
------------------------- ---------------------------
Title: Title:
- 13 -
<PAGE>
Schedule to Amended and Restated
Investment Advisory Agreement
<TABLE>
<CAPTION>
Effective
Fund Fee Rate Date
- ---- -------- ---------
<S> <C> <C>
PIMCO Tax Exempt Fund .30% __/__/19__
PIMCO Capital Appreciation .45% 11/15/1994
PIMCO Mid Cap Growth .45% 11/15/1994
PIMCO Equity Income .45% 11/15/1994
PIMCO Value .45% 11/15/1994
PIMCO Enhanced Equity .45% 11/15/1994
PIMCO Balanced .45% 11/15/1994
PIMCO Structured Emerging Markets .45% 09/15/1996
PIMCO Growth .50% __/__/19__
PIMCO Opportunity .50% __/__/19__
PIMCO International .60% 11/15/1994
PIMCO International Developed Fund [.__%] __/__/19__
PIMCO Renaissance .60% __/__/19__
PIMCO Target .60% __/__/19__
PIMCO Small Cap Value .60% 11/15/1994
PIMCO Precious Metals .60% __/__/19__
PIMCO Innovation .70% __/__/19__
PIMCO Emerging Markets .85% 11/15/1996
PIMCO Small Cap Growth 1.00% 11/15/1996
PIMCO Micro Cap Growth 1.25% 11/15/1996
</TABLE>
<PAGE>
EXHIBIT 6(d)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this ___ day of ____________ , 199__ between PIMCO
Advisors L.P. ("Adviser"), a limited partnership, and Columbus Circle Investors
("Portfolio Manager"), a partnership.
WHEREAS, PIMCO Funds: Multi-Manager Series (the "Trust") is
registered with the Securities and Exchange Commission ("SEC") as an open-end,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate series, with each such series representing
interests in a separate portfolio; and
WHEREAS, the Trust has established multiple series, including
operational series or series that are expected to be operational that are
designated as the PIMCO International Fund, [PIMCO PAF International Fund],
PIMCO Emerging Markets Fund, PIMCO Capital Appreciation Fund, PIMCO Mid Cap
Growth Fund, PIMCO Small Cap Growth Fund, PIMCO Micro Cap Growth Fund, PIMCO
Renaissance Fund, PIMCO Growth Fund, PIMCO Target Fund, PIMCO Opportunity Fund,
PIMCO Innovation Fund, PIMCO Tax Exempt Fund, PIMCO Equity Income Fund, PIMCO
Value Fund, PIMCO Small Cap Value Fund, PIMCO Enhanced Equity Fund, PIMCO
Structured Emerging Markets Fund, PIMCO Balanced Fund, and PIMCO Precious Metals
Fund, such series together with any other series subsequently established by the
Trust, with respect to which the Trust desires to retain the Portfolio Manager
to render investment advisory services hereunder, and with respect to which the
Portfolio Manager is willing to do so, being herein collectively referred to
also as the "Funds"; and
WHEREAS, the Portfolio Manager is registered with the SEC as an
investment adviser under the Investment Advisers Act of 1940 ("Advisers Act");
and
WHEREAS, the Trust has retained the Adviser to render management
services to the Funds pursuant to an Investment Advisory Agreement dated as of
November 15, 1994, as amended 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
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WHEREAS, the Adviser desires to retain the Portfolio Manager to
furnish investment advisory services to one or more of the Funds of the Trust,
and the Portfolio Manager is willing to furnish such services to such Funds and
the Adviser in the manner and on the terms hereinafter set forth; and
NOW THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Adviser and the
Portfolio Manager as follows:
1. Appointment. The Adviser hereby appoints Columbus Circle
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Investors to act as Portfolio Manager to the PIMCO Summit Fund, the PIMCO Growth
Fund, the PIMCO Target Fund, the PIMCO Opportunity Fund, the PIMCO Innovation
Fund, and the PIMCO Tax Exempt Fund (the "Funds") for the periods and on the
terms set forth in this Agreement. The Portfolio Manager accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
In the event the Adviser wishes to retain the Portfolio Manager to
render investment advisory services to one or more series other than the Funds,
the Adviser shall notify the Portfolio Manager in writing. If the Portfolio
Manager is willing to render such services, it shall notify the Adviser in
writing, whereupon such series shall become a Fund hereunder, and be subject to
this Agreement.
2. Portfolio Management Duties. Subject to the supervision of the
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Trust's Board of Trustees and the Adviser, the Portfolio Manager will provide a
continuous investment program for the Funds and determine 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. The Portfolio
Manager will provide investment research and analysis, which may consist of
computerized investment methodology, and will conduct a continuous program of
evaluation, investment, sales, and reinvestment of the Fund's assets by
determining the securities and other investments that shall be purchased,
entered into, sold, closed, or exchanged for the Funds, when these transactions
should be executed, and what portion of the assets of the Funds should be held
in the various securities and other investments in which it may invest, and the
Portfolio Manager is hereby authorized to execute and perform such services on
behalf of the Funds. To the extent permitted by the investment policies of the
Funds, the Portfolio Manager shall make decisions for the Funds as to foreign
currency matters and
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make determinations as to the retention or disposition of foreign currencies or
securities or other instruments denominated in foreign currencies, or derivative
instruments based upon foreign currencies, including forward foreign currency
contracts and options and futures on foreign currencies and shall execute and
perform the same on behalf of each Fund. The Portfolio Manager will provide the
services under this Agreement in accordance with the Funds' investment objective
or objectives, investment policies, and investment restrictions as stated in the
Trust's Registration Statement filed on Form N-1A with the SEC, as supplemented
or amended from time to time, copies of which shall be sent to the Portfolio
Manager by the Adviser. In performing these duties, the Portfolio Manager:
(a) Shall conform with the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Trust's
Board of Trustees, and with the provisions of the Trust's Registration
Statement filed on Form N-1A, as supplemented or amended from time to
time.
(b) Shall use reasonable efforts to manage each Fund so that it
qualifies as a regulated investment company under Subchapter M of the
Internal Revenue Code.
(c) Is responsible, in connection with its responsibilities under this
Section 2, for decisions to buy and sell securities and other
investments for the Funds, for broker-dealer and futures commission
merchant ("FCM") selection, and for negotiation of commission rates.
The Portfolio Manager's primary consideration in effecting a security
or other transaction will be to obtain the best execution for the
Funds, taking into account the factors specified in the Prospectus and
Statement of Additional Information for the Trust, as they may be
amended or supplemented from time to time. Subject to such policies
as the Board of Trustees may determine and consistent with Section
28(e) of the Securities Exchange Act of 1934, the Portfolio Manager
shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of its
having caused the Funds to pay a broker or dealer, acting as agent,
for effecting a portfolio transaction at a price in excess of the
amount of commission another broker or dealer would have charged for
effecting that transaction, if
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the Portfolio Manager determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the Portfolio Manager's
overall responsibilities with respect to the Funds and to its other
clients as to which it exercises investment discretion. To the extent
consistent with these standards, and in accordance with Section 11(a)
of the Securities Exchange Act of 1934 and Rule 11a2-(T) thereunder,
and subject to any other applicable laws and regulations, the
Portfolio Manager is further authorized to allocate the orders placed
by it on behalf of the Funds to the Portfolio Manager if it is
registered as a broker or dealer with the SEC, to its affiliate that
is registered as a broker or dealer with the SEC, or to such brokers
and dealers that also provide research or statistical research and
material, or other services to the Funds or the Portfolio Manager.
Such allocation shall be in such amounts and proportions as the
Portfolio Manager shall determine consistent with the above standards,
and, upon request, the Portfolio Manager will report on said
allocation to the Adviser and Board of Trustees of the Trust,
indicating the brokers or dealers to which such allocations have been
made and the basis therefor.
(d) May, on occasions when the purchase or sale of a security is
deemed to be in the best interest of a Fund as well as any other
investment advisory clients, to the extent permitted by applicable
laws and regulations, but shall not be obligated to, aggregate the
securities to be so sold or purchased with those of its other clients
where such aggregation is not inconsistent with the policies set forth
in the Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Portfolio Manager in a manner
that is fair and equitable in the judgment of the Portfolio Manager in
the exercise of its fiduciary obligations to the Trust and to such
other clients.
(e) Will, in connection with the purchase and sale of securities for
each Fund, arrange for the transmission to the custodian for the Trust
on a daily basis, such confirmation, trade tickets, and other
documents and information, including, but not limited to, Cusip,
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Sedol, or other numbers that identify securities to be purchased or
sold on behalf of the Fund, as may be reasonably necessary to enable
the custodian to perform its administrative and recordkeeping
responsibilities with respect to the Fund, and, with respect to
portfolio securities to be purchased or sold through the Depository
Trust Company, will arrange for the automatic transmission of the
confirmation of such trades to the Trust's custodian.
(f) The Portfolio Manager will assist the custodian and recordkeeping
agent(s) for the Trust in determining or confirming, consistent with
the procedures and policies stated in the Registration Statement for
the Trust, the value of any portfolio securities or other assets of
the Fund for which the custodian and recordkeeping agent(s) seek
assistance from the Portfolio Manager or identify for review by the
Portfolio Manager.
(g) Will make available to the Trust and Adviser, promptly upon
request, any of the Funds' investment records and ledgers as are
necessary to assist the Trust to comply with requirements of the 1940
Act and the Investment Advisers Act of 1940, as well as other
applicable laws, and will furnish to regulatory authorities having the
requisite authority any information or reports in connection with such
services which may be requested in order to ascertain whether the
operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
(h) Will regularly report to the Trust's Board of Trustees on the
investment program for each Fund and the issuers and securities
represented in each Fund's portfolio, and will furnish the Trust's
Board of Trustees with respect to the Funds such periodic and special
reports as the Trustees may reasonably request.
(i) The Portfolio Manager shall be responsible for making reasonable
inquiries and for reasonably ensuring that any employee of the
Portfolio Manager has not, to the best of the Portfolio Manager's
knowledge:
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(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor involving the purchase or sale of any security or
arising out of such person's conduct as an underwriter, broker,
dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered
under the Commodity Exchange Act, or as an affiliated person,
salesman, or employee of any investment company, bank, insurance
company, or entity or person required to be registered under the
Commodity Exchange Act; or
(ii) been permanently or temporarily enjoined by reason of any
misconduct, by order, judgment, or decree of any court of
competent jurisdiction from acting as an underwriter, broker,
dealer, investment adviser, municipal securities dealer,
government securities broker, government securities dealer,
transfer agent, or entity or person required to be registered
under the Commodity Exchange Act, or as an affiliated person,
salesman or employee of any investment company, bank, insurance
company, or entity or person required to be registered under the
Commodity Exchange Act, or from engaging in or continuing any
conduct or practice in connection with any such activity or in
connection with the purchase or sale of any security.
3. Disclosure about Portfolio Manager. The Portfolio Manager has
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reviewed the Registration Statement for the Trust filed with the SEC and
represents and warrants that, with respect to the disclosure about the Portfolio
Manager or information relating, directly or indirectly, to the Portfolio
Manager, such Registration Statement contains, as of the date hereof, no untrue
statement of any material fact and does not omit any statement of a material
fact which was required to be stated therein or necessary to make the statements
contained therein not misleading. The Portfolio Manager further represents and
warrants that it is a duly registered investment adviser under the Advisers Act
and a duly registered investment adviser in all states in which the Portfolio
Manager is required to be registered. The Adviser has received a current copy
of the Portfolio Manager's Uniform Application for Investment Adviser
Registration on Form ADV, as filed with the SEC. The Portfolio Manager agrees
to provide the Adviser with current copies of the
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Portfolio Manager's Form ADV, and any supplements or amendments thereto, as
filed with the SEC.
4. Expenses. During the term of this Agreement, the Portfolio
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Manager will pay all expenses incurred by it and its staff and for their
activities in connection with its services under this Agreement. The Portfolio
Manager shall not be responsible for any of the following:
(a) Expenses of all audits by the Trust's independent public
accountants;
(b) Expenses of the Trust's transfer agent(s), registrar, dividend
disbursing agent(s), and shareholder recordkeeping services;
(c) Expenses of the Trust's custodial services, including
recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value of the
Funds' net assets;
(e) Expenses of obtaining Portfolio Activity Reports for each Fund;
(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's executive
officers and employees, if any, who are not officers, directors,
stockholders, or employees of the Adviser, its subsidiaries or
affiliates, or any Portfolio Manager of the Trust;
(h) Taxes, if any, levied against the Trust or any of its Funds;
(i) Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Funds;
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(j) Costs, including the interest expenses, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports
of the Trust to its shareholders, the filing of reports with
regulatory bodies, the maintenance of the Trust's existence, and the
registration of shares with federal and state securities or insurance
authorities;
(l) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for
sale;
(m) Costs of printing stock certificates representing shares of the
Trust;
(n) Trustees' fees and expenses to trustees who are not officers,
employees, or stockholders of the Portfolio Manager or any affiliate
thereof;
(o) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(p) Association membership dues;
(q) Extraordinary expenses of the Trust as may arise, including
expenses incurred in connection with litigation, proceedings and other
claims and the legal obligations of the Trust to indemnify its
trustees, officers, employees, shareholders, distributors, and agents
with respect thereto; and
(r) Organizational and offering expenses and, if applicable,
reimbursement (with interest) of underwriting discounts and
commissions.
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5. Compensation. For the services provided, the Adviser will pay the
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Portfolio Manager a fee accrued and computed daily and, payable monthly, based
on the average daily net assets of each of the Funds as set forth on the
Schedule attached hereto.
6. Seed Money. The Adviser agrees that the Portfolio Manager shall
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not be responsible for providing money for the initial capitalization of the
Trust or the Funds.
7. Compliance.
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(a) The Portfolio Manager agrees that it shall immediately notify the
Adviser and the Trust in the event (i) that the SEC has censured the
Portfolio Manager; placed limitations upon its activities, functions
or operations; suspended or revoked its registration as an investment
adviser; or has commenced proceedings or an investigation that may
result in any of these actions, and (ii) upon having a reasonable
basis for believing that a Fund has ceased to qualify or might not
qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code. The Portfolio Manager further agrees to notify
the Adviser and the Trust immediately of any material fact known to
the Portfolio Manager respecting or relating to the Portfolio Manager
that is not contained in the Registration Statement or prospectus for
the Trust, or any amendment or supplement thereto, or of any statement
contained therein that becomes untrue in any material respect.
(b) The Adviser agrees that it shall immediately notify the Portfolio
Manager in the event (i) that the SEC has censured the Adviser or the
Trust; placed limitations upon either of their activities, functions,
or operations; suspended or revoked the Adviser's registration as an
investment adviser; or has commenced proceedings or an investigation
that may result in any of these actions, and (ii) upon having a
reasonable basis for believing that a Fund has ceased to qualify or
might not qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code.
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8. Independent Contractor. The Portfolio Manager shall for all
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purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Adviser from time to
time, have no authority to act for or represent the Adviser in any way or
otherwise be deemed its agent. The Portfolio Manager understands that unless
expressly provided herein or authorized from time to time by the Trust, the
Portfolio Manager shall have no authority to act for or represent the Trust in
any way or otherwise be deemed the Trust's agent.
9. Books and Records. In compliance with the requirements of Rule
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31a-3 under the 1940 Act, the Portfolio Manager hereby agrees that all records
which it maintains for the Fund are the property of the Trust and further agrees
to surrender promptly to the Trust any of such records upon the Trust's or the
Adviser's request, although the Portfolio Manager may, at its own expense, make
and retain a copy of such records. The Portfolio Manager further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-l under the 1940 Act and to preserve the
records required by Rule 204-2 under the Advisers Act for the period specified
in the Rule.
10. Cooperation. Each party to this Agreement agrees to cooperate
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with each other party and with all appropriate governmental authorities having
the requisite jurisdiction (including, but not limited to, the SEC) in
connection with any investigation or inquiry relating to this Agreement or the
Trust.
11. Services Not Exclusive. It is understood that the services of
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the Portfolio Manager are not exclusive, and nothing in this Agreement shall
prevent the Portfolio Manager (or its affiliates) from providing similar
services to other clients, including investment companies (whether or not their
investment objectives and policies are similar to those of the Funds) or from
engaging in other activities.
12. Liability. Except as provided in Section 13 and as may otherwise
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be required by the 1940 Act or the rules thereunder or other applicable law, the
Adviser agrees that the Portfolio Manager, any affiliated person of the
Portfolio Manager, and each person, if any, who, within the meaning of Section
15 of the Securities Act of 1933 (the "1933 Act") controls the Portfolio Manager
shall not be liable for, or subject to any damages, expenses, or losses in
connection with,
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any act or omission connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of the Portfolio Manager's duties, or by reason of
reckless disregard of the Portfolio Manager's obligations and duties under this
Agreement.
13. Indemnification. The Portfolio Manager agrees to indemnify and
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hold harmless, the Adviser, any affiliated person within the meaning of Section
2(a)(3) of the 1940 Act ("affiliated person") of the Adviser and each person, if
any, who, within the meaning of Section 15 of the 1933 Act, controls
("controlling person") the Adviser (collectively, "PM Indemnified Persons")
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), to which the Adviser or such affiliated
person or controlling person may become subject under the 1933 Act, 1940 Act,
the Advisers Act, under any other statute, at common law or otherwise, arising
out of the Portfolio Manager's responsibilities to the Trust which (i) may be
based upon any misfeasance, malfeasance, or nonfeasance by the Portfolio
Manager, any of its employees or representatives, or any affiliate of or any
person acting on behalf of the Portfolio Manager (other than a PM Indemnified
Person), or (ii) may be based upon any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or
prospectus covering the Shares of the Trust or any Fund, or any amendment
thereof or any supplement thereto, or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, if such a statement or omission was made in
reliance upon information furnished to the Adviser, the Trust, or any affiliated
person of the Trust by the Portfolio Manager or any affiliated person of the
Portfolio Manager (other than a PM Indemnified Person); provided, however, that
in no case is the Portfolio Manager's indemnity in favor of the Adviser or any
affiliated person or controlling person of the Adviser deemed to protect such
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties, or by reason of his reckless disregard of obligation
and duties under this Agreement.
The Adviser agrees to indemnify and hold harmless the Portfolio
Manager, any affiliated person within the meaning of Section 2(a)(3) of the 1940
Act of the Portfolio Manager and each person, if any, who, within the meaning of
Section 15 of the 1933 Act controls the Portfolio Manager (collectively,
"Adviser
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Indemnified Persons") against any and all losses, claims, damages, liabilities
or litigation (including legal and other expenses) to which the Portfolio
Manager or such affiliated person or controlling person may become subject under
the 1933 Act, the 1940 Act, the Advisers Act, under any other statute, at common
law or otherwise, arising out of the Adviser's responsibilities as adviser of
the Trust which (i) may be based upon any misfeasance, malfeasance, or
nonfeasance by the Adviser, any of its employees or representatives or any
affiliate of or any person acting on behalf of the Adviser (other than an
Adviser Indemnified Person) or (ii) may be based upon any untrue statement or
alleged untrue statement of a material fact contained in a registration
statement or prospectus covering Shares of the Trust or any Fund, or any
amendment thereof or any supplement thereto, or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statement therein not misleading, unless such statement or omission was
made in reliance upon written information furnished to the Adviser or any
affiliated person of the Adviser by the Portfolio Manager or any affiliated
person of the Portfolio Manager (other than an Adviser Indemnified Person);
provided however, that in no case is the indemnity of the Adviser in favor of
the Portfolio Manager, or any affiliated person or controlling person of the
Portfolio Manager deemed to protect such person against any liability to which
any such person would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of his duties, or by reason of his
reckless disregard of obligations and duties under this Agreement.
14. Duration and Termination. This Agreement shall take effect as of
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the date hereof, and shall remain in effect for two years from such date, and
continue thereafter on an annual basis with respect to a Fund; provided that
such annual continuance is specifically approved at least annually (a) by the
vote of a majority of the Board of Trustees of the Trust, or (b) by the vote of
a majority of the outstanding voting shares of that Fund, and provided that
continuance is also approved by the vote of a majority of the Board of Trustees
of the Trust who are not parties to this Agreement or "interested persons" (as
such term is defined in the 1940 Act) of the Trust, the Adviser, or the
Portfolio Manager, cast in person at a meeting called for the purpose of voting
on such approval. This Agreement may not be materially amended without a
majority vote of the outstanding shares (as defined in the 1940 Act) of the
Fund. This Agreement may be terminated:
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(a) by the Trust at any time with respect to the services provided by
the Portfolio Manager, without the payment of any penalty, by vote of
a majority of the entire Board of Trustees of the Trust, by a vote of
a majority of the Trustees of the Trust who are not interested
persons' (as such term is defined in the 1940 Act) of the Trust or the
Portfolio Manager, or by a vote of a majority of the outstanding
voting shares of the Trust or, with respect to a particular Fund, by
vote of a majority of the outstanding voting shares of such Fund, on
60 days' written notice to the Portfolio Manager;
(b) by the Portfolio Manager at any time, without the payment of any
penalty, upon 60 days' written notice to the Trust.
(c) by the Adviser at any time, without the payment of any penalty,
upon 60 days' written notice to the Portfolio Manager.
However, any approval of this Agreement by the holders of a majority
of the outstanding shares (as defined in the 1940 Act) of a particular Fund
shall be effective to continue this Agreement with respect to such Fund
notwithstanding (a) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Fund or (b) that this
Agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. This Agreement will terminate automatically with
respect to the services provided by the Portfolio Manager in event of its
assignment, as that term is defined in the 1940 Act, by the Portfolio Manager.
15. Agreement and Declaration of Trust. A copy of the Second Amended
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and Restated Agreement and Declaration of Trust for the Trust is on file with
the Secretary of the Commonwealth of Massachusetts. The Second Amended and
Restated Agreement and Declaration of Trust has been executed on behalf of the
Trust by a Trustee of the Trust in his capacity as Trustee of the Trust and not
individually. The obligations of this Agreement shall be binding upon the
assets and property of the Trust and shall not be binding upon any Trustee,
officer, or shareholder of the Trust individually.
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16. Miscellaneous.
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(a) This Agreement shall be governed by the laws of California,
provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940 or
rules or orders of the SEC thereunder.
(b) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
(c) If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby, and to this extent, the
provisions of this Agreement shall be deemed to be severable. To the
extent that any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise with regard to
any party hereunder, such provisions with respect to other parties
hereto shall not be affected thereby.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
PIMCO ADVISORS L.P.
By:
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Attest: Title:
Title:
By:
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Attest: Title:
Title:
COLUMBUS CIRCLE INVESTORS
By:
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Attest: Title:
Title:
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Schedule for Portfolio Management Agreement
Fund Fee Rate
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PIMCO Tax Exempt Fund .30%
PIMCO Growth Fund .34%
PIMCO Opportunity Fund .48%
PIMCO Target Fund .36%
PIMCO Renaissance Fund .38%
PIMCO Innovation Fund .38%
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EXHIBIT 7(b)
DISTRIBUTION CONTRACT
PIMCO Funds: Multi-Manager Series
840 Newport Center Drive
Newport Beach, California 92660
___________, 1996
PIMCO Advisors Distribution Company
2187 Atlantic Avenue
Stamford, Connecticut 06902
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust") and
you (the "Distributor") as follows:
1. Description of Trust and Classes of Shares. The Trust is an open-end
investment company which presently has the following [twenty] investment
portfolios: Equity Income Fund, Value Fund, Summit Fund, Enhanced Equity Fund,
Growth Fund, Capital Appreciation Fund, Mid Cap Growth Fund, Target Fund, Small
Cap Value Fund, Small Cap Growth Fund, Opportunity Fund, Micro Cap Growth Fund,
Innovation Fund, International Fund, [New International Fund], Emerging Markets
Fund, Precious Metals Fund, Balanced Fund and Tax Exempt Fund (each a "Fund,"
and collectively, the "Funds"). Additional investment portfolios may be
established in the future. This Contract shall pertain to the Funds and to such
additional investment portfolios as shall be designated in Supplements to this
Contract, as further agreed between the Trust and the Distributor. A separate
series of shares of beneficial interest in the Trust is offered to investors
with respect to each Fund, and each Fund currently offers its shares with
respect to five classes: Class A shares, Class B shares, and Class C shares
(together, the "Retail Classes"), and Institutional Class shares and
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Administrative Class shares. The Trust engages in the business of investing and
reinvesting the assets of the Funds in the manner and in accordance with the
investment objective and restrictions specified in the Trust's currently
effective Prospectus or Prospectuses and Statement of Additional Information
(together, the "Prospectus") relating to the Retail, Institutional and
Administrative Classes of the Funds included in the Trust's Registration
Statement, as amended from time to time (the "Registration Statement"), as filed
by the Trust under the Investment Company Act of 1940, as amended (together with
the rules and regulations thereunder, the "1940 Act") and the Securities Act of
1933, as amended (together with the rules and regulations thereunder, the "1933
Act"). Copies of the documents referred to in the preceding sentence have been
furnished to the Distributor. Any amendments to those documents shall be
furnished to the Distributor promptly. The Trust has adopted separate
Distribution and Servicing Plans pursuant to Rule 12b-l under the 1940 Act with
respect to each of the Retail Classes (the "Retail Class Plans") and has adopted
a Distribution Plan, also pursuant to Rule 12b-1, with respect to the
Administrative Class shares of the Funds (the "Administrative Distribution
Plan"). The Trust has also adopted an Administrative Services Plan with respect
to the Administrative Class shares of the Funds, in conformity with Rule 12b-1,
as if the expenditures made thereunder were subject to Rule 12b-1, excepting the
shareholder voting rights under Rule 12b-1 (the "Administrative Services Plan,"
and together with the Retail Class Plans and the Administrative Distribution
Plan, the "Plans").
2. Appointment and Acceptance. The Trust hereby appoints the Distributor
as a distributor of shares of beneficial interest in the Trust (the "shares")
which may from time to time be registered under the 1933 Act and as servicing
agent of shareholders and shareholder accounts of the Trust, and the Distributor
hereby accepts such appointment in accordance with the terms and conditions set
forth herein. As the Trust's agent, the Distributor shall, except to the extent
provided in Section 4 hereof, be the exclusive distributor for the unsold
portion of the shares.
3. Sale of Shares to Distributor and Sales by Distributor. The
Distributor will have the right, as principal, to sell shares of each Class of
each Fund directly to the public against orders therefor at the applicable
public offering price as described below in the case of Class A shares, and at
net asset value in the case of Class B shares, Class C shares, Institutional
Class shares and Administrative Class shares. For such purposes, the
Distributor will have the right to purchase shares at net asset value. The
Distributor will also have the right, as agent, to sell shares of a Fund
indirectly to the public through broker dealers who are members of the National
Association of Securities Dealers, Inc. and who are acting as introducing
brokers pursuant to clearing agreements with the Distributor ("introducing
brokers"), to broker dealers which are members of the National Association of
Securities Dealers, Inc. and who have entered into selling agreements with the
Distributor ("participating brokers") or through other financial intermediaries,
in each case against orders therefor. The price for introducing brokers,
participating brokers and other financial intermediaries shall be, in the case
of Class A shares, the applicable public offering price less a concession to be
determined by the Distributor, which concession will not exceed the amount of
the sales
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<PAGE>
charge or underwriting discount, if any, described below and, in the case of
Class B shares, Class C shares, Institutional Class shares and Administrative
Class shares, net asset value.
The Trust shall sell through the Distributor, as the Trust's agent, shares
to eligible investors as described in the Prospectus. All orders through the
Distributor shall be subject to acceptance and confirmation by the Trust. The
Trust shall have the right, at its election, to deliver either shares issued
upon original issue or treasury shares.
Prior to the time of transfer of any shares by the Trust to, or on the
order of, the Distributor or any introducing broker, participating broker or
other financial intermediary, the Distributor shall pay or cause to be paid to
the Trust or to its order an amount in New York clearing house funds equal to
the applicable net asset value of the shares. Upon receipt of registration
instructions in proper form, the Distributor will transmit or cause to be
transmitted such instructions to the Trust or its agent for registration of the
shares purchased.
The public offering price of Class A shares shall be the net asset value of
such shares, plus any applicable sales charge as set forth in the Prospectus.
In no event will any applicable sales charge or underwriting discount exceed the
limitations on permissible sales loads imposed by Section 22(b) of the 1940 Act
and Section 26(d)(1) of Article III of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc., as either or both may be
amended from time to time.
On every sale, the Trust shall receive the net asset value of the shares.
The net asset value of the shares shall be determined in the manner provided in
the Declaration of Trust and By-laws of the Trust as then amended or restated.
In the case of Class A shares, the Distributor may retain so much of any sales
charge or underwriting discount as is not allowed by the Distributor as a
concession to dealers and such sales charge or underwriting discount shall be in
addition to the fee paid to the Distributor in respect of Class A shares as
described in Section 5 hereof.
4. Sales of Shares by the Trust. In addition to sales by the Distributor,
the Trust reserves the right to issue shares at any time directly to its
shareholders as a stock dividend or stock split or to sell shares to its
shareholders or other persons at not less than net asset value to the extent
that the Trust, its officers, or other persons associated with the Trust
participate in the sale, or to the extent that the Trust or the transfer agent
for its shares receive purchase requests for shares.
5. Fees. For its services as servicing agent of a Fund's Class A
shareholders and Class A shareholder accounts, the Trust shall pay the
Distributor on behalf of the Fund a servicing fee at the annual rate of 0.25% of
the Fund's average daily net assets attributable to its Class A shares upon the
terms and conditions set forth in the Distribution and Servicing Plan attached
as Exhibit A hereto, and as amended from time to time, and may retain so much of
any sales charge or underwriting discount as is not allowed by the Distributor
as a
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<PAGE>
concession to dealers, and shall receive any contingent deferred sales charge as
provided in Section 8 hereof.
For its services as distributor of a Fund's Class B and Class C shares and
as servicing agent of Class B and Class C shareholders and Class B and Class C
shareholder accounts, the Trust shall pay the Distributor on behalf of the Fund
a distribution fee at the annual rate of 0.75% of the Fund's average daily net
assets, and a servicing fee at the annual rate of 0.25% of the Fund's average
daily net assets, attributable to the Fund's Class B shares and Class C shares,
respectively, upon the terms and conditions set forth in the relevant
Distribution and Servicing Plans attached as Exhibits B and C hereto, as amended
from time to time, and shall receive any contingent deferred sales charge as
provided in Section 8 hereof. The respective distribution and servicing fees
shall be accrued daily and paid monthly to the Distributor as soon as
practicable after the end of the calendar month in which they accrue, but in any
event within 5 business days following the last calendar day of each month.
The Trust shall reimburse the Distributor at an annual rate not to exceed
0.25% of the Fund's average daily net assets attributable to its Administrative
Class shares for payments made by the Distributor to various financial
intermediaries in connection with the distribution of Administrative Class
shares upon the terms and conditions set forth in the Administrative
Distribution Plan set forth as Exhibit D hereto.
6. Reservation of Right Not to Sell. The Trust reserves the right to
refuse at any time or times to sell any of its shares for any reason deemed
adequate by it.
7. Use of Sub-Agents; Non-exclusivity. The Distributor may employ such
sub-agents, including one or more participating brokers or introducing brokers,
for the purposes of selling shares of the Trust as the Distributor, in its sole
discretion, shall deem advisable or desirable. The Distributor may enter into
similar arrangements with other issuers and, except to the extent necessary to
perform its obligations hereunder, nothing herein shall be deemed to limit or
restrict the right of the Distributor, or any affiliate of the Distributor, or
any employee of the Distributor, to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, firm, individual or association.
8. Repurchase of Shares. The Distributor will act as agent for the Trust
in connection with the repurchase and redemption of shares by the Trust upon the
terms and conditions set forth in the Prospectus or as the Trust acting through
its Trustees may otherwise direct. The Distributor may employ such sub-agents,
including one or more participating brokers or introducing brokers, for such
purposes as the Distributor, in its sole discretion, shall deem to be advisable
or desirable. Any contingent deferred sales charge imposed on repurchases and
redemptions of Class A, Class B and Class C shares upon the terms and conditions
set forth in the Prospectus shall be paid to the Distributor in addition to the
fees with respect to Class A, Class B and Class C shares set forth in Section 5
hereof. The Trust
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<PAGE>
will take such steps as are commercially reasonable to track on a share-by-share
basis the aging of its shares for purposes of calculating any contingent
deferred sales charges and/or distribution fees.
9. Basis of Purchases and Sales of Shares. The Distributor's obligation
to sell shares hereunder shall be on a best efforts basis only and the
Distributor shall not be obligated to sell any specific number of shares.
Shares will be sold by the Distributor only against orders therefor. The
Distributor will not purchase shares from anyone other than the Trust except in
accordance with Section 8 hereof, and will not take "long" or "short" positions
in shares contrary to any applicable provisions of the Declaration of Trust of
the Trust, as amended or restated from time to time.
10. Rules of Securities Associations, etc. As the Trust's agent, the
Distributor may sell and distribute shares in such manner not inconsistent with
the provisions hereof and the Trust's Prospectus as the Distributor may
determine from time to time. In this connection, the Distributor shall comply
with all laws, rules and regulations applicable to it, including, without
limiting the generality of the foregoing, all applicable rules or regulations
under the 1940 Act and of any securities association registered under the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "1934 Act"). The Distributor will conform to the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
and the securities laws of any jurisdiction in which it sells, directly or
indirectly, any shares. The Distributor also agrees to furnish to the Trust
sufficient copies of any agreement or plans it intends to use in connection with
any sales of shares in adequate time for the Trust to file and clear them with
the proper authorities before they are put in use, and not to use them until so
filed and cleared.
11. Independent Contractor. The Distributor shall be an independent
contractor and neither the Distributor nor any of its officers or employees as
such, is or shall be an employee of the Trust. The Distributor is responsible
for its own conduct and the employment, control and conduct of its agents and
employees and for injury to such agents or employees or to others through its
agents or employees. The Distributor assumes full responsibility for its agents
and employees under applicable statutes and agrees to pay all employer taxes
thereunder.
12. Registration and Qualification of Shares. The Trust agrees to execute
such papers and to do such acts and things as shall from time to time be
reasonably requested by the Distributor for the purpose of qualifying and
maintaining qualification of the shares for sale under the so-called Blue Sky
Laws of any state or for maintaining the registration of each Fund of the Trust
and the Trust under the 1933 Act and the 1940 Act, to the end that there will be
available for sale from time to time such number of shares as the Distributor
may reasonably be expected to sell. The Trust shall advise the Distributor
promptly of (a) any action of the Securities and Exchange Commission or any
authorities of any state or territory, of which it may be advised, affecting
registration or qualification of the Trust, a Fund or the
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<PAGE>
shares thereof, or rights to offer such shares for sale and (b) the happening of
any event which makes untrue any statement or which requires the making of any
change in the registration statement or Prospectus in order to make the
statements therein not misleading.
13. Securities Transactions. The Trust agrees that the Distributor may
effect a transaction on any national securities exchange of which it is a member
for the account of the Trust and any Fund of the Trust which is permitted by
Section 11(a) of the 1934 Act.
14. Expenses.
(a) The Distributor shall from time to time employ or associate with
it such persons as it believes necessary to assist it in carrying out its
obligations under this Contract. The compensation of such persons shall be paid
by the Distributor.
(b) The Distributor shall pay all expenses incurred in connection with
its qualification as a dealer or broker under Federal or state law.
(c) The Distributor will pay all expenses of preparing, printing and
distributing advertising and sales literature as such expenses relate to Retail
Class shares (apart from expenses of registering shares under the 1933 Act and
the 1940 Act and the preparation and printing of prospectuses and reports for
shareholders as required by said Acts and the direct expenses of the issue of
shares, except that the Distributor will pay the cost of the preparation and
printing of prospectuses and shareholders' reports used by it in the sale of
Trust shares). The Trust may enter into arrangements with affiliates of the
Distributor providing for the payment by such affiliates of some or all of these
expenses as they relate to Institutional and Administrative Class shares.
(d) The Trust shall pay or cause to be paid all expenses incurred in
connection with (i) the preparation, printing and distribution to shareholders
of the Prospectus and reports and other communications to existing shareholders,
(ii) future registrations of shares under the 1933 Act and the 1940 Act, (iii)
amendments of the Registration Statement subsequent to the initial public
offering of shares, (iv) qualification of shares for sale in jurisdictions
designated by the Distributor, including under the securities or so-called "Blue
Sky" laws of any State, (v) qualification of the Trust as a dealer or broker
under the laws of jurisdictions designated by the Distributor, (vi)
qualification of the Trust as a foreign corporation authorized to do business in
any jurisdiction if the Distributor determines that such qualification is
necessary or desirable for the purpose of facilitating sales of shares,
(vii) maintaining facilities for the issue and transfer of shares, (viii)
supplying information, prices and other data to be furnished by the Trust under
this Contract, (ix) any expenses assumed by the Trust with regard to shares of
each Retail Class of each Fund pursuant to the Retail Class Plan applicable to
that class; (x) any expenses assumed by the Trust with regard to the
Administrative Class shares of each Fund pursuant to the Administrative
Distribution
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<PAGE>
Plan; and (xi) any expenses assumed by the Trust with regard to the
Administrative Class shares of each Fund pursuant to the Administrative Services
Plan.
(e) The Trust shall pay any original issue taxes or transfer taxes
applicable to the sale or delivery of shares or certificates therefor.
15. Indemnification of Distributor. The Trust shall prepare and furnish
to the Distributor from time to time such number of copies of the most recent
form of the Prospectus filed with the SEC as the Distributor may reasonably
request. The Trust authorizes the Distributor to use the Prospectus, in the
form furnished to the Distributor from time to time, in connection with the sale
of shares. The Trust shall indemnify, defend and hold harmless the Distributor,
its officers and trustees and any person who controls the Distributor within the
meaning of the 1933 Act, from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers and trustees or any such
controlling person may incur under the 1933 Act, the 1940 Act, the common law or
otherwise, arising out of or based upon any alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either or necessary to make the statements in either
not misleading. This Contract shall not be construed to protect the Distributor
against any liability to the Trust or its shareholders to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Contract. This indemnity
agreement is expressly conditioned upon the Trust being notified of any action
brought against the Distributor, its officers or directors or any such
controlling person, which notification shall be given by letter or by telegram
addressed to the Trust at its principal office in Newport Beach, California, and
sent to the Trust by the person against whom such action is brought within 10
days after the summons or other first legal process shall have been served. The
failure to notify the Trust of any such action shall not relieve the Trust from
any liability which it may have to the person against whom such action is
brought by reason of any such alleged untrue statement or omission otherwise
than on account of the indemnity agreement contained in this Section 15. The
Trust shall be entitled to assume the defense of any suit brought to enforce any
such claim, demand or liability, but, in such case, the defense shall be
conducted by counsel chosen by the Trust and approved by the Distributor. If
the Trust elects to assume the defense of any such suit and retain counsel
approved by the Distributor, the defendant or defendants in such suit shall bear
the fees and expenses of any additional counsel retained by any of them, but in
case the Trust does not elect to assume the defense of any such suit, or in the
case the Distributor does not approve of counsel chosen by the Trust, the Trust
will reimburse the Distributor, its officers and directors or the controlling
person or persons named as defendant or defendants in such suit, for the fees
and expenses of any counsel retained by the Distributor or them. In addition,
the Distributor shall have the right to employ counsel to represent it, its
officers and directors and any such controlling person who may be subject to
liability arising
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<PAGE>
out of any claim in respect of which indemnity may be sought by the Distributor
against the Trust hereunder if in the reasonable judgment of the Distributor it
is advisable for the Distributor, its officers and directors or such controlling
person to be represented by separate counsel, in which event the fees and
expense of such separate counsel shall be borne by the Trust. This indemnity
agreement and the Trust's representations and warranties in this Contract shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of the Distributor, its officers and directors or any such
controlling person. This indemnity agreement shall inure exclusively to the
benefit of the Distributor and its successors, the Distributor's officers and
directors and their respective estates and any such controlling persons and
their successors and estates. The Trust shall promptly notify the Distributor
of the commencement of any litigation or proceedings against it in connection
with the issue and sale of any shares.
16. Indemnification of Trust. The Distributor agrees to indemnify, defend
and hold harmless the Trust, its officers and trustees and any person who
controls the Trust within the meaning of the 1933 Act, from and against any and
all claims, demands, liabilities and expenses (including the cost of
investigating or defending such claims, demands or liabilities and any counsel
fees incurred in connection therewith) which the Trust, its officers or trustees
or any such controlling person, may incur under the 1933 Act, the 1940 Act, the
common law or otherwise, but only to the extent that such liability or expense
incurred by the Trust, its officers or trustees or such controlling person
resulting from such claims or demands shall arise out of or be based upon (a)
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Trust specifically for use in the
Registration Statement or the Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or the
Prospectus or necessary to make such information not misleading, (b) any alleged
act or omission on the Distributor's part as the Trust's agent that has not been
expressly authorized by the Trust in writing, and (c) any claim, action, suit or
proceeding which arises out of or is alleged to arise out of the Distributor's
failure to exercise reasonable care and diligence with respect to its services
rendered in connection with investment, reinvestment, employee benefit and other
plans for shares. The foregoing rights of indemnification shall be in addition
to any other rights to which the Trust or a trustee may be entitled as a matter
of law. This indemnity agreement is expressly conditioned upon the Distributor
being notified of any action brought against the Trust, its officers or trustees
or any such controlling person, which notification shall be given by letter or
telegram addressed to the Distributor at its principal office in Stamford,
Connecticut, and sent to the Distributor by the person against whom such action
is brought, within 10 days after the summons or other first legal process shall
have been served. The failure to notify the Distributor of any such action
shall not relieve the Distributor from any liability which it may have to the
Trust, its officers or trustees or such controlling person by reason of any
alleged misstatement, omission, act or failure on the Distributor's part
otherwise than on account of the indemnity agreement contained in this Section
16. The Distributor shall have a right to control the defense of such action
with counsel of its own choosing and approved by the Trust if such
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<PAGE>
action is based solely upon such alleged misstatement, omission, act or failure
on the Distributor's part, and in any other event the Trust, its officers and
trustees or such controlling person shall each have the right to participate in
the defense or preparation of the defense of any such action at their own
expense. If the Distributor elects to assume the defense of any such suit and
retain counsel approved by the Trust, the defendant or defendants in such suit
shall bear the fees and expenses of any additional counsel retained by any of
them, but in case the Distributor does not elect to assume the defense of any
such suit, or in the case the Trust does not approve of counsel chosen by the
Distributor, the Distributor will reimburse the Trust, its officers and trustees
or the controlling person or persons named as defendant or defendants in such
suit, for the fees and expenses of any counsel retained by the Trust or them. In
addition, the Trust shall have the right to employ counsel to represent it, its
officers and trustees and any such controlling person who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Trust against the Distributor hereunder if in the reasonable judgment of
the Trust it is advisable for the Trust, its officers and trustees or such
controlling person to be represented by separate counsel, in which event the
fees and expense of such separate counsel shall be borne by the Distributor.
This indemnity agreement and the Distributor's representations and warranties in
this Contract shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of the Trust, its officers and trustees
or any such controlling person. This indemnity agreement shall inure exclusively
to the benefit of the Trust and its successors, the Trust's officers and
trustees and their respective estates and any such controlling persons and their
successors and estates. The Distributor shall promptly notify the Trust of the
commencement of any litigation or proceedings against it in connection with the
issue and sale of any shares.
17. Assignment Terminates this Contract; Amendments of this Contract.
This Contract shall automatically terminate, without the payment of any penalty,
in the event of its assignment. This Contract may be amended only if such
amendment be approved either by action of the Trustees of the Trust or at a
meeting of the shareholders of the Trust by the affirmative vote of a majority
of the outstanding shares of the Trust, and by a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plans or this Contract by
vote cast in person at a meeting called for the purpose of voting on such
approval.
18. Effective Period and Termination of this Contact. This Contract shall
take effect upon the date first above written and shall remain in full force and
effect continuously as to a Fund and a class of shares thereof (unless
terminated automatically as set forth in Section 17 hereof) until terminated:
(a) Either by such Fund or such class or the Distributor by not more
than sixty (60) days' nor less than thirty (30) days' written notice delivered
or mailed by registered mail, postage prepaid, to the other party; or
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<PAGE>
(b) Automatically as to any Fund or class thereof at the close of
business one year from the date hereof, or upon the expiration of one year
from the effective date of the last continuance of this Contract, whichever
is later, if the continuance of this Contract is not specifically approved
at least annually by the Trustees of the Trust or the shareholders of such
Fund or such class by the affirmative vote of a majority of the outstanding
shares of such Fund or such class, and by a majority of the Trustees of the
Trust who are not interested persons of the Trust and who have no direct or
indirect financial interest in the operation of the Plans or this Contract
by vote cast in person at a meeting called for the purpose of voting on
such approval.
Action by a Fund or a class thereof under (a) above may be taken either (i)
by vote of the Trustees of the Trust, or (ii) by the affirmative vote of a
majority of the outstanding shares of such Fund or such class. The requirement
under (b) above that the continuance of this Contract be "specifically approved
at least annually" shall be construed in a manner consistent with the 1940 Act
and the rules and regulations thereunder.
Termination of this Contract pursuant to this Section 18 shall be without
the payment of any penalty.
If this Contract is terminated or not renewed with respect to one or more
Funds or classes thereof, it may continue in effect with respect to any Fund or
any class thereof as to which it has not been terminated (or has been renewed).
19. Limited Recourse. The Distributor hereby acknowledges that the
Trust's obligations hereunder with respect to the distribution fee or servicing
fee or contingent deferred sales charges payable with respect to the shares of
any Fund of the Trust or a particular class of shares of a Fund are binding only
on the assets and property belonging to such Fund or allocated to such class.
20. Certain Definitions. For the purposes of this Contract, the
"affirmative vote of a majority of the outstanding shares" means the affirmative
vote, at a duly called and held meeting of shareholders, (a) of the holders of
67% or more of the shares of the Trust, Fund or class, as the case may be,
present (in person or by proxy) and entitled to vote at such meeting, if the
holders of more than 50% of the outstanding shares of the Trust, Fund or class,
as the case may be, entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Trust, Fund or class, as the case may be, entitled to vote at such meeting,
whichever is less.
For the purposes of this Contract, the terms "interested persons" and
"assignment" shall have the meanings defined in the 1940 Act, subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
under said Act. Certain other items used herein that are not otherwise defined
have the meaning given in the Trust's Prospectus or constituent agreements or
documents of the Trust.
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<PAGE>
A copy of the First Amended and Restated Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of Massachusetts
and notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and property of
the Trust.
If the foregoing correctly sets forth the agreement between the Trust and
the Distributor, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
PIMCO FUNDS: MULTI-
MANAGER SERIES
By: ___________________
Title:
ACCEPTED:
PIMCO ADVISORS DISTRIBUTION COMPANY
By: _______________________________________
Title:
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<PAGE>
EXHIBIT 10(a)
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
Advisors 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
<PAGE>
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 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
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<PAGE>
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
- 3 -
<PAGE>
Plan for such a vote, it shall have been effectively approved with respect to a
Fund if a majority of the outstanding voting 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
- 4 -
<PAGE>
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:
- 5 -
<PAGE>
Exhibit 10(b)
PIMCO FUNDS: MULTI-MANAGER SERIES
(formerly PIMCO Funds: Equity Advisors Series)
AMENDED AND RESTATED MULTI-CLASS PLAN
Plan pursuant to Rule 18f-3 under the Investment Company Act of 1940
--------------------------------------------------------------------
Effective Date [December 31, 1996]
WHEREAS, the Board of Trustees of the PIMCO Funds: Multi-Manager Series
(formerly PIMCO Funds: Equity Advisors Series) (the "Trust") have considered the
following Amended and Restated Multi-Class Plan (the "Plan") under which the
Trust may offer multiple classes of shares of its now existing and hereafter
created series pursuant to Rule 18f-3 under the Investment Company Act of 1940,
as amended (the "1940 Act"); and
WHEREAS, a majority of the Trustees of the Trust and a majority of the
Trustees who are not interested persons of the Trust have found the Plan, as
proposed, to be in the best interests of each class of the Trust individually
and the Trust as a whole;
NOW, THEREFORE, the Trust hereby approves and adopts the following Plan
pursuant to Rule 18f-3 under the 1940 Act.
1. FEATURES OF THE CLASSES
Each now existing and hereafter created series (each a "Fund") of the Trust
is authorized to issue from time to time its shares of beneficial interest in
five classes: Class A shares, Class B shares, Class C shares, Institutional
Class shares and Administrative Class shares./1/ Each class is subject to
such investment minimums and other conditions of eligibility as are set forth in
the Trust's prospectus(es) as from time to time in effect (together with all
relevant Statements of Additional Information, the "Prospectus"). Each Fund
offers such classes of shares to such classes of persons as are set forth in the
Prospectus.
- ----------------------
/1/ Currently, Class A and Class C shares of the Trust's Opportunity Fund
are not available for purchase by new investors in that Fund. The Opportunity
Fund has never offered Class B shares. Shareholders who owned shares of the
Opportunity Fund on December 31, 1992 will still be permitted to purchase
additional shares for as long as they continue to own any shares of the Fund.
Similarly, participants in any self-directed qualified benefit plan that owned
Opportunity Fund shares on March 1, 1993 will be eligible to direct the purchase
of Opportunity Fund shares by their plan account for so long as the plan
continues to own shares of the Fund.
<PAGE>
Shares of each class of a Fund shall represent an equal pro rata interest
in such Fund and, generally, shall have identical voting, dividend, liquidation,
and other rights, preferences, powers, restrictions, limitations, qualifications
and terms and conditions, except that: (a) each class shall have a different
designation; (b) each class of shares shall bear any Class Expenses, as defined
in Section 4 below and (c) each class shall have separate voting rights on any
matter submitted to shareholders in which the interests of one class differ from
the interests of any other class and shall have exclusive voting rights on any
matter submitted to shareholders that relates solely to that class.
In addition, Class A, Class B, Class C, Institutional Class and
Administrative Class shares shall have the features described in Sections 2, 3,
4 and 5 below. These features are subject to change, to the extent permitted by
law and by the Amended and Restated Declaration of Trust and By-laws of the
Trust, by action of the Board of Trustees of the Trust.
2. SALES CHARGE STRUCTURE
(a) Initial Sales Charge. Class A shares of the Funds are offered at a
--------------------
public offering price that is equal to their net asset value ("NAV") plus a
sales charge of up to 5.50% of the public offering price (which maximum may be
less for certain Funds, as described in the Prospectus). The sales charges on
Class A shares are subject to reduction or waiver as permitted by Rule 22d-1
under the 1940 Act, as described in the Prospectus. For example, as of the date
of this Plan, each Fund may waive the Class A sales charge for certain
categories of investors, including current or retired officers, trustees,
directors or employees of the Trust, and for current registered representatives
and other full-time employees of participating brokers.
Class B, Class C, Institutional Class and Administrative Class shares of
the Funds are offered at their NAV, without an initial sales charge.
(b) Contingent Deferred Sales Charge. A contingent deferred sales charge
--------------------------------
(a "CDSC") may be imposed on Class A, Class B or Class C shares under certain
circumstances. The Trust imposes a CDSC on redemptions of a particular class of
shares of a Fund if the investor redeems an amount which causes the current
value of the investor's account for the Fund to fall below the total dollar
amount of purchase payments subject to the CDSC, except that no CDSC is imposed
if the shares redeemed have been acquired through the reinvestment of dividends
or capital gains distributions or if the amount redeemed is derived from
increases in the value of the account above the amount of purchase payments
subject to a CDSC. In determining whether a CDSC is payable, it is assumed that
the purchase payment from which the redemption is made is the earliest purchase
payment from which a redemption or exchange has not already been effected. In
determining whether an amount is available for redemption of a certain class
without incurring a CDSC, the purchase payments made for all shares of that
class in the investor's account with the particular Fund are aggregated, and the
current value of all such shares is aggregated.
-2-
<PAGE>
Purchases of Class A shares of each Fund of $1 million or more that are
redeemed within eighteen months of their purchase are subject to a CDSC of 1%,
except that the CDSC on Class A shares does not apply to an investor purchasing
$1 million or more of a Fund's Class A shares if such investor is otherwise
eligible (i.e. without regard to the amount of the purchase) to purchase Class A
shares of such Fund without any sales charge. The conditions for such
eligibility will be set forth in the Prospectus.
Class B shares that are redeemed within 6 years from purchase are subject
to a CDSC of up to 5% of the redemption amount to which the CDSC applies; such
percentage declines, eventually to 0%, the longer the shares are held, as
described in the Prospectus. As of the date of this Plan, purchases of Class B
shares are subject to a CDSC according to the following schedule:
<TABLE>
<CAPTION>
Years Since Purchase Percentage
Payment was Made CDSC
---------------- ----------
<S> <C>
First............... 5
Second.............. 4
Third............... 3
Fourth.............. 3
Fifth............... 2
Sixth............... 1
Seventh............. 0
Eighth.............. *
</TABLE>
* Class B shares convert into Class A shares as described below.
Class C shares are subject to a CDSC of 1% if redeemed within 1 year after
purchase.
As permitted by Rule 6c-10 under the 1940 Act and as described in the
Prospectus, the CDSC otherwise applicable to Class A, Class B and Class C shares
is subject to reduction or waiver in connection with particular classes of
transactions provided the conditions in Rule 22d-1 under the 1940 Act are
satisfied. As of the date of this Plan, examples of redemptions for which the
CDSC is not applicable include any partial or complete redemption following
death or disability of a shareholder from an account in which the deceased or
disabled is named, provided the redemption is requested within one year of the
death or initial determination of disability (which applies to all classes), and
any redemption resulting from a return of an excess contribution to a qualified
employer retirement plan or an IRA (which applies only to Class A and Class C
shares).
Institutional Class and Administrative Class shares of each Fund are not
subject to a CDSC.
-3-
<PAGE>
3. SERVICE, DISTRIBUTION AND ADMINISTRATIVE FEES
(a) Service and Distribution Fees. Class A, Class B and Class C shares
-----------------------------
pay PIMCO Advisors Distribution Company (the "Distributor") fees for services
rendered and expenses borne in connection with personal services rendered to
shareholders of that class and the maintenance of shareholder accounts ("Service
Fees"). Class A, Class B and Class C shares of each Fund pay a Service Fee of
up to 0.25% per annum of the average daily net assets of such Fund attributable
to such class, as described in the Prospectus. In addition, Class B and Class C
shares pay the Distributor fees in connection with the distribution of shares of
that class ("Distribution Fees"). Class B and Class C shares of each Fund pay a
Distribution Fee of up to 0.75% per annum of the average daily net assets of
such Fund attributable to such class, as described in the Prospectus. Class A
Service Fees and Class B and C Distribution and Service Fees ("12b-1 Fees") are
paid pursuant to separate plans adopted for each class pursuant to Rule 12b-1
under the 1940 Act.
The Trust has not adopted an administrative services plan or a distribution
plan with respect to the Institutional Class shares of the Funds. However,
Institutional Class shares may be offered through certain brokers and financial
intermediaries ("service agents") that have established a shareholder servicing
relationship with the Trust on behalf of their customers. The Trust pays no
compensation to such entities. Service agents may impose additional or different
conditions on the purchase or redemption of Trust shares and may charge
transaction or account fees. Service agents are responsible for transmitting to
their customers a schedule of any such fees and conditions.
The Trust has adopted an administrative services plan and a distribution
plan with respect to the Administrative Class shares of each Fund. Under the
terms of each plan, the Trust is permitted to reimburse, out of the
Administrative Class assets of each Fund, in an amount up to 0.25% on an annual
basis of the average daily net assets of that class ("Administrative Class
Fees"), financial intermediaries that provide services in connection with the
distribution of shares or administration of plans or programs that use Fund
shares as their funding medium, as described in the Prospectus. The same entity
may not receive both distribution and administrative services fees with respect
to the same assets but, with respect to separate assets, may receive fees under
both a distribution plan and an administrative services plan.
(b) Administration Fees. Each class of shares of a Fund pays an
-------------------
administration fee ("Administration Fees") to Pacific Investment Management
Company (the "Administrator") pursuant to an administration agreement, which may
be amended from time to time, to provide for such management services as
custody, transfer agency, accounting, legal and printing services. As of the
date of this Plan, with respect to every Fund except the Metals, International
and Emerging Markets Funds, (i) Class A, Class B and Class C shares pay an
Administration Fee of 0.40% of their respective average daily net asset and (ii)
Institutional Class and Administrative Class shares pay an Administration Fee of
0.25% of their respective
-4-
<PAGE>
average daily net asset value. The classes of shares of the Metals,
International and Emerging Markets Funds pay the following Administration Fees:
<TABLE>
<CAPTION>
Fees for Fees for Instit'l Class
Fund Class A, B, C and Admin. Class
---- ------------- ----------------
<S> <C> <C>
Metals 0.50% 0.35%
International 0.60% 0.45%
Emerging Markets 0.65% 0.50%
</TABLE>
4. ALLOCATION OF INCOME AND EXPENSES
(a) Class A, Class B, Class C and Administrative Class shares pay the
expenses associated with their different distribution and shareholder servicing
arrangements. All classes pay their respective Administration Fees. Each class
of shares may, at the Trustees' discretion, also pay a different share of other
expenses (together with 12b-1 Fees, Administrative Class Fees and Administration
Fees, "Class Expenses"), not including advisory fees or other expenses related
to the management of the Trust'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.
(b) The gross income of each Fund generally shall be allocated to each
class on the basis of net assets. To the extent practicable, certain expenses
(other than Class Expenses as defined above, which shall be allocated more
specifically) shall be subtracted from the gross income on the basis of the net
assets of each class of the Fund. These expenses include:
(1) Expenses incurred by the Trust (including, but not limited
to, fees of Trustees, insurance and legal counsel) not
attributable to a particular Fund or to a particular class of
shares of a Fund ("Corporate Level Expenses"); and
(2) Expenses incurred by a Fund not attributable to any
particular class of the Fund's shares (for example, advisory
fees, custodial fees, or other expenses relating to the
management of the Fund's assets) ("Fund Expenses").
Expenses of a Fund shall be apportioned to each class of shares depending
on the nature of the expense item. Corporate Level Expenses and Fund Expenses
shall be allocated among the classes of shares based on their relative net asset
values in relation to the net asset value of the Trust. Approved Class Expenses
shall be allocated to the particular class to which they are attributable. In
addition, certain expenses may be allocated differently if their method of
imposition changes. Thus, if a Class Expense can no longer be attributed to a
class, it shall be charged to a Fund for allocation among classes, as determined
by the Board of Trustees. Any additional Class Expenses not specifically
identified above which are subsequently
-5-
<PAGE>
identified and determined to be properly allocated to one class of shares shall
not be so allocated until approved by the Board of Trustees of the Trust in
light of the requirements of the 1940 Act and the Internal Revenue Code of 1986,
as amended (the "Code").
5. EXCHANGE PRIVILEGES
Except with respect to exchanges for shares of the Opportunity Fund,
shareholders may exchange shares of one class of a Fund at net asset value,
without the imposition of any sales charge or CDSC, for shares of the same class
offered by another Fund or by PIMCO Funds: Pacific Investment Management Series,
a registered investment company advised by the Administrator, provided that the
exchange is made in states where the securities being acquired are properly
registered. Shareholders of Funds other than the Opportunity Fund are not
permitted to exchange any of their shares for Opportunity Fund shares unless the
shareholders are independently eligible to purchase Opportunity Fund shares as
described in footnote 1 above. Institutional Class shares of a Fund may be
exchanged for Administrative Class shares offered by any Fund or by PIMCO Funds:
Pacific Investment Management Series, or vice versa, provided that the
Institutional Class or Administrative Class shareholder, as the case may be,
meets the eligibility requirements of the class into which the shareholder seeks
to exchange.
With respect to Class A, Class B and Class C shares subject to a CDSC, if
less than all of an investment is exchanged out of a Fund, any portion of the
investment attributable to capital appreciation and/or reinvested dividends or
capital gains distributions will be exchanged first, and thereafter any portions
exchanged will be from the earliest investment made in the Fund from which the
exchange was made.
6. CONVERSION FEATURES
Class B shares of each Fund automatically convert to Class A shares of the
same Fund after they have been held for 7 years, and thereafter are subject to
the lower fees charged to Class A shares. In this regard, if there is any
material increase in 12b-1 Fees applicable to Class A shares without the
approval of the Class B shareholders, the Trust will establish a new class of
shares, into which Class B shares would convert, on the same terms as those that
applied to Class A shares before such increase. No other conversion features
exist between classes of shares of the Funds.
7. DIVIDENDS/DISTRIBUTIONS
Each Fund pays out as dividends substantially all of its net investment
income (which comes from dividends and interest it receives from its
investments) and net realized short-term capital gains.
All dividends and/or distributions will be paid in the form of additional
shares of the
-6-
<PAGE>
class of shares of the Fund to which the dividends and/or distributions relate
or, at the election of the shareholder, of another Fund or a series of PIMCO
Funds at net asset value of such Fund or series, unless the shareholder elects
to receive cash. Dividends paid by each Fund are calculated in the same manner
and at the same time with respect to each class.
8. WAIVER OR REIMBURSEMENT OF EXPENSES
Expenses may be waived or reimbursed by any adviser or sub-adviser to the
Trust, by the Trust's underwriter or any other provider of services to the Trust
without the prior approval of the Trust's Board of Trustees.
9. EFFECTIVENESS OF PLAN
This Plan shall not take effect until it has been approved by votes of a
majority of both (a) the Trustees of the Trust and (b) the Independent Trustees
and supersedes all previous plans of the Trust adopted pursuant to Rule 18f-3
under the 1940 Act.
10. MATERIAL MODIFICATIONS
This Plan may not be amended to modify materially its terms unless such
amendment is approved in the manner provided for initial approval hereof in
section 9 above.
11. LIMITATION OF LIABILITY
The Trustees of the Trust and the shareholders of each Fund shall not be
liable for any obligations of the Trust or any Fund under this Plan, and the
Administrator or any other person, in asserting any rights or claims under this
Plan, shall look only to the assets and property of the Trust or such Funds in
settlement of such right or claim, and not to such Trustees or shareholders.
-7-
<PAGE>
Exhibit 11
Dechert Price & Rhoads
1500 K Street, N.W.
Washington, D.C. 20005-1208
(202) 626-3300
September 27, 1996
PIMCO Funds: Equity Advisors Series
840 Newport Center Drive
Suite 360
Newport Beach, California 92660
Dear Sirs:
We have acted as counsel to PIMCO Funds: Equity Advisors Series, a
Massachusetts business trust (the "Trust"), and we have a general familiarity
with the Trust's business operations, practices and procedures. You have asked
for our opinion regarding the issuance of shares of beneficial interest by the
Trust in connection with the acquisition by the Growth Fund, a series of the
Trust, of the assets of the Columbus Circle Investors Core Equity Fund, a series
of the Trust, and the acquisition by the Target Fund, a series of the Trust, of
the assets of the Columbus Circle Investors Mid Cap Equity Fund, a series of the
Trust, which will be registered on a Form N-14 Registration Statement (the
"Registration Statement") to be filed by the Trust with the Securities and
Exchange Commission.
We have examined originals or certified copies, or copies otherwise
identified to our satisfaction as being true copies, of various corporate
records of the Trust and such other instruments, documents and records as we
have deemed necessary in order to render this opinion. We have assumed the
genuineness of all signatures, the authenticity of all documents examined by us
and the correctness of all statements of fact contained in those documents.
On the basis of the foregoing, we are of the opinion that the shares of
beneficial interest of the Trust being registered under the Securities Act of
1933 in the Registration Statement will be legally and validly issued, fully
paid and non-assessable by the Trust, upon transfer of assets pursuant to the
terms of the Agreement and Plan of Reorganization included in the Registration
Statement.
We hereby consent to the filing of this opinion with and as part of the
Registration Statement.
Very truly yours,
/s/ Dechert Price & Rhoads
<PAGE>
Exhibit 13(e)
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, made this _____ day of _____, 199_, between
PIMCO Funds: Multi-Manager Series (the "Trust"), a Massachusetts business trust,
and PIMCO Advisors L.P. (the "Administrator" or "PALP"), a limited partnership
organized under the laws of Delaware.
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("SEC") as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate series, with each such series representing
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust has established multiple series, including PIMCO
International Fund, PIMCO International Developed Fund, PIMCO Emerging Markets
Fund, PIMCO Capital Appreciation Fund, PIMCO Mid Cap Growth Fund, PIMCO Small
Cap Growth Fund, PIMCO Micro Cap Growth Fund, PIMCO Renaissance Fund, PIMCO
Growth Fund, PIMCO Target Fund, PIMCO Opportunity Fund, PIMCO Innovation Fund,
PIMCO Tax Exempt Fund, PIMCO Equity Income Fund, PIMCO Value Fund, PIMCO Small
Cap Value Fund, PIMCO Enhanced Equity Fund, PIMCO Structured Emerging Markets
Fund, PIMCO Balanced Fund, and PIMCO Precious Metals Fund (each a "Fund"); and
WHEREAS, on or after the effect date of this agreement, each Fund
offers five classes of shares: Institutional Class, Administrative Class, Class
A, Class B, and Class C, of which Class A, Class B, and Class C shares are
referred to herein as "Retail Class" shares; and
WHEREAS, the Trust wishes to retain PALP to provide administrative and
other services to the Trust with respect to the Funds in the manner and on the
terms hereinafter set forth; and
WHEREAS, PALP is willing to furnish such services in the manner and on
the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
<PAGE>
1. Appointment. The Trust hereby appoints PALP as the Administrator
-----------
to provide the administrative and other services with respect to the Funds for
the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees during such period to render the services
herein set forth for the compensation herein provided.
In the event the Trust establishes and designates additional series
with respect to which it desires to retain the Administrator to render
administrative and other services hereunder, it shall notify the Administrator
in writing. If the Administrator is willing to render such services, it shall
notify the Trust in writing, whereupon such additional series shall become a
Fund hereunder.
2. Duties. Subject to the general supervision of the Board of
------
Trustees, the Administrator shall provide all organizational, administrative and
other services reasonably necessary for the operation of the Funds other than
the investment advisory services provided by PALP pursuant to its Investment
Advisory Agreement with the Trust.
(a) Administrative Services. Subject to the approval or consent
-----------------------
of the Board of Trustees, the Administrator shall provide or procure,
at the Administrator's expense, services to include the following:
(i) coordinating matters relating to the operation of the Funds,
including any necessary coordination among the adviser or advisers to
the Funds, the custodian(s), transfer agent(s), dividend disbursing
agent(s), and recordkeeping agent(s) (including pricing and valuation
of the Funds), accountants, attorneys, and other parties performing
services or operational functions for the Funds; (ii) providing the
Funds with the services of a sufficient number of persons competent to
perform such administrative and clerical functions as are necessary to
ensure compliance with federal securities laws, as well as other
applicable laws, and to provide effective administration of the Funds;
(iii) maintaining, or supervising the maintenance by third parties, of
such books and records of the Trust and the Funds as may be required
by applicable federal or state law other than the records and ledgers
maintained under the Investment Advisory Agreement; (iv) preparing or
supervising the preparation by third parties of all federal, state,
and local tax returns and reports of the Funds required by applicable
law; (v) preparing, filing, and arranging for the distribution of
proxy materials and periodic reports to shareholders of the Funds as
required by
- 2 -
<PAGE>
applicable law; (vi) preparing and arranging for the filing of such
registration statements and other documents with the SEC and other
federal and state regulatory authorities as may be required to
register the shares of the Funds and qualify the Trust to do business
or as otherwise required by applicable law; (vii) taking such other
action with respect to the Funds as may be required by applicable law,
including, without limitation, the rules and regulations of the SEC
and of state securities commissions and other regulatory agencies;
and (viii) providing the Funds with adequate personnel, office space,
communications facilities, and other facilities necessary for the
Funds' operations as contemplated in this Agreement.
(b) Other Services. Subject to the general supervision of the
--------------
Board of Trustees, the Administrator shall also provide or procure on
behalf of the Trust and the Funds, and at the expense of the
Administrator, the following services to the Funds: (i) custodian
services to provide for the safekeeping of the Funds' assets; (ii)
recordkeeping services to maintain the portfolio accounting records
for the Funds; (iii) transfer agency services to maintain the
portfolio accounting records for the Funds; and (iv) dividend
disbursing services for the Funds. The services to be provided under
(iii) and (iv) of this Section 2(b) shall be commensurate with the
level of services reasonably necessary for the institutional investors
that are eligible to invest in Institutional and Administrative
Classes of the Funds, as set forth in the prospectus or prospectuses
for such Classes of the Funds. The Trust may be a party to any
agreement with any person or persons engaged to provide the services
referred to in this Section 2(b).
(c) Retail Class Services. In addition to the Administrator's
---------------------
responsibilities as specified in Subsections (a) and (b) above,
subject to the general supervision of the Board of Trustees, the
Administrator, at its own expense, also shall provide, directly or
through persons selected by the Administrator, to the Retail Classes
of the Funds administrative, recordkeeping, and shareholder services
reasonably required by the Retail Classes of the Funds, which may
include some or all of the following services: (i) transfer agency
services reasonably necessary to meet the increased account activity
associated with Retail Classes; (ii) dividend disbursing services
reasonably necessary to meet the
- 3 -
<PAGE>
increased number of accounts associated with the Retail Classes; (iii)
preparing and arranging for the distribution of prospectuses,
statements of additional information, proxy materials, periodic
reports to shareholders, and other communications with Retail Class
shareholders; and (iv) taking such other actions and providing or
procuring such other services with respect to the Retail Classes as
are reasonably necessary or desirable.
(d) Organizational Services. The Administrator shall provide the
-----------------------
Trust and the Funds, at the Administrator's expense, with the services
necessary to organize any Funds that commence operations on or after
the date of this Agreement so that such Funds can conduct business as
described in the Trust's Registration Statement.
(e) The Administrator shall also make its officers and employees
available to the Board of Trustees and officers of the Trust for
consultation and discussions regarding the administration of the Funds
and services provided to the Funds under this agreement.
(f) In performing these services, the Administrator:
(i) Shall conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws
and regulations, with any applicable procedures adopted by the Trust's
Board of Trustees, and with the provisions of the Trust's Registration
Statement filed on Form N-1A as supplemented or amended from time to
time.
(ii) Will make available to the Trust, promptly upon
request, any of the Funds' books and records as are maintained under
this Agreement, and will furnish to regulatory authorities having the
requisite authority any such books and records and any information or
reports in connection with the Administrator's services under this
Agreement that may be requested in order to ascertain whether the
operations of the Trust are being conducted in a manner consistent
with applicable laws and regulations.
(iii) Will regularly report to the Trust's Board of Trustees
on the services provided under this Agreement and will furnish the
Trust's Board of
- 4 -
<PAGE>
Trustees with respect to the Funds such periodic and special reports
as the Trustees may reasonably request.
3. Documentation. The Trust has delivered copies of each of the
-------------
following documents to the Administrator and will deliver to it all future
amendments and supplements thereto, if any:
(a) the Trust's Registration Statement as filed with the SEC and
any amendments thereto; and
(b) exhibits, powers of attorneys, certificates and any and all
other documents relating to or filed in connection with the
Registration Statement described above.
4. Independent Contractor. The Administrator shall for all purposes
----------------------
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees of the Trust
from time to time, have no authority to act for or represent the Trust in any
way or otherwise be deemed its agent.
5. Compensation. As compensation for the services rendered under
------------
this Agreement, the Trust shall pay to the Administrator a fee based on the
average daily net assets of each of the Funds as set forth in the attached
Schedule. The fees payable to the Administrator shall be computed and accrued
daily and paid monthly. If the Administrator shall serve for less than any
whole month, the foregoing compensation shall be prorated.
6. Non-Exclusivity. It is understood that the services of the
---------------
Administrator hereunder are not exclusive, and the Administrator shall be free
to render similar services to other investment companies and other clients.
7. Expenses. During the term of this Agreement, the Administrator
--------
will pay all expenses incurred by it in connection with its obligations under
this Agreement, except such expenses as are those of the Funds under this
Agreement. The Administrator shall pay for maintaining its staff and personnel
and shall, at its own expense provide the equipment, office space, and
facilities necessary to perform its obligations under this Agreement. In
addition, the Administrator shall, at its expense, furnish to the Trust:
(a) Services by the Trust's independent public accountants to
perform all audits;
- 5 -
<PAGE>
(b) Services of the Trust's transfer agent(s), registrar,
dividend disbursing agent(s), and shareholder recordkeeping services;
(c) Services of the Trust's custodian, including any
recordkeeping services provided by the custodian;
(d) Services of obtaining quotations for calculating the value of
each Fund's net assets;
(e) Services of obtaining Fund Activity Reports for each Fund;
(f) Services of maintaining the Trust's tax records;
(g) Services, including procurement of legal services, incident
to meetings of the Trust's shareholders, the preparation and mailing
of prospectuses and reports of the Trust to its shareholders, the
filing of reports with regulatory bodies, the maintenance of the
Trust's existence and qualification to do business, and the
registration of shares with federal and state securities authorities
(except as described in subsection (f) below);
(h) Procurement of ordinary legal services, including the
services that arise in the ordinary course of business for a
Massachusetts business trust registered as an open-end management
investment company;
(i) Certificates representing shares of the Trust;
(j) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(k) Association membership dues; and
(l) Services to organize and offer shares of the Trust and the
Funds.
The Trust shall bear the following expenses:
(a) Salaries and other compensation of any of the Trust's
executive officers and employees, if any, who are not officers,
directors, stockholders, or employees of the Administrator or its
subsidiaries or affiliates;
- 6 -
<PAGE>
(b) Taxes, if any, levied against the Trust or any of its Funds;
(c) Brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for any of the Funds;
(d) Costs, including the interest expenses, of borrowing money;
(e) Fees and expenses of trustees who are not officers,
employees, or stockholders of PALP or its subsidiaries or affiliates,
and the fees and expenses of any counsel, accountants, or any other
persons engaged by such trustees in connection with the duties of
their office with the Trust;
(f) Extraordinary expenses, including extraordinary legal
expenses and federal and state securities registration fees and
expenses to the extent authorized by the Trust's Board of Trustees, as
may arise, including expenses incurred in connection with litigation,
proceedings, other claims and the legal obligations of the Trust to
indemnify its trustees, officers, employees, shareholders,
distributors, and agents with respect thereto;
(g) Organizational and offering expenses of the Trust and the
Funds to the extent authorized by the Trust's Board of Trustees, and
any other expenses which are capitalized in accordance with generally
accepted accounting principles; and
(h) Any expenses allocated or allocable to a specific class of
shares, including fees paid pursuant to an administrative services or
distribution plan.
8. Liability. The Administrator shall give the Trust the benefit of
---------
the Administrator's best efforts in rendering services under this Agreement.
The Administrator may rely on information reasonably believed by it to be
accurate and reliable. As an inducement for the Administrator's undertaking to
render services under this Agreement, the Trust agrees that neither the
Administrator nor its stockholders, officers, directors, or employees shall be
subject to any liability for, or any damages, expenses or losses incurred in
connection with, any act or omission or mistake in judgment connected with or
arising out of any services rendered under this Agreement, except by reason of
willful misfeasance, bad faith, or gross negligence in performance of the
Administrator's duties, or by reason of
- 7 -
<PAGE>
reckless disregard of the Administrator's obligations and duties under this
Agreement. This provision shall govern only the liability to the Trust of the
Administrator and that of its stockholders, officers, directors, and employees,
and shall in no way govern the liability to the Trust or the Administrator or
provide a defense for any other person, including persons that provide services
for the Funds as described in Section 2(b) or (c) of this Agreement.
9. Term and Continuation. This Agreement shall take effect as of
---------------------
the date hereof, and shall remain in effect, unless sooner terminated as
provided herein, until two years from the date of this Agreement, and shall
continue thereafter on an annual basis with respect to each Fund, provided that
such continuance is specifically approved at least annually (a) by the vote of a
majority of the Board of Trustees of the Trust, or (b) by vote of a majority of
the outstanding voting shares of the Funds, and provided continuance is also
approved by the vote of a majority of the Board of Trustees of the Trust who are
not parties to this Agreement or "interested persons" (as defined in the 1940
Act) of the Trust, or PALP, cast in person at a meeting called for the purpose
of voting on such approval.
This Agreement may be terminated:
(a) by the Trust at any time with respect to the services
provided by the Administrator, by vote of a majority of the entire
Board of Trustees of the Trust, by vote of a majority of the Trustees
of the Trust who are not "interested persons" (as defined in the 1940
Act) of the Trust or PALP, or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a
particular Fund, by vote of a majority of the outstanding voting
shares of such Fund, on 60 days' written notice to the Administrator;
and
(b) by the Administrator at any time, without the payment of any
penalty, upon 60 days' written notice to the Trust.
10. Use of Name. It is understood that the name "PIMCO Advisors
-----------
L.P." or "PALP" or any derivative thereof or logo associated with those names
are the valuable property of PALP and its affiliates, and that the right of the
Trust and/or the Funds to use such names (or derivatives or logos) shall be
governed by ____________.
11. Notices. Notices of any kind to be given to the Administrator by
-------
the Trust shall be in writing and shall be duly given if mailed or delivered to
the Administrator at 800 Newport Center Drive, Newport Beach, California 92660,
or to such other address or to such individual as shall be specified by the
- 8 -
<PAGE>
Administrator. Notices of any kind to be given to the Trust by the
Administrator shall be in writing and shall be duly given if mailed or delivered
to 840 Newport Center Drive, Suite 360, Newport Beach, California 92660, or to
such other address or to such individual as shall be specified by the Trust.
12. Trust Obligation. A copy of the Trust's Amended and Restated
----------------
Agreement and Declaration of Trust, as amended, is on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that the Agreement
has been executed on behalf of the Trust by a trustee of the Trust in his or her
capacity as trustee and not individually. The obligations of this Agreement
shall only be binding upon the assets and property of the Trust and shall not be
binding upon any trustee, officer, or shareholder of the Trust individually.
13. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original.
14. Miscellaneous.
-------------
(a) This Agreement shall be governed by the laws of California,
provided that nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or order of the SEC thereunder.
(b) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby and, to this extent, the
provisions of this Agreement shall be deemed to be severable. To the
extent that any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise with regard to any party
hereunder, such provisions with respect to other parties hereto shall not
be affected thereby.
(c) The captions in this Agreement are included for convenience
only and in no way define any of the provisions hereof or otherwise affect
their construction or effect.
(d) This Agreement may not be assigned by the Trust or the
Administrator without the consent of the other party.
- 9 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
PIMCO FUNDS: MULTI-MANAGER
SERIES
Attest: By:
--------------------- ----------------------
Title: Title:
PIMCO ADVISORS L.P.
Attest: By:
--------------------- ----------------------
Title: Title:
Attest: By:
--------------------- ----------------------
Title: Title:
- 10 -
<PAGE>
Schedule to Administration Agreement
<TABLE>
<CAPTION>
Fee Rate:
---------
Fund Non-Retail Classes Retail Classes/*/
- ---- ------------------------ --------------------------
Custody Custody
and and
Portfolio Portfolio
Accounting Other Total Accounting Other Total
---------- ----- ------- ----------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
PIMCO Capital Appreciation .10% .15% .25% .10% .30% .40%
PIMCO Mid Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Small Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Micro Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Renaissance .10% .15% .25% .10% .30% .40%
PIMCO Growth .10% .15% .25% .10% .30% .40%
PIMCO Target .10% .15% .25% .10% .30% .40%
PIMCO Opportunity .10% .15% .25% .10% .30% .40%
PIMCO Innovation .10% .15% .25% .10% .30% .40%
PIMCO Tax Exempt .10% .15% .25% .10% .30% .40%
PIMCO Equity Income .10% .15% .25% .10% .30% .40%
PIMCO Value .10% .15% .25% .10% .30% .40%
PIMCO Small Cap Value .10% .15% .25% .10% .30% .40%
PIMCO Enhanced Equity .10% .15% .25% .10% .30% .40%
PIMCO Balanced .10% .15% .25% .10% .30% .40%
PIMCO Precious Metals .10% .20% .30% .10% .35% .45%
PIMCO International .10% .40% .50% .10% .55% .65%
PIMCO International
Developed .10% .40% .50% .10% .55% .65%
PIMCO Emerging Markets .10% .40% .50% .10% .55% .65%
PIMCO Structured Emerging
Markets .10% .40% .50% .10% .55% .65%
- --------------------
</TABLE>
/*/ Subject to a reduction of .05% once Fund assets attributable to Retail
Class shares exceed $2.5 billion.
- 11 -
<PAGE>
EXHIBIT 13(f)
SUB-ADMINISTRATION AGREEMENT
This Sub-Administration Agreement (the "Agreement") is made as of the
____ day of ____________, 199_ between PIMCO Advisors L.P., a limited
partnership having its principal place of business at 800 Newport Center Drive,
Newport Beach, CA 92679 ("PALP" or the "Administrator") and Pacific Investment
Management Company, a California corporation, having its principal place of
business at 840 Newport Center Drive, Suite 360, Newport Beach, CA 92660
("PIMCO" or the "Sub-Administrator").
WITNESSETH:
WHEREAS, PIMCO Funds: Multi-Manager Series, a Massachusetts business
trust having its principal place of business at 840 Newport Center Drive, Suite
360, Newport Beach, CA 92660 (the "Trust"), has established multiple series,
including PIMCO International Fund, PIMCO International Developed Fund, PIMCO
Emerging Markets Fund, PIMCO Capital Appreciation Fund, PIMCO Mid Cap Growth
Fund, PIMCO Small Cap Growth Fund, PIMCO Micro Cap Growth Fund, PIMCO
Renaissance Fund, PIMCO Growth Fund, PIMCO Target Fund, PIMCO Opportunity Fund,
PIMCO Innovation Fund, PIMCO Tax Exempt Fund, PIMCO Equity Income Fund, PIMCO
Value Fund, PIMCO Small Cap Value Fund, PIMCO Enhanced Equity Fund, PIMCO
Structured Emerging Markets Fund, PIMCO Balanced Fund, and PIMCO Precious Metals
Fund (each a "Fund"); and
WHEREAS, on or after the effect date of this agreement, each Fund
offers five classes of shares: Institutional Class, Administrative Class, Class
A, Class B, and Class C, of which Class A, Class B, and Class C shares are
referred to herein as "Retail Class" shares; and
WHEREAS, pursuant to the Administration Agreement between the Trust
and PALP dated _____________, 199_, the Trust has appointed PALP as
Administrator of the Trust, including each of the aforementioned Funds, and PALP
has accepted such appointment; and
WHEREAS, the Administrator desires to retain PIMCO to perform certain
administrative services for each of the aforementioned series of the Trust; and
WHEREAS, PIMCO desires to perform such administrative services,
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties agree as follows:
1. Appointment. The Administrator hereby appoints PIMCO as the Sub-
-----------
Administrator of the Trust and PIMCO accepts such appointment.
<PAGE>
2. Duties.
------
(a) Subject to the general supervision of the Board of Trustees of the Trust
and the direct supervision of the Administrator, the Sub-Administrator shall
provide or procure, at the Sub-Administrator's expense, services to include the
following: (i) coordinating matters relating to the operation of the Funds,
including any necessary coordination among the adviser or advisers to the Funds,
the custodian(s), transfer agent(s), dividend disbursing agent(s), and
recordkeeping agent(s) (including pricing and valuation of the Funds),
accountants, attorneys, and other parties performing services or operational
functions for the Funds; (ii) providing the Funds with the services of a
sufficient number of persons competent to perform such administrative and
clerical functions as are necessary to ensure compliance with federal securities
laws, as well as other applicable laws, and to provide effective administration
of the Funds; (iii) maintaining, or supervising the maintenance by third
parties, of such books and records of the Trust and the Funds as may be required
by applicable federal or state law other than the records and ledgers maintained
under the Investment Advisory Agreement; (iv) preparing or supervising the
preparation by third parties of all federal, state, and local tax returns and
reports of the Funds required by applicable law; (v) preparing, filing, and
arranging for the distribution of proxy materials and periodic reports to
shareholders of the Funds as required by applicable law; (vi) preparing and
arranging for the filing of such registration statements and other documents
with the SEC and other federal and state regulatory authorities as may be
required to register the shares of the Funds and qualify the Trust to do
business or as otherwise required by applicable law; (vii) taking such other
action with respect to the Funds as may be required by applicable law,
including, without limitation, the rules and regulations of the SEC and of state
securities commissions and other regulatory agencies; and (viii) providing the
Funds with adequate personnel, office space, communications facilities, and
other facilities necessary for the Funds' operations as contemplated in this
Agreement.
(b) Other Services. Subject to the general supervision of the Board of
--------------
Trustees and the direct supervision of the Administrator, the Sub-Administrator
shall also provide or procure on behalf of the Trust and the Funds, and at the
expense of the Sub-Administrator, the following services to the Funds: (i)
custodian services to provide for the safekeeping of the Funds' assets; (ii)
recordkeeping services to maintain the portfolio accounting records for the
Funds; (iii) transfer agency services to maintain the portfolio accounting
records for the Funds; and (iv) dividend disbursing services for the Funds. The
services to be provided under (iii) and (iv) of this Section 2(b) shall be
commensurate with the level of services reasonably necessary for the
- 2 -
<PAGE>
institutional investors that are eligible to invest in Institutional and
Administrative Classes of the Funds, as set forth in the prospectus or
prospectuses for such Classes of the Funds. The Trust may be a party to any
agreement with any person or persons engaged to provide the services referred to
in this Section 2(b).
(c) Retail Class Services. In addition to the Sub-Administrator's
---------------------
responsibilities as specified in Subsections (a) and (b) above, subject to the
general supervision of the Board of Trustees of the Trust and the direct
supervision of the Administrator, the Sub-Administrator, at its own expense,
also shall provide, directly or through persons selected by the Administrator,
to the Retail Classes of the Funds administrative, recordkeeping, and
shareholder services reasonably required by the Retail Classes of the Funds,
which may include some or all of the following services: (i) transfer agency
services reasonably necessary to meet the increased account activity associated
with Retail Classes; (ii) dividend disbursing services reasonably necessary to
meet the increased number of accounts associated with the Retail Classes; (iii)
preparing and arranging for the distribution of prospectuses, statements of
additional information, proxy materials, periodic reports to shareholders, and
other communications with Retail Class shareholders; and (iv) taking such other
actions and providing or procuring such other services with respect to the
Retail Classes as are reasonably necessary or desirable.
(d) Organizational Services. The Sub-Administrator shall provide the Trust and
-----------------------
the Funds, at the Sub-Administrator's expense, with the services necessary to
organize any Funds that commence operations on or after the date of this
Agreement so that such Funds can conduct business as described in the Trust's
Registration Statement.
(e) The Sub-Administrator shall also make its officers and employees available
to the Board of Trustees and Officers of the Trust, as well as to the
Administrator, for consultation and discussions regarding the administration of
the Funds and services provided to the Funds under this Agreement.
(f) The Sub-Administrator acknowledges that, while it is assuming full
responsibility for the day-to-day administrative services to the Trust described
in subparagraphs (a)-(d) above, the Administrator retains overall responsibility
for the provision of such services, including, but not limited to, the
responsibility and authority to supervise and direct such services.
- 3 -
<PAGE>
(g) In performing these services, the Sub-Administrator:
(i) Shall conform with the Investment Company Act of 1940, as amended
(the "1940 Act") and all rules and regulations thereunder, all other
applicable federal and state laws and regulations, with any applicable
procedures adopted by the Trust's Board of Trustees, and with the
provisions of the Trust's Registration Statement filed on Form N-1A as
supplemented or amended from time to time.
(ii) Will make available to the Administrator or the Trust, promptly upon
request, any of the Funds' books and records as are maintained under this
Agreement, and will furnish to regulatory authorities having the requisite
authority any such books and records and any information or reports in
connection with the Sub-Administrator's services under this Agreement that
may be requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and
regulations.
(iii) Will regularly report to the Administrator and to the Trust's Board
of Trustees on the services provided under this Agreement and will furnish
to the Administrator and to the Trust's Board of Trustees with respect to
the Funds such periodic and special reports as the Administrator or the
Trustees reasonably may request.
3. Documentation. The Administrator has delivered copies of each of the
-------------
following documents to the Sub-Administrator and will deliver to it all future
amendments and supplements thereto, if any:
(i) the Trust's Registration Statement as filed with the Securities and
Exchange Commission ("SEC") and any amendments thereto; and
(ii) exhibits, powers of attorneys, certificates and any and all other
documents relating to or filed in connection with the Registration
Statement described above.
4. Independent Contractor. The Sub-Administrator shall for all purposes
----------------------
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Administrator or the Board of
Trustees of the Trust from time to time, have no authority to act for or
represent the Administrator or the Trust in any way or otherwise be deemed its
agent.
5. Compensation. As compensation for the services rendered under this
------------
Agreement, the Administrator shall pay to the Sub-
- 4 -
<PAGE>
Administrator a fee based on the average daily net assets of each of the Funds
as set forth in the attached Schedule. These fees shall be computed and accrued
daily and paid monthly. If the Sub-Administrator shall provide services
pursuant to this Agreement for less than any whole month, the foregoing
compensation shall be prorated. The Administrator and the Sub-Administrator
agree that all payments made to the Sub-Administrator under this Agreement shall
be for the provision of administrative services, which are described in Section
2 of this Agreement.
6. Non-Exclusivity. It is understood that the services of the Sub-
---------------
Administrator hereunder are not exclusive, and the Sub-Administrator shall be
free to render similar services to other investment companies and other clients.
7. Liability. The Sub-Administrator shall give the Administrator and the
---------
Trust the benefit of the Sub-Administrator's best efforts in rendering services
under this Agreement. The Sub-Administrator may rely on information reasonably
believed by it to be accurate and reliable. As an inducement for the Sub-
Administrator's undertaking to render services under this Agreement, the
Administrator agrees that neither the Sub-Administrator nor its partners,
officers, or employees shall be subject to any liability for, or any damages,
expenses or losses incurred in connection with, any act or omission or mistake
in judgment connected with or arising out of any services rendered under this
Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in performance of the Sub-Administrator's obligations and duties
under this Agreement, or the Sub-Administrator's reckless disregard of such
obligations and duties. This provision shall govern only the liability to the
Administrator of the Sub-Administrator and that of its partners, officers, and
employees, and shall in no way govern the liability to the Trust of the Sub-
Administrator.
8. Term and Continuation
---------------------
(a) This Agreement shall take effect as of the date indicated above, and shall
remain in effect, unless sooner terminated as provided herein, for two years
from such date, and shall continue thereafter on an annual basis with respect to
each Fund provided that such continuance is specifically approved at least
annually by the Administrator or by the vote of a majority of the Board of
Trustees of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of the Trust, or the Administrator or the
Sub-Administrator, cast in person at a meeting called for the purpose of voting
on such approval.
(b) The parties specifically agree and recognize the Trust as a third party
beneficiary of this Agreement.
- 5 -
<PAGE>
(c) This Agreement may be terminated:
(i) by the Administrator or the Trust at any time with respect to the
services provided by the Sub-Administrator, by vote of a majority of the
entire Board of Trustees of the Trust or by a vote of a majority of the
outstanding voting shares of the Trust or, with respect to a particular
Fund, by vote of a majority of the outstanding voting shares of such Fund,
on 60 days' written notice to the Sub-Administrator;
(ii) by the Sub-Administrator at any time, without the payment of any
penalty, upon 60 days' written notice to the Administrator and the Trust;
(iii) automatically in the event the Administration Agreement between the
Trust and PALP is terminated.
9. Notices. Notices of any kind to be given to any party shall be in writing
-------
and shall be duly given if mailed or delivered to the addresses below or to such
other address or to such other individual as shall be specified in writing to
the other parties:
If to the Trust: 840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
If to PIMCO: 840 Newport Center Drive, Suite 360
Newport Beach, CA 92660
If to PALP: 800 Newport Center Drive
Newport Beach, CA 92660
10. Use of Name. It is understood that the name "Pacific Investment Management
-----------
Company" or "PIMCO" or any derivative thereof or logo associated with those
names are the valuable property of PIMCO and its affiliates, and that the right
of the Administrator, the Trust and/or the Funds to use such names (or
derivatives or logos) shall be governed by ____________.
11. Counterparts. This Agreement may be executed in one or more counterparts,
------------
each of which shall be deemed to be an original.
12. Miscellaneous.
-------------
(a) This Agreement shall be governed by the laws of California, provided that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or order of the SEC thereunder.
(b) If any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby and, to this extent, the provisions of this Agreement shall
be deemed to be
- 6 -
<PAGE>
severable. To the extent that any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise with regard to any
party hereunder, such provisions with respect to the other party hereto shall
not be affected thereby.
(c) The captions in this Agreement are included for convenience only and in no
way define any of the provisions hereof or otherwise affect their construction
or effect.
(d) This Agreement may not be assigned by the Administrator or the Sub-
Administrator without the consent of the other party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below on the day and year first above
written.
PIMCO ADVISORS L.P.
By:
- ------------------------- --------------------------------
Attest:
Title: Title:
-----------------------------
By:
- ------------------------- --------------------------------
Attest:
Title: Title:
-----------------------------
PACIFIC INVESTMENT MANAGEMENT COMPANY
By:
- ------------------------- --------------------------------
Attest:
Title: Title:
-----------------------------
- 7 -
<PAGE>
Schedule to Sub-Administration Agreement
<TABLE>
<CAPTION>
Fee Rate:
---------
Non-Retail Classes Retail Classes/*/
------------------------------------- ----------------------------------------
Custody and Custody and
Fund Portfolio Accounting Other Total Portfolio Accounting Other Total
- ---- -------------------- ----- ----- -------------------- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PIMCO Capital Appreciation .10% .15% .25% .10% .30% .40%
PIMCO Mid Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Small Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Micro Cap Growth .10% .15% .25% .10% .30% .40%
PIMCO Summit .10% .15% .25% .10% .30% .40%
PIMCO Growth .10% .15% .25% .10% .30% .40%
PIMCO Target .10% .15% .25% .10% .30% .40%
PIMCO Opportunity .10% .15% .25% .10% .30% .40%
PIMCO Innovation .10% .15% .25% .10% .30% .40%
PIMCO Tax Exempt .10% .15% .25% .10% .30% .40%
PIMCO Equity Income .10% .15% .25% .10% .30% .40%
PIMCO Value .10% .15% .25% .10% .30% .40%
PIMCO Small Cap Value .10% .15% .25% .10% .30% .40%
PIMCO Enhanced Equity .10% .15% .25% .10% .30% .40%
PIMCO Balanced .10% .15% .25% .10% .30% .40%
PIMCO Precious Metals .10% .20% .30% .10% .35% .45%
PIMCO International .10% .40% .50% .10% .55% .65%
PIMCO International Developed .10% .40% .50% .10% .55% .65%
PIMCO Emerging Markets .10% .40% .50% .10% .55% .65%
PIMCO Structured Emerging Markets .10% .40% .50% .10% .55% .65%
- --------------------
</TABLE>
/*/ Subject to a reduction of .05% once Fund assets attributable to Retail
Class shares exceed $2.5 billion.
- 8 -
<PAGE>
EXHIBIT 13(g)
PIMCO FUNDS: MULTI-MANAGER SERIES
ADMINISTRATIVE SERVICES 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 is authorized to issue 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 administrative,
recordkeeping, and other 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 administrative, recordkeeping, and shareholder
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 Administrative Services Agreements ("Agreements") pursuant
to this Administrative Services Plan (the "Plan") with various Service
Organizations ("Service Organizations"), either directly or through the Funds'
principal underwriter, PIMCO Advisors Distribution Company (the "Distributor")
or other agent of the Fund, pursuant to which the Service Organization will
provide certain administrative, recordkeeping and/or shareholder services to its
clients, members or customers who purchase shares of the Administrative Class of
a Fund;
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;
and
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 Plan on the
<PAGE>
following terms and conditions:
1. The Trust (or the Distributor or other person acting as agent of
the Trust) shall reimburse a Service Organization with which the Trust (or the
Distributor or other agent), regarding the Administrative Class of a Fund, has
an Agreement, for costs and expenses incurred in connection with providing
certain administrative services for shareholders of that Class, 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 not more than 0.25% of the Fund's average daily net assets
attributable to the Administrative Class may be used in any month to pay
expenses pursuant to the Agreement. Each 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 or other agent). If
an Administrative Class shareholder ceases to be a client of a Service
Organization that has entered into such an Agreement, 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
and/or the provision of certain shareholder services to its customers that
invest in the Funds. 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
Administrative Services 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
- 2 -
<PAGE>
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.
5. Any Service Organization entering into an Agreement with the Trust
(or with the Distributor or other agent) under this Plan may also enter into a
Distribution Agreement with regard to the Administrative Class of a Fund
pursuant to a Distribution Plan adopted for such Class. 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. The Trust (or the Distributor or other person,
acting as the Trust's agent) under this Plan may enter into more than one
Administrative Services Agreement for its Administrative Class shares, with
different Service Organizations providing services to different groups of
shareholders.
6. 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.
7. 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 6.
8. 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.
9. Any agreement related to the Plan 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, on
not more than sixty (60) days' written notice to any other party to the
agreement; and (b) that such agreement shall terminate
- 3 -
<PAGE>
automatically in the event of its assignment.
10. The Plan may be amended at any time with respect to a Fund by the
Board of Trustees, provided that any amendment to increase materially the costs
which the Administrative Class shares may bear for administrative services
pursuant to the Plan shall be effective only upon approval as provided in
paragraph 6 hereof.
11. While the Plan is in effect, the selection and nomination of
Trustees who are not interested persons (as defined in the Act) of the Trust
shall be committed to the discretion of the Trustees who are not interested
persons.
12. The Trust shall preserve copies of the Plan, any related
agreement and any report made pursuant to paragraph 8 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.
13. 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 amended and restated
Administrative Services Plan effective as of the ______ day of ____________,
199__.
PIMCO FUNDS: MULTI-MANAGER SERIES
By:
-------------------------------
Title:
- 4 -
<PAGE>
Exhibit 14(a)
Consent of Independent Accountants
We hereby consent to the incorporation by reference of our report dated August
12, 1996, relating to the financial statements and financial highlights
appearing in the Annual Report to Shareholders dated June 30, 1996 of PIMCO
Funds: Equity Advisors Series, which have been further incorporated into this
registration statement on Form N-14 of the PIMCO Funds: Equity Advisors Series.
We also consent to the references to us under the heading "Financial Highlights"
in the Prospectus and under the headings "Independent Accountants" and
"Financial Statements" in the Statement of Additional Information which are also
incorporated by reference into this registration statement on Form N-14 of the
PIMCO Funds: Equity Advisors Series.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Kansas City, Missouri
September 26, 1996
<PAGE>
Exhibit 14(b)
Coopers & Lybrand L.L.P.
a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
------------------
We consent to the incorporation by reference in the Registration Statement on
Form N-14 of PIMCO Funds: Equity Advisors Series (on behalf of its Growth Fund
and Target Fund series) of our report dated November 16, 1995 on our audits of
the financial statements and financial highlights of PIMCO Advisors Funds as of
September 30, 1995 and for the years then ended which are included in the
Statement of Additional Information of PIMCO Advisors Funds dated July 12, 1996.
We also consent to the reference to our firm under the heading "Independent
Accountants" in such Statement of Additional Information, which is incorporated
by reference into such Registration Statement.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
New York, New York
September 26, 1996
<PAGE>
Exhibit 16
POWER OF ATTORNEY
I, the undersigned Trustee of the PIMCO Funds: Equity Advisors Series
(the "Trust"), hereby severally constitute and appoint R. Wesley Burns and
Teresa A. Wagner, and each of them singly, our true and lawful attorneys, with
full power to them and each of them, to sign for us, and in our names and in the
capacities indicated below, the Registration Statements on Form N-14 of the
Trust and any and all amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
with the securities commissioner of any state, or with other regulatory
authorities, granting unto our said attorneys, and each of them acting alone,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or either of them may lawfully do or cause to be done by
virtue thereof.
WITNESS my hand and the common seal on the date set forth below.
Signature Title Date
- --------- ----- ----
/s/ Lyman W. Porter Trustee August 8th, 1996
- -------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of the PIMCO Funds: Equity Advisors Series
(the "Trust"), hereby severally constitute and appoint R. Wesley Burns and
Teresa A. Wagner, and each of them singly, our true and lawful attorneys, with
full power to them and each of them, to sign for us, and in our names and in the
capacities indicated below, the Registration Statements on Form N-14 of the
Trust and any and all amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
with the securities commissioner of any state, or with other regulatory
authorities, granting unto our said attorneys, and each of them acting alone,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or either of them may lawfully do or cause to be done by
virtue thereof.
WITNESS my hand and the common seal on the date set forth below.
Signature Title Date
- --------- ----- ----
/s/ William D. Cvengros Trustee August 8th, 1996
- -----------------------
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of the PIMCO Funds: Equity Advisors Series
(the "Trust"), hereby severally constitute and appoint R. Wesley Burns and
Teresa A. Wagner, and each of them singly, our true and lawful attorneys, with
full power to them and each of them, to sign for us, and in our names and in the
capacities indicated below, the Registration Statements on Form N-14 of the
Trust and any and all amendments (including Post-effective amendments) to said
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
with the securities commissioner of any state, or with other regulatory
authorities, granting unto our said attorneys, and each of them acting alone,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or either of them may lawfully do or cause to be done by
virtue thereof.
WITNESS my hand and the common seal on the date set forth below.
Signature Title Date
- --------- ----- ----
/s/ Alan Richards Trustee August 8th, 1996
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<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee of the PIMCO Funds: Equity Advisors Series
(the "Trust"), hereby severally constitute and appoint R. Wesley Burns and
Teresa A. Wagner, and each of them singly, our true and lawful attorneys, with
full power to them and each of them, to sign for us, and in our names and in the
capacities indicated below, the Registration Statements on Form N-14 of the
Trust and any and all amendments (including post-effective amendments) to said
Registration Statement and to file the same with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
with the securities commissioner of any state, or with other regulatory
authorities, granting unto our said attorneys, and each of them acting alone,
full power and authority to do and perform each and every act and thing
requisite or necessary to be done in the premises, as fully to all intents and
purposes as he or she might or could do in person, and hereby ratify and confirm
all that said attorneys or either of them may lawfully do or cause to be done by
virtue thereof.
WITNESS my hand and the common seal on the date set forth below.
Signature Title Date
- --------- ----- ----
/s/ Richard L. Nelson Trustee August 8th, 1996
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