<PAGE>
LOOMIS SAYLES FUNDS
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange
Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or
(S) 240.14a-12
LOOMIS SAYLES FUNDS
-------------------
(Name of Registrant as Specified In Its Charter)
LOOMIS SAYLES FUNDS
-------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
-------------
<PAGE>
LOOMIS SAYLES FUNDS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the Loomis Sayles Funds:
A Special Meeting of the shareholders of the Loomis Sayles Funds, a
Massachusetts business trust (the "Trust"), will be held on [April 28, 2000] at
11:00 a.m. Boston time on the 34th floor of One Financial Center, Boston,
Massachusetts, for the following purposes:
1. To elect Trustees. (Part I of the Proxy Statement.)
2. To authorize the Board of Trustees to change each Fund's investment
objective without shareholder approval. (Part II of the Proxy Statement.)
3. To change the Funds' fundamental investment restriction relating to making
loans of portfolio securities. (For each Fund other than Loomis Sayles
Aggressive Growth Fund, Loomis Sayles Emerging Markets Fund, Loomis Sayles
Intermediate Maturity Bond Fund, Loomis Sayles Investment Grade Bond Fund,
Loomis Sayles Mid-Cap Value Fund and Loomis Sayles Small Cap Growth Fund.)
4. To change the Funds' fundamental investment restriction relating to
borrowing.
5. To transact any other business that may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on [February 29, 2000] are
entitled to notice of and to vote at the meeting.
By Order of the Trustees
Sheila M. Barry
Secretary
[March 13, 2000]
WE URGE YOU TO MARK, SIGN, DATE AND MAIL
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE
SO YOU WILL BE REPRESENTED AT THE MEETING.
<PAGE>
SPECIAL MEETING OF SHAREHOLDERS
LOOMIS SAYLES FUNDS
ONE FINANCIAL CENTER
BOSTON, MASSACHUSETTS 02111
PROXY STATEMENT
THE ENCLOSED PROXY IS SOLICITED BY THE TRUSTEES OF LOOMIS SAYLES FUNDS (the
"Trust") for use at a special meeting of shareholders of the Trust (the
"Meeting") to be held at its offices on [April 28, 2000] and at any adjournments
thereof, for the purposes set forth in the accompanying Notice of Special
Meeting of Shareholders. Only shareholders of record at the close of business
on [February 29, 2000] (the "Record Date") are entitled to vote at the meeting
or at any adjourned session thereof. As of the Record Date, there were issued
and outstanding ___________ shares of the Trust consisting of the following
number of shares of each of the following series ("Funds"):
Outstanding Shares
Fund as of the Record Date
---- ---------------------
Loomis Sayles Aggressive Growth Fund ...........
Loomis Sayles Bond Fund ........................
Loomis Sayles Core Value Fund ..................
Loomis Sayles Emerging Markets Fund ............
Loomis Sayles Global Bond Fund .................
Loomis Sayles Global Technology Fund ...........
Loomis Sayles Growth Fund ......................
Loomis Sayles High Yield Fund ..................
Loomis Sayles Intermediate Maturity Bond Fund ..
Loomis Sayles International Equity Fund ........
Loomis Sayles Investment Grade Bond Fund .......
Loomis Sayles Managed Bond Fund ................
Loomis Sayles Mid-Cap Value Fund ...............
Loomis Sayles Municipal Bond Fund ..............
Loomis Sayles Short-Term Bond Fund .............
Loomis Sayles Small Cap Growth Fund ............
Loomis Sayles Small Cap Value Fund .............
Loomis Sayles U.S. Government Securities Fund ..
Loomis Sayles Worldwide Fund ...................
Each whole share shall be entitled to one vote as to any matter on which it is
entitled to vote and each fractional share shall be entitled to a proportionate
fractional vote.
The Notice of Special Meeting, proxy card and this Proxy Statement are
being mailed to shareholders of record as of the Record Date on or about [March
13, 2000]. A copy of the Annual Report of the Trust for its most recent fiscal
year ended September 30, 1999, including financial statements, can be obtained
without charge by writing to Loomis Sayles at One Financial Center, Boston,
Massachusetts 02111 or by calling (800) 633-3330.
<PAGE>
Shares represented by duly executed proxies will be voted for the election
of the nominees named herein as Trustees, unless such authority has been
withheld. With respect to the other matters specified in the proxy, shares will
be voted in accordance with the instructions made. IF NO INSTRUCTIONS ARE MADE,
THE PROXY WILL BE VOTED FOR THE ELECTION AS TRUSTEES OF THE NOMINEES NAMED BELOW
AND FOR THE MATTERS SPECIFIED IN THE PROXY. Proxies may be revoked at any time
before they are voted by a written revocation received by the Secretary of the
Trust, by properly executing a later-dated proxy or by attending the Meeting and
voting in person.
Proxies will be solicited primarily by mailing this Proxy Statement and its
enclosures, but supplementary solicitations may also be made by mail, telephone,
telegraph or personal interview by officers of the Trust or by officers,
employees or agents of Loomis Sayles and its affiliates [D.F. King]. The cost
of the solicitation will be borne by the Trust.
1. ELECTION OF TRUSTEES
The Trustees have fixed at five the number of Trustees for election at the
Meeting. All nominees, except Paul G. Chenault, are presently Trustees of the
Trust and have been Trustees since the year indicated below. The nominees for
Trustees who are proposed for election at the Meeting and Mr. Finlayson who is
currently a Trustee, their ages and a description of their principal occupations
during the past five years are set forth below.
Name of Year Principal Occupations
Trustee or Nominee Age Elected for Last Five Years
- ------------------ --- ------- -------------------
*Daniel J. Fuss............. 66 1995 President of the Trust. Vice
Chairman and Director, Loomis,
Sayles & Company, L.P. ("Loomis
Sayles")
Michael T. Murray........... 69 1991 Retired; formerly Vice
President, Loomis Sayles.
Richard S. Holway........... 73 1991 Retired; prior to October, 1988,
Senior Vice President, Loomis
Sayles.
Joseph Alaimo............... 69 [1999]/1/ President, Wintrust Asset
Management Company
- --------------
/1/ Mr. Alaimo was appointed by the Trustees to fill a vacancy on
August 2, 1999.
- 2 -
<PAGE>
Name of Year Principal Occupations
Trustee or Nominee Age Elected for Last Five Years
- ------------------ --- ------- -------------------
Paul G. Chenault(1)......... 66 N/A Retired; Trustee of Variable
Investors Series Trust. From
August, 1997 to September 1997,
Vice President of Loomis Sayles
and prior to October, 1995,
Senior Vice President and Chief
Investment Officer, XL Capital
Ltd., Hamilton, Bermuda
- --------------
* Interested person (as defined in the Investment Company Act of 1940 (the
"1940 Act") of the Trust. Mr. Fuss is deemed "interested persons" of the
Trust and Loomis Sayles by virtue of their positions as officers of Loomis
Sayles.
(1) Not currently a Trustee
The terms of office of each person elected as a Trustee will be until the
next meeting held for the purpose of electing Trustees and until his successor
is elected and qualified. Each of the nominees has agreed to serve as a Trustee
if elected. If any of the nominees should be unavailable for election at the
time of the Meeting (which is not presently anticipated), the persons named as
proxies may vote for other persons in their discretion or the Trustees may vote
to fix the number of Trustees at fewer than five. The Trust's Agreement and
Declaration of Trust does not provide for the annual election of Trustees.
However, in accordance with the Investment Company Act of 1940 (the "1940 Act"),
(i) the Trust will hold a shareholder's meeting for the election of Trustees at
such times as less than a majority of the Trustees holding office have been
elected by shareholders, and (ii) if, after filling a vacancy on the Board of
Trustees, less than two-thirds of the Trustees holding office would have been
elected by the shareholders, that vacancy may only be filled by a vote of the
shareholders. In addition, Trustees may be removed from office by a written
consent signed by the holders of two-thirds of the outstanding shares of the
Trust and filed with the Trust's custodian, or by vote of the holders of two-
thirds of the outstanding shares of the Trust at a meeting duly called for such
purpose, which meeting shall be held upon the written request of the
shareholders of not less than 10% of the Trust's outstanding shares.
The Trustees of the Trust who are not "interested persons" (as defined in
the 1940 Act) of the Trust or Loomis Sayles (the "Independent Trustees") perform
the functions of an audit, nominating and contract review committee. Their
responsibilities as such include review of financial and accounting controls and
procedures; recommendations as to the selection of the independent accountants;
review of the scope of the audit; review of financial statements and audit
reports; and review of the independence of the independent accountants and
approval of fees and assignments relating to all activities of the independent
accountants on the Trust's
- 3 -
<PAGE>
behalf. In addition, the Independent Trustees have responsibility for the
nomination of other Independent Trustees, and review and make recommendations to
the Board as to contracts requiring approval of a majority of the Independent
Trustees and any other contracts which may be referred to it by the Board.
No Trustee or Nominee purchased or sold any securities of Loomis Sayles or
its parents or subsidiaries during fiscal 1999. The table below shows the
shares of the Trust held as of February 29, 2000 by (i) each person who is known
to the Trust to own beneficially more than 5% of the outstanding shares of the
Trust, (ii) each nominee and current Trustee of the Trust and (iii) all Trustees
and officers of the Trust as a group. Unless otherwise noted, each of the
stockholders named below has sole investment power and sole voting power with
respect to the shares of the Trust beneficially owned.
Ownership of
Shares of the Percent
Trustees and Nominees Trust as of 2/29/00 of Shares
- --------------------- ------------------- ---------
Daniel J. Fuss.............. ___________(1) *
Richard S. Holway........... ___________(2) *
Terry R. Lautenbach......... ___________(3) *
Michael T. Murray........... ___________(4) *
Joseph Alaimo............... ___________(5) *
Paul G. Chenault............ ___________(6) *
All trustees and officers
as a group (22 persons).. ___________(7) ____
- ---------------
* Less than 1%
(1) Includes ____________ shares of the Growth Fund, __________ shares of the
Small Cap Fund, __________ shares of the International Equity Fund,
___________ shares of the Bond Fund and __________ shares of the Municipal
Bond Fund, ___________ shares of the Loomis Sayles Aggressive Growth Fund,
_______ shares of the Loomis Sayles Bond Fund, _________ shares of the
Loomis Sayles Core Value Fund, ___________ shares of the Loomis Sayles
Emerging Markets Fund, ___________ shares of the Loomis Sayles Global Bond
Fund, ___________ shares of the Loomis Sayles Global Technology Fund,
_____________ shares of the Loomis Sayles Growth Fund, _____________ shares
of the Loomis Sayles High Yield Fund, __________ shares of the Loomis
Sayles Intermediate Maturity Bond Fund, ___________ shares of
- 4 -
<PAGE>
the Loomis Sayles International Equity Fund, ___________ shares of the
Loomis Sayles Investment Grade Bond Fund, ___________ shares of the Loomis
Sayles Mid-Cap Value Fund, ___________ shares of the Loomis Sayles
Municipal Bond Fund, ___________ shares of the Loomis Sayles Short-Term
Bond Fund, ___________ shares of the Loomis Sayles Small Cap Growth Fund,
___________ shares of the Loomis Sayles Small Cap Value Fund, ___________
shares of the Loomis Sayles U.S. Government Securities Fund, and
____________ shares of the Loomis Sayles Worldwide Fund. [These amounts
include shares owned by individual retirement accounts for Mr. Fuss'
benefit, shares owned by Mr. Fuss as custodian for his children and shares
owned jointly by Mr. Fuss and his wife.]
(2) Includes _________ shares of the Small Cap Fund and _______ shares of the
International Equity Fund, ___________ shares of the Loomis Sayles
Aggressive Growth Fund, _______ shares of the Loomis Sayles Bond Fund,
_________ shares of the Loomis Sayles Core Value Fund, ___________ shares
of the Loomis Sayles Emerging Markets Fund, ___________ shares of the
Loomis Sayles Global Bond Fund, ___________ shares of the Loomis Sayles
Global Technology Fund, _____________ shares of the Loomis Sayles Growth
Fund, _____________ shares of the Loomis Sayles High Yield Fund, __________
shares of the Loomis Sayles Intermediate Maturity Bond Fund, ___________
shares of the Loomis Sayles International Equity Fund, ___________ shares
of the Loomis Sayles Investment Grade Bond Fund, ___________ shares of the
Loomis Sayles Mid-Cap Value Fund, ___________ shares of the Loomis Sayles
Municipal Bond Fund, ___________ shares of the Loomis Sayles Short-Term
Bond Fund, ___________ shares of the Loomis Sayles Small Cap Growth Fund,
___________ shares of the Loomis Sayles Small Cap Value Fund, ___________
shares of the Loomis Sayles U.S. Government Securities Fund, and
____________ shares of the Loomis Sayles Worldwide Fund.
(3) Includes _________ shares of the Small Cap Fund and __________ shares of
the Municipal Bond Fund, ___________ shares of the Loomis Sayles Aggressive
Growth Fund, _______ shares of the Loomis Sayles Bond Fund, _________
shares of the Loomis Sayles Core Value Fund, ___________ shares of the
Loomis Sayles Emerging Markets Fund, ___________ shares of the Loomis
Sayles Global Bond Fund, ___________ shares of the Loomis Sayles Global
Technology Fund, _____________ shares of the Loomis Sayles Growth Fund,
_____________ shares of the Loomis Sayles High Yield Fund, __________
shares of the Loomis Sayles Intermediate Maturity Bond Fund, ___________
shares of the Loomis Sayles International Equity Fund, ___________ shares
of the Loomis Sayles Investment Grade Bond Fund, ___________ shares of the
Loomis Sayles Mid-Cap Value Fund, ___________ shares of the Loomis Sayles
Municipal Bond Fund, ___________ shares of the Loomis Sayles Short-Term
Bond Fund, ___________ shares of the Loomis Sayles Small Cap Growth Fund,
___________ shares of the Loomis Sayles Small Cap Value Fund, ___________
shares of the Loomis Sayles U.S. Government Securities Fund, and
____________ shares of the Loomis Sayles Worldwide Fund. [These amounts
include securities owned jointly by Mr. Holway and his wife.]
- 5 -
<PAGE>
(4) Includes _______ shares of the Growth Fund, _______shares of the Growth &
Income Fund, ________ shares of the Small Cap Fund, _________ shares of the
International Equity Fund, ________ shares of the Global Bond Fund,
_________ Shares of the Bond Fund, ________ shares of the Municipal Bond
Fund and ________ shares of the U.S. Government Securities Fund,
___________ shares of the Loomis Sayles Aggressive Growth Fund, _______
shares of the Loomis Sayles Bond Fund, _________ shares of the Loomis
Sayles Core Value Fund, ___________ shares of the Loomis Sayles Emerging
Markets Fund, ___________ shares of the Loomis Sayles Global Bond Fund,
___________ shares of the Loomis Sayles Global Technology Fund,
_____________ shares of the Loomis Sayles Growth Fund, _____________ shares
of the Loomis Sayles High Yield Fund, __________ shares of the Loomis
Sayles Intermediate Maturity Bond Fund, ___________ shares of the Loomis
Sayles International Equity Fund, ___________ shares of the Loomis Sayles
Investment Grade Bond Fund, ___________ shares of the Loomis Sayles Mid-Cap
Value Fund, ___________ shares of the Loomis Sayles Municipal Bond Fund,
___________ shares of the Loomis Sayles Short-Term Bond Fund, ___________
shares of the Loomis Sayles Small Cap Growth Fund, ___________ shares of
the Loomis Sayles Small Cap Value Fund, ___________ shares of the Loomis
Sayles U.S. Government Securities Fund, and ____________ shares of the
Loomis Sayles Worldwide Fund.
(5) Includes _________ shares of the Growth & Income Fund, __________ shares of
the International Equity Fund, __________ shares of the Bond Fund,
_________ shares of the Municipal Bond Fund and __________ shares of the
Short-Term Bond Fund, ___________ shares of the Loomis Sayles Aggressive
Growth Fund, _______ shares of the Loomis Sayles Bond Fund, _________
shares of the Loomis Sayles Core Value Fund, ___________ shares of the
Loomis Sayles Emerging Markets Fund, ___________ shares of the Loomis
Sayles Global Bond Fund, ___________ shares of the Loomis Sayles Global
Technology Fund, _____________ shares of the Loomis Sayles Growth Fund,
_____________ shares of the Loomis Sayles High Yield Fund, __________
shares of the Loomis Sayles Intermediate Maturity Bond Fund, ___________
shares of the Loomis Sayles International Equity Fund, ___________ shares
of the Loomis Sayles Investment Grade Bond Fund, ___________ shares of the
Loomis Sayles Mid-Cap Value Fund, ___________ shares of the Loomis Sayles
Municipal Bond Fund, ___________ shares of the Loomis Sayles Short-Term
Bond Fund, ___________ shares of the Loomis Sayles Small Cap Growth Fund,
___________ shares of the Loomis Sayles Small Cap Value Fund, ___________
shares of the Loomis Sayles U.S. Government Securities Fund, and
____________ shares of the Loomis Sayles Worldwide Fund. [These amounts
include securities owned jointly by Mr. Murray and his wife.]
(6) Includes __________ shares of the Growth Fund, ____________ shares of the
Growth & Income Fund, ___________ shares of the Small Cap Fund, ___________
shares of the International Equity Fund, _________ shares of the Global
Bond Fund, ____________ Shares of the Bond Fund, __________ shares of the
Municipal Bond Fund, ___________ shares of the U.S. Government Securities
Fund and __________
- 6 -
<PAGE>
shares of the Short-Term Bond Fund, ___________ shares of the Loomis Sayles
Aggressive Growth Fund, _______ shares of the Loomis Sayles Bond Fund,
_________ shares of the Loomis Sayles Core Value Fund, ___________ shares
of the Loomis Sayles Emerging Markets Fund, ___________ shares of the
Loomis Sayles Global Bond Fund, ___________ shares of the Loomis Sayles
Global Technology Fund, _____________ shares of the Loomis Sayles Growth
Fund, _____________ shares of the Loomis Sayles High Yield Fund, __________
shares of the Loomis Sayles Intermediate Maturity Bond Fund, ___________
shares of the Loomis Sayles International Equity Fund, ___________ shares
of the Loomis Sayles Investment Grade Bond Fund, ___________ shares of the
Loomis Sayles Mid-Cap Value Fund, ___________ shares of the Loomis Sayles
Municipal Bond Fund, ___________ shares of the Loomis Sayles Short-Term
Bond Fund, ___________ shares of the Loomis Sayles Small Cap Growth Fund,
___________ shares of the Loomis Sayles Small Cap Value Fund, ___________
shares of the Loomis Sayles U.S. Government Securities Fund, and
____________ shares of the Loomis Sayles Worldwide Fund. [These amounts
include shares owned of record by the Profit Sharing Plan for the accounts
of employees and former employees of Loomis Sayles who are Trustees or
officers of the Trust.]
In 1999 the Trust held four Board meetings. Each of the Trustees attended
at least 75% of the meetings of the Board of Trustees and committees thereof of
which such Trustee is a member. Each Trustee who is not affiliated with Loomis
Sayles is compensated at the rate of $1,250 per Fund per annum and is reimbursed
for travel expenses in connection with attendance at meetings./2/ The Trust
pays no compensation to its officers or to Trustees who are affiliated with
Loomis Sayles. The following table sets forth the compensation received by the
Trustees during fiscal 1999:
- ----------
/2/ Mr. Alaimo attended the only Board meeting held after his appointment.
- 7 -
<PAGE>
<TABLE>
<CAPTION>
COMPENSATION TABLE
for the year ended September 30, 1999
=====================================================================================================
(1) (2) (3) (4) (5)
Total
Pension or Estimated Compensation
Aggregate Retirement Benefits Annual From Trust and
Name of Person, Compensation Accrued as Part of Benefits Upon Fund Complex*
Position from Trust Fund Expenses Retirement Paid to Trustee
=====================================================================================================
<S> <C> <C> <C> <C>
Joseph Alaimo, $ 5,312.50 N/A N/A $ 5,312.50
Trustee
Earl W. Foell, $21,562.50 N/A N/A $21,562.50
Former Trustee
Richard S. Holoway, $21,562.50 N/A N/A $21,562.50
Trustee
Michael T. Murray, $21,562.50 N/A N/A $21,562.50
Trustee
Daniel J. Fuss, $ 0 N/A N/A $ 0
Trustee
</TABLE>
* No Trustee receives any compensation from any funds affiliated with Loomis
Sayles, other than the Trust.
The Agreement and Declaration of Trust and the By-Laws of the Trust provide
that the Trust will indemnify its Trustees and officers against liabilities and
expenses incurred in connection with litigation in which they may be involved
because of their offices with the Trust, except if it is determined in the
manner specified in the By-Laws that they have not acted in good faith in the
reasonable belief that their actions were in the best interests of the Trust,
and except that no such person shall be indemnified against any liability to the
Trust or its shareholders arising by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
such person's office.
No Trustee or nominee other than Mr. Fuss owns securities of or has or had
during the past five years any other material direct or indirect interest in
Loomis Sayles or any person controlling, controlled by, or under common control
with Loomis Sayles other than as an employee or officer of such.
THE TRUSTEES UNANIMOUSLY RECOMMEND THE ELECTION OF EACH NOMINEE FOR TRUSTEE
LISTED ABOVE.
REQUIRED VOTE. The vote of a plurality of the shares represented at the Meeting
(all Funds voting together as a single class) is required to elect the nominees
as Trustees.
- 8 -
<PAGE>
2. AUTHORIZATION OF THE BOARD OF TRUSTEES
TO CHANGE EACH FUND'S INVESTMENT OBJECTIVE
WITHOUT SHAREHOLDER APPROVAL
The investment objective of each Fund is currently "fundamental" (i.e.,
cannot be changed without approval by the Fund's shareholders). Because Loomis
Sayles Funds, as a Massachusetts business trust, is not required to hold annual
stockholder meetings, a Fund's investment objective could not currently be
changed without incurring the expense of calling a special meeting of its
shareholders. The proposed change would make each Fund's investment objective
non-fundamental, which the Trustees believe would enhance the Fund's ability to
respond to changing market conditions without incurring shareholder meeting
expenses.
Although, if passed, the resolution would authorize them to do so, the
Trustees do not presently intend to change the investment objective of any Fund
other than the Loomis Sayles Short-Term Bond Fund. The Trustees have approved,
subject to approval of this proposal by shareholders of the Loomis Sayles Short-
Term Bond Fund, the elimination from the Fund's current investment objective,
"high total investment return through a combination of current income and
capital appreciation with relatively low fluctuation in net asset value," of the
phrase "with relatively low fluctuation in net asset value" to permit the Fund
to seek higher yield.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS APPROVE THE CHANGING
OF EACH FUND'S INVESTMENT OBJECTIVE FROM FUNDAMENTAL TO NON-FUNDAMENTAL.
REQUIRED VOTE. For each Fund, the vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares of the fund
present at the meeting if more than 50% of the outstanding shares of the fund
are present at the meeting in person or by proxy is required to approve this
proposal.
3. CHANGING THE FUNDS' FUNDAMENTAL
INVESTMENT RESTRICTION WITH RESPECT
TO MAKING LOANS OF PORTFOLIO SECURITIES.
(For each Fund other than Loomis Sayles Aggressive Growth Fund, Loomis
Sayles Emerging Markets Fund, Loomis Sayles Intermediate Maturity Bond Fund,
Loomis Sayles Investment Grade Bond Fund, Loomis Sayles Mid-Cap Value Fund and
Loomis Sayles Small Cap Growth Fund.)
Each Fund (other than the six Funds identified above) is currently subject
to a fundamental investment restriction prohibiting the Fund from making loans.
Securities lending involves a Fund lending its portfolio securities to broker-
dealers or other parties under contracts calling for the deposit by the borrower
with the Fund's custodian of cash collateral equal to at least the market value
of the securities loaned, marked to market on a daily basis. Securities loans
must be fully collateralized at all times, but involve some credit risk to the
Fund if the borrower defaults on its obligation and the Fund is delayed or
prevented from recovering the collateral. Loomis Sayles believes that
securities lending may provide an
- 9 -
<PAGE>
attractive opportunity for a Fund to earn additional income. Accordingly, the
proposal would amend the restriction to provide that each Fund may not make
loans, except that each Fund may lend its portfolio securities to the extent
permitted under the 1940 Act./3/
Only the Loomis Sayles International Equity Fund currently intends to engage in
securities lending if the proposal is approved, although each of the Funds may
choose to do so in the future.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS APPROVE THE CHANGING OF
EACH FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO MAKING LOANS OF
PORTFOLIO SECURITIES.
REQUIRED VOTE. For each Fund, the vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares of the fund
present at the meeting if more than 50% of the outstanding shares of the fund
are present at the meeting in person or by proxy is required to approve this
proposal.
4. CHANGING THE FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO BORROWING.
Each Fund is currently subject to a fundamental investment restriction
prohibiting the Fund from borrowing money in excess of the lesser of 10% of its
assets (taken at cost) or 5% of its assets (taken at current value), and then
only as a temporary measure for extraordinary or emergency purposes. Loomis
Sayles believes that additional flexibility to borrow money may enhance the
Funds' ability to respond to changing market conditions. For example, a Fund may
find it advantageous to borrow in an amount greater than 10% of its assets to
meet redemption requests. Accordingly, the proposal would amend the restriction
to provide that each Fund may borrow money to the extent permitted under the
1940 Act.
If the proposal is approved, the Funds expect to adopt a non-fundamental
investment policy permitting them to borrow money only up to 20% of net assets
and only for temporary and emergency purposes, except that each of the Loomis
Sayles International Equity Fund, Loomis Sayles Emerging Markets Fund and Loomis
Sayles Global Technology Fund may also borrow up to 10% of net assets to
facilitate settlement of purchase transactions in markets that have shorter
settlement periods than the markets in which the Fund has sold securities and is
awaiting the receipt of settlement proceeds.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS APPROVE CHANGING EACH
FUND'S FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO BORROWING.
- ----------
/3/ For purposes of this restriction, neither (i) entering into repurchase
agreements nor (ii) purchasing debt obligations in which a Fund may invest
consistent with its investment policies is considered the making of a loan.
- 10 -
<PAGE>
REQUIRED VOTE. For each Fund, the vote of the lesser of (1) more than 50% of the
outstanding shares of the fund, or (2) 67% or more of the shares of the fund
present at the meeting if more than 50% of the outstanding shares of the fund
are present at the meeting in person or by proxy is required to approve this
proposal.
5. OTHER INFORMATION
The following table lists the executive officers of the Trust and their
ages. Each such person has been elected to the indicated office by the Trust's
Trustees. Each such person's principal occupation is as an employee or officer
of Loomis Sayles, the Trust's adviser. Each officer's principal occupation for
the past five years is listed; similar prior positions within the same company
are omitted.
JOSEPH ALAIMO (69)--Trustee. 727 N. Bank Lane, Lake Forest, Illinois.
President, Wintrust Asset Management Company.
RICHARD S. HOLWAY (73)--Trustee. 1314 Seaspray Lane, Sanibel, Florida.
Retired. Formerly Vice President, Loomis Sayles. Director, Sandwich Cooperative
Bank.
MICHAEL T. MURRAY (69)--Trustee. 404 N. Western Ave., Lake Forest,
Illinois. Retired. Formerly Vice President, Loomis Sayles.
DANIEL J. FUSS (66)--President and Trustee. Vice Chairman and Director,
Loomis Sayles.
ROBERT J. BLANDING (52)--Executive Vice President. 555 California Street,
San Francisco, California. President, Chairman, Director, and Chief Executive
Officer, Loomis Sayles.
MARK W. HOLLAND (50)--Treasurer. Vice President, Finance and Administration
and Director, Loomis Sayles.
SHEILA M. BARRY (54)--Secretary and Compliance Officer. Assistant General
Counsel and Vice President, Loomis Sayles. Formerly, Senior Counsel and Vice
President, New England Funds, L.P.
DAWN M. ALSTON-PAIGE (35)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.
MARK BARIBEAU (40)--Vice President. Vice President, Loomis Sayles.
JAMES C. CARROLL (49)--Vice President. 1533 N. Woodward, Bloomfield Hills,
Michigan. Vice President, Loomis Sayles. Formerly Managing Director and Senior
Energy Analyst at Paine Webber, Inc.
PAMELA N. CZEKANSKI (41)--Vice President. Vice President, Loomis Sayles.
E. JOHN DEBEER (61)--Vice President. Vice President, Loomis Sayles.
RODERICK H. DILLON, JR. (43)--Vice President. 2001 Pennsylvania Avenue,
N.W., Suite 200, Washington, DC. Vice President, Loomis Sayles.
WILLIAM H. EIGEN, JR. (62)--Vice President. Vice President, Loomis Sayles.
Formerly Vice President, INVESCO Funds Group and Vice President, The Travelers
Corp.
- 11 -
<PAGE>
CHRISTOPHER R. ELY (44)--Vice President. Vice President, Loomis Sayles.
Formerly Senior Vice President and Portfolio Manager, Keystone Investment
Management Company, Inc.
QUENTIN P. FAULKNER (60)--Vice President. Vice President, Loomis Sayles.
PHILIP C. FINE (50)--Vice President. Vice President, Loomis Sayles.
Formerly Vice President and Portfolio Manager, Keystone Investment Management
Company, Inc.
KATHLEEN C. GAFFNEY (38)--Vice President. Vice President, Loomis Sayles.
JOSEPH R. GATZ (37)--Vice President. Vice President, Loomis Sayles.
ISAAC GREEN (38)--Vice President. 1533 N. Woodward, Bloomfield Hills,
Michigan. Executive Vice President and Director, Loomis Sayles.
DEAN A. GULIS (44)--Vice President. Vice President, Loomis Sayles.
MARTHA F. HODGMAN (48)--Vice President. Vice President, Loomis Sayles.
JOHN HYLL (45)--Vice President. 555 California Street, San Francisco,
California.
ART LUTSCHAUNIG ( )--Vice President. [ ].
JEFFREY L. MEADE (49)--Vice President. Executive Vice President, Chief
Operating Officer and Director, Loomis Sayles.
ESWAR MENON (35)--Vice President. 555 California Street, San Francisco,
California. Vice President, Loomis Sayles. Formerly Portfolio Manager at
Nicholas Applegate Capital Management, Equity Analyst at Koaneman Capital
Management, and Senior Engineer at Integrated Device Technology.
ALEX MUROMCEW (36)--Vice President. 555 California Street, San Francisco,
California. Vice President, Loomis Sayles. Formerly Portfolio Manager at
Nicholas Applegate Capital Management and Investment Analyst at Teton Partners,
L.P.
KENT P. NEWMARK (61)--Vice President. 555 California Street, San Francisco,
California. Vice President, Managing Partner and Director, Loomis Sayles.
BRUCE G. PICARD, JR. (30)--Vice President. Vice President, Loomis Sayles.
LAUREN B. PITALIS (39)--Vice President. Vice President, Loomis Sayles.
Formerly Vice President and Assistant Secretary, Harris Associates Investment
Trust.
RICHARD D. SKAGGS (44)--Vice President. Vice President, Loomis Sayles.
DAVID L. SMITH (46)--Vice President. Vice President, Loomis Sayles.
Formerly Vice President and Portfolio Manager, Keystone Investment Management
Company, Inc.
SANDRA P. TICHENOR (50)--Vice President. 555 California Street, San
Francisco, California. General Counsel, Executive Vice President, Secretary and
Clerk, Loomis Sayles. Formerly Partner, Heller, Ehrman, White & McAuliffe.
JOHN TRIBOLET (29)--Vice President. 555 California Street, San Francisco,
California. Vice President, Loomis Sayles. Formerly Portfolio Manager at
Nicholas-Applegate Capital Management, MBA student at the University of Chicago,
and investment banker, most recently at PaineWebber, Inc.
- 12 -
<PAGE>
JEFFREY W. WARDLOW (39)--Vice President. 1533 N. Woodward, Bloomfield
Hills, Michigan. Vice President, Loomis Sayles.
GREGG D. WATKINS (51)--Vice President. 1533 N. Woodward, Bloomfield Hills,
Michigan. Vice President, Loomis Sayles.
ANTHONY J. WILKINS (57)--Vice President. Executive Vice President and
Director, Loomis Sayles.
Except as indicated above, the address of each officer of the Trust
affiliated with Loomis Sayles is One Financial Center, Boston, Massachusetts
02111. The Trust pays no compensation to its officers.
Loomis Sayles serves as investment adviser to the Funds, and Loomis Sayles
Distributors, L.P. (the "Distributor") serves as distributor of the Funds. The
address of Loomis Sayles and the Distributor is One Financial Center, Boston,
Massachusetts 02111.
As of [February 29, 2000], the following persons owned beneficially (within
the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) 5% or more
of the outstanding shares of the following Funds: [TO BE UPDATED]
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES AGGRESSIVE
GROWTH FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
LOOMIS SAYLES BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES CORE VALUE
FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
</TABLE>
- 13 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
US Bank National Association (Custodian) P.O. Box 64010 %
Green Tree Financial Corp St. Paul, MN 55164
Equity Income Trust
Mutual Funds #21739732
Asbestos Workers Local c/o Loomis Sayles & Co. Inc. %
#84 Pension Fund 1533 North Woodward,
Suite 300
Bloomfield Hills, MI 48304
John W. George, Trustee 590 Renaud %
John W. George Trust Grosse Pointe, MI 48236
U/A/D 12/6/90
LOOMIS SAYLES EMERGING
MARKETS FUND
Loomis Sayles & Co., L.P. One Financial Center %
Boston, MA 02111
LOOMIS SAYLES GLOBAL BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Norwest Bank MN NA P.O. Box 1533 %
FBO Desert States UFCW Union Minneapolis, MN 55480
Employees Pension AC#13279801
Fleet National Bank TTEE P.O. Box 92800 %
Kaman Corp Master Trust Fixed Rochester, NY 14692
Income Fund U/A/D 10-1-96
Attn A/C# 0004884410
San Diego Transit Pension Plan P.O. Box 2511 %
San Diego, CA 92112
BNY Clearing Services LLC Wrap Account 111 E. Kilbourn Ave. %
Milwaukee, WI 53202
</TABLE>
- 14 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES GROWTH FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National City Bank Columbus (Trustee) P.O. Box 94984 %
Columbus Distributing Co. PSP Cleveland, Ohio 44101
LOOMIS SAYLES HIGH YIELD FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Daniel J. Fuss 44 Longfellow Road %
Wellesley, MA 02181
LOOMIS SAYLES
INTERMEDIATE MATURITY
BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Pacific Century Trust (Agent) P.O. Box 1930 %
Hawaii Sheet Metal Workers Honolulu, HI 96805
Health & Welfare Fund
Pomona College Alexander Hall %
550 N. College Ave.
Claremont, CA 91711
LOOMIS SAYLES
INTERNATIONAL EQUITY FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Comerica Bank FBO P.O. Box 75000, MC 3446 %
City of Livonia Employee Detroit, MI 48275
Retirement System A/C 02 01 100 0302406
Church Mutual Insurance Co. 3000 Schuster Lane %
Merrill, WI 54452
</TABLE>
- 15 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES
INVESTMENT GRADE BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Pomona College Alexander Hall %
550 N. College Ave.
Claremont, CA 91711
Daniel J. Fuss 44 Longfellow Road %
Wellesley, MA 02481
Rosemary B. Fuss 44 Longfellow Road %
Wellesley, MA 02481
LOOMIS SAYLES MID-CAP VALUE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
John W. George, Jr. Trustee 590 Renaud %
John W. George, Jr. Trust Grosse Pointe, MI 48236
U/A/D 12/6/90
LOOMIS SAYLES MUNICIPAL BOND
FUND
John W. George Jr. Trustee 590 Renaud %
John W. George Jr. Trust Grosse Pointe, MI 48236
U/A/D 12/6/90
Ann A. Morris Trustee 1842 Nugent Sound Road %
Ann A. Morris Trust Lummi Island, WA 98262
The Charles Schwab Corp. 101 Montgomery Street %
San Francisco, CA 94104
</TABLE>
- 16 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES SHORT-TERM
BOND FUND
NFSC FEBO Customers 200 Liberty %
One World Financial Center
New York, NY 10281
John W. George Jr. Trustee 590 Renaud %
John W. George Trust Grosse Pointe, MI 48236
U/A/D
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
LOOMIS SAYLES SMALL CAP
GROWTH FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty Street %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES SMALL CAP
VALUE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Smith Barney Inc. 388 Greenwich St. %
00109801250 New York, NY 10001
LOOMIS SAYLES U.S.
GOVERNMENT SECURITIES FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National City Bank Columbus (Trustee) P.O. Box 94984 %
Columbus Distributing Co. PSP Cleveland, OH 44101
LOOMIS SAYLES WORLDWIDE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
</TABLE>
- 17 -
<PAGE>
RETAIL CLASS SHARES
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES AGGRESSIVE
GROWTH FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty Street %
FEBO Customers One World Financial Center
New York, NY 10281
BOND FUND
National Financial Services Corp. 200 Liberty Street %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES CORE VALUE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty Street %
FEBO Customers One World Financial Center
New York, NY 10281
Whitelaw & Co. New Plan Worlds P.O. Box 94984 %
c/o National City Bank Cleveland, OH 44101
State Street Bank & Trust Company Harbor House 400 %
Custodian for the IRA of Gerald L. Hindman Key Largo, FL 33037
</TABLE>
- 18 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES GLOBAL BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
National Investor Services Corp. 55 Water St. %
FEBO Customers New York, NY 10041
LOOMIS SAYLES GROWTH FUND
Angelo V. Glorioso 225 Summit Dr. %
Pittsburgh, PA 15238
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Whitelaw & Co. New Plan Worlds P.O. Box 94984 %
c/o National City Bank Cleveland, OH 44101
LOOMIS SAYLES
INTERMEDIATE MATURITY BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Donaldson Lufkin & Jenrette P.O. Box 2052 %
Securities Corp. Inc. Jersey City, NJ 07303
LOOMIS SAYLES
INTERNATIONAL EQUITY FUND
National Investor Services Corp. 55 Water St. %
FEBO Customers New York, NY 10041
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
</TABLE>
- 19 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES INVESTMENT GRADE BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Donaldson Lufkin & Jenrette P.O. Box 2052 %
Securities Corp. Inc. Jersey City, NJ 07303
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES MID-CAP VALUE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Donaldson Lufkin & Jenrette P.O. Box 2052 %
Securities Corp. Inc. Jersey City, NJ 07303
Fiserv Security Inc. One Commerce Square %
2005 Market St.
Philadelphia, PA 19103
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES SHORT-TERM BOND FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
Donaldson Lufkin & Jenrette P.O. Box 2052 %
Securities Corp. Inc. Jersey City, NJ 07303
National Investor Services Corp. 55 Water St. %
FEBO Customers New York, NY 10041
E. Scott Glacken 9221 Vendome Dr. %
Z. Margaret Glacken Bethesda, MD 20817
JT WROS
</TABLE>
- 20 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES SMALL CAP GROWTH FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Chase Manhattan Bank (Trustee) 770 Broadway, Floor 10 %
MetLife Defined Contribution Group New York, NY 10003
Attn: Cindy Chu
MO Institute of Sports Medicine 621 S. New Ballas %
Profit Sharing Plan & Trust Suite 101
DTD 5/1/80 St. Louis, MO 63141
National Financial Services Corp. 200 Liberty St. %
FEBO Customers One World Financial Center
New York, NY 10281
LOOMIS SAYLES SMALL CAP VALUE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
Chase Manhattan Bank Trustee 770 Broadway %
MetLife Defined Contribution 10th Floor
Group; Attn: Cindy Chu New York, NY 10003
First Trust National Association 180 East Fifth St. %
Trustee for United Healthcare P.O. Box 64488
401K Savings Plan St. Paul, MN 55164
Fidelity Investments Institutional 100 Magellan Way KWIC %
FIIOC Agent for Certain Employee Covington, KY 41015
Benefits Plans
</TABLE>
- 21 -
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES WORLDWIDE FUND
The Charles Schwab Corp. 101 Montgomery St. %
San Francisco, CA 94104
National Investor Services Corp. 55 Water St. %
FBO Customers New York, NY 10041
State Street Bank & Trust Company 235 Arlington Road, Apt. 214 %
Custodian for the IRA of Redwood City, CA 94062
Benjamin T. Ream
</TABLE>
- 22 -
<PAGE>
ADMIN CLASS SHARES
<TABLE>
<CAPTION>
PERCENTAGE OF
SHAREHOLDER ADDRESS SHARES HELD
- ----------- ------- -----------
<S> <C> <C>
LOOMIS SAYLES BOND FUND
Smith Barney Corp Trust Co. (Trustee) Two Tower Center %
Smith Barney 401(k) Advisor Group Trust P.O. Box 1063
dated 1/1/98 E. Brunswick, NJ 08816
New York Life Trust Co. 51 Madison Ave., %
Client Account Rm. 117A
New York, NY 10010
LOOMIS SAYLES SMALL CAP VALUE FUND
Merrill Lynch Pierce Fenner & Smith Inc. 4800 Deer Lake Dr. E %
FBO Customers 3rd Floor
Jacksonville, FL 32246
Smith Barney Corp. Trust Co. (Trustee) Two Tower Center %
Smith Barney 401(k) Advisor P.O. Box 1063
Group Trust E. Brunswick, NJ 08816
Wilmington Trust Co. (Trustee) 1100 N. Market St. %
various 401(K) Plans Drop Code 2030
Wilmington, DE 19801
Smith Barney Corp. Trust Co. (Trustee) Two Tower Center %
The Copeland Retirement P.O. Box 1063
Group Trust dated 4/21/95 E. Brunswick, NJ 08816
</TABLE>
In the event that sufficient votes in favor of one or more items in the
Notice of Special Meeting are not received by [April 28, 2000], the persons
named as proxies may propose one or more adjournments of the Meeting to permit
further solicitation of proxies for such item or items. Any such adjournment
will require the affirmative vote of a majority of the shares present in person
or by proxy at the session of the Meeting to be adjourned. The persons named as
proxies will vote in favor of such adjournment those proxies which they are
entitled to vote in favor of such item or items. They will vote against such
adjournment those proxies required to be voted against such item or items and
will not vote any proxies that direct them to abstain from voting on such item
or items.
- 23 -
<PAGE>
Although the Meeting is called to transact any other business that may
properly come before it, the only business that management intends to present or
knows that others will present is the business mentioned in the Notice of
Special Meeting. However, if any additional matters properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the proxy in
accordance with their judgment on such matters unless previously instructed to
the contrary by means of written instructions from a shareholder received by the
Secretary of the Trust.
SHAREHOLDER PROPOSALS AT FUTURE MEETINGS. Shareholder proposals to be
presented at any future meeting of shareholders of the Trust must be received by
the Trust a reasonable time before the Trust's solicitation of proxies in order
for such proposals to be considered for inclusion in the proxy materials
relating to that meeting.
QUORUM AND METHODS OF TABULATION. Forty percent of the shares entitled to
vote, present in person or represented by proxy, constitutes a quorum for the
transaction of business with respect to such proposals at the Meeting. Votes
cast by proxy or in person at the meeting will be counted by persons appointed
by the Trust as tellers (the "Tellers") for the Meeting.
The Tellers will count the total number of votes cast "for" approval of the
proposals 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 shares that are present
and entitled to vote on the matter for purposes of determining the presence of a
quorum. With respect to Proposal 1, neither abstentions nor broker non-votes
have any effect on the outcome of the proposal. With respect to Proposal 2,
abstentions and broker non-votes have the effect of negative votes on the
proposal.
- 24 -
