SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
CONSULTING GROUP CAPITAL MARKETS FUNDS
(Name of Registrant as Specified In Its Charter)
James B. O'Connell
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(j)(1), or 14a-
6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] 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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to
Exchange Act Rule 0-11:1
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4) Proposed maximum aggregate value of transaction:
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1 Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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LARGE CAPITALIZATION GROWTH INVESTMENTS
LARGE CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION GROWTH INVESTMENTS
INTERNATIONAL EQUITY INVESTMENTS
EACH A PORTFOLIO OF
CONSULTING GROUP CAPITAL MARKETS FUNDS
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 10, 1995
To the Shareholders of:
LARGE CAPITALIZATION GROWTH INVESTMENTS
LARGE CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION GROWTH INVESTMENTS
INTERNATIONAL EQUITY INVESTMENTS
Notice is hereby given that a Special Meeting of Shareholders of Consult-
ing Group Capital Markets Funds (the "Trust") will be held at 388 Green-
wich Street, New York, New York 10013 on March 10, 1995, commencing at
9:00 a.m.
The Special Meeting is held for the purposes of:
1. approving or disapproving for Large Capitalization Growth Investments
a new investment advisory agreement with Provident Investment Counsel
-- LARGE CAPITALIZATION GROWTH INVESTMENTS ONLY;
2. approving or disapproving for Large Capitalization Value Equity In-
vestments a new investment advisory agreement with Parametric Portfo-
lio Associates -- LARGE CAPITALIZATION VALUE EQUITY INVESTMENTS ONLY;
3. approving or disapproving for Small Capitalization Value Equity In-
vestments a new investment advisory agreement with NFJ Investment
Group -- SMALL CAPITALIZATION VALUE EQUITY INVESTMENTS ONLY;
4. approving or disapproving for Small Capitalization Value Equity In-
vestments a proposed investment advisory agreement with Wells Fargo
Nikko Investment Advisors -- SMALL CAPITALIZATION VALUE EQUITY INVEST-
MENTS ONLY;
5. approving or disapproving for Small Capitalization Growth Investments
a proposed investment advisory agreement with Mellon Capital Manage-
ment -- SMALL CAPITALIZATION GROWTH INVESTMENTS ONLY;
6. approving or disapproving for Small Capitalization Growth Investments
an amended and restated investment advisory agreement with Pilgrim
Baxter & Associates, Ltd. -- SMALL CAPITALIZATION GROWTH INVESTMENTS
ONLY;
7. approving or disapproving for International Equity Investments a pro-
posed investment advisory agreement with State Street Global Advisors
-- INTERNATIONAL EQUITY INVESTMENTS ONLY;
8. approving or disapproving for International Equity Investments an
amended and restated investment advisory agreement with Oechsle Inter-
national Advisors, L.P. -- INTERNATIONAL EQUITY INVESTMENTS ONLY; and
9. considering and acting upon such other business as may properly come
before the Special Meeting and any adjournments thereof.
The close of business on January 6, 1995, has been fixed as the record
date for the determination of shareholders of the Trust entitled to notice
of and to vote at the Special Meeting and any adjournments thereof.
By Order of the Board of Trustees,
CHRISTINA T. SYDOR
Secretary
January 11, 1995
SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING ARE REQUESTED TO COM-
PLETE, SIGN, DATE AND RETURN THE PROXY CARDS IN THE ENCLOSED ENVELOPE,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. INSTRUCTIONS FOR
THE PROPER EXECUTION OF PROXY CARDS ARE SET FORTH ON THE FOLLOWING PAGE.
IT IS IMPORTANT THAT PROXY CARDS BE RETURNED PROMPTLY.
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy card(s) may be of assistance
to and avoid the time and expense to the Trust involved in validating your
vote if you fail to sign your proxy card(s) properly.
1. Individual Accounts: Sign your name exactly as it appears in the reg-
istration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the registration
on the proxy card.
3. All Other Accounts: The capacity of the individual signing the proxy
card should be indicated unless it is reflected in the form of regis-
tration. For example:
<TABLE>
<CAPTION>
REGISTRATION VALID SIGNATURE
<S> <C>
CORPORATE ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) Estate of John B. Smith John B. Smith, Jr.,
Executor
</TABLE>
LARGE CAPITALIZATION GROWTH INVESTMENTS
LARGE CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION VALUE EQUITY INVESTMENTS
SMALL CAPITALIZATION GROWTH INVESTMENTS
INTERNATIONAL EQUITY INVESTMENTS
EACH A PORTFOLIO OF
CONSULTING GROUP CAPITAL MARKETS FUNDS
388 GREENWICH STREET
NEW YORK, NEW YORK 10013
SPECIAL MEETING OF SHAREHOLDERS
MARCH 10, 1995
PROXY STATEMENT
INTRODUCTION
This document is a proxy statement for the Consulting Group Capital Mar-
kets Funds (the "Trust"). This proxy statement is being furnished to the
shareholders of Large Capitalization Growth Investments, Large Capitaliza-
tion Value Equity Investments, Small Capitalization Value Equity Invest-
ments, Small Capitalization Growth Investments and International Equity
Investments (each a "Portfolio" and together the "Portfolios"), in connec-
tion with the Trust's Board of Trustees' (the "Board") solicitation of
proxies to be used at the special meeting of shareholders of the Portfo-
lios, to be held on March 10, 1995, or any adjournment or adjournments
thereof (the "Meeting"). The Meeting will be held at 388 Greenwich Street,
New York, New York at 9:00 a.m. This proxy statement and accompanying
proxy card(s) are first being mailed on or about January 11, 1995. Proxy
solicitations will be made primarily by mail, but proxy solicitations also
may be made by telephone, telegraph or personal interviews conducted by
officers and employees of the Trust; Smith Barney Inc. ("Smith Barney"),
the distributor of the Trust, of which the Consulting Group (the "Consult-
ing Group" or the "Manager"), the investment manager of the Trust, is a
part; Smith Barney Mutual Funds Management Inc. ("SBMFM"), the administra-
tor for the Trust; The Boston Company Advisors, Inc. ("Boston Advisors"),
an indirect wholly owned subsidiary of Mellon Bank Corporation ("Mellon"),
the sub-administrator for the Trust; and/or The Shareholder Services
Group, Inc. ("TSSG"), a subsidiary of First Data Corporation, the transfer
agent for the Trust. The cost of the proxy solicitation is anticipated to
be $150,000. A portion of the cost of the solicitation will be born by
Provident Investment Counsel ("PIC"), Parametric Portfolio Associates and
NFJ Investment Group. The Trust will reimburse brokerage firms and others
for their expenses in forwarding solicitation material to the beneficial
owners of Trust shares.
The Trust has an unlimited number of shares of beneficial interest, par
value $0.001 per share, which are divided among twenty-five portfolios of
the Trust. Shares of thirteen of such portfolios are currently offered for
sale to shareholders. Holders of shares of each Portfolio have equal vot-
ing rights of one vote per share and any fractional share is entitled to a
fractional vote. The Proposals to approve or disapprove new or amended ad-
visory agreements will be submitted to a vote of the shareholders of the
Portfolios of the Trust indicated below:
<TABLE>
<CAPTION>
PROPOSAL ADVISORY AGREEMENT WITH PORTFOLIO
<S> <C> <C>
1. Provident Investment Counsel Large Cap. Growth
2. Parametric Portfolio Associates Large Cap. Value
Equity
3. NFJ Investment Group Small Cap. Value
Equity
4. Wells Fargo Nikko Investment Advisors Small Cap. Value
Equity
5. Mellon Capital Management Small Cap. Growth
6. Pilgrim Baxter & Associates, Ltd. Small Cap. Growth
7. State Street Global Advisors International
Equity
8. Oechsle International Advisors, L.P. International
Equity
</TABLE>
If an enclosed proxy is properly executed and returned in time to be voted
at the Meeting, the shares represented thereby will be voted in accordance
with the instruction marked thereon. Unless instructions to the contrary
are marked thereon, a proxy will be voted FOR the matters listed in the
accompanying Notice of Special Meeting of Shareholders. For purposes of
determining the presence of a quorum for transacting business at the Meet-
ing, abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from
the beneficial owner or other persons entitled to vote shares on a partic-
ular matter with respect to which the brokers or nominees do not have dis-
cretionary power) will be treated as shares that are present but which
have not been voted. For this reason, abstentions and broker non-votes
will have the effect of a "no" vote for purposes of obtaining the requi-
site approval of each Proposal. Any shareholder who has given a proxy has
the right to revoke it at any time prior to its exercise either by attend-
ing the Meeting and voting his or her shares in person or by submitting a
letter of revocation or a later-dated proxy to the Trust at the above ad-
dress prior to the date of the meeting.
In the event that a quorum is not present at the Meeting, or in the event
that a quorum is present but sufficient votes to approve any of the pro-
posals are not received, the persons named as proxies may propose one or
more adjournments of the Meeting to permit further solicitation of prox-
ies. In determining whether to adjourn the Meeting, the following factors
may be considered: the nature of the proposals that are the subject of the
Meeting, the percentage of votes actually cast, the percentage of negative
votes actually cast, the nature of any further solicitation and the infor-
mation to be provided to shareholders with respect to the reasons for the
solicitation. Any adjournment will require the affirmative vote of a ma-
jority of those shares represented at the meeting in person or by proxy. A
shareholder vote may be taken on one of the proposals in this proxy state-
ment prior to any adjournment if sufficient votes have been received for
approval. Under the Master Trust Agreement of the Trust, dated April 12,
1991, as amended from time, a quorum is constituted by the presence in
person or by proxy of the holders of a majority of the outstanding shares
entitled to vote on the particular matter at the Meeting.
The Board has fixed the close of business on January 6, 1995 as the record
date (the "Record Date") for the determination of shareholders of the
Trust entitled to notice of and to vote at the meeting. At the close of
business on the Record Date, the following numbers of shares of each Port-
folio were issued and outstanding:
<TABLE>
<CAPTION>
NAME OF PORTFOLIO SHARES
OUTSTANDING
<S> <C>
Small Capitalization Value Equity Investments
32,538,316.331
Large Capitalization Value Equity Investments
94,179,993.969
Large Capitalization Growth Investments
57,719,212.353
Small Capitalization Growth Investments
16,037,566.377
International Equity Investments
58,888,704.457
</TABLE>
As of the Record Date, to the knowledge of the Trust and its Board, no
single shareholder or "group" (as that term is used in Section 13(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
beneficially owned more than 5% of the outstanding shares of any Portfo-
lio. As of the Record Date, the officers and Board members of the Trust as
a group beneficially owned less than 1% of the shares of the Trust or of
any Portfolio.
Approval of proposals 1 through 8 requires the affirmative vote of a "ma-
jority of the outstanding voting securities" of each respective Portfolio
which, as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), means the lesser of (a) 67% of the Portfolio's shares present
at a meeting of its shareholders if the owners of more than 50% of the
shares of the Portfolio then outstanding are present in person or by proxy
or (b) more than 50% of the Portfolio's outstanding shares ("Majority
Vote").
Separate proxy cards are enclosed for each Portfolio in which a share-
holder is a record owner of shares. It is therefore essential that share-
holders complete, date and sign each proxy card.
The Trust will furnish, without charge, a copy of the Trust's 1994 Annual
Report, which was previously mailed to shareholders. Shareholders who de-
sire a copy of the Annual Report may request it by calling, toll-free
1-800-423-7922.
In order that a shareholder's shares may be represented at the Meeting,
shareholders are required to allow sufficient time for their proxies to be
received on or before 9:00 a.m. on March 10, 1995.
PROPOSAL 1: LARGE CAPITALIZATION GROWTH INVESTMENTS ONLY
TO APPROVE OR DISAPPROVE FOR LARGE CAPITALIZATION GROWTH IN-
VESTMENTS AN INVESTMENT ADVISORY AGREEMENT WITH PROVIDENT IN-
VESTMENT COUNSEL
BACKGROUND
Shareholders must consider a new subadvisory agreement for the Fund as a
result of a proposed transaction (the "Proposed Transaction") whereby
United Asset Management Corporation ("UAM") would acquire substantially
all of the assets of PIC, a current investment adviser of Large Capitali-
zation Growth Investments ("Large Capitalization Growth"). UAM would then
contribute such assets to an indirect, wholly-owned subsidiary of UAM, PIC
Newco, which would carry on the business of PIC under PIC's current name.
(PIC and PIC Newco are hereinafter sometimes collectively referred to as
the "Adviser"). The Proposed Transaction represents an ownership change
and, as such, has the effect of terminating the existing advisory agree-
ment. Accordingly, shareholders are being asked to approve a "new" advi-
sory agreement with the Adviser under its new ownership (the "New PIC Ad-
visory Agreement") embodying exactly the same terms and fees. The Trust's
Board of Trustees has approved the New PIC Advisory Agreement, subject to
approval by the shareholders of Large Capitalization Growth, to become ef-
fective on the later of the consummation of the Proposed Transaction or
shareholder approval.
THE ADVISORY AGREEMENT
PIC currently serves as an adviser for Large Capitalization Growth under
an investment advisory agreement (the "Existing PIC Advisory Agreement")
dated March 3, 1994. The Existing PIC Advisory Agreement provides for its
automatic termination in the event of a legal assignment or change in own-
ership of the Adviser. The shareholders of the Portfolio approved the Ex-
isting PIC Advisory Agreement on March 3, 1994. Under the Existing PIC Ad-
visory Agreement, PIC is entitled to receive from the Adviser an annual
fee of .30% of the average daily net assets of Large Capitalization Growth
multiplied by a fraction, the numerator of which is the average daily net
assets of Large Capitalization Growth allocated to PIC for management and
the denominator of which is the average daily net assets of Large Capital-
ization Growth.
Except for different effective and termination dates, the terms of the New
PIC Advisory Agreement are identical in all respects to the terms of the
Existing PIC Advisory Agreement. A form of the New PIC Advisory Agreement
is attached to this Proxy Statement as Exhibit A, and the description set
forth in this Proxy Statement of the New PIC Advisory Agreement is quali-
fied in its entirety by reference to Exhibit A.
THE ACQUISITION AGREEMENT
UAM, PIC and the stockholders of PIC1 (the "PIC Stockholders") have en-
tered into an acquisition agreement (the "Acquisition Agreement") which
contemplates that PIC will become a wholly-owned subsidiary of UAM. In ad-
dition, the Acquisition Agreement contemplates that certain key personnel
of PIC will enter into employment agreements with PIC Newco. This will as-
sure that PIC Newco will continue to operate with its same investment per-
sonnel and officers. The same persons who are presently responsible for
the investment policies of PIC will continue to direct the investment pol-
icies of PIC Newco following the acquisition. No changes in PIC's method
of operation, or the location where it conducts its business, are contem-
plated.
The Acquisition Agreement provides that PIC will sell UAM substantially
all of the assets of PIC, including certain advisory contracts, customer
lists, books, records, all goodwill associated with the assets being sold
and the exclusive right to use the name of PIC as all or part of a trade
or corporate name. The purchase price is payable in a combination of cash,
common stock of UAM, promissory notes of UAM and warrants to purchase UAM
stock which are exercisable on or before the year 2002. The cash portion
of the purchase price is approximately $262 million. The UAM common stock
is expected to have a value of $67 million. The warrants have been as-
signed an approximate value of $500,000. The UAM notes will have a value
slightly in excess of $20 million. In addition, UAM will make cash bonus
payments to certain stockholders and other PIC personnel. The total pur-
chase price is subject to certain preclosing adjustments and conditions.
In addition, UAM has agreed to make additional purchase price payments in
the form of incentives tied to performance and assets under management
over the next three years.
UAM, PIC Newco and certain of the PIC Stockholders have also agreed to
enter into a revenue sharing agreement under which UAM and PIC Newco will
share PIC Newco's revenues. That agreement is intended to allow the key
executives of PIC to participate in PIC Newco's growth in a substantial
manner and make operating decisions freely within the limits of PIC New-
co's share of revenues. The revenue sharing agreement recites that PIC key
executives will continue to have authority over the investment management
process.
1 Such stockholders and their respective positions with PIC are as fol-
lows: Robert Kommerstad, Chairman and President; Thomas Condon, Managing
Director; Jefferey Miller, Managing Director; George Handtmann, Managing
Director; Larry Tashjian, Managing Director; Thomas Mitchell, Executive
Vice President, Portfolio Management; F. Brown Windle, Executive Vice
President, Marketing and Lauro Guerra, Executive Vice President, Re-
search.
Section 15 (f) of the 1940 Act provides that when a change in the control
of an investment adviser occurs, the investment adviser or any of its af-
filiated persons may receive any amount or benefit in connection therewith
as long as two conditions are satisfied. First, no "unfair burden" may be
imposed on the investment company as a result of the transaction relating
to the investment company as a result of the transaction relating to the
change of control, or any express or implied terms, conditions or under-
standings applicable thereto. The term "unfair burden," as defined in the
1940 Act, includes any arrangement during the two-year period after the
change in control whereby the investment adviser (or predecessor or suc-
cessor adviser), or any interested person of any such adviser, receives or
is entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection
with the purchase or sale of securities or other property to, from, or on
behalf of the investment company (other than fees for bona fide principal
underwriting services). No such compensation arrangements are contemplated
in the Proposed Transaction. In the Acquisition Agreement, PIC and PIC
Newco have agreed to use their best efforts to ensure that the Proposed
Transaction will not cause the imposition of an unfair burden on the Port-
folio.
The second condition is that, during the three-year period immediately
following consummation of the transaction, at least 75% of the investment
company's board of trustees must not be "interested persons" of PIC Newco
or PIC within the meaning of the 1940 Act. In the Acquisition Agreement,
PIC and PIC Newco have agreed to use their best efforts to ensure that the
second condition is met.
There are a number of conditions precedent to the closing of the Proposed
Transaction. Such conditions include, among other things, that all regula-
tory filings, applications and notifications and all third-party consents
will have been duly and properly made or obtained, and that consents will
have been obtained from a specified percentage of PIC's current clients,
including Large Capitalization Growth among others, as required by appli-
cable law.
If the conditions for the Proposed Transaction are not met and the acqui-
sition is not completed, the Existing PIC Advisory Agreement will remain
in effect. In the event the acquisition is completed but the New PIC Advi-
sory Agreement is not approved by Large Capitalization Growth's sharehold-
ers, the Trustees and the Manager will promptly seek to enter a new subad-
visory arrangement for Large Capitalization Growth, subject to approval by
Large Capitalization Growth's shareholders.
During the fiscal year ended August 31, 1994, the Adviser paid PIC
$236,342 in advisory fees.
PIC, a California corporation with offices at Corporate Center, 300 North
Lake Avenue, Pasadena, California 91101, is owned by the PIC Stockholders.
PIC is registered under the Investment Advisers Act of 1940 (the "Advisers
Act"). PIC Newco, a Massachusetts corporation and an indirect wholly-owned
subsidiary of UAM, as of the closing date of the Proposed Transaction,
will be registered under the Advisers Act, and have the same address as,
and employ the same key personnel as, PIC did previously. The New PIC Ad-
visory Agreement was approved by the Board of Trustees of the Trust, in-
cluding a majority of the non-interested Trustees (those trustees who are
not parties to the New PIC Advisory Agreement, or interested persons of
such parties), at a meeting held for such purpose on December 14, 1994,
and is now being submitted for approval by the shareholders of Large Capi-
talization Growth.
The principal executive officers and directors of PIC are shown below. The
address of each, as it relates to his duties at PIC, is the same as that
of PIC. Except for Mr. Johnson, each of the individuals named below will
hold the same position with PIC Newco after the acquisition of PIC by UAM.
Mr. Johnson will not be a director of PIC Newco.
<TABLE>
<CAPTION>
NAME AND POSITION WITH PIC PRINCIPAL
OCCUPATION
<S> <C>
Robert M. Kommerstad Chief Executive
Officer and
President and Chairman of the Board Chairman of the Board
Jeffrey J. Miller Managing Director
Managing Director and Secretary
Thomas J. Condon Managing Director
Managing Director
George E. Handtmann, III Managing Director
Managing Director
Larry D. Tashjian Managing Director
Managing Director
Bernard James Johnson Chairman Emeritus
Chairman Emeritus
</TABLE>
After the acquisition, PIC Newco will be an indirect, wholly-owned subsid-
iary of United Asset Management Corporation, a New York Stock Exchange
listed holding company principally engaged, through affiliated firms, in
providing institutional investment management services and acquiring in-
stitutional investment management firms like PIC. Its wholly-owned subsid-
iaries operate as investment advisers, and, as of November 1994, the UAM
group had collectively more than $102 billion of assets under management.
The investment management firms that comprise the UAM group are located
throughout the United States. UAM strives for diversification in the vari-
ety of asset classes with regard to which its investment advisory subsid-
iaries provide investment management services. UAM's corporate headquar-
ters is located at One International Place, Boston, Massachusetts 02110.
After the acquisition, the Subadviser will be a direct subsidiary of
United Asset Management Holdings, Inc. ("UAM Holdings"). UAM Holdings' ad-
dress is 103 Springer Building, 3411 Silver Side Road, Wilmington, Dela-
ware 19810.
TRUSTEES' CONSIDERATIONS
The Board of Trustees believes that the terms of the New PIC Advisory
Agreement are fair to, and in the best interest of, the Trust, Large Capi-
talization Growth, and its shareholders. The Board of Trustees, including
all of the non- interested Trustees, recommends approval by the sharehold-
ers of the New PIC Advisory Agreement between PIC Newco and the Manager.
In making this recommendation, the Trustees carefully evaluated the expe-
rience of PIC's key personnel in institutional investing, the quality of
services PIC Newco is expected to provide to Large Capitalization Growth,
and the compensation proposed to be paid to PIC Newco, and have given
careful consideration to all factors deemed to be relevant to Large Capi-
talization Growth, including, but not limited to: (1) the fees and expense
ratios of comparable mutual funds; (2) the performance of Large Capitali-
zation Growth since commencement of operations; (3) the nature and quality
of the services expected to be rendered to Large Capitalization Growth by
PIC Newco; (4) the distinct investment objective and policies of Large
Capitalization Growth; (5) that the compensation payable to PIC Newco by
the Manager under the proposed New PIC Advisory Agreement will be at the
same rate as the compensation now payable to the Adviser under the Exist-
ing PIC Advisory Agreement; (6) that the terms of the Existing PIC Advi-
sory Agreement will be unchanged under the New PIC Advisory Agreement ex-
cept for different effective and termination dates; (7) the history, repu-
tation, qualification and background of PIC and UAM, as well as the
qualifications of their personnel and their respective financial condi-
tions; (8) the commitment of the parties to the Acquisition Agreement to
pay or reimburse the Trust for the expenses of the Trust incurred in con-
nection with the Proposed Transaction; (9) PIC's investment performance
record; (10) the benefits expected to be realized as a result of PIC New-
co's affiliation with UAM; and (11) other factors deemed relevant.
PIC has advised the Board of Trustees that it expects that there will be
no dilution in the scope and quality of advisory services provided to
Large Capitalization Growth as a result of the Proposed Transaction. Ac-
cordingly, the Board of Trustees believes that Large Capitalization Growth
should receive investment advisory services under the New PIC Advisory
Agreement equal or superior to those they currently receive under the Ex-
isting PIC Advisory Agreement, at the same fee levels.
Please refer to Exhibit B to this Proxy Statement, which identifies all
investment companies for which PIC serves as investment subadviser or ad-
viser, states the size of such investment companies and PIC's rate of com-
pensation under the applicable advisory or subadvisory contract, and indi-
cates whether PIC has agreed to waive or reduce its compensation under any
such contract involving such investment companies.
REQUIRED VOTE
Approval of the New PIC Advisory Agreement requires a Majority Vote of the
outstanding shares of Large Capitalization Growth.
THE TRUSTEES, INCLUDING ALL OF THE INDEPENDENT TRUSTEES, RECOMMEND THAT
SHAREHOLDERS OF LARGE CAPITALIZATION GROWTH VOTE "FOR" THE NEW PIC ADVI-
SORY AGREEMENT.
BACKGROUND ON PROPOSALS 2 AND 3
(PROPOSAL 2 TO BE VOTED ON BY SHAREHOLDERS OF LARGE CAPITALIZATION
VALUE EQUITY INVESTMENTS ONLY AND PROPOSAL 3 TO BE VOTED ON
BY SHAREHOLDERS OF SMALL CAPITALIZATION VALUE EQUITY INVESTMENTS ONLY)
Parametric Portfolio Associates, Inc. ("Parametric") had served as an in-
vestment adviser ("Adviser") to Large Capitalization Value Equity Invest-
ments ("Large Capitalization Value") pursuant to an Advisory Agreement
dated March 3, 1994 between The Consulting Group (the Manager) and Para-
metric. NFJ Investment Group, Inc. ("NFJ") had served as an Adviser to
Small Capitalization Value Equity Investments ("Small Capitalization
Value") pursuant to an Advisory Agreement dated April 1, 1993 between The
Consulting Group and NFJ (the prior Advisory Agreements with Parametric
and NFJ hereinafter collectively referred to as "Prior Advisory Agree-
ments.") Parametric and NFJ are each wholly owned subsidiaries of Pacific
Financial Asset Management Corporation ("PFAMCo"), which is in turn, an
indirect wholly owned subsidiary of Pacific Mutual Life Insurance Company
("Pacific Mutual").
As a result of the transaction described below, the Prior Advisory Agree-
ments terminated on November 17, 1994. Parametric, NFJ, and others entered
into an agreement ("Consolidation Agreement") with Thomson Advisory Group
L.P. ("TAG") providing for the consolidation of Parametric, NFJ, and cer-
tain other entities with TAG (the "Consolidation"). As described in more
detail below, the Consolidation resulted in the transfer of the investment
advisory businesses of Parametric and NFJ to new general partnerships that
are called Parametric Portfolio Associates ("New Parametric") and NFJ In-
vestment Group ("New NFJ"), respectively.
The Prior Advisory Agreements each provided for their automatic termina-
tion in the event of an "assignment," as that term is defined in the 1940
Act, and the Consolidation resulted in an assignment and termination of
the Prior Advisory Agreements with Parametric and NFJ. Consequently, New
Parametric and New NFJ have proposed that The Consulting Group enter into
new Advisory Agreements for Large Capitalization Value Equity Investments
and Small Capitalization Value to take effect upon the approval of share-
holders.
At a meeting held on September 1, 1994, after considering various factors
described below, the Trustees, including the Trustees who are not parties
to the Advisory Agreements or interested persons (as defined in the 1940
Act) of any such party (the "Independent Trustees"), unanimously approved
two proposed new Advisory Agreements (collectively referred to hereinafter
as the "New Advisory Agreements"), one between The Consulting Group and
New Parametric for Large Capitalization Value Equity Investments, and one
between The Consulting Group and New NFJ for Small Capitalization Value.
The form of the New Advisory Agreements is attached as Exhibit A.
Accordingly, a shareholder meeting was called to consider the New Advisory
Agreements. However, due to a shortened period for solicitation prior to
the closing of the transaction and the effect of year-end holidays the
necessary shareholder approvals were not obtained. Both New NFJ and New
Parametric have agreed to provide advisory services without payment pend-
ing shareholder approval.
PFAMCo has advised the Board of Trustees that after the Consolidation, New
Parametric and New NFJ have each retained the services of their respective
advisory personnel and employees who previously provided (and continue to
provide) services to Large Capitalization Value and Small Capitalization
Value. PFAMCo further advised the Trustees that, subject to approval of
the New Advisory Agreements by shareholders, the Consolidation is not ex-
pected to materially affect the level or quality of advisory services pro-
vided to Large Capitalization Value and Small Capitalization Value, and
that the same investment management personnel who currently manage these
Portfolios are expected to continue to do so after the Consolidation. No
change is anticipated in the investment objectives and policies of these
Portfolios.
THE CONSOLIDATION TRANSACTION
The Consolidation Agreement provided for the consolidation of the invest-
ment advisory and other businesses of Parametric, NFJ, and other subsid-
iaries of PFAMCo with TAG, which changed its name to PIMCO Advisors, L.P.
TAG and its affiliates provided investment advisory and related services
to a wide range of institutional and individual clients, including mutual
funds. As a result of the Consolidation, the investment advisory business
of Parametric and NFJ has been transferred to separate general partner-
ships that are called Parametric Portfolio Associates and NFJ Investment
Group, respectively. These new general partnerships are subsidiary part-
nerships of PIMCO Advisors.
The general partner of PIMCO Advisors is another partnership, called PIMCO
Partners, G.P. PFAMCo indirectly holds a majority interest in PIMCO Part-
ners, G.P., and the remainder is held indirectly by a group comprised of
the current Managing Directors of Pacific Investment Management Company
("PIMCO"), another subsidiary of PFAMCo. As a result of the Consolidation,
Pacific Mutual and its affiliates hold a majority interest in PIMCO Advi-
sors, New Parametric, and New NFJ, through direct or indirect ownership of
PIMCO Advisors.
Under the Consolidation, PIMCO Partners, G.P.'s power to conduct the busi-
ness of PIMCO Advisors is delegated to two boards that govern PIMCO Advi-
sors -- an Operating Board and an Equity Board. The Operating Board exer-
cises substantially all of the governance powers of the general partner
and delegates day-to-day operational issues to an Operating Committee. The
Operating Board and Operating Committee cannot effect certain transactions
and other material matters without the prior consent of the Equity Board.
For purposes of governance of PIMCO Advisors, the Operating Board and the
Equity Board are intended to constitute the functional and legal equiva-
lent of a board of directors of PIMCO Advisors. Pacific Mutual and its af-
filiates holds a majority interest in PIMCO Advisors, New Parametric and
New NFJ after the Consolidation through its indirect ownership of units of
PIMCO Advisors.
The Consolidation Agreement provides for the discretionary award of op-
tions on units of PIMCO Advisors to provide incentives and rewards to key
management employees of PIMCO Advisors and its subsidiary partnerships.
The Consolidation Agreement contemplates that the Trust conform with the
provisions of Section 15(f) of the 1940 Act, which provides, in pertinent
part, that a fund's investment adviser (or its controlling person) may re-
ceive any amount or benefit in connection with its sale which results in
an assignment of an investment advisory contract if (1) for a period of
three years after the time of the event, 75% of the members of the fund's
board of directors are not "interested persons" (as defined in the 1940
Act) of the new or old investment adviser; and (2) there is no "unfair
burden" imposed on the fund as a result of the transaction.
The Board of Trustees currently conforms with these provisions, and is ex-
pected to continue to conform with these provisions for the required time
period. PFAMCo and the Consulting Group have committed to the Trust's
Board that there is no present intention to seek an increase in the
Trust's advisory or management fees with respect to the Portfolios for
which Parametric or NFJ serves as Adviser for a period of at least two
years following the Consolidation.
TAG, a Delaware limited partnership organized in 1987, and its affiliates
provided investment advisory and related services to a wide range of in-
stitutional and individual clients including mutual funds. TAG's outstand-
ing partnership units were traded on the New York Stock Exchange. As of
June 30, 1994, TAG managed approximately $9.4 billion in assets, primarily
through its Columbus Circle Investors division ("CCI").
Consummation of the Consolidation was contingent upon certain events, in-
cluding regulatory approvals and consents, approval by TAG unitholders,
and approval of new advisory contracts or consent by a substantial portion
of the advisory clients of TAG and PFAMCo and its subsidiaries, including
Parametric and NFJ.
See Exhibit C for additional information about the consolidation.
THE PRIOR AND NEW ADVISORY AGREEMENTS
The Prior Advisory Agreement with Parametric was initially approved by the
Trustees on December 9, 1993 and by the shareholders of the Large Capital-
ization Value Portfolio on March 3, 1994, and was last approved by the
Trustees on September 1, 1994. The Prior Advisory Agreement with NFJ was
initially approved by the Trustees on March 4, 1993 and by the sharehold-
ers of the Portfolio on June 1, 1993, and was last approved by the Trust-
ees on September 1, 1994.
If the New Advisory Agreements are approved by shareholders, New Paramet-
ric would continue as Adviser to Large Capitalization Value, and New NFJ
would continue as Adviser to Small Capitalization Value. THE TERMS AND
CONDITIONS OF THE NEW ADVISORY AGREEMENTS ARE IDENTICAL IN ALL MATERIAL
RESPECTS TO THOSE OF THE PRIOR ADVISORY AGREEMENTS WITH THE EXCEPTION OF
THE IDENTITY OF THE ADVISER, AND THE EFFECTIVENESS AND TERMINATION DATES.
Each of the New Advisory Agreements, like each of the Prior Advisory
Agreements, provides that the Adviser is required to manage a portion of
the securities held by the Portfolio it serves, subject to the supervision
and stated direction of the Manager and ultimately the Board of Trustees
in accordance with the Portfolio's investment objective and policies, make
investment decisions for the Portfolio, and place orders to purchase and
sell securities on behalf of the Portfolio.
Each of the New Advisory Agreements and the Prior Advisory Agreements pro-
vide that the Adviser shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Manager or the Trust in
connection with any investment advisory services rendered under the agree-
ment, except, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Advisor against any liability to the
Manager or the Trust or to holders of the Trust's shares representing in-
terests in the Portfolio to which the Adviser would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Adviser's reck-
less disregard of its obligations and duties under the agreement.
Each of the New Advisory Agreements, like each of the Prior Advisory
Agreements provides that it terminates automatically in the event of its
assignment. In addition, each of these agreements may be terminated by the
Manager at any time without penalty, upon written notice to the appropri-
ate Adviser and the Trust, by the Adviser upon 60 days' written notice to
the Manager and the Trust, and by the Trust at any time without penalty,
upon the vote of a majority of the Trust's Board of Trustees or a majority
of the outstanding voting securities of the Portfolio of the Trust to
which the agreement pertains, upon written notice to the appropriate Ad-
viser and the Manager.
Shareholders should refer to Exhibit A for the complete terms of the New
Advisory Agreements.
If the New Advisory Agreements are approved by the shareholders of Large
Capitalization Value or Small Capitalization Value, as appropriate, they
will become effective upon approval and will remain in effect, unless ear-
lier terminated, for an initial two year term, subject to annual review
and continuation thereafter.
In the event that the shareholders of Large Capitalization Value or Small
Capitalization Value do not approve the New Advisory Agreements, subject
to the approval of the Securities and Exchange Commission if necessary,
the Board of Trustees could seek to obtain for Large Capitalization Value
and Small Capitalization Value interim advisory services either from the
current Adviser or from another advisory organization. Thereafter, the
Board of Trustees would either negotiate a new advisory agreement with an
advisory organization recommended by the Consulting Group and approved by
the Board or make other appropriate arrangements in either event subject
to approval by the shareholders of Large Capitalization Value or Small
Capitalization Value, as appropriate.
ADVISORY FEES
The fees under the New Advisory Agreements are the same as the fees under
the Prior Advisory Agreements. The New Advisory Agreement for Large Capi-
talization Value provides that The Consulting Group (and not the Trust)
will pay New Parametric a fee, payable monthly, at an annual rate of .20%
of the value of Large Capitalization Value's average daily net assets on
the first $300 million of assets and 0.15% of the value of the Portfolio's
average daily net assets thereafter, multiplied by a fraction, the numera-
tor of which is the average daily value of the net assets of the Portfolio
allocated to New Parametric and the denominator of which is the average
daily net asset value of the Portfolio. For the fiscal period ended August
31, 1994, total advisory fees paid by The Consulting Group to Parametric
aggregated $417,098 based on average net assets for the fiscal period of
$532,691,573. The New Advisory Agreement for Small Capitalization Value
with New NFJ provides that The Consulting Group (and not the Trust) will
pay New NFJ a fee, payable monthly, at an annual rate equal to .30% of the
value of average daily net assets of Small Capitalization Value, multi-
plied by a fraction, the numerator of which is the average daily value of
the net assets of the Portfolio allocated to New NFJ and the denominator
of which is the average daily net asset value of the Portfolio. For the
fiscal year ended August 31, 1994 and for the period August 2, 1993 to Au-
gust 31, 1993, total advisory fees paid by The Consulting Group to NFJ
under the Current Advisory Agreement aggregated $303,211 and $1,503, re-
spectively.
MANAGEMENT FEES
The Consulting Group serves as Manager to the Trust pursuant to a Manage-
ment Agreement. Large Capitalization Value pays The Consulting Group a
management fee, payable monthly, at an annual rate of .60% of the average
daily net assets of that Portfolio, and Small Capitalization Value pays
The Consulting Group a management fee, payable monthly, at an annual rate
of .60% of the average daily net assets of that Portfolio. The Consulting
Group, in turn, pays the Advisers to the Portfolios the advisory fees de-
scribed above out of The Consulting Group's assets.
PARAMETRIC PORTFOLIO ASSOCIATES, INC.
Parametric, located at 7310 Columbia Center, 701 Fifth Avenue, Seattle,
Washington 98104-7090, provided investment management services to large
accounts, such as employee benefit plans, college endowments, and founda-
tions. Accounts managed by Parametric had combined assets, as of December
31, 1993, of approximately $1.4 billion. Parametric was a subsidiary of
PFAMCo, which is an indirect wholly owned subsidiary of Pacific Mutual.
NFJ INVESTMENT GROUP, INC.
NFJ, located at 2121 San Jacinto, Suite 1440, Dallas, Texas 75201, pro-
vided investment management services to large accounts such as employee
benefit plans, college endowment funds, and foundations. Accounts managed
by NFJ had combined assets as of December 31, 1993 of approximately $965.9
million. NFJ was a subsidiary of PFAMCo.
NEW PARAMETRIC AND NEW NFJ
New Parametric and New NFJ are each be a general partnership with two
partners. The supervisory partner for each is PIMCO Advisors. The managing
partner for each is Parametric Management, Inc. and NFJ Management, Inc.,
respectively, which are newly formed Delaware corporations that are wholly
owned by PIMCO Advisors. PIMCO Advisors holds 99.9% of the partnership in-
terest of each of New NFJ and New Parametric.
The addresses of each of New Parametric and New NFJ (each a "New Portfolio
Manager") are the same as the addresses of Parametric and NFJ, respec-
tively (each a "Prior Portfolio Manager"). Under the Consolidation, the
day-to-day management of each New Portfolio Manager is entrusted to its
managing general partner, which will delegate authority over the business
and operations of such New Portfolio Manager to the New Portfolio Manag-
er's Managing Directors. The Managing Directors of each New Portfolio Man-
ager will be the same individuals who currently serve as Managing Direc-
tors of the applicable Prior Portfolio Managers. Prior approval from PIMCO
Advisors will be necessary for certain extraordinary business transac-
tions, contractual arrangements, or other specified activities of each New
Portfolio Manager.
See Exhibit D for a list of the directors and principal executive officers
of New Parametric and a table setting forth the registered investment com-
panies for which New Parametric serves as investment adviser, including
the fees payable by such investment companies and their approximate net
assets. See Exhibit E for a list of the directors and principal executive
officers of New NFJ and a table setting forth the registered investment
companies for which New NFJ serves as investment adviser, including the
fees payable by such investment companies and their approximate net as-
sets.
PROPOSAL 2: LARGE CAPITALIZATION VALUE
TO APPROVE OR DISAPPROVE FOR LARGE CAPITALIZATION VALUE AN
INVESTMENT ADVISORY AGREEMENT WITH PARAMETRIC PORTFOLIO ASSO-
CIATES
The Board of Trustees has determined that, by approving the New Advisory
Agreement with New Parametric on behalf of Large Capitalization Value, the
Portfolio can best assure itself that services previously provided by
Parametric and its officers and employees will continue to be provided
without interruption. The Board believes that, like the Prior Advisory
Agreement with Parametric, the New Advisory Agreement with New Parametric
will enable Large Capitalization Value to obtain services of high quality
at costs deemed appropriate, reasonable, and in the best interests of the
Portfolio and its shareholders.
At a meeting on September 1, 1994, the Trustees considered information
with respect to whether the New Advisory Agreement with New Parametric was
in the best interests of Large Capitalization Value and its shareholders.
The Trustees considered, among other factors, representations by PFAMCo
that the Consolidation would not materially affect the investment advisory
operations of Parametric or the level or quality of advisory services pro-
vided to Large Capitalization Value; that, subject to Board and share-
holder approval, the same personnel at Parametric who currently provide
services to Large Capitalization Value are expected to continue to do so
after the Consolidation; that the advisory fee would not change as a re-
sult of the Consolidation; and that Large Capitalization Value would be
unaffected in any other way by the Consolidation, including that the Port-
folio would not be subjected to any unfair burden as a result of the
transaction.
Based upon its review, the Board of Trustees concluded that the New Advi-
sory Agreement with New Parametric is reasonable, fair and in the best in-
terests of Large Capitalization Value and its shareholders, and that the
fees provided in the New Advisory Agreement with New Parametric are fair
and reasonable. In the Board's view, retaining New Parametric to serve as
Adviser of Large Capitalization Value, under the terms of the New Advisory
Agreement with New Parametric, after the Consolidation is desirable and in
the best interests of the Portfolio and its shareholders. Accordingly,
after consideration of the above factors, and such other factors and in-
formation as it deemed relevant, the Board of Trustees, including all of
the Independent Trustees, unanimously approved the New Advisory Agreement
with New Parametric and voted to recommend its approval by Large Capitali-
zation Value's shareholders.
REQUIRED VOTE
Approval of the New Advisory Agreement requires a Majority Vote of the
outstanding shares of Large Capitalization Value.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF LARGE CAPITALIZATION VALUE VOTE "FOR" THE NEW IN-
VESTMENT ADVISORY AGREEMENT BETWEEN THE CONSULTING GROUP AND NEW PARAMET-
RIC.
PROPOSAL 3: SMALL CAPITALIZATION VALUE
TO APPROVE OR DISAPPROVE FOR SMALL CAPITALIZATION VALUE AN
INVESTMENT ADVISORY AGREEMENT WITH NEW NFJ
The Board of Trustees has determined that, by approving the New Advisory
Agreement with New NFJ on behalf of Small Capitalization Value, the Port-
folio can best assure itself that services previously provided by NFJ and
their officers and employees will continue to be provided without inter-
ruption. The Board believes that, like the Prior Advisory Agreements, the
New Advisory Agreements will enable Small Capitalization Value to obtain
services of high quality at costs deemed appropriate, reasonable, and in
the best interests of Small Capitalization Value and its shareholders.
At a meeting on September 1, 1994, the Trustees considered information
with respect to whether the New Advisory Agreements with New NFJ were in
the best interests of Small Capitalization Value and its shareholders. The
Trustees considered, among other factors, representations by Pacific Mu-
tual and PFAMCo that the Consolidation would not materially affect the in-
vestment advisory operations of NFJ or the level or quality of advisory
services provided to Small Capitalization Value; that, subject to Board
and shareholder approval, the same personnel at NFJ who currently provide
services to Small Capitalization Value are expected to continue to do so
after the Consolidation; that the advisory fees would not change as a re-
sult of the Consolidation; and that Small Capitalization Value would be
unaffected in any other way by the Consolidation, including that the Port-
folio would not be subjected to any unfair burden as a result of the
transaction.
Based upon its review, the Board of Trustees concluded that the New Advi-
sory Agreement with New NFJ is reasonable, fair and in the best interests
of Small Capitalization Value and its shareholders, and that the fees pro-
vided in the New Advisory Agreements with New NFJ are fair and reasonable.
In the Board's view, retaining New NFJ to serve as Adviser of Small Capi-
talization Value, under the terms of the New Advisory Agreement, after the
Consolidation is desirable and in the best interests of Small Capitaliza-
tion Value and its shareholders. Accordingly, after consideration of the
above factors, and such other factors and information as it deemed rele-
vant, the Board of Trustees, including all of the Independent Trustees,
unanimously approved the New Advisory Agreement and voted to recommend its
approval by Small Capitalization Value's shareholders.
REQUIRED VOTE
Approval of the New Advisory Agreement requires a Majority Vote of the
outstanding shares of Small Capitalization Value.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF SMALL CAPITALIZATION VALUE VOTE "FOR" THE NEW AD-
VISORY AGREEMENT BETWEEN THE CONSULTING GROUP AND NEW NFJ.
PROPOSAL 4: SMALL CAPITALIZATION VALUE ONLY
TO APPROVE OR DISAPPROVE FOR SMALL CAPITALIZATION VALUE AN
INVESTMENT ADVISORY AGREEMENT WITH WELLS FARGO NIKKO INVEST-
MENT ADVISORS
The fourth proposal to be considered at the Meeting is the approval of a
proposed investment advisory agreement (the "WFNIA Advisory Agreement")
between the Manager and Wells Fargo Nikko Investment Advisors ("WFNIA"),
pursuant to which WFNIA will act as a co-adviser of Small Capitalization
Value. The WFNIA Advisory Agreement is being submitted to shareholders of
Small Capitalization Value as required by the 1940 Act, which requires
that shareholders must grant prior approval for any new investment advi-
sory agreement.
On November 17, 1994, the advisory agreement between the Manager and
Thorsell, Parker Partners Inc., pursuant to which Thorsell, Parker Part-
ners Inc. served as a co-adviser of Small Capitalization Value, was termi-
nated at the request of the Manager. Since that time, all of the assets of
Small Capitalization Value have been managed by Small Capitalization Val-
ue's remaining co-adviser, NFJ Investment Group ("NFJ"). It is intended
that, upon shareholder approval of the WFNIA Advisory Agreement, the Man-
ager will allocate a portion of Small Capitalization Value's assets to be
advised by WFNIA.
WFNIA's principal offices are located at 45 Fremont Street, 17th Floor,
San Francisco, California, 94105. WFNIA is a partnership owned 50% by
Wells Fargo Investment Advisors, a wholly owned subsidiary of Wells Fargo
Bank, and 50% by The Nikko Building USA, Inc., a wholly owned subsidiary
of the Nikko Securities Co., Ltd., a Japanese securities firm. The address
of Wells Fargo Bank is 420 Montgomery Street, San Francisco, California
94163, The address of Nikko Securities Co., Ltd. is 3-1, Marunouchi
3-Chome, Chiyoda-ku, Tokyo, 100, Japan. WFNIA is registered with the Secu-
rities and Exchange Commission as an investment adviser and, as of Septem-
ber 30, 1994, had assets under management of $161.5 billion. The names of
the investment companies, including those with investment objectives simi-
lar to Small Capitalization Value, for which WFNIA provides services, the
amount of their net assets and the annual rate of WFNIA's fees for its
services to those companies are set forth in Exhibit F attached hereto.
The name, position with WFNIA and principal occupation of the members of
the management committee and the principal executive officers of WFNIA are
set forth below. The address of each, as it relates to his/her duties at
WFNIA, is the same as that of WFNIA.
<TABLE>
<CAPTION>
NAME AND POSITION WITH WFNIA PRINCIPAL
OCCUPATION
<S> <C>
Frederick L.A. Grauer Chairman
Chairman
Donald Luskin Managing Director
Managing Director CEO -- Defined
Contribution
CEO -- Defined Contribution Group Group
Andrea Maria Zulberti Chief Financial Officer
Managing Director
Chief Financial Officer
Clyde Ostler Vice Chairman
Member of Management Committee Wells Fargo Bank, N.A.
Christina Polischuk Chief Counsel
Managing Director
Chief Counsel
Yuji Shirakawa Deputy President
Member of Management Committee The Nikko Securities
Co., Ltd.
Masao Yuki Director,
Member of Management Committee The Nikko Securities
Co., Ltd.
William F. Zuendt President
Member of Management Committee Wells Fargo Bank, N.A.
</TABLE>
The WFNIA Advisory Agreement was approved by the Trustees, including the
Trustees who are not "interested persons" to any party to the Agreement
("Independent Board Members"), on December 14, 1994, and such approval was
made expressly subject to subsequent shareholder approval of such agree-
ment. A copy of the form of the WFNIA Advisory Agreement is set forth as
Exhibit A to this proxy statement. Under the terms of the WFNIA Advisory
Agreement, WFNIA will manage a portion of Small Capitalization Value's as-
sets, subject to the supervision of the Consulting Group and the Board, in
accordance with the investment objective and stated investment policies of
Small Capitalization Value. As to the portion of Small Capitalization
Value assets managed by it, WFNIA will make investment decisions for Small
Capitalization Value intended to match the performance of the Russell 2000
Value Index, place orders to purchase and sell investments for Small Capi-
talization Value and employ professional portfolio managers and securities
analysts who will provide research services to WFNIA.
Under the terms of the WFNIA Advisory Agreement, the Consulting Group will
pay WFNIA a fee that is computed daily and paid monthly at the annual rate
of 0.15% of the first $200 million of the average daily net assets; 0.10%
of the next $100 million of the average daily net assets and 0.05% on the
balance of the average daily net assets above $300 million of Small Capi-
talization Value, multiplied by a fraction, the numerator of which is the
average daily net assets of Small Capitalization Value allocated to WFNIA
for management and the denominator of which is the average daily net as-
sets of Small Capitalization Value.
TRUSTEES CONSIDERATIONS
The Board of Trustees believes that the terms of the WFNIA Advisory Agree-
ment are fair to, and in the best interest of, the Trust, Small Capitali-
zation Value, and its shareholders. The Board of Trustees, including all
of the non-interested Trustees, recommends approval by the shareholders of
the WFNIA Advisory Agreement between WFNIA and the Manager. In making this
recommendation, the Trustees carefully evaluated the experience of WFNIA's
key personnel in institutional investing, the quality of services WFNIA is
expected to provide to Small Capitalization Value, and the compensation
proposed to be paid to WFNIA, and have given careful consideration to all
factors deemed to be relevant to Small Capitalization Value, including,
but not limited to: (1) the fees and expense ratios of comparable mutual
funds; (2) the performance of Small Capitalization Value since commence-
ment of operations; (3) the nature and quality of the services expected to
be rendered to Small Capitalization Value by WFNIA; (4) the distinct in-
vestment objective and policies of Small Capitalization Value; (5) the
history, reputation, qualification and background of WFNIA, as well as the
qualifications of WFNIA's personnel and its financial condition; (6) WF-
NIA's investment performance record; and (7) other factors deemed rele-
vant.
REQUIRED VOTE
Approval of the WFNIA Advisory Agreement requires a Majority Vote of the
outstanding shares of Small Capitalization Value. Failure to obtain the
requisite vote for approval of the WFNIA Advisory Agreement will result in
NFJ continuing as the sole Investment Adviser to Small Capitalization
Value.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF SMALL CAPITALIZATION VALUE VOTE "FOR" ADOPTION OF
THE WFNIA ADVISORY AGREEMENT.
PROPOSAL 5: SMALL CAPITALIZATION GROWTH INVESTMENTS
TO APPROVE OR DISAPPROVE FOR SMALL CAPITALIZATION GROWTH IN-
VESTMENTS A PROPOSED INVESTMENT ADVISORY AGREEMENT WITH MEL-
LON CAPITAL MANAGEMENT CORPORATION
The fifth proposal to be considered at the Meeting is the approval of a
proposed investment advisory agreement (the "MCM Advisory Agreement") be-
tween the Manager and Mellon Capital Management Corporation ("MCM"), pur-
suant to which MCM will act as a co-adviser of Small Capitalization Growth
Investments ("Small Capitalization Growth"). This proposal is only rele-
vant to the shareholders of Small Capitalization Growth. The MCM Advisory
Agreement is being submitted to shareholders of Small Capitalization
Growth as required by the 1940 Act, which provides that shareholders must
grant prior approval for any new investment advisory agreement.
MCM, a Delaware corporation, is located at 595 Market Street, Suite 3000,
San Francisco, California 94105. MCM is registered with the SEC as an in-
vestment adviser and, as of December 31, 1994, had over $31 billion of as-
sets under management. MCM is a wholly owned, indirect subsidiary of Mel-
lon. Mellon is located at One Mellon Bank Center, Pittsburgh, Pennsylvania
15258. The names of the investment companies, including those with similar
investment objectives, for which MCM provides advisory services, the
amount of their net assets and the annual rate of MCM's fees for its ser-
vices to those companies are set forth on Exhibit G attached hereto.
The name, position with MCM, and the principal occupation of the directors
and principal executive officers of MCM are shown below: The address of
each, as it relates to his or her duties at MCM, is the same as that of
MCM.
<TABLE>
<CAPTION>
NAME AND POSITION WITH MCM PRINCIPAL OCCUPATION
<S> <C>
Thomas F. Loeb Chairman, CEO
Chairman, CEO
Robert M. Boyles President, COO
Director, President, COO
William L. Fouse Chairman of Executive
Director, Chairman of Executive Committee Committee
Philip R. Roberts Director
W. Keith Smith Director
Mary Catherine Shouse Executive Vice President
Executive Vice President
Brenda J. Oakley Executive Vice President
- --
Executive Vice President -- Corporate Corporate Operations,
Operations, Chief Administrative Officer Chief Administrative
Officer
Thomas B. Hazuka Executive Vice President
- --
Executive Vice President -- Investment Investment Management
Management
</TABLE>
The MCM Advisory Agreement was approved by the Trustees, including the In-
dependent Board Members, on December 14, 1994, and such approval was made
expressly subject to subsequent shareholder approval of such agreement. A
copy of the form of the MCM Advisory Agreement is set forth as Exhibit A
to this proxy statement. Under the terms of the MCM Advisory Agreement,
MCM will manage a portion of Small Capitalization Growth's assets, subject
to the supervision of the Consulting Group and the Board, in accordance
with the investment objective and stated investment policies of Small Cap-
italization Growth. As to the portion of Small Capitalization Growth as-
sets managed by it, MCM will make investment decisions for Small Capitali-
zation Growth intended to match the performance of the Russell 2000 Growth
Index, place orders to purchase and sell investments for Small Capitaliza-
tion Growth and employ professional portfolio managers and securities ana-
lysts who will provide research services to MCM.
Under the terms of the MCM Advisory Agreement, the Consulting Group will
pay MCM a fee that is computed daily and paid monthly at the annual rate
of 0.15% of the first $200 million of the average daily net assets; 0.10%
of the next $100 million of the average daily net assets and 0.05% on the
balance of the average daily net assets above $300 million of Small Capi-
talization Value, multiplied by a fraction, the numerator of which is the
average daily net assets of Small Capitalization Growth allocated to MCM
for management and the denominator of which is the average daily net as-
sets of Small Capitalization Growth.
TRUSTEES' CONSIDERATIONS
The Board of Trustees believes that the terms of the MCM Advisory Agree-
ment are fair to, and in the best interest of, the Trust, Small Capitali-
zation Growth, and its shareholders. The Board of Trustees, including all
of the non-interested Trustees, recommends approval by the shareholders of
the MCM Advisory Agreement between MCM and the Manager. In making this
recommendation, the Trustees carefully calculated the experience of MCM's
key personnel in institutional investing, the quality of services MCM is
expected to provide to Small Capitalization Growth, and the compensation
proposed to be paid to MCM, and have given careful consideration to all
factors deemed to be relevant to Small Capitalization Growth, including,
but not limited to: (1) the fees and expense ratios of comparable mutual
funds; (2) the performance of Small Capitalization Growth since commence-
ment of operations; (3) the nature and quality of the services expected to
be rendered to Small Capitalization Growth by MCM; (4) the distinct in-
vestment objective and policies of Small Capitalization Growth; (5) the
history, reputation, qualification and background of MCM, as well as the
qualifications of MCM's personnel and its financial condition; (6) MCM's
investment performance record; and (7) other factors deemed relevant.
REQUIRED VOTE
Approval of the MCM Advisory Agreement requires a Majority Vote of the
outstanding shares of Small Capitalization Growth. Failure to obtain the
requisite vote for approval of the MCM Advisory Agreement, if the PBA
Amended and Restated Advisory Agreement (as that term is defined below) is
approved, will result in PBA (as that term is defined below) continuing as
the sole Investment Adviser to Small Capitalization Growth. Failure to ob-
tain the requisite vote for approval of both the MCM Advisory Agreement
and the PBA Amended and Restated Advisory Agreement will result in PBA
continuing to act as the sole Investment Adviser to Small Capitalization
Growth pursuant to the PBA's current Advisory Agreement (as that term is
defined below).
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF SMALL CAPITALIZATION GROWTH VOTE "FOR" ADOPTION
OF THE MCM ADVISORY AGREEMENT.
PROPOSAL 6: SMALL CAPITALIZATION GROWTH ONLY
TO APPROVE OR DISAPPROVE FOR SMALL CAPITALIZATION GROWTH AN
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT WITH PIL-
GRIM BAXTER & ASSOCIATES, LTD.
The sixth proposal to be considered at the meeting is the approval of an
amended and restated investment advisory agreement ("PBA Amended and Re-
stated Advisory Agreement") with Pilgrim Baxter & Associates, Ltd ("PBA").
This proposal is only relevant to the shareholders of Small Capitalization
Growth. The PBA Amended and Restated Advisory Agreement is being submitted
to shareholders of Small Capitalization Growth, as required by the 1940
Act, which provides that shareholders must grant prior approval for any
amended and restated investment advisory agreement.
PBA currently serves as investment adviser to Small Capitalization Growth
pursuant to an Investment Advisory Agreement dated July 30, 1993 (the "PBA
Current Advisory Agreement"). The only material difference between the PBA
Current Advisory Agreement and the PBA Amended and Restated Advisory
Agreement is that the latter agreement provides for the management of
Small Capitalization Growth by more than one investment adviser.
PBA has been registered as an investment adviser under the Investment Ad-
visers Act of 1940 (the "Advisers Act") since 1982 and is controlled by
Gary L. Pilgrim and Harold J. Baxter, each an officer of PBA. PBA provides
investment advisory services to various institutional clients. As of De-
cember 31, 1994, PBA had assets under management of approximately $4 bil-
lion. PBA's principal executive offices are located at, and the business
address of its directors and officers is, 1255 Drummers Lane, Wayne, Penn-
sylvania 19087. The names of the investment companies for which PBA pro-
vides services, the amounts of their net assets and the annual rate of
PBA's fees for its services to those companies are set forth on Exhibit H
attached hereto.
The names, positions and principal occupations of the officers and direc-
tors of PBA are set forth below:
<TABLE>
<CAPTION>
NAME AND POSITION WITH PBA PRINCIPAL
OCCUPATION
<S> <C>
Harold J. Baxter President
President
Gary L. Pilgrim Chief Investment
Officer
Secretary and Treasurer
</TABLE>
The PBA Amended and Restated Advisory Agreement was approved by the Trust-
ees, including the Independent Board Members, on December 14, 1994, and
such approval was made expressly subject to subsequent shareholder ap-
proval of such agreement. A copy of the form of the PBA Amended and Re-
stated Advisory Agreement is set forth as Exhibit A to this proxy state-
ment. Under the terms of the PBA Amended and Restated Advisory Agreement,
PBA will manage a portion of Small Capitalization Growth's assets, subject
to the supervision of the Consulting Group and the Board, in accordance
with the investment objective and stated investment policies of Small Cap-
italization Growth. As to the portion of Small Capitalization Growth as-
sets managed by it, PBA will make investment decisions for Small Capitali-
zation Growth, place orders to purchase and sell investments for Small
Capitalization Growth and employ professional portfolio managers and secu-
rities analysts who will provide research services to PBA.
Under the terms of the PBA Amended and Restated Advisory Agreement, the
Consulting Group will pay to PBA a fee that is computed daily and paid
monthly at the annual rate of 0.30% of the average daily net assets of
Small Capitalization Growth multiplied by a fraction, the numerator of
which is the average daily value of the net assets of Small Capitalization
Growth allocated to PBA for management and the denominator of which is the
average daily net assets of Small Capitalization Growth.
TRUSTEES' CONSIDERATIONS
The Board of Trustees believes that the terms of the PBA Amended and Re-
stated Advisory Agreement are fair to, and in the best interest of, the
Trust, Small Capitalization Growth, and its shareholders. The Board of
Trustees, including all of the non-interested Trustees, recommends ap-
proval by the shareholders of the PBA Amended and Restated Agreement be-
tween PBA and the Manager. In making this recommendation, the Trustees
carefully evaluated the experience of PBA's key personnel in institutional
investing, the quality of services PBA has provided, and is expected to
provide, to Small Capitalization Growth, and the compensation proposed to
be paid to PBA, and have given careful consideration to all factors deemed
to be relevant to Small Capitalization Growth, including, but not limited
to: (1) the fees and expense ratios of comparable mutual funds; (2) the
performance of Small Capitalization Growth since commencement of opera-
tions; (3) the nature and quality of the services expected to be rendered
to Small Capitalization Growth by PBA; (4) the distinct investment objec-
tive and policies of Small Capitalization Growth; (5) that the compensa-
tion payable to PBA by the manager under the PBA Amended and Restated Ad-
visory Agreement will be at the same rate as the compensation now payable
to PBA under the PBA Current Advisory Agreement; (6) that the terms of the
PBA Current Advisory Agreement will be unchanged under the PBA Amended and
Restated Advisory Agreement except for allowing multiple investment advis-
ers, as well as different effective and termination dates; (7) the his-
tory, reputation, qualification and background of the PBA, as well as the
qualifications of PBA's personnel and its financial condition; (8) PBA's
investment performance record; and (9) other factors deemed relevant.
REQUIRED VOTE
Approval of the PBA Amended and Restated Advisory Agreement requires a Ma-
jority Vote of the outstanding shares of Small Capitalization Growth.
Failure to obtain the requisite vote for approval of the PBA Amended and
Restated Advisory Agreement, if the MCM Advisory Agreement is approved,
will result in the appointment of MCM as the sole Investment Adviser to
Small Capitalization Growth. Failure to obtain the requisite vote for ap-
proval of both the PBA Amended and Restated Advisory Agreement and the MCM
Advisory Agreement will result in PBA's continuing to act as the sole In-
vestment Adviser to Small Capitalization Growth under the PBA Current Ad-
visory Agreement.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF SMALL CAPITALIZATION GROWTH VOTE "FOR" THE AP-
PROVAL OF THE PBA AMENDED AND RESTATED ADVISORY AGREEMENT.
PROPOSAL 7: INTERNATIONAL EQUITY INVESTMENTS ONLY
TO APPROVE OR DISAPPROVE FOR INTERNATIONAL EQUITY INVESTMENTS
A PROPOSED INVESTMENT ADVISORY AGREEMENT WITH STATE STREET
GLOBAL ADVISORS
The seventh proposal to be considered at the meeting is the approval of a
proposed investment advisory agreement (the "SSGA Advisory Agreement") be-
tween the Manager and State Street Global Advisors ("SSGA"), pursuant to
which SSGA will act as a co-adviser of International Equity Investments
("International Equity"). This proposal is only relevant to the sharehold-
ers of International Equity. The SSGA Advisory Agreement is being submit-
ted to shareholders of International Equity as required by the 1940 Act,
which provides that shareholders must grant prior approval for any new in-
vestment advisory agreement.
SSGA's principal offices are located at Two International Place, Boston,
Massachusetts 02110. SSGA is a division of State Street Bank and Trust
Company, which is a wholly-owned subsidiary of State Street Boston Corpo-
ration. The address of State Street Boston Corporation is 225 Franklin
Street, Boston, Massachusetts 02110. As of November 30, 1994, SSGA had as-
sets under management of approximately $136 billion. The names of the in-
vestment companies for which SSGA provides services, the amounts of their
net assets and the annual rate of SSGA's fees for its services to those
companies are set forth on Exhibit I attached hereto.
The name, position with, and principal occupation of directors and princi-
pal executive officers of SSGA are shown below. The address of each, as it
relates to his duties at SSGA, is the same as that of SSGA.
<TABLE>
<CAPTION>
NAME AND POSITION WITH SSGA PRINCIPAL
OCCUPATIONS
<S> <C>
Nicholas A. Lopardo Principal, CEO
Principal, CEO
Timothy B. Harbett Principal, COO
Principal, COO
Peter M. Stonberg Principal, CIO
Principal, CIO
William G. Shipman Principal
Principal
Peter E. Braun Principal
Principal
Marc V. Simons Principal
Principal
Bentti O. Hoiska Principal
Principal
Theodore A. Miller, Jr. Principal
Principal
Larry L. Martin Principal
Principal
James V. Thompson, Jr. Principal
Principal
Gustaff V. Fish, Jr. Principal
Principal
</TABLE>
The SSGA Advisory Agreement was approved by the Trustees, including the
Trustees who are not "interested persons" to any party to the Agreement
("Independent Board Members"), and such approval was made expressly sub-
ject to subsequent shareholder approval of such agreement. A copy of the
form of the SSGA Advisory Agreement is set forth as Exhibit A to this
proxy statement. Under the terms of the SSGA Advisory Agreement, SSGA will
manage a portion of International Equity's assets, subject to the supervi-
sion of the Consulting Group and the Board, in accordance with the invest-
ment objective and stated investment policies of International Equity. As
to the portion of International Equity assets managed by it, SSGA will
make investment decisions for International Equity, intended to match the
performance of the Morgan Stanley Capital International Europe, Australia,
Far East ("EAFE") Index, place orders to purchase and sell investments for
International Equity and employ professional portfolio managers and secu-
rities analysts who will provide research services to SSGA.
Under the terms of the SSGA Advisory Agreement, the Consulting Group will
pay to SSGA a fee that is computed daily and paid monthly at the annual
rate of 0.07% of the average daily net assets of International Equity mul-
tiplied by a fraction, the numerator of which is the average daily value
of the net assets of International Equity allocated to SSGA for management
and the denominator of which is the average daily net assets of Interna-
tional Equity.
TRUSTEES' CONSIDERATIONS
The Board of Trustees believes that the terms of the SSGA Advisory Agree-
ment are fair to, and in the best interest of, the Trust, International
Equity, and its shareholders. The Board of Trustees, including all of the
non-interested Trustees, recommends approval by the shareholders of the
SSGA Advisory Agreement between SSGA and the manager. In making this rec-
ommendation, the Trustees carefully evaluated the experience of SSGA's key
personnel in institutional investing, the quality of services SSGA is ex-
pected to provide to International Equity, and the compensation proposed
to be paid to SSGA, and have given careful consideration to all factors
deemed to be relevant to International Equity, including, but not limited
to: (1) the fees and expense ratios of comparable mutual funds; (2) the
performance of International Equity since commencement of operations; (3)
the nature and quality of the services expected to be rendered to Interna-
tional Equity by SSGA; (4) the distinct investment objective and policies
of International Equity; (5) the history, reputation, qualification and
background of SSGA as well as the qualifications of SSGA's personnel and
its financial condition; (6) SSGA's investment performance record; and (7)
other factors deemed relevant.
REQUIRED VOTE
Approval of the SSGA Advisory Agreement requires a Majority Vote of the
outstanding shares of International Equity. Failure to obtain the requi-
site vote for approval of the SSGA Advisory Agreement, if the OIA Amended
and Restated Advisory Agreement (as that term is defined below) is ap-
proved, will result in Oechsle International Advisors, L.P. continuing as
the sole Investment Adviser to International Equity.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF INTERNATIONAL EQUITY VOTE "FOR" ADOPTION OF THE
SSGA ADVISORY AGREEMENT.
PROPOSAL 8: INTERNATIONAL EQUITY ONLY
TO APPROVE OR DISAPPROVE FOR INTERNATIONAL EQUITY AN AMENDED
AND RESTATED INVESTMENT ADVISORY AGREEMENT WITH OECHSLE IN-
TERNATIONAL ADVISORS, L.P.
The eighth proposal to be considered at the Meeting is the approval of an
amended and restated investment advisory agreement ("OIA Amended and Re-
stated Advisory Agreement") with Oechsle International Advisors, L.P.
("OIA"). This proposal is only relevant to the shareholders of Interna-
tional Equity. The OIA Amended and Restated Advisory Agreement is being
submitted to shareholders of International Equity, as required by the 1940
Act, which provides that shareholders must grant prior approval for any
amended and restated investment advisory agreement.
OIA currently serves as investment adviser to International Equity pursu-
ant to an investment advisory agreement dated July 30, 1993 (the "OIA Cur-
rent Advisory Agreement"). The only material difference between the OIA
Current Advisory Agreement and the OIA Amended and Restated Advisory
Agreement is that the latter agreement provides for the management of In-
ternational Equity by more than one investment adviser.
OIA has been registered as an investment adviser under the Advisers Act
since 1986. Oechsle Group, L.P. holds 100% of the voting securities of
OIA. Oechsle Group, L.P. is a limited partnership whose business consists
exclusively of global investment management services. The general partners
of Oechsle Group, L.P. are individuals who also serve as officers of OIA.
OIA provides investment advisory services to individual and institutional
clients. As of November 30, 1994, OIA had assets under management of ap-
proximately $6.5 billion. OIA's principal executive offices are located at
One International Place, Boston, Massachusetts 02110. The name of the in-
vestment company with an investment objective similar to International Eq-
uity for which OIA provides services, the amounts of its net assets and
the annual rate of OIA's fees for its services to that company is set
forth on Exhibit J attached hereto.
The names, positions and principal occupations of the General Partners of
OIA are set forth below:
<TABLE>
<CAPTION>
NAME AND POSITION WITH OIA PRINCIPAL
OCCUPATION
<S> <C>
Walter Oechsle Chief Executive
Officer
General Partner
Singleton Dewey Keesler, Jr. Investment Manager
General Partner
Stephen P. Langer Investment Manager
General Partner
Lawrence S. Roche Investment Manager
General Partner
Steven H. Schaefer Investment Manager
General Partner
Tetsuo Shiozumi Investment Manager
General Partner
Warren Walker Investment Manager
General Partner
</TABLE>
The business address of the General Partners, other than Messrs. Schaefer,
Shiozumi and Walker, is the same as that of OIA. The business address of
Messrs. Shaefer and Walker is 36 St. George Street, London WIR 9FA, En-
gland. The business address of Mr. Shiozumi is Maedajisho Uchikanda Build-
ing, 1-12-3 Uchikanda, Chiyoda-ku, Tokyo 101, Japan.
The OIA Amended and Restated Advisory Agreement was approved by the Trust-
ees, including the Independent Board Members, on December 14, 1994, and
such approval was made expressly subject to subsequent shareholder ap-
proval of such agreement. A copy of the form of the OIA Amended and Re-
stated Advisory Agreement is set forth as Exhibit A to this proxy state-
ment. Under the terms of the OIA Amended and Restated Advisory Agreement,
OIA will manage a portion of International Equity's assets, subject to the
supervision of the Consulting Group and the Board, in accordance with the
investment objective and stated investment policies of International Eq-
uity. As to the portion of International Equity assets managed by it, OIA
will make investment decisions for International Equity, place orders to
purchase and sell investments for International Equity and employ profes-
sional portfolio managers and securities analysts who will provide re-
search services to OIA.
Under the terms of the OIA Amended and Restated Advisory Agreement, the
Consulting Group will pay to OIA a fee that is computed daily and paid
monthly at the annual rate of 0.40% of the average daily net assets of In-
ternational Equity multiplied by a fraction, the numerator of which is the
average daily value of the net assets of International Equity allocated to
OIA for management and the denominator of which is the average daily net
assets of International Equity.
TRUSTEES' CONSIDERATIONS
The Board of Trustees believes that the terms of the OIA Amended and Re-
stated Advisory Agreement are fair to, and in the best interest of, the
Trust, International Equity and its shareholders. The Board of Trustees,
including all of the non-interested Trustees, recommends approval by the
shareholders of the OIA Amended and Restated Advisory Agreement between
OIA and the Manager. In making this recommendation, the Trustees carefully
evaluated the experience of OIA's key personnel in institutional invest-
ing, the quality of services OIA has provided, and is expected to provide
to International Equity, and the compensation proposed to be paid to OIA,
and have given careful consideration to all factors deemed to be relevant
to International Equity, including, but not limited to: (1) the fees and
expense ratios of comparable mutual funds; (2) the performance of Interna-
tional Equity since commencement of operations; (3) the nature and quality
of the services expected to be rendered to International Equity by OIA;
(4) the distinct investment objective and policies of International Eq-
uity; (5) that the compensation payable to OIA by the Manager under the
proposed OIA Amended and Restated Advisory Agreement will be at the same
rate as the compensation now payable to the Adviser under the OIA Current
Advisory Agreement; (6) that the terms of the OIA Current Advisory Agree-
ment will be unchanged under the OIA Amended and Restated Advisory Agree-
ment except for allowing for multiple investment advisers, as well as dif-
ferent effective and termination dates; (7) the history, reputation, qual-
ification and background of OIA, as well as the qualifications of OIA's
personnel and OIA's financial condition; (8) OIA's investment performance
record; and (9) other factors deemed relevant.
REQUIRED VOTE
Approval of the OIA Amended and Restated Advisory Agreement requires a Ma-
jority Vote of the outstanding shares of International Equity. Failure to
obtain the requisite vote for approval of the OIA's Amended and Restated
Advisory Agreement, if the SSGA Advisory Agreement is approved, will re-
sult in the appointment of SSGA as the sole Investment Adviser to Interna-
tional Equity. Failure to obtain the requisite vote for approval of both
the OIA Amended and Restated Advisory Agreement and the SSGA Advisory
Agreement will result in OIA continuing to act as the sole investment ad-
viser to International Equity under the OIA Current Advisory Agreement.
THE TRUSTEES, INCLUDING A MAJORITY OF THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF INTERNATIONAL EQUITY VOTE "FOR" THE APPROVAL OF
THE OIA AMENDED AND RESTATED ADVISORY AGREEMENT.
DESCRIPTION OF THE PROPOSED ADVISORY AGREEMENTS
Each of the PIC Advisory Agreement, the WFNIA Advisory Agreement, the MCM
Advisory Agreement, the PGA Amended and Restated Advisory Agreement, the
SSGA Advisory Agreement and the OIA Amended and Restated Advisory Agree-
ment provides that the Adviser named therein will exercise its best judg-
ment in rendering services under the Agreement and that the relevant Advi-
sor will not be liable for any error of judgment or mistake of law or for
any loss suffered by Smith Barney or the Trust in connection with the mat-
ters to which the Agreement relates, provided that nothing in any Advisory
Agreement shall be deemed to protect or purport to protect the Advisor
named therein against any liability to the relevant Portfolio or its
shareholders to which that party would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence on its part in the per-
formance of its duties or by reason of the party's reckless disregard of
its obligations and duties under the relevant Agreement.
Pursuant to the Advisory Agreements, the relevant Adviser agrees to keep
the Trust and the Consulting Group informed of material developments af-
fecting the relevant Portfolio, to comply with the provisions of the 1940
Act and, with the exception of WFNIA, to refrain during the one-year pe-
riod following termination of the Advisory Agreement, from acting as an
investment adviser, manager or other similar service provider to or for
the benefit of any registered investment company that seeks as its primary
market for its shares programs similar to the TRAK Personalized Investment
Advisory Service. Each Advisory Agreement will become effective on the
date on which it is approved by the relevant Portfolio's shareholders.
Each Advisory Agreement shall continue for an initial two-year term and
shall continue automatically for successive annual periods, provided that
such continuance is approved at least annually by the Board or the vote of
the holders of a majority of the relevant Portfolio's outstanding voting
securities with the approval of the Independent Board Members. Each Advi-
sory Agreement may be terminated by (a) the Manager upon written notice;
(b) vote of a majority of the Trustees or the holders of a majority of the
relevant Portfolio's outstanding voting securities, as the case may be,
upon written notice; or (c) the Adviser named therein, upon 60 days' prior
written notice.
PORTFOLIO TRANSACTIONS WITH AFFILIATED BROKER-DEALERS
To the extent consistent with applicable provisions of the 1940 Act and
the rules and exemptions adopted by the SEC under the 1940 Act, the Board
has determined that transactions for each of the Portfolios may be exe-
cuted through Smith Barney and other affiliated broker-dealers if, in the
judgment of the Investment Advisers, the use of an affiliated broker-
dealer is likely to result in price and execution at least as favorable as
those of other qualified broker-dealers.
The Board periodically reviews the commissions paid by the Trust to deter-
mine if the commissions paid over representative periods of time were rea-
sonable in relation to the benefits inuring to the Trust. During the fis-
cal year ended August 31, 1994, the Trust incurred total brokerage commis-
sions on portfolio transactions of $6,309,327, of which $202,699, or 3.21%
of the aggregate, was paid to Smith Barney during the Trust's last fiscal
year.
Such brokerage commissions were incurred with respect to each of the eq-
uity portfolios as follows:
<TABLE>
<CAPTION>
% OF
TOTAL
COMMISSIONS
COMMISSIONS
TOTAL PAID TO PAID
TO
PORTFOLIO COMMISSIONS SMITH BARNEY SMITH
BARNEY
<S> <C> <C> <C>
Balanced Investments $19,844 -- --
Large Capitalization Value
Equity Investments 2,649,739 $184,620
6.97%
Large Capitalization Growth
Investments 986,852 1,698 0.17
Small Capitalization Value
Equity Investments 1,024,781 15,659 1.53
Small Capitalization Growth
Investments 135,420 -- --
Emerging Markets Equity
Investments 156,570 -- --
International Equity Invest-
ments 1,336,121 722 0.06
</TABLE>
ADDITIONAL INFORMATION
Smith Barney and SBMFM are located at 388 Greenwich Street, New York, New
York 10013. The Consulting Group is located at 222 Delaware Avenue, Wilm-
ington, Delaware 19801. Boston Advisers is located at One Boston Place,
Boston, Massachusetts 02108. TSSG is located at Exchange Place, Boston,
Massachusetts 02109.
SUBMISSION OF SHAREHOLDER PROPOSALS
As a Massachusetts business trust, the Trust does not hold annual share-
holder's meetings. Shareholders wishing to submit proposals for inclusion
in a proxy statement for a subsequent meeting of shareholders must submit
their proposals for inclusion in the proxy materials in writing to the
Secretary of the Trust, c/o Consulting Group Capital Markets Funds, 388
Greenwich Street, New York, New York 10013
SHAREHOLDERS' REQUEST FOR SPECIAL MEETING
Shareholders holding at least 10% of the Trust's outstanding voting secu-
rities (as defined in the 1940 Act) may require the calling of a meeting
of shareholders for the purpose of voting on the removal of any Board mem-
ber of the Trust. Meetings of shareholders for any other purpose also
shall be called by the Board members when requested in writing by share-
holders holding at least 10% of the shares then outstanding or, if the
Board members shall fail to call or give notice of any meeting of share-
holders for a period of 30 days after such application, shareholders hold-
ing at least 10% of the shares then outstanding may call and give notice
of such meeting.
OTHER MATTERS TO COME BEFORE THE MEETING
The Trustees do not intend to present any other business at the Meeting,
nor are they aware that any shareholder intends to do so. If, however, any
other matters are properly brought before the Meeting, the persons named
in the accompanying proxy card(s) will vote thereon in accordance with
their judgment.
January 11, 1995
IT IS IMPORTANT THAT THE PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE MEETING ARE THEREFORE URGED TO COMPLETE, SIGN,
DATE AND RETURN THE PROXIES AS SOON AS POSSIBLE IN THE ENCLOSED POSTAGE-
PAID ENVELOPE.
EXHIBIT LIST
<TABLE>
<S> <C>
EXHIBIT A Form of New Advisory Agreement
EXHIBIT B List of Investment Companies of which PIC serves
as an
Investment Adviser or Subadviser
EXHIBIT C More Information about Consolidation
EXHIBIT D Information about Parametric Portfolio
Associates
EXHIBIT E Information about NFJ Investment Group
EXHIBIT F List of Investment Companies of which WFNIA serves
as an
Investment Adviser or Subadviser
EXHIBIT G List of Investment Companies of which MCM serves
as an
Investment Adviser or Subadviser
EXHIBIT H List of Investment Companies of which PBA serves
as an
Investment Adviser or Subadviser
EXHIBIT I List of Investment Companies of which SSGA serves
as an
Investment Adviser or Subadviser
EXHIBIT J List of Investment Companies of which OIA serves
as an
Investment Adviser or Subadviser
</TABLE>
EXHIBIT A
CONSULTING GROUP CAPITAL MARKETS FUNDS
FORM OF
INVESTMENT ADVISORY AGREEMENT
[DATE]
[Name and Address of Advisor]
DEAR SIRS:
Under an agreement (the "Management Agreement") between the Consulting
Group Capital Markets Funds, a Massachusetts business trust (the "Trust"),
and Smith Barney Mutual Funds Management Inc. (the "Manager"), the Manager
serves as the Trust's investment manager and has the responsibility of
evaluating, recommending, supervising and compensating investment advisers
to each series of the Trust.
The Manager hereby confirms its agreement with [NAME OF ADVISOR] (the "Ad-
visor") with respect to the Advisor's serving as an investment advisor of
[NAME OF PORTFOLIO] (the "Portfolio"), a series of the Trust, as follows:
SECTION 1. Investment Description; Appointment
(a) The Trust desires to employ the Portfolio's capital by investing and
reinvesting in investments of the kind and in accordance with the invest-
ment objectives, policies and limitations specified in its Master Trust
Agreement dated April 12, 1991, as amended from time to time (the "Trust
Agreement"), in the prospectus (the "Prospectus") and in the statement of
additional information (the "Statement of Additional Information") filed
with the Securities and Exchange Commission (the "SEC") as part of the
Trust's Registration Statement on Form N-1A, as amended from time to time
(the "Registration Statement"), and in the manner and to the extent as may
from time to time be approved in the manner set forth in the Trust Agree-
ment. Copies of the Trust's Prospectus, the Statement of Additional Infor-
mation and the Trust Agreement have been or will be submitted to the Advi-
sor.
(b) The Manager, with the approval of the Trust, hereby appoints the Ad-
visor to act as an investment advisor to the Portfolio for the periods and
on the terms set forth in this Agreement. The Advisor accepts such ap-
pointment and agrees to furnish the services herein set forth for the com-
pensation herein provided.
SECTION 2. Portfolio Management Duties
(a) Subject to the supervision of the Manager and the Trust's Board of
Trustees, the Advisor will (i) manage the portion of the Portfolio's as-
sets allocated to the Advisor upon the recommendation of the Manager and
the approval of the Board of Trustees ("Allocated Assets") in accordance
with the Portfolio's investment objectives, policies and limitations as
stated in the Trust's Prospectus and Statement of Additional Information;
(ii) make investment decisions with respect to Allocated Assets; and (iii)
place orders to purchase and sell securities and, where appropriate, com-
modity futures contracts with respect to Allocated Assets.
(b) The Advisor will keep the Trust and the Manager informed of develop-
ments materially affecting the Portfolio and shall, on the Advisor's own
initiative, furnish to the Trust and the Manager from time to time what-
ever information the Advisor believes appropriate for this purpose.
(c) The Advisor agrees that it will comply with the Investment Company
Act of 1940, as amended (the "Act"), and all rules and regulations there-
under, all applicable federal and state laws and regulations and with any
applicable procedures adopted by the Trust's Board of Trustees.
SECTION 3. Brokerage
(a) The Advisor agrees that it will place orders pursuant to its invest-
ment determinations with respect to Allocated Assets either directly with
the issuer or with brokers or dealers selected by it in accordance with
the standards specified in paragraphs (b) and (c) of this Section 3. The
Advisor may place orders with respect to Allocated Assets with Smith Bar-
ney Inc. or its affiliates in accordance with Section 11(a) of the Securi-
ties Exchange Act of 1934 and Rule 11a2-2(T) thereunder, Section 17(e) of
the Act and Rule 17e-1 thereunder and other applicable laws and regula-
tions.
(b) In placing orders with brokers and dealers, the Advisor will use its
best efforts to seek the best overall terms available. In assessing the
best overall terms available for any portfolio transaction, the Advisor
will consider all factors it deems relevant including, but not limited to,
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker or dealer and
the reasonableness of any commission for the specific transaction and on a
continuing basis.
(c) In selecting brokers or dealers to execute a particular transaction
and in evaluating the best overall terms available, the Advisor may con-
sider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided to the
Trust and/or other accounts over which the Advisor or an affiliate exer-
cises investment discretion.
SECTION 4. Information Provided to the Manager and the Trust
(a) The Advisor agrees that it will make available to the Manager and the
Trust promptly upon their request copies of all of its investment records
and ledgers with respect to the Portfolio to assist the Manager and the
Trust in monitoring compliance with the Act and the Investment Advisers
Act of 1940, as amended (the "Advisers Act"), as well as other applicable
laws. The Advisor will furnish the Trust's Board of Trustees with respect
to the Portfolio such periodic and special reports as the Manager and the
Board of Trustees may reasonably request.
(b) The Advisor agrees that it will immediately notify the Manager and
the Trust in the event that the Advisor or any of its affiliates: (i) be-
comes subject to a statutory disqualification that prevents the Advisor
from serving as investment advisor pursuant to this Agreement; or (ii) is
or expects to become the subject of an administrative proceeding or en-
forcement action by the SEC or other regulatory authority. The Advisor has
provided the information about itself set forth in the Registration State-
ment and has reviewed the description of its operations, duties and re-
sponsibilities as stated therein and acknowledges that they are true and
correct and contain no material misstatement or omission, and it further
agrees to notify the Manager and the Trust's Administrator immediately of
any material fact known to the Advisor respecting or relating to the Advi-
sor that is not contained in the Prospectus or Statement of Additional In-
formation of the Trust, or any amendment or supplement thereto, or any
statement contained therein that becomes untrue in any material respect.
(c) The Advisor represents that it is an investment adviser registered
under the Advisers Act and other applicable laws and that the statements
contained in the Advisor's registration under the Advisers Act on Form
ADV, as of the date hereof, are true and correct and do not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The Advisor agrees to maintain
the completeness and accuracy of its registration on Form ADV in accor-
dance with all legal requirements relating to that Form. The Advisor ac-
knowledges that it is an "investment adviser" to the Portfolio within the
meaning of the Act and the Advisers Act.
SECTION 5. Books and Records
In compliance with the requirements of Rule 31a-3 under the Act, the Advi-
sor hereby agrees that all records that it maintains for the Trust are the
property of the Trust and further agrees to surrender promptly to the
Trust copies of any such records upon the Trust's request. The Advisor
further agrees to preserve for the periods prescribed by Rule 31a-2 under
the Act the records required to be maintained by Rule 31a-1 under the Act
and to preserve the records required by Rule 204-2 under the Advisers Act
for the period specified in that Rule.
SECTION 6. Compensation
(a) In consideration of services rendered pursuant to this Agreement, the
Manager will pay the Advisor a fee that is computed daily and paid monthly
at the annual rate of *% of the average daily net assets of the Portfolio,
multiplied by a fraction, the numerator of which is the average daily
value of Allocated Assets and the denominator of which is the average
daily value of the Portfolio's total assets (the "Portfolio Advisory
Fee"). The Portfolio Advisory Fee payable to the Advisor shall be reduced
in the same proportion as the Portfolio Advisory Fee bears to the Manag-
er's fee from the Portfolio to the extent, in any fiscal year of the Port-
folio, the aggregate expenses of the Portfolio (including fees pursuant to
this Agreement and the Trust's Administration Agreement with the Adminis-
trator, but excluding interest, taxes, brokerage fees, and, if permitted
by state securities commissions, extraordinary expenses) exceed the ex-
pense limitation of any state having jurisdiction over the Portfolio.
(b) The Portfolio Advisory Fee for the period from the date this Agree-
ment becomes effective to the end of the month during which this Agreement
becomes effective shall be prorated according to the proportion that such
period bears to the full monthly period. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month
shall be prorated according to the proportion that such period bears to
the full monthly period and shall be payable upon the date of termination
of this Agreement.
(c) For the purpose of determining fees payable to the Advisor, the value
of the Portfolio's net assets shall be computed at the time and in the
manner specified in the Trust's Prospectus and/or the Statement of Addi-
tional Information.
SECTION 7. Costs and Expenses
During the term of this Agreement, the Advisor will pay all expenses in-
curred by it and its staff in connection with the performance of its ser-
vices under this Agreement, including the payment of salaries of all of-
ficers and employees who are employed by it and the Trust.
* 0.30% for the PIC Agreement
0.20% of the first $300 million; and 0.15% on the balance for the New
Parametric Agreement
0.15% of the first $200 million; 0.10% of the next $100 million; and
0.05% of the balance for the WFNIA Agreement
0.30% for the New NFJ Agreement
0.15% of the first $200 million; 0.10% of the next $100 million; and
0.05% of the balance for the MCM Agreement
0.30% for the PBA Agreement
0.07% for the SSGA Agreement
0.40% for the OIA Agreement.
SECTION 8. Standard of Care
The Advisor shall exercise its best judgment in rendering the services
provided by it under this Agreement. The Advisor shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Manager or the Trust in connection with the matters to which this Agree-
ment relates, provided that nothing in this Agreement shall be deemed to
protect or purport to protect the Advisor against any liability to the
Manager or the Trust or to holders of the Trust's shares representing in-
terests in the Portfolio to which the Advisor would otherwise be subject
by reason of willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or by reason of the Advisor's reck-
less disregard of its obligations and duties under this Agreement.
SECTION 9. Services to Other Companies or Accounts**
(a) It is understood that the services of the Advisor are not exclusive,
and nothing in this Agreement shall prevent the Advisor from providing
similar services to other investment companies (whether or not their in-
vestment objectives and policies are similar to those of the Trust) or
from engaging in other activities; provided, however, that the Advisor
agrees that neither it nor any of its affiliated persons (as defined in
the Act) shall accept retention as investment adviser, investment manager
or similar service provider during the pendency of this Agreement and for
the period of one (1) year after the termination of this Agreement with or
for the benefit of any investment company registered under the Act that
seeks as a primary market for its shares asset allocation programs similar
in nature or market to TRAK Personalized Investment Advisory Service.
(b) The proviso set forth in paragraph (a) of this Section 9 shall not
apply to the continuation of any contractual relationship to which the Ad-
visor is a party that is in effect on the date of this Agreement.
(c) When the Advisor recommends the purchase or sale of a security for
other
investment companies and other clients, and at the same time the Advisor
** Section 9 of the WFNIA Agreement is as follows:
(a) It is understood that the services of the Advisor are not exclusive,
and nothing in this Agreement shall prevent the Advisor from provid-
ing similar services to other investment companies (whether or not
their investment objectives and policies are similar to those of the
Trust) or from engaging in other activities.
(b) When the Advisor recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time
the Advisor recommends the purchase or sale of the same security for
the Trust, it is understood that in light of its fiduciary duty to
the Trust such transactions will be executed on a basis that is fair
and equitable to the Trust.
(c) The Trust and the Manager understand and acknowledge that the persons
employed by the Advisor to assist in the performance of its duties
under this Agreement will not devote their full time to that service;
nothing contained in this Agreement will be deemed to limit or re-
strict the right of the Advisor or any affiliate of the Advisor to
engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
recommends the purchase or sale of the same security for the Trust, it is
understood that in light of its fiduciary duty to the Trust such transac-
tions will be executed on a basis that is fair and equitable to the Trust.
(d) The Trust and the Manager understand and acknowledge that the persons
employed by the Advisor to assist in the performance of its duties under
this Agreement will not devote their full time to that service; nothing
contained in this Agreement will be deemed to limit or restrict the right
of the Advisor or any affiliate of the Advisor to engage in and devote
time and attention to other businesses or to render services of whatever
kind or nature, subject to the proviso set forth in paragraph (a) of this
Section 9.
SECTION 10. Duration and Termination
(a) This Agreement shall become effective on March 6, 1995, or, if a
later date, the date it is approved by shareholders of the Portfolio and
shall continue for two years from that date, and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Trust's Board of Trust-
ees or (ii) a vote of a majority of the Portfolio's outstanding voting se-
curities (as defined in the Act), provided that the continuance is also
approved by a majority of the Trustees who are not "interested persons"
(as defined in the Act) of the Trust, by vote cast in person at a meeting
called for the purpose of voting on such approval.
(b) Notwithstanding the foregoing, this Agreement may be terminated (i)
by the Manager at any time without penalty, upon notice to the Advisor and
the Trust, (ii) at any time without penalty by the Trust, upon the vote of
a majority of the Trust's Trustees or by vote of the majority of the
Trust's outstanding voting securities, upon notice to the Manager and the
Trust or (iii) by the Advisor at any time without penalty, upon sixty (60)
days' written notice to the Manager and the Trust.
(c) This Agreement will terminate automatically in the event of its as-
signment (as defined in the Act and in rules adopted under the Act).
SECTION 11. Amendments
No provision of this Agreement may be changed, waived, discharged or ter-
minated orally, but only by an instrument in writing signed by the party
against whom enforcement of the change, waiver, discharge or termination
is sought, and no amendment of this Agreement shall be effective until ap-
proved in accordance with applicable law.
SECTION 12. Miscellaneous
(a) This Agreement shall be governed by the laws of the State of New
York, provided that nothing herein shall be construed in a manner incon-
sistent with the Act, the Advisers Act, 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 thereof or otherwise af-
fect 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 Agree-
ment shall not be affected thereby and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Advisor as an
agent of the Trust or the Manager.
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by sign-
ing and returning to us the enclosed copy of this Agreement.
SMITH BARNEY INC.
By:
Name:
Title:
Accepted:
[Name of Advisor]
By:
Name:
Title:
EXHIBIT B
LIST OF INVESTMENT COMPANIES FOR WHICH PIC
SERVES AS AN INVESTMENT ADVISER OR SUBADVISER
<TABLE>
<CAPTION>
ADVISORY/SUB-
NET ASSETS
PIC ADVISORY FEE RATE
VALUE AT
NAME OF FUND AND/OR SERIES CAPACITY (AS PERCENTAGE OF NET
ASSETS) OCTOBER 31, 1994
<S> <C> <C>
<C>
GROWTH AND/OR EQUITY FUNDS
PIC Growth Portfolio
PIC Institutional Growth Fund Adviser 0.80%
$177.6 million
PIC Endeavor Growth Fund
PIC Small Capital Growth Fund
PIC Small Capital Growth Fund Adviser 0.80%
$84.2 million
Allmerica Investment Trust
Select Growth Fund Subadviser 0.50% First $50 million
$86.5 million
0.45% Next $100 million
0.35% Next $100 million
0.30% Next $100 million
0.25% On balance
Blanchard Funds
Blanchard American Equity Subadviser 0.50% First $150 million
Fund 0.45% Next $100 million
$12.1 million
0.40% Next $150 million
0.35% On balance
Lincoln Adviser Funds, Inc.
Lincoln U.S. Growth Portfolio Subadviser 0.40%
$12.5 million
Enterprise Group of Funds
Aggressive Growth Portfolio Subadviser 0.75%
$108.1 million
Liberty All-Star Equity Fund Subadviser 0.40%
$150.0 million
Charles Allmon Trust, Inc. Subadviser 0.40% First $125 million
$8.6 million
0.30% Next $125 million
0.20% On balance
Sun America Series Trust
Provident Growth Portfolio Subadviser 0.50% First $50 million
$78.9 million
0.45% Next $100 million
0.35% Next $100 million
0.30% Next $100 million
0.25% On balance
BALANCED FUNDS
PIC Balanced Portfolio
PIC Institutional Balanced Fund Adviser 0.60%
$9.1 million
Paine Webber Series Trust
Balanced Portfolio Series Subadviser 0.45%
$12.0 million
</TABLE>
EXHIBIT C
MORE INFORMATION ABOUT THE CONSOLIDATION
The following is a discussion, prepared prior to the consolidation, of
more detailed information about the Consolidation for those shareholders
seeking such information.
The Consolidation Agreement provides that the business of Parametric, NFJ,
and certain other subsidiaries of PFAMCo will be transferred to TAG in re-
turn for 24,575,000 newly issued units of partner interest, of which
400,000 will be units of general partner interest ("GP units") and
24,175,000 will be units of limited partner interest, divided into two
classes -- Class A and Class B. In connection with its assuming the role
of general partner of PIMCO Advisors, PIMCO Partners, G.P. also will ac-
quire common stock of TAG Inc., the current general partner of TAG, for
approximately $130 million. The current common stockholders of TAG Inc.
will retain economic interests in TAG Inc. through preferred stock repre-
senting approximately 34% of the Class A and Class B partnership units
owned by TAG Inc. Class A units will have the same rights as the currently
outstanding public units of TAG; Class B units will be subordinated to
Class A units with respect to certain distribution rights. In connection
with the consolidation and recapitalization of TAG Inc., the Board of Di-
rectors of TAG Inc. has approved a conversion ratio of 1 limited partner
unit and/or GP unit held by TAG Inc. for 1.4 Class B units. Effective Jan-
uary 1, 1998, or earlier in the event of a restructuring of PIMCO Advisors
that may be undertaken by PIMCO Partners, G.P. in connection with changes
in the tax status of PIMCO Advisors, it is anticipated that Class B units
will convert to Class A units. The average of the high and low prices for
TAG units quoted on the New York Stock Exchange on August 29, 1994 was
$40.1875.
Giving effect to the Consolidation, but prior to any secondary offering,
PIMCO Partners, G.P. will own approximately 60.5% of all outstanding units
of PIMCO Advisors. PFAMCo and its other affiliates will separately own ap-
proximately 7.4% of all outstanding units. TAG Inc. will own approximately
19.6% of all outstanding units, and the public will own approximately
12.2% of all outstanding units. Pacific Mutual and its affiliates would
hold a majority interest in PIMCO Advisors, New Parametric and New NFJ
through direct or indirect ownership of units of PIMCO Advisors.
In connection with the Consolidation, PIMCO Advisors will adopt a stock
option plan to provide incentives and rewards to key employees of PIMCO
Advisors, and its subsidiary partnerships, which may include officers and
directors of New Parametric and New NFJ. The aggregate number of Class B
units with respect to which options may be granted under the plan is
2,800,000 and the terms of the Consolidation Agreement provide for the
grant of options with respect to up to 2,675,000 units at the closing of
the Consolidation. Each subsidiary partnership of PIMCO Advisors will es-
tablish a profit sharing plan in which its Managing Directors and certain
designated employees may participate.
PIMCO Partners, L.P., a California limited partnership, will be the manag-
ing general partner of PIMCO Partners, G.P. All of the ownership interest
in PIMCO Partners, L.P. will be held directly or indirectly by the PIMCO
Managing Directors. PIMCO Partners, L.P. will have a profits interest of
approximately 37.3% in PIMCO Partners, G.P. As of the Consolidation, but
prior to any secondary offering of units that may be made at or about that
time, William H. Gross, a Managing Director of PIMCO, will hold approxi-
mately 41.9% of the ownership interests in PIMCO Partners, L.P. (repre-
senting an indirect economic interest in approximately 15.6% of the units
owned by PIMCO Partners, G.P., or 12.5% of the outstanding units of PIMCO
Advisors after the Consolidation). Under the terms of the Amended and Re-
stated Agreement of Limited Partnership of PIMCO Advisors under the Con-
solidation, the Chief Executive Officer of PIMCO Partners, L.P. will be a
member of the Equity Board of PIMCO Advisors, and PIMCO Partners, L.P.
will have the right to appoint two other members to the Equity Board,
which is described below.
Pursuant to a registration rights agreement among TAG Inc., certain cur-
rent stockholders of TAG Inc., certain individuals affiliated with TAG or
PFAMCo, PIMCO Partners, G.P., and PFAMCo, and certain affiliates of
PFAMCo, holders of rights may cause PIMCO Advisors to register Class A
units held by such individuals and entities for public sale under the Se-
curities Act of 1933 (the "Secondary Offering"). It is presently contem-
plated that approximately 4,000,000 Class A units may be registered and
sold in this manner contemporaneously with the closing of the Consolida-
tion. The terms of any secondary offering of units are subject to negotia-
tion among the parties and whether such offering will occur will depend on
many factors, including prevailing market conditions. It is not possible
to predict whether such an offering will occur. Depending on the number of
units sold, the secondary offering would impact the indirect interest of
PFAMCO in PIMCO Advisors and the secondary offering may change the rela-
tive percentage interests in PIMCO Partners, L.P. of the individual PIMCO
Managing Directors. Certain units received by the Managing Directors of
Parametric and NFJ will be effectively restricted as to sale or other dis-
position until January 1, 1998.
The Amended and Restated Partnership Agreement of PIMCO Advisors will pro-
vide that a person or group that owns more than 20% of the combined voting
power of the outstanding units of the partnership shall have the right to
vote not more than 20% of the outstanding units entitled to vote, and the
remaining units owned by such person or group shall have no voting rights
and shall not be counted for quorum or unitholder approval purposes. These
provisions do not apply to entities controlled by Pacific Mutual, PFAMCo,
or the PIMCO Managing Directors, to certain savings, profit-sharing, unit
or stock bonus and employee incentive or stock ownership plans established
by PIMCO Advisors or certain of its subsidiaries, or to other persons or
groups approved by PIMCO Partners, G.P. The intention of this provision
is to reduce the possibility that a future sale of units by a significant
holder of units would cause a "change in control" of the PIMCO Advisors
for purposes of the 1940 Act or Investment Advisers Act of 1940.
On September 8, 1994, TAG announced a 106% distribution on TAG's outstand-
ing units, payable on October 9, 1994 to unitholders of record as of the
close of business on October 1, 1994, with holders of limited partner
units receiving limited partner units and holders of general partner units
receiving general partner units. The effect of the unit distribution will
be to double approximately the number of TAG units outstanding, as well as
the gross number of TAG units issued in return for the PFAMCo businesses
in the Consolidation. However, the unit distribution will not have a mate-
rial impact on the relative percentage ownership interests of the parties
to the Consolidation as discussed herein.
PIMCO Partners, G.P., the general partner of PIMCO Advisors, will delegate
management and supervisory functions for PIMCO Advisors to an Operating
Board and an Equity Board. The Operating Board and Equity Board are in-
tended to constitute the functional and legal equivalent of a board of di-
rectors after the Consolidation. The Operating Board will exercise sub-
stantially all of the governance powers of the general partner except for
those powers specifically delegated to the Equity Board, and will delegate
day-to-day operational issues to the Operating Committee. The Equity Board
will have the authority to approve certain transactions and other material
matters involving PIMCO Advisors, including an amendment to the partner-
ship agreement of PIMCO Advisors or a subsidiary partnership, incurring
large amounts of debt or making material acquisitions or dispositions, is-
suing additional units, and others.
The Operating Board will initially be composed of 12 members as follows:
the Chief Executive Officer of New PIMCO, initially William S. Thompson,
Jr. (who will also serve as Chairperson of the Operating Board), six other
persons designated by the Managing Directors of New PIMCO (initially
William H. Gross, Brent R. Harris, Dean S. Meiling, James F. Muzzy,
William F. Podlich, III and William C. Powers), three persons designated
by the Managing Directors of the successor of Columbus Circle Investors
("New CCI"), (initially Irwin F. Smith, Donald A. Chiboucas and Daniel S.
Pickett), and one person selected by the vote of the successor of Cadence
Capital Management, Inc., New NFJ, and New Parametric, weighted by their
contribution to the income of PIMCO Advisors (initially David B. Breed).
The final initial member of the Operating Board shall be the Chief Execu-
tive Officer of the PIMCO Advisors, William D. Cvengros. Initially, the
members of the Operating Committee will be William D. Cvengros, William S.
Thompson and Irwin F. Smith. The Equity Board will initially be composed
of 12 members as follows: the Chairperson of the Operating Board (ini-
tially William S. Thompson), the Chief Executive Officer of PIMCO Advisors
(initially William D. Cvengros), three persons designated by PFAMCo (ini-
tially Walter B. Gerken, Thomas C. Sutton and Glenn S. Schafer), two per-
sons designated by PIMCO Partners, L.P. (initially William H. Gross and
William F. Podlich, III), two persons designated by the preferred stock-
holders of TAG Inc. (initially Irwin F. Smith and Donald K. Miller) and
three independent members designated by the other nine members of the Eq-
uity Board, initially Walter E. Auch, Sr., Donald R. Kurtz and a third
person to be selected. The Chairperson of the Equity Board will initially
be Walter B. Gerken.
Under the Consolidation, PIMCO Partners, G.P. will be given broad author-
ity to effect a restructuring of PIMCO Advisors to address certain tax
consequences associated with the potential loss of PIMCO Advisor's status
as a partnership for federal tax purposes. After any restructuring of
PIMCO Advisors, the members of the Operating Board (other than the Chief
Executive Officer of the partnership, who will serve ex officio) will be
selected by the advisory subsidiary partnerships based on their relative
contributions to the net income of the partnership, and the members of the
Equity Board (other than the Chairperson of the Operating Board and the
Chief Executive Officer of the partnership) will be selected by the exist-
ing members of the Equity Board in a manner reasonably determined to most
effectively represent the proportionate interests of all direct and indi-
rect beneficial holders of units, including public unitholders, with at
least three members of the Equity Board being independent.
The Amended and Restated Partnership Agreement of PIMCO Advisors provides
that PIMCO Partners, G.P. may choose the form and timing of any restruc-
turing of PIMCO Advisors. A restructuring may occur on or about the date
on which the partnership's exemption from corporate income tax expires,
which is expected to be December 31, 1997, or on such earlier or later
date as PIMCO Partners, G.P. may determine based on certain factors, in-
cluding certain tax considerations relating to PFAMCo.
EXHIBIT D
INFORMATION ABOUT PARAMETRIC PORTFOLIO ASSOCIATES
Parametric Portfolio Associates is a general partnership with two general
partners, PIMCO Advisors Limited Partners and Parametric Management Incor-
porated. The Directors and Officers of Parametric Management Inc. are:
<TABLE>
<CAPTION>
POSITION WITH PARAMETRIC
NAME AND PRINCIPAL OCCUPATION(S)
<S> <C>
William E. Cornelius, Jr. Director and Managing Director, Parametric.
Mark W. England-Markun Director, Managing Director and Chief
Executive Officer,
Parametric.
Brian Girvan Treasurer, Parametric; Financial Officer,
PIMCO Advisors
700 Newport Center Drive L.P.
Newport Beach, CA 92660
Newton Schott, Jr. Secretary, Parametric; Executive Vice
President --
700 Newport Center Drive Legal, PIMCO Advisors L.P.
Newport Beach, CA 92660
Michelle Mitchell Assistant Secretary, Parametric; Vice
President, PIMCO
700 Newport Center Drive Advisors L.P.
Newport Beach, CA 92660
</TABLE>
Business address of Parametric is 701 5th Avenue, Suite 7310, Seattle,
Washington 98104.
OTHER INVESTMENT COMPANY CLIENTS
Parametric also acts as investment adviser to the registered investment
companies listed below. The following table sets forth the name of each
such investment company, its approximate net assets at December 31, 1994,
and the annual advisory fee charged by Parametric (as a percentage of av-
erage daily net assets).
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF NET ASSETS AT
INVESTMENT COMPANY DECEMBER 31, 1994 ANNUAL ADVISORY
FEES
<S> <C> <C>
PFAMCo Funds
Enhanced Equity Portfolio $65,995,000 .45% of average daily
net assets
International Equity Port-
folio 6,770,000 .45% of average daily
net assets
Balanced Portfolio 77,275,000 .45% of average daily
net assets
(Equity Segment) allocated to Equity
Segment of
Balanced Portfolio
</TABLE>
EXHIBIT E
INFORMATION ABOUT NFJ INVESTMENT GROUP
("NFJ")
DIRECTORS AND EXECUTIVE OFFICERS
NFJ's directors and principal executive officers and their principal occu-
pations are shown below. Unless otherwise indicated, the business address
of each such person is 2121 San Jacinto, Suite 1440, Dallas, Texas 75201.
<TABLE>
<CAPTION>
POSITION WITH NFJ
NAME AND PRINCIPAL OCCUPATION(S)
<S> <C>
Benno J. Fischer Director and Managing Director,
NFJ.
John L. Johnson Director and Managing Director,
NFJ.
Jack C. Najork Director and Managing Director,
NFJ.
</TABLE>
OTHER INVESTMENT COMPANY CLIENTS
NFJ also acts as investment adviser to the registered investment companies
listed below. The following table sets forth the name of each such invest-
ment company, its approximate net assets at June 30, 1994 and the annual
advisory fee charged by NFJ (as a percentage of average daily net assets).
<TABLE>
<CAPTION>
APPROXIMATE
NAME OF NET ASSETS
INVESTMENT COMPANY AT DECEMBER 31, 1994 ANNUAL
ADVISORY FEES
<S> <C> <C>
PFAMCo Funds
Equity Income Portfolio $86,630,578 .45% of average
daily net assets
Diversified Low P/E Portfolio 14,045,974 .45% of average
daily net assets
Small Cap Value Portfolio 33,072,889 .60% of average
daily net assets
RSI Value Equity Fund
Equity Income Portfolio 34,848,357 .60% of 1st $10
million; .50%
of next $10
million; .40% of next
$20 million; .30%
of next $20
million; .20% of
next $40
million; .15% of
next $50
million; .10% over
$150 million
thereafter.
</TABLE>
EXHIBIT F
LIST OF INVESTMENT COMPANIES FOR WHICH WELLS FARGO NIKKO
INVESTMENT ADVISORS SERVES AS AN INVESTMENT ADVISER
<TABLE>
<CAPTION>
ADVISORY/SUB-
ADVISORY FEE RATE
(AS ANNUALIZED % OF NET
ASSETS AT
NAME OF FUND AND/OR SERIES AVERAGE NET ASSETS) NOVEMBER
30, 1994
(IN
MILLIONS)
<S> <C> <C>
MASTER INVESTMENT PORTFOLIO
S&P 500 Index Master Series 0.04%
$431
Bond Index Master Series 0.07%
$102
Asset Allocation Master Series 0.20%
$244
U.S. Treasury Allocation Master Series 0.15% $
56
Lifepath 2000 Master Series 0.40% $
60
Lifepath 2010 Master Series 0.40% $
43
Lifepath 2020 Master Series 0.40% $
69
Lifepath 2030 Master Series 0.04% $
42
Lifepath 2040 Master Series 0.40% $
54
STAGECOACH FUNDS, INC.
Asset Allocation Fund 0.20%
$955
US Government Allocation Fund .15% + $40,000
$147
Corporate Stock Fund .08% + $40,000
$244
OVERLAND EXPRESS FUNDS
Asset Allocation Fund .20% + $60,000 $
57
LIFE & ANNUITY TRUST
Asset Allocation Fund 0.20% $
7
US Government Allocation Fund 0.15% $
1
DREYFUS
Edison Electric Index Fund, Inc. 0.10% $
71
Peoples Index Fund 0.10%
$233
Stock Index Fund, Inc. 0.15% $
91
FRANK RUSSELL INVESTMENT COMPANY
Equity Q Fund .25% - .15%
$136
Quantitative Equity Fund .25% - .15%
$122
ACCESSOR FUNDS, INC.
Small Cap Portfolio 0.1% plus incentive fee $
9
</TABLE>
EXHIBIT G
LIST OF INVESTMENT COMPANIES FOR WHICH MELLON CAPITAL MANAGEMENT CORPORA-
TION SERVES AS AN INVESTMENT ADVISER OR SUBADVISER
<TABLE>
<CAPTION>
NET ASSET VALUE
FUND (SERIES) CAPACITY RATE OF FEE
AS OF 9/30/94
<S> <C> <C>
<C>
C.I.M.L.--Preferred Group of Sub-Adviser 0.50% First $200 million
$30.1 million
Mutual Funds 0.20% on balance
Preferred Asset Allocation
Fund
Credit Commercial de France Sub-Adviser Base fee: 0.20%
$9.4 million
(Luxembourg) S.A. Performance-based fee:
America Index Plus Fund 20% of account alpha
The Vanguard Group of Adviser 0.20% First $100 million
$157.7 million
Investment Companies 0.15% on balance
Vanguard Asset Allocation
Fund
</TABLE>
EXHIBIT H
LIST OF INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES
FOR WHICH PBA SERVES AS AN INVESTMENT ADVISER OR SUBADVISER
<TABLE>
<CAPTION>
ADVISORY/SUB-ADVISORY
ANNUAL FEE RATE
NET ASSETS AT
NAME OF FUND CAPACITY (AS PERCENTAGE OF NET ASSETS)
DECEMBER 31, 1994
(IN MILLIONS)
<S> <C> <C>
<C>
PBGH Growth Fund Advisor 0.85%
$744
Diversified Investment
Advisors, Inc. Sub-Advisor 0.50%
$ 54
SEI Small Cap Growth Fund Sub-Advisor 0.50%
$ 98
Managers Special Equity Fund Sub-Advisor 0.30%
$218
</TABLE>
EXHIBIT I
State Street Bank and Trust Company acts as the investment adviser to the
following investment companies, in addition to the Fund.
<TABLE>
<CAPTION>
ADVISORY FEE RATE
(AS PERCENTAGE OF
NAME OF FUND (SERIES) NET ASSETS) NET
ASSETS
<S> <C> <C>
THE SEVEN SEAS SERIES FUND
(08/31/94)
The Seven Seas Series Money Market
Fund 0.25%
$3,020,795,826
The Seven Seas Series U.S. Government
Money Market Fund 0.25%
251,165,232
The Seven Seas Series Short Term
Government Securities Fund 0.50%
25,720,142
The Seven Seas Series Matrix Equity
Fund 0.75%
130,764,439
The Seven Seas Series Yield Plus Fund 0.25%
1,358,463,580
The Seven Seas Series Emerging Markets
Fund 0.75%
27,479,070
The Seven Seas Series U.S. Treasury
Money Market Fund 0.25%
154,857,938
The Seven Seas Series U.S. Treasury
Obligations Fund 0.25% *
The Seven Seas Series Growth and Income
Fund 0.85%
26,746,547
The Seven Seas Series Intermediate
Fund 0.80%
19,962,863
The Seven Seas Series Prime Money
Market Fund 0.15%
432,223,728
The Seven Seas Series S&P 500 Index
Fund 0.10%
361,711,898
The Seven Seas Series International
European Index Fund 0.50% *
The Seven Seas Series International
Pacific Index Fund 0.50% *
The Seven Seas Series Bond Market Fund 0.30% *
THE BOSTON GROWTH AND INCOME FUND .375% first $20MM $
38,909,052
.300% thereafter of
(09/30/94)
average daily net
assets ($25,000
minimum)
COLONIAL U.S. FUND FOR GROWTH .40% first $200MM $
270,657,448
.35% thereafter of
(09/30/94)
average daily net
assets
COLONIAL KEYPORT U.S. FUND FOR .40% first $200 MM
GROWTH .35% thereafter of $
12,537,028
average daily net
(09/30/94)
assets
BENNINGTON ACCESSOR FUNDS, INC. .10% flat fee. If $
20,137,632
the return is
(09/30/94)
greater than, .05%
to 0% over the BARRA
Growth Index, there
is a performance fee
of .05%. If the
return is between 0
and .50% over the
BARRA Growth Index,
there is a perfor-
mance fee of .10%.
If the return is be-
tween 0.50% and
1.00% over the BARRA
Growth Index, there
is a performance fee
of .15%. If the re-
turn is 1.01% to
2.00% over the BARRA
Growth Index, there
is a performance fee
of .20%. If the re-
turn is over 2.00%
over the BARRA
Growth Index, there
is a performance fee
of .32%.
FIRMCO/PORTICO 0.50% and a waiver $
22,597,781
of all expenses when
(09/30/94)
expenses exceed
1.50% for the first
year; thereafter, a
waiver of all ex-
penses over 2.52%.
VARIABLE INVESTORS SERIES TRUST .65% first $100MM $
13,061,248
.55% thereafter
(09/30/94)
<FN>
* Fund has not yet commenced operations.
</TABLE>
EXHIBIT J
LIST OF INVESTMENT COMPANIES WITH SIMILAR INVESTMENT OBJECTIVES
FOR WHICH OECHSLE INTERNATION ADVISORS, L.P.
SERVES AS AN INVESTMENT ADVISER OR SUBADVISER
FEE (AS A PERCENTAGE NET
ASSETS
NAME OF FUND CAPACITY OF NET ASSETS) AT
12/31/94
(IN
MILLIONS)
MFS WORLD GROWTH SUB-ADVISER 0.15%
$133.5
This proxy, if properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL(S) LISTED BELOW. Please refer to the Proxy
Statement for a discussion of the Proposal. Please indicate your vote by
an "X" in the appropriate box below.
3. To approve the Investment Advisory Agreement FOR * AGAINST *
ABSTAIN *
with NFJ Investment Group
(Small Capitalization Value Equity Investments only)
4. To approve the Investment Advisory Agreement FOR * AGAINST *
ABSTAIN *
with Wells Fargo Nikko Investment Advisors
(Small Capitalization Value Equity Investments only)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...........................................................................
...........................................................................
...........
Consulting Group Capital Markets Funds - Small Capitalization Value Equity
Invesments
Special Meeting of Shareholders on March 10, 1995
The undersigned holder of shares of the above named portfolio (the
"Portfolio"), of Consulting Group Capital Markets Funds (the "Trust"),
hereby appoints Heath B. McLendon, Leonard Reinhart, Christina T. Sydor and
Lee D. Augsburger as attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Portfolio that the
undersigned is entitled to vote at the meeting of shareholders of the Trust
to be held at the offices of the Trust, 388 Greenwich Street, New York, New
York at 10:00 a.m. on the date indicated above and any adjournments thereof
(the "Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Meeting. A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your
full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
This proxy, if properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL(S) LISTED BELOW. Please refer to the Proxy
Statement for a discussion of the Proposal. Please indicate your vote by
an "X" in the appropriate box below.
1. To approve the Investment Advisory Agreement FOR * AGAINST *
ABSTAIN *
with Provident Investment Counsel
(Large Capitalization Growth Investments only)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...........................................................................
...........................................................................
...........
Consulting Group Capital Markets Funds - Large Capitalization Growth
Investments
Special Meeting of Shareholders on March 10, 1995
The undersigned holder of shares of the above named portfolio (the
"Portfolio"), of Consulting Group Capital Markets Funds (the "Trust"),
hereby appoints Heath B. McLendon, Leonard Reinhart, Christina T. Sydor and
Lee D. Augsburger as attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Portfolio that the
undersigned is entitled to vote at the meeting of shareholders of the Trust
to be held at the offices of the Trust, 388 Greenwich Street, New York, New
York at 12:00 p.m. on the date indicated above and any adjournments thereof
(the "Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Meeting. A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your
full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
This proxy, if properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL(S) LISTED BELOW. Please refer to the Proxy
Statement for a discussion of the Proposals. Please indicate your vote by
an "X" in the appropriate box below.
5. To approve the Investment Advisory Agreement FOR * AGAINST *
ABSTAIN *
with Mellon Capital Management Corporation
(Small Capitalization Growth Investments only)
6. To approve the Amended Investment Advisory FOR * AGAINST *
ABSTAIN *
Agreement with Pilgrim Baxter & Associates, Ltd.
(Small Capitalization Growth Investments only)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...........................................................................
...........................................................................
...........
Consulting Group Capital Markets Funds - Small Capitalization Growth
Investments
Special Meeting of Shareholders on March 12, 1995
The undersigned holder of shares of the above named portfolio (the
"Portfolio"), of Consulting Group Capital Markets Funds (the "Trust"),
hereby appoints Heath B. McLendon, Leonard Reinhart, Christina T. Sydor and
Lee D. Augsburger as attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Portfolio that the
undersigned is entitled to vote at the meeting of shareholders of the Trust
to be held at the offices of the Trust, 388 Greenwich Street, New York, New
York at 12:00 p.m. on the date indicated above and any adjournments thereof
(the "Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Meeting. A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your
full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
This proxy, if properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL(S) LISTED BELOW. Please refer to the Proxy
Statement for a discussion of the Proposals. Please indicate your vote by
an "X" in the appropriate box below.
7. To approve the Investment Advisory Agreement FOR * AGAINST *
ABSTAIN *
with State Street Global Advisors
(International Equity Investments only)
8. To approve the Amended Investment Advisory FOR * AGAINST *
ABSTAIN *
Agreement with Oechsle International Advisors, L.P.
(International Equity Investments only)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...........................................................................
...........................................................................
...........
Consulting Group Capital Markets Funds - International Equity Investments
Special Meeting of Shareholders on March 10, 1995
The undersigned holder of shares of the above named portfolio (the
"Portfolio"), of Consulting Group Capital Markets Funds (the "Trust"),
hereby appoints Heath B. McLendon, Leonard Reinhart, Christina T. Sydor and
Lee D. Augsburger as attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Portfolio that the
undersigned is entitled to vote at the meeting of shareholders of the Trust
to be held at the offices of the Trust, 388 Greenwich Street, New York, New
York at 10:00 a.m. on the date indicated above and any adjournments thereof
(the "Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Meeting. A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your
full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
This proxy, if properly executed, will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL LISTED BELOW. Please refer to the Proxy Statement
for a discussion of the Proposal. Please indicate by filling in the
appropriate box below, as shown, using blue or balck ink or dark pencil, do
not use red ink.
2. To approve for Large Capitalization FOR * AGAINST * ABSTAIN *
Value Equity Investments a new
investment advisory agreement with .
Parametric Portfolio Associates.
(Large Capitalization Value Equity
Investments only)
VOTE THIS PROXY CARD TODAY!
YOUR PROMPT RESPONSE WILL SAVE
THE EXPENSE OF ADDITIONAL MAILINGS
(Please Detach at Perforation Before Mailing)
...........................................................................
...........................................................................
...........
Consulting Group Capital Markets Funds - Large Capitalization Value Equity
Investments
Special Meeting of Shareholders on March 10, 1995
The undersigned holder of shares of the above named portfolio (the
"Portfolio"), of Consulting Group Capital Markets Funds (the "Trust"),
hereby appoints Heath B. McLendon, Leonard Reinhart, Christina T. Sydor and
Lee D. Augsburger as attorneys and proxies for the undersigned, with full
powers of substitution and revocation, to represent the undersigned and to
vote on behalf of the undersigned all shares of the Portfolio that the
undersigned is entitled to vote at the meeting of shareholders of the Trust
to be held at the offices of the Trust, 388 Greenwich Street, New York, New
York at 12:00 p.m. on the date indicated above and any adjournments thereof
(the "Meeting"). The undersigned hereby acknowledges receipt of the Notice
of Meeting and Proxy Statement, and hereby instructs said attorneys and
proxies to vote said shares as indicated hereon. In their discretion, the
proxies are authorized to vote upon such other business as may properly
come before the Meeting. A majority of the proxies present and acting at
the Meeting in person or by substitute (or, if only one shall be so
present, then that one) shall have and may exercise all of the power and
authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE
Note: Please sign exactly as your name appears on this Proxy. If joint
owners, EITHER may sign this Proxy. When signing as attorney, executor,
administrator, trustee, guardian or corporate officer, please give your
full title.
DATE: ________________________________
________________________________
________________________________
Signature(s) (Title(s), if applicable)
shared/shearsn2/TRAK/proxy/0395crds.doc
