<PAGE>
As filed with the Securities and Exchange Commission on March 2, 1998
Registration Nos. 33-46593
811-6578
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 9 /X/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 10 /X/
----------------------------
The Glenmede Portfolios
(Exact Name of Registrant as Specified in Charter)
One South Street
Baltimore, Maryland 21202
(Address of Principal Executive Offices)
Registrant's Telephone Number:
1-800-442-8299
Michael P. Malloy, Esq.
Secretary
Drinker Biddle & Reath LLP
1100 Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107-3496
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[X] immediately upon filing pursuant to paragraph (b)
[ ] on February 28, 1998 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(i)
[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of rule 485.
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Shares of Beneficial Interest.
<PAGE>
THE GLENMEDE PORTFOLIOS
Muni Intermediate Portfolio
New Jersey Muni Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-1A Item Number Location
Part A Prospectus Caption
<S> <C>
1. Cover Page........................................... Cover Page
2. Synopsis............................................. Expenses of the Portfolios
3. Condensed Financial Information...................... Financial Highlights; Performance
Calculations
4. General Description of Registrant.................... Cover Page; Investment Objectives and
Policies; Investment Techniques; Risk
Factors; Investment Limitations;
General Information
5. Management of the Fund............................... Investment Advisor; Administrative,
Transfer Agency and Dividend Paying
Services; Board Members and Officers;
Purchase of Shares
5. A.Management's Discussion of
Fund Performance ................................. Not Applicable
6. Capital Stock and Other Securities ................. Purchase of Shares; Redemption of
Shares; Dividends, Capital Gains
Distributions and Taxes;
General Information
7. Purchase of Securities Being Offered ............... Valuation of Shares; Purchase of Shares;
Redemption of Shares
8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares
9. Pending Legal Proceedings............................ Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
One South Street, Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
(800) 442-8299
- --------------------------------------------------------------------------------
Prospectus - March 2, 1998
INVESTMENT OBJECTIVES
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), and The
Glenmede Portfolios, a Massachusetts business trust ("Glenmede Portfolios" and
collectively with Glenmede Fund, the "Funds"), are no-load, open-end
management investment companies. The Funds currently offer twelve series of
shares, each of which has different investment objectives and policies. The
securities offered hereby are five of these series of shares (known as
"Portfolios") of the Funds listed below.
Government Cash Portfolio. The objective of the Government Cash Portfolio is to
provide maximum current interest income consistent with the preservation of
capital and liquidity. The Government Cash Portfolio seeks to achieve its
objective by investing primarily in short-term money market instruments issued
by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises
or instrumentalities sponsored by the U.S. Government and by entering into
repurchase agreements secured thereby. It is anticipated that the Portfolio will
maintain a constant net asset value or price of $1.00 per share, and an average
weighted maturity of 90 days or less.
Tax-Exempt Cash Portfolio. The objective of the Tax-Exempt Cash Portfolio is to
provide maximum current interest income exempt from Federal income taxes
consistent with the preservation of capital and liquidity. The Tax-Exempt Cash
Portfolio seeks to achieve its objective by investing primarily in short-term,
high quality municipal securities ("Municipal Obligations"). It is anticipated
that the Portfolio will maintain a constant net asset value or price of $1.00
per share, and an average weighted maturity of 90 days or less.
Core Fixed Income Portfolio. The objective of the Core Fixed Income Portfolio is
to provide maximum, long-term total return consistent with reasonable risk to
principal. The Core Fixed Income Portfolio seeks to achieve its objective by
investing primarily in mortgage-backed securities and fixed income securities
issued by the U.S. Treasury, U.S. Government agencies, or other agencies,
enterprises or instrumentalities sponsored by the U.S. Government. The Portfolio
may also invest up to 35% of its total assets during normal circumstances in
other securities, including debt obligations of domestic and foreign companies.
The net asset value of this Portfolio will fluctuate.
Muni Intermediate Portfolio. The objective of the Muni Intermediate Portfolio is
to seek as high a level of current income exempt from Federal income tax as is
consistent with preservation of capital. The Muni Intermediate Portfolio seeks
to achieve its objective by investing primarily in Municipal Obligations. The
net asset value of this Portfolio will fluctuate.
New Jersey Muni Portfolio. The objective of the New Jersey Muni Portfolio is
to seek as high a level of current income exempt from Federal income tax as is
consistent with preservation of capital. The New Jersey Muni Portfolio seeks
to achieve its objective by investing primarily in Municipal Obligations. The
net asset value of this Portfolio will fluctuate.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolios are subject to investment risks, including
possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank. There can be no assurance that the Government Cash
or Tax-Exempt Cash Portfolios will be able to maintain a stable net asset value
of $1.00 per share.
- --------------------------------------------------------------------------------
<PAGE>
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets forth
certain information that you should know before you invest. A Statement of
Additional Information ("SAI") containing additional information about the Funds
has been filed with the Securities and Exchange Commission. Such SAI dated
March 2, 1998, as amended or supplemented from time to time, is incorporated
by reference into this Prospectus. The 1997 Annual Report to Shareholders
contains additional investment and performance information about the Portfolios.
A copy of the SAI and the 1997 Annual Report may be obtained, without charge, by
writing to the Funds at the address shown above or by calling the Funds at the
telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
EXPENSES OF THE PORTFOLIOS
Client Fees and Annual Portfolio Operating Expenses
The following table illustrates the expenses and fees incurred by each
Portfolio for the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
Tax- New
Government Exempt Core Fixed Muni Jersey
Cash Cash Income** Intermediate Muni
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ------------ -------------- -----------
<S> <C> <C> <C> <C> <C>
Shareholder Transaction Expenses*......... None None None None None
Maximum Annual Client Fee+................ 1.00% 1.00% 1.00% 1.00% 1.00%
Annual Portfolio Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fees.............. 0% .0% .0% .0% .0%
Administration Fees................... .04% .04% .04% .04% .04%
Other Expenses........................ .09% .10% .09%*** .30% .27%
---- ---- ---- ---- ----
Total Annual Portfolio
Expenses................................ .13% .14% .13%*** .34% .31%
==== ==== === ==== ====
- -----------------------------
+ The Portfolios described in this prospectus do not pay any advisory fees to The Glenmede Trust
Company, the investment advisor of the Funds (the "Advisor"), or its affiliates ("Affiliates").
However, investors in these Portfolios must be clients of the Advisor or Affiliates. The
"Maximum Annual Client Fee" in the above table is the current maximum fee that the Advisor or
an Affiliate would charge its clients directly for fiduciary, trust and/or advisory services (e.g.,
personal trust, estate, advisory, tax and custodian services). The actual annual fees charged by the
Advisor and its Affiliates directly to their clients for such services vary depending on a number of
factors, including the particular services provided to the client, but are generally under 1% of the
client's assets under management. Investors may also have to pay various fees to others to become
clients of the Advisor or an Affiliate. See "Investment Advisor."
* A transaction charge may be imposed by broker-dealers or others that
make shares of the Portfolio available. There is no transaction
charge for shares purchased directly from the Portfolios.
** The Intermediate Government Portfolio was renamed the Core Fixed Income Portfolio effective
September 25, 1997.
*** "Other Expenses" does not include interest expenses of the Core Fixed Income Portfolio. If such
interest expenses are included, "Other Expenses" would be 0.30% and "Total Operating Expenses"
would be 0.43% for the Core Fixed Income Portfolio.
</TABLE>
The purpose of the above table is to assist an investor in understanding
the various estimated costs and expenses that an investor in a Portfolio will
bear directly or indirectly. Actual expenses may be greater or lesser than such
estimates. For further information concerning the Funds' expenses see
"Investment Advisor" and "Administrative, Transfer Agency and Dividend Paying
Services."
The following example illustrates the estimated Annual Portfolio Operating
Expenses that an investor would pay on a $1,000 investment over various time
periods assuming (i) a 5% annual rate of return and (ii) redemption at the end
of each time period. The example does not include fees for fiduciary and
investment services which investors pay the Advisor or Affiliates as clients.
See "Investment Advisor." As noted in the above table the Funds charge no
shareholder transaction expenses of any kind.
-2-
<PAGE>
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Government Cash Portfolio.................. $ 1 $ 4 $ 7 $17
Tax-Exempt Cash Portfolio.................. $ 1 $ 5 $ 8 $18
Core Fixed Income Portfolio................ $ 1 $ 4 $ 7 $17
Muni Intermediate Portfolio................ $ 3 $11 $19 $43
New Jersey Muni Portfolio.................. $ 3 $10 $17 $39
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
-3-
<PAGE>
FINANCIAL HIGHLIGHTS
The following tables provide financial highlights of each Portfolio for the
respective periods presented and includes data derived from the Funds' Financial
Statements included in the Funds' 1997 Annual Report to Shareholders, which
Financial Statements and reports thereon of Coopers & Lybrand L.L.P., the Funds'
independent accountants, are incorporated by reference in the SAI. The following
information should be read in conjunction with such Financial Statements.
Glenmede Fund's Financial Statements for the periods ended October 31, 1991,
1990 and 1989 were examined by the Funds' previous independent accountants,
Price Waterhouse L.L.P.
<TABLE>
<CAPTION>
Government Cash Portfolio
----------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992
-------- --------- -------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- --------- --------- --------- ---------- ---------
Net investment income......................... 0.054 0.053 0.059 0.038 0.031 0.041
Distributions from net investment income...... $ (0.054) $ (0.053) $ (0.059) $ (0.038) $ (0.031) $ (0.041)
-------- --------- ----------- --------- ---------- ----------
Net asset value, end of year.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ========= ========= ========= ========== ==========
Total return++................................ 5.53% 5.46% 5.87% 3.78% 3.18% 4.19%
======== ========= ========= ========= ========== =========
Ratios to average net assets/ Supplemental
data:
Net assets, end of year (in 000's).......... $451,038 $ 452,395 $ 408,605 $ 353,405 $ 247,816 $ 203,882
Ratio of operating expenses to average net
assets...................................... 0.13% 0.16% 0.15% 0.11% 0.11% 0.13%
Ratio of net investment income to average
net assets.................................. 5.39% 5.32% 5.71% 3.82% 3.14% 4.18%
[RESTUBED TABLE]
-------------------------------------
Year Year Period
Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31,
1991 1990 1989+
---------- ---------- ----------
Net asset value, beginning of year............ $ 1.00 $ 1.00 $ 1.00
---------- ---------- ----------
Net investment income......................... 0.064 0.081 0.089
Distributions from net investment income...... $ (0.064) $ (0.081) $ (0.089)
---------- ---------- ----------
Net asset value, end of year.................. $ 1.00 $ 1.00 $ 1.00
========= ========= =========
Total return++................................ 6.59% 8.41% 9.27%
========= ========= =========
Ratios to average net assets/ Supplemental
data:
Net assets, end of year (in 000's).......... $ 253,260 $ 217,398 $ 229,555
Ratio of operating expenses to average net
assets...................................... 0.13% 0.15% 0.14%*
Ratio of net investment income to average
net assets.................................. 6.45% 8.08% 9.00%*
</TABLE>
- -----------------
+ The Portfolio commenced operations on November 7, 1988.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
-4-
<PAGE>
<TABLE>
<CAPTION>
Tax-Exempt Cash Portfolio
-------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992
--------- --------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year...........$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- ---------- --------- --------- ---------
Net investment income........................ 0.034 0.034 0.038 0.025 0.023 0.033
Distributions from net investment income.....$ (0.034) $ (0.034) $ (0.038) $ (0.025) $ (0.023) $ (0.033)
--------- --------- --------- --------- ---------- ---------
Net asset value, end of year.................$ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total return++............................... 3.46% 3.42% 3.76% 2.48% 2.34% 3.30%
========= ========= ========= ========= ========= =========
Ratios to average net assets/
Supplemental data:
Net assets, end of year (in 000's).........$ 280,950 $ 224,999 $ 222,808 $ 222,985 $ 106,590 $ 125,826
Ratio of operating expenses to average net
assets..................................... 0.14% 0.15% 0.15% 0.13% 0.13% 0.15%
Ratio of net investment income to average
net assets................................. 3.40% 3.36% 3.69% 2.52% 2.33% 3.21%
</TABLE>
[RESTUBED TABLE]
<TABLE>
<CAPTION>
-----------------------------------
Year Year Period
Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31,
1991 1990 1989+
-------- -------- ---------
<S> <C> <C> <C>
Net asset value, beginning of year........... $ 1.00 $ 1.00 $ 1.00
-------- -------- ---------
Net investment income........................ 0.047 0.057 0.061
Distributions from net investment income..... $ (0.047) $ (0.057) $ (0.061)
-------- -------- ---------
Net asset value, end of year................. $ 1.00 $ 1.00 $ 1.00
======== ======== =========
Total return++............................... 4.83% 5.85% 6.27%
======== ======== =========
Ratios to average net assets/
Supplemental data:
Net assets, end of year (in 000's)......... $ 81,394 $107,283 $ 69,047
Ratio of operating expenses to average net
assets..................................... 0.16% 0.15% 0.15%*
Ratio of net investment income to average
net assets................................. 4.78% 5.78% 6.31%*
</TABLE>
- -----------------
+ The Portfolio commenced operations on November 10, 1988.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
-5-
<PAGE>
<TABLE>
<CAPTION>
Core Fixed Income Portfolio***
-------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992
--------- --------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.... $ 10.29 $ 10.36 $ 9.89 $ 10.84 $ 10.76 $ 10.61
-------- -------- --------- --------- ---------- ----------
Income from investment operations:
Net investment income................. 0.68 0.66 0.69 0.64 0.66 0.74
Net realized and unrealized gain/(loss)
on investments........................ 0.17 (0.08) 0.46 (0.96) 0.41 0.22
--------- --------- --------- --------- --------- ---------
Total from investment operations...... 0.85 0.58 1.15 (0.32) 1.07 0.96
-------- -------- --------- --------- --------- ---------
Less Distributions:
Distribution from net investment income (0.68) (0.65) (0.68) (0.63) (0.67) (0.70)
Distributions from net realized capital
gains................................. - - - - (0.32) (0.11)
-------- -------- --------- --------- ---------- ---------
Total Distributions.................. (0.68) (0.65) (0.68) (0.63) (0.99) (0.81)
-------- -------- --------- --------- ---------- ---------
Net asset value, end of year.......... $ 10.46 $ 10.29 $ 10.36 $ 9.89 $ 10.84 $ 10.76
======== ======== ========= ========= ========= ==========
Total return++........................ 8.63% 5.88% 12.06% (3.03)% 10.38% 9.34%
======== ======== ========= ========= ========= =========
Ratios to average net assets/
Supplemental data:
Net assets, end of year (in 000's).... $ 266,733 $ 259,503 $ 342,874 $ 333,797 $ 581,823 $ 445,816
Ratio of operating expenses to average
net assets............................ 0.13% 0.16% 0.11% 0.12% 0.14% 0.16%
Ratio of gross expenses to average net
assets................................ 0.43%** 0.16% 0.11% 0.14%** 0.16%** 0.16%
Ratio of net investment income to
average net assets.................... 6.67% 6.37% 6.67% 6.06% 6.03% 7.03%
Portfolio turnover rate............... 307% 47% 228% 165% 83% 39%
</TABLE>
<PAGE>
[RESTUB TABLE]
<TABLE>
<CAPTION>
--------------------------------------
Year Year Period
Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31,
1991 1990 1989+
-------- --------- ---------
<S> <C> <C> <C>
Net asset value, beginning of year.... $ 10.11 $ 10.28 $ 10.00
-------- --------- ---------
Income from investment operations:
Net investment income................. 0.87 0.88 0.86
Net realized and unrealized gain/(loss)
on investments........................ 0.56 (0.07) 0.22
-------- --------- ---------
Total from investment operations...... 1.43 0.81 1.08
-------- --------- ---------
Less Distributions:
Distribution from net investment income (0.93) (0.89) (0.80)
Distributions from net realized capital
gains................................. - (0.09) -
-------- --------- ---------
Total Distributions.................. (0.93) (0.98) (0.80)
-------- --------- ---------
Net asset value, end of year.......... $ 10.61 $ 10.11 $ 10.28
======== ========= =========
Total return++........................ 14.75% 8.32% 11.20%
======== ========= =========
Ratios to average net assets/
Supplemental data:
Net assets, end of year (in 000's).... $265,963 $ 207,182 $ 187,012
Ratio of operating expenses to average
net assets............................ 0.16% 0.14% 0.14%
Ratio of gross expenses to average net
assets................................ 0.16% 0.14% 0.14%*
Ratio of net investment income to
average net assets.................... 8.22% 8.75% 9.07%*
Portfolio turnover rate............... 91% 94% 29%
- -----------------
+ The Portfolio commenced operations on November 17, 1988.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** The annualized operating expense ratios exclude interest expense. The ratios including interest expense for the years ended
October 31, 1997, October 31, 1994 and October 31, 1993 were 0.13%, 0.12% and 0.14%, respectively.
*** The Intermediate Government Portfolio was renamed the Core Fixed Income Portfolio effective September 25, 1997.
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
Muni Intermediate Portfolio
---------------------------------------------------------------------------
Year Year Year Year Year Period
Ended Ended Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992+
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........ $ 10.26 $ 10.32 $ 9.74 $ 10.59 $ 10.00 $ 10.00
-------- -------- -------- -------- -------- --------
Income from investment operations:
Net investment income.................. 0.52 0.53 0.53 0.53 0.44 0.11
Net realized and unrealized gain/loss
on investments........................ .14 (0.06) 0.58 (0.85) 0.59 (0.03)
-------- -------- -------- -------- -------- --------
Total from investment operations.......... 0.66 0.47 1.11 (0.32) 1.03 0.08
-------- -------- -------- -------- -------- --------
Distributions from net investment
income................................. (0.52) (0.53) (0.53) (0.53) (0.44) (0.08)
-------- ---------- -------- -------- -------- ---------
Net asset value, end of period............ $ 10.40 $ 10.26 $ 10.32 $ 9.74 $ 10.59 $ 10.00
======== ======== ======== ======== ======== ========
Total return++............................ 6.69% 4.67% 11.76% (3.13)% 10.54% 0.74%
======== ======== ======== ======== ======== ========
Ratios to average net assets/
Supplemental data:
Net assets, end of period (in 000's)...... $ 19,219 $ 18,471 $ 18,096 $ 22,097 $ 94,803 $ 42,533
Ratio of operating expenses to average
net assets............................. 0.34% 0.32% 0.28% 0.25% 0.25% 0.25%*
Ratio of net investment income to
average net assets..................... 5.09% 5.16% 5.23% 4.78% 4.41% 4.22%*
Portfolio turnover rate................... 21% 44% 28% 11% 10% 3%
- --------------------------
+ The Portfolio commenced operations on June 5, 1992.
++ Total return represents aggregate return for the period indicated.
* Annualized.
</TABLE>
-7-
<PAGE>
<TABLE>
<CAPTION>
New Jersey
Muni Portfolio
---------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994+
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period...................... $ 9.97 $ 10.00 $ 9.22 $ 10.00
-------- ------- -------- --------
Income from investment operations:
Net investment income................................. 0.44 0.44 0.41 0.32
Net realized and unrealized loss on investments....... 0.23 (0.03) 0.78 (0.82)
-------- ------- -------- --------
Total from investment operations.................... 0.67 0.41 1.19 (0.50)
-------- ------- -------- --------
Distributions from net investment income.................. (0.44) (0.44) (0.41) (0.28)
-------- ------- -------- --------
Net asset value, end of period............................ $ 10.20 $ 9.97 $ 10.00 $ 9.22
======== ======= ======== ========
Total return++............................................ 6.90% 4.24% 13.25% (5.13)%
======== ======= ======== ========
Ratios to average net assets/Supplemental data:
Net assets, end of period (in 000's).................. $ 12,117 $ 7,545 $ 5,932 $ 4,564
Ratio of operating expenses to average net assets..... 0.31% 0.24% 0.53% 0.60%*
Ratio of net investment income to average net assets.. 4.42% 4.56% 4.30% 3.60%*
Portfolio turnover rate............................... 19% 33% 12% 65%
- --------------
+ The Portfolio commenced operations on November 1, 1993.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
</TABLE>
-8-
<PAGE>
PERFORMANCE CALCULATIONS
From time to time, the Government Cash Portfolio and the Tax-Exempt Cash
Portfolio (each a "Cash Portfolio," collectively, the "Cash Portfolios") may
advertise or quote its "yield" and "effective yield." The "yield" of either of
the Cash Portfolios refers to the income generated by an investment in each such
Portfolio over a seven-day period (which period will be stated in the
advertisement or quote). This income is then "annualized." That is, the amount
of income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated similarly but, when annualized,
the income earned by an investment in such a Portfolio is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment.
The Core Fixed Income, Muni Intermediate and New Jersey Muni Portfolios
also may advertise or quote yield data from time to time. The yield of such
Portfolios is computed based on the net income of the Portfolio during a 30-day
(or one-month) period, which period will be identified in connection with the
particular yield quotation. More specifically, each such Portfolio's yield is
computed by dividing the Portfolio's net income per share during a 30-day (or
one-month) period by the maximum offering price per share on the last day of the
period and annualizing the result on a semi-annual basis.
The Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios'
"tax-equivalent yields" may be advertised or quoted from time to time. The tax
equivalent yield shows the level of taxable yield needed to produce an after-tax
equivalent to each such Portfolio's tax-free yield. This is done by increasing
each such Portfolio's yield (calculated as above) by the amount necessary to
reflect the payment of Federal and/or State income tax at a stated tax rate.
Each of the Core Fixed Income, Muni Intermediate and New Jersey Muni
Portfolios may advertise or quote total return data from time to time. Total
return will be calculated on an average annual total return basis and also may
be calculated on an aggregate total return basis, for various periods. Average
annual total return reflects the average annual percentage change in value of an
investment in the particular Portfolio. Aggregate total return reflects the
total percentage change in value over the measuring period. Both methods of
calculating total return assume that dividend and capital gains distributions
made by the Portfolio during the period are reinvested in additional Portfolio
shares.
Each of the Core Fixed Income, Muni Intermediate and New Jersey Muni
Portfolios may compare their total returns, and their yields, to that of other
investment companies with similar investment objectives and to bond and other
relevant indices such as those compiled by Merrill Lynch, Lehman Brothers or
others or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds. For example,
the total return or the yield of the Core Fixed Income, Muni Intermediate or New
Jersey Muni Portfolios may be compared to data prepared by Lipper Analytical
Services, Inc. Total return and yield data as reported in national financial
publications such as Money Magazine, Forbes, Barron's, The Wall Street Journal
and The New York Times, or in publications of a local or regional nature, also
may be used in comparing the performance of the Core Fixed Income, Muni
Intermediate or New Jersey Muni Portfolios.
Performance quotations represent a Portfolio's past performance and should
not be considered as indicative of future results. Since performance will
fluctuate, performance data for a Portfolio should not be used to compare an
investment in the Portfolio's shares with bank deposits, savings accounts and
similar investment alternatives which often provide an agreed or guaranteed
fixed yield/return for a stated period of time. Shareholders should remember
that performance is generally a function of the kind and quality of the
instruments held in a Portfolio, portfolio maturity, operating expenses and
market conditions. Any management fees charged by the Advisor or an Affiliate to
its respective clients will not be included in the Portfolio's calculations of
yield, effective yield, tax-equivalent yield or total return. See "Investment
Advisor."
-9-
<PAGE>
INVESTMENT POLICIES AND RISK FACTORS
The investment objective of each Portfolio is not fundamental and may be
changed by the particular Funds' Board members without shareholder approval.
GOVERNMENT CASH PORTFOLIO
The objective of the Government Cash Portfolio is to provide maximum
current interest income consistent with the preservation of capital and
liquidity. The Government Cash Portfolio seeks to achieve its objective by
investing in short-term U.S. dollar-denominated money market instruments issued
by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises
or instrumentalities sponsored by the U.S. Government and by entering into
repurchase agreements secured thereby. During normal market conditions, the
Portfolio will invest at least 65% of its total assets in such instruments.
The Portfolio may invest in the following securities provided they are
"eligible securities," as defined below ("Eligible Securities"), which the
Advisor believes presents minimal credit risk at the time of purchase: (i)
straight-debt and mortgage-backed obligations issued by the U.S. Government or
its sponsored agencies, enterprises or instrumentalities; (ii) securities of
international institutions (Asian Development Bank, Export-Import Bank, Inter
American Development Bank, International Bank for Reconstruction and
Development, Government Trust Certificates, Private Export Funding Corp. and
Agency for International Development) which are not direct obligations of the
U.S. Government but which involve governmental agencies, instrumentalities or
enterprises (such investments will represent no more than 25% of the Portfolio's
total assets); and (iii) any publicly or privately placed, unrated securities
issued by the U.S. Government, its agencies, enterprises or instrumentalities,
including floating and variable rate securities, which, in the Advisor's
opinion, are equivalent in credit quality to securities rated AAA by Standard &
Poor's Ratings Group, Division of McGraw Hill ("S&P") or Aaa by Moody's
Investors Service, Inc. ("Moody's"). The Portfolio will invest in securities
maturing within 13 months from the date of purchase, except that securities
collateralizing repurchase agreements may bear maturities exceeding 13 months,
and the Portfolio may also purchase bonds with longer final maturities if such
bonds pursuant to a demand feature provide for an earlier redemption date within
13 months from the date of purchase.
Obligations of certain agencies and instrumentalities of the U.S.
Government, such as the Government National Mortgage Association and the
Export-Import Bank of the United States, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal National
Mortgage Association, are supported by the right of the issuer to borrow from
the Treasury; others are supported by the discretionary authority of the U.S.
Government to purchase the agency's obligations; still others, such as those of
the Federal Farm Credit Banks or the Federal Home Loan Mortgage Corporation, are
supported only by the credit of the instrumentality. No assurance can be given
that the U.S. Government would provide financial support to U.S.
Government-sponsored agencies or instrumentalities if it is not obligated to do
so by law.
Securities issued or guaranteed by the U.S. Government, its agencies and
instrumentalities have historically involved little risk of loss of principal if
held to maturity. However, due to fluctuations in interest rates, the market
value of such securities may vary during the period a shareholder owns shares of
the Portfolio. See "Investment Policies -- Core Fixed Income Portfolio" for a
description of obligations of certain agencies, enterprises and
instrumentalities of the U.S. Government. Securities in which the Government
Cash Portfolio may invest may not earn as much income as longer term and/or
lower quality securities.
The Government Cash Portfolio may only invest in: (i) securities rated in
the two highest rating categories of a nationally recognized statistical rating
organization (an "NRSRO"), provided that if they are rated by more than one
NRSRO, at least one other NRSRO rates them in one of its two highest categories;
and (ii) unrated securities determined to be of comparable quality at the time
of purchase (collectively, "Eligible Securities"). The rating symbols of the
NRSROs which the Fund may use are described in the Appendix in the Statement of
Additional Information.
For a description of other securities in which the Portfolio may invest,
see "Common Investment Policies and Risk Factors."
-10-
<PAGE>
TAX-EXEMPT CASH PORTFOLIO
The objective of the Tax-Exempt Cash Portfolio is to provide maximum
current interest income exempt from Federal income taxes consistent with the
preservation of capital and liquidity. The Tax-Exempt Cash Portfolio seeks to
achieve its objective by investing primarily in short-term, high quality
Municipal Obligations (defined below). Under normal circumstances, at least 80%
of the net assets of the Portfolio will be invested in Municipal Obligations,
the interest on which, in the opinion of bond counsel or the issuer's counsel,
is exempt from regular Federal income tax and does not constitute an item of tax
preference for purposes of the Federal alternative minimum tax ("Tax-Exempt
Interest"). Glenmede Fund will use its best efforts to not invest any of the
Tax-Exempt Cash Portfolio's assets in Municipal Obligations the interest on
which constitutes an item of tax preference for purposes of the Federal
alternative minimum tax.
Municipal Obligations in which the Portfolio may invest include the
following, provided at the time of purchase they are Eligible Securities which
the Advisor believes presents minimal credit risk: project notes, demand notes,
short-term municipal obligations (including tax anticipation notes, revenue
anticipation notes, bond anticipation notes, tax and revenue anticipation notes,
construction loan notes, and short-term discount notes) rated SP-1+ or SP-1 by
S&P or MIG-1 by Moody's; tax-exempt commercial paper rated A-1+ or A-1 by S&P or
Prime-1 by Moody's; municipal bonds with a remaining effective maturity of 13
months or less, rated AA or better by S&P or Aa or better by Moody's; variable
rate demand notes rated "VMIG-1" by Moody's; and any non-rated tax-exempt,
privately placed securities which, in the Advisor's opinion, are equivalent in
credit quality to an AA or Aa-rated security as determined by S&P or Moody's,
respectively.
The Portfolio will invest in securities maturing within 13 months from the
date of purchase, except that securities collateralizing repurchase agreements
may bear maturities exceeding 13 months; and the Portfolio may purchase bonds
with final maturities exceeding 13 months if such bonds pursuant to a demand
feature provide for an earlier redemption date within 13 months from the date of
purchase.
Municipal Obligations. The two principal classifications of Municipal
Obligations are "general obligation" securities and "revenue" securities.
General obligation securities are secured by the issuer's pledge of its full
faith, credit and taxing power for the payment of principal and interest.
Revenue securities are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special or specific excise tax or other specific revenue source such as the user
of the facility being financed. Revenue securities include private activity
bonds which are not payable from the unrestricted revenues of the issuer.
Consequently, the credit quality of private activity bonds is usually directly
related to the credit standing of the corporate user of the facility involved.
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Municipal Obligations may include variable rate demand notes, provided they
are Eligible Securities. Such notes are frequently not rated by credit rating
agencies, but unrated notes will be purchased by the Portfolio if they are
comparable in quality at the time of the purchase to rated Eligible Securities
as determined by the Advisor. Where necessary to ensure that a note is an
Eligible Security, the Portfolio will require that the issuer's obligation to
pay the principal of the note be backed by an unconditional bank letter or line
of credit, guarantee or commitment to lend. While there may be no active
secondary market with respect to a particular variable rate demand note
purchased by the Portfolio, the Portfolio may, upon the notice specified in the
note, demand payment of the principal of the note at any time or during
specified periods not exceeding 13 months, depending upon the instrument
involved. The absence of such an active secondary market, however, could make it
difficult for the Portfolio to dispose of a variable rate demand note if the
issuer defaulted on its payment obligation or during the periods that the
Portfolio is not entitled to exercise its demand rights. The Portfolio could,
for this or other reasons, suffer a loss to the extent of the default. The
Portfolio invests in variable rate demand notes only when the Advisor deems the
investment to involve minimal credit risk. The Advisor also monitors the
continuing creditworthiness of issuers of such notes and parties providing
credit enhancement to determine whether the Portfolio should continue to hold
the notes.
-11-
<PAGE>
For a further discussion of Municipal Obligations, see the Appendix to the
Statement of Additional Information.
For a description of other securities in which the Portfolio may invest,
see "Common Investment Policies and Risk Factors."
CORE FIXED INCOME PORTFOLIO
The objective of the Core Fixed Income Portfolio is to provide maximum,
long-term total return consistent with reasonable risk to principal. The Core
Fixed Income Portfolio seeks to achieve its objective by investing primarily in
a diversified portfolio of mortgage-backed securities and fixed income
securities issued by the U.S. Treasury, U.S. Government agencies, or other
agencies, enterprises or instrumentalities sponsored by the U.S. Government. The
Portfolio seeks to achieve consistent results over the long-term. While
portfolio securities will be traded, the Portfolio is not expected to engage in
active trading under normal circumstances. The net asset value of the Portfolio
will fluctuate, and it is anticipated that the Portfolio will maintain an
average weighted maturity of 3 to 10 years.
The Portfolio may invest in the following securities: (i) straight-debt and
mortgage-backed obligations issued by the U.S. Government or its sponsored
agencies, enterprises or instrumentalities; (ii) securities of international
institutions which are not direct obligations of the U.S. Government but which
involve governmental agencies, enterprises or instrumentalities; (iii) any other
publicly or privately placed, unrated securities issued by the U.S. Government,
its agencies, enterprises or instrumentalities, which, in the Advisor's opinion,
are equivalent in credit quality to securities rated at least A by S&P or
Moody's; (iv) mortgage-backed and asset-backed obligations which are privately
issued with a rating of at least A by S&P or Moody's or which if unrated, are in
the Advisor's opinion equivalent in credit quality to securities so rated; and
(v) debt obligations of domestic and foreign companies rated at least A by S&P
or Moody's or which if unrated, are in the Advisor's opinion equivalent in
credit quality to securities so rated. Any of the above securities may be
variable or floating rate. Under normal circumstances, at least 65% of the Core
Fixed Income Portfolio's total assets will be invested in U.S. government
securities and repurchase agreements relating thereto, and no more than 35% of
the value of its total assets will be invested in the securities described in
(ii) and (v) of the first sentence of this paragraph.
Mortgage-Backed Obligations. Mortgage-backed obligations represent an
ownership interest in a pool of residential mortgage loans, the interests in
which are issued and guaranteed by an agency or instrumentality of the U.S.
Government, though not necessarily by the U.S. Government itself.
One such type of mortgage-backed obligation in which the Portfolio may
invest is a Government National Mortgage Association ("GNMA") Certificate. GNMA
Certificates are backed as to the timely payment of principal and interest by
the full faith and credit of the U.S. Government. Another type is a Federal
National Mortgage Association ("FNMA") Certificate; the principal and interest
of which are guaranteed only by FNMA itself, not by the full faith and credit of
the U.S. Government. Another type is a Federal Home Loan Mortgage Association
("FHLMC") Participation Certificate. This type of obligation is guaranteed by
FHLMC as to timely payment of principal and interest. However, like a FNMA
security, it is not guaranteed by the full faith and credit of the U.S.
Government. Another type is a privately issued obligation with a rating of at
least A by S&P or Moody's or which if unrated, is in the Advisor's opinion
equivalent in credit quality to securities so rated. Mortgage-backed obligations
issued by private issuers, whether or not such obligations are subject to
guarantees by the private issuer, may entail greater risk than obligations
directly or indirectly guaranteed by the U.S. Government.
Mortgage-backed obligations are characterized by monthly payments to the
security holder, reflecting the monthly payments, net of certain fees, made by
the mortgagors of the underlying mortgage loans. The payments to the security
holders (such as the Portfolio), similar to the payments on the underlying
loans, represent both principal and interest. Although the underlying mortgage
loans are for specified periods of time (such as thirty years) the borrowers
can, and typically do, repay them sooner. Thus, the security holders frequently
receive prepayments of principal, in addition to the principal which is part of
the regular monthly payments. A borrower is more likely to prepay a mortgage
which bears a relatively high rate of interest. Therefore, in times of declining
interest rates, some of the Portfolio's higher yielding securities might be
repaid and thereby converted to cash and the Portfolio will be forced to accept
lower interest rates when that cash is used to purchase additional securities.
The Portfolio normally will not distribute principal payments (whether regular
or prepaid) to its shareholders. Interest received by
-12-
<PAGE>
the Portfolio will, however, be distributed to shareholders in the form of
dividends. For a further discussion of mortgage-backed obligations, see the
Appendix to the Statement of Additional Information.
Asset-Backed Securities. Asset-backed securities consist of undivided
fractional interests in pools of consumer loans or receivables held in a trust.
Examples include certificates for automobile receivables and credit card
receivables. Payments of principal and interest on the loans or receivables are
passed through to certificate holders. Asset-backed securities are not issued or
guaranteed by the the U.S. Government or its agencies or instrumentalities, they
may be guaranteed up to a certain amount by a private issuer, however, through a
letter of credit. Payment on asset-backed securities of private issuers is
typically supported by some form of credit enhancement, such as a letter of
credit, surety bond, limited guaranty, or subordination. The extent of credit
enhancement varies, but usually amounts to only a fraction of the asset-backed
security's par value until exhausted. Ultimately, asset-backed securities are
dependent upon payment of the consumer loans or receivables by individuals, and
the certificate holder frequently has no recourse to the entity that originated
the loans or receivables.
An asset-backed security's underlying assets may be prepaid with the result
of shortening the certificate's weighted average life. Prepayment rates vary
widely and may be affected by changes in market interest rates. It is not
possible to accurately predict the average life of a particular pool of loans or
receivables. The proceeds of prepayments received by the Portfolio must be
reinvested in securities whose yields reflect interest rates prevailing at the
time. Thus, the Portfolio's ability to maintain a portfolio which includes
high-yielding asset-backed securities will be adversely affected to the extent
reinvestments are in lower yielding securities. The actual maturity and realized
yield will therefore vary based upon the prepayment experience of the underlying
asset pool and prevailing interest rates at the time of prepayment. Asset-backed
securities may be subject to greater risk of default during periods of economic
downturn than other instruments. Also, while the secondary market for
asset-backed securities is ordinarily quite liquid, in times of financial stress
the secondary market may not be as liquid as the market for other types of
securities, which could result in the Portfolio's experiencing difficulty in
valuing or liquidating such securities.
Debt Obligations. Debt obligations of domestic and foreign companies may
include a broad range of fixed and variable rate bonds, debentures and notes.
Although government-guaranteed or sponsored securities reduce credit risk
(the possibility that issuers of bonds will default on payments of interest and
principal), the Portfolio's shares are still subject to the risk of market value
fluctuations inherent in owning fixed income securities, including securities of
international institutions and corporate debt obligations. The market value of
securities held by the Core Fixed Income Portfolio is expected to vary according
to, among other factors, changes in prevailing interest rates and the average
weighted maturity of the Portfolio maintained by the Advisor. In general, if
interest rates increase from the time a fixed income investment is made, the
market value of that investment is likely to decline. Similarly, if interest
rates fall from the time a fixed income investment is made, the market value of
that investment is likely to increase. Also, in general, for a given change in
interest rates, a fixed income investment with a longer maturity is likely to
fluctuate more in market value than a comparable investment with a shorter
maturity. An investment in the Core Fixed Income Portfolio is expected to be
subject to such market risks.
For a description of other securities in which the Core Fixed Income
Portfolio may invest, see "Common Investment Policies and Risk Factors."
MUNI INTERMEDIATE PORTFOLIO AND NEW JERSEY MUNI PORTFOLIO
The objective of each of the Muni Intermediate and New Jersey Muni
Portfolios is to seek as high a level of current income exempt from Federal
income tax as is consistent with preservation of capital. To the extent
possible, the Muni Intermediate Portfolio seeks to achieve its objective by
investing primarily in intermediate and long-term Municipal Obligations issued
by the Commonwealth of Pennsylvania and its political subdivisions, agencies,
instrumentalities and authorities ("Pennsylvania Municipal Obligations") and the
New Jersey Muni Portfolio seeks to achieve its objective by investing primarily
in intermediate and long-term Municipal Obligations issued by the State of New
Jersey and its political subdivisions, agencies, instrumentalities and
authorities ("New Jersey Municipal Obligations"). Municipal Obligations acquired
by these Portfolios will be rated at the time of purchase within the three
highest ratings assigned by Moody's (i.e., Aaa, Aa, A) or by S&P (AAA, AA, A) in
the case of bonds, rated SP-1 or higher by
-13-
<PAGE>
S&P or MIG-2 or higher by Moody's in the case of notes, rated A-1 or higher by
S&P or Prime-1 or higher by Moody's in the case of tax-exempt commercial paper
or in unrated securities determined by the Advisor at the time of purchase to be
of comparable quality. If a portfolio security is reduced below A by Moody's or
S&P, the Advisor will dispose of the security in an orderly fashion as soon as
practicable. The Muni Intermediate and New Jersey Muni Portfolios may not be
able to achieve as high a level of current income under all market conditions as
would be possible if they were permitted to invest in lower quality and longer
term securities which, however, generally are less liquid, have greater market
risk and are generally subject to more fluctuation of market value. See
"Investment Policies--Tax-Exempt Cash Portfolio" for a description of Municipal
Obligations and the Appendix to the SAI for a description of Moody's and S&P's
ratings.
To the extent possible, during normal market conditions at least 65% of the
net assets of the New Jersey Muni Portfolio will be invested in New Jersey
Municipal Obligations. It is anticipated that the New Jersey Portfolio and the
Muni Intermediate Portfolio will each maintain an average weighted maturity of
three to ten years.
During normal market conditions: up to 20% of each Portfolio's net assets
may be invested in securities which are not Municipal Obligations; and at least
80% of the Portfolio's net assets will be invested in intermediate and long-term
Municipal Obligations, the interest on which is Tax-Exempt Interest. Each of the
Portfolios may invest up to 20% of its net assets in Municipal Obligations, the
interest on which is exempt from regular Federal income tax but is an item of
tax preference for purposes of the Federal alternative minimum tax. During
temporary defensive periods, each Portfolio may invest without limitation in
obligations which are not Municipal Obligations and may hold without limitation
uninvested cash reserves. Such securities may include, without limitation,
bonds, notes, variable rate demand notes and commercial paper, provided such
securities are rated within the relevant categories applicable to Municipal
Obligations set forth above, or if unrated, are of comparable quality as
determined by the Advisor and may also include, without limitation, other debt
obligations, such as bank obligations which are also of comparable quality as
determined by the Advisor. Each Portfolio may acquire "stand-by commitments"
with respect to Municipal Obligations held by it. Under a stand-by commitment, a
dealer agrees to purchase, at the Portfolio's option, specified Municipal
Obligations at a specified price. The acquisition of a stand-by commitment may
increase the cost, and thereby reduce the yield, of the Municipal Obligation to
which such commitment relates. Each Portfolio will acquire stand-by commitments
solely to facilitate portfolio liquidity and does not intend to exercise its
rights thereunder for trading purposes.
Each Portfolio is classified as non-diversified under the Investment
Company Act of 1940, as amended (the "1940 Act"). Investment returns on a
non-diversified portfolio typically are dependent upon the performance of a
smaller number of securities relative to the number held in a diversified
portfolio. Consequently, the change in value of any one security may affect the
overall value of a non-diversified portfolio more than it would a diversified
portfolio. Additionally, a non-diversified portfolio may be more susceptible to
economic, political and regulatory developments than a diversified portfolio
with a similar objective.
Since each of the Muni Intermediate and New Jersey Muni Portfolios will
invest primarily in securities issued by issuers located in one state, each of
these Portfolios is susceptible to adverse changes in value due to changes in
the economic condition and governmental policies of that state and its political
subdivisions, agencies, instrumentalities and authorities. A comparable
municipal bond fund which is not concentrated in obligations issued by issuers
located in one state would be less susceptible to these risks. If any issuer of
securities held by one of these Portfolios is unable to meet its financial
obligations, that Portfolio's income, capital, and liquidity may be adversely
affected.
With respect to the Commonwealth of Pennsylvania, although the balance in
the General Fund of the Commonwealth (the principal operating fund of the
Commonwealth) experienced deficits in fiscal 1990 and 1991, tax increases and
spending decreases have resulted in surpluses the last several years; as of June
30, 1996, the General Fund had a surplus of $635.2 million. The deficit in the
Commonwealth's unreserved/undesignated funds also has been eliminated.
The concentration of investments by the New Jersey Muni Portfolio in New
Jersey Municipal Obligations also raises special investment considerations. The
State of New Jersey generally has a diversified economic base consisting of,
among others, commerce and service industries, selective
-14-
<PAGE>
commercial agriculture, insurance, tourism, petroleum refining and
manufacturing, although New Jersey's manufacturing industry has shown a downward
trend in the last few years. New Jersey is a major recipient of Federal
assistance and, of all the states, is among the highest in the amount of Federal
aid received. Therefore, a decrease in Federal financial assistance may
adversely affect New Jersey's financial condition. While New Jersey's economic
base has become more diversified over time and thus its economy appears to be
less vulnerable during recessionary periods, a recurrence of high levels of
unemployment could adversely affect New Jersey's overall economy and its ability
to meet its financial obligations. In addition, because New Jersey maintains a
balanced budget which restricts total appropriation increases to only 5%
annually to any municipality or county, the balanced budget plan may actually
adversely affect a particular municipality's or county's ability to repay its
obligations.
See "Common Investment Policies and Risk Factors" for a description of
other investment policies.
COMMON INVESTMENT POLICIES AND RISK FACTORS
There can be no assurance that any of the Portfolios will achieve its
stated investment objective. There are a number of investment policies common to
each of the Portfolios.
REPURCHASE AGREEMENTS
Each Portfolio may enter into repurchase agreements with qualified brokers,
dealers, banks and other financial institutions deemed creditworthy by the
Advisor. Under normal circumstances, however, the Muni Intermediate and New
Jersey Muni Portfolios will not enter into repurchase agreements if entering
into such agreements would cause, at the time of entering into such agreements,
more than 20% of the value of the total assets of the particular Portfolio to be
subject to repurchase agreements.
In a repurchase agreement, a Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller (a
qualified bank or securities dealer) at an agreed upon price plus an agreed upon
market rate of interest (itself unrelated to the coupon rate or date of maturity
of the purchased security). The securities held subject to a repurchase
agreement may have stated maturities exceeding 13 months, provided that with
respect to the Cash Portfolios, the repurchase agreement itself matures in less
than 13 months. The Advisor currently expects that repurchase agreements with
respect to the Core Fixed Income, Muni Intermediate and New Jersey Muni
Portfolios also will mature in less than 13 months. The seller under a
repurchase agreement will be required to maintain the value of the securities
subject to the agreement at not less than 101% of the repurchase price including
accrued interest. The Funds' administrator will mark to market daily the value
of the securities purchased, and the Advisor will, if necessary, require the
seller to deposit additional securities to ensure that the value is in
compliance with the 101% requirement stated above. The Advisor will consider the
creditworthiness of a seller in determining whether a Portfolio should enter
into a repurchase agreement, and the Portfolios will only enter into repurchase
agreements with banks and dealers which are determined to present minimal credit
risk by the Advisor under procedures adopted by the Board members.
In effect, by entering into a repurchase agreement, a Portfolio is lending
its funds to the seller at the agreed upon interest rate, and receiving a
security as collateral for the loan. Such agreements can be entered into for
periods of one day (overnight repo) or for a fixed term (term repo). Repurchase
agreements are a common way to earn interest income on short-term funds.
The use of repurchase agreements involves certain risks. For example, if
the seller of a repurchase agreement defaults on its obligation to repurchase
the underlying securities at a time when the value of these securities has
declined, a Portfolio may incur a loss upon disposition of them. Default by the
seller would also expose a Portfolio to possible loss because of delays in
connection with the disposition of the underlying obligations. If the seller of
an agreement becomes insolvent and subject to liquidation or reorganization
under the Bankruptcy Code or other laws, a bankruptcy court may determine that
the underlying securities are collateral not within the control of a Portfolio
and therefore subject to sale by the trustee in bankruptcy. Further, it is
possible that a Portfolio may not be able to substantiate its interest in the
underlying securities.
-15-
<PAGE>
REVERSE REPURCHASE AGREEMENTS
The Government Cash and Core Fixed Income Portfolios may enter into reverse
repurchase agreements. In a reverse repurchase agreement a Portfolio sells a
security and simultaneously commits to repurchase that security at a future date
from the buyer. In effect, the Portfolio is temporarily borrowing funds at an
agreed upon interest rate from the purchaser of the security, and the sale of
the security represents collateral for the loan. The Portfolio retains record
ownership of the security and the right to receive interest and principal
payments on the security. At an agreed upon future date, the Portfolio
repurchases the security by remitting the proceeds previously received, plus
interest. In certain types of agreements, there is no agreed upon repurchase
date and interest payments are calculated daily, often based on the prevailing
overnight repurchase rate. These agreements, which are treated as if
reestablished each day, are expected to provide the Government Cash Portfolio
and the Core Fixed Income Portfolio with a flexible borrowing tool. Reverse
repurchase agreements are considered to be borrowings by a Portfolio under the
1940 Act.
A Portfolio's investment of the proceeds of a reverse repurchase agreement
is the speculative factor known as leverage. The Portfolio may enter into a
reverse repurchase agreement only if the interest income from investment of the
proceeds is greater than the interest expense of the transaction and the
proceeds are invested for a period no longer than the term of the agreement. A
Portfolio will maintain with the custodian a separate account with a segregated
portfolio of liquid securities at least equal to its purchase obligations under
these agreements. The Advisor will consider the creditworthiness of the other
party in determining whether a Portfolio will enter into a reverse repurchase
agreement.
The Government Cash and Core Fixed Income Portfolios are each permitted to
invest up to one-third of each of their total assets in reverse repurchase
agreements and securities lending transactions. Investments in reverse
repurchase agreements and securities lending transactions will be aggregated for
purposes of this investment limitation.
The use of reverse repurchase agreements involves certain risks. For
example, the other party to the agreement may default on its obligation or
become insolvent and unable to deliver the securities to the Portfolio at a time
when the value of the securities has increased. Reverse repurchase agreements
also involve the risk that a Portfolio may not be able to substantiate its
interest in the underlying securities.
BORROWING
As a temporary measure for extraordinary or emergency purposes, a Portfolio
may borrow money from banks. However, none of the Portfolios will borrow money
for speculative purposes.
LENDING OF SECURITIES
Each Portfolio may lend its portfolio securities with a value of up to
one-third of its total assets (including the val
ue of the collateral for the
loans) to qualified brokers, dealers, banks and other financial institutions for
the purpose of realizing additional net investment income through the receipt of
interest on the loan. Such loans would involve risks of delay in receiving
additional collateral in the event the value of the collateral decreased below
the value of the securities loaned or of delay in recovering the securities
loaned or even loss of rights in the collateral should the borrower of the
securities fail financially. Loans will be made only to borrowers deemed by the
Advisor to be of good standing.
MUNICIPAL OBLIGATIONS
The Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios may
each invest 25% or more of its net assets in Municipal Obligations, the interest
on which is paid solely from revenues of similar projects, and may invest up to
20% of its total assets in private activity bonds when added together with any
taxable investments held by the Portfolio when, in the opinion of the Advisor,
the investment is warranted. To the extent a Portfolio's assets are invested in
Municipal Obligations payable from the revenues of similar projects or are
invested in private activity bonds, the particular Portfolio will be subject to
the peculiar risks presented by the laws and economic conditions relating to
such projects and bonds to a greater extent than it would be if its assets were
not so invested.
-16-
<PAGE>
"WHEN ISSUED," "DELAYED SETTLEMENT" AND "FORWARD DELIVERY" SECURITIES
The Portfolios may purchase and sell securities on a "when issued,"
"delayed settlement" or "forward delivery" basis. "When issued" or "forward
delivery" refers to securities whose terms and indenture are available and for
which a market exists, but which are not available for immediate delivery. When
issued or forward delivery transactions may be expected to occur one month or
more before delivery is due. Delayed settlement is a term used to describe
settlement of a securities transaction in the secondary market which will occur
sometime in the future. No payment or delivery is made by a Portfolio in a when
issued, delayed settlement or forward delivery transaction until the Portfolio
receives payment or delivery from the other party to the transaction. A
Portfolio will maintain a separate account of cash, U.S. Government securities
or other high grade debt obligations at least equal to the value of purchase
commitments until payment is made. Such segregated securities will either mature
or, if necessary, be sold on or before the settlement date. Although a Portfolio
receives no income from the above described securities prior to delivery, the
market value of such securities is still subject to change. A Portfolio receives
no income from "when issued," "delayed settlement" or "forward delivery"
securities prior to delivery of such securities.
A Portfolio will engage in when issued transactions to obtain what is
considered to be an advantageous price and yield at the time of the transaction.
When a Portfolio engages in when issued, delayed settlement or forward delivery
transactions, it will do so for the purpose of acquiring securities consistent
with its investment objective and policies and not for the purpose of
speculation. Each Portfolio's when issued, delayed settlement and forward
delivery commitments are not expected to exceed 25% of its total assets absent
unusual market circumstances, and each Portfolio will only sell securities on
such a basis to offset securities purchased on such a basis.
INVESTMENT COMPANY SECURITIES
In connection with the management of their daily cash positions, the
Portfolios may each invest in securities issued by other open-end investment
companies with investment objectives and policies that are consistent with those
of the investing portfolio. Except as otherwise permitted under the 1940 Act,
each Portfolio limits its investments so that, as determined immediately after a
securities purchase is made: (a) not more than 5% of the value of its total
assets will be invested in the securities of any one investment company; (b) not
more than 10% of the value of its total assets will be invested in the aggregate
in the securities of investment companies as a group; and (c) not more than 3%
of the outstanding voting stock of any one investment company will be owned by
the Portfolio. As a shareholder of another investment company, the Portfolio
would bear its pro rata portion of the other investment company's advisory fees
and other expenses, in addition to the expenses the Portfolio bears directly in
connection with its own operations.
ILLIQUID SECURITIES
No Portfolio will invest more than 10% of its net assets in securities that
are illiquid.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental, and the
particular Funds' Board members may change such policies without shareholder
approval.
-----------------------
PURCHASE OF SHARES
Shares of each Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its or an Affiliate's
clients ("Clients") and to other institutions (the "Institutions"), at the net
asset value per share next determined after receipt of the purchase order by the
transfer agent. See "Valuation of Shares." The minimum initial investment for
each Portfolio is $25,000; the minimum for subsequent investments for each
Portfolio is $1,000. The Funds reserve the right to reduce or waive the minimum
initial and subsequent investment requirements from time to time. Beneficial
ownership of shares will be reflected on books maintained by the Advisor or the
Institutions. A prospective investor wishing to purchase shares in the Funds
should contact the Advisor or his or her Institution.
-17-
<PAGE>
It is the responsibility of the Advisor or Institutions to transmit orders
for share purchases to Investment Company Capital Corp. ("ICC"), the Funds'
transfer agent, and deliver required funds to The Chase Manhattan Bank, N.A.,
Brooklyn, New York, the Funds' custodian, on a timely basis. Shares purchased in
the Cash Portfolios before 12:00 noon (Eastern time) begin earning dividends on
the same business day provided Federal funds are available to the particular
Portfolio before 12:00 noon (Eastern time) that day.
The Funds reserve the right, in its sole discretion, to suspend the
offering of shares of its Portfolios or reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interests of
the Fund.
Purchases of a Portfolio's shares will be made in full and fractional
shares of the Portfolio calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will not be issued except upon
the written request of the shareholder. Certificates for fractional shares,
however, will not be issued.
REDEMPTION OF SHARES
Shares of each Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemption
request by the transfer agent. Generally, a properly signed written request is
all that is required. Any redemption may be more or less than the purchase price
of the shares depending on the market value of the investment securities held by
the Portfolio. An investor wishing to redeem shares should contact the Advisor
or his or her Institution. It is the responsibility of the Advisor or
Institutions to transmit promptly redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper form
by the transfer agent. The Funds may suspend the right of redemption or postpone
the date of payment at times when the New York Stock Exchange (the "Exchange")
is closed, or under any emergency circumstances as determined by the Securities
and Exchange Commission (the "Commission"). See "Valuation of Shares" for the
days on which the Exchange is closed.
If the Funds' Board determines that it would be detrimental to the best
interests of the remaining shareholders of the Funds to make payment wholly or
partly in cash, the Funds may pay the redemption proceeds in whole or in part by
a distribution in-kind of securities held by a Portfolio in lieu of cash in
conformity with applicable rules of the Commission. Investors may incur
brokerage charges on the sale of portfolio securities received as a redemption
in kind.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES OF THE PORTFOLIOS
The Funds may, from time to time, in its sole discretion appoint one or
more entities as its agent to receive purchase and redemption orders of shares
of the Portfolios and cause these orders to be transmitted, on a net basis, to
the Funds' transfer agent. In these instances, orders are effected at the net
asset value per share next determined after receipt of that order by the entity,
if the order is actually received by the Funds' transfer agent not later than
the next business morning.
VALUATION OF SHARES
The net asset value of the Portfolios is determined by dividing the total
market value of each Portfolio's investments and other assets, less any
liabilities of that Portfolio, by the total outstanding shares of that
Portfolio. For the Cash Portfolios, net asset value per share is determined as
of 12:00 noon (Eastern time) on each day that the Exchange is open for business
(an "Exchange Business Day"). Currently the Exchange is closed on weekends and
the customary national business holidays of New Year's Day, Dr. Martin Luther
King Jr. Day, Presidents' Day, Good Friday, Memorial Day,
-18-
<PAGE>
Independence Day, Labor Day, Thanksgiving Day and Christmas Day (or the days on
which they are observed). For the Core Fixed Income, Muni Intermediate and New
Jersey Muni Portfolios, net asset value per share is determined as of the close
of regular trading hours of the Exchange on each Exchange Business Day on which
the Portfolio receives an order to purchase or redeem its shares. One or more
pricing services may be used to provide securities valuations in connection with
the determination of the net asset value of each Portfolio.
GOVERNMENT CASH AND TAX-EXEMPT CASH PORTFOLIOS
For the purpose of calculating each Cash Portfolio's net asset value per
share, securities are valued by the "amortized cost" method of valuation, which
does not take into account unrealized gains or losses. The amortized cost method
involves valuing an instrument at its cost and thereafter assuming a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While this
method provides certainty in valuation, it may result in periods during which
value, as determined by amortized cost, is higher or lower than the price the
Portfolio would receive if it sold the instrument.
The use of amortized cost and the maintenance of each Portfolio's per share
net asset value at $1.00 is based on its election to operate under the
provisions of Rule 2a-7 under the 1940 Act. As a condition of operating under
that Rule, each Cash Portfolio must maintain an average weighted maturity of 90
days or less, purchase only instruments deemed to have remaining maturities of
13 months or less, and invest only in securities which are determined by the
Advisor, pursuant to procedures established by the Board, to present minimal
credit risks and which are Eligible Securities, pursuant to procedures
established by the Board.
The Board has established procedures reasonably designed to stabilize the
net asset value per share for the purposes of sales and redemptions at $1.00.
These procedures include daily review of the relationship between the amortized
cost value per share and a net asset value per share based upon available
indications of market value.
In the event of a deviation of over 1/2 of 1% between a Cash Portfolio's
net asset value based upon available market quotations or market equivalents and
$1.00 per share based on amortized cost, the Board members will promptly
consider what action, if any, should be taken. The Board members also will take
such action as they deem appropriate to eliminate or to reduce to the extent
reasonably practicable any material dilution or other unfair results which might
arise from differences between the two. Such action may include redemption in
kind, selling instruments prior to maturity to realize capital gains or losses
or to shorten the average weighted maturity, exercising puts, withholding
dividends, paying distributions from capital or capital gains or utilizing a net
asset value per share as determined by using available market quotations.
The net asset value per share of each Cash Portfolio will ordinarily remain
at $1.00, but each Cash Portfolio's daily dividends will vary in amount. There
can be no assurance, however, that the Cash Portfolios will maintain a constant
net asset value per share of $1.00.
CORE FIXED INCOME PORTFOLIO
Bonds and other fixed income securities are valued according to the
broadest and most representative market, which will ordinarily be the
over-the-counter market, at the most recent quoted bid price, or when stock
exchange valuations are used, at the latest quoted sale price on the day of
valuation. If there is not such a reported sale, the latest quoted bid price
will be used. Net asset value includes interest on fixed income securities which
is accrued daily. In addition, bond and other fixed income securities may be
valued on the basis of prices provided by a pricing service when the Advisor
believes such prices reflect the fair market value of such securities. The
prices provided by a pricing service are determined without regard to bid or
last sale prices but take into account institutional size trading in similar
groups of securities and any developments related to specific securities. Debt
securities with remaining maturities of 60 days or less are valued at amortized
cost, pursuant to which (i) such securities shall be valued initially at cost on
the date of purchase or, in the case of securities purchased with more than 60
days maturity, at their market or fair value on the 61st day prior to maturity,
and (ii) thereafter (absent unusual circumstances), a constant proportionate
amortization of any discount or premium shall be assumed until maturity of the
security.
-19-
<PAGE>
The value of other assets and securities for which no quotations are
readily available (including restricted securities) is determined in good faith
at fair value using methods determined by the Board.
MUNI INTERMEDIATE AND NEW JERSEY MUNI PORTFOLIOS
Municipal Obligations for which quotations are readily available are valued
at the most recent quoted bid price provided by investment dealers, provided
that Municipal Obligations may be valued on the basis of prices provided by a
pricing service when such prices are determined by the administrator to reflect
the fair market value of such Municipal Obligations. Municipal Obligations for
which market quotations are not readily available are valued at fair market
value as determined in good faith by or under the direction of the particular
Board. Debt obligations with remaining maturities of 60 days or less are valued
on the basis of amortized cost, pursuant to which (i) such securities are valued
initially at cost on the date of purchase or, in the case of securities
purchased with more than 60 days maturity, at their market or fair value on the
61st day prior to maturity, and (ii) thereafter (absent unusual circumstances),
a constant proportionate amortization of any discount or premium shall be
assumed until maturity of the security.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolios have the following dividend and capital gains policies:
(a) The Cash Portfolios declare dividends daily and normally distribute
substantially all of their net investment income to shareholders monthly.
(b) The Core Fixed Income, Muni Intermediate and New Jersey Muni Portfolios
normally will distribute substantially all of their net investment income
to shareholders in the form of monthly dividends.
If any net capital gains are realized, the Portfolios normally distribute
such gains at least once a year. However, see "Dividends, Capital Gains
Distributions and Taxes--Federal Taxes--Miscellaneous," for a discussion of the
Federal excise tax applicable to certain regulated investment companies.
Undistributed net investment income is included in a Portfolio's net assets
for the purpose of calculating net asset value per share. Therefore, on the Core
Fixed Income, Muni Intermediate and New Jersey Muni Portfolios' "ex-dividend"
date, the net asset value per share excludes the dividend (i.e., is reduced by
the per share amount of the dividend). Dividends paid shortly after the purchase
of shares of the Core Fixed Income, Muni Intermediate and New Jersey Muni
Portfolios by an investor, although in effect a return of capital, are taxable
to the investor.
FEDERAL TAXES
Each Portfolio intends to qualify as a "regulated investment company" under
the Internal Revenue Code of 1986, as amended (the "Code"). Such qualification
relieves a Portfolio of liability for Federal income taxes to the extent its
earnings are distributed in accordance with the Code.
Taxable Portfolios. Qualification as a regulated investment company under
the Code for a taxable year requires, among other things, that a taxable
Portfolio distribute to its shareholders an amount at least equal to 90% of its
investment company taxable income and 90% of its net exempt interest income (if
any) for such taxable year. In general, a Portfolio's investment company taxable
income will be its net investment income, including interest and dividends,
subject to certain adjustments, and net short-term capital gains and excluding
the excess of any net long-term capital gain for the taxable year over the net
short-term capital loss, if any, for such year. Each Portfolio intends to
distribute as dividends substantially all of its investment company taxable
income each year. Such dividends will be taxable as ordinary income to each
Portfolio's shareholders who are not currently exempt from Federal income taxes,
whether such income or gain is received in cash or reinvested in additional
shares. The dividends received deduction for corporations will apply to such
ordinary income distributions to the extent the total qualifying dividends
received by a Portfolio are from domestic corporations for the taxable year. It
is anticipated that none of
-20-
<PAGE>
the dividends paid by the Government Cash and Core Fixed Income Portfolios will
be eligible for the dividends received deduction.
Substantially all of each Portfolio's net realized long-term capital gains,
if any, will be distributed at least annually to its shareholders. A Portfolio
generally will have no tax liability with respect to such gains and the
distributions will be taxable to the shareholders who are not currently exempt
from Federal income taxes as mid-term or other long-term capital gains,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
With respect to shares of the Core Fixed Income, Muni Intermediate and New
Jersey Muni Portfolios, a shareholder considering buying shares of a fund on or
just before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon redemption or
transfer of shares of the Core Fixed Income, Muni Intermediate and New Jersey
Muni Portfolios, depending upon the tax basis of such shares and their price at
the time of redemption or transfer.
Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios.
Exempt-interest dividends may be treated by shareholders as items of interest
excludable from their gross income under Section 103(a) of the Code, unless
under the circumstances applicable to the particular shareholder the exclusion
would be disallowed. (See "Additional Information Concerning Taxes" in the SAI.)
Distributions of net income may be taxable to investors under state or local law
as dividend income even though a substantial portion of such distributions may
be derived from interest on tax-exempt obligations which, if realized directly,
would be exempt from such income taxes.
If the Portfolio should hold certain private activity bonds issued after
August 7, 1986, shareholders must include, as an item of tax preference, the
portion of dividends paid by a Portfolio that is attributable to interest on
such bonds in their Federal alternative minimum taxable income for purposes of
determining liability (if any) for the alternative minimum tax. Corporate
shareholders must also take all exempt-interest dividends into account in
determining certain adjustments for Federal alternative minimum tax purposes.
For individuals, the alternative minimum tax rate is 26% for alternative minimum
taxable income in excess of an exemption amount and 28% for any amount of
alternative minimum taxable income in excess of the exemption amount plus
$175,000. For corporations, the alternative minimum tax rate is 20%.
Shareholders receiving Social Security benefits should note that all
exempt-interest dividends will be taken into account in determining the
taxability of such benefits.
To the extent that dividends paid to shareholders are derived from taxable
interest or from long-term or short-term capital gains, such dividends will be
subject to Federal income tax (whether such dividends are paid in cash or
additional shares) and may also be subject to state and local taxes.
Miscellaneous. Dividends declared in October, November or December of any
year payable to shareholders of record on a specified date in such months will
be deemed to have been received by the shareholders and paid by a Portfolio on
December 31, in the event such dividends are paid during January of the
following year.
A 4% nondeductible excise tax is imposed on regulated investment companies
that fail to currently distribute specified percentages of their ordinary
taxable income and net capital gain (excess of capital gains over capital
losses). Each Portfolio intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and any net capital gain prior to
the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations generally
affecting the Portfolios and their shareholders and is not intended as a
substitute for careful tax planning. Accordingly, potential investors in the
Portfolios should consult their tax advisers with specific reference to their
own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
-21-
<PAGE>
Shareholders will be advised at least annually as to the federal income tax
consequences of distributions made each year.
Each Portfolio will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable dividends or gross proceeds realized
upon sale paid to shareholders who have failed to provide a correct tax
identification number in the manner required, who are subject to withholding by
the IRS for failure properly to include on their return payments of taxable
interest or dividends, or who have failed to certify to the Portfolio that they
are not subject to backup withholding when required to do so or that they are
"exempt recipients."
PENNSYLVANIA TAX CONSIDERATIONS
Shareholders of the Muni Intermediate Portfolio will not be subject to
Pennsylvania Personal Income Tax on distributions from the Portfolio
attributable to interest income from Pennsylvania Municipal Obligations held by
the Portfolio, either when received by the Portfolio or when credited or
distributed to the shareholders. The exemption from Pennsylvania Personal Income
Tax also will extend to interest on obligations of the United States, its
territories and certain of its agencies and instrumentalities ("Federal
Securities"). Shareholders of the Portfolio will not be subject to the
Philadelphia School District Net Income Tax imposed on Philadelphia residents on
distributions from the Portfolio attributable to interest income from
Pennsylvania Municipal Obligations or Federal Securities held by the Portfolio,
either when received by the Portfolio or when credited or distributed to the
shareholders.
For purposes of the Pennsylvania Personal Income Tax and the School
District Tax, distributions derived from investments in other than Pennsylvania
Municipal Obligations and Federal Securities and distributions from net realized
capital gains in respect of such investments will be taxable. Distributions
qualifying as capital gain dividends for Federal income tax purposes are not
taxable for purposes of the School District Tax. Gain on the disposition of a
share of the Muni Intermediate Portfolio will be subject to the Pennsylvania
Personal Income Tax and the School District Tax, except that gain realized with
respect to a share held for more than six months is not subject to the School
District Tax.
Shareholders of the Muni Intermediate Portfolio are not subject to the
Pennsylvania personal property tax imposed by many counties in Pennsylvania to
the extent that the Portfolio is comprised of Pennsylvania Municipal Obligations
and Federal Securities. In addition, Glenmede Fund has obtained a Certificate of
Authority to do business as a foreign corporation in Pennsylvania, and currently
does business in that state. Accordingly, the shares of the Glenmede Fund will
be exempt from Pennsylvania Personal Property Taxes.
NEW JERSEY TAX CONSIDERATIONS
It is anticipated that substantially all dividends paid by the New Jersey
Muni Portfolio will not be subject to New Jersey personal income tax. In
accordance with the provisions of New Jersey law, as currently in effect,
distributions paid by a "qualified investment fund" will not be subject to the
New Jersey personal income tax to the extent that the distributions are
attributable to income received as interest or gain from New Jersey Municipal
Obligations, or as interest or gain from direct U.S. Government obligations.
Distributions by a qualified investment fund that are attributable to most other
sources will be subject to the New Jersey personal income tax. If the New Jersey
Muni Portfolio qualifies as a qualified investment fund under New Jersey law,
any gain on the redemption or sale of the Portfolio's shares will not be subject
to the New Jersey personal income tax. To be classified as a qualified
investment fund, at least 80% of the Portfolio's investment must consist of New
Jersey Municipal Obligations or direct U.S. Government obligations; it must have
no investments other than interest-bearing obligations, obligations issued at a
discount, and cash and cash items (including receivables) and financial options,
futures and forward contracts related to interest bearing obligations issued at
a discount; and it must satisfy certain reporting obligations and provide
certain information to its shareholders. Shares of the Portfolio are not subject
to property taxation by New Jersey or its political subdivisions. To the extent
that a shareholder is subject to state or local taxes outside New Jersey,
dividends earned by an investment in the Fund may represent taxable income.
The New Jersey personal income tax is not applicable to corporations. For
all corporations subject to the New Jersey Corporation Business Tax, dividend
and distributions from a "qualified investment
-22-
<PAGE>
fund" are included in the net income tax base for purposes of computing the
Corporation Business Tax. Furthermore, any gain upon the redemption or sale of
Fund shares by a corporate shareholder is also included in the net income tax
base for purposes of computing the Corporation Business Tax.
The foregoing is only a summary of certain New Jersey tax considerations
generally affecting the Portfolio and its shareholders, and is not intended as a
substitute for careful tax planning. Shareholders are urged to consult their tax
advisors with specific reference to their own tax situations.
OTHER STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on distributions
from the Funds. A shareholder should consult with his or her tax adviser with
respect to the tax status of distributions from the Funds in a particular state
and locality.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956, provides
fiduciary and investment services to endowment funds, foundations, employee
benefit plans and other institutions and individuals. The Advisor is a
wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania 19103.
At December 31, 1997, the Advisor had over $13 billion in assets in the
accounts for which it serves in various capacities including as executor,
trustee or investment advisor.
Under Investment Advisory Agreements (the "Investment Advisory Agreements")
with the Funds, the Advisor, subject to the control and supervision of the
particular Fund's Board and in conformance with the stated investment objective
and policies of each Portfolio, manages the investment and reinvestment of the
assets of each Portfolio. It is the responsibility of the Advisor to make
investment decisions for the Portfolios and to place each Portfolio's purchase
and sales orders.
The Advisor does not receive any fee from the Funds for its investment
services provided to the Portfolios described in this Prospectus. However,
shareholders in the Funds who are clients of the Advisor or an Affiliate pay
fees which vary depending on the capacity in which the Advisor or the Affiliate
provides fiduciary and investment services to the particular client (e.g.,
personal trust, estate settlement, advisory and custodian services).
Shareholders in the Funds who are customers of other Institutions may pay fees
to those Institutions.
Mary Ann B. Wirts, First Vice President and Manager of the Fixed Income
Division of the Advisor, has been the portfolio manager primarily responsible
for the management of the Tax-Exempt Cash Portfolio since that Portfolio
commenced operations. Since November 1, 1996, Mrs. Wirts has also been the
portfolio manager primarily responsible for the management of the Government
Cash Portfolio. Mrs. Wirts has been employed by the Advisor since 1982.
Laura LaRosa is the portfolio manager primarily responsible for the
management of the Muni Intermediate and New Jersey Muni Portfolios. Ms. LaRosa
has been primarily responsible for the management of those Portfolios since
November 1994. Prior to her employment with the Advisor, Ms. LaRosa was Vice
President of Institutional Sales at Hopper Soliday, Philadelphia from 1986
through October 1994. Ms. LaRosa has been employed by the Advisor since November
1994.
Timothy M. Wooley, CFA is the portfolio manager primarily responsible for
the management of the Core Fixed Income Portfolio. Mr. Wooley has been primarily
responsible for the management of this Portfolio since January 1, 1998. Mr.
Wooley is a Fixed Income Portfolio Manager and analyst specializing in
mortgage-backed securities. Prior to his employment with the Adviser, Mr. Wooley
was with Meridian Capital Markets and Meridian Bank for five years, most
recently serving as Vice President specializing in mortgage research. Mr. Wooley
had been employed by the Adviser since 1994.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as the Funds' administrator, transfer agent and dividend paying
agent pursuant to a Master Services Agreement, and in those capacities
supervises all aspects of the Funds' day-to-day operations, other than
management of the Funds' investments. ICC is an indirect subsidiary of Bankers
Trust New York Corporation. For its services as administrator, transfer agent
and dividend paying agent,
-23-
<PAGE>
ICC is entitled to receive fees from the Funds equal to .12% of the first $100
million of the combined net assets of the Funds; .08% of the next $150 million
of the combined net assets of the Funds; .04% of the next $500 million of the
combined net assets of the Funds and .03% of the combined net assets of the
Funds over $750 million. For the fiscal year ended October 31, 1997, ICC
received fees at the rate of .04% of the Government Cash Portfolio's average net
assets; .04% of the Tax-Exempt Cash Portfolio's average net assets; .04% of the
Core Fixed Income Portfolio's average net assets; .04% of the Muni Intermediate
Portfolio's average net assets; and .04% of the New Jersey Muni Portfolio's
average net assets.
SHAREHOLDER SERVICING PLAN
The Funds have adopted an Amended and Restated Shareholder Servicing Plan
(the "Plan") effective January 1, 1998 under which the Funds may pay a fee to
broker/dealers, banks and other financial institutions (including the Advisor
and its affiliates) that are dealers of record or holders of record or which
have a servicing relationship ("Servicing Agents") with the beneficial owners of
shares in any of the Portfolios. Under the Plan, Servicing Agents enter into
Shareholder Servicing Agreements (the "Agreements") with the Funds. Pursuant to
such Agreements, Servicing Agents provide shareholder support services to their
clients ("Customers") who beneficially own shares of the Portfolios. The fee,
which is at an annual rate of .05%, is computed monthly and is based on the
average daily net assets of the shares beneficially owned by Customers of such
Servicing Agents. All expenses incurred by the Portfolios in connection with the
Agreements and the implementation of the Plans shall be borne entirely by the
holders of the shares of the particular Portfolio involved and will result in an
equivalent increase to each Portfolio's Total Annual Portfolio Operating
Expenses. The Advisor has entered into an Agreement with the Funds.
The services provided by the Servicing Agents under the Agreements may
include aggregating and processing purchase and redemption requests from
Customers and transmitting purchase and redemption orders to the transfer agent;
providing Customers with a service that invests the assets of their accounts in
shares pursuant to specific or pre-authorized instructions; processing dividend
and distribution payments from the Funds on behalf of Customers; providing
information periodically to Customers showing their positions; arranging for
bank wires; responding to Customers' inquiries concerning their investments;
providing sub-accounting with respect to shares beneficially owned by Customers
or the information necessary for sub-accounting; if required by law, forwarding
shareholder communications (such as proxies, shareholder reports, annual and
semi-annual financial statements and dividend, distribution and tax notices) to
Customers; and providing such other similar services as may be reasonably
requested.
INVESTMENT LIMITATIONS
Each Portfolio will not:
(a) purchase more than 10% of any class of the outstanding voting
securities of any issuer;
(b) acquire any securities of companies within one industry if, as a
result of such acquisition, more than 25% of the value of the
Portfolio's total assets would be invested in securities of companies
within such industry; provided, however, that there shall be no
limitation on the purchase of obligations issued or guaranteed by the
U.S. Government, its agencies, enterprises or instrumentalities;
(c) pledge, mortgage, or hypothecate any of its assets to an extent
greater than 10% of its total assets at fair market value, except as
described in this Prospectus and the Statement of Additional
Information and in connection with entering into futures contracts,
but the deposit of assets in a segregated account in connection with
the writing of covered put and call options and the purchase of
securities on a when issued, delayed settlement or forward delivery
basis and collateral arrangements with respect to initial or variation
margin for futures contracts will not be deemed to be pledges of a
Portfolio's assets or the purchase of any securities on margin for
purposes of this investment limitation;
(d) issue senior securities except that a Portfolio may borrow money in
accordance with investment limitation (e), purchase securities on a
when issued, delayed settlement or forward delivery basis and enter
into reverse repurchase agreements; and
-24-
<PAGE>
(e) borrow money except as a temporary measure for extraordinary or
emergency purposes, and then not in excess of 10% of its total assets
at the time of borrowing (entering into reverse repurchase agreements
and purchasing securities on a when issued, delayed settlement or
forward delivery basis are not subject to this investment limitation).
With respect to investment limitation (b), (a) there is no limitation with
respect to (i) instruments issued or guaranteed by the United States, any state,
territory or possession of the United States, the District of Columbia or any of
their authorities, agencies, instrumentalities or political subdivisions, and
(ii) repurchase agreements secured by the instruments described in clause (i);
(b) wholly-owned finance companies will be considered to be in the industries of
their parents if their activities are primarily related to financing the
activities of the parents; and (c) utilities will be divided according to their
services; for example, gas, gas transmission, electric and gas, electric and
telephone will each be considered a separate industry.
Each Portfolio, with the exceptions of the Muni Intermediate and New Jersey
Muni Portfolios, also will not:
(a) with respect to 75% of its total assets, invest more than 5% of its
total assets at the time of purchase in the securities of any single
issuer (other than obligations issued or guaranteed by the U.S.
Government, its agencies, enterprises or instrumentalities).
Pursuant to Rule 2a-7 under the 1940 Act, each of the Government Cash
Portfolio and the Tax-Exempt Cash Portfolio may not invest more than 5% of its
total assets in securities of any one issuer (other than U.S. Government
securities, repurchase agreements collateralized by such obligations, certain
money market fund securities and securities subject to certain guarantees which
are issued by persons that, directly or indirectly, do not control and are not
controlled by or under common control with the issuer). Each of these Portfolios
may, however, invest more than 5% of its total assets in First Tier Securities
(as defined in Rule 2a-7) of a single issuer for a period of three business days
after the purchase thereof. For the Government Cash Portfolio and the Tax-Exempt
Cash Portfolio, compliance with the diversification provisions of Rule 2a-7
under the 1940 Act will be deemed to be in compliance with the diversification
limitation in paragraph (a). Each of the Muni Intermediate and New Jersey Muni
Portfolios is classified as a "non-diversified" investment company under the
1940 Act, which means that each Portfolio is not limited by the 1940 Act in the
proportion of its assets that it may invest in the securities of a single
issuer. However, each Portfolio intends to conduct its operations so as to
qualify as a "regulated investment company" for purposes of the Internal Revenue
Code of 1986, as amended (the "Code"), which generally will relieve the
Portfolio of any liability for federal income tax to the extent its earnings are
distributed to shareholders. In order to qualify as a regulated investment
company, the Code requires, among other things, that at the end of each quarter,
no more than 5% of the value of a Portfolio's total assets may be invested in
the securities of any one issuer, and no more than 10% of the outstanding voting
securities of such issuer may be held by the Portfolio, except that (a) up to
50% of the value of the Portfolio's total assets may be invested without regard
to these limitations, provided that no more than 25% of the value of the
Portfolio's total assets are invested in the securities of any one issuer (or
two or more issuers which the Portfolio controls and which are engaged in the
same or similar trades or businesses or related trades or businesses); (b) the
foregoing limitations do not apply to securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities; and (c) a Portfolio will be
considered to have violated these diversification requirements only if the
noncompliance results from an acquisition of securities during the quarter and
is not cured within 30 days after the end of the quarter.
If a percentage restriction for a Portfolio is adhered to at the time an
investment is made, a later increase in percentage resulting from a change in
value or assets will not constitute a violation of such restriction. If a
Portfolio's borrowings are in excess of 5% (excluding overdrafts) of its total
net assets, additional portfolio purchases will not be made until the amount of
such borrowing is reduced to 5% or less.
The investment limitations described here and in the SAI other than those
relating to Rule 2a-7 are fundamental policies of the Portfolios and may be
changed only with the approval of the holders of a majority of the outstanding
shares (as defined in the 1940 Act) of the affected Portfolio.
-25-
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30, 1988.
Glenmede Fund's Articles of Incorporation authorize the Board members to issue
2,500,000,000 shares of common stock, with a $.001 par value. The Board has the
power to designate one or more classes ("Portfolios") of shares of common stock
and to classify or reclassify any unissued shares with respect to such
Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios.
Glenmede Portfolios was organized as a Massachusetts business trust on
March 3, 1992. Glenmede Portfolios' Master Trust Agreement authorizes Glenmede
Portfolios' Board to issue an unlimited number of shares of beneficial interest
with a $.001 par value. Glenmede Portfolios' Board has the power to designate
one or more series (Sub-Trusts) of shares of beneficial interest and to classify
or reclassify any unissued shares with respect to such Sub-Trusts. Currently,
Glenmede Portfolios is offering shares of two Sub-Trusts, the Muni Intermediate
and New Jersey Muni Portfolios.
The shares of each Portfolio have no preference as to conversion, exchange,
dividends, retirement or other rights, and, when issued and paid for as provided
in this Prospectus, will be fully paid and non-assessable. The shares of each
Portfolio have no pre-emptive rights and do not have cumulative voting rights,
which means that the holders of more than 50% of the shares of a Fund voting for
the election of its Board members can elect 100% of the Board of that Fund if
they choose to do so. A shareholder is entitled to one vote for each full share
held (and a fractional vote for each fractional share held), then standing in
his or her name on the books of the particular Fund. The Funds will not hold
annual meetings of shareholders, except as required by the 1940 Act, the next
sentence and other applicable law. Each Fund has undertaken that its Board will
call a meeting of shareholders for the purpose of voting upon the question of
removal of a Board member or members if such a meeting is requested in writing
by the holders of not less than 10% of the outstanding shares of the particular
Fund. To the extent required by the undertaking, the particular Fund will assist
shareholder communication in such matters. The staff of the Commission has
expressed the view that the use of this combined Prospectus for the Funds may
subject a Fund to liability for misstatements, inaccuracies or incomplete
disclosure about the other Fund.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively acted
upon unless approved by a majority of the outstanding shares of the Portfolio or
class affected by the matter. The Portfolio or class is affected by a matter
unless it is clear that the interests of the Portfolio or class in the matter
are substantially identical or that the matter does not affect any interest of
the Portfolio or class. Under Rule 18f-2, the approval of an investment advisory
agreement or any change in a fundamental investment policy would be effectively
acted upon with respect to the Portfolio only if approved by a majority of the
outstanding shares of the Portfolio. However, the Rule also provides that the
ratification of independent public accountants and the election of directors may
be effectively acted upon by shareholders of the Glenmede Fund voting without
regard to the Portfolio.
Notwithstanding any provision of Maryland law requiring a greater vote of
Glenmede Fund's common stock (or of the shares of the Portfolio or class voting
separately as a class) in connection with any corporate action, unless otherwise
provided by law (for example by Rule 18f-2 discussed above) or by Glenmede
Fund's Articles of Amendment and Restatement, Glenmede Fund may take or
authorize such action upon the favorable vote of the holders of more than 50% of
the outstanding common stock of Glenmede Fund entitled to vote thereon.
At January 31, 1998, the Advisor was the record owner of substantially all
of the outstanding shares of each Portfolio.
DISTRIBUTOR
ICC Distributors, Inc., P.O. Box 7558, Portland, Maine 04101, serves as the
Funds' distributor.
-26-
<PAGE>
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the custodian
of the Funds' respective assets.
TRANSFER AGENT
ICC, One South Street, Baltimore, Maryland 21202, acts as the Funds'
transfer agent.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania, serves as independent
accountants for each of the Funds and will audit its respective financial
statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and audited
annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as counsel
to each of the Funds.
-27-
<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of each of the Funds are managed under the
direction of its Board. The following is a list of the Board members and
officers of each of the Funds and a brief statement of their principal
occupations during the past five years:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address Age Principal Occupation During Past Five Years
- ------------------------ --- ---------------------------------------------------
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and Economics;
The Wharton School Professor of Finance and Economics from 1990-1996; Vice
University of Pennsylvania Dean and Director of Wharton Doctoral Programs from 1990-
Philadelphia, PA 19104-6367 1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 76 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director, Penn Engineering & Manufacturing Corp.;
Wyndmoor, PA 19118 Former Director of Georgia-Pacific Corp.; Former Managing
Director of PaineWebber, Inc.
John W. Church, Jr. 65 Chairman and Director of Glenmede Fund; Chairman and
44 Wistar Road Trustee of The Glenmede Portfolios; Retired, formerly the
Villanova, PA 19085 Executive Vice President and Chief Investment Officer of The
Glenmede Trust Company. Mr. Church was employed by The
Glenmede Trust Company from 1979-1997.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund; Director, XTRA
Phoenix, AZ 85064-4024 Corporation; Former Executive Vice President--Finance of
ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of the Glenmede Trust Company;
Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.;
Former Co-Director, Principal and Officer of Philadelphia
Investment Banking Co.; Former Director and Officer of Valley
Forge Administrative Services Company.
Mary Ann B. Wirts 46 President of Glenmede Fund and The Glenmede Portfolios;
One Liberty Place First Vice President and Manager of the Fixed Income Division
1650 Market Street, Suite 1200 of The Glenmede Trust Company. She has been employed by
Philadelphia, PA 19103 The Glenmede Trust Company since 1982.
Kimberly C. Osborne 32 Executive Vice President of Glenmede Fund and The Glenmede
One Liberty Place Portfolios; Vice President of The Glenmede Trust Company.
1650 Market Street, Suite 1200 She has been employed by The Glenmede Trust Company since
Philadelphia, PA 19103 1993. From 1992-1993, she was a Client Service Manager
with Mutual Funds Service Company, and from 1987-1992, she
was a Client Administrator with The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund and The Glenmede Portfolios;
Philadelphia National Bank Building Partner in the law firm of Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund and The Glenmede
One South Street Portfolios; Principal, BT Alex. Brown Inc.; Executive Vice
Baltimore, MD 21202 President of ICC.
</TABLE>
-28-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Joseph A. Finelli 41 Treasurer of Glenmede Fund and The Glenmede Portfolios. He
One South Street has been a Vice President of BT Alex. Brown Inc. since 1995.
Baltimore, MD 21202 Prior thereto, he was Vice President and Treasurer of The
Delaware Group.
</TABLE>
- ------------
* Mr. Pew is an "interested person" of the Funds as that term is defined in the
1940 Act.
For additional information concerning remuneration of Board members see
"Management of the Funds" in the SAI.
--------------------------------------------
Shareholder inquiries should be addressed to the Funds at the address or
telephone number stated on the cover page.
-29-
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
One South Street, Baltimore, Maryland 21202
================================================================================
Prospectus
Dated March 2, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place One South Street
1650 Market Street, Suite 1200 Baltimore, Maryland 21202
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
- --------------------------------------------------------------------------------
Table of Contents
Page
EXPENSES OF THE PORTFOLIOS................................................
FINANCIAL HIGHLIGHTS......................................................
PERFORMANCE CALCULATIONS..................................................
INVESTMENT POLICIES AND RISK FACTORS......................................
COMMON INVESTMENT POLICIES AND RISK FACTORS...............................
PURCHASE OF SHARES........................................................
REDEMPTION OF SHARES......................................................
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES OF THE PORTFOLIOS.............................................
VALUATION OF SHARES.......................................................
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES..........................
INVESTMENT ADVISOR........................................................
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES..............
SHAREHOLDER SERVICING PLAN................................................
INVESTMENT LIMITATIONS....................................................
GENERAL INFORMATION.......................................................
BOARD MEMBERS AND OFFICERS................................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in the Funds' Statement of
Additional Information, in connection with the offering made by this Prospectus
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Funds or their Distributor. This
Prospectus does not constitute an offering by the Funds or the Distributor in
any jurisdiction in which such offering may not lawfully be made.
-30-
<PAGE>
THE GLENMEDE FUND, INC.
Institutional International Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-1A Item Number Location
- --------------------- --------
Part A Prospectus Caption
- ------ ------------------
<S> <C>
1. Cover Page........................................... Cover Page
2. Synopsis............................................. Expenses of the Portfolio
3. Condensed Financial Information...................... Financial Highlights;
Performance Calculations
4. General Description of Registrant.................... Cover Page; Investment
Objective and Policies;
Investment Techniques; Risk Factors;
Investment Limitations;
General Information
5. Management of the Fund............................... Investment Advisor; Administrative,
Transfer Agency and Dividend Paying
Services; Board Members and Officers;
Purchase of Shares; Redemption of Shares
5.A. Management's Discussion of
Fund Performance..................................... Not Applicable
6. Capital Stock and Other Securities................... Purchase of Shares; Redemption of
Shares; Dividends, Capital Gains
Distributions and Taxes;
General Information
7. Purchase of Securities Being Offered................. Valuation of Shares; Purchase of Shares;
Redemption of Shares
8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares
9. Pending Legal Proceedings............................ Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
(800) 442-8299
- --------------------------------------------------------------------------------
Prospectus - March 2, 1998
INVESTMENT OBJECTIVE
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is a
no-load, open-end management investment company. Glenmede Fund consists of ten
series of shares, each of which has different investment objectives and
policies. The securities offered hereby are shares ("shares") of one class of
one of these series, the Institutional International Portfolio (the
"Portfolio").
Institutional International Portfolio. The objective of the Institutional
International Portfolio is to provide maximum long-term total return
consistent with reasonable risk to principal. The Institutional International
Portfolio seeks to achieve its objective by investing primarily in common
stocks and other equity securities of companies located outside the United
States. The net asset value of this Portfolio will fluctuate.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolio are subject to investment risks, including
the possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank.
- --------------------------------------------------------------------------------
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets
forth certain information that you should know before you invest. A Statement
of Additional Information ("SAI") containing additional information about the
Portfolio has been filed with the Securities and Exchange Commission. The SAI
dated March 2, 1998, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. The 1997 Annual Report to
Shareholders contains additional investment and performance information about
the Portfolios. A copy of the SAI and the 1997 Annual Report may be obtained,
<PAGE>
without charge, by writing to Glenmede Fund at the address shown above or
by calling Glenmede Fund at the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-2-
<PAGE>
EXPENSES OF THE PORTFOLIO
The following table illustrates the expenses and fees incurred by the
Institutional International Portfolio for the fiscal year ended October 31,
1997.
SHAREHOLDER TRANSACTION EXPENSES*
Sales Load Imposed on Purchases............................................NONE
Sales Load Imposed on Reinvested Dividends.................................NONE
Deferred Sales Load........................................................NONE
Redemption Fees............................................................NONE
Exchange Fees..............................................................NONE
ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)
Institutional
International
Portfolio
-------------
Investment Advisory Fees.................................... .75%1
Administration Fees......................................... .04%
Other Expenses.............................................. .08%
----
Total Operating Expenses.................................... .87%
====
- ----------------------
* A transaction charge may be imposed by broker-dealers or others that
make shares of the Portfolio available. There is no transaction
charge for shares purchased directly from the Portfolio.
1. The Glenmede Trust Company (the "Advisor") has agreed to waive its
fees to the extent necessary to ensure that the Institutional
International Portfolio's annual total operating expenses do not
exceed 1.00% of such Portfolio's average net assets.
The purpose of the above table is to assist an investor in
understanding the various estimated costs and expenses that an investor in the
Portfolio will bear directly or indirectly. Actual expenses may be greater or
lesser than such estimates. For further information concerning the Portfolio's
expenses see "Investment Advisor" and "Administrative, Transfer Agency and
Dividend Paying Services."
The following example illustrates the estimated expenses that an
investor in the Portfolio would pay on a $1,000 investment over various time
periods assuming (i) a 5% annual rate of return and (ii) redemption at the end
of each time period. As noted in the above table, Glenmede Fund charges no
redemption fees of any kind.
1 Year 3 Years 5 Years 10 Years
------- ------- ------- --------
Institutional International
Portfolio................... $ 9 $28 $48 $107
-3-
<PAGE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
FINANCIAL HIGHLIGHTS
The table below sets forth financial highlights of the Institutional
International Portfolio for the respective periods presented. The data
presented for the Portfolio is derived from the Portfolio's Financial
Statements included in Glenmede Fund's 1997 Annual Report to Shareholders,
which Financial Statements and the report thereon of Coopers & Lybrand L.L.P.,
Glenmede Fund's independent accountants, are incorporated by reference into
the SAI. The following information should be read in conjunction with those
Financial Statements.
-4-
<PAGE>
Institutional International Portfolio
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended Period Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992+
---------- ---------- ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year............... $13.67 $12.34 $12.63 $12.00 $9.42 $10.00
------ ------ ------ ------ ----- ------
Income from investment operations:
Net investment income#......................... 0.27 0.28 0.19 0.16 0.15 0.03
Net realized and unrealized gain/(loss)
on investments................................ 1.86 1.50 (0.13) 1.49 2.88 (0.60)
------ ------ ------ ------ ------ ------
Total from investment operations............. 2.13 1.78 0.06 1.65 3.03 (0.57)
------ ------ ----- ------ ------ ------
Less Distributions:
Distributions from net investment
income........................................ (0.22) (0.25) (0.18) (0.13) (0.14) (0.01)
Distributions from net realized
capital gains................................. (0.61) (0.14) (0.17) (0.87) (0.31) --
Distributions in excess of net
realized gains................................ -- (0.06) -- (0.02) -- --
Distributions in excess of net ............. (0.08) -- -- -- -- --
------ ------ ------ ------ ------ ----
investment income
Total Distributions.......................... (0.91) (0.45) (0.35) (1.02) (0.45) (0.01)
------ ------- ----- ------ ------ ------
Net asset value, end of year..................... $14.89 $13.67 $12.34 $12.63 $12.00 $9.42
====== ====== ====== ====== ====== =====
Total return++................................... 15.54% 14.46% 0.38% 13.85% 32.34% (5.60)%
====== ======= ======= ======= ======= =======
-5-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended Period Ended
Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31,
1997 1996 1995 1994 1993 1992+
---------- ---------- ---------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratios to average net assets/ Supplemental data:
Net assets, end of year (in 000's) $81,659 $58,390 $44,206 $17,076 $12,979 $9,416
Ratio of operating expenses to average
net assets** 0.87% 0.95% 0.93% 1.00% 1.00% 1.00%*
Ratio of net investment income to average
net assets 1.94% 2.06% 1.78% 1.29% 1.41% 1.28%*
Portfolio turnover rate 15% 10% 25% 39% 34% 10%
Average commissions per share## $0.0341 $0.0200 N/A N/A N/A N/A
- ----------------
+ The Portfolio commenced operations on August 1, 1992.
++ Total return represents aggregate total return for the period indicated.
* Annualized.
** Annualized expense ratio before waiver of fees and/or expenses reimbursed by the investment advisor for the years ended
October 31, 1996, 1995, 1994 and 1993 and the period ended October 31, 1992 were .95%, .93%, 1.01%, 1.08% and 1.08%,
respectively.
# Net investment income before waiver of fees and/or expenses reimbursed by the investment advisor for the years ended
October 31, 1996, 1995, 1994 and 1993 and the period ended October 31, 1992 were $.28, $0.19, $0.16, $0.14 and $0.03,
respectively.
## Represents Average Commission rate per share charged to the Portfolio on purchases and sales of investment during the period.
Such information is only required for fiscal years beginning on or after September 1, 1995.
-6-
</TABLE>
<PAGE>
PERFORMANCE CALCULATIONS
The Institutional International Portfolio may advertise or quote total
return data from time to time. Total return will be calculated on an average
annual total return basis, and may also be calculated on an aggregate total
return basis, for various periods. Average annual total return reflects the
average annual percentage change in value of an investment in the Portfolio
over the measuring period. Aggregate total return reflects the total
percentage change in value over the measuring period. Both methods of
calculating total return assume that dividends and capital gains distributions
made by the Portfolio during the period are reinvested in Portfolio shares.
The Portfolio may compare its total return to that of other investment
companies with similar investment objectives and to stock and other relevant
indices or to rankings prepared by independent services or other financial or
industry publications that monitor the performance of mutual funds. For
example, the total return of the Portfolio may be compared to data prepared by
Lipper Analytical Services, Inc. ("Lipper") and the Morgan Stanley Capital
International EAFE Index. Total return and other performance data as reported
in national financial publications such as Money Magazine, Forbes, Barron's,
The Wall Street Journal and The New York Times, or in publications of a local
or regional nature, may also be used in comparing the performances of the
Portfolio.
Performance quotations represent the Portfolio's past performance, and
should not be considered as representative of future results. Since
performance will fluctuate, performance data for the Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in the Portfolio, portfolio maturity,
operating expenses and market conditions. Any management fees charged by the
Advisor or institutions to their clients will not be included in the
Portfolio's calculations of total return.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Institutional International Portfolio is
not fundamental and may be changed by the Board members without shareholder
approval.
The objective of the Portfolio is to provide maximum, long-term total
return consistent with reasonable risk to principal. The Portfolio seeks to
achieve its objective by investing primarily in a diversified portfolio of
common stocks and other
-7-
<PAGE>
equity securities of companies located outside the United States. The
Portfolio is expected to diversify its investments across companies located in
a number of foreign countries, which may include, but are not limited to,
Japan, the United Kingdom, Germany, France, Switzerland, the Netherlands,
Sweden, Australia, Hong Kong and Singapore. The Portfolio will invest an
aggregate of at least 65% of its total assets in the securities of companies
(other than investment companies) in at least three different countries, other
than the United States.
The securities which the Portfolio may purchase include the following:
common stocks of companies located outside the U.S.; shares of closed-end
investment companies which invest chiefly in the shares of companies located
outside the U.S. (such shares will be purchased by the Portfolio within the
limits prescribed by the Investment Company Act of 1940 (the "1940 Act"));
U.S. or foreign securities convertible into foreign common stock; and American
Depositary Receipts ("ADRs") which are U.S. domestic securities representing
ownership rights in foreign companies.
The Portfolio also may enter into forward currency exchange
contracts only in order to hedge against uncertainty in the level
of future foreign exchange rates in the purchase and sale of
investment securities; it may not enter into such contracts for
speculative purposes. See "Investment Techniques--Forward
Foreign Currency Exchange Contracts."
The Portfolio intends to remain, for the most part, fully invested in
equity securities of companies located outside of the United States. However,
the Portfolio may invest a portion of its assets (up to 20% under normal
circumstances) in the following fixed income and money market securities:
obligations of the U.S. Government and its guaranteed or sponsored agencies,
including shares of open-end or closed-end investment companies which invest
in such obligations (such shares will be purchased within the limits
prescribed by the 1940 Act and would subject a shareholder of the Portfolio to
expenses of the other investment company in addition to the expenses of the
Portfolio); short-term money market instruments issued in the U.S. or abroad,
denominated in dollars or any foreign currency, including short-term
certificates of deposit (including variable rate certificates of deposit),
time deposits with a maturity no greater than 180 days, bankers acceptances,
commercial paper rated A-1 by Standard & Poor's Ratings Group, Division of
McGraw Hill ("S&P") or Prime-1 by Moody's Investors Service, Inc. ("Moody's"),
or in equivalent money market securities; and high quality fixed income
securities denominated in U.S. dollars, any foreign currency, or a
multi-national currency unit such as the European Currency Unit.
-8-
<PAGE>
INVESTMENT TECHNIQUES
Repurchase Agreements. The Portfolio may enter into repurchase agreements
with qualified brokers, dealers, banks and other financial institutions deemed
creditworthy by the Advisor. Under normal circumstances, however, the
Portfolio will not enter into repurchase agreements if entering into such
agreements would cause, at the time of entering into such agreements, more
than 20% of the value of its total assets to be subject to repurchase
agreements. The Portfolio would generally enter into repurchase transactions
to invest cash reserves and for temporary defensive purposes.
In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Advisor currently expects that repurchase agreements will mature in less than
13 months. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
101% of the repurchase price including accrued interest. Glenmede Fund's
administrator and the Advisor will mark-to-market daily the value of the
securities purchased, and the Advisor will, if necessary, require the seller
to deposit additional securities to ensure that the value is in compliance
with the 101% requirement stated above. The Advisor will consider the
creditworthiness of a seller in determining whether the Portfolio should enter
into a repurchase agreement, and the Portfolio will only enter into repurchase
agreements with banks and dealers which are determined to present minimal
credit risk by the Advisor under procedures adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, the Portfolio is
lending its funds to the seller at the agreed upon interest rate and receiving
securities as collateral for the loan. Such agreements can be entered into for
periods of one day (overnight repo) or for a fixed term (term repo).
Repurchase agreements are a common way to earn interest income on short-term
funds.
The use of repurchase agreements involves certain risks. For example, if
the seller of a repurchase agreement defaults on its obligation to repurchase
the underlying securities at a time when the value of these securities has
declined, the Portfolio may incur a loss upon disposition of them. Default by
the seller would also expose the Portfolio to possible loss because of delays
in connection with the disposition of the underlying obligations. If the
seller of an agreement becomes insolvent and
-9-
<PAGE>
subject to liquidation or reorganization under the Bankruptcy Code or other
laws, a bankruptcy court may determine that the underlying securities are
collateral not within the control of the Portfolio and therefore subject to
sale by the trustee in bankruptcy. Further, it is possible that the Portfolio
may not be able to substantiate its interest in the underlying securities.
Lending of Securities. The Portfolio may lend its portfolio securities with
a value up to one-third of its total assets (including the value of the
collateral for the loans) to qualified brokers, dealers, banks and other
financial institutions for the purpose of realizing additional net investment
income through the receipt of interest on the loan. Such loans would involve
risks of delay in receiving additional collateral in the event the value of the
collateral decreased below the value of the securities loaned or of delay in
recovering the securities loaned or even loss of rights in the collateral should
the borrower of the securities fail financially. Loans will be made only to
borrowers deemed by the Advisor to be of good standing.
"When Issued," "Delayed Settlement," and "Forward Delivery" Securities.
The Portfolio may purchase and sell securities on a "when issued," "delayed
settlement" or "forward delivery" basis. "When issued" or "forward delivery"
refer to securities whose terms and indenture are available and for which a
market exists, but which are not available for immediate delivery. When issued
or forward delivery transactions may be expected to occur one month or more
before delivery is due. Delayed settlement is a term used to describe
settlement of a securities transaction in the secondary market which will
occur sometime in the future. No payment or delivery is made by the Portfolio
in a when issued, delayed settlement or forward delivery transaction until the
Portfolio receives payment or delivery from the other party to the
transaction. The Portfolio will maintain a separate account of cash, U.S.
Government securities or other high grade debt obligations at least equal to
the value of purchase commitments until payment is made. Such segregated
securities will either mature or, if necessary, be sold on or before the
settlement date. Although the Portfolio receives no income from the above
described securities prior to delivery, the market value of such securities is
still subject to change.
The Portfolio will engage in when issued transactions to obtain what is
considered to be an advantageous price and yield at the time of the
transaction. When the Portfolio engages in when issued, delayed settlement or
forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
the purpose of speculation. The Portfolio's when issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market
-10-
<PAGE>
circumstances, and the Portfolio will only sell securities on such a basis to
offset securities purchased on such a basis.
Borrowing. As a temporary measure for extraordinary or emergency
purposes, the Portfolio may borrow money from banks. However, the Portfolio
will not borrow money for speculative purposes.
Forward Foreign Currency Exchange Contracts. The Portfolio may enter into
forward foreign currency exchange contracts in connection with the purchase
and sale of investment securities; such contracts may not be used for
speculative purposes. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts may be
bought or sold to protect the Portfolio, to some degree, against a possible
loss resulting from an adverse change in the relationship between foreign
currencies and the U.S. dollar. It should be realized that this method of
protecting the value of the Portfolio's investment securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
at some future point in time. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time they tend to limit any potential gain which might
result should the value of such currency increase.
Depositary Receipts. The Portfolio may purchase sponsored or unsponsored
ADRs. ADRs are depositary receipts typically issued by a U.S. bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. Generally, depositary receipts in registered form are designed
for use in the U.S. securities market and depositary receipts in bearer form
are designed for use in securities markets outside the United States.
Depositary receipts may not necessarily be denominated in the same currency as
the underlying securities into which they may be converted. Depositary
receipts may be issued pursuant to sponsored or unsponsored programs. In
sponsored programs, an issuer has made arrangements to have its securities
traded in the form of depositary receipts. In unsponsored programs, the issuer
may not be directly involved in the creation of the program. Although
regulatory requirements with respect to sponsored and unsponsored programs are
generally similar, in some cases it may be easier to obtain financial
information from an issuer that has participated in the creation of a
sponsored program. Accordingly, there may be less information available
regarding issuers of securities underlying unsponsored programs and there may
not be a correlation between such information and the market value of the
depositary receipts. Depositary receipts also involve the risks of other
investments
-11-
<PAGE>
in foreign securities, as discussed below. For purposes of the Portfolio's
investment policies, the Portfolio's investments in Depositary receipts will
be deemed to be investments in the underlying securities.
Illiquid Securities. The Portfolio will not invest more than 10% of net
assets in securities that are illiquid. Illiquid securities are difficult to
sell promptly at an acceptable price.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
RISK FACTORS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the
Portfolio, nor can there be any assurance that the Portfolio's investment
objective will be attained. As with any investment in securities, the value
of, and income from, an investment in the Portfolio can decrease as well as
increase, depending on a variety of factors which may affect the values and
income generated by the Portfolio's securities, including general economic
conditions, market factors and currency exchange rates. An investment in the
Portfolio is not intended as a complete investment program.
Foreign Securities. The Portfolio has the right to purchase securities in
any foreign country, developed or underdeveloped. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations, which are in addition to the
usual risks inherent in domestic investments. Investors should recognize that
investing in the securities of foreign companies involve special risks and
considerations not typically associated with investing in U.S. companies.
These risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries,
and potential restrictions on the flow of international capital. Moreover, the
dividends payable on the Portfolio's foreign portfolio securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Portfolio's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Also, changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities in the Portfolio which are denominated or
-12-
<PAGE>
quoted in currencies other than the U.S. dollar. In addition, in many
countries there is less publicly available information about issuers than is
available in reports about companies in the United States. Foreign companies
are not generally subject to uniform accounting, auditing and financial
reporting standards, and auditing practices and requirements may not be
comparable to those applicable to U.S. companies. Further, the Portfolio may
encounter difficulties or be unable to pursue legal remedies and obtain
judgments in foreign courts.
Brokerage commissions, custodial services, and other costs relating to
investment in foreign securities markets are generally more expensive than in
the United States. Foreign securities markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to these and other settlement problems
could cause the Portfolio to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to settlement problems could
result either in losses to the Portfolio due to subsequent declines in value
of the portfolio security or, if the Portfolio has entered into a contract to
sell the security, could result in possible liability to the purchaser.
There are further risk factors, including possible losses through the
holding of securities in domestic and foreign custodian banks and
depositories.
PURCHASE OF SHARES
Shares of the Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its clients ("Clients")
and to other institutions (the "Institutions"), at the net asset value per
share next determined after receipt of the purchase order by Glenmede Fund's
transfer agent. See "Valuation of Shares." The minimum initial investment for
the Portfolio is $25,000; the minimum for subsequent investments for the
Portfolio is $1,000. Glenmede Fund reserves the right to reduce or waive the
minimum initial and subsequent investment requirements from time to time.
Beneficial ownership of shares will be reflected on books maintained by the
Advisor or the Institutions. A prospective investor wishing to purchase shares
in Glenmede Fund should contact the Advisor or his or her Institution.
-13-
<PAGE>
It is the responsibility of the Advisor of Institutions to transmit orders
for share purchases to Investment Company Capital Corp. ("ICC"), Glenmede Fund's
transfer agent, and deliver required funds to Glenmede Fund's custodian, on a
timely basis.
Glenmede Fund reserves the right, in its sole discretion, to suspend the
offering of shares of the Portfolio or reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interests
of Glenmede Fund.
Purchases of the Portfolio's shares will be made in full and fractional
shares of the Portfolio calculated to three decimal places. In the interest of
economy and convenience, certificates for shares will not be issued except
upon the written request of the shareholder. Certificates for fractional
shares, however, will not be issued.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemption
request by the transfer agent. Generally, a properly signed written request is
all that is required. Any redemption may be more or less than the purchase price
of the shares depending on the market value of the investment securities held by
the Portfolio. An investor wishing to redeem shares should contact the Advisor
or his or her Institution. It is the responsibility of the Advisor or
Institutions to transmit promptly redemption orders to the transfer agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper
form by the transfer agent. Glenmede Fund may suspend the right of redemption
or postpone the date of payment at times when the New York Stock Exchange (the
"Exchange") is closed, or under any emergency circumstances as determined by
the Securities and Exchange Commission (the "Commission"). See "Valuation of
Shares" for the days on which the Exchange is closed.
If Glenmede Fund's Board determines that it would be detrimental to the
best interests of the remaining shareholders of the Portfolio to make payment
wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in
whole or in part by a distribution in-kind of securities held by the Portfolio
in lieu of cash in conformity with applicable rules of the Commission.
Investors may incur brokerage charges on the sale of portfolio securities
received as a redemption in kind.
-14-
<PAGE>
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES
Glenmede Fund may, from time to time, in its sole discretion appoint one
or more entities, including the Advisor, as its agent to receive purchase and
redemption orders of shares of the Portfolio and cause these orders to be
transmitted, on a net basis, to Glenmede Fund's transfer agent. In these
instances, orders are effected at the net asset value per share next
determined after receipt of that order by the entity, if the order is actually
received by Glenmede Fund's transfer agent not later than the next business
morning.
VALUATION OF SHARES
The net asset value per share of the Portfolio is determined by dividing
the total market value of its investments and other assets attributable to the
shares, less liabilities attributable to the shares, by the total outstanding
shares of the Portfolio. The net asset value per share of the Portfolio is
determined as of the close of regular trading hours of the Exchange on each
day that the Exchange is open for business and the Portfolio receives an order
to purchase or redeem its shares. Currently the Exchange is closed on weekends
and the customary national business holidays of New Year's Day, Dr. Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day (or the days on which they
are observed). One or more pricing services may be used to provide securities
valuations in connection with the determination of the net asset value per
share of the Portfolio.
Equity securities listed on a U.S. securities exchange for which market
quotations are available are valued at the last quoted sale price as of the
close of that exchange's regular trading hours on the day the valuation is
made. Securities listed on a foreign exchange and unlisted foreign securities
are valued at the latest quoted sales price available before the time when
assets are valued. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted U.S. equity
securities and listed securities not traded on the valuation date for which
market quotations are readily available are valued not in excess of the asked
prices or less than the bid prices. The value of securities for which no
quotations are readily available (including restricted securities) is
determined in good faith at fair value using
-15-
<PAGE>
methods determined by the Board. Foreign currency amounts are
translated into U.S. dollars at the bid prices of such currencies
against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio normally distributes substantially all of its net
investment income to shareholders in the form of a quarterly dividend. If any
net capital gains are realized, the Portfolio normally distributes such gains
at least once a year. However, see "Dividends, Capital Gains Distributions and
Taxes-Federal Taxes-Miscellaneous," for a discussion of the Federal excise tax
applicable to certain regulated investment companies.
Undistributed net investment income is included in the Portfolio's net
assets for the purpose of calculating net asset value per share. Therefore, on
the Portfolio's "ex-dividend" date, the net asset value per share excludes the
dividend (i.e., is reduced by the per share amount of the dividend).
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves the Portfolio of liability for Federal income
taxes to the extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Portfolio distribute to
its shareholders an amount at least equal to 90% of its investment company
taxable income and 90% of its net exempt interest income, if any, for such
taxable year. In general, the Portfolio's investment company taxable income
will be the sum of its net investment income, including interest and
dividends, subject to certain adjustments, and net short-term capital gain
over net long-term capital loss, if any, for such year. The Portfolio intends
to distribute as dividends substantially all of its investment company taxable
income each year. Such dividends will be taxable as ordinary income to the
Portfolio's shareholders who are not currently exempt from Federal income
taxes, whether such income or gain is received in cash or reinvested in
-16-
<PAGE>
additional shares. The dividends received deduction for corporations will
apply to such ordinary income distributions to the extent the total qualifying
dividends received by the Portfolio are from domestic corporations for the
taxable year. It is anticipated that only a small part, if any, of the
dividends paid by the Portfolio will be eligible for the dividends received
deduction.
Substantially all of the Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. The
Portfolio generally will have no tax liability with respect to such gains and
the distributions will be taxable as mid-term or other long-term capital gains
to the shareholders who are not currently exempt from Federal income taxes,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
A shareholder considering buying shares of the Portfolio on or just
before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon his
redemption or transfer of shares of the Portfolio, depending upon the tax
basis of such shares and their price at the time of redemption or transfer.
It is expected that dividends and certain interest income earned by the
Portfolio from foreign securities will be subject to foreign withholding taxes
or other taxes. So long as more than 50% of the value of the Portfolio's total
assets at the close of any taxable year consists of stock or securities of
foreign corporations, the Portfolio may elect, for U.S. Federal income tax
purposes, to treat certain foreign taxes paid by it, including generally any
withholding taxes and other foreign income taxes, as paid by its shareholders.
If the Portfolio makes this election, the amount of such foreign taxes paid by
the Portfolio will be included in its shareholders' income pro rata (in
addition to taxable distributions actually received by them), and each
shareholder will be entitled (a) to credit his proportionate amount of such
taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes
his deductions, to deduct such proportionate amount from his U.S. income,
should he so choose.
Miscellaneous. Dividends declared in October, November or December of any
year payable to shareholders of record on a specified date in such months will
be deemed to have been received by the shareholders and paid by the Portfolio
on December 31, in the event such dividends are paid during January of the
following year.
-17-
<PAGE>
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and net capital gain (excess of capital gains over
capital losses). The Portfolio intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any net capital gain
prior to the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolio and its shareholders and is not intended as
a substitute for careful tax planning. Accordingly, potential investors in the
Portfolio should consult their tax advisers with specific reference to their
own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal income
tax consequences of distributions made each year.
The Portfolio will be required in certain cases to withhold and remit to
the United States Treasury 31% of taxable dividends or gross proceeds realized
upon sale paid to shareholders who have failed to provide a correct tax
identification number in the manner required, who are subject to withholding
by the IRS for failure properly to include on their return payments of taxable
interest or dividends, or who have failed to certify to the Portfolio that
they are not subject to backup withholding when required to do so or that they
are "exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on
distributions from the Portfolio. A shareholder should consult with his tax
adviser with respect to the tax status of distributions from the Portfolio in
a particular state and locality.
The Portfolio has obtained a Certificate of Authority to do business as a
foreign corporation in Pennsylvania, and currently does business in that
state. Accordingly, the shares of the Portfolio will be exempt from
Pennsylvania Personal Property Taxes.
-18-
<PAGE>
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956, provides
fiduciary and investment services to endowment funds, foundations, employee
benefit plans and other institutions and individuals. The Advisor is a
wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At December 31, 1997, the Advisor had over $13 billion in assets in
the accounts for which it serves in various capacities including as executor,
trustee or investment advisor.
Under its Investment Advisory Agreement with Glenmede Fund with respect
to the Portfolio, the Advisor, subject to the control and supervision of
Glenmede Fund's Board and in conformance with the stated investment objective
and policies of the Portfolio, manages the investment and reinvestment of the
Portfolio's assets. It is the responsibility of the Advisor to make investment
decisions for the Portfolio and to place the Portfolio's purchase and sales
orders.
The Advisor is entitled to receive a fee from the Portfolio for its
investment services computed daily and payable monthly, at the annual rate of
.75% of the Portfolio's average daily net assets. Although the advisory fee
rate payable by the Portfolio is higher than the rates paid by most mutual
funds, Glenmede Fund's Board of Directors believes it is comparable to the
rates paid by other similar funds. The Advisor has agreed to waive its fees to
the extent necessary to ensure that the Portfolio's annual total operating
expenses do not exceed 1.00% of its average net assets. For the fiscal year
ended October 31, 1997, the Advisor received a fee of .75% (annualized) of the
Portfolio's average net assets. Shareholders of the Portfolio who are customers
of other Institutions may pay fees to those Institutions.
Andrew Williams, Senior Vice President of the Advisor, is the portfolio
manager for the Portfolio, and has been primarily responsible for its
management since that Portfolio commenced operations. Mr. Williams has been
employed by the Advisor since May 1985.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and dividend
paying agent pursuant to a Master Services Agreement and in those capacities
supervises all aspects of Glenmede Fund's day-to-day operations, other than
the management of Glenmede Fund's investments. ICC is an indirect subsidiary
of Bankers Trust New York Corporation. For its services as administrator,
transfer agent and dividend paying agent, ICC is entitled to receive fees from
Glenmede Fund equal to .12% of the first $100 million of the combined net
assets of Glenmede Fund and The Glenmede Portfolios, an investment company
-19-
<PAGE>
with the same officers, Board and service providers as Glenmede Fund
(collectively, the "Funds"); .08% of the next $150 million of the combined net
assets of the Funds; .04% of the next $500 million of the combined net assets
of the Funds; and .03% of the combined net assets of the Funds over $750
million. For fiscal year ended October 31, 1997, ICC received fees at the rate
of .04% of the Portfolio's average net assets.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) With respect to 75% of its total assets, invest more than 5% of
its total assets at the time of purchase in the securities of
any single issuer (other than obligations issued or guaranteed
by the U.S. Government, its agencies, enterprises or
instrumentalities);
(b) Purchase more than 10% of any class of the outstanding voting
securities of any issuer;
(c) Acquire any securities of companies within one industry
if, as a result of such acquisition, more than 25% of
the value of its total assets would be invested in
securities of companies within such industry; provided,
however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the
U.S. Government, its agencies, enterprises or
instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to
an extent greater than 10% of the Portfolio's total
assets, at fair market value, except as described in
this Prospectus and the SAI and in connection with
entering into futures contracts, but the deposit of
assets in a segregated account in connection with the
writing of covered put and call options and the
purchase of securities on a when issued, delayed
settlement or forward delivery basis and collateral
arrangements with respect to initial or variation
margin for futures contracts will not be deemed to be
pledges of the Portfolio's assets or the purchase of
any securities on margin for purposes of this
investment limitation;
(e) Issue senior securities, except that the Portfolio may borrow
money in accordance with investment limitation (f), purchase
-20-
<PAGE>
securities on a when issued, delayed settlement or forward
delivery basis and enter into reverse repurchase agreements; and
(f) Borrow money, except that the Portfolio may borrow
money as a temporary measure for extraordinary or
emergency purposes, and then not in excess of 10% of
its total assets at the time of borrowing (entering
into reverse repurchase agreements and purchasing
securities on a when issued, delayed settlement or
forward delivery basis are not subject to this
investment limitation).
With respect to investment limitation (c), (a) there is no limitation
with respect to (i) instruments issued or guaranteed by the United States, any
state, territory or possession of the United States, the District of Columbia
or any of their authorities, agencies, instrumentalities or political
subdivisions, and (ii) repurchase agreements secured by the instruments
described in clause (i); (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of the parents; and (c) utilities will be
divided according to their services; for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a separate
industry.
If a percentage restriction is adhered to at the time an investment is
made, a later increase in percentage resulting from a change in value of
assets will not constitute a violation of such restriction. If the Portfolio's
borrowings are in excess of 5% (excluding overdrafts) of its total net assets,
additional portfolio purchases will not be made until the amount of such
borrowing is reduced to 5% or less. The Portfolio's borrowings including
reverse repurchase agreements and securities purchased on a when-issued,
delayed settlement or forward delivery basis may not exceed 33 1/3% of its
total net assets.
The investment limitations described here and in the SAI are fundamental
policies and may be changed only with the approval of the holders of a
majority of the outstanding shares (as defined in the 1940 Act) of the
Portfolio.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30, 1988.
Glenmede Fund's Articles of Incorporation authorize the Board members to issue
2,500,000,000 shares of common stock, with a $.001 par value. The Board has
the power to designate one or more classes ("Portfolios") of shares of common
-21-
<PAGE>
stock and to classify or reclassify any unissued shares with respect to such
Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios.
The shares of the Portfolio have no preference as to conversion,
exchange, dividends, retirement or other rights, and, when issued and paid for
as provided in this Prospectus, will be fully paid and non-assessable. The
shares of the Portfolio have no pre-emptive rights and do not have cumulative
voting rights, which means that the holders of more than 50% of the
outstanding shares of common stock of Glenmede Fund voting for the election of
its Board members can elect 100% of the Board of Glenmede Fund if they choose
to do so. A shareholder is entitled to one vote for each full share held (and
a fractional vote for each fractional share held), then standing in his or her
name on the books of Glenmede Fund. Glenmede Fund will not hold annual
meetings of shareholders except as required by the 1940 Act, the next sentence
and other applicable law. Glenmede Fund has undertaken that its Board will
call a meeting of shareholders for the purpose of voting upon the question of
removal of a Board member or members if such a meeting is requested in writing
by the holders of not less than 10% of the outstanding shares of common stock
of Glenmede Fund. To the extent required by the undertaking, Glenmede Fund
will assist shareholder communication in such matters.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively
acted upon unless approved by a majority of the outstanding shares of the
Portfolio or class affected by the matter. The Portfolio or class is affected
by a matter unless it is clear that the interests of the Portfolio or class in
the matter are substantially identical or that the matter does not affect any
interest of the Portfolio or class. Under Rule 18f-2, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to the Portfolio only if approved
by a majority of the outstanding shares of the Portfolio. However, the Rule
also provides that the ratification of independent public accountants and the
election of directors may be effectively acted upon by shareholders of the
Glenmede Fund voting without regard to the Portfolio.
Notwithstanding any provision of Maryland law requiring a greater vote of
Glenmede Fund's common stock (or of the shares of the Portfolio or class
voting separately as a class) in connection with any corporate action, unless
otherwise provided by law (for example by Rule 18f-2 discussed above) or by
Glenmede Fund's Articles of Amendment and Restatement, Glenmede Fund may take
or authorize such action upon the favorable vote of the holders of more than
50% of the outstanding common stock of Glenmede Fund entitled to vote thereon.
At January 31, 1998, the Advisor was the record owner of substantially
all of the outstanding shares of the Portfolio.
-22-
<PAGE>
DISTRIBUTOR
ICC Distributors, Inc., P.O. Box 7558, Portland, Maine 04101, serves as
Glenmede Fund's distributor.
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, One South Street, Baltimore, Maryland 21202, serves as Glenmede
Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania serves as
independent accountants for Glenmede Fund and will audit its financial
statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as counsel
to Glenmede Fund.
-23-
<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the direction
of its Board. The following is a list of the Board members and officers of
Glenmede Fund and a brief statement of their principal occupations during the
past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
---------------- --- -------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and
The Wharton School Economics; Professor of Finance and Economics from 1990-
University of Pennsylvania 1996; Vice Dean and Director of Wharton Doctoral Programs
Philadelphia, PA 19104-6367 from 1990-1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 76 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director of Penn Engineering & Manufacturing
Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; Former
Managing Director of Paine Webber, Inc.
John W. Church, Jr. 65 Chairman and Director of Glenmede Fund; Chairman and
44 Wistar Road Trustee of The Glenmede Portfolios; Retired, formerly the
Villanova, PA 19085 Executive Vice President and Chief Investment Officer of
The Glenmede Trust Company. Mr. Church was employed by
The Glenmede Trust Company from 1979-1997.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund;
Phoenix, AZ 85064-4024 Director of XTRA Corporation; Former Executive Vice
President--Finance of ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of The Glenmede Trust Company;
Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.;
Former Co-Director, Principal and Officer of
Philadelphia Investment Banking Co.; Former
Director and Officer of Valley Forge Administrative
Services Company.
Mary Ann B. Wirts 46 President of Glenmede Fund; First Vice President
One Liberty Place and Manager of The Fixed Income Division of The
1650 Market Street, Suite 1200 Glenmede Trust Company. She has been employed by
Philadelphia, PA 19103 The Glenmede Trust Company since 1982.
Kimberly C. Osborne 32 Executive Vice President of Glenmede Fund; Vice President
One Liberty Place of The Glenmede Trust Company. She has been employed by
1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993,
Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service
Company and from 1987-1992, she was a Client Administrator
with The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of
Philadelphia National Bank Building Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex.
One South Street Brown Inc.; Executive Vice President of ICC.
Baltimore, MD 21202
Joseph A. Finelli 41 Treasurer of Glenmede Fund. He has been a Vice President
One South Street of BT Alex. Brown Inc. since 1995. Prior thereto, he was
Baltimore, MD 21202 Vice President and Treasurer of The Delaware Group.
</TABLE>
- --------------
* Mr. Pew is an "interested person" of Glenmede Fund as that term is
defined in the 1940 Act.
For additional information concerning remuneration of Board members see
"Management of Glenmede Fund" in the SAI.
-24-
<PAGE>
-----------------------------
Shareholder inquiries should be addressed to Glenmede Fund at the address
or telephone number stated on the cover page.
-25-
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
Prospectus
Dated March 2, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place One South Street
1650 Market Street, Baltimore, Maryland 21202
Suite 1200
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
Table of Contents
Page
----
EXPENSES OF THE PORTFOLIO................................................
FINANCIAL HIGHLIGHTS.....................................................
PERFORMANCE CALCULATIONS.................................................
INVESTMENT OBJECTIVE AND POLICIES........................................
INVESTMENT TECHNIQUES....................................................
RISK FACTORS.............................................................
PURCHASE OF SHARES.......................................................
REDEMPTION OF SHARES.....................................................
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES...........................................................
VALUATION OF SHARES......................................................
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS................................
INVESTMENT ADVISOR.......................................................
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING
SERVICES............................................................
INVESTMENT LIMITATIONS...................................................
GENERAL INFORMATION......................................................
BOARD MEMBERS AND OFFICERS...............................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by
-26-
<PAGE>
Glenmede Fund or the Distributor in any jurisdiction in which such
offering may not lawfully be made.
-27-
<PAGE>
THE GLENMEDE FUND, INC.
Emerging Markets Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495 (a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-1A Item Number Location
- --------------------- --------
Part A Prospectus Caption
- ------ ------------------
<S> <C>
1. Cover Page.......................................... Cover Page
2. Synopsis............................................ Expenses of the Portfolio
3. Condensed Financial Information..................... Financial Highlights;
Performance Calculations
4. General Description of Registrant................... Cover page; Investment
Objective and Policies; Investment
Techniques; Risk Factors;
Investment Limitations; General
Information
5. Management of the Fund.............................. Investment Advisor; Administrative,
Transfer Agent and Dividend Paying
Services; Board Members and
Officers; Purchase of Shares;
Redemption of Shares
5A. Management's Discussion of
Fund Performance.................................. Not Applicable
6. Capital Stock and Other
Securities........................................ Purchase of Shares; Redemption of
Shares; Dividends, Capital Gains
Distributions and Taxes; General
Information
7. Purchase of Securities Being
Offered........................................... Valuation of Shares; Purchase of
Shares; Redemption of Shares
8. Redemption or Repurchase............................ Valuation of Shares; Purchase of
Shares; Redemption of Shares
9. Pending Legal Proceedings........................... Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
- -------------------------------------------------------------------------------
(800) 442-8299
- -------------------------------------------------------------------------------
Prospectus - March 2, 1998
INVESTMENT OBJECTIVE
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is a
no-load, open-end management investment company. Glenmede Fund consists of ten
series of shares, each of which has different investment objectives and
policies. The securities offered hereby are one of these series of shares, the
Emerging Markets Portfolio (the "Portfolio").
Emerging Markets Portfolio. The objective of the Emerging Markets Portfolio is
to provide long-term growth of capital. The Emerging Markets Portfolio seeks
to achieve its objective by investing primarily in equity securities of
issuers in countries having emerging markets. The net asset value of this
Portfolio will fluctuate.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolio are subject to investment risks, including
the possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank.
- -------------------------------------------------------------------------------
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets
forth certain information that you should know before you invest. A Statement
of Additional Information ("SAI") containing additional information about the
Portfolio has been filed with the Securities and Exchange Commission. The SAI
dated March 2, 1998, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. The 1997 Annual Report to
Shareholders contains additional investment and performance information about
the Portfolios. A copy of the SAI and the 1997 Annual Report may be obtained,
without charge, by writing to Glenmede Fund at the address shown above or by
calling Glenmede Fund at the telephone number shown above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-2-
<PAGE>
EXPENSES OF THE PORTFOLIO
The following table illustrates the expenses and fees incurred by the
Emerging Markets Portfolio for the fiscal year ended October 31, 1997.
SHAREHOLDER TRANSACTION EXPENSES*
Sales Load Imposed on Purchases............................................NONE
Sales Load Imposed on Reinvested Dividends.................................NONE
Deferred Sales Load........................................................NONE
Redemption Fees............................................................NONE
Exchange Fees..............................................................NONE
ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)
Emerging
Markets
Portfolio
---------
Investment Advisory Fees......................................... 1.25%
Administration Fees.............................................. .04%
Other Expenses................................................... .44%
-----
Total Operating Expenses......................................... 1.73%
=====
- --------------------------
* A transaction charge may be imposed by broker-dealers or others that
make shares of the Portfolio available. There is no transaction
charge for shares purchased directly from the Portfolio.
The purpose of the above table is to assist an investor in
understanding the various estimated costs and expenses that an investor in the
Portfolio will bear directly or indirectly. Actual expenses may be greater or
lesser than such estimates. For further information concerning the Portfolio's
expenses see "Investment Advisor" and "Administrative, Transfer Agency and
Dividend Paying Services."
The following example illustrates the estimated expenses that an
investor in the Portfolio would pay on a $1,000 investment over various time
periods assuming (i) a 5% annual rate of return and (ii) redemption at the end
of each time period. As noted in the above table, Glenmede Fund charges no
redemption fees of any kind.
1 Year 3 Years 5 Years 10 Years
------- ------- ------- --------
Emerging Markets
Portfolio..................... $18 $54 $94 $204
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER
OR LESSER THAN THOSE SHOWN.
-3-
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth financial highlights of the Emerging
Markets Portfolio for the respective periods presented. The data presented for
the Portfolio is derived from the Portfolio's Financial Statements included in
Glenmede Fund's 1997 Annual Report to Shareholders, which Financial Statements
and the report thereon of Coopers & Lybrand, L.L.P., Glenmede Fund's
independent accountants, are incorporated by reference into the SAI. The
following information should be read in conjunction with those Financial
Statements.
Emerging Markets Portfolio
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
Oct. 31, 1997 Oct. 31, 1996 Oct. 31, 1995+
------------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of period....................... $9.52 $9.73 $10.00
----- ----- ------
Income from investment operations:
Net investment income.................................... 0.03 0.06 0.16
Net realized and unrealized gain/(loss)..................
on investments.......................................... 0.09 (0.16) (0.31)
----- ------ ------
Total from investment operations....................... 0.12 (0.10) (0.15)
----- ------ ------
Less Distributions:
Distributions from net investment income................. (0.02) (0.08) (0.12)
Distributions from net realized capital gains............ (0.57) (0.03) --
------ ------ -----
Total Distributions.................................... (0.59) (0.11) (0.12)
------ ------ ------
Net asset value, end of period............................. $9.05 $9.52 $9.73
===== ===== =====
Total return............................................... 1.01% (0.96)% (1.96)%*
===== ======= ========
Ratios to average net assets/Supplemental data:
Net assets, end of year (in 000's)......................... $95,012 $86,385 $27,297
Ratio of operating expenses to average
net assets................................................ 1.73% 1.76% 1.81%*
Ratio of net investment income to average
net assets................................................ 0.29% 0.80% 1.87%*
Portfolio turnover rate.................................... 94% 44% 50%
Average Commission per Share#.............................. $0.0022 $0.0010 NA
-4-
</TABLE>
<PAGE>
- -----------------------------
+ The Portfolio commenced operations on December 14, 1994.
* Annualized.
# Represents average commission rate per share changed to the Portfolio
on purchases and sales of investments during the period. Such
information is only required for fiscal year beginning on or after
September 1, 1995.
-5-
PHTRANS:144250_2.WP5
<PAGE>
PERFORMANCE CALCULATIONS
The Emerging Markets Portfolio may advertise or quote total return
data from time to time. Total return will be calculated on an average annual
total return basis, and may also be calculated on an aggregate total return
basis, for various periods. Average annual total return reflects the average
annual percentage change in value of an investment in the Portfolio over the
measuring period. Aggregate total return reflects the total percentage change
in value over the measuring period. Both methods of calculating total return
assume that dividends and capital gains distributions made by the Portfolio
during the period are reinvested in Portfolio shares.
The Portfolio may compare its total return to that of other
investment companies with similar investment objectives and to stock and other
relevant indices or to rankings prepared by independent services or other
financial or industry publications that monitor the performance of mutual
funds. For example, the total return of the Emerging Markets Portfolio may be
compared to data prepared by Lipper, the Morgan Stanley Capital International
Emerging Markets Free Index (also known as the Emerging Markets Index) and the
International Financial Corporation Composite Index. Total return and other
performance data as reported in national financial publications such as Money
Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or
in publications of a local or regional nature, may also be used in comparing
the performances of the Portfolios.
Performance quotations represent the Portfolio's past performance,
and should not be considered as representative of future results. Since
performance will fluctuate, performance data for the Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in the Portfolio, portfolio maturity,
operating expenses and market conditions. Any management fees charged by the
Advisor or institutions to their clients will not be included in the
Portfolio's calculations of total return.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Portfolio is not fundamental and may
be changed by the Board members without shareholder approval.
The objective of the Portfolio is to provide long-term growth of
capital. The Portfolio seeks to achieve this objective by investing primarily
-6-
<PAGE>
in a diversified portfolio of equity securities of issuers in countries
having emerging markets. It is currently expected that under normal conditions
at least 65% of the Portfolio's total assets will be invested in emerging
market equity securities.
The Portfolio considers countries having emerging markets to be all
countries that are generally considered to be developing or emerging countries
by the International Bank for Reconstruction and Development (more commonly
referred to as the World Bank) and the International Finance Corporation, as
well as countries that are classified by the United Nations or otherwise
regarded by their authorities as developing. The countries may include for
example, but are not limited to, the following: Turkey, India, Indonesia,
Brazil, Greece, Malaysia, China, Taiwan, South Korea, Portugal and Hungary. In
addition, as used in this Prospectus, "emerging market equity securities" means
(i) equity securities of companies the principal securities trading market for
which is an emerging market country, as defined above, (ii) equity securities,
traded in any market, of companies that derive 50% or more of their total
revenue from either goods or services produced in such emerging market countries
or sales made in such emerging market countries or (iii) equity securities of
companies organized under the laws of, and with a principal office in, an
emerging market country. "Equity securities," as used in this Prospectus, refers
to common stock, preferred stock, warrants or rights to subscribe to or purchase
such securities and sponsored or unsponsored American Depository Receipts
("ADRs"), European Depositary Receipts ("EDRs"), and Global Depositary Receipts
("GDRs"). Determinations as to eligibility will be made by the Emerging Markets
Portfolio's sub-advisor, Pictet International Management Limited (the
"Sub-Advisor"), based on publicly available information and inquiries made to
the companies. See "Risk Factors" for a discussion of the nature of information
publicly available for non-U.S. companies. The Portfolio will at all times,
except during defensive periods, maintain investments in at least three
countries having developing markets. The Sub-Advisor will limit holdings in any
one country to 15% at the time of investment.
The Portfolio and its Sub-Advisor may, from time to time, use various
methods of selecting securities for the Portfolio, and may also employ and
rely on independent or affiliated sources of information and ideas in
connection with management of the Portfolio. The Sub-Advisor's philosophy for
investing in emerging markets focuses on stock selection and significantly
diversifying the Portfolio's investments on a company and country level. The
Sub-Advisor uses a proprietary data base which screens for emerging markets
that meet the Sub-Advisor's strict quantitative criteria. Generally, in order
for a country to be included by the Sub-Advisor as a permissible emerging
market investment it must satisfy three conditions and meet certain additional
-7-
<PAGE>
criteria. First, the country must meet certain custodial criteria, such
as security of assets and international experience. Second, the country
typically satisfies certain socioeconomic conditions, including political
stability, freedom to invest and repatriate capital and deregulation of the
economy. Third, the country typically satisfies specific cyclical criteria,
including liquidity conditions, industrial production capacity constraints,
direction of real interest rates and the valuation of the market.
For long-term growth of capital, the Portfolio may invest up to 35%
of its total assets in debt securities (defined as bonds, notes, debentures,
commercial paper, certificates of deposit, time deposits and bankers'
acceptances) which are rated at least Baa by Moody's Investors Service, Inc.
("Moody's") or BBB by Standard & Poor's Rating Group, Division of McGraw Hill
("S&P") or are unrated debt securities deemed to be of comparable quality by
the Sub-Advisor. Securities with the lowest rating in the investment grade
category (i.e., Baa by Moody's or BBB by S&P) are considered to have some
speculative characteristics and are more sensitive to economic change than
higher rated securities. Certain debt securities can provide the potential for
long-term growth of capital based on various factors such as changes in
interest rates, economic and market conditions, improvement in an issuer's
ability to repay principal and pay interest, and ratings upgrades.
Additionally, convertible bonds can provide the potential for long-term growth
of capital through the conversion feature, which enables the holder of the
bond to benefit from increases in the market price of the securities into
which they are convertible. However, there can be no assurances that debt
securities or convertible bonds will provide long-term growth of capital.
The Portfolio may lend its portfolio securities. In addition, the
Portfolio may enter into forward foreign currency contracts and reverse
repurchase agreements. When deemed appropriate by the Sub-Advisor, the
Portfolio may invest cash balances in repurchase agreements and other money
market investments to maintain liquidity in an amount to meet expenses or for
day-to-day operating purposes. These investment techniques are described below
and under the heading "Investment Objective and Policies" in the SAI.
When the Sub-Advisor believes that market conditions warrant, the
Portfolio may adopt a temporary defensive position and may invest without
limit in high-quality money market securities denominated in U.S. dollars or
in the currency of any foreign country. See "Investment Techniques --
Temporary Investments."
-8-
<PAGE>
INVESTMENT TECHNIQUES
Temporary Investments. As determined by the Sub-Advisor, when market
conditions warrant, the Portfolio may invest up to 100% of its total assets in
the following high-quality (that is, rated Prime-1 by Moody's or A or better
by S&P or, if unrated, of comparable quality as determined by the Sub-Advisor)
money market securities, denominated in U.S. dollars or in the currency of any
foreign country, issued by entities organized in the United States or any
foreign country: short-term (less than twelve months to maturity) and
medium-term (not greater than five years to maturity) obligations issued or
guaranteed by the U.S. Government or the governments of foreign countries,
their agencies or instrumentalities; finance company and corporate commercial
paper, and other short-term corporate obligations; obligations (including
certificates of deposit, time deposits and bankers' acceptances) of banks; and
repurchase agreements with banks and broker-dealers with respect to such
securities. The Emerging Markets Portfolio also may purchase shares of
closed-end investment companies which invest chiefly in the shares of
companies located outside the U.S. (such shares will be purchased by the
Portfolio within the limits prescribed by the Investment Company Act of 1940
(the "1940 Act").
Repurchase Agreements. The Portfolio may enter into repurchase
agreements with qualified brokers, dealers, banks and other financial
institutions deemed creditworthy by the Sub-Advisor. Under normal circumstances,
however, the Portfolio will not enter into repurchase agreements if entering
into such agreements would cause, at the time of entering into such agreements,
more than 20% of the value of its total assets to be subject to repurchase
agreements. The Portfolio would generally enter into repurchase transactions to
invest cash reserves and for temporary defensive purposes.
In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Sub-Advisor currently expects that repurchase agreements will mature in less
than 13 months. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
101% of the repurchase price including accrued interest. Glenmede Fund's
administrator and the Sub-Advisor will mark to market daily the value of the
securities purchased, and the Sub-Advisor will, if necessary, require the
seller to deposit additional securities to ensure that the value is in
compliance with the 101% requirement stated above. The Sub-Advisor will
-9-
<PAGE>
consider the creditworthiness of a seller in determining whether the
Portfolio should enter into a repurchase agreement, and the Portfolio will
only enter into repurchase agreements with banks and dealers which are
determined to present minimal credit risk by the Sub-Advisor under procedures
adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, the Portfolio is
lending its funds to the seller at the agreed upon interest rate and receiving
securities as collateral for the loan. Such agreements can be entered into for
periods of one day (overnight repo) or for a fixed term (term repo).
Repurchase agreements are a common way to earn interest income on short-term
funds.
The use of repurchase agreements involves certain risks. For example,
if the seller of a repurchase agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, the Portfolio may incur a loss upon disposition of
them. Default by the seller would also expose the Portfolio to possible loss
because of delays in connection with the disposition of the underlying
obligations. If the seller of an agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are collateral
not within the control of the Portfolio and therefore subject to sale by the
trustee in bankruptcy. Further, it is possible that the Portfolio may not be
able to substantiate its interest in the underlying securities.
Reverse Repurchase Agreements. The Portfolio may enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Portfolio sells
a security and simultaneously commits to repurchase that security at a future
date from the buyer. In effect, the Portfolio is temporarily borrowing funds
at an agreed upon interest rate from the purchaser of the security, and the
sale of the security represents collateral for the loan. The Portfolio retains
record ownership of the security and the right to receive interest and
principal payments on the security. At an agreed upon future date, the
Portfolio repurchases the security by remitting the proceeds previously
received, plus interest. In certain types of agreements, there is no agreed
upon repurchase date and interest payments are calculated daily, often based
on the prevailing overnight repurchase rate. These agreements, which are
treated as if reestablished each day, are expected to provide the Emerging
Markets Portfolio with a flexible borrowing tool. Reverse repurchase
agreements are considered to be borrowings by the Portfolio under the 1940
Act.
The Portfolio's investment of the proceeds of a reverse repurchase
agreement is the speculative factor known as leverage. The Portfolio may enter
-10-
<PAGE>
into a reverse repurchase agreement only if the interest income from
investment of the proceeds is greater than the interest expense of the
transaction and the proceeds are invested for a period no longer than the term
of the agreement. The Portfolio will maintain with the custodian a separate
account with a segregated portfolio of liquid securities at least equal to its
purchase obligations under these agreements. The Sub-Advisor will consider the
creditworthiness of the other party in determining whether the Portfolio will
enter into a reverse repurchase agreement.
The Portfolio is permitted to invest up to one-third of its total
assets in reverse repurchase agreements and securities lending transactions.
Investments in reverse repurchase agreements and securities lending
transactions will be aggregated for purposes of this investment limitation.
The use of reverse repurchase agreements involves certain risks. For
example, the other party to the agreement may default on its obligation or
become insolvent and unable to deliver the securities to the Portfolio at a
time when the value of the securities has increased. Reverse repurchase
agreements also involve the risk that the Portfolio may not be able to
substantiate its interest in the underlying securities.
Lending of Securities. Subject to the limitation above under "Reserve
Repurchase Agreements," the Portfolio may lend its portfolio securities with a
value up to one-third of its total assets (including the value of the collateral
for the loans) to qualified brokers, dealers, banks and other financial
institutions for the purpose of realizing additional net investment income
through the receipt of interest on the loan. Such loans would involve risks of
delay in receiving additional collateral in the event the value of the
collateral decreased below the value of the securities loaned or of delay in
recovering the securities loaned or even loss of rights in the collateral should
the borrower of the securities fail financially. Loans will be made only to
borrowers deemed by the Sub-Advisor to be of good standing.
"When Issued," "Delayed Settlement," and "Forward Delivery"
Securities. The Portfolio may purchase and sell securities on a "when issued,"
"delayed settlement" or "forward delivery" basis. "When issued" or "forward
delivery" refer to securities whose terms and indenture are available and for
which a market exists, but which are not available for immediate delivery.
When issued or forward delivery transactions may be expected to occur one
month or more before delivery is due. Delayed settlement is a term used to
describe settlement of a securities transaction in the secondary market which
will occur sometime in the future. No payment or delivery is made by the
Portfolio in a when issued, delayed settlement or forward delivery transaction
until the Portfolio receives payment or delivery from the other party to the
transaction. The Portfolio will maintain a separate account of cash, U.S.
-11-
<PAGE>
Government securities or other high grade debt obligations at least equal
to the value of purchase commitments until payment is made. Such segregated
securities will either mature or, if necessary, be sold on or before the
settlement date. Although the Portfolio receives no income from the above
described securities prior to delivery, the market value of such securities is
still subject to change.
The Portfolio will engage in when issued transactions to obtain what
is considered to be an advantageous price and yield at the time of the
transaction. When the Portfolio engages in when issued, delayed settlement or
forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
the purpose of speculation. The Portfolio's when issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market circumstances, and the Portfolio will only sell
securities on such a basis to offset securities purchased on such a basis.
Borrowing. As a temporary measure for extraordinary or emergency
purposes, the Portfolio may borrow money from banks. However, the Portfolio
will not borrow money for speculative purposes.
Forward Foreign Currency Exchange Contracts. The Portfolio may enter
into forward foreign currency exchange contracts in connection with the
purchase and sale of investment securities; such contracts may not be used for
speculative purposes. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts may be
bought or sold to protect the Portfolio, to some degree, against a possible
loss resulting from an adverse change in the relationship between foreign
currencies and the U.S. dollar. It should be realized that this method of
protecting the value of the Portfolio's investment securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
at some future point in time. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time they tend to limit any potential gain which might
result should the value of such currency increase.
Depositary Receipts. The Emerging Markets Portfolio may purchase
sponsored or unsponsored ADRs, EDRs and GDRs (collectively, "Depositary
Receipts"). ADRs are depositary receipts typically issued by a U.S. bank or
-12-
<PAGE>
trust company which evidence ownership of underlying securities issued by
a foreign corporation. EDRs and GDRs are depository receipts typically issued
by foreign banks or trust companies, although they also may be issued by U.S.
banks or trust companies, and evidence ownership of underlying securities
issued by either a foreign or a United States corporation. Generally,
Depositary Receipts in registered form are designed for use in the U.S.
securities market and Depositary Receipts in bearer form are designed for use
in securities markets outside the United States. Depositary Receipts may not
necessarily be denominated in the same currency as the underlying securities
into which they may be converted. Depositary Receipts may be issued pursuant
to sponsored or unsponsored programs. In sponsored programs, an issuer has
made arrangements to have its securities traded in the form of Depositary
Receipts. In unsponsored programs, the issuer may not be directly involved in
the creation of the program. Although regulatory requirements with respect to
sponsored and unsponsored programs are generally similar, in some cases it may
be easier to obtain financial information from an issuer that has participated
in the creation of a sponsored program. Accordingly, there may be less
information available regarding issuers of securities underlying unsponsored
programs and there may not be a correlation between such information and the
market value of the Depositary Receipts. Depositary Receipts also involve the
risks of other investments in foreign securities, as discussed below. For
purposes of the Portfolio's investment policies, the Portfolio's investments
in Depositary Receipts will be deemed to be investments in the underlying
securities.
Illiquid Securities. The Portfolio will not invest more than 15% of net
assets in securities that are illiquid. Illiquid securities are difficult to
sell promptly at an acceptable price.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
RISK FACTORS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the
Portfolio, nor can there be any assurance that the Portfolio's investment
objective will be attained. As with any investment in securities, the value
of, and income from, an investment in the Portfolio can decrease as well as
increase, depending on the variety of factors which may affect the values and
income generated by the Portfolio's securities, including general economic
-13-
<PAGE>
conditions, market factors and currency exchange rates. An investment in the
Portfolio is not intended as a complete investment program.
Foreign Securities. The Portfolio has the right to purchase securities
in any foreign country, developed or underdeveloped. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations, which are in addition to the
usual risks inherent in domestic investments. Investors should recognize that
investing in the securities of foreign companies involve special risks and
considerations not typically associated with investing in U.S. companies.
These risks and considerations include differences in accounting, auditing and
financial reporting standards, generally higher commission rates on foreign
portfolio transactions, the possibility of expropriation or confiscatory
taxation, adverse changes in investment or exchange control regulations,
political instability which could affect U.S. investment in foreign countries,
and potential restrictions on the flow of international capital. Moreover, the
dividends payable on the Portfolio's foreign portfolio securities may be
subject to foreign withholding taxes, thus reducing the net amount of income
available for distribution to the Portfolio's shareholders. Further, foreign
securities often trade with less frequency and volume than domestic securities
and, therefore, may exhibit greater price volatility. Also, changes in foreign
exchange rates will affect, favorably or unfavorably, the value of those
securities in the Portfolio which are denominated or quoted in currencies
other than the U.S. dollar. In addition, in many countries there is less
publicly available information about issuers than is available in reports
about companies in the United States. Foreign companies are not generally
subject to uniform accounting, auditing and financial reporting standards, and
auditing practices and requirements may not be comparable to those applicable
to U.S. companies. Further, the Portfolio may encounter difficulties or be
unable to pursue legal remedies and obtain judgments in foreign courts.
These risks are often heightened for investments in developing or
emerging markets, including certain Eastern European countries where the risks
include the possibility that such countries may revert to a centrally planned
economy. Developing countries may also impose restrictions on the Portfolio's
ability to repatriate investment income or capital. Even where there is no
outright restriction on repatriation of investment income or capital, the
mechanics of repatriation may affect certain aspects of the operations of the
Portfolio. For example, funds may be withdrawn from the People's Republic of
China only in U.S. or Hong Kong dollars and only at an exchange rate
established by the government once each week.
-14-
<PAGE>
Some of the currencies in emerging markets have experienced
devaluations relative to the U.S. dollar, and major adjustments have been made
periodically in certain of such currencies. Certain developing countries face
serious exchange constraints.
Lastly, governments of some developing countries exercise substantial
influence over many aspects of the private sector. In some countries, the
government owns or controls many companies, including the largest in the
country. As such, government actions in the future could have a significant
effect on economic conditions in developing countries in these regions, which
could affect private sector companies, the Portfolio and the value of its
securities. Furthermore, certain developing countries are among the largest
debtors to commercial banks and foreign governments. Trading in debt
obligations issued or guaranteed by such governments or their agencies and
instrumentalities involves a high degree of risk.
Brokerage commissions, custodial services, and other costs relating
to investment in foreign securities markets are generally more expensive than
in the United States. Foreign securities markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to these and other settlement problems
could cause the Portfolio to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to settlement problems could
result either in losses to the Portfolio due to subsequent declines in value
of the portfolio security or, if the Portfolio has entered into a contract to
sell the security, could result in possible liability to the purchaser.
In many emerging markets, there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. The foreign securities markets of
many of the countries in which the Portfolio may invest may also be smaller,
less liquid, and subject to greater price volatility than those in the United
States.
There are further risk factors, including possible losses through the
holding of securities in domestic and foreign custodian banks and
depositories.
-15-
<PAGE>
PURCHASE OF SHARES
Shares of the Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its clients ("Clients")
and to other institutions (the "Institutions"), at the net asset value per
share next determined after receipt of the purchase order by Glenmede Fund's
transfer agent. See "Valuation of Shares." The minimum initial investment for
the Portfolio is $25,000; the minimum for subsequent investments for the
Portfolio is $1,000. Glenmede Fund reserves the right to reduce or waive the
minimum initial and subsequent investment requirements from time to time.
Beneficial ownership of shares will be reflected on books maintained by the
Advisor or the Institutions. A prospective investor wishing to purchase shares
in Glenmede Fund should contact the Advisor or his or her Institution.
It is the responsibility of the Advisor or Institutions to transmit
orders for share purchases to Investment Company Capital Corp. ("ICC"), Glenmede
Fund's transfer agent, and deliver required funds to Glenmede Fund's custodian,
on a timely basis.
Glenmede Fund reserves the right, in its sole discretion, to suspend
the offering of shares of the Portfolio or reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interests
of Glenmede Fund.
Purchases of the Portfolio's shares will be made in full and
fractional shares of the Portfolio calculated to three decimal places. In the
interest of economy and convenience, certificates for shares will not be
issued except upon the written request of the shareholder. Certificates for
fractional shares, however, will not be issued.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at
the net asset value of the Portfolio next determined after receipt of the
redemption request by the transfer agent. Generally, a properly signed written
request is all that is required. Any redemption may be more or less than the
purchase price of the shares depending on the market value of the investment
securities held by the Portfolio. An investor wishing to redeem shares should
contact the Advisor or his or her Institution. It is the responsibility of the
Advisor or Institutions to transmit promptly redemption orders to the transfer
agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper
form by the transfer agent. Glenmede Fund may suspend the right of redemption
-16-
<PAGE>
or postpone the date of payment at times when the New York Stock Exchange (the
"Exchange") is closed, or under any emergency circumstances as determined by
the Securities and Exchange Commission (the "Commission"). See "Valuation of
Shares" for the days on which the Exchange is closed.
If Glenmede Fund's Board determines that it would be detrimental to
the best interests of the remaining shareholders of the Portfolio to make
payment wholly or partly in cash, Glenmede Fund may pay the redemption
proceeds in whole or in part by a distribution in-kind of securities held by
the Portfolio in lieu of cash in conformity with applicable rules of the
Commission. Investors may incur brokerage charges on the sale of portfolio
securities received as a redemption in kind.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES
Glenmede Fund may, from time to time, in its sole discretion appoint
one or more entities, including the Advisor, as its agent to receive purchase
and redemption orders of shares of the Portfolio and cause these orders to be
transmitted, on a net basis, to Glenmede Fund's transfer agent. In these
instances, orders are effected at the net asset value per share next
determined after receipt of that order by the entity, if the order is actually
received by Glenmede Fund's transfer agent not later than the next business
morning.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the
total market value of its investments and other assets, less any of its
liabilities, by the total outstanding shares of the Portfolio. The Portfolio's
net asset value per share is determined as of the close of regular trading
hours of the Exchange on each day that the Exchange is open for business and
the Portfolio receives an order to purchase or redeem its shares. Currently
the Exchange is closed on weekends and the customary national business
holidays of New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day (or the days on which they are observed). One or more pricing
-17-
<PAGE>
services may be used to provide securities valuations in connection with the
determination of the net asset value of the Portfolio.
Equity securities listed on a U.S. securities exchange for which market
quotations are available are valued at the last quoted sale price as of the
close of that exchange's regular trading hours on the day the valuation is
made. Securities listed on a foreign exchange and unlisted foreign securities
are valued at the latest quoted sales price available before the time when
assets are valued. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted U.S. equity
securities and listed securities not traded on the valuation date for which
market quotations are readily available are valued not in excess of the asked
prices or less than the bid prices. The value of securities for which no
quotations are readily available (including restricted securities) is
determined in good faith at fair value using methods determined by the Board.
Foreign currency amounts are translated into U.S. dollars at the bid prices of
such currencies against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio normally distributes substantially all of its net
investment income to shareholders in the form of a quarterly dividend. If any
net capital gains are realized, the Portfolio normally distributes such gains
at least once a year. However, see "Dividends, Capital Gains Distributions and
Taxes-Federal Taxes-Miscellaneous," for a discussion of the Federal excise tax
applicable to certain regulated investment companies.
Undistributed net investment income is included in the Portfolio's
net assets for the purpose of calculating net asset value per share.
Therefore, on the Portfolio's "ex-dividend" date, the net asset value per
share excludes the dividend (i.e., is reduced by the per share amount of the
dividend). Dividends paid shortly after the purchase of shares of the
Portfolio by an investor, although in effect a return of capital, are taxable
to the investor.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves the Portfolio of liability for Federal income
taxes to the extent its earnings are distributed in accordance with the Code.
-18-
<PAGE>
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Portfolio distribute to
its shareholders an amount at least equal to 90% of its investment company
taxable income and 90% of its net exempt interest income, if any, for such
taxable year. In general, the Portfolio's investment company taxable income
will be its net investment income, including interest and dividends, subject
to certain adjustments, and net short-term capital gains excluding the excess
of any net long-term capital gain for the taxable year over the net short-term
capital loss, if any, for such year. The Portfolio intends to distribute as
dividends substantially all of its investment company taxable income each
year. Such dividends will be taxable as ordinary income to the Portfolio's
shareholders who are not currently exempt from Federal income taxes, whether
such income or gain is received in cash or reinvested in additional shares.
The dividends received deduction for corporations will apply to such ordinary
income distributions to the extent the total qualifying dividends received by
the Portfolio are from domestic corporations for the taxable year. It is
anticipated that only a small part (if any) of the dividends paid by the
Portfolio will be eligible for the dividends received deduction.
Substantially all of the Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. The
Portfolio generally will have no tax liability with respect to such gains and
the distributions will be taxable to the shareholders who are not currently
exempt from Federal income taxes as mid-term or other long-term capital gains,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
A shareholder considering buying shares of the Portfolio on or just
before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon his
redemption or transfer of shares of the Portfolio, depending upon the tax
basis of such shares and their price at the time of redemption or transfer.
It is expected that dividends and certain interest income earned by
the Portfolio from foreign securities will be subject to foreign withholding
taxes or other taxes. So long as more than 50% of the value of the Portfolio's
total assets at the close of any taxable year consists of stock or securities
of foreign corporations, the Portfolio may elect, for U.S. Federal income tax
-19-
<PAGE>
purposes, to treat certain foreign taxes paid by it, including generally any
withholding taxes and other foreign income taxes, as paid by its shareholders.
If the Portfolio makes this election, the amount of such foreign taxes paid by
the Portfolio will be included in its shareholders' income pro rata (in
addition to taxable distributions actually received by them), and each
shareholder will be entitled (a) to credit his proportionate amount of such
taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes
his deductions, to deduct such proportionate amount from his U.S. income,
should he so choose.
Miscellaneous. Dividends declared in October, November or December of
any year payable to shareholders of record on a specified date in such months
will be deemed to have been received by the shareholders and paid by the
Portfolio on December 31, in the event such dividends are paid during January
of the following year.
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and net capital gain (excess of capital gains over
capital losses). The Portfolio intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any net capital gain
prior to the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolio and its shareholders and is not intended as
a substitute for careful tax planning. Accordingly, potential investors in the
Portfolio should consult their tax advisers with specific reference to their
own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.
The Portfolio will be required in certain cases to withhold and remit
to the United States Treasury 31% of taxable dividends or gross proceeds
realized upon sale paid to shareholders who have failed to provide a correct
tax identification number in the manner required, who are subject to
withholding by the IRS for failure properly to include on their return
payments of taxable interest or dividends, or who have failed to certify to
the Portfolio that they are not subject to backup withholding when required to
do so or that they are "exempt recipients."
-20-
<PAGE>
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on
distributions from Glenmede Fund. A shareholder should consult with his tax
adviser with respect to the tax status of distributions from Glenmede Fund in
a particular state and locality.
Glenmede Fund has obtained a Certificate of Authority to do business
as a foreign corporation in Pennsylvania, and currently does business in that
state. Accordingly, the shares of the Portfolio will be exempt from
Pennsylvania Personal Property Taxes.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956,
provides fiduciary and investment services to endowment funds, foundations,
employee benefit plans and other institutions and individuals. The Advisor is
a wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At December 31, 1997, the Advisor had over $13 billion in assets in
the accounts for which it serves in various capacities including as executor,
trustee or investment advisor.
Under its Investment Advisory Agreement with Glenmede Fund with
respect to the Portfolio, the Advisor, subject to the control and supervision
of Glenmede Fund's Board and in conformance with the stated investment
objective and policies of the Portfolio, has agreed to manage the investment
and reinvestment of the Portfolio assets, make investment decisions for the
Portfolio and place the Portfolio's purchase and sales orders.
Pursuant to that Agreement, the Advisor also may select a person to
act as sub-advisor. The Advisor and Glenmede Fund, on behalf of the Emerging
Markets Portfolio, have entered into a sub-investment advisory agreement with
Pictet International Management Limited, located at Cutlers Gardens,
5 Devonshire Square, London, United Kingdom EC2M 4LD. The Sub-Advisor, subject
to the control and supervision of Glenmede Fund's Board and in conformance
with the stated investment objective and policies of the Portfolio, performs
sub-advisory and portfolio transaction services for the Portfolio, including
managing the Portfolio's holdings in accordance with the Portfolio's
investment objective and policies, making investment decisions concerning
foreign assets for the Portfolio, placing purchase and sale orders for
portfolio transactions and employing professional portfolio managers and
security analysts who provide research services to the Portfolio.
-21-
<PAGE>
The Advisor and Sub-Advisor are entitled to receive fees from the
Portfolio for their investment services computed daily and payable monthly at
the annual rate of .75% and .50%, respectively, of the Portfolio's average
daily net assets. The aggregate fees paid to the Portfolio's Advisor and
Sub-Advisor are higher than advisory fees paid by most other U.S. investment
companies. Glenmede Fund's Board believes such fees are comparable to the
rates paid by other similar funds. For the fiscal year ended October 31, 1997,
the Advisor received a fee of .75% of the Portfolio's average net assets and
the Sub-Advisor received a fee at the rate of .50% of the Portfolio's average
net assets. Shareholders in the Portfolio who are customers of other
Institutions may pay fees to those Institutions.
The Sub-Advisor is an affiliate of Pictet & Cie (the "Bank"), a Swiss
private bank, which was founded in 1805. As of December 31, 1997, the Bank
managed in excess of $52 billion for institutional and private clients. The Bank
is owned by seven partners. The Sub-Advisor was established in 1980 to manage
the investment needs of clients seeking to invest in the international fixed
revenue and equity markets.
Douglas Polunin, Senior Investment Manager at the Sub-Advisor, is a
co-portfolio manager for the Emerging Markets Portfolio. Mr. Polunin has been
employed by the Sub-Advisor since January 1989. Prior to his employment with the
Sub-Advisor, Mr. Polunin had been with Union Bank of Switzerland since 1982.
Morid Kamshad, Senior Investment Manager at the Sub-Advisor, is a
co-portfolio manager for the Emerging Markets Portfolio. Mr. Kamshad has been
employed by the Sub-Advisor since July 1995. Prior to his employment with the
Sub-Advisor, from March 1994 to July 1995, Mr. Kamshad worked at HSBC Asset
Management as an analyst specializing in the emerging markets of Europe and
the Middle East. From August 1989 to December 1993, he worked at Air Products
and Chemicals as a business development manager.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and
dividend paying agent pursuant to a Master Services Agreement and in those
capacities supervises all aspects of Glenmede Fund's day-to-day operations,
other than the management of Glenmede Fund's investments. ICC is an indirect
subsidiary of Bankers Trust New York Corporation. For its services as
administrator, transfer agent and dividend paying agent, ICC is entitled to
receive fees from Glenmede Fund equal to .12% of the first $100 million of the
combined net assets of Glenmede Fund and The Glenmede Portfolios, an
-22-
<PAGE>
investment company with the same officers, Board and service providers as
Glenmede Fund (collectively, the "Funds"); .08% of the next $150 million of
the combined net assets of the Funds; .04% of the next $500 million of the
combined net assets of the Funds and .03% of the combined net assets of the
Funds over $750 million. For the fiscal year ended October 31, 1997, ICC
received fees at the rate of .04% of the Portfolio's average net assets.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) With respect to 75% of its total assets, invest more than 5%
of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities);
(b) Purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(c) Acquire any securities of companies within one industry
if, as a result of such acquisition, more than 25% of
the value of its total assets would be invested in
securities of companies within such industry; provided,
however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the
U.S. Government, its agencies, enterprises or
instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to
an extent greater than 15% of the Emerging Markets
Portfolio's total assets, each at fair market value,
except as described in this Prospectus and the SAI and
in connection with entering into futures contracts, but
the deposit of assets in a segregated account in
connection with the writing of covered put and call
options and the purchase of securities on a when
issued, delayed settlement or forward delivery basis
and collateral arrangements with respect to initial or
variation margin for futures contracts will not be
deemed to be pledges of the Portfolio's assets or the
purchase of any securities on margin for purposes of
this investment limitation;
(e) Issue senior securities, except that the Portfolio may
borrow money in accordance with investment limitation (f),
purchase securities on a when issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements; and
-23-
<PAGE>
(f) Borrow money, except that the Portfolio may borrow
money as a temporary measure for extraordinary or
emergency purposes, and then not in excess of 10% of
its total assets at the time of borrowing (entering
into reverse repurchase agreements and purchasing
securities on a when issued, delayed settlement or
forward delivery basis are not subject to this
investment limitation).
With respect to investment limitation (c), (a) there is no limitation
with respect to (i) instruments issued or guaranteed by the United States, any
state, territory or possession of the United States, the District of Columbia
or any of their authorities, agencies, instrumentalities or political
subdivisions, and (ii) repurchase agreements secured by the instruments
described in clause (i); (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of the parents; and (c) utilities will be
divided according to their services; for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a separate
industry.
If a percentage restriction is adhered to at the time an investment
is made, a later increase in percentage resulting from a change in value of
assets will not constitute a violation of such restriction. If the Portfolio's
borrowings are in excess of 5% (excluding overdrafts) of its total net assets,
additional portfolio purchases will not be made until the amount of such
borrowing is reduced to 5% or less. The Portfolio's borrowings including
reverse repurchase agreements and securities purchased on a when-issued,
delayed settlement or forward delivery basis may not exceed 33 1/3% of its
total net assets.
The investment limitations described here and in the SAI are
fundamental policies and may be changed only with the approval of the holders
of a majority of the outstanding shares (as defined in the 1940 Act) of the
Portfolio.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30,
1988. Glenmede Fund's Articles of Incorporation authorize the Board members to
issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board
has the power to designate one or more classes ("Portfolios") of shares of
common stock and to classify or reclassify any unissued shares with respect to
such Portfolios. Currently, Glenmede Fund is offering shares of ten
Portfolios.
-24-
<PAGE>
The shares of the Portfolio have no preference as to conversion,
exchange, dividends, retirement or other rights, and, when issued and paid for
as provided in this Prospectus, will be fully paid and non-assessable. The
shares of the Portfolio have no pre-emptive rights and do not have cumulative
voting rights, which means that the holders of more than 50% of the shares of
Glenmede Fund voting for the election of its Board members can elect 100% of
the Board of Glenmede Fund if they choose to do so. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his or her name on the books of
Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders
except as required by the 1940 Act, the next sentence and other applicable
law. Glenmede Fund has undertaken that its Board will call a meeting of
shareholders for the purpose of voting upon the question of removal of a Board
member or members if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of Glenmede Fund. To the extent
required by the undertaking, Glenmede Fund will assist shareholder
communication in such matters.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively
acted upon unless approved by a majority of the outstanding shares of the
Portfolio or class affected by the matter. The Portfolio or class is affected
by a matter unless it is clear that the interests of the Portfolio or class in
the matter are substantially identical or that the matter does not affect any
interest of the Portfolio or class. Under Rule 18f-2, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to the Portfolio only if approved
by a majority of the outstanding shares of the Portfolio. However, the Rule
also provides that the ratification of independent public accountants and the
election of directors may be effectively acted upon by shareholders of the
Glenmede Fund voting without regard to the Portfolio.
Notwithstanding any provision of Maryland law requiring a greater
vote of Glenmede Fund's common stock (or of the shares of the Portfolio or
class voting separately as a class) in connection with any corporate action,
unless otherwise provided by law (for example by Rule 18f-2 discussed above)
or by Glenmede Fund's Articles of Amendment and Restatement, Glenmede Fund may
take or authorize such action upon the favorable vote of the holders of more
than 50% of the outstanding common stock of Glenmede Fund entitled to vote
thereon.
At January 31, 1998, the Advisor was the record owner of
substantially all of the outstanding shares of the Portfolio.
-25-
<PAGE>
DISTRIBUTOR
ICC Distributors, Inc., P.O. Box 7558, Portland, Maine 04101, serves
as Glenmede Fund's distributor.
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, One South Street, Baltimore, Maryland 21202, serves as Glenmede
Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P., Philadelphia, Pennsylvania serves as
independent accountants for Glenmede Fund and will audit its financial
statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as
counsel to Glenmede Fund.
<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the
direction of its Board. The following is a list of the Board members and
officers of Glenmede Fund and a brief statement of their principal occupations
during the past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
---------------- --- -------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and
The Wharton School Economics; Professor of Finance and Economics from 1990-1996;
University of Pennsylvania Vice Dean and Director of Wharton Doctoral Programs
Philadelphia, PA 19104-6367 from 1990-1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 76 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director of Penn Engineering & Manufacturing
Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; Former
Managing Director of Paine Webber, Inc.
John W. Church, Jr. 65 Chairman and Director of Glenmede Fund; Chairman and
44 Wistar Road Trustee of The Glenmede Portfolios; Retired, formerly the
Villanova, PA 19085 Executive Vice President and Chief Investment Officer of
The Glenmede Trust Company. Mr. Church was employed by The
Glenmede Trust Company from 1979-1997.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund;
Phoenix, AZ 85064-4024 Director of XTRA Corporation; Former Executive Vice
President--Finance of ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of The Glenmede Trust Company;
Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.;
Former Co-Director, Principal and Officer of
Philadelphia Investment Banking Co.; Former
Director and Officer of Valley Forge
Administrative Services Company.
Mary Ann B. Wirts 46 President of Glenmede Fund; First Vice President
One Liberty Place and Manager of The Fixed Income Division of The
1650 Market Street, Suite 1200 Glenmede Trust Company. She has been employed by
Philadelphia, PA 19103 The Glenmede Trust Company since 1982.
Kimberly C. Osborne 32 Executive Vice President of Glenmede Fund; Vice President
One Liberty Place of The Glenmede Trust Company. She has been employed by
1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993,
Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service
Company and from 1987-1992, she was a Client Administrator
with The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of
Philadelphia National Bank Building Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex.
One South Street Brown Inc.; Executive Vice President of ICC.
Baltimore, MD 21202
Joseph A. Finelli 41 Treasurer of Glenmede Fund. He has been a Vice President
One South Street of BT Alex. Brown Inc. since 1995. Prior thereto, he was
Baltimore, MD 21202 Vice President and Treasurer of The Delaware Group.
</TABLE>
-27-
<PAGE>
- --------------
* Mr. Pew is an "interested person" of Glenmede Fund as that term is defined in
the 1940 Act.
For additional information concerning remuneration of Board members
see "Management of Glenmede Fund" in the SAI.
--------------------------
Shareholder inquiries should be addressed to Glenmede Fund at the
address or telephone number stated on the cover page.
-28-
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
Prospectus
Dated March 2, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place One South Street
1650 Market Street, Suite 1200 Baltimore, Maryland 21202
Philadelphia, PA 19103
Investment Sub-Advisor Distributor
(for Emerging Markets Portfolio)
Pictet International Management Limited ICC Distributors, Inc.
Cutlers Garden P.O. Box 7558
5 Devonshire Square Portland, Maine 04101
London, United Kingdom
EC2M 4LD
Table of Contents
Page
----
EXPENSES OF THE PORTFOLIO.......................................
FINANCIAL HIGHLIGHTS............................................
PERFORMANCE CALCULATIONS........................................
INVESTMENT OBJECTIVE AND POLICIES...............................
INVESTMENT TECHNIQUES...........................................
RISK FACTORS....................................................
PURCHASE OF SHARES..............................................
REDEMPTION OF SHARES............................................
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES..............................................
VALUATION OF SHARES.............................................
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES................
INVESTMENT ADVISOR..............................................
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING
SERVICES...............................................
INVESTMENT LIMITATIONS..........................................
GENERAL INFORMATION.............................................
BOARD MEMBERS AND OFFICERS......................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
-29-
<PAGE>
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by Glenmede Fund
or the Distributor in any jurisdiction in which such offering may not lawfully
be made.
-30-
<PAGE>
THE GLENMEDE FUND, INC.
Global Equity Portfolio
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
under the Securities Act of 1933
<TABLE>
<CAPTION>
Form N-1A Item Number Location
- --------------------- --------
<S> <C>
Part A Prospectus Caption
- ------ ------------------
1. Cover Page.......................................... Cover Page
2. Synopsis............................................ Expenses of the Portfolio
3. Condensed Financial Information..................... Performance Calculations
4. General Description of Registrant................... Cover Page; Investment
Objective and Policies;
Investment Techniques; Risk Factors;
Investment Limitations;
General Information
5. Management of the Fund.............................. Investment Advisor; Administrative,
Transfer Agency and Dividend Paying
Services; Purchase of Shares; Redemption
of Shares
5 A.Management's Discussion of
Fund Performance ................................... Not Applicable
6. Capital Stock and Other Securities ................. Purchase of Shares; Redemption of Shares;
Dividends, Capital Gains Distributions and
Taxes; General Information
7. Purchase of Securities Being Offered ............... Purchase of Shares; Redemption of Shares
8. Redemption or Repurchase............................ Purchase of Shares; Redemption of Shares
9. Pending Legal Proceedings........................... Not Applicable
</TABLE>
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
- --------------------------------------------------------------------------------
(800) 442-8299
Prospectus - March 2, 1998
INVESTMENT OBJECTIVE
The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is an
open-end management investment company. Glenmede Fund consists of ten series
of shares, each of which has different investment objectives and policies. The
securities offered hereby are one of these series of shares, the Global Equity
Portfolio (the "Portfolio").
Global Equity Portfolio. The objective of the Global Equity Portfolio is to
provide maximum long-term total return consistent with reasonable risk to
principal. The Global Equity Portfolio seeks to achieve its objective by
investing primarily in equity securities and securities convertible into
equity securities of companies located inside and outside the United States.
The net asset value of this Portfolio will fluctuate.
Total return consists of income (dividend and/or interest income from
portfolio securities) and capital gains and losses, both realized and
unrealized, from portfolio securities.
Shares of the Portfolio are subject to investment risks, including
the possible loss of principal, are not bank deposits and are not endorsed by,
insured by, guaranteed by, obligations of or otherwise supported by the U.S.
Government, the Federal Deposit Insurance Corporation, the Federal Reserve
Board, The Glenmede Corporation or any of its affiliates or any other
governmental agency or bank.
- --------------------------------------------------------------------------------
ABOUT THIS PROSPECTUS
This Prospectus, which should be retained for future reference, sets
forth certain information that you should know before you invest. A Statement
of Additional Information ("SAI") containing additional information about the
Portfolio has been filed with the Securities and Exchange Commission. The SAI
dated March 2, 1998, as amended or supplemented from time to time, is
incorporated by reference into this Prospectus. A copy of the SAI may be
obtained, without charge, by writing to Glenmede Fund at the address shown
above or by calling Glenmede Fund at the telephone number shown above.
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
-2-
<PAGE>
EXPENSES OF THE PORTFOLIO
Below is information regarding the shareholder transaction expenses
charged by the Portfolio and the operating expenses which the Portfolio
expects to incur during the current fiscal year. An example based on this
information is also provided.
SHAREHOLDER TRANSACTION EXPENSES*
Sales Load Imposed on Purchases............................................NONE
Sales Load Imposed on Reinvested Dividends.................................NONE
Deferred Sales Load........................................................NONE
Redemption Fees............................................................NONE
Exchange Fees..............................................................NONE
ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets)
Global
Equity
Portfolio
---------
Investment Advisory Fees.............................. .70%
Administration Fees................................... .04%
Other Expenses........................................ .11%
----
Total Operating Expenses.............................. .85%
====
- ----------------------
* A transaction charge may be imposed by broker-dealers or others that
make shares of the Portfolio available. There is no transaction
charge for shares purchased directly from the Portfolio.
The purpose of the above table is to assist an investor in
understanding the various estimated costs and expenses that an investor in the
Portfolio will bear directly or indirectly. Actual expenses may be greater or
lesser than such estimates. For further information concerning the Portfolio's
expenses see "Investment Advisor" and "Administrative, Transfer Agency and
Dividend Paying Services."
The following example illustrates the estimated expenses that an
investor in the Portfolio would pay on a $1,000 investment over various time
periods assuming (i) a 5% annual rate of return and (ii) redemption at the end
of each time period. As noted in the above table, Glenmede Fund charges no
redemption fees of any kind.
1 Year 3 Years
------ -------
Global Equity Portfolio............................. $9 $27
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES OR PERFORMANCE. THE ABOVE FIGURES ARE ESTIMATES
ONLY. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
-3-
<PAGE>
FINANCIAL HIGHLIGHTS
The table below sets forth financial highlights of the Global Equity
Portfolio. The data presented for the Portfolio is derived from the
Portfolio's unaudited financial statements which are included in the SAI. The
following information should be read in conjunction with those financial
statements.
Global Equity Portfolio
Period Ended
January 31, 1998+
-----------------
Net asset value, beginning of period $ 10.00
------
Income from investment operations:
Net investment income 0.03
Net realized and unrealized gain/(loss)
on investments 0.13
Total from investment operations 0.16
Less Distributions:
Distributions from net investment income (0.03)
------
Total Distributions (0.03)
------
Net asset value, end of period $ 10.14
======
Total return 2.10%
Ratios to average net assets/ Supplemental data:
Net assets, end of period (in 000's) $ 25,349
Ratio of operating expenses to
average net assets 0.85%
Ratio of net investment income to
average net assets 1.16%
Portfolio turnover rate 27%
Average commission per share $ 0.0351
- -----------------
+ The Portfolio commenced operations on November 4, 1997.
* Annualized.
-4-
<PAGE>
PERFORMANCE CALCULATIONS
The Global Equity Portfolio may advertise or quote total return data
from time to time. Total return will be calculated on an average annual total
return basis, and may also be calculated on an aggregate total return basis,
for various periods. Average annual total return reflects the average annual
percentage change in value of an investment in the Portfolio over the
measuring period. Aggregate total return reflects the total percentage change
in value over the measuring period. Both methods of calculating total return
assume that dividends and capital gains distributions made by the Portfolio
during the period are reinvested in Portfolio shares.
The Portfolio may compare its total return to that of other
investment companies with similar investment objectives and to stock and other
relevant indices or to rankings prepared by independent services or other
financial or industry publications that monitor the performance of mutual
funds. For example, the total return of the Portfolio may be compared to data
prepared by Lipper Analytical Services, Inc. ("Lipper"), the MSCI World Index
and the Morgan Stanley Capital International EAFE Index. Total return and
other performance data as reported in national financial publications such as
Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York
Times, or in publications of a local or regional nature, may also be used in
comparing the performances of the Portfolio.
Performance quotations represent the Portfolio's past performance,
and should not be considered as representative of future results. Since
performance will fluctuate, performance data for the Portfolio should not be
used to compare an investment in the Portfolio's shares with bank deposits,
savings accounts and similar investment alternatives which often provide an
agreed or guaranteed fixed yield/return for a stated period of time.
Shareholders should remember that performance is generally a function of the
kind and quality of the instruments held in the Portfolio, portfolio maturity,
operating expenses and market conditions. Any management fees charged by the
Advisor or institutions to their clients will not be included in the
Portfolio's calculations of total return.
-5-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Global Equity Portfolio is not
fundamental and may be changed by the Board members without shareholder
approval.
The objective of the Portfolio is to provide maximum, long-term total
return consistent with reasonable risk to principal. The Portfolio seeks to
achieve its objective by investing primarily in a diversified portfolio of
equity securities and securities convertible into equity securities of
companies located inside and outside the United States. The Portfolio is
expected to diversify its investments across companies located in a number of
countries, which may include, but are not limited to, the United States,
Japan, the United Kingdom, Germany, France, Switzerland, the Netherlands,
Sweden, Australia, Hong Kong and Singapore. Under normal circumstances, at
least 65% of the Portfolio's total assets will be invested in equity
securities and securities convertible into equity securities.
The Portfolio also may enter into forward currency exchange contracts
only in order to hedge against uncertainty in the level of future foreign
exchange rates in the purchase and sale of investment securities; it may not
enter into such contracts for speculative purposes. See "Investment
Techniques--Forward Foreign Currency Exchange Contracts."
The Portfolio intends to remain, for the most part, fully invested in
equity securities and securities convertible into equity securities. However,
the Portfolio may invest a portion of its assets (up to 20% under normal
circumstances) in the following fixed income and money market securities:
obligations of the U.S. Government and its guaranteed or sponsored agencies,
including shares of open-end or closed-end investment companies which invest in
such obligations (such shares will be purchased within the limits prescribed by
the Investment Company Act of 1940 (the "1940 Act") and would subject a
shareholder of the Portfolio to expenses of the other investment company in
addition to the expenses of the Portfolio); short-term money market instruments
issued in the U.S. or abroad, denominated in dollars or any foreign currency,
including short-term certificates of deposit (including variable rate
certificates of deposit), time deposits with a maturity no greater than 180
days, bankers acceptances, commercial paper rated A-1 by Standard & Poor's
Ratings Group, Division of McGraw Hill ("S&P") or Prime-1 by Moody's Investors
Service, Inc. ("Moody's"), or in equivalent money market securities; and high
quality fixed income securities denominated in U.S. dollars, any foreign
currency, or a multi-national currency unit such as the European Currency Unit.
-6-
<PAGE>
INVESTMENT TECHNIQUES
Repurchase Agreements. The Portfolio may enter into repurchase
agreements with qualified brokers, dealers, banks and other financial
institutions deemed creditworthy by the Advisor. Under normal circumstances,
however, the Portfolio will not enter into repurchase agreements if entering
into such agreements would cause, at the time of entering into such
agreements, more than 20% of the value of its total assets to be subject to
repurchase agreements. The Portfolio would generally enter into repurchase
transactions to invest cash reserves and for temporary defensive
purposes.
In a repurchase agreement, the Portfolio purchases a security and
simultaneously commits to resell that security at a future date to the seller
(a qualified bank or securities dealer) at an agreed upon price plus an agreed
upon market rate of interest (itself unrelated to the coupon rate or date of
maturity of the purchased security). The securities held subject to a
repurchase agreement may have stated maturities exceeding 13 months, but the
Advisor currently expects that repurchase agreements will mature in less than
13 months. The seller under a repurchase agreement will be required to
maintain the value of the securities subject to the agreement at not less than
101% of the repurchase price including accrued interest. Glenmede Fund's
administrator and the Advisor will mark-to-market daily the value of the
securities purchased, and the Advisor will, if necessary, require the seller
to deposit additional securities to ensure that the value is in compliance
with the 101% requirement stated above. The Advisor will consider the
creditworthiness of a seller in determining whether the Portfolio should enter
into a repurchase agreement, and the Portfolio will only enter into repurchase
agreements with banks and dealers which are determined to present minimal
credit risk by the Advisor under procedures adopted by the Board of Directors.
In effect, by entering into a repurchase agreement, the Portfolio is
lending its funds to the seller at the agreed upon interest rate and receiving
securities as collateral for the loan. Such agreements can be entered into for
periods of one day (overnight repo) or for a fixed term (term repo).
Repurchase agreements are a common way to earn interest income on short-term
funds.
The use of repurchase agreements involves certain risks. For example,
if the seller of a repurchase agreement defaults on its obligation to
repurchase the underlying securities at a time when the value of these
securities has declined, the Portfolio may incur a loss upon disposition of
them. Default by the seller would also expose the Portfolio to possible loss
because of delays in connection with the disposition of the underlying
-7-
<PAGE>
obligations. If the seller of an agreement becomes insolvent and subject to
liquidation or reorganization under the Bankruptcy Code or other laws, a
bankruptcy court may determine that the underlying securities are collateral
not within the control of the Portfolio and therefore subject to sale by the
trustee in bankruptcy. Further, it is possible that the Portfolio may not be
able to substantiate its interest in the underlying securities.
Reverse Repurchase Agreements. The Portfolio may enter into reverse
repurchase agreements. In a reverse repurchase agreement, the Portfolio sells
a security and simultaneously commits to repurchase that security at a future
date from the buyer. In effect, the Portfolio is temporarily borrowing funds
at an agreed upon interest rate from the purchaser of the security, and the
sale of the security represents collateral for the loan. The Portfolio retains
record ownership of the security and the right to receive interest and
principal payments on the security. At an agreed upon future date, the
Portfolio repurchases the security by remitting the proceeds previously
received, plus interest. In certain types of agreements, there is no agreed
upon repurchase date and interest payments are calculated daily, often based
on the prevailing overnight repurchase rate. These agreements, which are
treated as if reestablished each day, are expected to provide the Portfolio
with a flexible borrowing tool. Reverse repurchase agreements are considered
to be borrowings by the Portfolio under the 1940 Act.
The Portfolio's investment of the proceeds of a reverse repurchase
agreement is the speculative factor known as leverage. The Portfolio may enter
into a reverse repurchase agreement only if the interest income from
investment of the proceeds is greater than the interest expense of the
transaction and the proceeds are invested for a period no longer than the term
of the agreement. The Portfolio will maintain with the custodian a separate
account with a segregated portfolio of liquid securities at least equal to its
purchase obligations under these agreements. The Advisor will consider the
creditworthiness of the other party in determining whether the Portfolio will
enter into a reverse repurchase agreement.
The use of reverse repurchase agreements involves certain risks. For
example, the other party to the agreement may default on its obligation or
become insolvent and unable to deliver the securities to the Portfolio at a
time when the value of the securities has increased. Reverse repurchase
agreements also involve the risk that the Portfolio may not be able to
substantiate its interest in the underlying securities.
The Portfolio is permitted to invest up to one-third of its total
assets in reverse repurchase agreements and securities lending transactions.
-8-
<PAGE>
Investments in reverse repurchase agreements and securities lending
transactions will be aggregated for purposes of this investment limitation.
Lending of Securities. Subject to the limitation above under "Reverse
Repurchase Agreements," the Portfolio may lend its portfolio securities with a
value up to one-third of its total assets (including the value of the collateral
for the loans) to qualified brokers, dealers, banks and other financial
institutions for the purpose of realizing additional net investment income
through the receipt of interest on the loan. Such loans would involve risks of
delay in receiving additional collateral in the event the value of the
collateral decreased below the value of the securities loaned or of delay in
recovering the securities loaned or even loss of rights in the collateral should
the borrower of the securities fail financially. Loans will be made only to
borrowers deemed by the Advisor to be of good standing.
"When Issued," "Delayed Settlement," and "Forward Delivery"
Securities. The Portfolio may purchase and sell securities on a "when issued,"
"delayed settlement" or "forward delivery" basis. "When issued" or "forward
delivery" refer to securities whose terms and indenture are available and for
which a market exists, but which are not available for immediate delivery.
When issued or forward delivery transactions may be expected to occur one
month or more before delivery is due. Delayed settlement is a term used to
describe settlement of a securities transaction in the secondary market which
will occur sometime in the future. No payment or delivery is made by the
Portfolio in a when issued, delayed settlement or forward delivery transaction
until the Portfolio receives payment or delivery from the other party to the
transaction. The Portfolio will maintain a separate account of cash, U.S.
Government securities or other high grade debt obligations at least equal to
the value of purchase commitments until payment is made. Such segregated
securities will either mature or, if necessary, be sold on or before the
settlement date. Although the Portfolio receives no income from the above
described securities prior to delivery, the market value of such securities is
still subject to change.
The Portfolio will engage in when issued transactions to obtain what
is considered to be an advantageous price and yield at the time of the
transaction. When the Portfolio engages in when issued, delayed settlement or
forward delivery transactions, it will do so for the purpose of acquiring
securities consistent with its investment objective and policies and not for
the purpose of speculation. The Portfolio's when issued, delayed settlement
and forward delivery commitments are not expected to exceed 25% of its total
assets absent unusual market circumstances, and the Portfolio will only sell
securities on such a basis to offset securities purchased on such a basis.
-9-
<PAGE>
Investment Company Securities. The Portfolio may invest in securities
issued by other open-end investment companies with investment objectives and
policies that are consistent with those of the Portfolio. The Portfolio will
limit its investments so that, as determined immediately after a securities
purchase is made: (a) not more than 5% of the value of its total assets will
be invested in the securities of any one investment company; (b) not more than
10% of the value of its total assets will be invested in the aggregate in the
securities of investment companies as a group; and (c) not more than 3% of the
outstanding voting stock of any one investment company will be owned by the
Portfolio. As a shareholder of another investment company, the Portfolio would
bear its pro rata portion of the other investment company's advisory fees and
other expenses, in addition to the expenses the Portfolio bears directly in
connection with its own operations.
Borrowing. As a temporary measure for extraordinary or emergency
purposes, the Portfolio may borrow money from banks. However, the Portfolio
will not borrow money for speculative purposes.
Forward Foreign Currency Exchange Contracts. The Portfolio may enter
into forward foreign currency exchange contracts in connection with the
purchase and sale of investment securities; such contracts may not be used for
speculative purposes. A forward foreign currency exchange contract involves an
obligation to purchase or sell a specific currency at a future date, which may
be any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. These contracts may be
bought or sold to protect the Portfolio, to some degree, against a possible
loss resulting from an adverse change in the relationship between foreign
currencies and the U.S. dollar. It should be realized that this method of
protecting the value of the Portfolio's investment securities against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
at some future point in time. Additionally, although such contracts tend to
minimize the risk of loss due to a decline in the value of the hedged
currency, at the same time they tend to limit any potential gain which might
result should the value of such currency increase.
Depositary Receipts. The Portfolio may purchase sponsored or
unsponsored ADRs, EDRs and GDRs (collectively, "Depositary Receipts"). ADRs
are depositary receipts typically issued by a U.S. bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs and GDRs are depositary receipts typically issued by foreign banks or
trust companies, although they also may be issued by U.S. banks or trust
-10-
<PAGE>
companies, and evidence ownership of underlying securities issued by
either a foreign or a United States corporation. Generally, Depositary
Receipts in registered form are designed for use in the U.S. securities market
and Depositary Receipts in bearer form are designed for use in securities
markets outside the United States. Depositary Receipts may not necessarily be
denominated in the same currency as the underlying securities into which they
may be converted. Depositary Receipts may be issued pursuant to sponsored or
unsponsored programs. In sponsored programs, an issuer has made arrangements
to have its securities traded in the form of Depositary Receipts. In
unsponsored programs, the issuer may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, in some cases it may be easier to
obtain financial information from an issuer that has participated in the
creation of a sponsored program. Accordingly, there may be less information
available regarding issuers of securities underlying unsponsored programs and
there may not be a correlation between such information and the market value
of the Depositary Receipts. Depositary Receipts also involve the risks of
other investments in foreign securities, as discussed below. For purposes of
the Portfolio's investment policies, the Portfolio's investments in Depositary
Receipts will be deemed to be investments in the underlying securities.
Illiquid Securities. The Portfolio will not invest more than 15% of net
assets in securities that are illiquid.
Unless specified above and except as described under "Investment
Limitations," the foregoing investment policies are not fundamental and the
Board may change such policies without shareholder approval.
RISK FACTORS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the
Portfolio, nor can there be any assurance that the Portfolio's investment
objective will be attained. As with any investment in securities, the value
of, and income from, an investment in the Portfolio can decrease as well as
increase, depending on a variety of factors which may affect the values and
income generated by the Portfolio's securities, including general economic
conditions, market factors and currency exchange rates. An investment in the
Portfolio is not intended as a complete investment program.
Foreign Securities. The Portfolio has the right to purchase
securities in any foreign country, developed or underdeveloped. Investors
should consider carefully the substantial risks involved in investing in
securities issued by companies and governments of foreign nations, which are
-11-
<PAGE>
in addition to the usual risks inherent in domestic investments.
Investors should recognize that investing in the securities of foreign
companies involve special risks and considerations not typically associated
with investing in U.S. companies. These risks and considerations include
differences in accounting, auditing and financial reporting standards,
generally higher commission rates on foreign portfolio transactions, the
possibility of expropriation or confiscatory taxation, adverse changes in
investment or exchange control regulations, political instability which could
affect U.S. investment in foreign countries, and potential restrictions on the
flow of international capital. Moreover, the dividends payable on the
Portfolio's foreign portfolio securities may be subject to foreign withholding
taxes, thus reducing the net amount of income available for distribution to
the Portfolio's shareholders. Further, foreign securities often trade with
less frequency and volume than domestic securities and, therefore, may exhibit
greater price volatility. Also, changes in foreign exchange rates will affect,
favorably or unfavorably, the value of those securities in the Portfolio which
are denominated or quoted in currencies other than the U.S. dollar. In
addition, in many countries there is less publicly available information about
issuers than is available in reports about companies in the United States.
Foreign companies are not generally subject to uniform accounting, auditing
and financial reporting standards, and auditing practices and requirements may
not be comparable to those applicable to U.S. companies. Further, the
Portfolio may encounter difficulties or be unable to pursue legal remedies and
obtain judgments in foreign courts.
These risks are often heightened for investments in developing or
emerging markets, including certain Eastern European countries where the risks
include the possibility that such countries may revert to a centrally planned
economy. Developing countries may also impose restrictions on the Portfolio's
ability to repatriate investment income or capital. Even where there is no
outright restriction on repatriation of investment income or capital, the
mechanics of repatriation may affect certain aspects of the operations of the
Portfolio.
Some of the currencies in emerging markets have experienced
devaluations relative to the U.S. dollar, and major adjustments have been made
periodically in certain of such currencies. Certain developing countries face
serious exchange constraints.
Governments of some developing countries exercise substantial
influence over many aspects of the private sector. In some countries, the
government owns or controls many companies, including the largest in the
country. As such, government actions in the future could have a significant
effect on economic conditions in developing countries in these regions, which
-12-
<PAGE>
could affect private sector companies, the Portfolio and the value of its
securities. Furthermore, certain developing countries are among the largest
debtors to commercial banks and foreign governments. Trading in debt
obligations issued or guaranteed by such governments or their agencies and
instrumentalities involves a high degree of risk.
Brokerage commissions, custodial services, and other costs relating to
investment in foreign securities markets are generally more expensive than in
the United States. Foreign securities markets also have different clearance
and settlement procedures, and in certain markets there have been times when
settlements have been unable to keep pace with the volume of securities
transactions, making it difficult to conduct such transactions. Delays in
settlement could result in temporary periods when assets of the Portfolio are
uninvested and no return is earned thereon. The inability of the Portfolio to
make intended security purchases due to these and other settlement problems
could cause the Portfolio to miss attractive investment opportunities.
Inability to dispose of portfolio securities due to settlement problems could
result either in losses to the Portfolio due to subsequent declines in value
of the portfolio security or, if the Portfolio has entered into a contract to
sell the security, could result in possible liability to the purchaser.
In many emerging markets, there is less government supervision and
regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States. The foreign securities markets of
many of the countries in which the Portfolio may invest may also be smaller,
less liquid, and subject to greater price volatility than those in the United
States.
There are further risk factors, including possible losses through the
holding of securities in domestic and foreign custodian banks and
depositories.
PURCHASE OF SHARES
Shares of the Portfolio are sold without a sales commission on a
continuous basis to the Advisor acting on behalf of its clients ("Clients")
and to other institutions (the "Institutions"), at the net asset value per
share next determined after receipt, in proper order, of the purchase order by
Glenmede Fund's transfer agent. See "Valuation of Shares." The minimum initial
investment for the Portfolio is $25,000; the minimum for subsequent
investments for the Portfolio is $1,000. Glenmede Fund reserves the right to
reduce or waive the minimum initial and subsequent investment requirements
from time to time. Beneficial ownership of shares will be reflected on books
-13-
<PAGE>
maintained by the Advisor or the Institutions. A prospective investor wishing
to purchase shares in Glenmede Fund should contact the Advisor or his or her
Institution.
It is the responsibility of the Advisor or Institutions to transmit
their clients' orders for share purchases to Investment Company Capital Corp.
("ICC"), Glenmede Fund's transfer agent, and deliver required funds to Glenmede
Fund's custodian, on a timely basis.
Glenmede Fund reserves the right, in its sole discretion, to suspend
the offering of shares of the Portfolio or reject purchase orders when, in the
judgment of management, such suspension or rejection is in the best interests
of Glenmede Fund.
Purchases of the Portfolio's shares will be made in full and
fractional shares of the Portfolio calculated to three decimal places. In the
interest of economy and convenience, certificates for shares will not be
issued except upon the written request of the shareholder. Certificates for
fractional shares, however, will not be issued.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed at any time, without cost, at
the net asset value of the Portfolio next determined after receipt of the
redemption request by the transfer agent. Generally, a properly signed written
request is all that is required. Any redemption may be more or less than the
purchase price of the shares depending on the market value of the investment
securities held by the Portfolio. An investor wishing to redeem shares should
contact the Advisor or his or her Institution. It is the responsibility of the
Advisor or Institutions to transmit promptly redemption orders to the transfer
agent.
Payment of the redemption proceeds will ordinarily be made within one
business day, but in no event more than seven days, after receipt of the order
in proper form by the transfer agent. Redemption orders are effected at net
asset value per share next determined after receipt of the order in proper
form by the transfer agent. Glenmede Fund may suspend the right of redemption
or postpone the date of payment at times when the New York Stock Exchange (the
"Exchange") is closed, or under any emergency circumstances as determined by
the Securities and Exchange Commission (the "SEC"). See "Valuation of Shares"
for the days on which the Exchange is closed.
-14-
<PAGE>
If Glenmede Fund's Board determines that it would be detrimental to
the best interests of the remaining shareholders of the Portfolio to make
payment wholly or partly in cash, Glenmede Fund may pay the redemption
proceeds in whole or in part by a distribution in-kind of securities held by
the Portfolio in lieu of cash in conformity with applicable rules of the SEC.
Investors may incur brokerage charges on the sale of portfolio securities
received as a redemption in kind.
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION
OF SHARES
Glenmede Fund may, from time to time, in its sole discretion appoint
one or more entities, including the Advisor, as its agent to receive purchase
and redemption orders of shares of the Portfolio and cause these orders to be
transmitted, on a net basis, to Glenmede Fund's transfer agent. In these
instances, orders are effected at the net asset value per share next
determined after receipt of that order by the entity, if the order is actually
received by Glenmede Fund's transfer agent not later than the next business
morning.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the
total market value of its investments and other assets, less any of its
liabilities, by the total outstanding shares of the Portfolio. The Portfolio's
net asset value per share is determined as of the close of regular trading
hours of the Exchange on each day that the Exchange is open for business and
the Portfolio receives an order to purchase or redeem its shares. Currently
the Exchange is closed on weekends and the customary national business
holidays of New Year's Day, Dr. Martin Luther King, Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day (or the days on which they are observed). One or more pricing
services may be used to provide securities valuations in connection with the
determination of the net asset value of the Portfolio.
Equity securities listed on a U.S. securities exchange for which
market quotations are available are valued at the last quoted sale price as of
the close of that exchange's regular trading hours on the day the valuation is
made. Securities listed on a foreign exchange and unlisted foreign securities
-15-
<PAGE>
are valued at the latest quoted sales price available before the time when
assets are valued. Price information on listed securities is taken from the
exchange where the security is primarily traded. Unlisted U.S. equity
securities and listed securities not traded on the valuation date for which
market quotations are readily available are valued not in excess of the asked
prices or less than the bid prices. The value of securities for which no
quotations are readily available (including restricted securities) is
determined in good faith at fair value using methods determined by the Board.
Foreign currency amounts are translated into U.S. dollars at the bid prices of
such currencies against U.S. dollars last quoted by a major bank.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio normally distributes substantially all of its net
investment income to shareholders in the form of a quarterly dividend. If any
net capital gains are realized, the Portfolio normally distributes such gains
at least once a year. However, see "Dividends, Capital Gains Distributions and
Taxes-Federal Taxes-Miscellaneous," for a discussion of the Federal excise tax
applicable to certain regulated investment companies.
Undistributed net investment income is included in the Portfolio's
net assets for the purpose of calculating net asset value per share.
Therefore, on the Portfolio's "ex-dividend" date, the net asset value per
share excludes the dividend (i.e., is reduced by the per share amount of the
dividend).
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Such
qualification generally relieves the Portfolio of liability for Federal income
taxes to the extent its earnings are distributed in accordance with the Code.
Qualification as a regulated investment company under the Code for a
taxable year requires, among other things, that the Portfolio distribute to
its shareholders an amount at least equal to 90% of its investment company
taxable income and 90% of its net exempt interest income, if any, for such
taxable year. In general, the Portfolio's investment company taxable income
will be the sum of its net investment income, including interest and
dividends, subject to certain adjustments, and net short-term capital gain
over net long-term capital loss, if any, for such year. The Portfolio intends
to distribute as dividends substantially all of its investment company taxable
-16-
<PAGE>
income each year. Such dividends will be taxable as ordinary income to the
Portfolio's shareholders who are not currently exempt from Federal income
taxes, whether such income or gain is received in cash or reinvested in
additional shares. The dividends received deduction for corporations will
apply to such ordinary income distributions to the extent the total qualifying
dividends received by the Portfolio are from domestic corporations for the
taxable year. It is anticipated that only a small part, if any, of the
dividends paid by the Portfolio will be eligible for the dividends received
deduction.
Substantially all of the Portfolio's net realized long-term capital
gains, if any, will be distributed at least annually to its shareholders. The
Portfolio generally will have no tax liability with respect to such gains and
the distributions will be taxable to the shareholders who are not currently
exempt from Federal income taxes as mid-term or other long-term capital gains,
regardless of how long the shareholders have held the shares and whether such
gains are received in cash or reinvested in additional shares.
A shareholder considering buying shares of the Portfolio on or just
before the record date of a dividend should be aware that the amount of the
forthcoming dividend payment, although in effect a return of capital, will be
taxable.
A taxable gain or loss may be realized by a shareholder upon his
redemption or transfer of shares of the Portfolio, depending upon the tax
basis of such shares and their price at the time of redemption or transfer.
It is expected that dividends and certain interest income earned by
the Portfolio from foreign securities will be subject to foreign withholding
taxes or other taxes. So long as more than 50% of the value of the Portfolio's
total assets at the close of any taxable year consists of stock or securities
of foreign corporations, the Portfolio may elect, for U.S. Federal income tax
purposes, to treat certain foreign taxes paid by it, including generally any
withholding taxes and other foreign income taxes, as paid by its shareholders.
If the Portfolio makes this election, the amount of such foreign taxes paid by
the Portfolio will be included in its shareholders' income pro rata (in
addition to taxable distributions actually received by them), and each
shareholder will be entitled (a) to credit his proportionate amount of such
taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes
his deductions, to deduct such proportionate amount from his U.S. income,
should he so choose.
Miscellaneous. Dividends declared in October, November or December of
any year payable to shareholders of record on a specified date in such months
-17-
<PAGE>
will be deemed to have been received by the shareholders and paid by the
Portfolio on December 31, in the event such dividends are paid during January
of the following year.
A 4% nondeductible excise tax is imposed on regulated investment
companies that fail to currently distribute specified percentages of their
ordinary taxable income and net capital gain (excess of capital gains over
capital losses). The Portfolio intends to make sufficient distributions or
deemed distributions of its ordinary taxable income and any net capital gain
prior to the end of each calendar year to avoid liability for this excise tax.
The foregoing summarizes some of the important tax considerations
generally affecting the Portfolio and its shareholders and is not intended as
a substitute for careful tax planning. Accordingly, potential investors in the
Portfolio should consult their tax advisers with specific reference to their
own tax situation.
The foregoing discussion of tax consequences is based on tax laws and
regulations in effect on the date of this Prospectus, which are subject to
change by legislative or administrative action.
Shareholders will be advised at least annually as to the federal
income tax consequences of distributions made each year.
The Portfolio will be required in certain cases to withhold and remit
to the United States Treasury 31% of taxable dividends or gross proceeds
realized upon sale paid to shareholders who have failed to provide a correct
tax identification number in the manner required, who are subject to
withholding by the IRS for failure properly to include on their return
payments of taxable interest or dividends, or who have failed to certify to
the Portfolio that they are not subject to backup withholding when required to
do so or that they are "exempt recipients."
STATE AND LOCAL TAXES
Shareholders may also be subject to state and local taxes on
distributions from the Portfolio. A shareholder should consult with his tax
adviser with respect to the tax status of distributions from the Portfolio in
a particular state and locality.
The Portfolio has obtained a Certificate of Authority to do business
as a foreign corporation in Pennsylvania, and currently does business in that
-18-
<PAGE>
state. Accordingly, the shares of the Portfolio will be exempt from
Pennsylvania Personal Property Taxes.
INVESTMENT ADVISOR
The Advisor, a limited purpose trust company chartered in 1956,
provides fiduciary and investment services to endowment funds, foundations,
employee benefit plans and other institutions and individuals. The Advisor is
a wholly-owned subsidiary of The Glenmede Corporation and is located at One
Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania
19103. At December 31, 1997, the Advisor had over $13 billion in assets in
the accounts for which it serves in various capacities including as executor,
trustee or investment advisor.
Under its Investment Advisory Agreement with Glenmede Fund with respect
to the Portfolio, the Advisor, subject to the control and supervision of
Glenmede Fund's Board and in conformance with the stated investment objective
and policies of the Portfolio, manages the investment and reinvestment of the
Portfolio's assets. It is the responsibility of the Advisor to make investment
decisions for the Portfolio and to place the Portfolio's purchase and sales
orders.
The Advisor is entitled to receive a fee from the Portfolio for its
investment services computed daily and payable monthly, at the annual rate of
.70% of the Portfolio's average daily net assets. Although the advisory fee
rate payable by the Portfolio is higher than the rates paid by most mutual
funds, Glenmede Fund's Board of Directors believes it is comparable to the
rates paid by other similar funds. Shareholders in the Portfolio who are
customers of other Institutions may pay fees to those Institutions.
Andrew Williams, Senior Vice President of the Advisor, is the
portfolio manager for the Portfolio, and has been primarily responsible for
its management since the Portfolio commenced operations. Mr. Williams has been
employed by the Advisor since May 1985.
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES
ICC serves as Glenmede Fund's administrator, transfer agent and
dividend paying agent pursuant to a Master Services Agreement and in those
capacities supervises all aspects of Glenmede Fund's day-to-day operations,
other than the management of Glenmede Fund's investments. ICC is an indirect
subsidiary of Bankers Trust New York Corporation. For its services as
administrator, transfer agent and dividend paying agent, ICC is entitled to
receive fees from Glenmede Fund equal to .12% of the first $100 million of the
combined net assets of Glenmede Fund and The Glenmede Portfolios, an
-19-
<PAGE>
investment company with the same officers, Board and service providers as
Glenmede Fund (collectively, the "Funds"); .08% of the next $150 million of
the combined net assets of the Funds; .04% of the next $500 million of the
combined net assets of the Funds; and .03% of the combined net assets of the
Funds over $750 million.
INVESTMENT LIMITATIONS
The Portfolio will not:
(a) With respect to 75% of its total assets, invest more than 5%
of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities);
(b) Purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(c) Acquire any securities of companies within one industry
if, as a result of such acquisition, more than 25% of
the value of its total assets would be invested in
securities of companies within such industry; provided,
however, that there shall be no limitation on the
purchase of obligations issued or guaranteed by the
U.S. Government, its agencies, enterprises or
instrumentalities;
(d) Pledge, mortgage, or hypothecate any of its assets to
an extent greater than 15% of the Portfolio's total
assets, at fair market value, except as described in
this Prospectus and the SAI and in connection with
entering into futures contracts, but the deposit of
assets in a segregated account in connection with the
writing of covered put and call options and the
purchase of securities on a when issued, delayed
settlement or forward delivery basis and collateral
arrangements with respect to initial or variation
margin for futures contracts will not be deemed to be
pledges of the Portfolio's assets or the purchase of
any securities on margin for purposes of this
investment limitation;
(e) Issue senior securities, except that the Portfolio may
borrow money in accordance with investment limitation (f),
purchase securities on a when issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements; and
-20-
<PAGE>
(f) Borrow money, except that the Portfolio may borrow
money as a temporary measure for extraordinary or
emergency purposes, and then not in excess of 10% of
its total assets at the time of borrowing (entering
into reverse repurchase agreements and purchasing
securities on a when issued, delayed settlement or
forward delivery basis are not subject to this
investment limitation).
With respect to investment limitation (c), (a) there is no limitation
with respect to (i) instruments issued or guaranteed by the United States, any
state, territory or possession of the United States, the District of Columbia
or any of their authorities, agencies, instrumentalities or political
subdivisions, and (ii) repurchase agreements secured by the instruments
described in clause (i); (b) wholly-owned finance companies will be considered
to be in the industries of their parents if their activities are primarily
related to financing the activities of the parents; and (c) utilities will be
divided according to their services; for example, gas, gas transmission,
electric and gas, electric and telephone will each be considered a separate
industry.
If a percentage restriction is adhered to at the time an investment
is made, a later increase in percentage resulting from a change in value of
assets will not constitute a violation of such restriction. If the Portfolio's
borrowings are in excess of 5% (excluding overdrafts) of its total net assets,
additional portfolio purchases will not be made until the amount of such
borrowing is reduced to 5% or less. The Portfolio's borrowings including
reverse repurchase agreements and securities purchased on a when-issued,
delayed settlement or forward delivery basis may not exceed 33 1/3% of its
total net assets.
The investment limitations described here and in the SAI are
fundamental policies and may be changed only with the approval of the holders
of a majority of the outstanding shares (as defined in the 1940 Act) of the
Portfolio.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
Glenmede Fund was organized as a Maryland corporation on June 30,
1988. Glenmede Fund's Articles of Incorporation authorize the Board members to
issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board
has the power to designate one or more classes ("Portfolios") of shares of
common stock and to classify or reclassify any unissued shares with respect to
such Portfolios. Currently, Glenmede Fund is offering shares of ten
Portfolios.
-21-
<PAGE>
The shares of the Portfolio have no preference as to conversion,
exchange, dividends, retirement or other rights, and, when issued and paid for
as provided in this Prospectus, will be fully paid and non-assessable. The
shares of the Portfolio have no pre-emptive rights and do not have cumulative
voting rights, which means that the holders of more than 50% of the shares of
Glenmede Fund voting for the election of its Board members can elect 100% of
the Board of Glenmede Fund if they choose to do so. A shareholder is entitled
to one vote for each full share held (and a fractional vote for each
fractional share held), then standing in his or her name on the books of
Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders
except as required by the 1940 Act, the next sentence and other applicable
law. Glenmede Fund has undertaken that its Board will call a meeting of
shareholders for the purpose of voting upon the question of removal of a Board
member or members if such a meeting is requested in writing by the holders of
not less than 10% of the outstanding shares of Glenmede Fund. To the extent
required by the undertaking, Glenmede Fund will assist shareholder
communication in such matters.
Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted to the holders of the outstanding voting securities of an investment
company such as Glenmede Fund shall not be deemed to have been effectively
acted upon unless approved by a majority of the outstanding shares of the
Portfolio or class affected by the matter. The Portfolio or class is affected
by a matter unless it is clear that the interests of the Portfolio or class in
the matter are substantially identical or that the matter does not affect any
interest of the Portfolio or class. Under Rule 18f-2, the approval of an
investment advisory agreement or any change in a fundamental investment policy
would be effectively acted upon with respect to the Portfolio only if approved
by a majority of the outstanding shares of the Portfolio. However, the Rule
also provides that the ratification of independent public accountants and the
election of directors may be effectively acted upon by shareholders of the
Glenmede Fund voting without regard to the Portfolio.
Notwithstanding any provision of Maryland law requiring a greater
vote of Glenmede Fund's common stock (or of the shares of the Portfolio or
class voting separately as a class) in connection with any corporate action,
unless otherwise provided by law (for example by Rule 18f-2 discussed above)
or by Glenmede Fund's Articles of Amendment and Restatement, Glenmede Fund may
take or authorize such action upon the favorable vote of the holders of more
than 50% of the outstanding common stock of Glenmede Fund entitled to vote
thereon.
At January 31, 1998, the Advisor was the record owner of
substantially all of the outstanding shares of the Portfolio.
DISTRIBUTOR
ICC Distributors, Inc., P.O. Box 7558, Portland, Maine 04101, serves
as Glenmede Fund's distributor.
-22-
<PAGE>
CUSTODIAN
The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the
custodian of Glenmede Fund's assets.
TRANSFER AGENT
ICC, One South Street, Baltimore, Maryland 21202, serves as Glenmede
Fund's transfer agent.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P., Philadelphia, Pennsylvania, serves as
independent accountants for Glenmede Fund and will audit its financial
statements annually.
REPORTS
Shareholders receive unaudited semi-annual financial statements and
audited annual financial statements.
COUNSEL
Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania, serves as
counsel to Glenmede Fund.
-23-
<PAGE>
BOARD MEMBERS AND OFFICERS
The business and affairs of Glenmede Fund are managed under the
direction of its Board. The following is a list of the Board members and
officers of Glenmede Fund and a brief statement of their principal occupations
during the past five years:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupation During Past Five Years
---------------- --- -------------------------------------------
<S> <C> <C>
H. Franklin Allen, Ph.D. 41 Director of Glenmede Fund; Trustee of The Glenmede
Finance Department Portfolios; Nippon Life Professor of Finance and
The Wharton School Economics; Professor of Finance and Economics from 1990-
University of Pennsylvania 1996; Vice Dean and Director of Wharton Doctoral Programs
Philadelphia, PA 19104-6367 from 1990-1993. He has been employed by The University of
Pennsylvania since 1980.
Willard S. Boothby, Jr. 76 Director of Glenmede Fund; Trustee of The Glenmede
600 East Gravers Lane Portfolios; Director of Penn Engineering & Manufacturing
Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; Former
Managing Director of Paine Webber, Inc.
John W. Church, Jr. 65 Chairman and Director of Glenmede Fund; Chairman and
44 Wistar Road Trustee of The Glenmede Portfolios; Retired, formerly the
Villanova, PA 19085 Executive Vice President and Chief Investment Officer of
The Glenmede Trust Company. Mr. Church was employed by
The Glenmede Trust Company from 1979-1997.
Francis J. Palamara 72 Director of Glenmede Fund; Trustee of The Glenmede
P.O. Box 44024 Portfolios; Trustee of Gintel Fund; Director of XTRA
Phoenix, AZ 85064-4024 Corporation; Former Executive Vice President--Finance of
ARAMARK, Inc.
G. Thompson Pew, Jr.* 55 Director of Glenmede Fund; Trustee of The Glenmede
310 Caversham Road Portfolios; Director of The Glenmede Trust Company; Former
Bryn Mawr, PA 19010 Director of Brown & Glenmede Holdings, Inc.; Former Co-
Director, Principal and Officer of Philadelphia Investment
Banking Co.; Former Director and Officer of Valley Forge
Administrative Services Company.
Mary Ann B. Wirts 46 President of Glenmede Fund; First Vice President and
One Liberty Place Manager of The Fixed Income Division of The Glenmede Trust
1650 Market Street, Suite 1200 Company. She has been employed by The Glenmede Trust
Philadelphia, PA 19103 Company since 1982.
Kimberly C. Osborne 32 Executive Vice President of Glenmede Fund; Vice President
One Liberty Place of The Glenmede Trust Company. She has been employed by
1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993,
Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service
Company and from 1987-1992, she was a Client Administrator
with The Vanguard Group, Inc.
Michael P. Malloy 38 Secretary of Glenmede Fund; Partner in the law firm of
Philadelphia National Bank Building Drinker Biddle & Reath LLP.
1345 Chestnut Street
Philadelphia, PA 19107-3496
Edward J. Veilleux 54 Assistant Secretary of Glenmede Fund; Principal, BT Alex.
One South Street Brown Inc., Executive Vice President of ICC.
Baltimore, MD 21202
Joseph A. Finelli 41 Treasurer of Glenmede Fund. He has been a Vice President
One South Street of BT Alex. Brown Inc. since 1995. Prior thereto, he was
Baltimore, MD 21202 Vice President and Treasurer of The Delaware Group.
</TABLE>
- --------------
* Mr. Pew is an "interested person" of Glenmede Fund as that term is
defined in the 1940 Act.
For additional information concerning remuneration of Board members
see "Management of Glenmede Fund" in the SAI.
--------------------------
Shareholder inquiries should be addressed to Glenmede Fund at the
address or telephone number stated on the cover page.
-24-
<PAGE>
THE GLENMEDE FUND, INC.
One South Street, Baltimore, Maryland 21202
Prospectus
Dated March 2, 1998
Investment Advisor Administrator and Transfer Agent
The Glenmede Trust Company Investment Company Capital Corp.
One Liberty Place One South Street
1650 Market Street, Baltimore, Maryland 21202
Suite 1200
Philadelphia, PA 19103
Distributor
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
Table of Contents
Page
----
EXPENSES OF THE PORTFOLIOS...............................................
PERFORMANCE CALCULATIONS.................................................
INVESTMENT OBJECTIVE AND POLICIES........................................
INVESTMENT TECHNIQUES....................................................
RISK FACTORS.............................................................
PURCHASE OF SHARES.......................................................
REDEMPTION OF SHARES.....................................................
ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION OF
SHARES..............................................................
VALUATION OF SHARES......................................................
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.........................
INVESTMENT ADVISOR.......................................................
ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES.............
INVESTMENT LIMITATIONS...................................................
GENERAL INFORMATION......................................................
BOARD MEMBERS AND OFFICERS...............................................
No person has been authorized to give any information or to make any
representations not contained in this Prospectus, or in Glenmede Fund's
Statement of Additional Information, in connection with the offering made by
this Prospectus and, if given or made, such information or representations
must not be relied upon as having been authorized by Glenmede Fund or its
Distributor. This Prospectus does not constitute an offering by Glenmede Fund
or the Distributor in any jurisdiction in which such offering may not lawfully
be made.
-25-
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
(800) 442-8299
STATEMENT OF ADDITIONAL INFORMATION
March 2, 1998
This Statement of Additional Information is not a prospectus but should
be read in conjunction with The Glenmede Fund, Inc.'s ("Glenmede Fund") and The
Glenmede Portfolios' ("Glenmede Portfolios" and collectively with Glenmede Fund,
the "Funds") Prospectuses dated January 1, 1998 and March 2, 1998, as amended or
supplemented from time to time (the "Prospectuses"). This Statement of
Additional Information is for the Government Cash, Tax-Exempt Cash, Core Fixed
Income, International, Equity, Small Capitalization Equity, Large Cap Value,
Muni Intermediate and New Jersey Muni Portfolios. To obtain any of the
Prospectuses, please call the Funds at the above telephone number.
Capitalized terms used in this Statement of Additional Information
and not otherwise defined have the same meanings given to them in the Funds'
Prospectuses.
Table of Contents
Page
THE FUNDS................................................. 2
INVESTMENT OBJECTIVES AND POLICIES........................ 2
PURCHASE OF SHARES........................................ 3
REDEMPTION OF SHARES...................................... 4
SHAREHOLDER SERVICES...................................... 4
PORTFOLIO TURNOVER........................................ 4
INVESTMENT LIMITATIONS.................................... 4
MANAGEMENT OF THE FUNDS................................... 8
INVESTMENT ADVISORY AND OTHER SERVICES..................... 9
DISTRIBUTOR............................................... 12
PORTFOLIO TRANSACTIONS.................................... 12
ADDITIONAL INFORMATION CONCERNING TAXES................... 13
PERFORMANCE CALCULATIONS.................................. 24
GENERAL INFORMATION....................................... 29
FINANCIAL STATEMENTS...................................... 30
OTHER INFORMATION......................................... 30
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS.........A-1
<PAGE>
THE FUNDS
On February 27, 1997, the Model Equity Portfolio changed its name to
the Large Cap Value Portfolio. On September 25, 1997, the Intermediate
Government Portfolio changed its name to the Core Fixed Income Portfolio.
References in this Statement of Additional Information are to a Portfolio's
current name.
On March 1, 1991 the Small Capitalization Equity Portfolio commenced
operations offering a single class of shares. On January 1, 1998 the Small
Capitalization Portfolio began to offer a second class of shares known as
"Institutional Shares." The original class of shares has been designated as
"Advisor Shares." Historical information concerning expenses and performance
prior to January 1, 1998 is that of the Advisor Shares.
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and
policies set forth in the Funds' Prospectuses:
Repurchase Agreements
Repurchase agreements that do not provide for payment to a Portfolio
within seven days after notice without taking a reduced price are considered
illiquid securities.
Forward Foreign Exchange Contracts
The International Portfolio may enter into forward foreign exchange
contracts. A forward foreign currency exchange contract involves an obligation
to purchase or sell a specific currency at a future date, which may be any
fixed number of days from the date of the contract as agreed by the parties,
at a price set at the time of the contract. In the case of a cancelable
forward contract, the holder has the unilateral right to cancel the contract
at maturity by paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades. A
foreign currency futures contract is a standardized contract for the future
delivery of a specified amount of a foreign currency at a future date at a
price set at the time of the contract. Foreign currency futures contracts
traded in the United States are designed by and traded on exchanges regulated
by the CFTC such as the New York Mercantile Exchange. The International
Portfolio would enter into foreign currency futures contracts solely for
hedging or other appropriate investment purposes as defined in CFTC
regulations.
-2-
<PAGE>
Forward foreign currency exchange contracts differ from foreign
currency futures contracts in certain respects. For example, the maturity date
of a forward contract may be any fixed number of days from the date of the
contract agreed upon by the parties, rather than a predetermined date in any
given month. Forward contracts may be in any amounts agreed upon by the
parties rather than predetermined amounts. Also, forward foreign exchange
contracts are traded directly between currency traders so that no intermediary
is required. A forward contract generally requires no margin or other deposit.
At the maturity of a forward contract, the International Portfolio
may either accept or make delivery of the currency specified in the contract,
or at or prior to maturity enter into a closing transaction involving the
purchase or sale of an offsetting contract. Closing transactions with respect
to forward contracts are usually effected with the currency trader who is a
party to the original forward contract.
Securities Lending
Each Portfolio may lend its investment securities to qualified
institutional investors who need to borrow securities in order to complete
certain transactions, such as covering short sales, avoiding failures to
deliver securities or completing arbitrage operations. By lending its
investment securities, a Portfolio attempts to increase its income through the
receipt of interest on the loan. Any gain or loss in the market price of the
securities loaned that might occur during the term of the loan would be for
the account of the Portfolio. Each Portfolio may lend its investment
securities to qualified brokers, dealers, domestic and foreign banks or other
financial institutions, so long as the terms, the structure and the aggregate
amount of such loans are not inconsistent with the Investment Company Act of
1940 (the "1940 Act") or the rules and regulations or interpretations of the
Securities and Exchange Commission (the "Commission") thereunder. The
Portfolios may, from time to time, pay negotiated fees in connection with the
lending of securities.
PURCHASE OF SHARES
The purchase price of shares of each Portfolio is the net asset value
next determined after receipt of the purchase order by the particular Fund.
Each Portfolio reserves the right in its sole discretion (i) to
suspend the offering of its shares, (ii) to reject purchase orders when in the
judgment of management such rejection is in the best interest of the
particular Fund, and (iii) to reduce or waive the minimum for initial and
subsequent investments from time to time.
-3-
<PAGE>
At the discretion of the Funds, investors may be permitted to
purchase Portfolio shares by transferring securities to the Portfolio that
meet the Portfolios investment objectives and policies.
REDEMPTION OF SHARES
Each Portfolio may suspend redemption privileges or postpone the date
of payment (i) during any period that the Exchange is closed, or trading on
the Exchange is restricted as determined by the Commission, (ii) during any
period when an emergency exists as defined by the rules of the Commission as a
result of which it is not reasonably practicable for a Portfolio to dispose of
securities owned by it, or fairly to determine the value of its assets, and
(iii) for such other periods as the Commission may permit.
No charge is made by any Portfolio for redemptions. Any redemption
may be more or less than the shareholder's initial cost depending on the
market value of the securities held by the Portfolio.
SHAREHOLDER SERVICES
Shareholders may transfer shares of the Portfolios to another person.
An investor wishing to transfer shares should contact the Advisor.
PORTFOLIO TURNOVER
The Portfolios will not normally engage in short-term trading, but
reserve the right to do so. A high portfolio turnover rate can result in
corresponding increases in brokerage commissions; however, the Advisor will
not consider turnover rate a limiting factor in making investment decisions
consistent with that Portfolio's investment objectives and policies. The
Portfolios' portfolio turnover rates for each of the past fiscal years are set
forth under "Financial Highlights" in the Funds' Prospectuses. Changes in the
Portfolios' turnover rates were due to market fluctuations and investment
opportunities.
INVESTMENT LIMITATIONS
Each Portfolio is subject to the following restrictions. The numbered
restrictions are fundamental policies and may not be changed without the
approval of the lesser of: (1) 67% of the voting securities of the affected
Portfolio present at a meeting if the holders of more than 50% of the
outstanding voting securities of the affected Portfolio are present or
represented by proxy, or (2) more than 50% of the outstanding voting securities
of the affected Portfolio. Each Portfolio will not:
-4-
<PAGE>
(1) invest in commodities or commodity contracts, except that
each Portfolio may invest in futures contracts and options;
(2) purchase or sell real estate, although it may purchase and
sell securities of companies which deal in real estate and
may purchase and sell securities which are secured by
interests in real estate;
(3) make loans, except (i) by purchasing bonds, debentures
or similar obligations (including repurchase agreements,
subject to the limitation described in investment limitation
(9) below, and money market instruments, including bankers
acceptances and commercial paper, and selling securities on a
when issued, delayed settlement or forward delivery basis)
which are publicly or privately distributed, and (ii) by
lending its portfolio securities to banks, brokers, dealers
and other financial institutions so long as such loans are not
inconsistent with the 1940 Act or the rules and regulations or
interpretations of the Commission thereunder;
(4) purchase on margin or sell short, except as specified above
in investment limitation (1);
(5) purchase more than 10% of any class of the outstanding
voting securities of any issuer;
(6) issue senior securities, except that a Portfolio may borrow
money in accordance with investment limitation (7) below,
purchase securities on a when issued, delayed settlement or
forward delivery basis and enter into reverse repurchase
agreements;
(7) borrow money, except as a temporary measure for extraordinary
or emergency purposes, and then not in excess of 10% of its
total assets at the time of the borrowing (entering into
reverse repurchase agreements and purchasing securities on a
when issued, delayed settlement or forward delivery basis are
not subject to this investment limitation);
(8) pledge, mortgage, or hypothecate any of its assets to an
extent greater than 10% of its total assets at fair market
value, except as described in the Prospectus and this
Statement of Additional Information and in connection with
entering into futures contracts, but the deposit of assets in
a segregated account in connection with the writing of covered
put and call options and the purchase of securities on a when
issued, delayed settlement or forward delivery basis
-5-
<PAGE>
and collateral arrangements with respect to initial or
variation margin for futures contracts will not be deemed to
be pledges of a Portfolio's assets or the purchase of any
securities on margin for purposes of this investment
limitation;
(9) underwrite the securities of other issuers or invest more than
an aggregate of 10% of the total assets of the Portfolio, at
the time of purchase, in securities subject to legal or
contractual restrictions on resale or securities for which
there are no readily available markets, including repurchase
agreements which have maturities of more than seven days;
(10) invest for the purpose of exercising control over
management of any company;
(11) invest its assets in securities of any investment company,
except in connection with mergers, acquisitions of assets or
consolidations and except as may otherwise be permitted by
the 1940 Act;
(12) acquire any securities of companies within one industry if, as
a result of such acquisition, more than 25% of the value of
the Portfolio's total assets would be invested in securities
of companies within such industry; provided, however, that
there shall be no limitation on the purchase of obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities, or instruments issued by
U.S. banks; and
(13) write or acquire options or interests in oil, gas or other
mineral exploration or development programs.
Each Portfolio, with the exception of the Muni Intermediate and New
Jersey Muni Portfolios, also will not:
(1) with respect as to 75% of its total assets, invest more than
5% of its total assets at the time of purchase in the
securities of any single issuer (other than obligations
issued or guaranteed by the U.S. Government, its agencies,
enterprises or instrumentalities).
Pursuant to Rule 2a-7 under the 1940 Act, each of the Government Cash
Portfolio and the Tax-Exempt Cash Portfolio may not invest more than 5% of its
total assets in securities of any one issuer (other than U.S. Government
securities, repurchase agreements collateralized by such obligations, certain
money market fund securities and securities subject to certain guarantees
-6-
<PAGE>
which are issued by persons that, directly or indirectly, do not control
and are not controlled by or under common control with the issuer). Each of
these portfolios may, however, invest more than 5% of its total assets in
First Tier Securities (as defined in Rule 2a-7) of a single issuer for a
period of three business days after the purchase thereof. For the Government
Cash Portfolio and the Tax-Exempt Cash Portfolio compliance with the
diversification provisions of Rule 2a-7 under the 1940 Act will be deemed to
be compliance with the diversification limitation in paragraph (1).
Each of the Muni Intermediate and New Jersey Muni Portfolios is
classified as a "non-diversified" investment company under the 1940 Act, which
means the Portfolio is not limited by the 1940 Act in the proportion of its
assets that it may invest in the securities of a single issuer. However, each
Portfolio intends to conduct its operations so as to qualify as a "regulated
investment company" for purposes of the Internal Revenue Code of 1986, as
amended, which generally will relieve the Portfolio of any liability for
federal income tax to the extent its earnings are distributed to shareholders.
In order to qualify as a regulated investment company for federal income tax
purposes, the Portfolio generally will diversify its investments such that at
the close of each quarter of the taxable year at least 50% of the value of its
total assets will be represented by specified investments, provided that the
Portfolio may not, invest more than 5% of its total assets at the time of
purchase in the securities of any single issuer (other than obligations issued
or guaranteed by the U.S. Government, its agencies, enterprises or
instrumentalities).
If a percentage restriction is adhered to at the time an investment
is made, a later increase in percentage resulting from a change in value or
assets will not constitute a violation of such restriction.
With regard to limitation (11), the 1940 Act currently prohibits an
investment company from acquiring securities of another investment company if,
as a result of the transaction, the acquiring company and any company or
companies controlled by it would own in the aggregate: (i) more than 3% of the
total outstanding voting stock of the acquired company, (ii) securities issued
by the acquired company having an aggregate value in excess of 5% of the value
of the total assets of the acquiring company, or (iii) securities issued by
the acquired company and all other investment companies (other than treasury
stock of the acquired company) having an aggregate value in excess of 10% of
the value of the total assets of the acquiring company. In addition to the
advisory fees and other expenses that a Portfolio bears directly in connection
with its own operations, as a shareholder of another investment company, such
Portfolio would bear its "pro rata" portion of the other investment company's
-7-
<PAGE>
advisory fees and other expenses. Therefore, to the extent that a
Portfolio is invested in shares of other investment companies, such
Portfolio's shareholders will be subject to expenses of such other investment
companies, in addition to expenses of the Portfolio.
As a matter of policy which may be changed by the particular Fund's
Board without shareholder approval, with respect to limitation (12),
Portfolios other than the Government Cash Portfolio and the Tax-Exempt Cash
Portfolio will not invest more than 25% of the value of their respective total
assets in instruments issued by U.S. banks.
In addition, with respect to investment limitation (12), (a) there is
no limitation with respect to (i) instruments issued or guaranteed by the
United States, any state, territory or possession of the United States, the
District of Columbia or any of their authorities, agencies, instrumentalities
or political subdivisions, and (ii) repurchase agreements secured by the
instruments described in clause (i); (b) wholly-owned finance companies will
be considered to be in the industries of their parents if their activities are
primarily related to financing the activities of the parents; and (c)
utilities will be divided according to their services; for example, gas, gas
transaction, electric and gas, electric and telephone will each be considered
a separate industry.
With regard to limitation (13), the purchase of securities of a
corporation, a subsidiary of which has an interest in oil, gas or other
mineral exploration or development programs shall not be deemed to be
prohibited by the limitation.
MANAGEMENT OF THE FUNDS
Each Fund's officers, under the supervision of the particular Board,
manage the day-to-day operations of the Fund. The Board members set broad
policies for each Fund and choose its officers. A list of the Board members
and officers and a brief statement of their current positions and principal
occupations during the past five years is set forth in the Funds'
Prospectuses.
Remuneration of Board Members
Glenmede Fund pays each Board member, other than officers of the
Advisor, an annual fee of $8,000 plus $1,250 for each Board meeting attended
and each Board Valuation Committee meeting attended (unless such meeting was
held in conjunction with a Board meeting) and out-of-pocket expenses incurred
in attending Board meetings. Glenmede Portfolios pays each Board member, other
than officers of the Advisor, an annual fee of $1,000 per year and
-8-
<PAGE>
out-of-pocket expenses incurred in attending Board meetings. Officers of
the Funds receive no compensation as officers from the Funds.
Set forth in the table below is the compensation received by Board
members for the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
Pension or
Retirement
Aggregate Aggregate Benefits Estimated
Compensation Compensation Total Annual Total
from from Part of Benefits Compensation
Name of Glenmede Glenmede the Funds' Upon from the
Person, Position Fund Portfolios Expense Retirement Funds
---------------- ------------ ------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Dr. H. Franklin Allen, Ph.D., $15,459 $1,041 None None $16,500
Director/Trustee
Willard S. Boothby, Jr., $14,196 $1,054 None None $15,250
Director/Trustee
John W. Church, Jr. None None None None None
Director/Trustee
Francis J. Palamara, $14,196 $1,054 None None $15,250
Director/Trustee
G. Thompson Pew, Jr., $16,696 $1,054 None None $17,750
Director/Trustee
</TABLE>
INVESTMENT ADVISORY AND OTHER SERVICES
The Advisor, The Glenmede Trust Company, is the wholly-owned
subsidiary of The Glenmede Corporation (the "Corporation") whose shares are
closely held by 76 shareholders. The Corporation has a nine person Board of
Directors which, at September 30, 1997, collectively, owned 98.67% of the
Corporation's voting shares and 37.80% of the Corporation's total outstanding
shares. The members of the Board and their respective interests in the
Corporation at September 30, 1997 are as follows:
The Glenmede Corporation Percent of Percent of
Board of Directors Voting Shares Total Shares
- ------------------------ ------------- ------------
Susan W. Catherwood..................... 10.83% 1.23%
Richard F. Pew.......................... 10.83% 1.07%
Thomas W. Langfitt, M.D................. 11.07% 8.69%
Arthur E. Pew III....................... 10.83% 1.07%
J. Howard Pew, II....................... 10.83% 1.43%
J. N. Pew, III.......................... 11.07% 5.45%
J. N. Pew, IV........................... 11.07% 1.43%
R. Anderson Pew......................... 11.07% 6.03%
Ethel Benson Wister..................... 11.07% 11.40%
------ ------
98.67% 37.80%
-9-
<PAGE>
As noted in the Prospectuses, the Advisor does not receive any fee
from the Government Cash, Tax-Exempt Cash, Core Fixed Income, International,
Equity, Large Cap Value, Muni Intermediate and New Jersey Muni Portfolios for
its investment services. Prior to January 1, 1998, the Advisor did not receive
any fee from The Small Capitalization Equity Portfolio for its investment
services. Effective January 1, 1998, the Advisor is entitled to receive a fee
from the Small Capitalization Equity Portfolio for its investment services
computed daily and payable monthly, at an annual rate of .55% of that
Portfolio's average daily net assets. Additionally, all shareholders in the
Portfolios are clients of the Advisor or an Affiliate and, as clients, pay
fees which vary depending on the capacity in which the Advisor or Affiliate
provides fiduciary and investment services to the particular client. Such
services may include personal trust, estate settlement, advisory and custodian
services. For example, for advisory services, the Advisor charges its clients
up to 1% on the first $1 million of principal, .60% on the next $1 million of
principal, .50% on the next $3 million of principal and .40% on the next $5
million of principal, with a minimum annual fee of $10,000. For accounts in
excess of $10 million of principal, the fee would be determined by special
analysis.
Since July 1, 1995, administrative, transfer agency and dividend
paying services have been provided to each of the Funds by ICC, pursuant to a
Master Services Agreement between each of the Funds and ICC. See
"Administrative, Transfer Agency and Dividend Paying Services" in the
Prospectuses for information concerning the substantive provisions of each
Master Services Agreement. For the fiscal year ended October 31, 1997, the
Funds paid ICC fees of $178,351 for the Government Cash Portfolio, $99,450 for
the Tax-Exempt Cash Portfolio, $101,654 for the Core Fixed Income Portfolio,
$342,102 for the International Portfolio, $45,406 for the Equity Portfolio,
$144,610 for the Small Capitalization Equity Portfolio, $24,893 for the Large
Cap Value Portfolio, $7,183 for the Muni Intermediate Portfolio and $3,821 for
the New Jersey Muni Portfolio.
For the fiscal year ended October 31, 1996, the Funds paid ICC fees
of $183,151 for the Government Cash Portfolio, $95,073 for the Tax-Exempt Cash
Portfolio, $110,811 for the Core Fixed Income Portfolio, $216,069 for the
International Portfolio, $33,415 for the Equity Portfolio, $101,413 for the
Small Capitalization Equity Portfolio, $12,716 for the Large Cap Value
Portfolio, $7,474 for the Muni Intermediate Portfolio and $2,571 for the New
Jersey Muni Portfolio.
-10-
<PAGE>
For the period July 1, 1995 to October 31, 1995, the Funds paid ICC fees
of $59,300 for the Government Cash Portfolio, $30,104 for the Tax-Exempt Cash
Portfolio, $48,906 for the Core Fixed Income Portfolio, $55,781 for the
International Portfolio, $11,445 for the Equity Portfolio, $24,932 for the
Small Capitalization Equity Portfolio, $2,615 for the Large Cap Value
Portfolio, $2,663 for the Muni Intermediate Portfolio and $808 for the New
Jersey Muni Portfolio.
From the close of business on May 6, 1994 to the close of business on
June 30, 1995, administrative services were provided to each Fund by The
Shareholder Services Group, Inc. ("TSSG"), pursuant to Administration
Agreements. For the period November 1, 1994 to June 30, 1995, the Funds paid
TSSG administrative fees of $238,455 for the Government Cash Portfolio,
$126,195 for the Tax-Exempt Cash Portfolio, $193,903 for the Core Fixed Income
Portfolio, $172,504 for the International Portfolio, $38,056 for the Equity
Portfolio, $76,001 for the Small Capitalization Equity Portfolio, $11,371 for
the Large Cap Value Portfolio, $11,012 for the Muni Intermediate Portfolio and
$2,829 for the New Jersey Muni Portfolio.
As described more fully in the Prospectuses, the Advisor provides
shareholder support services to their clients who beneficially own shares of
the Portfolios pursuant to a Shareholder Servicing Agreement ("Agreement")
with each of the Funds. Shareholder servicing fees payable for the fiscal year
ended October 31, 1997 for the Government Cash, Tax-Exempt Cash, Core Fixed
Income, Muni Intermediate, New Jersey Muni, Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios were $233,912, $130,408,
$129,813, $9,418, $5,023, $59,674, $448,678, $189,976 and $32,710,
respectively.
Shareholder servicing fees payable for the fiscal year ended October
31, 1996 for the Government Cash, Tax-Exempt Cash, Core Fixed Income, Muni
Intermediate, New Jersey Muni, Equity, International, Small Capitalization
Equity and Large Cap Value Portfolios were $226,624, $117,082, $136,249,
$9,135, $3,168, $42,934, $265,082, $125,390 and $15,789, respectively.
Shareholder servicing fees payable for the period January 1, 1995 to
October 31, 1995 for the Government Cash, Tax-Exempt Cash, Core Fixed Income,
Muni Intermediate, New Jersey Muni, Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios were $179,403, $88,295,
$137,633, $7,721, $2,177, $29,441, $130,533, $ 61,932, and $7,699,
respectively.
Custody services are provided to each Portfolio by The Chase
Manhattan Bank, N.A., Brooklyn, New York.
-11-
<PAGE>
DISTRIBUTOR
Shares of the Funds are distributed continuously and are offered
without a sales load by ICC Distributors, Inc. ("ICC Distributors"), pursuant
to Distribution Agreements between the Funds and ICC Distributors. ICC
Distributors receives no fee from the Funds for its distribution services.
PORTFOLIO TRANSACTIONS
The Investment Advisory Agreements authorize the Advisor to select
the brokers or dealers that will execute the purchases and sales of investment
securities for each of the Portfolios and direct the Advisor to use its best
efforts to obtain the best available price and most favorable execution with
respect to all transactions for the Portfolios. The Advisor may, however,
consistent with the interests of a Portfolio, select brokers on the basis of
the research, statistical and pricing services they provide to a Portfolio.
Information and research received from such brokers will be in addition to,
and not in lieu of, the services required to be performed by the Advisor under
the Investment Advisory Agreements. A commission paid to such brokers may be
higher than that which another qualified broker would have charged for
effecting the same transaction, provided that such commissions are paid in
compliance with the Securities Exchange Act of 1934, as amended, and that the
Advisor determines in good faith that such commission is reasonable in terms
either of the transaction or the overall responsibility of the Advisor to a
Portfolio and the Advisor's other clients.
During the fiscal year ended October 31, 1997, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$80,102, $1,256,020, $592,458 and $171,033 in brokerage commissions,
respectively. During the fiscal year ended October 31, 1996, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$99,329, $726,803, $487,995 and $165,881 in brokerage commissions,
respectively. During the fiscal year ended October 31, 1995, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios paid
$157,547, $453,721, $343,683 and $165,103 in brokerage commissions,
respectively.
The Government Cash, Core Fixed Income, Muni Intermediate and New
Jersey Muni Portfolios do not currently expect to incur any brokerage
commission expense on transactions in their portfolio securities because debt
instruments are generally traded on a "net" basis with dealers acting as
-12-
<PAGE>
principal for their own accounts without a stated commission. The price of the
security, however, usually includes a profit to the dealer.
Because shares of the Portfolios are not marketed through intermediary
brokers or dealers, it is not the Funds' practice to allocate brokerage or
effect principal transactions with dealers on the basis of sales of shares which
may be made through such firms. However, the Advisor may place portfolio orders
with qualified broker-dealers who refer clients to the Advisor.
Some securities considered for investment by each Portfolio may also
be appropriate for other clients served by the Advisor. If purchase or sale of
securities is consistent with the investment policies of a Portfolio and one
or more of these other clients served by the Advisor and is considered at or
about the same time, transactions in such securities will be allocated among
the Portfolio and clients in a manner deemed fair and reasonable by the
Advisor. While in some cases this practice could have a detrimental effect on
the price, value or quantity of the security as far as a Portfolio is
concerned, in other cases it is believed to be beneficial to the Portfolios.
ADDITIONAL INFORMATION CONCERNING TAXES
General. The following summarizes certain additional tax
considerations generally affecting the Portfolios and their shareholders that
are not described in the Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Portfolios or their shareholders, and
the discussion here and in the Prospectus is not intended as a substitute for
careful tax planning. Potential investors should consult their tax advisers
with specific reference to their own tax situation.
Each Portfolio is treated as a separate corporate entity under the
Internal Revenue Code of 1986, as amended (the "Code"), and intends to qualify
as a regulated investment company. Qualification as a regulated investment
company under the Code requires, among other things, that each Portfolio
distribute to its shareholders an amount equal to at least the sum of 90% of
its investment company taxable income and 90% of its tax-exempt income (if
any) net of certain deductions for a taxable year. In addition, each Portfolio
must satisfy certain requirements with respect to the source of its income for
a taxable year. At least 90% of the gross income of each Portfolio must be
derived from dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities or foreign
currencies, and other income (including, but not limited to, gains from
options, futures, or forward contracts) derived with respect to the
Portfolio's business of investing in such stock, securities or currencies. The
Treasury Department may by regulation exclude from qualifying income foreign
currency gains which are not directly related to a Portfolio's principal
business of investing in stock or securities, or options and futures with
respect to stock or securities. Any income derived by a Portfolio from a
partnership or trust is treated for this purpose as derived with respect to
-13-
<PAGE>
the Portfolio's business of investing in stock, securities or currencies
only to the extent that such income is attributable to items of income which
would have been qualifying income if realized by the Portfolio in the same
manner as by the partnership or trust.
Any distribution of the excess of net long-term capital gain over net
short-term capital loss is taxable to a shareholder as long-term capital gain,
regardless of how long the shareholder has held the distributing Portfolio's
shares and whether such distribution is received in cash or additional
Portfolio shares. Each Portfolio will designate such distributions as capital
gain dividends in a written notice mailed to shareholders within 60 days after
the close of the Portfolio's taxable year. Shareholders should note that, upon
the sale or exchange of Portfolio shares, if the shareholder has not held such
shares for more than six months, any loss on the sale or exchange of those
shares will be treated as long-term capital loss to the extent of the capital
gain dividends received with respect to the shares.
Under the Taxpayer Relief Act of 1997, for capital gains on
securities recognized after July 28, 1997, the maximum tax rate for
individuals is 20% if the property was held more than 18 months; for property
held for more than 12 months, but no longer than 18 months, the maximum tax
rate on capital gains continues to be 28%. For sales or exchanges on or before
July 28, 1997, an individual's net capital gains are still taxable at a
maximum rate of 28%. Ordinary income of individuals is taxable at a maximum
marginal rate of 39.6%, but because of limitations on itemized deductions
otherwise allowable and the phase-out of personal exemptions, the maximum
effective marginal rate of tax for some taxpayers may be higher. For
corporations, long-term capital gains and ordinary income are both taxable at
a maximum nominal rate of 35% (although surtax provisions apply at certain
income levels to result in marginal rates as high as 39%).
The following Portfolios have available capital loss carryforwards to
offset future net capital gains through the indicated expiration dates as
follows:
<TABLE>
<CAPTION>
Expiring Expiring Expiring Expiring Expiring Expiring Expiring
Portfolio in 1999 in 2000 in 2001 in 2002 in 2003 in 2004 in 2005
- --------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Government Cash - - $127 $1,000 $26,819 - $7,815
Tax Exempt Cash $18,922 - 19,079 8,905 27,815 $13 -
Core Fixed Income - - - 9,261,440 - - -
Muni Intermediate - $656 4,787 215,936 549,436 2,107 42,723
New Jersey Muni - - - 56,594 21,708 11,660 -
</TABLE>
-14-
<PAGE>
If for any taxable year a Portfolio does not qualify for the special
Federal income tax treatment afforded regulated investment companies, all of its
taxable income will be subject to Federal income tax at regular corporate rates
(without any deduction for distributions to its shareholders). In such event,
dividend distributions (including amounts derived from interest on tax-exempt
obligations in the case of the Tax-Exempt Cash, Muni Intermediate and New Jersey
Muni Portfolios) would be taxable as ordinary income to shareholders to the
extent of the Portfolio's current and accumulated earnings and profits, and
would be eligible for the dividends received deduction for corporations.
Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios. As
described in the Prospectus, these Portfolios are designed to provide
investors with current tax-exempt interest income. Shares of the Portfolios
would not be suitable for tax-exempt institutions and may not be suitable for
retirement plans qualified under Section 401 of the Code, H.R. 10 plans and
individual retirement accounts since such plans and accounts are generally
tax-exempt and, therefore, would not only fail to gain any additional benefit
from each such Portfolio's dividends being tax-exempt, but such dividends
would be ultimately taxable to the beneficiaries when distributed to them. In
addition, the Portfolios may not be an appropriate investment for entities
which are "substantial users" of facilities financed by private activity bonds
or "related persons" thereof. "Substantial user" is defined under U.S.
Treasury Regulations to include a non-exempt person who regularly uses a part
of such facilities in his trade or business and whose gross revenues derived
with respect to the facilities financed by the issuance of bonds are more than
5% of the total revenues derived by all users of such facilities, who occupies
more than 5% of the usable area of such facilities or for whom such facilities
or a part thereof were specifically constructed, reconstructed or acquired.
"Related persons" include certain related natural persons, affiliated
corporations, a partnership and its partners and an S corporation and its
shareholders.
The percentage of total dividends paid by each Portfolio with respect
to any taxable year which qualify as Federal exempt-interest dividends will be
the same for all shareholders receiving dividends for such year. In order for
each Portfolio to pay exempt-interest dividends with respect to any taxable
year, at the close of each quarter of its taxable year at least 50% of the
-15-
<PAGE>
aggregate value of each Portfolio's assets must consist of exempt-interest
obligations. After the close of its taxable year, each Portfolio will notify
its shareholders of the portion of the dividends paid by it which constitutes
an exempt-interest dividend with respect to such year. However, the aggregate
amount of dividends so designated by each Portfolio cannot exceed the excess
of the amount of interest exempt from tax under Section 103 of the Code
received by the particular Portfolio for the taxable year over any amounts
disallowed as deductions under Sections 265 and 171(a)(2) of the Code.
Interest on indebtedness incurred by a shareholder to purchase or
carry such a Portfolio's shares generally is not deductible for Federal income
tax purposes if the Portfolio distributes exempt-interest dividends during the
shareholder's taxable year.
While each Portfolio will seek to invest substantially all of its
assets in tax-exempt obligations (except on a temporary basis or for temporary
defensive periods), any investment company taxable income earned by a
Portfolio will be distributed. In general, each Portfolio's investment company
taxable income will be its taxable income (including taxable interest received
from temporary investments and any net short-term capital gains realized by a
Portfolio) subject to certain adjustments and excluding the excess of any net
long-term capital gains for the taxable year over the net short-term capital
loss, if any, for such year.
Federal Taxation of Certain Financial Instruments. Generally, certain
foreign currency contracts entered into and held by the International
Portfolio at the close of the Fund's taxable year may be treated for Federal
income tax purposes as sold for their fair market value on the last business
day of such year, a process known as "mark-to-market." Forty percent of any
gain or loss resulting from such constructive sale will be treated as
short-term capital gain or loss and sixty percent of such gain or loss will be
treated as long-term capital gain or loss without regard to the length of time
the Portfolio holds the foreign currency contract ("the 40-60 rule"). To
receive such Federal income tax treatment, a foreign currency contract must
meet the following conditions: (1) the contract must require delivery of a
foreign currency of a type in which regulated futures contracts are traded or
upon which the settlement value of the contract depends; (2) the contract must
be entered into at arm's length at a price determined by reference to the
price in the interbank market; and (3) the contract must be traded in the
interbank market. The amount of any capital gain or loss actually realized by
the Portfolio in a subsequent sale or other disposition of those foreign
currency contracts will be adjusted to reflect any capital gain or loss taken
-16-
<PAGE>
into account by the Portfolio in a prior year as a result of the constructive
sale of the contracts. The Treasury Department has broad authority to issue
regulations under the provisions respecting foreign currency contracts. As of
the date of this Statement of Additional Information, the Treasury has not
issued any such regulations. Other foreign currency contracts entered into by
the International Portfolio may result in the creation of one or more
straddles for Federal income tax purposes, in which case certain loss
deferral, short sales, and wash sales rules and the requirement to capitalize
interest and carrying charges may apply.
Special rules govern the Federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules include
the following: (i) the acquisition of, or becoming the obligor under, a bond
or other debt instrument (including, to the extent provided in Treasury
regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instrument if such
instrument is not marked to market. The disposition of a currency other than
the U.S. dollar by a U.S. taxpayer is also treated as a transaction subject to
the special currency rules. However, foreign currency-related regulated
futures contracts and non-equity options are generally not subject to the
special currency rules if they are or would be treated as sold for their fair
market value at year-end under the mark-to-market rules, unless an election is
made to have such currency rules apply. With respect to transactions covered
by the special rules, foreign currency gain or loss is calculated separately
from any gain or loss on the underlying transaction and is normally taxable as
ordinary gain or loss. A taxpayer may elect to treat as capital gain or loss
foreign currency gain or loss arising from certain identified forward
contracts, futures contracts and options that are capital assets in the hands
of the taxpayer and which are not part of a straddle. In accordance with
Treasury regulations under which certain transactions that are part of a
"section 988 hedging transaction" (as defined in the Code and the Treasury
regulations) will be integrated and treated as a single transaction or
otherwise treated consistently for purposes of the Code. Any gain or loss
attributable to the foreign currency component of a transaction engaged in by
a Portfolio which is not subject to the special currency rules (such as
foreign equity investments other than certain preferred stocks) will be
treated as capital gain or loss and will not be segregated from the gain or
loss on the underlying transaction. It is anticipated that some of the
-17-
<PAGE>
non-U.S. dollar denominated investments and foreign currency contracts the
International Portfolio may make or enter into will be subject to the special
currency rules described above.
Special Considerations Regarding Investment In Pennsylvania
Municipal Obligations.
The concentration of investments in Pennsylvania Municipal Obligations
by the Muni Intermediate Portfolio raises special investment considerations. In
particular, changes in the economic condition and governmental policies of the
Commonwealth of Pennsylvania and its municipalities could adversely affect the
value of the Portfolio and its portfolio securities. This section briefly
describes current economic trends in Pennsylvania.
Pennsylvania's economy historically has been dependent on heavy
industry although recent declines in the coal, steel and railroad industries
have led to diversification of the Commonwealth's economy. Recent sources of
economic growth in Pennsylvania are in the service sector, including trade,
medical and health services, education and financial institutions. Agriculture
continues to be an important component of the Commonwealth's economic
structure, with nearly one-third of the Commonwealth's total land area devoted
to cropland, pasture and farm woodlands.
The Commonwealth utilizes the fund method of accounting and over 120
funds have been established for purposes of recording receipts and
disbursements of the Commonwealth, of which the General Fund is the largest.
Most of the Commonwealth's operating and administrative expenses are payable
from the General Fund. The major tax sources for the General Fund are the
sales tax, the personal income tax and the corporate net income tax. Major
expenditures of the Commonwealth include funding for education, public health
and welfare, transportation, and economic development.
The constitution of the Commonwealth provides that operating budget
appropriations of the Commonwealth may not exceed the estimated revenues and
available surplus in the fiscal year for which funds are appropriated. Annual
budgets are enacted for the General Fund and for certain special revenue funds
which together represent the majority of expenditures of the Commonwealth.
Although the balance in the General Fund of the Commonwealth (the principal
operating fund of the Commonwealth) experienced deficits in fiscal 1990 and
1991, tax increases and spending decreases have resulted in surpluses the last
four years; as of June 30, 1996, the General Fund had a surplus of $635.2
million.
-18-
<PAGE>
Current constitutional provisions permit the Commonwealth to issue
the following types of debt: (i) electorate approved debt, (ii) debt for
capital projects subject to an aggregate debt limit of 1.75 times the annual
average tax revenues of the preceding five fiscal years, (iii) tax
anticipation notes payable in the fiscal year of issuance and (iv) debt to
suppress insurrection or rehabilitate areas affected by disaster. Certain
state-created agencies issue debt supported by assets of, or revenues derived
from, the various projects financed and the debt of such agencies is not an
obligation of the Commonwealth although some of the agencies are indirectly
dependent on Commonwealth appropriations.
Certain litigation is pending against the Commonwealth that could
adversely affect the ability of the Commonwealth to pay debt service on its
obligations including suits relating to the following matters: (a) the ACLU
has filed suit in federal court demanding additional funding for child welfare
services; the Commonwealth settled a similar suit in the Commonwealth Court of
Pennsylvania and is seeking the dismissal of the federal suit, inter alia,
because of that settlement; after its earlier denial was reversed by the Third
Circuit Court of Appeals, the district court granted class certification to
the ACLU, and the parties are proceeding with discovery (no available
estimates of potential liability); (b) in 1987, the Supreme Court of
Pennsylvania held that the statutory scheme for county funding of the judicial
system to be in conflict with the constitution of the Commonwealth, but stayed
judgment pending enactment by the legislature of funding consistent with the
opinion; a special master appointed by the Court submitted an implementation
plan in 1997, recommending a four phase transition to state funding of a
unified judicial system; the special master recommended that the
implementation of the phase should be effective July 1, 1998, with the
completion of the final phase early next century; objections to the Special
Master's report were due by September 1, 1997; the General Assembly has yet to
consider legislation implementing the Court's judgment; (c) litigation has
been filed in both state and federal court by an association of rural and
small schools and several individual school districts and parents challenging
the constitutionality of the Commonwealth's system for funding local school
districts -- the federal case has been stayed pending resolution of the state
case; the state trial, post-trial briefing, and oral arguments have been
completed, and the judge has taken the case under advisement (no available
estimate of potential liability); (d) Envirotest/Synterra Partners
("Envirotest") filed suit against the Commonwealth asserting that it sustained
damages in excess of $350 million as a result of investments it made in
reliance on a contract to conduct emissions testing before the emissions
testing program was suspended. Envirotest has entered into a Settlement
Agreement resolve to which Envirotest's claims that will say Environtest a
-19-
<PAGE>
conditional sum of $195 million over four years; (e) in litigation brought by
the Pennsylvania Human Relations Commission to remedy unintentional conditions
of segregation in the Philadelphia public schools, the School District of
Philadelphia filed a third-party complaint against the Commonwealth asking the
Commonwealth Court to require the Commonwealth to supply funding necessary for
the District to comply with orders of the court; the Commonwealth Court found
that the School District was entitled to receive an additional $45.2 million
for the 1996-97 school year, but the Pennsylvania Supreme Court vacated this
decision in September 1996; pursuant to the Court's orders, the parties have
briefed certain issues, but oral argument has not yet been scheduled (no
available estimate of potential liability); (f) in February 1997, five
residents of the City of Philadelphia, joined by the City, the School District
and Others, filed a civil action in the Commonwealth Court for declaratory
judgment against the Commonwealth and certain Commonwealth officers and
officials that the defendants had failed to provide an adequate quality of
education in Philadelphia, as required by the Pennsylvania Constitution; after
preliminary objections and briefs were filed, the Court heard oral argument en
banc in September 1997, and has taken the matter under advisement (no
available estimate of potential liability); (g) in April 1995, the
Commonwealth reached a settlement agreement with Fidelity Bank and certain
other banks with respect to the constitutional validity of the Amended Bank
Shares Act and related legislation; although this settlement agreement did not
require expenditure of Commonwealth funds, the petitions of other banks are
currently pending with the Commonwealth court (no available estimate of
potential liability); and (h) suit has been filed in state court against the
State Employees' Retirement Board claiming that the use of gender distinct
actuarial factors to compute benefits received before August 1, 1983 violates
the Pennsylvania Constitution (gender-neutral factors have been used since
August 1, 1983, the date on which the U.S. Supreme Court held in Arizona
Governing Committee v. Norris that the use of such factors violated the
Federal Constitution); in 1996, the Commonwealth Court heard oral argument en
banc, and in 1997 denied the plaintiff's motion for judgment on the pleadings
(no available estimate of potential liability).
Local government units in the Commonwealth of Pennsylvania (which
include, among other things, counties, cities, boroughs, towns, townships,
school districts and other municipally created units such as industrial
development authorities and municipality authorities, including water and
sewer authorities) are permitted to issue debt for capital projects: (i) in
any amount so long as the debt has been approved by the voters of the local
government unit; or (ii) without electoral approval if the aggregate
outstanding principal amount of debt of the local government unit is not in
-20-
<PAGE>
excess of 100% of its borrowing base (in the case of a school district of
the first class), 300% of its borrowing base (in the case of a county) or 250%
of its borrowing base (in the case of all other local government units); or
(iii) without electoral approval and without regard to the limit described in
(ii) in any amount in the case of certain subsidized debt and self-liquidating
debt (defined to be debt with no claim on taxing power, secured solely by
revenues from a specific source which have been projected to be sufficient to
pay debt service on the related debt). Lease rental debt may also be issued,
in which case the total debt limits described in section (ii) (taking into
account all existing lease rental debt in addition to all other debt) are
increased. The borrowing base for a local government unit is the average of
total revenues for the three fiscal years preceding the borrowing. The risk of
investing in debt issued by any particular local government unit depends, in
the case of general obligation bonds secured by tax revenues, on the
creditworthiness of that issuer or, in the case of revenue bonds, on the
revenue producing ability of the project being financed, and not directly on
the credit-worthiness of the Commonwealth of Pennsylvania as a whole.
The City of Philadelphia (the "City") experienced a series of General
Fund deficits for Fiscal Years 1988 through 1992 and, while its general
financial situation has improved, the City is still seeking a long-term
solution for its economic difficulties. The City has no legal authority to
issue deficit reduction bonds on its own behalf, but state legislation has
been enacted to create an Intergovernmental Cooperation Authority (the
"Authority") to provide fiscal oversight for Pennsylvania cities (primarily
Philadelphia) suffering recurring financial difficulties. The Authority is
broadly empowered to assist cities in avoiding defaults and eliminating
deficits by encouraging the adoption of sound budgetary practices and issuing
bonds. In order for the Authority to issue bonds on behalf of the City, the
City and the Authority entered into an intergovernmental cooperative agreement
providing the Authority with certain oversight powers with respect to the
fiscal affairs of the City, and in recent years, the Authority has issued
approximately $1.76 billion of Special Revenue Bonds on behalf of the City.
The City currently is operating under a five year plan approved by the
Authority in 1996, with technical amendments officially incorporated on July
18, 1996. The audited balance of the City's General Fund as of June 30, 1996
showed a surplus of approximately $118.5 million up from approximately $80.5
million as of June 30, 1995.
The Authority's power to issue further bonds to finance capital
projects or deficit expired on December 31, 1994. The Authority's power to
issue debt to finance a cash flow deficit expired on December 31, 1996, and
its ability to refund outstanding bonds is unrestricted. The Authority had
-21-
<PAGE>
approximately $1.1 billion in Special Revenue Bonds outstanding as of June 30,
1997.
The foregoing information as to certain Pennsylvania risk factors
constitutes only a brief summary, does not purport to be a complete
description of Pennsylvania risk factors and is principally drawn from
official statements relating to securities offerings of the Commonwealth of
Pennsylvania that have come to the Funds' attention and were available as of
the date of this Statement of Additional Information.
Special Considerations Regarding Investment in New Jersey
Municipal Obligations
The State of New Jersey (the "State") and its political subdivisions,
agencies and public authorities are authorized to issue two general classes of
indebtedness; general obligation bonds and revenue bonds. Both classes of
bonds may be included in the New Jersey Muni Portfolio. The repayment of
principal and interest on general obligation bonds is secured by the full
faith and credit of the issuer, backed by the issuer's taxing authority,
without recourse to any special project or source of revenue. Special
obligation or revenue bonds may be repaid only from revenues received in
connection with the project for which the bonds are issued, special excise
taxes, or other special revenue sources and generally are issued by entities
without taxing power. Neither the State of New Jersey nor any of its
subdivisions is liable for the repayment of principal or interest on revenue
bonds except to the extent stated in the preceding sentences.
General obligation bonds of the state are repaid from revenues
obtained through the state's general taxing authority. An inability to
increase taxes may adversely affect the state's ability to authorize or repay
debt.
Public authorities, private non-profit corporations, agencies and
similar entities of New Jersey ("Authorities") are established for a variety
of beneficial purposes, including economic development, housing and mortgage
financing, health care facilities and public transportation. The Authorities
are not operating entities of the State of New Jersey, but are separate legal
entities that are managed independently. The state oversees the Authorities by
appointing the governing boards, designating management, and by significantly
influencing operations. The Authorities are not subject to New Jersey
constitutional restrictions on the incurrence of debt, applicable to the State
of New Jersey itself, and may issue special obligation or private activity
bonds in legislatively authorized amounts.
-22-
<PAGE>
An absence or reduction of revenue will affect a bond-issuing
Authority's ability to repay debt on special obligation bonds and no assurance
can be given that sufficient revenues will be obtained to make such payments,
although in some instances repayment may be guaranteed or otherwise secured.
Various Authorities have issued bonds for the construction of health
care facilities, transportation facilities, office buildings and related
facilities, housing facilities, pollution control facilities, water and
sewerage facilities and power and electric facilities. Each of these
facilities may incur different difficulties in meeting its debt repayment
obligations. Hospital facilities, for example, are subject to changes in
Medicare and Medicaid reimbursement regulations, attempts by Federal and state
legislatures to limit the costs of health care and management's ability to
complete construction projects on a timely basis as well as to maintain
projected rates of occupancy and utilization. At any given time, there are
several proposals pending on a Federal and state level concerning health care
which may further affect a hospital's debt service obligation.
Housing facilities may be subject to increases in operating costs,
management's ability to maintain occupancy levels, rent restrictions and
availability of Federal or state subsidies, while power and electric
facilities may be subject to increased costs resulting from environmental
restrictions, fluctuations in fuel costs, delays in licensing procedures and
the general regulatory framework in which these facilities operate. All of
these entities are constructed and operated under rigid regulatory guidelines.
Some entities which financed facilities with proceeds of private
activity bonds issued by the New Jersey Economic Development Authority, a
major issuer of special obligation bonds, have defaulted on their debt service
obligations. Because these special obligation bonds were repayable only from
revenue received from the specific projects which they funded, the New Jersey
Economic Development Authority was unable to repay the debt service to
bondholders for such facilities. Each issue of special obligation bonds,
however, depends on its own revenue for repayment, and thus these defaults
should not affect the ability of the New Jersey Economic Development Authority
to repay obligations on other bonds that it issues in the future.
The state has experienced a gradual economic recovery since hitting a
recessionary peak during 1992. Recently, the state's unemployment rate has
fallen, and job growth has been experienced in several sectors of the state's
economy. To the extent that any adverse conditions exist in the future which
affect the obligor's ability to repay debt, the value of the Portfolio may be
immediately and substantially affected.
-23-
<PAGE>
The following are cases presently pending or threatened in which the
State has a potential for either a significant loss of revenue or a
significant unanticipated expenditure: (i) several labor unions have
challenged 1994 legislation mandating a revaluation of several public employee
pension funds which resulted in a refund of millions of dollars in public
employer contributions to the State and significant ongoing annual savings to
the State; (ii) several cases filed in the State courts challenged the basis
on which recoveries of certain costs for residents in State psychiatric
hospitals and other facilities are shared between the State Department of
Human Services and the State's county governments, and certain counties are
seeking the recovery from the Department of costs they have incurred for the
maintenance of such residents; (iii) the County of Passaic and other parties
have filed suit alleging the State violated a 1984 consent order concerning
the construction of a resource recovery facility in that county; (iv) several
Medicaid eligible children and the Association for Children of New Jersey have
filed suit claiming the Medicaid reimbursement rates for services rendered to
such children are inadequate under federal law; (v) a coalition of churches
and church leaders in Hudson County have filed suit asserting the State-owned
Liberty State Park in Jersey City violates environmental standards; (vi)
representatives of the trucking industry have filed a constitutional challenge
to annual hazardous and solid waste licensure renewal fees; (vii) the
Education Law Center filed a motion compelling the State to close the spending
gap between poor urban school districts and wealthy rural school districts;
(viii) a group of insurance companies have filed a constitutional challenge to
the challenge to the State's assessment of monies pursuant to the Fair
Automobile Insurance Reform Act of 1990; (ix) a class action consisting of
prisoners with serious mental disorders has been filed against officers of the
Department of Corrections, alleging sex discrimination, violation of the
Americans with Disabilities Act of 1990, and constitutional violations; (x) a
class action has been brought in federal court challenging the State's method
of determining the monthly needs of a spouse of an institutionalized person
under the Medicare Catastrophic Act; (xi) several suits have been filed
against the State in federal court alleging that the State committed
securities fraud and environmental violations in the financing of a new
Atlantic City highway and tunnel; (xii) a class action has been filed against
the State alleging the State's breach of contract for not paying certain
Medicare co-insurance and deductibles; and (xiii) an action has been filed
challenging the State's issuance of bonds to fund the accrued liability in its
pension funds under the Pension Bond Financing Act of 1997.
Although the Portfolio generally intends to invest its assets
primarily in New Jersey Municipal Obligations rated no lower than A, MIG2 or
Prime-1 by Moody's or A SP-1 or A-1 by S&P, there can be no assurance that
-24-
<PAGE>
such ratings will remain in effect until the bond matures or is redeemed or
will not be revised downward or withdrawn. Such a revision or withdrawal may
have an adverse affect on the market price of such securities.
PERFORMANCE CALCULATIONS
From time to time, the Government Cash Portfolio and the Tax-Exempt Cash
Portfolio (the "Cash Portfolios"), may advertise or quote yield, effective
yield or total return. The "yield" and "effective yield" of the Government
Cash and Tax-Exempt Cash Portfolios, and the "tax-equivalent yield" of the
Tax-Exempt Cash Portfolio, are calculated according to formulas prescribed by
the Commission. The standardized seven-day yield of each of these Portfolios
is computed by determining the net change, exclusive of capital changes, in
the value of a hypothetical pre-existing account in the particular Portfolio
having a balance of one share at the beginning of the period, dividing the net
change in account value by the value of the account at the beginning of the
base period to obtain the base period return, and multiplying the base period
return by (365/7). The net change in the value of an account in the Cash
Portfolios includes the value of additional shares purchased with dividends
from the original share, and dividends declared on both the original share and
any such additional shares, net of all fees, other than nonrecurring account
or sales charges, that are charged by the Fund to all shareholder accounts in
proportion to the length of the base period and the Portfolio's average
account size. The capital changes to be excluded from the calculation of the
net change in account value are realized gains and losses from the sale of
securities and unrealized appreciation and depreciation. An effective
annualized yield for the Cash Portfolios may be computed by compounding the
unannualized base period return (calculated as above) by adding 1 to the base
period return, raising the sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.
The Tax-Exempt Cash Portfolio's "7-day tax-equivalent yield" may be
computed by dividing the tax-exempt portion of the Portfolio's yield
(calculated as above) by one minus a stated Federal income tax rate and adding
the product to that portion, if any, of the Portfolio's yield that is not
tax-exempt. The Tax-Exempt Cash Portfolio's tax-equivalent yield, and the Cash
Portfolios' yield and effective yield, do not reflect any fees charged by the
Advisor to its clients. See "Investment Advisor."
Set forth below is an example, for purposes of illustration only, of
the current yield calculations for each of the Cash Portfolios for the seven
day period ended October 31, 1997.
-25-
<PAGE>
Government Cash Tax-Exempt
Portfolio Cash Portfolio
10/31/97 10/31/97
--------------- --------------
7-Day Yield (Net Change
X 365/7 average net
asset value) 5.56% 3.52%
7-Day Effective Yield 5.71% 3.58%
7-Day Tax-Equivalent Yield 8.06% 5.10%*
- ---------------------------------
* Assumes an effective Federal income tax rate of 31%
The Commission yield of the Core Fixed Income Portfolio, Muni
Intermediate Portfolio and the New Jersey Muni Portfolio for the 30-day period
ended October 31, 1997 was 7.22%, 4.75% and 4.22%, respectively. These yields
were calculated by dividing the net investment income per share (as described
below) earned by the Portfolio during a 30-day (or one month) period by the
maximum offering price per share on the last day of the period and annualizing
the result on a semi-annual basis by adding one to the quotient, raising the
sum to the power of six, subtracting one from the result and then doubling the
difference. The Portfolio's net investment income per share earned during the
period is based on the average daily number of shares outstanding during the
period entitled to receive dividends and includes dividends and interest
earned during the period minus expenses accrued for the period, net of
reimbursements. This calculation can be expressed as follows:
Yield = 2 [( a-b + 1)6 - 1]
---
cd
Where: a = dividends and interest earned during the
period.
b = expenses accrued for the period net of
reimbursements.
c = the average daily number of
shares outstanding during the
period that were entitled to
receive dividends.
d = maximum offering price per share
on the last day of the period.
For the purpose of determining net investment income earned during
the period (variable "a" in the formula), interest earned on any debt
obligations held by the Core Fixed Income, Muni Intermediate or New Jersey
Muni Portfolios is calculated by computing the yield to maturity of each
obligation held by the Portfolio based on the market value of the obligation
(including actual accrued interest) at the close of business on the last
business day of each month, or, with respect to obligations purchased during
the month, the purchase price (plus actual accrued interest) and dividing the
result by 360 and multiplying the quotient by the market value of the
-26-
<PAGE>
obligation (including actual accrued interest) in order to determine the
interest income on the obligation for each day of the subsequent month that
the obligation is held by the particular Portfolio. For purposes of this
calculation, it is assumed that each month contains 30 days. The maturity of
an obligation with a call provision is the next call date on which the
obligation reasonably may be expected to be called or, if none, the maturity
date. With respect to debt obligations purchased at a discount or premium, the
formula generally calls for amortization of the discount or premium. The
amortization schedule will be adjusted monthly to reflect changes in the
market values of such debt obligations.
Undeclared earned income will be subtracted from the maximum offering
price per share (variable "d" in the formula). Undeclared earned income is the
net investment income which, at the end of the base period, has not been
declared as a dividend, but is reasonably expected to be and is declared and
paid as a dividend shortly thereafter. The Core Fixed Income, Muni
Intermediate and New Jersey Muni Portfolios' yields do not reflect any fees
charged by the Advisor or an Affiliate to its clients. See "Investment
Advisor."
The Muni Intermediate and New Jersey Muni Portfolios'
"tax-equivalent" yield is computed by dividing the portion of the yield that
is exempt from Federal and/or State income taxes by one minus a stated Federal
income tax rate and/or the State income tax rate and by adding that figure to
that portion, if any, of the yield that is not tax-exempt. The 30 day
tax-equivalent yield for the Muni Intermediate Portfolio and New Jersey
Portfolio for the 30-day period ended October 31, 1997 was 7.18% and 6.65%,
respectively (assuming a marginal Federal income tax rate of 31% and marginal
Pennsylvania and New Jersey income tax rates of 2.80 and 5.525%,
respectively).
The Core Fixed Income, Equity, International, Small Capitalization
Equity, Muni Intermediate, New Jersey Muni and Large Cap Value Portfolios each
compute their respective average annual total returns separately for each
class by determining the average annual compounded rates of return during
specified periods that equate the initial amount invested to the ending
redeemable value of such investment. This is done by dividing the ending
redeemable value of a hypothetical $1,000 initial payment by $1,000 and
raising the quotient to a power equal to one divided by the number of years
(or fractional portion thereof) covered by the computation and subtracting one
from the result. This calculation can be expressed as follows:
-27-
<PAGE>
T = [( ERV )1/n - 1]
---
P
Where: T = average annual total return.
ERV = ending redeemable value
at the end of the period
covered by the
computation of a
hypothetical $1,000
payment made at the
beginning of the period.
P = hypothetical initial
payment of $1,000.
n = period covered by the computation,
expressed in terms of years.
The Core Fixed Income, Equity, International, Small Capitalization
Equity, Muni Intermediate, New Jersey Muni and Large Cap Value Portfolios
compute their aggregate total returns separately for each class by determining
the aggregate rates of return during specified periods that likewise equate
the initial amount invested to the ending redeemable value of such investment.
The formula for calculating aggregate total return is as follows:
T = [( ERV ) - 1]
---
P
The calculations of average annual total return and aggregate total
return assume the reinvestment of all dividends and capital gain
distributions. The ending redeemable value (variable "ERV" in each formula) is
determined by assuming complete redemption of the hypothetical investment and
the deduction of all nonrecurring charges at the end of the period covered by
the computations. Each Portfolio's average annual total return and aggregate
total return do not reflect any fees charged by the Advisor to its clients.
See "Investment Advisor."
As of January 1, 1998, the Small Capitalization Equity Portfolio
began to offer Institutional Shares. Institutional Shares are subject to an
annual .05% fee payable pursuant to the Amended and Restated Shareholder
Servicing Plan ("Shareholder Servicing Fee"). Prior to January 1, 1998, the
Small Capitalization Equity Portfolio did not have an advisory fee and Advisor
Shares had a .05% Shareholder Servicing Fee. Performance of the Institutional
Shares prior to January 1, 1998 is represented by performance of the Advisor
Shares.
Set forth below are the average annual total return figures for the
Core Fixed Income, Equity, International, Small Capitalization Equity, Muni
Intermediate, Large Cap Value and New Jersey Muni Portfolios since inception
-28-
<PAGE>
and for the one year and five year periods ended October 31, 1997.
<TABLE>
<CAPTION>
Small
Core Fixed Capitalization Muni
Income Equity International Equity Intermediate
Portfolio Portfolio Portfolio Portfolio Portfolio
---------- --------- ------------- --------------- ------------
Advisor Institutional
Shares Shares
------- --------------
<S> <C> <C> <C> <C> <C> <C>
1 Year Ended 10/31/97 8.63% 36.39% 16.35% 41.80% N/A 6.69%
5 Years Ended 10/31/97 6.65% 20.71% 15.98% 22.83% N/A 5.97%
Inception to 10/31/97 8.55% 15.79% 11.61% 19.05% N/A 5.65%
Large Cap New
Value Jersey Muni
Portfolio Portfolio
--------- ------------
1 Year Ended 10/31/97 36.55% 6.90%
Inception to 10/31/97 18.44% 4.62%
Inception Dates:
Core Fixed Income Portfolio.................................. 11/17/88
Equity Portfolio............................................. 07/20/89
International Portfolio...................................... 11/17/88
Small Capitalization Equity Portfolio........................ 03/01/91
Muni Intermediate Portfolio.................................. 06/05/92
Large Cap Value Portfolio.................................... 12/31/92
New Jersey Muni Portfolio.................................... 11/01/93
</TABLE>
Set forth below are the aggregate total return figures for the Core
Fixed Income, Equity, International, Small Capitalization Equity, Muni
Intermediate, Large Cap Value and New Jersey Muni Portfolios from inception to
October 31, 1997.
Portfolio Inception Date Aggregate Total Return
- --------- -------------- ----------------------
Core Fixed Income 11/17/88 108.50%
Equity 07/20/89 236.96%
International 11/17/88 167.39%
Small Capitalization Equity 03/01/91 219.93%(1)
Muni Intermediate 06/05/92 34.65%
Large Cap Value 12/31/92 126.25%
New Jersey Muni 11/01/93 19.73%
- ---------------
(1) Represents performance of Advisor Shares
GENERAL INFORMATION
Dividends and Capital Gains Distributions
Each Portfolio's policy is to distribute substantially all of its net
investment income, if any, together with any net realized capital gains in the
amount and at the times that will avoid both income (including capital gains)
taxes on it and the imposition of the Federal excise tax on undistributed
income and gains (see discussion under "Dividends, Capital Gains Distributions
and Taxes" in the Prospectus). As set forth in the Prospectuses, the
Government Cash and the Tax-Exempt Cash Portfolios declare dividends daily and
normally distribute substantially all of their net investment income to
shareholders monthly; the International, Equity, Small Capitalization Equity
and Large Cap Value Portfolios normally distribute substantially all of their
net investment income to shareholders in the form of a quarterly dividend and
-29-
<PAGE>
the Core Fixed Income, Muni Intermediate and New Jersey Muni Portfolios
normally distribute substantially all of their net investment income to
shareholders in the form of a monthly dividend. If any net capital gains are
realized by a Portfolio, that Portfolio normally distributes such gains at
least once a year. The amounts of any income dividends or capital gains
distributions for a Portfolio cannot be predicted.
Any dividend or distribution paid shortly after the purchase of
shares of a Portfolio by an investor may have the effect of reducing the per
share net asset value of that Portfolio by the per share amount of the
dividend or distribution. Furthermore, such dividends or distributions,
although in effect a return of capital, are subject to income taxes as set
forth in the Prospectus.
Certain Record Holders
As of January 31, 1998, the Advisor held of record substantially all of
the outstanding shares of each Portfolio. For more information about the
Advisor, see "Investment Advisor" in the Prospectus. As of January 31, 1998
the directors/trustees and officers of the Funds collectively owned less than
1% of the outstanding shares of each of the Funds' Portfolios.
FINANCIAL STATEMENTS
The Funds' Financial Statements for the Government Cash, Tax-Exempt
Cash, Core Fixed Income, International, Equity, Small Capitalization Equity,
Large Cap Value, Muni Intermediate and New Jersey Muni Portfolios for the year
ended October 31, 1997 and the financial highlights for each of the respective
periods presented, appearing in the 1997 Annual Report to Shareholders, and
the reports thereon of Coopers & Lybrand L.L.P., the Funds' independent
accountants, also appearing therein, are incorporated by reference in this
Statement of Additional Information. No other parts of the 1997 Annual Report
to Shareholder are incorporated herein.
OTHER INFORMATION
The Prospectus and this Statement of Additional Information do not
contain all the information included in the Registration Statement filed with
the Commission under the Securities Act of 1933 with respect to the securities
offered by the Prospectus. Certain portions of the Registration Statement have
been omitted from the Prospectus and this Statement of Additional Information
pursuant to the rules and regulations of the SEC. The Registration Statement,
including the exhibits filed therewith, may be examined at the office of the
SEC in Washington, D.C.
-30-
<PAGE>
Statements contained in the Prospectus or in this Statement of
Additional Information as to the contents of any contract or other documents
referred to are not necessarily complete, and in each instance reference is
made to the copy of such contract or other document filed as an exhibit to the
Registration Statement of which the Prospectus and this Statement of
Additional Information form a part, each such statement being qualified in all
respects by such reference.
-31-
<PAGE>
APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS
I. Description of Bond Ratings
Excerpts from Moody's description of its highest bond ratings: Aaa -- judged
to be the best quality; carry the smallest degree of investment risk; Aa --
judged to be of high quality by all standards; A -- judged to be of upper medium
quality; factors giving security to principal and interest considered adequate
but elements may be present which suggest a susceptibility to impairment
sometime in the future; Baa -- judged to be of medium quality; lacking
outstanding investment characteristics and in fact having speculative
characteristics.
Excerpts from S&P description of its highest bond ratings: AAA -- highest
grade obligations; indicates an extremely strong capacity to pay interest and
repay principal; AA -- also qualify as high grade obligations; indicates a very
strong capacity to pay interest and repay principal and differs from AAA issues
only in small degree; A -- qualifies as upper medium grade obligations; have
strong capacity to pay interest and repay principal, although somewhat more
susceptible to adverse effects of change in circumstances and economic
conditions than higher rated bonds; BBB -- indicates adequate capacity to pay
interest and repay principal, although adverse economic conditions are likely to
weaken such capacity.
Description of Moody's ratings of state and municipal notes: Moody's ratings
for state and municipal notes, other short-term obligations and variable rate
demand obligations are as follows: MIG-1/VMIG-1 -- Best quality, enjoying strong
protection by established cash flows, superior liquidity support or demonstrated
broadbased access to the market for refinancing; MIG-2/VMIG-2 -- High quality
with margins of protection ample although not so large as in the preceding
group.
Description of Moody's highest commercial paper rating: Prime-1 ("P-1") --
judged to be of the best quality. Issuers rated P-1 (or related supporting
institutions) are considered to have a superior capacity for repayment of
short-term promissory obligations.
Excerpt from S&P rating of municipal note issues: SP-1+ -- overwhelming
capacity to pay principal and interest; SP-1 -- very strong or strong capacity
to pay principal and interest.
Description of S&P highest commercial papers ratings: A-1+ -- this
designation indicates the degree of safety regarding timely payment is
overwhelming. A-1 -- this designation indicates the degree of safety regarding
timely payment is either overwhelming or very strong.
A-1
<PAGE>
II. Description of Mortgage-Backed Securities
Mortgage-backed securities represent an ownership interest in a pool of
residential mortgage loans. These securities are designed to provide monthly
payments of interest and principal to the investor. The mortgagor's monthly
payments to his/her lending institution are "passed-through" to an investor such
as the Government Cash Portfolio and the Core Fixed Income Portfolio. Most
issuers or poolers provide guarantees of payments, regardless of whether or not
the mortgagor actually makes the payment. The guarantees made by issuers or
poolers are supported by various forms of credit, collateral, guarantees or
insurance, including individual loan, title, pool and hazard insurance purchased
by the issuer. There can be no assurance that the private issuers or poolers can
meet their obligations under the policies. Mortgage-backed securities issued by
private issuers or poolers, whether or not such securities are subject to
guarantees, may entail greater risk than securities directly or indirectly
guaranteed by the U.S. Government.
About Mortgage-Backed Securities. Interests in pools of mortgage-backed
securities differ from other forms of debt securities, which normally provide
for periodic payment of interest in fixed amounts with principal payments at
maturity or specified call dates. Instead, these securities provide a monthly
payment which consists of both interest and principal payments. In effect, these
payments are a "pass-through" of the monthly payments made by the individual
borrowers on their residential mortgage loans, net of any fees paid. Additional
payments are caused by repayments resulting from the sale of the underlying
residential property, refinancing or foreclosure net of fees or costs which may
be incurred. Some mortgage-backed securities are described as "modified
pass-through." These securities entitle the holders to receive all interest and
principal payments owed on the mortgages in the pool, net of certain fees,
regardless of whether or not the mortgagors actually make the payments.
Residential mortgage loans are pooled by the Federal Home Loan Mortgage
Corporation (FHLMC). FHLMC is a corporate instrumentality of the U.S. Government
and was created by Congress in 1970 for the purpose of increasing the
availability of mortgage credit for residential housing. Its stock is owned by
the twelve Federal Home Loan Banks. FHLMC issues Participation Certificates
("PC's") which represent interests in mortgages from FHLMC's national portfolio.
FHLMC guarantees the timely payment of interest and ultimate collection of
principal.
The Federal National Mortgage Association (FNMA) is a Government sponsored
corporation owned entirely by private stockholders. It is subject to general
regulation by the Secretary of Housing and Urban Development. FNMA purchases
A-2
<PAGE>
residential mortgages from a list of approved seller/servicers which include
state and federally-chartered savings and loan associations, mutual savings
banks, commercial banks and credit unions and mortgage bankers. Pass-through
securities issued by FNMA are guaranteed as to timely payment of principal and
interest by FNMA.
The principal Government guarantor of mortgage-backed securities is the
Government National Mortgage Association (GNMA). GNMA is a wholly-owned U.S.
Government corporation within the Department of Housing and Urban Development.
FNMA is authorized to guarantee, with the full faith and credit of the U.S.
Government, the timely payment of principal and interest on securities issued by
approved institutions and backed by pools of FHA-insured or VA-guaranteed
mortgages.
Commercial banks, savings and loan institutions, private mortgage insurance
companies, mortgage bankers and other secondary market issuers also create
pass-through pools of conventional residential mortgage loans. Pools created by
such non-governmental issuers generally offer a higher rate of interest than
Government and Government-related pools because there are no direct or indirect
Government guarantees of payments in the former pools. However, timely payment
of interest and principal of these pools is supported by various forms of
insurance or guarantees, including individual loan, title, pool and hazard
insurance purchased by the issuer. The insurance and guarantees are issued by
Governmental entities, private insurers and the mortgage poolers. There can be
no assurance that the private insurers or mortgage poolers can meet their
obligations under the policies.
The Funds expect that Governmental or private entities may create mortgage
loan pools offering pass-through investments in addition to those described
above. The mortgages underlying these securities may be alternative mortgage
instruments, that is, mortgage instruments whose principal or interest payment
may vary or whose terms to maturity may be shorter than previously customary. As
new types of mortgage-backed securities are developed and offered to investors,
each of the Government Cash Portfolio and the Core Fixed Income Portfolio will,
consistent with its investment objective and policies, consider making
investments in such new types of securities.
Underlying Mortgages. Pools consist of whole mortgage loans or
participations in loans. The majority of these loans are made to purchasers of
1-4 family homes. The terms and characteristics of the mortgage instruments are
generally uniform within a pool but may vary among pools. For example, in
addition to fixed-rate, fixed-term mortgages, the Core Fixed Income Portfolio
may purchase pools of variable rate mortgages (VRM), growing equity mortgages
(GEM), graduated payment mortgages (GPM) and other
A-3
<PAGE>
types where the principal and interest payment procedures vary. VRMs are
mortgages which reset the mortgage's interest rate periodically with changes in
open market interest rates. To the extent that the Portfolio is actually
invested in VRMs, the Portfolio's interest income will vary with changes in the
applicable interest rate on pools of VRMs. GPM and GEM pools maintain constant
interest rates, with varying levels of principal repayment over the life of the
mortgage. These different interest and principal payment procedures should not
impact the Portfolio's net asset value since the prices at which these
securities are valued will reflect the payment procedures.
All poolers apply standards for qualification to local lending institutions
which originate mortgages for the pools. Poolers also establish credit standards
and underwriting criteria for individual mortgages included in the pools. In
addition, some mortgages included in pools are insured through private mortgage
insurance companies.
Average Life. The average life of pass-through pools varies with the
maturities of the underlying mortgage instruments. In addition, a pool's term
may be shortened by unscheduled or early payments of principal and interest on
the underlying mortgages. The occurrence of mortgage prepayments is affected by
factors including the level of interest rates, general economic conditions, the
location and age of the mortgage and other social and demographic conditions.
As prepayment rates of individual pools vary widely, it is not possible to
accurately predict the average life of a particular pool. For pools of fixed
rate 30 year mortgages, common industry practice is to assume that prepayments
will result in a 12-year average life. Pools of mortgages with other maturities
or different characteristics will have varying assumptions for average life.
Returns on Mortgage-Backed Securities. Yields on mortgage-backed
pass-through securities are typically quoted based on the maturity of the
underlying instruments and the associated average life assumption. Actual
prepayment experience may cause the yield to differ from the assumed average
life yield.
Reinvestment of prepayments may occur at higher or lower interest rates than
the original investment, thus affecting the yields of the Portfolios which
invest in them. The compounding effect from reinvestments of monthly payments
received by a Portfolio will increase its yield to shareholders, compared to
bonds that pay interest semi-annually.
A-4
<PAGE>
III. Description of U.S. Government Securities and Certain Other
Securities
The term "U.S. Government securities" refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government.
U.S. Treasury securities are backed by the "full faith and credit" of the
United States. Securities issued or guaranteed by Federal agencies and U.S.
Government sponsored enterprises or instrumentalities may or may not be backed
by the full faith and credit of the United States. In the case of securities not
backed by the full faith and credit of the United States, an investor must look
principally to the agency, enterprise or instrumentality issuing or guaranteeing
the obligation for ultimate repayment, and may not be able to assert a claim
against the United States itself in the event the agency, enterprise or
instrumentality does not meet its commitment. Agencies which are backed by the
full faith and credit of the United States include the Export Import Bank,
Farmers Home Administration, Federal Financing Bank and others. Certain
agencies, enterprises and instrumentalities, such as the Government National
Mortgage Association are, in effect, backed by the full faith and credit of the
United States through provisions in their charters that they may make
"indefinite and unlimited" drawings on the Treasury, if needed to service its
debt. Debt from certain other agencies, enterprises and instrumentalities,
including the Federal Home Loan Bank and Federal National Mortgage Association,
are not guaranteed by the United States, but those institutions are protected by
the discretionary authority for the U.S. Treasury to purchase certain amounts of
their securities to assist the institution in meeting its debt obligations.
Finally, other agencies, enterprises and instrumentalities, such as the Farm
Credit System and the Federal Home Loan Mortgage Corporation, are federally
chartered institutions under Government supervision, but their debt securities
are backed only by the creditworthiness of those institutions, not the U.S.
Government.
Some of the U.S. Government agencies that issue or guarantee securities
include the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration and The Tennessee Valley Authority.
An instrumentality of the U.S. Government is a Government agency organized
under Federal charter with Government supervision. Instrumentalities issuing or
guaranteeing securities include, among others, Overseas Private Investment
Corporation, Federal Home Loan Banks, the Federal Land Banks,
A-5
<PAGE>
Central Bank for Cooperatives, Federal Intermediate Credit Banks and the Federal
National Mortgage Association.
International institutions that issue securities which the Core Fixed
Income Portfolio may purchase include the Asian Development Bank, Inter-American
Development Bank and the International Bank for Reconstruction and Development
(the "World Bank").
IV. Description of Municipal Obligations
Municipal Obligations generally include debt obligations issued by states
and their political subdivisions, and duly constituted authorities and
corporations, to obtain funds to construct, repair or improve various public
facilities such as airports, bridges, highways, hospitals, housing, schools,
streets and water and sewer works. Municipal Obligations may also be issued to
refinance outstanding obligations as well as to obtain funds for general
operating expenses and for loan to other public institutions and facilities.
The two principal classifications of Municipal Obligations are "general
obligation" and "revenue" or "special tax" bonds. General obligation bonds are
secured by the issuer's pledge of its full faith, credit and taxing power for
the payment of principal and interest. Revenue or special tax bonds are payable
only from the revenues derived from a particular facility or class of facilities
or, in some cases, from the proceeds of a special excise or other tax, but not
from general tax revenues. The Tax-Exempt Cash Portfolio may also invest in
tax-exempt industrial development bonds, short-term municipal obligations (rated
SP-1+ or SP-1 by S&P or MIG-1/VMIG-1 by Moody's), project notes, demand notes
and tax-exempt commercial paper (rated A-1+ or A-1 by S&P or P-1 by Moody's),
and municipal bonds with a remaining effective maturity of 13 months or less
(rated AA or better by S&P or Aa or better by Moody's).
Industrial revenue bonds in most cases are revenue bonds and generally do
not have the pledge of the credit of the issuer. The payment of the principal
and interest on such industrial revenue bonds is dependent solely on the ability
of the user of the facilities financed by the bonds to meet its financial
obligations and the pledge, if any, of real and personal property so financed as
security for such payment. Short-term municipal obligations issued by states,
cities, municipalities or municipal agencies, include Tax Anticipation Notes,
Revenue Anticipation Notes, Bond Anticipation Notes, Construction Loan Notes and
Short-Term Discount Notes. Project Notes are instruments guaranteed by the
Department of Housing and Urban Development but issued by a state or local
housing agency. While the issuing agency has the primary obligation on Project
Notes, they are also secured by the full faith and credit of the United States.
A-6
<PAGE>
Municipal Obligations may also include "moral obligation" bonds, which are
normally issued by special purpose public authorities. If the issuer of moral
obligation bonds is unable to meet its debt service obligations from current
revenues, it may draw on a reserve fund, the restoration of which is a moral
commitment but not a legal obligation of the state or municipality which created
the issuer.
Note obligations with demand or put options may have a stated maturity in
excess of 13 months, but permit any holder to demand payment of principal plus
accrued interest upon a specified number of days' notice. Frequently, such
obligations are secured by letters of credit or other credit support
arrangements provided by banks. The issuer of such notes normally has a
corresponding right, after a given period, to repay in its discretion the
outstanding principal of the note plus accrued interest upon a specific number
of days' notice to the bondholders. The interest rate on a demand note may be
based upon a known lending rate, such as a bank's prime rate, and be adjusted
when such rate changes, or the interest rate on a demand note may be a market
rate that is adjusted at specified intervals. The demand notes in which the
Tax-Exempt Cash Portfolio will invest are payable on not more than thirteen
months notice.
The yields of Municipal Obligations depend on, among other things, general
money market conditions, conditions in the Municipal Obligation market, the size
of a particular offering, the maturity of the obligation, and the rating of the
issue. The ratings of Moody's and S&P represent their opinions of the quality of
the Municipal Obligations rated by them. It should be emphasized that such
ratings are general and are not absolute standards of quality. Consequently,
Municipal Obligations with the same maturity, coupon and rating may have
different yields, while Municipal Obligations of the same maturity and coupon,
but with different ratings may have the same yield. It will be the
responsibility of the Advisor to appraise independently the fundamental quality
of the bonds held by the Tax-Exempt Cash Portfolio.
Municipal Obligations are sometimes purchased on a "when issued" basis,
which means the buyer has committed to purchase certain specified securities at
an agreed upon price when they are issued. The period between commitment date
and issuance date can be a month or more. It is possible that the securities
will never be issued and the commitment cancelled.
From time to time proposals have been introduced before Congress to
restrict or eliminate the Federal income tax exemption for interest on Municipal
Obligations. Similar proposals may be introduced in the future. If any such
proposal were enacted, it might restrict or eliminate the ability of the
A-7
<PAGE>
Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios to achieve
their investment objectives. In that event the Funds' Board members and officers
would reevaluate the Tax-Exempt Cash, Muni Intermediate and New Jersey Muni
Portfolios' investment objectives and policies and consider recommending to
their shareholders changes in such objectives and policies.
V. Foreign Investments
Investors should recognize that investing in foreign companies involves
certain special considerations which are not typically associated with investing
in U.S. companies. Because the stocks of foreign companies are frequently
denominated in foreign currencies, and because the Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios may temporarily hold
uninvested reserves in bank deposits in foreign currencies, the Equity,
International, Small Capitalization Equity and Large Cap Value Portfolios may be
affected favorably or unfavorably by changes in currency rates and in exchange
control regulations, and may incur costs in connection with conversions between
various currencies. The investment policies of the International Portfolio
permit the Portfolio to enter into forward foreign currency exchange contracts
in order to hedge the Portfolio's holdings and commitments against changes in
the level of future currency rates. Such contracts involve an obligation to
purchase or sell a specific currency at a future date at a price set at the time
of the contract.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers and listed
companies than in the U.S. In addition, there is the possibility of
expropriation or confiscatory taxation, political or social instability, or
diplomatic developments which could affect U.S. investments in foreign
countries.
Although the Equity, International, Small Capitalization Equity and Large
Cap Value Portfolios will endeavor to achieve most favorable execution costs in
its portfolio transactions, commissions on many foreign stock exchanges are
generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable, the
non-recovered portion of foreign withholding taxes will reduce the income
received from the foreign companies comprising the Equity, International, Small
Capitalization Equity and Large Cap Value Portfolios.
A-8
<PAGE>
THE GLENMEDE PORTFOLIOS
PART C. OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements
Included in Part A:
Financial Highlights for:
- Muni Intermediate Portfolio
- New Jersey Muni Portfolio
Included in Part B:
The audited financial statements and related notes thereto
as well as the auditor's report thereon for each of the Muni
Intermediate and New Jersey Muni Portfolios for the fiscal
year ended October 31, 1997 are incorporated herein by
reference to the 1997 Annual Report as filed with the
Securities and Exchange Commission (the "SEC") on December
30, 1997 pursuant to Rule 30b2-1 of the Investment Company
Act of 1940 (Nos. 33-46593/811-6578).
(b) Exhibits
1. Master Trust Agreement dated March 3, 1992 is incorporated
herein by reference to Exhibit 1 to Post-Effective Amendment
No. 6 to the Registrant's Registration Statement on Form
N-1A (Nos. 33-46593/811-6578) filed with the SEC on
December 29, 1995 ("PEA #6").
2. By-Laws of Registrant dated March 3, 1992 are incorporated
herein by reference to Exhibit 2 to PEA #6.
3. Not Applicable.
4. See: Articles IV and V of Registrant's Master Trust
Agreement which is incorporated herein by reference as
Exhibit 1; and Article 7 of Registrant's By-laws which are
incorporated herein by reference as Exhibit 2.
5. (a) Investment Advisory Agreement between
Registrant and The Glenmede Trust Company dated
June 5, 1992 is incorporated herein by reference to
Exhibit 5(a) to PEA #6.
<PAGE>
(b) Supplement dated March 2, 1993 to Investment
Advisory Agreement relating to the New Jersey Muni
and Maryland Muni Portfolios between Registrant and
The Glenmede Trust Company is incorporated herein
by reference to Exhibit 5(b) to PEA #6.
(c) Amendment No. 1 dated September 13, 1994 to
Investment Advisory Agreement between Registrant
and The Glenmede Trust Company is incorporated
herein by reference to Exhibit 5(c) to PEA #6.
6. Distribution Agreement between Registrant and ICC
Distributors, Inc.
7. Not Applicable.
8. (a) Custody Agreement between Registrant and The Chase
Manhattan Bank, N.A. dated May 1, 1995 is
incorporated herein by reference to Exhibit 8(a)
to PEA #6.
(b) Amendment dated May 1, 1995 to Custody Agreement
between Registrant and The Chase Manhattan Bank,
N.A. dated May 1, 1995 is incorporated herein by
reference to Exhibit 8(b) to PEA #6.
9. (a) Master Services Agreement between Registrant and
Investment Company Capital Corp. dated July 1,
1995 is incorporated herein by reference to
Exhibit 9(a) to PEA #6.
(b) Amended and Restated Shareholder Servicing Plan
dated December 5, 1995 and Form of Shareholder
Servicing Agreement attached thereto as Appendix A
is incorporated herein by reference to Exhibit 9(b)
to PEA #6.
10. Opinion of Counsel as to Legality of Securities Being
Registered.
11. (a) Consent of Drinker Biddle & Reath LLP.
(b) Consent of Coopers & Lybrand L.L.P.
12. Not Applicable.
13. (a) Purchase Agreement between Registrant and The
Glenmede Trust Company.
-2-
<PAGE>
(b) Purchase Agreement between the Registrant and The
Glenmede Trust Company relating to the New Jersey
Muni and Maryland Muni Portfolios dated November
1, 1993 is incorporated herein by reference to
Exhibit 13(b) to PEA #6.
14. Not Applicable.
15. Not Applicable.
16. Not Applicable.
17. Financial Data Schedules of Registrant.
18. Not Applicable.
Item 25. Persons Controlled by or Under Common Control with
Registrant
Registrant is not controlled by or under common control with
any person. Registrant is controlled by its Board of Trustees.
Item 26. Number of Record Holders of Securities
As of January 31, 1998, the number of record holders of
securities was:
New Jersey Muni Portfolio -1
Muni Intermediate Portfolio -1
Item 27. Indemnification
Reference is made to Article VI of Registrant's Master Trust
Agreement which is incorporated herein by reference as Exhibit 1.
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the
Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling
person in connection with the securities being registered, the
Registrant will, unless in the opinion of counsel the matter
-3-
<PAGE>
has been settled by controlling precedent, submit to court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Advisor
Reference is made to the caption of "Investment Advisor" in
the Prospectus in Part A of this Registration Statement and
"Investment Advisory and Other Services" in Part B of this
Registration Statement.
Set forth below is a list of all of the directors, senior
officers and those officers primarily responsible for Registrant's
affairs and, with respect to each such person, the name and business
address of the Company (if any) with which such person has been
connected at any time since October 31, 1995, as well as the capacity
in which such person was connected.
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
- ----------------------- ---------------------------- ------------------
Susan W. Catherwood Trustee Board of Chairman
the Medical Center
of the University
of Pennsylvania
PECO Energy Board Member
University of Pennsylvania Vice Chairman,
Board of Trustees
The World Affairs Council Board Member
of Philadelphia
Monell Chemical Senses Director
Center
The Ludwick Institute Vice Chairman,
Member of the
Board of Trustees
Executive Service Corps Vice Chairman,
of the Delaware Valley Board of Directors
Montessori Genesis II Advisory Board
Member
United Way of Southeastern Director
Pennsylvania
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
- ----------------------- ------------------------- ------------------
Richard F. Pew North Ridge Owner/Operator
Ranches, Montana
and Wyoming
Yellowstone Center Board Member
for Mountain Environments
Mountain Research Center, Director
Montana State University
Teton Science School; Director
Kelly Wyoming
Thomas W. Langfitt, M.D. Management Department, Senior Fellow
The Wharton School of
the University of
Pennsylvania
New York Life Insurance Board Member
Company
Committee on Automotive Chairman
Safety, General Motors
Corporation
University of Pennsylvania Board Member
Medical Center Trustee
Board
Institute of Medicine Member
of the National Academy
of Sciences
Sun Company Former Board
Member
SmithKline Beecham Former Board
Corporation Member
Princeton University Former Member,
Board of Trustees
Harvard Medical Former Member,
Board of Overseers
The American Philosophical Former Secretary
Society
Greater Philadelphia Urban Board Member
Affairs Coalition
The Philadelphia Public Board Member
School/Business Partnership
for Reform Governing Board
Secretary's Advisory Board Member
Committee on Infant
Mortality, Department of
Health and Human Services
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
- ----------------------- -------------------------- ------------------
Community College of Director
Philadelphia
Arthur E. Pew, III Burlington Northern Retired Director
Railroad of Administration,
Purchasing &
Material Manage-
ment Department
Minnesota Transportation Board Member
Museum
Museum of Transportation Chairman of the
Development Corporation, Board
St. Paul
Manitow Island Association Board Member
(White Bear, Minnesota)
Osceola and St. Croix Board Member
Valley Railway (Osceola,
Wisconsin)
J. Howard Pew, II None None
J.N. Pew, III None None
J.N. Pew, IV, M.D. Private Practice None
of Internal Medicine
Flying Hills Self Storage, President
Inc.
American Red Cross, Director
Berks County
Alvernia College Trustee
French and Pickering Creek Director
Conservation Trust, Inc.
R. Anderson Pew Radnor Corp., a Sun Retired Chief
Company subsidiary Executive Officer
Bryn Mawr College Vice Chairman
Children's Hospital of Vice Chairman of
Philadelphia the Board of
Trustees
Alex. Brown Advisory & Chairman of the Audit
Trust Company, Baltimore Committee
Development Committee, Trustee & Chairman
Curtis Institute of
Music, Philadelphia
AOPA (a private pilot's Chairman
association)
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal
Name and Position Business Address Connection with
with Investment Adviser of other Company other Company
- ----------------------- -------------------------- ------------------
Academy of Music Board Member
Philadelphia Inc. ACM Committee
Ethel Benson Wister Lincoln University Board Board Member
of Trustees
Academy of Music Committee Member
Philadelphia, Inc.
Biotechnology Foundation Board Member (at
Jefferson
University)
Peoples' Light and Theater Honorary Board
Company Member
Concerto Soloists Orchestra Arts Award 1997
Recipient
</TABLE>
Item 29. Principal Underwriters.
(a) In addition to The Glenmede Portfolios, ICC
Distributors, Inc. ("ICC Distributors") currently acts as distributor for The
Glenmede Fund, Inc., Total Return U.S. Treasury Fund, Inc., Managed Municipal
Fund, Inc. and North American Government Bond Fund, Inc. ICC Distributors is
registered with the Securities and Exchange Commission as a broker-dealer and
is a member of the National Association of Securities Dealers.
(b)
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Position and Offices Position and Offices
Business Address with Principal Underwriter with Registrant
- ------------------ -------------------------- --------------------
John Y. Keffer President None
Sara M. Morris Treasurer None
David I. Goldstein Secretary None
Richard C. Butt Vice President None
Benjamin L. Niles Vice President None
Margaret J. Fenderson Assistant Treasurer None
Dana L. Lukens Assistant Secretary None
Nanette K. Chern Chief Compliance Officer None
</TABLE>
-7-
<PAGE>
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of
1940 and the Rules thereunder will be maintained at the
offices of:
The Glenmede Trust Company
One Liberty Place
1650 Market Street, Suite 1200
Philadelphia, Pennsylvania 19103
(records relating to its function as
investment advisor)
The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
(records relating to its function as
custodian)
Investment Company Capital Corp.
One South Street
Baltimore, Maryland 21202
(records relating to its function as
administrator, transfer agent and dividend
disbursing agent)
<
ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
(records relating to its functions as
distributor)
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, Pennsylvania 19107
(Registrant's minute books)
Item 31. Management Services.
Not Applicable.
Item 32. Undertakings.
(a) Registrant undertakes to comply with the provisions of
Section 16(c) of the 1940 Act in regard to shareholders' right to call a
meeting of shareholders for the purpose of voting on the removal of trustees
and to assist in shareholder communications in such matters, to the extent
required by law. Specifically, the Registrant will, if requested to do so by
the holders of at least 10% of the
-8-
<PAGE>
Registrant's outstanding voting shares, call a meeting of shareholders for the
purpose of voting upon the question of the removal of trustees, and the
Registrant will assist in shareholder communications as required by Section
16(c) of the 1940 Act.
(b) Registrant undertakes to furnish to each person to whom
a prospectus is delivered, a copy of Registrant's latest annual report to
shareholders, upon request and without delay.
-9-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the Registrant
certifies that it meets all of the requirements for effectiveness of this
Post-Effective Amendment to the Registration Statement pursuant to Rule 485(b)
under the Securities Act of 1933 and has duly caused this Post-Effective
Amendment No. 9 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Philadelphia, and
Commonwealth of Pennsylvania on the 27th day of February, 1998.
THE GLENMEDE PORTFOLIOS
By /s/ Mary Ann B. Wirts
---------------------------
Mary Ann B. Wirts
President and Chief
Executive Officer
-----------------
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Post-Effective Amendment No. 9 to the Registration Statement of
The Glenmede Portfolios has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
--------- ----- -----
* John W. Church Chairman February 27, 1998
- ------------------------
John W. Church, Jr.
/s/ Mary Ann B. Wirts
- ------------------------ President and February 27, 1998
Mary Ann B. Wirts Chief Executive
Officer
* H. Franklin Allen Director February 27, 1998
- ------------------------
H. Franklin Allen, Ph.D.
* Willard S. Boothby Director February 27, 1998
- ------------------------
Willard S. Boothby, Jr.
* Francis J. Palamara Director February 27, 1998
- -------------------------
Francis J. Palamara
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
* G. Thompson Pew, Jr. Director February 27, 1998
- -------------------------
G. Thompson Pew, Jr.
/s/ Joseph A. Finelli
- ------------------------- Treasurer February 27, 1998
Joseph A. Finelli
*By: /s/ Michael P. Malloy
- ---------------------------------------------
Michael P. Malloy, Attorney-in-fact
</TABLE>
-11-
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
Power of Attorney
I hereby appoint John W. Church, Jr., Michael P. Malloy or Mary Ann B.
Wirts attorney for me, with full power of substitution, and in my name and on my
behalf as a director or trustee to sign any Registration Statement or Amendment
thereto of THE GLENMEDE FUND, INC. and/or THE GLENMEDE PORTFOLIOS to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on December 9, 1997.
/s/H. Franklin Allen
------------------------------
H. Franklin Allen, Ph.D.
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
Power of Attorney
I hereby appoint John W. Church, Jr., Michael P. Malloy or Mary Ann B.
Wirts attorney for me, with full power of substitution, and in my name and on my
behalf as a director or trustee to sign any Registration Statement or Amendment
thereto of THE GLENMEDE FUND, INC. and/or THE GLENMEDE PORTFOLIOS to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on December 9, 1997.
/s/Willard S. Boothby, Jr.
----------------------------
Willard S. Boothby, Jr.
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
Power of Attorney
I hereby appoint John W. Church, Jr., Michael P. Malloy or Mary Ann B.
Wirts attorney for me, with full power of substitution, and in my name and on my
behalf as a director or trustee to sign any Registration Statement or Amendment
thereto of THE GLENMEDE FUND, INC. and/or THE GLENMEDE PORTFOLIOS to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on December 9, 1997.
/s/Francis J. Palmara
--------------------------
Francis J. Palmara
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
Power of Attorney
I hereby appoint John W. Church, Jr., Michael P. Malloy or Mary Ann B.
Wirts attorney for me, with full power of substitution, and in my name and on my
behalf as a director or trustee to sign any Registration Statement or Amendment
thereto of THE GLENMEDE FUND, INC. and/or THE GLENMEDE PORTFOLIOS to be filed
with the Securities and Exchange Commission under the Securities Act of 1933
and/or the Investment Company Act of 1940 and generally to do and perform all
things necessary to be done in that connection.
I have signed this Power of Attorney on December 9, 1997.
/s/G. Thompson Pew, Jr.
-----------------------
G. Thompson Pew, Jr.
<PAGE>
THE GLENMEDE FUND, INC.
THE GLENMEDE PORTFOLIOS
Power of Attorney
I hereby appoint Michael P. Malloy or Mary Ann B. Wirts attorney for
me, with full power of substitution, and in my name and on my behalf as the
Chairman and a director or trustee to sign any Registration Statement or
Amendment thereto of THE GLENMEDE FUND, INC. and/or THE GLENMEDE PORTFOLIOS to
be filed with the Securities and Exchange Commission under the Securities Act of
1933 and/or the Investment Company Act of 1940 and generally to do and perform
all things necessary to be done in that connection.
I have signed this Power of Attorney on December 9, 1997.
/s/John W. Church, Jr.
---------------------------
John W. Church, Jr.
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No.
6. Distribution Agreement between Registrant and ICC
Distributors, Inc.
10. Opinion of Counsel as to Legality of Securities Being
Registered.
11. (a) Consent of Drinker Biddle & Reath LLP.
(b) Consent of Coopers & Lybrand L.L.P.
13 (a) Purchase Agreement between the Registrant and The
Glenmede Trust Company.
17. Financial Data Schedules
-12-
<PAGE>
THE GLENMEDE PORTFOLIOS
DISTRIBUTION AGREEMENT
AGREEMENT made as of the 10th day of September, 1997, by and between
The Glenmede Portfolios, a Massachusetts business trust, with its principal
office and place of business at One South Street, Baltimore, Maryland 21202 (the
"Company"), and ICC Distributors, Inc., a Delaware corporation with its
principal office and place of business at Two Portland Square, Portland, Maine
04101 (the "Distributor").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company,
may issue its shares of beneficial interest (the "Shares") in separate series
and classes and continuously offers for sale its Shares to the public; and
WHEREAS, the Distributor is registered under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), as a broker-dealer and is engaged in
the business of selling shares of registered investment companies either
directly to purchasers or through other securities dealers;
WHEREAS, the Company offers Shares in one or more series as listed in
Appendix A hereto (each such series, together with all other series subsequently
established by the Company and made subject to this Agreement in accordance with
Section 16, being herein referred to as a "Fund," and collectively as the
"Funds") and the Company offers shares of one or more classes of each Fund as
listed in Appendix A hereto (each such class together with all other classes
subsequently established by the Company in a Fund being herein referred to as a
"Class," and collectively as the "Classes");
WHEREAS, the Company desires that the Distributor offer the Shares of
each Fund and Class thereof to the public and the Distributor is willing to
provide those services on the terms and conditions set forth in this Agreement
in order to promote the growth of the Funds and facilitate the distribution of
the Shares;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Company and the Distributor hereby agree as
follows:
SECTION 1. DELIVERY OF DOCUMENTS AND APPOINTMENT
(a) The Company has delivered to the Distributor properly certified or
authenticated copies of its Declaration of Trust and
<PAGE>
Bylaws, or similar documents (collectively, as amended from time to time,
"Organic Documents"), the Company's Notification of Registration filed with the
U.S. Securities and Exchange Commission ("SEC") pursuant to Section 8(a) of the
1940 Act on Form N-8A under the 1940 Act, the Company's Registration Statement
and all amendments thereto filed with the SEC pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration
Statement") and the current Prospectus and Statement of Additional Information
of each Fund (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and shall promptly furnish the Distributor with
all amendments of or supplements to the foregoing, each properly certified or
authenticated. In addition, the Company shall furnish the Distributor with
properly certified or authenticated copies of all documents, notices and reports
filed with the SEC.
(b) The Company has delivered to the Distributor certified resolutions
of the Company's Board of Trustees (the "Board") of the resolutions of its Board
authorizing the appointment of the Distributor as distributor and approving this
Agreement.
(c) The Company hereby appoints the Distributor as the principal
underwriter and distributor of its Funds to sell the Shares of the Funds to the
public and hereby agrees during the term of this Agreement to sell Shares of its
Funds to the Distributor upon the terms and conditions herein set forth.
SECTION 2. EXCLUSIVE NATURE OF DUTIES
The Distributor shall be the exclusive representative of the Company to
act as principal underwriter and distributor of the Company's Funds except that
the rights given under this Agreement to the Distributor shall not apply to
Shares issued in connection with the merger, consolidation or reorganization of
any other investment company with a Fund; a Fund's acquisition by purchase or
otherwise of all or substantially all of the assets or stock of any other
investment company; or the reinvestment in Shares by a Fund's shareholders of
dividends or other distributions or any other offering by the Company of
securities to its shareholders.
SECTION 3. PURCHASE OF SHARES; OFFERING OF SHARES
(a) The Distributor shall act as the Company's agent, to offer, and to
solicit offers to subscribe to, unsold Shares of the Funds as shall then be
effectively registered under the Securities Act. The Distributor will promptly
forward all orders and subscriptions for Shares of the Company to the Company.
The price that the Distributor shall offer Shares shall be the net asset value,
determined as set forth in Section 3(c) hereof, used in determining the public
offering price on which the orders are based. The Company reserves the right to
sell Shares of its
-2-
<PAGE>
Funds directly to investors through subscriptions received by the Company, but
no such direct sales shall affect the sales charges due to the Distributor
hereunder.
(b) The public offering price of the Shares of a Fund, i.e., the price
per Share at which the Distributor or selected dealers or selected agents (each
as defined in Section 11 hereof) may sell Shares to the public or to those
persons eligible to invest in Shares as described in the applicable Prospectus,
shall be the net asset value determined in accordance with the then currently
effective Prospectus of the Fund or Class thereof under the Securities Act,
relating to such Shares, plus, in the case of Shares for which an initial sales
charge is assessed, an initial charge equal to a specified percentage or
percentages of the public offering price of the Shares as set forth in the
current Prospectus relating to the Shares. In the case of Shares for which an
initial sales charge may be assessed, Shares may be sold to certain classes of
persons at reduced sales charges or without any sales charge as from time to
time set forth in the current Prospectus relating to the Shares. The Company
will advise the Distributor of the net asset value per Share at each time as the
net asset value per Share shall have been determined by the Company.
(c) The net asset value per Shares of each Fund or Class thereof shall
be determined by the Company, or an agent of the Company, as of such time and on
such days as set forth in the applicable Prospectus in accordance with the
method set forth in the Prospectus and guidelines established by the Board.
(d) The Company reserves the right to suspend the offering of Shares of
any or all of its Funds or of any class thereof at any time in the absolute
discretion of the Board, and upon notice of such suspension the Distributor
shall cease to offer Shares of the Funds or Classes thereof specified in the
notice.
(e) All subscriptions for Shares obtained by the Distributor as agent
shall be directed to the Company for acceptance and shall not be binding until
accepted by the Company. Any subscription may be rejected by the Company in its
sole discretion. The Company (or its agent) will confirm subscriptions upon
their receipt, will make appropriate book entries and, upon receipt by the
Company (or its agent) of payment thereof, will issue such Shares in
certificated or uncertificated form pursuant to the instructions of the
Distributor. The Distributor agrees to cause such payment and such instructions
to be delivered promptly to the Company (or its agent).
-3-
<PAGE>
SECTION 4. REDEMPTION OF SHARES
(a) Any of the outstanding Shares of a Fund or Class thereof may be
tendered for redemption at any time, and the Company agrees to redeem or
repurchase the Shares so tendered, as set forth in the Company's Organic
Documents and the Prospectus relating to the Shares. The price to be paid to
redeem the Shares of a Fund shall be equal to the net asset value calculated in
accordance with the provisions of Section 3(b) hereof less, in the case of
Shares for which a deferred sales charge is assessed, a deferred sales charge
equal to a specified percentage or percentages of the net asset value of those
Shares as from time to time set forth in the Prospectus relating to those Shares
or their cost, whichever is less. Shares of a Fund or Class thereof for which a
deferred sales charge may be assessed and that have been outstanding for a
specified period of time may be redeemed without payment of a deferred sales
charge as from time to time set forth in the Prospectus relating to those
Shares.
(b) The Company or its designated agent shall pay (i) the total amount
of the redemption price consisting of the redemption price less any applicable
deferred sales charge to the redeeming shareholder or its agent and (ii) except
as may be otherwise required by the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. (the "NASD") and any interpretations
thereof, any applicable deferred sales charges to the Distributor in accordance
with the Distributor's instructions on or before the third business day
subsequent to the Company or its agent having received the notice of redemption
in proper form.
(c) The Company may suspend redemption privileges or postpone the date
of payment (i) during any period that the New York Stock Exchange (the
"Exchange") is closed, or trading on the Exchange is restricted as determined by
the SEC, (ii) during any period when an emergency exists as defined by the rules
of the SEC as a result of which it is not reasonably practicable for a Fund to
dispose of securities owned by it, or fairly to determine the value of its
assets, and (iii) for such other periods as the SEC may permit.
SECTION 5. DUTIES AND REPRESENTATIONS OF THE DISTRIBUTOR
(a) The Distributor shall use reasonable efforts to sell Shares of the
Funds upon the terms and conditions contained herein and in the then current
Prospectus. The Distributor shall devote reasonable time and effort to effect
sales of Shares but shall not be obligated to sell any specific number of
Shares. The services of the Distributor to the Company hereunder are not to be
deemed exclusive, and nothing herein contained shall prevent the Distributor
from entering into like arrangements with
-4-
<PAGE>
other investment companies so long as the performance of its obligations
hereunder is not impaired thereby.
(b) In selling Shares of the Funds, the Distributor shall comply with
the requirements of all federal and state laws relating to the sale of the
Shares. None of the Distributor, any selected dealer, any selected agent or any
other person is authorized by the Company to give any information or to make any
representations other than as is contained in a Fund's Prospectus or any
advertising materials or sales literature specifically approved in writing by
the Company.
(c) The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers or selected agents, the
collection of amounts payable by investors and selected dealers or selected
agents on such sales, and the cancellation of unsettled transactions, as may be
necessary to comply with the requirements of the NASD and any other applicable
self-regulatory organization.
(d) The Distributor will perform its duties hereunder under the
supervision of and in accordance with the directives of the Board. The
Distributor will perform its duties hereunder in accordance with the Company's
Organic Documents and Prospectuses and with the instructions and directions of
the Boards and will conform to and comply with the requirements of the 1940 Act,
the Securities Act and other applicable laws.
(e) The Distributor shall provide the Board with a written report of
the amounts expended in connection with this Agreement as requested by the
applicable Board.
(f) The Distributor represents and warrants to the Company that:
(i) It is a corporation duly organized and existing and in good
standing under the laws of the State of Delaware and it is duly
qualified to carry on its business in the State of Maine;
(ii) It is empowered under applicable laws and by its Articles of
Incorporation to enter into and perform this Agreement;
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement;
(iv) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement;
-5-
<PAGE>
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Distributor,
enforceable against the Distributor in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting the rights and
remedies of creditors and secured parties;
(vi) It is registered under the 1934 Act with the SEC as a
broker-dealer, it is a member in good standing of the NASD, it
will abide by the rules and regulations of the NASD, and it will
notify the Company if its membership in the NASD is terminated or
suspended; and
(vii) The performance by the Distributor of its obligations hereunder
does not and will not contravene any provision of its Articles of
Incorporation or any applicable laws.
(g) Notwithstanding anything in this Agreement, including the
Appendices, to the contrary, the Distributor makes no warranty or representation
as to the number of selected dealers or selected agents with which it has
entered into agreements in accordance with Section 11 hereof, as to the
availability of any Shares to be sold through any selected dealer, selected
agent or other intermediary or as to any other matter not specifically set forth
herein.
(h) The Distributor agrees to obtain and maintain at all times an
insurance policy sufficient in coverage and amount to cover any obligations and
amounts owing to the Company relating to or arising in connection with any bad
faith, willful misfeasance or gross negligence in the performance of the
Distributor's duties or obligations under this Agreement or by reason of the
Distributor's reckless disregard of its duties and obligations under this
Agreement.
SECTION 6. DUTIES AND REPRESENTATIONS OF THE COMPANY
(a) The Company shall furnish to the Distributor copies of all
financial statements and other documents to be delivered to shareholders or
investors and shall furnish the Distributor copies of all other financial
statements, documents and other papers or information which the Distributor may
reasonably request for use in connection with the distribution of Shares. The
Company shall make available to the Distributor the number of copies of the
Prospectuses of the Fund's of the Company as the Distributor shall reasonably
request.
(b) The Company shall take, from time to time, subject to the approval
of its Board and any required approval of the shareholders of the Company, all
action necessary to fix the number of authorized Shares (if such number is not
limited) and
-6-
<PAGE>
to register the Shares under the Securities Act, to the end that there will be
available for sale the number of Shares as reasonably may be expected to be sold
pursuant to this Agreement.
(c) The Company shall execute any and all documents, furnish to the
Distributor any and all information and otherwise take all actions that may be
reasonably necessary and cooperate with the Distributor and all other parties in
taking any action as may be reasonably necessary to register or qualify the
Company's Shares for sale under the securities laws of the various states of the
United States and other jurisdictions ("States"). Any registration or
qualification may be withheld, terminated or withdrawn by the Company at any
time in its discretion. The Distributor shall furnish such information and other
material relating to its affairs and activities as may be required by the
Company in connection with such registration or qualification.
(d) The Company represents and warrants to the Distributor that:
(i) It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts;
(ii) It is empowered under applicable laws and by its Organic
Documents to enter into and perform this Agreement;
(iii) All proceedings required by the Organic Documents have been
taken to authorize it to enter into and perform its duties under
this Agreement;
(iv) It is registered as an open-end management investment company
with the SEC under the 1940 Act;
(v) All Shares, when issued in accordance with the Organic Documents
and the relevant prospectus, shall be validly issued, fully paid
and non-assessable;
(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of
creditors and secured parties;
(vii) The performance by the Company of its obligations hereunder does
not and will not contravene any provision of its Organic
Documents;
-7-
<PAGE>
(viii) The Company's Registration Statement is currently effective and,
unless the Company gives the Distributor notice to the
contrary, will remain effective with respect to all Shares of
the Company's Funds and Classes thereof being offered for sale;
(ix) It will use its best efforts to ensure that its Registration
Statement and Prospectuses have been or will be, as the case may
be, carefully prepared in conformity with the requirements of
the Securities Act and the rules and regulations thereunder;
(x) It will use its best efforts to ensure that (A) its Registration
Statement and Prospectuses contain or will contain all material
statements required to be stated therein in accordance with the
Securities Act and the rules and regulations thereunder, (B) all
statements of fact contained or to be contained in the
Registration Statement or Prospectuses are or will be true and
correct in all material respects at the time indicated or on the
effective date as the case may be and (C) neither the
Registration Statement nor any Prospectus, when they shall
become effective or be authorized for use, will include an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares;
(xi) It will from time to time file such amendment or amendments to
its Registration Statement and Prospectuses as, in the light of
then-current and then-prospective developments, shall, in the
opinion of its counsel, be necessary in order to have the
Registration Statement and Prospectuses at all times contain all
material facts required to be stated therein or necessary to
make any statements therein not misleading to a purchaser of
Shares ("Required Amendments");
(xii) It shall not file any amendment to its Registration Statement or
Prospectuses without giving the Distributor reasonable advance
notice thereof (which shall be at least three Fund business
days); provided, however, that nothing contained in this
Agreement shall in any way limit the Company's right to file at
any time such amendments to its Registration Statement or
Prospectuses, of whatever character, as the Company may deem
advisable, such right being in all respects absolute and
unconditional; and
(xiii) It will use its best efforts to ensure that (A) any amendment to
its Registration Statement or Prospectuses hereafter filed will,
when it becomes effective, contain all material statements
required to be stated therein in accordance with the 1940 Act
and the rules and regulations
-8-
<PAGE>
thereunder, (B) all statements of fact contained in the
Registration Statement or Prospectuses will be true and correct
in all material respects at the time indicated or on the
effective date as the case may be and (C) no such amendment,
when it becomes effective, will include an untrue statement of a
material fact or will omit to state a material fact required to
be stated therein or necessary to make the statements therein
not misleading to a purchaser of the Shares.
SECTION 7. STANDARD OF CARE
(a) The Distributor shall use its best judgment and efforts in
rendering services to the Company under this Agreement but shall be under no
duty to take any action except as specifically set forth herein or as may be
specifically agreed to by the Distributor in writing. The Distributor shall not
be liable to the Company or any of the Company's shareholders for any error of
judgment or mistake of law, for any loss arising out of any investment, or for
any action or inaction of the Distributor in the absence of bad faith, willful
misfeasance or gross negligence in the performance of the Distributor's duties
or obligations under this Agreement or by reason of the Distributor's reckless
disregard of its duties and obligations under this Agreement.
(b) Subject to Section 7(a), the Distributor shall not be liable to the
Company for any action taken or failure to act in good faith reliance upon:
(i) the advice of the Company or of counsel, who may be counsel to
the Company or counsel to the Distributor;
(ii) any oral instruction which the Distributor receives and which it
reasonably believes in good faith was transmitted by the person
or persons authorized by the Board, to give such oral
instruction (the Distributor shall have no duty or obligation to
make any inquiry or effort of certification of such oral
instruction);
(iii) any written instruction or certified copy of any resolution of
the Board, and the Distributor may rely upon the genuineness of
any such document or copy thereof reasonably believed in good
faith by the Distributor to have been validly executed; or
(iv) any signature, instruction, request, letter of transmittal,
certificate, opinion of counsel, statement, instrument, report,
notice, consent, order, or other document reasonably believed in
good faith by the Distributor to be genuine and to have been
signed or presented by the Company or other proper party or
parties;
-9-
<PAGE>
and the Distributor shall not be under any duty or obligation to
inquire into the validity or invalidity or authority or lack
thereof of any statement, oral or written instruction,
resolution, signature, request, letter of transmittal,
certificate, opinion of counsel, instrument, report, notice,
consent, order, or any other document or instrument which the
Distributor reasonably believes in good faith to be genuine.
(c) Subject to Section 7(a), the Distributor shall not be responsible
or liable for any failure or delay in performance of its obligations under this
Agreement arising out of or caused, directly or indirectly, by circumstances
beyond its reasonable control including, without limitation, acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdowns, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power supply. In
addition, subject to Section 7(a), to the extent the Distributor's obligations
hereunder are to oversee or monitor the activities of third parties, the
Distributor shall not be liable for any failure or delay in the performance of
the Distributor's duties caused, directly or indirectly, by the failure or delay
of such third parties in performing their respective duties or cooperating
reasonably and in a timely manner with the Distributor.
SECTION 8. INDEMNIFICATION
(a) The Company will indemnify, defend and hold the Distributor, its
employees, agents, directors and officers and any person who controls the
Distributor within the meaning of section 15 of the Securities Act or section 20
of the 1934 Act ("Distributor Indemnities") free and harmless from and against
any and all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, reasonable counsel fees and other expenses of every
nature and character (including the cost of investigating or defending such
claims, demands, actions, suits or liabilities and any reasonable counsel fees
incurred in connection therewith) which any Distributor Indemnitee may incur,
under the Securities Act, or under common law or otherwise, arising out of or
based upon any alleged untrue statement of a material fact contained in the
Company's Registration Statement or Prospectuses or arising out of or based upon
any alleged omission to state a material fact required to be stated in any one
thereof or necessary to make the statements in any one thereof not misleading,
unless such statement or omission was made in reliance upon, and in conformity
with, information furnished in writing to the Company in connection with the
preparation of the Registration Statement or exhibits to the Registration
Statement by or on behalf of the Distributor ("Distributor Claims").
-10-
<PAGE>
(b) The Company may assume the defense of any suit brought to enforce
any Distributor Claim and may retain counsel of good standing chosen by the
Company and approved by the Distributor, which approval shall not be withheld
unreasonably. The Company shall advise the Distributor that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Company assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel that they retain. If the Company does not assume the defense
of any such suit, or if Distributor does not approve of counsel chosen by the
Company or has been advised that it may have available defenses or claims that
are not available to or conflict with those available to the Company, the
Company will reimburse any Distributor Indemnitee named as defendant in such
suit for the reasonable fees and expenses of any counsel that person retains. A
Distributor Indemnitee shall not settle or confess any claim without the prior
written consent of the Company, which consent shall not be unreasonably withheld
or delayed.
(c) The Distributor will indemnify, defend and hold the Company and its
several agents, officers and trustees and any person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the 1934
Act (collectively, the "Company Indemnitees"), free and harmless from and
against any and all claims, demands, actions, suits, judgments, liabilities,
losses, damages, costs, charges, reasonable counsel fees and other expenses of
every nature and character (including the cost of investigating or defending
such claims, demands, actions, suits or liabilities and any reasonable counsel
fees incurred in connection therewith), but only to the extent that such claims,
demands, actions, suits, judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses result from, arise out of or
are based upon:
(i) any alleged untrue statement of a material fact contained in the
Company's Registration Statement or Prospectus or any alleged
omission of a material fact required to be stated or necessary
to make the statements therein not misleading, if such statement
or omission was made in reliance upon, and in conformity with,
information furnished to the Company in writing in connection
with the preparation of the Registration Statement or Prospectus
by or on behalf of the Distributor; or
(ii) any act of, or omission by, Distributor, its sales
representatives or its agents that does not conform to the
standard of care set forth in Section 7 of this Agreement
(collectively, "Company Claims").
-11-
<PAGE>
(d) The Distributor may assume the defense of any suit brought to
enforce any Company Claim and may retain counsel of good standing chosen by the
Distributor and approved by the Company, which approval shall not be withheld
unreasonably. The Distributor shall advise the Company that it will assume the
defense of the suit and retain counsel within ten (10) days of receipt of the
notice of the claim. If the Distributor assumes the defense of any such suit and
retains counsel, the defendants shall bear the fees and expenses of any
additional counsel, that they retain. If the Distributor does not assume the
defense of any such suit, or if Company does not approve of counsel chosen by
the Distributor or has been advised that it may have available defenses or
claims that are not available to or conflict with those available to the
Distributor, the Distributor will reimburse any Company Indemnitee named as
defendant in such suit for the reasonable fees and expenses of any counsel that
person retains. The Company Indemnitee shall not settle or confess any claim
without the prior written consent of the Distributor, which consent shall not be
unreasonably withheld or delayed.
(e) The Company's and the Distributor's obligations to provide
indemnification under this Section is conditioned upon the Company or the
Distributor receiving notice of any action brought against a Distributor
Indemnitee or Company Indemnitee, respectively, by the person against whom such
action is brought within twenty (20) days after the summons or other first legal
process is served. Such notice shall refer to the person or persons against whom
the action is brought. The failure to provide such notice shall not relieve the
party entitled to such notice of any liability that it may have to any
Distributor Indemnitee or Company Indemnitee except to the extent that the
ability of the party entitled to such notice to defend such action has been
materially adversely affected by the failure to provide notice.
(f) The provisions of this Section and the parties' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Distributor
Indemnitee or Company Indemnitee and shall survive the sale and redemption of
any Shares made pursuant to subscriptions obtained by the Distributor. The
indemnification provisions of this Section will inure exclusively to the benefit
of each person that may be a Distributor Indemnitee or Company Indemnitee at any
time and their respective successors and assigns (it being intended that such
persons be deemed to be third party beneficiaries under this Agreement).
(g) The Distributor agrees promptly to notify the Company of the
commencement of any litigation or proceeding of which it becomes aware arising
out of or in any way connected with the issuance or sale of Shares. The Company
agrees promptly to
-12-
<PAGE>
notify the Distributor of the commencement of any litigation or proceeding of
which it becomes aware arising out of or in any way connected with the issuance
or sale of its Shares.
(h) Nothing contained herein shall require the Company to take any
action contrary to any provision of its Organic Documents or any applicable
statute or regulation or shall require the Distributor to take any action
contrary to any provision of its Articles of Incorporation or Bylaws or any
applicable statute or regulation; provided, however, that neither the Company
nor the Distributor may amend their Organic Documents or Articles of
Incorporation and Bylaws, respectively, in any manner that would result in a
violation of a representation or warranty made in this Agreement, except if
required by any applicable statute or regulation.
(i) Nothing contained in this section shall be construed to protect the
Distributor against any liability to the Company or the security holders of the
Company to which the Distributor would otherwise be subject by reason of its
failure to satisfy the standard of care set forth in Section 7 of this
Agreement.
SECTION 9. NOTIFICATION TO THE DISTRIBUTOR
The Company shall advise the Distributor immediately: (i) of any
request by the SEC for amendments to the Company's Registration Statement or
Prospectus or for additional information; (ii) in the event of the issuance by
the SEC of any stop order suspending the effectiveness of the Company's
Registration Statement or any Prospectus or the initiation of any proceedings
for that purpose; (iii) of the happening of any material event which makes
untrue any statement made in the Company's then current Registration Statement
or Prospectus or which requires the making of a change in either thereof in
order to make the statements therein not misleading; and (iv) of all action of
the SEC with respect to any amendments to the Company's Registration Statement
or Prospectus which may from time to time be filed with the Commission under the
1940 Act or the Securities Act.
SECTION 10. COMPENSATION; EXPENSES
(a) In consideration of the Distributor's services in connection with
the distribution of Shares of each Fund and Class thereof, the Distributor shall
receive: (i) any applicable sales charge assessed upon investors in connection
with the purchase of Shares; (ii) from the Company, any applicable contingent
deferred sales charge ("CDSC") assessed upon investors in connection with the
redemption of Shares; and (iii) from the Company, the distribution service fees
with respect to the Shares of those Classes as designated in Appendix A for
which a plan under Rule 12b-1 under the 1940 Act (a "Plan") is effective (the
-13-
<PAGE>
"Distribution Fee"). The Distribution Fee be accrued daily by each applicable
Fund or Class thereof and shall be paid monthly as promptly as possible after
the last day of each calendar month at the rate or in the amounts set forth in
Appendix A and, as applicable, the Plan(s).
(b) The Company shall cause its transfer agent (the "Transfer Agent")
to withhold, from redemption proceeds payable to holders of Shares of the Funds
and the Classes thereof, all CDSCs properly payable by the shareholders in
accordance with the terms of the applicable Prospectus and shall cause the
Transfer Agent to pay such amounts over to the Distributor as promptly as
possible after the settlement date for each redemption of Shares.
(c) Except as specified in Sections 8 and 10(a), the Distributor shall
be entitled to no compensation by the Company or reimbursement of expenses from
the Company for the services provided by the Distributor pursuant to this
Agreement.
(d) The Company shall be responsible and assumes the obligation for
payment of all the expenses of the Company's Funds, including fees and
disbursements of its counsel and auditors, in connection with the preparation
and filing of the Registration Statement and Prospectuses (including but not
limited to the expense of setting in type the Registration Statement and
Prospectuses and printing sufficient quantities for internal compliance,
regulatory purposes and for distribution to current shareholders).
(e) The Company shall bear the cost and expenses (i) of the
registration of its Shares for sale under the Securities Act; (ii) of the
registration or qualification of its Shares for sale under the securities laws
of the various States; (iii) if necessary or advisable in connection therewith,
of qualifying the Company, or its Funds or the Classes thereof (but not the
Distributor) as an issuer or as a broker or dealer, in such States as shall be
selected by the Company and the Distributor pursuant to Section 6(c) hereof, and
(iv) payable to each State for continuing registration or qualification therein
until the Company decides to discontinue registration or qualification pursuant
to Section 6(c) hereof. The Distributor shall pay all expenses relating to the
Distributor's broker-dealer qualification.
SECTION 11. SELECTED DEALER AND SELECTED AGENT AGREEMENTS
(a) The Distributor shall have the right to enter into sub-
distribution agreements with securities dealers of its choice ("selected
dealers") and with depository institutions and other financial intermediaries of
its choice ("selected agents") for the sale of Shares and to fix therein the
portion of the sales charge, if any, that may be allocated to the selected
dealers or
-14-
<PAGE>
selected agents; provided, that all such agreements shall be in substantially
the form of agreement as set forth in Appendix B hereto. Shares of each Fund or
Class thereof shall be resold by selected dealers or selected agents only at the
public offering price(s) set forth in the Prospectus relating to the Shares. The
Distributor shall offer and sell Shares of the Funds only to such selected
dealers as are members in good standing of the NASD.
(b) The Distributor will supervise each Fund's relationship with
selected dealers and agents and may make payments to those selected dealers and
agents in such amounts as the Distributor may determine from time to time in its
sole discretion. The amount of payments to selected dealers and agents by the
Distributor may be reviewed by the Board from time to time; provided, however,
that no payment by the Distributor to any selected dealer or agent with respect
to a Share shall exceed the amount of payments made to the Distributor hereunder
with respect to that Share.
SECTION 12. CONFIDENTIALITY
The Distributor agrees to treat all records and other information
related to the Company as proprietary information of that Company and, on behalf
of itself and its employees, to keep confidential all such information, except
that the Distributor may:
(i) prepare or assist in the preparation of periodic reports to
shareholders and regulatory bodies such as the SEC;
(ii) provide information typically supplied in the investment company
industry to companies that track or report price, performance or
other information regarding investment companies; and
(iii) release such other information as approved in writing by the
Company, which approval shall not be unreasonably withheld;
provided, however, that the Distributor may release any information regarding
the Company without the consent of the Company if the Distributor reasonably
believes that it may be exposed to civil or criminal legal proceedings for
failure to comply, when requested to release any information by duly constituted
authorities or when so requested by the Company.
SECTION 13. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective with respect to each series
or class listed in Appendix A on the later of (i) September 10, 1997 or (ii) the
date on which the Company's
-15-
<PAGE>
Registration Statement relating to Shares of the Fund becomes effective. Upon
effectiveness of this Agreement, it shall supersede all previous agreements
between the parties hereto covering the subject matter hereof insofar as such
Agreement may have been deemed to relate to the Funds.
(b) This Agreement shall continue in effect with respect to a Fund
until October 31, 1998 and thereafter shall continue in effect with respect to a
Fund until terminated; provided, that continuance is specifically approved at
least annually (i) by the Board or by a vote of a majority of the outstanding
voting securities of the Fund and (ii) by a vote of a majority of Trustees of
the Company (I) who are not parties to this Agreement or interested persons of
any such party (other than as Trustees of the Company) and (II) with respect to
each Class of a Fund for which there is an effective Plan, who do not have any
direct or indirect financial interest in any such Plan applicable to the Class
or in any agreements related to the Plan, cast in person at a meeting called for
the purpose of voting on such approval.
(c) This Agreement may be terminated at any time with respect to a
series or class, without the payment of any penalty, (i) by the Board or by a
vote of a majority of the outstanding voting securities of the Fund or, with
respect to each Class of a Fund for which there is an effective Plan, a majority
of Trustees of the Company who do not have any direct or indirect financial
interest in any such Plan or in any agreements related to the Plan, on 60 days'
written notice to the Distributor or (ii) by the Distributor on 60 days' written
notice to the applicable Company.
(d) This Agreement shall automatically terminate upon its assignment.
(e) The obligations of Sections 5(e), 5(f), 6(d), 7, 8 and 10 shall
survive any termination of this Agreement with respect to a Fund or Company.
SECTION 14. NOTICES
Any notice required or permitted to be given hereunder by the
Distributor to the Company or the Company to the Distributor shall be deemed
sufficiently given if personally delivered or sent by telegram, facsimile or
registered, certified or overnight mail, postage prepaid, addressed by the party
giving such notice to the other party at the last address furnished by the other
party to the party giving such notice, and unless and until changed pursuant to
the foregoing provisions hereof each such notice shall be addressed to the
Company or the Distributor, as the case may be, at their respective principal
places of business.
-16-
<PAGE>
SECTION 15. ACTIVITIES OF THE DISTRIBUTOR
Except to the extent necessary to perform the Distributor's obligations
hereunder, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of the Distributor's employees, agents, officers or
directors who may also be a trustee, officer or employee of the Company, or
affiliated persons of the Company to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render services of any kind to
any other corporation, trust, firm, individual or association.
SECTION 16. ADDITIONAL FUNDS AND CLASSES
In the event that the Company establishes one or more series of Shares
or one or more classes of Shares after the effectiveness of this Agreement, such
series of Shares or classes of Shares, as the case may be, shall become Funds
and Classes under this Agreement upon approval of this Agreement by the Company
with respect to the series of Shares or class of Shares and the execution of an
amended Appendix A reflecting the applicable names and terms. The Distributor
may elect not to make any such series or classes subject to this Agreement.
SECTION 17. MISCELLANEOUS
(a) The Distributor shall not be liable to the Company and the Company
shall not be liable to the Distributor for consequential damages under any
provision of this Agreement.
(b) No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by the
Distributor and the Company.
(c) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the Commonwealth of Massachusetts.
(d) This Agreement constitutes the entire agreement between the
Distributor and the Company and supersedes any prior agreement with respect to
the subject matter hereof, whether oral or written.
(e) This Agreement may be executed by the parties hereto on any number
of counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) If any part, term or provision of this Agreement is held to be
illegal, in conflict, with any law or otherwise invalid, the remaining portion
or portions shall be considered
-17-
<PAGE>
severable and not be affected, and the rights and obligations of the parties
shall be construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
(g) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(h) Notwithstanding any other provision of this Agreement, the
Distributor and the Company agree that the assets and liabilities of each Fund
are separate and distinct from the assets and liabilities of each other Fund and
that no Fund shall be liable or shall be charged for any debt, obligation or
liability of any other Fund, whether arising under this Agreement or otherwise.
(i) No affiliated person, employee, agent, officer or director of the
Distributor shall be liable at law or in equity for the Distributor's
obligations under this Agreement.
(j) Each of the undersigned warrants and represents that they have full
power and authority to sign this Agreement on behalf of the party indicated and
that their signature will bind the party indicated to the terms hereof.
-18-
<PAGE>
(k) The terms "vote of a majority of the outstanding voting
securities," "interested person," "affiliated person" and "assignment" shall
have the meanings ascribed thereto in the 1940 Act.
(l) The names "The Glenmede Portfolios" and "Board of Trustees of The
Glenmede Portfolios" refer respectively to the Company created and the Trustees,
as trustees but not individually or personally, acting from time to time under a
Master Trust Agreement dated March 3, 1992, which is hereby referred to and a
copy of which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and at the principal office of the Company. The obligations of
"The Glenmede Portfolios" entered into in the name or on behalf thereof by any
of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Company personally, but bind only the Property of the
Company, and all persons dealing with any class of shares of the Company must
look solely to the Property of the Company belonging to such class for the
enforcement of any claims against the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
THE GLENMEDE PORTFOLIOS
By: /s/ John W. Church
----------------------------
John W. Church
President
ICC DISTRIBUTORS, INC.
By: /s/ John Y. Keffer
---------------------------
John Y. Keffer
President
-19-
<PAGE>
THE GLENMEDE PORTFOLIOS
DISTRIBUTION AGREEMENT
Appendix A
as of August 31, 1997
================================================================================
Distribution
Funds of The Glenmede Portfolios Class Fee
- --------------------------------------------------------------------------------
Muni Intermediate Portfolio Single class of shares None
- --------------------------------------------------------------------------------
New Jersey Muni Portfolio Single class of shares None
================================================================================
-A1-
<PAGE>
THE GLENMEDE PORTFOLIOS
DISTRIBUTION AGREEMENT
Appendix B
[Form of Sub-Distribution Agreement]
[Date]
Ladies and Gentlemen:
ICC Distributors, Inc. ("ICC"), a Delaware corporation, serves as
Distributor (the "Distributor") of various series of The Glenmede Portfolios
(the "Fund"). The Fund is an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "Investment Company Act"). The
Fund offers its shares ("Shares") to the public in accordance with the terms and
conditions contained in the Prospectus of the Fund. The term "Prospectus" as
used herein refers to each prospectus on file with the Securities and Exchange
Commission which is part of the registration statement of the Fund under the
Securities Act of 1933 (the "Securities Act"). In connection with the foregoing
you may serve as a participating dealer (and, therefore, accept orders for the
purchase or redemption of Shares, respond to shareholder inquiries and perform
other related functions) on the following terms and conditions:
1. Participating Dealer. You are hereby designated a Participating
Dealer and as such are authorized (i) to accept orders for the purchase of
Shares and to transmit to the Fund such orders and the payment made therefore,
(ii) to accept orders for the redemption of Shares and to transmit to the Fund
such orders and all additional material, including any certificates for Shares,
as may be required to complete the redemption and (iii) to assist shareholders
with the foregoing and other matters relating to their investments in the Fund,
in each case subject to the terms and conditions set forth in the Prospectus of
the Fund. You are to review each Share purchase or redemption order submitted
through you or with your assistance for completeness and accuracy. You further
agree to undertake from time to time certain shareholder servicing activities
for customers of yours who have purchased Shares and who use your facilities to
communicate with the Fund or to effect redemptions or additional purchases of
the Shares.
2. Limitation of Authority. No person is authorized to make any
representations concerning the Fund or the Shares except those contained in the
Prospectuses of the Fund and in such printed information as the Distributor may
subsequently prepare.
-C1-
<PAGE>
No person is authorized to distribute any sales material relating to the Fund
without the prior written approval of the Distributor.
3. Compensation. As compensation for such services, you will look
solely to the Distributor, and you acknowledge that the Fund shall have no
direct responsibility for any compensation. In addition to any sales charge
payable to you by your customer pursuant to a Prospectus, the Distributor will
pay you no less often than annually a shareholder processing service fee (as we
may determine from time to time in writing) computed as a percentage of the
average daily net assets maintained with the Fund during the preceding period by
shareholders who purchase their shares through you or with your assistance,
provided that said assets are at least $25,000 for the fund family for which you
are to be compensated, and provided that in all cases your name is transmitted
with each shareholder's purchase order.
4. Prospectus and Reports. You agree to comply with the provisions
contained in the Securities Act governing the distribution of prospectuses to
persons to whom you offer Shares. You further agree to deliver, upon our
request, copies of any amended Prospectus of the relevant Fund to purchasers
whose Shares you are holding as record owner and to deliver to such persons
copies of the annual and interim reports and proxy solicitation materials of the
Fund. We agree to furnish to you as many copies of each Prospectus, annual and
interim reports and proxy solicitation materials as you may reasonably request.
5. Qualification to Act. You represent that you are a member in good
standing of National Association of Securities Dealers, Inc. (the "NASD"). Your
expulsion or suspension from the NASD will automatically terminate this
Agreement on the effective date of such expulsion or suspension. You agree that
you will not offer Shares to persons in any jurisdiction in which you may not
lawfully make such offer due to the fact that you have not registered under, or
are not exempt from, the applicable registration or licensing requirements of
such jurisdiction. You agree that in performing the services under this
Agreement, you at all times, will comply with the Conduct Rules (formerly the
Rules of Fair Practice) of the NASD, including, without limitation, the
provisions of Rule 2830 (formerly Section 26) of such Rules. You agree that you
will not combine customer orders to reach breakpoints in commission for any
purposes whatsoever unless authorized by the then current Prospectus in respect
of a particular class of Shares or by us in writing. You also agree that you
will place orders immediately upon their receipt and will not withhold any order
so as to profit therefrom. In determining the amount payable to you hereunder,
we reserve the right to exclude any sales which we reasonably determine are not
made in accordance with the terms of the relevant prospectus and provisions of
the Agreement.
-C2-
<PAGE>
6. Blue Sky. The Fund has registered an indefinite number of Shares
under the Securities Act. The Fund intends to make appropriate notice filings in
certain states where such filing is required. We will inform you as to the
states or other jurisdictions in which we believe the Shares are eligible for
sale under the respective securities laws of such states. You agree that you
will offer Shares to your customers only in those states where such Shares are
eligible to be sold. We assume no responsibility or obligation as to your right
to sell Shares in any jurisdiction.
7. Authority of Fund. The Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining to the
offering of its Shares, including the right in its sole discretion to not accept
any order for the purchase of Shares.
8. Record Keeping. You will (i) maintain all records required by law to
be kept by you relating to transactions in Shares and, upon request by the Fund,
promptly make such of these records available to the Fund as the Fund may
reasonably request in connection with its operations and (ii) promptly notify
the Fund if you experience any difficulty in maintaining the records described
in the foregoing clauses in an accurate and complete manner.
9. Liability. The Distributor shall be under no liability to you except
for lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out your obligations, you agree to act in good faith and without
negligence. Nothing contained in this Agreement is intended to operate as a
waiver by the Distributor or you of compliance with any provisions of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
10. Termination. This Agreement may be terminated by either party,
without penalty, upon ten days' notice to the other party and shall
automatically terminate in the event of its assignment, as defined in the
Investment Company Act. This Agreement may also be terminated upon notice to you
at any time for any particular Fund without penalty by the vote of a majority of
the members of the Board of Directors of the Fund who are not "interested
persons" (as such phrase is defined in the Investment Company Act) and who have
no direct or indirect financial interest in the operation of the Distribution
Agreement between the Fund and the Distributor or by the vote of a majority of
the outstanding voting securities of the Fund.
-C3-
<PAGE>
11. Communications. All communications to us should be sent to the
address listed below. Any notice to you shall be duly given if mailed or
telegraphed to you at the address specified by you below.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us both copies of this Agreement to:
The Glenmede Portfolios
c/o ICC Distributors, Inc.
P.O. Box 7558
Portland, Maine 04101
Attn: Dealer Services
----------------------------------------
ICC Distributors, Inc.
By: Richard C. Butt
Vice President
-C4-
<PAGE>
Confirmed and accepted:
Firm Name:_____________________________________________________________
By:____________________________________________________________________
Signature
____________________________________________________________________
Printed Name and Title
Date:__________________________________________________________________
Address:_______________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
Clears Through:________________________________________________________
Phone No.:_____________________________________________________________
-C5-
<PAGE>
Law Offices
Drinker Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Telephone: 215-988-2700
Fax: 215-988-2757
February 27, 1998
The Glenmede Portfolios
One South Street
Baltimore, MD 21202
Re: Post-Effective Amendment No. 9 to the Registration
Statement on Form N-1A (File Nos. 33-46593
and 811-6578)
--------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to The Glenmede Portfolios, a Massachusetts
business trust (the "Trust"), in connection with the preparation and filing with
the Securities and Exchange Commission of Post-Effective Amendment No. 9 (the
"Amendment") to the Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended.
The Trust is authorized to issue an unlimited number of shares of
beneficial interest (the "Shares"), with a par value of $0.001 per share. The
Board of Trustees of the Trust has the power to designate one or more series
("Sub-Trusts") of Shares and to classify or reclassify any unissued Shares with
respect to such Sub-Trusts. Currently the Trust is offering Shares of two
Sub-Trusts, the Muni Intermediate and New Jersey Muni Portfolios. The Board of
Trustees have previously authorized the issuance of Shares to the public.
We have reviewed the Trust's Master Trust Agreement (the "Trust
Agreement"), By-Laws, resolutions of its Board of Trustees and such other legal
and factual matters as we have deemed appropriate. We assume that the Shares
have been or will be issued against payment therefor as described in the Trust's
applicable Prospectus.
This opinion is based exclusively on Massachusetts law and the federal
law of the United States of America.
<PAGE>
The Glenmede Portfolios
February 27, 1998
Page 2
Based upon the foregoing, it is our opinion that the Shares have been
and will be validly issued, fully paid and non-assessable by the Trust.
We note that under Massachusetts law, shareholders of a Massachusetts
business trust could, under certain circumstances, be held personally liable for
the obligations of such trust. However, the Trust Agreement disclaims
shareholder liability for claims against the Trust. The Trust Agreement further
provides that every note, bond, contract, instrument, certificate or other
undertaking made or issued by the Trust's Trustees or officers shall recite to
the effect that the same was executed or made by or on behalf of the Trust or by
them as Trustees or officers and that the obligations of such instrument are not
binding upon the Trust's shareholders individually but are binding only upon the
assets and property of the Trust or a particular Sub-Trust thereof. The Trust
Agreement provides for indemnification out of the assets of the Sub-Trust of
which a shareholder owns or owned Shares, for any and all loss or expense for
which the shareholder shall be charged or held personally liable solely by
reason of the shareholder's being or having been such a shareholder. Thus, the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the relevant Sub-Trust itself
would be unable to meet its obligations.
We hereby consent to the filing of this opinion as an exhibit to the
Amendment to the Trust's Registration Statement.
Very truly yours,
/s/Drinker Biddle & Reath LLP
DRINKER BIDDLE & REATH LLP
<PAGE>
CONSENT OF COUNSEL
We hereby consent to the use of our name and to the reference to our Firm
under the caption "Counsel" in the Prospectus that is included in Post-Effective
Amendment No. 9 to the Registration Statement (No. 33-46593) on Form N-1A under
the Securities Act of 1933, as amended, and Post-Effective Amendment No. 10 to
the Registration Statement (No. 811-6578) on Form N-1A under the Investment
Company Act of 1940, as amended, of The Glenmede Portfolios. This consent does
not constitute a consent under section 7 of the Securities Act of 1933, and in
consenting to the use of our name and the references to our Firm under such
caption we have not certified any part of the Registration Statement and do not
otherwise come within the categories of persons whose consent is required under
said section 7 or the rules and regulations of the Securities and Exchange
Commission thereunder.
/s/ Drinker Biddle & Reath LLP
---------------------------------
DRINKER BIDDLE & REATH LLP
Philadelphia, Pennsylvania
February 27, 1998
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Post-Effective
Amendment No. 9 (File No. 33-46593) under the Securities Act of 1933 and
Post-Effective Amendment No. 10 (File No. 811-6578) under the Securities Act of
1940 to the Registration Statement on Form N-1A of the Glenmede Portfolios of
our reports dated December 5, 1997 on our audits of the financial statements and
financial highlights of The Glenmede Portfolios and the Government Cash,
Tax-Exempt Cash, Core Fixed Income, International, Equity, Small Capitalization
and Large Cap Value Portfolios of The Glenmede Fund, Inc. for the year ended
October 31, 1997, which reports are included in the Annual Reports to
Shareholders.
We also consent to the reference to our firm under the captions
"Financial Highlights" and "Other Information" in the Prospectus and "Financial
Statements" in the Statement of Additional Information.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 27, 1998
<PAGE>
PURCHASE AGREEMENT
The Glenmede Portfolios (the "Company"), a Massachusetts Business
Trust, and The Glenmede Trust Company ("Glenmede") a Pennsylvania Corporation,
hereby agree as follows:
1. The Company hereby offers Glenmede and Glenmede and Glenmede hereby
purchases ten thousand (10,000) shares, with par value $.001 per share, at
$10.00 per share in the Company's Muni Intermediate Portfolio (the "Portfolio").
The shares are the "initial shares" of the Portfolio. Glenmede hereby
acknowledges receipt of a purchase confirmation reflecting the purchase of ten
thousand (10,000) shares, and the Company hereby acknowledges receipt from
Glenmede of funds in the amount of $100,000.00 in full payment for the shares.
2. Glenmede represents and warrants to the Company that the shares are
being acquired for investment purposes and not for the purpose of distribution.
3. Glenmede agrees that if it or any direct or indirect transferee of
the shares redeem the shares prior to the fifth university of the date that the
Company begins its investment activities, Glenmede will pay to the Company an
amount equal to the number resulting from multiplying the Company's total
unamortized organizational expenses by a fraction, the numerator of which is
equal to the number of shares redeemed by Glenmede or such transferee and the
denominator of which is equal to the number of shares outstanding as of the date
of such redemption, as long as the administrative position of the staff of the
Securities and Exchange Commission requires such reimbursement.
4. The Company represents that a copy of its Master Trust Agreement,
dated February 28, 1992, is on file in the Office of the Secretary of the
Commonwealth of Massachusetts.
5. This Agreement has been executed on behalf of the Company by the
undersigned officer of the Company in his capacity as an officer of the Company.
The obligations of this Agreement shall be binding only upon the assets and
property of the Portfolio and not upon the assets and propeorty of any other
portfolio of the Company and shall not be binding upon any Trustee, officer or
shareholder of the Portfolio and/or the Company individually.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the ________ day of _________, 1992.
THE GLENMEDE PORTFOLIOS
Attest:
____________________________ By:____________________________
(SEAL) THE GLENMEDE TRUST COMPANY
Attest:
____________________________ By:____________________________
<PAGE>
THE GLENMEDE PORTFOLIOS
NEW JERSEY MUNI
PERIOD-TYPE 12-MOS
FISCAL-YEAR-END OCT-31-1997
PERIOD-START NOV-01-1996
PERIOD-END OCT-31-1997
EXCHANGE-RATE 1
INVESTMENTS-AT-COST 11,445,355
INVESTMENTS-AT-VALUE 11,764,967
RECEIVABLES 180,783
ASSETS-OTHER 177,497
OTHER-ITEMS-ASSETS 0
TOTAL-ASSETS 12,123,247
PAYABLE-FOR-SECURITIES 0
SENIOR-LONG-TERM-DEBT 0
OTHER-ITEMS-LIABILITIES 6,563
TOTAL-LIABILITIES 6,563
SENIOR-EQUITY 0
PAID-IN-CAPITAL-COMMON 11,844,800
SHARES-COMMON-STOCK 1,187,867
SHARES-COMMON-PRIOR 756,459
ACCUMULATED-NII-CURRENT 42,795
OVERDISTRIBUTION-NII 0
ACCUMULATED-NET-GAINS (90,523)
OVERDISTRIBUTION-GAINS 0
ACCUM-APPREC-OR-DEPREC 319,612
NET-ASSETS 12,116,684
DIVIDEND-INCOME 0
INTEREST-INCOME 475,458
OTHER-INCOME 0
EXPENSES-NET 31,241
NET-INVESTMENT-INCOME 444,217
REALIZED-GAINS-CURRENT 17,254
APPREC-INCREASE-CURRENT 224,762
NET-CHANGE-FROM-OPS 686,233
EQUALIZATION 0
DISTRIBUTIONS-OF-INCOME 430,888
DISTRIBUTIONS-OF-GAINS 0
DISTRIBUTIONS-OTHER 0
NUMBER-OF-SHARES-SOLD 5,766,081
NUMBER-OF-SHARES-REDEEMED 144,674
SHARES-REINVESTED 0
NET-CHANGE-IN-ASSETS 4,571,544
ACCUMULATED-NII-PRIOR 29,465
ACCUMULATED-GAINS-PRIOR (107,777)
OVERDISTRIB-NII-PRIOR 0
OVERDIST-NET-GAINS-PRIOR 0
GROSS-ADVISORY-FEES 0
INTEREST-EXPENSE 0
GROSS-EXPENSE 31,241
AVERAGE-NET-ASSETS 10,046,945
PER-SHARE-NAV-BEGIN 9.97
PER-SHARE-NII 0.44
PER-SHARE-GAIN-APPREC 0.23
PER-SHARE-DIVIDEND 0.44
PER-SHARE-DISTRIBUTIONS 0.00
RETURNS-OF-CAPITAL 0.00
PER-SHARE-NAV-END 10.20
EXPENSE-RATIO 0.31
AVG-DEBT-OUTSTANDING 0
AVG-DEBT-PER-SHARE 0
<PAGE>
THE GLENMEDE PORTFOLIOS
MUNI INTERMEDIATE PORTFOLIO
PERIOD-TYPE 12-MOS
FISCAL-YEAR-END OCT-31-1997
PERIOD-START NOV-01-1996
PERIOD-END OCT-31-1997
EXCHANGE-RATE 1
INVESTMENTS-AT-COST 18,367,408
INVESTMENTS-AT-VALUE 18,887,657
RECEIVABLES 320,712
ASSETS-OTHER 18,547
OTHER-ITEMS-ASSETS 0
TOTAL-ASSETS 19,226,916
PAYABLE-FOR-SECURITIES 0
SENIOR-LONG-TERM-DEBT 0
OTHER-ITEMS-LIABILITIES 7,727
TOTAL-LIABILITIES 7,727
SENIOR-EQUITY 0
PAID-IN-CAPITAL-COMMON 19,434,385
SHARES-COMMON-STOCK 1,848,113
SHARES-COMMON-PRIOR 1,799,502
ACCUMULATED-NII-CURRENT 80,499
OVERDISTRIBUTION-NII 0
ACCUMULATED-NET-GAINS (815,944)
OVERDISTRIBUTION-GAINS 0
ACCUM-APPREC-OR-DEPREC 520,249
NET-ASSETS 19,219,189
DIVIDEND-INCOME 0
INTEREST-INCOME 1,023,618
OTHER-INCOME 0
EXPENSES-NET 64,668
NET-INVESTMENT-INCOME 958,950
REALIZED-GAINS-CURRENT (42,723)
APPREC-INCREASE-CURRENT 295,021
NET-CHANGE-FROM-OPS 1,211,248
EQUALIZATION 0
DISTRIBUTIONS-OF-INCOME 961,378
DISTRIBUTIONS-OF-GAINS 0
DISTRIBUTIONS-OTHER 0
NUMBER-OF-SHARES-SOLD 440,883
NUMBER-OF-SHARES-REDEEMED 392,272
SHARES-REINVESTED 0
NET-CHANGE-IN-ASSETS 748,129
ACCUMULATED-NII-PRIOR 82,927
ACCUMULATED-GAINS-PRIOR (773,221)
OVERDISTRIB-NII-PRIOR 0
OVERDIST-NET-GAINS-PRIOR 0
GROSS-ADVISORY-FEES 0
INTEREST-EXPENSE 0
GROSS-EXPENSE 64,668
AVERAGE-NET-ASSETS 18,835,988
PER-SHARE-NAV-BEGIN 10.26
PER-SHARE-NII 0.52
PER-SHARE-GAIN-APPREC 0.14
PER-SHARE-DIVIDEND 0.52
PER-SHARE-DISTRIBUTIONS 0.00
RETURNS-OF-CAPITAL 0.00
PER-SHARE-NAV-END 10.40
EXPENSE-RATIO 0.34
AVG-DEBT-OUTSTANDING 0
AVG-DEBT-PER-SHARE 0
