THE SHAWMUT FUNDS
Federated Investors
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
OF SHAWMUT QUANTITATIVE EQUITY FUND
A Special Meeting of Shareholders of Shawmut Quantitative Equity Fund
("Quantitative Equity Fund") will be held at 2:00 p.m. on August 8,
1995, at the offices of Quantitative Equity Fund, Federated Investors
Tower, 19th Floor, Pittsburgh, Pennsylvania 15222-3779, for the
following purposes:
1. To approve or disapprove a proposed Agreement and Plan of
Reorganization between Quantitative Equity Fund and Shawmut
Growth and Income Equity Fund ("Growth and Income Equity
Fund"), dated May 22, 1995, whereby Growth and Income Equity
Fund would acquire all of the assets of Quantitative Equity
Fund in exchange for Trust Shares and Investment Shares of
Growth and Income Equity Fund to be distributed pro rata by
Quantitative Equity Fund to its shareholders of Trust Shares
and Investment Shares, respectively, in complete liquidation
and dissolution of Quantitative Equity Fund; and
2. To transact such other business as may properly come before
the meeting or any adjournment thereof.
By Order of the Board of Trustees,
John W. McGonigle
Secretary
Dated: July 14, 1995
SHAREHOLDERS OF RECORD AT THE CLOSE OF BUSINESS ON JULY 6, 1995, ARE
ENTITLED TO VOTE AT THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE SIGN AND RETURN THE ENCLOSED PROXY CARD. YOUR VOTE IS
IMPORTANT.
TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF
FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING
OR VOTE IN PERSON IF YOU ATTEND THE MEETING.
SHAWMUT QUANTITATIVE EQUITY FUND
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Dear Shareholder:
The Board of Trustees and management of The Shawmut Funds (the "Trust"),
on behalf of its portfolio, Shawmut Quantitative Equity Fund
("Quantitative Equity Fund"), are pleased to submit for your vote a
proposal to transfer all of the Quantitative Equity Fund's assets to
another investment portfolio of the Trust, Shawmut Growth and Income
Equity Fund ("Growth and Income Equity Fund"). Growth and Income Equity
Fund has a similar investment objective and substantially similar
investment policies as Quantitative Equity Fund. As part of the
transaction, shareholders of Trust Shares or Investment Shares of
Quantitative Equity Fund would receive Trust Shares or Investment
Shares, respectively, in Growth and Income Equity Fund equal in value to
their shares in Quantitative Equity Fund and Quantitative Equity Fund
would be dissolved.
The Board of Trustees of the Trust, as well as Shawmut Bank, N.A.,
Quantitative Equity Fund's investment adviser, believe the proposed
Agreement and Plan of Reorganization is in the best interests of
Quantitative Equity Fund shareholders. Since Quantitative Equity Fund
began operations in June 1994, the growth of Quantitative Equity Fund's
assets have not met expectations. The Quantitative Equity Fund's total
net assets were approximately $4.3 million on July 6, 1995. In
addition, there are expectations of no further growth and possibly
continuing asset dissipation due to various factors associated with the
potential removal of Marque Millennium Group Limited. as Quantitative
Equity Fund's sub-adviser, and the merger of Shawmut National
Corporation and Fleet Financial Group, the current parents of
Quantitative Equity Fund's investment adviser and Fleet Investment
Advisers, an investment adviser, respectively. We believe the proposed
Agreement and Plan of Reorganization offers shareholders of Quantitative
Equity Fund the opportunity to pursue a similar investment objective
under substantially similar investment policies in Growth and Income
Equity Fund, which has a lower expense ratio due to improved economies
of scale.
We believe the transfer of Quantitative Equity Fund's assets in this
transaction will present an excellent investment opportunity for our
shareholders. Your vote on the transaction is critical to its success.
The transfer will be effected only if approved by a majority of
Quantitative Equity Fund's outstanding shares on the record date voted
in person or represented by proxy. We hope you share our enthusiasm and
will participate by casting your vote in person, or by proxy if you are
unable to attend the meeting. Please read the enclosed Prospectus/Proxy
Statement carefully before you vote. If you have any questions, please
feel free to call us at 1-800-467-Shawmut.
Thank you for your prompt attention and participation.
Sincerely,
THE SHAWMUT FUNDS
Edward C. Gonzales
President
PROSPECTUS/PROXY STATEMENT
July 14, 1995
Acquisition of the Assets of
SHAWMUT QUANTITATIVE EQUITY FUND,
a portfolio of The Shawmut Funds
By and in exchange for shares of
SHAWMUT GROWTH AND INCOME EQUITY FUND,
a portfolio of The Shawmut Funds
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-SHAWMUT
This Prospectus/Proxy Statement describes the proposed Agreement and
Plan of Reorganization (the "Agreement"), dated May 22, 1995, whereby
Shawmut Growth and Income Equity Fund ("Growth and Income Equity Fund")
would acquire all of the assets of Shawmut Quantitative Equity Fund
("Quantitative Equity Fund"), both portfolios of The Shawmut Funds, a
Massachusetts business trust (the "Trust"), in exchange for Growth and
Income Equity Fund shares to be distributed pro rata by Quantitative
Equity Fund to its shareholders in complete liquidation and dissolution
of Quantitative Equity Fund. As a result of the Agreement, each
shareholder of Trust Shares or Investment Shares of Quantitative Equity
Fund will become the owner of Trust Shares or Investment Shares,
respectively, of Growth and Income Equity Fund having a total value
equal to the total value of his or her holdings in Quantitative Equity
Fund.
The Trust is an open-end management investment company which currently
includes several portfolios, each of which has its own investment
objective. Growth and Income Equity Fund and Quantitative Equity Fund
are both portfolios of the Trust. The investment objective of Growth
and Income Equity Fund is to provide a relatively high total return
through long-term capital appreciation and current income while
Quantitative Equity Fund's investment objective is to provide growth of
capital. Both Growth and Income Equity Fund and Quantitative Equity
Fund pursue their respective investment objectives by investing in the
same general categories of securities, including common stocks,
convertible securities, securities of foreign issuers, options and
futures contracts, stock index futures, swap agreements, indexed
securities, options, restricted securities, illiquid securities,
securities of other investment companies, short-term money market
instruments rated in one of the top two rating categories by a
nationally recognized statistical rating organization, securities issued
and/or guaranteed as to payment of principal and interest by the U.S.
government, its agencies, or instrumentalities, repurchase agreements,
and reverse repurchase agreements. An investment in Growth and Income
Equity Fund or Quantitative Equity Fund is neither insured nor
guaranteed by the United States government or its agencies, nor does it
represent an obligation of any bank, including Shawmut Bank. For a
comparison of the investment policies of Growth and Income Equity Fund
and Quantitative Equity Fund, see "Summary of the Reorganization, Growth
and Income Equity Fund, and Quantitative Equity Fund."
This Prospectus/Proxy Statement should be retained for future reference.
It sets forth concisely the information about the Trust and Growth and
Income Equity Fund that a prospective investor should know before
investing. The Combined Prospectus of The Shawmut Equity Funds dated
December 31, 1994, is included with this Prospectus/Proxy Statement.
The Combined Prospectus includes information concerning Growth and
Income Equity Fund. A Statement of Additional Information for The
Shawmut Equity Funds dated December 31, 1994 (relating to Shawmut Equity
Funds' prospectus of the same date) and July 14, 1995 (relating to this
Prospectus/Proxy Statement) containing additional information have been
filed with the Securities and Exchange Commission and are incorporated
herein by reference. Copies of the Statements of Additional Information
may be obtained without charge by writing or calling the Trust at the
address and telephone number shown above.
TABLE OF CONTENTS
Summary of Expenses...............................................
........................2
Summary of the Reorganization, Growth and Income Equity Fund,
and Quantitative Equity Fund 4
Information About the Reorganization. 7
Additional Information About Growth and Income Equity Fund and
Quantitative Equity Fund 10
Voting Information. 11
Agreement and Plan of Reorganization. Exhibit A
Prospectus of Shawmut Equity Funds
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS
OR OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK,
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN
THE FUNDS INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF
PRINCIPAL.
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.
SUMMARY OF EXPENSES
Growth and IncomeQuantitative
Equity
Equity Fund Fund
Investment SharesInvestment Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................... 4.00% 4.00%
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) None None
Deferred Sales Load (as a percentage of original purchase
price or redemption proceeds, as applicable) None None
Redemption Fees (as a percentage of amount redeemed,
if applicable) None None
Exchange Fee None None
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1) 0.80% 0.00%
12b-1 Fees (2) 0.25% 0.25%
Total Other Expenses(3) 0.24% 1.50%
Total Investment Shares Operating Expenses (after waiver
and reimbursement)(4) 1.29% 1.75%
(1) The management fee has been reduced to reflect the voluntary
waiver by the investment adviser. The advisers can terminate this
voluntary waiver at any time at its sole discretion. The maximum
management fee is 1.00%.
(2) The 12b-1 fee has been reduced to reflect the voluntary waiver
by the distributor. The Equity Funds can pay up to 0.50% of the
average daily net assets of Investment Shares as a 12b-1 fee to the
distributor.
(3) Estimated other expenses for Quantitative Equity Fund have been
reduced to reflect the voluntary waiver by the administrator and
reimbursement by the adviser. Estimated other expenses for both
Growth and Income Equity Fund and Quantitative Equity Fund have been
reduced to reflect the voluntary waiver by the custodian of its fee.
(4) Absent the anticipated voluntary waivers and reimbursement
explained in the above footnotes, the Investment Shares Operating
Expenses are estimated to be 1.74% for Growth and Income Equity Fund
and 9.12% for Quantitative Equity Fund.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Investment Shares will
bear, either directly or indirectly. For more complete descriptions of
the various costs and expenses, see "The Shawmut Funds Information" and
"Investing in Investment Shares" in the Equity Funds prospectus for The
Shawmut Funds - Investment Shares. Wire-transferred redemptions of less
than $5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the National
Association of Securities Dealers, Inc.
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EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return and (2) redemption at the end of each time period. As noted in
the table above, neither Growth and Income Equity Fund nor Quantitative Equity
Fund charge a redemption fee.
1 Year 3 Years 5 Years 10
Years
Growth and Income Equity Fund $53 $79 $108 $189
Quantitative Equity Fund $57 $93 $131 $238
The above example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.
SUMMARY OF EXPENSES
Growth and IncomeQuantitative
Equity
Equity Fund Fund
Trust Shares Trust Shares
Shareholder Transaction Expenses
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)................... None None
Maximum Sales Load Imposed on Reinvested Dividends
(as a percentage of offering price) None None
Deferred Sales Load (as a percentage of original purchase
price or redemption proceeds, as applicable) None None
Redemption Fees (as a percentage of amount redeemed,
if applicable) None None
Exchange Fee None None
ANNUAL INVESTMENT SHARES OPERATING EXPENSES
(As a percentage of average net assets)
Management Fee (after waiver) (1) 0.80% 0.00%
12b-1 Fees None None
Total Other Expenses(2) 0.24% 1.50%
Total Investment Shares Operating Expenses (after waiver
and reimbursement)(3) 1.04% 1.50%
(1) The management fee has been reduced to reflect the voluntary waiver
by the investment adviser. The advisers can terminate this voluntary
waiver at any time at its sole discretion. The maximum management fee is
1.00%.
(2) Estimated other expenses for Quantitative Equity Fund have been
reduced to reflect the voluntary waiver by the administrator and
reimbursement by the adviser. Estimated other expenses for both Growth and
Income Equity Fund and Quantitative Equity Fund have been reduced to
reflect the voluntary waiver by the custodian of its fee.
(3) Absent the anticipated voluntary waivers and reimbursement explained
in the above footnotes, the Trust Shares Operating Expenses are estimated
to be 1.24% for Growth and Income Equity Fund and 8.62% for Quantitative
Equity Fund.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder of Trust Shares will bear,
either directly or indirectly. For more complete descriptions of the
various costs and expenses, see "The Shawmut Funds Information" and
"Investing in Investment Shares" in the Equity Funds prospectus for The
Shawmut Funds - Trust Shares. Wire-transferred redemptions of less than
$5,000 may be subject to additional fees.
Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted under the rules of the
National Association of Securities Dealers, Inc.
EXAMPLE
You would pay the following expenses on a $1,000 investment assuming (1)
5% annual return and (2) redemption at the end of each time period. As
noted in the table above, neither Growth and Income Equity Fund nor
Quantitative Equity Fund charge a redemption fee.
1 Year 3 Years 5 Years 10
Years
Growth and Income Equity Fund $11 $33 $57 $127
Quantitative Equity Fund $15 $47 $82 $179
The above example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those
shown.
SUMMARY
About the Proposed Reorganization
The Board of Trustees (the "Board") of The Shawmut Funds (the "Trust")
has voted to recommend to shareholders on behalf of its portfolios,
Shawmut Quantitative Equity Fund ("Quantitative Equity Fund") and
Shawmut Growth and Income Equity Fund ("Growth and Income Equity Fund"),
the approval of an Agreement and Plan of Reorganization (the
"Agreement"), dated May 22, 1995, whereby Growth and Income Equity Fund
would acquire all of the assets of Quantitative Equity Fund in exchange
for Growth and Income Equity Fund shares to be distributed pro rata by
Quantitative Equity Fund to its shareholders in a complete liquidation
and dissolution of Quantitative Equity Fund (the "Reorganization"). A
copy of the Agreement is attached to this Proxy/Prospectus and
designated as Exhibit A. As a result of the Reorganization, each
shareholder of Trust Shares or Investment Shares of Quantitative Equity
Fund will become the owner of Trust Shares or Investment Shares,
respectively, of Growth and Income Equity Fund having a total value
equal to the total value of his or her holdings in Quantitative Equity
Fund on the date of the Reorganization, which is scheduled for August
11, 1995.
As a condition to the Reorganization, the Trust will receive an opinion
of counsel that the Reorganization will be considered a tax-free
"reorganization" under applicable provisions of the Internal Revenue
Code of 1986, as amended, so that no gain or loss will be recognized by
Quantitative Equity Fund or its shareholders. The tax cost basis of the
Growth and Income Equity Fund shares received by Quantitative Equity
Fund shareholders will be the same as the tax cost basis of their shares
in Quantitative Equity Fund.
After the acquisition is completed, Quantitative Equity Fund will
liquidate and terminate as portfolio of the Trust. The Trust will
continue to be registered as an investment company under the Investment
Company Act of 1940, as amended (the "1940 Act").
Investment Objective and Policies
The investment objective of Growth and Income Equity Fund is to provide
a relatively high total return through long-term capital appreciation
and current income while Quantitative Equity Fund's investment objective
is to provide growth of capital. Both Growth and Income Equity Fund and
Quantitative Equity Fund pursue their respective investment objectives
by investing in the same general categories of securities including
common stocks, convertible securities, securities of foreign issuers,
options and futures contracts, stock index futures, swap agreements,
indexed securities, options, restricted securities, illiquid securities,
securities of other investment companies, short-term money market
instruments rated in one of the top two rating categories by a
nationally recognized statistical rating organization, securities issued
and/or guaranteed as to payment of principal and interest by the U.S.
government, its agencies, or instrumentalities, repurchase agreements,
and reverse repurchase agreements.
Advisory Fees and Expense Ratios
Growth and Income Equity Fund's and Quantitative Equity Fund's
investment adviser is Shawmut Bank, N.A. (the "Adviser"), which
currently makes investment decisions for the Growth and Income Equity
Fund and Quantitative Equity Fund. With respect to Quantitative Equity
Fund, the Adviser utilizes the services of Marque Millennium Group
Limited, as described below. The arrangement with the Adviser is
identical for Growth and Income Equity Fund and Quantitative Equity
Fund. The Adviser may receive an annual investment advisory fee of up
to 1.00% of each Growth and Income Equity Fund's and Quantitative Equity
Fund's average daily net assets. These advisory fees, while higher than
the advisory fees paid by other mutual funds in general, are comparable
to fees paid by many mutual funds with similar objectives and policies.
The Adviser may undertake to waive a portion of its advisory fee, up to
the amount of the advisory fee, to reimburse Growth and Income Equity
Fund and Quantitative Equity Fund for operating expenses in excess of
limitations established by certain states. The Adviser may further
voluntarily waive a portion of its fee or reimburse Growth and Income
Equity Fund and Quantitative Equity Fund for certain operating expenses.
The Adviser can terminate such voluntary waiver or reimbursement policy
with either Growth and Income Equity Fund or Quantitative Equity Fund at
any time at its sole discretion.
The principal difference between Growth and Income Equity Fund's and
Quantitative Equity Fund's payment of advisory fees is that Quantitative
Equity Fund has a sub-adviser, Marque Millennium Group Limited ("Marque
Millennium" or the "Sub-Adviser"), to whom the Adviser pays a portion of
the advisory fees that it collects. Marque Millennium uses a
quantitative computer valuation model to evaluate the relative
attractiveness of common stocks selected based upon their price
momentum. For the services provided and the expenses incurred by the
Sub-Adviser pursuant to the sub-advisory agreement, Marque Millennium is
entitled to receive an annual fee of one-half of the total advisory fee
being charged (up to .50 of 1.00% of Quantitative Equity Fund's average
daily net assets being paid to the Sub-Adviser), payable by the Adviser.
Marque Millennium may elect to waive some or all of its fee. In no
event shall Quantitative Equity Fund be responsible for any fees due to
the Sub-Adviser for its services to the Adviser.
Distribution Arrangements
Currently, Federated Securities Corp., a subsidiary of Federated
Investors, ("FSC" or the "distributor") is the principal distributor of
Growth and Income Equity Fund and Quantitative Equity Fund. If the
Reorganization is consummated, FSC would continue to be the principal
distributor of Growth and Income Equity Fund. In addition, Growth and
Income Equity Fund and Quantitative Equity Fund now operate under the
same distribution plan adopted in accordance with Investment Company Act
Rule 12b-1 (the "Plan"), and Quantitative Equity Fund would continue to
operate under the Plan if the Reorganization proceeds. Under the Plan,
Growth and Income Equity Fund and Quantitative Equity Fund pay to FSC an
amount computed at an annual rate of up to .50 of 1% of the average
daily net asset value of the Investment Shares of the respective funds.
FSC may, from time to time and for such periods as it deems appropriate,
voluntarily reduce its compensation under the Plan. FSC may select
financial institutions such as banks, fiduciaries, custodians for public
funds, investment advisers, and broker/dealers to provide distribution
and/or administrative services as agents for their clients or customers
who own Investment Shares of Growth and Income Equity Fund or
Quantitative Equity Fund. The Plan and fees associated thereto which is
currently in effect for either Growth and Income Equity Fund or
Quantitative Equity Fund would continue for Growth and Income Equity
Fund if the Reorganization is consummated.
Purchase and Redemption Procedures
Procedures for the purchase and redemption of Growth and Income Equity
Fund shares are identical to procedures currently applicable to the
purchase and redemption of Quantitative Equity Fund shares. Any
questions about such procedures may be directed to, and assistance in
effecting purchases or redemptions of Growth and Income Equity Fund
shares may be obtained by calling 1-800-SHAWMUT.
Reference is made to the Shawmut Equity Funds Prospectus for Growth and
Income Equity Fund and Quantitative Equity Fund dated December 31, 1994
(the "Combined Prospectus"), for a complete description of the purchase
and redemption procedures applicable to purchases and redemptions of
Growth and Income Equity Fund and Quantitative Equity Fund shares,
respectively.
Exchange Privileges
Shareholders in Growth and Income Equity Fund and Quantitative Equity
Fund currently have an identical exchange privilege. If the
Reorganization is consummated, shareholders from Quantitative Equity
Fund would continue to have these exchange privileges as shareholders of
Growth and Income Equity Fund. Shareholders in Growth and Income Equity
Fund and Quantitative Equity Fund may exchange Investment Shares, with a
minimum net asset value of $1,000, except retirement plan accounts,
which must have a minimum net asset value of $500, for shares of the
same designated class of other funds advised by Shawmut Bank at net
asset value without the payment of a sales load. Investment Shares of
either Growth and Income Equity Fund or Quantitative Equity Fund with a
sales load may currently be exchanged at net asset value for shares of
other funds with an equal sales load, a lower sales load, or no sales
load. Trust Shares of either Growth and Income Equity Fund or
Quantitative Equity Fund, which are sold without a sales load may be
exchanged for shares of other Shawmut Funds without a sales load being
imposed. Reference is made to the Combined Prospectus, for a complete
description of the exchange privilege applicable to shares of Growth and
Income Equity Fund and Quantitative Equity Fund shares, respectively.
COMPARISON OF INVESTMENT POLICIES AND RISK FACTORS
Growth and Income Equity Fund and Quantitative Equity Fund have similar
investment objectives. Growth and Income Equity Fund seeks to provide
relatively high total return through long-term capital appreciation and
current income while Quantitative Equity Fund seeks to provide growth of
capital. Both Growth and Income Equity Fund and Quantitative Equity
Fund are fluctuating net asset value management investment companies
(mutual funds).
Growth and Income Equity Fund and Quantitative Equity Fund invest at
least 65% of their respective net assets in equity securities that
include common stocks. Growth and Income Equity Fund and Quantitative
Equity Fund may invest the remaining 35% of assets in a combination of
other types of securities including, but not limited to, convertible
securities, securities of foreign issuers, options and futures
contracts, stock index futures, swap agreements, indexed securities,
options, restricted securities, illiquid securities, repurchase
agreements, reverse repurchase agreements, and securities of other
investment companies. In addition, Growth and Income Equity Fund and
Quantitative Equity Fund may invest in certain securities for temporary
defensive purposes including short-term money market instruments rated
in one of the top two rating categories by a nationally recognized
statistical rating organization, securities issued and/or guaranteed as
to payment of principal and interest by the U.S. government, its
agencies, or instrumentalities, and repurchase agreements. The Funds'
investment policies are identical with respect to the types of
securities described in this paragraph.
The principal difference between Growth and Income Equity Fund's and
Quantitative Equity Fund's permitted investments is in their respective
policies for equity securities selection. Growth and Income Equity Fund
invests in equity securities that offer investors an opportunity to
pursue total return through both capital appreciation and current
income. The Growth and Income Equity Fund generally seeks to achieve a
yield that exceeds the composite dividend yield of securities included
in the Standard & Poor's 500 Composite Stock Index. The securities in
which the Growth and Income Equity Fund may invest include growth
oriented stocks of issuers with small capitalization. Small
capitalization stocks have historically been more volatile in price than
larger capitalization stocks, such as those included in the Standard and
Poor's 500 Composite Stock Index. This is because, among other things,
smaller companies have a lower degree of liquidity in the equity market
and tend to have a greater sensitivity to changing economic conditions.
Further, in addition to exhibiting greater volatility, these stocks may,
to some degree, fluctuate independently of the stocks of large
companies. That is, the stock of small capitalization companies may
decline in price as the price of large company stocks rises or vice
versa. Therefore, investors should expect that mutual funds, like
Growth and Income Equity Fund, will be more volatile than broad stock
market indices such as the Standard and Poor's 500 Index.
In contrast, Quantitative Equity Fund invests in the equity securities
of companies with market value capitalization in excess of $250,000,000
and a minimum daily average trading volume as established by the Sub-
Adviser, from time to time. While equity securities that show growth or
value characteristics may be included in the Quantitative Equity Fund
investment portfolio, these characteristics do not drive the selection
process. Instead, Quantitative Equity Fund uses a quantitative computer
valuation model to evaluate the relative attractiveness of equity
securities based upon price momentum, as measured by combining four
quantitative disciplines: price trend analysis, velocity of price
movements, analysis of price compared to moving averages, and current
price and volume activity. Because of its price and volume oriented
selection method, Quantitative Equity Fund would tend to be less
volatile than broad stock market indices such as the Standard & Poor's
500 Index. Of course, there can be no assurance that this will occur.
Both Growth and Income Equity Fund's and Quantitative Equity Fund's
investment objective and policies are more fully described in the
Combined Prospectus.
Except for the differences noted in the preceding paragraphs, the
investment restrictions and investment policies of Growth and Income
Equity Fund and Quantitative Equity Fund are identical. Reference is
made to Growth and Income Equity Fund's and Quantitative Equity Fund's
Combined Statement of Additional Information dated December 31, 1994
(the "Combined Statement of Additional Information") for a complete
description of the investment restrictions and investment policies of
Growth and Income Equity Fund and Quantitative Equity Fund. Copies of
the Combined Statement of Additional Information are available upon
request at no charge. See "Information About the Trust, Growth and
Income Equity Fund, and Quantitative Equity Fund."
INFORMATION ABOUT THE REORGANIZATION
Background and Reasons for the Proposed Acquisition
Quantitative Equity Fund was organized in 1994 in order to provide an
investment vehicle that pursues growth of capital. Although the Board
is satisfied with Quantitative Equity Fund's performance, both the Board
and the Adviser are concerned about the relatively small amount of total
assets invested in Quantitative Equity Fund and the relatively high
level of operating expenses sustained by Quantitative Equity Fund. In
addition, the Board has been advised that Shawmut Bank, N.A., the
adviser to Quantitative Equity Fund, and Marque Millennium Group
Limited, the sub-adviser, desire to terminate their relationship with
regard to the management of Quantitative Equity Fund. In this setting,
the Board was asked to consider a transfer of all of the Quantitative
Equity Fund's assets to Growth and Income Equity Fund. In connection
with this transaction, the adviser to Quantitative Equity Fund believes
that the combination of Quantitative Equity Fund and Growth and Income
Equity Fund would enable shareholders of Quantitative Equity Fund to
benefit from increased diversification of investments and other
economies of scale. In addition, the Adviser believes that the
shareholders of Quantitative Equity Fund will benefit from the
investment policies of Growth and Income Equity Fund in pursuit of
capital appreciation, along with income. While there is no assurance
that the Growth and Income Equity Fund will provide shareholders with
superior long term investment performance, the Adviser will endeavor to
do so by following the investment policies described in the preceding
section.
In addition to the foregoing, the Board has been informed by the adviser
of the proposed acquisition of the adviser by Fleet Financial Group,
Inc. It is anticipated that the acquisition will be completed during
the fourth quarter of 1995. As part of the acquisition transaction, the
Adviser has informed the Board that it may seek to reorganize the
investment portfolios of the Trust, including Growth and Income Equity
Fund, into the Galaxy Funds, an open-end management investment company
for which Fleet Investment Advisers, a subsidiary of Fleet Financial
Group, Inc., serves as investment adviser. It is proposed that Growth
and Income Equity Fund will be reorganized into a newly-formed
investment portfolio of the Galaxy Funds and that the investment
objective and policies of Growth and Income Equity Fund will be
identical in the new portfolio. A separate shareholder vote will be
required to approve the merger of Growth and Income Equity Fund into the
Galaxy Funds, the cost of which will be borne by the acquiring fund.
The Trust's Board of Trustees concluded that reorganization of the
Acquired Fund into the Acquiring Fund could provide operating
efficiencies and economies of scale. The Trustees also noted that
shareholders of the Acquired Fund would continue to receive the same
quality investment management services from the Adviser as shareholders
of the Acquiring Fund. The Trust's Board of Trustees, including a
majority of the independent Trustees, additionally determined that
participation in the Reorganization is in the best interests of the
Acquired Fund and that the interests of the Acquired Fund's shareholders
would not be diluted as a result of its effecting the Reorganization.
Based upon the foregoing considerations, and the fact that shareholders
of the Acquired Fund and the Acquiring Fund will not suffer any adverse
tax consequences as a result of the Reorganization, the Board of
Trustees unanimously voted to approve, and recommend to Acquired Fund
shareholders the approval of, the Reorganization.
The Trustees of the Trust, including the independent Trustees, have
unanimously concluded that consummation of the Reorganization is in the
best interests of the Trust and the shareholders of the Acquired Fund
and Acquiring Fund and that the interests of their respective
shareholders would not be diluted as a result of effecting the
Reorganization and have unanimously approved the Agreement.
Description of the Agreement and Plan of Reorganization
The Agreement provides that Quantitative Equity Fund will discharge all
of its liabilities and Growth and Income Equity Fund will acquire all of
the assets of Quantitative Equity Fund in exchange for Trust Shares and
Investment Shares of Growth and Income Equity Fund to be distributed pro
rata by Quantitative Equity Fund to its shareholders of Trust Shares and
Investment Shares, respectively, in complete liquidation and dissolution
of Quantitative Equity Fund, on or about August 11, 1995.
Consummation of the Reorganization is subject to the conditions set
forth in the Agreement, including receipt of an opinion in form and
substance satisfactory to the Trust, as described under the caption
"Federal Income Tax Consequences" below. The Agreement may be
terminated and the Reorganization may be abandoned at any time before or
after approval of shareholders of Quantitative Equity Fund prior to the
Closing Date by either party if it believes that consummation of the
Reorganization would not be in the best interests of shareholders.
The Adviser is responsible for the payment of all expenses of the
Reorganization incurred by either party, whether or not the
Reorganization is consummated. Such expenses included, but are not
limited to, legal fees, registration fees, transfer taxes (if any), the
fees of banks and transfer agents and the costs of preparing, printing,
copying, and mailing proxy solicitation materials to Quantitative Equity
Fund's shareholders and the costs of holding the Special Meeting of
Shareholders.
The foregoing description of the Plan entered into between Growth and
Income Equity Fund and Quantitative Equity Fund is qualified in its
entirety by terms and provisions of the Agreement, a copy of which is
attached hereto as Exhibit A and incorporated herein by reference
thereto.
Description of Growth and Income Equity Fund Shares
Shares of Growth and Income Equity Fund to be issued to shareholders of
Quantitative Equity Fund under the Agreement will be fully paid and
nonassessable when issued and transferable without restrictions and will
have no preemptive or conversion rights. The Declaration of Trust
permits the Trust to offer separate series of shares representing
interests in separate portfolios of securities. The shares in any one
portfolio may be offered in separate classes. As of the date of the
Combined Prospectus, the Board has established two classes of shares of
Growth and Income Equity Fund and Quantitative Equity Fund, known as
Trust Shares and Investment Shares. Trust Shares of each of Growth and
Income Equity Fund and Quantitative Equity Fund are sold primarily to
accounts for which Shawmut Bank, N.A., or its affiliates, act in a
fiduciary or agency capacity and, with respect to the Quantitative
Equity Fund, to customers of Marque Millennium Group Limited.
Investment Shares are sold primarily to financial institutions that rely
upon the distribution services provided by the distributor in the
marketing of Investment Shares, as well as to retail customers of such
institutions. Investment Shares of Growth and Income Equity Fund are
subject to a Rule 12b-1 fee of up to .50 of 1.00% of daily net assets of
Investment Shares. Trust Shares are not subject to a Rule 12b-1 fee.
Shareholders of Quantitative Equity Fund would receive shares of the
same designated class of Growth and Income Equity Fund if the
Reorganization is consummated.
Federal Income Tax Consequences
As a condition to the Reorganization transactions, the Trust, on behalf
of Growth and Income Equity Fund and Quantitative Equity Fund, will
receive an opinion from the Trust's counsel, Dickstein, Shapiro & Morin,
L.L.P., to the effect that, on the basis of the existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), current
administrative rules and court decisions, for federal income tax
purposes: (1) the Reorganization as set forth in the Agreement will
constitute a tax-free reorganization under section 368(a)(1)(C) of the
Code; (2) no gain or loss will be recognized by Growth and Income Equity
Fund upon its receipt of Quantitative Equity Fund's assets solely in
exchange for Growth and Income Equity Fund shares; (3) no gain or loss
will be recognized by Quantitative Equity Fund upon the transfer of its
assets to Growth and Income Equity Fund in exchange for Growth and
Income Equity Fund shares or upon the distribution (whether actual or
constructive) of Growth and Income Equity Fund shares to Quantitative
Equity Fund shareholders in exchange for their shares to Quantitative
Equity Fund; (4) no gain or loss will be recognized by shareholders of
Quantitative Equity Fund upon the exchange of their Quantitative Equity
Fund shares for Growth and Income Equity Shares; (5) the tax basis of
Quantitative Equity Fund's assets acquired by Growth and Income Equity
Fund will be the same as the tax basis of such assets to Quantitative
Equity Fund immediately prior to the Reorganization; (6) the tax basis
of Growth and Income Equity Fund shares received by each shareholder of
Quantitative Equity Fund pursuant to the Agreement will be the same as
the tax basis of Quantitative Equity Fund shares held by such
shareholder immediately prior to the Reorganization; (7) the holding
period of the assets of Quantitative Equity Fund in the hands of Growth
and Income Equity Fund will include the period during which those assets
were held by Quantitative Equity Fund; and (8) the holding period of
Growth and Income Equity Fund shares received by each shareholder of
Quantitative Equity Fund will include the period during which the
Quantitative Equity Fund shares exchanged therefor were held by such
shareholder, provided the Quantitative Equity Fund shares were held as
capital assets on the date of the Reorganization.
Comparative Information on Shareholder Rights and Obligations
The Trust was established as a Massachusetts business trust under a
Declaration of Trust dated July 16, 1992, under the laws of the
Commonwealth of Massachusetts. Growth and Income Equity Fund and
Quantitative Equity Fund are separate investment portfolios of the
Trust, and they are subject to the same rights of shareholders and
obligations to shareholders under the Declaration of Trust and the By-
laws for the Trust.
Capitalization
The following table sets forth the capitalization of Growth and Income
Equity Fund and Quantitative Equity Fund as of July 13, 1995, and on a
pro forma basis as of that date:
Growth and Income Quantitative Pro Forma
Equity Fund Equity Fund Combined*
Net Assets 188,356,137.56 (TS)*3,493,581.49 (TS)*191,849,719.05
(TS)
40,768,229.56 (IS)**839,418.47 (IS)**41,607,648.03
(IS)
Net Asset Value
Per Share 12.25 (TS) 11.08 (TS) 12.25 (TS)
12.25(IS) 11.07 (IS) 12.25 (IS)
Shares
Outstanding 15,375,659.496 (TS)315,387.007 (TS)15,661,201.555
(TS)
3,328,986.425 (IS) 75,824.274(IS)3,396,542.696 (IS)
Shares Authorized Indefinite Indefinite Indefinite
* TS refers to Trust Shares
** IS refers to Investment Shares
INFORMATION ABOUT THE TRUST, GROWTH AND INCOME EQUITY FUND,
AND QUANTITATIVE EQUITY FUND
Growth and Income Equity Fund, a portfolio of The Shawmut Funds
Information about the Trust and Growth and Income Equity Fund is
contained in the Shawmut Equity Funds Prospectuses - Trust Shares or
Investment Shares, a copy of which is included herewith and incorporated
by reference herein. Additional information about the Trust and Growth
and Income Equity Fund is included in the Combined Statement of
Additional Information of the Shawmut Equity Funds, which is
incorporated herein by reference. Additional information about the
Reorganization is included in the Statement of Additional Information to
this Prospectus/Proxy Statement, which is incorporated by reference
herein. Copies of the Combined Statement of Additional Information and
the Statement of Additional Information to this Prospectus/Proxy
Statement, which have been filed with the Securities and Exchange
Commission, may be obtained without charge by contacting the Trust at 1-
800-SHAWMUT or by writing the Trust at The Shawmut Funds, Shawmut Bank,
N.A., One Federal Street, 0F0424, Boston Massachusetts 02211. The Trust
on behalf of Growth and Income Equity Fund is subject to the
informational requirements of the Securities Act of 1933, the Securities
Exchange Act of 1934, and the Investment Company Act of 1940, and in
accordance therewith files reports and other information with the
Securities and Exchange Commission. Reports, proxy and information
statements, and other information filed by the Trust, on behalf of
Growth and Income Equity Fund, can be obtained by calling or writing the
Trust and can also be inspected and copied by the public at the public
reference facilities maintained by the Securities and Exchange
Commission in Washington, D.C. located at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the following SEC regional offices:
Northeast Regional Office, 7 World Trade Center, Suite 1300, New York,
New York 10048; and the Midwest Regional Office, Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60611.
Copies of such material can be obtained at prescribed rates from the
Public Reference Branch, Office of Consumer Affairs and Information
Services, Securities and Exchange Commission, Washington, D.C. 20549.
This Prospectus/Proxy Statement, which constitutes part of a
registration Statement filed by the Trust, on behalf of Growth and
Income Equity Fund, with the Securities and Exchange Commission under
the Securities Act of 1933, omits certain of the information contained
in the Registration Statement. Reference is hereby made to the
Registration statement and to the exhibits thereto for further
information with respect to the Trust, Growth and Income Equity Fund and
shares offered hereby. Statements contained herein concerning the
provisions of documents are necessarily summaries of such documents, and
each such statement is qualified in its entirety by reference to the
copy of the applicable documents filed with the Securities and Exchange
Commission.
Quantitative Equity Fund, a portfolio of The Shawmut Funds
Information about the Trust and Quantitative Equity Fund is also
contained in the Shawmut Equity Funds Prospectuses - Trust Shares or
Investment Shares. Additional information about the Trust and
Quantitative Equity Fund is included in the Combined Statement of
Additional Information of the Shawmut Equity Funds, which is
incorporated herein by reference. Copies of the Combined Statement of
Additional Information, which has been filed with the Securities and
Exchange Commission, may be obtained without charge by contacting the
Trust at 1-800-SHAWMUT or by writing the Trust at The Shawmut Funds,
Shawmut Bank, N.A., One Federal Street, 0F0424, Boston, Massachusetts
02211. The Trust on behalf of Growth and Income Equity Fund is subject
to the informational requirements of the Securities Act of 1933, the
Securities Exchange Act of 1934, and the Investment Company Act of 1940
and in accordance therewith files reports and other information with the
Securities and Exchange Commission. Reports, proxy and information
statements, and other information filed by the Trust, on behalf of
Quantitative Equity Fund, can be obtained by calling or writing the
Trust and can also be inspected and copied by the public at the public
reference facilities maintained by the Securities and Exchange
Commission at the addresses and its regional offices listed above.
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with the
solicitation by the Board of Trustees of the Trust of proxies for use at
the Special Meeting of Shareholders (the "Meeting") to be held on August
8, 1995, and at any adjournment thereof. The proxy confers
discretionary authority on the persons designated therein to vote on
other business not currently contemplated which may properly come before
the Meeting. A proxy, if properly executed, duly returned and not
revoked, will be voted in accordance with the specifications thereon; if
no instructions are given, such proxy will be voted in favor of the
Plan. A shareholder may revoke a proxy at any time prior to use by
filing with the Secretary of the Fund an instrument revoking the proxy,
or by submitting a proxy bearing a later date, or by attending and
voting at the Meeting.
The cost of the solicitation, including the printing and mailing of
proxy materials, will be borne by the Adviser. In addition to
solicitations through the mails, proxies may be solicited by officers,
employees and agents of Quantitative Equity Fund and the Adviser at no
additional cost to Quantitative Equity Fund. Such solicitations may be
by telephone. The Adviser will reimburse custodians, nominees and
fiduciaries for the reasonable costs incurred by them in connection with
forwarding solicitation materials to the beneficial owners of shares
held of record by such persons.
Outstanding Shares and Voting Requirements
The Board of Directors of Quantitative Equity Fund has fixed the close
of business on July 6, 1995, as the record date for the determination of
shareholders entitled to notice of and to vote at the Special Meeting of
Shareholders and any adjournment thereof. As of the record date, there
were 391,521.55 shares of Quantitative Equity Fund outstanding. Each
Quantitative Equity Fund share is entitled to one vote, and fractional
shares have proportionate voting rights. On the record date, Olsen &
Co., Boston, Massachusetts, beneficially owned approximately
299,102.6920 (or 76.4%) of Quantitative Equity Fund's outstanding
shares. On such date, no other person owned of record, or to the
knowledge of FSC, beneficially owned 5% or more of Quantitative Equity
Fund's outstanding shares. On the record date, the Trustees and
officers of the Trust and Quantitative Equity Fund as a group owned less
than 1% of the outstanding shares of the Fund.
On the record date, Olsen & Co., Boston, Massachusetts, beneficially
owned approximately 15,335,910.9500 shares (or 82.2%) of Growth and
Income Equity Fund's outstanding Shares. On such date, no other person
owned of record, or to the knowledge of FSC, beneficially owned 5% or
more of Growth and Income Equity Fund's outstanding shares.
Approval of the Agreement requires the affirmative vote of the holders
of more than fifty percent of Quantitative Equity Fund's outstanding
shares. Approval is determined upon calculation of all shares of
Quantitative Equity Fund, regardless of class designation. In that
regard, each share of Quantitative Equity Fund is entitled to one vote
at the Special Shareholder meeting. Quantitative Equity Fund requires
that at any meeting of Shareholders there must be present, in person or
by proxy, holders of more than fifty percent of the total number of
outstanding shares entitled to vote at such meeting. For purposes of
determining the presence of a quorum and counting votes on the matter
presented, shares represented by abstentions and broker non-votes will
be counted as present, but not as votes cast, at the meeting. The votes
of shareholders of Growth and Income Equity Fund are not being solicited
since their approval is not required in order to effect the
Reorganization.
No Dissenter's Right of Appraisal
Shareholders of Quantitative Equity Fund objecting to the Reorganization
have no appraisal rights under the Declaration of Trust or Massachusetts
law. Under the Plan, if approved by Quantitative Equity Fund
shareholders, each Quantitative Equity Fund shareholder will become the
owner of Growth and Income Equity Fund shares having a total value equal
to the total value of his or her holdings in Quantitative Equity Fund at
the Closing Date.
Other Matters
Management of Quantitative Equity Fund knows of no other matters that
may properly be, or which are likely to be, brought before the meeting.
However, if any other business shall properly come before the meeting
the persons named in the proxy intend to vote thereon in accordance with
their best judgment.
So far as management is presently informed, there is no litigation
pending or threatened against the Trust or its investment portfolios.
Whether or not shareholders expect to attend the meeting, all
shareholders are urged to sign, fill in, and return the enclosed proxy
form promptly.
Exhibit A
AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT AND PLAN OF REORGANIZATION dated May 22, 1995 (the
"Agreement"), between Shawmut Growth and Income Equity Fund (hereinafter
called the "Acquiring Fund"), and Shawmut Quantitative Equity Fund
(hereinafter called the "Acquired Fund"), portfolios of THE SHAWMUT
FUNDS, a Massachusetts business trust (the "Trust").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section
368(a)(1)(C) of the United States Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization (the "Reorganization") will
consist of the transfer of all of the assets of the Acquired Fund in
exchange solely for shares of beneficial interest of Trust Shares and
Investment Shares of the Acquiring Fund (collectively, the "Acquiring
Fund Shares") and the distribution, after the Closing Date hereinafter
referred to, of the Acquiring Fund Shares to the shareholders of the
Trust Shares and Investment Shares, respectively, of the Acquired Fund
in liquidation of the Acquired Fund as provided herein, all upon the
terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Trust is a registered open-end management investment
company and the Acquired Fund owns securities in which the Acquiring
Fund is permitted to invest;
WHEREAS, the Trust is authorized to issue shares of beneficial interest
of both the Acquiring Fund and the Acquired Fund;
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the Investment Company
Act of 1940, as amended (the "1940 Act")), of the Trust has determined
that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares is in the best interests of the Acquiring Fund
shareholders and that the interests of the existing shareholders of the
Acquiring Fund would not be diluted as a result of this transaction; and
WHEREAS, the Board of Trustees, including a majority of the Trustees who
are not "interested persons" (as defined under the 1940 Act), of the
Trust has determined that the exchange of all of the assets of the
Acquired Fund for Acquiring Fund Shares is in the best interests of the
Acquired Fund shareholders and that the interests of the existing
shareholders of the Acquired Fund would not be diluted as a result of
this transaction;
NOW THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR THE
ACQUIRING FUND SHARES AND LIQUIDATION OF THE ACQUIRED FUND.
1.1 Subject to the terms and conditions contained herein, the Acquired
Fund agrees to assign, transfer and convey to the Acquiring Fund all of
the assets of the Acquired Fund, including all securities and cash, and
the Acquiring Fund agrees in exchange therefor to deliver to the
Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, determined as set forth in paragraph 2.3. Such
transaction shall take place at the closing (the "Closing") on the
closing date (the "Closing Date") provided for in paragraph 3.1. In
lieu of delivering certificates for the Acquiring Fund Shares, the
Acquiring Fund shall credit the Acquiring Fund Shares to the Acquired
Fund's account on the stock record books of the Acquiring Fund and shall
deliver a confirmation thereof to the Acquired Fund.
1.2 The Acquired Fund will discharge all of its liabilities and
obligations prior to the Closing Date.
1.3 Delivery of the assets of the Acquired Fund to be transferred
shall be made on the Closing Date and shall be delivered to Shawmut
Bank, N.A., Boston, Massachusetts, the Acquiring Fund's custodian (the
"Custodian"), for the account of the Acquiring Fund, together with
proper instructions and all necessary documents to transfer to the
account of the Acquiring Fund, free and clear of all liens,
encumbrances, rights, restrictions and claims. All cash delivered shall
be in the form of currency and immediately available funds payable to
the order of the Custodian for the account of the Acquiring Fund.
1.4 The Acquired Fund will pay or cause to be paid to the Acquiring
Fund any dividends or interest received on or after the Closing Date
with respect to assets transferred to the Acquiring Fund hereunder. The
Acquired Fund will transfer to the Acquiring Fund any distributions,
rights or other assets received by the Acquired Fund after the Closing
Date as distributions on or with respect to the securities transferred.
Such assets shall be deemed included in assets transferred to the
Acquiring Fund on the Closing Date and shall not be separately valued.
1.5 As soon after the Closing Date as is conveniently practicable, the
Acquired Fund will liquidate and distribute pro rata to the Acquired
Fund's shareholders of record, determined as of the close of business on
the Closing Date (the "Acquired Fund Shareholders"), the Acquiring Fund
Shares received by the Acquired Fund pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund
on the books of the Acquiring Fund to open accounts on the share record
books of the Acquiring Fund in the names of the Acquired Fund
Shareholders and representing the respective pro rata number of the
Acquiring Fund Shares due such shareholders. All issued and outstanding
shares of the Acquired Fund will simultaneously be canceled on the books
of the Acquired Fund. Share certificates representing interests in the
Acquired Fund will represent a number of Acquiring Fund Shares after the
Closing Date as determined in accordance with Section 2.3. The
Acquiring Fund shall not issue certificates representing the Acquiring
Fund Shares in connection with such exchange.
1.6 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Acquiring Fund Shares will be
issued in the manner described in the Acquiring Fund's current
prospectus and statement of additional information.
1.7 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund
shares on the books of the Acquired Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom
such Acquiring Fund Shares are to be issued and transferred.
1.8 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the
Closing Date and such later dates, with respect to liquidation and
termination of the Acquired Fund, on which the Acquired Fund is
liquidated and terminated.
1.9 The Acquired Fund shall be discontinued as a portfolio of the
Trust promptly following the Closing Date and the making of all
distributions pursuant to paragraph 1.5. The Trust shall continue its
registration as an investment company under the 1940 Act.
2. VALUATION
2.1 The value of the Acquired Fund's net assets to be acquired by the
Acquiring Fund hereunder shall be the value of such assets computed as
of 4:00 p.m. (Eastern time) on the Closing Date (such time and date
being hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Acquiring Fund's then-current prospectus or
statement of additional information.
2.2 The net asset value of an Acquiring Fund Share shall be the net
asset value per share computed as of 4:00 p.m. (Eastern time) on the
Valuation Date, using the valuation procedures set forth in the
Acquiring Fund's then-current prospectus or statement of additional
information.
2.3 The number of the Acquiring Fund Shares to be issued (including
fractional shares, if any) in exchange for the Acquired Fund's net
assets shall be determined by dividing the value of the net assets of
the Acquired Fund determined using the same valuation procedures
referred to in paragraph 2.1 by the net asset value of one Acquiring
Fund Share determined in accordance with paragraph 2.2.
2.4 All computations of value shall be made in accordance with the
regular practices of the Acquiring Fund.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be July 28, 1995, or such later date as the
parties may mutually agree. All acts taking place at the Closing Date
shall be deemed to take place simultaneously as of the close of business
on the Closing Date unless otherwise provided. The Closing shall be
held at 4:00 p.m. (Eastern time) at the offices of the Acquiring Fund,
Federated Investors Tower, Pittsburgh, PA 15222-3779, or such other time
and/or place as the parties may mutually agree.
3.2 If on the Valuation Date (a) the primary trading market for
portfolio securities of the Acquiring Fund or the Acquired Fund shall be
closed to trading or trading thereon shall be restricted; or (b) trading
or the reporting of trading shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquiring Fund or the
Acquired Fund is impracticable, the Closing Date shall be postponed
until the first business day after the day when trading shall have been
fully resumed and reporting shall have been restored.
3.3 Federated Services Company, as transfer agent for each of the
Acquired Fund and Acquiring Fund, shall deliver at the Closing a
certificate of an authorized officer stating that its records contain
the names and addresses of the Acquired Fund Shareholders and the number
and percentage ownership of outstanding shares owned by each such
shareholder immediately prior to the Closing. The Acquiring Fund shall
issue and deliver a confirmation evidencing the Acquiring Fund Shares to
be credited on the Closing Date to the Secretary of the Acquired Fund,
or provide evidence satisfactory to the Acquired Fund that such
Acquiring Fund Shares have been credited to the Acquired Fund's account
on the books of the Acquiring Fund. At the Closing, each party shall
deliver to the other such bills of sale, checks, assignments, assumption
agreements, share certificates, if any, receipts or other documents as
such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES.
4.1 With respect to the Acquired Fund, the Trust represents and
warrants as follows:
(a) The Acquired Fund is a portfolio of the Trust, which is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has power to own all of its properties
and assets and to carry out this Agreement.
(b) The Trust is registered under the 1940 Act, as an open-end,
diversified, management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
(c) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in violation of its Declaration of Trust
or By-Laws or of any agreement, indenture, instrument, contract, lease
or other undertaking to which the Acquired Fund is a party or by which
it is bound.
(d) The Acquired Fund has no material contracts or other commitments
outstanding (other than this Agreement) which will result in liability
to it after the Closing Date.
(e) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquired Fund or any of its properties
or assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The
Acquired Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability
to consummate the transactions herein contemplated.
(f) The current prospectus and statement of additional information of
the Acquired Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933, as amended (the "1933 Act"),
and the 1940 Act and the rules and regulations of the Securities and
Exchange Commission (the "Commission") thereunder and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(g) The Statement of Assets and Liabilities of the Acquired Fund at
October 31, 1994, has been audited by Price Waterhouse, LLP,
independent accountants, and has been prepared in accordance with
generally accepted accounting principles, consistently applied, and such
statement (a copy of which has been furnished to the Acquiring Fund)
fairly reflects the financial condition of the Acquired Fund as of such
date, and there are no known contingent liabilities of the Acquired Fund
as of such date not disclosed therein. The unaudited financial
statements of the Acquired Fund at April 30, 1995, will be prepared by
management of the Acquired Fund in accordance with generally accepted
accounting principles and such statements will fairly reflect the
financial condition of the Acquired Fund as of such date.
(h) Since October 31, 1994, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred, except as otherwise disclosed to and accepted by the Acquiring
Fund.
(i) At the Closing Date, all Federal and other tax returns and reports
of the Acquired Fund required by law to have been filed by such dates
shall have been filed, and all Federal and other taxes shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Acquired Fund's knowledge no such return
is currently under audit and no assessment has been asserted with
respect to such returns.
(j) For each fiscal year of its operation, the Acquired Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(k) All issued and outstanding shares of the Acquired Fund are, and at
the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable. All of the issued and outstanding shares of
the Acquired Fund will, at the time of the Closing, be held by the
persons and in the amounts set forth in the records of the transfer
agent as provided in paragraph 3.3. The Acquired Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquired Fund shares, nor is there outstanding any
security convertible into any of the Acquired Fund shares.
(l) On the Closing Date, the Acquired Fund will have full right, power
and authority to sell, assign, transfer and deliver the assets to be
transferred by it hereunder.
(m) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action on the part of the Trust's Trustees and, subject to the approval
of the Acquired Fund Shareholders, this Agreement will constitute the
valid and legally binding obligation of the Acquired Fund enforceable in
accordance with its terms, subject to the effect of bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other
similar laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and to general principles of
equity and the discretion of the court (regardless of whether the
enforceability is considered in a proceeding in equity or at law).
(n) The prospectus/proxy statement of the Acquired Fund (the
"Prospectus/Proxy Statement") to be included in the Registration
Statement referred to in paragraph 5.5 (other than information therein
that relates to the Acquiring Fund) will, on the effective date of the
Registration Statement and on the Closing Date, not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading.
(o) The Acquired Fund has entered into an agreement under which
Shawmut Bank, N.A., will assume the expenses of the reorganization
including accountants' fees, legal fees, registration fees, transfer
taxes (if any), the fees of banks and transfer agents and the costs of
preparing, printing, copying and mailing proxy solicitation materials to
the Acquired Fund's shareholders and the costs of holding the Special
Meeting of Shareholders.
4.2 With respect to the Acquiring Fund, the Trust represents and
warrants as follows:
(a) The Acquiring Fund is a portfolio of the Trust, which is duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the power to carry on its business
as it is now being conducted and to carry out this Agreement.
(b) The Trust is registered under the 1940 Act as an open-end,
diversified, management investment company, and such registration has
not been revoked or rescinded and is in full force and effect.
(c) The Trust is not, and the execution, delivery and performance of
this Agreement will not result, in material violation of its Declaration
of Trust or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Acquiring Fund is a
party or by which it is bound.
(d) No litigation or administrative proceeding or investigation of or
before any court or governmental body is currently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties
or assets which, if adversely determined, would materially and adversely
affect its financial condition or the conduct of its business. The
Acquiring Fund knows of no facts which might form the basis for the
institution of such proceedings, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental
body which materially and adversely affects its business or its ability
to consummate the transactions contemplated herein.
(e) The current prospectus and statement of additional information of
the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission thereunder and do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(f) The financial statements of the Acquiring Fund at October 31,
1994, have been audited by Price Waterhouse, LLP, independent
accountants, and have been prepared in accordance with generally
accepted accounting principles, and such statements (copies of which
have been furnished to the Acquired Fund) fairly reflect the financial
condition of the Acquiring Fund as of such date. The unaudited
financial statements of the Acquiring Fund at April 30, 1995, will be
prepared by management of the Acquiring Fund in accordance with
generally accepted accounting principles and such statements will fairly
reflect the financial condition of the Acquiring Fund as of such date.
(g) Since October 31, 1994, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities
or business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquiring Fund of any indebtedness,
except as otherwise disclosed to and accepted by the Acquiring Fund.
(h) At the Closing Date, all Federal and other tax returns and reports
of the Acquiring Fund required by law then to be filed shall have been
filed, and all Federal and other taxes shown as due on said returns and
reports shall have been paid or provision shall have been made for the
payment thereof.
(i) For each fiscal year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company.
(j) All issued and outstanding shares of the Acquiring Fund are, and
at the Closing Date will be, duly and validly issued and outstanding,
fully paid and non-assessable. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or
purchase any of the Acquiring Fund Shares, nor is there outstanding any
security convertible into any Acquiring Fund Shares.
(k) The execution, delivery and performance of this Agreement will
have been duly authorized prior to the Closing Date by all necessary
action, if any, on the part of the Trust's Trustees, and this Agreement
will constitute the valid and legally binding obligation of the
Acquiring Fund enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and to
general principles of equity and the discretion of the court (regardless
of whether the enforceability is considered in a proceeding in equity or
at law).
(l) The Prospectus/Proxy Statement to be included in the Registration
Statement (only insofar as it relates to the Acquiring Fund) will, on
the effective date of the Registration Statement and on the Closing
Date, not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which such
statements were made, not misleading.
(m) The Acquiring Fund has entered into an agreement under which
Shawmut Bank, N.A., will assume the expenses of the reorganization
including accountants' fees, legal fees, registration fees, transfer
taxes (if any), the fees of banks and transfer agents and the costs of
preparing, printing, copying and mailing proxy solicitation materials to
the Acquired Fund's shareholders and the costs of holding the Special
Meeting of Shareholders.
5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND.
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and the Closing
Date, it being understood that such ordinary course of business will
include customary dividends and distributions.
5.2 The Trust's Board of Trustees will call a meeting of the Acquired
Fund Shareholders to consider and act upon this Agreement and to take
all other action necessary to obtain approval of the transactions
contemplated herein.
5.3 Subject to the provisions of this Agreement, the Acquiring Fund
and the Acquired Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper or
advisable to consummate and make effective the transactions contemplated
by this Agreement.
5.4 As promptly as practicable, but in any case within sixty days
after the Closing Date, the Acquired Fund shall furnish the Acquiring
Fund, in such form as is reasonably satisfactory to the Acquiring Fund,
a statement of the earnings and profits of the Acquired Fund for Federal
income tax purposes which will be carried over to the Acquiring Fund as
a result of Section 381 of the Code and which will be certified by the
Acquired Fund's President or Vice President and its Treasurer or
Assistant Treasurer.
5.5 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the
"Prospectus") which will include the Proxy Statement, referred to in
paragraph 4.1(n), all to be included in a Registration Statement on Form
N-14 of the Acquiring Fund (the "Registration Statement"), in compliance
with the 1933 Act, the Securities Exchange Act of 1934, as amended, and
the 1940 Act in connection with the meeting of the Acquired Fund
Shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.6 The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state Blue Sky or securities laws as it may deem
appropriate in order to continue its operations after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the
performance by the Acquired Fund of all the obligations to be performed
by it hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
6.1 All representations and warranties of the Trust contained in this
Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the transactions
contemplated by this Agreement, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
6.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets, together with a list of the
Acquired Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the
Closing Date, certified by the Treasurer or Assistant Treasurer of the
Acquired Fund.
6.3 The Acquired Fund shall have delivered to the Acquiring Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Acquiring Fund, to the effect that the
representations and warranties of the Acquired Fund made in this
Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Acquiring Fund shall reasonably
request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided herein shall be subject, at its election, to the
performance by the Acquiring Fund of all the obligations to be performed
by it hereunder on or before the Closing Date and, in addition thereto,
the following conditions:
7.1 All representations and warranties of the Acquiring Fund contained
in this Agreement shall be true and correct in all material respects as
of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with
the same force and effect as if made on and as of the Closing Date.
7.2 The Acquiring Fund shall have delivered to the Acquired Fund on
the Closing Date a certificate executed in its name by its President or
Vice President and its Treasurer or Assistant Treasurer, in form and
substance satisfactory to the Acquired Fund, to the effect that the
representations and warranties of the Acquiring Fund made in this
Agreement are true and correct at and as of the Closing Date, except as
they may be affected by the transactions contemplated by this Agreement,
and as to such other matters as the Acquired Fund shall reasonably
request.
7.3 The Acquiring Fund shall have delivered to the Acquired Fund
before the Closing Date the Statement of Assets and Liabilities referred
to in Section 4.2(f).
7.4 There shall not have been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business
since the date of such Statement of Assets and Liabilities other than
changes occurring in the ordinary course of business, or any incurrence
by the Acquiring Fund of any indebtedness, except as otherwise disclosed
to and accepted by the Acquired Fund.
8. FURTHER CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquired Fund or the Acquiring Fund,
the other party to this Agreement shall, at its option, not be required
to consummate the transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of the
Declaration of Trust of the Trust.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection
with, this Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of Federal, state and local regulatory authorities (including
those of the Commission and of state Blue Sky and securities
authorities) deemed necessary by the Acquiring Fund or the Acquired Fund
to permit consummation, in all material respects, of the transactions
contemplated hereby shall have been obtained, except where failure to
obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the Acquiring
Fund or the Acquired Fund, provided that either party hereto may for
itself waive any of such conditions.
8.4 The Registration Statement shall have become effective under the
1933 Act and no stop order suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted
or be pending, threatened or contemplated under the 1933 Act.
8.5 The Trust shall have received an opinion of Dickstein, Shapiro &
Morin, L.L.P. substantially to the effect that for Federal income tax
purposes:
(a) The transfer of all of the Acquired Fund assets in exchange for
the Acquiring Fund Shares and the distribution of the Acquiring Fund
Shares to the shareholders of the Acquired Fund in liquidation of the
Acquired Fund will constitute a "reorganization" within the meaning of
Section 368(a)(1)(C) of the Code; (b) No gain or loss will be recognized
by the Acquiring Fund upon the receipt of the assets of the Acquired
Fund solely in exchange for the Acquiring Fund Shares; (c) No gain or
loss will be recognized by the Acquired Fund upon the transfer of the
Acquired Fund assets to the Acquiring Fund in exchange for the Acquiring
Fund Shares or upon the distribution (whether actual or constructive) of
the Acquiring Fund Shares to Acquired Fund Shareholders in exchange for
their shares of the Acquired Fund; (d) No gain or loss will be
recognized by the Acquired Fund Shareholders upon the exchange of their
Acquired Fund shares for the Acquiring Fund Shares; (e) The tax basis of
the Acquired Fund assets acquired by the Acquiring Fund will be the same
as the tax basis of such assets to the Acquired Fund immediately prior
to the Reorganization; (f) The tax basis of the Acquiring Fund Shares
received by each of the Acquired Fund Shareholders pursuant to the
Reorganization will be the same as the tax basis of the Acquired Fund
shares held by such shareholder immediately prior to the Reorganization;
(g) The holding period of the assets of the Acquired Fund in the hands
of the Acquiring Fund will include the period during which those assets
were held by the Acquired Fund; and (h) The holding period of the
Acquiring Fund Shares to be received by each Acquired Fund Shareholder
will include the period during which the Acquired Fund shares exchanged
therefor were held by such shareholder (provided the Acquired Fund
shares were held as capital assets on the date of the Reorganization).
9. TERMINATION OF AGREEMENT.
9.1 This Agreement and the transactions contemplated hereby may be
terminated and abandoned by resolution of the Board of Trustees of the
Trust at any time prior to the Closing Date if circumstances should
develop that, in the opinion of the Board of Trustees, make proceeding
with the Agreement inadvisable.
9.2 If this Agreement is terminated and the exchange contemplated
hereby is abandoned pursuant to the provisions of this Section 9, this
Agreement shall become void and have no effect, without any liability on
the part of any party hereto or the trustees, officers or shareholders
of the Acquiring Fund or of the Acquired Fund, in respect of this
Agreement.
10. WAIVER.
At any time prior to the Closing Date, any of the foregoing
conditions may be waived by the Board of Trustees of the Trust if such
waiver will not have a material adverse effect on the benefits intended
under this Agreement to the shareholders of the Acquiring Fund or of the
Acquired Fund, as the case may be.
11. MISCELLANEOUS.
11.1 None of the representations and warranties included or provided
for herein shall survive consummation of the transactions contemplated
hereby.
11.2 This Agreement contains the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof,
and merges and supersedes all prior discussions, agreements, and
understandings of every kind and nature between them relating to the
subject matter hereof. Neither party shall be bound by any condition,
definition, warranty or representation, other than as set forth or
provided in this Agreement or as may be set forth in a later writing
signed by the party to be bound thereby.
11.3 This Agreement shall be governed and construed in accordance with
the internal laws of the Commonwealth of Massachusetts, without giving
effect to principles of conflict of laws.
11.4 This Agreement may be executed in any number of counterparts, each
of which, when executed and delivered, shall be deemed to be an
original.
11.5 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof of any rights or obligations hereunder shall be made by
any party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer
upon or give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
11.6 The Acquired Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration of
Trust of the Trust and agrees that the obligations assumed by the
Acquiring Fund pursuant to this Agreement shall be limited in any case
to the Acquiring Fund and its assets and the Acquired Fund shall not
seek satisfaction of any such obligation from the shareholders of the
Acquiring Fund, the trustees, officers, employees or agents of the Trust
or any of them.
11.7 The Acquiring Fund is hereby expressly put on notice of the
limitation of liability as set forth in Article XI of the Declaration of
Trust of the Trust and agrees that the obligations assumed by the
Acquired Fund pursuant to this Agreement shall be limited in any case to
the Acquired Fund and its assets and the Acquiring Fund shall not seek
satisfaction of any such obligation from the shareholders of the
Acquired Fund, the trustees, officers, employees or agents of the Trust
or any of them.
IN WITNESS WHEREOF, the Trust, on behalf of the Acquired Fund and the
Acquiring Fund, has caused this Agreement and Plan of Reorganization to
be executed and attested on its behalf by its duly authorized
representatives as of the date first above written.
Acquired Fund:
THE SHAWMUT FUNDS, on behalf of
its portfolio, SHAWMUT
QUANTITATIVE EQUITY FUND
Attest:
By: /s/John W. McGonigle
Robert C. Rosselot Name: John W. McGonigle
Assistant Secretary Title: Vice President
Acquiring Fund:
THE SHAWMUT FUNDS, on behalf of
its portfolio, SHAWMUT GROWTH AND
EQUITY FUND
Attest:
By: /s/John W. McGonigle
Robert C. Rosselot Name: John W. McGonigle
Assistant Secretary Title: Vice President
STATEMENT OF ADDITIONAL INFORMATION
Dated July 14, 1995
Acquisition of the Assets of
SHAWMUT QUANTITATIVE EQUITY FUND,
a portfolio of THE SHAWMUT FUNDS
By and in exchange for shares of
SHAWMUT GROWTH AND INCOME EQUITY FUND,
a portfolio of THE SHAWMUT FUNDS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone Number: 1-800-SHAWMUT
This Statement of Additional Information dated July 14, 1995, is not a
prospectus. A Prospectus/Proxy Statement dated July 14, 1995, related
to the above-referenced matter may be obtained from the Shawmut Growth
and Income Equity Fund, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. This Statement of Additional Information
should be read in conjunction with such Prospectus/Proxy Statement.
TABLE OF CONTENTS
1. Statement of Additional Information of The Shawmut Equity Funds,
dated December 31, 1994.
2. Annual Report of The Shawmut Funds, dated October 31, 1994.
The Statement of Additional Information of The Shawmut Equity Funds
(including Shawmut Quantitative Equity Fund and Shawmut Growth and
Income Equity Fund), dated December 31, 1994, is incorporated herein by
reference to Post-Effective Amendment No. 12 to The Shawmut Fund's
Registration Statement on Form N-1A (1933 Act File 33-48933; 1940 Act
File No. 811- 58437), which was filed with the Securities and Exchange
Commission on December 27, 1994. The Annual Report of The Shawmut Funds
and the report of Price Waterhouse, LLP, are incorporated herein by
reference. The Annual Report (1933 Act File No. 33-48933; 1940 Act File
No. 811-58437) was filed with the Securities and Exchange Commission on
December 27, 1994. Copies of these documents may be obtained free of
charge from The Shawmut Funds at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, Telephone Number: 1-800-SHAWMUT.
3. The pro forma financial statements required by Rule 11-01 of
Regulation S-X have not been included because the net asset value of the
Acquired Fund does not exceed ten percent of the Acquiring Fund's net
asset value as of July 13, 1995.
THE SHAWMUT FUNDS
SHAWMUT QUANTITATIVE EQUITY FUND-TRUST SHARES
SPECIAL MEETING OF SHAREHOLDERS AUGUST 8, 1995
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of
SHAWMUT QUANTITATIVE EQUITY FUND, an investment portfolio of THE SHAWMUT
FUNDS, hereby appoint Robert C. Rosselot, Kathleen R. O'Brien, Stephen
R. Newcamp, Colleen Gallagher and Patricia F. Conner, or any of them
true and lawful attorneys, with power of substitution of each, to vote
all shares of SHAWMUT QUANTITATIVE EQUITY FUND, which the undersigned is
entitled to vote, at the Special Meeting of Shareholders to be held on
August 8, 1995, at Federated Investors Tower, Pittsburgh, Pennsylvania,
at 2:00 p.m. and at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Special Meeting.
PROPOSAL
1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The
attorneys named will vote the shares represented by this proxy in
accordance with the choice made on this ballot. IF NO CHOICE IS
INDICATED AS TO ANY MATTER, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON
THE MATTER PRESENTED.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION. Place the mail-in stub so that the return
address, located on the reverse side of the ballot, appears through the
window of the envelope.
SHAWMUT QUANT. EQUITY FUND-
TRUST SHARES PROXY VOTING MAIL-IN STUB
RECORD DATE SHARES
PROPOSAL 1: TO APPROVE OR
DISAPPROVE AN AGREEMENT AND
PLAN OF REORGANIZATION
o FOR
o AGAINST
o ABSTAIN
Please sign EXACTLY as your name(s) appear above. When signing as
attorney, executor, administrator, guardian, trustee, custodian, etc.,
please give your full title as such. If a corporation or partnership,
please sign the full name by an authorized officer or partner. If stock
is owned jointly, all owners should sign.
Dated: ___________________________________, 19_________
_______________________________________________________
_______________________________________________________
Signature(s) of Shareholder(s)
THE SHAWMUT FUNDS
SHAWMUT QUANTITATIVE EQUITY FUND-INVESTMENT SHARES
SPECIAL MEETING OF SHAREHOLDERS AUGUST 8, 1995
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of
SHAWMUT QUANTITATIVE EQUITY FUND, an investment portfolio of THE SHAWMUT
FUNDS, hereby appoint Robert C. Rosselot, Kathleen R. O'Brien, Stephen
R. Newcamp, Colleen Gallagher and Patricia F. Conner, or any of them
true and lawful attorneys, with power of substitution of each, to vote
all shares of SHAWMUT QUANTITATIVE EQUITY FUND, which the undersigned is
entitled to vote, at the Special Meeting of Shareholders to be held on
August 8, 1995, at Federated Investors Tower, Pittsburgh, Pennsylvania,
at 2:00 p.m. and at any adjournment thereof.
Discretionary authority is hereby conferred as to all other matters as
may properly come before the Special Meeting.
PROPOSAL
1. TO APPROVE OR DISAPPROVE AN AGREEMENT AND PLAN OF REORGANIZATION.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The
attorneys named will vote the shares represented by this proxy in
accordance with the choice made on this ballot. IF NO CHOICE IS
INDICATED AS TO ANY MATTER, THIS PROXY WILL BE VOTED AFFIRMATIVELY ON
THE MATTER PRESENTED.
PLEASE RETURN BOTTOM PORTION WITH YOUR VOTE IN THE ENCLOSED ENVELOPE AND
RETAIN THE TOP PORTION. Place the mail-in stub so that the return
address, located on the reverse side of the ballot, appears through the
window of the envelope.
SHAWMUT QUANT. EQUITY FUND-
INVESTMENT SHARES PROXY VOTING MAIL-IN STUB
RECORD DATE SHARES
PROPOSAL 1: TO APPROVE OR
DISAPPROVE AN AGREEMENT AND
PLAN OF REORGANIZATION
o FOR
o AGAINST
o ABSTAIN
Please sign EXACTLY as your name(s) appear above. When signing as
attorney, executor, administrator, guardian, trustee, custodian, etc.,
please give your full title as such. If a corporation or partnership,
please sign the full name by an authorized officer or partner. If stock
is owned jointly, all owners should sign.
Dated: ___________________________________, 19_________
_______________________________________________________
_______________________________________________________
Signature(s) of Shareholder(s)
