<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [ X ]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ X ] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ARK FUNDS
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of filing fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on the table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
-------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials:
-------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
ARK FUNDS
Oaks, Pennsylvania 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
THE FOLLOWING PORTFOLIOS OF ARK FUNDS:
Income Portfolio
Maryland Tax-Free Portfolio
Pennsylvania Tax-Free Portfolio
Balanced Portfolio
Blue Chip Equity Portfolio
Mid-Cap Equity Portfolio
Capital Growth Portfolio
Special Equity Portfolio
To be held on February 4, 1998
NOTICE IS HEREBY GIVEN that a special meeting of the shareholders of the
Income Portfolio, Maryland Tax-Free Portfolio, Pennsylvania Tax-Free Portfolio,
Balanced Portfolio, Blue Chip Equity Portfolio, Mid-Cap Equity Portfolio,
Capital Growth Portfolio, and Special Equity Portfolio of ARK Funds (the
"Trust") will be held on Wednesday, February 4, 1998, at 10 o'clock a.m.,
Eastern Time, at SEI Investments, 1 Freedom Valley Drive, Oaks, Pennsylvania,
for the following purposes:
1. To approve or disapprove a new investment advisory contract between
the Trust and Allied Investment Advisors, Inc.
2. To consider and act upon such other business as may properly come
before the meeting and any adjournments thereof.
By Order of the Board of Trustees
Kathryn L. Stanton
Secretary
Shareholders of record as of the close of business on December 29, 1997 are
entitled to notice of and to vote at the meeting.
, 199
- -------------- -
- --------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE SIGN THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED. YOUR PROMPT
RETURN OF THE PROXY WILL HELP ENSURE THAT THERE WILL BE A QUORUM AND THE MAXIMUM
NUMBER OF SHARES ARE VOTED.
- --------------------------------------------------------------------------------
<PAGE> 3
ARK FUNDS
One Freedom Valley Drive
Oaks, Pennsylvania 19456
--------------------------------
PROXY STATEMENT
This proxy statement is being furnished in connection with the solicitation
of proxies by the Board of Trustees of ARK Funds (the "Trust") for use at the
special meeting of shareholders of the Trust's Income Portfolio, Maryland
Tax-Free Portfolio, Pennsylvania Tax-Free Portfolio, Balanced Portfolio, Blue
Chip Equity Portfolio, Mid-Cap Equity Portfolio, Capital Growth Portfolio and
Special Equity Portfolio (individually, a "Portfolio" and collectively, the
"Portfolios") to be held on February 4, 1998, and at any adjournments thereof.
If the enclosed proxy is executed properly and returned in time to be voted at
the meeting, the shares represented will be voted according to the instructions
contained therein. Executed proxies that are unmarked will be voted in favor of
all proposals. A proxy may be revoked at any time prior to its exercise by
filing with the Secretary of the Trust a written notice of revocation, by
delivering a duly executed proxy bearing a later date, or by attending the
meeting and voting in person. This proxy statement was first mailed to
shareholders on or about ___________, 199_.
The Board of Trustees has fixed the close of business on December 29, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the meeting and any adjournments thereof. As of the record date,
the following number of shares were outstanding for each of the respective
Portfolios:
<TABLE>
<CAPTION>
Shares Outstanding as of
ARK Portfolio December 29, 1997
------------- ----------------------------------
Retail Institutional
------ -------------
Class Class
----- -----
<S> <C> <C>
Income Portfolio
Maryland Tax-Free Portfolio
Pennsylvania Tax-Free Portfolio
Balanced Portfolio
Blue Chip Equity Portfolio
Mid-Cap Equity Portfolio
Capital Growth Portfolio
Special Equity Portfolio
</TABLE>
<PAGE> 4
The presence in person or by proxy of the holders entitled to cast a
majority of all the votes entitled to be cast at the meeting will constitute a
quorum for the transaction of business at the meeting. Broker non-votes and
abstentions all count for the purpose of determining a quorum. If a quorum is
present at the meeting but sufficient votes in favor of one or more proposals
are not received, the persons named as proxies may propose one or more
adjournments of the meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a majority of the shares
present at the meeting or represented by proxy. The persons named as proxies
will vote in favor of such adjournment if they determine that adjournment and
additional solicitation is reasonable and in the interests of shareholders of
the Portfolios.
PROPOSAL 1: APPROVE OR DISAPPROVE A NEW INVESTMENT ADVISORY CONTRACT
The Board of Trustees has determined that it would be in the best interest
of the Portfolios and their shareholders to terminate the existing investment
advisory contract (the "Existing Contract") between Allied Investment Advisors,
Inc. (the "Advisor") and the Trust and to adopt a new investment advisory
contract (the "Proposed Contract"), a form of which is attached to this proxy
statement as Exhibit A. UNDER THE PROPOSED CONTRACT THERE WILL BE AN INCREASE IN
THE RATE OF ADVISORY FEES PAID TO THE ADVISOR BY THE PORTFOLIOS.
TERMS OF EXISTING AND PROPOSED CONTRACTS
Except for the different fee rates, effective dates and renewal dates, the
terms of the Existing and Proposed Contracts are substantially identical.
Pursuant to the terms of each contract, the Advisor serves as investment adviser
to the Trust and is responsible for providing a continuous investment program
for the Portfolios, including the provision of investment research and
management with respect to all securities and investments and cash equivalents
purchased, sold or held in the Portfolios, and the selection of brokers and
dealers through which securities transactions for the Portfolios will be
executed. The Advisor performs its responsibilities subject to the supervision
of, and policies established by, the Board of Trustees.
Under both the Existing and Proposed Contracts, the Advisor bears all
expenses incurred by it in performing its duties as investment adviser. The
Trust bears all expenses, not specifically assumed by the Advisor, incurred in
the conduct of its operations, including, without limitation, the following: (a)
the cost (including brokerage commissions) of securities purchased or sold by
the Portfolios and any losses incurred in connection therewith; (b) fees payable
to, and expenses incurred on behalf of the Trust by, the Advisor; (c) expenses
of organizing the Trust; (d) filing fees and expenses relating to the
registration and qualification of the Trust's shares and the Trust under federal
and/or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Trust's trustees and
officers; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability,
- 2 -
<PAGE> 5
uncollectible items of deposit and other insurance or fidelity bonds; (h) any
costs, expenses or losses arising out of a liability of or claim for damages or
other relief asserted against the Trust for violation of any law; (i) legal,
accounting and auditing expenses, including legal fees of special counsel at any
time retained for those members of the board who are not interested persons of
the Trust and expenses relating to the use of consulting services by the Trust
provided that the use of such services is approved by the Trust's trustees; (j)
charges of custodians, transfer agents and other agents; (k) costs of preparing
share certificates; (l) expenses of setting in type and printing prospectuses
and supplements thereto for existing shareholders, reports, shareholder reports,
and proxy materials; (m) costs of mailing prospectuses, statements of additional
information and supplements thereto to existing shareholders as well as
shareholder reports and proxy material; (n) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Trust; (o) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (p) costs of mailing and tabulating proxies
and costs of shareholders and directors meetings; and (q) the cost of investment
company literature and other publications provided by the Trust to its trustees
and officers. All expenses are allocated among the Portfolios in accordance with
the Trust's Agreement and Declaration of Trust and the provisions of the
Investment Company Act of 1940.
Both the Existing and Proposed Contracts provide that the Advisor shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust or any of its Portfolios in connection with the matters to which
the contracts relate including, without limitation, losses that may be sustained
in connection with the purchase, holding, redemption or sale of any security on
behalf of any Portfolio of the Trust, except a loss resulting from the willful
misfeasance, bad faith or gross negligence of the Advisor in the performance of
its duties or from reckless disregard by it of its obligations and duties under
the contracts.
Both the Existing and Proposed Contract are renewable annually by (a) the
vote of a majority of those members of the Board of Trustees who are not parties
to the contract or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval; and (b) all of the
members of the Board of Trustees or by vote of the holders of a majority of the
outstanding voting securities of the Trust. The Existing Contract has been
approved by the Board of Trustees and by the initial shareholder of each
Portfolio. The Board of Trustees most recently approved renewal of the Existing
Contract on March 27, 1997. The Existing and Proposed Contracts terminate
automatically if assigned (as defined in the Investment Company Act of 1940) and
may be terminated with respect to a Portfolio at any time, without penalty, on
60 days' written notice.
PROPOSED ADVISORY FEES AND ADVISORY FEE INCREASE
For the services provided and the expenses assumed pursuant to the Existing
and Proposed Contracts, the Advisor is or will be entitled to receive a fee,
payable monthly, at an annual rate based on the average daily net assets of each
Portfolio. The fees for each Portfolio under the Existing and Proposed Contracts
are as follows:
- 3 -
<PAGE> 6
<TABLE>
<CAPTION>
Fee Under Fee Under
ARK Funds Portfolio Existing Contract Proposed Contract
- ------------------- ----------------- -----------------
<S> <C> <C>
Income 0.50% 0.60%
Maryland Tax-Free 0.50% 0.65%
Pennsylvania Tax-Free 0.50% 0.65%
Balanced 0.55% 0.65%
Blue Chip Equity 0.60% 0.70%
Mid-Cap Equity 0.70% 0.80%
Capital Growth 0.60% 0.70%
Special Equity 0.60% 0.80%
</TABLE>
The tables below set forth information about the current and pro forma fees
and expenses payable by the Portfolios. Unless otherwise noted, the information
in the expense tables and the examples reflects voluntary fee waivers and or
reimbursements.
- 4 -
<PAGE> 7
ARK INCOME PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
----------------------------------------- ------------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract Contract(3)
------------------- ------------------ -------------------- -----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers) ......... 0.50% 0.51% 0.50% 0.51%
12b-1 Fees (after waivers) ............ 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers) ..................... 0.00% 0.00% -- 0.06%
Other Expenses ........................ 0.20% 0.20% 0.20% 0.20%
===============================================================================================================================
Total Operating Expenses
(after waivers) ..................... 0.95% 0.96% 0.70% 0.77%
===============================================================================================================================
</TABLE>
(1) Absent voluntary fee waivers, 12b-1 fees, shareholder services fees and
total operating expenses for the Retail Class under the Existing Contract
would be 0.30%, 0.15% and 1.15%, respectively.
(2) Absent voluntary fee waivers, advisory fees, 12b-1 fees, shareholder
services fees and total operating expenses for the Retail Class under the
Proposed Contract would be 0.60%, 0.30%, 0.15% and 1.25%, respectively.
(3) Absent voluntary fee waivers, advisory fees, shareholder services fees and
total operating expenses for the Institutional Class under the Proposed
Contract would be 0.60%, 0.15% and 0.95%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -----------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 39 40 7 8
3 years....................... 59 60 22 25
5 years....................... 81 81 39 43
10 years..................... 143 144 87 95
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the
ARK Income Portfolio to the Advisor for services on behalf of the Portfolio
was $1,065,590. If the proposed fee (after waivers) had been in effect during
the same year, the Advisor would have received $1,088,650, which equals a 2%
increase.
- 5 -
<PAGE> 8
ARK MARYLAND TAX-FREE PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------ -- --------------------- ------------------- --- -----------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract(3) Contract(4)
------------------ --------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.45% 0.49% 0.45% 0.49%
12b-1 Fees (after waivers).......... 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)..................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.23% 0.23% 0.23% 0.23%
=================================================================================================================================
Total Operating Expenses
(after waivers)..................... 0.93% 0.97% 0.68% 0.78%
=================================================================================================================================
</TABLE>
(1) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Existing
Contract would be 0.50%, 0.30%, 0.15% and 1.18%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
Contract would be 0.65%, 0.30%, 0.15% and 1.33%, respectively.
(3) Absent fee waivers, advisory fees and total operating expenses for the
Institutional Class under the Existing Contract would be 0.50% and 0.73%,
respectively.
(4) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.65%, 0.15% and 1.03%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------- -------------- --------------
<C> <C> <C> <C> <C>
1 year........................ 39 40 7 8
3 years....................... 59 60 22 25
5 years....................... 80 82 38 43
10 years..................... 141 145 85 97
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the ARK
Maryland Tax-Free Portfolio to the Advisor for services on behalf of the
Portfolio was $171,715. If the proposed fee (after waivers) had been in effect
during the same year, the Advisor would have received $185,839, which equals a
8% increase.
- 6 -
<PAGE> 9
ARK PENNSYLVANIA TAX-FREE PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------------------------------- ----------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract(3) Contract(4)
------------------ --------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)......... 0.40% 0.65% 0.40% 0.65%
12b-1 Fees (after waivers)............ 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)..................... 0.00% 0.00% -- 0.06%
Other Expenses........................ 0.23% 0.23% 0.23% 0.23%
================================================================================================================================
Total Operating Expenses
(after waivers)..................... 0.88% 1.13% 0.63% 0.94%
================================================================================================================================
</TABLE>
(1) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Existing
contract would be 0.50%, 0.30%, 0.15% and 1.18%, respectively.
(2) Absent fee waivers, 12b-1 fees, shareholder services fees and total
operating expenses for the Retail Class under the Proposed Contract would
be 0.30%, 0.15% and 1.33%, respectively.
(3) Absent fee waivers, advisory fees and total operating expenses for the
Institutional Class under the Existing Contract would be 0.50% and 0.73%,
respectively.
(4) Absent fee waivers, shareholder services fees and total operating expenses
for the Institutional Class under the Proposed Contract would be 0.15% and
1.03%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -----------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 39 41 6 10
3 years....................... 57 65 20 30
5 years....................... 77 90 35 52
10 years...................... 135 163 79 115
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the ARK
Pennsylvania Tax-Free Portfolio to the Advisor for services on behalf of the
Portfolio was $39,105. If the proposed fee (after waivers) had been in effect
during the same year, the Advisor would have received $68,287, which equals a
75% increase.
- 7 -
<PAGE> 10
ARK BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------ --- --------------------- ------------------- -- -----------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract Contract(3)
------------------ --------------------- ------------------- -----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.55% 0.56% 0.55% 0.56%
12b-1 Fees (after waivers).......... 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.21% 0.21% 0.21% 0.21%
=================================================================================================================================
Total Operating Expenses
(after waivers)................... 1.01% 1.02% 0.76% 0.83%
=================================================================================================================================
</TABLE>
(1) Absent fee waivers, 12b-1 fees, shareholder services fees and total
operating expenses for the Retail Class under the Existing Contract would
be 0.40%, 0.15% and 1.31%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
Contract would be 0.65%, 0.40%, 0.15% and 1.41%, respectively.
(3) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.65%, 0.15% and 1.01%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------- ------------------ ------------------- -----------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 40 40 8 8
3 years....................... 61 61 24 26
5 years....................... 84 85 42 46
10 years...................... 150 151 94 103
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the
ARK Balanced Portfolio to the Advisor for services on behalf of the Portfolio
was $534,609. If the proposed fee (after waivers) had been in effect during the
same year, the Advisor would have received $545,359, which equals a 2% increase.
- 8 -
<PAGE> 11
ARK BLUE CHIP EQUITY PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------------------------- -------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract Contract(3)
----------------- ---------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.60% 0.60% 0.60% 0.60%
12b-1 Fees (after waivers).......... 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.17% 0.17% 0.17% 0.17%
====================================================================================================================
Total Operating Expenses
(after waivers)................... 1.02% 1.02% 0.77% 0.83%
====================================================================================================================
</TABLE>
(1) Absent fee waivers, 12b-1 fees, shareholder services fees and total
operating expenses for the Retail Class under the Existing contract would
be 0.55%, 0.15%, and 1.47%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
contract would be 0.70%, 0.55%, 0.15% and 1.57%, respectively.
(3) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.70%, 0.15% and 1.02%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 40 40 8 8
3 years....................... 61 61 25 26
5 years....................... 85 85 43 46
10 years..................... 151 151 95 103
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the ARK
Blue Chip Equity Portfolio to the Advisor for services on behalf of the
Portfolio was $103,419. If the proposed fee (after waivers) had been in effect
during the same year, the Advisor would have received $103,419.
- 9 -
<PAGE> 12
ARK MID-CAP EQUITY PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
------------------------------------------ -------------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract(3) Contract(4)
------------------ --------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.65% 0.74% 0.65% 0.74%
12b-1 Fees (after waivers).......... 0.00% 0.00% -- --
Shareholder Services Fees
(after waivers)................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.30% 0.30% 0.30% 0.30%
==================================================================================================================================
Total Operating Expenses
(after waivers)................... 0.95% 1.04% 0.95% 1.10%
==================================================================================================================================
</TABLE>
(1) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Existing
Contract would be 0.70%, 0.40, 0.15% and 1.55%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
Contract would be 0.80%, 0.40%, 0.15% and 1.65%, respectively.
(3) Absent fee waivers, advisory fees and total operating expenses for the
Institutional Class under the Existing Contract would be 0.70% and 1.00%,
respectively.
(4) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.80%, 0.15% and 1.25%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 39 40 10 11
3 years....................... 59 62 30 35
5 years....................... 81 86 53 61
10 years..................... 143 153 117 134
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the
ARK Mid-Cap Equity Portfolio to the Advisor for services on behalf of the
Portfolio was $77,985. If the proposed fee (after waivers) had been in effect
during the same year, the Advisor would have received $88,256, which equals a
13% increase.
- 10 -
<PAGE> 13
ARK CAPITAL GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
---------------------------------------- --------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract Contract(3)
------------------ ------------------ ------------------- ----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.60% 0.65% 0.60% 0.65%
12b-1 Fees (after waivers).......... 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.26% 0.26% 0.26% 0.26%
==========================================================================================================================
Total Operating Expenses
(after waivers)................... 1.11% 1.16% 0.86% 0.97%
==========================================================================================================================
</TABLE>
(1) Absent fee waivers, 12b-1 fees, shareholder services fees and total
operating expenses for the Retail Class under the Existing Contract would
be 0.40%, 0.15% and 1.41%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
Contract would be 0.70%, 0.40%, 0.15% and 1.51%, respectively.
(3) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.70%, 0.15% and 1.11%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -----------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 41 41 9 10
3 years....................... 64 66 27 31
5 years....................... 89 92 48 54
10 years..................... 161 167 106 119
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee payable by the
ARK Capital Growth Portfolio to the Advisor for services on behalf of the
Portfolio was $________, all of which was waived except for $58,177. If the
proposed fee (after waivers) had been in effect during the same period, the
Advisor would have received $_________, which equals a ___% increase.
- 11 -
<PAGE> 14
ARK SPECIAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
Retail Class Institutional Class
----------------------------------------- ---------------------------------------
Pro Forma Pro Forma
ANNUAL OPERATING EXPENSES Under Existing Under Proposed Under Existing Under Proposed
(as a % of average net assets) Contract(1) Contract(2) Contract Contract(3)
------------------ ------------------ ----------------- -----------------
<S> <C> <C> <C> <C>
Advisory Fees (after waivers)....... 0.60% 0.79% 0.60% 0.79%
12b-1 Fees (after waivers).......... 0.25% 0.25% -- --
Shareholder Services Fees
(after waivers)................... 0.00% 0.00% -- 0.06%
Other Expenses...................... 0.39% 0.39% 0.39% 0.39%
=============================================================================================================================
Total Operating Expenses
(after waivers)................... 1.24% 1.43% 0.99% 1.24%
=============================================================================================================================
</TABLE>
(1) Absent fee waivers, 12b-1 fees, shareholder services fees and total
operating expenses for the Retail Class under the Existing Contract would
be 0.40%, 0.15% and 1.54%, respectively.
(2) Absent fee waivers, advisory fees, 12b-1 fees, shareholder services fees
and total operating expenses for the Retail Class under the Proposed
Contract would be 0.80%, 0.40%, 0.15% and 1.74%, respectively.
(3) Absent fee waivers, advisory fees, shareholder services fees and total
operating expenses for the Institutional Class under the Proposed Contract
would be 0.80%, 0.15% and 1.34%, respectively.
EXAMPLE
An investor would pay the following expenses on a hypothetical $1,000
investment, assuming (1) a 5% annual return, (2) redemption at the end of each
time period, and (3) imposition of a 3% sales charge on Retail Class shares:
<TABLE>
<CAPTION>
Retail Class Institutional Class
-------------------------------------- -------------------------------------
Pro Forma Under Pro Forma
Under Existing Proposed Under Existing Under Proposed
Contract Contract Contract Contract
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
1 year........................ 42 44 10 13
3 years....................... 68 74 32 39
5 years....................... 96 106 55 68
10 years..................... 175 196 121 150
</TABLE>
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
For the fiscal year ended April 30, 1997, the aggregate fee paid by the ARK
Special Equity Portfolio to the Advisor for services on behalf of the Portfolio
was $149,991. If the proposed fee (after waivers) had been in effect during the
same year, the Advisor would have received $209,075, which equals a 39%
increase.
- 12 -
<PAGE> 15
CONSIDERATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Trust met on November 7, 1997 to consider,
among other things, the Proposed Contract and the increased fees proposed by the
Advisor for the Portfolios. The Advisor reviewed the proposal in full with the
trustees and provided them with information to assist in their deliberations.
The information prepared by the Advisor included an analysis of the investment
performance and expenses of the Portfolios of the Trust as well as comparative
advisory fee and expense information for mutual funds similar to the Portfolios.
The trustees were assisted in their deliberations by outside counsel to the
Trust and by their own independent counsel.
The representatives of the Advisor stated that the current advisory fee for
each Portfolio for which a fee increase was being proposed was below the median
and average of advisory fees for mutual funds of similar investment objective,
size and cost structure. In addition, they pointed out that a number of
Portfolios were being subsidized by the Advisor and were operating subject to
expense limitations. The Advisor's representatives indicated that the Advisor
expected to continue waiving fees or reimbursing expenses in order to maintain
the expenses ratios of the Portfolios at or below the medians of expense ratios
for comparable mutual funds.
The Board of Trustees considered all of the information provided by the
Advisor. In addition, the independent trustees met separately with their
counsel, and reviewed their duties to the Trust's shareholders in considering
the proposal and the various factors to be considered and standards to be
applied. The independent trustees considered a number of factors relating to the
proposed fee increases and the Proposed Contract, including the following: (1)
the nature and quality of the services provided by the Advisor; (2) the
mutual-fund related revenues and expenses of the Advisor; (3) whether the
Portfolios and their shareholders benefit from any economies of scale; (4)
whether the Advisor and its affiliates receive any fall-out benefits that should
be considered in negotiating the fees; and (5) the investment advisory fees
payable by comparable investment companies.
After consideration of the proposal, the Board of Trustees, including all
of the independent trustees, unanimously approved the Proposed Contract and the
fee increases.
REQUIRED VOTE
Approval of the proposal with respect to a Portfolio requires the
affirmative vote of a majority of the outstanding shares of that Portfolio. As
defined in Investment Company Act of 1940, a "majority of the outstanding
shares" of a Portfolio means the vote (i) of 67% or more of the Portfolio's
outstanding shares present at the meeting, if the holders of more than 50% of
the outstanding shares of the Portfolio are present or represented by proxy; or
(ii) of more than 50% of the Portfolio's outstanding shares, whichever is less.
Abstentions and broker non-votes will not be considered votes cast and will have
the effect of votes cast against the proposal.
- 13 -
<PAGE> 16
If the Proposed Contract is not approved by the shareholders of a
Portfolio, the Existing Contract will remain in effect for that Portfolio and
the proposed fee increase for that Portfolio will not take effect.
THE BOARD OF TRUSTEES RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF
THE PROPOSED CONTRACT.
INFORMATION CONCERNING THE ADVISOR AND ITS AFFILIATES
The Advisor is a wholly-owned subsidiary of First National Bank of Maryland
("First National"). First National, established in 1806, is a wholly-owned
subsidiary of First Maryland Bancorp ("First Maryland"), a bank holding company
registered under the Bank Holding Company Act of 1956. First Maryland is a
subsidiary of Allied Irish Banks, p.l.c. which, together with its subsidiaries,
is Ireland's leading banking and financial services organization.
The Advisor was organized in 1995 to manage assets and provide research
services for the Trust Division of First National, which previously served as
investment adviser to the Portfolios. The Advisor's officers, portfolio managers
and investment analysts previously served in comparable capacities for the Trust
Division of First National. First National transferred responsibility for
advising the Portfolios to the Advisor effective as of September 1, 1996. The
transfer did not involve a change of actual control or management of the
investment adviser to the Portfolios.
The Advisor provides investment management and advisory services to
individual, corporate and institutional clients, pension plans, common and
collective trust funds, and mutual funds. As of September 30, 1997, the Advisor
had assets under management of approximately $10 billion.
The following is a list of the directors and principal executive officers
of the Advisor. The address of each is 100 East Pratt Street, Baltimore,
Maryland 21202.
<TABLE>
<CAPTION>
Name Office or Title Principal Occupation
---- --------------- --------------------
<S> <C> <C>
Walter R. Fatzinger, Jr. Director and Chairman of the Board Chairman and Chief Executive Officer, FMB Trust
Company, N.A.; Executive Vice President, First
National Bank of Maryland
Charles G. Cusic, Jr. Director President, FMB Trust Company, N.A.; Senior Vice
President, First National Bank of Maryland
Timothy J. Hynes, III Director and Assistant Secretary Executive Vice President, FMB Trust Company, N.A.;
Senior Vice President, First National Bank of Maryland
</TABLE>
- 14 -
<PAGE> 17
<TABLE>
<CAPTION>
Name Office or Title Principal Occupation
---- --------------- --------------------
<S> <C> <C>
Kathy A. Jackson Director Executive Vice President, FMB Trust Company, N.A.;
Senior Vice President, First National Bank of
Maryland
Jennifer Ward Lambdin Director and President President, Allied Investment Advisors, Inc.
Diana M. Kalin Director and Treasurer Senior Vice President, FMB Trust Company, N.A.;
Senior Vice President, First National Bank of
Maryland
Ronald C. McGuirk Secretary Trust/Investment Executive
</TABLE>
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
ADMINISTRATOR. SEI Investments-Fund Resources, 1 Freedom Valley Drive,
Oaks, Pennsylvania 19456, serves as the Portfolios' administrator under an
administration agreement with the Trust. SEI Investment Management Corporation,
which served as administrator for the Trust prior to June 1, 1996, is the owner
of all beneficial interest in SEI Investments-Fund Resurces.
DISTRIBUTOR. SEI Investments Distribution Co., 1 Freedom Valley Drive,
Oaks, Pennsylvania 19456, a wholly-owned subsidiary of SEI Investments Company,
serves as the distributor for shares of the Trust pursuant to a distribution
agreement with the Trust.
5% SHAREHOLDERS. As of December __, 1997, the following persons were the
only persons who were record owners or, to the knowledge of the Trust,
beneficial owners of 5% or more of shares of any class of any of the Portfolios.
The Trust believes that most of the shares referred to above were held by the
persons listed below in accounts for their fiduciary, agency or custodial
customers.
<TABLE>
<CAPTION>
RETAIL CLASS INSTITUTIONAL CLASS
-------------------- ----------------------
NUMBER OF % OF NUMBER OF % OF
Name and Address of Beneficial Owner SHARES CLASS SHARES CLASS
- ------------------------------------ ------ ----- ------ -----
<S> <C> <C> <C> <C>
ARK INCOME
ARK MARYLAND TAX-FREE
ARK PENNSYLVANIA TAX-FREE
ARK BALANCED
</TABLE>
- 15 -
<PAGE> 18
<TABLE>
<CAPTION>
RETAIL CLASS INSTITUTIONAL CLASS
--------------------- -----------------------
NUMBER OF % OF NUMBER OF % OF
Name and Address of Beneficial Owner SHARES CLASS SHARES CLASS
- ------------------------------------ ------ ----- ------ -----
<S> <C> <C> <C> <C>
ARK BLUE CHIP EQUITY
ARK MID-CAP EQUITY
ARK CAPITAL GROWTH
ARK SPECIAL EQUITY
</TABLE>
As of December 29, 1997, the trustees and officers of the Trust owned in
the aggregate less than 1% of the shares of any of the Portfolios.
OTHER BUSINESS. The management of the Trust knows of no other business that
may come before the special meeting. If any additional matters are properly
presented at the meeting, the persons named in the enclosed proxy, or their
substitutes, will vote such proxies which do not contain specific restrictions
to the contrary in accordance with their best judgment on such matters.
SOLICITATION OF PROXIES. In addition to solicitation by mail, solicitations
on behalf of the Board of Trustees may be made by personal interview, telegram
and telephone. Certain officers and regular agents of the Trust, who will
receive no additional compensation for their services, may use their efforts, by
telephone or otherwise, to request the return of proxies. The costs of
preparing, assembling, mailing and transmitting proxy materials and of
soliciting proxies on behalf of the Board of Trustees will be borne by First
Maryland. First Maryland will reimburse, upon request, broker-dealers and other
custodians, nominees and fiduciaries for their reasonable expenses of sending
proxy soliciting material to beneficial owners.
SHAREHOLDER PROPOSALS. The Trust does not hold annual meetings of
shareholders. Shareholders wishing to submit a proposal for inclusion in the
proxy statement for a subsequent meeting of shareholders should send their
written proposal to the Secretary of the Trust.
- 16 -
<PAGE> 19
SHAREHOLDER REPORTS. The Trust's Annual Report for the fiscal year ended
April 30, 1997, and Semi-Annual Report for the six-months ended October 31,
1997, may be obtained without charge by calling the Trust toll free at
1-800-624-4116.
Dated: ___________, 199_
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY AND RETURN
IT PROMPTLY.
- 17 -
<PAGE> 20
Exhibit A
INVESTMENT ADVISORY CONTRACT
AGREEMENT made this ___ day of ________, 1998 by and between ARK Funds, a
Massachusetts business trust (the "Fund"), and Allied Investment Advisors, Inc.,
a Maryland corporation (the "Adviser").
WHEREAS, the Fund is registered as an open-end, management series
investment company under the Investment Company Act of 1940, as amended (the
"Investment Company Act"); and
WHEREAS, the Fund currently offers nineteen series of units of beneficial
interest ("Shares"), each series representing interests in a separate investment
portfolio, and may offer other series of Shares from time to time (all such
series of Shares hereinafter collectively referred to as the "Portfolios"); and
WHEREAS, the Fund desires to retain the Adviser to render investment
advisory services to the Fund and to the Portfolios, subject to and in
accordance with the requirements of the Investment Company Act; and
WHEREAS, the Adviser is willing to render such services under the terms of
this Agreement:
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
1. Appointment of Adviser. The Fund hereby appoints the Adviser to act as
investment adviser to the Fund and its Portfolios for the period and on such
terms as are set forth in this Agreement. The Adviser hereby accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. Duties as Investment Adviser. Subject to the supervision of the Fund's
Board of Trustees ("Board"), the Adviser will be responsible for providing a
continuous investment program for the Fund's Portfolios, including the provision
of investment research and management with respect to all securities and
investments and cash equivalents purchased, sold or held in the Portfolios and
the selection of brokers and dealers through which securities transactions for
the respective Portfolios will be executed. In carrying out its responsibilities
under this Agreement, the Adviser will at all times act in accordance with the
investment objectives, policies and restrictions of each Portfolio as stated in
the Fund's registration statement as it may be amended from time to time
("Registration Statement") as well as all applicable rules and regulations of
the Securities and Exchange Commission.
<PAGE> 21
The Adviser further agrees that it will:
(a) promptly advise the Fund's custodian and accounting services agent of
each purchase and sale, as the case may be, made on behalf of each of the
Portfolios of any security or other investment specifying in each case; the name
and quantity of the investment purchased or sold, the unit and aggregate
purchase or sale price, commission paid, the market on which the transaction was
effected, the trade date, the settlement date, the identity of the effecting
broker or dealer and/or such other information as may be reasonably requested by
the custodian and accounting services agent, all in such manner as may from time
to time be reasonably requested by them;
(b) provide, in a timely manner, such information as may be reasonably
requested by the Fund or its authorized agent in connection with the computation
of the net asset value and the net income of each Portfolio in accordance with
the procedures prescribed in the Registration Statement or as more frequently
requested by the Board; provided, however, that the Adviser shall not be
responsible for any such computation or for the calculation of the net asset
value per share of any of the Fund's Portfolios; and
(c) render regular reports to the Board concerning the Adviser's
performance of its responsibilities under this Agreement and such other periodic
and special reports as the Board may request; in particular, the Adviser agrees
that it will attend meetings of the Board or validly constituted committees
thereof.
3. Brokerage Transactions. In placing orders with brokers and dealers, the
Adviser shall obtain the most favorable execution of such orders. However, the
Adviser may, in its discretion, purchase and sell portfolio securities to and
from brokers and dealers who provide the Adviser with research, analysis, advice
and similar services, and the Adviser may cause the Fund to pay to those brokers
or dealers, in return for research and analysis, a higher commission or spread
than may be charged by other brokers or dealers, provided that the Adviser
determines in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Adviser to the Fund and any other accounts with respect to which the Adviser
exercises investment discretion. In no instance will securities be purchased
from or sold to the Adviser or any affiliated person of the Adviser except in
accordance with the Investment Company Act.
4. Delegation. The Adviser may delegate any of its duties as described in,
or derived from, the duties set forth in paragraph 3 of this Agreement, provided
that any such delegation may be made only pursuant to written agreements which
satisfy the requirements of the Investment Company Act and shall have been
approved by the Fund's Board, and by the shareholders of each Portfolio to which
such agreement applies, in accordance with the provisions of the Investment
Company Act.
- 2 -
<PAGE> 22
5. Services Not Exclusive. The services furnished by the Adviser hereunder
are not to be deemed exclusive and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the Investment Company Act, the Adviser hereby agrees that all records
which it maintains for the Fund and/or the Portfolios are the property of the
Fund and further agrees to surrender promptly to the Fund any of such records
upon request by the Fund. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the Investment Company Act the records required
to be maintained by Rule 31a-1 under the Investment Company Act.
7. Expenses of the Fund. All expenses shall be allocated among the
Portfolios in accordance with the Fund's Declaration of Trust and the provisions
of the Investment Company Act. During the term of this Agreement, the Fund will
bear all expenses, not specifically assumed by the Adviser, incurred in the
conduct of its operations, including, without limitation, responsibility for the
following: (a) the cost (including brokerage commissions) of securities
purchased or sold by the Portfolios and any losses incurred in connection
therewith; (b) fees payable to, and expenses incurred on behalf of the Fund by,
the Adviser; (c) expenses of organizing the Fund; (d) filing fees and expenses
relating to the registration and qualification of the Fund's shares and the Fund
under federal and/or state securities laws and maintaining such registrations
and qualifications; (e) fees and salaries payable to the Fund's trustees and
officers; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability, uncollectible items of deposit and other
insurance or fidelity bonds; (h) any costs, expenses or losses arising out of a
liability of or claim for damages or other relief asserted against the Fund for
violation of any law; (i) legal, accounting and auditing expenses, including
legal fees of special counsel at any time retained for those members of the
Board who are not interested persons of the Fund and expenses relating to the
use of consulting services by the Fund provided that the use of such services is
approved by the Fund's trustees; (j) charges of custodians, transfer agents and
other agents; (k) costs of preparing share certificates; (l) expenses of setting
in type and printing prospectuses and supplements thereto for existing
shareholders, reports, shareholder reports, and proxy materials; (m) costs of
mailing prospectuses, statements of additional information and supplements
thereto to existing shareholders as well as shareholder reports and proxy
material; (n) any extraordinary expenses (including fees and disbursements of
counsel) incurred by the Fund; (o) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (p) costs of mailing and tabulating proxies and costs of
shareholders and directors meetings; and (q) the cost of investment company
literature and other publications provided by the Fund to its trustees and
officers.
The Fund may pay directly any expense incurred by it in its normal
operations and, if any such payment is consented to by the Adviser and
acknowledged as otherwise payable by the Adviser pursuant to this Agreement, the
Fund may reduce the fee payable to the Adviser pursuant to this Agreement by
such amount. To the extent that such deductions exceed the fee
- 3 -
<PAGE> 23
payable to the Adviser for any monthly payment period, such excess shall be
carried forward and deducted in the same manner from the fee payable on
succeeding monthly payment dates.
8. Expenses of Adviser. The Adviser will bear all expenses incurred by it
in performing its duties as investment adviser under this Agreement. The Adviser
may, but is not required to, voluntarily assume any portion or all of the
expenses that the Fund is required to pay under paragraph 7 hereof. In addition,
if the expenses borne by the Fund in any fiscal year exceed the applicable
expense limitations imposed by the securities regulations of any state in which
shares are registered or qualified for sale to the public, the Adviser will
reimburse the Fund for any excess up to the amount of the fee payable to it
during that fiscal year pursuant to this Agreement.
9. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement, the Fund will pay to the Adviser a fee in accordance
with the compensation schedule appended to this Agreement.
10. Limitation of Liability of Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund or
any of its Portfolios in connection with the matters to which this Agreement
relates including, without limitation, losses that may be sustained in
connection with the purchase, holding, redemption, or sale of any security on
behalf of any Portfolio of the Fund, except a loss resulting from the willful
misfeasance, bad faith or gross negligence of the Adviser in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
11. Duration and Termination. This Agreement shall become effective upon
the date first above written and, unless sooner terminated as provided herein,
shall continue in effect automatically for successive periods of twelve months
each, so long as such continuance is specifically approved with respect to each
Portfolio at least annually by (a) the vote of a majority of those members of
the Board who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval; and (b) all of the members of the Board or by vote of the holders of a
majority of the outstanding voting securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated with
respect to any Portfolio or the Fund at any time, without the payment of any
penalty by the Fund, upon the vote of the Board or the vote of a majority of the
outstanding voting securities of the Fund and on 60 days' written notice to the
Adviser or by the Adviser at any time, without the payment of any penalty, on 60
days' written notice to the Fund. This Agreement will automatically and
immediately terminate in the event of its assignment. As used in this Agreement,
the terms "majority of the outstanding voting securities," "interested person"
and "assignment" shall have the same meaning as such terms have in the
Investment Company Act.
In the event that this Agreement shall not be approved in the manner
provided herein or shall have been terminated with respect to any Portfolio, the
Adviser and the Fund shall continue
- 4 -
<PAGE> 24
to be bound by the terms of this Agreement with respect to any other Portfolio
provided that this Agreement shall have been approved in the manner contemplated
herein with respect to such Portfolio.
12. Amendment of this Agreement. No material provision of this Agreement
may be changed, waived, discharged or terminated except by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, and no amendment of any material term of
this Agreement shall be effective until approved by the Board and by the holders
of a majority of the Fund's outstanding voting securities.
13. Name of the Fund. The Fund may use the name "ARK Fund" or any name
derived from or using the word "ARK" only for so long as this Agreement or any
extension, renewal or amendment hereof remains in effect. At such time as such
an agreement, shall no longer be in effect, the Fund will (to the extent that it
lawfully can) cease to use such a name or any other name similar thereto.
14. Miscellaneous. The Adviser acknowledges that the Fund is a
Massachusetts business trust, and that the Fund is required by its Declaration
of Trust to limit its liability in all agreements to the assets of the Fund.
Consequently, the Adviser agrees that any claims by it against the Fund may be
satisfied only from the assets of the Fund, and no shareholders, trustees or
officers of the Fund may be held personally liable or responsible for any
obligations arising out of this Agreement.
The captions in this Agreement are included for convenience of reference
only and in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and shall be governed by Maryland law.
- 5 -
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: ARK FUNDS
By:
- ------------------------------- -----------------------------
Attest: ALLIED INVESTMENT ADVISORS, INC.
By:
- ------------------------------- -----------------------------
- 6 -
<PAGE> 26
ARK FUNDS
INCOME PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins,
and each of them, attorneys and proxies of the undersigned each with the power
of substitution and resubstitution, to attend, vote and act for the undersigned
at the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate
box, SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and
return this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 27
Please mark your
vote as in this example
[ X ]
INCOME PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 28
ARK FUNDS
MARYLAND TAX-FREE PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 29
Please mark your
vote as in this example
[ X ]
MARYLAND TAX-FREE PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 30
ARK FUNDS
PENNSYLVANIA TAX-FREE PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 31
Please mark your
vote as in this example
[ X ]
PENNSYLVANIA TAX-FREE PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 32
ARK FUNDS
BALANCED PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 33
Please mark your
vote as in this example
[ X ]
BALANCED PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 34
ARK FUNDS
BLUE CHIP EQUITY PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 35
Please mark your
vote as in this example
[ X ]
BLUE CHIP EQUITY PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 36
ARK FUNDS
MID-CAP EQUITY PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 37
Please mark your
vote as in this example
[ X ]
MID-CAP EQUITY PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 38
ARK FUNDS
CAPITAL GROWTH PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at 10
o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive, Oaks,
Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 39
Please mark your
vote as in this example
[ X ]
CAPITAL GROWTH PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
<PAGE> 40
ARK FUNDS
SPECIAL EQUITY PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
This proxy is solicited on behalf of the Board of Trustees of ARK Funds
(the "Trust") for use at a Special Meeting of the Shareholders of the
above-referenced portfolio of the Trust to be held on February 4, 1998 at
10 o'clock a.m. (Eastern Time) at SEI Investments, 1 Freedom Valley Drive,
Oaks, Pennsylvania.
The undersigned hereby appoints Kathryn Stanton and Kevin P. Robins, and
each of them, attorneys and proxies of the undersigned each with the power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the above-referenced Special Meeting of Shareholders, and at any adjournment
thereof, casting votes according to the number of shares of the Portfolio which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such Special Meeting, and hereby ratifying
and confirming all that said attorneys and proxies, or each of them, may
lawfully do by virtue hereof.
You are encouraged to specify your choices by marking the appropriate box,
SEE REVERSE SIDE. The Proxies cannot vote your shares unless you sign and return
this card.
(continued and to be SIGNED on the other side)
* FOLD AND DETACH HERE *
<PAGE> 41
Please mark your
vote as in this example
[ X ]
SPECIAL EQUITY PORTFOLIO
The undersigned hereby acknowledges receipt of the Notice of Special Meeting of
Shareholders and the Proxy Statement dated ____________, 199_.
1. To approve a new investment advisory contract between the Trust and Allied
Investment Advisors, Inc.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
2. To consider and act upon such other business as may properly come before
the Special Meeting and any adjournments thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
This Proxy, if properly executed, will be voted in accordance with the
undersigned's direction as set forth herein. If no direction is made, this
Proxy will be voted FOR Proposal 1. This Proxy may be revoked in writing
prior to its exercise. The undersigned hereby revokes any proxies
heretofore given to vote upon or act with respect to such shares.
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR
NAMES APPEAR HEREON. CORPORATE OR PARTNERSHIP
PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR
PARTNERSHIP NAME BY AN AUTHORIZED OFFICER.
JOINT OWNERS SHOULD EACH SIGN PERSONALLY,
WHEN SIGNING AS AN ATTORNEY, EXECUTOR,
TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR FULL
TITLE AS SUCH.
Dated: , 1998
-------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature (see note above)
IMPORTANT: PLEASE SIGN, DATE AND RETURN
PROMPTLY.
* FOLD AND DETACH HERE *
THIS PROXY CARD IS ONLY VALID WHEN SIGNED AND DATED.
