<PAGE>
SCHEDULE 14A INFORMATION
(Amendment No. )
Filed by the Registrant[x]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[x] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
_________________________________________________________________________
HERITAGE SERIES TRUST
_________________________________________________________________________
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of
Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction
applies:
____________________________________________________________________
2) Aggregate number of securities to which transaction applies:
____________________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
____________________________________________________________________
4) Proposed maximum aggregate value of transaction:
____________________________________________________________________
5) Total fee paid:
____________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
1) Amount Previously Paid:
____________________________________________________
2) Form, Schedule or Registration Statement No.:
____________________________________________________
3) Filing Party:
____________________________________________________
4) Date Filed:
____________________________________________________
<PAGE>
Preliminary copy for
the information of
the Securities and
Exchange Commission;
File No. 811-7470;
Rule 14a-6
HERITAGE SERIES TRUST -
VALUE EQUITY FUND
NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS
May 24, 1996
To the Shareholders:
A Special Meeting of the holders of shares of beneficial interest of
the Heritage Series Trust - Value Equity Fund (the "Fund") will be held on
May 24, 1996 at 8:30 a.m., Eastern time, or any adjournment(s) thereof, at
the offices of Heritage Asset Management, Inc., at 880 Carillon Parkway,
St. Petersburg, Florida 33716 in Classroom A for the following purposes:
(1) To approve an Investment Subadvisory Agreement between
Heritage Asset Management, Inc. and Dreman Value Advisors,
Inc.; and
(2) To transact such other business as may properly come before
the Special Meeting or any adjournment(s) thereof.
You are entitled to vote at the meeting and any adjournment(s)
thereof if you owned shares of the Fund at the close of business on March
22, 1996. If you attend the meeting, you may vote your shares in person.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
By Order of the Board of Trustees,
CLIFFORD J. ALEXANDER
Secretary
March 25, 1996
880 Carillon Parkway
St. Petersburg, Florida 33716
YOUR VOTE IS IMPORTANT
NO MATTER HOW MANY SHARES YOU OWN
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY
FORM, DATE AND SIGN THE FORM, AND RETURN THE FORM IN THE ENVELOPE
PROVIDED. IF YOU SIGN, DATE AND RETURN THE PROXY FORM BUT GIVE NO
VOTING INSTRUCTIONS, YOUR SHARES WILL BE VOTED "FOR" THE PROPOSALS
NOTICED ABOVE. IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF FURTHER
SOLICITATION, WE ASK YOUR COOPERATION IN MAILING YOUR PROXY CARD
PROMPTLY. UNLESS PROXY CARDS SUBMITTED BY CORPORATIONS AND
PARTNERSHIPS ARE SIGNED BY THE APPROPRIATE PERSONS AS INDICATED IN THE
VOTING INSTRUCTIONS ON THE PROXY CARD, THEY WILL NOT BE VOTED.
<PAGE>
HERITAGE SERIES TRUST -
VALUE EQUITY FUND
880 Carillon Parkway, St. Petersburg, Florida 33716
___________________
PROXY STATEMENT
___________________
Special Meeting of Shareholders to be Held on May 24, 1996
This is a proxy statement with respect to the Value Equity Fund (the
"Fund") of Heritage Series Trust (the "Trust") in connection with the
solicitation of proxies made by, and on behalf of, the Trust's Board of
Trustees ("Trustees") to be used at the Fund's special meeting of
shareholders of the Trust or any adjournment(s) thereof ("Meeting"). This
proxy statement first will be mailed to shareholders on or about March 25,
1996.
A majority of the shares of the Fund outstanding on March 22, 1996
("Record Date"), represented in person or by proxy, must be present to
constitute a quorum for the transaction of business at the Meeting. Only
holders of securities as of this date are entitled to notice of and to
vote at the Meeting. In the absence of a quorum or in the event that a
quorum is present at the Meeting but votes sufficient to approve any one
of the proposals are not received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit the further
solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares represented at the Meeting
in person or by proxy. If a quorum is present, the persons named as
proxies will vote those proxies that they are entitled to vote FOR such
proposal in favor of an adjournment and will vote those proxies required
to be voted AGAINST such proposal against such adjournment. A shareholder
vote may be taken on the proposal described in this Proxy Statement prior
to any such adjournment if sufficient votes have been received and it is
otherwise appropriate.
Broker non-votes are shares held in street name for which the broker
indicates that instructions have not been received from the beneficial
owners or persons entitled to vote and the broker does not have
discretionary voting authority. Abstentions and broker non-votes will be
counted for purposes of determining whether a quorum is present, but will
not be voted for or against any adjournment. Accordingly, abstentions and
broker non-votes effectively will be a vote against adjournment or against
the proposal when the required vote is a percentage of the shares present.
Abstentions and broker non-votes will not be counted, however, as votes
cast for purposes of determining whether sufficient votes have been
received to approve a proposal.
The individuals named as proxies in the enclosed proxy card will
vote in accordance with your directions as indicated thereon if your proxy
card is received properly executed by you or by your duly appointed agent
<PAGE>
or attorney-in-fact. If you sign, date and return the proxy card but give
no voting instructions, your shares will be voted in favor of the proposal
described in this proxy statement. The duly appointed proxies may, in
their discretion, vote upon such other matters as may properly come before
the Meeting. Your proxy card may be revoked by giving another proxy, by
letter or telegram revoking your proxy if received by the Fund prior to
the Meeting, or by appearing and voting at the Meeting.
As of the Record Date, the Fund had _________ Class A shares
outstanding and _______ Class C shares outstanding, and, to the best of
the Fund's knowledge, no person held of record or owned beneficially more
than 5% of the Fund's outstanding shares. All costs associated with the
Meeting, including the solicitation of proxies, will be borne by the Fund.
Solicitations will be made primarily by mail but also may include
telephone communications by regular employees of Heritage Asset
Management, Inc. ("Heritage"), the Fund's investment adviser and
administrator, who will not receive any compensation therefor from the
Fund. Each full share of the Fund is entitled to one vote, and each
fractional share is entitled to a proportionate share of one vote. YOU
MAY OBTAIN A COPY OF THE FUND'S MOST RECENT ANNUAL AND SEMI-ANNUAL REPORTS
TO SHAREHOLDERS, FREE OF CHARGE, BY WRITING TO HERITAGE AT 880 CARILLON
PARKWAY, ST. PETERSBURG, FLORIDA 33716 OR BY CALLING 1-800-421-4184.
PROPOSAL 1. APPROVAL OF THE SUBADVISORY AGREEMENT
The Trustees and Heritage propose that Dreman Value Advisors, Inc.
("Dreman") be appointed a subadviser of the Fund. If this appointment is
approved by shareholders, Dreman would become the second subadviser to the
Fund. Eagle Asset Management, Inc. ("Eagle"), an affiliate of Heritage,
currently is the Fund's sole subadviser. Heritage and Eagle are wholly-
owned subsidiaries of Raymond James Financial, Inc. ("RJF"). Eagle has
been the investment subadviser of the Fund since the Fund's inception
pursuant to a subadvisory agreement between Heritage and Eagle dated
December 24, 1994 ("Eagle Agreement").
The proposed retention of Dreman is based primarily on the desire of
Trustees and Heritage to have Christian C. Bertelsen continue serving as
portfolio manager of the Fund. Mr. Bertelsen has served in this capacity
since the Fund's inception and is responsible for its day-to-day portfolio
management. Mr. Bertelsen became Chief Investment Officer of Dreman on
March 1, 1996. He also continues to serve as a Senior Vice President of
Eagle under an agreement that is scheduled to expire on May 31, 1996.
Pending shareholder action on this proposal to retain Dreman as one of the
Fund's subadviser, Mr. Bertelsen remains the portfolio manager in his
capacity as a Senior Vice President of Eagle.
If Dreman is approved as a subadviser, Heritage will have discretion
to allocate the assets of the Fund between Dreman and Eagle subject to the
oversight of the Trustees. Heritage initially intends to allocate all of
the Fund's assets to Dreman. The proportion of assets allocated to each
subadviser will be reviewed periodically by Heritage. If shareholders
- 2 -
<PAGE>
approve Dreman's appointment as subadviser, Dreman will provide similar
portfolio management services as Eagle has provided, will employ the same
portfolio manager, and will receive a lower subadvisory fee than Eagle
currently receives.
At a meeting held on March 15, 1996, the Trustees determined that it
would be in the Fund's best interest to continue to retain Mr. Bertelsen's
services by appointing Dreman as the Fund's investment subadviser. In
making this decision, the Trustees considered, among other factors,
continuity in the Fund's investment strategy and style, Mr. Bertelsen's
specialized experience and success as a portfolio manager, his experience
and track record to date as the Fund's portfolio manager, the other
personnel employed by Dreman who would assist in portfolio management
activities, and other portfolio management alternatives available to the
Fund.
At their March 15, 1996 meeting, the Trustees unanimously approved
proposals that (1) Dreman be appointed as an additional investment
subadviser to the Fund, (2) the proposed investment subadvisory agreement
between Heritage and Dreman ("Agreement") be approved, and (3) the
Agreement be submitted for shareholder approval. These decisions included
the unanimous approval of all Trustees who are not "interested persons" of
the Trust, Heritage, Eagle or Dreman as that term is defined in the
Investment Company Act of 1940, as amended ("Independent Trustees").
DESCRIPTION OF THE SUBADVISORY AGREEMENT
Under the Agreement, Dreman will manage the investment of Fund
assets allocated to it and will be responsible for placing all orders for
the purchase and sale of portfolio securities for which it is responsible,
subject to the supervision of the Trustees and Heritage.
As compensation for Dreman's services and for expenses borne by
Dreman under the Agreement, Dreman will be paid a monthly subadvisory fee
by Heritage (not by the Trust) at an annual rate equal to 0.35% of the
Fund's average daily net assets allocated to Dreman by Heritage. However,
if, at some time in the future, Heritage's advisory fee is reduced due to
the imposition of asset level breakpoints, Dreman's subadvisory fee shall
be reduced proportionately, provided that in no event shall such fee be
reduced below 0.35% for the first $50 million of the Fund's average daily
net assets allocated to Dreman by Heritage. Heritage currently pays from
its advisory fee to Eagle a subadvisory fee of 0.375% of the Fund's
average daily net assets allocated to Eagle. Accordingly, allocation of
100% of the Fund's assets to Dreman will result in a higher portion of the
advisory fee being retained by Heritage.
The Agreement provides that Heritage will indemnify and hold
harmless Dreman against any losses, expenses, claims, damages or
liabilities (or action or proceedings with respect thereof), for wrongful
action in breach of the Agreement or Heritage's advisory agreement with
the Trust, in the distribution of the Fund's shares, or any other wrongful
action, except that Dreman may be held liable to the extent that a court
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<PAGE>
having jurisdiction determined by a final judgment, or an independent
counsel agreed upon by Heritage and Dreman shall have concluded in a
written opinion, that such losses resulted from Dreman's willful
misfeasance, bad faith or gross negligence or by reason of the reckless
disregard by Dreman of its duties. The foregoing indemnification is in
addition to any rights that Dreman may have at common law or otherwise.
The Agreement also provides that Dreman will indemnify and hold
harmless Heritage against any losses, expenses, claims, damages or
liabilities (or action or proceedings with respect thereof), for wrongful
action in breach of the Agreement or Heritage's advisory agreement with
the Trust, in the distribution of the Fund's shares, or any other wrongful
action, except that Heritage may be held liable to the extent that a court
having jurisdiction determined by a final judgment, or an independent
counsel agreed upon by Heritage and Dreman shall have concluded in a
written opinion, that such losses resulted from Heritage's willful
misfeasance, bad faith or gross negligence or by reason of the reckless
disregard by Heritage of its duties. The foregoing indemnification is in
addition to any rights that Heritage may have at common law or otherwise.
If approved by shareholders, the Agreement would be executed
promptly by Heritage and Dreman. Unless sooner terminated, it would
remain in effect for two years following its effective date. Thereafter,
it would continue automatically for successive annual periods, provided
that it is specifically approved at least annually (1) by a vote of a
majority of the Independent Trustees and (2) by all Trustees or by a vote
of a majority of the outstanding shares of the Fund. The Trust may
terminate the proposed Agreement by a vote of a majority of its Trustees
or a majority of its outstanding voting securities on 60 days' written
notice to Heritage or Dreman. Heritage may at any time terminate that
Agreement upon 60 days' written notice to Dreman. Dreman may at any time
terminate that Agreement upon 90 days' written notice to Heritage. The
Agreement automatically will terminate without penalty in the event of its
assignment.
INFORMATION ABOUT DREMAN
Dreman is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"). Dreman was
established as a wholly-owned subsidiary of Zurich Kemper Investments,
Inc. ("ZKI") in August, 1995. Dreman previously conducted business as
Dreman Value Management, L.P. Dreman serves as an investment advisor to 6
mutual fund series and to private accounts with aggregate assets in excess
of $1.8 billion. For a list of investment companies having a similar
investment strategy to the Fund which are advised by Dreman, including
Dreman's rates of compensation, see Appendix A. Dreman is located at 10
Exchange Place, 20th Floor, Jersey City, NJ 07301.
ZKI, which provides ongoing administrative and financial support to
Dreman, has been managing mutual funds for over 46 years. ZKI is an
indirect wholly-owned subsidiary of Zurich Insurance Company. Zurich
Insurance Company is part of the Zurich Insurance Group, a global
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<PAGE>
organization headquartered in Zurich, Switzerland, that provides services
in life and non-life insurance, reinsurance and asset management in more
than 45 companies. ZKI currently manages 28 open-end mutual funds and 7
closed-end funds, together offering 68 portfolios. ZKI and its affiliates
have approximately $79 billion in assets under management and constitute
one of the nation's largest asset management complexes. The address of
ZKI is 120 LaSalle Street, Chicago, Illinois 60603. Zurich Insurance
Company's address is Mythenquai 2, P.O. Box Ch-8022, Zurich, Switzerland.
The names, position with Dreman, and principal occupations of the
principal executive officer and the directors of Dreman are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH DREMAN PRINCIPAL OCCUPATION
<S> <C> <C>
Stephen B. Timbers Director Director, President, Chief
Executive Officer and Chief
Investment Officer, ZKI;
Director, Kemper Distributors,
Inc.; President and Trustee,
Kemper Funds
David N. Dreman Chairman and Director Chairman, Dreman
John E. Neal Director Director, ZKI; President,
Kemper Funds Group (a unit of
ZKI); Director, Kemper
Distributors, Inc.
James R. Neel President, Chief President, Chief Executive
Executive Officer and Officer, Dreman
Director
John E. Peters Director Senior Executive Vice
President and Director, ZKI;
President and Director, Kemper
Distributors, Inc.
</TABLE>
RECOMMENDATION OF THE BOARD OF TRUSTEES
In order to minimize any potential disruption of portfolio
management services and to maintain quality portfolio management services
in the future, the Trustees decided to appoint Dreman as investment
subadviser to the Fund and recommend that shareholders approve the
proposed Agreement. In approving the Agreement, the Board analyzed the
- 5 -
<PAGE>
factors discussed above and other factors that would affect positively or
negatively the provision of portfolio management services.
If Proposal 1 is not approved by shareholders, Heritage will
continue as the Fund's investment adviser and investment discretion with
respect to 100% of the Fund's assets will continue to be allocated to
Eagle as subadviser. The Trustees would then consider whether any other
arrangements for the provision of investment subadvisory services are
appropriate and in the best interests of the Fund's shareholders.
VOTE REQUIRED
Approval of Proposal 1 requires the affirmative vote of the holders
of the lesser of (1) 67% or more of the shares of the Fund present at the
Meeting, if the holders of more than 50% of the outstanding Fund shares
are present or represented by proxy at the Meeting, or (2) more than 50%
of the outstanding shares of the Fund entitled to vote at the Meeting.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU
VOTE "FOR" PROPOSAL 1.
INFORMATION ABOUT THE TRUST
CURRENT ADVISORY ARRANGEMENTS
Heritage is a Florida corporation organized in 1985 and registered
as an investment adviser under the Advisers Act. Heritage serves as
investment adviser and administrator to the Fund pursuant to an Investment
Advisory and Administration Agreement between Heritage and the Trust on
behalf of the Fund, dated December 24, 1994 ("Advisory Agreement"). The
Advisory Agreement and the Eagle Agreement each were approved by the
Fund's sole initial shareholder on December 29, 1994 and were last
approved by the Board of Trustees on November 20, 1995. All of the
capital stock of Heritage is owned by RJF. Thomas A. James, a Trustee of
the Trust, by virtue of his direct or indirect ownership of RJF, owns
beneficially more than 10% of Heritage. RJF, through its subsidiaries, is
engaged primarily in providing customers with a wide variety of financial
services in connection with securities, limited partnerships, options,
investment banking and related fields. Heritage also serves as investment
adviser and manager to five other investment companies with net assets
totaling approximately $2 billion as of January 31, 1996.
The principal address of Heritage, RJF, Thomas A. James and each of
Heritage's directors and principal executive officer is at 880 Carillon
Parkway, St. Petersburg, Florida 33716. The directors and principal
executive officer of Heritage are: Jeffrey P. Julien, Director; Richard K.
Riess, Director; and Stephen G. Hill, Director, President and Chief
Executive Officer. The officers of the Fund who also are employed by
Heritage are: Stephen G. Hill; Donald H. Glassman; and Patricia Schneider.
The Trustees and officers of the Fund do not own in the aggregate more
than 1% of the shares of beneficial interest in the Fund.
- 6 -
<PAGE>
Under the Advisory Agreement, and subject to the supervision of the
Trustees, Heritage has agreed, among other duties, to provide a continuous
investment program for the Fund's investment portfolio, supervise all
aspects of the Fund's operation and hold itself available to respond to
shareholder inquiries. The Advisory Agreement expressly permits advisory
services to be delegated to and performed by a subadviser. Under the
Advisory Agreement, the Fund bears all of its expenses not specifically
assumed by Heritage incurred in its operation and the offering of shares.
For services provided under the Advisory Agreement, the Fund pays Heritage
an annualized advisory fee, computed daily and paid monthly, of 0.75% of
the Fund's average daily net assets. As required by state regulations,
Heritage will reimburse the Fund if and to the extent that the aggregate
operating expenses of the Fund in any fiscal year exceed applicable
limits. To date, no such reimbursements have been required. If, during
the current fiscal year, Class A expenses exceed 1.65% of average daily
net assets, or Class C expenses exceed 2.40%, Heritage voluntarily will
waive its advisory fees or reimburse each class of the Fund as necessary
to limit expenses to these levels. For the period December 30, 1994
(commencement of operations) to October 31, 1995, Heritage waived its fees
in the amount of $47,250 and reimbursed Fund expenses in the amount of
$68,724.
Heritage also is the fund accountant and transfer and dividend
disbursing agent for the Fund. For the period December 30, 1994
(commencement of operations) to October 31, 1995, the Fund paid Heritage
$10,346 for its services as transfer and dividend disbursing agent. For
the same period, the Fund paid Heritage $20,509 for its services as fund
accountant. Heritage will continue to provide these services to the Fund
if the Agreement is approved.
In addition, an affiliate of Heritage, Raymond James & Associates,
Inc. ("RJA"), serves as the Trust's principal underwriter. As
compensation for certain distribution and shareholder servicing
activities, the Fund paid RJA $13,040 and $10,848 for distribution fees
for the Fund's Class A Shares and Class C Shares, respectively, pursuant
to the Trust's Rule 12b-1 distribution plan. RJA will continue to serve
as principal underwriter to the Trust after the advisory contract is
approved.
The Advisory Agreement and the Eagle Agreement each provide that
Heritage and/or Eagle, as applicable, will not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the matter to which the Agreements relate, except a loss
resulting from willful misfeasance, bad faith, or gross negligence on
their part in the performance of their duties or from reckless disregard
by them of their obligations and duties thereunder.
BROKER COMMISSIONS
RJA may act as broker on behalf of the Fund in the purchase and sale
of portfolio securities. For the period December 29, 1994 (commencement
of operations) to October 31, 1995, the total dollar amount of brokerage
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<PAGE>
commission paid by the Fund were $43,552, of which $8,596 was paid to RJA.
Transactions in which the Fund used RJA as broker involved 12.08% of the
aggregate dollar amount of transactions involving the payment of
commissions, and 19.74% of the aggregate commissions paid by the Fund
during the period.
SHAREHOLDER PROPOSALS
As a general matter, the Fund does not hold regular annual or other
meetings of shareholders. Any shareholder who wishes to submit proposals
to be considered at a special meeting of the Fund's shareholders should
send such proposals to the Fund at 880 Carillon Parkway, St. Petersburg,
Florida 33733, so as to be received a reasonable time before the proxy
solicitation for that meeting is made.
Shareholder proposals that are submitted in a timely manner will not
necessarily be included in the Fund's proxy materials. Inclusion of such
proposals is subject to limitations under the federal securities laws.
OTHER BUSINESS
Management knows of no business to be presented to the Meeting other
than the matters set forth in this Proxy Statement, but should any other
matter requiring a vote of shareholders arise, the proxies will vote
thereon according to their best judgment in the interests of the Fund.
By the Order of the Board of Trustees,
CLIFFORD J. ALEXANDER
Secretary
March 25, 1996
IT IS IMPORTANT THAT YOU EXECUTE AND RETURN YOUR PROXY PROMPTLY.
- 8 -
<PAGE>
APPENDIX A
Dreman acts as investment adviser or subadviser to the following
mutual funds (or series of mutual funds) with similar investment
objectives to the Heritage Series Trust - Value Equity Fund:
Assets as of Advisory or
2/29/96 Subadvisory Fee
------------- ---------------
Kemper-Dreman Fund, Inc. (KDFI)
Kemper-Dreman Contrarian Fund $ 35 million 0.75%*
KDFI --
Dreman High Return Fund $145 million 0.75%*
The Legend Fund, Inc. --
Dreman Value Portfolio
(Subadviser) $16 million 0.50%
Kemper Value Plus Growth Fund,
Inc.
(Subadviser) $16 million 0.25%
Kemper Horizon Fund, Inc.
(Subadviser) $9 million 0.25%
______________
* A portion of fee may be waived as a result of expense limitations.
<PAGE>
PROXY
-----
March 25, 1996
Dear Shareholder:
The enclosed proxy materials relate to a special meeting of the
shareholders of the Heritage Series Trust - Value Equity Fund ("Fund") to
be held on Tuesday, May 24, 1996. The purpose of this meeting is to seek
shareholder approval of a Subadvisory Agreement under which Dreman Value
Advisors, Inc. ("Dreman") would become an additional investment subadviser
of the Fund. Under the proposed agreement, Dreman would be compensated by
Heritage Asset Management, Inc. ("Heritage"), the Fund's investment
adviser, and not by the Fund. Adding Dreman as an investment subadviser
of the Fund would allow Christian C. Bertelsen, who has been the Fund's
portfolio manager since its inception in late 1994, to continue in that
role. Mr. Bertelsen became Chief Investment Officer of Dreman on March 1,
1996.
Heritage has recommended, and the Fund's Board of Trustees has approved,
the appointment of Dreman as subadviser to the Fund. Dreman, an
investment management firm that provides investment advisory services to
retail and institutional clients and registered investment companies,
currently has assets under management of approximately $1.8 billion.
Please take the time to review the enclosed proxy statement and vote your
shares today by signing and returning the proxy ballot below. Your prompt
attention to this matter will enable the Fund to avoid the expenses of
further proxy solicitations.
Very truly yours,
Stephen G. Hill
President
Heritage Series Trust
--------------------------------------------------------------------------
The undersigned hereby appoints as proxies Stephen G. Hill, K.C. Clark and
Donald H. Glassman, each with the power of substitution, to vote for the
undersigned all shares of beneficial interest of the undersigned at the
Special Meeting of Shareholders on May 24, 1996 and any adjournment
thereof with all the power the undersigned would have if personally
present. The shares represented by this proxy will be voted as
instructed. Unless indicated to the contrary, this proxy shall be deemed
to indicate authority to vote "FOR" all proposals. This proxy is
solicited on behalf of the Board of Trustees.
Please vote by placing an "X" in the appropriate space below, date and
sign this proxy. Return it in the enclosed prepaid envelope.
<PAGE>
The Board of Trustees recommends a vote "FOR":
1. Approval of the proposed Investment Subadvisory Agreement
between Heritage Asset Management, Inc. and Dreman Value Advisors,
Inc. with respect to the Heritage Series Trust - Value Equity Fund.
FOR _______ AGAINST _______ ABSTAIN______
If shares are held jointly, each shareholder
named should sign; if only one signs, his or
her signature will be binding. If the
shareholder is a corporation, the President
or Vice President should sign in his or her
own name, indicating title. If the share-
holder is a partnership, a partner should
sign in his or her own name, indicating that
he or she is a "Partner."
____________________________________________
Signature
____________________________________________
Signature
Date: ______________________________________
<PAGE>
