SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
The Diversified Investors Funds Group - Diversified Investors
Equity Growth Fund
(Name of Registrant as Specified In Its Charter)
Toby R. Serkin
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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>
BOS-BUS:354378.1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X]
Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting
Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Diversified Investors Portfolios - Equity
Growth Portfolio
(Name of Registrant as Specified In Its Charter)
Toby R. Serkin
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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>
BOS-BUS:354378.1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X]
Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting
Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Diversified Investors Variable Funds - Diversified Investors
Variable Funds Equity Growth Subaccount
(Name of Registrant as Specified In Its Charter)
Toby R. Serkin
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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>
BOS-BUS:354378.1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Act of 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential,
for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X]
Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting
Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Keynote Series Account- Keynote Equity Growth
Subaccount
(Name of Registrant as Specified In Its Charter)
Toby R. Serkin
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] 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:
THE DIVERSIFIED INVESTORS FUNDS GROUP
4 Manhattanville Road
Purchase, New York 10577
January 27, 1997
Dear Shareholder:
On February 28, 1997 at 9:00 a.m. (Eastern time) we will hold a special meeting
of shareholders of Diversified Investors Equity Growth Fund (the "Fund"), a
series of The Diversified Investors Funds Group (the "Trust"), to vote on
important proposals relating to the Fund.
VOTING ONLY TAKES A FEW MINUTES - PLEASE RESPOND PROMPTLY.
As a shareholder, you cast one vote for each share that you own. Every
shareholder's vote is important, no matter how many shares you own.
Please take a few moments to read the enclosed materials and then cast your
vote on the enclosed proxy card. Items 1, 2 and 3 have been carefully
considered by the Board of Trustees of the Trust, which is responsible for
protecting your interests as a shareholder. The Board of Trustees of the Trust
believes that the proposals are fair and reasonable and recommends that you
vote in favor of the proposals.
The proposals you will vote on for the Fund are summarized below. Complete
information is contained in the enclosed Proxy Statement.
ITEM 1. To consider and vote on approval of a new Investment
Subadvisory Agreement between Diversified Investment
Advisors, Inc. and Chancellor LGT Asset Management, Inc.
ITEM 2. To consider and vote on approval of an Amendment to the
Investment Advisory Agreement between Equity Growth Portfolio,
a series of Diversified Investors Portfolios, and Diversified
Investment Advisors, Inc.
ITEM 3. To consider and vote on ratification of the selection of
Coopers & Lybrand L.L.P. as the independent certified public
accountants of the Fund and Equity Growth Portfolio, a series
of Diversified Investors Portfolios.
ITEM 4. To transact such other business as may properly come before
the Special Meeting of Shareholders and any adjournments
thereof.
After you have voted on Items 1, 2, and 3, please be sure to SIGN YOUR PROXY
CARD AND RETURN IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
This is your opportunity to voice your opinion on matters affecting the Fund.
Your participation is extremely important, no matter how many or how few shares
you own.
We appreciate your prompt response. Thank you.
Sincerely,
Robert F. Colby
Secretary
<PAGE>
DIVERSIFIED INVESTORS EQUITY GROWTH FUND
a series of The Diversified Investors Funds Group
4 Manhattanville Road
Purchase, New York 10577
Telephone: (914) 697-8000
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held February 28, 1997
A Special Meeting of Shareholders of DIVERSIFIED INVESTORS EQUITY GROWTH FUND
(the "Fund"), a series of The Diversified Investors Funds Group (the "Trust"),
will be held at the offices of Diversified Investment Advisors, Inc., 4
Manhattanville Road, Purchase, New York 10577, on February 28, 1997 at 9:00
a.m., Eastern time, for the following purposes:
ITEM 1. To consider and vote on approval of a new Investment
Subadvisory Agreement between Diversified Investment Advisors,
Inc. and Chancellor LGT Asset Management, Inc.
ITEM 2. To consider and vote on approval of an Amendment to the
Investment Advisory Agreement between Equity Growth Portfolio,
a series of Diversified Investors Portfolios, and Diversified
Investment Advisors, Inc.
ITEM 3. To consider and vote on ratification of the selection of
Coopers & Lybrand L.L.P. as the independent certified public
accountants of the Fund and Equity Growth Portfolio, a series
of Diversified Investors Portfolios.
ITEM 4. To transact such other business as may properly come before
the Special Meeting of Shareholders and any adjournments
thereof.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT YOU VOTE IN FAVOR OF ITEMS
1, 2 AND 3.
Only shareholders of record on January 13, 1997 will be entitled to vote at the
Special Meeting of Shareholders and at any adjournments thereof.
Robert F. Colby, Secretary
January 27, 1997
YOUR VOTE IS IMPORTANT. WE WOULD APPRECIATE YOU PROMPTLY VOTING, SIGNING AND
RETURNING THE ENCLOSED PROXY, WHICH WILL HELP AVOID THE ADDITIONAL EXPENSES OF
A SECOND SOLICITATION. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND
IS PROVIDED FOR YOUR CONVENIENCE.
<PAGE>
DIVERSIFIED INVESTORS EQUITY GROWTH FUND
a series of The Diversified Investors Funds Group
4 Manhattanville Road
Purchase, New York 10577
Telephone: (914) 697-8000
PROXY STATEMENT
This Proxy Statement and Notice of Special Meeting with accompanying form of
proxy are being mailed by the Board of Trustees of The Diversified Investors
Funds Group (the "Trust") on behalf of Diversified Investors Equity Growth Fund
(the "Fund"), a series of the Trust, on or about January 27, 1997. They are
being furnished in connection with the solicitation of proxies by the Board of
Trustees of the Trust for use at the special meeting of shareholders of the
Fund, or any adjournment thereof, to be held at the offices of Diversified
Investment Advisors, Inc., 4 Manhattanville Road, Purchase, New York 10577, on
February 28, 1997, 9:00 a.m., Eastern time (the "Meeting"), for the purposes
set forth in the accompanying Notice of Special Meeting.
The Fund is one of the thirteen series of the Trust, which is a registered
investment company organized as a Massachusetts business trust under a
Declaration of Trust dated as of April 23, 1993. The Fund was designated as a
separate series of the Trust on April 23, 1993. The mailing address of the
Trust is 4 Manhattanville Road, Purchase, New York 10577. The Fund seeks to
achieve its investment objective by investing all of its investable assets in
Equity Growth Portfolio (the "Portfolio"), a series of Diversified Investors
Portfolios (the "Portfolio Series"), a registered investment company. The
Portfolio has the same investment objective as the Fund. Shareholders of the
Fund are being asked to vote on certain matters with respect to the Portfolio
because the Portfolio has called a meeting of its investors to vote on such
matters.
The Fund commenced operations on July 1, 1994. The annual report for the Fund
for the period ended December 31, 1995, including audited financial statements,
and the semi-annual report for the Fund for the period ended June 30, 1996 have
previously been sent to shareholders and are available upon request without
charge by contacting Catharine A. Mohr, Diversified Investors Fund Group, 4
Manhattanville Road, Purchase, New York 10019 or by calling the Trust toll-free
at (800) 926-0044.
MANNER OF VOTING PROXIES AND VOTE REQUIRED
If the accompanying form of proxy is executed properly and returned, shares
represented by it will be voted at the Meeting in accordance with the
instructions on the proxy. If no instructions are specified, shares will be
voted for proposed Items 1, 2 and 3. If the enclosed form of proxy is executed
and returned, it may nevertheless be revoked prior to its exercise by a signed
writing delivered at the Meeting or filed with the Secretary of the Trust.
If sufficient votes to approve the proposed Items 1, 2 and 3 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 those shares voted at the
Meeting. When voting on a proposed adjournment, the persons named as proxies
will vote all shares that they are entitled to vote with respect to each Item
for the proposed adjournment, unless directed to disapprove the Item, in which
case such shares will be voted against the proposed adjournment.
The presence in person or by proxy of the holders of a majority of the
outstanding shares of the Fund entitled to vote is required to constitute a
quorum at the Meeting. For purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes" (that
<PAGE>
is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owner or other persons entitled to
vote shares on a particular matter with respect to which the brokers or
nominees do not have discretionary power) will be treated as shares that are
present but which have not been voted. For this reason, abstentions and broker
"non-votes" will have the effect of a "no" vote for purposes of obtaining the
requisite approval of the proposals.
The cost of soliciting proxies in the accompanying form, including the fees of
a proxy soliciting agent, will be borne by the Fund. In addition to
solicitation by mail, proxies may be solicited by the Board of Trustees of the
Trust, officers, and regular employees and agents of the Trust without
compensation therefor. The Fund may reimburse brokerage firms and others for
their expenses in forwarding proxy materials to the beneficial owners and
soliciting them to execute the proxies.
The close of business on January 13, 1997 has been fixed as the Record Date for
the determination of shareholders entitled to notice of and to vote at the
Meeting. 559,780.293 shares of the Fund, par value $0.00001 per share, were
outstanding as of the close of business on the Record Date. Shareholders of
record at the close of business on the Record Date will be entitled to one vote
for each share held.
INTERESTS OF CERTAIN PERSONS
As of the Record Date, no Trustees or officers of the Trust owned beneficially
or had the right to vote any outstanding shares of the Fund.
As of the Record Date, no persons owned of record or had the right to vote 5%
or more of the outstanding shares of the Fund.
SUBMISSION OF CERTAIN PROPOSALS
The Trust is a Massachusetts business trust and as such is not required to hold
annual meetings of shareholders, although special meetings may be called for
the Fund, or for the Trust as a whole, for purposes such as electing Trustees
or removing Trustees, changing fundamental policies, or approving an advisory
contract. Shareholder proposals to be presented at any subsequent meeting of
shareholders must be received by the Trust at the Trust's office within a
reasonable time before the proxy solicitation is made.
BACKGROUND
As disclosed in the Fund's Prospectus, the Fund is a SpokeSM fund within a
two-tier, master/feeder mutual fund structure, also referred to as a Hub and
Spoke(R) structure. Hub and Spoke(R) is a registered service mark of Signature
Financial Group, Inc. In such Hub and Spoke(R) structure, the Fund, unlike
other mutual funds which directly acquire and manage their own portfolios of
securities, seeks to achieve its investment objective by investing all of its
investable assets in the Portfolio. The Portfolio has the same investment
objective as the Fund.
Diversified Investment Advisors, Inc., a Delaware corporation (the "Adviser"),
4 Manhattanville Road, Purchase, New York 10577, manages the assets of the
Portfolio pursuant to an Investment Advisory Agreement dated as of January 3,
1994 (the "Advisory Agreement"). The Advisory Agreement was most recently
approved by the Board of Trustees of the Portfolio Series, including a majority
of the Trustees who are not "interested persons," as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of any party to such
agreement (the "Independent Trustees") on November 7, 1995. Subject to the
terms of the Advisory Agreement, the Adviser is responsible for the management
of the Portfolio, selects, subject to the review and approval of the Board of
<PAGE>
Trustees of the Portfolio Series, an appropriate subadviser to make the
day-to-day investment selections for the Portfolio consistent with the
guidelines and directions set by the Adviser and the Board of Trustees of the
Portfolio Series and reviews such subadviser's continued performance.
Jundt Associates, Inc. ("Jundt") is a Minnesota corporation with principal
offices at 1550 Utica Avenue South, Suite 950, St. Louis Park, Minnesota 55416.
Prior to November 15, 1996, Jundt served as the investment subadviser of the
Portfolio pursuant to an Investment Subadvisory Agreement between Jundt and the
Adviser (the "Jundt Investment Subadvisory Agreement"). The Jundt Investment
Subadvisory Agreement was most recently approved by the Board of Trustees of
the Portfolio Series, including a majority of the Independent Trustees on
November 7, 1995.
At a meeting of the Board of Trustees of the Portfolio Series held on November
12, 1996, the Board reviewed, at the Adviser's request, certain investment
strategies for the Portfolio. As discussed in Item 1 below under the heading
"Evaluation by the Board of Trustees", the Board authorized the Adviser to
terminate the Jundt Investment Subadvisory Agreement and enter into a new
subadvisory agreement with Chancellor LGT Asset Management, Inc. ("Chancellor
LGT"). The Adviser terminated the Jundt Investment Subadvisory Agreement
effective November 15, 1996. The Adviser also entered into an Investment
Subadvisory Agreement with Chancellor LGT dated as of November 15, 1996 (the
"Chancellor LGT Investment Subadvisory Agreement").
In its negotiations with Chancellor LGT about the Chancellor LGT Investment
Subadvisory Agreement, the Adviser has agreed to pay Chancellor LGT a lower
subadvisory fee than that which was payable to Jundt under the Jundt Investment
Subadvisory Agreement. Because of this lower fee payable by the Adviser to
Chancellor LGT under the Chancellor LGT Investment Subadvisory Agreement, the
Adviser has agreed to lower the fee to be paid to it by the Portfolio under the
Advisory Agreement. The Adviser has not lowered its fee by the full amount of
the difference between the Chancellor LGT and Jundt subadvisory fees. At the
meeting of the Board of Trustees of the Portfolio Series held on November 12,
1996, the Board of Trustees authorized the Portfolio to enter into an Amendment
to the Advisory Agreement (the "Amendment") to reflect the lower fee payable by
the Portfolio to the Adviser for its services under the Advisory Agreement.
In accordance with the requirements of the 1940 Act, both the Chancellor LGT
Investment Subadvisory Agreement and the Amendment to the Advisory Agreement
must be approved by the holders of beneficial interests in the Portfolio. The
Portfolio and the Fund have agreed that the shareholders of the Fund will be
asked to vote on all matters on which the Fund is asked to vote as a holder of
a beneficial interest in the Portfolio. The Trust will cast all of the Fund's
votes with respect to the Chancellor LGT Investment Subadvisory Agreement and
the Amendment to the Advisory Agreement in the same proportion as the votes of
the Fund's shareholders cast at the Meeting on Items 1 and 2.
<PAGE>
ITEM 1. APPROVAL OR DISAPPROVAL OF CHANCELLOR LGT INVESTMENT
SUBADVISORY AGREEMENT
THE JUNDT AND THE CHANCELLOR LGT INVESTMENT SUBADVISORY AGREEMENTS
The terms of the Chancellor LGT Investment Subadvisory Agreement are similar to
those of the Jundt Investment Subadvisory Agreement, with the exception of the
identity of the service provider, the effective date and termination date and
the compensation payable to the service provider by the Adviser. A description
of the investment advisory fees to be paid to Chancellor LGT by the Adviser is
set forth below under the caption "Investment Advisory Fees." The Chancellor
LGT Investment Subadvisory Agreement became effective on November 15, 1996 and,
if approved by the vote of the holders of a "majority of the outstanding voting
securities" (as such term is defined below) of the Portfolio, will continue in
effect for a two-year period from November 15, 1996, and thereafter from year
to year, subject to approval annually in accordance with the 1940 Act. The
Chancellor LGT Investment Subadvisory Agreement may be terminated at any time
without the payment of any penalty by the Board of Trustees of the Portfolio
Series or by the vote of a "majority of the outstanding voting securities" of
the Portfolio or by the Adviser. The Chancellor LGT Investment Subadvisory
Agreement may also be terminated by Chancellor LGT upon 90 days' advance
written notice to the Adviser. The Chancellor LGT Investment Subadvisory
Agreement will also terminate automatically in the event of its "assignment"
(as defined in the 1940 Act).
Under the Chancellor LGT Investment Subadvisory Agreement, as under the Jundt
Investment Subadvisory Agreement, Chancellor LGT will furnish continuing
portfolio management services to the Portfolio, subject always to the
provisions of the 1940 Act and to the investment objectives, policies,
procedures and restrictions imposed by the Portfolio's then current
Registration Statement under the 1940 Act. Investment management decisions of
Chancellor LGT will be made by committee and not by managers individually.
Chancellor LGT will also provide the Adviser with such investment advice and
reports and data as are requested by the Adviser.
Like the Jundt Investment Subadvisory Agreement, the Chancellor LGT Investment
Subadvisory Agreement provides that Chancellor LGT shall be responsible only
for managing the assets of the Portfolio in good faith and in accordance with
investment guidelines, and shall have no responsibility whatsoever for, and
shall incur no liability on account of, (i) diversification, selection or
establishment of such investment guidelines, (ii) advice on, or management of,
any other assets for the Adviser, (iii) filing of any tax or information
returns or forms, withholding or paying any taxes, or seeking any exemption or
refund, (iv) registration with any government or agency, or (v) administration
of the plans and trusts investing through the Portfolio, and shall be
indemnified by the Adviser for any loss in carrying out the terms and
provisions of the agreement, including reasonable attorney's fees,
indemnification to brokers and commission merchants, fines, taxes, penalties
and interest. Chancellor LGT, however, shall be liable for any liability,
damages, or expenses of the Adviser arising out of the negligence, malfeasance
or violation of applicable law by it or any of its employees in providing
management under the Chancellor LGT Investment Subadvisory Agreement; and, in
such cases, the indemnification by the Adviser referred to above shall be
inapplicable.
Shareholders should refer to Exhibit A attached hereto for the complete terms
of the Chancellor LGT Investment Subadvisory Agreement, and the description of
the Chancellor LGT Investment Subadvisory Agreement set forth herein is
qualified in its entirety by the provisions of the Chancellor LGT Investment
Subadvisory Agreement as set forth in such Exhibit.
<PAGE>
INVESTMENT ADVISORY FEES
Under the Chancellor LGT Investment Subadvisory Agreement, the Adviser (not the
Portfolio) pays Chancellor LGT for its services on the basis of the annual fee
schedule set forth below:
Chancellor LGT Fee Schedule
.50% of the aggregate net assets of the Portfolio
applied to the first $50 million dollars
.30% of the aggregate net assets of the Portfolio
applied to the next $75 million dollars
.25% of the aggregate net assets of the Portfolio
applied to the next $75 million dollars
.20% of the aggregate net assets of the Portfolio
applied thereafter
Aggregate net assets are equal to the total market value of the Portfolio. Fees
will be calculated by multiplying the arithmetic average of the beginning and
ending monthly net assets in the Portfolio by the fee schedule and dividing by
twelve. The fee will be paid quarterly.
Under the Jundt Investment Subadvisory Agreement, the Adviser (not the
Portfolio) paid Jundt for its services on the basis of the annual fee schedule
set forth below:
Jundt Fee Schedule
September 24, 1993 through January 31, 1994:
.50% of aggregate net assets
February 1, 1994 and thereafter:
.625% of aggregate net assets or 50% of the Portfolio's asset
charge to participants if this charge exceeded 1.25%
Aggregate net assets were equal to the total market value of the Portfolio.
Fees were calculated monthly by multiplying the arithmetic average of the
beginning and ending monthly net assets of the Portfolio by the fee schedule
and dividing by twelve.
Fees were paid by the Adviser quarterly.
Approval of the Chancellor LGT Investment Subadvisory Agreement, by itself,
would have no effect upon the amount of advisory fees paid by the Portfolio to
the Adviser. The Adviser, not the Portfolio, pays investment advisory fees to
Chancellor LGT as a subadviser to the Portfolio. Chancellor LGT will receive
from the Adviser a lower level of compensation than the Adviser would have paid
to Jundt under the Jundt Investment Subadvisory Agreement. Because Chancellor
LGT will receive a lower level of fees from the Adviser and because the
Adviser's fees will not decrease by an equal amount even if the Amendment to
the Advisory Agreement described under Item 2 is approved, the Adviser will be
able to retain more of the fees paid to it by the Portfolio.
Fees accrued to Jundt for services provided pursuant to the Jundt Investment
Subadvisory Agreement for the period from January 1, 1996 to December 31, 1996
were $1,178,949.10. Neither Jundt nor any affiliated person of Jundt nor any
affiliated person of such person received any other fees from the Adviser or
from the Portfolio for services provided to the Portfolio during the fiscal
year of the Portfolio ended December 31, 1996. There were no other material
payments by the Adviser or the Portfolio to Jundt, any affiliated person of
<PAGE>
Jundt, or any affiliated person of such person, during the fiscal year of the
Portfolio ended December 31, 1996.
Fees that would have accrued to Chancellor LGT for services provided pursuant
to the Chancellor LGT Investment Subadvisory Agreement for the period from
January 1, 1996 to December 31, 1996, had the Chancellor LGT Investment
Subadvisory Agreement been in effect for such period, would have been
$634,079.64, a 46% decrease in the amount of fees paid to Jundt for such period
under the Jundt Investment Subadvisory Agreement.
As of December 31, 1996, the Portfolio had net assets of $299,127,686.
For the most recently completed fiscal year of the Portfolio, no commissions
were paid to any broker that (i) is an affiliated person of the Portfolio, or
(ii) is affiliated with any such person described in clause (i) of this
paragraph, or (iii) an affiliated person of which is an affiliated person of
the Portfolio, the Adviser, Jundt, Chancellor LGT, or the administrator or
distributor of the Portfolio.
INFORMATION REGARDING CHANCELLOR LGT
Chancellor LGT, a California corporation, was formed in 1996 as a result of the
merger between LGT Asset Management, Inc., a wholly-owned subsidiary of
Liechtenstein Global Trust AG ("LGT"), and Chancellor Capital Management, Inc.,
a wholly-owned subsidiary of LGT which was acquired by LGT in 1996. Chancellor
LGT is a wholly-owned subsidiary of LGT. The principal address of Chancellor
LGT is 1166 Avenue of the Americas, New York, New York 10036. LGT is comprised
of Chancellor LGT and its worldwide affiliates, including LGT Bank in
Liechtenstein, formerly Bank of Liechtenstein. LGT is a provider of global
asset management and private banking products and services to individual and
institutional investors. LGT is controlled by the Prince of Liechtenstein
Foundation, which serves as the parent organization for the various business
enterprises of the Princely Family of Liechtenstein. The principal business
address of the Prince of Liechtenstein Foundation is Herrengasse 12, FL-9490,
Vaduz, Liechtenstein. As of December 31, 1996, total assets under management by
Chancellor LGT for clients that are managed in a similar manner as the
Portfolio is expected to be managed by Chancellor LGT were approximately $2.1
billion, none of which were assets of registered investment companies.
Listed below are the names, positions and principal occupations of the
directors and the principal executive officer of Chancellor LGT. The principal
business address of each director and principal executive officer, as it
relates to his or her duties at Chancellor LGT, is the same as that of
Chancellor LGT, unless noted below.
POSITION AND OFFICES WITH
NAME CHANCELLOR LGT OTHER EMPLOYMENT
David A. Minella Chairman of the Board Mr. Minella is Chairman of
the Board and President of
LGT Asset Management, Inc.
("LGTAM"), a Director of LGT,
President of the Asset
Management Division of LGT
and a Director of Bank of
Liechtenstein ("BIL").
H.S.H. Prince Director H.S.H. Prince Philipp is
Philipp von und zu Chairman and Chief Executive
Liechtenstein Officer of LGT and BIL and a
Liechtenstein Global Director of LGTAM.
Trust, AG
Herrengasse 12
FL-9490
Vaduz,
Liechtenstein
Warren E. Shaw Director, Chief Mr. Shaw is Director and
Executive Officer Global Chief Investment
and Chief Investment Officer of the Asset
Officer Management Division of LGT
and LGTAM.
Penny Zuckerwise Director, President Ms. Zuckerwise is a Director
and Chief Operating and Chief Operating Officer
Officer of LGTAM and a Director of
the Asset Management Division
of LGT.
Ellen H. Adams Director and Head of Ms. Adams is a Director and
North American Equities Head of North American
Equities of LGTAM.
Nina Lesavoy Director and Head of Ms. Lesavoy as a Director and
North American Head of North American
Institutional Institutional Distribution of
Distribution LGTAM and a Director of the
Asset Management Division of
LGT.
Jeffrey M. Trongone Director and Chief Mr. Trongone is a Director
Financial Officer and Chief Financial Officer
of LGTAM.
Rachel L. Arfa Director and Chief Ms. Arfa is the Chief Legal
Legal Officer Officer of LGTAM.
Merry Quackenbush Director and Head of Ms. Quackenbush is the Head
Business Integration, of Business Integration,
Strategy and Planning of
Strategy and Planning LGTAM.
John G. Greenwood Director and Chief Mr. Greenwood is Chief
Chancellor LGT Economist Economist of LGTAM.
Asset Management,
Inc.
50 California Street
San Francisco, CA
94111
There have been no purchases or sales of any interests in Chancellor LGT or LGT
or any of Chancellor LGT's or LGT's subsidiaries since the beginning of the
most recently completed fiscal year by any of the Trustees of the Portfolio
Series or any of the Trustees of the Trust. No officer or Trustee of the
Portfolio Series or the Trust is an officer, employee, director or shareholder
of Chancellor LGT or LGT or has any other material direct or indirect interest
in Chancellor LGT or LGT or any other person controlling, controlled by or
under common control with Chancellor LGT. Since January 1, 1996, none of the
Trustees of the Portfolio Series or the Trust has had any material interest,
<PAGE>
direct or indirect, in any material transactions, or in any material proposed
transactions, to which Chancellor LGT, LGT or any subsidiary of Chancellor LGT
or LGT was or is to be a party.
Chancellor LGT does not manage the assets of any other investment companies in
the manner in which the Portfolio is expected to be managed.
THE EVALUATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Portfolio Series authorized the Adviser to
terminate the Jundt Investment Subadvisory Agreement and approved the
Chancellor LGT Investment Subadvisory Agreement at a meeting held on November
12, 1996.
Before authorizing the Adviser to terminate the Jundt Investment Subadvisory
Agreement or approving the Chancellor LGT Investment Subadvisory Agreement, the
Board of Trustees of the Portfolio Series considered information with respect
to Jundt's performance under the Jundt Investment Subadvisory Agreement and
whether the Chancellor LGT Investment Subadvisory Agreement was in the best
interests of the Portfolio and its holders of beneficial interests. The
Trustees noted that since Jundt had been serving as subadviser to the
Portfolio, the Portfolio had underperformed the benchmarks selected for the
Portfolio. The Trustees considered the nature and quality of services expected
to be provided by Chancellor LGT and reviewed and discussed information
regarding fees, expense ratios and performance. In evaluating Chancellor LGT's
ability to provide services to the Portfolio, the Trustees considered
information as to Chancellor LGT's business organization, financial resources,
personnel and other matters. The Trustees compared the investment performance
of certain accounts advised by Chancellor LGT having investment objectives
similar to the Portfolio against various benchmarks and to the investment
performance of the Portfolio's assets as managed by Jundt. The Trustees also
compared the amount of fees to be paid to Chancellor LGT by the Adviser under
the Chancellor LGT Investment Subadvisory Agreement to the amount of fees paid
to Jundt by the Adviser under the Jundt Investment Subadvisory Agreement.
The Board of Trustees of the Portfolio Series also considered that under
circumstances in which best price and execution may be obtained from more than
one broker or dealer, Chancellor LGT may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and other
information to Chancellor LGT. Although certain research, market and
statistical information from brokers and dealers can be useful to the Portfolio
and Chancellor LGT, Chancellor LGT has advised that such information is, in its
opinion, only supplementary to Chancellor LGT's own research activities and the
information must still be analyzed, weighed and reviewed by Chancellor LGT. It
was noted that such information may be useful to Chancellor LGT in providing
services to clients other than the Portfolio. Conversely, it was noted that
information provided to Chancellor LGT by brokers and dealers through whom
other clients of Chancellor LGT effect securities transactions may be useful to
Chancellor LGT in providing services to the Portfolio.
Based upon its review, the Board of Trustees of the Portfolio Series concluded
that (a) for relevant periods Jundt's investment performance underperformed
both the relevant benchmarks and Chancellor LGT's performance in managing
assets of equity growth clients, (b) the terms of the Chancellor LGT Investment
Subadvisory Agreement are reasonable, fair and in the best interests of the
Portfolio and its holders of beneficial interests, and (c) the fees provided in
the Chancellor LGT Investment Subadvisory Agreement are fair and reasonable in
light of the usual and customary charges made by others for services of the
same nature and quality. Accordingly, after consideration of the above factors,
and such other factors and information as it deemed relevant, the Board of
Trustees of the Portfolio Series, including all of the Independent Trustees,
unanimously authorized the Adviser to terminate the Jundt Investment
<PAGE>
Subadvisory Agreement, approved the Chancellor LGT Investment Subadvisory
Agreement and voted to recommend its approval by the holders of beneficial
interests in the Portfolio.
REQUIRED VOTE
Approval of the Chancellor LGT Investment Subadvisory Agreement will require
the approval of "a majority of the outstanding voting securities" (as defined
below) of the Portfolio present in person or represented by proxy at a meeting
of the holders of the beneficial interests in the Portfolio. Under the 1940
Act, a "majority of the outstanding voting securities" of an issuer means the
affirmative vote by the lesser of (a) 67% or more of the issuer's voting
securities present at a meeting if the holders of more than 50% of the issuer's
outstanding voting securities are present in person or represented by proxy or
(b) more than 50% of the issuer's outstanding voting securities (a "1940 Act
Majority"). The Portfolio and the Fund have agreed that the shareholders of the
Fund will be asked to vote on all matters on which the Fund is asked to vote as
a holder of a beneficial interest in the Portfolio. The Trust will cast all of
the Fund's votes with respect to the Chancellor LGT Investment Subadvisory
Agreement in the same proportion as the votes of the Fund's shareholders cast
at the Meeting on this Item 1. The percentage of the Fund's votes representing
shareholders of the Fund not voting at the Meeting will be voted by the Trust
in the same proportion as those cast by shareholders of the Fund who do, in
fact, vote.
Because there are holders of beneficial interests in the Portfolio besides the
Fund, it is possible that the Chancellor LGT Investment Subadvisory Agreement
will not be approved by the requisite vote, even if the Chancellor LGT
Investment Subadvisory Agreement is approved by a 1940 Act Majority of the
outstanding voting securities of the Fund. It is also possible that the
Chancellor LGT Investment Subadvisory Agreement will be approved by the
requisite vote, even if the Chancellor LGT Investment Subadvisory Agreement is
not approved by a 1940 Act Majority of the outstanding voting securities of the
Fund.
In the event that the Chancellor LGT Investment Subadvisory Agreement does not
receive the requisite shareholder approval, the Adviser would negotiate a new
investment subadvisory agreement with a different advisory organization or make
other appropriate arrangements, in either event subject to approval in
accordance with the 1940 Act.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND
VOTE FOR APPROVAL OF THE CHANCELLOR LGT INVESTMENT SUBADVISORY AGREEMENT.
ITEM 2. APPROVAL OR DISAPPROVAL OF AN AMENDMENT
TO THE ADVISORY AGREEMENT
THE AMENDMENT TO THE ADVISORY AGREEMENT
The proposed Amendment to the Advisory Agreement lowers the compensation
payable to the Adviser by the Portfolio under the Advisory Agreement. Under the
Advisory Agreement as currently in effect, the Portfolio pays the Adviser for
its services a fee accrued daily and payable monthly at an annual rate equal to
.70% of the Portfolio's average daily net assets. Under the Advisory Agreement
as amended by the Amendment, the Portfolio will pay the Adviser for its
services a fee accrued daily and payable monthly at an annual rate equal to
.62% of the Portfolio's average daily net assets.
The proposed Amendment does not pass through to investors the entire benefit to
the Adviser of the lower fee payable by the Adviser to Chancellor LGT under the
Chancellor LGT Investment Subadvisory Agreement than that which was payable by
<PAGE>
the Adviser to Jundt under the Jundt Investment Subadvisory Agreement. As a
result, the Adviser will retain more of the fees payable to it by the Portfolio
under the Advisory Agreement as amended by the Amendment.
Fees accrued to the Adviser for services provided pursuant to the Advisory
Agreement for the period from January 1, 1996 to December 31, 1996 were
$1,730,719. Neither the Adviser nor any affiliated person of the Adviser nor
any affiliated person of such person received any other fees from the Portfolio
for services provided to the Portfolio during the fiscal year of the Portfolio
ended December 31, 1996. There were no other material payments by the Portfolio
to the Adviser, any affiliated person of the Adviser, or any affiliated person
of such person, during the fiscal year of the Portfolio ended December 31,
1996.
Fees that would have accrued to the Adviser for services provided pursuant to
the Advisory Agreement as amended by the Amendment for the period from January
1, 1996 to December 31, 1996, had the Amendment to the Advisory Agreement been
in effect for such period, would have been $1,565,188, a 10% decrease in the
amount of fees paid to the Adviser for such period under the Advisory
Agreement.
All other terms of the Advisory Agreement will remain the same. The Adviser's
obligations under the Advisory Agreement will remain the same in all respects
and there will be no reduction in the services provided by the Adviser to the
Portfolio. The Advisory Agreement became effective on January 3, 1994 and may
be terminated at any time without the payment of any penalty by the Board of
Trustees of the Portfolio Series or by the vote of a "majority of the
outstanding voting securities" of the Portfolio on 60 days' written notice to
the Adviser or by the Adviser on 90 days' written notice to the Portfolio. The
Advisory Agreement will also terminate automatically in the event of its
"assignment" (as defined in the 1940 Act).
Shareholders should refer to Exhibit B attached hereto for the complete terms
of the Amendment to the Advisory Agreement, and the description of the
Amendment to the Advisory Agreement set forth herein is qualified in its
entirety by the provisions of the Amendment to the Advisory Agreement as set
forth in such Exhibit.
THE EVALUATION BY THE BOARD OF TRUSTEES
The Board of Trustees of the Portfolio Series approved the Amendment to the
Advisory Agreement at a meeting held on November 12, 1996.
Before approving the Amendment to the Advisory Agreement, the Board of Trustees
of the Portfolio Series considered information with respect to Diversified's
performance under the Advisory Agreement and whether the Advisory Agreement, as
amended by the Amendment, was in the best interests of the Portfolio and its
holders of beneficial interests. The Trustees considered the nature and quality
of services provided by Diversified under the Advisory Agreement and the
representations from Diversified that the nature and quality of such services
provided by Diversified would remain the same under the Advisory Agreement as
amended by the Amendment. The Trustees considered information as to
Diversified's business organization, financial resources, personnel and other
matters. The Trustees also reviewed and discussed information regarding the
expense ratios and performance of the Portfolio, as well as comparative fee
data for other mutual funds with similar investment objectives. The Trustees
also considered the amount of fees to be paid to the Adviser under the Advisory
Agreement as amended by the Amendment in relation to the amount of fees to be
paid to Chancellor LGT by the Adviser under the Chancellor LGT Investment
Subadvisory Agreement.
Based upon its review, the Board of Trustees of the Portfolio Series concluded
that (a) terms of the Amendment to the Advisory Agreement are reasonable, fair
and in the best interests of the Portfolio and its holders of beneficial
interests, and (b) the fees provided in the Advisory Agreement as amended by
<PAGE>
the Amendment are fair and reasonable in light of the usual and customary
charges made by others for services of the same nature and quality.
Accordingly, after consideration of the above factors, and such other factors
and information as it deemed relevant, the Board of Trustees of the Portfolio
Series, including all of the Independent Trustees, unanimously approved the
Amendment to the Advisory Agreement and voted to recommend its approval by the
holders of beneficial interests in the Portfolio.
REQUIRED VOTE
Approval of the Amendment to the Advisory Agreement will require the approval
of a 1940 Act Majority of the outstanding voting securities of the Portfolio
present in person or represented by proxy at a meeting of the holders of the
beneficial interests of the Portfolio. The Portfolio and the Fund have agreed
that the shareholders of the Fund will be asked to vote on all matters on which
the Fund is asked to vote as a holder of a beneficial interest in the
Portfolio. The Trust will cast all of the Fund's votes with respect to the
Amendment to the Advisory Agreement in the same proportion as the votes of the
Fund's shareholders cast at the Meeting on this Item 2. The percentage of the
Fund's votes representing shareholders of the Fund not voting at the Meeting
will be voted by the Trust in the same proportion as those cast by shareholders
of the Fund who do, in fact, vote.
Because there are holders of beneficial interests in the Portfolio besides the
Fund, it is possible that the Amendment to the Advisory Agreement will not be
approved by the requisite vote, even if the Amendment to the Advisory Agreement
is approved by a 1940 Act Majority of the outstanding voting securities of the
Fund. It is also possible that the Amendment to the Advisory Agreement will be
approved by the requisite vote, even if the Amendment to the Advisory Agreement
is not approved by a 1940 Act Majority of the outstanding voting securities of
the Fund.
Adoption of the Amendment to the Advisory Agreement pursuant to this Item 2 is
contingent upon the approval of the Chancellor LGT Investment Subadvisory
Agreement under Item 1.
In the event that the Amendment to the Advisory Agreement does not receive the
requisite shareholder approval or in the event that the Chancellor LGT
Investment Subadvisory Agreement is not approved, the Adviser will continue to
provide advisory services to the Portfolio under the Advisory Agreement as
currently in effect.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF THE FUND
VOTE FOR APPROVAL OF THE AMENDMENT TO THE ADVISORY AGREEMENT.
ITEM 3. RATIFICATION OR REJECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
It is intended that proxies cast by the Fund's shareholders not limited to
the contrary will be voted in favor of ratifying the selection, by a majority
of the Trustees of the Trust who are not "interested persons" (as that term is
defined in the 1940 Act) of the Trust, of Coopers & Lybrand L.L.P. under
Section 32(a) of the 1940 Act as independent public accountants to certify
every financial statement of the Fund required by any law or regulation to be
certified by independent public accountants and filed with the Securities and
Exchange Commission (the "SEC") in respect of all or any part of the fiscal
year of the Fund ending December 31, 1997. Coopers & Lybrand L.L.P. has no
direct or material indirect interest in the Fund.
<PAGE>
Coopers & Lybrand L.L.P. has served as the Fund's independent certified
public accountants since the commencement of operations on July 1, 1994,
providing audit services and consultation with respect to the preparation of
filings with the SEC.
Coopers & Lybrand L.L.P. has also served as the Portfolio's independent
certified public accountants since the commencement of operations on January 3,
1994. The Portfolio has requested the ratification by its holders of beneficial
interests (including the Fund) of such selection. Therefore, the Fund's
shareholders are also being asked to ratify the selection of Coopers & Lybrand
L.L.P. as independent certified public accountants of the Portfolio. It is
intended that proxies cast by the Fund's shareholders not voted to the contrary
will be voted in favor of ratifying the selection of Coopers & Lybrand L.L.P.
under Section 32(a) of the 1940 Act as independent public accountants for the
Portfolio, to certify every financial statement of the Portfolio required by
any law or regulation to be certified for the fiscal year ending December 31,
1997. Coopers & Lybrand L.L.P. has no direct or material indirect interest in
the Portfolio.
Representatives of Coopers & Lybrand L.L.P. are not expected to be present
at the Meeting.
REQUIRED VOTE
Ratification of the selection of Coopers & Lybrand L.L.P. as the
independent certified public accountants of the Fund will require a 1940 Act
Majority of the outstanding voting securities of the Fund, present in person or
represented by proxy at the Meeting.
Ratification of the selection of Coopers & Lybrand L.L.P. as the
independent certified public accountants of the Portfolio will require the vote
of a 1940 Act Majority of the outstanding voting securities of the Portfolio
present in person or represented by proxy at a meeting of the holders of the
beneficial interests in the Portfolio. The Portfolio and the Fund have agreed
that the shareholders of the Fund will be asked to vote on all matters on which
the Fund is asked to vote as a holder of a beneficial interest in the
Portfolio. The Trust will cast all of the Fund's votes with respect to the
selection of Coopers & Lybrand L.L.P. as independent certified public
accountants of the Portfolio in the same proportion as the votes of the Fund's
shareholders cast at the Meeting on this Item 3. The percentage of the Fund's
votes representing shareholders of the Fund not voting at the Meeting will be
voted by the Trust in the same proportion as those cast by shareholders of the
Fund who do, in fact, vote.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF
THE FUND VOTE FOR RATIFICATION OF THE SELECTION OF COOPERS & LYBRAND L.L.P. AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FUND AND FOR THE PORTFOLIO.
ITEM 4. OTHER BUSINESS
The management of the Trust knows of no other business to be presented at the
Meeting. If any additional matters should be properly presented, it is intended
that the enclosed proxy (if not limited to the contrary) will be voted in
accordance with the judgment of the persons named in such proxy.
<PAGE>
ADDITIONAL INFORMATION
The Fund's Distributor is Diversified Investors Securities Corp., 4
Manhattanville Road, Purchase, New York 10577. The Fund's Administrator and
Transfer Agent is Diversified Investment Advisors, Inc., 4 Manhattanville Road,
Purchase, New York 10577.
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
By Order of the Board of Trustees,
Robert F. Colby, Secretary
January 27, 1997
<PAGE>
EXHIBIT A
INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, dated as of November 15, 1996, by and
between Diversified Investment Advisors, Inc., a Delaware corporation
("Diversified") and Chancellor LGT Asset Management, Inc. ("Subadvisor").
WITNESSETH:
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940 and has been
retained to provide investment advisory services to the Equity Growth
Portfolio, a series of Diversified Investors Portfolios ("Portfolio"), a
diversified open-end management investment company registered under the
Investment Company Act of 1940 ("1940 Act"); and
WHEREAS, Diversified desires to retain the Subadvisor to furnish it with
portfolio management services in connection with Diversified's investment
advisory activities on behalf of the Portfolio, and the Subadvisor is willing
to furnish such services to Diversified;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
of the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Subadvisor. In accordance with and subject to the
Investment Advisory Agreement between the Portfolio and Diversified, attached
hereto as Schedule A (the "Advisory Agreement"), Diversified hereby appoints
the Subadvisor to perform the portfolio investment advisory services described
herein for the investment and reinvestment of the Portfolio's assets, subject
to the control and direction of Diversified and the Portfolio's Board of
Trustees, for the period and on the terms hereinafter set forth.
The Subadvisor shall provide Diversified with such investment advice and
supervision as the latter may from time to time consider necessary for the
proper supervision of the Portfolio's assets. The Subadvisor shall furnish
continuously an investment program and shall determine from time to time what
securities shall be purchased, sold or exchanged and what portion of the assets
of the Portfolio shall be held uninvested, subject always to the provisions of
the 1940 Act and to the Portfolio's then-current Prospectus and Statement of
Additional Information ("SAI"). The Subadvisor will not supervise the
investment of cash. Cash in the Fund will be invested by Diversified who shall
be solely responsible for the investment of such cash.
In particular, the Subadvisor shall: (i) continuously review, supervise
and administer the investment program of the Portfolio; (ii) monitor regularly
the relevant securities for the Portfolio to determine if adjustments are
warranted and, if so, to make such adjustments on a periodic basis; (iii)
determine, in the Subadvisor's discretion, the securities to be purchased or
sold or exchanged in order to keep the Portfolio in balance with its designated
investment strategy; (iv) determine, in the Subadvisor's discretion, whether to
exercise warrants or other rights with respect to the Portfolio's securities;
(v) determine, in the Subadvisor's discretion, whether the merit of an
investment has been substantially impaired by extraordinary events or financial
conditions, thereby warranting the removal of such securities from the
Portfolio; (vi) as promptly as practicable after the end of each calendar
month, furnish a report showing: (a) all transactions during such month, (b)
all assets of the Portfolio on the last day of such month, rates of return, and
<PAGE>
(c) such other information relating to the Portfolio as Diversified may
reasonably request; (vii) meet at least four times per year with Diversified
and with such other persons as may be designated on reasonable notice and at
reasonable locations, at the request of Diversified, to discuss general
economic conditions, performance, investment strategy, and other matters
relating to the Portfolio; (viii) provide the Portfolio with records concerning
the Subadvisor's activities which the Portfolio is required to by law maintain;
and (ix) render regular reports to the Portfolio's officers and Directors
concerning the Subadvisor's discharge of the foregoing responsibilities.
The Subadvisor shall also make recommendations as to the manner in which
voting rights, rights to consent to corporate action and any other rights
pertaining to the Portfolio's securities shall be exercised. Should the Board
of Trustees of the Portfolio at any time, however, make any definite
determination as to investment policy and notify the Subadvisor thereof in
writing, the Subadvisor shall be bound by such determination for the period, if
any, specified in such notice or until similarly notified that such policy has
been revoked.
The Subadvisor shall take, on behalf of the Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
Portfolio securities for the Portfolio's account with brokers or dealers
selected by it, and to that end the Subadvisor is authorized as the agent of
the Portfolio to give instructions to the custodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
In connection with the selection of such brokers or dealers and the placing of
such orders, the Subadvisor is directed to seek for the Portfolio, in its best
judgment, prompt execution in an effective manner at the most favorable price.
Subject to this requirement of seeking the most favorable price, securities may
be bought from or sold to broker-dealers who have furnished statistical,
research and other information or services to the Subadvisor or the Portfolio,
subject to any applicable laws, rules and regulations.
2. Allocation of Charges and Expenses. The Subadvisor shall furnish at
its own expense all necessary services, facilities and personnel in connection
with its responsibilities under Section 1 above. It is understood that the
Portfolio will pay all of its own expenses including, without limitation,
compensation and out-of-pocket expenses of Trustees not affiliated with the
Subadvisor or Diversified; governmental fees; interest charges; taxes;
membership dues; fees and expenses of independent auditors, of legal counsel
and of any transfer agent, administrator, distributor, shareholder servicing
agents, registrar or dividend disbursing agent of the Portfolio; expenses of
distributing and redeeming shares and servicing shareholder accounts; expenses
of preparing, printing and mailing prospectuses, shareholder reports, notices,
proxy statements and reports to governmental officers and commissions and to
shareholders of the Portfolio; expenses connected with the execution, recording
and settlement of Portfolio security transactions; insurance premiums; fees and
expenses of the custodian for all services to the Portfolio, including
safekeeping of funds and securities and maintaining required books and
accounts; expenses of calculating the net asset value of shares of the
Portfolio; expenses of shareholder meetings; expenses of litigation and other
extraordinary or non-recurring events and expenses relating to the issuance,
registration and qualification of shares of the Portfolio.
3. Compensation of the Subadvisor. For the services to be rendered,
Diversified shall pay to the Subadvisor an investment advisory fee computed in
accordance with the terms of Schedule B herewith attached. If the Subadvisor
serves for less than the whole of any period specified, its compensation shall
be prorated.
4. Covenants and Representations of the Subadvisor. The Subadvisor agrees
that it will not deal with itself, or with the Trustees of the Portfolio or
with Diversified, or the principal underwriter or distributor as principals in
making purchases or sales of securities or other property for the account of
<PAGE>
the Portfolio, except as permitted by the 1940 Act, will not take a long or
short position in the shares of the Portfolio except as permitted by the
Portfolio's Articles, and will comply with all other provisions of the
Portfolio's Articles and By-Laws and any current Prospectus of the Portfolio.
5. Limits on Duties. The Subadvisor shall be responsible only for
managing the assets in good faith and in accordance with the investment
guidelines, and shall have no responsibility whatsoever for, and shall incur no
liability on account of (i) diversification or selection of such investment
guidelines, (ii) advice on, or management of, any other assets for Diversified,
(iii) filing of any tax or information returns or forms, withholding or paying
any taxes, or seeking any exemption or refund, (iv) registration with any
government or agency, or (v) administration of the plans and trusts investing
through the Portfolio, and shall be indemnified by Diversified for any loss in
carrying out the terms and provisions of this Agreement, including reasonable
attorney's fees, indemnification to brokers and commission merchants, fines,
taxes, penalties and interest. Subadvisor, however, shall be liable for any
liability, damages, or expenses of Diversified arising out of the negligence,
malfeasance or violation of applicable law by it or any of its employees in
providing management under this Agreement; and, in such cases, the
indemnification by Diversified, referred to above shall be inapplicable.
The Subadvisor may apply to Diversified at any time for instructions and
may consult counsel for Diversified or its own counsel with respect to any
matter arising in connection with the duties of the Subadvisor. Also, the
Subadvisor shall be protected in acting upon any document which it reasonably
believes to be genuine and to have been signed by the proper person or persons.
6. Exclusivity of the Subadvisor. Subadvisor represents to Diversified
that for so long as the total assets under Subadvisor's management for the
Portfolio equal or exceed the total assets of the Portfolio as of November 14,
1996, Subadvisor will not act in a subadvisory capacity to any Comparable
Commingled Fund(s) (utilizing the Subadvisor's Select Growth investment
discipline as presented to the Board of Directors of Diversified Investors'
Portfolios on November 12, 1996). For purposes of this Section 6, a "Comparable
Commingled Fund" means any domestic commingled portfolio for the investment of
pension assets and whose sponsor has designed such portfolio for use in
Diversified's target market. (See Schedule C).
7. Duration, Termination and Amendments of this Agreement. This Agreement
shall become effective as of the day and year first above written and shall
govern the relations between the parties hereto thereafter, and, unless
terminated earlier as provided below, shall remain in force for two years, on
which date it will terminate unless its continuance thereafter is specifically
approved at least annually (a) by the vote of a majority of the Trustees of the
Portfolio who are not "interested persons" to this Agreement or of the
Subadvisor or Diversified at a meeting specifically called for the purpose of
voting on such approval, and (b) by the Board of Trustees of the Portfolio or
by vote of a majority of the outstanding voting securities of the Portfolio.
However, if the shareholders of the Portfolio fail to approve the Agreement as
provided herein, the Subadvisor may continue to serve hereunder in the manner
and to the extent permitted by the 1940 Act and Rules thereunder.
This Agreement may be terminated at any time without the payment of any
penalty by the Trustees or by the vote of a majority of the outstanding voting
securities of the Portfolio, or by Diversified. The Subadvisor may terminate
the Agreement only upon giving 90 days' advance written notice to Diversified.
This Agreement shall automatically terminate in the event of its assignment.
<PAGE>
This Agreement may be amended only if such amendment is approved by the
vote of a majority of the outstanding voting securities of the Portfolio and by
vote of a majority of the Board of Trustees of the Portfolio 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.
The terms "specifically approved at least annually", "vote of a majority
of the outstanding voting securities", "assignment", "affiliated person", and
"interested persons", when used in this Agreement, shall have the respective
meanings specified in, and shall be construed in a manner consistent with, the
1940 Act, subject, however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
8. Certain Records. Any records to be maintained and preserved pursuant
to the provisions of Rule 31a-1 and Rule 31a-2 adopted under the 1940 Act which
are prepared or maintained by the Subadvisor on behalf of the Portfolio are the
property of the Portfolio and will be surrendered promptly to the Portfolio on
request.
9. Survival of Compensation Rates. All rights to compensation under this
Agreement shall survive the termination of this Agreement.
10. Entire Agreement. This Agreement states the entire agreement of the
parties with respect to management of the Portfolio and may not be amended
except in a writing signed by the parties.
11. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
12. Change of Management and Pending Litigation. Subadvisor represents to
Diversified that it will disclose to Diversified as soon as it has knowledge of
any significant change or variation in its management structure or personnel or
any significant change or variation in its management style or investment
philosophy. In addition, Subadvisor represents to Diversified that it will
similarly disclose to Diversified, as soon as it has knowledge, the existence
of any pending or threatened significant legal action being brought against it
whether in the form of a lawsuit or an investigation by any federal or state
governmental agency.
Diversified represents to Subadvisor that any information received by
Diversified pursuant to this section will be kept strictly confidential.
13. Use of Name. Subadvisor hereby agrees that Diversified may use the
Subadvisor's name in its marketing or advertising materials. Diversified agrees
to allow the Subadvisor to examine and approve any such materials prior to use.
IN WITNESS WHEREOF, the parties thereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned,
thereunto duly authorized, all as of the day and year first above written.
Diversified Investment Advisors, Inc.
By: /s/ John T. Hughes
Chancellor LGT Asset Management, Inc.
By: /s/ Eileen Cohen
<PAGE>
SCHEDULE A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of January 3, 1994 by and between the Equity Growth
Portfolio, a series of Diversified Investors Portfolios (herein called the
"Portfolio"), and Diversified Investment Advisors, Inc. a Delaware corporation
(herein called "Diversified").
WHEREAS, the Portfolio is registered as a diversified, open-end,
management investment company under the Investment Company Act of 1940 (the
"1940 Act"); and
WHEREAS, Diversified has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940; and
WHEREAS, the Portfolio desires to retain Diversified to render investment
advisory services, and Diversified is willing to so render such services on the
terms hereinafter set forth;
NOW, THEREFORE, this Agreement
WITNESSETH:
In consideration of the promises and mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. The Portfolio hereby appoints Diversified to act as investment advisor
to the Portfolio for the period and on the terms set forth in this Agreement.
Diversified accepts such appointment and agrees to render the services herein
set forth for the compensation herein provided.
2. (a) Diversified shall, at its expense, (i) employ sub-advisors or
associate with itself such entities as it believes appropriate to assist it in
performing its obligations under this Agreement and (ii) provide all services,
equipment and facilities necessary to perform its obligations under this
Agreement.
(b) The Portfolio shall be responsible for all of its expenses and
liabilities, including, but not limited to: compensation and out-of-pocket
expenses of Trustees not affiliated with any subadvisor or Diversified;
governmental fees; interest charges; taxes; membership dues; fees and expenses
of independent auditors, of legal counsel and of any transfer agent,
administrator, distributor, shareholder servicing agents, registrar or dividend
disbursing agent of the Portfolio; expenses of distributing and redeeming
shares and servicing shareholder accounts; expenses of preparing, printing and
mailing prospectuses, shareholder reports, notices, proxy statements and
reports to governmental officers and commissions and to shareholders of the
Portfolio; expenses connected with the execution, recording and settlement of
Portfolio security transactions; insurance premiums; fees and expenses of the
custodian for all services to the Portfolio, including safekeeping of funds and
securities and maintaining required books and accounts; expenses of calculating
the net asset value of shares of the Portfolio; expenses of shareholder
meetings; expenses of litigation and other extraordinary or non-recurring
events and expenses relating to the issuance, registration and qualification of
shares of the Portfolio.
<PAGE>
3. (a) Subject to the general supervision of the Board of Trustees of the
Portfolio, Diversified shall formulate and provide an appropriate investment
program on a continuous basis in connection with the management of the
Portfolio, including research, analysis, advice, statistical and economic data
and information and judgments of both a macroeconomic and microeconomic
character.
Diversified will determine the securities to be purchased, sold, lent,
exchanged or otherwise disposed of or acquired by the Portfolio in accordance
with predetermined guidelines as set forth from time to time in the Portfolio's
then-current prospectus and Statement of Additional Information ("SAI") and
will place orders pursuant to its determinations either directly with the
issuer or with any broker or dealer who deals in such securities. In placing
orders with brokers and dealers, Diversified will use its reasonable best
efforts to obtain the best net price and the most favorable execution of its
orders, after taking into account all factors it deems relevant, including the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. Consistent with this obligation, Diversified may, to the
extent permitted by law, purchase and sell Portfolio securities to and from
brokers and dealers who provide brokerage and research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to or for the
benefit of the Portfolio and/or other accounts over which Diversified or any of
its affiliates exercises investment discretion.
Subject to the review of the Portfolio's Board of Trustees from time to
time with respect to the extent and continuation of the policy, Diversified is
authorized to pay to a broker or dealer who provides such brokerage and
research services a commission for effecting a securities transaction for the
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if Diversified
determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of Diversified with respect to the accounts as to which it
exercises investment discretion.
In placing orders with brokers and/or dealers, Diversified intends to
seek best price and execution for purchases and sales and may effect
transactions through itself and its affiliates on a securities exchange
provided that the commissions paid by the Portfolio are "reasonable and fair"
compared to commissions received by other broker-dealers having comparable
execution capability in connection with comparable transactions involving
similar securities and provided that the transactions in connection with which
such commissions are paid are effected pursuant to procedures established by
the Board of the Trustees of the Portfolio. All transactions are effected
pursuant to written authorizations from the Portfolio conforming to the
requirements of Section 11(a) of the Securities Exchange Act of 1934 and Rule
11a2-2(T) thereunder. Pursuant to such authorizations, an affiliated
broker-dealer may transmit, clear and settle transactions for the Portfolio
that are executed on a securities exchange provided that it arranges for
unaffiliated brokers to execute such transactions.
Diversified shall determine from time to time the manner in which voting
rights, rights to consent to corporate action and any other rights pertaining
to the Portfolio's securities shall be exercised, provided, however, that
should the Board of Trustees at any time make any definite determination as to
investment policy and notify Diversified thereof in writing, Diversified shall
be bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked.
Diversified will determine what portion of securities owned by the Portfolio
shall be invested in securities described by the policies of the Portfolio and
what portion, if any, should be held uninvested. Diversified will determine
whether and to what extent to employ various investment techniques available to
<PAGE>
the Portfolio. In effecting transactions with respect to securities or other
property for the account of the Portfolio, Diversified may deal with itself and
its affiliates, with the Trustees of the Portfolio or with other entities to
the extent such actions are permitted by the 1940 Act.
(b) Diversified also shall provide to the Portfolio administrative
assistance in connection with the operation of the Portfolio, which shall
include compliance with all reasonable requests of the Portfolio for
information, including information required in connection with the Portfolio's
filings with the Securities and Exchange Commission and state securities
commissions.
(c) As a manager of the assets of the Portfolio, Diversified shall
make investments for the account of the Portfolio in accordance with
Diversified's best judgment and within the Portfolio's investment objectives,
guidelines, and restrictions, the 1940 Act and the provisions of the Internal
Revenue Code of 1986 relating to regulated investment companies subject to
policy decisions adopted by the Board of Trustees.
(d) Diversified shall furnish to the Board of Trustees periodic
reports on the investment performance of the Portfolio and on the performance
of its obligations under this Agreement and shall supply such additional
reports and information as the Portfolio's officers or Board of Trustees shall
reasonably request.
(e) On occasions when Diversified deems the purchase or sale of a
security to be in the best interest of the Portfolio as well as other
customers, Diversified, to the extent permitted by applicable law, may
aggregate the securities to be so sold or purchased in order to obtain the best
execution or lower brokerage commissions, if any. Diversified may also on
occasion purchase or sell a particular security for one or more customers in
different amounts. On either occasion, and to the extent permitted by
applicable law and regulations, allocation of the securities so purchased or
sold, as well as the expenses incurred in the transaction, will be made by
Diversified in the manner it considers to be the most equitable and consistent
with its fiduciary obligations to the Portfolio and to such other customers.
(f) Diversified shall also provide the Portfolio with the following
services as may be required:
(i) providing office space, equipment and clerical personnel
necessary for maintaining the organization of the Portfolio and
for performing administrative and management functions;
(ii) supervising the overall administration of the Portfolio,
including negotiation of contracts and fees with and the
monitoring of performance and billings of the Portfolio's
transfer agent, custodian and other independent contractors or
agents;
(iii)preparing and, if applicable, filing all documents required for
compliance by the Portfolio with applicable laws and
regulations, including registration statements, registration
fee filings, semi-annual and annual reports to investors, proxy
statements and tax returns;
(iv) preparation of agendas and supporting documents for and minutes
of meeting of Trustees, committees of Trustees and investors;
and
(v) maintaining books and records of the Portfolio.
<PAGE>
4. Diversified shall give the Portfolio the benefit of Diversified's best
judgment and efforts in rendering services under this Agreement. As an
inducement to Diversified's undertaking to render these services, the Portfolio
agrees that Diversified shall not be liable under this Agreement for any
mistake in judgment or in any other event whatsoever provided that nothing in
this Agreement shall be deemed to protect or purport to protect Diversified
against any liability to the Portfolio or its investors to which Diversified
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Adviser's duties under this Agreement or
by reason of the Adviser's reckless disregard of its obligations and duties
hereunder.
5. In consideration of the services to be rendered by Diversified under
this Agreement, the Portfolio shall pay Diversified a fee accrued daily and
paid monthly at an annual rate equal to .70% of the Portfolio's average daily
net assets. If the fees payable to Diversified pursuant to this paragraph 5
begin to accrue before the end of any month or if this Agreement terminates
before the end of any month, the fees for the period from that date to the end
of that month or from the beginning of that month to the date of termination,
as the case may be, shall be prorated according to the proportion which the
period bears to the full month in which the effectiveness or termination
occurs. For purposes of calculating the monthly fees, the value of the net
assets of the Portfolio shall be computed in the manner specified in its
Regulation Statement on Form N-1A for the computation of net asset value. For
purposes of this Agreement, a "business day" is any day the New York Stock
Exchange is open for trading.
In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Diversified hereby agrees that all records which it maintains for the Portfolio
are property of the Portfolio and further agrees to surrender promptly to the
Portfolio any such records upon the Portfolio's request. Diversified further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
any such records required to be maintained by Rule 31a-1 under the 1940 Act.
6. This Agreement shall be effective as to the Portfolio as of the date
the Portfolio commences investment operations after this Agreement shall have
been approved by the Board of Trustees of the Portfolio and the investor(s) in
the Portfolio in the manner contemplated by Section 15 of the 1940 Act and,
unless sooner terminated as provided herein, shall continue until the second
anniversary of the date hereof. Thereafter, if not terminated, this Agreement
shall continue in effect as to the Portfolio for successive periods of 12
months each, provided such continuance is specifically approved at least
annually by the vote of a majority of those members of the Board of Trustees of
the Portfolio 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 either (a) by the vote of a majority of the full Board of
Trustees or (b) by vote of a majority of the outstanding voting securities of
the Portfolio; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by the Board of
Trustees of the Portfolio or by vote of a majority of the outstanding voting
securities of the Portfolio on 60 days' written notice to Diversified, or by
Diversified as to the Portfolio at any time, without payment of any penalty, on
90 days' written notice to the Portfolio. This Agreement will 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 meanings as such terms have in the 1940 Act
and the rule and regulatory constructions thereunder).
7. Except to the extent necessary to perform Diversified's obligations
under this Agreement, nothing herein shall be deemed to limit or restrict the
right of Diversified, or any affiliate of Diversified, or any employee of
Diversified, to engage in any other business or devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other trust,
corporation, firm, individual or association.
8. The investment management services of Diversified to the Portfolio
under this Agreement are not to be deemed exclusive as to Diversified and
Diversified will be free to render similar services to others.
Each party agrees to perform such further acts and execute such further
documents as are necessary to effectuate the purposes hereof.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge, or termination is
sought and no material amendment of this Agreement shall be effective until
approved by vote of the holders of a majority of the outstanding voting
securities of the Portfolio.
This Agreement embodies the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. 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.
Should any part of this Agreement 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 and shall inure to the
benefit of the parties hereto and their respective successors, to the extent
permitted by law.
9. This Agreement shall be construed in accordance with the laws of the
State of New York provided that nothing herein shall be construed in a manner
inconsistent with the requirements of 1940 Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
Attest: Diversified Investments Portfolios
/s/ John Hughes By:/s/ Tom Schlossberg
Chairman and President
Attest: Diversified Investment Advisors, Inc.
/s/ Catharine A. Mohr By:/s/ Gerald L. Katz
Vice President and CFO
<PAGE>
SCHEDULE B
The Subadvisor shall be compensated for its services under this Agreement on
the basis of the below-described annual fee schedule. The fee schedule shall
only be amended by agreement between the parties.
FEE SCHEDULE
.50% of the aggregate net assets of the Portfolio
applied to the first $50 million dollars
.30% of the aggregate net assets of the Portfolio
applied to the next $75 million dollars
.25% of the aggregate net assets of the Portfolio
applied to the next $75 million dollars
.20% of the aggregate net assets of the Portfolio
applied thereafter
Aggregate net assets are equal to the total market value of the Portfolio. Fees
will be calculated by multiplying the arithmetic average of the beginning and
ending monthly net assets in the Portfolio by the fee schedule and dividing by
twelve. The fee will be paid quarterly.
<PAGE>
SCHEDULE C
Target market for 401(a) plans is those plans with assets between $1 and $50
million.
For 403(b) plans, the target market is those plans that have an employee base
between 300 - 2000 lives, and with assets between $1 and $15 million.
<PAGE>
EXHIBIT B
AMENDMENT NO. 1 TO THE
INVESTMENT ADVISORY AGREEMENT DATED JANUARY 3, 1994
BETWEEN
EQUITY GROWTH PORTFOLIO, A SERIES OF
DIVERSIFIED INVESTORS PORTFOLIOS, AND DIVERSIFIED INVESTMENT
ADVISORS, INC.
WHEREAS, the Equity Growth Portfolio, a series of Diversified Investors
Portfolios ("Portfolio"), and Diversified Investment Advisors, Inc.
("Diversified") entered into an Investment Advisory Agreement ("Agreement") as
of January 3, 1994 whereby Diversified would render investment advisory
services to the Portfolio; and
WHEREAS, Section 8 of the Agreement provides for its amendment by the
Portfolio and Diversified provided that any material amendment must be approved
by a majority vote of the outstanding securities of the Portfolio; and
WHEREAS, the Portfolio and Diversified wish to amend the Agreement with
respect to the applicable fee schedule; now
NOW, THEREFORE, subject to obtaining the required majority vote of the
outstanding securities of the Portfolio, the Agreement is amended as follows,
such amendment to be effective as of November 15, 1996.
The first sentence of Section 5 of the Agreement is amended in its
entirety to read as follows:
In consideration of the services to be rendered by Diversified under this
Agreement, the Portfolio shall pay Diversified a fee accrued daily and
paid monthly at an annual rate equal to .62% of the Portfolio's average
daily net assets.
This Amendment No. 1 to the Agreement shall be construed in accordance
with the laws of the State of New York provided that nothing herein shall be
construed in a manner inconsistent with the requirements of the Investment
Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1
to be executed by their officers designated below.
Attest: Diversified Investors Portfolios
_________________________ By:________________________________
Tom Schlossberg
Chairman and President
Attest: Diversified Investment Advisors, Inc.
________________________ By:_________________________________
<PAGE>
PROXY CARD PROXY CARD
DIVERSIFIED INVESTORS EQUITY GROWTH FUND
A SERIES OF THE DIVERSIFIED INVESTORS FUNDS GROUP
A PROXY FOR A SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD FEBRUARY 28, 1997
The undersigned, revoking all Proxies heretofore given, hereby appoints
each of Tom A. Schlossberg, Robert F. Colby and Gerald L. Katz, or any of them,
as Proxies of the undersigned with full power of substitution, to vote on
behalf of all of the undersigned all shares in the Diversified Investors Equity
Growth Fund (the "Fund"), a series of The Diversified Investors Funds Group
(the "Trust"), which the undersigned is entitled to vote at the Special Meeting
of Shareholders of the Fund to be held at the offices of Diversified Investment
Advisors, Inc., 4 Manhattanville Road, Purchase, New York 10577 on February 28,
1997, at 9:00 a.m., Eastern time, and at any adjournment thereof, as fully as
the undersigned would be entitled to vote if personally present, as follows:
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE TRUST.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING
PROPOSALS.
1. To consider and vote on approval of a new Investment Subadvisory
Agreement between Diversified Investment Advisors, Inc. and Chancellor
LGT Asset Management, Inc.:
_____ FOR _____ AGAINST _____ABSTAIN
2. To consider and vote on approval of an Amendment to the Investment
Advisory Agreement between Equity Growth Portfolio, a series of
Diversified Investors Portfolios, and Diversified Investment Advisers,
Inc.
_____ FOR _____ AGAINST _____ABSTAIN
3. (a) To ratify the selection of Coopers & Lybrand L.L.P. as independent
public accountants of the Fund for the year ended December 31, 1997:
_____ FOR _____ AGAINST _____ABSTAIN
(b) To ratify the selection of Coopers & Lybrand L.L.P. as independent
public accountants of Equity Growth Portfolio, a series of Diversified
Investors Portfolios, for the year ended December 31, 1997:
_____ FOR _____ AGAINST _____ABSTAIN
Adoption of the Amendment to the Investment Advisory Agreement pursuant
to Proposal 2 is contingent upon approval of Proposal 1 by a majority of the
outstanding voting securities of the Fund in accordance with the Investment
Company Act of 1940, as amended.
THE SHARES REPRESENTED HEREBY WILL BE VOTED AS INDICATED OR FOR ANY PROPOSALS
FOR WHICH NO CHOICE IS INDICATED.
<PAGE>
THE PROXIES ARE AUTHORIZED IN THEIR DISCRETION TO VOTE UPON SUCH OTHER MATTERS
AS MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Date:_______________
-----------------------------------
Signature
-----------------------------------
Signature of joint owner, if any
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR ON THIS CARD
When signing as attorney, executor, administrator, trustee, guardian or as
custodian for a minor, please sign your name and give your full title as such.
If signing on behalf of a corporation, please sign the full corporate name and
your name and indicate your title. If you are a partner signing for a
partnership, please sign the partnership name and your name. Joint owners
should each sign this proxy. Please sign, date and return in the enclosed
envelope.
