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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] 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 (S) 240.14a-11(c) or (S) 240.14a-12
Alleghany Funds
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
Reg. (S) 240.14a-101.
SEC 1913 (3-99)
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Alleghany Funds
171 North Clark Street
Chicago, Illinois 60601
Dear Fellow Shareholder:
We are pleased to enclose a Notice, Proxy Statement and proxy card(s) for a
Special Meeting of Shareholders of the Alleghany Funds (the "Company"). The
meeting is scheduled to be held at 2:00 p.m., January 17, 2001 at the offices
of the Company, 171 North Clark Street, 9th Floor, Chicago, Illinois.
Pursuant to an agreement entered into on October 18, 2000, Alleghany Asset
Management, Inc. ("AAM"), corporate owner of a controlling interest (within
the meaning of the Investment Company Act of 1940, as amended) in the
investment adviser to each Fund and subadviser to each Fund with a subadviser
(except Alleghany/Chicago Trust Talon Fund, which is subadvised by Talon Asset
Management, Inc., which is not affiliated with AAM), will be merged with a
direct or indirect subsidiary of ABN AMRO North America Holding Company ("ABN
AMRO"). AAM is currently owned by Alleghany Corporation ("Alleghany").
In connection with the Alleghany--ABN AMRO transaction, we are asking
shareholders of each Fund to approve a new investment advisory agreement and,
where applicable, a new sub-investment advisory agreement that is
substantially identical to each Fund's current investment advisory agreement
or sub-investment advisory agreement, except for the dates of execution and
termination and, in the case of Alleghany/Chicago Trust Talon Fund, the
absence of a guaranty by Chicago Title and Trust Company, as more fully
described in the attached Proxy Statement. To aid you in understanding the
proposals, we have also enclosed a Questions & Answers section regarding the
proposals.
The Board of Trustees has carefully reviewed the change in control of AAM and
believes that shareholders will benefit from the additional resources
anticipated to be available through ABN AMRO, which may allow for the creation
of more investment choices and even better service for our shareholders. ABN
AMRO has told the Board of Trustees that it believes that the Alleghany--ABN
AMRO transaction will have no material effect on the investment advisory
services or other services provided to the Funds by affiliates of AAM,
including Alleghany Investment Services, Inc., the Funds' administrator. In
addition, no fees will increase and ABN AMRO believes that no portfolio
managers will change as a result of the transaction. Therefore, the Board
unanimously approved the new investment advisory agreements and sub-investment
advisory agreements and recommends that you vote "FOR" the new agreements.
YOUR VOTE IS IMPORTANT! Please review the attached proxy statement carefully.
Enclosed is a separate proxy card for each Fund in which you are invested. We
ask that you complete, sign, date and return each proxy card as soon as
possible in the postage-paid envelope. You may also vote by telephone at (800)
597-7836 or the internet at www.vote.proxy-direct.com. Thank you for your
attention and your vote with regard to these important proposals. Please call
shareholder services at (800) 992-8151 if you need more information.
Sincerely,
/s/ Kenneth C. Anderson
Kenneth C. Anderson
President
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December 15, 2000
IMPORTANT NEWS FOR SHAREHOLDERS OF ALLEGHANY FUNDS
While we encourage you to read the full text of the enclosed Proxy
Statement, here is a brief overview of some matters affecting your Fund which
will require a shareholder vote.
QUESTIONS AND ANSWERS
Q: What is happening?
A: Pursuant to an agreement entered into on October 18, 2000, Alleghany
Asset Management, Inc. ("AAM"), the corporate owner of a controlling
interest (within the meaning of the Investment Company Act of 1940, as
amended) in each of the investment advisers to the Alleghany Funds,
will be merged with a direct or indirect subsidiary of ABN AMRO North
America Holding Company ("ABN AMRO"). AAM is currently owned by
Alleghany Corporation ("Alleghany"). The advisers to the Alleghany
Funds are The Chicago Trust Company ("Chicago Trust"), Montag &
Caldwell, Inc., Veredus Asset Management LLC, Blairlogie Capital
Management and TAMRO Capital Partners LLC. In addition, AAM indirectly
controls Chicago Capital Management, Inc., the subadviser to all
Alleghany Funds advised by Chicago Trust, with the exception of
Alleghany/Chicago Trust Talon Fund (the "Talon Fund"), which is
subadvised by Talon Asset Management, Inc., a non-affiliate of AAM.
Although this transaction is not anticipated to have any effect on the
operations of any of the advisers, subadvisers, AAM, or the Alleghany
Funds, we are asking each Fund's shareholders to approve a new
investment advisory agreement and, where applicable, a new sub-
investment advisory agreement.
The following pages give you additional information about the
proposed acquisition, the new investment and sub-investment advisory
agreements and certain other matters.
The Board of Trustees, including those who are not "interested
persons" (as defined by the Investment Company Act of 1940, as
amended) of any Fund, any adviser, any subadviser, Alleghany, AAM or
ABN AMRO, unanimously recommend that you vote FOR approval of the new
investment advisory agreement and, where applicable, a new sub-
investment advisory agreement for your Fund.
Q: Why am I being asked to vote on a new investment advisory agreement?
A: The Investment Company Act of 1940, as amended, which regulates
investment companies such as your Fund, requires a shareholder vote to
approve a new investment advisory agreement following certain types of
business transactions such as the Alleghany--ABN AMRO transaction. The
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new investment advisory agreement is substantially identical to the
existing investment advisory agreement, except for the dates of
execution and termination and, in the case of the Talon Fund only, the
absence of a guaranty by Chicago Title and Trust Company ("Chicago
Title and Trust"), the former parent of Chicago Trust.
Currently, the investment advisory agreement with Chicago Trust for
the Talon Fund is supported by an Amended and Restated Guaranty
Agreement ("Guaranty Agreement") under which Chicago Title and Trust
guarantees the obligations and liabilities of Chicago Trust to the
Talon Fund. The guaranty agreement was originally put in place in 1995
when Chicago Title and Trust transferred responsibilities for advising
and the personnel managing the Funds to Chicago Trust. Since 1998,
however, Chicago Title and Trust and Chicago Trust are no longer
affiliated entities. The Guaranty Agreement provides that it
terminates upon the termination of the investment advisory agreement
with the Talon Fund, which will occur as a result of the Alleghany--
ABN AMRO transaction.
Q: Why am I being asked to vote on a new sub-investment advisory agreement
(for the Chicago Trust managed Funds only)?
A: Chicago Capital Management, Inc. ("Chicago Capital") serves as
subadviser pursuant to a sub-investment advisory agreement for
Alleghany/Chicago Trust Balanced Fund, Alleghany/Chicago Trust Bond
Fund, Alleghany/Chicago Trust Growth & Income Fund, Alleghany/ Chicago
Trust Money Market Fund, Alleghany/Chicago Trust Municipal Bond Fund
and Alleghany/Chicago Trust Small Cap Value Fund. As with the
investment advisory agreements, the Alleghany--ABN AMRO transaction
will require shareholders of each of these Funds to approve a new sub-
investment advisory agreement.
Talon Asset Management, Inc. ("Talon") acts as subadviser for the
Talon Fund pursuant to a sub-investment advisory agreement. By the
terms of the sub-investment advisory agreement with Chicago Trust, the
agreement automatically terminates in the event that the Fund's
investment advisory agreement is also terminated. Because consummation
of the Alleghany--ABN AMRO transaction will result in the termination
of the investment advisory agreement and, therefore, the sub-
investment advisory agreement, shareholders of the Talon Fund are
being asked to approve a new sub-investment advisory agreement.
The new sub-investment advisory agreement for each applicable Fund is
substantially identical to the existing sub-investment advisory
agreement except for the dates of execution and termination.
Q: How will the Alleghany--ABN AMRO transaction affect me?
A: Each Fund and its respective investment objective will not change as a
result of the transaction. You will still own the same shares in the
same Fund. The
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Alleghany--ABN AMRO transaction should have no impact on the
operations of your Fund. AAM and ABN AMRO have told the Board of
Trustees that they do not intend to make any changes in the nature of
or reduction in the quality of the services provided to your Fund and
that no fees will be changed as a result of the Alleghany--ABN AMRO
transaction. In fact, we believe that the additional resources
anticipated to be available through ABN AMRO will bring you more
investment choices and even better service.
Q: How does the Board of Trustees recommend that I vote?
A: After careful consideration, the Board of Trustees, including those
Trustees who are not affiliated with your Fund, any adviser,
subadviser, Alleghany or ABN AMRO, recommend that you vote FOR both
proposals on the enclosed proxy card(s).
Q: Whom do I call for more information?
A: Please call shareholder services at (800) 992-8151.
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Alleghany Funds
171 North Clark Street
Chicago, Illinois 60601
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on January 17, 2001
To the Shareholders of:
Alleghany/Chicago Trust Balanced Fund
Alleghany/Chicago Trust Bond Fund
Alleghany/Chicago Trust Growth & Income Fund
Alleghany/Chicago Trust Money Market Fund
Alleghany/Chicago Trust Municipal Bond Fund
Alleghany/Chicago Trust Small Cap Value Fund
Alleghany/Chicago Trust Talon Fund (collectively, the "Chicago Trust Funds")
Alleghany/Montag & Caldwell Balanced Fund
Alleghany/Montag & Caldwell Growth Fund
Alleghany/Blairlogie Emerging Markets Fund
Alleghany/Blairlogie International Developed Fund
Alleghany/Veredus Aggressive Growth Fund
Alleghany/Veredus SciTech Fund
Alleghany/TAMRO Large Cap Value Fund
Alleghany/TAMRO Small Cap Fund (each a "Fund" and collectively, the "Funds")
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the Shareholders of the
Alleghany Funds (the "Company"), a Delaware business trust, will be held at
the offices of the Company, 171 North Clark Street, 9th Floor, Chicago,
Illinois on January 17, 2001 at 2:00 p.m. Central Time (the "Special Meeting")
for the following purposes:
1. To approve or disapprove a new investment advisory agreement for each
Fund. (Proposal 1)
2. To approve or disapprove a new sub-investment advisory agreement for each
Chicago Trust Fund. (Proposal 2)
3. To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
The Board of Trustees has fixed the close of business on December 4, 2000
as the record date for the determination of shareholders entitled to notice of
and to vote at the Special Meeting.
By order of the Board of Trustees
Gerald Dillenburg
Vice President, Secretary and
Treasurer
December 15, 2000
Shareholders who do not expect to attend the special meeting are requested to
complete, sign, date and return the accompanying proxy card(s) in the enclosed
envelope, which needs no postage if mailed in the United States. Shareholders
also have the option to provide their vote by telephone or the internet by
following the instructions accompanying the proxy card. Instructions for the
proper execution of the proxy card are set forth on the inside cover of this
notice. It is important that proxies be returned promptly.
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INSTRUCTIONS FOR VOTING
If you plan to vote by mail, the following general rules will help you to
properly sign your proxy card(s). Please read carefully because if you do not
sign your proxy card(s) properly your vote will be invalidated.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Both parties must sign and the name of each party signing
should conform exactly to the name shown in the registration on the proxy
card.
3. All Other Accounts: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the form of registration.
For example:
Registration Valid Signature
Corporate Accounts
(1) ABC Corp. ABC Corp. by
John Doe, Treasurer
(2) ABC Corp. John Doe
John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee Jane B. Doe
u/t/d/ 12/28/78
Custodial or Estate Accounts
(1) John B. Smith, Cust. John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) Estate of John B. Smith John B. Smith, Jr., Executor
Rather than mailing in your proxy, you may also provide your proxy through
telephone touch-tone voting by calling (800) 597-7836, and electronically
transmitted or Internet voting at www.vote.proxy-direct.com. These options
require you to input a fourteen digit control number which is located on each
proxy card. After inputting this number you will be permitted to enter your
vote on each proposal. You will have an opportunity to review your vote and
make any necessary changes before submitting your vote and terminating the
telephone call or Internet link. If you vote on the Internet, in addition to
confirming your vote prior to submission, you may choose to receive an e-mail
confirming your vote.
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Alleghany Funds
171 North Clark Street
Chicago, Illinois 60601
SPECIAL MEETING OF SHAREHOLDERS
January 17, 2001
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of Alleghany Funds (the "Company") for
Alleghany/Chicago Trust Balanced Fund, Alleghany/Chicago Trust Bond Fund,
Alleghany/Chicago Trust Growth & Income Fund, Alleghany/Chicago Trust Money
Market Fund, Alleghany/Chicago Trust Municipal Bond Fund, Alleghany/Chicago
Trust Small Cap Value Fund, Alleghany/Chicago Trust Talon Fund (collectively,
the "Chicago Trust Funds"), Alleghany/Montag & Caldwell Growth Fund,
Alleghany/Montag & Caldwell Balanced Fund (collectively, the "Montag &
Caldwell Funds"), Alleghany/Veredus Aggressive Growth Fund, Alleghany/Veredus
SciTech Fund (collectively, the "Veredus Funds"), Alleghany/Blairlogie
Emerging Markets Fund, Alleghany/Blairlogie International Developed Fund
(collectively, the "Blairlogie Funds"), Alleghany/TAMRO Large Cap Value Fund
and Alleghany/TAMRO Small Cap Fund (collectively, the "TAMRO Funds") (the
Chicago Trust Funds, Montag & Caldwell Funds, Veredus Funds, Blairlogie Funds
and TAMRO Funds are collectively referred to as the "Funds"), for use at a
Special Meeting of Shareholders of the Funds to be held at 2:00 p.m. Central
Time on January 17, 2001 at the offices of the Company, 171 North Clark
Street, 9th Floor, Chicago, Illinois, 60601, and any adjournments thereof (the
"Special Meeting"). A Notice of Special Meeting and proxy card(s) accompany
this Proxy Statement. This Proxy Statement and the accompanying Notice of
Special Meeting and proxy card(s) are first being mailed to shareholders on or
about December 15, 2000. In addition to solicitations of proxies by mail,
proxy solicitations may also be made by telephone, telegraph or personal
interviews conducted by officers and employees of the Company, PFPC Inc., the
Company's transfer agent, or other representatives of the Company. PFPC Global
Fund Services--Proxy Advantage ("PFPC") has been engaged to assist in the
solicitation of proxies. The cost of preparing, printing and mailing the
enclosed proxy card(s) and Proxy Statement and all other costs incurred in
connection with the solicitation of proxies, including any additional
solicitation made by letter, telephone or telegraph, will be shared on an
equal basis by ABN AMRO North America Holding Company ("ABN AMRO") and
Alleghany Corporation ("Alleghany"). The cost of PFPC's assistance in
soliciting proxies is expected to be approximately $50,000. The Company's most
recent annual report is available upon request without charge by writing the
Company at P.O. Box 5164, Westborough, MA 01581 or calling (800) 992-8151.
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If each enclosed proxy card is properly executed and returned in time to
be voted at the Special Meeting, the shares of beneficial interest ("Shares")
represented by the proxy will be voted in accordance with the instructions
marked thereon. If no direction is indicated, it will be voted FOR the
proposals listed in the accompanying Notice of Special Meeting of
Shareholders. Any shareholder who has given a proxy has the right to revoke it
at any time prior to its exercise either by attending the Special Meeting and
voting his or her Shares in person or by submitting a letter of revocation or
a later-dated proxy to the Company at the above address prior to the date of
the Special Meeting.
Under the Company's Trust Instrument dated September 8, 1993, a quorum of
shareholders is constituted by the presence in person or by proxy of the
holders of one third (33 1/3%) of the outstanding shares of each Fund entitled
to vote at the Special Meeting. For purposes of determining the presence of a
quorum for transacting business at the Special Meeting, abstentions and broker
"non-votes" will be treated as shares that are present but which have not been
voted. Broker non-votes are proxies received by the Company from brokers or
nominees when the broker or nominee has neither received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary power
to vote on a particular matter. In the event that a quorum is not present at
the Special Meeting, or in the event that a quorum is present but sufficient
votes to approve the proposals are not received, the persons named as proxies
on the enclosed proxy card(s) may propose one or more adjournments of the
Special Meeting to permit further solicitation of proxies. The persons named
as proxies will vote in favor of adjournment if they determine that such
adjournment and additional solicitation are reasonable and in the best
interests of the Fund. ABN AMRO and Alleghany will share on an equal basis the
costs of preparing and distributing to shareholders additional proxy
materials, if required in connection with any adjournment. Any adjournment
will require the affirmative vote of a majority of those shares represented at
the Special Meeting in person or by proxy. A shareholder vote may be taken on
one or more of the proposals in this Proxy Statement for one or more Funds
prior to any such adjournment if sufficient votes have been received for
approval.
Each proposal requires the affirmative vote of a "majority of the
outstanding voting securities" of a Fund whose shareholders will be voting on
such proposal. The term "majority of the outstanding voting securities," as
defined in the Investment Company Act of 1940, as amended (the "1940 Act") and
as used in this Proxy Statement with respect to any Fund, means: the
affirmative vote of the lesser of (1) 67% of the voting securities of a Fund
present at the meeting if more than 50% of the outstanding voting securities
of the Fund are present in person or by proxy or (2) more than 50% of the
outstanding voting securities of a Fund. Shareholders of each Fund will vote
separately with respect to both proposals. Abstentions and broker non-votes
will have the effect of a "no" vote on each proposal.
The Board of Trustees has fixed the close of business on December 4, 2000
as the record date (the "Record Date") for the determination of shareholders
of the
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Funds entitled to notice of and to vote at the Special Meeting and all
adjournments thereof. Appendix 1 contains the number of shares outstanding of
each Fund at the close of business on the Record Date. As of the Record Date,
to the best knowledge of the management of the Funds, the shareholders shown
on Appendix 2 to this Proxy Statement owned of record or beneficially 5% or
more of the shares of any class of each Fund. For the TAMRO Funds, which began
offering shares to the public on November 30, 2000, and for Alleghany/Veredus
SciTech Fund, Alleghany was the initial investor in and continues to control
(within the meaning of the 1940 Act) the Funds. Alleghany has advised that it
will vote its shares in favor of proposal 1. As of December 4, 2000, the
officers and Trustees of the Company as a group beneficially owned less than
1% of the shares of each Fund with the exception of Alleghany/Chicago Trust
Municipal Bond Fund of which an interested Trustee owns 7%.
In order that your shares may be represented at the Special Meeting, you
are requested to:
--indicate your instructions on the enclosed proxy card(s);
--date and sign the proxy card(s);
--mail the proxy card(s) promptly in the enclosed envelope, which requires
no postage if mailed in the United States; and
--allow sufficient time for the proxy card(s) to be received on or before
2:00 p.m. Central Time on January 17, 2001.
As the Special Meeting date approaches, certain shareholders of a Fund may
receive a telephone call from PFPC if their vote has not yet been received.
Authorization to permit PFPC to execute proxies may be obtained by
telephonically transmitted instructions from shareholders of such Fund.
Proxies that are obtained telephonically will be recorded in accordance with
the procedures set forth below. The Trustees believe that these procedures are
reasonably designed to ensure that the identity of the shareholder casting the
vote is accurately determined and that the voting instructions of the
shareholder are accurately determined.
In all cases where a telephonic proxy is solicited, the PFPC
representative is required to ask for each shareholder's full name, address,
social security or taxpayer identification number, title (if the shareholder
is authorized to act on behalf of an entity, such as a corporation), and the
number of shares owned and to confirm that the shareholder has received the
Proxy Statement and proxy card(s) in the mail. If the information solicited
agrees with the information provided to PFPC, then the PFPC representative has
the responsibility to explain the process, read the proposals listed on the
proxy card(s), and ask for the shareholder's instructions on each proposal.
The PFPC representative, although permitted to answer questions about the
process, is not permitted to recommend to the shareholder how to vote, other
than to read any recommendation set forth in the Proxy Statement. The PFPC
representative will record
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the shareholder's instructions on the card. Within 72 hours, PFPC will send
the shareholder a letter or mailgram to confirm his or her vote and ask the
shareholder to call PFPC immediately if his or her instructions are not
correctly reflected in the confirmation.
Summary of Proposals
The table set forth below lists each proposal contained in the Proxy
Statement and the Funds whose shareholders will be voting on the proposals.
<TABLE>
<CAPTION>
Proposal
Number Proposal Summary Fund(s)
<S> <C> <C>
Proposal 1 To approve or disapprove a All Funds (Shareholders of
new investment advisory each Fund shall consider
agreement for each Fund this proposal separately)
Proposal 2 Chicago Trust Funds only
To approve or disapprove a (Shareholders of each
new sub-investment Chicago Trust Fund shall
advisory agreement for consider this proposal
each Chicago Trust Fund separately)
</TABLE>
PROPOSAL NO. 1
TO APPROVE OR DISAPPROVE A NEW INVESTMENT ADVISORY AGREEMENT FOR EACH
FUND.
Introduction
The Chicago Trust Company ("Chicago Trust"), Montag & Caldwell, Inc.
("Montag & Caldwell"), Veredus Asset Management LLC ("Veredus"), Blairlogie
Capital Management ("Blairlogie") and TAMRO Capital Partners LLC ("TAMRO")
(collectively the "Advisers") act as investment advisers for the Chicago Trust
Funds, Montag & Caldwell Funds, Veredus Funds, Blairlogie Funds and TAMRO
Funds, respectively. The Advisers provide investment advisory services
pursuant to an investment advisory agreement with each applicable Fund (each
an "Existing Investment Advisory Agreement").
On October 18, 2000, Alleghany, 375 Park Avenue, New York, New York 10152,
Alleghany Asset Management, Inc. ("AAM"), 171 North Clark Street, Chicago,
Illinois 60601, and ABN AMRO, 135 South LaSalle Street, Chicago, Illinois
60603, entered into an agreement and plan of merger pursuant to which a direct
or indirect subsidiary of ABN AMRO will be merged with and into AAM. ABN AMRO
may, however, assign its rights and obligations under the agreement and plan
of merger to any of its affiliates. ABN AMRO will pay Alleghany a purchase
price of $825 million, subject to adjustments to be made at and after the
closing. AAM holds a controlling interest (within the meaning of the 1940 Act)
in each of the Advisers. AAM is a wholly owned subsidiary of Alleghany.
Consummation of the transaction is subject to a number of contingencies,
including the consent to the transaction of clients constituting 70% of the
assets managed by Montag & Caldwell on October 16, 2000, as adjusted to
eliminate increases or decreases attributable exclusively to positive or
negative changes in the market value of such assets.
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ABN AMRO is a wholly owned subsidiary of ABN AMRO Bank N.V. ("ABN AMRO
Bank"). While ABN AMRO Bank was formed in September 1991 following the merger
of Algemene Bank Nederland N.V. and Amsterdam-Rotterdam Bank N.V., the two
largest banks of the Netherlands, its history dates back to 1824 when King
William I founded the Dutch Trading Society. As of July 2000, ABN AMRO Bank is
the 13th largest financial institution in the world with assets of more than
EUR457.9 billion and ranks 6th among European banks in terms of total assets.
Headquartered in Amsterdam, ABN AMRO Bank is located in more than 70 countries
and territories across the globe with around 108,000 employees worldwide. ABN
AMRO Bank is wholly owned by ABN AMRO Holding N.V. ("Holding"), a publicly
listed company. Stichting Administratiekantoor ABN AMRO Holding ("Stichting"),
holds and administers 99.9% of the preference shares of Holding. Stichting is
a non-membership organization (i.e., an entity without shareholders or other
members that is similar to a trust or foundation) with a self-appointing
managing board organized under the laws of the Netherlands. Pursuant to the
Articles of Association of Holding, the holder of the one priority share of
Holding, Stichting Prioriteit ABN AMRO Holding, a non-membership organization
with a self appointing managing board organized under the laws of the
Netherlands, determines the members of the managing board and supervisory
board of Holding.
Through ABN AMRO Asset Management ("AAAM"), its asset management arm, ABN
AMRO Bank has managed domestic, regional and international equity and fixed
income portfolios since 1933. Mutual funds account for over 48% of AAAM's
assets under management, totaling over $59 billion of the total assets of $122
billion, as of June 30, 2000.
As required by the 1940 Act, the Existing Investment Advisory Agreements
provide for their automatic termination in the event of an "assignment."
Consummation of the Alleghany--ABN AMRO transaction will result in an
"assignment", as that term is defined in the 1940 Act, of each Existing
Investment Advisory Agreement and, consequently, its termination.
ABN AMRO has told the Board of Trustees that it believes that the
Alleghany-- ABN AMRO transaction will have no material effect on the
investment advisory services provided to the Funds or the other services
provided to the Funds by affiliates of AAM, including Alleghany Investment
Services, Inc., the Funds' administrator. In addition, no fees will increase
and ABN AMRO believes that no portfolio managers will change as a result of
the transaction.
The Board of Trustees of the Company is submitting for approval by the
shareholders of each Fund a new investment advisory agreement with each Fund
and its respective Adviser (each a "New Investment Advisory Agreement") (the
New Investment Advisory Agreements and the Existing Investment Advisory
Agreements are collectively referred to as the "Investment Advisory
Agreements"). Each New Investment Advisory Agreement is substantially
identical to the corresponding
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Existing Investment Advisory Agreement, except for the dates of execution and
termination and, in the case of Alleghany/Chicago Trust Talon Fund only, the
absence of a guaranty by Chicago Title and Trust Company ("Chicago Title and
Trust"), as more fully described below. The description of each New Investment
Advisory Agreement, which is set forth below, is qualified in its entirety by
reference to the Form of New Investment Advisory Agreement, a copy of which is
attached to this Proxy Statement as Exhibit A.
Section 15(f) of the 1940 Act
Section 15(f) of the 1940 Act provides that an investment adviser to a
mutual fund (or its affiliates) may receive any amount or benefit in
connection with a sale of any interest in such adviser which results in an
assignment of an investment advisory contract if two conditions are satisfied.
One condition is that, for a period of three years after such assignment, at
least 75% of the board of directors of the fund cannot be "interested persons"
of the new investment adviser or its predecessor. The second condition is that
no "unfair burden" be imposed on the fund as a result of the assignment or any
express or implied terms, conditions or understandings applicable thereto.
In connection with the first condition of Section 15(f), ABN AMRO has
agreed that, for a period of three years after the closing date, it will use
commercially reasonable efforts to assure that at least 75% of the Board of
Trustees (or permitted successors thereto) are not "interested persons" of ABN
AMRO, Alleghany, AAM or any of their affiliates.
With respect to the second condition of Section 15(f), an "unfair burden"
on a fund is defined in the 1940 Act to include any arrangement during the
two-year period after any such transaction occurs whereby the investment
adviser or its predecessor or successor, or any interested person of such
adviser, predecessor or successor, receives or is entitled to receive any
compensation of two types, either directly or indirectly. The first type is
compensation from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the fund, other than
bona fide ordinary compensation as principal underwriter for such fund. The
second type is compensation from the fund or its security holders for other
than bona fide investment advisory or other services. ABN AMRO and Alleghany
have agreed, for a period of two years after the closing date, not to impose
or seek to impose any unfair burden on the Funds within the meaning of Section
15(f).
Board's Recommendation
On November 21, 2000, the Board of Trustees met and the Trustees,
including the Trustees who are not "interested persons" (as defined under the
1940 Act) of the Company, Advisers, subadvisers, Alleghany, ABN AMRO or any of
their affiliates ("Disinterested Trustees"), unanimously voted to approve the
New Investment Advisory Agreements and to recommend their approval to the
shareholders of each Fund.
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Board Evaluation
At a special meeting held on November 21, 2000, the Board of Trustees met
with senior management personnel of AAM and ABN AMRO to consider the
Alleghany--ABN AMRO transaction and its effects on the Company. The Board of
Trustees had the assistance of legal counsel who provided advice on, among
other things, the Board's fiduciary obligations in considering the proposed
new advisory agreements.
In connection with this review, ABN AMRO stated to the Board of Trustees
its belief and intention that the Alleghany--ABN AMRO transaction: (1) will
have no material effect on the investment advisory services provided or other
services provided to the Funds by affiliates of AAM, including Alleghany
Investment Services, Inc., the Funds' administrator; (2) will have no material
effect on the operational management of the Funds; (3) will result in no
change in fees or contractual expense limitations of the Funds; (4) will not
result in any material change in the management or operations of the Advisers
or subadvisers to the Funds; and (5) will not adversely affect any investment
adviser's or subadviser's human and other resources or financial condition, in
a manner that would adversely impact AAM's ability to provide the same quality
of investment advisory and other services that the Advisers and subadvisers
have provided in the past. In addition, ABN AMRO stated that it believed that
as a result of the Alleghany--ABN AMRO transaction, shareholders of the Funds
would benefit by the increased resources available to AAM. Among other things,
such resources may allow for the creation of more investment choices and an
increased level of shareholder services.
ABN AMRO assured the Board of Trustees that it intends to comply with
Section 15(f) of the 1940 Act as described above. ABN AMRO advised the Board
of Trustees that it does not have any express or implied understanding or
arrangement that would be reasonably expected to impose an "unfair burden" on
the Funds as a result of the Alleghany--ABN AMRO transaction.
In evaluating the proposed new investment and sub-investment advisory
agreements, the Board of Trustees reviewed materials furnished by AAM, ABN
AMRO, Alleghany and Fund counsel. The Board of Trustees reviewed information
about ABN AMRO, including its personnel, operations, and financial condition,
as well as its existing U.S. investment company operations. The Board of
Trustees reviewed the terms of the Alleghany--ABN AMRO transaction and its
possible effects on the Advisers, the subadvisers, the Funds and the Funds'
shareholders. The Board of Trustees considered the actions taken to retain key
personnel and the additional resources that may be provided to the Funds,
including investment advisory and distribution resources. The Board of
Trustees reviewed information regarding the investment performance of the
Funds on an absolute basis and compared to investment companies with similar
investment objectives and policies (the "peer group") and the fees and
expenses incurred by the Funds compared to their peer group. The Board of
Trustees also considered the profitability of the advisory agreements.
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The Board of Trustees specifically considered the following as relevant to
their recommendations: (1) that the terms of the new investment and sub-
investment advisory agreements are substantially identical to those of the
existing agreements, except for different dates of execution and termination,
other than for the Alleghany/Chicago Trust Talon Fund advisory agreement,
which will no longer have a guaranty from Chicago Title and Trust; (2) the
financial strength and resources of ABN AMRO and its commitment to global
asset management growth; (3) the favorable history, reputation, qualifications
and background of ABN AMRO, as well as the qualifications of its personnel;
(4) the experience of ABN AMRO with other U.S. registered investment
companies; (5) the likelihood of benefits to the Fund shareholders resulting
from AAM's affiliation with ABN AMRO and access to greater resources; (6) the
increased likelihood of continuity of management of the Funds by reducing
their vulnerability to changes in control of AAM that may be adverse to the
Funds' interests; (7) ABN AMRO's statement as to its intention and belief that
it does not intend to make any material changes to AAM's financial, human and
other resources that would adversely impact AAM's ability to provide the same
quality of investment advisory and other services that the Advisers and
subadvisers have provided in the past; (8) ABN AMRO's statement as to its
intention and belief that the Alleghany--ABN AMRO transaction would have no
material effect on the investment advisory or other services provided to the
Funds by affiliates of AAM; (9) the anticipated continuity of portfolio
managers and no changes in fees or contractual expense limitations as a result
of the Alleghany--ABN AMRO transaction; (10) that the fees and expense ratios
of the Funds are reasonable given the quality of services expected to be
provided and are comparable to the fees and expense ratios of similar mutual
funds; (11) the relative performance of the Funds since commencement of
operations to comparable mutual funds and unmanaged indices; (12) the
commitment of Alleghany and ABN AMRO to pay the expenses of the Funds in
connection with the Alleghany--ABN AMRO transaction so that shareholders of
the Funds would not have to bear such expenses; and (13) other factors deemed
relevant by the Trustees.
THE BOARD RECOMMENDS THAT YOU VOTE
"FOR" THE NEW INVESTMENT ADVISORY AGREEMENT.
Description of Investment Advisory Agreements
Except as disclosed below, all of the Investment Advisory Agreements are
substantially identical. Pursuant to the Existing Investment Advisory
Agreements, each Adviser acts as an investment adviser for certain Funds. The
Adviser provides an investment program for each respective Fund in accordance
with such Fund's investment policies, limitations and restrictions, and
furnishes executive, administrative and clerical services required for the
transaction of such Fund's business.
For the investment advisory services provided to each Fund, the
appropriate Adviser receives a monthly fee based on the respective Fund's
average daily net
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assets. The table in Exhibit B provides the annual fee rate, exclusive of
contractual expense limitations, for each Existing Investment Advisory
Agreement and the aggregate advisory fees earned during the fiscal year ended
October 31, 2000 by the Adviser for each Fund. Each New Investment Advisory
Agreement has the same advisory fee as the corresponding Existing Investment
Advisory Agreement and will be subject to the same contractual expense
limitations.
Under the terms of the Investment Advisory Agreements, the Adviser is not
liable to a Fund for any error of judgment, mistake of law or any other act or
omission in the course of rendering investment advisory services, including
any losses sustained in connection with the purchase, holding, redemption or
sale of any security on behalf of the Fund, except in the case of willful
misfeasance, bad faith, gross negligence or reckless disregard by the Adviser
of its duties under the agreement.
Each Investment Advisory Agreement may be terminated without penalty upon
sixty (60) days' written notice by a Fund, upon the vote of a majority of
Trustees or by a vote of the majority of a Fund's outstanding voting
securities, and by the Adviser for such Fund.
For Alleghany/Chicago Trust Talon Fund ("Talon Fund") only, the Existing
Investment Advisory Agreement is supported by an Amended and Restated Guaranty
Agreement ("Guaranty Agreement") under which Chicago Title and Trust
guarantees the obligations and liabilities of Chicago Trust to the Talon Fund.
The New Investment Advisory Agreement for the Talon Fund would not be
supported by the Guaranty Agreement. The guaranty agreement was originally put
in place in 1995 when Chicago Title and Trust transferred responsibilities for
advising and the personnel managing the Funds to Chicago Trust. Since 1998,
however, Chicago Title and Trust and Chicago Trust are no longer affiliated
entities. In 1999, the Board authorized a shareholders' meeting to consider
removal of the guaranty for all Chicago Trust Funds. For all Chicago Trust
Funds other than the Talon Fund, sufficient votes were received to eliminate
the guaranty. The Guaranty Agreement provides for its termination upon the
termination of the Existing Investment Advisory Agreement, which will occur as
a result of the Alleghany--ABN AMRO transaction.
The table in Exhibit C lists the date of each Existing Investment Advisory
Agreement and the date each Existing Investment Advisory Agreement was last
submitted to a shareholder vote. The most recent action taken by the Board
with respect to each Existing Investment Advisory Agreement was December 16,
1999 in connection with its annual renewal, except for Alleghany/Veredus
SciTech Fund for which the Board of Trustees initially approved the Existing
Investment Advisory Agreement on June 15, 2000 and the TAMRO Funds for which
the Board of Trustees initially approved the Existing Investment Advisory
Agreement on September 21, 2000. At its regularly scheduled meeting on
December 21, 2000, the Board of Trustees will consider the annual renewal of
each Existing Investment Advisory Agreement, except for the TAMRO Funds and
Alleghany/Veredus SciTech Fund, for which the initial term has not yet
expired.
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The New Investment Advisory Agreements
The New Investment Advisory Agreement for each Fund will be dated as of
the date of the consummation of the Alleghany--ABN AMRO transaction, which is
expected to occur during the first quarter of 2001. Each New Investment
Advisory Agreement will be in effect for an initial term ending on December
31, 2001 and to be continued thereafter from year to year if specifically
approved by a vote of a majority of the outstanding voting securities of such
Fund, or by the Board of Trustees and, in either event, by a vote of a
majority of Disinterested Trustees, cast in person at a meeting called for
such purpose. In the event that shareholders do not approve a New Investment
Advisory Agreement, the Board will take such action as it deems to be in the
best interests of that Fund and its shareholders.
Differences Between the Existing and New Investment Advisory Agreements
The New Investment Advisory Agreements are substantially identical to the
Existing Investment Advisory Agreements, except for the date of execution and
termination and, in the case of Alleghany/Chicago Trust Talon Fund, the
absence of a guaranty by Chicago Title and Trust, as more fully described
above.
Description of Advisers
Chicago Trust: Chicago Trust is the investment adviser for the Chicago
Trust Funds. As of September 30, 2000, Chicago Trust managed approximately
$14.1 billion in assets (which includes assets managed by its subsidiaries
Chicago Capital Management, Inc. and The Chicago Trust Company of California),
consisting primarily of insurance, pension and profit sharing accounts, as
well as accounts of high net worth individuals and families. Chicago Trust is
a wholly owned subsidiary of AAM. The principal business address of Chicago
Trust is 171 North Clark Street, Chicago, IL 60601-3294.
Montag & Caldwell: Montag & Caldwell is the investment adviser for the
Montag & Caldwell Funds. Founded in 1945, Montag & Caldwell managed
approximately $29.2 billion in assets as of September 30, 2000. Montag &
Caldwell is a wholly owned subsidiary of Chicago Trust. The principal business
address of Montag & Caldwell is 3455 Peachtree Road, NE, Suite 1200, Atlanta,
GA 30326-1022.
Veredus: Veredus is the investment adviser for the Veredus Funds. Veredus
was founded in 1998 and as of September 30, 2000, managed approximately $546
million in assets. Pursuant to a subscription agreement with Veredus and each
of its members, AAM owns a 40% membership interest in Veredus. In addition,
the subscription agreement grants to AAM three options to purchase additional
membership interests, with each option representing a 10% membership interest
in Veredus. The first option may be exercised in calendar year 2003; the
second, in calendar year 2005; and the
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third, in calendar year 2007. If AAM chooses to exercise all three options, it
could own a 70% membership interest in Veredus. B. Anthony Weber, director,
chief executive officer and president of Veredus currently holds a 42%
membership interest. The principal business address of Veredus is 6060
Dutchmans Lane, Suite 320, Louisville, KY 40205.
Blairlogie: Blairlogie is the investment adviser to the Blairlogie Funds.
Founded in 1992, Blairlogie managed approximately $1 billion as of September
30, 2000, primarily for institutional clients. Blairlogie International L.L.C.
and its subsidiary, Pacific Shelf 797 Ltd., have a controlling interest in
Blairlogie and act as general partners. Blairlogie International L.L.C. is
wholly owned by AAM. As a result, Alleghany indirectly owns 83.25% of
Blairlogie. The principal business address of Blairlogie is 125 Princes
Street, 4th Floor, Edinburgh, Scotland EH2 4AD.
TAMRO: TAMRO is the investment adviser to the TAMRO Funds. AAM owns all of
the capital interests of TAMRO, which was founded in May 2000. The principal
business address of TAMRO is 1660 Duke Street, Alexandria, VA 22314.
Exhibit D contains tables listing the directors and principal executive
officers of each Adviser and their principal occupations. Unless otherwise
noted, the business address of each person is the same as the principal
business address of the Adviser. The table also lists the trustees and
officers of the Company who are employees, officers, directors or shareholders
of an Adviser.
Exhibit E sets forth the fees and other information regarding investment
companies advised by an Adviser that have similar investment objectives to any
of the Funds.
Required Vote
The shareholders of each Fund will consider this proposal separately.
Approval of this proposal with respect to each Fund requires the affirmative
vote of a "majority of the outstanding voting securities" of that Fund, as
more fully described above.
PROPOSAL NO. 2
TO APPROVE OR DISAPPROVE A NEW SUB-INVESTMENT ADVISORY AGREEMENT FOR EACH
CHICAGO TRUST FUND (Alleghany/Chicago Trust Balanced Fund; Alleghany/Chicago
Trust Bond Fund; Alleghany/Chicago Trust Growth & Income Fund;
Alleghany/Chicago Trust Money Market Fund; Alleghany/Chicago Trust Municipal
Bond Fund; Alleghany/Chicago Trust Small Cap Value Fund; and Alleghany/Chicago
Trust Talon Fund).
Introduction
Chicago Capital Management, Inc. ("Chicago Capital") acts as subadviser
for each Chicago Trust Fund, except Alleghany/Chicago Trust Talon Fund,
pursuant to a
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separate sub-investment advisory agreement with Chicago Trust for each such
Fund (each an "Existing Sub-Investment Advisory Agreement"). For these Funds,
as required by the 1940 Act, each Existing Sub-Investment Advisory Agreement
automatically terminates in the event of its "assignment," as defined in the
1940 Act. Consummation of the Alleghany--ABN AMRO transaction, described above
in proposal 1, will result in an assignment, as that term is defined in the
1940 Act, of each Existing Sub-Investment Advisory Agreement and,
consequently, its termination. Also, each Existing Sub-Investment Advisory
Agreement provides for its termination automatically in the event that the
corresponding Existing Investment Advisory Agreement is terminated. Therefore,
the termination of each Existing Investment Advisory Agreement as a result of
the Alleghany--ABN AMRO transaction will also result in the termination of
each corresponding Existing Sub-Investment Advisory Agreement.
Talon Asset Management, Inc. ("Talon" and together with Chicago Capital,
the "Subadvisers") acts as subadviser for Alleghany/Chicago Trust Talon Fund
pursuant to a sub-investment advisory agreement with Chicago Trust (also
referred to as an "Existing Sub-Investment Advisory Agreement"). Talon's
Existing Sub-Investment Advisory Agreement provides for its automatic
termination in the event the Existing Investment Advisory Agreement is
terminated. Therefore, the termination of the Existing Investment Advisory
Agreement for Alleghany/Chicago Trust Talon Fund as a result of the
Alleghany--ABN AMRO transaction will also result in the termination of the
Existing Sub-Investment Advisory Agreement.
The Board of Trustees of the Company is submitting for approval by the
shareholders of each Chicago Trust Fund a new sub-investment advisory
agreement with Chicago Capital or Talon, as appropriate, for each Chicago
Trust Fund (each a "New Sub-Investment Advisory Agreement") (the New Sub-
Investment Advisory Agreements and the Existing Sub-Investment Advisory
Agreements are collectively referred to as the "Sub-Investment Advisory
Agreements"). Each New Sub-Investment Advisory Agreement is substantially
identical to the corresponding Existing Sub-Investment Advisory Agreement,
except for the dates of execution and termination. The description of the New
Sub-Investment Advisory Agreements, which is set forth below, is qualified in
its entirety by reference to the Form of New Sub-Investment Advisory
Agreement, a copy of which is attached to this Proxy Statement as Exhibit F.
Board's Recommendation
On November 21, 2000, the Board of Trustees, including the Disinterested
Trustees, met and voted to approve the New Sub-Investment Advisory Agreements
and to recommend approval of the New Sub-Investment Advisory Agreement to the
shareholders of each Chicago Trust Fund. In approving the New Sub-Investment
Advisory Agreements, the Board of Trustees considered the same factors as
described in proposal 1 in approving the New Investment Advisory Agreements.
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THE BOARD RECOMMENDS THAT YOU VOTE
"FOR" THE NEW SUB-INVESTMENT ADVISORY AGREEMENTS.
Description of Sub-Investment Advisory Agreements
Except as described below, all of the Sub-Investment Advisory Agreements
are substantially identical. Pursuant to the Existing Sub-Investment Advisory
Agreements, Chicago Capital and Talon each act as a subadviser for certain
Chicago Trust Funds. The Subadvisers provide an investment program for each
such Fund in accordance with its investment policies, limitations and
restrictions.
For the subadvisory services provided to each Chicago Trust Fund, the
appropriate Subadviser receives a monthly fee from Chicago Trust based on each
respective Fund's average daily net assets. The table in Exhibit B provides
the annual fee rate for each Existing Sub-Investment Advisory Agreement and
the aggregate subadvisory fees earned during the fiscal year ended October 31,
2000 by the Subadviser for each Fund. Each New Sub-Investment Advisory
Agreement has the same subadvisory fee as the corresponding Existing Sub-
Investment Advisory Agreement.
Under the terms of each Sub-Investment Advisory Agreement, the appropriate
subadviser is not liable to Chicago Trust or the Company for any error of
judgment, mistake of law or any loss suffered in connection with any matters
to which the agreement relates or any other act or omission in the performance
of its duties under the agreement, except in the case of its willful
misfeasance, bad faith, gross negligence in the performance of its duties or
reckless disregard of its obligations and duties under the agreement.
Each Sub-Investment Advisory Agreement may be terminated without penalty
upon sixty (60) days' written notice by a Chicago Trust Fund, upon the vote of
a majority of Trustees or by a vote of the majority of a Fund's outstanding
voting securities, and by the Subadviser. Each Sub-Investment Advisory
Agreement also terminates upon the termination of the corresponding Investment
Advisory Agreement between each Fund and Chicago Trust.
The table in Exhibit C lists the date of each Existing Sub-Investment
Advisory Agreement and the date each Existing Sub-Investment Advisory
Agreement was last submitted to a shareholder vote. The most recent action
taken by the Board of Trustees with respect to each Existing Sub-Investment
Advisory Agreement with Chicago Capital was on June 15, 2000 in connection
with its initial approval. The most recent action taken by the Board of
Trustees with respect to the Existing Sub-Investment Advisory Agreement with
Talon was on December 16, 1999 in connection with its annual approval. At its
regularly scheduled meeting on December 21, 2000, the Board of Trustees will
consider renewal of the Existing Sub-Investment Advisory Agreement for the
Talon Fund.
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The New Sub-Investment Advisory Agreements
The New Sub-Investment Advisory Agreement for each Chicago Trust Fund will
be dated as of the date of the consummation of the Alleghany--ABN AMRO
transaction, which is expected to occur during the first quarter of 2001. Each
New Sub-Investment Advisory Agreement will be in effect for an initial term
ending on December 31, 2001 and to be continued thereafter from year to year
if specifically approved by a vote of a majority of the outstanding voting
securities of the applicable Fund, or by the Board of Trustees and, in either
event, by a vote of a majority of Disinterested Trustees, cast in person at a
meeting called for such purpose. In the event that shareholders do not approve
a New Sub-Investment Advisory Agreement, the Board will take such action as it
deems to be in the best interests of that Fund and its shareholders.
Differences Between the Existing and New Investment Advisory Agreements
The New Sub-Investment Advisory Agreements are substantially identical to
the Existing Sub-Investment Advisory Agreements, except for the dates of
execution and termination.
Description of Subadviser
Chicago Capital: Chicago Capital is the subadviser for the Chicago Trust
Funds, except Alleghany/Chicago Trust Talon Fund. Chicago Capital was formed
in 1999 from the investment, marketing and client service officers and
employees affiliated with the institutional business of Chicago Trust. Chicago
Capital is a registered investment adviser offering institutional asset
management services to corporations, public funds, Taft Hartley plans,
insurance companies and mutual fund clients. The advisory personnel of Chicago
Capital continue to serve the Chicago Trust Funds in the same capacities as
with Chicago Trust. As of September 30, 2000, Chicago Capital managed
approximately $3.5 billion in assets.
Chicago Capital is a wholly owned subsidiary of Chicago Trust, which in
turn is a wholly owned subsidiary of AAM, which in turn is a wholly owned
subsidiary of Alleghany. The principal business address of Chicago Capital is
171 North Clark Street, Chicago, IL 60601.
Talon: Talon is the subadviser for the Talon Fund. The principal business
address of Talon is One North Franklin, Suite 450, Chicago, Illinois 60606. As
of September 30, 2000, Talon managed approximately $539 million in assets.
Terry D. Diamond, chairman and director of Talon, owns approximately 72% of
Talon.
Exhibit D contains a table listing the directors and principal executive
officers of the Subadvisers and their principal occupations. Unless otherwise
noted, the business address of such persons is the same as the principal
business address of the Subadviser. The table also lists the trustees and
officers of the Company who are employees, officers, directors or shareholders
of a Subadviser.
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Required Vote
The shareholders of each Chicago Trust Fund will consider this proposal
separately. Approval of this proposal with respect to each Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of that
Fund, as more fully described above.
SUBMISSION OF SHAREHOLDER PROPOSALS
Under Delaware law, the Company is not required to hold annual
shareholders' meetings, but it will hold special meetings as required or
deemed desirable, or upon the request of holders of at least 10% of the
Company's shares. Since the Company does not hold regular meetings of
shareholders, the anticipated date of the next special shareholder meeting
cannot be provided. Any shareholder who wishes to submit a proposal for
consideration at a subsequent shareholders' meeting should mail the proposal
promptly to the Company. Any proposal to be considered for submission to
shareholders must comply with Rule 14a-8 under the Securities Exchange Act of
1934 and must be received by the Company within a reasonable time before the
solicitation of proxies for that meeting. The timely submission of a proposal
does not guarantee its inclusion.
OTHER MATTERS TO COME BEFORE THE MEETING
The Board of Trustees is not aware of any matters that will be presented
for action at the Special Meeting other than the matters set forth herein.
Should any other matters requiring a vote of shareholders arise, the proxy in
the accompanying form will confer upon the person or persons entitled to vote
the shares represented by such proxy the discretionary authority to vote
matters in accordance with their best judgment.
DISTRIBUTOR AND ADMINISTRATOR
Set forth below are the names and addresses of Alleghany Funds'
distributor and administrator:
ADMINISTRATOR DISTRIBUTOR
Alleghany Investment Services, Inc.
171 North Clark Street, 12MD Chicago, Provident Distributors, Inc. 3200
IL 60601-3294 Horizon Drive King of Prussia, PA
19406
During the fiscal year ended October 31, 2000, the Company paid Alleghany
Investment Services, Inc. $2.76 million for providing administrative services
to the Funds, of which $2.18 million was paid to PFPC, Inc., as sub-
administrator.
December 15, 2000
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EXHIBIT A
FORM OF NEW INVESTMENT ADVISORY AGREEMENT
Alleghany/ Fund
AGREEMENT made this day of 2001 by and between
Alleghany Funds, a Delaware business trust (the "Trust"), on behalf of
Alleghany/ Fund (the "Fund") and (the
"Adviser").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company; and
WHEREAS, the Trust wishes to retain the Adviser to render investment
advisory services to the Fund, and the Adviser is willing to furnish such
services to the Fund.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the Fund and the Adviser as follows:
1. Appointment. The Trust hereby appoints the Adviser to act as investment
adviser to the Fund for the periods and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth, for the compensation herein provided.
2. Duties of Adviser. As investment adviser, the Adviser shall: (1) manage
the investment and reinvestment of the assets of the Fund, (ii)
continuously review, supervise and administer the investment program of
the Fund, (iii) determine in its discretion, the assets to be held
uninvested, (iv) provide the Trust with records concerning the Adviser's
activities which are required to be maintained by the Trust and (v) render
regular reports to the Trust's officers and Board of Trustees concerning
the Adviser's discharge of the foregoing responsibilities. The Adviser
shall discharge the foregoing responsibilities subject to the control of
the officers and the Board of Trustees of the Trust and in compliance with
the objectives, policies and limitations set forth in the Fund's then
effective prospectus and statement of additional information. The Adviser
accepts such employment and agrees to render such services and to provide,
at its own expense, the office space, furnishings, equipment and the
personnel required by it to perform such services on the terms and for the
compensation provided herein.
3. Portfolio Transactions. The Adviser shall select and monitor the selection
of the brokers or dealers that will execute the purchases and sales of
securities for the Fund and is directed to use its best efforts to ensure
that the best available price and most favorable execution of securities
transactions for the Fund are obtained. Subject to policies established by
the Board of Trustees of the Trust and communicated to the Adviser, it is
understood that the Adviser will not be deemed to have acted unlawfully,
or to have breached a fiduciary duty to the
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Trust or in respect of the Fund, or be in breach of any obligation owing
to the Trust or in respect of the Fund under this Agreement, or otherwise,
solely by reason of its having caused the Fund to pay a member of a
securities exchange, a broker or a dealer a commission for effecting a
securities transaction for the Fund in excess of the amount of commission
another member of an exchange, broker or dealer would have charged if the
Adviser determines in good faith that the commission paid was reasonable
in relation to the brokerage or research services provided by such member,
broker or dealer, viewed in terms of that particular transaction or the
Adviser's overall responsibilities with respect to the accounts, including
the Fund, as to which it exercises investment discretion. The Adviser will
promptly communicate to the officers and Trustees of the Trust such
information relating to Fund transactions as they may reasonably request.
4. Compensation of the Adviser. For the services to be rendered by the
Adviser as provided in Section 2 and 3 of this Agreement, the Fund shall
pay to the Adviser within five business days after the end of each
calendar month a monthly fee of one-twelfth of % of the Fund's
average daily net assets for that month.
In the event of termination of this Agreement, the fee provided in this
Section 4 shall be paid on a pro-rata basis, based on the number of days
during which this Agreement was in effect.
5. Reports. The Fund and the Adviser agree to furnish to each other such
information regarding their operations with regard to their affairs as
each may reasonably request.
6. Status of Adviser. The services of the Adviser to the Fund are not to be
deemed exclusive, and the Adviser shall be free to render similar services
to others so long as its services to the Fund are not impaired thereby.
7. Liability of Adviser. In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard by the Adviser of its obligations
and duties hereunder, the Adviser shall not be subject to any liability
whatsoever to the Fund, or to any shareholder of the Fund, for any error
of judgment, mistake of law or any other act or omission in the course of,
or connected with, rendering services hereunder including, without
limitation, for any losses that may be sustained in connection with the
purchase, holding, redemption or sale of any security on behalf of the
Fund.
8. Duration and Termination. The term of this Agreement shall commence on the
date that an amendment to the Trust's registration statement establishing
the Fund becomes effective (the "Effective Date"), provided that first it
is approved by the Board of Trustees of the Trust, including a majority of
those Trustees who are not parties to this Agreement or interested persons
of any party hereto, in the manner provided in Section 15(c) of the 1940
Act, and by the holders of a majority of the outstanding voting securities
of the Fund, and shall continue in effect until December 31, 2001. This
Agreement may continue in effect after its initial term only if such
continuance is approved at least annually by (i) the
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Trust's Board of Trustees or (ii) the vote of a majority of the
outstanding voting securities of the Fund; and in either event by a vote
of a majority of those Trustees of the Trust who are not parties to this
Agreement or interested persons of any such party in the manner provided
in Section 15(c) of the 1940 Act. Notwithstanding the foregoing, this
Agreement may be terminated: (a) at any time without penalty by the Fund
upon the vote of a majority of the Trustees or by vote of the majority of
the Fund's outstanding voting securities, upon sixty (60) days' written
notice to the Adviser or (b) by the Adviser at any time without penalty,
upon sixty (60) days' written notice to the Fund. This Agreement will also
terminate automatically in the event of its assignment (as defined in the
1940 Act). Any notice under this Agreement shall be given in writing,
addressed and delivered or mailed postpaid, to the other party at the
principal office of such party.
As used in this Section 8, the terms "assignment", "interested person" and
"a vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and
Section 2(a)(42) of the 1940 Act and Rule l8f-2 thereunder.
9. Severability. If any provisions of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
10. Amendments. 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 amendment of this Agreement
shall be effective until approved by an affirmative vote of (i) a majority
of the outstanding voting securities of the Fund and (ii) a majority of
the Trustees, including a majority of the Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval, if such approval is required
by applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
ALLEGHANY FUNDS for
ALLEGHANY/ FUND
ATTEST
By: __________________________________________
__________________________
Title: _______________________________________
ATTEST
______________________________________________
__________________________
By: __________________________________________
Title: _______________________________________
A-3
<PAGE>
EXHIBIT B
FUND ADVISORY FEE RATES AND AGGREGATE ADVISORY FEES
<TABLE>
<CAPTION>
Aggregate
Fund Annual Rate Annual Fees Paid
---- ----------- ----------------
<S> <C> <C>
Alleghany/Chicago Trust Balanced
Fund 0.70% $2,139,983
Alleghany/Chicago Trust Bond Fund 0.55% 505,447
Alleghany/Chicago Trust Growth &
Income Fund 0.70% 3,822,871
Alleghany/Chicago Trust Money
Market Fund 0.40% 1,573,389
Alleghany/Chicago Trust Municipal
Bond Fund 0.60% 0*
Alleghany/Chicago Trust Small Cap
Value Fund 1.00% 428,290
Alleghany/Chicago Trust Talon
Fund 0.80% 136,409
Alleghany/Montag & Caldwell
Balanced Fund 0.75% 2,441,002
Alleghany/Montag & Caldwell
Growth Fund First $800 million 0.80% 20,110,532
Over $800 million 0.60%
Alleghany/Blairlogie Emerging
Markets Fund 0.85% 88,138
Alleghany/Blairlogie
International Developed Fund 0.85% 592,912
Alleghany/Veredus Aggressive
Growth Fund 1.00% 1,387,507
Alleghany/Veredus SciTech Fund 1.00% 0*
Alleghany/TAMRO Large Cap Value
Fund 0.80% 0**
Alleghany/TAMRO Small Cap Fund 0.90% 0**
</TABLE>
-----------
*Adviser reimbursed amounts above the advisory fees
**Inception date 11/30/00
CHICAGO TRUST FUNDS SUBADVISORY FEE RATES
AND AGGREGATE SUBADVISORY FEES (Paid by the Adviser)
<TABLE>
<CAPTION>
Aggregate
Fund Annual Rate Annual Fees Paid
---- ----------- ----------------
<S> <C> <C>
Alleghany/Chicago Trust Balanced
Fund 0.18% $189,155*
Alleghany/Chicago Trust Bond Fund 0.12% 59,603*
Alleghany/Chicago Trust Growth &
Income Fund 0.22% 418,435*
Alleghany/Chicago Trust Money
Market Fund 0.11% 138,264*
Alleghany/Chicago Trust Municipal
Bond Fund 0.00% 0*
Alleghany/Chicago Trust Small Cap
Value Fund 0.30% 48,175*
Alleghany/Chicago Trust Talon
Fund 0.6875% 87,936
of net advisory fee
</TABLE>
-----------
* For the period 7/01/00-10/31/00
B-1
<PAGE>
EXHIBIT C
DATES RELATING TO EXISTING INVESTMENT ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
Date Existing Investment
Advisory Agreement was Last
Fund Dated Submitted to Shareholder Vote
---- ----- -----------------------------
<S> <C> <C>
Alleghany/Chicago Trust Balanced 03/15/95 06/17/99
Fund
Alleghany/Chicago Trust Bond Fund 11/30/93 06/17/99
Alleghany/Chicago Trust Growth & 11/30/93 06/17/99
Income Fund
Alleghany/Chicago Trust Money 11/30/93 06/17/99
Market Fund
Alleghany/Chicago Trust Municipal 11/30/93 06/17/99
Bond Fund
Alleghany/Chicago Trust Small Cap 09/17/98 11/10/98
Value Fund
Alleghany/Chicago Trust Talon 08/27/94 06/17/99
Fund
Alleghany/Montag & Caldwell 08/27/94 06/17/99
Balanced Fund
Alleghany/Montag & Caldwell 08/27/94 06/17/99
Growth Fund
Alleghany/Blairlogie Emerging 09/17/98 04/30/99
Markets Fund
Alleghany/Blairlogie 09/17/98 04/30/99
International Developed Fund
Alleghany/Veredus Aggressive 09/17/98 12/07/98
Growth Fund
Alleghany/Veredus SciTech Fund 06/30/00 06/29/00
Alleghany/TAMRO Large Cap Value 11/30/00 11/29/00
Fund
Alleghany/TAMRO Small Cap Fund 11/30/00 11/29/00
</TABLE>
DATES RELATING TO EXISTING SUB-INVESTMENT ADVISORY AGREEMENTS
<TABLE>
<CAPTION>
Date Existing Sub-Investment
Advisory Agreement was Last
Fund Dated Submitted to Shareholder Vote
---- ----- -----------------------------
<S> <C> <C>
Alleghany/Chicago Trust Balanced 07/01/00 N/A
Fund
Alleghany/Chicago Trust Bond Fund 07/01/00 N/A
Alleghany/Chicago Trust Growth & 07/01/00 N/A
Income Fund
Alleghany/Chicago Trust Money 07/01/00 N/A
Market Fund
Alleghany/Chicago Trust Municipal 07/01/00 N/A
Bond Fund
Alleghany/Chicago Trust Small Cap 07/01/00 N/A
Value Fund
Alleghany/Chicago Trust Talon 08/27/94 09/16/94
Fund
</TABLE>
C-1
<PAGE>
EXHIBIT D
DIRECTORS AND OFFICERS ASSOCIATED WITH EACH ADVISER AND SUBADVISER
Chicago Trust
<TABLE>
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Stuart D. Director, Chief President and Director, Alleghany
Bilton Executive Asset Management, Inc.; Chairman,
Officer, Chicago Capital Management, Inc.;
President Director of each of the following
entities: Montag & Caldwell, Inc.,
The Chicago Trust Company of
California, TAMRO Capital Partners
LLC, Veredus Asset Management LLC,
Chicago Deferred Exchange
Corporation, Chicago Deferred
Exchange Corporation of
California, Alleghany Investment
Services, Inc.; President and
Chief Executive Officer,
Blairlogie International LLC;
Trustee, Alleghany Asset
Management Foundation
Edward S. Director Managing Director, Chase Franklin
Bottum Corp.; Director, Alleghany Asset
Management, Inc.; Corporate
Director, Kellwood Corp.;
Chairman, Learning Insights
L.L.C.; Trustee, Pacific
Innovations Funds; Director,
PetMed Express.com, Inc.; Trustee,
Underwriters Laboratories, Inc.;
Senior Advisor, American
International Group
Ronald E. Director Director, Alleghany Asset
Canakaris Management, Inc.; Director, Chief
Executive Officer, and President,
Montag & Caldwell, Inc.
David B. Cuming Director Senior Vice President and Chief
Financial Officer, Alleghany
Corp.; Director of the following
entities: Alleghany Asset
Management, Inc., Montag &
Caldwell, Inc., Blairlogie Capital
Management
Robert M. Hart Director Senior Vice President, General
Counsel and Secretary, Alleghany
Corp.; Director, Alleghany
Properties, Inc.; Director,
Sacramento Properties Holdings,
Inc.; Director, Alleghany Asset
Management, Inc.; Director,
Alleghany Underwriting Holdings
Ltd.
Jefferson W. Director Vice President, Alleghany Corp.;
Kirby Director, Alleghany Asset
Management, Inc.; Director,
Connecticut Surety Corp.;
Director, Covenant Insurance
Group; Director, Eldorado
Bancshares, Inc.; Director,
Sentius Corp.; Board Member, The
F.M. Kirby Foundation, Inc.; Board
Member, Lafayette College; Board
Member, The National Football
Foundation; Board Member, The Peck
School; Director, Veredus Asset
Management LLC; Director, TAMRO
Capital Partners LLC
</TABLE>
D-1
<PAGE>
<TABLE>
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Solon P. Director Director, Alleghany Asset
Patterson Management, Inc.; Director and
Chairman, Montag and Caldwell,
Inc.; Director, The Georgia
Chamber of Commerce; Board Member
of Governors of the Investment
Counsel Association of America
Robert E. Riley Director President and Chief Executive
Officer, Joseph P. Kennedy
Enterprises, Inc.; Director, John
F. Kennedy Library Foundation;
Director, Alleghany Asset
Management, Inc.; Associate
Trustee, Holy Cross College;
Overseer, Beth Israel Deaconess
Medical Center; Overseer, Tufts
Medical School
Richard P. Toft Director Director and Chairman, Alleghany
Asset Management, Inc.; Director,
Peoples Energy Corp.; Director,
Fidelity National Financial, Inc.
Seymour A. Treasurer Vice President and Treasurer,
Newman Alleghany Asset Management, Inc.;
Senior Vice President and
Treasurer, The Chicago Trust
Company; Director, Chief Financial
Officer and Treasurer, Chicago
Deferred Exchange Corporation;
Director, Vice President, Chief
Financial Officer, Secretary and
Treasurer, The Chicago Trust
Company of California; Director,
Vice President, Chief Financial
Officer, Secretary and Treasurer,
Chicago Deferred Exchange
Corporation of California;
Treasurer and Secretary, Alleghany
Investment Services Inc.;
Assistant Treasurer, Montag &
Caldwell, Inc.; Senior Vice
President, Chief Financial Officer
and Treasurer, Blairlogie
International LLC; Treasurer,
TAMRO Capital Partners, LLC
David L. Nyberg Secretary Secretary, Chicago Capital
Management, Inc.
Montag & Caldwell
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Stuart D. Director See description under Chicago
Bilton Trust above
Ronald E. Director, Chief See description under Chicago
Canakaris Executive Trust above
Officer,
President
David B. Cuming Director See description under Chicago
Trust above
Solon P. Director See description under Chicago
Patterson Trust above
David F. Seng Director Retired from Montag & Caldwell,
Inc.
Elizabeth C. Secretary
Chester
Brian W. Stahl Treasurer
</TABLE>
D-2
<PAGE>
Veredus
<TABLE>
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Stuart D. Director See description under Chicago
Bilton Trust above
B. Anthony Director, President
Weber
Charles P. Director, Executive
McCurdy, Jr. Vice President
James R. Director,
Jenkins Treasurer,
Secretary
Jefferson W. Director See description under Chicago
Kirby Trust above
Blairlogie
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Gavin R. Dobson Director, Chief
Executive Officer
James G.S. Director
Smith
Robert M. Director Executive Vice President,
Boyles Alleghany Asset Management, Inc.;
Director, TAMRO Capital Partners
LLC; President, Chicago Capital
Management, Inc.
David B. Cuming Director See description under Chicago
Trust above
TAMRO
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Ronald A. Director, Chief
Marsilia Executive Officer
Philip D. Tasho Director
Stuart D. Director See description under Chicago
Bilton Trust above
Robert M. Director See description under Blairlogie
Boyles above
Jefferson W. Director See description under Chicago
Kirby Trust above
Seymour A. Treasurer See description under Chicago
Newman Trust above
Talon
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Terry D. Director, Chairman
Diamond
Alan R. Wilson Director, President
Barbara L. Treasurer
Rumminger
Sophia A. Secretary
Erskine
</TABLE>
D-3
<PAGE>
Chicago Capital
<TABLE>
<CAPTION>
Name Title/Position Other Business
---- -------------- --------------
<C> <C> <S>
Stuart D. Chairman See description under Chicago
Bilton Trust above
Robert M. President See description under Blairlogie
Boyles above
Seymour A. Treasurer, See description under Chicago
Newman Executive Vice Trust above
President
Frederick W. Director, Senior Vice President, The Chicago
Engimann Executive Vice Trust Company
President
Patricia A. Director, Senior Vice President, The Chicago
Falkowski Executive Vice Trust Company
President
Bernard F. Director, Senior Vice President, The Chicago
Myszkowski Executive Vice Trust Company
President
Carla Straeten Director, Senior Vice President, The Chicago
Vorhees Executive Vice Trust Company
President
David L. Nyberg Secretary Secretary, The Chicago Trust
Company
</TABLE>
Stuart D. Bilton, Chairman and Trustee of the Company, acts as Director
and Officer of a number of Advisers and Subadvisers, as described above.
Kenneth C. Anderson, President (Chief Operating Officer) of the Company, is
also a Senior Vice President of Chicago Trust. Gerald F. Dillenburg, Vice
President, Secretary and Treasurer (Chief Financial Officer and Compliance
Officer) of the Company is also a Vice President of Chicago Trust and Senior
Vice President of Chicago Capital. Debra Reams, Vice President of the Company,
is also a Vice President of Montag & Caldwell.
D-4
<PAGE>
EXHIBIT E
COMPARABLE INVESTMENT COMPANIES
ADVISED BY THE ADVISER
The following are investment companies with investment objectives similar
to a Fund, for whom an Adviser provides advisory services:
<TABLE>
<CAPTION>
Sub-Advisory
Total Net Compensation
Assets as of on an Annual Basis
October 31, Based on the
Name of 2000 Value of Average
Sub-Adviser Investment Company (in Millions) Daily Net Assets
----------- ------------------------ ------------- ------------------
<C> <C> <C> <S>
Montag & Caldwell, Inc. Enterprise Growth Fund 0.30% less than
2,118 $100 million
0.25% greater
than or equal
to $100 million
or less
than $200
million
0.20% $200
million or
greater
Montag & Caldwell, Inc. Enterprise Balanced Fund 0.30% less than
14 $100 million
0.25% greater
than or equal
to $100 million
or less than
$200 million
0.20% $200
million or
greater
Montag & Caldwell, Inc. Accumulation Trust 308 0.30% less than
Growth Fund $1 billion
0.20% $1
billion or
greater
Montag & Caldwell, Inc. Accumulation Trust 16 0.30% less than
Balanced Fund $100 million
0.25% greater
than or equal
to $100 million
or less than
$200 million
0.20% $200
million or
greater
Montag & Caldwell, Inc. Vision Large Cap 7 0.50% less than
Growth Fund $50 million
0.40% greater
than or equal
to $50 million
or less than
$100 million
0.30% greater
than or equal
to $100 million
or less than
$200 million
0.20% $200
million or
greater
Montag & Caldwell, Inc. Diversified Investors 1,318 0.30% less than
Equity Growth Fund $100 million
0.25% greater
than or equal
to $100 million
or less than
$200 million
0.20% $200
million or
greater
Blairlogie Capital Pimco International Fund 114 0.40%
</TABLE>
E-1
<PAGE>
EXHIBIT F
FORM OF NEW SUB-INVESTMENT ADVISORY AGREEMENT
between
THE CHICAGO TRUST COMPANY
and
--------------------------------------
SUB-INVESTMENT ADVISORY AGREEMENT (the "Agreement") made this day of
, 2001, by and between The Chicago Trust Company (hereinafter
referred to as the "Investment Advisor") and
(hereinafter referred to as the "Sub-Advisor"), which Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one instrument.
WITNESSETH:
WHEREAS, the Investment Advisor wishes to enter into a contract with the
Sub-Advisor to render the Investment Advisor the following services:
Provide research, analysis, advice and recommendations with respect to the
purchase and sale of securities, and make investment commitments regarding
assets of the Alleghany/Chicago Trust Fund (hereinafter referred
to as the "Fund"; the Fund is a series of the Alleghany Funds, hereinafter
referred to as the "Trust"), subject to oversight by the Board of Trustees of
the Trust and the supervision of the Investment Advisor.
NOW THEREFORE, in consideration of the mutual agreements herein contained,
and intending to be bound, the parties agree as follows:
1. As compensation for the services enumerated herein, the Investment
Advisor will pay the Sub-Advisor a fee, which shall be calculated monthly
and payable monthly, as set forth in Schedule A hereto.
If this Agreement shall become effective subsequent to the first day of a
month, or shall terminate before the last day of a month, the Sub-Advisor's
compensation for such fraction of the month shall be determined by applying
the foregoing percentages to the average daily net asset value of the Fund
during such fraction of a month and in the proportion that such fraction of a
month bears to the entire month.
2. This Agreement shall become effective as of the date first above
written, subject to the approval of the Trustees of the Trust in
accordance with the provisions of the Investment Company Act of 1940 (the
"Act"). The Investment Advisor will promptly advise the Sub-Advisor as to
the giving of such approval. The Investment Advisor represents that it is
the investment advisor of the Fund, with the authority as such to enter
into this Agreement.
F-1
<PAGE>
3. This Agreement shall continue for a period ending one year from its
effective date. It may be renewed thereafter by the Investment Advisor and
the Sub-Advisor for successive periods not exceeding one year only so long
as such renewal and continuance is specifically approved at least annually
by the Board of Trustees of the Trust or by a vote of the majority of the
outstanding voting securities of the Fund as prescribed by the Act and
provided further that such continuance is approved at least annually
thereafter by a vote of a majority of the Trust's Trustees, who are not
parties to such Agreement or interested persons of such a party, cast in
person at a meeting called for the purpose of voting on such approval.
This Agreement will terminate automatically without the payment of any
penalty upon termination of the Investment Advisory Agreement ("Investment
Advisory Agreement") relating to the Fund between the Trust and the
Investment Advisor (accompanied by simultaneous notice to the Sub-Advisor)
or upon sixty days' written notice by the Trust to the Sub-Advisor that
the Trustees of the Trust or the shareholders by vote of a majority of the
outstanding voting securities of the Fund, as provided by the Act, have
terminated the Investment Advisory Agreement. This Agreement may also be
terminated by the Sub-Advisor without penalty upon sixty days' written
notice to Investment Advisor and the Trust.
This Agreement shall terminate automatically in the event of its
assignment or (upon notice thereof to the Sub-Advisor) the assignment of the
Investment Advisory Agreement, unless its continuation thereafter is approved
by the Board of Trustees of the Trust and the shareholders of the Fund as
required by the Act (in each case as the term "assignment" is defined in
Section 2(a)(4) of the Act).
4. Subject to the supervision of the Board of Trustees of the Trust
and the Investment Advisor, the Sub-Advisor will provide an investment
program for the Fund, including investment research and management with
respect to securities and investments, including cash and cash equivalents
in the Fund, and will determine from time to time what securities and
other investments will be purchased, retained or sold by the Fund. The
Sub-Advisor will provide the services under this Agreement in accordance
with the Fund's investment objective policies and restrictions as stated
in the Prospectus (as used herein this term includes the related Statement
of Additional Information). The Sub-Advisor further agrees that it:
a. will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and will, in addition, conduct its
activities under this Agreement in accordance with regulations of any
other Federal or State agencies which now have or in the future will
have jurisdiction over its activities;
b. will pay expenses incurred by it in connection with its
activities under this Agreement other than the cost of securities and
other investments (including brokerage commissions and other
transaction changes, if any) purchased for the Fund, provided that
the Sub-Advisor will not pay for or
F-2
<PAGE>
provide a credit with respect to any research provided to it in
accordance with Section 4(c);
c. will place orders pursuant to its investment determinations
for the Fund either directly with any broker or dealer, or with the
issuer. In placing orders with brokers or dealers, the Sub-Advisor
will attempt to obtain the best overall price and the most favorable
execution of its orders, except as provided below. Consistent with
this obligation, when the execution and price offered by two or more
brokers or dealers are comparable, the Sub-Advisor has been advised
by the Investment Advisor that the Trust has authorized the
Investment Advisor to authorize the Sub-Advisor, in its discretion,
to purchase and sell securities to and from brokers and dealers who
promote the sale of Fund shares and the Investment Advisor hereby so
authorizes the Sub-Advisor. In no instance will securities be
purchased from or sold to the Sub-Advisor or any affiliated person of
the Sub-Advisor as principal. Notwithstanding the foregoing sentence,
the Sub-Advisor may arrange for the execution of brokered
transactions through an affiliated broker dealer in conformity with
policies and procedures for such purpose if, when, and as established
by the Trustees of the Fund. Subject to policies established by the
Board of Trustees of the Trust and communicated to the Sub-Advisor,
it is understood that the Sub-Advisor will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Trust
or in respect of the Fund, or be in breach of any obligation owing to
the Investment Advisor or the Trust or in respect of the Fund under
this Agreement, or otherwise, solely by reason of its having caused
the Fund to pay a member of a securities exchange, a broker or a
dealer a commission for effecting a securities transaction for the
Fund in excess of the amount of commission another member of an
exchange, broker or dealer would have charged if the Sub-Advisor
determines in good faith that the commission paid was reasonable in
relation to the brokerage or research services provided by such
member, broker or dealer, viewed in terms of that particular
transaction or the Sub-Advisor's overall responsibilities with
respect to the accounts, including the Fund, as to which it exercises
investment discretion.
d. will review the daily valuation of securities owned by the
Fund as obtained on a daily basis by the Fund's administrator and
furnished by it to Sub-Advisor, and will promptly notify the Trust
and the Investment Advisor if the Sub-Advisor believes that any such
valuations may not properly reflect the market value of any
securities owned by the Fund, provided, however, that the Sub-Advisor
is not required by this sub-paragraph to obtain valuations of any
such securities from brokers or dealers or otherwise, or to otherwise
independently verify valuations of any such securities.
e. will attend regular business and investment-related meetings
with the Trust's Board of Trustees and the Investment Advisor if
requested to do so by the Trust and/or the Investment Advisor.
F-3
<PAGE>
f. maintain books and records with respect to the securities
transactions for the Fund, furnish to the Investment Advisor and the
Trust's Board of Trustees such periodic and special reports as they
may request with respect to the Fund, and provide in advance to the
Investment Advisor all of the Sub-Advisor's reports to the Trust's
Board of Trustees for examination and review within a reasonable time
prior to the Trust's Board meetings.
5. Sub-Advisor agrees with respect to the services provided to the
Fund that it:
a. will telecopy trade information to , on the
first business day following the day of the trade and cause broker
confirmations to be sent directly to the Investment Advisor; and
b. will treat confidentially and as proprietary information of
the Trust all records and other information relative to the Fund and
its prior, present or potential shareholders, and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust, which approval
may not be withheld where Sub-Advisor is advised by counsel that the
Sub-Advisor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Trust).
6. In compliance with the requirements of Rule 31a-3 under the Act,
Sub-Advisor acknowledges that all records which it maintains for the Trust
are the property of the Trust and agrees to surrender promptly to the
Trust any of such records upon the Trust's request, provided, that Sub-
Advisor may retain copies thereof at its own expense. Sub-Advisor further
agrees to preserve for the periods prescribed by Rule 31a-2 under the Act
the records required to be maintained by Rule 31a-1 under the Act relating
to transactions placed by Sub-Advisor for the Fund.
7. It is expressly understood and agreed that the services to be
rendered by the Sub-Advisor to the Investment Advisor under the provisions
of this Agreement are not to be deemed to be exclusive, and the Sub-
Advisor shall be free to provide similar or different services to others
so long as its ability to provide the services provided for in this
Agreement shall not be materially impaired thereby.
8. The Investment Advisor agrees that it will furnish currently to the
Sub-Advisor all information with reference to the Fund and the Trust that
is reasonably necessary to permit the Sub-Advisor to carry out its
responsibilities under this Agreement, and the parties agree that they
will from time to time consult and make appropriate arrangements as to
specific information that is required under this paragraph and the
frequency and manner with which it shall be supplied. Without limiting the
generality of the foregoing, Investment Advisor
F-4
<PAGE>
will furnish to Sub-Advisor procedures consistent with the Trust's
contract with the Fund's custodian from time to time (the "Custodian"),
and reasonably satisfactory to Sub-Advisor, for consummation of portfolio
transactions for the Fund by payment to or delivery by the Custodian of
all cash and/or securities or other investments due to or from the Fund,
and Sub-Advisor shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. Upon giving
proper instructions to the Custodian, Sub-Advisor shall have no
responsibility or liability with respect to custodial arrangements or the
acts, omissions or other conduct of the Custodian.
9. The Sub-Advisor and its directors, officers, stockholders,
employees and agents shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Investment Advisor or the
Trust in connection with any matters to which this Agreement relates or
for any other act or omission in the performance by the Sub-Advisor of its
duties under this agreement except that nothing herein contained shall be
construed to protect the Sub-Advisor against any liability by reason of
the Sub-Advisor's willful misfeasance, bad faith, or gross negligence in
the performance of its duties or by reckless disregard of its obligations
or duties under this Agreement.
10. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. Except to the extent governed by
federal law including the Act, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
applying the principles of conflicts of law thereunder.
11. No provision of this Agreement may be changed, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, discharge or termination is
sought. No amendment of this Agreement shall be effective with respect to
the Trust until approved in accordance with the Act.
F-5
<PAGE>
12. Any notice to be given hereunder may be given by personal
notification or by facsimile transmission, to the party specified at the
address stated below:
To the Investment Advisor at: The Chicago Trust Company
171 North Clark Street
Chicago, Illinois 60601
Attn: Stuart D. Bilton
Facsimile: (312) 223-5143
To the Sub-Advisor at:
Attn:
Facsimile:
To the Fund or the Trust at: The Alleghany Funds
171 North Clark Street
Chicago, Illinois 60601
Attn: Gerald F. Dillenburg
Facsimile: (312) 223-5608
With copies to: ---------------------------
---------------------------
---------------------------
---------------------------
or addressed as such party may from time to time designate by notice to
other parties in accordance herewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
ATTEST: THE CHICAGO TRUST COMPANY
-------------------------------------- By: __________________________________
ATTEST:
-------------------------------------- By: __________________________________
F-6
<PAGE>
APPENDIX 1
FUND SHARES OUTSTANDING
The table below sets forth the number of shares outstanding for each Fund
as of the Record Date.
<TABLE>
<CAPTION>
Total Fund
Name of Fund Class N Shares Class I Shares Shares
------------ -------------- -------------- ----------
<S> <C> <C> <C>
Alleghany/Chicago Trust Balanced Fund 22,601,871.181 N/A 22,601,871.181
Alleghany/Chicago Trust Bond Fund 11,577,721.460 5,065,607.057 16,643,328.517
Alleghany/Chicago Trust Growth & Income Fund 17,820,599.615 1,644,282.451 19,464,882.066
Alleghany/Chicago Trust Money Market Fund 406,458,831.510 N/A 406,458,831.510
Alleghany/Chicago Trust Municipal Bond Fund 1,969,413.966 N/A 1,969,413.966
Alleghany/Chicago Trust Small Cap Value Fund 4,418,946.006 N/A 4,418,946.006
Alleghany/Chicago Trust Talon Fund 1,421,441.786 N/A 1,421,441.786
Alleghany/Montag & Caldwell Balanced Fund 8,545,371.684 9,239,150.551 17,784,522.235
Alleghany/Montag & Caldwell Growth Fund 41,864,379.638 42,009,718.789 83,874,098.427
Alleghany/Blairlogie Emerging Markets Fund 185,277.412 1,166,776.702 1,352,054.114
Alleghany/Blairlogie International Developed Fund 532,227.947 3,292,262.280 3,824,490.227
Alleghany/Veredus Aggressive Growth Fund 7,999,889.088 N/A 7,999,889.088
Alleghany/Veredus SciTech Fund 292,303.958 N/A 292,303.958
Alleghany/TAMRO Large Cap Value Fund 195,413.836 N/A 195,413.836
Alleghany/TAMRO Small Cap Fund 97,268.956 N/A 97,268.956
</TABLE>
<PAGE>
APPENDIX 2
BENEFICIAL OWNERS OF 5% OR MORE OF FUND SHARES
(As of the Record Date)
Alleghany/Chicago Trust Balanced Fund
<TABLE>
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Stetson & Co.* 12,961,609.283 57.35%
c/o M&I Trust Co.
P.O. Box 2977
Milwaukee, WI 53201
Miter & Co.* 7,228,544.922 31.98%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
Alleghany/Chicago Trust Bond Fund--Class N
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Stetson & Co.* 5,573,207.187 48.14%
c/o M&I Trust Co.
P.O. Box 2966
Milwaukee, WI 53201
Miter & Co.* 2,768,986.773 23.92%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
Alleghany/Chicago Trust Bond Fund--Class I
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Miter & Co.* 2,330,054.209 46.00%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
Davis & Company* 2,125,133.210 41.95%
ATTN Marshall & Ilsley Co.
c/o M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
1
<PAGE>
<TABLE>
<S> <C> <C>
Stetson & Co.* 610,419.638 12.05%
c/o M&I Trust Co.
P.O. Box 2966
Milwaukee, WI 53201
Alleghany/Chicago Trust Growth & Income Fund--Class N
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Stetson & Co.* 7,692,737.623 43.17%
c/o M&I Trust Co.
P.O. Box 2977
Milwaukee, WI 53201
Miter & Co.* 5,159,331.351 28.95%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
Charles Schwab & Co. Inc. 1,591,785.156 8.93%
Special Custody Account
For Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Alleghany/Chicago Trust Growth & Income Fund--Class I
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Stetson & Co.* 1,325,567.859 80.62%
c/o M&I Trust Co.
P.O. Box 2966
Milwaukee, WI 53201
Davis & Company* 238,526.202 14.51%
c/o Marshall & Ilsley Trust Co.
c/o M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
Alleghany/Chicago Trust Money Market Fund
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Davis & Company* 356,378,841.13 87.68%
c/o Marshall & Ilsley Trust Co.
c/o M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
2
<PAGE>
Alleghany/Chicago Trust Municipal Bond Fund
<TABLE>
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------ ----------------
<S> <C> <C>
Davis & Company* 1,423,172.66 72.26%
Attn: Marshall & Ilsley Trust Co.
c/o M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
The Chicago Trust Co. of California 173,089.390 8.79%
Omnibus Cash Sweep Account
P.O. Box 121589
San Diego, CA 92112-1589
Stuart D. Bilton 122,632.038 6.23%
and Bette E. Bilton
JT Ten
171 North Clark Street
Chicago, IL 60601
</TABLE>
Alleghany/Chicago Trust Small Cap Value Fund
<TABLE>
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------- ----------------
<S> <C> <C>
Miter & Co.* 2,740,390.947 62.01%
M&I Trust Co/Outsourcing
c/o Marshall & Ilsley Trust Co.
P.O. Box 2977
Milwaukee, WI 53202-2977
Stetson & Co.* 605,624.728 13.71%
c/o M&I Trust Co.
P.O. Box 2977
Milwaukee, WI 53201
Charles Schwab & Co., Inc. 415,496.468 9.40%
Special Custody Account
For Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Davis & Company* 352,402.208 7.97%
c/o Marshall & Ilsley Trust Co.
c/o M&I Trust Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
3
<PAGE>
Alleghany/Chicago Trust Talon Fund
<TABLE>
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------- ----------------
<S> <C> <C>
National Investor Services Corp. 227,052.338 15.97%
For the Exclusive Benefit
of Our Customers
55 Water St. 32nd Floor
New York, NY 10041-3299
Stetson & Co. 118,448.737 8.33%
c/o M&I Trust Co.
P.O. Box 2966
Milwaukee, WI 53201
Alleghany/Montag & Caldwell Balanced Fund--Class N
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------- ----------------
<S> <C> <C>
Stetson & Co. 5,055,365.001 59.16%
c/o M&I Trust Co
P.O. Box 2977
Milwaukee, WI 53201
Montag & Caldwell Balanced Fund--Class I
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------- ----------------
<S> <C> <C>
Wells Fargo Bank Minnesota NA Cust 2,784,356.500 30.14%
For Pacificare Health Systems
401 (k) Plan A/C #4300103020
510 Marquette Ave South
Minneapolis, MN 55479
Wilmington Trust Co Cust 1,406,081.769 15.22%
FBO Pricewaterhouse Coopers LLP
Empl-Partners Svgs. A/C #50084-7
c/o Mutual Funds P.O. Box 8971
Wilmington, DE 19899-8971
American Express Trust Company 644,953.648 6.98%
FBO American EX TR RET
Services
U/A DTD 1/1/98
Attn: Chris Hunt N10/996
P.O. Box 534
Minneapolis, MN 55422
Stetson & Co.* 614,043.690 6.65%
c/o M&I Trust Co.
P.O. Box 2977
Milwaukee, WI 53201
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
4
<PAGE>
<TABLE>
<S> <C> <C>
BNY Western Trust Company CUS 553,395.683 5.99%
Columbia River Logscalers Pension
Two Union Square Ste 520
601 Union Street
Seattle, WA 98121-2321
Branch Banking & Trust Co Cust 548,982.413 5.94%
SE Regional-Montag & Caldwell
P.O. Box 2887
Wilson, NC 27894-2887
Mercantile Safe Deposit & Trust Cust 515,771.595 5.58%
FBO Calvert School A/C 1166008
766 Old Hammonds Ferry Rd.
Linthicum, MD 21090
Alleghany/Montag & Caldwell Growth Fund--Class N
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Charles Schwab & Co., Inc. 10,748,264.503 25.67%
Special Custody Account
For Exclusive Benefit of Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Stetson & Co. 7,802,616.085 18.64%
c/o M&I Trust Co.
P.O. Box 2977
Milwaukee, WI 53201
Montag & Caldwell Growth Fund--Class I
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ -------------- ----------------
<S> <C> <C>
Miter & Co.* 2,679,813.295 6.38%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53202-2977
Bancorp South Bank 2,196,740.742 5.23%
c/o Trust
P.O. Box 1605
Jackson, MS 39215-1605
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
5
<PAGE>
Alleghany/Blairlogie Emerging Markets Fund--Class N
<TABLE>
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------ ----------------
<S> <C> <C>
Miter & Co.* 93,093.111 50.25%
M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
Davis & Company* 30,954.078 16.71%
Attn Marshall & Ilsley Co.
c/o M&I Trust Co/Outsourcing
P.O. Box 2977
Milwaukee, WI 53201-2977
Alleghany/Blairlogie Emerging Markets Fund--Class I
<CAPTION>
Shareholders Shares Owned Percentage Owned
------------ ------------ ----------------
<S> <C> <C>
Pacific Life Insurance Co. 389,911.996 33.42%
Employees Retirement Plan Trust
Attn Iwona Scibisz
700 Newport Center Drive
Newport Beach, CA 92660-6307
Charles Schwab & Co. Inc. 369,533.399 31.67%
Attn Mutual Fund Dept.
101 Montgomery St.
San Francisco, CA 94104
California Race Track Association 88,296.944 7.57%
P.O. Box 67
La Verne, CA 91750-0067
Vincent W Foglia & 86,748,143 7.43%
Patricia A Foglia JTWROS
51 Hillburn Ln
N Barrington, IL 60010-6925
CMTA-GMPP & Allied Workers Pension Trust 61,535.641 5.27%
c/o Associated Third Party
Administrator
1640 S. Loop Rd.
Alameda, CA 94502
</TABLE>
-----------
*Alleghany or one of its affiliates, in its capacity as trustee of retirement
plans or other trusts, has discretion to vote a certain number of such
shares. Alleghany, however, intends to use an independent third party to
determine how to vote such shares.
6
<PAGE>
Proxy Proxy
[Fund Name]
A Series of Alleghany Funds
Special Meeting of Shareholders to be held on January 17, 2001
THE UNDERSIGNED HEREBY APPOINTS GAIL A. HANSON AND LAURA M. HLADE, AND EACH OF
THEM, AS PROXIES, EACH WITH THE POWER TO APPOINT HER SUBSTITUTE, AND HEREBY
AUTHORIZES THEM TO REPRESENT AND TO VOTE, ALL SHARES OF THE FUNDS OF ALLEGHANY
FUNDS HELD OF RECORD BY THE UNDERSIGNED ON DECEMBER 4, 2000, AT THE SPECIAL
MEETING OF SHAREHOLDERS TO BE HELD AT 2:00 P.M. ON JANUARY 17, 2001 AT THE
OFFICES OF THE COMPANY, 171 NORTH CLARK STREET, 28TH FLOOR, CHICAGO, ILLINOIS
60601 AND ANY ADJOURNMENT THEREOF.
BY SIGNING AND DATING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE PROXIES
TO VOTE EACH PROPOSAL AS MARKED, OR IF NOT MARKED TO VOTE "FOR" EACH PROPOSAL,
AND TO USE THEIR DISCRETION TO VOTE ANY OTHER MATTER AS MAY PROPERLY COME BEFORE
THE MEETING. IF YOU DO NOT INTEND TO PERSONALLY ATTEND THE MEETING PLEASE
COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. THE UNDERSIGNED
HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN.
VOTE VIA THE INTERNET: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-800-597-7836
CONTROL NUMBER: 999 9999 9999 999
Please sign name or names as printed on proxy to authorize the voting of your
shares as indicated. Where shares are registered with joint owners all joint
owners should sign. Persons signing as executors, administrators, trustees, etc.
should so indicate.
Signature
Signature of joint owner if any
, 2000
<PAGE>
This proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholders. If no direction is made this proxy will be voted
FOR all proposals.
Please vote by filling in the box(es)
1. To approve a new investment advisory agreement for the Fund.
[_] Approve [_] Disapprove [_] Abstain
2. To approve a new sub-investment advisory agreement for the Fund.
[_] Approve [_] Disapprove [_] Abstain
IMPORTANT: Please sign and date on the reverse side before mailing
