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ESC STRATEGIC FUNDS, INC.
SUPPLEMENT DATED OCTOBER 3, 1997
TO PROSPECTUS DATED JULY 29, 1997
Equitable Securities Corporation ("Adviser"), the investment adviser to
ESC Strategic Funds, Inc. ("Company"), has entered into a definitive agreement
to be acquired by SunTrust Banks, Inc. ("SunTrust"). The acquisition is
expected to be completed during the first quarter of 1998. The acquisition will
combine the Adviser with an existing SunTrust subsidiary to form a new SunTrust
subsidiary to be named SunTrust Equitable Securities. The Adviser, as
reorganized, will continue to act as Adviser to the Company and to provide the
same services it currently provides, and there will be no significant change in
the terms of the current investment advisory agreement or the rate of fees
payable to the Adviser under that agreement. Overall, the transaction is
expected to expand the Adviser's general financial service capabilities.
The acquisition will cause a termination in the Company's investment
advisory agreement with the Adviser, as well as the portfolio management
agreements with each of the Managers. The Company's Board of Directors is
expected to approve a new investment advisory agreement with the Adviser and
new portfolio management agreements with each of the current Managers with
terms substantially identical to those of the current agreement except for the
name of the Adviser, the date and term. Shareholders of all the portfolios
("Funds") will be asked to approve the new investment advisory agreement.
Shareholders of each Fund for which Equitable Asset Management, Inc. ("EAM")
acts as Manager will be asked to approve a new portfolio management agreement
between the Adviser and EAM for those Funds. (These Funds are ESC Strategic
Small Cap Fund, ESC Strategic Growth Fund and ESC Strategic Value Fund.) Under
the terms of an exemptive order received by the Company and the Adviser from
the Securities and Exchange Commission, the agreements with the other Managers,
none of which is affiliated with the Adviser, do not require shareholder
approval.
More information will be provided shortly in a proxy statement.
