SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C) OF THE SECURITIES
EXCHANGE ACT OF 1934
Check the appropriate box:
(X) Preliminary information statement (_) Confidential, for use of the
Commission only (as permitted by
Rule 14c-5(d)(2))
(_) Definitive information statement
THE SARATOGA ADVANTAGE TRUST
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
(X) No Fee required.
(_) Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies: ______
(2) Aggregate number of securities to which transaction applies: _________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined): _______
(4) Proposed maximum aggregate value of transaction: _____________________
(5) Total fee paid:________________________________________________________
(_) Fee paid previously with preliminary materials.
(_) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: ______________________________________________
(2) Form, Schedule or Registration Statement No.: ________________________
(3) Filing Party: ________________________________________________________
(4) Date Filed: __________________________________________________________
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May _, 1998
Dear Shareholders:
The enclosed document is purely for informational purposes.
You are not being asked to vote or take action on any matter. The document
relates to a recent merger of Ivory & Sime Group, the parent of Ivory & Sime
International, Inc., and Ivory & Sime plc, with the FP Asset Management Group, a
subsidiary of Friends Provident Group.
This merger resulted in the formation of Friends Ivory & Sime
plc, a subsidiary of Friends Provident Group and Ivory & Sime International,
Inc. became a wholly-owned subsidiary of Friends Ivory & Sime plc. As described
in the enclosed Information Statement, the Board of Trustees of The Saratoga
Advantage Trust has approved new agreements with the new entities on
substantially identical terms and with the same fees as the old agreements.
As always, please feel free to call us at 1-800-807-FUND with
any questions you may have.
Sincerely,
Bruce E. Ventimiglia
Chairman, President and CEO
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THE ENCLOSED DOCUMENT IS PURELY FOR INFORMATIONAL PURPOSES. YOU ARE NOT
BEING ASKED TO VOTE OR TAKE ACTION ON ANY MATTER.
I. BACKGROUND
Ivory & Sime International, Inc. ("ISI") is the investment
adviser to the International Equity Portfolio (the "Portfolio") of The Saratoga
Advantage Trust (the "Trust") pursuant to an agreement with the Trust's manager,
Saratoga Capital Management ("SCM"). ISI has in turn entered into a subadvisory
agreement with its parent company, Ivory & Sime plc, with respect to the
Portfolio. On February 17, 1998, Ivory & Sime Group, the parent company of ISI
and Ivory & Sime plc, merged with and into FP Asset Management, a subsidiary of
Friends Provident Group, to form Friends Ivory & Sime plc and ISI became a
wholly-owned subsidiary of Friends Ivory & Sime plc (the "Transaction").
The FP Asset Management Group is wholly-owned by Friends
Provident Group. It serves as investment manager to life assurance funds and
unit trust funds of the Friends Provident Life Assurance and Unit Trust Group
subsidiary of the Friends Provident Group in the United Kingdom. Friends
Provident was founded in 1832 and is a mutual life assurance company registered
in England. The Friends Provident Group consists of Friends Provident and its
subsidiary companies. The principal business units in the Friends Provident
Group transact long-term insurance business and unit trust management in the
United Kingdom.
As discussed below, the Transaction may be deemed to have
terminated the investment management agreement between ISI and SCM and the
sub-advisory agreement between ISI and Ivory & Sime plc. Under an order the
Trust has received from the Securities and Exchange Commission, the Trust is
permitted to appoint an investment adviser for the Portfolio without shareholder
approval. The Trustees of the Trust must approve such investment advisory
agreements, and the Trust must provide notice to shareholders within 90 days of
such hiring of a new investment adviser or the implementation of any material
change in an investment advisory contract. This Information Statement is being
supplied to shareholders to fulfill the notice condition, and will be mailed on
or about May 6, 1998.
The Transaction might be deemed to create an "assignment," as
defined in The Investment Company Act of 1940, as amended (the "1940 Act"), of
both the investment advisory agreement between ISI and SCM and subadvisory
agreement between ISI and Ivory & Sime plc, respectively, resulting in the
termination of the agreements. Therefore, on January 9, 1998, the Board of
Trustees approved new agreements with ISI and Friends Ivory & Sime plc,
respectively, which became effective on February 17, 1998 and which are
identical, except for the date of execution and termination to the prior
agreements approved by shareholders on April 11, 1997.
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II. INFORMATION CONCERNING A NEW INVESTMENT ADVISORY
AGREEMENT BETWEEN SCM AND IVORY & SIME INTERNATIONAL, INC. WITH
RESPECT TO THE INTERNATIONAL EQUITY PORTFOLIO
Prior to February 17, 1998, ISI served as the investment
adviser to the Portfolio pursuant to an investment advisory agreement between
ISI and SCM (the "Prior International Equity Portfolio Investment Advisory
Agreement"). On January 9, 1998, the Board of Trustees approved an investment
advisory agreement between SCM and ISI pursuant to which ISI serves as the
investment adviser following the Transaction (the "New International Equity
Portfolio Investment Advisory Agreement"). The New International Equity
Portfolio Investment Advisory Agreement contains identical terms and conditions,
including identical investment advisory fee levels, as the Prior International
Equity Portfolio Investment Advisory Agreement.
Under the terms of the New International Equity Portfolio
Investment Advisory Agreement, ISI will serve as investment adviser to the
Portfolio, subject to the supervision of SCM and the Trust's Board of Trustees.
Pursuant to the New International Equity Portfolio Investment Advisory
Agreement, ISI performs the identical duties performed under the Prior
International Equity Portfolio Investment Advisory Agreement including reviewing
investment performance, policies and guidelines, facilitating communications
between the subadviser and SCM and maintaining certain books and records. As was
the case under the Prior International Equity Portfolio Agreement, ISI, at its
own expense, furnishes necessary investment and management facilities for
conducting the investment activities of the Portfolio, and pays the salaries of
its respective personnel under the New International Equity Portfolio Investment
Advisory Agreement. In addition, as was the case under the Prior International
Equity Portfolio Agreement, under the New International Equity Portfolio
Agreement; (a) SCM shall indemnify and hold harmless ISI, its officers and
directors and each person, if any, who controls ISI within the meaning of
Section 15 of the Securities Act of 1933, (any and all such persons shall be
referred to as "Indemnified Party") against any loss, liability, claim, damage
or expense arising by reason of any matter to which the New International Equity
Portfolio Investment Advisory Agreement relates, except for liability by reason
of misfeasance, bad faith or negligence in the performance of the duties of such
Indemnified party; and (b) ISI shall indemnify and hold harmless SCM and the
Trust and each of their directors and officers and each perons, if any, who
controls SCM and the Trust against any loss, liability, claim damage or expense
arising by reason of any matter to which the New International Equity Portfolio
Investment Advisory Agreement relates, but only with respect to ISI's
misfeasance, bad faith or negligence in the performance of its duties under the
Agreement.
Investment Advisory Fee Rates
As compensation for its services, ISI receives a fee from SCM
calculated at an annual rate of .40% of the average net assets of International
Equity Portfolio.
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Under the New International Equity Portfolio Investment
Advisory Agreement, ISI will receive fees at the same rate received by it
pursuant to the Prior International Equity Portfolio Investment Advisory
Agreement.
Investment Advisory Fees Paid
For the Trust's fiscal year ended August 31, 1997, SCM paid
[$34,266] in investment advisory fees to ISI for management of the Portfolio.
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III. INFORMATION CONCERNING A NEW SUBADVISORY AGREEMENT
BETWEEN SCM AND FRIENDS IVORY & SIME PLC WITH RESPECT TO THE
INTERNATIONAL EQUITY PORTFOLIO
Prior to February 17, 1998, Ivory & Sime plc served as the
subadviser to the International Equity Portfolio pursuant to a subadvisory
agreement with ISI, the Portfolio's investment adviser, (the "Prior
International Equity Portfolio Subadvisory Agreement"; with the Prior
International Equity Portfolio Investment Advisory Agreement, collectively, the
"Prior International Equity Portfolio Agreements"). On January 9, 1998, the
Board approved a subadvisory agreement between Friends Ivory & Sime plc and ISI,
pursuant to which Friends Ivory & Sime plc serves as the subadviser following
the Transaction (the "New International Equity Portfolio Subadvisory Agreement";
with the New International Equity Portfolio Investment Advisory Agreement,
collectively, the "New International Equity Portfolio Agreements"). Under the
terms of the New International Equity Portfolio Subadvisory Agreement, Friends
Ivory & Sime plc is responsible for the identical duties performed by Ivory &
Sime plc under the Prior International Equity Portfolio Subadvisory Agreement
(i.e., the day-to-day management of the Portfolio's assets). As was the case
with Ivory & Sime plc under the Prior International Equity Portfolio Subadvisory
Agreement, Friends Ivory & Sime plc, at its own expense, furnishes necessary
investment and management facilities for conducting the investment activities of
the Portfolio and pays the salaries of its personnel under the New International
Equity Portfolio Subadvisory Agreement. In addition, as was the case with
respect to the Prior International Equity Portfolio Subadvisory Agreement, the
New International Equity Portfolio Subadvisory Agreement provides that Friends
Ivory & Sime plc shall not be liable for any mistake in judgment or any event
whatsoever except for lack of good faith and is not protected against any
liability to ISI, SCM, the Trust or shareholders to which it would otherwise be
subject by reason of an act or practice constituting willful misfeasance, bad
faith, negligence, reckless disregard of duty or breach of fiduciary duty
involving personal misconduct (all within the meaning of the 1940 Act) in
respect of ISI, SCM or the Trust in the performance of its duties.
Subadvisory Fee Rates under the New International Equity
Portfolio Subadvisory Agreement
As compensation for its services, Friends Ivory & Sime plc
receives from ISI 78% of the net monthly fees paid by SCM to ISI pursuant to the
New International Equity Portfolio Investment Advisory Agreement between SCM and
ISI.
Under the New International Equity Portfolio Subadvisory
Agreement, Friends Ivory & Sime plc will receive fees at the same rate received
pursuant to the Prior International Equity Portfolio Subadvisory Agreement.
Subadvisory Fee Paid
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For the fiscal year ended August 31, 1997, ISI paid $30,213 in
subadvisory fees to Ivory & Sime plc. THE SUBADVISORY FEES ARE PAID BY THE
ADVISER OUT OF THE ADVISORY FEE IT RECEIVES FOR EACH PORTFOLIO AND ARE NOT
ADDITIONAL CHARGES TO THE PORTFOLIO.
Shareholder and Board Approval of the Prior International Equity Portfolio
Agreements
The Prior International Equity Portfolio Agreements were
initially approved by the Board of Trustees on December 18, 1996 and by the
shareholders of the International Equity Portfolio on April 11, 1997.
IV. BOARD CONSIDERATION
At a meeting held on January 9, 1998 the Board of Trustees
approved the New International Equity Portfolio Agreements.
The Board of Trustees believes that the Agreements will enable
the Portfolio to continue to obtain high quality services at costs which it
deems appropriate and reasonable. In connection with its review, the Board of
Trustees considered materials furnished by Ivory & Sime Group including
information regarding the personnel, operations and financial condition of
Friends Provident Group and Ivory & Sime Group.
In evaluating the New International Equity Portfolio
Agreements, the Board requested and reviewed, with the assistance of independent
legal counsel, materials furnished by Ivory & Sime plc and Friends Provident
Group. These materials included financial statements as well as other written
information regarding FP Asset Management Group and Friends Provident Group and
their personnel, operations and financial condition, A representative of Ivory &
Sime plc made a presentation to the Board on Ivory & Sime plc, the Portfolio and
the Transaction with Friends Provident and responded to questions of the
Trustees. The Board also reviewed and discussed the terms of the New
International Equity Portfolio Agreements and compared them to the Prior
International Equity Portfolio Agreements.
The Board considered, with its counsel, (i) the quality of the operations
and service which have been provided to the Trust on behalf of the International
Equity Portfolio by ISI and Ivory & Sime plc and which are expected to continue
to be provided after the Transaction by ISI and Friends Ivory & Sime plc, with
no change in fee rates, (ii) the overall experience and reputation of ISI and
Ivory & Sime plc in providing such services to others, and the likelihood of the
financial stability of ISI and Friends Ivory & Sime plc, (iii) the
capitalization of Friends Provident, (iv) the aspects of the transaction with
Friends Provident that would affect the ability of ISI and
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Friends Ivory & Sime plc to retain and attract qualified personnel and (v) the
benefits of continuity in the services to be provided under the New
International Equity Portfolio Agreements. The Board focused primarily on the
nature and quality of the services provided by ISI and Ivory & Sime plc to the
Portfolio, and the fact that the terms and conditions of the Prior International
Equity Portfolio Agreements, including the terms relating to the services to be
performed and to expenses and fees, are substantially identical. In addition,
the Board focused on assurances from representatives from Friends Provident that
key personnel of ISI and Ivory & Sime plc will continue in their positions with
ISI and Friends Ivory & Sime plc and will continue to be involved in the
operations of the Portfolio, and that the Portfolio will be operated in the same
manner as before the Transaction. Based upon its review of the above factors,
the Board of Trustees concluded that the New International Equity Portfolio
Agreements are in the best interests of the Portfolio and its shareholders, and
that the fees provided therein are fair and reasonable in light of the usual and
customary charges made by others for services of the same nature and quality.
V. DURATION AND TERMINATION OF ALL AGREEMENTS
The New International Equity Portfolio Agreements will have
initial terms of two years, and thereafter will continue in effect for
successive annual periods provided such continuance is approved at least
annually by (i) a majority of the Trustees not parties to the Agreements, and
who are not "interested persons" (as defined in the 1940 Act) of any such party
and (ii) a majority of the Board of Trustees as a whole or the holders of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Portfolio. All Agreements will terminate automatically in the event of their
"assignment."
VI. GENERAL INFORMATION CONCERNING ISI AND FRIENDS IVORY & SIME
PLC
Information Concerning ISI
The names, titles and principal occupations of the current
directors and executive officers of ISI are set forth in the following table:
<TABLE>
<CAPTION>
NAME TITLE AND PRINCIPAL OCCUPATION
- ---------------------- --------------------------------
<S> <C>
George E. Walker President
John C. Edwards Director
Karen Patterson Director
</TABLE>
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The business address of each person listed above is One World
Trade Center, Suite 2101, New York, NY 10048.
Management Control of ISI
ISI is located at One World Trade Center, Suite 2101, New
York, NY 10048. ISI is a wholly-owned subsidiary of Friends Ivory & Sime plc.
The names, title and principal occupations of the principal executive officers
and directors of Friends Ivory & Sime plc are set forth below.
Information Concerning Friends Ivory & Sime plc
Friends Ivory & Sime plc is a subsidiary of Friends Provident
which is registered in England. The principal business address of Friends Ivory
& Sime plc is Princes Court, 7 Princes Street, London, England EC2R8AQ.
The names, titles and principal occupations of the current
directors and executive officers of Friends Ivory & Sime plc are set forth in
the following table. The business address of each person listed below is Princes
Court, 7 Princes Street, London, England EC2R8AQ.
<TABLE>
<CAPTION>
NAME TITLE AND PRINCIPAL OCCUPATION
- ---------------------- --------------------------------------------
<S> <C>
Peter Jones Chief Executive of Friends Ivory & Sime plc,
Director of Friends Provident
Howard Carter Executive of Friends Ivory & Sime plc,
Director of FP Asset Management
Christopher Jemmett Director of Friends Ivory & Sime plc,
member of the Board of Friends Provident
Keith Satchell Director of Friends Ivory & Sime plc,
member of the Board of Friends Provident
Brian Sweetland Director of Friends Ivory & Sime plc,
member of the Board of Friends Provident
Sir David Kenloch Chairman of Friends Ivory & Sime plc
Allan Munro Executive Director of Friends Ivory &
Sime plc
Ian Rushbrook Director of Friends Ivory & Sime plc
John Stubbs Executive Director of Friends Ivory &
Sime plc
Roger Young Director of Friends Ivory & Sime plc
</TABLE>
Other Matters
The Trust will furnish, without charge, a copy of the Trust's
annual report for the fiscal year ended August 31, 1997 and a copy of the
Trust's semi-annual report for the period ended February 28, 1998 to a
shareholder upon request. To obtain a report, please contact the Trust by
calling 1-800-807-FUND (or by writing to The Saratoga Advantage Trust, 1501
Franklin Avenue, Mineola, NY 11501, Attention: William Marra).
SCM, the manager of the Trust, is located at 1501 Franklin
Avenue, Mineola, NY 11501.
The Trust is not required to hold annual meetings of
shareholders, and therefore it cannot be determine when the next meeting of
shareholders will be held. Shareholder proposals to be presented at any future
meeting of shareholders of the Trust must be received by the Trust within a
reasonable time before the Trust's solicitation of proxies for that meeting in
order for such proposals to be considered for inclusion in the proxy materials
related to that meeting. The cost of the preparation, printing and distribution
of this Information Statement is an expense of [Friends Provident entity].
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