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UAM FUNDS
PROSPECTUS
August 31,1998
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Pell Rudman Mid-Cap Growth Portfolio
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UAM
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TABLE OF CONTENTS
Estimated Fund Expenses..................................................... 1
Prospectus Summary.......................................................... 3
Risk Factors................................................................ 4
Investment Objective........................................................ 4
Investment Policies......................................................... 4
Other Investment Policies................................................... 6
Investment Limitations...................................................... 9
Purchase of Shares.......................................................... 10
Redemption of Shares........................................................ 14
Shareholder Services........................................................ 16
Valuation of Shares......................................................... 18
Performance Calculations.................................................... 18
Dividends, Capital Gains Distributions and Taxes............................ 19
Investment Adviser.......................................................... 20
Adviser's Historical Performance............................................ 22
Administrative Services..................................................... 23
Distributor................................................................. 24
Portfolio Transactions...................................................... 24
General Information......................................................... 25
UAM Funds -- Institutional Class Shares..................................... 27
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UAM FUNDS PELL RUDMAN MID-CAP GROWTH
PORTFOLIO
INSTITUTIONAL CLASS SHARES
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PROSPECTUS--AUGUST 31, 1998
UAM Funds Trust (the "Fund") is an open-end, management investment company
known as a "mutual fund". The Fund consists of multiple series of shares
(known as "Portfolios"), each of which has different investment objectives and
policies. The Pell Rudman Mid-Cap Growth Portfolio currently offers only one
class of shares. The securities offered in this Prospectus are Institutional
Class Shares of a diversified, no-load Portfolio of the Fund managed by Pell
Rudman Trust Company, N.A.
PELL RUDMAN MID-CAP GROWTH PORTFOLIO. The objective of the Pell Rudman Mid-
Cap Growth Portfolio (the "Portfolio") is to provide capital appreciation. The
primary focus of the Portfolio is on quality growth companies with medium mar-
ket capitalizations (i.e., companies with market capitalizations that fall
within the range of the Russell Mid-Cap Growth Index at the time of invest-
ment).
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
Keep this Prospectus for future reference. It contains information that you
should know before you invest. A "Statement of Additional Information" ("SAI")
containing additional information about the Portfolio has been filed with the
Securities and Exchange Commission. The SAI is dated August 31, 1998 and has
been incorporated by reference into this Prospectus. For a free copy of the
SAI, contact the UAM Funds Service Center at 1-800-638-7983.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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ESTIMATED FUND EXPENSES
The following table illustrates expenses and fees that a shareholder of the
Portfolio's Institutional Class Shares will incur. The Portfolio does not
charge shareholder transaction fees. However, transaction fees may be charged
if a broker-dealer or other financial intermediary deals with the Fund on your
behalf. (See "PURCHASE OF SHARES.")
SHAREHOLDER TRANSACTION EXPENSES
Sales Load Imposed on Purchases.......................................... NONE
Sales Load Imposed on Reinvested Dividends............................... NONE
Deferred Sales Load...................................................... NONE
Redemption Fees.......................................................... NONE
Exchange Fee............................................................. NONE
ESTIMATED ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Investment Advisory Fees (After Fee Waiver).............................. 0.86%
12b-1 Fees............................................................... NONE
Other Expenses........................................................... 0.44%
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Total Operating Expenses (After Fee Waiver).............................. 1.30%+
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+ The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses otherwise payable by the Portfolio, if necessary, in
order to reduce its expense ratio. As of the date of this Prospectus, the
Adviser has agreed to keep the Portfolio's Institutional Class Shares from
exceeding 1.30% of average daily net assets. Absent the fee waiver and ex-
penses assumed by the Adviser, Investment Advisory Fees and Total Operating
Expenses would be 1.00% and 1.44%, respectively.
The table above shows various fees and expenses that a shareholder of the
Portfolio would bear directly or indirectly. The expenses and fees set forth
above are based on estimated amounts for its first year of operations, based
upon assumed average daily assets of $100 million. The effect of expense off-
sets is excluded.
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EXAMPLE
The following example illustrates expenses a shareholder would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. As noted in the ta-
ble above, the Portfolio charges no redemption fees of any kind.
1 YEAR 3 YEARS
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Pell Rudman Mid-Cap Growth Portfolio Institutional Class
Shares.................................................. $13 $41
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EX-
PENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE
SHOWN.
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PROSPECTUS SUMMARY
INVESTMENT ADVISER
Pell Rudman Trust Company, N.A. (the "Adviser"), a nationally chartered
trust company formed in 1980, serves as investment adviser to Pell Rudman Mid-
Cap Growth Portfolio. The Adviser provides comprehensive and integrated finan-
cial services to individuals and selected institutional clients. (See "INVEST-
MENT ADVISER.")
PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor") to investors at net asset value without a sales commission.
Share purchases may be made by sending investments directly to the Fund. The
minimum initial investment is $2,500. The minimum for subsequent investments
is $100. The minimum initial investment for IRA accounts is $500. The minimum
initial investment for spousal IRA accounts is $250. Certain exceptions to the
initial or minimum investment amounts may be permitted by the officers of the
Fund. (See "PURCHASE OF SHARES.")
DIVIDENDS AND DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income in quarterly dividends. The Portfolio will distribute any realized
net capital gains annually. Distributions will be reinvested in Portfolio
shares automatically unless an investor elects to receive cash distributions.
(See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES.")
REDEMPTIONS AND EXCHANGES
Shares of the Portfolio may be redeemed at any time, without cost, at the
net asset value of the Portfolio next determined after receipt of the redemp-
tion request. The redemption price maybe more or less than the purchase price.
Shares of the Portfolio may be exchanged for shares of the same class of any
other Portfolio of the UAM Funds. (See "REDEMPTION OF SHARES" and "EXCHANGE
PRIVILEGE.")
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of United As-
set Management Corporation, is responsible for performing and overseeing ad-
ministration, fund accounting, dividend disbursing and transfer agency serv-
ices provided to the Fund and its Portfolios by third-party service providers.
(See "ADMINISTRATIVE SERVICES.")
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RISK FACTORS
The value of the Portfolio's shares can be expected to fluctuate in response
to changes in market and economic conditions as well as the financial condi-
tions and prospects of the issuers in which the Portfolio invests. Prospective
investors should consider the following: (1) The Portfolio may invest in secu-
rities of foreign issuers, which will be subject to additional risk factors
not applicable to securities of U.S. issuers (See "OTHER INVESTMENT POLI-
CIES"); (2) In general, the Portfolio will not trade for short-term profits,
however, when circumstances warrant, investments may be sold without regard to
the length of time held. High rates of portfolio turnover may result in addi-
tional transaction costs and the realization of capital gains. (See "OTHER IN-
VESTMENT POLICIES"); and (3) The Portfolio may use various investment practic-
es, that involve special consideration, including investing in repurchase
agreements, when-issued, forward delivery and delayed settlement securities
and lending of securities. (See "OTHER INVESTMENT POLICIES").
INVESTMENT OBJECTIVE
The investment objective of the Portfolio is to provide long-term capital
appreciation. The primary focus of the Portfolio is on quality growth compa-
nies with medium market capitalizations (i.e., companies with market capital-
izations within the range of the Russell Mid-Cap Growth Index at the time of
investment).
There can be no assurance that the Portfolio will achieve its stated objec-
tive.
INVESTMENT POLICIES
The Portfolio seeks to achieve its objective by investing at least 65% of
its assets, under normal circumstances, in a diversified portfolio of common
stocks of companies with market capitalizations between $200 million and $10
billion at the time of initial purchase. The Portfolio may also invest in con-
vertible bonds or convertible preferred stocks.
The Adviser believes that the Portfolio can add value over time by investing
in high-quality mid-cap growth companies. The Adviser emphasizes bottom-up,
fundamental stock selection that focuses on companies which can deliver
consistently strong earnings growth, cash flow growth, and return on equity.
Importantly, the Adviser looks for a proven history of growth in the companies
in which the Portfolio invests, because it believes that such a history is
indicative of the value of the underlying franchise or market position. These
companies typically have a proprietary product or business approach that
allows them to be leaders within their respective industries. In addition, the
Adviser emphasizes diversification in terms of sector exposure as well as the
number of securities held, and normally expects low turnover of holdings.
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The Adviser expects that stocks selected for the portfolio will provide an
attractive tradeoff between risk and return. The Adviser identifies catalysts
for each stock and uses those criteria to decide whether the Portfolio should
buy or hold a particular security. This is an important criteria in selecting
those stocks that do and do not get purchased for the portfolio. In narrowing
potential candidates, The Adviser looks for companies that will outperform in
the future and/or possess a catalyst that will allow the stock to recognize
its potential. In addition, the Adviser constantly evaluates companies in
terms of growth characteristics relative to valuations, that is, by examining
the price/earnings to growth rate of current portfolio holdings and potential
purchase candidates.
The Adviser screens the Portfolio weekly for potential securities to sell
using both fundamental and quantitative criteria.
OTHER INVESTMENT POLICIES
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated redemp-
tions, or for temporary defensive purposes, the Portfolio may invest a portion
of its assets in domestic and foreign money market instruments including cer-
tificates of deposit, bankers acceptances, time deposits, U.S. Government ob-
ligations, U.S. Government agency securities, short-term corporate debt secu-
rities, and commercial paper rated A-1 or A-2 by Standard & Poor's Ratings
Services ("S&P") or Prime-1 or Prime-2 by Moody's Investors Service, Inc.
("Moody's") or if unrated, determined by the Adviser to be of comparable qual-
ity.
The Fund has received permission from the Securities and Exchange Commission
(the "SEC") to deposit the daily uninvested cash balances of the Fund's Port-
folios, as well as cash for investment purposes, into one or more joint ac-
counts and to invest the daily balance of the joint accounts in the following
short-term investments: fully collateralized repurchase agreements, interest-
bearing or discounted commercial paper including dollar-denominated commercial
paper of foreign issuers, and any other short-term money market instruments
including variable rate demand notes and tax-exempt money instruments. By en-
tering into these investments on a joint basis, a Portfolio may earn a higher
rate of return on investments relative to what it could earn individually.
The Fund has received permission from the SEC for each of its Portfolios to
invest, for cash management purposes, the greater of 5% of its total assets or
$2.5 million in the Fund's DSI Money Market Portfolio. (See "INVESTMENT COMPA-
NIES.")
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REPURCHASE AGREEMENTS
The Portfolio may invest in repurchase agreements collateralized by U.S.
Government securities, certificates of deposit, and certain bankers' accept-
ances and other securities outlined above under "SHORT-TERM INVESTMENTS." In a
repurchase agreement, a Portfolio buys a security and simultaneously commits
to sell it back at an agreed upon price plus an agreed upon market rate of in-
terest. Under a repurchase agreement, the seller is also required to maintain
the value of securities subject to the agreement at not less than 100% of the
repurchase price. The value of the securities will be evaluated daily, and the
Adviser will, if necessary, require the seller to maintain additional securi-
ties to ensure that the value is in compliance with the previous sentence.
The use of repurchase agreements involves certain risks. For example, a de-
fault by the seller under an agreement may cause a Portfolio to experience a
loss or delay in the liquidation of the collateral securing the repurchase
agreement. The Portfolio might also incur disposition costs in liquidating the
collateral. While the Fund's management acknowledges these risks, it is ex-
pected that they can be controlled through stringent security selection crite-
ria and careful monitoring procedures.
The Fund has received permission from the SEC to pool daily uninvested cash
balances of the Fund's Portfolios in order to invest in repurchase agreements
on a joint basis. By entering into joint repurchase agreements, a Portfolio
may incur lower transaction costs and earn higher rates of interest on joint
repurchase agreements. Each Portfolio's contribution would determine its re-
turn from a joint repurchase agreement. (See "SHORT-TERM INVESTMENTS.")
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified institutional
investors as a means of earning income. The Portfolio will not loan securities
to the extent that greater than one-third of its total assets at fair market
value would be committed to loans. During the term of a loan, the Portfolio is
subject to a gain or loss depending on any increase or decrease in the market
price of the securities loaned. Lending of securities is subject to review by
the Fund's Board of Trustees. All relevant facts and circumstances, including
the creditworthiness of the broker, dealer or institution, will be considered
by the Adviser in making decisions about securities lending.
An investment company may pay reasonable negotiated fees in connection with
loaned securities so long as such fees are set forth in a written contract and
approved by its Board of Trustees. The Portfolio will continue to retain any
voting rights with respect to loaned securities. If a material event occurs
affecting an investment on a loan, the loan must be called and the securities
voted.
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WHEN-ISSUED, FORWARD DELIVERY AND DELAYED SETTLEMENT SECURITIES
The Portfolio may purchase and sell securities on a "when-issued," "delayed
settlement," or "forward delivery" basis. When-issued or forward delivery re-
fers to securities whose terms and indenture are available, and for which a
market exists, but which are not available for immediate delivery. When-issued
and forward delivery transactions may be expected to occur a month or more be-
fore delivery is due. Delayed settlement is a term used to describe settlement
of a securities transaction in the secondary market which will occur sometime
in the future. No payment or delivery is made by a Portfolio until it receives
delivery or payment from the other party to any of the above transactions. It
is possible that the market price of the securities at the time of delivery
may be higher or lower than the purchase price. The Portfolio will maintain a
separate account of cash or liquid securities at least equal to the value of
purchase commitments until payment is made. Such segregated securities will
either mature or, if necessary, be sold on or before the settlement date. Typ-
ically, no income accrues on securities purchased on a delayed delivery basis
prior to the time delivery is made although the Portfolio may earn income on
securities it has deposited in a segregated account.
The Portfolio may engage in these types of purchases in order to buy securi-
ties that fit with its investment objective at attractive prices--not to in-
crease its investment leverage.
PORTFOLIO TURNOVER
Portfolio turnover is not anticipated to exceed 50%. In addition to portfo-
lio trading costs, higher rates of portfolio turnover may result in the reali-
zation of capital gains. (See "DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAX-
ES" for information on taxation). The Portfolio will not normally engage in
short-term trading, but reserves the right to do so.
INVESTMENT COMPANIES
The Portfolio reserves the right to invest up to 10% of its total assets,
calculated at the time of investment, in the securities of other open-end or
closed-end investment companies. No more than 5% of the Portfolio's total as-
sets may be invested in the securities of any one investment company nor may
it acquire more than 3% of the voting securities of any other investment com-
pany. The Portfolio will indirectly bear its proportionate share of any man-
agement fees paid by an investment company in which it invests in addition to
the advisory fee paid by the Portfolio.
The Fund has received permission from the SEC to allow each of its Portfo-
lios to invest, for cash management purposes, the greater of 5% of its total
assets or $2.5 million in the Fund's DSI Money Market Portfolio provided that
the investment is consistent with the Portfolio's investment policies and re-
strictions. Based
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upon the Portfolio's assets invested in the DSI Money Market Portfolio, the
investing Portfolio's adviser will waive its investment advisory fee and any
other fees earned as a result of the Portfolio's investment in the DSI Money
Market Portfolio. The investing Portfolio will bear expenses of the DSI Money
Market Portfolio on the same basis as all of its other shareholders.
FOREIGN SECURITIES
The Portfolio may purchase foreign securities that are listed on a principal
foreign securities exchange or over-the-counter market, represented by Ameri-
can Depositary Receipts (ADR's) listed on a domestic securities exchange, or
traded in the United States over-the-counter market. The portfolio will not
hold foreign currency as an investment or invest in forward foreign currency
contracts.
There may be less publicly available information about these issuers than is
available about companies in the U.S. and foreign auditing requirements may
not be comparable to those in the U.S. In addition, the value of the foreign
securities may be adversely affected by movements in the exchange rates be-
tween foreign currencies and the U.S. dollar, as well as other political and
economic developments, including the possibility of expropriation, confisca-
tory taxation, exchange controls or other foreign governmental restrictions.
The portfolio may also invest in securities of foreign issuers which are
listed on a domestic national securities exchange.
RESTRICTED SECURITIES
The Portfolio may purchase restricted securities that are not registered for
sale to the general public but which are eligible for resale to qualified in-
stitutional investors under Rule 144A of the Securities Act of 1933 (the "1933
Act"). Under the supervision of the Fund's Board of Trustees, the Adviser de-
termines the liquidity of such investments by considering all relevant fac-
tors. Provided that a dealer or institutional trading market in such securi-
ties exists, these restricted securities are not treated as illiquid securi-
ties for purposes of a Portfolio's investment limitations. The Portfolio may
also invest up to 15% of its net assets in illiquid securities. Prices real-
ized from sales of these securities could be more or less than those origi-
nally paid by the Portfolio or less than what may be considered the fair value
of such securities.
Except as specified above and as described under "INVESTMENT LIMITATIONS,"
the foregoing investment policies are not fundamental and the Trustees may
change such policies without an affirmative vote of a majority of the out-
standing voting securities of the Portfolio, as defined in the Investment Com-
pany Act of 1940 ("1940 Act").
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INVESTMENT LIMITATIONS
The Portfolio will not:
(a) with respect to 75% of its assets, invest more than 5% of its total
assets at the time of purchase in the securities of any single issuer
(other than obligations issued or guaranteed as to principal and in-
terest by the U.S. Government or any agency or instrumentality there-
of);
(b) with respect to 75% of its assets, purchase more than 10% of any class
of the outstanding voting securities of any issuer;
(c) invest more than 5% of its assets at the time of purchase in the secu-
rities of companies that have (with predecessors) a continuous operat-
ing history of less than 3 years;
(d) invest more than 25% of its assets in companies within a single indus-
try; however, there are no limitations on investments made in instru-
ments issued or guaranteed by the U.S. Government and its agencies
when the Portfolio adopts a temporary defensive position;
(e) make loans except (i) by purchasing bonds, debentures or similar obli-
gations which are publicly distributed, (including repurchase agree-
ments provided, however, that repurchase agreements maturing in more
than seven days, together with securities which are not readily mar-
ketable, will not exceed 15% of the Portfolio's total assets), and
(ii) by lending its portfolio securities to banks, brokers, dealers
and other financial institutions so long as such loans are not incon-
sistent with the 1940 Act and the Rules and Regulations or interpreta-
tions of the SEC thereunder;
(f) (i) borrow, except from banks and as a temporary measure for extraor-
dinary or emergency purposes and then, in no event, in excess of 33
1/3% of the Portfolio's gross assets valued at the lower of market or
cost, and (ii) a Portfolio may not purchase additional securities when
borrowings exceed 5% of total assets; or
(g) pledge, mortgage or hypothecate any of its assets to an extent greater
than 33 1/3% of its total assets at fair market value.
The investment objective of the Portfolio is nonfundamental and may be
changed without shareholder approval. Except for limitations (a), (b), (d),
(e) and (f)(i), the Portfolio's investment limitations and policies described
in this Prospectus and in the SAI are not fundamental and may be changed by
the Fund's Board of Trustees upon reasonable notice to investors. All other
investment limitations described here and in the SAI are fundamental policies
and may be changed only with the approval of the holders of a majority of the
outstanding shares of the Portfolio. If a percentage limitation on investment
or utilization of assets as set forth above is adhered to at the time an in-
vestment is made, a later change in percentage resulting from changes in the
value or total cost of the Portfolio's assets will not be considered a viola-
tion of the restriction.
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PURCHASE OF SHARES
Shares of the Portfolio are offered through UAM Fund Distributors, Inc. (the
"Distributor"), without a sales commission at the net asset value per share
next determined after an order is received by the Portfolio and payment is re-
ceived by the Fund or a designated Service Agent. (See "VALUATION OF SHARES.")
The minimum initial investment required is $2,500. The minimum initial invest-
ment for IRA accounts is $500. The minimum initial investment for spousal IRA
accounts is $250. Certain exceptions may be permitted by the officers of the
Fund.
Shares of the Portfolio may be purchased by customers of brokers-dealers or
other financial intermediaries ("Service Agents") which have established a
shareholder servicing relationship with the Fund on behalf of their customers.
Service Agents may impose additional or different conditions on purchases or
redemptions of Portfolio shares and may charge transaction or other account
fees. Each Service Agent is responsible for transmitting to its customers a
schedule of any such fees and information regarding additional or different
purchase or redemption conditions. Shareholders who are customers of Service
Agents should consult their Service Agent for information regarding these fees
and conditions. Amounts paid to Service Agents may include transaction fees
and/or service fees paid by the Fund from the Fund assets attributable to the
Service Agent, which would not be imposed if shares of the Portfolio were pur-
chased directly from the Fund or the Distributor. Service Agents may provide
shareholder services to their customers that are not available to a share-
holder dealing directly with the Fund. A salesperson and any other person en-
titled to receive compensation for selling or servicing Portfolio shares may
receive different compensation with respect to one particular class of shares
over another in the Fund.
Service Agents, or if applicable, their designees, that have entered into
agreements with the Fund or its agent may enter confirmed purchase or redemp-
tion orders on behalf of clients and customers, with payment to follow no
later than the Portfolio's pricing on the following business day. If payment
is not received by UAM Funds Service Center by such time, the Service Agent
could be held liable for resulting fees or losses. The Portfolio may be deemed
to have received a purchase or redemption order when a Service Agent, or, if
applicable, its authorized designee, accepts the order. Orders received by the
Fund in proper form will be priced at the Portfolio's net asset value next
computed after they are accepted by the Service Agent or its authorized desig-
nee. Service Agents are responsible to their customers and the Fund for timely
transmission of all subscription and redemption requests, investment informa-
tion, documentation and money.
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INITIAL INVESTMENTS
BY MAIL
. Complete and sign an Application and mail it, together with a check made
payable to "UAM Funds" to:
UAM Funds Trust
UAM Funds Service Center
P.O. Box 419081
Kansas City, MO 64141-6081
Payment for purchases of shares received by mail will be credited to your
account at the net asset value per share of the Portfolio next determined af-
ter receipt. The Fund will not accept third-party checks to purchase shares of
the Portfolios. If you purchase shares by check, please be sure that your
check is made payable to the "UAM Funds."
BY WIRE
. Telephone the UAM Funds Service Center and provide the account name, ad-
dress, telephone number, social security or taxpayer identification num-
ber, Portfolio selected, amount being wired and the name of the bank
wiring the funds. The call must be received prior to the close of regu-
lar trading on the New York Stock Exchange ("NYSE") (generally 4:00 p.m.
Eastern Time) to receive that day's price. An account number and a wire
control number will then be provided to you in addition to wiring in-
structions. Next,
. instruct your bank to wire the specified amount to the address below:
United Missouri Bank
ABA #101000695
UAM Funds
DDA Acct. #9870964163
Ref: Portfolio Name ----------
Your Account Number ----------
Your Account Name -----------
Wire Control Number ----------
(assigned by the UAM Funds Service Center)
. Forward a completed Application to the Fund at the address shown on the
form.
. To be sure that a bank wire order is received on the same day it is
sent, an investor's bank should wire funds as early in the day as possi-
ble. The bank sending funds may charge for this service. The Fund's
agent reserves the right to charge investors for receipt of wired funds,
but no charge is currently imposed by this service. It is necessary to
obtain a new wire control number every time money is wired into an ac-
count in the Portfolio. Wire control numbers are effective for one
transaction only and cannot be used
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more than once. Wired money that is not properly identified with a cur-
rently effective wire control number will be returned to the bank from
which it was wired and will not be credited to the shareholder's ac-
count.
ADDITIONAL INVESTMENTS
Additional investments can be made at any time. The minimum additional in-
vestment is $100. Shares can be purchased at net asset value by mailing a
check to the UAM Funds Service Center (payable to "UAM Funds") or by wiring
money to United Missouri Bank as outlined above. When making additional in-
vestments, be sure that the account number, account name and the Portfolio to
be purchased are identified on the check or wire. Prior to wiring additional
investments, notify the Fund by calling the number on the cover of this Pro-
spectus. Mail orders should include, when possible, the "Invest by Mail" stub
which accompanies any Fund confirmation statement.
PURCHASE BY ACH
If you have made this election, shares of the Portfolio may be purchased via
Automated Clearing House ("ACH"). Investors purchasing via ACH should complete
the appropriate sections of the Account Application and attach a voided check
or deposit slip to the Account Application. This option must be established on
your account at least 15 days prior to your initiating an ACH transaction.
(See "SHAREHOLDER SERVICES--AUTOMATIC INVESTMENT PLAN.")
OTHER PURCHASE INFORMATION
Investments received by the close of regular trading on the NYSE (generally
4 p.m. Eastern Time) will be invested at the price calculated after the NYSE
closes on that day. Investments received after the close of the NYSE will be
executed at the price computed on the next day the NYSE is open.
The Fund reserves the right, in its sole discretion, to suspend the offering
of shares of the Portfolio or to reject purchase orders when, in the judgment
of management, such suspension or rejection is in the best interests of the
Fund. The Portfolio is intended to be a long-term investment vehicle and is
not designed to provide investors with a means of speculation on short-term
market movements. A pattern of frequent purchases can be disruptive to effi-
cient portfolio management and, consequently, can be detrimental to the Port-
folio's performance and shareholders. Accordingly, if the Fund's management
determines that an investor is engaged in excessive trading, the Fund, with or
without prior notice, may reject in whole or part any purchase request, with
respect to such investor's account. Such investors also may be barred from
purchasing other portfolios of the UAM Funds.
Purchases of shares will be made in full and fractional shares of the Port-
folio calculated to three decimal places. Certificates for fractional shares
will not be issued. Certificates for whole shares will not be issued except at
the written request of the shareholder.
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IN-KIND PURCHASES
If accepted by the Fund, shares of the Portfolio may be purchased in ex-
change for securities which are eligible for acquisition by the Portfolio, as
described in this Prospectus. Securities to be exchanged which are accepted by
the Fund will be valued as detailed under "VALUATION OF SHARES" at the next
determination of net asset value after acceptance. Shares issued by a Portfo-
lio in exchange for securities will be issued at net asset value determined as
of the same time. All dividends, interest, subscription, or other rights per-
taining to such securities shall become the property of the Portfolio and must
be delivered to the Fund by the investor upon receipt from the issuer. Securi-
ties acquired through an in-kind purchase will be acquired for investment and
not for immediate resale.
The Fund will not accept securities in exchange for shares of a Portfolio
unless:
. at the time of exchange, such securities are eligible to be in-
cluded in the Portfolio (current market quotations must be readily
available for such securities);
. the investor represents and agrees that all securities offered to
be exchanged are liquid securities and not subject to any restric-
tions upon their sale by the Portfolio under the 1933 Act, or oth-
erwise; and
. the value of any such securities (except U.S. Government securi-
ties) being exchanged together with other securities of the same
issuer owned by the Portfolio will not exceed 5% of the net assets
of the Portfolio immediately after the transaction.
Investors who are subject to federal taxation upon exchange may realize a
gain or loss for federal income tax purposes depending upon the cost of secu-
rities or local currency exchanged. Investors interested in such exchanges
should contact the Adviser.
REDEMPTION OF SHARES
Shares of the Portfolio may be redeemed by mail or telephone at any time,
without cost, at the net asset value of the Portfolio next determined after
receipt of the redemption request. No charge is made for redemptions. Any re-
demption may be more or less than the purchase price of the shares depending
on the market value of investment securities held by the Portfolio.
BY MAIL
Address requests for redemption to the UAM Funds Service Center. Requests to
redeem shares must include:
. share certificates, if issued;
13
<PAGE>
. a letter of instruction or an assignment specifying the number of
shares or dollar amount to be redeemed, signed by all registered
owners of the shares in the exact names in which they are regis-
tered;
. any required signature guarantees (see "SIGNATURE GUARANTEES"); and
. any other necessary legal documents, if required, in the case of
estates, trusts, guardianships, custodianships, corporations, pen-
sion and profit sharing plans and other organizations.
BY TELEPHONE
A redemption request by telephone requires the following:
. establish the telephone redemption privilege (and if desired, the
wire redemption privilege) by completing appropriate sections of
the Application; and
. call the Fund and instruct that the redemption proceeds be mailed
to you or wired to your bank.
The following tasks cannot be accomplished by telephone:
. changing the name of the commercial bank or the account designated
to receive redemption proceeds (this can be accomplished only by a
written request signed by each shareholder, with each signature
guaranteed); and
. redemption of certificated shares by telephone.
The Fund and UAM Funds Service Center will employ reasonable procedures to
confirm that instructions communicated by telephone are genuine, and they may
be liable for any losses if they fail to do so. These procedures include re-
quiring the investor to provide certain personal identification at the time an
account is opened, as well as prior to effecting each transaction requested by
telephone. All telephone transaction requests will be recorded and investors
may be required to provide additional telecopied written instructions of such
transaction requests. The Fund or UAM Funds Service Center may be liable for
any losses due to unauthorized or fraudulent telephone instructions if the
Fund or UAM Funds Service Center do not employ the procedures described above.
Neither the Fund nor UAM Funds Service Center will be responsible for any
loss, liability, cost or expense for following instructions received by tele-
phone that it reasonably believes to be genuine.
SIGNATURE GUARANTEES
Signature guarantees are required for the following redemptions:
. redemptions where the proceeds are to be sent to someone other than
the registered shareowner(s);
14
<PAGE>
. redemptions where the proceeds are to be sent to someplace other
than the registered address; or
. share transfer requests.
Signature guarantees will be accepted from any eligible guarantor institu-
tion which participates in a signature guarantee program. Eligible guarantor
institutions include banks, brokers, dealers, credit unions, national securi-
ties exchanges, registered securities associations, clearing agencies and sav-
ings associations. Broker-dealers guaranteeing signatures must be a member of
a clearing corporation or maintain net capital of at least $100,000. Credit
unions must be authorized to issue signature guarantees.
OTHER REDEMPTION INFORMATION
The Fund ordinarily will make payment for all shares redeemed within seven
days after receipt by the UAM Funds Service Center of a redemption request in
proper form. Although the Fund will redeem shares purchased by check before
the check clears, payment of the redemption proceeds may be delayed for a pe-
riod of up to fifteen days after their purchase, pending determination that
the check has cleared. Investors should consider purchasing shares using a
certified or bank check or money order if they anticipate an immediate need
for redemption proceeds. The Fund may suspend the right of redemption or post-
pone the date at times when either the NYSE and Custodian Bank are closed, or
under any emergency circumstances determined by the SEC.
If the Fund's Board of Trustees determines that it would be detrimental to
the best interests of remaining shareholders of the Fund to make payment
wholly or partly in cash, the Fund may pay redemption proceeds in whole or in
part by a distribution in-kind of liquid securities held by a Portfolio in
lieu of cash in conformity with applicable rules of the SEC. Investors may in-
cur brokerage charges on the sale of portfolio securities received in payment
of redemptions.
The Portfolio reserves the right to liquidate any account that is below 50
percent of the required minimum initial investment account for the Portfolio
as set forth in the Prospectus, where the reduction in value has occurred due
to a redemption or exchange out of the account. If at any time your total in-
vestment does not have a value of at least 50 percent of the required minimum
initial investment amount, you may be notified that the value of your account
is below the Portfolio's minimum account balance requirement. You would then
be allowed 60 days to make an additional investment before the account is liq-
uidated. Retirement accounts and certain other accounts will not be subject to
automatic liquidation. Reductions in value that result solely from market ac-
tivity will not trigger an involuntary redemption.
15
<PAGE>
SHAREHOLDER SERVICES
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for Institu-
tional Class Shares of any other UAM Funds Portfolio. (See the list of Portfo-
lios of the UAM Funds Institutional Class Shares at the end of this Prospec-
tus.) Exchange requests should be made by contacting the UAM Funds Service
Center.
Any exchange will be based on the net asset value of the shares involved.
There is no sales commission or charge of any kind for an exchange. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objectives and policies of the Portfolio to be
purchased. Call the UAM Funds Service Center for a copy of the Prospectus for
the Portfolio(s) in which you are interested. Exchanges can only be made with
Portfolios that are qualified for sale in a shareholder's state of residence.
Exchange requests may be made either by mail or telephone. Telephone ex-
changes will be accepted only if the certificates for the shares to be ex-
changed have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received prior to the
close of regular trading on the NYSE (generally 4:00 p.m. EST) will be proc-
essed as of the close of business on the same day. Requests received after the
close of regular trading on the NYSE will be processed on the next business
day. For additional information regarding responsibility for the authenticity
of telephone instructions, see "REDEMPTIONS OF SHARES BY TELEPHONE." The Fund
may modify or terminate the exchange program at any time upon 60 days' written
notice to shareholders, and may reject any exchange request. If the Fund's
management determines that an investor is engaged in excessive trading, the
Fund, with or without prior notice, may reject in whole or part any exchange
request, with respect to such investor's account. Such investors also may be
barred from exchanging into other Portfolios of the Fund.
An exchange into another UAM Funds Portfolio is a sale of shares and may re-
sult in a gain or loss for income tax purposes.
AUTOMATIC INVESTMENT PLAN
An Automatic Investment Plan permits shareholders of a Portfolio with a min-
imum value of $2,500 or more to purchase shares automatically (minimum of $100
per transaction) at regular intervals selected by the shareholder. Provided
the shareholder's bank or other financial institution allows automatic with-
drawals, shares are purchased by transferring funds via the Automated Clearing
House ("ACH"). Investments made through ACH will be automatically transferred
from a shareholder's checking, bank money market or NOW account designated by
the shareholder. Such withdrawals are made electronically, if the sharehold-
er's bank or financial institution so permits, or by pre-authorized checks or
drafts drawn on
16
<PAGE>
the shareholder's bank or other account. The bank or financial institution
must be a member of ACH. At the shareholder's option, the account designated
will be debited in the specified amount, and shares will be purchased monthly
or quarterly.
To establish an Automatic Investment Plan, a shareholder must complete the
appropriate sections of the Account Application. A shareholder may cancel
his/her participation or change the amount of purchase at any time by mailing
written notification to UAM Funds Service Center, P.O. Box 419081, Kansas
City, MO 64141-6081 and notification generally will be effective three busi-
ness days following receipt. The Fund may modify or terminate this privilege
at any time, or may charge a service fee, although no such fee currently is
contemplated.
SYSTEMATIC WITHDRAWAL PLAN
Any shareholder whose account balance totals at least $10,000 may establish
a Systematic Withdrawal Plan under which an amount pre-determined by the
shareholder (but at least $100) is automatically redeemed from the sharehold-
er's account either monthly or quarterly. A shareholder may participate in the
Systematic Withdrawal Plan by using ACH. Redemptions made through ACH will be
automatically transferred to the shareholder's bank or other similar financial
institution account or a properly designated third party. The bank or finan-
cial institution must be a member of ACH. Redemptions ordinarily are made on
the third business day of the month and payments ordinarily will be transmit-
ted within five business days after the redemption date. Because the prices of
Fund shares fluctuate, the number of shares redeemed to finance systematic
withdrawal payments of a given amount will vary from payment to payment. If a
shareholder owns shares in more than one Portfolio, the shareholder must des-
ignate the Portfolio from which the redemptions under a Systematic Withdrawal
Plan should be made. A Systematic Withdrawal Plan may be terminated or sus-
pended at any time by the Fund. A shareholder may elect at any time, in writ-
ing, to terminate participation in the Systematic Withdrawal Plan. Such writ-
ten election must be sent to and received by the Fund before a termination be-
comes effective. There is currently no charge to the shareholder for a System-
atic Withdrawal Plan.
VALUATION OF SHARES
The net asset value of the Portfolio is determined by dividing the value of
the Portfolio's assets less any liabilities by the number of shares outstand-
ing. The net asset value per share of the Portfolio is determined as of the
close of the NYSE on each day that the NYSE is open for business.
Equity securities listed on a securities exchange for which market quota-
tions are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where
the security is primarily traded. Unlisted equity securities and listed secu-
rities not traded on the
17
<PAGE>
valuation date for which market quotations are readily available are valued
neither exceeding the current asked prices nor less than the current bid pric-
es. Quotations of foreign securities in a foreign currency are converted to
U.S. dollar equivalents. The converted value is based upon the bid price of
the foreign currency against U.S. dollars quoted by any major bank or by a
broker.
Bonds and other fixed income securities are valued according to the broadest
and most representative market, which will ordinarily be the over-the-counter
market. Bonds and other fixed income securities may be valued on the basis of
prices provided by a pricing service when such prices are believed to reflect
the fair market value of such securities. Securities purchased with remaining
maturities of 60 days or less are valued at amortized cost when the Board of
Trustees determines that amortized cost reflects fair value.
The value of other assets and securities for which no quotations are readily
available (including restricted securities) is determined in good faith at
fair value using methods determined by the Trustees.
PERFORMANCE CALCULATIONS
The Portfolio measures performance by calculating yield and total return.
Both yield and total return figures are based on historical earnings and are
not intended to indicate future performance.
Yield refers to the income generated by an investment in the Portfolio over
a given period of time, expressed as an annual percentage rate. Yields are
calculated according to a standard that is required for all funds. As this
differs from other accounting methods, the quoted yield may not equal the in-
come actually paid to shareholders.
Total return is the change in value of an investment in the Portfolio over a
given period, assuming reinvestment of any dividends and capital gains. A cu-
mulative or aggregate total return reflects actual performance over a stated
period of time. An average annual total return is a hypothetical rate of re-
turn that, if achieved annually, would have produced the same cumulative total
return if performance had been constant over the entire period.
The Portfolio's performance may be compared to data prepared by independent
services which monitor the performance of investment companies, data reported
in financial and industry publications, and various indices as further de-
scribed in the Portfolio's SAI. This information may also be included in sales
literature and advertising.
Since this is a new Portfolio, we can offer no information about past port-
folio investment performance. When this information becomes available, you
will find it, together with comparisons to appropriate indices, in the Portfo-
lio's Annual Re-
18
<PAGE>
port to Shareholders, which may be obtained without charge. To receive an An-
nual Report, contact the UAM Funds Service Center at the address or telephone
number on the cover of this Prospectus.
DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Portfolio will normally distribute substantially all of its net invest-
ment income (for tax purposes) to shareholders in quarterly dividends. If any
net capital gains are realized, the Portfolio will normally distribute them
annually.
All dividends and capital gains distributions will be automatically rein-
vested in additional shares of the Portfolio unless the Fund is notified in
writing that the shareholder elects to receive distributions in cash.
FEDERAL TAXES
The Portfolio intends to qualify as a "regulated investment company" under
subchapter M of the Internal Revenue Code of 1986, as amended, for federal in-
come tax purposes and to meet all other requirements that are necessary for it
(but not its shareholders) to be exempt generally from federal taxes on income
and gains paid to shareholders in the form of dividends. To do this, the Port-
folio must, among other things, distribute substantially all of its ordinary
income and net capital gains on a current basis and maintain a portfolio of
investments which satisfies certain diversification criteria.
Dividends paid by the Portfolio from net investment income, whether in cash
or reinvested in shares, are taxable to shareholders as ordinary income.
Short-term capital gains will be taxed as ordinary income. Long-term or mid-
term capital gains distributions are taxed as long-term and mid-term capital
gains, as the case may be. Shareholders will be notified annually of dividend
income earned for tax purposes.
Dividends declared in October, November and December to shareholders of rec-
ord in such a month and paid in January of the following year will be treated
as if they had been paid by the Fund and received by the shareholders on De-
cember 31.
The Portfolio is required by federal law to withhold 31% of reportable pay-
ments paid to shareholders who have not complied with IRS regulations. In or-
der to avoid this withholding requirement, you must certify that your Social
Security or Taxpayer Identification Number you have provided is correct and
that either you are not currently subject to backup withholding or you are ex-
empt from backup withholding. This certification must be made on the Applica-
tion or on a separate form supplied by the Fund.
19
<PAGE>
INVESTMENT ADVISER
Pell Rudman Trust Company, N.A., is a nationally chartered trust company
formed in 1980 and is located at 100 Federal Street, Boston, Massachusetts
02110. The Adviser is a wholly-owned subsidiary of United Asset Management
Corporation ("UAM"), a holding company, and provides comprehensive and inte-
grated financial services to individuals and selected institutional clients.
As of March 31, 1998, the Adviser had over $4.2 billion in assets under man-
agement.
All mid-cap equity accounts at the Adviser, including the Portfolio, are
managed on a team basis; however, Jeffrey Thomas, CFA, CIO, has overall re-
sponsibility for the day-to-day management of the Portfolio A description of
the team's business experience during the past five years is as follows:
JEFFREY S. THOMAS, CFA, CHIEF INVESTMENT OFFICER. Mr. Thomas heads the In-
vestment Committee and oversees the portfolio management of all client portfo-
lios of the Adviser. Prior to joining Rudman in 1986, he was Vice President,
Scudder Stevens & Clark, 1981-1986; Senior Investment Officer, Bank of New En-
gland, 1979-1981; and Investment Officer, The Northern Trust Company, 1973-
1979. Mr. Thomas is a member of the Boston Security Analysts Society, Bank
Analysts Association of Boston and President of Boston Media Analysts Group.
He earned his BS in Finance and Economics from Miami University (Ohio) and his
MBA in Finance from the University of Chicago. He is a Chartered Financial An-
alyst and Chartered Investment Counselor.
FREDERICK L. WEISS, CFA, DIRECTOR OF RESEARCH. Mr. Weiss is a senior invest-
ment professional and heads the research efforts of the investment team. Prior
to joining Pell Rudman in 1989, he was Vice President and Senior Analyst,
Adams, Harkness & Hill, 1989; Vice President State Street Research and Manage-
ment, 1983-1988; and Analyst, State Street Research and Management, 1979-1983.
Mr. Weiss is a member of the Boston Security Analyst Society and Healthcare,
Technology and Chemicals Analysts Society. He earned his AB from Harvard Col-
lege, Magna Cum Laude, and his MBA from Harvard Business School, with honors.
He is a Chartered Financial Analyst.
JAY PEARLSTEIN, CFA, CPA, SENIOR RESEARCH ANALYST AND PORTFOLIO MANAGER. Mr.
Pearlstein is a senior investment professional responsible for providing eq-
uity research on a number of industries. Prior to joining Pell Rudman in 1996,
he was a Vice President of the Equity Research Department and on the Invest-
ment Policy Committee, Loomis Sayles & Co., 1981-1996; Staff Analyst, Gulf Oil
Corporation, 1980; and Senior Auditor at Coopers & Lybrand, 1977-1980.
Mr. Pearlstein earned his BA in Accounting from Michigan State University,
Summa Cum Laude. He received the Board of Trustees Award for graduating first
in his class and was the recipient of a National Merit Scholarship, Financial
Executives Institute Award and Alpha Kappa Psi Scholarship Key. He also earned
his
20
<PAGE>
MBA, with distinction, from Harvard University Graduate School of Business
Administration where he received First-Year Honors. He is a Chartered Finan-
cial Analyst and a Certified Public Accountant.
Pursuant to an Investment Advisory Agreement with the Portfolio dated
August 31, 1998, the Adviser manages the investment and reinvestment of the
assets of the Portfolio. The Adviser must adhere to the stated investment ob-
jective and policies of the Portfolio and is subject to the control and super-
vision of the Fund's Board of Trustees.
The Portfolio pays an annual fee, in monthly installments, calculated by ap-
plying the following annual percentage rate to the Portfolio's average daily
net assets for the month:
<TABLE>
<CAPTION>
RATE
----
<S> <C>
Pell Rudman Mid-Cap Growth Portfolio................................... 1.00%
</TABLE>
The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses otherwise payable by the Portfolio to keep the Portfo-
lio's total annual operating expenses from exceeding 1.30% of its average
daily net assets.
The Adviser may compensate its affiliated companies for referring investors
to the Portfolio. The Distributor, UAM, the Adviser, or any of their affili-
ates, may, at its own expense, compensate a Service Agent or other person for
marketing, shareholder servicing, record-keeping and/or other services per-
formed with respect to the Fund, a Portfolio or any Class of Shares of the
Portfolio. Payments made for any of these purposes may be made from the paying
entity's revenues, its profits or any other source available to it. When in
effect, such service arrangements are made generally available to all quali-
fied service providers.
ADVISER'S HISTORICAL PERFORMANCE
Set forth below are certain performance data provided by the Adviser relat-
ing to the composite of all separately managed accounts of clients of the Ad-
viser that have the same investment objective as the Portfolio, and were man-
aged using substantially similar, though not in all cases identical, invest-
ment strategies, techniques and policies as those contemplated for use by the
Adviser in managing the Portfolio. The performance data for the managed ac-
counts is net of all fees and expense. The investment returns of the Portfolio
may differ from those of the separately managed accounts because such sepa-
rately managed accounts may have fees and expenses that differ from those of
the Portfolio. All fees and expenses of the managed accounts are less than the
estimated operating expenses of the Portfolio. If the performance of the man-
aged accounts was adjusted to reflect fees and expenses of the Portfolio, the
composite's performance would have been lower. Further, the separately managed
accounts are not subject to investment limitations, diversification require-
ments, and other restrictions imposed by the 1940 Act and
21
<PAGE>
Internal Revenue Code; such conditions, if applicable, may have lowered the
returns for the separately managed accounts. The results presented are not in-
tended to predict or suggest the return to be experienced by the Portfolio or
the return an investor might achieve by investing in the Portfolio.
PELL, RUDMAN TRUST COMPANY, N.A. -- COMPOSITE RETURNS
FOR INDIVIDUAL YEARS ENDED DECEMBER 31
<TABLE>
<CAPTION>
PELL
RUDMAN
TRUST RUSSELL MID-
COMPANY, CAP GROWTH
CALENDAR YEARS N.A. INDEX
- -------------- -------- ------------
<S> <C> <C>
1997...................................................... 22.52% 22.54%
1996...................................................... 18.64% 17.48%
1995...................................................... 36.26% 33.98%
1994...................................................... 2.12% (2.16)%
1993...................................................... 28.44% 11.19%
1992...................................................... 35.93% 14.09%
Cumulative (6/1/92-6/30/98)............................... 310.13% 192.75%
1-year period ended 6/30/98 (average annual).............. 28.13% 24.02%
3-year period ended 6/30/98 (average annual).............. 25.91% 21.70%
5-year period ended 6/30/98 (average annual).............. 22.26% 18.39%
Value of $1 invested during (6/1/92-6/30/98).............. $ 4.10 $2.93
</TABLE>
- -----------
Notes:
1. The annualized return is calculated from monthly data, allowing for com-
pounding. This methodology of calculating returns is different than the SEC
Standard, which may produce different results.
2. The cumulative return means that $1 invested in the composite of separately
managed accounts on June 1, 1992 had grown to $4.10 by June 30, 1998.
3. The Russell Mid-Cap Growth Index is an unmanaged index which assumes rein-
vestment of dividends and is generally considered representative of securi-
ties similar to those invested in by the Adviser for the purpose of the
composite performance numbers set forth above.
4. During the period shown (6/1/92-6/30/98), fees on the Adviser's individual
accounts ranged from 0.50% to 1.00% (50 basis points to 100 basis points).
The Adviser's returns presented above are net of the average maximum fee of
0.70%. Net returns to investors vary depending on the management fee.
22
<PAGE>
ADMINISTRATIVE SERVICES
UAM Fund Services, Inc. ("UAMFSI"), a wholly-owned subsidiary of UAM, is re-
sponsible for performing and overseeing administrative, fund accounting, divi-
dend disbursing and transfer agent services provided to the Fund and its Port-
folios. UAMFSI's principal office is located at 211 Congress Street, Boston,
MA 02110. UAMFSI has subcontracted some of these services to Chase Global
Funds Services Company ("CGFSC"), an affiliate of The Chase Manhattan Bank, by
a Mutual Funds Service Agreement dated June 30, 1997. CGFSC is located at 73
Tremont Street, Boston, MA 02108.
The Portfolio pays UAMFSI a two part monthly fee: a Portfolio specific fee
which is retained by UAMFSI and a sub-administration fee which UAMFSI in turn
pays to CGFSC. The Portfolio specific fee is the following annual percentage
of aggregate net assets:
<TABLE>
<CAPTION>
ANNUAL
RATE
------
<S> <C>
Pell Rudman Mid-Cap Growth Portfolio.................................. 0.04%
</TABLE>
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
$52.500 base fee per portfolio; and
0.025 of 1% of combined UAM Fund assets.
23
<PAGE>
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, with its
principal office located at 211 Congress Street, Boston, MA 02110, distributes
shares of the Fund. Under the Distribution Agreement (the "Agreement"), the
Distributor, as agent of the Fund, agrees to use its best efforts as sole dis-
tributor of Fund shares. The Distributor does not receive any fee or other
compensation under the Agreement with respect to the Pell Rudman Mid-Cap
Growth Portfolio Institutional Class Shares offered in this Prospectus. The
Agreement continues in effect so long as it is approved at least annually by
the Fund's Board of Trustees. Those approving the Agreement must include a ma-
jority of Trustees who are neither parties to the Agreement nor interested
persons of any such party. The Agreement provides that the Fund will bear
costs of registration of its shares with the SEC and various states and the
printing of its prospectuses, its SAIs and its reports to shareholders.
PORTFOLIO TRANSACTIONS
The Advisory Agreements authorize the Adviser to select the brokers or deal-
ers that will execute the purchases and sales of investment securities for the
Portfolios. The Agreements direct the Adviser to use its best efforts to ob-
tain the best available price and most favorable execution for all transac-
tions of the Portfolios. The Adviser may, however, consistent with the inter-
ests of the Portfolio, select brokers on the basis of research, statistical
and pricing services they or their affiliates provide to the Portfolio in ad-
dition to required broker services. Such brokers may be paid a higher commis-
sion than that which another qualified broker would have charged for effecting
the same transaction, provided that such commissions are paid in compliance
with the Securities Exchange Act of 1934, as amended, and that the Adviser de-
termines in good faith that the commission is reasonable in terms either of
the transaction or the overall responsibility of the Adviser to the Portfolios
and the Adviser's other clients.
Although not a typical practice, the Adviser may place portfolio orders with
qualified broker-dealers who refer clients to the Adviser.
If a purchase or sale of securities is consistent with the investment poli-
cies of a Portfolio and one or more other clients served by the Adviser is
considering a purchase at or about the same time, transactions in such securi-
ties will be allocated among the Portfolio and clients in a manner deemed fair
and reasonable by the Adviser. Although there is no specified formula for al-
locating such transactions, allocations are subject to periodic review by the
Fund's Trustees.
24
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized as a Delaware business trust on May 18, 1994 under
the name "The Regis Fund II." On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust." The Fund's Agreement and Declaration of Trust
permits the Fund to issue an unlimited number of shares of beneficial inter-
est, without par value. The Trustees have the power to designate one or more
series ("Portfolios") or classes of shares of beneficial interest without fur-
ther action by shareholders.
At its discretion, the Board of Trustees may create additional Portfolios
and classes of shares. The shares of the Portfolio are fully paid and nonas-
sessable, have no preference as to conversion, exchange, dividends, retirement
or other features and have no pre-emptive rights. They have noncumulative vot-
ing rights, which means that holders of more than 50% of shares voting for the
election of Trustees can elect 100% of the Trustees if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his name on the books
of the Fund.
In addition to the Institutional Class Shares offered by this Prospectus,
the Board of Trustees of the Fund has authorized Institutional Service Class
Shares and Advisor Class Shares, which are not currently being offered by this
Portfolio.
Annual meetings will not be held except as required by the 1940 Act and
other applicable laws. The Fund has undertaken that its Trustees will call a
meeting of shareholders if such a meeting is requested in writing by the hold-
ers of not less than 10% of the outstanding shares of the Fund. The Fund will
assist shareholder communications in such matters.
CUSTODIAN
The Chase Manhattan Bank serves as Custodian of the Portfolio's assets.
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP serves as the independent accountants for the
Fund.
REPORTS
Shareholders receive unaudited semi-annual financial statements and annual
financial statements audited by PricewaterhouseCoopers LLP.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be made by contacting the UAM Funds Service Center
at the telephone number or address listed on the cover of this Prospectus.
25
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRE-
SENTATIONS NOT CONTAINED IN THIS PROSPECTUS, OR IN THE FUND'S STATEMENT OF AD-
DITIONAL INFORMATION, IN CONNECTION WITH THE OFFERING MADE BY THIS PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS DOES NOT CONSTI-
TUTE AN OFFERING BY THE FUND IN ANY JURISDICTION IN WHICH SUCH OFFERING MAY
NOT LAWFULLY BE MADE.
26
<PAGE>
UAM FUNDS -- INSTITUTIONAL CLASS SHARES
Acadian Emerging Markets Portfolio
Acadian International Equity Portfolio
BHM&S Total Return Bond Portfolio
Cambiar Opportunity Portfolio
Chicago Asset Management Intermediate Bond Portfolio
Chicago Asset Management Value/Contrarian Portfolio
C&B Balanced Portfolio
C&B Equity Portfolio
C&B Equity Portfolio for Taxable Investors
C&B Mid Cap Equity Portfolio
Clipper Focus Portfolio
DSI Balanced Portfolio
DSI Disciplined Value Portfolio
DSI Limited Maturity Bond Portfolio
DSI Money Market Portfolio
FMA Small Company Portfolio
FPA Crescent Portfolio
Hanson Equity Portfolio
Heitman Real Estate Portfolio
ICM Equity Portfolio
ICM Fixed Income Portfolio
ICM Small Company Portfolio
Jacobs International Octagon Portfolio
McKee Domestic Equity Portfolio
McKee International Equity Portfolio
McKee Small Cap Equity Portfolio
McKee U.S. Government Portfolio
MJI International Equity Portfolio
NWQ Balanced Portfolio
NWQ Value Equity Portfolio
NWQ Small Cap Portfolio
NWQ Special Equity Portfolio
Pell Rudman Mid-Cap Growth Portfolio
Rice, Hall, James Small Cap Portfolio
Rice, Hall, James Small/Mid Cap Portfolio
Sirach Bond Portfolio
Sirach Equity Portfolio
Sirach Growth Portfolio
Sirach Special Equity Portfolio
Sirach Strategic Balanced Portfolio
Sterling Partners' Balanced Portfolio
Sterling Partners' Equity Portfolio
Sterling Partners' Small Cap Value Portfolio
SAMI Preferred Stock Income Portfolio
TS&W Balanced Portfolio
TS&W Equity Portfolio
TS&W Fixed Income Portfolio
TS&W International Equity Portfolio
27
<PAGE>
- --------------------------------------------------------------------------------
APPLICATION
INSTITUTIONAL CLASS SHARES
- --------------------------------------------------------------------------------
UAM FUNDS
REGULAR MAIL: UAM Funds Express Mail: UAM Funds
P.O. Box 419081 210 West 10th St.
Kansas City, MO 64141-6081 Kansas City, MO 64105
FOR HELP WITH THIS APPLICATION, OR FOR MORE
INFORMATION, CALL US TOLL FREE: 1-800-638-7983.
Distributed by UAM Fund Distributors, Inc.
- --------------------------------------------------------------------------------
1 YOUR ACCOUNT REGISTRATION (Check one box.)
- --------------------------------------------------------------------------------
[_] Individual or Joint Account
--------------------------------------------------------------------
Owner's Name: First, Initial, Last
[_][_][_][-][_][_][-][_][_][_][_]
---------------------------------
Owner's Social Security Number
--------------------------------------------------------------------
Joint Owner's Name: First, Initial, Last
[_][_][_][-][_][_][-][_][_][_][_]
---------------------------------
Joint Owner's
Social Security Number
Joint accounts will be registered joint tenants with right of
survivorship unless otherwise indicated.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[_] Trust [_] Exempt [_] Non-Exempt [_] Qualified Plan
--------------------------------------------------------------------
Trustee(s)' Name
--------------------------------------------------------------------
Name of Trust Agreement
--------------------------------------------------------------------
Beneficiary's Name
[_][_][-][_][_][_][_][_][_][_]
------------------------------ ---------------------------------
Taxpayer's ID Date of Trust Agreement
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[_] Custodial/Gift to Minors
--------------------------------------------------------------------
Custodian's Name: First, Initial, Last
--------------------------------------------------------------------
Minor's Name: First, Initial, Last
--------------------------------------------------------------------
Minor's Social Security Number
--------------------------------------------------------------------
Minor's State of residence
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
[_] *Corporation, Partnership or Other Entity
Type: [_] Corp. [_] Partnership [_] Other
--------------------------------------------------------------------
Name of Corp. or Other Entity
[_][_][-][_][_][_][_][_][_][_] [_] Exempt [_] Non-Exempt
------------------------------
Taxpayer ID Number
* Please enclose a corporate resolution which identifies individuals
authorized to conduct transactions in this account.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- --------------------------------------------------------------------------------
2 ADDRESS
- --------------------------------------------------------------------------------
--------------------------------------------------------------------
Street or P.O. Box Number
--------------------------------------------------------------------
City State Zip Code
( ) ( )
-------------------------------- --------------------------------
Daytime Phone Evening Phone
Citizenship: [_] U.S. [_] Resident- [_] Non- ---------------
Alien Resident Specify Country
Alien
- --------------------------------------------------------------------------------
3 INVESTMENT
- --------------------------------------------------------------------------------
Fill in the name of the Portfolio EXACTLY AS IT APPEARS ON THE FRONT OF THE
PROSPECTUS.
Fund Code
$
- --------------------------------------------- ---------------- ----------------
- --------------------------------------------- ---------------- ----------------
- --------------------------------------------- ---------------- ----------------
TOTAL $
----------------
- --------------------------------------------------------------------------------
4 METHOD OF PAYMENT
- --------------------------------------------------------------------------------
A.[_] Check (payable to UAM Funds) An Account No. will be assigned.
B.[_] This application confirms my prior wire purchase on (date): _____________
I was assigned the following wire reference control number:____________________
- --------------------------------------------------------------------------------
5 DIVIDEND & CAPITAL GAINS
- --------------------------------------------------------------------------------
Unless otherwise instructed, all distributions will be reinvested in
additional shares.
All dividends are to be [_] reinvested [_] paid in cash
All capital gains are to be [_] reinvested [_] paid in cash
- --------------------------------------------------------------------------------
6 ADDITIONAL INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Owner's Occupation Owner's Date of Birth
- --------------------------------------------------------------------------------
Employer's Name
- --------------------------------------------------------------------------------
Employer's Address
- --------------------------------------------------------------------------------
Joint Owner's Occupation Joint Owner's Date of Birth
- --------------------------------------------------------------------------------
Joint Owner's Employer's Name
- --------------------------------------------------------------------------------
Joint Owner's Employer's Address
- --------------------------------------------------------------------------------
7 BROKER-DEALER/FINANCIAL PLANNER INFORMATION
- --------------------------------------------------------------------------------
- --------------------------------------- --------------------------------------
Dealer Name Address of office servicing account
(as it appears on Selling Group
Agreement)
--------------------------------------
City State Zip Code
- ---------------------------------------
Address of home office
--------------------------------------
Representative's Name, Number,
- --------------------------------------- Branch Number
City State Zip Code
--------------------------------------
Representative's telephone number
- ---------------------------------------
Authorized signature of dealer
- --------------------------
For Internal Use Only
Source: ______
Code: ________
- --------------------------
- --------------------------------------------------------------------------------
8 INTERESTED PARTY:
- --------------------------------------------------------------------------------
In addition to the account statement sent to your registered address, you may
also have a Monthly Consolidated Statement Mailed to up to ten (10) interested
parties (tax adviser, 401(k) Plan Administrator, Financial Planner, etc.).
Please add a sheet with additional interested party names and addresses.
- ------------------------------------ ----------------------------------------
Name Firm Name (if applicable)
- ----------------------------------------------------
Address
- -------------------------------------------------- ------------ --------------
City State Zip Code
- --------------------------------------------------------------------------------
9 AUTOMATIC INVESTMENT PLAN (AIP)
- --------------------------------------------------------------------------------
An account balance of at least $2,500 is required.
I hereby authorize and direct the agent to draw on my (our) bank account on a
periodic basis, as indicated in section 11, for investment in my (our)
account. Attached is a voided check of the bank account I/we wish to use
(Initial investments may not be made through the Automatic Investment Plan.)
Please note this privilege will be effective 15 days after UAM Funds receives
this application. If no date is chosen below, your bank account will be
debited on the 15th of the month.
PREFERRED INVESTMENT SCHEDULE (PLEASE CHECK ONE):
[_] Monthly [_] Quarterly [_] Semi-Annually [_] Annually
Begin investment on (Enter month/year):
------------------------------------
Debit My (Our) Bank Account and Invest as Follows ($100 Minimum Per Account):
$
-------------------------------------------------------------------------------
Fund Amount
$
-------------------------------------------------------------------------------
Fund Amount
$
-------------------------------------------------------------------------------
Fund Amount
- --------------------------------------------------------------------------------
Please be sure to complete the back of this form.
- --------------------------------------------------------------------------------
UAM Funds Service Center
<PAGE>
- --------------------------------------------------------------------------------
10 SYSTEMATIC WITHDRAWAL PLAN (SWP)
- --------------------------------------------------------------------------------
An account balance of at least $10,000 is required.
PREFERRED WITHDRAWAL SCHEDULE:
[_] Monthly [_] Quarterly [_] Semi-Annually [_] Annually
[_] 1st or [_] 15th
-------------------------------------------------------------------------------
BEGIN WITHDRAWALS ON (ENTER MONTH/YEAR) DAY OF MONTH
I ELECT TO RECEIVE A PERIODIC PAYMENT OF ($100 MINIMUM PER ACCOUNT):
$
-------------------------------------------------------------------------------
Fund Amount
$
-------------------------------------------------------------------------------
Fund Amount
$
-------------------------------------------------------------------------------
Fund Amount
- --------------------------------------------------------------------------------
11 BANK INFORMATION
- --------------------------------------------------------------------------------
FOR ACH, WIRE REDEMPTIONS, AIP AND SWP
Your bank account information must be on file in order to exercise telephone
investment privileges. The account name(s) below must match exactly at least
one name in section 1. A blank, voided check is necessary to provide account
and bank routing information and must accompany this application.
-------------------------------------------------------------------------------
NAME OF BANK ABA NUMBER
[_] CHECKING [_] SAVINGS
-------------------------------------------------------------------------------
ACCOUNT NUMBER ACCOUNT TYPE
-------------------------------------------------------------------------------
BANK ADDRESS CITY STATE ZIP CODE
Return the following to the address below:
1. This completed application.
2. Voided bank check or deposit slip if applicable.
3. One check made payable to:
UAM Funds
Send to: UAM Funds
P.O. Box 419081
Kansas City, MO 64141-6081
- --------------------------------------------------------------------------------
12 TELEPHONE REDEMPTION AND EXCHANGE
- --------------------------------------------------------------------------------
I/We authorize Chase Global Funds Services Company to honor any request(s)
believed to be authentic for the following:
[_] Telephone Exchange [_] Telephone Redemption
[_] a. Mail proceeds to name and address in which account is registered.
[_] b. Wire redemption proceeds to bank indicated below.
A VOIDED CHECK OR DEPOSIT SLIP MUST BE ATTACHED.
-------------------------------------------------------------------------------
Bank Name
-------------------------------------------------------------------------------
Bank Address
( )
------------------------------------------ -----------------------------------
Account Number Bank Phone
-------------------------------------------------------------------------------
Name(s) in which Account is Registered
-------------------------------------------------------------------------------
Bank Transit Routing Number (ABA #)
- --------------------------------------------------------------------------------
13 SIGNATURE(S)
- --------------------------------------------------------------------------------
[X] I/We have full authority and legal capacity to purchase Fund shares.
[X] I/We have received the current Prospectus of the Portfolio(s) and agree to
be bound by its (their) terms.
- --------------------------------------------------------------------------------
[X] UNDER PENALTY OF PERJURY, I/WE ALSO CERTIFY THAT --
A. THE NUMBER SHOWN ON THIS FORM IS A CORRECT TAXPAYER ID NUMBER OR
SOCIAL SECURITY NUMBER.
B. I AM NOT SUBJECT TO BACKUP WITHHOLDING BECAUSE (I) I HAVE NOT BEEN
NOTIFIED BY THE INTERNAL REVENUE SERVICE THAT I AM SUBJECT TO BACKUP
WITHHOLDING AS A RESULT OF A FAILURE TO REPORT ALL INTEREST OR
DIVIDENDS, OR (II) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER SUBJECT
TO BACKUP WITHHOLDING. (CROSS OUT ITEM "B" IF YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE SUBJECT TO BACKUP WITHHOLDING BECAUSE OF
UNDERREPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN.)
- --------------------------------------------------------------------------------
THE INTERNAL REVENUE SERVICE DOES NOT REQUIRE YOUR CONSENT TO ANY PROVISION OF
THIS DOCUMENT OTHER THAN THE CERTIFICATIONS REQUIRED TO AVOID BACKUP
WITHHOLDING.
- ------------------------------------------------------ -----------------------
Signature (Owner, Trustee, etc.) Date
- ------------------------------------------------------ -----------------------
Signature (Joint Owner, Co-trustee, etc.) Date
================================================================================
APPLICATION INSTRUCTIONS
- --------------------------------------------------------------------------------
IF YOU NEED ASSISTANCE, A REPRESENTATIVE OF UAM FUNDS WILL BE PLEASED TO HELP
YOU. OUR TOLL-FREE NUMBER IS 1-800-638-7983.
- --------------------------------------------------------------------------------
NEW ACCOUNT APPLICATION. An account can be registered as only one of the
-----------------------
following:
. individual } Supply the Social Security Number of
. joint tenants } the registered account owner who is
} to be taxed.
. Custodial/Gift } Supply minor's Social Security Number.
to Minor
. a trust } Supply the Taxpayer Identification Number
} of the legal entity
. a corporation, } or organization that will report income
partnership, organization, } and/or capital gains.
fiduciary
Please check the box that corresponds with the type of account you are opening
and fill in the required information exactly as you wish it to appear on the
account.
Redemption Authorizations. Corporations, other organizations, trusts and
fiduciaries will be required to furnish additional paperwork to authorize
redemptions. Call a representative of UAM Funds at 1-800-638-7983 for more
information.
Your Mailing Address. Please be sure to provide us with the address at which
--------------------
you wish to receive your mail.
Your Investment. Please be sure to indicate the total amount invested. For
---------------
more than two investments, please attach a separate sheet or an additional
application.
Establishing Your Account.
-------------------------
A. Section 4A lets you open your account by check. Your check(s) should be
made payable to UAM Funds. Be sure to enclose your check(s) with this
application.
B. If you are confirming a new Fund purchase previously made by wire, be
sure to fill in Section 4B and provide the wire reference control number
you were assigned at the time of this purchase. A completed application
must follow all wire purchases.
All applications are subject to acceptance by UAM Funds.
Receiving Your Dividends and Capital Gains. Check the distribution option
you prefer. If you do not select an option, all dividends and capital
gains will be reinvested in your account.
Employment Information. It is required by the National Association of
----------------------
Securities Dealers, Inc. to request this information.
Interested Party/Broker-Dealer. In addition to the account statement sent
------------------------------
to your registered address, you may also have a monthly consolidated
statement mailed to up to ten (10) interested parties. You may add a sheet
with additional interested party names and addresses. This section should
also be completed if you are investing through a Broker-Dealer.
--IMPORTANT--
REGULAR MAIL: UAM Funds
P.O. Box 419081
Kansas City, MO 64141-6081
EXPRESS MAIL: UAM Funds
210 West 10th Street
Kansas City, MO 64105
MORE QUESTIONS? Call a representative of UAM Funds at 1-800-638-7983.
Telephone Redemption and Exchange. Telephone redemption proceeds mailed to a
---------------------------------
shareholder will be sent only to the address listed on the account. The
Funds' bank wire feature is available for redeeming out of your Fund account
to your bank account. Be sure to check with your bank for proper wiring
instructions. The Funds require the transit/routing number of your bank or
its correspondent if your bank is unable to receive wires directly. Please
complete Section 6 to add the bank wire feature.
Telephone exchanges may be made only if a Fund holds all share certificates
and if the registration of the two accounts will be identical.
Your Signature(s). Please be sure to sign this application. If the account
is registered in the name of:
.an individual, the individual should sign
.joint tenants, both should sign
.a trust or other fiduciary, the fiduciary or fiduciaries should sign
(please indicate capacity)
.a corporation or other organization, an officer should sign (please
indicate corporate office or title)
<PAGE>
UAM Funds Service Center
P.O. Box 419081
Kansas City, MO 64141-6081
1-800-638-7983
Investment Adviser
Pell Rudman Trust Company, N.A.
100 Federal Street
Boston, Massachusetts 02110
(617) 357-9600
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
PROSPECTUS
August 31, 1998
<PAGE>
PART B
UAM FUNDS TRUST
PELL RUDMAN MID-CAP GROWTH PORTFOLIO
STATEMENT OF ADDITIONAL INFORMATION -- August 31, 1998
This Statement is not a Prospectus but should be read in conjunction with
the Prospectus of the UAM Funds Trust (the "UAM Funds" or the "Fund") for the
Pell Rudman Mid-Cap Growth Portfolio (the "Portfolio") dated August 31, 1998
relating to the Institutional Class Shares. To obtain a Prospectus, please call
the UAM Funds Service Center: 1-800-638-7983
TABLE OF CONTENTS
<TABLE>
<S> <C>
INVESTMENT OBJECTIVES AND POLICIES....................................... 2
PURCHASE AND REDEMPTION OF SHARES........................................ 3
VALUATION OF SHARES...................................................... 4
SHAREHOLDER SERVICES..................................................... 4
INVESTMENT LIMITATIONS................................................... 5
MANAGEMENT OF THE FUND................................................... 6
INVESTMENT ADVISER....................................................... 8
PORTFOLIO TRANSACTIONS................................................... 9
ADMINISTRATIVE SERVICES.................................................. 9
CUSTODIAN................................................................ 10
INDEPENDENT ACCOUNTANTS.................................................. 11
DISTRIBUTOR.............................................................. 11
PERFORMANCE CALCULATIONS................................................. 11
GENERAL INFORMATION...................................................... 12
APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS...................... 14
APPENDIX B - COMPARISON, PUBLICATIONS, INDICES AND AVERAGES.............. 18
</TABLE>
INVESTMENT ADVISER
Pell Rudman Trust Company, N.A. (Adviser)
DISTRIBUTOR
UAM Fund Distributors, Inc. (Distributor)
ADMINISTRATOR AND TRANSFER AGENT
UAM Fund Services, Inc. (FSI)
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The following policies supplement the investment objectives and policies of
the Portfolio as set forth in its Prospectus for the Institutional Class Shares.
LENDING OF SECURITIES
The Portfolio may lend its investment securities to qualified brokers,
dealers, domestic and foreign banks or other financial institutions, so long as
the terms, the structure and the aggregate amount of such loans are not
inconsistent with the Investment Company Act of 1940, as amended, (the "1940
Act") or the Rules and Regulations or interpretations of the Securities and
Exchange Commission (the "SEC") thereunder, which currently require that (a) the
borrower pledge and maintain with the Portfolio collateral consisting of cash,
an irrevocable letter of credit issued by a domestic U.S. bank or securities
issued or guaranteed by the United States Government having a value at all times
not less than 100% of the value of the securities loaned, (b) the borrower add
to such collateral whenever the price of the securities loaned rises (i.e., the
borrower "marks to the market" on a daily basis), (c) the loan be made subject
to termination by the Portfolio at any time, and (d) the Portfolio receives
reasonable interest on the loan (which may include the Portfolio investing any
cash collateral in interest bearing short-term investments). A portfolio will
not loan more than one-third of its total assets (including the value of the
collateral for the loans) at fair market value would be committed to loans. As
with other extensions of credit, there are risks of delay in recovery or even
loss of rights in the securities loaned if the borrower of the securities fails
financially. These risks are similar to the ones involved with repurchase
agreements as discussed in the prospectus.
SHORT-TERM INVESTMENTS
In order to earn a return on uninvested assets, meet anticipated
redemptions, or for temporary defensive purposes, the Portfolio may invest a
portion of its assets in the short-term investment described below.
(1) Time deposits, certificates of deposit (including marketable variable
rate certificates of deposit) and bankers' acceptances issued by a
commercial bank or savings and loan association. Time deposits are
non-negotiable deposits maintained in a banking institution for a
specified period of time at a stated interest rate. Time deposits
maturing in more than seven days will not be purchased by a Portfolio,
and time deposits maturing from two business days through seven
calendar days will not exceed 10% of the total assets of a Portfolio.
Certificates of deposit are negotiable short-term obligations issued
by commercial banks or savings and loan associations collateralized by
funds deposited in the issuing institution. Variable rate certificates
of deposit are certificates of deposit on which the interest rate is
periodically adjusted prior to their stated maturity based upon a
specified market rate. A banker's acceptance is a time draft drawn on
a commercial bank by a borrower, usually in connection with an
international commercial transaction (to finance the import, export,
transfer or storage of goods).
The Portfolio will not invest in any security issued by a commercial
bank unless (i) the bank has total assets of at least $1 billion, or
the equivalent in other currencies, (ii) in the case of U.S. banks, it
is a member of the Federal Deposit Insurance Corporation, and (iii) in
the case of foreign branches of U.S. banks, the security is, in the
opinion of the Adviser, of an investment quality comparable with other
debt securities which may be purchased by the Portfolio;
(2) Commercial paper rated A-1 or A-2 by S&P or Prime-1 or Prime-2 by
Moody's or, if not rated, issued by a corporation having an
outstanding unsecured debt issue rated A or better by Moody's or by
S&P;
2
<PAGE>
(3) Short-term corporate obligations rated BBB or better by S&P or Baa by
Moody's;
(4) U.S. Government obligations including bills, notes, bonds and other
debt securities issued by the U.S. Treasury. These are direct
obligations of the U.S. Government and differ mainly in interest
rates, maturities and dates of issue;
(5) U.S. Government agency securities issued or guaranteed by U.S.
Government sponsored instrumentalities and federal agencies. These
include securities issued by the Federal Home Loan Banks, Federal Land
Bank, Farmers Home Administration, Federal Farm Credit Banks, Federal
Intermediate Credit Bank, Federal National Mortgage Association,
Federal Financing Bank, the Tennessee Valley Authority, and others;
and
(6) Repurchase agreements collateralized by securities listed above.
PORTFOLIO TURNOVER
The portfolio turnover rates described in the Prospectus are calculated by
dividing the lesser of purchases or sales of portfolio securities for the year
by the monthly average of the value of the portfolio securities. The
calculation excludes all securities, including options, whose maturities at the
time of acquisition were one year or less. Portfolio turnover may vary greatly
from year to year as well as within a particular year, and may also be affected
by cash requirements for redemptions of shares.
PURCHASE AND REDEMPTION OF SHARES
Shares of the Portfolio may be purchased without sales commission at the
net asset value per share next determined after an order is received in proper
form by the Fund, and payment is received by the Fund's custodian. The minimum
initial investment required is $2,500 with certain exceptions as may be
determined from time to time by officers of the Fund. Other investment minimums
are: initial IRA investment, $500; initial spousal IRA investment, $250; minimum
additional investment for all accounts, $100. An order received in proper form
prior to the close of regular trading on the New York Stock Exchange (the
"Exchange") (generally 4:00 p.m. Eastern Time) will be executed at the price
computed on the date of receipt; and an order received not in proper form or
after the close of the Exchange will be executed at the price computed on the
next day the Exchange is open after proper receipt. The Exchange will be closed
on the following days: New Year's Day, Dr. Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
The Portfolio reserves the right in its sole discretion (1) to suspend the
offering of its shares, (2) to reject purchase orders when in the judgment of
management such rejection is in the best interests of the Fund, and (3) to
reduce or waive the minimum for initial and subsequent investment for certain
fiduciary accounts such as employee benefit plans or under circumstances where
certain economies can be achieved in sales of the Portfolio's shares.
The Portfolio may suspend redemption privileges or postpone the date of
payment (1) during any period that either the Exchange and custodian bank are
closed or trading on the Exchange is restricted as determined by the SEC, (2)
during any period when an emergency exists as defined by the rules of the SEC as
a result of which it is not reasonably practicable for a Portfolio to dispose of
securities owned by it or to fairly determine the value of its assets, and (3)
for such other periods as the SEC may permit. The Fund has made an election with
the SEC to pay in cash all redemptions requested by any shareholder of record
limited in amount during any 90-day period to the lesser of $250,000 or 1% of
the net assets of the Fund at the beginning of such period. Such commitment is
irrevocable without the prior approval of the SEC. Redemptions in excess of the
above limits may be paid, in whole or in part, in investment securities or in
cash as the Board of Trustees may deem advisable; however, payment will be made
wholly in cash unless the Trustees believe that economic or market conditions
exist which would make such a practice detrimental to the best interests of the
Fund. If redemptions are paid in investment securities, such securities will be
valued as set forth in the Prospectus under "VALUATION OF SHARES," and a
redeeming shareholder would normally incur brokerage expenses if those
securities were converted to cash.
3
<PAGE>
No charge is made by the Portfolio for redemptions. Any redemption may be
more or less than the shareholder's initial cost depending on the market value
of the securities held by the Portfolio.
SIGNATURE GUARANTEES
To protect your account, the Fund and UAM Funds Service Center from fraud,
signature guarantees are required for certain redemptions. The purpose of
signature guarantees is to verify the identity of the party who has authorized a
redemption from your account. Signature guarantees are required for (1) all
redemptions when the proceeds are to be paid to someone other than the
registered owner(s) and/or the registered address, or (2) share transfer
requests. The purpose of the signature guarantees is to verify the identity of
the person who has authorized a redemption from your account.
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934. Eligible
guarantor institutions include banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies and
savings associations. A complete definition of eligible guarantor institutions
is available from the Fund's transfer agent. Broker-dealers guaranteeing
signatures must be a member of a clearing corporation or maintain net capital of
at least $100,000. Credit unions must be authorized to issue signature
guarantees, signature guarantees will be accepted from any eligible guarantor
institution which participates in a signature guarantee program.
The signature guarantee must appear either: (1) on the written request for
redemption; (2) on a separate instrument for assignment ("stock power") which
should specify the total number of shares to be redeemed; or (3) on all stock
certificates tendered for redemption and, if shares held by the Fund are also
being redeemed, on the letter or stock power.
VALUATION OF SHARES
Equity securities listed on a securities exchange for which market
quotations are readily available are valued at the last quoted sale price of the
day. Price information on listed securities is taken from the exchange where the
security is primarily traded. Unlisted equity securities and listed securities
not traded on the valuation date for which market quotations are readily
available are valued neither exceeding the current asked prices nor less than
the current bid prices. Quotations of foreign securities in a foreign currency
are converted to U.S. dollar equivalents. The converted value is based upon the
bid price of the foreign currency against U.S. dollars quoted by any major bank
or by a broker.
Bonds, other fixed income securities and fixed dividends are valued
according to the broadest and most representative market, which will ordinarily
be the over-the-counter market. Bonds and other fixed income securities may be
valued on the basis of prices provided by a pricing service when such prices are
believed to reflect the fair market value of such securities. Securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost, using methods approved by the Board of Trustees.
The value of other assets and securities for which no quotations are
readily available (including restricted securities) is determined in good faith
at fair value using methods determined by the Trustees.
SHAREHOLDER SERVICES
The following information supplements the information set forth under
"Shareholder Services" in the Prospectus.
EXCHANGE PRIVILEGE
Institutional Class Shares of the Portfolio may be exchanged for any other
Institutional Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. (See the list of Portfolios of the UAM
Funds--Institutional Class Shares at the end of the Portfolio's Institutional
Class Shares Prospectus.) Service Class Shares of the Portfolio may be exchanged
for any
4
<PAGE>
other Service Class Shares of a Portfolio included in the UAM Funds which is
comprised of the Fund and UAM Funds, Inc. (For those Portfolios currently
offering Service Class Shares, please see the list of Service Class Shares at
the end of the Portfolio's Service Class Shares Prospectus.). Exchange requests
should be made by calling the Fund (1-800-638-7983) or by writing to UAM Funds
Inc., UAM Funds Service Center, P.O. Box 419081, Kansas City, MO 64141-6081. The
exchange privilege is only available with respect to Portfolios that are
qualified for sale in the shareholder's state of residence.
Any such exchange will be based on the respective net asset values of the
shares involved. There is no sales commission or charge of any kind. Before
making an exchange into a Portfolio, a shareholder should read its Prospectus
and consider the investment objective of the Portfolio to be purchased. You may
obtain a Prospectus for the Portfolio(s) you are interested in by calling the
UAM Funds Service Center at 1-800-638-7983.
Exchange requests may be made either by mail or telephone. Telephone
exchanges will be accepted only if the certificates for the shares to be
exchanged have not been issued to the shareholder and if the registration of the
two accounts will be identical. Requests for exchanges received by the close of
regular trading on the Exchange (generally 4:00 p.m. Eastern Time) will be
processed as of the close of business on the same day. Requests received after
these times will be processed on the next business day. Neither the Fund nor UAM
Funds Service Center will be responsible for the authenticity of the exchange
instructions received by telephone. Exchanges may also be subject to limitations
as to amounts or frequency and to other restrictions established by the Fund's
Board of Trustees to assure that such exchanges do not disadvantage the Fund and
its shareholders.
For federal income tax purposes an exchange between Portfolio's is a
taxable event, and, accordingly, a capital gain or loss may be realized. In a
revenue ruling relating to circumstances similar to the Fund's, an exchange
between series of a Fund was also deemed to be a taxable event. It is likely,
therefore, that a capital gain or loss would be realized on an exchange between
Portfolios. You may want to consult your tax adviser for further information in
this regard. The exchange privilege may be modified or terminated at any time.
TRANSFER OF SHARES
Shareholders may transfer shares of the Portfolio to another person by
making a written request to the Fund. The request should clearly identify the
account and number of shares to be transferred, and include the signature of all
registered owners and all stock certificates, if any, which are subject to the
transfer. The signature on the letter of request, the stock certificate or any
stock power must be guaranteed in the same manner as described under "PURCHASE
AND REDEMPTION OF SHARES." As in the case of redemptions, the written request
must be received in good order before any transfer can be made.
INVESTMENT LIMITATIONS
The following limitations supplement those set forth in the Prospectus. A
Portfolio's fundamental investment limitations cannot be changed without
approval by a "majority of the outstanding shares" (as defined in the 1940 Act)
of the Portfolio. Except for the numbered investment limitations noted as
fundamental below, however, the limitations described below are not fundamental,
and may be changed without the consent of shareholders. Whenever an investment
limitation sets forth a percentage limitation on investment or utilization of
assets, such limitation shall be determined immediately after and as a result of
the Portfolio's acquisition of such security or other asset. Accordingly, any
later increase or decrease resulting from a change in values, net assets or
other circumstances will not be considered when determining whether the
investment complies with the Portfolio's investment limitation.
AS A MATTER OF FUNDAMENTAL POLICY, THE PORTFOLIO WILL NOT:
1) invest in physical commodities or contracts on physical commodities;
5
<PAGE>
2) purchase or sell real estate or real estate limited partnerships,
although it may purchase and sell securities of companies which deal
in real estate and may purchase and sell securities which are secured
by interests in real estate;
3) underwrite the securities of other issuers;
4) issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Portfolio from (i)
making any permitted borrowings, mortgages or pledges, or (ii)
entering into repurchase transactions.
AS A MATTER OF NON-FUNDAMENTAL POLICY, THE PORTFOLIO WILL NOT:
a) purchase on margin or sell short;
b) investment more than aggregate of 15% of the net assets of the
Portfolio, determined at the time of investment, in securities subject
to legal or contractual restrictions on resale or securities for which
there are no readily available markets; and
c) invest for the purpose of exercising control over management of any
company.
MANAGEMENT OF THE FUND
TRUSTEES AND OFFICERS
The officers of the Fund manage its day-to-day operations and are responsible to
the Fund's Board of Trustees. The Trustees set broad policies for the Fund and
elect its officers. The following is a list of the Trustees and officers of the
Fund, their addresses and dates of birth and a brief statement of their present
positions, date of birth, address and principal occupations during the past five
years.
<TABLE>
<C> <S>
JOHN T. BENNETT, JR. Trustee of the Fund; President of Squam Investment Management Company, Inc. and
College Road--RFD 3, Great Island Investment Company, Inc.; President of Bennett Management Company
Meredith, NH 03253; from 1988 to 1993.
1/26/29
NANCY J. DUNN Trustee of the Fund; Vice President for Finance and Administration and Treasurer
10 Garden Street, of Radcliffe College since 1991.
Cambridge MA 02138
8/14/51
PHILIP D. ENGLISH Trustee of the Fund; President and Chief Executive Officer of Broventure Company,
16 West Madison Street Inc.; Chairman of the Board of Chektec Corporation and Cyber Scientific, Inc.
Baltimore, MD 21201
8/5/48
WILLIAM A. HUMENUK Trustee of the Fund; Executive Vice President and Chief Administrative Officer of
100 King Street West Philip Services Corp.; Director, Hofler Corp.; Formerly, a Partner in the
P.O. Box 2440, LCD-1, Philadelphia office of the law firm Dechert Price & Rhoads.
Hamilton Ontario, Canada
L8N-456
4/21/42
NORTON H. REAMER* Trustee of the Fund, President and Chairman of the Fund; President, Chief
One International Place Executive Officer and a Director of United Asset Management Corporation; Director,
Boston, MA 02110 Partner or Trustee of each of the Investment Companies of the Eaton Vance Group of
3/21/35 Mutual Funds.
</TABLE>
6
<PAGE>
<TABLE>
<C> <S>
PETER M. WHITMAN, JR.* Trustee of the Fund; President and Chief Investment Officer of Dewey Square
One Financial Center Investors Corporation ("DSI") since 1988; Director and Chief Executive Officer of
Boston, MA 02111 H. T. Investors, Inc., formerly a subsidiary of DSI.
7/1/43
WILLIAM H. PARK Executive Vice President of the Fund; Executive Vice President and Chief Financial
One International Place Officer of United Asset Management Corporation.
Boston, MA 02110
9/19/47
GARY L. FRENCH Treasurer of the Fund; President of UAM Fund Services, Inc. and UAM Fund
211 Congress Street Distributors, Inc., formerly Vice President of Operations, Development and Control
Boston, MA 02110 of Fidelity Investments in 1995; Treasurer of the Fidelity Group of Mutual Funds
7/4/51 from 1991 to 1995.
MICHAEL E. DEFAO Secretary of the Fund; Vice President and General Counsel of UAM Fund Services,
211 Congress Street Inc. and UAM Fund Distributors, Inc.; Associate Attorney of Ropes & Gray (a law
Boston, MA 02110 firm) from 1993 to 1995.
2/28/68
ROBERT R. FLAHERTY Assistant Treasurer of the Fund; Vice President of UAM Fund Services, Inc.;
211 Congress Street formerly Manager of Fund Administration and Compliance of Chase Global Fund
Boston, MA 02110 Services Company from 1995 to 1996; Deloitte & Touche LLP from 1985 to 1995,
9/18/63 Senior Manager.
MICHELLE AZRIALY Assistant Secretary of the Fund; Assistant Treasurer of Chase Global Funds
73 Tremont Street Services Company since 1996. Senior Public Accountant with Price Waterhouse LLP
Boston, MA 02108 from 1991 to 1994.
4/12/69
</TABLE>
____
* Messrs. Reamer and Whitman are deemed to be "interested persons" of the Fund
as that term is defined in the 1940 Act.
REMUNERATION OF TRUSTEES AND OFFICERS
The Fund pays each Trustee, who is not also an officer or affiliated
person, a $150 quarterly retainer fee per active Portfolio which currently
amounts to $1,050 per quarter. In addition, each unaffiliated Trustee receives a
$2,000 meeting fee, which is aggregated for all of the Trustees and allocated
proportionately among the Portfolios of the Fund and UAM Funds, Inc.
(collectively the "Fund Complex"), and reimbursement for travel and other
expenses incurred while attending Board meetings. Trustees who are also officers
or affiliated persons receive no remuneration for their service as Trustees. The
Fund's officers and employees are paid by either the Adviser, United Asset
Management Corporation ("UAM"), UAM Fund Services, Inc. ("UAMFSI") or Chase
Global Funds Services Company ("CGFSC") and receive no compensation from the
Fund.
The following table shows aggregate compensation paid to each of the Fund's
Trustees by the Fund and total compensation paid by the Fund Complex in the
fiscal year ended April 30, 1998. As of June 1, 1998 Trustees and officers of
the Fund owned less than 1% of the Portfolio's outstanding shares.
7
<PAGE>
COMPENSATION TABLE
<TABLE>
<CAPTION>
(1) (2) (3) (4) (5)
PENSION OR TOTAL COMPENSATION
RETIREMENT BENEFITS ESTIMATED ANNUAL FROM REGISTRANT AND
AGGREGATE COMPENSATION ACCRUED AS PART OF BENEFITS UPON FUND COMPLEX
NAME OF PERSON, POSITION FROM REGISTRANT FUND EXPENSES RETIREMENT PAID TO BOARD MEMBERS
- -------------------------- ---------------------- ------------------------- ---------------- ---------------------
<S> <C> <C> <C> <C>
John T. Bennett, Jr.
Trustee................. $ 6,149 0 0 $33,500
Nancy J. Dunn
Trustee................. $4,6687 0 0 $25,200
Philip D. English
Trustee................. $ 6,149 0 0 $33,500
William A. Humenuk
Trustee................. $ 6,149 0 0 $33,500
</TABLE>
PRINCIPAL HOLDERS OF SECURITIES
As of the date of this statement of additional information, no person or
organizations held of record or beneficially 5% or more of the shares of the
Portfolio.
Any persons or organizations owning 25% or more of the outstanding shares
of the Portfolio may be presumed to "control" (as that term is defined in the
1940 Act) the Portfolio. As a result, those persons or organizations could have
the ability to vote a majority of the shares of the Portfolio on any matter
requiring the approval of shareholders of the Portfolio.
INVESTMENT ADVISER
CONTROL OF ADVISER
Pell Rudman Trust Company, N.A. (the "Adviser") is a wholly-owned
subsidiary of UAM, a holding company incorporated in Delaware in December 1980
for the purpose of acquiring and owning firms engaged primarily in institutional
investment management. Since its first acquisition in August 1983, UAM has
acquired or organized over 45 such wholly-owned affiliated firms (the "UAM
Affiliated Firms"). UAM believes that permitting UAM Affiliated Firms to retain
control over their investment advisory decisions is necessary to allow them to
continue to provide investment management services that are intended to meet the
particular needs of their respective clients. Accordingly, after acquisition by
UAM, UAM Affiliated Firms continue to operate under their own firm name, with
their worn leadership and individual investment philosophy and approach. Each
UAM Affiliated Firm also acts as investment advisers to separate series or
Portfolios of UAM Funds, Inc., a registered investment company.
SERVICE PERFORMED BY ADVISER
Pursuant to an Investment Advisory Agreement (the "Agreement") between the
Fund and the Adviser, the Adviser has agreed to manage the investment and
reinvestment of the Portfolio's assets, to continuously review, supervise and
administer the Portfolio's investment program, and to determine in its
discretion the securities to be purchased or sold and the portion of such
Portfolio's assets to be held uninvested.
In the absence of (i) willful misfeasance, bad faith, or gross negligence
of the part of the Adviser in the performance of its obligations and duties
under the Agreement, (ii) reckless disregard by the Adviser
8
<PAGE>
of its obligations and duties under the Agreement, or (iii) a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services, the Adviser shall not be subject to any liability whatsoever to 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 under the Agreement.
Unless sooner terminated, the Agreement shall continue for periods of one
year so long as such continuance is specifically approved at least annually (a)
by the vote of a majority of those members of the Board of Trustees of the Fund
who are not parties to the Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Board of Trustees of the Fund or (c) by vote of a majority of the
outstanding voting securities of the Portfolio. The Agreement may be terminated
at any time by the Portfolio, without the payment of any penalty, by vote of a
majority of the outstanding voting securities of the Portfolio on 60 days'
written notice to the Adviser. The Agreement may be terminated by the Adviser at
any time, without the payment of any penalty, upon 90 days' written notice to
the Fund. The Agreement will automatically and immediately terminate in the
event of its assignment.
ADVISORY FEES
As compensation for its services as an Adviser, the Portfolio pays the
Adviser an annual fee, in monthly installments, equal to 1.00% of the
Portfolio's average daily net assets;
Until further notice, the Adviser has voluntarily agreed to waive a portion
of its advisory fees or assume certain expenses of the Portfolio so that the
total operating expenses of the portfolio do not exceed 1.30%. The Adviser
intends to maintain this expense limitation through the initial fiscal period of
the Portfolio, but may change or cancel it at any time.
PORTFOLIO TRANSACTIONS
The Agreement authorizes the Adviser to select the brokers or dealers that
will execute the purchases and sales of investment securities for the Portfolio
and directs the Adviser to use its best efforts to obtain the best execution
with respect to all transactions for the Portfolio. In doing so, the Portfolio
may pay higher commission rates than the lowest rate available when the Adviser
believes it is reasonable to do so in light of the value of the research,
statistical, and pricing services provided by the broker effecting the
transaction.
It is not the Fund's practice to allocate brokerage or effect principal
transactions with dealers on the basis of sales of Fund shares which may be made
through broker-dealer firms. However, the Adviser may place portfolio orders
with qualified broker-dealers who refer clients to the Adviser.
Some securities considered for investment by the Portfolio may also be
appropriate for other clients served by the Adviser. If purchases or sales of
securities consistent with the investment policies of the Portfolio and one or
more of these other clients served by the Adviser are considered at or about the
same time, transactions in such securities will be allocated among the Portfolio
and clients in a manner deemed fair and reasonable by the Adviser. Although
there is no specified formula for allocating such transactions, the various
allocation methods used by the Adviser, and the results of such allocations, are
subject to periodic review by the Fund's Board of Trustees.
ADMINISTRATIVE SERVICES
The Board of Trustees of the Fund approved a Fund Administration Agreement,
effective April 15, 1996 ("Fund Administration Agreement") between UAMFSI, a
wholly owned subsidiary of UAM, and the Fund. Pursuant to the terms of the Fund
Administration Agreement, UAMFSI manages, administers and conducts the general
business activities of the Fund other than those which have been contracted to
9
<PAGE>
other third parties by the Fund. Additionally, UAMFSI has agreed to provide
transfer agency services to the Portfolio pursuant to the terms of the
Agreement.
UAMFSI has subcontracted some of these services to CGFSC, an affiliate of
The Chase Manhattan Bank, pursuant to a Mutual Fund Services Agreement between
UAMFSI and CGFSC (collectively, with the Fund Administration Agreement between
UAMFSI and the Fund, the "Agreements").
Pursuant to the terms of the Agreements, the Portfolio pays UAMFSI a two
part monthly fee: a Portfolio-specific fee which is retained by UAMFSI and a
sub-administration fee which UAMFSI in turn pays to CGFSC. The portfolio-
specific fee is calculated at the annual rate of 0.04% of the aggregate net
assets of the Portfolio.
CGFSC's monthly fee for its services is calculated on an annualized basis as
follows:
$52,500 base fee per portfolio; and
0.025 of 1% of combined UAM Fund assets.
UAMFSI bears all expenses in connection with the performance of its
services under the Fund Administration Agreement. Other expenses to be incurred
in the operation of the Fund are borne by the Fund or other parties, including
taxes, interest, brokerage fees and commissions, if any, salaries and fees of
officers and members of the Board who are not officers, directors, shareholders
or employees of UAMFSI, or the Fund's investment adviser or distributor, SEC
fees and state Blue Sky fees, EDGAR filing fees, processing services and related
fees, advisory and administration fees, charges and expenses of pricing and data
services, independent public accountants and custodians, insurance premiums
including fidelity bond premiums, outside legal expenses, costs of maintenance
of corporate existence, typesetting and printing of prospectuses for regulatory
purposes and for distribution to current shareholders of the Fund, printing and
production costs of shareholders' reports and corporate meetings, cost and
expenses of Fund stationery and forms, costs of special telephone and data lines
and devices, trade association dues and expenses, and any extraordinary expenses
and other customary Fund expenses.
Unless sooner terminated, the Fund Administration Agreement shall continue
in effect from year to year provided such continuance is specifically approved
at least annually by the Board. The Fund Administration Agreement is
terminable, without penalty, by the Board or by UAMFSI, on not less than ninety
(90) days' written notice. The Fund Administration Agreement shall
automatically terminate upon its assignment by UAMFSI without the prior written
consent of the Fund.
UAMFSI will from time to time employ or associate with such person or
persons as may be fit to assist them in the performance of the Fund
Administration Agreement. Such person or persons may be officers and employees
who are employed by both UAMFSI and the Fund. The compensation of such person
or persons for such employment shall be paid by UAMFSI and no obligation will be
incurred by or on behalf of the Fund in such respect.
Effective February 28, 1997, the Fund entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the Portfolios in the accounts for which it provides
services.
CUSTODIAN
The Chase Manhattan Bank, 3 Chase MetroTech Center, Brooklyn, New York
11245, provides for the custody of the Fund's assets pursuant to the terms of a
custodian agreement with the Fund.
10
<PAGE>
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 160 Federal Street, Boston, Massachusetts
02110, serves as independent accountants for the Fund.
DISTRIBUTOR
UAM Fund Distributors, Inc., a wholly-owned subsidiary of UAM, serves as
the Funds distributor. Shares of the Fund are offered continuously. While the
Distributor will use its best efforts to sell shares of the Fund, it is not
obligated to sell any particular amount of shares.
PERFORMANCE CALCULATIONS
PERFORMANCE
The Portfolio may quote various performance figures to illustrate the past
performance of each class of the Portfolio. Performance quotations by investment
companies are subject to rules adopted by the SEC, which require the use of
standardized performance quotations or, alternatively, that every non-
standardized performance quotation furnished by the Fund be accompanied by
certain standardized performance information computed as required by the SEC.
Current yield and average annual compounded total return quotations used by the
Fund are based on the standardized methods of computing performance mandated by
the SEC. An explanation of the method used to compute or express performance
follows.
TOTAL RETURN
The average annual total return of a Portfolio is determined by finding the
average annual compounded rates of return over 1, 5 and 10 year periods that
would equate an initial hypothetical $1,000 investment to its ending redeemable
value. The calculation assumes that all dividends and distributions are
reinvested when paid. The quotation assumes the amount was completely redeemed
at the end of each 1, 5 and 10 year period and the deduction of all applicable
Fund expenses on an annual basis.
The average annual total return for the Portfolio is calculated according
to the following formula:
P (1 + T)/n/ = ERV
where:
P = a hypothetical initial payment of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of the 1, 5 or 10 year periods at the end of the 1, 5 or 10
year periods (or fractional portion thereof).
YIELD
Current yield reflects the income per share earned by the Portfolio's
investments.
Current yield is determined by dividing the net investment income per share
earned during a 30-day base period by the maximum offering price per share on
the last day of the period and annualizing the result. Expenses accrued for the
period include any fees charged to all shareholders during the base period.
11
<PAGE>
Yield for a Portfolio is calculated according to the following formula:
Yield = 2[( a - b + 1 )/6/ - 1]
-----
cd
where:
a = dividends and interest earned during the period
b = expenses accrued for the period (net of reimbursements)
c = the average daily number of shares outstanding during the period that
were entitled to receive income distributions
d = the maximum offering price per share on the last day of the period.
COMPARISONS
To help investors better evaluate how an investment in a Portfolio of the
Fund might satisfy its investment objective, advertisements regarding the Fund
may discuss various measures of Fund performance as reported by various
financial publications. Advertisements may also compare performance (as
calculated above) to performance as reported by other investments, indices and
averages. Please see Appendix B for publications, indices and averages which may
be used.
In assessing such comparisons of performance, an investor should keep in
mind that the composition of the investments in the reported indices and
averages is not identical to the composition of investments in the Portfolio,
that the averages are generally unmanaged, and that the items included in the
calculations of such averages may not be identical to the formula used by the
Portfolio to calculate its performance. In addition, there can be no assurance
that the Portfolio will continue this performance as compared to such other
averages.
GENERAL INFORMATION
DESCRIPTION OF SHARES AND VOTING RIGHTS
The Fund was organized under the name The Regis Fund II as a Delaware
business trust on May 18, 1994. On October 31, 1995, the name of the Fund was
changed to "UAM Funds Trust". The Fund's principal executive office is located
at One International Place, 44th Floor, Boston, MA 02110; however, all investor
correspondence should be directed to the Fund at UAM Funds Service Center, c/o
Chase Global Funds Services Company, P.O. Box 2798, Boston, MA 02208-2798. The
Fund's Agreement and Declaration of Trust permits the Fund to issue an unlimited
number of shares of beneficial interest, without par value. The Trustees have
the power to designate one or more series ("Portfolios") or classes of shares of
beneficial interest without further action by shareholders.
The Board of Trustees has classified additional classes of shares in the
Portfolio, known as Institutional Service Class Shares ("Service Class Shares")
and Advisor Class Shares. As of the date of this Statement of Additional
Information, no Service Class or Advisor class Shares have been offered by the
Portfolio.
The shares of the Portfolio, when issued and paid for as provided for in
the Prospectus, will be fully paid and nonassessable, have no preference as to
conversion, exchange, dividends, retirement or other features and have no
preemptive rights. The shares of the Fund have noncumulative voting rights,
which means that the holders of more than 50% of the shares voting for the
election of Trustees can elect 100% of the Trustees, if they choose to do so. A
shareholder is entitled to one vote for each full share held (and a fractional
vote for each fractional share held), then standing in his or her name of the
books of the Fund. Institutional Class,
12
<PAGE>
Service Class and Advisor Class shares represent an interest in the same assets
of a Portfolio and are identical in all respects except that the Service Class
and Advisor Class Shares bear certain expenses related to shareholder servicing
and the distribution of shares, and have exclusive voting rights with respect to
matters relating to such expenditures.
In the event of liquidation of the Fund, the holders of the shares of each
Portfolio or any class thereof that has been established and designated shall be
entitled to receive, when and as declared by the Trustees, the excess of the
assets belonging to that Portfolio, or in the case of a class, belonging to that
Portfolio and allocable to that class, over the liabilities belonging to that
Portfolio or class. The assets so distributable to the holders of shares of any
particular Portfolio or class thereof shall be distributed to the holders in
proportion to the number of shares of that Portfolio or class thereof held by
them and recorded on the books of the Fund. The liquidation of any Portfolio or
class thereof may be authorized at any time by vote of a majority of the
Trustees then in office.
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS
The Fund's policy is to distribute substantially all of the Portfolio's net
investment income, if any, together with any net realized capital gains
quarterly in the amount and at the times that will avoid both income (including
capital gains) taxes incurred on it and the imposition of the federal excise tax
on undistributed income and capital gains. The amounts of any income dividends
or capital gains distributions cannot be predicted. See the discussion under
"Dividends, Capital Gains Distributions and Taxes" in the Prospectus.
Any dividend or distribution paid shortly after the purchase of shares of a
Portfolio by an investor may have the effect of reducing the per share net asset
value of the Portfolio by the per share amount of the dividend or distribution.
Furthermore, such dividends or distributions, although in effect a return of
capital, are subject to income taxes as set forth in the Prospectus.
As set forth in the Prospectus, unless the shareholder elects otherwise in
writing, all dividend and capital gains distributions are automatically
reinvested in additional shares of the Portfolio at net asset value (as of the
business day following the record date). This will remain in effect until the
Fund is notified by the shareholder in writing at least three days prior to the
record date that either the Income Option (income dividends in cash and capital
gains distributions in additional shares at net asset value) or the Cash Option
(both income dividends and capital gains distributions in cash) has been
elected. An account statement is sent to shareholders whenever an income
dividend or capital gains distribution is paid.
Each Portfolio of the Fund will be treated as a separate entity (and hence
as a separate "regulated investment company") for federal tax purposes. Any net
capital gains recognized by a Portfolio will be distributed to its investors
without need to offset (for federal income tax purposes) such gains against any
net capital losses realized by another Portfolio.
CODE OF ETHICS
The Fund has adopted a Code of Ethics which restricts to a certain extent
personal transactions by access persons of the Fund and imposes certain
disclosure and reporting obligations.
13
<PAGE>
APPENDIX A -- DESCRIPTION OF SECURITIES AND RATINGS
I. DESCRIPTION OF CORPORATE BOND RATINGS
MOODY'S INVESTORS SERVICE, INC.'S CORPORATE BOND RATINGS
Aaa -- Bonds which are rated Aaa are judged to be the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large or by an exceptionally
stable margin, and principal is secure. While the various protective elements
are likely to change, such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known
as high grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca -- Bonds which are rated Ca represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers 1, 2 and 3 in the Aa and A rating
categories. The modifier 1 indicates that the security ranks at a higher end of
the rating category, modifier 2 indicates a mid-range rating and the modifier 3
indicates that the issue ranks at the lower end of the rating category.
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STANDARD & POOR'S RATINGS SERVICES CORPORATE BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard &
Poor's to a debt obligation and indicate an extremely strong capacity to pay
principal and interest.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only to a small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher rated
categories.
BBB -- Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
BB, B, CCC, CC -- Debt rated BB, B, CCC and CC is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
C -- The rating C is reserved for income bonds on which no interest is
being paid.
D -- Debt rated D is in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus (+) or minus
(-) sign, which is used to show relative standing within the major rating
categories, except in the AAA category.
II. DESCRIPTION OF U.S. GOVERNMENT SECURITIES
The term ''U.S. Government Securities'' refers to a variety of securities
which are issued or guaranteed by the United States Government, and by various
instrumentalities which have been established or sponsored by the United States
Government.
U.S. Treasury securities are backed by the ''full faith and credit'' of the
United States. Securities issued or guaranteed by federal agencies and U.S.
Government sponsored instrumentalities may or may not be backed by the full
faith and credit of the United States.
In the case of securities not backed by the full faith and credit of the
United States, the investor must look principally to the agency or
instrumentality issuing or guaranteeing the obligation for ultimate repayment,
and may not be able to assess a claim against the United States itself in the
event the agency or instrumentality does not meet its commitment. Agencies which
are backed by the full faith and credit of the United States include the Export-
Import Bank, Farmers Home Administration, Federal Financing Bank, and others.
Certain agencies and instrumentalities, such as the GNMA are, in effect, backed
by the full faith and credit of the United States through provisions in their
charters that they may make ''indefinite and unlimited'' drawings on the U.S.
Treasury, if needed to service its debt. Debt from certain other agencies and
instrumentalities, including the Federal Home Loan Bank and FNMA, is not
guaranteed by the United States, but those institutions are protected by the
discretionary authority of the U.S. Treasury to purchase
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certain amounts of their securities to assist the institution in meeting its
debt obligations. Finally, other agencies and instrumentalities, such as the
Farm Credit System and the FHLMC, are federally chartered institutions under
Government supervision, but their debt securities are backed only by the credit
worthiness of those institutions, not the U.S. Government.
Some of the U.S. Government agencies that issue or guarantee securities
include the Export-Import Bank of the United States, Farmers Home
Administration, Federal Housing Administration, Maritime Administration, Small
Business Administration, and the Tennessee Valley Authority.
III. DESCRIPTION OF COMMERCIAL PAPER
The Portfolios may invest in commercial paper (including variable amount
master demand notes) rated A-1 or better by S&P or Prime-1 by Moody's or by S&P.
Commercial paper refers to short-term, unsecured promissory notes issued by
corporations to finance short-term credit needs. Commercial paper is usually
sold on a discount basis and has a maturity at the time of issuance not
exceeding nine months. Variable amount master demand notes are demand
obligations that permit the investment of fluctuating amounts at varying market
rates of interest pursuant to arrangement between the issuer and a commercial
bank acting as agent for the payees of such notes whereby both parties have the
right to vary the amount of the outstanding indebtedness on the notes. As
variable amount master demand notes are direct lending arrangements between a
lender and a borrower, it is not generally contemplated that such instruments
will be traded, and there is no secondary market for these notes, although they
are redeemable (and thus immediately repayable by the borrower) at face value,
plus accrued interest, at any time. In connection with the Portfolio's
investment in variable amount master demand notes, the Adviser's investment
management staff will monitor, on an ongoing basis, the earning power, cash flow
and other liquidity ratios of the issuer and the borrower's ability to pay
principal and interest on demand.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated ''A'' or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established, and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned. Relative strength or weakness of the above factors determine
whether the issuer's commercial paper is A-1, A-2 or A-3. The rating Prime-1 is
the highest commercial paper rating assigned by Moody's. Among the factors
considered by Moody's in assigning ratings are the following: (1) evaluation of
the management of the issuer; (2) economic evaluation of the issuer's industry
or industries and the appraisal of speculative-type risks which may be inherent
in certain areas; (3) evaluation of the issuer's products in relation to
completion and customer acceptance; (4) liquidity; (5) amount and quality of
long term debt; (6) trend of earnings over a period of ten years; (7) financial
strength of a parent company and the relationships which exist with the issuer;
and (8) recognition by the management of issuer of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
IV. DESCRIPTION OF BANK OBLIGATIONS
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time at a stated interest rate.
Certificates of deposit are negotiable short-term obligations of commercial
banks. Variable rate certificates of deposit are certificates of deposit on
which the interest rate is periodically adjusted prior to their stated maturity
based upon a specified market rate. As a result of these adjustments, the
interest rate on these obligations may increase or decrease periodically.
Frequently, dealers selling variable rate certificates of deposit to the
Portfolio will agree to repurchase such instruments, at the Portfolio's option,
at par on or near the coupon dates. The dealers' obligations to repurchase these
instruments are subject to conditions imposed by various dealers. Such
conditions typically are the continued credit standing of the issuer and the
existence of reasonably orderly market conditions. The Portfolio is also able to
sell variable rate certificates of deposit in the secondary market. Variable
rate certificates of deposit normally carry a higher interest rate than
comparable fixed rate
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certificates of deposit. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction to finance the import, export, transfer or storage of
goods. The borrower is liable for payment as well as the bank which
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
the secondary markets prior to maturity.
V. DESCRIPTION OF FOREIGN INVESTMENTS
Investors should recognize that investing in foreign companies involves
certain special risks which are not typically associated with investing in U.S.
companies. Since the securities of foreign companies are frequently denominated
in foreign currencies, a Portfolio may be affected favorably or unfavorably by
changes in currency rates and in exchange control regulations, and may incur
costs in connection with conversions between various currencies.
As foreign companies are not generally subject to uniform accounting,
auditing and financial reporting standards and they may have policies that are
not comparable to those of domestic companies, there may be less information
available about certain foreign companies than about domestic companies.
Securities of some foreign companies are generally less liquid and more volatile
than securities of comparable domestic companies. There is generally less
government supervision and regulation of stock exchanges, brokers and listed
companies than in the U.S. In addition, with respect to certain foreign
countries, there is the possibility of expropriation or confiscatory taxation,
political or social instability, or diplomatic developments which could affect
U.S. investments in those countries.
Although the Fund will endeavor to achieve the most favorable execution
costs in its portfolio transactions, fixed commissions on many foreign stock
exchanges are generally higher than negotiated commissions on U.S. exchanges.
Certain foreign governments levy withholding taxes on dividend and interest
income. Although in some countries a portion of these taxes are recoverable, the
non-recoverable portion of foreign withholding taxes will reduce the income
received from the companies comprising the Fund's Portfolios. However, these
foreign withholding taxes are not expected to have a significant impact.
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APPENDIX B - COMPARISONS
With respect to the comparative measures of performance for equity securities
described herein, comparisons of performance assume reinvestment of dividends,
except as otherwise stated below.
(a) CDA Mutual Fund Report, published by CDA Investment Technologies, Inc. --
analyzes price, current yield, risk, total return and average rate of
return (average annual compounded growth rate) over specified time periods
for the mutual fund industry.
(b) Composite Indices -- 60% Standard & Poor's 500 Stock Index, 30% Lehman
Brothers Long-Term Treasury Bond and 10% U.S. Treasury Bills; 70% Standard
& Poor's 500 Stock Index and 30% NASDAQ Industrial Index; 35% Standard &
Poor's 500 Stock Index and 65% Salomon Brothers High Grade Bond Index; all
stocks on the NASDAQ system exclusive of those traded on an exchange, and
65% Standard & Poor's 500 Stock Index and 35% Salomon Brothers High Grade
Bond Index.
(c) Consumer Price Index (or Cost of Living Index), published by the U.S.
Bureau of Labor Statistics -- a statistical measure of change, over time in
the price of goods and services in major expenditure groups.
(d) Donoghue's Money Fund Average -- is an average of all major money market
fund yields, published weekly for 7 and 30-day yields.
(e) Dow Jones Composite Average or its component averages -- an unmanaged index
composed of 30 blue-chip industrial corporation stocks (Dow Jones
Industrial Average), 15 utilities company stocks and 20 transportation
stocks.
(f) Financial publications: Business Week, Changing Times, Financial World,
Forbes, Fortune, Money, Barron's, Consumer's Digest, Financial Times,
Global Investor, Investor's Daily, Lipper Analytical Services, Inc.,
Morningstar, Inc., New York Times, Personal Investor, Wall Street Journal
and Weisenberger Investment Companies Service -- publications that rate
fund performance over specified time periods.
(g) Goldman Sachs 100 Convertible Bond Index -- currently includes 67 bonds and
33 preferred. The original list of names was generated by screening for
convertible issues of 100 million or greater in market capitalization. The
index is priced monthly.
(h) Historical data supplied by the research departments of First Boston
Corporation, J.P. Morgan & Co, Inc., Salomon Brothers, Merrill Lynch & Co.,
Inc., Lehman Brothers, Inc. and Bloomberg L.P.
(i) Lehman Brothers Government/Corporate Index -- is a combination of the
Government and Corporate Bond Indices. The Government Index includes
public obligations of the U.S. Treasury, issues of the Government agencies,
and corporate debt backed by the U.S. Government. The Corporate Bond Index
includes fixed-rate nonconvertible corporate debt. Also included are
Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or
international governments and agencies. All issues are investment grade
(BBB) or higher, with maturities of one to ten years and an outstanding par
value of at least $100 million for U.S. Government issues and $25 million
for others.. Any security downgraded during the month is held in the index
until month-end and then removed. All returns are market value weighted
inclusive of accrued income.
(j) Lehman Brothers Long-Term Treasury Bond -- is composed of all bonds covered
by the Lehman Brothers Treasury Bond Index with maturities of 10 years or
greater.
(k) Lipper -- Mutual Fund Performance Analysis; and Lipper -- Fixed Income Fund
Performance Analysis -- measures total return and average current yield for
the mutual fund industry. Rank individual mutual fund performance over
specified time periods, assuming reinvestments of all distributions,
exclusive of any applicable sales charges.
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(l) Lipper Capital appreciation Funds Index -- a fund that aims at maximum
capital appreciation, frequently by means of 100% or more portfolio
turnover, leveraging, purchasing unregistered securities, purchasing
options, etc. the fund may take large cash positions.
(m) Lipper Small Cap Funds Index -- a fund that by prospectus or portfolio
practice invests primarily in companies with market capitalizations of less
than $1 billion at the time of purchase.
(n) Lipper 1-5 Year Short Investment Grade Debt Funds Average -- is an average
of 160 funds that invest at least 65% of assets in investment grade debt
issues (rated in top four grades with dollar-weighted average maturities of
5 years or less.
(o) Merrill Government/Corporate 1 to 5 Year Index -- is an unmanaged index
composed of U.S. Treasuries, agencies and corporates with maturities from 1
to 4.99 years. Corporates are investment grade only (rated in the top four
grades).
(p) Merrill Lynch 1-4.99 Year Corporate/Government Bond Index -- is an
unmanaged index composed of U.S. Treasuries, agencies and corporates with
maturities from 1 to 4.99 years. Corporates are investment grade only
(rated in the top four grades).
(q) Morgan Stanley Capital International EAFE Index and World Index --
respectively, arithmetic, market value-weighted averages of the performance
of over 900 securities listed on the stock exchanges of countries in
Europe, Australia and the Far East, and over 1,400 securities listed on the
stock exchanges of these continents, including North America.
(r) Mutual Fund Source Book, published by Morningstar, Inc. analyzes price,
yield, risk and total return for equity funds.
(s) NASDAQ Industrial Index -- is composed of more than 3,000 industrial
issues. It is a value-weighted index calculated on price change only and
does not include income.
(t) New York Stock Exchange composite or component indices -- unmanaged indices
of all industrial, utilities, transportation and finance stocks listed on
the New York Stock Exchange.
(u) Russell 2000 -- composed of the 2,000 smallest stocks in the Russell 3000,
a market value weighted index of the 3,000 largest U.S. publicly-traded
companies.
(v) Russell Mid-Cap Growth Index -- is composed of the 800 smallest stocks in
the Russell 1000 Index, with an average capitalization of $1.96 billion.
(w) Salomon Brothers Broad Investment Grade Bond -- is a market-weighted index
that contains approximately 4,700 individually priced investment grade
corporate bonds rated BBB or better. U.S. Treasury/agency issues and
mortgage pass-through securities.
(x) Salomon Brothers GNMA Index -- includes pools of mortgages originated by
private lenders and guaranteed by the mortgage pools of the Government
National Mortgage Association.
(y) Salomon Brothers High Grade Corporate Bond Index -- consists of publicly
issued, non-convertible corporate bonds rated AA or AAA. It is a value-
weighted, total return index, including approximately 800 issues with
maturities of 12 years or greater.
(z) Salomon Brothers Three-Month T-Bill Average -- the average for all Treasury
bills for the previous three-month period.
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(aa) Savings and Loan Historical Interest Rates -- as published by the U.S.
Savings and Loan League Fact Book.
(bb) Standard & Poor's 400 Mid Cap Index -- consists of 400 domestic stocks
chosen for market size, liquidity, and industry group representation. It
is also a market-value weighted index and was the first benchmark of mid
cap stock price movement.
(cc) Standard & Poor's 500 Stock Index or its component indices an unmanaged
index composed of 400 industrial stocks, 40 financial stocks, 40 utilities
stocks and 20 transportation stocks.
(dd) Stocks, Bonds, Bills and Inflation, published by Ibbotson Associates --
historical measure of yield, price and total return for common and small
company stock, long-term government bonds, U.S. Treasury bills and
inflation.
(ee) Value Line -- composed of over 1,600 stocks in the Value Line Investment
Survey.
(ff) Wilshire 5000 Equity Index or its component indices -- represents the
return on the market value of all common equity securities for which daily
pricing is available.
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