SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
THE BEAR STEARNS FUNDS.
(the "Company")
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined.
---------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------
<PAGE>
5) Total Fee Paid:
---------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
--------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------
3) Filing Party:
--------------------------------------------------------------
4) Date Filed:
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<PAGE>
PRELIMINARY PROXY SOLICITATION MATERIALS
THE BEAR STEARNS FUNDS
575 Lexington Avenue
New York, New York 10022
1-800-766-4111
Date: March __, 2000
Dear Shareholder:
You are cordially invited to attend a special meeting of shareholders of
The Bear Stearns Funds to be held on April 17, 2000 at 10:30 a.m.Eastern time at
575 Lexington Avenue, 9th Floor, New York, New York.
We have prepared a single "combined" Proxy Statement for use by the
shareholders of all of the Fund's Portfolios because much of the information
required to be included in the proxy materials for each Portfolio is
substantially identical. We believe that a joint Proxy Statement is more
efficient and cost effective. If you own shares in more than one Portfolio, you
are receiving separate proxy materials for each Portfolio you own.
Please note that not all of the Proposals relate to each Portfolio. Please
refer to page __ of the Proxy Statement for a table illustrating which Proposals
are to be voted upon by shareholders of a Portfolio or Class thereof.
The information set forth below is designed to answer your questions and
help you cast your proxy as a shareholder. It is being provided as a supplement
to, not a substitute for, your proxy materials. Please read the full text of the
Proxy Statement for a complete understanding of the Proposals.
Q. Why are the Proposals being recommended?
A. Proposal 1. Election of Trustees. When Trustees retire or leave the Board
for other reasons, in order to fill a vacancy without calling an annual or
special meeting of shareholders, at least two-thirds of the Trustees must
have been elected by shareholders immediately after filling any such
vacancy. Since the Fund does not meet this test, the new nominees must be
elected by shareholders.
<PAGE>
THE BEAR STEARNS FUND
Letter to Shareholders
March __, 2000
Page 2
Proposal 2. Ratification of the selection of the Fund's independent
auditors. Such selection is required to be submitted for ratification at
the next succeeding annual meeting of shareholders. The Fund does not hold
regular annual meetings of shareholders and is, therefore, submitting this
Proposal at this special meeting.
Proposals 3, 4, 5 and 7. Approval of amended and restated advisory
agreements, approval of amended and restated distribution plans and, with
respect to certain Portfolios, approval of a fundamental policy concerning
the issuance of senior securities. Basically, the proposed amendments will
simplify, modernize and make the agreements, plans and fundamental policy
consistent for all of the Portfolios managed by Bear Stearns Asset
Management Inc. The proposed new investment advisory agreement (Proposal 3)
modifies the list of enumerated expenses to be borne by a participating
money market fund Portfolio to include premiums for insurance coverage
against credit defaults and similar losses in its investment portfolio
should such a program be implemented. The proposed new distribution plans
(Proposal 5) clarify that to the extent certain types of expenditures are
deemed to constitute the indirect use of a Portfolio's assets for
distribution, such payments shall be authorized under the plans.
Proposal 6. Approval of an interportfolio lending program. The program will
allow the Portfolios to loan money to each other if - and only if - it
makes good financial sense to do so on both sides of the transaction. By
dealing with each other instead of banks, the Portfolios will be able to
borrow money more cheaply and lend money more profitably. This Proposal is
subject to an order of the Securities and Exchange Commission allowing the
Fund to engage in the program.
Proposal 8. Approval of amendments to, and a restatement of, the Fund's
Declaration of Trust. The amendments will clarify and broaden the powers of
the Trustees and give them the flexibility to amend the Declaration of
Trust without the need and expense of obtaining shareholder approval,
except when a vote of shareholders is required by applicable law; authority
to approve a consolidation or merger or the transfer of a substantial
portion of the assets of the Fund or a Portfolio without shareholder
approval ; allow for electronic and telephonic voting; and grant voting
rights based on the dollar amount of your investment rather than the number
of shares you own.
Q. Will the fees of the Portfolios be affected?
A. The Proposals will not change the amount of any advisory, distribution,
service or administration fees applicable to a Portfolio (or a Class
thereof).
Q. Will there be any change in the way the Portfolios are managed?
A. The Portfolios have no current intention of altering their investment
strategies and the Proposal which requests approval of a modification of an
investment policy is not expected to have an effect on the management of
the Portfolios. Note, however, that the
<PAGE>
THE BEAR STEARNS FUND
Letter to Shareholders
March __, 2000
Page 3
proposed interportfolio lending program will let Bear Stearns Asset
Management Inc. match the borrowing and lending needs of different
Portfolios - to everyone's benefit.
Q. As a shareholder, what do I need to do?
A. Please read the enclosed Proxy Statement and vote now by completing,
signing and returning the enclosed proxy in the prepaid envelope.
Thank you in advance for your attention and vote with regard to these
important Proposals.
Sincerely,
Stephen A. Bornstein
Secretary
<PAGE>
THE BEAR STEARNS FUNDS
575 Lexington Avenue
New York, New York 10022
1-800-766-4111
Notice of Special Meeting of Shareholders to be held April 17, 2000
A special meeting of the shareholders (the "Meeting") of The Bear Stearns
Funds (the "Fund") will be held on April 17, 2000 at 10:30 a.m. Eastern time at
575 Lexington Avenue, 9th Floor, New York, New York, for the purposes indicated
below:
1. Election of seven Trustees to serve until their successors are duly elected
and qualified.
2. Ratification of the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the fiscal year ending March 31, 2001. No change
in auditors is proposed.
3. Approval, with respect to each Portfolio of the Fund, of an Amended and
Restated Investment Advisory Agreement. No fee increase is proposed.
4. Approval with respect to the International Equity Portfolio, of an Amended
and Restated Sub-Investment Advisory Agreement. No fee increase is
proposed.
5. Approval, with respect to the A, B and C Classes of shares of each
Portfolio, of an Amended and Restated Distribution Plan. No fee increase is
proposed.
6. Approval, with respect to each Portfolio of the Fund, of a fundamental
investment policy to permit interportfolio lending. Subject to an order of
the Securities and Exchange Commission allowing the Fund to engage in the
program.
7. Approval, with respect to the Income Portfolio, S&P STARS Portfolio, The
Insiders Select Fund, Large Cap Value Portfolio and Small Cap Value
Portfolio of the Fund, of a modification of a fundamental policy concerning
the issuance of senior securities.
8. Approval of amendments to, and a restatement of, the Fund's Declaration of
Trust:
8(a) To permit the Trustees to reorganize the Fund and any future Portfolio
without shareholder approval;
8(b) To permit the Trustees to reorganize an existing Portfolio without
shareholder approval;
8(c) To permit electronic and telephonic voting;
<PAGE>
8(d) To permit the Trustees to amend the Declaration of Trust without
shareholder approval;
8(e) To convert from share-based to dollar-based voting rights.
9. To transact such other business as may properly come before the Meeting or
any adjournment(s) thereof.
Shareholders of record as of the close of business on March 1, 2000 are
entitled to receive notice of, and to vote at, the Meeting and any and all
adjournments(s) thereof. Your attention is called to the accompanying Proxy
Statement.
By Order of the Board of Trustees
Stephen A. Bornstein
Secretary
Dated: March _, 2000
You can help avoid the necessity and expense of sending follow-up letters to
ensure a quorum by promptly returning the enclosed proxy. If you are unable to
attend the Meeting, please mark, sign, date and return the enclosed proxy so
that the necessary quorum may be represented at the Meeting. The enclosed
envelope requires no postage if mailed in the United States.
<PAGE>
THE BEAR STEARNS FUNDS
575 Lexington Avenue
New York, New York 10022
1-800-766-4111
PROXY STATEMENT DATED March __, 2000
Special Meeting of Shareholders to be held on April 17, 2000
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of The Bear Stearns Funds, a Massachusetts
business trust (the "Fund"), on behalf of its series (each a "Portfolio" and
collectively the "Portfolios"), in connection with a special meeting of
shareholders (the "Meeting") to be held on April 17, 2000 at 10:30 a.m. Eastern
time at 575 Lexington Avenue, 9th Floor, New York, New York, and at any
adjournment(s) thereof, at which shareholders will be asked to consider the
following:
1. Election of seven Trustees to serve until their successors are duly elected
and qualified.
2. Ratification of the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the fiscal year ending March 31, 2001. No change
in auditors is proposed.
3. Approval, with respect to each Portfolio of the Fund, of an Amended and
Restated Investment Advisory Agreement. No fee increase is proposed.
4. Approval with respect to the International Equity Portfolio, of an Amended
and Restated Sub-Investment Advisory Agreement. No fee increase is
proposed.
5. Approval, with respect to the A, B and C Classes of shares of each
Portfolio, of an Amended and Restated Distribution Plan. No fee increase is
proposed.
6. Approval with respect to each Portfolio of the Fund, of a fundamental
investment policy to permit interportfolio lending. Subject to an order of
the Securities and Exchange Commission allowing the Fund to engage in the
program.
7. Approval, with respect to the Income Portfolio, S&P STARS Portfolio, The
Insiders Select Fund, Large Cap Value Portfolio and Small Cap Value
Portfolio of the Fund, of a modification of a fundamental policy concerning
the issuance of senior securities.
8. Approval of amendments to, and a restatement of, the Fund's Declaration of
Trust:
<PAGE>
8(a) To permit the Trustees to reorganize the Fund and any future Portfolio
without shareholder approval;
8(b) To permit the Trustees to reorganize an existing Portfolio without
shareholder approval;
8(c) To permit electronic and telephonic voting;
8(d) To permit the Trustees to amend the Declaration of Trust without
shareholder approval;
8(e) To convert from share-based to dollar-based voting rights.
9. To transact such other business as may properly come before the Meeting or
any adjournment(s) thereof.
The table below illustrates which Proposals are to be voted upon by
shareholders of a Portfolio or Class thereof:
<TABLE>
<CAPTION>
Proposal Number
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
1 2 3 4 5 6 7 8
(A, B & C
Classes
only)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Prime Money Market Portfolio X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Income Portfolio X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
High Yield Total Return Portfolio X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Emerging Markets Debt Portfolio X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
S&P STARS Portfolio X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
The Insiders Select Fund X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Large Cap Value Portfolio X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Small Cap Value Portfolio X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Focus List Portfolio X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
Balanced Portfolio X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
International Equity Portfolio X X X X X X X
- ------------------------------------- ------ ----- ------ ---- ------------- ---- ----- ----
</TABLE>
Even if you sign and return the accompany proxy, you may revoke it by
giving written notice of such revocation to the Secretary of the Fund prior to
the Meeting or by delivering a subsequently dated proxy or by attending and
voting at the Meeting in person. In the event that a shareholder signs and
returns the proxy ballot, but does not indicate a choice as to any of the items
on the proxy ballot, the proxy attorneys will vote those shares of beneficial
interest ("shares") for the election of the proposed nominees as Trustees and in
favor of the other proposals.
The cost of preparing and mailing the notice of Meeting, the proxy card,
this Proxy Statement, and any additional proxy solicitation material has been or
is to be borne by the Portfolios. Proxy solicitation will be made primarily by
mail, but may also be made by telephone, telegraph, facsimile, or personal
interview conducted by certain officers or employees of the Fund, Bear Stearns
Asset Management Inc. ("BSAM"), 575 Lexington Avenue , New
2
<PAGE>
York, New York, Bear, Stearns & Co. Inc., the Portfolios' Distributor ("Bear
Stearns"), 245 Park Avenue, New York, New York, and their affiliates, none of
whom will receive compensation for soliciting proxies. The Fund has retained
Shareholder Communications Corporation, a professional proxy solicitation firm,
to assist in the solicitation of proxies. The cost of the services of
Shareholder Communications Corporation is expected to be approximately $60,000.
In return for compensation from the Portfolios, Shareholder Communications
Corporation will request that shareholders of the Portfolios, submit their
proxies, and may do so by mail, telephone, telegraph, facsimile, or personal
interview.
The Board of Trustees has fixed the close of business on March 1 , 2000 as
the record date for the determination of the shareholders entitled to notice of,
and to vote at, the Meeting or any adjournment(s) thereof (the "Record Date").
The Fund is composed of eleven separate Portfolios, ten of which have four
classes of shares -- Class A, Class B, Class C, and Class Y shares. The Class Y
Shares are not offered by the following Portfolios: High Yield Total Return
Portfolio, Focus List Portfolio and International Equity Portfolio. The Prime
Money Market Portfolio only has Class Y Shares. As of the Record Date, there
were _________ shares of the Fund outstanding, as set forth in the table below.
<TABLE>
<CAPTION>
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Portfolio Class A Shares Class B Shares Class C Shares Class Y Shares
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
<S> <C> <C> <C> <C>
Prime Money Market Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Income Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
High Yield Total Return Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Emerging Markets Debt Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
S&P STARS Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
The Insiders Select Fund
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Large Cap Value Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Small Cap Value Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Focus List Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
Balanced Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
International Equity Portfolio
- -------------------------------------- ------------------ ---------------- -------------------- ----------------------
</TABLE>
The holders of each share of a Portfolio shall be entitled to one vote for
each full share and a fractional vote for each fractional share. As of March 1,
2000, the following shareholders owned, directly or indirectly, 5% or more of
any Class of the Fund's outstanding shares:
<TABLE>
<CAPTION>
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
Portfolio Class Name and Address Number of Shares Number of Shares Percent
of Beneficial Owner Beneficially Owned Owned of Record of Class
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
<S> <C> <C> <C> <C> <C>
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
- --------------- --------- -------------------------- -------------------------- ----------------------- ------------
</TABLE>
3
<PAGE>
A copy of your Portfolio's annual report for the fiscal year ended March
31, 1999 and semi-annual report for the period ended September 30, 1999 may be
received, free of charge, by calling the Fund, toll free, at 1-800-766-4111.
The vote of a "majority of the outstanding voting securities" of a
Portfolio is required for approval of Proposals 3, 4, 6 and 7 with respect to
that Portfolio. The vote of a "majority of the outstanding voting securities" of
a Class is required for approval of Proposal 5 with respect to that Class. The
vote of a "majority of the outstanding voting securities" for purposes of
Proposals 3, 4, 5, 6 and 7 means the affirmative vote of the lesser of (1) 67%
of more of the shares present or represented by proxy at the Meeting, if the
holders of more than 50% of the outstanding shares are present or represented by
proxy, or (2) more than 50% of the outstanding shares. The vote of a plurality
of the Fund's shares represented at the Meeting is required for the election of
Trustees (Proposal 1). The vote of a simple majority of the shares voted at the
Meeting is required for the ratification of the selection of Deloitte & Touche
LLP as the independent auditors for the Fund (Proposal 2). The vote of a
majority of the shares of the Fund outstanding and entitled to vote (all
Portfolios voting together as a single class) is required to approve Proposal
8(a) (to permit the Trustees to reorganize the Fund and any future Portfolio
without shareholder approval), Proposal 8(c) (to permit electronic and
telephonic voting), Proposal 8(d) (to permit the Trustees to amend the
Declaration of Trust without shareholder approval) and Proposal 8(e) (to convert
from share-based to dollar-based voting). The vote of a majority of shares of a
Portfolio outstanding and entitled to vote is required to approve Proposal 8(b)
(to permit the Trustees to reorganize a Portfolio without shareholder approval)
for that Portfolio.
Shareholders entitled to cast 30% of the votes, either in person or by
proxy, shall constitute a quorum. For purposes of determining the presence of a
quorum and counting votes on the matters presented, shares represented by
abstentions and "broker non-votes" will be counted as present, but not as votes
cast, at the Meeting. Under the Investment Company Act of 1940, as amended (the
"1940 Act"), the affirmative vote necessary to approve a matter under
consideration may be determined with reference to a percentage of votes against
the proposal.
If the proposals are approved, it is anticipated that they will become
effective as soon as practical after shareholder approval.
4
<PAGE>
PROPOSAL 1 - ELECTION OF TRUSTEES
The first proposal to be considered at the Meeting is the election of
Trustees.
Four individuals not currently serving on the Board of Trustees have been
nominated to serve as Trustees. If elected by shareholders, these individuals
will serve together with three members of the present Board of Trustees: Peter
M. Bren, M. B. Oglesby, Jr. and Michael Minikes. Alan J. Dixon will serve as an
Advisory Trustee. Following the Meeting, John R. McKernan, Jr. will no longer
serve as a Trustee.
Seven nominees are to be elected as Trustees, each to serve until his or
her successor is duly elected and qualified. All nominees have consented to be
named in this Proxy Statement and agreed to serve if elected. The current
independent Trustees reserve the right to substitute another person or persons
of their choice as a nominee or nominees if a nominee is unable to serve as a
Trustee at the time of the Meeting for any reason. Nothing, however, indicates
that such a situation will arise. The following table sets forth certain
information regarding each nominee for election as a Trustee.
<TABLE>
<CAPTION>
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
Name Age Principal Occupation During the Past Five Years Position Trustee Since
and Directorships of Public Companies with the Fund
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
<S> <C> <C> <C> <C>
Peter M. Bren 65 Since 1969, President of The Bren Co. (realty); Trustee 1995
until 1969, President of Koll, Bren Realty
Advisors and Senior Partner of Lincoln Properties.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
Doni L. Fordyce 40 Since 1996, Senior Managing Director of Bear President --
Stearns; until 1996, Vice President, Asset and Nominee
Management Group, Goldman, Sachs & Co.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
John S. Levy 64 Since 1996, Managing Partner, Fayerweather Capital Nominee --
Partners (a private investment partnership); from
1984 to 1995, Managing Director and Chief
Administrative Officer of the Financial Services
Division of Lehman Brothers Inc. and Senior
Executive Vice President and Co-Director of
International Division of Shearson Lehman/American
Express
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
Michael Minikes 56 Senior Managing Director of Bear Stearns; since Trustee, 1995
1997, Chairman of BSFM; Treasurer of Bear Stearns; Chairman of
Treasurer of The Bear Stearns Companies Inc.; the Board
Director of the Bear Stearns Companies Inc.; Since
1999, Co-President of Bear Stearns Securities Corp.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
M. B. Oglesby, Jr. 57 Since 1999, Consultant and Chairman of Oglesby Trustee 1995
Properties, Inc.; since 1997, President
and Chief Executive Officer, Association
of American Railroads; from 1996 to 1997,
Vice Chairman of Cassidy & Associates;
from 1989 to 1996, Senior Vice President
of RJR Nabisco, Inc.; from 1988 to 1989,
White House Deputy Chief of Staff.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
Robert E. Richardson 58 Retired. From 1990 to 1999, Vice President, Nominee --
Broker/Dealer Department, Mellon Bank, N.A.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
Robert M. Steinberg 54 Senior Managing Director of Bear Stearns and Nominee --
Co-Director of its Risk Arbitrage Department;
Chairman of Bear Stearns International Credit
Committee; Director of The Bear Stearns Companies
Inc.
- ------------------------------ ------ ---------------------------------------------------- -------------- --------------
</TABLE>
5
<PAGE>
Michael Minikes, Doni L. Fordyce and Robert M. Steinberg, as affiliated
persons of Bear Stearns and its affiliates, are "interested persons" of the Fund
within the meaning of Section 2(a)(19) of the 1940 Act.
Trustees who are not employees of BSAM or its affiliates receive an annual
retainer of $12,500, plus $1,000 for each Board meeting attended in person.
Trustees will be paid $750 for any Board meeting attended by telephone. The
compensation paid to the Trustees for the fiscal year ended March 31, 1999 is as
follows:
<TABLE>
<CAPTION>
COMPENSATION TABLE
- ---------------------------------------- -------------------------------------- --------------------------------------
Name of Trustee Aggregate Compensation from the Fund Total Compensation from all Funds in
the Bear Stearns Complex
- ---------------------------------------- -------------------------------------- --------------------------------------
<S> <C> <C>
Peter M. Bren $8,000 $20,000
- ---------------------------------------- -------------------------------------- --------------------------------------
Alan J. Dixon $8,000 $ 8,000
- ---------------------------------------- -------------------------------------- --------------------------------------
John R. McKernan, Jr. $8,000 $20,000
- ---------------------------------------- -------------------------------------- --------------------------------------
M. B. Oglesby, Jr. $8,000 $20,000
- ---------------------------------------- -------------------------------------- --------------------------------------
Michael Minikes NONE NONE
- ---------------------------------------- -------------------------------------- --------------------------------------
</TABLE>
The Fund has an Audit Committee currently consisting of Mr. Bren, Mr.
McKernan and Mr. Oglesby. If all of the nominees to serve on the Board are
elected by shareholders, it is anticipated that the Audit Committee will consist
of four nominees for election as Trustees who are not "interested persons" of
the Fund, BSAM, Marvin & Palmer Associates, Inc., the Sub-Adviser to the
International Equity Portfolio, Bear Stearns or Bear Stearns Funds Management
Inc. ("BSFM"), the Fund's Administrator. The Audit Committee makes
recommendations to the Board of Trustees concerning the selection of the Fund's
independent auditors, reviews with such accountants the scope and results of the
Fund's annual audit, reviews the annual and semi-annual financial reports of the
Fund and considers any comments which the accountants may have regarding the
Fund's financial statements or books of account. Audit Committee members receive
additional compensation of $500 for attending any Audit Committee meeting in
person or by telephone.
During the fiscal year ended March 31, 1999, the Board of Trustees held
four meetings and the Audit Committee held two meetings. During such fiscal
year, each Trustee attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Trustees (held during the period during which
he has been a Trustee); and (ii) the total number of meetings held by any
committee of the Board of Trustees on which he served.
Executive Officers
The Fund's executive officers are set forth below. The business address of
each is 575 Lexington Avenue, New York, New York 10022 or as otherwise
indicated. The executive officers receive no compensation from the Fund.
6
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Name Age Principal Occupation During Officer Position with The Fund
the Past Five Years Since
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
<S> <C> <C> <C>
Michael Minikes 56 See table of nominees under "Election of 1997 Trustee, Chairman of
245 Park Avenue Trustees" the Board
New York, New York 10167
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Doni L. Fordyce 40 See table of nominees under "Election of 1997 President
Trustees"
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Barry Sommers 30 Since 1997, Managing Director and Head of 1997 Executive Vice
Marketing and Sales for The Bear Stearns Funds; President
from 1995 to 1997, Vice President, Mutual Fund
Sales, Goldman, Sachs & Co.
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Stephen A. Bornstein 56 Managing Director of Bear Stearns, Legal 1995 Vice President and
Department; since 1997, General Counsel, BSAM Secretary
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Frank J. Maresca 41 Since 1997, Managing Director of Bear Stearns; 1995 Vice President and
Associate Director prior thereto; since 1997, Treasurer
Chief Executive Officer and President of
BSFM; Executive Vice President prior
thereto.
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
Vincent L. Pereira 34 Since 1999, Managing Director of Bear Stearns; 1995 Assistant Treasurer
Associate Director prior thereto; since 1997,
Treasurer and Secretary of BSFM; until
1995, Vice President of Bear Stearns.
- -------------------------------- ------ -------------------------------------------------- ------------ -----------------------
</TABLE>
The Board of Trustees unanimously recommends that shareholders vote "For"
election of the proposed slate of nominees.
PROPOSAL 2 - RATIFICATION OF INDEPENDENT AUDITORS
Deloitte & Touche LLP has been selected by vote of the Board of Trustees,
including a majority of the independent Trustees, as the Fund's independent
auditors for the current fiscal year ending March 31, 2001. The employment of
Deloitte & Touche LLP is conditioned upon the right of the Fund, by a vote of a
majority of its outstanding shares, to terminate the employment without any
penalties.
Deloitte & Touche LLP has acted as the Fund's independent auditors since
1995. If the Fund's shareholders do not ratify the selection of Deloitte &
Touche LLP, other certified auditors will be considered for selection by the
Board of Trustees.
Representatives of Deloitte & Touche LLP are not expected to be present at
the Meeting, although they will have an opportunity to attend and to make a
statement, if they desire to do so. If representatives of Deloitte & Touche LLP
are present, they will be available to respond to appropriate questions from
shareholders.
The Board of Trustees unanimously recommends that shareholders ratify the
selection of Deloitte & Touche LLP.
PROPOSAL 3 - APPROVAL OF AN AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
FOR EACH PORTFOLIO
The Board of Trustees, including a majority of the independent Trustees,
has approved, and recommends that shareholders of each Portfolio approve, a
proposal to adopt an Amended and Restated Investment Advisory Agreement with
Bear Stearns Asset Management Inc. ("BSAM"). The Amended and Restated Investment
Advisory Agreement (i) consolidates all current investment advisory agreements
into a single agreement with a single renewal date; (ii) modifies the list of
enumerated expenses borne by a participating money market fund portfolio to
include annual premiums for insurance coverage against credit defaults and
similar losses on
7
<PAGE>
securities in its investment portfolio; (iii) modifies certain current
investment advisory agreements by including a "soft dollars" provision that
explicitly allows BSAM to select brokers or dealers who also provide brokerage
and research services to BSAM, the Portfolio, and/or other accounts over which
BSAM exercises investment discretion for the purpose of making the policy
consistent among all of the Portfolios managed by BSAM; and (iv) clarifies the
authority of BSAM to aggregate orders among a Portfolio and other clients of
BSAM. The Proposal will not change the amount of advisory fees that any
Portfolio will pay.
Modernization of the Current Investment Advisory Agreements
The Fund's Board of Trustees authorized a review of the current investment
advisory agreements applicable to the Fund's Portfolios with the goal of
combining them into a single agreement with a single renewal date. The
amendments simplify, modernize and make the provisions of the current investment
advisory agreements consistent for all of the Portfolios managed by BSAM.
The amendments, which are described in the following paragraphs, either
state or clarify BSAM's present activities and obligations as investment adviser
of the Portfolios, and will not materially affect the way in which BSAM manages
a Portfolio in the future. In addition, the amendments will not result in a
significant benefit to BSAM, or its affiliates. In approving the following
amendments, the Board of Trustees considered that the amendments merely reflect
the current operation of the Portfolios, and concluded that the amendments are
in the best interests of the shareholders of the Portfolios.
Soft Dollars. A provision of the Amended and Restated Investment Advisory
Agreement explicitly allows BSAM to select brokers or dealers who also provide
brokerage and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934) to BSAM, the Portfolio, and/or other
accounts over which BSAM exercises investment discretion. BSAM must seek brokers
or dealers, which may include affiliated brokers or dealers, who provide the
best execution of the Portfolio's transactions. The factors that are to be
considered in determining best execution, which do not solely include lowest
commission or best net price, are described in the Amended and Restated
Investment Advisory Agreement. The Amended and Restated Investment Advisory
Agreement permits BSAM to select brokers or dealers (including Bear Stearns) who
provide brokerage and research services and pay such brokers or dealers a
commission which is in excess of the amount of commission another broker or
dealer would have charged if BSAM makes a good faith determination that the
commission is reasonable in relation to the services provided. The Amended and
Restated Investment Advisory Agreement provides that such transactions shall be
reported to the Board of Trustees of the Fund. The Amended and Restated
Sub-Investment Advisory Agreement provides that transactions of affiliated
brokers and dealers must comply with applicable regulations and authorizes
affiliated brokers and dealers to retain commissions earned from effecting
Portfolio transactions and to pay out of such commissions any compensation due
to others in connection with effecting the transaction.
Aggregation of Orders. There is also a clarification of the authority of
BSAM to aggregate the securities to be sold or purchased with those of other
clients of BSAM if, in BSAM's reasonable judgment, such aggregation will result
in an overall benefit to the Portfolio,
8
<PAGE>
taking into consideration the advantageous selling or purchase price, brokerage
commission and other expenses and trading requirements.
Insurance Coverage.
Money market funds, such as the Prime Money Market Portfolio, attempt to
maintain a stable net asset value of $1.00 per share. The possibility exists,
however, that certain events, such as a material default on a security in a
money market fund's investment portfolio, could cause the fund to sustain a loss
that results in the net asset value of the fund falling below $1.00 per share. A
money market fund may obtain insurance to minimize (but not eliminate) the risk
of such a loss. The insurance coverage would provide protection against credit
defaults and similar losses on securities in a money market fund's investment
portfolio. However, certain other losses, such as those due to interest rate
fluctuations, would not be covered, and, despite insurance coverage, a money
market fund's net asset value still could fall below $1.00 per share. The
amendment modifies the list of enumerated expenses borne by a participating
money market fund Portfolio to include annual premiums for insurance coverage
covering credit defaults and similar losses on securities.
The Board of Trustees of the Fund recommends that shareholders of each
Portfolio approve the amendments to the current investment advisory agreements.
There is no assurance that the Board of Trustees will obtain this insurance in
the future. The Form of Amended and Restated Investment Advisory Agreement is
attached as Exhibit A. You should read the agreement. The description in this
Proxy Statement of the agreement is only a summary.
Current Investment Advisory Agreements
See the Appendix attached to this Proxy Statement for information with
respect to the current investment advisory agreements and the fees paid by each
Portfolio of the Fund to BSAM and its affiliates during the fiscal year ended
March 31, 1999 and for additional information concerning BSAM.
Board Consideration.
The proposal to present the Amended and Restated Investment Advisory
Agreement to shareholders was approved by the Fund's Board of Trustees,
including the independent Trustees, on February 7, 2000. The Board received
materials relating to the proposed Amended and Restated Investment Advisory
Agreement in advance of such meeting and also relied upon information regarding
the operations of BSAM and the background and experience of its investment
personnel, including the information provided at each meeting at which the Board
of Trustees approved a continuation of an investment advisory agreement. The
Trustees also considered that the fees and investment advisory services to be
performed under the proposed Amended and Restated Investment Advisory Agreement
are the same as those under the existing investment advisory agreements.
In considering the Amended and Restated Investment Advisory Agreement, the
independent Trustees were advised by independent legal counsel to the
independent Trustees. Based on their evaluation of all material factors, the
Trustees concluded (i) that the existing
9
<PAGE>
investment advisory fee structure is fair and reasonable; and (ii) that the
proposed addition of an insurance premium as an expense borne directly by a
participating money market fund under the proposed Amended and Restated
Investment Advisory Agreement and the other proposed amendment provisions are in
the best interests of each Portfolio's shareholders. The Board of Trustees,
including the independent Trustees, voted to approve the submission of the
Amended and Restated Investment Advisory Agreement to shareholders of each
Portfolio.
If the Amended and Restated Investment Advisory Agreement is not approved
by shareholders of a Portfolio, BSAM will continue to serve as the investment
adviser to the Portfolio pursuant to the terms of the current investment
advisory agreement.
The Board of Trustees unanimously recommends that shareholders vote "For" the
approval of an Amended and Restated Investment Advisory Agreement.
PROPOSAL 4 - APPROVAL OF AN AMENDED AND RESTATED SUB-INVESTMENT ADVISORY
AGREEMENT FOR THE INTERNATIONAL EQUITY PORTFOLIO
The Board of Trustees, including a majority of the independent Trustees,
has approved, and recommends that shareholders of the International Equity
Portfolio approve, a proposal to adopt an Amended and Restated Sub-Investment
Advisory Agreement with Marvin & Palmer Associates, Inc. ("M&P"). The Amended
and Restated Sub-Investment Advisory Agreement modifies the current
sub-investment advisory agreement by including a "soft dollars" provision that
explicitly allows M&P to select brokers or dealers who also provide brokerage
and research services to M&P, the Portfolio, and/or other accounts over which
M&P exercises investment discretion and clarifies the authority of M&P to
aggregate orders among the Portfolio and other clients of M&P. The Proposal will
not change the amount of sub-advisory fees that BSAM pays to M&P.
Modernization of the Current Sub-Investment Advisory Agreement
The amendments, which are described in the following paragraphs, either
state or clarify M&P's present activities and obligations as sub-investment
adviser of the International Equity Portfolio, and will not materially affect
the way in which M&P manages the Portfolio in the future. In addition, the
amendments will not result in a significant benefit to M&P, or its affiliates.
In approving the following amendments, the Board of Trustees considered that the
amendments merely reflect the current operation of the International Equity
Portfolio, and concluded that the amendments are in the best interests of the
shareholders of the International Equity Portfolio.
Soft Dollars. A provision of the Amended and Restated Sub-Investment
Advisory Agreement explicitly allows M&P to select brokers or dealers who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to M&P, the International Equity
Portfolio, and/or other accounts over which M&P exercises investment discretion.
M&P must seek brokers or dealers, which may include affiliated brokers or
dealers, who provide the best execution of the Portfolio's transactions. The
factors that are to be considered in determining best execution, which do not
10
<PAGE>
solely include lowest commission or best net price, are described in the Amended
and Restated Sub-Investment Advisory Agreement. The Amended and Restated
Sub-Investment Advisory Agreement permits M&P to select brokers or dealers who
provide brokerage and research services and pay such brokers or dealers a
commission which is in excess of the amount of commission another broker or
dealer would have charged if M&P makes a good faith determination that the
commission is reasonable in relation to the services provided. The Amended and
Restated Sub-Investment Advisory Agreement provides that such transactions shall
be reported to the Board of Trustees of the Fund. The Amended and Restated
Sub-Investment Advisory Agreement provides that transactions of affiliated
brokers and dealers must comply with applicable regulations and authorizes
affiliated brokers and dealers to retain commissions earned from effecting
Portfolio transactions and to pay out of such commissions any compensation due
to others in connection with effecting the transaction.
On September 30, 1999, the Securities and Exchange Commission ("SEC")
entered a Consent Order in In the Matter of Marvin & Palmer Associates, Inc. et
al. (Admin. Proc. File No. 3-10072). Without admitting or denying the
allegations, M&P and David F. Marvin, its Chairman and Chief Executive Officer,
consented to the Order in which the SEC found that M&P, Mr. Marvin and two
unrelated parties violated, or aided in the violation of, Sections 206(1),
206(2) and 207 of the Investment Advisers Act of 1940 in connection with the
alleged failure of M&P to properly disclose a soft dollar arrangement with a
third party. The Consent Order, among other things, censured M&P and Mr. Marvin
and ordered M&P to pay disgorgement and prejudgment interest in the aggregate
amount of $976,980. M&P and Mr. Marvin were ordered to pay civil money penalties
in the amounts of $50,000 and $25,000, respectively. Neither M&P nor Mr. Marvin
is prohibited from acting as, or being associated with, an investment adviser.
Aggregation of Orders. There is also a clarification of the authority of
M&P to aggregate the securities to be sold or purchased with those of other
clients of M&P if, in M&P's reasonable judgment, such aggregation will result in
an overall benefit to the International Equity Portfolio, taking into
consideration the advantageous selling or purchase price, brokerage commission
and other expenses and trading requirements.
The Board of Trustees of the Fund recommends that shareholders of the
International Equity Portfolio approve the amendments to the current
sub-investment advisory agreement. The Form of Amended and Restated
Sub-Investment Advisory Agreement is attached as Exhibit B. You should read the
agreement. The description in this Proxy Statement of the agreement is only a
summary.
Current Investment Sub-Advisory Agreement
See the Appendix attached to this Proxy Statement for information with
respect to the current investment sub-advisory agreement. There were no fees
paid by BSAM to M&P during the fiscal year ended March 31, 1999.
11
<PAGE>
Board Consideration.
The proposal to present the Amended and Restated Sub-Investment Advisory
Agreement to shareholders of the International Equity Portfolio was approved by
the Fund's Board of Trustees, including the independent Trustees, on February 7,
2000. The Board received materials relating to the proposed Amended and Restated
Sub-Investment Advisory Agreement in advance of such meeting and also relied
upon information regarding the operations of M&P and the background and
experience of its investment personnel, including the information provided at
the last meeting at which the Board of Trustees approved a continuation of the
sub-investment advisory agreement between BSAM and M&P. The Trustees also
considered that the fees and sub-investment advisory services to be performed
under the proposed Amended and Restated Sub-Investment Advisory Agreement are
the same as those under the existing sub-investment advisory agreement.
In considering the Amended and Restated Sub-Investment Advisory Agreement,
the independent Trustees were advised by independent legal counsel to the
independent Trustees. Based on their evaluation of all material factors, the
Trustees concluded (i) that the existing sub-investment advisory fee structure
is fair and reasonable; and (ii) that the proposed amendment provisions are in
the best interests of the Portfolio's shareholders. The Board of Trustees,
including the independent Trustees, voted to approve the submission of the
Amended and Restated Sub-Investment Advisory Agreement to shareholders of the
International Equity Portfolio.
If the Amended and Restated Sub-Investment Advisory Agreement is not
approved by shareholders, M&P will continue to serve as the sub-investment
adviser to the Portfolio pursuant to the current sub-investment advisory
agreement.
The Board of Trustees unanimously recommends that shareholders vote "For" the
approval of an Amended and Restated Sub-Investment Advisory Agreement.
PROPOSAL 5 - APPROVAL OF AN AMENDED AND RESTATED DISTRIBUTION PLAN FOR THE A, B
AND C CLASSES OF SHARES (ALL PORTFOLIOS EXCEPT THE PRIME MONEY MARKET PORTFOLIO)
Rule 12b-1 (the "Rule"), adopted by the Securities and Exchange Commission
under the 1940 Act, provides, among other things, that an investment company may
bear expenses of distributing its shares only pursuant to a plan (a "Rule 12b-1
Plan") adopted in accordance with the Rule.
It is proposed that amended and restated Rule 12b-1 Plans be approved as
described below. The existing Rule 12b-1 Plan and the amended and restated Rule
12b-1 Plan for each Class of shares of a Portfolio are identical in all material
respects, except that (i) the Plans have been consolidated into a single Plan
for each Class of shares; and (ii) the Plans clarify that to the extent that
certain types of expenditures may be deemed to constitute the indirect use of a
Portfolio's assets for distribution such payments shall be authorized under the
Plans. In no case is the rate a Class of shares of a Portfolio pays under its
Rule 12b-1 Plan proposed to
12
<PAGE>
be increased. Copies of the Amended and Restated Distribution Plans for Class A
Shares, Class B Shares and Class C Shares are attached as Exhibits C-1, C-2 and
C-3, respectively. You should review Schedule I of the relevant Plan to
determine the amount of the distribution fee applicable to your Class.
The Fund's Board of Trustees authorized a review of the current
distribution plans applicable to the Fund's Portfolios with the goal of
combining them into a single Plan for each Class of shares. The Amended and
Restated Distribution Plans simplify and make the provisions of each Plan
consistent for each Class of shares.
Direct versus Indirect Use of a Portfolio's Assets
If a Portfolio makes payments which are earmarked for distribution, that is
obviously a direct use of a Portfolio's assets for distribution. If a Portfolio
makes payments which are ostensibly for some other purpose, and the recipient of
these payments finances distribution, the question arises as to whether the
Portfolio's assets are being used indirectly. For example, a question could be
raised as to whether expenditures by BSAM to finance distribution of a
Portfolio's shares constitute an indirect use of a Portfolio's assets on the
theory that BSAM is using funds derived from its investment advisory agreement.
The Amended and Restated Distribution Plans clarify that any payments made by
Bear Stearns, BSAM, BSFM or any sub-adviser, directly or through an affiliate,
are, in each case, from its own resources and, to the extent that any such
payments should be deemed to be indirect financing of any activity primarily
intended to result in the sale of a Class of shares of a Portfolio within the
context of the Rule, these payments shall be deemed to be authorized by the
Plans.
Current Distribution Plans
See the Appendix attached to this Proxy Statement for information with
respect to the current distribution plans and the fees paid by each Class of
shares of a Portfolio pursuant to its plan during the fiscal year ended March
31, 1999.
Board Consideration
The proposal to present the Amended and Restated Distribution Plans to
shareholders was approved by the Fund's Board of Trustees, including the
independent Trustees, on February 7, 2000. The Board received materials relating
to the proposed Amended and Restated Distribution Plans in advance of such
meeting and also relied upon information regarding the operations of Bear
Stearns and the background and experience of its personnel, including the
information provided at each meeting at which the Board of Trustees approved a
continuation of a Plan. The Trustees also considered that the distribution fees
under the proposed Amended and Restated Distribution Plans are the same as those
under the existing Plans.
In considering the Amended and Restated Distribution Plans, the independent
Trustees were advised by independent legal counsel to the independent Trustees.
Based on their evaluation of all material factors, the Trustees concluded (i)
13
<PAGE>
that the Distribution Plans are reasonable and in the best interests of the
Fund's shareholders. The Board of Trustees, including the independent Trustees,
voted to approve the submission of the Amended and Restated Distribution Plans
to Class A, Class B and Class C shareholders of each Portfolio.
If the Amended and Restated Distribution Plan is not approved by
shareholders of a particular Class, the current Distribution Plan for such Class
will continue to remain in effect.
The Board of Trustees unanimously recommends that shareholders vote "For" the
approval of the Amended and Restated Distribution Plans.
PROPOSAL 6 - APPROVAL OF A FUNDAMENTAL INVESTMENT POLICY TO PERMIT
INTERPORTFOLIO LENDING
The Portfolios existing investment policies do not allow for interportfolio
loans. Such a policy, if approved by shareholders of each Portfolio, will allow
the Portfolios to loan money to each other if it makes good financial sense to
do so both on the part of the Portfolio lending the money and on the part of the
Portfolio borrowing the money. A Portfolio would lend money to generate income
on its cash reserves. By dealing with each other instead of banks, the
Portfolios will be able to borrow money more cheaply and lend money more
profitably because there will be no bank fees for these transactions and the
banks' spread (the difference between the rates that they typically charge
borrowers and pay lenders) will have been eliminated. Moreover, any expenses of
a Portfolio in maintaining a committed line of credit with a bank to cover
emergency borrowing needs will be eliminated.
If approved by shareholders, a Portfolio will not participate in the
interportfolio lending program unless the Fund, on behalf of the Portfolio, has
applied for and received permission to do so from the Securities and Exchange
Commission. The granting of any such permission may be subject to conditions.
Except for the Prime Money Market Portfolio, each Portfolio's existing
investment policy on borrowing and lending does not allow for interportfolio
loans. If shareholders of a Portfolio approve this Proposal, the Portfolio will
adopt a new investment policy which states that the Portfolio can borrow and
lend money through the interportfolio lending program, subject to compliance
with any conditions imposed by the Securities and Exchange Commission.
The Board of Trustees unanimously recommends that shareholders vote "For"
approval of a new fundamental investment policy permitting interportfolio
lending.
PROPOSAL 7 - MODIFICATION OF THE PORTFOLIOS' FUNDAMENTAL POLICY REGARDING
ISSUANCE OF SENIOR SECURITIES (INCOME PORTFOLIO, S&P STARS PORTFOLIO, THE
INSIDERS SELECT FUND, LARGE CAP VALUE PORTFOLIO AND SMALL CAP VALUE PORTFOLIO).
Each of the Fund's Portfolios has a fundamental policy regarding the
issuance of senior securities. The language of the Portfolios' policies,
however, varies. It is proposed that the policy on senior securities be revised
with respect to the Income, S&P STARS, The Insiders
14
<PAGE>
Select Fund, Large Cap Value and Small Cap Value Portfolios of the Fund to
conform to the policy that is expected to become the standard for all of the
Fund's Portfolios.
Although the definition of a "senior security" involves complex statutory
and regulatory concepts, a senior security is generally thought of as an
obligation of a fund which has a claim to the fund's assets or earnings that
takes precedence over the claims of the fund's shareholders. The 1940 Act
generally prohibits mutual funds from issuing senior securities; however, mutual
funds are permitted to engage in certain types of transactions that might be
considered "senior securities" as long as it maintains a segregated account
containing liquid securities in value equal to its obligations to pay cash for
the securities at a future date.
Set forth below is the policy on issuance of senior securities, as proposed
to be modified:
The Portfolio may not issue any senior security (as such term is
defined in Section 18(f) of the 1940 Act) except that (a) the
Portfolio may engage in transactions that may result in the issuance
of senior securities to the extent permitted under applicable
regulations and interpretations of the 1940 Act or an exemptive order;
(b) the Portfolio may acquire other securities, the acquisition of
which may result in the issuance of a senior security, to the extent
permitted under applicable regulations or interpretations of the 1940
Act; and (c) subject to the Investment Restriction related to
Borrowing, the Portfolio may borrow money as authorized by the 1940
Act.
The Board of Trustees unanimously recommends that shareholders vote "For"
approval of a modification of a fundamental policy concerning the issuance of
senior securities.
PROPOSAL 8 - APPROVAL OF AMENDMENTS TO, AND A RESTATEMENT OF, THE FUND'S
DECLARATION OF TRUST
The Board of Trustees has approved, subject to shareholder approval,
certain amendments to the Fund's Declaration of Trust. The amendments clarify
and broaden the powers of the Trustees by giving them authority to (i)
reorganize, consolidate or merge the Fund or any Portfolio created in the future
with another trust, corporation or other similar entity, or series thereof
(Proposal 8(a)); (ii) reorganize, consolidate or merge an existing Portfolio
with another trust, corporation or other similar entity, or series thereof
(Proposal 8(b)); (iii) provide for electronic and telephonic voting by
shareholders (Proposal 8(c)); (iv) amend the Declaration of Trust without the
necessity of obtaining the favorable vote of shareholders, unless required by
applicable law (Proposal 8(d)); and (v) grant voting rights based on the dollar
amount of a shareholder's investment in a Portfolio. As you consider each
proposal, please review the text of the proposed amendments set forth in Exhibit
D.
In several cases, the proposed amendments give the Trustees more
flexibility and, subject to applicable requirements of the 1940 Act and
Massachusetts law, broader authority to act. In other cases, the proposed
amendment merely confirms and clarifies the Trustees' ability to take
15
<PAGE>
certain action already permitted them under the Declaration of Trust in its
current form. The increased flexibility provided by the proposed amendments may
allow the Trustees to react more quickly to changes in competitive and
regulatory conditions and, as a consequence, may allow the Fund to operate in a
more efficient and economical manner. Adoption of the proposed amendments will
not alter in any way the Trustees' existing fiduciary obligations to act with
due care and in the interest of shareholders.
Proposals 8(a) and 8(b) - Consolidation or Merger of the Fund or a
Portfolio or Transfer of the Fund's or a Portfolio's Assets. The Declaration of
Trust does not contain an express provision regarding the reorganization or
merger of the Fund or any Portfolio into another trust or a corporation,
partnership, limited liability company or similar entity. Subject to applicable
state and federal law, certain powers of the Trustees under the Declaration of
Trust may be construed to allow the Trustees to reorganize or merge the Fund or
any Portfolio in this manner without shareholder approval. In order that this
power be expressly stated in the Declaration of Trust, the Trustees have
approved certain amendments to the Declaration of Trust which are being
submitted for shareholder approval separately as Proposals 8(a) and 8(b).
Under Proposal 8(a), the shareholders of all Portfolios are being asked to
approve an amendment to the Declaration of Trust that would expressly permit a
majority of Trustees then in office to approve (i) the consolidation or merger
of the Fund or any Portfolio created after the date on which shareholders
approve Proposal 8(a) into another trust or a corporation, partnership, limited
liability company or similar entity (or series thereof) or (ii) the transfer of
a substantial portion of the assets by the Fund or any Portfolio created after
the date on which shareholders approve Proposal 8(a) to another trust or a
corporation, partnership, limited liability company or similar entity (or series
thereof). Because it affects the Fund as a whole, Proposal 8(a) requires the
approval of a majority of the shares of the Fund outstanding and entitled to
vote (all Portfolios voting together as a single class).
Under Proposal 8(b), the shareholders of each Portfolio are being asked to
approve an amendment to the Declaration of Trust that would expressly permit a
majority of Trustees then in office to approve (i) the consolidation or merger
of their Portfolio into another trust or a corporation, partnership, limited
liability company or similar entity (or series thereof) or (ii) the transfer of
a substantial portion of the assets by their Portfolio to another trust or a
corporation, partnership, limited liability company or similar entity (or series
thereof). Proposal 8(b) is being considered separately by shareholders of each
Portfolio; the votes cast on Proposal 8(b) by shareholders of one Portfolio
will, therefore, determine only whether the amendment is approved with respect
to that Portfolio.
Although the Trustees have no present intention of reorganizing the Fund or
any Portfolio, they may determine at some point in the future that a
reorganization would be in the interest of the Fund or one or more Portfolios.
For example, to reduce the cost and scope of state and regulatory constraints or
to take advantage of more favorable tax treatment offered by another state, the
Trustees may determine that it would be in shareholders' interest to reorganize
the Fund to domicile it in another state or to change its legal form.
Alternatively, the Trustees may determine at some future point that the Fund or
a Portfolio has insufficient assets to invest effectively or has excessively
high expense levels. Under such circumstances, and absent other
16
<PAGE>
viable alternatives, the Trustees may determine that reorganizing the Fund or a
Portfolio into a successor entity that would be able to invest effectively or
would be able to operate at acceptable expense levels following reorganization
is in the interest of shareholders. In each case, the Trustees believe that it
would be in the interest of shareholders for the Fund or a Portfolio to take the
necessary action without the delay and expense associated with a shareholder
meeting.
In each instance, whether under the current Declaration of Trust or under
the Declaration of Trust as amended, the Trustees have a fiduciary
responsibility to first determine that a proposed reorganization is in the
interest of the affected shareholders. Any exercise of this power is also
subject to any applicable requirements of the 1940 Act and Massachusetts law.
In the event that shareholders do not approve Proposal 8(a) or shareholders
of a Portfolio do not approve Proposal 8(b), the Declaration of Trust will
remain unchanged in that respect, and the Trustees will consider what action, if
any, should be taken.
Proposal 8(c) - Electronic and Telephonic Voting. The Fund's Declaration of
Trust does not expressly address the manner in which proxies may be given by
shareholders. The proposed amendment will expressly permit proxies to be given
orally or by any computerized, telephonic or mechanical data gathering process
which, should the Trustees choose to authorize these methods of voting in any
particular instance, would offer shareholders greater flexibility to cast their
votes by phone or over the Internet in addition to using written proxies.
In the event that the amendment to the Declaration of Trust to allow
shareholders to give proxies orally or in writing or pursuant to any
computerized, telephonic or mechanical data gathering process is not approved by
shareholders of the Fund, the Declaration of Trust will remain unchanged in this
respect and the Trustees will consider what action, if any, should be taken.
Proposal 8(d) - Amendments. The Fund's Declaration of Trust generally
requires the approval of the holders of a majority of the outstanding shares of
the Fund (or series or class of shares on matters only affecting such series or
class) to amend the Declaration of Trust. To enable the Fund to be more flexible
in the operation of its Portfolios and to respond quickly and favorably to
changing markets without going to the expense and delay of holding a meeting of
shareholders, the Trustees are seeking shareholder approval of an amendment to
the Declaration of Trust that would permit amendments to the Fund's Declaration
of Trust at any time by vote of a majority of the Trustees then in office unless
shareholder approval is required by applicable law. Except for the proposed
amendments referred to in Proposals 8(a) through 8(c) and Proposal 8(e), the
Trustees have no present intention of recommending any amendments to the Fund's
Declaration of Trust. As discussed above, such increased authority remains
subordinate to the Trustees' continuing fiduciary obligations to act with due
care and in the interest of shareholders.
In the event that the proposed amendment regarding amendments to the
Declaration of Trust is not approved by shareholders of the Fund, the
Declaration of Trust will remain unchanged in this respect and the Trustees will
consider what action, if any, should be taken.
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<PAGE>
Proposal 8(e) - Dollar-based Voting Rights. The Declaration of Trust
currently provides for share-based voting rights. `Share-based voting rights'
means that each Fund share is entitled to one vote. When a fund has multiple
portfolios something your Fund now has - the share prices of the portfolios
differ. If voting is share-based, owners of lower priced shares have a greater
amount of influence on matters submitted to a shareholder vote than shareholders
holding an equivalent amount of higher priced shares. The proposed amendment
replaces share-based voting rights with dollar-based voting rights.
>Dollar-based voting rights' entitle each shareholder to one vote for each
dollar of net asset value held by that shareholder regardless of the number of
shares held. Under dollar-based voting rights, a shareholder's voting power is
in direct proportion to the shareholder's investment in the Fund or a Portfolio.
The Example below illustrates the relative effects of each system of voting
rights.
Example:
<TABLE>
<CAPTION>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Net Asset Value Per Number of Shares Held Share-Based Votes Dollar-Based Votes
Share
<S> <C> <C> <C> <C>
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Portfolio A $1.00 100 100 100
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Portfolio B $10.00 100 100 1,000
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>
In the event that the proposed amendment regarding dollar-based voting is
not approved by shareholders of the Fund, the Declaration of Trust will remain
unchanged in this respect and the Trustees will consider what action, if any,
should be taken. Even if the proposed amendment regarding dollar-based voting is
approved by shareholders at this Meeting, there is no assurance that
dollar-based voting will be implemented by the time of the holding of the next
meeting of shareholders.
Please read the text of the proposed amendments in Exhibit D. The
description in this Proxy Statement of the amendments is only a summary of the
proposed changes.
If approved by shareholders, Articles of Amendment to the Fund's
Declaration of Trust reflecting the changes so approved will be executed and
filed in Massachusetts. After that filing becomes effective, a Restated
Declaration of Trust that only restates and integrates the provisions of the
articles as theretofore amended will also be executed and filed in the
Commonwealth.
The Board of Trustees unanimously recommends that shareholders vote "For"
approval of the amendments to the Fund's Declaration of Trust.
OTHER INFORMATION
Voting Information and Discretion of the Persons Named as Proxies. While
the Meeting is called upon to act upon any other business that may properly come
before it, at the date of this Proxy Statement the only business which the
management intends to present or knows that others will present is the business
mentioned in the Notice of Meeting. If any other matters lawfully come before
the Meeting, and in all procedural matters at the Meeting, it is the intention
that the enclosed proxy shall be voted in accordance with the best judgment of
the attorneys named therein, or their substitutes, present and acting at the
Meeting.
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<PAGE>
If at the time any session of the Meeting is called to order a quorum is
not present, in person or by proxy, the persons named as proxies may vote those
proxies which have been received to adjourn the Meeting to a later date. In the
event that a quorum is present but sufficient votes in favor of one or more of
the Proposals have not been received, the persons named as proxies may propose
one or more adjournments of the Meeting to permit further solicitation of
proxies with respect to any such Proposal. All such adjournments will require
the affirmative vote of a majority of the shares present in person or by proxy
at the session of the Meeting to be adjourned. The persons named as proxies will
vote those proxies which they are entitled to vote in favor of the Proposal, in
favor of such an adjournment, and will vote those proxies required to be voted
against the Proposal, against any such adjournment. A vote may be taken on one
or more of the Proposals in this Proxy Statement prior to any such adjournment
if sufficient votes for its approval have been received and it is appropriate.
Any adjourned session or sessions may be held within 90 days after the date set
for the original Meeting without the necessity of further notice.
Submission of Proposals for the Next Annual Meeting of the Fund. Under the
Fund's Agreement and Declaration of Trust and By-Laws, annual meetings of
shareholders are not required to be held unless necessary under the 1940 Act
(for example, when fewer than a majority of the Trustees have been elected by
shareholders). Therefore, the Fund does not hold shareholder meetings on an
annual basis. A shareholder proposal intended to be presented at any meeting
hereafter called should be sent to the Fund at 575 Lexington Avenue, New York,
New York 10022, and must be received by the Fund within a reasonable time before
the solicitation relating thereto is made in order to be included in the notice
or proxy statement related to such meeting. The submission by a shareholder of a
proposal for inclusion in a proxy statement does not guarantee that it will be
included. Shareholder proposals are subject to certain regulations under federal
securities law.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. IF YOU DO NOT EXPECT TO
ATTEND THE MEETING, PLEASE SIGN YOUR PROXY CARD PROMPTLY AND RETURN IT IN THE
ENCLOSED ENVELOPE TO AVOID UNNECESSARY EXPENSE AND DELAY. NO POSTAGE IS
NECESSARY.
By Order of the Board of Trustees,
Stephen A. Bornstein
Secretary
<PAGE>
EXHIBIT A
FORM OF
AMENDED AND RESTATED
INVESTMENT ADVISORY AGREEMENT
THE BEAR STEARNS FUNDS
575 Lexington Avenue
New York, New York 10022
_______ __, 2000
Bear Stearns Asset Management Inc.
575 Lexington Avenue
New York, New York 10022
Dear Sirs:
The above-named investment company (the "Fund"), with respect to the series
named on Schedule 1 hereto, as such Schedule may be revised from time to time
(each, a "Series"), herewith confirms its agreement with you as follows:
The Fund desires to employ its capital by investing and reinvesting the
same in investments of the type and in accordance with the limitations specified
in its charter documents and in its offering documents (Part A and Part B) as
from time to time in effect, copies of which have been or will be submitted to
you, and in such manner and to such extent as from time to time may be approved
by the Fund's Board. The Fund desires to employ you to act as its investment
adviser.
You may render services through your own employees or the employees of one
or more affiliated companies that are qualified to act as an investment adviser
to the Fund under applicable laws and are under your common control as long as
all such persons are functioning as part of an organized group of persons, and
such organized group of persons, with respect to the services used by the Fund,
is managed at all times by your authorized officers. It is also understood that
you may from time to time, subject to the approval by the Fund's Board and
shareholders of the Series, as necessary, employ or associate yourself with such
person or persons as you may believe to be particularly fitted to assist you in
the performance of this Agreement. You will be as fully responsible to the Fund
for the acts and omissions of such persons as you are for your own acts and
omissions. The compensation of such person or persons shall be paid by you and
no obligation may be incurred on the Fund's behalf in any such respect.
Subject to the supervision and approval of the Fund's Board, you will
provide investment management of each Series' portfolio in accordance with such
Series' investment objectives and policies as stated in the Fund's offering
documents (Part A and Part B) as from time to time in effect. In connection,
therewith, you will obtain and provide investment research and will supervise
each Series'
<PAGE>
investments and conduct a continuous program of investment, evaluation and, if
appropriate, sale and reinvestment of such Series assets. You will furnish to
the Fund such statistical information, with respect to the investments which a
Series may hold or contemplate purchasing, as the Fund may reasonably request.
The Fund wishes to be informed of important developments materially affecting
each Series' portfolio and shall expect you, on your own initiative, to furnish
to the Fund from time to time such information as you may believe appropriate
for this purpose.
You shall exercise your best judgment in rendering the services to be
provided to the Fund hereunder, and the Fund agrees as an inducement to your
undertaking the same that neither you nor any Sub-Investment Adviser shall be
liable hereunder for any error of judgment or mistake of law or for any loss
suffered by one or more Series, provided that nothing herein shall be deemed to
protect or purport to protect you or any Sub-Investment Adviser against any
liability to the Fund or a Series or to its security holders to which you would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of your duties hereunder or by reason of your
reckless disregard of your obligations or duties hereunder (hereinafter
"Disabling Conduct") or to which any Sub-Investment Adviser would otherwise be
subject by reason of Disabling Conduct.
In consideration of services rendered pursuant to this Agreement, the Fund
will pay you on the first business day of each month a fee at the rate set forth
on Schedule 1 hereto or will pay you in accordance with the methodology
described on additional Schedules hereto. Net asset value shall be computed on
such days and at such time or times as described in the Fund's then-current Part
A and Part B. The fee for the period from the date of execution of this
Agreement to the end of the month during which this Agreement has been executed
shall be pro-rated according to the proportion which such period bears to the
full monthly period, and upon any termination of this Agreement before the end
of any month, the fee for such part of a month shall be pro-rated according to
the proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of each
Series' net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of each Series' net assets.
You will bear all expenses in connection with the performance of your
services under this Agreement and will pay all fees of any Sub-Investment
Adviser in connection with its duties in respect of a Series. All other expenses
to be incurred in the operation of the Fund (other than those to be borne by a
Sub-Investment Adviser, if any) will be borne by the Fund, except to the extent
specifically assumed by you. The expenses to be borne by the Fund include,
without limitation, the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees of Board members, Securities and
Exchange Commission fees, state Blue Sky qualification fees, advisory,
administration and fund accounting fees, charges of custodians, transfer and
dividend disbursing agents fees, certain insurance premiums, insurance coverage
against credit defaults and similar losses on securities held in a participating
Series' money market fund investment portfolio, industry association fees,
outside auditing and legal expenses, costs of independent pricing services,
costs of maintaining a Series' existence, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs of preparing and printing prospectuses and statements of additional
information for regulatory purposes and for
2
<PAGE>
distribution to existing shareholders, costs of shareholders' reports and
meetings, and any extraordinary expenses.
The Fund understands that you now act, and that from time to time hereafter
you may act, as investment adviser to one or more other investment companies and
fiduciary or other managed accounts, and the Fund has no objection to your so
acting, provided that when the purchase or sale of securities of the same issuer
is suitable for the investment objectives of two or more companies or accounts
managed by you which have available funds for investment, the available
securities will be allocated in a manner believed by you to be equitable to each
company or account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by one or more Series or the size of
the position obtainable for or disposed of by one or more Series.
In addition, it is understood that the persons employed by you to assist in
the performance of your duties hereunder will not devote their full time to such
service and nothing contained herein shall be deemed to limit or restrict your
right or the right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
Any person, even though also your officer, director, partner, employee or
agent, who may be or become an officer, Board member, employee or agent of the
Fund, shall be deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as your officer, director, partner, employee, or agent or one under
your control or direction even though paid by you.
You shall place all orders for the purchase and sale of portfolio
securities for a Series with brokers or dealers selected by you, which may
include brokers or dealers affiliated with you to the extent permitted by the
Investment Company Act of 1940, as amended (the "1940 Act") and the Fund's
policies and procedures applicable to the Series. You shall use your best
efforts to seek to execute portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the most favorable to a
Series. In assessing the best overall terms available for any transaction, you
shall consider all factors you deem relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, research services provided to you,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall you be under any duty
to obtain the lowest commission or the best net price for any Series on any
particular transaction, nor shall you be under any duty to execute any order in
a fashion either preferential to any Series relative to other accounts managed
by you or otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to you and/or the other accounts over which you exercise
investment discretion. You are authorized to pay a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for a Series which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if you
determine in good faith that the total commission is reasonable in relation to
the value of the brokerage and research services provided by such broker or
dealer, viewed in terms of either that particular transaction or your overall
responsibilities with respect to accounts over which you exercise
3
<PAGE>
investment discretion. You shall report to the Board of Trustees of the Fund
regarding any overall commissions paid by a Series and their reasonableness in
relation to their benefits to the Series. Any transactions for a Series that are
effected through an affiliated broker-dealer on a national securities exchange
of which such broker-dealer is a member will be effected in accordance with
Section 11(a) of the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder. Each Series hereby authorizes any such
broker or dealer to retain commissions for effecting such transactions and to
pay out of such retained commissions any compensation due to others in
connection with effectuating those transactions.
In executing portfolio transactions for a Series, you may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other portfolios
or its other clients if, in your reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the Series, taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in the Fund's registration statement and the Series'
Prospectus and Statement of Additional Information. In such event, you will
allocate the securities so purchased or sold, and the expenses incurred in the
transaction, in an equitable manner, consistent with your fiduciary obligations
to the Series and such other clients.
The Fund will indemnify you and any Sub-Investment Adviser, your officers,
directors, employees and agents (each, an "indemnitee") against, and hold each
indemnitee harmless from, any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses) not resulting from
Disabling Conduct by the indemnitee. Indemnification shall be made only
following: (i) a final decision on the merits by a court or other body before
whom the proceeding was brought that the indemnitee was not liable by reason of
Disabling Conduct or (ii) in the absence of such a decision, a reasonable
determination, based upon a review of the facts, that the indemnitee was not
liable by reason of Disabling Conduct by (a) the vote of a majority of a quorum
of Board members who are neither "interested persons" of the Fund nor parties to
the proceeding ("disinterested non-party Board members") or (b) an independent
legal counsel in a written opinion. Each indemnitee shall be entitled to
advances from the Fund for payment of the reasonable expenses incurred by it in
connection with the matter as to which it is seeking indemnification in the
manner and to the fullest extent permissible under the New York Business
Corporation Law. Each indemnitee shall provide to the Fund a written affirmation
of its good faith belief that the standard of conduct necessary for
indemnification by the Fund has been met and a written undertaking to repay any
such advance if it should ultimately be determined that the standard of conduct
has not been met. In addition, at least one of the following additional
conditions shall be met: (a) the indemnitee shall provide security in form and
amount acceptable to the Fund for its undertaking; (b) the Fund is insured
against losses arising by reason of the advance; or (c) a majority of a quorum
of disinterested non-party Board members, or independent legal counsel, in a
written opinion, shall have determined, based on a review of facts readily
available to the Fund at the time the advance is proposed to be made, that there
is reason to believe that the indemnitee will ultimately be found to be entitled
to indemnification. No provision of this Agreement shall be construed to protect
any Board member or officer of the Fund, or any indemnitee, from liability in
violation of Sections 17(h) and (i) of the 1940 Act.
As to each Series, this Agreement shall become effective upon its
execution, shall remain in force for a period of two (2) years from that date
and thereafter shall continue automatically for
4
<PAGE>
successive annual periods, provided such continuance is specifically approved at
least annually by (i) the Fund's Board; or (ii) vote of a majority (as defined
in the 1940 Act) of such Series' outstanding voting securities, provided that in
either event its continuance also is approved by a majority of the Fund's Board
members who are not "interested persons" (as defined in the 1940 Act) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. As to each Series, this Agreement is
terminable without penalty, on 60 days' notice, by the Fund's Board or by vote
of holders of a majority of such Series' shares or, upon not less than 90 days'
notice, by you. This Agreement also will terminate automatically, as to the
relevant Series, in the event of its assignment (as defined in the 1940 Act).
The Fund recognizes that from time to time your directors, officers and
employees may serve as trustees, directors, partners, officers and employees of
other business trusts, corporations, partnerships or other entities (including
other investment companies), and that such other entities may include the name
"Bear Stearns" as part of their name, and that your corporation or its
affiliates may enter into investment advisory or other agreements with such
other entities. If you cease to act as the Fund's investment adviser, the Fund
agrees that, at your request, the Fund will take all necessary action to change
the name of the Fund to a name not including "Bear Stearns" in any form or
combination of words.
This Agreement has been executed on behalf of the Fund by the
undersigned officer of the Fund in his capacity as an officer of the Fund. The
obligations of this Agreement shall only be binding upon the assets and property
of the relevant Series and shall not be binding upon any Board member, officer
or shareholder of the Fund individually.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
THE BEAR STEARNS FUNDS
By:_______________________
Accepted:
BEAR STEARNS ASSET MANAGEMENT INC.
By:_______________________________
5
<PAGE>
SCHEDULE 1
Name of Series Annual Fee as a Percentage
of Average Daily Net Assets
Prime Money Market Portfolio 0.20%
Balanced Portfolio 0.65%
High Yield Total Return Portfolio 0.60%
International Equity Portfolio 1.00%
S&P STARS Portfolio 0.75%
Focus List Portfolio 0.65%
Large Cap Value Portfolio 0.75%
Small Cap Value Portfolio 0.75%
Income Portfolio 0.45%
Emerging Markets Debt Portfolio Asset level up to $50 million, 1.00%;
asset level more than $50 million up to
$100 million, 0.85%; asset level more
than $100 million, 0.55%
The Insiders Select Fund See Schedule 2
<PAGE>
SCHEDULE 2
Insiders Select Fund
The Fund will pay you, at the end of each month, a monthly advisory fee
calculated at an annual rate of 1.0% of the Series' average daily net assets
during such month (the "Basic Fee"). The Basic Fee will be adjusted each month
(the "Monthly Performance Adjustment") depending on the extent to which the
investment performance of the Class of shares expected to bear the highest total
Series operating expenses (as such Class from time to time may be designated by
the Fund's Board, the "Designated Class"), reflecting the deduction of expenses,
exceeds or is exceeded by the percentage change in the investment record of the
Standard & Poor's MidCap 400 Index (the "MidCap 400") for the immediately
preceding twelve calendar months on a rolling basis. The rate of the Monthly
Performance Adjustment may increase or decrease the fee payable to you by up to
.50% per annum of the Series' average daily net assets.
The performance of the Designated Class during a performance period will be
calculated by first determining the change in the Class' net asset value per
share during the period, assuming the reinvestment of distributions during that
period, and then expressing this amount as a percentage of the net asset value
per share at the beginning of the period. The performance of the MidCap 400
during a performance period is calculated as the sum of the change in the level
of the index during the period, plus the value of any dividends or distributions
made by the companies whose securities comprise the index accumulated to the end
of the period.
The total advisory fee, payable by the Fund to you at the end of each
calendar month, will be equal to the Basic Fee for the month adjusted upward or
downward for the month by the Monthly Performance Adjustment for the month. The
monthly advisory fee will be calculated as follows: (1) one-twelfth of the 1%
annual basic fee rate will be applied to the Series' average daily net assets
over the most recent calendar month, giving a dollar amount which will be the
Basic Fee for that month; (2) one-twelfth of the applicable performance
adjustment fee rate from the table below will be applied to the Series' average
daily net assets over the most recent month, giving a dollar amount which will
be the Monthly Performance Adjustment; and (3) the Monthly Performance
Adjustment will then be added to or subtracted from the Basic Fee and the result
will be the amount payable by the Fund to you as the total advisory fee for that
month.
<PAGE>
The full range of permitted fees on an annualized basis is as follows:
<TABLE>
<CAPTION>
Percentage Point Difference Between Designated
Class' Performance (Net of Expenses Including Performance
Advisory Fees) and Percentage Change in the Basic Fee on Average Adjustment
MidCap 400 Investment Record Daily Net Assets (%) Rate (%) Total Fee (%)
---------------------------- ----------- ------------ -------------
<S> <C> <C> <C>
+3.00 percentage points or more.............................. 1.00% 0.50% 1.50%
+2.75 percentage points or more but less
less than + 3.00 percentage points........................ 1.00% 0.40% 1.40%
+2.50 percentage points or more but less
than + 2.75 percentage points............................. 1.00% 0.30% 1.30%
+2.25 percentage points or more but less
than + 2.50 percentage points............................. 1.00% 0.20% 1.20%
+2.00 percentage points or more but less
than + 2.25 percentage points............................. 1.00% 0.10% 1.10%
Less than + 2.00 percentage points but more
than -2.00 percentage points.............................. 1.00% 0.00% 1.00%
- -2.00 percentage points or less but more
than -2.25 percentage points.............................. 1.00% -0.10% 0.90%
- -2.25 percentage points or less but more
than -2.50 percentage points.............................. 1.00% -0.20% 0.80%
- -2.50 percentage points or less but more
than -2.75 percentage points............................... 1.00% -0.30% 0.70%
- -2.75 percentage points or less but more
than -3.00 percentage points.............................. 1.00% -0.40% 0.60%
- -3.00 percentage points or less.............................. 1.00% -0.50% 0.50%
</TABLE>
Performance will be measured over a rolling 12-month period based on the
fiscal year.
<PAGE>
EXHIBIT B
FORM OF
SUB-INVESTMENT ADVISORY AGREEMENT
BEAR STEARNS ASSET MANAGEMENT INC.
575 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
_________ _, 2000
Marvin & Palmer Associates, Inc.
1201 N. Market Street-Suite 2300
Wilmington, Delaware 19801-1165
Dear Sirs:
As you are aware, each Series of The Bear Stearns Funds (the "Fund")
desires to employ its capital by investing and reinvesting the same in
investments of the type and in accordance with the limitations specified in its
charter documents and in its Prospectus and Statement of Additional Information
as from time to time in effect, copies of which have been or will be submitted
to you, and in which manner and to such extent as from time to time may be
approved by the Fund's Board of Trustees (the "Board"). The Fund intends to
employ us (the "Adviser") to act as its investment adviser pursuant to a written
agreement (the "Investment Advisory Agreement"), a copy of which has been
provided to you. The Adviser desires to employ you to act as the sub-investment
adviser to the International Equity Portfolio (the "Series").
In this connection, it is understood that from time to time you will employ
or associate with yourself such person or persons as you may believe to be
particularly fitted to assist you in the performance of this Agreement. Such
person or persons shall be officers or employees who are employed by you or the
Fund. The compensation of such person or persons shall be paid by you and no
obligation shall be incurred on the Fund's behalf in any such respect.
Subject to the supervision and approval of the Adviser, you will provide
investment management of the Series' portfolio in accordance with the Series'
investment objectives and policies as stated in its Prospectus and Statement of
Additional Information as from time to time in effect. In connection therewith,
you will supervise the Series' investments and conduct a continuous program of
investment, evaluation and, if appropriate, sales and reinvestment of the
Series' assets. You will furnish to the Adviser or the Fund such statistical
information, with respect to the investments which the Series may hold or
contemplate purchasing, as the Adviser or the Fund may reasonably request. The
Fund and the Adviser wish to be informed of important developments materially
affecting the Series' portfolio and shall expect you, on your own initiative, to
furnish to the Fund or the Adviser from time to time such information as you may
believe appropriate for this purpose.
<PAGE>
You shall exercise your best judgment in rendering the services to be
provided hereunder, and, to the extent provided in the Investment Advisory
Agreement, the Fund has agreed as an inducement to your undertaking the same
that you shall not be liable hereunder for any error of judgment or mistake of
law or for any loss suffered by the Fund, provided that nothing herein shall be
deemed to protect or purport to protect you against any liability to the
Adviser, the Fund or the Fund's security holders to which you would otherwise be
subject by reasons of willful misfeasance, bad faith or gross negligence in the
performance of your duties hereunder, or by reason of your reckless disregard of
your obligations and duties hereunder.
In consideration of services rendered pursuant to this Agreement, the
Adviser will pay you, in arrears, by the twentieth day of each month, a fee
calculated as set forth on Schedule 1 hereto.
Net asset value shall be computed on such days and at such time or times as
described in the Series' then-current Prospectus and Statement of Additional
Information. The fee for the period from the date of execution of this Agreement
to the end of the month during which this Agreement has been executed shall be
pro-rated according to the proportion which such period bears to the full
monthly period, and upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable within 10 business days of the date of termination of this Agreement.
For the purpose of determining fees payable to you, the value of the
Series' net assets shall be computed in the manner specified in the Fund's
charter documents for the computation of the value of the Series' net assets.
You will bear all of your expenses in connection with the performance of
your services under this Agreement. Except to the extent specifically assumed by
you, all expenses to be incurred in the operation of the Series (other than
those borne by the Adviser) will be borne by the Series, including, without
limitation, the following: organizational costs, taxes, interest, loan
commitment fees, interest and distributions paid on securities sold short,
brokerage fees and commissions, if any, fees and expenses of Board members,
Securities and Exchange Commission and state Blue Sky qualification fees,
advisory, administration, distribution and fund accounting fees, charges of
custodians, transfer and dividend disbursing agents' fees, fees paid pursuant to
a Rule 12b-1 Plan, certain insurance premiums, industry association fees,
outside auditing and legal expenses, costs of independent pricing services,
costs of maintaining the Series' existence, costs attributable to investor
services (including, without limitation, telephone and personnel expenses),
costs or shareholders' reports and meetings, and any extraordinary expenses.
The Adviser understands that you now act, and that from time to time
hereafter you may act, as investment adviser to one or more other investment
companies and fiduciary or other managed accounts, and the Adviser has no
objection to your so acting and continuing to so act pursuant to your current
agreements, provided that, during the term of this Agreement, (i) if you charge
a management fee to any other investment company with an investment objective
and policies comparable to that of the Series that is
2
<PAGE>
less than the fees as set forth in Schedule 1, you shall notify us and adjust
the fees for managing the Series to reflect such lower fee, and (ii) you shall
not enter any advisory relationship with any other investment company sponsored
or managed by someone other than the Adviser if that investment company has an
investment objective and policies comparable to that of the Series and a lower
overall fee structure.
In addition, it is understood that the persons employed by you to assist in
the performance of your duties hereunder will not devote their full time to such
services and nothing contained herein shall be deemed to limit or restrict your
right or the right of any of your affiliates to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
Any person, even though also your officer, director, partner, employee or
agent, who may be or become an officer, Board member, employee or agent of the
Fund, shall be deemed, when rendering services to the Fund or acting on any
business of the Fund, to be rendering such services to or acting solely for the
Fund and not as your officer, director, partner, employee, or agent or one under
your control or direction even though paid by you.
You shall place all orders for the purchase and sale of portfolio
securities for the Series with brokers or dealers selected by you, which may
include brokers or dealers affiliated with you or the Adviser to the extent
permitted by the Investment Company Act of 1940, as amended (the "1940 Act") and
the Fund's policies and procedures applicable to the Series. You shall use your
best efforts to seek to execute portfolio transactions at prices which, under
the circumstances, result in total costs or proceeds being the most favorable to
the Series. In assessing the best overall terms available for any transaction,
you shall consider all factors you deem relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, research services provided to you,
and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall you be under any duty
to obtain the lowest commission or the best net price for any Series on any
particular transaction, nor shall you be under any duty to execute any order in
a fashion either preferential to the Series relative to other accounts managed
by you or otherwise materially adverse to such other accounts.
In arranging for the execution of a particular transaction, you may select
brokers or dealers who also provide brokerage and research services (as those
terms are defined in Section 28(e) of the Securities Exchange Act of 1934) to
you and/or the other accounts over which you exercise investment discretion. You
are authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Series which is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if you determine in good faith
that the total commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or your overall responsibilities
with respect to accounts over which you exercise investment discretion. You
shall report to the Board of Trustees of the Fund regarding overall commissions
paid by the Series and their reasonableness in relation to their benefits to the
Series. Any transactions for the Series that are effected
3
<PAGE>
through a broker-dealer that is affiliated with the Adviser, on a national
securities exchange of which such broker-dealer is a member will be effected in
accordance with Section 11(a) of the Securities Exchange Act of 1934, as
amended, and the regulations promulgated thereunder. The Series hereby
authorizes any such broker or dealer to retain commissions for effecting such
transactions and to pay out of such retained commissions any compensation due to
others in connection with effectuating those transactions.
In executing portfolio transactions for the Series, you may, to the extent
permitted by applicable laws and regulations, but shall not be obligated to,
aggregate the securities to be sold or purchased with those of other portfolios
or your other clients if, in your reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the Series, taking into consideration
the advantageous selling or purchase price, brokerage commission and other
expenses, and trading requirements, and (ii) is not inconsistent with the
policies set forth in the Fund's registration statement and the Series'
Prospectus and Statement of Additional Information. In such event, you hereby
agree to allocate the securities so purchased or sold, and the expenses incurred
in the transaction, in an equitable manner, consistent with your fiduciary
obligations to the Series and such other clients. The Adviser recognizes that in
some cases this procedure may adversely affect the price paid or received by the
Series or the size of the position obtainable for or disposed of by the Series.
This Agreement shall become effective upon its execution, shall remain in
force for a period of two (2) years from that date and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Fund's Board or (ii) the vote
of a majority (as defined in the 1940 Act of the Fund's outstanding voting
securities, provided that in either event its continuance also is approved by a
majority of the Fund's Board members who are not "interested persons" (as
defined in said Act) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval. This Agreement is
terminable without penalty (i) by the Adviser upon 60 days' notice to you, (ii)
by the Fund's Board or by vote of the holders of a majority of the Series'
shares upon 60 days' notice to you, or (iii) by you upon not less than 90 days'
notice to the Fund and the Adviser. This Agreement also will terminate
automatically in the event of its assignment (as defined in said Act). In
addition, notwithstanding anything herein to the contrary, if the Investment
Advisory Agreement terminates for any reason, this Agreement shall terminate
effective upon the date the Investment Advisory Agreement terminates.
All assets of the Series' shall be maintained for safekeeping with the
Fund's custodian (and sub-custodian network) and you shall not have custody of
the assets of the Series. Each party hereto also represents and warrants that it
is duly authorized to enter this Agreement and has caused this Agreement to be
executed by a duly authorized representative.
If the foregoing is in accordance with your understanding, will you kindly
so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
BEAR STEARNS ASSET MANAGEMENT INC.
By:_______________________________________
Title:______________________________________
Accepted:
MARVIN & PALMER ASSOCIATES, INC.
By:__________________________
Title:_________________________
Attest:
By:___________________________
4
<PAGE>
SCHEDULE 1
In consideration of the services rendered pursuant to this Agreement, the
Adviser will pay to Marvin & Palmer Associates, Inc. a monthly payment
calculated on an annual basis as set forth below:
=========================================== ===============================
Portfolio's Average Annual Fee as a Percentage
Daily Net Assets at of Total Average Daily
Relevant Month-End Net Assets
=========================================== ===============================
Up to $25 million 0.00%
More than $25 million up to $50 million 0.20%
More than $50 million up to $65 million 0.45%
More than $65 million 0.60%
=========================================== ===============================
<PAGE>
EXHIBIT C-1
FORM OF
THE BEAR STEARNS FUNDS
AMENDED AND RESTATED
DISTRIBUTION PLAN
(CLASS A SHARES)
WHEREAS, The Bear Stearns Funds (the "Trust") engages in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of the Trust are divided into separate portfolios of
investments, each with different investment objectives and policies (each a
"Portfolio") and, in turn each Portfolio is divided into separate classes (each
a "Class");
WHEREAS, the Trust desires to adopt this Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act (the "Rule") with respect to each Class of
"A" Shares of each Portfolio listed on Schedule 1 annexed hereto;
WHEREAS, the public offering price for Class A Shares is the net asset
value that the Trust calculates after an order is placed plus the applicable
sales charge, all as described in the Trust's prospectuses or statement of
additional information on file with the Securities and Exchange Commission which
is part of the most recent registration statement effective from time to time
under the Securities Act of 1933, as amended;
WHEREAS, the Trust's Board has determined that there is a reasonable
likelihood that adoption of this Plan will benefit the Portfolios and their
shareholders; and
WHEREAS, the Trust employs Bear, Stearns & Co. Inc. (the "Distributor") as
Distributor of the Portfolios' shares (the "Shares") pursuant to a Distribution
Agreement dated February 22, 1995.
NOW, THEREFORE, the Trust hereby adopts, and the Distributor hereby agrees
to the terms of, this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. (a) Each Portfolio shall pay the Distributor for distributing its
Class "A" Shares a monthly fee at the annual rate set forth on
Schedule 1.
(b) The Distributor may pay one or more third parties a fee in
respect of any Class "A" Shares owned by investors for whom the
third party is the dealer or holder of record. The Distributor
shall determine the amounts to be paid to such third parties and
the basis on which such payments will be made. Payments to a
third party are subject to compliance by the third party with the
terms of any related Plan agreement between the third party and
the Distributor.
(c) To the extent that any payments made by the Distributor, Bear
Stearns Funds Management Inc., Bear Stearns Asset Management Inc.
or any sub-adviser, directly
<PAGE>
or through an affiliate (in each case, from its own resources),
should be deemed to be indirect financing of any activity
primarily intended to result in the sale of Class "A" Shares
within the context of the Rule, then such payments shall be
deemed to be authorized by this Plan.
(d) For the purposes of determining the fees payable under this Plan,
the value of the net assets of the Class "A" Shares of each
Portfolio shall be computed in the manner specified in the
Trust's charter documents as then in effect for the computation
of the value of net assets.
2. The terms and provisions of this Plan shall be interpreted and defined in
a manner consistent with the provisions and definitions contained in (i)
the Act, (ii) the Rule and (iii) Section 2830 of the National Association
of Securities Dealers, Inc. Business Conduct Rules or its successor.
3. As to any Portfolio or its Class "A" Shares, this Plan shall not take
effect until it, together with any related agreement, has been approved
by vote of a majority of both (a) the Trust's Board and (b) those
Trustees who are not "interested persons" of the Trust (as defined by the
Act) and who have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Rule 12b-1
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on this Plan and such related agreements.
4. As to any Portfolio or its Class "A" Shares, as the case may be, this
Plan shall remain in effect for one year from the date on which the Plan
was first executed and shall continue in effect thereafter so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Trust's Board and the Board shall
review, at least quarterly, a written report of amounts paid hereunder
and the purposes for which they were made.
6. As to any Portfolio or its Class "A" Shares, as the case may be, this
Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of its outstanding voting
securities.
7. This Plan may not be amended to increase materially the amount of
compensation payable pursuant to paragraph 1 hereof unless such amendment
is approved by a vote of at least a majority (as defined in the Act) of
the outstanding voting securities of the relevant Portfolio or its Class
"A" Shares. No material amendment to the Plan shall be made unless
approved in the manner provided in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not
less than six years from the date of this Plan, any such agreement or any
such report, as the case may be, the first two years in an easily
accessible place.
2
<PAGE>
10. The name The Bear Stearns Funds is the designation of the Trustees for
the time being under an Agreement and Declaration of Trust dated
September 29, 1994, as amended from time to time, and all persons dealing
with the Trust must look solely to the property of the Trust for
enforcement of any claims against the Trust as neither the Trustees,
officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust.
IN WITNESS WHEREOF, the Trust, on behalf each Portfolio and its Class "A"
Shares, and the Distributor have executed this Plan as of the date set forth
below.
September 8, 1997;amended and restated February 10, 1999 and _________ __, 2000.
THE BEAR STEARNS FUNDS
By:_______________________
BEAR, STEARNS & CO. INC.
By: _______________________
3
<PAGE>
SCHEDULE 1
Name of Series Class "A" Shares *
- -------------- ----------------
S&P STARS Portfolio 0.25%
Large Cap Value Portfolio 0.25%
Small Cap Value Portfolio 0.25%
Income Portfolio 0.10%
The Insiders Select Fund 0.25%
Focus List Portfolio 0.25%
Balanced Portfolio 0.25%
High Yield Total Return Portfolio 0.10%
International Equity Portfolio 0.25%
Emerging Markets Debt Portfolio 0.10%
- ------------------------
Schedule I amended and restated as of __________ ___, 2000.
* Annual Fee as a Percentage of Average Daily Net Assets.
<PAGE>
EXHIBIT C-2
FORM OF
THE BEAR STEARNS FUNDS
AMENDED AND RESTATED
DISTRIBUTION PLAN
(CLASS "B" SHARES)
WHEREAS, The Bear Stearns Funds (the "Trust") engages in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of the Trust are divided into separate portfolios of
investments, each with different investment objectives and policies (each a
"Portfolio") and, in turn each Portfolio is divided into separate classes (each
a "Class");
WHEREAS, the Trust desires to adopt this Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act (the "Rule") with respect to each Class of
"B" Shares of each Portfolio listed on Schedule 1 annexed hereto;
WHEREAS, the public offering price for Class B Shares is the net asset
value that the Trust calculates after an order is placed with no initial sales
charge, but subject to a contingent deferred sales charge if the shares are sold
within six years of purchase, all as described in the Trust's prospectuses or
statement of additional information on file with the Securities and Exchange
Commission which is part of the most recent registration statement effective
from time to time under the Securities Act of 1933, as amended;
WHEREAS, the Trust's Board has determined that there is a reasonable
likelihood that adoption of this Plan will benefit the Portfolios and their
shareholders; and
WHEREAS, the Trust employs Bear, Stearns & Co. Inc. (the "Distributor") as
Distributor of the Portfolios' shares (the "Shares") pursuant to a Distribution
Agreement dated February 22, 1995.
NOW, THEREFORE, the Trust hereby adopts, and the Distributor hereby agrees
to the terms of, this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. (a) Each Portfolio shall pay the Distributor for distributing its
Class "B" Shares a monthly fee at the annual rate set forth on
Schedule 1.
(b) The Distributor may pay one or more third parties a fee in
respect of any Class "B" Shares owned by investors for whom the
third party is the dealer or holder of record. The Distributor
shall determine the amounts to be paid to such third parties and
the basis on which such payments will be made. Payments to a
third party are subject to compliance by the third party with the
terms of any related Plan agreement between the third party and
the Distributor.
<PAGE>
(c) To the extent that any payments made by the Distributor, Bear
Stearns Funds Management Inc., Bear Stearns Asset Management Inc.
or any sub-adviser, directly or through an affiliate (in each
case, from its own resources), should be deemed to be indirect
financing of any activity primarily intended to result in the
sale of Class "B" Shares within the context of the Rule, then
such payments shall be deemed to be authorized by this Plan.
(d) For the purposes of determining the fees payable under this Plan,
the value of the net assets of the Class "B" Shares of each
Portfolio shall be computed in the manner specified in the
Trust's charter documents as then in effect for the computation
of the value of net assets.
2. The terms and provisions of this Plan shall be interpreted and defined in
a manner consistent with the provisions and definitions contained in (i)
the Act, (ii) the Rule and (iii) Section 2830 of the National Association
of Securities Dealers, Inc. Business Conduct Rules or its successor.
3. As to any Portfolio or its Class "B" Shares, this Plan shall not take
effect until it, together with any related agreement, has been approved
by vote of a majority of both (a) the Trust's Board and (b) those
Trustees who are not "interested persons" of the Trust (as defined by the
Act) and who have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Rule 12b-1
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on this Plan and such related agreements.
4. As to any Portfolio or its Class "B" Shares, as the case may be, this
Plan shall remain in effect for one year from the date on which the Plan
was first executed and shall continue in effect thereafter so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Trust's Board and the Board shall
review, at least quarterly, a written report of amounts paid hereunder
and the purposes for which they were made.
6. As to any Portfolio or its Class "B" Shares, as the case may be, this
Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of its outstanding voting
securities.
7. This Plan may not be amended to increase materially the amount of
compensation payable pursuant to paragraph 1 hereof unless such amendment
is approved by a vote of at least a majority (as defined in the Act) of
the outstanding voting securities of the relevant Portfolio or its Class
"B" Shares. No material amendment to the Plan shall be made unless
approved in the manner provided in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
2
<PAGE>
9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not
less than six years from the date of this Plan, any such agreement or
any such report, as the case may be, the first two years in an easily
accessible place.
10. The name The Bear Stearns Funds is the designation of the Trustees for
the time being under an Agreement and Declaration of Trust dated
September 29, 1994, as amended from time to time, and all persons dealing
with the Trust must look solely to the property of the Trust for
enforcement of any claims against the Trust as neither the Trustees,
officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust.
IN WITNESS WHEREOF, the Trust, on behalf each Portfolio and its Class "B"
Shares, and the Distributor have executed this Plan as of the date set forth
below.
September 8, 1997; amended and restated February 10, 1999 and __________ ____
2000.
THE BEAR STEARNS FUNDS
By:_______________________
BEAR, STEARNS & CO. INC.
By: _______________________
3
<PAGE>
SCHEDULE 1
Name of Series Class "B" Shares *
- -------------- ----------------
S&P STARS Portfolio 0.75%
Large Cap Value Portfolio 0.75%
Small Cap Value Portfolio 0.75%
Income Portfolio 0.75%
The Insiders Select Fund 0.75%
Focus List Portfolio 0.75%
Balanced Portfolio 0.75%
High Yield Total Return Portfolio 0.75%
International Equity Portfolio 0.75%
Emerging Markets Debt Portfolio 0.75%
- ------------------------
Schedule I amended and restated as of __________ ___, 2000.
* Annual Fee as a Percentage of Average Daily Net Assets.
<PAGE>
EXHIBIT C-3
FORM OF
THE BEAR STEARNS FUNDS
AMENDED AND RESTATED
DISTRIBUTION PLAN
(Class "C" Shares)
WHEREAS, The Bear Stearns Funds (the "Trust") engages in business as an
open-end management investment company and is registered as such under the
Investment Company Act of 1940, as amended (the "Act");
WHEREAS, shares of the Trust are divided into separate portfolios of
investments, each with different investment objectives and policies (each a
"Portfolio") and, in turn each Portfolio is divided into separate classes (each
a "Class");
WHEREAS, the Trust desires to adopt this Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act (the "Rule") with respect to each Class of
"C" Shares of each Portfolio listed on Schedule 1 annexed hereto;
WHEREAS, the public offering price for Class C Shares is the net asset
value that the Trust calculates after an order is placed with no initial sales
charge, but subject to a contingent deferred sales charge if the shares are sold
within the first year of purchase, all as described in the Trust's prospectuses
or statement of additional information on file with the Securities and Exchange
Commission which is part of the most recent registration statement effective
from time to time under the Securities Act of 1933, as amended;
WHEREAS, the Trust's Board has determined that there is a reasonable
likelihood that adoption of this Plan will benefit the Portfolios and their
shareholders; and
WHEREAS, the Trust employs Bear, Stearns & Co. Inc. (the "Distributor") as
Distributor of the Portfolios' shares (the "Shares") pursuant to a Distribution
Agreement dated February 22, 1995.
NOW, THEREFORE, the Trust hereby adopts, and the Distributor hereby agrees
to the terms of, this Plan in accordance with Rule 12b-1 under the Act on the
following terms and conditions:
1. (a) Each Portfolio shall pay the Distributor for distributing its
Class "C" Shares a monthly fee at the annual rate set forth on
Schedule 1.
(b) The Distributor may pay one or more third parties a fee in
respect of any Class "C" Shares owned by investors for whom the
third party is the dealer or holder of record. The Distributor
shall determine the amounts to be paid to such third parties and
the basis on which such payments will be made. Payments to a
third party are subject to compliance by the third party with the
terms of any related Plan agreement between the third party and
the Distributor.
(c) To the extent that any payments made by the Distributor, Bear
Stearns Funds Management Inc., Bear Stearns Asset Management Inc.
or any sub-adviser, directly
<PAGE>
or through an affiliate (in each case, from its own resources),
should be deemed to be indirect financing of any activity
primarily intended to result in the sale of Class "C" Shares
within the context of the Rule, then such payments shall be
deemed to be authorized by this Plan.
(d) For the purposes of determining the fees payable under this Plan,
the value of the net assets of the Class "C" Shares of each
Portfolio shall be computed in the manner specified in the
Trust's charter documents as then in effect for the computation
of the value of net assets.
2. The terms and provisions of this Plan shall be interpreted and defined in
a manner consistent with the provisions and definitions contained in (i)
the Act, (ii) the Rule and (iii) Section 2830 of the National Association
of Securities Dealers, Inc. Business Conduct Rules or its successor.
3. As to any Portfolio or its Class "C" Shares, this Plan shall not take
effect until it, together with any related agreement, has been approved
by vote of a majority of both (a) the Trust's Board and (b) those
Trustees who are not "interested persons" of the Trust (as defined by the
Act) and who have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Rule 12b-1
Trustees") cast in person at a meeting (or meetings) called for the
purpose of voting on this Plan and such related agreements.
4. As to any Portfolio or its Class "C" Shares, as the case may be, this
Plan shall remain in effect for one year from the date on which the Plan
was first executed and shall continue in effect thereafter so long as
such continuance is specifically approved at least annually in the manner
provided for approval of this Plan in paragraph 3.
5. The Distributor shall provide to the Trust's Board and the Board shall
review, at least quarterly, a written report of amounts paid hereunder
and the purposes for which they were made.
6. As to any Portfolio or its Class "C" Shares, as the case may be, this
Plan may be terminated at any time by vote of a majority of the Rule
12b-1 Trustees or by a vote of a majority of its outstanding voting
securities.
7. This Plan may not be amended to increase materially the amount of
compensation payable pursuant to paragraph 1 hereof unless such amendment
is approved by a vote of at least a majority (as defined in the Act) of
the outstanding voting securities of the relevant Portfolio or its Class
"C" Shares. No material amendment to the Plan shall be made unless
approved in the manner provided in paragraph 3 hereof.
8. While this Plan is in effect, the selection and nomination of the
Trustees who are not interested persons (as defined in the Act) of the
Trust shall be committed to the discretion of the Trustees who are not
such interested persons.
9. The Trust shall preserve copies of this Plan and any related agreements
and all reports made pursuant to paragraph 5 hereof, for a period of not
less than six years from the date of
2
<PAGE>
this Plan, any such agreement or any such report, as the case may be, the
first two years in an easily accessible place.
10. The name The Bear Stearns Funds is the designation of the Trustees for
the time being under an Agreement and Declaration of Trust dated
September 29, 1994, as amended from time to time, and all persons dealing
with the Trust must look solely to the property of the Trust for
enforcement of any claims against the Trust as neither the Trustees,
officers, agents or shareholders assume any personal liability for
obligations entered into on behalf of the Trust.
IN WITNESS WHEREOF, the Trust, on behalf each Portfolio and its Class "C"
Shares, and the Distributor have executed this Plan as of the date set forth
below.
September 8, 1997; amended and restated February 10, 1999 and ________ ___2000.
THE BEAR STEARNS FUNDS
By:_______________________
BEAR, STEARNS & CO. INC.
By: _______________________
3
<PAGE>
SCHEDULE 1
Name of Series Class "C" Shares *
- -------------- ----------------
S&P STARS Portfolio 0.75%
Large Cap Value Portfolio 0.75%
Small Cap Value Portfolio 0.75%
Income Portfolio 0.75%
The Insiders Select Fund 0.75%
Focus List Portfolio 0.75%
Balanced Portfolio 0.75%
High Yield Total Return Portfolio 0.75%
International Equity Portfolio 0.75%
Emerging Markets Debt Portfolio 0.75%
- ------------------------
Schedule I amended and restated as of __________ ___, 2000.
* Annual Fee as a Percentage of Average Daily Net Assets.
<PAGE>
EXHIBIT D
THE BEAR STEARNS FUNDS
PROPOSED AMENDMENTS
TO THE FUND'S DECLARATION OF TRUST
The changes to the Declaration of Trust described in Proposals 8(a) through
8(e) are shown below. Where an existing provision will be amended, language to
be added is shown in boldface type and double underlined while language to be
deleted is shown in italic type surrounded by brackets.
Proposal 8(a) - to permit the Trustees to reorganize the Fund and any future
Portfolio without shareholder approval.
If shareholders approve this proposal, the following new section will be
added to Article IX of the Declaration of Trust:
"Section 9. Reorganization of Trust or Series Created After
[Insert Date of Shareholder Approval]. At any time, by vote of a
majority of the Trustees then in office, the Trust, or any one or more
series of Shares created after [insert date of shareholder approval],
may, either as the successor, survivor, or non-survivor, (1)
consolidate or merge with one or more other trusts, partnerships,
limited liability companies, associations or corporations (or series
of any of the foregoing) organized under the laws of The Commonwealth
of Massachusetts or any other state of the United States, to form a
consolidated or merged trust, partnership, limited liability company,
association or corporation (or series of any of the foregoing) under
the laws of which any one of the constituent entities is organized, or
(2) transfer a substantial portion of its assets to one or more other
trusts, partnerships, limited liability companies, associations or
corporations (or series of any of the foregoing) organized under the
laws of The Commonwealth of Massachusetts or any other state of the
United States, or have one or more such trusts, partnerships, limited
liability companies, associations or corporations (or series of any of
the foregoing) transfer a substantial portion of its assets to it, any
such consolidation, merger or transfer to be upon such terms and
conditions as are specified in an agreement and plan of reorganization
authorized and approved by the Trustees and entered into by the Trust,
or one or more of such series of Shares as the case may be, in
connection therewith."
<PAGE>
Proposal 8(b) - to permit the Trustees to reorganize an existing Portfolio
without shareholder approval.
To the extent approved by shareholders, the following new section will be
added to Article IX of the Declaration of Trust:
"Section 10. Certain Other Reorganizations. At any time, by vote
of a majority of the Trustees then in office, the series of Shares
designated as [name[s] of Portfolio[s] approving Proposal 8(b)], may,
either as the successor, survivor, or non-survivor, (1) consolidate or
merge with one or more other trusts, partnerships, limited liability
companies, associations or corporations (or series of any of the
foregoing) organized under the laws of The Commonwealth of
Massachusetts or any other state of the United States, to form a
consolidated or merged trust, partnership, limited liability company,
association or corporation (or series of any of the foregoing) under
the laws of which any one of the constituent entities is organized, or
(2) transfer a substantial portion of its assets to one or more other
trusts, partnerships, limited liability companies, associations or
corporations (or series of any of the foregoing) organized under the
laws of The Commonwealth of Massachusetts or any other state of the
United States, or have one or more such trusts, partnerships, limited
liability companies, associations or corporations (or series of any of
the foregoing) transfer a substantial portion of its assets to it, any
such consolidation, merger or transfer to be upon such terms and
conditions as are specified in an agreement and plan of reorganization
authorized and approved by the Trustees and entered into by one or
more of such series of Shares in connection therewith."
Proposal 8(c) - To permit electronic and telephonic voting.
If shareholders approve this proposal, the following changes will be made to
current Article V, Section 1 of the Declaration of Trust:
2
<PAGE>
"Section 1. Voting Powers. The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Article IV,
Section 1, of this Declaration of Trust; provided, however, that no
meeting of Shareholders is required to be called for the purpose of
electing Trustees unless and until such time as less than a majority
of the Trustees have been elected by the Shareholders, (ii) for the
removal of Trustees as provided in Article IV, Section 6, (iii) with
respect to any Manager as provided in Article IV, Section 5, (iv) with
respect to any amendment of this Declaration of Trust as provided in
Article IX, Section 8, (v) with respect to the termination of the
Trust or a series of Shares as provided in Article IX, Section 5, and
(vi) with respect to such additional matters relating to the Trust as
may be required by law, by this Declaration of Trust, or the By-laws
of the Trust or any registration of the Trust with the Commission or
any state, or as the Trustees may consider desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled
to vote (except that in the election of Trustees said vote may be cast
for as many persons as there are Trustees to be elected), and each
fractional Share shall be entitled to a proportionate fractional vote.
Notwithstanding any other provision of this Declaration of Trust, on
any matter submitted to a vote of Shareholders, all Shares of the
Trust then entitled to vote shall be voted in the aggregate as a
single class without regard to series or classes of Shares, except (i)
when required by the 1940 Act or when the Trustees shall have
determined that the matter affects one or more series or classes
differently Shares shall be voted by individual series or class and
(ii) when the Trustees have determined that the matter affects only
the interests of one or more series or classes then only Shareholders
of such series or classes shall be entitled to vote thereon. There
shall be no cumulative voting in the election of Trustees. Shares may
be voted in person or by proxy. [A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed by any
one of them, unless at or prior to exercise of the proxy the Trust
receives a specific written notice to the contrary from any one of
them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its
exercise and the burden of providing invalidity shall rest on the
challenger.] Proxies may be given by or on behalf of a Shareholder
orally or in writing or pursuant to any computerized, telephonic, or
mechanical data gathering process. A proxy with respect to Shares held
in the name of two or more persons shall be valid if executed or
otherwise given by or on behalf of any one of them unless at or prior
to exercise of the proxy the Trust receives a specific written notice
to the contrary from any one of them. A proxy purporting to be
executed or otherwise given by or on behalf of a Shareholder shall be
deemed valid unless challenged at or prior to its exercise and the
burden of proving invalidity shall rest on the challenger. Whenever no
Shares of any series or class are issued and outstanding, the Trustees
may exercise with respect to such series or class all rights of
Shareholders and may take any action required by law, this Declaration
of Trust or any By-Laws of the Trust to be taken by Shareholders."
3
<PAGE>
Proposal 8(d) - To permit the Trustees to amend the Declaration of Trust without
shareholder approval.
If shareholders approve this proposal, the following changes will be made to
current Article IX, Section 8 and to the first sentence of current Article V,
Section 1 of the Declaration of Trust:
"Section 8. Amendments. [This Declaration of Trust may be amended
at any time by an instrument in writing signed by a majority of the
then Trustees when authorized so to do by a vote of Shareholders
holding a majority of the Shares outstanding and entitled to vote,
except that an amendment which shall affect the holders of one or more
series or class of Shares but not the holders of all outstanding
series or classes of Shares shall be authorized by vote of the
Shareholders holding a majority of the Shares entitled to vote of the
series or classes affected and no vote of Shareholders of a series or
class not affected shall be required. Amendments having the purpose of
changing the name of the Trust or of supplying any omission, curing
any ambiguity or curing, correcting or supplementing any defective or
inconsistent provision contained herein shall not require
authorization by Shareholder vote]. The provisions of this Declaration
of Trust may be amended at any time by an instrument in writing signed
by a majority of the then Trustees (or by an officer of the Trust
pursuant to the vote of a majority of such Trustees). Any such
amendment to this Declaration of Trust need not be approved by
Shareholders unless such approval is required by applicable law. If
Shareholder approval of an amendment to this Declaration of Trust is
required by applicable law, such amendment may be adopted at any time
by an instrument in writing signed by a majority of the then Trustees
(or by an officer of the Trust pursuant to a vote of a majority of
such Trustees) when authorized to do so by the vote of Shareholders in
accordance with applicable law and Article V hereof. Subject to the
foregoing, any such amendment shall be effective as of any prior or
future time as provided in the instrument containing the terms of such
amendment or, if there is no provision therein with respect to
effectiveness, upon the execution of such instrument and of a
certificate (which may be a part of such instrument) executed by a
Trustee or officer of the Trust to the effect that such amendment has
been duly adopted."
Proposal 8(e) - To convert from share-based to dollar-based voting.
If shareholders approve this proposal, the following changes will be made to
current Article V, Section 1:
4
<PAGE>
"Section 1. Voting Powers. The Shareholders shall have power to
vote only (i) for the election of Trustees as provided in Article IV,
Section 1, of this Declaration of Trust; provided, however, that no
meeting of Shareholders is required to be called for the purpose of
electing Trustees unless and until such time as less than a majority
of the Trustees have been elected by the Shareholders, (ii) for the
removal of Trustees as provided in Article IV, Section 6, (iii) with
respect to any Manager as provided in Article IV, Section 5, (iv) with
respect to any amendment of this Declaration of Trust as provided in
Article IX, Section 8, (v) with respect to the termination of the
Trust or a series of Shares as provided in Article IX, Section 5, and
(vi) with respect to such additional matters relating to the Trust as
may be required by law, by this Declaration of Trust, or the By-laws
of the Trust or any registration of the Trust with the Commission or
any state, or as the Trustees may consider desirable. [Each whole
Share shall be entitled to one vote as to any matter on which it is
entitled to vote (except that in the election of Trustees said vote
may be cast for as many persons as there are Trustees to be elected),
and each fractional Share shall be entitled to a proportionate
fractional vote.] Each holder of Shares entitled to vote on a matter
submitted to a vote of Shareholders shall be entitled to one vote for
each dollar of net asset value standing in such holder?s name on the
books of the Trust with respect to such Shares (except that in the
election of Trustees said vote may be cast for as many persons as
there are Trustees to be elected).. . . [see the excerpt shown above
for Proposal 8(c) for the remainder of current Article V, Section 1]"@
WITNESS our hands this ____ day of ________ __, 2000.
[Signature lines]
<PAGE>
THE BEAR STEARNS FUNDS
INTERNATIONAL EQUITY PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Approval of an Amended and [ ] [ ] [ ]
Restated Investment
Sub-Advisory Agreement.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(International Equity Portfolio)
<PAGE>
KL2:2001683.2
THE BEAR STEARNS FUNDS
BALANCED PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to
Portfolio. N/A N/A N/A
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(f) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(g) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(h) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(i) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(j) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Balanced Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
FOCUS LIST PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box
below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
(f) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Focus List Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
SMALL CAP VALUE PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Approval of a modification of [ ] [ ] [ ]
a fundamental policy
concerning the issuance of
senior securities
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Small Cap Value Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
LARGE CAP VALUE PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Approval of a modification of [ ] [ ] [ ]
a fundamental policy
concerning the issuance of
senior securities
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Large Cap Value Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
THE INSIDERS SELECT FUND
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Approval of a modification of [ ] [ ] [ ]
a fundamental policy
concerning the issuance of
senior securities
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(The Insiders Select Fund)
<PAGE>
THE BEAR STEARNS FUNDS
S&P STARS PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Approval of a modification of [ ] [ ] [ ]
a fundamental policy
concerning the issuance of
senior securities
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(S&P STARS Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
EMERGING MARKET DEBT PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Emerging Markets Debt Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
HIGH YIELD TOTAL RETURN PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(High Yield Total Return Portfolio)
<PAGE>
THE BEAR STEARNS FUNDS
INCOME PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Approval of an Amended and [ ] [ ] [ ]
Restated Distribution Plan.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Approval of a modification of [ ] [ ] [ ]
a fundamental policy
concerning the issuance of
senior securities
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(IncomePortfolio)
<PAGE>
THE BEAR STEARNS FUNDS
PRIME MONEY MARKET PORTFOLIO
MEETING: APRIL 17, 2000 AT 10:30 AM
PROXY SOLICITED BY THE BOARD OF TRUSTEES
The undersigned holder of shares of the Portfolio referenced above hereby
appoints Frank J. Maresca, Vincent L. Pereira and Stephen A. Bornstein,
attorneys with full powers of substitution and revocation, to represent the
undersigned and to vote on behalf of the undersigned all shares of the Portfolio
that the undersigned is entitled to vote at the Special Meeting of Shareholders
of the Fund to be held at 575 Lexington Avenue, 9th Floor, New York, New York at
the date and time indicated above and at any adjournments thereof. The
undersigned hereby acknowledges receipt of the enclosed Notice of Special
Meeting and Proxy Statement and hereby instructs said attorneys and proxies to
vote said shares as indicated herein. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
Special Meeting. A majority of the proxies present and acting at the Special
Meeting in person or by substitute (or, if only one shall be so present, then
that one) shall have and may exercise all of the power and authority of said
proxies hereunder. The undersigned hereby revokes any proxy previously given.
Date: ______________________, 2000
PLEASE SIGN IN THE BOX BELOW
Please sign exactly as your name appears
on this Proxy. If Joint owners, EITHER
may sign the Proxy. When signing as
attorney, executor, administrator,
trustee, guardian or corporate officer,
please give your full title.
----------------------------------------
Signature(s) Title(s), if applicable
<PAGE>
NOTE: YOUR PROXY IS NOT VALID UNLESS IT IS SIGNED ON THE REVERSE SIDE
Please vote by filling in the appropriate box below.
Proposal: FOR ALL FOR ALL EXCEPT AS WITHHOLD ALL
MARKED BELOW
1. To elect Trustees of the Fund. [ ] [ ] [ ]
(1) Peter M. Bren, (2) Doni L. [ ] [ ] [ ]
Fordyce, (3) John S. Levy, (4)
Michael Minikes, (5) M. B.
Oglesby, Jr., (6) Robert E.
Richardson and (7) Robert M.
Steinberg. To withhold
authority to vote for any
individual nominee, print that
nominee's name on the line
below
------------------------------
------------------------------
FOR AGAINST ABSTAIN
2. Ratification of the selection [ ] [ ] [ ]
of Deloitte & Touche LLP as
the Fund's independent
auditors.
3. Approval of an Amended and [ ] [ ] [ ]
Restated Investment Advisory
Agreement.
4. Proposal Not Applicable to N/A N/A N/A
Portfolio.
5. Proposal Not Applicable to N/A N/A N/A
Portfolio.
6. Approval of a fundamental [ ] [ ] [ ]
investment policy to permit
interportfolio lending.
7. Proposal Not Applicable to N/A N/A N/A
Portfolio.
8. Approval of Amendments to, and [ ] [ ] [ ]
a restatement of, the Fund's
Declaration of Trust:
(a) To permit the Trustees to [ ] [ ] [ ]
reorganize the Fund and
any future Portfolio
without shareholder
approval;
(b) To permit the Trustees to [ ] [ ] [ ]
reorganize an existing
Portfolio;
(c) To permit electronic and [ ] [ ] [ ]
telephonic voting;
(d) To permit the Trustees to [ ] [ ] [ ]
amend the Declaration of
Trust without shareholder
approval;
(e) To convert from [ ] [ ] [ ]
share-based to
dollar-based voting
rights.
9. To transact such other [ ] [ ] [ ]
business as may properly come
before the Meeting or any
adjournment(s) thereof.
(Prime Money Market Portfolio)