PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
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FundManager Trust
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
October 30, 1996
Dear Shareholder:
I urge you to vote on the important proposals described in the enclosed
proxy material.
If the shareholders of FundManager Aggressive Growth Portfolio, FundManager
Growth Portfolio, FundManager Growth and Income Portfolio, FundManager Bond
Portfolio and FundManager Managed Total Return Portfolio (the "Portfolios")
approve these proposals, Freedom Capital Management Corporation (the "Adviser")
will become independent of John Hancock Mutual Life Insurance Company ("John
Hancock") and will be owned by an investor group including the present
management of the Adviser.
The independent non-management trustees of FundManager Trust (the "Trust"),
of which the Portfolios are series, have unanimously approved the proposals
described in the enclosed proxy material and recommend that the shareholders
approve them as well.
TO VOTE ON THESE PROPOSALS, WE ASK THAT YOU SIGN THE ENCLOSED PROXY CARD AND
RETURN IT TO US AS SOON AS POSSIBLE IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
IT IS VERY IMPORTANT THAT WE RECEIVE YOUR CARD SOON, SO THAT THE NECESSARY
QUORUM OF SHAREHOLDERS IS REPRESENTED AT THE DECEMBER 16, 1996 MEETING.
This is your opportunity to voice your opinion on matters that affect your
Portfolio(s). Your prompt vote will also help to save time and money. If we do
not receive enough votes, we must increase participation with additional
mailings. That's a costly and time consuming process.
John Hancock, through its subsidiary John Hancock Subsidiaries, Inc.
("Hancock Subsidiaries"), owns John Hancock Freedom Securities Corporation
("Freedom Securities") which is the parent company of the Adviser. Hancock
Subsidiaries has decided to transfer substantially all of the stock of Freedom
Securities that it holds to an investor group that includes the management of
Freedom Securities and its subsidiaries, including the Adviser. The investor
group also includes several non-employee outside investors. The investor group
has arranged bank financing to consummate the contemplated transactions. None of
the assets of the Portfolios will be used to finance the transaction, nor will
the transaction affect the investment objectives or policies of any of the
Portfolios or the fees paid by any of the Portfolios.
We support the proposed change in ownership of the Adviser because
management ownership will give us greater flexibility to attract and motivate
professionals to do the best possible job for the Portfolios and their
shareholders.
If you have any questions before you vote, please contact your Signature,
Tucker Anthony or Sutro investment executive or call D.F. King, a proxy
solicitation firm assisting in the proxy process, at 1-800-628-8538. We will be
glad to help you get your vote in quickly.
IT IS IMPORTANT THAT YOU ACT PROMPTLY BY SIGNING AND RETURNING THE ENCLOSED
PROXY CARD SO THAT WE WILL HAVE THE NECESSARY QUORUM OF SHAREHOLDERS REPRESENTED
FOR EACH PORTFOLIO AT THE MEETING ON DECEMBER 16, 1996. Of course, we would be
delighted if you could attend the meeting in person and discuss these proposals,
or any other relevant matters, with us personally.
We appreciate your continued support and look forward to receiving your
votes of approval.
Sincerely,
/s/ Dexter A. Dodge
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DEXTER A. DODGE
Chairman of the Board
FUNDMANAGER AGGRESSIVE GROWTH PORTFOLIO
FUNDMANAGER GROWTH PORTFOLIO
FUNDMANAGER GROWTH AND INCOME PORTFOLIO
FUNDMANAGER BOND PORTFOLIO
FUNDMANAGER MANAGED TOTAL RETURN PORTFOLIO
EACH A SERIES OF
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
(800) 344-9033
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 1996
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of FundManager Aggressive Growth Portfolio ("Aggressive Growth
Portfolio"), FundManager Growth Portfolio ("Growth Portfolio"), FundManager
Growth and Income Portfolio ("Growth and Income Portfolio"), FundManager Bond
Portfolio ("Bond Portfolio") and FundManager Managed Total Return Portfolio
("Managed Total Return Portfolio"), each a series of FundManager Trust (the
"Trust"), will be held at the principal offices of the Trust, sixth floor, One
Beacon Street, Boston, Massachusetts 02108 on Monday, December 16, 1996 at 3:00
p.m., Boston time, and at any adjournment or postponement thereof, for the
purposes listed below. The Trust, a Delaware business trust, is referred to
within this document as the "Trust". The portfolio series of funds within the
Trust are collectively referred to as the "Portfolios" and individually as a
"Portfolio." The matters to be voted on by the shareholders of the respective
Portfolios are as follows:
1. All Portfolios -- To consider and vote on approval of a New Master
Investment Advisory Contract between the Trust, on behalf of each
Portfolio, and Freedom Capital Management Corporation (Proposal One).
2. All Portfolios -- To elect four Trustees of the Trust (Proposal
Two).
3. All Portfolios -- To ratify the selection of Ernst & Young LLP as the
independent auditors of the Trust (Proposal Three).
4. To consider and vote upon such other matters as may properly come before
the Meeting or any adjournment or postponement thereof.
These items are discussed in greater detail in the accompanying Proxy Statement.
The Board of Trustees has fixed the close of business on October 18, 1996,
as the record date for determination of shareholders who are entitled to notice
of and to vote at the Meeting and any adjournment or postponement thereof.
By order of the Trustees,
MAUREEN RENZI
Assistant Secretary
Boston, Massachusetts
October 30, 1996
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. WHETHER OR NOT YOU
EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY
CARD(S) AND RETURN IT (THEM) PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH NEEDS NO
POSTAGE IF MAILED IN THE CONTINENTAL UNITED STATES. IF YOU DESIRE TO VOTE IN
PERSON AT THE MEETING, YOUR PROXY MAY BE REVOKED. THIS PROXY IS BEING SOLICITED
BY THE TRUSTEES OF THE TRUST.
FUNDMANAGER AGGRESSIVE GROWTH PORTFOLIO
FUNDMANAGER GROWTH PORTFOLIO
FUNDMANAGER GROWTH AND INCOME PORTFOLIO
FUNDMANAGER BOND PORTFOLIO
FUNDMANAGER MANAGED TOTAL RETURN PORTFOLIO
EACH A SERIES OF
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
(800) 344-9033
--------
PROXY STATEMENT
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD DECEMBER 16, 1996
SPECIAL MEETING
This Proxy Statement is being furnished to the shareholders of FundManager
Aggressive Growth Portfolio ("Aggressive Growth Portfolio"), FundManager Growth
Portfolio ("Growth Portfolio"), FundManager Growth and Income Portfolio ("Growth
and Income Portfolio"), FundManager Bond Portfolio ("Bond Portfolio") and
FundManager Managed Total Return Portfolio ("Managed Total Return Portfolio"),
each series of FundManager Trust, a Delaware business trust, which is referred
to in this Proxy Statement as the "Trust". The portfolio series of funds within
the Trust are collectively referred to herein as the "Portfolios" and
individually as a "Portfolio." This Proxy Statement is furnished in connection
with the solicitation of proxies by and on behalf of the Trust's Trustees for
use at the Special Meeting of Shareholders (the "Meeting") to be held at the
principal offices of the Trust, sixth floor, One Beacon Street, Boston,
Massachusetts 02108 on Monday, December 16, 1996 at 3:00 p.m., Boston time, and
at any adjournment or postponement thereof.
1
As more fully described in this Proxy Statement, the Meeting has been called
for the purposes set forth in the table below. This table identifies each
proposal set forth in the Notice of Special Meeting of Shareholders and the
checkmark (|Pm) indicates which Portfolio's shareholders are being solicited to
approve which proposal:
<TABLE>
<CAPTION>
MANAGED
AGGRESSIVE GROWTH AND TOTAL
GROWTH GROWTH INCOME BOND RETURN
PROPOSAL PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
<S> <C> <C> <C> <C> <C>
1. Approval of New
Invest-
ment Advisory
Contract
(All Portfolios) X X X X X
2. Election of Trustees
(All Portfolios) X X X X X
3. Ratification of
Independent Auditors
(All Portfolios) X X X X X
</TABLE>
The most recent annual and semiannual reports for the Trusts have previously
been sent to shareholders and are available upon request without charge by
calling 1-(800) 344-9033. The annual reports for the year ended September 30,
1996 will be sent to shareholders of record when they are available which is
expected to occur prior to November 29, 1996.
This Proxy Statement and the forms of proxy will be mailed to shareholders
of each of the Portfolios on or about November 1, 1996.
SOLICITATION, REVOCATION AND USE OF PROXIES
HOLDERS OF SHARES OF THE PORTFOLIOS ARE REQUESTED TO COMPLETE, DATE, SIGN
AND PROMPTLY RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE. If the
enclosed proxy is properly executed and returned in time to be voted at the
Meeting, the shares represented thereby will, unless the proxy has previously
been revoked, be voted in accordance with the instructions marked on the proxy.
Unless instructions to the contrary are marked on the proxy, the proxy will be
voted FOR each Proposal, as described in this Proxy Statement and as set forth
in the accompanying Notice of Special Meeting, and in the discretion of the
persons named as proxies in connection with any other matters as may properly
come before the Meeting or any adjournment or postponement of the Meeting. The
Trustees do not know of any matter to be considered at the Meeting other than
the matters referred to in the Notice of Special Meeting.
2
Proxy solicitations will be made primarily by mail, but proxy solicitations
also may be made by telephone, telegraph or personal interviews conducted by
Trustees and officers of the Trusts, by personnel of Freedom Capital Management
Corporation, the investment adviser for each of the Portfolios, by personnel of
Tucker Anthony Incorporated, and Sutro & Co. Incorporated, the Portfolios'
distributors, the Portfolios' transfer agent, Investors Bank & Trust Company,
and by D.F. King, Inc., a proxy solicitation firm that has been engaged to
assist in proxy solicitation.
A shareholder executing and returning a proxy has the power to revoke it at
any time before it is exercised by filing with the Trusts a written notice of
revocation at the following address: One Beacon Street, Boston, Massachusetts
02108, Attention: Maureen Renzi, Assistant Secretary, or returning a duly
executed proxy bearing a later date prior to the time of the Meeting. Any
shareholder who has executed a proxy but is present at the Meeting and who
wishes to vote in person may revoke his or her proxy by notifying the Assistant
Secretary of the Trusts (without complying with any formalities) at any time
before it is voted. Presence at the Meeting alone will not serve to revoke a
previously executed and returned proxy.
A majority of the shares of a Portfolio entitled to vote at the Meeting
shall be a quorum for the transaction of business by that Portfolio. In the
event a quorum is not present in person or by proxy at the time any session of
the Meeting is called to order, 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 any 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 of the Proposals. Any such adjournment will require the
affirmative vote of a majority of those shares present in person or by proxy at
the session of the Meeting to be adjourned. A shareholder vote may be taken on
one or more of the Proposals in the Proxy Statement prior to an adjournment if
sufficient votes for its approval have been received and it is otherwise
appropriate.
For purposes of determining the presence or absence of a quorum and for
determining whether sufficient votes have been received for approval of any
matter to be acted upon at the Meeting, abstentions and broker non-votes will be
treated as shares that are present at the Meeting but which have not been voted.
For this reason, abstentions and broker non-votes will assist a Portfolio in
obtaining a quorum but will have the practical effect of a "no" vote for
purposes of obtaining the requisite vote for approval of Proposals One and
Three.
3
Shares do not have cumulative voting rights, which means that in situations
in which shareholders elect Trustees, holders of more than 50% of the shares
voting for the election of Trustees can elect 100% of the Trust's Trustees, and
the holders of less than 50% of the shares voting for the election of Trustees
will not be able to elect any person as a Trustee.
RECORD DATE AND OUTSTANDING SHARES
Only shareholders of the Portfolios of record as of the close of business on
October 18, 1996 (the "Record Date") are entitled to receive notice of, and to
vote at, the Meeting and any adjournment or postponement of the Meeting. As of
the close of business on the Record Date, the following number of shares of each
Portfolio were outstanding and entitled to vote:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
PORTFOLIO OUTSTANDING
<S> <C>
Aggressive Growth Portfolio 2,393,020.419
Growth Portfolio 1,815,092.472
Growth and Income Portfolio 1,909,597.833
Bond Portfolio 7,102,465.338
Managed Total Return Portfolio 1,062,982.007
</TABLE>
The holder of each full share outstanding as of the close of business on the
Record Date is entitled to one vote for each share held of record upon each
matter properly submitted to the Meeting or any adjournment or postponement
thereof, with a proportionate vote for each fractional share.
PROXY SOLICITATION EXPENSES
The cost of soliciting proxies, including the fees of D.F. King, which are
estimated to cost $12,000, and all expenses incurred by the Portfolios in
connection with the Transaction described in Proposal One, including, without
limitation, the expenses relating to the Meeting and to the meetings of the
Trustees at which the proposed Transaction (as described below) was considered,
and the fees and expenses of counsel to the Portfolios, will be borne by John
Hancock Subsidiaries, Inc. and/or by JHFSC Acquisition Corp., and not by the
Trust. Hancock Subsidiaries, Inc. and JHFSC Acquisition Corp. will also
reimburse brokerage firms and others for their expenses in forwarding proxy
materials to the beneficial owners and soliciting them to execute the proxies.
4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of the close of business on the Record Date, the following persons owned
of record or beneficially 5% or more of a Portfolio's shares (percentage is
percentage of outstanding shares of a Portfolio owned by the shareholders):
Tod & Co., Operations Department, P.O. Box 1250, Boston, MA 02104
Aggressive Growth Portfolio -- 24.2%
Growth Portfolio -- 43.2% Growth & Income Portfolio -- 48.0% Bond
Portfolio -- 72.7%
Charles Schwab & Co., Inc., Special Custody Account for the Exclusive
Benefit of Customers, 101 Montgomery Street, San Francisco, CA 94104
Aggressive Growth Portfolio -- 20.0%
Growth Portfolio -- 10.5%
Growth & Income Portfolio -- 5.1%
Bond Portfolio -- 9.9%
Cates Sheet Metal Industries, Inc., Profit Sharing Plan, Michael E.
Coughlin TR, 5828 Reeds Rd, Mission, KS 66202
Managed Total Return Portfolio -- 5.3%
PROPOSAL ONE
CONSIDERATION AND APPROVAL OF A NEW MASTER
INVESTMENT ADVISORY CONTRACT BETWEEN THE TRUST,
ON BEHALF OF EACH PORTFOLIO, AND THE ADVISER
The investment adviser for the Trust is Freedom Capital Management
Corporation, a Massachusetts corporation (the "Adviser"), with offices at One
Beacon Street, Boston, Massachusetts. The Adviser is a registered investment
advisory firm which maintains a securities research department, the efforts of
which are made available to the Portfolios. The Adviser is a wholly-owned
subsidiary of John Hancock Freedom Securities Corporation ("Freedom
Securities"), which is a wholly-owned subsidiary of John Hancock Subsidiaries,
Inc. ("Hancock Subsidiaries"), which is in turn a wholly-owned subsidiary of
John Hancock Mutual Life Insurance Company ("John Hancock"). The head offices of
John Hancock, Hancock Subsidiaries and Freedom Securities are at 200 Clarendon
Street, Boston, Massachusetts 02116.
Freedom Distributors Corporation ("Freedom Distributors"), Tucker Anthony
Incorporated ("Tucker Anthony") and Sutro & Co. Incorporated ("Sutro"),
affiliates of the Adviser, serve as distributors and principal underwriters for
the Portfolios pursuant to Master Distribution Agreements
5
with the Trust. Tucker Anthony and Sutro are brokerage firms which are members
of the New York Stock Exchange. Freedom Distributors, Tucker Anthony and Sutro
are all direct subsidiaries of Freedom Securities and indirect subsidiaries of
John Hancock.
THE TRANSACTION
Under a Contribution Agreement (the "Contribution Agreement") dated as of
October 4, 1996 among Hancock Subsidiaries, JHFSC Acquisition Corp., Thomas H.
Lee Equity Fund III, L.P. ("Lee") and SCP Private Equity Partners, L.P. ("SCP"),
Hancock Subsidiaries, which owns all of the capital stock of Freedom Securities,
will contribute 100% of the issued and outstanding shares of capital stock of
Freedom Securities to JHFSC Acquisition Corp., in exchange for (i) 4.999% of the
issued and outstanding capital stock of JHFSC Acquisition Corp. and (ii)
aggregate consideration of $180,000,000 (subject to reduction to the extent of
certain distributions made prior to closing) (the "Transaction"). Of the
$180,000,000 aggregate consideration paid by JHFSC Acquisition Corp.,
$85,000,000 will be financed through senior debt issued to a syndicate of banks
led by The First National Bank of Boston and $75,000,000 will be financed by the
issuance of common stock of JHFSC Acquisition Corp. (the "Equity Financing"),
with the remainder being funded from working capital. The Equity Financing will
be consummated through the contribution to JHFSC Acquisition Corp. by (i) Lee of
an aggregate of up to $40,000,000, (ii) SCP of an aggregate of up to
$10,000,000, and (iii) certain members of management and employees of Freedom
Securities and its subsidiaries, including the Adviser (the "Employee
Shareholders") of an aggregate of at least $25,000,000, in exchange for shares
of capital stock of JHFSC Acquisition Corp. In connection with the financing
arrangements, the loan from the syndicate of banks led by The First National
Bank of Boston will be secured by a pledge of the outstanding capital stock of
one or more of JHFSC Acquisition Corp., Freedom Securities and their
subsidiaries, including the Adviser, Tucker Anthony and Sutro.
After giving effect to consummation of the transactions contemplated by the
Contribution Agreement, Freedom Securities will become a wholly-owned subsidiary
of JHFSC Acquisition Corp., and the Adviser will remain a wholly-owned
subsidiary of Freedom Securities. It is anticipated that the outstanding capital
stock of JHFSC Acquisition Corp. after the consummation of the Transaction will
be held approximately as follows:
PERCENTAGE
INVESTOR OWNERSHIP
---------- ------------
Thomas H. Lee Equity Fund III, L.P. 49.9%
SCP Private Equity Partners, L.P. 13.0%
John Hancock Subsidiaries, Inc. 4.9%
Employee Shareholders 32.2%
6
If the Employee Shareholders contribute more than $25,000,000 (up to
$30,000,000), the percentage ownership of Lee and SCP in JHFSC Acquisition Corp.
set forth above will be reduced proportionately.
As a result of the transactions, Freedom Distributors, Tucker Anthony and
Sutro, which are also subsidiaries of Freedom Securities, will undergo a change
of control similar to the Adviser.
Thomas H. Lee Equity Fund III, L.P. is a Massachusetts limited partnership.
The general partner of Thomas H. Lee Equity Fund III, L.P. is THL Equity
Advisors III Limited Partnership, a Massachusetts limited partnership. The
general partner of THL Equity Advisors III Limited Partnership is THL Equity
Trust III, a Massachusetts business trust. The sole beneficial owner of THL
Equity Trust III is Thomas H. Lee. The address of Thomas H. Lee Equity Fund III,
L.P., THL Equity Advisors III Limited Partnership and THL Equity Trust III is 75
State Street, Boston, Massachusetts 02109.
SCP Private Equity Partners, L.P. is a Delaware limited partnership. The
general partner of SCP Private Equity Partners, L.P. is SCP Private Equity
Management, L.P., a Delaware limited partnership. The interests of SCP Private
Equity Management, L.P. are divided equally among its three general partners:
Safeguard Capital Management, Inc. (which is a wholly owned subsidiary of
Safeguard Scientifics, Inc., a publicly held company), Winston J. Churchill and
Samuel A. Plum. The address of SCP Private Equity Partners, L.P., SCP Private
Equity Management, L.P., Safeguard Capital Management, Inc., Winston J.
Churchill and Samuel A. Plum is 435 Devon Park Drive, Wayne, Pennsylvania 19087.
Consummation of the Transaction is subject to the conditions set forth in
the Contribution Agreement, including, without limitation, consummation of the
financing arrangements, approval by the Trustees of the Trust of the New Master
Investment Advisory Contract (which approval has been obtained) and the receipt
of certain governmental and third party approvals. The Transaction is also
conditioned upon the approval by shareholders of the Portfolios of Proposal One
set forth in this Proxy Statement and the receipt of the Exemptive Order
described below. No assurance can be given that the Transaction will be
consummated.
If the Transaction is consummated and if shareholders of the Portfolios
approve the proposed New Master Investment Advisory Contract with the Adviser,
the Adviser will continue the investment advisory functions it currently
performs. If the Transaction is not consummated, the Portfolios' Existing Master
Investment Advisory Contract with the Adviser will remain in place.
Compliance with Section 15(f) of the 1940 Act. The Trust intends to adhere
to the provisions of Section 15(f) of the Investment Company Act of 1940 (the
"1940 Act"). Section 15(f) of the 1940 Act provides that when a
7
change in control of an investment adviser occurs, the investment adviser or any
of its affiliated persons may receive any amount or benefit in connection
therewith as long as two conditions are satisfied. First, no unfair burden may
be imposed on the investment company as a result of the Transaction relating to
the change of control, or any express or implied terms, conditions or
understandings, applicable thereto. The term "unfair burden," as defined in the
1940 Act, includes any arrangement during the two-year period after the change
in control whereby the investment adviser (or predecessor or successor adviser),
or any interested person of any such adviser, receives or is entitled to
received any compensation, directly or indirectly, from the investment company
or its security holders (other than fees for bona fide investment advisory or
other services) or from any person in connection with the purchase or sale of
securities or other property to, from, or on behalf of the investment company
(other than fees for bona fide principal underwriting services). No such
compensation arrangements are contemplated in the Transaction. Hancock
Subsidiaries and JHFSC Acquisition Corp. have agreed in the Contribution
Agreement to, and have each represented to the Board of Trustees of the Trust
that they will use their best efforts to, ensure that the Transaction will not
cause the imposition of an unfair burden on any of the Portfolios.
The second condition is that during the three-year period immediately
following consummation of the Transaction, at least 75% of the investment
company's board of trustees must not be "interested persons" of the investment
adviser or predecessor investment adviser within the meaning of the 1940 Act.
Hancock Subsidiaries and JHFSC Acquisition Corp. have agreed in the Contribution
Agreement to, and have each represented to the Trustees of the Trust that they
will use their best efforts to, ensure that the second condition is met. The
current nominees for election as Trustees of the Trust, as described below under
Proposal Two of this Proxy Statement, meet this condition of Section 15(f).
Change of Control and Exemptive Order Application. As required by the 1940
Act, the Existing Master Investment Advisory Contract pursuant to which the
Adviser provides investment advisory services to the Portfolios provides for its
automatic termination upon its "assignment." The 1940 Act defines "assignment"
to include any direct or indirect transfer or hypothecation of a contract by the
assignor, or of a controlling block of the assignor's outstanding voting
securities by a security holder of the assignor. If the Transaction is
consummated, an indirect change in control of the Adviser would occur, giving
rise to an "assignment" of the Portfolios' Existing Master Investment Advisory
Contract with the Adviser within the meaning of the 1940 Act, necessitating
shareholder approval of new master investment advisory agreements. In addition,
if the Transaction is consummated, Freedom Distributors, Tucker Anthony and
Sutro, which are also
8
subsidiaries of Freedom Securities and affiliates of the Adviser, would also
undergo an indirect change of control similar to the Adviser, giving rise to the
"assignment" of the Portfolios' current distribution agreements with these
distributors within the meaning of the 1940 Act, necessitating Trustee approval
of new distribution agreements. The Trustees of the Trusts approved new
distribution agreements with the Portfolios' distributors on October 3, 1996 in
anticipation of the consummation of the Transaction.
With respect to the Existing Master Investment Advisory Contract, the Trust
on behalf of the Portfolios and the Adviser (together with the Trust, the
"Applicants"), applied pursuant to Section 6(c) of the 1940 Act, for an order of
the SEC to provide the Applicants an exemption from Section 15(a) of the 1940
Act (the "Exemptive Order"). Section 15(a) of the 1940 Act generally requires
the shareholders to approve a new investment advisory agreement.
The requested exemption would permit the implementation, prior to formal
shareholder approval, of the New Master Investment Advisory Contract described
below, which is substantially identical to the existing master investment
advisory agreement, between the Trust and the Adviser with respect to each
Portfolio. The requested exemption would cover an interim period of not more
than 120 days (the "Interim Period") beginning on the date of the Transaction
and continuing through the date a New Master Investment Advisory Contract is
approved or disapproved by the shareholders of the respective Portfolios
pursuant to this proxy, but in no event later than March 31, 1997. For each
Portfolio, the aggregate contractual rate chargeable for investment advisory
services will remain the same. During the Interim Period, fees payable by the
Portfolios for such investment advisory services will be paid into escrow.
Under the Exemptive Order, the Applicants proposed to enter into an escrow
arrangement with an unaffiliated financial institution that will serve as escrow
agent. The arrangement, in substance, will provide that the fees payable to the
Adviser during the Interim Period under the New Master Investment Advisory
Contract will be paid into an interest-bearing escrow account maintained by the
escrow agent and that the amounts in the escrow account with respect to each
Portfolio (including interest earned on such paid fees) will be paid to the
Adviser only if shareholders of the Portfolio approve the New Master Investment
Advisory Contract . If shareholders of a Portfolio fail to approve the New
Master Investment Advisory Contract , the escrow agent will pay that Portfolio
its respective share of the escrow amounts (including any interest earned).
EXISTING MASTER INVESTMENT ADVISORY CONTRACT
Pursuant to a master investment advisory contract dated as of May 8, 1995
(the "Existing Master Investment Advisory Contract ") between the Trust and the
Adviser, the Adviser agreed to act as investment adviser and manager
9
to the Portfolios. As manager and investment adviser, the Adviser has: (a)
furnished continuously an investment program for the Portfolios and determine,
subject to the overall supervision and review of the Trustees, which investments
should be purchased, held, sold or exchanged, (b) provided supervision over all
aspects of the Portfolios' operations except those which are delegated to a
custodian, transfer agent or other agent, and (c) provided the Trust with such
executive, administrative and clerical personnel, offices and equipment as are
deemed necessary for the conduct of the business of the Portfolios.
Each Portfolio bears all costs of its organization and operation, including
expenses of preparing, printing and mailing all shareholders' reports, notices,
prospectuses (except that the expense of printing and mailing prospectuses used
for promotional purposes will not be borne by the Portfolios), proxy statements
and reports to regulatory agencies; expenses relating to the issuance,
registration and qualification of shares of the Trust; government fees; interest
charges; expenses of furnishing to shareholders their account statements; taxes;
expenses of redeeming shares; brokerage and other expenses connected with the
execution of portfolio securities sales; fees and expenses of the Trust's
custodian, including those for keeping books and accounts and calculating the
net asset value of shares of each Portfolio; fees and expenses of its
independent auditors, legal counsel, transfer agent and dividend disbursing
agent; the compensation and expenses of its Trustees, officers and employees;
expenses of Trustees' and shareholders' meetings; insurance premiums; and any
extraordinary expenses.
The continuation of the Existing Master Investment Advisory Contract for the
Trust was last approved on March 12, 1996 by all of the Trustees, including all
of the Trustees who are not parties to that Existing Master Investment Advisory
Contract or "interested persons" (as defined in the 1940 Act) of any such party
and was approved on May 4, 1995 by the then outstanding shareholders of each of
the Portfolios. The Existing Master Investment Advisory Contract will continue
in effect with respect to each Portfolio from year to year, provided that its
continuance is approved annually both (i) by the holders of a majority of the
outstanding voting securities of each Portfolio or by the Board of Trustees, and
(ii) by a majority of the Trustees who are not parties to the Existing Master
Investment Advisory Contracts or "interested persons" (as defined in the 1940
Act) of any such party. The Existing Master Investment Advisory Contract may be
terminated on 60 days' written notice by either party and will terminate
automatically if it is assigned.
Each of the Portfolios pays the Adviser a monthly advisory fee in an amount
equal, on an annual basis, to .50% of each Portfolio's average daily net assets
up to and including $500,000,000 and .40% of each Portfolio's average daily net
assets in excess of $500,000,000.
10
For the fiscal year ended September 30, 1996, the Aggressive Growth
Portfolio, the Growth Portfolio, the Growth and Income Portfolio, the Bond
Portfolio and the Managed Total Return Portfolio paid the Adviser Investment
Advisory fees of $181,228, $132,741, $167,091, $367,139 and $67,171,
respectively.
NEW MASTER INVESTMENT ADVISORY CONTRACT
If the proposed New Master Investment Advisory Contract is approved by the
shareholders of the Portfolios to which the respective agreements relate, the
Adviser will continue to serve as investment adviser to each Portfolio.
Following the Transaction, the Adviser will continue as a subsidiary of John
Hancock Freedom Securities Corporation and will become a subsidiary of JHFSC
Acquisition Corp. The terms and conditions of the proposed New Master Investment
Advisory Contract are substantially identical to those of the Existing Master
Investment Advisory Contract.
The proposed New Investment Advisory Contract, if approved, will continue in
effect for a two year period following the later to occur of (i) such approval
by the relevant Portfolio's shareholders, or (ii) the consummation of the
Transaction; provided, that, if exemptive relief is granted by the SEC, the New
Master Investment Advisory Contract will become effective upon the consummation
of the Transaction, even if that is prior to the approval of the New Master
Investment Advisory Contract by the shareholders of the Portfolios. Subsequently
the proposed New Master Investment Advisory Contract will be subject to annual
approval by the Trustees and by the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Adviser or the Trust (the "Independent
Trustees"), or to approval by the relevant Portfolio's shareholders. The
proposed New Master Investment Advisory Contract may be terminated as to any
Portfolio, without penalty, by the Trustees or by the shareholders of the
relevant Portfolio upon 60 days' written notice to the Adviser or by the Adviser
upon 60 days' written notice to the Portfolio. The proposed New Master
Investment Advisory Contract will terminate automatically in the event of its
"assignment," as defined in the 1940 Act. If the proposed New Investment
Advisory Contract is approved, as manager and investment adviser, the Adviser
will: (a) furnish continuously an investment program for the Portfolios and
determine, subject to the overall supervision and review of the Trustees, which
investments should be purchased, held, sold or exchanged, (b) provide
supervision over all aspects of the Portfolios' operations except those which
are delegated to a custodian, transfer agent or other agent, and (c) provide the
Trust with such executive, administrative and clerical personnel, offices and
equipment as are deemed necessary for the conduct of the business of the
Portfolios.
11
If the proposed New Master Investment Advisory Contract is approved, each
Portfolio will bear all costs of its organization and operation, including
expenses of preparing, printing and mailing all shareholders' reports, notices,
prospectuses (except that the expense of printing and mailing prospectuses used
for promotional purposes will not be borne by the Portfolios), proxy statements
and reports to regulatory agencies; expenses relating to the issuance,
registration and qualification of shares of the Trust; government fees; interest
charges; expenses of furnishing to shareholders their account statements; taxes;
expenses of redeeming shares; brokerage and other expenses connected with the
execution of portfolio securities transactions; fees and expenses of the Trust's
custodian, including those for keeping books and accounts and calculating the
net asset value of shares of each Portfolio; fees and expenses of its
independent auditors, legal counsel, transfer agent and dividend disbursing
agent; the compensation and expenses of its Trustees, officers and employees;
expenses of Trustees' and shareholders' meetings; insurance premiums; and any
extraordinary expenses.
If the proposed New Master Investment Advisory Contract is approved, each of
the Portfolios will pay the Adviser a monthly advisory fee in an amount equal,
on an annual basis, to .50% of each Portfolio's average daily net assets up to
and including $500,000,000 and .40% of each Portfolio's average daily net assets
in excess of $500,000,000, which is identical to the fees paid to the Adviser
under the Existing Master Investment Advisory Contract.
INFORMATION ABOUT THE ADVISER
Information Concerning Directors and Executive Officers of the Adviser. The
names and principal occupations of each director and executive officer of the
Adviser are set forth below. The business address of each person listed below is
One Beacon Street, Boston, Massachusetts 02108, except that the business address
for Messrs. Kirshbaum, Lipson and Hirsch and Ms. Graham-Lyons is One World
Financial Center, New York, NY 10281.
PRINCIPAL OCCUPATION AND POSITION
POSITION OTHER BUSINESS EXPERIENCE WITH THE
NAME WITH ADVISER WITHIN LAST TWO YEARS TRUSTS
------- ------------ ------------------------- ---------
Dexter A. Dodge Chairman and Chief Executive Officer, Trustee,
Managing President and Managing Chairman
Director Director of the Adviser and Chief
Executive
Officer
John J. Danello President and President and Chief Executive
Managing Operating and Secretary Vice
Director Officer of the Adviser President
12
PRINCIPAL OCCUPATION AND POSITION
POSITION OTHER BUSINESS EXPERIENCE WITH THE
NAME WITH ADVISER WITHIN LAST TWO YEARS TRUSTS
------- ------------ ------------------------- ---------
John Goldsmith Managing Chairman & CEO, John --
Director Hancock Freedom
Securities Corporation
Lawrence G. Kirshbaum Managing Chief Financial Officer Trustee
Director and Executive Vice
President of John
Hancock Freedom
Securities Corporation
Terrence J. Gerlich Managing Managing Director of the --
Director Adviser
Arthur E. McCarthy Managing Managing Director of the --
Director Adviser. Registered
Representative of
Tucker Anthony
Incorporated
Richard V. Howe Managing Managing Director of the --
Director Adviser
Ellen C. Varney Senior Vice Senior Vice President and --
President and Chief Financial Officer
Chief of Adviser since
Financial February 1996.
Officer Financial Manager of
John Hancock from
September 1990 to
December 1995
Charles B. Lipson President of President and founder of President
the M.D. the M.D. Hirsch Division and
Hirsch of the Adviser since Principal
Division of February 1995. Chief Executive
the Adviser Operating Officer of the Officer
M.D. Hirsch Division of
Republic Asset
Management Corporation
from February 1991 to
December 1994.
Michael D. Hirsch Chairman, Chairman, M.D. Hirsch Executive
M.D. Hirsch Division of the Adviser Vice
Division of since February 1995. President
the Adviser Vice Chairman and and
Managing Director, M.D. Portfolio
Hirsch Division of Manager
Republic Asset
Management Corporation
from June 1993 to
February 1994.
Michelle Graham-Lyons Senior Vice Senior Vice President Vice
President of since February 1995 of President
the Adviser the Adviser. First Vice and
President M.D. Hirsch Portfolio
Division of Republic Manager
Asset Management
Corporation from June
1993 to February 1994
13
CONSIDERATION BY THE TRUSTEES
The Trustees of the Trust, including the Independent Trustees, have approved
the New Master Investment Advisory Contract on behalf of each Portfolio, and
recommend that the New Investment Advisory Contract be approved by shareholders
of the Portfolios.
Since the commencement of negotiations by John Hancock concerning the
Transaction, the Contracts Committee, which is comprised of the Independent
Trustees, met separately and together with the full Board three times. Messrs.
Kendall and Osterberg have served and continue to serve on this Committee. In
the course of their review, the Trustees, including the Independent Trustees,
requested information of the Adviser and JHFSC Acquisition Corp. and reviewed
the information provided by them regarding the Transaction and its anticipated
effects upon the Portfolios and their shareholders.
The Trustees, including the Independent Trustees, of the Trust considered,
among other things, the structure of the Transaction and the terms of the
Contribution Agreement and related agreements, including the representations of
both the Adviser and JHFSC Acquisition Corp. with respect to the Portfolios. In
particular, the Trustees noted the parties' agreements to use their best efforts
to assure that no unfair burden would be imposed on the Portfolios as a result
of the Transaction, as well as the fact that the Transaction would be
conditioned upon approval of the New Master Investment Advisory Contract by the
Trust's Board of Trustees. The Trustees also relied upon representations of the
Adviser and JHFSC Acquisition Corp. that (i) no material changes in the
operation of the Trusts are contemplated as a result of the Transaction, (ii)
there is no present intention on the part of the Adviser or JHFSC Acquisition
Corp. to propose any increase in the rate of fees paid by the Trust to the
Adviser, and (iii) no material changes in the management of the Adviser are
presently contemplated as a result of the Transaction.
The Trustees, including the Independent Trustees, of the Trust further
considered whether the Transaction could enhance the investment advisory
operations of the Adviser and the level and quality of services provided to the
Portfolios and their shareholders, as well as the commitments provided by the
Adviser and JHFSC Acquisition Corp. that substantially the same personnel at the
Adviser who now provide advisory services to the Portfolios would continue to do
so after the Transaction. The Trustees also considered the reputation, financial
responsibility and stability of the owners of JHFSC Acquisition Corp.
The Trustees, including the Independent Trustees, of the Trust also
considered the fact that the advisory fees would remain the same under the New
Master Investment Advisory Contract as under the Existing Master
14
Investment Advisory Contract and the fact that the terms of the New Master
Investment Advisory Contract do not substantially differ from those of the
Existing Master Investment Advisory Contract. The Trustees also relied on the
representations of Hancock Subsidiaries and JHFSC Acquisition Corp. that the
Portfolios and their shareholders would not bear any fees or expenses in
connection with the Transaction. In addition, the Trustees considered, based on
the data available to them, the Adviser's historical profitability with respect
to its management of the Portfolios as well as its reasonably anticipated
profitability after the Transaction. The Trustees also considered that the New
Master Investment Advisory Contract provided that it may be terminated by the
shareholders of the relevant Portfolio and by the Trustees without the payment
of any penalty by such Portfolio.
In addition, the Trustees considered during the course of their due
diligence process (i) the history, reputation, qualifications and background of
the Adviser, as well as the qualifications of its personnel (ii) the Adviser's
investment performance record with respect to the Portfolios, and (iii) the
benefits, if any, expected to be realized as a result of the Transaction.
After considering these and other factors, the Trustees, including the
Independent Trustees, at a meeting held in person on October 3, 1996,
unanimously approved the proposed New Master Investment Advisory Contract with
the Adviser and recommended its approval to the shareholders of the Portfolios.
THE TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND
THAT THE SHAREHOLDERS OF EACH PORTFOLIO VOTE FOR PROPOSAL ONE, THE APPROVAL OF
THE NEW MASTER INVESTMENT ADVISORY CONTRACT FOR THEIR RESPECTIVE PORTFOLIO.
REQUIRED VOTE
Approval of the New Master Investment Advisory Contract between the Trust,
on behalf of a Portfolio, and the Adviser requires the affirmative vote of a
majority of the outstanding shares of each Portfolio, voting separately as a
Portfolio. Under the 1940 Act, this means that, to be approved by a Portfolio,
this Proposal must receive the affirmative vote of holders of the lesser of
either (a) 67% or more of the outstanding shares of the applicable Portfolio,
voting as a single class, present at the Meeting, if the holders of more than
50% of the outstanding shares of the Portfolio are present or represented by
proxy, or (b) more than 50% of the outstanding shares of the applicable
Portfolio, voting as a single class.
15
PROPOSAL TWO
ELECTION OF FOUR TRUSTEES OF EACH OF THE TRUSTS
At the Meeting, the shareholders of each of the Portfolios are being asked
to elect the four nominees of the Board of Trustees of the Trust, to serve
during the lifetime of the Trust except if a Trustee sooner dies, resigns or is
removed as provided in the Agreement and Declaration of Trust, as amended (the
"Agreement and Declaration of Trust"), of the Trust. After the election by the
shareholders at the Meeting, the Board of Trustees will be a self-perpetuating
body until fewer than 50% of the Trustees serving as such are Trustees who were
elected by shareholders. At that time, another meeting of shareholders will be
called to elect Trustees.
All of the nominees named below, except Mr. Haack, are presently serving as
Trustees of the Trust. All shares represented by valid proxies will be voted in
the election of Trustees of the Trust for the nominees named below, unless
authority to vote for a particular nominee is withheld. Each nominee has agreed
to serve as Trustee if elected. If any such nominee is not available for
election at the time of the Meeting, the persons named as proxies will vote for
such substitute nominee as the Independent Trustees may recommend.
CONSIDERATION BY BOARD OF TRUSTEES
THE TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, WHO ARE NOT
"INTERESTED PERSONS," RECOMMEND THAT SHAREHOLDERS OF THE TRUST VOTE FOR PROPOSAL
TWO, THE ELECTION OF THE NOMINEES BELOW AS TRUSTEES OF THE TRUST.
INFORMATION AS TO NOMINEES
Set forth below is certain information as of September 30, 1996 regarding
the nominees as Trustees of the Trust, including each nominee's position with
the Trust, principal occupation for the past five years and age.
TRUSTEE
NAME, AGE, OFFICE WITH EACH OF EACH
TRUST AND BUSINESS EXPERIENCE TRUST SHARES OF EACH FUND
DURING THE PAST FIVE YEARS SINCE BENEFICIALLY OWNED(1)
----------------------------------- ---------- ----------------------
DEXTER A. DODGE* (61): Chairman of the
Trust. President, CEO and Managing
Director of the Adviser since July 1992.
Vice President of Freedom Distributors
Corporation since 1989 and Director
since 1994 1992 0
16
ERNEST T. KENDALL (63): Trustee of the
Trust. President, Commonwealth Research
Group, Boston, MA, a consulting firm
specializing in microeconomics,
regulatory economics and labor
economics, since 1978. 1993 0
RICHARD B. OSTERBERG (52): Trustee of the
Trust. Member of the law firm of Weston,
Patrick, Willard & Redding, Boston, MA,
since 1978 1993 0
JOHN R. HAACK (54) Nominee for Trustee of
the Trust. Vice President of Operations,
Reliable Transaction Processing, 1995
to present. Major General, Assistant to
the Commander in Chief, U.S. Space
Command, 1993 to 1995. General Manager,
Unilect Industries, which is an
electrical component manufacture, 1993
to 1994. Brigadier General, Commander
of 102nd Fighter Interceptor Wing, U.S.
Air Force and Air National Guard, 1986
to 1993 N/A 0
Trustees and executive officers of
FundManager Trust as a group
(8 persons) Aggressive Growth Portfolio
- 2,045.533; Growth
Portfolio - 1,363.543;
Growth and Income Portfolio
- 592.858; Bond Portfolio -
1,244.439; Managed Total
Return Portfolio - 2,792.443
- -------------
* These nominees as Trustees and/or officers are deemed to be "interested
persons" of the Trusts, as defined in the 1940 Act, inasmuch as they are
affiliated with the Adviser, Freedom Distributors Corporation or John
Hancock Freedom Securities Corporation.
(1) None of the persons listed or the nominees as Trustees and executive
officers as a group beneficially owns in excess of 1% of the outstanding
shares of any Portfolio. Except as otherwise indicated, the individual
indicated as being the beneficial owner of such shares has sole voting and
investment power with respect to such shares.
17
TRUSTEE MEETINGS AND COMMITTEES
During the fiscal year ended September 30, 1996, the Trustees of the Trust
met four times and each Trustee who was serving as a Trustee or committee member
attended at least 75% of the meetings of the respective Trust and/or any
committees thereof of which he was a member.
The Board of Trustees has elected members of two standing committees: the
Audit Committee and the Contracts Committee. The Audit Committee of the Trust is
presently composed of Mr. Kendall (Chairman) and Mr. Osterberg. The Audit
Committee is responsible for conferring with its Trust's independent auditors,
reviewing the scope and procedures of the Trust's year-end audit and
recommending the selection of the Trust's independent auditors. The Audit
Committee of the Trust met two times during the fiscal year ended September 30,
1996.
The Contracts Committee of each Trust is presently composed of Mr. Osterberg
(Chairman) and Mr. Kendall. The Contracts Committee of the Trust is responsible
for evaluating the approval or continuation of the Trust's advisory,
distribution, custodial and transfer agent agreements and making recommendations
to the entire Board of Trustees of the Trust. The Contracts Committees of the
Trust met once during the fiscal year ended September 30, 1996.
OFFICERS OF THE TRUST
The following table lists the officers of the Trust who are not also
nominees as Trustees, along with their ages, principal occupations, and business
experience during the past five years. These officers are deemed to be
"interested persons" of the Trusts under the 1940 Act inasmuch as they are
affiliated with the Adviser as described herein. Information concerning Mr.
Dodge, who is an officer and Trustee of the Trust, is provided under the section
above entitled "Information as to Nominees."
NAME, AGE AND PRINCIPAL OCCUPATION AND
POSITION WITH TRUST BUSINESS EXPERIENCE FOR PAST FIVE YEARS
------------------- ---------------------------------------
Charles B. Lipson (50) President and founding partner of the
President and Principal M.D. Hirsch Division of Freedom
Executive Officer Capital since February 1995. President
and Chief Operating Officer of the
M.D. Hirsch Division of Republic Asset
Management Corporation from February
1991 to December 1994. Senior Vice
President and Chief Operating Officer
of Home Capital Services, Inc. prior
to February 1991.
18
NAME, AGE AND PRINCIPAL OCCUPATION AND
POSITION WITH TRUST BUSINESS EXPERIENCE FOR PAST FIVE YEARS
------------------- ---------------------------------------
John J. Danello (41) President of the Adviser since February
Executive Vice President 1996. Chief Operating Officer since
February 1994. Managing Director of
the Adviser since December 1992. Clerk
and General Counsel of the Adviser
since November 1986. President and
Director since February 1989 and Clerk
since February 1987 of Freedom
Distributors Corporation. President
and Secretary of Freedom Mutual Fund
and Freedom Group of Tax Exempt Funds
since July 1992.
Michael D. Hirsch (51) Chairman, M.D. Hirsch Division of the
Executive Vice President Adviser since February 1995. Vice
and Portfolio Manager Chairman and Managing Director, M.D.
Hirsch Division of Republic Asset
Management Corporation from June 1993
to February 1994. President M.D.
Hirsch Investment Management, Inc.
from February 1991 to June 1993. Chief
Investment Officer, Republic National
Bank of New York prior to February
1991.
Michelle Graham-Lyons (35) Senior Vice President of the Adviser
Vice President and Portfolio since February 1995. First Vice
Manager President, M.D. Hirsch Division of
Republic Asset Management Corporation
from June 1993 to February 1994. First
Vice President, M.D. Hirsch Investment
Management, Inc. from February 1991 to
June 1993. Senior Investment Analyst,
Republic National Bank of New York
prior to February 1991.
REMUNERATION OF EXECUTIVE OFFICERS AND TRUSTEES
The following table provides information concerning the aggregate
compensation paid to each of the incumbent Trustees nominated for election for
services rendered to the Portfolios during the year ended September 30, 1996.
The Trusts do not provide any pension or retirement benefits for the Trustees.
<TABLE>
<CAPTION>
TOTAL
AGGREGATE AGGREGATE AGGREGATE COMPENSATION
COMPENSATION AGGREGATE COMPENSATION AGGREGATE COMPENSATION FROM
FROM THE COMPENSATION FROM THE COMPENSATION FROM THE FUND
AGGRESSIVE FROM THE GROWTH FROM THE MANAGED COMPLEX
GROWTH GROWTH AND INCOME BOND TOTAL RETURN PAID TO
NAME OF TRUSTEES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TRUSTEES (A)
<S> <C> <C> <C> <C> <C> <C>
Dexter A. Dodge $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
Ernest T. Kendall 720 720 720 720 720 $ 20,400
Richard B. Osterberg 720 720 720 720 720 $ 20,400
</TABLE>
- ----------
(a) The term "Fund Complex" refers to the Portfolios and the portfolio series of
the Freedom Mutual Fund and the Freedom Group of Tax Exempt Funds to which
the Adviser also provides advisory services.
19
REQUIRED VOTE
Under the Trust's Agreement and Declaration of Trust, a quorum being
present, those nominees for Trustee of the Trust receiving a plurality of the
votes cast by the shareholders of the Trust, shall be elected.
PROPOSAL THREE
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Trustees of the Trust, including the Independent Trustees, have selected
Ernst & Young LLP, 200 Clarendon Street, Boston, MA 02110, as the independent
auditors for the fiscal year ended September 30, 1997 with respect to the Trust.
At the Meeting, shareholders of the Trust are being asked to ratify the
selection of Ernst & Young LLP to perform audit services for the Trust.
Ernst & Young LLP, which has no direct or indirect material financial
interest in the Trust, has served as the Trust's independent auditors since
1992. The services provided by Ernst & Young LLP consist of (1) examination of
the Trust's annual financial statements, (2) assistance and consultation in
connection with Securities and Exchange Commission filings, and (3) review of
the annual income tax returns filed on behalf of the Trust.
If the Trust receives a written request from any shareholder at least five
days prior to the Meeting stating the shareholder will be present in person at
the Meetings and desires to ask questions of the independent auditors, the Trust
will arrange to have a representative of Ernst & Young LLP present at the
Meeting to respond to such questions.
CONSIDERATION BY THE TRUSTEES
THE TRUSTEES OF THE TRUST, INCLUDING THE INDEPENDENT TRUSTEES, RECOMMEND
THAT SHAREHOLDERS OF THE TRUST VOTE FOR PROPOSAL THREE, THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS OF THE TRUST.
REQUIRED VOTE
Ratification of the selection of Ernst & Young LLP as the independent
auditors of the Trust requires the affirmative vote of a majority of the
outstanding shares of the Trust. Under the 1940 Act, this means that, to be
approved by the Trust, this Proposal must receive the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Trust, voting as a
single class, or (2) 67% or more of the outstanding shares of the Trust, voting
as a single class, present at the Meeting, if the holders of more than 50% of
the outstanding shares of the Trust are present or represented by proxy.
20
OTHER MATTERS
The Board of Trustees do not know of any other matters that will be
presented for action at the Meetings. If other matters are presented, proxies
will be voted in accordance with the best judgment of the proxy holders.
SHAREHOLDER PROPOSALS
Under the Trust's Agreement and Declaration of Trust, no annual or special
meetings of shareholders are required. Any shareholder desiring to present a
proposal for consideration at the next meeting of shareholders of one or more of
the Portfolios should submit the proposal in writing so that it is received by
the Assistant Secretary of the Portfolios at One Beacon Street, Boston,
Massachusetts 02108 within a reasonable time before the meeting.
ADDITIONAL INFORMATION
The principal distributors and underwriters for all of the Portfolios are
Tucker Anthony, Incorporated which is located at One World Financial Center, New
York, NY 10281, Sutro & Co. Incorporated, which is located at 201 California
Street, San Francisco, California 94111, and Freedom Distributors Corporation,
which is located at One Beacon Street, Boston, Massachusetts 02108. The Transfer
and Shareholder Services Agent for all of the Portfolios is Investors Bank &
Trust Company, 89 South Street, Boston, Massachusetts 02111.
The information contained in this Proxy Statement regarding JHFSC Acquisition
Corp., Lee and SCP and the terms of the Transaction was provided by JHFSC
Acquisition Corp., Lee and SCP.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO FILL IN,
DATE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
21
EXHIBIT A
MASTER INVESTMENT ADVISORY CONTRACT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end investment company organized as a Delaware
business trust and consists of one or more separate investment portfolios as
may be established and designated by the Trust's Board of Trustees (the
"Board of Trustees") from time to time. This Contract shall pertain only to
such portfolios of the Trust as shall be designated in Supplements to this
Contract as further agreed between the Trust and the Adviser (the
"Portfolios"). A separate series of shares of beneficial interest in the
Trust is offered to investors with respect to each Portfolio. The Trust
engages in the business of investing and reinvesting the assets of each
Portfolio in the manner and in accordance with the investment objectives and
restrictions specified in the currently effective prospectus (the
"Prospectus") relating to the Trust and the Portfolios included in the
company's Registration Statement, as amended from time to time, filed by the
Trust under the Investment Company Act of 1940, as amended (the "1940 Act")
and the Securities Act of 1933. Copies of the documents referred to in the
preceding sentence have been furnished to the Adviser. Any amendments to
those documents shall be furnished to the Adviser promptly. Pursuant to
Master Distribution Contracts and Supplements thereto between the Trust and
each of Tucker Anthony Incorporated, Sutro & Co., Incorporated, Freedom
Distributors Corporation and Signature Broker Dealer Services, Inc. [or such
other distributors as of the effective date of this Agreement] (the
"Distributors"), the Trust has employed the Distributors to act as principal
underwriters for each Portfolio pursuant to a Master Administrative Services
Contract and Supplements thereto between the Trust and Signature Broker
Dealer Services, Inc. [or such
A-1
other administrator as of the effective date of this Agreement] (the
"Administrator"). The Trust has employed the Administrator to provide to the
Trust management and other services.
2. The Trust hereby appoints the Adviser to provide to the Portfolios the
investment advisory services specified in this Contract and the Adviser
hereby accepts such appointment.
3. (a) The Adviser shall, at its expense, (i) employ or associate with
itself such persons as it believes appropriate to assist it in performing
its obligations under this Contract and (ii) provide all services, equipment
and facilities necessary to perform its obligations under this Contract.
(b) The Trust shall be responsible for all of their expenses and
liabilities, including compensation of Trustees who are not affiliated
with the Distributors or any of their affiliates; taxes and governmental
fees; interest charges; fees and expenses of the Trust's independent
auditors and legal counsel; trade association membership dues; fees and
expenses of any custodian (including maintenance of books and accounts
and calculation of the net asset value of shares of the Portfolios),
transfer agent, registrar and dividend disbursing agent of the Trust;
expenses of issuing, selling, redeeming, registering and qualifying for
Sale shares of beneficial interest in the Trust; expenses of preparing
and printing share certificates, and preparing, printing and mailing
prospectuses and reports to shareholders, notices, proxy statements
(other than the proxy statement prepared for the shareholders meeting
convened to consider this agreement (the "initial meeting") and reports
to regulatory agencies; and cost of office supplies, including
stationery; travel expenses of all officers, Trustees and employees;
insurance premiums; brokerage and other expenses of executing portfolio
transactions; expenses of shareholders' meetings, other than the initial
meeting; organization expenses; and extraordinary expenses.
4. (a) The Adviser shall provide to the Trust investment guidance and
policy direction in connection with the management of the portfolio of each
Portfolio, including oral and written research, analysis, advice,
statistical and economic data and information and judgments of both a
macroeconomic and microeconomic character.
The Adviser will determine the securities to be purchased or sold by
each Portfolio and will place orders pursuant to its determinations
either directly with the issuer or with any broker or
A-2
dealer who deals in such securities. The Adviser will determine what
portion of each Portfolio's portfolio shall be invested in securities
described by the policies of such Portfolio and what portion, if any,
should be invested otherwise or held uninvested.
The Trust will have the benefit of the investment analysis and
research, the review of current economic conditions and trends and the
consideration of long-range investment policy generally available to
investment advisory customers of the Adviser. It is understood that the
Adviser will not use any non-public information pertinent to investment
decisions undertaken in connection with this Contract that may be in its
possession or in the possession of any of its affiliates nor will the
Adviser seek to obtain any such information.
(b) The Adviser also shall provide to the Trust's officers administrative
assistance in connection with the operation of the Trust and each of the
Portfolios, which shall include (i) compliance with all reasonable requests
of the Trust for information, including information required in connection
with the Trust's filings with the Securities and Exchange Commission and
state securities commissions and (ii) such other services as the Advisers
shall from time to time determine, upon consultation with the Administrator,
to be necessary to useful to the administration of the Trust and each of the
Portfolios.
(c) As manager of the assets of each Portfolio, the Adviser shall make
investments for the account of each Portfolio in accordance with the
Adviser's best judgment and within the investment objectives and
restrictions set forth in the Prospectus, the 1940 Act and the provisions of
the Internal Revenue Code of 1986 relating to regulated investment companies
subject to policy decisions adopted by the Board of Trustees.
(d) The Adviser shall furnish to the Board periodic reports on the
investment performance of each Portfolio and on the performance of its
obligations under this Contract and shall supply such additional reports and
information as the Trust's officers or Board of Trustees shall reasonably
request.
(e) On occasions when the Adviser deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other
customers, the Adviser, to the extent permitted by applicable law, may
aggregate the securities to be so sold or purchased in order to obtain the
best execution or lower brokerage commissions, if any. The Adviser may also
on occasions purchase or sell a particular security for one or more
customers in different amounts. On either occasion, and to the extent
permitted by applicable law and regulations, allocation of the
A-3
securities so purchased or sold, as well as the expenses incurred in the
will be made by the Adviser in the manner it considers to be the most
equitable and consistent with its fiduciary obligations to that Portfolio
and to such other customers.
5. The Adviser shall give the Trust the benefit of the Adviser's best
judgment and efforts in rendering services under this Contract. As an
inducement to the Adviser's undertaking to render these services, the Trust
agrees that the Adviser shall not be liable under this Contract for any
mistake in judgment or in any other event whatsoever provided that nothing
in this Contract shall be deemed to protect or purport to protect the
Adviser against any liability to the Trust or its shareholders to which the
Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the Adviser's duties under
this Contract or by reason of the Adviser's reckless disregard of its
obligations and duties hereunder.
6. In consideration of the services to be rendered by the Adviser under
this Contract, each Portfolio shall pay the Adviser a monthly fee on the
first business day of each month based upon the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining the net asset value per share) of the net assets of each
Portfolio during the preceding month, at annual rates set forth in a
Supplement to this Contract with respect to each Portfolio. If the fees
payable to the Adviser pursuant to this paragraph 6 begin to accrue before
the end of any month or if this Contract terminates before the end of any
month, the fees for the period from that date to the end of that month or
from the beginning of that month to the date of termination, as the case may
be, shall be prorated according to the proportion which the period bears to
the full month in which the effectiveness or termination occurs. For
purposes of calculating the monthly fees, the value of the net assets of
each Portfolio shall be computed in the manner specified in the Prospectus
for the computation of net asset value. For purposes of this Contract, a
"business day" is any day the New York Stock Exchange is open for trading.
7. If the aggregate expenses of every character incurred by, or allocated
to, each Portfolio in any fiscal year, other than interest, taxes, expenses
under the Master Distribution Plan, brokerage commissions and other
portfolio transaction expenses, other expenditures which are capitalized in
accordance with generally accepted accounting principles and any
extraordinary expense (including, without limitation, litigation and
indemnification expense), but including the fees payable under this Contract
and the fees payable to the Distributors under the Master Distribution Plan
("includible expenses"), shall exceed the expense limitations appli-
A-4
cable to that Portfolio imposed by state securities law or regulations
thereunder, as these limitations may be raised or lowered from time to time,
the Adviser shall pay that Portfolio an amount equal to 50% of that excess.
With respect to portions of a fiscal year in which this Contract shall be in
effect, the foregoing limitations shall be prorated according to the
proportion which that portion of the fiscal year bears to the full fiscal
year. At the end of each month of the Trust's fiscal year, the Distributors
will review the includible expenses accrued during that fiscal year to the
end of the period and shall estimate the contemplated includible expenses
for the balance of that fiscal year. If, as a result of the review and
estimation, it appears likely that the includible expenses will exceed the
limitations referred to in this paragraph 7 for a fiscal year with respect
to a Portfolio, the monthly fees relating to that Portfolio payable to the
Adviser under this Contract for such month shall be reduced, subject to a
later reimbursement to reflect actual expenses, by an amount equal to 50% of
a pro rata portion (prorated on the basis of the remaining months of the
fiscal year, including the month just ended) of the amount by which the
includible expenses for the fiscal year (less an amount equal to the
aggregate of actual reductions made pursuant to this provision with respect
to prior months of the fiscal year) are expected to exceed the limitations
provided in this paragraph 7. For purposes of the foregoing, the value of
the net assets of each Portfolio shall be computed in the manner specified
in paragraph 6, and any payments required to be made by the Adviser shall be
made once a year promptly after the end of the Trust's fiscal year.
8. (a) This Contract and any Supplement hereto shall become effective
with respect to a Portfolio on the date specified in such Supplement and
shall thereafter continue in effect with respect to that Portfolio for a
period of more than two years from such date only so long as the continuance
is specifically approved at least annually (i) by the vote of a majority of
the outstanding voting securities of the Portfolio (as defined in the 1940
Act) or by the Board of Trustees and (ii) by the vote, cast in person at a
meeting called for that purpose, of a majority of the members of the Board
of Trustees who are not parties to this Contract or "interested persons" (as
defined in the 1940 Act) of any such party.
(b) This Contract and any Supplement hereto may be terminated with
respect to a Portfolio at any time, without the payment of any penalty,
by a vote of a majority of the outstanding voting securities of that
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
entire Board of Trustees on 60 days' written notice to the Adviser or by
the Adviser on 60 days' written notice to the Trust. This Contract shall
terminate automatically in the event of its assignment (as defined in the
1940 Act).
A-5
9. Except to the extent necessary to perform the Adviser's obligations
under this Contract, nothing herein shall be deemed to limit or restrict the
right of the Adviser, or any affiliate of the Adviser, or any employee of
the Adviser, to engage in any other business or to devote time and attention
to the management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind to any other
corporation, firm, individual or association.
10. The investment management services of the Adviser to the Trust under
this Contract are not to be deemed exclusive as to the Adviser and the
Adviser will be free to render similar services to others.
11. This Contract shall be construed in accordance with the laws of the
State of Delaware provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act.
12. In the event that the Board of Trustees shall establish one or more
additional investment portfolios, it shall so notify the Adviser in writing.
If the Adviser wishes to render investment advisory services to such
portfolio, it shall so notify the Trust in writing, whereupon such portfolio
shall become a Portfolio hereunder.
13. The Master Trust Agreement establishing the Trust (the "Master Trust
Agreement") provides that the name "FundManager Trust" refers to the
Trustees under the Master Trust Agreement collectively as Trustees and not
as individuals or personally, and that no shareholder, Trustee, officer,
employee or agent of the Trust shall be subject to claims against or
obligations of the Trust to any extent whatsoever, but that the Trust estate
only shall be liable.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
---------------------- ----------------------
Title: Title:
A-6
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
Re: Aggressive Growth Portfolio
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized as a
Delaware business trust and consists of such separate investment portfolios
as have been or may be established by the Trustees of the Trust from time to
time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Aggressive
Growth Portfolio (the "Portfolio") is a separate investment portfolio of the
Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract ("Master Advisory Contract") pursuant to which the Trust
has employed the Adviser to provide investment advisory and other services
specified in the Master Advisory Contract and the Adviser has accepted such
employment. Terms used but not otherwise defined herein shall have the same
meanings assigned to them by the Master Advisory Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the Trust
hereby adopts the Master Advisory Contract with respect to the Portfolio and
the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
5. As provided in paragraph 6 of the Master Advisory Contract and subject
to further conditions as set forth therein, the Trust shall with respect to
the Portfolio pay the Adviser a monthly fee on the first
A-7
business day of each month based upon the average daily value (as determined
on each business day at the time set forth in the Prospectus for determining
net asset value per share) of the net assets of the Portfolio during the
preceding month at the following annual rates:
PORTION OF AVERAGE DAILY
VALUE OF NET ASSETS OF THE PORTFOLIO FEE RATE
------------------------------------ --------
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on _______,
1996 and shall thereafter continue in effect with respect to the Portfolio
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by the Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. This Contract may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio (as defined in the 1940 Act)
or by a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
members of the Board of Trustees on 60 days' written notice to the Trust.
This Contract shall terminate automatically in the event of its assignment
as defined in the 1940 Act.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
Title: Title:
A-8
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
Re: Growth and Income Portfolio
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized as a
Delaware business trust and consists of such separate investment portfolios
as have been or may be established by the Trustees of the Trust from time to
time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Growth and
Income Portfolio (the "Portfolio") is a separate investment portfolio of the
Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract ("Master Advisory Contract") pursuant to which the Trust
has employed the Adviser to provide investment advisory and other services
specified in the Master Advisory Contract and the Adviser has accepted such
employment. Terms used but not otherwise defined herein shall have the same
meanings assigned to them by the Master Advisory Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the Trust
hereby adopts the Master Advisory Contract with respect to the Portfolio and
the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
5. As provided in paragraph 6 of the Master Advisory Contract and subject
to further conditions as set forth therein, the Trust shall with respect to
the Portfolio pay the Adviser a monthly fee on the first
A-9
business day of each month based upon the average daily value (as determined
on each business day at the time set forth in the Prospectus for determining
net asset value per share) of the net assets of the Portfolio during the
preceding month at the following annual rates:
PORTION OF AVERAGE DAILY
VALUE OF NET ASSETS OF THE PORTFOLIO FEE RATE
------------------------------------ --------
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on _____,
1996 and shall thereafter continue in effect with respect to the Portfolio
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by the Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. This Contract may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio (as defined in the 1940 Act)
or by a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
members of the Board of Trustees on 60 days' written notice to the Trust.
This Contract shall terminate automatically in the event of its assignment
as defined in the 1940 Act.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
--------------------- ----------------------
Title: Title:
A-10
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
Re: Growth Portfolio
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized as a
Delaware business trust and consists of such separate investment portfolios
as have been or may be established by the Trustees of the Trust from time to
time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Growth
Portfolio (the "Portfolio") is a separate investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract ("Master Advisory Contract") pursuant to which the Trust
has employed the Adviser to provide investment advisory and other services
specified in the Master Advisory Contract and the Adviser has accepted such
employment. Terms used but not otherwise defined herein shall have the same
meanings assigned to them by the Master Advisory Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the Trust
hereby adopts the Master Advisory Contract with respect to the Portfolio and
the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
5. As provided in paragraph 6 of the Master Advisory Contract and subject
to further conditions as set forth therein, the Trust shall with respect to
the Portfolio pay the Adviser a monthly fee on the first
A-11
business day of each month based upon the average daily value (as determined
on each business day at the time set forth in the Prospectus for determining
net asset value per share) of the net assets of the Portfolio during the
preceding month at the following annual rates:
PORTION OF AVERAGE DAILY
VALUE OF NET ASSETS OF THE PORTFOLIO FEE RATE
------------------------------------ --------
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on ______,
1996 and shall thereafter continue in effect with respect to the Portfolio
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by the Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. This Contract may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio (as defined in the 1940 Act)
or by a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
members of the Board of Trustees on 60 days' written notice to the Trust.
This Contract shall terminate automatically in the event of its assignment
as defined in the 1940 Act.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
----------------------- -----------------------
Title: Title:
A-12
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
Re: Bond Portfolio
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized as a
Delaware business trust and consists of such separate investment portfolios
as have been or may be established by the Trustees of the Trust from time to
time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Bond
Portfolio (the "Portfolio") is a separate investment portfolio of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract ("Master Advisory Contract") pursuant to which the Trust
has employed the Adviser to provide investment advisory and other services
specified in the Master Advisory Contract and the Adviser has accepted such
employment. Terms used but not otherwise defined herein shall have the same
meanings assigned to them by the Master Advisory Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the Trust
hereby adopts the Master Advisory Contract with respect to the Portfolio and
the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
5. As provided in paragraph 6 of the Master Advisory Contract and subject
to further conditions as set forth therein, the Trust shall with respect to
the Portfolio pay the Adviser a monthly fee on the first
A-13
business day of each month based upon the average daily value (as determined
on each business day at the time set forth in the Prospectus for determining
net asset value per share) of the net assets of the Portfolio during the
preceding month at the following annual rates:
PORTION OF AVERAGE DAILY
VALUE OF NET ASSETS OF THE PORTFOLIO FEE RATE
------------------------------------ --------
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on _____,
1996 and shall thereafter continue in effect with respect to the Portfolio
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by the Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. This Contract may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio (as defined in the 1940 Act)
or by a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
members of the Board of Trustees on 60 days' written notice to the Trust.
This Contract shall terminate automatically in the event of its assignment
as defined in the 1940 Act.
If the foregoing correctly sets forth the agreement between the Trust and the
Adviser, please so indicate by signing and returning to the Trust the enclosed
copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
------------------- -------------------
Title: Title:
A-14
INVESTMENT ADVISORY CONTRACT SUPPLEMENT
FUNDMANAGER TRUST
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108
, 1996
FREEDOM CAPITAL MANAGEMENT CORPORATION
ONE BEACON STREET
BOSTON, MASSACHUSETTS 02108-3105
Dear Sirs:
Re: Managed Total Return Portfolio
This will confirm the agreement between the undersigned (the "Trust") and
Freedom Capital Management Corporation (the "Adviser") as follows:
1. The Trust is an open-end management investment company organized as a
Delaware business trust and consists of such separate investment portfolios
as have been or may be established by the Trustees of the Trust from time to
time. A separate class of shares of beneficial interest of the Trust is
offered to investors with respect to each investment portfolio. Managed
Total Return Portfolio (the "Portfolio") is a separate investment portfolio
of the Trust.
2. The Trust and the Adviser have entered in to a Master Investment
Advisory Contract ("Master Advisory Contract") pursuant to which the Trust
has employed the Adviser to provide investment advisory and other services
specified in the Master Advisory Contract and the Adviser has accepted such
employment. Terms used but not otherwise defined herein shall have the same
meanings assigned to them by the Master Advisory Contract.
3. As provided in paragraph 1 of the Master Advisory Contract, the Trust
hereby adopts the Master Advisory Contract with respect to the Portfolio and
the Adviser hereby acknowledges that the Master Advisory Contract shall
pertain to the Portfolio, the terms and conditions of the Master Advisory
Contract being hereby incorporated herein by reference.
4. The term "Portfolio" as used in the Master Advisory Contract shall,
for purposes of this Supplement, pertain to the Portfolio.
5. As provided in paragraph 6 of the Master Advisory Contract and subject
to further conditions as set forth therein, the Trust shall with respect to
the Portfolio pay the Adviser a monthly fee on the first
A-15
business day of each month based upon the average daily value (as determined
on each business day at the time set forth in the Prospectus for determining
net asset value per share) of the net assets of the Portfolio during the
preceding month at the following annual rates:
PORTION OF AVERAGE DAILY
VALUE OF NET ASSETS OF THE PORTFOLIO FEE RATE
------------------------------------ --------
Assets not exceeding $500 million 0.50%
Assets in excess of $500 million 0.40%
6. This Supplement and the Master Advisory Contract (together, the
"Contract") shall become effective with respect to the Portfolio on _____,
1996 and shall thereafter continue in effect with respect to the Portfolio
only so long as the continuance is specifically approved at least annually
(a) by the vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by the Board of Trustees and (b)
by the vote, cast in person at a meeting called for that purpose, of a
majority of the members of the Board of Trustees who are not parties to this
Contract or "interested persons" (as defined in the 1940 Act) of any such
party. This Contract may be terminated with respect to the Portfolio at any
time, without the payment of any penalty, by vote of a majority of the
outstanding voting securities of the Portfolio (as defined in the 1940 Act)
or by a vote of a majority of the outstanding voting securities of the
Portfolio (as defined in the 1940 Act) or by a vote of a majority of the
members of the Board of Trustees on 60 days' written notice to the Trust.
This Contract shall terminate automatically in the event of its assignment
as defined in the 1940 Act.
If the foregoing correctly sets forth the agreement between the Trust and
the Adviser, please so indicate by signing and returning to the Trust the
enclosed copy hereof.
Very truly yours,
ACCEPTED: FUNDMANAGER TRUST
FREEDOM CAPITAL
MANAGEMENT CORPORATION
By: By:
--------------------- ---------------------
Title: Title:
A-16
VOTE THIS PROXY CARD TODAY!
Please fold and detach card at perforation before mailing
PORTFOLIO NAME WILL PRINT HERE PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking all previous proxies, hereby appoint(s)
Dexter A. Dodge and John J. Danello and each of them, attorneys with full power
of substitution in each, to vote all the shares of beneficial interest of the
above-referenced Portfolio (the "Portfolio"), a portfolio series of FundManager
Trust (the "Trust"), which the undersigned is (are) entitled to vote at the
Special Meeting of Shareholders (the "Meeting") of the Portfolio to be held at
the offices of the Trust, sixth floor, One Beacon Street, Boston, Massachusetts
02108, on Monday, December 16, 1996 at 3:00 p.m., Boston time, and at any
adjournment or postponement thereof. All powers may be exercised by majority of
said proxy holders or substitutes voting or acting, or, if only one votes and
acts, then by that one. Receipt of the Proxy Statement is hereby acknowledged.
If not revoked in the manner described in the Proxy Statement, this proxy shall
be voted as specified on the reverse side.
Date , 1996
-------------------------------------------
NOTE: Signature(s) should agree with name(s) printed
herein. Executors, Administrators, Trustees, etc.
should so indicate.
Signature(s)
VOTE THIS PROXY CARD TODAY!
Please fold and detach card at perforation before mailing
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSALS (1), (2) AND (3) IF NO
SPECIFICATION IS MADE BELOW. AS TO ANY OTHER MATTER, SAID PROXY OR PROXIES SHALL
VOTE IN ACCORDANCE WITH THEIR BEST JUDGEMENT.
(The following proposals are numbered to correspond to the numbering of
proposals contained in the Proxy Statement)
Please vote by filing in the appropriate boxes below, as shown, using blue or
black ink or dark pencil. Do not use red ink.
1. To consider and vote on approval of a new Master Investment Advisory
Contract between the Trust, on behalf of the Portfolio and Freedom Capital
Management Corporation.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
2. To elect four trustees of the Trust. Nominees: Dexter A. Dodge, Ernest T.
Kendall, Richard B. Osterberg and John R. Haack.
FOR all [ ] WITHHOLD AUTHORITY [ ]
nominees listed from all nominees except as
herein noted to the contrary at left
YOU MAY WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S), BY WRITING THE NOMINEE(S)
NAME(S) ON THE LINE BELOW.
- --------------------------------------------------------------------------------
3. To ratify the selection of Ernst & Young LLP as the independent auditors of
the Trust.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
In the discretion of said proxy or proxies, to act upon such other matters as
may properly come before the Meeting and any adjournment or postponement
thereof.
