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FUND MANAGER TRUST
SUPPLEMENT DATED OCTOBER 18, 1996
TO THE PROSPECTUS DATED JANUARY 29, 1996
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NAMES OF FUNDS
On October 3, 1996, the Trustees of the Trust approved a change in the
names of the Funds as follows:
OLD NAME NEW NAME
Aggressive Growth Fund Aggressive Growth Portfolio
Growth and Income Fund Growth and Income Portfolio
Growth Fund Growth Portfolio
Bond Fund Bond Portfolio
Managed Total Return Fund Managed Total Return Portfolio
CHANGE IN CONTROL OF ADVISER
John Hancock Subsidiaries, Inc. ("Hancock Subsidiaries") has decided to
sell approximately 95% of its interest in John Hancock Freedom Securities
Corporation ("Freedom Securities"), the parent company of Freedom Capital
Management Corporation, the Adviser of the Funds, to JHFSC Acquisition Corp., a
newly formed Delaware corporation, organized by an investor group which will
include certain members of management and employees of Freedom Securities and
its subsidiaries, including the Adviser (the "Employee Shareholders"). To
accomplish the sale, Hancock Subsidiaries, JHFSC Acquisition Corp., Thomas H.
Lee Equity Fund III, L.P. ("Lee") and SCP Private Equity Partners, L.P. ("SCP"),
entered into a Contribution Agreement on October 4, 1996, pursuant to which
Hancock Subsidiaries 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).
After giving effect to the 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:
INVESTOR PERCENTAGE 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%
If the Employee Shareholders contribute more than currently
anticipated, the percentage ownership of Lee and SCP in JHFSC Acquisition Corp.
set forth above will be reduced proportionately.
<PAGE>
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.
The consummation of the Transaction will result in a change of control
of the Adviser, causing the Master Investment Advisory Contract between the
Adviser and the Trust, on behalf of each of the Funds, to be "assigned," as such
term is defined under the Investment Company Act of 1940 (the "1940 Act"). This
assignment will necessitate approval of a new Master Investment Advisory
Contract by the shareholders of the Funds. A proxy statement seeking shareholder
approval of a new Master Investment Advisory Contract is expected to be mailed
to shareholders of the Funds shortly. The new Master Investment Advisory
Contract, if approved, will be substantially similar to the existing Master
Investment Advisory Contract and the services and fees described in the
Prospectus will remain unchanged.
Consummation of the Transaction is subject to the conditions set forth
in the Contribution Agreement. No assurance can be given that the Transaction
will be consummated. If the Transaction is consummated and if shareholders of
the Funds 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 Funds' Existing
Master Investment Advisory Contract with the Adviser will remain in place.
In connection with the Transaction, the Trust on behalf of the Funds
and the Adviser (together with the Trust, the "Applicants"), has also applied
for an order of the Securities and Exchange Commission to provide the Applicants
an exemption from Section 15(a) of the 1940 Act. The requested exemption would
permit the implementation, prior to formal shareholder approval, of the new
Master Investment Advisory Contract described above, which is substantially
identical to the existing Master Investment Advisory Contract, between the Trust
and the Adviser with respect to each Fund. The requested exemption would cover
an interim period of not more than 120 days 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 Funds,
but in no event later than March 31, 1997. For each Fund, the aggregate
contractual rate chargeable for investment advisory services will remain the
same. If the requested exemptive relief is granted, the investment advisory fees
collected during the interim period 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 Fund (including interest earned on such paid fees)
will be paid to the Adviser only if shareholders of the Fund approve the new
Master Investment Advisory Contract. If shareholders of a Fund fail to approve
the new Master Investment Advisory Contract, the escrow agent will pay that Fund
its respective share of the escrow amounts (including any interest earned). If
the Transaction is not consummated, the Funds' existing Master Investment
Advisory Contract with the Adviser will remain in place.
