-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I9ajm81r/DExnBBxXuwtcdpdUH48Wlql6GJJ6qhTnuyEIfdx4nCNBs3ula5lWk7Y Vo2MrTkru6MNtWV9VFQ0sg== 0000950116-95-000587.txt : 19960102 0000950116-95-000587.hdr.sgml : 19960102 ACCESSION NUMBER: 0000950116-95-000587 CONFORMED SUBMISSION TYPE: 485APOS PUBLIC DOCUMENT COUNT: 34 FILED AS OF DATE: 19951229 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLENMEDE FUND INC CENTRAL INDEX KEY: 0000835663 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 485APOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-22884 FILM NUMBER: 95605904 BUSINESS ADDRESS: STREET 1: 103 BELLEVUE PKWY STREET 2: BELLEVUE PARK CORPORATE CENTER CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 8004417379 485APOS 1 As filed with the Securities and Exchange Commission on December 29, 1995 Registration Nos. 33-22884 811-5577 ============================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM N-1A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ Pre-Effective Amendment No. / / Post-Effective Amendment No. 17 /X/ and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/ Amendment No. 19 /X/ ---------------------------- The Glenmede Fund, Inc. (Exact Name of Registrant as Specified in Charter) 135 East Baltimore Street Baltimore, Maryland 21202 (Address of Principal Executive Offices) Registrant's Telephone Number: 1-800-442-8299 Michael P. Malloy, Esq. Secretary Drinker Biddle & Reath 1100 Philadelphia National Bank Building 1345 Chestnut Street Philadelphia, Pennsylvania 19107-3496 (Name and Address of Agent for Service) It is proposed that this filing will become effective (check appropriate box) [ ] immediately upon filing pursuant to paragraph (b) [ ] on (date) pursuant to paragraph (b) [x] 60 days after filing pursuant to paragraph (a)(i) [ ] on (date) pursuant to paragraph (a)(i) [ ] 75 days after filing pursuant to paragraph (a)(ii) [ ] on (date) pursuant to paragraph (a)(ii) of rule 485. If appropriate, check the following box: [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Registrant has previously registered an indefinite number of securities under the Securities Act of 1933 pursuant to Section (a)(1) of Rule 24f-2 under the Investment Company Act of 1940, as amended. Registrant's Rule 24f-2 Notice for the fiscal year ended October 31, 1995 was filed with the Securities and Exchange Commission on November 16, 1995. ============================================================================== THE GLENMEDE FUND, INC. Institutional International Portfolio Emerging Markets Portfolio CROSS REFERENCE SHEET Pursuant to Rule 495(a) under the Securities Act of 1933
Form N-1A Item Number Location - --------------------- -------- Part A Prospectus Caption - ------ ------------------ 1. Cover Page........................................... Cover Page 2. Synopsis............................................. Expenses of the Portfolios 3. Condensed Financial Information...................... Financial Highlights; Performance Calculations 4. General Description of Registrant.................... Cover Page; Investment Objective and Policies; Investment Techniques; Risk Factors; Investment Limitations; General Information 5. Management of the Fund............................... Investment Advisor; Administrative, Transfer Agency and Dividend Paying Services; Board Members and Officers; Purchase of Shares; Redemption of Shares; 6. Capital Stock and Other Securities .................. Purchase of Shares; Redemption of Shares; Dividends, Capital Gains Distributions and Taxes; General Information 7. Purchase of Securities Being Offered ................ Valuation of Shares; Purchase of Shares; Redemption of Shares 8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares 9. Pending Legal Proceedings............................ Not Applicable
THE GLENMEDE FUND, INC. 135 East Baltimore Street, Baltimore, Maryland 21202 - ------------------------------------------------------------------------------- (800) 442-8299 - ------------------------------------------------------------------------------- Prospectus - February __, 1996 INVESTMENT OBJECTIVES The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), is a no-load, open-end management investment company. Glenmede Fund consists of ten series of shares, each of which has different investment objectives and policies. The securities offered hereby are two of these series of shares (each referenced herein as a "Portfolio") of Glenmede Fund. Institutional International Portfolio. The objective of the Institutional International Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The Institutional International Portfolio seeks to achieve its objective by investing primarily in common stocks and other equity securities of companies located outside the United States. The net asset value of this Portfolio will fluctuate. Emerging Markets Portfolio. The objective of the Emerging Markets Portfolio is to provide long-term growth of capital. The Emerging Markets Portfolio seeks to achieve its objective by investing primarily in equity securities of issuers in countries having emerging markets. The net asset value of this Portfolio will fluctuate. Total return consists of income (dividend and/or interest income from portfolio securities) and capital gains and losses, both realized and unrealized, from portfolio securities. Shares of the Portfolios are subject to investment risks, including the possible loss of principal, are not bank deposits and are not endorsed by, insured by, guaranteed by, obligations of or otherwise supported by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, The Glenmede Corporation or any of its affiliates or any other governmental agency or bank. - ------------------------------------------------------------------------------- ABOUT THIS PROSPECTUS This Prospectus, which should be retained for future reference, sets forth certain information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Portfolios has been filed with the Securities and Exchange Commission. The SAI dated February __, 1996, as amended or supplemented from time to time, is incorporated by reference into this Prospectus. The 199_ Annual Report to Shareholders contains additional investment and performance information about the Portfolios. A copy of the SAI and the 199_ Annual Report may be obtained, without charge, by writing to Glenmede Fund at the address shown above or by calling Glenmede Fund at the telephone number shown above. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. EXPENSES OF THE PORTFOLIOS The following table illustrates the expenses and fees incurred by the Institutional International and Emerging Markets Portfolios for the fiscal year ended October 31, 1995, restated to reflect new contractual arrangements. SHAREHOLDER TRANSACTION EXPENSES Sales Load Imposed on Purchases............................................NONE Sales Load Imposed on Reinvested Dividends................................ NONE Deferred Sales Load........................................................NONE Redemption Fees............................................................NONE Exchange Fees..............................................................NONE ANNUAL PORTFOLIO OPERATING EXPENSES (as a percentage of average net assets) Institutional Emerging International Markets Portfolio Portfolio ------------- --------- Investment Advisory Fees............. .__%1 ___% ----- ---- Administration Fees.................. .__% .__% ----- ---- Other Expenses....................... . % . % ----- ---- Total Operating Expenses............. .__% .__% ===== ==== - ---------------------- 1 The Glenmede Trust Company (the "Advisor") has agreed to waive its fees to the extent necessary to ensure that the Institutional International Portfolio's annual total operating expenses do not exceed 1.00% of such Portfolio's average net assets. Without waivers, Total Operating Expenses for the year ended October 31, 1995 would have been ____%. The purpose of the above table is to assist an investor in understanding the various estimated costs and expenses that an investor in a Portfolio will bear directly or indirectly. Actual expenses may be greater or lesser than such estimates. For further information concerning the Portfolios' expenses see "Investment Advisor," "Administrative, Transfer Agency and Dividend Paying Services" and "Board Members and Officers." The following example illustrates the estimated expenses that an investor in each Portfolio would pay on a $1,000 investment over various time periods assuming (i) a 5% annual rate of return and (ii) redemption at the end of each time period. As noted in the above table, Glenmede Fund charges no redemption fees of any kind. 1 Year * 3 Years* 5 Years* 10 Years* -------- -------- -------- --------- Institutional International Portfolio... $__ $__ $___ $___ --- --- ----- ---- Emerging Markets Portfolio.............. $__ $__ $___ $___ --- --- ----- ---- *You would pay the same expenses set forth above on the same investment, assuming no redemptions at the end of the period. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. THE ABOVE FIGURES ARE ESTIMATES ONLY. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. -3- FINANCIAL HIGHLIGHTS The table below sets forth financial highlights of the Institutional International and Emerging Markets Portfolios for the respective periods presented. The data presented for the Portfolios is derived from the Portfolios' Financial Statements included in Glenmede Fund's 199_ Annual Report to Shareholders, which Financial Statements and the report thereon of _____________, Glenmede Fund's independent accountants, are incorporated by reference into the SAI. The following information should be read in conjunction with those Financial Statements. Institutional International Portfolio
Year Ended Year Ended Year Ended Period Ended October 31 October 31, October 31, October 31, 1995 1994 1993 1992+ ---------- --------- -------- -------- Net asset value, beginning of year......................... $12.00 $9.42 $10.00 ------ ----- ------ Income from investment operations: Net investment income#................................... 0.16 0.15 0.03 Net realized and unrealized gain/(loss) on investments.......................................... 1.49 2.88 (0.60) ------ ------ ------ Total from investment operations....................... 1.65 3.03 (0.57) ------ ------ ------ Less Distributions: Distributions from net investment income.................................................. (0.13) (0.14) (0.01) Distributions from net realized capital gains........................................... (0.87) (0.31) -- Distributions in excess of net realized gains.......................................... (0.02) -- -- ------ ------ ---- Total Distributions.................................... (1.02) (0.45) (0.01) ------ ------ ------ Net asset value, end of year............................... $12.63 $12.00 $9.42 ====== ====== ===== Total return++.............................................. 13.85% 32.34% (5.60)% ======= ====== ====== Ratios to average net assets/Supplemental data: Net assets, end of year (in 000's)............................ $17,076 $12,979 $9,416 Ratio of operating expenses to average net assets**................................................. 1.00% 1.00% 1.00%* Ratio of net investment income to average net assets................................................... 1.29% 1.41% 1.28%* Portfolio turnover rate........................................ 39% 34% 10%
- ---------------- + The Portfolio commenced operations on August 1, 1992. ++ Total return represents aggregate total return for the period indicated. * Annualized. ** Annualized expense ratio before waiver of fees and/or expenses reimbursed by the investment advisor for the years ended October 31, 1995, 1994 and 1993 and the period ended October 31, 1992 were ____%, 1.01%, 1.08% and 1.08%, respectively. # Net investment income before waiver of fees and/or expenses reimbursed by the investment advisor for the years ended October 31, 1995, 1994 and 1993 and the period ended October 31, 1992 were $____, $0.16, $0.14 and $0.03, respectively. -4- Emerging Markets Portfolio Period Ended October 31, 1995+ ----------------- Net asset value, beginning of year......................... Income from investment operations: Net investment income.................................... Net realized and unrealized gain/(loss) on investments.......................................... Total from investment operations....................... Less Distributions: Distributions from net investment income................. Distributions from net realized capital gains............ Distributions in excess of net realized gains............ Total Distributions.................................... Net asset value, end of year............................... Total return++............................................. Ratios to average net assets/Supplemental data: Net assets, end of year (in 000's)......................... Ratio of operating expenses to average net assets................................................ Ratio of net investment income to average net assets................................................ Portfolio turnover rate.................................... - ------------------- + The Portfolio commenced operations on December 14, 1994. * Annualized. + + Total return represents aggregate total return for the period indicated. -5- PERFORMANCE CALCULATIONS Each Portfolio may advertise or quote total return data from time to time. Total return will be calculated on an average annual total return basis, and may also be calculated on an aggregate total return basis, for various periods. Average annual total return reflects the average annual percentage change in value of an investment in the particular Portfolio over the measuring period. Aggregate total return reflects the total percentage change in value over the measuring period. Both methods of calculating total return assume that dividends and capital gains distributions made by a Portfolio during the period are reinvested in Portfolio shares. Each Portfolio may compare its total returns to that of other investment companies with similar investment objectives and to stock and other relevant indices or to rankings prepared by independent services or other financial or industry publications that monitor the performance of mutual funds. For example, the total return of the Institutional International Portfolio may be compared to data prepared by Lipper Analytical Services, Inc. ("Lipper") and the Morgan Stanley Capital International EAFE Index. Total return of the Emerging Markets Portfolio may be compared to data prepared by Lipper, the Morgan Stanley Capital International Emerging Markets Free Index (also known as the Emerging Markets Index) and the International Financial Corporation Composite Index. Total return and other performance data as reported in national financial publications such as Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or in publications of a local or regional nature, may also be used in comparing the performances of the Portfolios. Performance quotations will represent a Portfolio's past performance, and should not be considered as representative of future results. Since performance will fluctuate, performance data for a Portfolio should not be used to compare an investment in a Portfolio's shares with bank deposits, savings accounts and similar investment alternatives which often provide an agreed or guaranteed fixed yield/return for a stated period of time. Shareholders should remember that performance is generally a function of the kind and quality of the instruments held in a Portfolio, portfolio maturity, operating expenses and market conditions. Any management fees charged by the Advisor or institutions to their clients will not be included in a Portfolio's calculations of total return. INVESTMENT OBJECTIVES AND POLICIES The investment objective of each Portfolio is not fundamental and may be changed by the Board members without shareholder approval. INSTITUTIONAL INTERNATIONAL PORTFOLIO The objective of the Institutional International Portfolio is to provide maximum, long-term total return consistent with reasonable risk to principal. The Institutional International Portfolio seeks to achieve its objective by investing primarily in common stocks and other equity securities of companies located outside the United States. The Institutional International Portfolio is expected to diversify its investments across companies located in a number of foreign countries, which may include, but are not limited to, Japan, the United Kingdom, Germany, France, Switzerland, the Netherlands, Sweden, Australia, Hong Kong and Singapore. The Institutional International Portfolio will invest an aggregate of at least 65% of its total assets in the securities of companies (other than investment companies) in at least three different countries, other than the United States. The securities which the Institutional International Portfolio may purchase include the following: common stocks of companies located outside the U.S.; shares of closed-end investment companies which invest chiefly in the shares of companies located outside the U.S. (such shares will be purchased by -6- the Institutional International Portfolio within the limits prescribed by the Investment Company Act of 1940 (the "1940 Act")); U.S. or foreign securities convertible into foreign common stock; and American Depositary Receipts ("ADRs") which are U.S. domestic securities representing ownership rights in foreign companies. The Institutional International Portfolio also may enter into forward currency exchange contracts only in order to hedge against uncertainty in the level of future foreign exchange rates in the purchase and sale of investment securities; it may not enter into such contracts for speculative purposes. See "Investment Techniques--Forward Foreign Currency Exchange Contracts." The Institutional International Portfolio intends to remain, for the most part, fully invested in equity securities of companies located outside of the United States. However, the Institutional International Portfolio may invest a portion of its assets (up to 20% under normal circumstances) in the following fixed income and money market securities: obligations of the U.S. Government and its guaranteed or sponsored agencies, including shares of open-end or closed-end investment companies which invest in such obligations (such shares will be purchased within the limits prescribed by the 1940 Act and would subject a shareholder of the Institutional International Portfolio to expenses of the other investment company in addition to the expenses of the Portfolio); short-term money market instruments issued in the U.S. or abroad, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, bankers acceptances, commercial paper rated A-1 by Standard & Poor's Ratings Group, Division of McGraw Hill ("S&P") or Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or in equivalent money market securities; and high quality fixed income securities denominated in U.S. dollars, any foreign currency, or a multi-national currency unit such as the European Currency Unit. EMERGING MARKETS PORTFOLIO The objective of the Emerging Markets Portfolio is to provide long-term growth of capital. The Emerging Markets Portfolio seeks to achieve this objective by investing primarily in equity securities of issuers in countries having emerging markets. It is currently expected that under normal conditions at least 65% of the Emerging Markets Portfolio's total assets will be invested in emerging market equity securities. The Portfolio considers countries having emerging markets to be all countries that are generally considered to be developing or emerging countries by the International Bank for Reconstruction and Development (more commonly referred to as the World Bank) and the International Finance Corporation, as well as countries that are classified by the United Nations or otherwise regarded by their authorities as developing. The countries may include, but are not limited to, the following: Turkey, India, Indonesia, Brazil, Greece, Malaysia, China, Taiwan, South Korea, Portugal and Hungary. In addition, as used in this Prospectus, "emerging market equity securities" means (i) equity securities of companies the principal securities trading market for which is an emerging market country, as defined above, (ii) equity securities, traded in any market, of companies that derive 50% or more of their total revenue from either goods or services produced in such emerging market countries or sales made in such emerging market countries or (iii) equity securities of companies organized under the laws of, and with a principal office in, an emerging market country. "Equity securities," as used in this Prospectus, refers to common stock, preferred stock, warrants or rights to subscribe to or purchase such securities and sponsored or unsponsored ADRs, European Depositary Receipts ("EDRs"), and Global Depositary Receipts ("GDRs"). Determinations as to eligibility will be made by the Emerging Markets Portfolio's sub-advisor, Pictet International Management Limited (the "Sub-Advisor"), based on publicly available information and inquiries made to the companies. See "Risk Factors" for a discussion of the nature of information publicly available for non-U.S. companies. The Portfolio -7- will at all times, except during defensive periods, maintain investments in at least three countries having developing markets. The Sub-Advisor will limit holdings in any one country to 15% at the time of investment. The Emerging Markets Portfolio and its Sub-Advisor may, from time to time, use various methods of selecting securities for the Emerging Markets Portfolio, and may also employ and rely on independent or affiliated sources of information and ideas in connection with management of the Portfolio. The Sub-Advisor's philosophy for investing in emerging markets focuses on stock selection and significantly diversifying the Portfolio's investments on a company and country level. The Sub-Advisor uses a proprietary data base which screens for emerging markets that meet the Sub-Advisor's strict quantitative criteria. Generally, in order for a country to be included by the Sub-Advisor as a permissible emerging market investment it must satisfy three conditions and meet certain additional criteria. First, the country must meet certain custodial criteria, such as security of assets and international experience. Second, the country typically satisfies certain socioeconomic conditions, including political stability, freedom to invest and repatriate capital and deregulation of the economy. Third, the country typically satisfies specific cyclical criteria, including liquidity conditions, industrial production capacity constraints, direction of real interest rates and the valuation of the market. For long-term growth of capital, the Emerging Markets Portfolio may invest up to 35% of its total assets in debt securities (defined as bonds, notes, debentures, commercial paper, certificates of deposit, time deposits and bankers' acceptances) which are rated at least Baa by Moody's or BBB by S&P or are unrated debt securities deemed to be of comparable quality by the Sub-Advisor. Securities with the lowest rating in the investment grade category (i.e., Baa by Moody's or BBB by S&P) are considered to have some speculative characteristics and are more sensitive to economic change than higher rated securities. Certain debt securities can provide the potential for long-term growth of capital based on various factors such as changes in interest rates, economic and market conditions, improvement in an issuer's ability to repay principal and pay interest, and ratings upgrades. Additionally, convertible bonds can provide the potential for long-term growth of capital through the conversion feature, which enables the holder of the bond to benefit from increases in the market price of the securities into which they are convertible. However, there can be no assurances that debt securities or convertible bonds will provide long-term growth of capital. The Emerging Markets Portfolio may lend its portfolio securities. In addition, the Emerging Markets Portfolio may enter into forward foreign currency contracts and reverse repurchase agreements. When deemed appropriate by the Sub-Advisor, the Emerging Markets Portfolio may invest cash balances in repurchase agreements and other money market investments to maintain liquidity in an amount to meet expenses or for day-to-day operating purposes. These investment techniques are described below and under the heading "Investment Objective and Policies" in the SAI. When the Sub-Advisor believes that market conditions warrant, the Emerging Markets Portfolio may adopt a temporary defensive position and may invest without limit in high-quality money market securities denominated in U.S. dollars or in the currency of any foreign country. See "Investment Techniques -- Temporary Investments." INVESTMENT TECHNIQUES Temporary Investments. As determined by the Sub-Advisor, when market conditions warrant, the Emerging Markets Portfolio may invest up to 100% of its total assets in the following high-quality (that is, rated Prime-1 by Moody's or -8- A or better by S&P or, if unrated, of comparable quality as determined by the Sub-Advisor) money market securities, denominated in U.S. dollars or in the currency of any foreign country, issued by entities organized in the United States or any foreign country: short-term (less than twelve months to maturity) and medium-term (not greater than five years to maturity) obligations issued or guaranteed by the U.S. Government or the governments of foreign countries, their agencies or instrumentalities; finance company and corporate commercial paper, and other short-term corporate obligations; obligations (including certificates of deposit, time deposits and bankers' acceptances) of banks; and repurchase agreements with banks and broker-dealers with respect to such securities. The Emerging Markets Portfolio also may purchase shares of closed-end investment companies which invest chiefly in the shares of companies located outside the U.S. (such shares will be purchased by the Emerging Markets Portfolio within the limits prescribed by the 1940 Act). Repurchase Agreements. Each Portfolio may enter into repurchase agreements with qualified brokers, dealers, banks and other financial institutions deemed creditworthy by its Advisor or Sub-Advisor. Under normal circumstances, however, a Portfolio will not enter into repurchase agreements if entering into such agreements would cause, at the time of entering into such agreements, more than 20% of the value of its total assets to be subject to repurchase agreements. A Portfolio would generally enter into repurchase transactions to invest cash reserves and for temporary defensive purposes. In a repurchase agreement, a Portfolio purchases a security and simultaneously commits to resell that security at a future date to the seller (a qualified bank or securities dealer) at an agreed upon price plus an agreed upon market rate of interest (itself unrelated to the coupon rate or date of maturity of the purchased security). The securities held subject to a repurchase agreement may have stated maturities exceeding 13 months, but the Advisor or SubAdvisor currently expects that repurchase agreements will mature in less than 13 months. The seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement at not less than 101% of the repurchase price including accrued interest. Glenmede Fund's administrator and the Advisor or Sub-Advisor will mark to market daily the value of the securities purchased, and the Advisor or Sub-Advisor will, if necessary, require the seller to deposit additional securities to ensure that the value is in compliance with the 101% requirement stated above. The Advisor or Sub-Advisor will consider the creditworthiness of a seller in determining whether a Portfolio should enter into a repurchase agreement, and a Portfolio will only enter into repurchase agreements with banks and dealers which are determined to present minimal credit risk by the Advisor or Sub-Advisor under procedures adopted by the Board of Directors. In effect, by entering into a repurchase agreement, a Portfolio is lending its funds to the seller at the agreed upon interest rate and receiving securities as collateral for the loan. Such agreements can be entered into for periods of one day (overnight repo) or for a fixed term (term repo). Repurchase agreements are a common way to earn interest income on short-term funds. The use of repurchase agreements involves certain risks. For example, if the seller of a repurchase agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a Portfolio may incur a loss upon disposition of them. Default by the seller would also expose a Portfolio to possible loss because of delays in connection with the disposition of the underlying obligations. If the seller of an agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a bankruptcy court may determine that the underlying securities are collateral not within the control of a Portfolio and therefore subject to sale by the trustee in bankruptcy. Further, it is possible that a Portfolio may not be able to substantiate its interest in the underlying securities. -9- Reverse Repurchase Agreements. The Emerging Markets Portfolio may enter into reverse repurchase agreements. In a reverse repurchase agreement, the Portfolio sells a security and simultaneously commits to repurchase that security at a future date from the buyer. In effect, the Portfolio is temporarily borrowing funds at an agreed upon interest rate from the purchaser of the security, and the sale of the security represents collateral for the loan. The Portfolio retains record ownership of the security and the right to receive interest and principal payments on the security. At an agreed upon future date, the Portfolio repurchases the security by remitting the proceeds previously received, plus interest. In certain types of agreements, there is no agreed upon repurchase date and interest payments are calculated daily, often based on the prevailing overnight repurchase rate. These agreements, which are treated as if reestablished each day, are expected to provide the Emerging Markets Portfolio with a flexible borrowing tool. Reverse repurchase agreements are considered to be borrowings by a Portfolio under the 1940 Act. The Portfolio's investment of the proceeds of a reverse repurchase agreement is the speculative factor known as leverage. The Portfolio may enter into a reverse repurchase agreement only if the interest income from investment of the proceeds is greater than the interest expense of the transaction and the proceeds are invested for a period no longer than the term of the agreement. The Portfolio will maintain with the custodian a separate account with a segregated portfolio of liquid securities at least equal to its purchase obligations under these agreements. The Sub-Advisor will consider the creditworthiness of the other party in determining whether a Portfolio will enter into a reverse repurchase agreement. Under normal circumstances the Portfolio will not enter into reverse repurchase agreements if entering into such agreements would cause, at the time of entering into such agreements, more than 10% of the value of its total assets to be subject to such agreements. The use of reverse repurchase agreements involves certain risks. For example, the other party to the agreement may default on its obligation or become insolvent and unable to deliver the securities to the Portfolio at a time when the value of the securities has increased. Reverse repurchase agreements also involve the risk that the Portfolio may not be able to substantiate its interest in the underlying securities. Lending of Securities. Each Portfolio may lend its portfolio securities with a value up to one-third of its total assets to qualified brokers, dealers, banks and other financial institutions for the purpose of realizing additional net investment income through the receipt of interest on the loan. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. Loans will be made only to borrowers deemed by the Advisor or Sub-Advisor to be of good standing. "When Issued," "Delayed Settlement," and "Forward Delivery" Securities. Each Portfolio may purchase and sell securities on a "when issued," "delayed settlement" or "forward delivery" basis. "When issued" or "forward delivery" refer to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. When issued or forward delivery transactions may be expected to occur one month or more before delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by a Portfolio in a when issued, delayed settlement or forward delivery transaction until the Portfolio receives payment or delivery from the other party to the transaction. A Portfolio will maintain a separate account of cash, U.S. Government securities or other high -10- grade debt obligations at least equal to the value of purchase commitments until payment is made. Such segregated securities will either mature or, if necessary, be sold on or before the settlement date. Although a Portfolio receives no income from the above described securities prior to delivery, the market value of such securities is still subject to change. A Portfolio will engage in when issued transactions to obtain what is considered to be an advantageous price and yield at the time of the transaction. When a Portfolio engages in when issued, delayed settlement or forward delivery transactions, it will do so for the purpose of acquiring securities consistent with its investment objective and policies and not for the purposes of speculation. A Portfolio's when issued, delayed settlement and forward delivery commitments are not expected to exceed 25% of its total assets absent unusual market circumstances, and a Portfolio will only sell securities on such a basis to offset securities purchased on such a basis. Borrowing. Each Portfolio may purchase securities on a "when issued," "delayed settlement" or "forward delivery" basis and the Emerging Markets Portfolio may enter into reverse repurchase agreements. As a temporary measure for extraordinary or emergency purposes, each Portfolio may borrow money from banks. However, neither Portfolio will borrow money for speculative purposes. Forward Foreign Currency Exchange Contracts. Each Portfolio may enter into forward foreign currency exchange contracts in connection with the purchase and sale of investment securities; such contracts may not be used for speculative purposes. A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts may be bought or sold to protect a Portfolio, to some degree, against a possible loss resulting from an adverse change in the relationship between foreign currencies and the U.S. dollar. It should be realized that this method of protecting the value of a Portfolio's investment securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange at some future point in time. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time they tend to limit any potential gain which might result should the value of such currency increase. Depositary Receipts. The Emerging Markets Portfolio may purchase sponsored or unsponsored ADRs, EDRs and GDRs (collectively, "Depositary Receipts") and the Institutional International Portfolio may purchase sponsored or unsponsored ADRs. ADRs are Depositary Receipts typically issued by a U.S. bank or trust company which evidence ownership of underlying securities issued by a foreign corporation. EDRs and GDRs are typically issued by foreign banks or trust companies, although they also may be issued by U.S. banks or trust companies, and evidence ownership of underlying securities issued by either a foreign or a United States corporation. Generally, Depositary Receipts in registered form are designed for use in the U.S. securities market and Depositary Receipts in bearer form are designed for use in securities markets outside the United States. Depositary Receipts may not necessarily be denominated in the same currency as the underlying securities into which they may be converted. Depositary Receipts may be issued pursuant to sponsored or unsponsored programs. In sponsored programs, an issuer has made arrangements to have its securities traded in the form of Depositary Receipts. In unsponsored programs, the issuer may not be directly involved in the creation of the program. Although regulatory requirements with respect to sponsored and unsponsored programs are generally similar, in some cases it may be easier to obtain financial information from an issuer that has participated in the creation of a sponsored program. Accordingly, there may be less information available regarding issuers of securities underlying unsponsored programs and there may not be a correlation between such information and the market value of the Depositary Receipts. Depositary Receipts also involve the risks of other -11- investments in foreign securities, as discussed below. For purposes of a Portfolio's investment policies, a Portfolio's investments in Depositary Receipts will be deemed to be investments in the underlying securities. Illiquid Securities. The Institutional International Portfolio will not invest more than 10% of net assets and the Emerging Markets Portfolio will not invest more than 15% of net assets in securities that are illiquid. Illiquid securities are difficult to sell promptly at an acceptable price. Unless specified above and except as described under "Investment Limitations," the foregoing investment policies are not fundamental and the Board may change such policies without shareholder approval. RISK FACTORS Shareholders should understand that all investments involve risk and there can be no guarantee against loss resulting from an investment in a Portfolio, nor can there be any assurance that a Portfolio's investment objective will be attained. As with any investment in securities, the value of, and income from, an investment in a Portfolio can decrease as well as increase, depending on a variety of factors which may affect the values and income generated by the Portfolio's securities, including general economic conditions, market factors and currency exchange rates. An investment in the Emerging Markets Portfolio or the Institutional International Portfolio is not intended as a complete investment program. Foreign Securities. Each Portfolio has the right to purchase securities in any foreign country, developed or underdeveloped. Investors should consider carefully the substantial risks involved in investing in securities issued by companies and governments of foreign nations, which are in addition to the usual risks inherent in domestic investments. Investors should recognize that investing in the securities of foreign companies involve special risks and considerations not typically associated with investing in U.S. companies. These risks and considerations include differences in accounting, auditing and financial reporting standards, generally higher commission rates on foreign portfolio transactions, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investment in foreign countries and potential restrictions on the flow of international capital. Moreover, the dividends payable on a Portfolio's foreign portfolio securities may be subject to foreign withholding taxes, thus reducing the net amount of income available for distribution to the Portfolio's shareholders. Further, foreign securities often trade with less frequency and volume than domestic securities and, therefore, may exhibit greater price volatility. Also, changes in foreign exchange rates will affect, favorably or unfavorably, the value of those securities in a Portfolio which are denominated or quoted in currencies other than the U.S. dollar. In addition, in many countries there is less publicly available information about issuers than is available in reports about companies in the United States. Foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards, and auditing practices and requirements may not be comparable to those applicable to U.S. companies. Further, a Portfolio may encounter difficulties or be unable to pursue legal remedies and obtain judgments in foreign courts. These risks are often heightened for investments in developing or emerging markets, including certain Eastern European countries where the risks include the possibility that such countries may revert to a centrally planned economy. Developing countries may also impose restrictions on a Portfolio's ability to repatriate investment income or capital. Even where there is no outright restriction on repatriation of investment income or capital, the mechanics of repatriation may affect certain aspects of the operations of a Portfolio. For example, funds may be withdrawn from the People's Republic of -12- China only in U.S. or Hong Kong dollars and only at an exchange rate established by the government once each week. Some of the currencies in emerging markets have experienced devaluations relative to the U.S. dollar, and major adjustments have been made periodically in certain of such currencies. Certain developing countries face serious exchange constraints. Lastly, governments of some developing countries exercise substantial influence over many aspects of the private sector. In some countries, the government owns or controls many companies, including the largest in the country. As such, government actions in the future could have a significant effect on economic conditions in developing countries in these regions, which could affect private sector companies, the Portfolio and the value of its securities. Furthermore, certain developing countries are among the largest debtors to commercial banks and foreign governments. Trading in debt obligations issued or guaranteed by such governments or their agencies and instrumentalities involves a high degree of risk. Brokerage commissions, custodial services, and other costs relating to investment in foreign securities markets are generally more expensive than in the United States. Foreign securities markets also have different clearance and settlement procedures, and in certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. Delays in settlement could result in temporary periods when assets of a Portfolio are uninvested and no return is earned thereon. The inability of a Portfolio to make intended security purchases due to settlement problems could cause the Portfolio to miss attractive investment opportunities. Inability to dispose of portfolio securities due to settlement problems could result either in losses to the Portfolio due to subsequent declines in value of the portfolio security or, if the Portfolio has entered into a contract to sell the security, could result in possible liability to the purchaser. In many emerging markets, there is less government supervision and regulation of business and industry practices, stock exchanges, brokers and listed companies than in the United States. The foreign securities markets of many of the countries in which the Emerging Markets Portfolio may invest may also be smaller, less liquid, and subject to greater price volatility than those in the United States. There are further risk factors, including possible losses through the holding of securities in domestic and foreign custodian banks and depositories. PURCHASE OF SHARES Shares of each Portfolio are sold without a sales commission on a continuous basis to the Advisor acting on behalf of its clients ("Clients") and to other institutions (the "Institutions"), at the net asset value per share next determined after receipt of the purchase order by Glenmede Fund's transfer agent. See "Valuation of Shares." The minimum initial investment for each Portfolio is $25,000; the minimum for subsequent investments for each Portfolio is $1,000. Glenmede Fund reserves the right to reduce or waive the minimum initial and subsequent investment requirements from time to time. Beneficial ownership of shares will be reflected on books maintained by the Advisor or the Institutions. A prospective investor wishing to purchase shares in Glenmede Fund should contact the Advisor or his or her Institution. -13- It is the Advisor's responsibility to transmit orders for share purchases to Investment Company Capital Corp. ("ICC"), Glenmede Fund's transfer agent, and deliver required funds to Glenmede Fund's custodian, on a timely basis. Glenmede Fund reserves the right, in its sole discretion, to suspend the offering of shares of the Portfolios or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of Glenmede Fund. Purchases of a Portfolio's shares will be made in full and fractional shares of a Portfolio calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued except upon the written request of the shareholder. Certificates for fractional shares, however, will not be issued. REDEMPTION OF SHARES Shares of each Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request by the transfer agent. Generally, a properly signed written request is all that is required. Any redemption may be more or less than the purchase price of the shares depending on the market value of the investment securities held by a Portfolio. An investor wishing to redeem shares should contact the Advisor or his or her Institution. It is the responsibility of the Advisor to transmit promptly redemption orders to the transfer agent. Payment of the redemption proceeds will ordinarily be made within one business day, but in no event more than seven days, after receipt of the order in proper form by the transfer agent. Redemption orders are effected at net asset value per share next determined after receipt of the order in proper form by the transfer agent. Glenmede Fund may suspend the right of redemption or postpone the date of payment at times when the New York Stock Exchange (the "Exchange") is closed, or under any emergency circumstances as determined by the Securities and Exchange Commission (the "Commission"). See "Valuation of Shares" for the days on which the Exchange is closed. If Glenmede Fund's Board determines that it would be detrimental to the best interests of the remaining shareholders of a Portfolio to make payment wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of securities held by a Portfolio in lieu of cash in conformity with applicable rules of the Commission. Investors may incur brokerage charges on the sale of portfolio securities received as a redemption in kind. Glenmede Fund reserves the right, upon 30 days' written notice, to redeem an account in a Portfolio if the net asset value of the account's shares falls below $100 and is not increased to at least such amount within such 30-day period. VALUATION OF SHARES The net asset value of each Portfolio is determined by dividing the total market value of its investments and other assets, less any of its liabilities, by the total outstanding shares of the Portfolio. Each Portfolio's net asset value per share is determined as of the close of regular trading hours of the Exchange on each day that the Exchange is open for business and the Portfolio receives an order to purchase or redeem its shares. Currently the Exchange is closed on weekends and the customary national business holidays of New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (or the days on which they are observed). One or more pricing services may be used to provide securities -14- valuations in connection with the determination of the net asset value of each Portfolio. Equity securities listed on a U.S. securities exchange for which market quotations are available are valued at the last quoted sale price as of the close of the exchange's regular trading hours on the day the valuation is made. Securities listed on a foreign exchange and unlisted foreign securities are valued at the latest quoted sales price available before the time when assets are valued. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted U.S. equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued not in excess of the asked prices or less than the bid prices. The value of securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Board. Foreign currency amounts are translated into U.S. dollars at the bid prices of such currencies against U.S. dollars last quoted by a major bank. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolios normally distribute substantially all of their net investment income to shareholders in the form of a quarterly dividend. If any net capital gains are realized, the Portfolios normally distribute such gains at least once a year. However, see "Dividends, Capital Gains Distributions and Taxes-Federal Taxes-Miscellaneous," for a discussion of the Federal excise tax applicable to certain regulated investment companies. Undistributed net investment income is included in each Portfolio's net assets for the purpose of calculating net asset value per share. Therefore, on a Portfolio's "ex-dividend" date, the net asset value per share excludes the dividend (i.e., is reduced by the per share amount of the dividend). Dividends paid shortly after the purchase of shares of a Portfolio by an investor, although in effect a return of capital, are taxable to the investor. FEDERAL TAXES Each Portfolio intends to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). Such qualification generally relieves a Portfolio of liability for Federal income taxes to the extent its earnings are distributed in accordance with the Code. Qualification as a regulated investment company under the Code for a taxable year requires, among other things, that a Portfolio distribute to its shareholders an amount at least equal to 90% of its investment company taxable income and 90% of its net exempt interest income (if any) for such taxable year. In general, a Portfolio's investment company taxable income will be its net investment income, including interest and dividends, subject to certain adjustments, and net short-term capital gains excluding the excess of any net long-term capital gain for the taxable year over the net short-term capital loss, if any, for such year. Each Portfolio intends to distribute as dividends substantially all of its investment company taxable income each year. Such dividends will be taxable as ordinary income to each Portfolio's shareholders who are not currently exempt from Federal income taxes, whether such income or gain is received in cash or reinvested in additional shares. The dividends received deduction for corporations will apply to such ordinary income distributions to the extent the total qualifying dividends received by a Portfolio are from domestic corporations for the taxable year. It is anticipated that only a small part (if any) of the dividends paid by the Portfolios will be eligible for the dividends received deduction. -15- Substantially all of each Portfolio's net realized long-term capital gains, if any, will be distributed at least annually to its shareholders. A Portfolio generally will have no tax liability with respect to such gains and the distributions will be taxable to the shareholders who are not currently exempt from Federal income taxes as long-term capital gains, regardless of how long the shareholders have held the shares and whether such gains are received in cash or reinvested in additional shares. A shareholder considering buying shares of a Portfolio on or just before the record date of a dividend should be aware that the amount of the forthcoming dividend payment, although in effect a return of capital, will be taxable. A taxable gain or loss may be realized by a shareholder upon his redemption or transfer of shares of a Portfolio, depending upon the tax basis of such shares and their price at the time of redemption or transfer. It is expected that dividends and certain interest income earned by the Portfolios from foreign securities will be subject to foreign withholding taxes or other taxes. So long as more than 50% of the value of a Portfolio's total assets at the close of any taxable year consists of stock or securities of foreign corporations, the Portfolio may elect, for U.S. Federal income tax purposes, to treat certain foreign taxes paid by it, including generally any withholding taxes and other foreign income taxes, as paid by its shareholders. If a Portfolio makes this election, the amount of such foreign taxes paid by the Portfolio will be included in its shareholders' income pro rata (in addition to taxable distributions actually received by them), and each shareholder will be entitled (a) to credit his proportionate amount of such taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes his deductions, to deduct such proportionate amount from his U.S. income. Miscellaneous. Dividends declared in October, November or December of any year payable to shareholders of record on a specified date in such months will be deemed to have been received by the shareholders and paid by a Portfolio on December 31, in the event such dividends are paid during January of the following year. A 4% nondeductible excise tax is imposed on regulated investment companies that fail to currently distribute specified percentages of their ordinary taxable income and net capital gain (excess of capital gains over capital losses). Each Portfolio intends to make sufficient distributions or deemed distributions of its ordinary taxable income and any net capital gain prior to the end of each calendar year to avoid liability for this excise tax. The foregoing summarizes some of the important tax considerations generally affecting the Portfolios and their shareholders and is not intended as a substitute for careful tax planning. Accordingly, potential investors in the Portfolios should consult their tax advisers with specific reference to their own tax situation. The foregoing discussion of tax consequences is based on tax laws and regulations in effect on the date of this Prospectus, which are subject to change by legislative or administrative action. Shareholders will be advised at least annually as to the federal income tax consequences of distributions made each year. Each Portfolio will be required in certain cases to withhold and remit to the United States Treasury 31% of taxable dividends or gross proceeds realized upon sale paid to shareholders who have failed to provide a correct tax identification number in the manner required, who are subject to withholding by the IRS for failure properly to include on their return payments of taxable interest or dividends, or who have failed to certify to the Portfolio that they -16- are not subject to backup withholding when required to do so or that they are "exempt recipients." STATE AND LOCAL TAXES Shareholders may also be subject to state and local taxes on distributions from Glenmede Fund. A shareholder should consult with his tax adviser with respect to the tax status of distributions from Glenmede Fund in a particular state and locality. Glenmede Fund has obtained a Certificate of Authority to do business as a foreign corporation in Pennsylvania, and currently does business in that state. Accordingly, the shares of the Portfolio will be exempt from Pennsylvania Personal Property Taxes. INVESTMENT ADVISOR The Advisor, a limited purpose trust company chartered in 1956, provides fiduciary and investment services to endowment funds, foundations, employee benefit plans and other institutions and individuals. The Advisor is a wholly-owned subsidiary of The Glenmede Corporation and is located at One Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania 19103. At November 30, 1995, the Advisor had over $8 billion in assets in the accounts for which it serves in various capacities including as executor, trustee or investment advisor. Under separate Investment Advisory Agreements (each, an "Investment Advisory Agreement") with Glenmede Fund with respect to the Institutional International Portfolio and the Emerging Markets Portfolio, the Advisor or SubAdvisor, respectively, subject to the control and supervision of Glenmede Fund's Board and in conformance with the stated investment objective and policies of each Portfolio, manages the investment and reinvestment of the assets of the respective Portfolio. It is the responsibility of the Advisor or Sub-Advisor to make investment decisions for the Institutional International Portfolio and Emerging Markets Portfolio, respectively, and to place each Portfolio's purchase and sales orders. INSTITUTIONAL INTERNATIONAL PORTFOLIO The Advisor is entitled to receive a fee from the Institutional International Portfolio for its investment services computed daily and payable monthly, at the annual rate of .75% of the Institutional International Portfolio's average daily net assets. Although the advisory fee rate payable by the Institutional International Portfolio is higher than the rates paid by most mutual funds, Glenmede Fund's Board of Directors believes it is comparable to the rates paid by other similar funds. The Advisor has agreed to waive its fees to the extent necessary to ensure that the Institutional International Portfolio's annual total operating expenses do not exceed 1.00% of the Institutional International Portfolio's average net assets. For the fiscal year ended October 31, 1995, the Advisor received a fee at a rate of ____% of the Institutional International Portfolio's average net assets. Andrew Williams, portfolio manager for the Institutional International Portfolio, has been primarily responsible for its management since that Portfolio commenced operations. Mr. Williams has been employed by the Advisor since May 1985. Before joining the Advisor, he was a vice president in investment research at Shearson Lehman Brothers. -17- EMERGING MARKETS PORTFOLIO The Advisor is entitled to receive a fee from the Emerging Markets Portfolio for its investment services computed daily and payable monthly at the annual rate of .50% of the Emerging Markets Portfolio's average daily net assets. Pursuant to the Investment Advisory Agreement relating to the Emerging Markets Portfolio, the Advisor may select a person to act as sub-advisor to the Portfolio. The Advisor and Glenmede Fund, on behalf of the Emerging Markets Portfolio, have entered into a sub-investment advisory agreement with Pictet International Management Limited, located at Cutlers Gardens, 5 Devonshire Square, London, United Kingdom EC2M 4LD. The Sub-Advisor performs sub-advisory and portfolio transaction services for the Portfolio, including managing the Portfolio's holdings in accordance with the Portfolio's investment objective and policies, making investment decisions concerning foreign assets for the Portfolio, placing purchase and sale orders for portfolio transactions and employing professional portfolio managers and security analysts who provide research services to the Emerging Markets Portfolio. The Sub-Advisor is entitled to receive from the Emerging Markets Portfolio for its investment services a fee, computed daily and payable monthly at the annual rate of .75% of the Emerging Markets Portfolio's average daily net assets. The aggregate fees paid to the Emerging Markets Portfolio's Advisor and Sub-Advisor are higher than advisory fees paid by most other U.S. investment companies. Glenmede Fund's Board believes such fees are comparable to the rates paid by other similar funds. For the period December 14, 1994 (commencement of operations) to October 31, 1995, the Advisor received a fee of ___% (annualized) of the Emerging Markets Portfolio's average net assets and the Sub-Advisor received a fee at the rate of ___% (annualized) of the Emerging Markets Portfolio's average net assets. The Sub-Advisor is an affiliate of Pictet & Cie (the "Bank"), a Swiss private bank, which was founded in 1805. As of November 30, 1995, the Bank managed in excess of $40 billion for institutional and private clients. The Bank is owned by seven partners. The Sub-Advisor was established in 1980 to manage the investment needs of clients seeking to invest in the international fixed revenue and equity markets. The Sub-Advisor and its affiliates presently manage over $3.5 billion for 70 accounts. Douglas Polunin, Senior Investment Manager at the Sub-Advisor, has been the portfolio manager primarily responsible for the management of the Emerging Markets Portfolio since its inception. Mr. Polunin has been employed by the Sub-Advisor since January 1989. Prior to his employment with the Sub-Advisor, Mr. Polunin had been with Union Bank of Switzerland since 1982. ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES ICC serves as Glenmede Fund's administrator , transfer agent and dividend paying agent pursuant to a Master Services Agreement and in those capacities supervises all aspects of Glenmede Fund's day-to-day operations, other than the management of Glenmede Fund's investments. ICC is a wholly-owned subsidiary of Alex. Brown & Sons Incorporated ("Alex. Brown"). For its services as administrator, transfer agent and dividend paying agent, ICC is entitled to receive fees from Glenmede Fund equal to .12% of the first $100 million of the combined net assets of Glenmede Fund and The Glenmede Portfolios, an investment company with the same officers, Board and service providers as Glenmede Fund (collectively, the "Funds"); .08% of the next $150 million of the combined net assets of the Funds; .04% of the next $500 million of the combined net assets of the Funds and .03% of the combined net assets of the Funds over $750 million. For the period July 1, 1995 to October 31, 1995, ICC received fees at the rate of _____% (annualized) of the Institutional International Portfolio's average net assets and _____% (annualized) of the Emerging Markets Portfolio's average net assets. For the period November 1, 1994 to June 30, 1995, Glenmede Fund's previous administrator received fees at the rate of ____% (annualized) of the Institutional -18- International Portfolio's average net assets. For the period December 14, 1994 (commencement of operations) to June 30, 1995, Glenmede Fund's previous administrator received fees at the rate of ____% (annualized) of the Emerging Markets Portfolio's average net assets. EXPENSES Glenmede Fund bears its own expenses incurred in its operations including: taxes; interest; miscellaneous fees (including fees paid to Board members); Securities and Exchange Commission fees; costs of preparing and printing prospectuses for regulatory purposes and for distribution to existing shareholders; administration fees; charges of the custodian, dividend agent fees; certain insurance premiums; outside auditing and legal expenses; costs of shareholders' reports and meetings; and any extraordinary expenses. Each Portfolio also pays for brokerage fees and commissions, if any, in connection with the purchase and sale of its portfolio securities. See "Financial Highlights." INVESTMENT LIMITATIONS Each Portfolio will not: (a) With respect to 75% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities); (b) Purchase more than 10% of any class of the outstanding voting securities of any issuer; (c) Acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of its total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities; (d) Pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of the Institutional International Portfolio's total assets or 15% of the Emerging Markets Portfolio's total assets, each at fair market value, except as described in this Prospectus and the SAI and in connection with entering into futures contracts, but the deposit of assets in a segregated account in connection with the writing of covered put and call options and the purchase of securities on a when issued, delayed settlement or forward delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts will not be deemed to be pledges of a Portfolio's assets or the purchase of any securities on margin for purposes of this investment limitation; (e) Issue senior securities, except that a Portfolio may borrow money in accordance with investment limitation (f), purchase securities on a when issued, delayed settlement or forward delivery basis and enter into reverse repurchase agreements; and (f) Borrow money, except that each Portfolio may borrow money as a temporary measure for extraordinary or emergency purposes, and then not in excess of 10% of its total assets at the time of borrowing (entering into reverse repurchase agreements and purchasing securities on a when issued, delayed settlement or forward delivery basis are not subject to this investment limitation). -19- If a percentage restriction is adhered to at the time an investment is made, a later increase in percentage resulting from a change in value of assets will not constitute a violation of such restriction. If a Portfolio's borrowings are in excess of 5% (excluding overdrafts) of its total net assets, additional portfolio purchases will not be made until the amount of such borrowing is reduced to 5% or less. A Portfolio's borrowings including reverse repurchase agreements and securities purchased on a when-issued, delayed settlement or forward delivery basis may not exceed 33 1/3% of its total net assets. The investment limitations described here and in the SAI are fundamental policies and may be changed only with the approval of the holders of a majority of the outstanding shares (as defined in the 1940 Act) of the affected Portfolio. In order to permit the sale of shares in certain states, Glenmede Fund may make commitments more restrictive than the investment policies and limitations described in this Prospectus and the SAI. Should Glenmede Fund determine that any such commitment is no longer in the best interest of Glenmede Fund, it will revoke the commitment by terminating sales of its shares in the state involved. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS Glenmede Fund was organized as a Maryland corporation on June 30, 1988. Glenmede Fund's Articles of Incorporation authorize the Board members to issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board has the power to designate one or more classes ("Portfolios") of shares of common stock and to classify or reclassify any unissued shares with respect to such Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios. The shares of each Portfolio have no preference as to conversion, exchange, dividends, retirement or other rights, and, when issued and paid for as provided in this Prospectus, will be fully paid and non-assessable. The shares of each Portfolio have no pre-emptive rights and do not have cumulative voting rights, which means that the holders of more than 50% of the shares of Glenmede Fund voting for the election of its Board members can elect 100% of the Board of Glenmede Fund if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders except as required by the 1940 Act, the next sentence and other applicable law. Glenmede Fund has undertaken that its Board will call a meeting of shareholders for the purpose of voting upon the question of removal of a Board member or members if such a meeting is requested in writing by the holders of not less than 10% of the outstanding shares of Glenmede Fund. To the extent required by the undertaking, Glenmede Fund will assist shareholder communication in such matters. At November 30, 1995, the Advisor was the record owner substantially all of Glenmede Fund's outstanding shares. DISTRIBUTOR Armata Financial Corp. ("Armata"), located at 135 East Baltimore Street, Baltimore, Maryland 21202, serves as Glenmede Fund's distributor. Armata is a subsidiary of Alex. Brown. CUSTODIAN The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the custodian of Glenmede Fund's assets. -20- TRANSFER AGENT ICC, located at 135 East Baltimore Street, Baltimore, Maryland 21202, serves as Glenmede Fund's transfer agent. INDEPENDENT ACCOUNTANTS _____________________, Philadelphia, Pennsylvania serves as independent accountants for Glenmede Fund and will audit its financial statements annually. REPORTS Shareholders receive unaudited semi-annual financial statements and audited annual financial statements. COUNSEL Drinker Biddle & Reath, Philadelphia, Pennsylvania, serves as counsel to Glenmede Fund. -21- BOARD MEMBERS AND OFFICERS The business and affairs of Glenmede Fund are managed under the direction of its Board. The following is a list of the Board members and officers of Glenmede Fund and a brief statement of their principal occupations during the past five years:
Name and Address Age Principal Occupation During Past Five Years - ------------------------------------- --- ------------------------------------------------------------- H. Franklin Allen, Ph.D. 38 Director of Glenmede Fund; Trustee of The Glenmede The Wharton School of The Portfolios; Professor of Finance and Economics; Vice Dean University of Pennsylvania and Director of Wharton Doctoral Programs; Associate 2300 Steinberg Hall-Dietrich Hall Professor of Finance and Economics; Associate Professor of Philadelphia, PA 19104-6302 Finance. He has been employed by The University of Pennsylvania since 1985. Willard S. Boothby, Jr. 73 Director of Glenmede Fund; Trustee of The Glenmede 600 East Gravers Lane Portfolios; Director of Penn Engineering & Manufacturing Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; formerly Managing Director of Paine Webber, Inc. John W. Church, Jr.* 62 Chairman, President and Director of Glenmede Fund; One Liberty Place Chairman, President and Director of The Glenmede 1650 Market Street, Suite 1200 Portfolios; Senior Vice President and Chief Investment Philadelphia, PA 19103 Officer of The Glenmede Trust Company. He has been employed by The Glenmede Trust Company since 1979. Francis J. Palamara 69 Director of Glenmede Fund; Trustee of The Glenmede P.O. Box 44024 Portfolios; Trustee of Gintel Fund and Gintel ERISA Fund; Phoenix, AZ 85064-4024 Director of XTRA Corporation and Central Tractor and Country, Inc.; Former Executive Vice President--Finance of ARA Services, Inc. G. Thompson Pew, Jr.* 53 Director of Glenmede Fund; Trustee of The Glenmede 310 Caversham Road Portfolios; Director of The Glenmede Trust Company; Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.; Co-Director, Principal and Officer of Philadelphia Investment Banking Co.; Director and Officer of Valley Forge Administrative Services Company. Mary Ann B. Wirts Executive Vice President of Glenmede Fund; Vice One Liberty Place 44 President and Manager of The Fixed Income Division of The 1650 Market Street, Suite 1200 Glenmede Trust Company. She has been employed by Philadelphia, PA 19103 The Glenmede Trust Company since 1982. Sheryl P. Durham, CFA Vice President of Glenmede Fund; Vice President of The One Liberty Place 37 Glenmede Trust Company and a Fixed Income Portfolio 1650 Market Street, Suite 1200 Manager at The Glenmede Trust Company since 1989. Philadelphia, PA 19103 Kimberly C. Osborne 30 Vice President of Glenmede Fund; Assistant Vice President One Liberty Plaza of The Glenmede Trust Company. She has been employed by 1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993, Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service Company and from 1987-1992, she was a Client Administrator with The Vanguard Group, Inc. Michael P. Malloy 36 Secretary of Glenmede Fund; Partner in the law firm of Philadelphia National Bank Building Drinker Biddle & Reath. 1345 Chestnut Street Philadelphia, PA 19107-3496 Brian C. Nelson 36 Assistant Secretary of Glenmede Fund; Vice President, 135 East Baltimore Street Alex. Brown, ICC and Armata. Baltimore, MD 21202 Joseph A. Finelli Treasurer of Glenmede Fund . He has been a Vice 135 East Baltimore Street 38 President of Alex. Brown since 1995. Prior thereto, he Baltimore, MD 21202 was Vice President and Treasurer of Delaware Group.
- -------------- *Board members Church and Pew are "interested persons" of Glenmede Fund as that term is defined in the 1940 Act. -22- For additional information concerning remuneration of Board members see "Management of Glenmede Fund" in the SAI. ---------------------- Shareholder inquiries should be addressed to Glenmede Fund at the address or telephone number stated on the cover page. -23- THE GLENMEDE FUND, INC. 135 East Baltimore Street, Baltimore, Maryland 21202 Prospectus Dated February __, 1996 Investment Advisor Administrator and Transfer Agent The Glenmede Trust Company Investment Company Capital Corp. One Liberty Place 135 East Baltimore Street 1650 Market Street, Suite 1200 Baltimore, Maryland 21202 Philadelphia, PA 19103 Investment Sub-Advisor Distributor (for Emerging Markets Portfolio) Pictet International Management Limited Armata Financial Corp. Cutlers Garden 135 East Baltimore Street 5 Devonshire Square Baltimore, Maryland 21202 London, United Kingdom EC2M 4LD - ------------------------------------------------------------------------------- Table of Contents Page ---- Expenses of the Portfolios........................................... Financial Highlights................................................. Performance Calculations............................................. Investment Objectives and Policies .................................. Investment Techniques................................................ Risk Factors......................................................... Purchase of Shares................................................... Redemption of Shares................................................. Valuation of Shares.................................................. Dividends, Capital Gains Distributions and Taxes..................... Investment Advisor................................................... Administrative, Transfer Agency and Dividend Paying Services......... Expenses............................................................. Investment Limitations............................................... General Information.................................................. Board Members and Officers........................................... No person has been authorized to give any information or to make any representations not contained in this Prospectus, or in Glenmede Fund's Statement of Additional Information, in connection with the offering made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by Glenmede Fund or its Distributor. This Prospectus does not constitute an offering by Glenmede Fund or the Distributor in any jurisdiction in which such offering may not lawfully be made. -24- THE GLENMEDE FUND, INC. (800) 442-8299 STATEMENT OF ADDITIONAL INFORMATION INSTITUTIONAL INTERNATIONAL PORTFOLIO EMERGING MARKETS PORTFOLIO February __, 1996 This Statement of Additional Information is not a prospectus but should be read in conjunction with The Glenmede Fund, Inc.'s (Glenmede Fund") Prospectus for the Institutional International Portfolio and the Emerging Markets Portfolio (the "Prospectus") dated February __, 1996. To obtain the Prospectus, please call Glenmede Fund at the above telephone number. Capitalized terms used in this Statement of Additional Information and not otherwise defined have the same meanings given to them in Glenmede Fund's Prospectus. Table of Contents Page Investment Objectives and Policies................................... Purchase of Shares................................................... Redemption of Shares................................................. Shareholder Services................................................. Portfolio Turnover................................................... Investment Limitations............................................... Management of Glenmede Fund.......................................... Investment Advisory and Other Services............................... Distributor.......................................................... Portfolio Transactions............................................... Additional Information Concerning Taxes.............................. Performance Calculations............................................. General Information.................................................. Financial Statements................................................. Appendix -- Description of Securities and Ratings.................... INVESTMENT OBJECTIVES AND POLICIES The following policies supplement the investment objectives and policies set forth in Glenmede Fund's Prospectus: Repurchase Agreements Repurchase agreements that do not provide for payment to a Portfolio within seven days after notice without taking a reduced price are considered illiquid securities. Securities Lending Each Portfolio may lend its investment securities to qualified institutional investors who need to borrow securities in order to complete certain transactions, such as covering short sales, avoiding failures to deliver securities or completing arbitrage operations. By lending its investment securities, a Portfolio attempts to increase its income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Portfolio. A Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940 (the "1940 Act") or the rules and regulations or interpretations of the Securities and Exchange Commission (the "Commission") thereunder. All relevant facts and circumstances, including the creditworthiness of the broker, dealer or institution, will be considered by the Advisor in making decisions with respect to the lending of securities, subject to review by Glenmede Fund's Board. PURCHASE OF SHARES The purchase price of shares of each Portfolio is the net asset value next determined after receipt of the purchase order by the particular Portfolio. Each Portfolio reserves the right in its sole discretion (i) to suspend the offering of its shares, (ii) to reject purchase orders when in the judgment of management such rejection is in the best interest of the Portfolio, and (iii) to reduce or waive the minimum for initial and subsequent investments from time to time. REDEMPTION OF SHARES Each Portfolio may suspend redemption privileges or postpone the date of payment (i) during any period that the New York Stock Exchange (the "Exchange") is closed, or trading on the Exchange is restricted as determined by the Commission, (ii) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for a Portfolio to dispose of securities owned by it, or fairly to determine the value of its assets, and (iii) for such other periods as the Commission may permit. No charge is made by a Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SHAREHOLDER SERVICES Transfer of Shares. Shareholders may transfer shares of the Portfolios to another person. An investor wishing to transfer shares should contact the Advisor. PORTFOLIO TURNOVER A high portfolio turnover rate can result in corresponding increases in brokerage commissions; however, the Advisor, and Sub-Advisor with respect to the Emerging Markets Portfolio, will not consider portfolio turnover rate a limiting factor in making investment decisions consistent with that Portfolio's investment objectives and policies. The portfolio turnover rates of the Institutional International Portfolio for the fiscal years ended October 31, 1995 and 1994 were ____% and 39%, respectively. The portfolio turnover rate of the Emerging Markets Portfolio for the period December 14, 1994 (commencement of operations) to October 31, 1995 was ____% (annualized). INVESTMENT LIMITATIONS Each Portfolio is subject to the following restrictions which are fundamental policies and may not be changed without the approval of the lesser of: (1) 67% of the voting securities of the Portfolio present at a meeting if the holders of more than 50% of the outstanding voting securities of the Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of the Portfolio. Each Portfolio will not: (1) invest in commodities or commodity contracts, except that each Portfolio may invest in futures contracts and options; (2) purchase or sell real estate, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans, except (i) by purchasing bonds, debentures or similar obligations (including repurchase agreements, subject to the limitation described in investment limitation (10) below, and money market instruments, including bankers acceptances and commercial paper, and selling securities on a when issued, delayed settlement or forward delivery basis) which are publicly or privately distributed, and (ii) by lending its portfolio securities to banks, brokers, dealers and other financial institutions so long as such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the Commission thereunder; (4) purchase on margin or sell short, except as specified above in investment limitation (1); (5) purchase more than 10% of any class of the outstanding voting securities of any issuer; (6) with respect as to 75% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities); (7) issue senior securities, except that each Portfolio may borrow money in accordance with investment limitation (8) below, purchase securities on a when issued, delayed settlement or forward delivery basis and enter into reverse repurchase agreements; (8) borrow money, except that each Portfolio may borrow money as a temporary measure for extraordinary or emergency purposes, and then not in excess of 10% of its total assets at the time of the borrowing (entering into reverse repurchase agreements and purchasing securities on a when issued, delayed settlement or forward delivery basis are not subject to this investment limitation); (9) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value in the case of the Institutional International Portfolio and 15% in the case of the Emerging Markets Portfolio, except as described in the Prospectus and this SAI and in connection with entering into futures contracts, but the deposit of assets in a segregated account in connection with the writing of covered put and call options and the purchase of securities on a when issued, delayed settlement or forward delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts will not be deemed to be pledges of a Portfolio's assets or the purchase of any securities on margin for purposes of this investment limitation; (10) underwrite the securities of other issuers or invest more than an aggregate of 10% of the total assets of the Institutional International Portfolio or 15% of the total assets of the Emerging Markets Portfolio, at the time of purchase, in securities for which there are no readily available markets, including repurchase agreements which have maturities of more than seven days or, in the case of Institutional International Portfolio, securities subject to legal or contractual restrictions on resale; (11) invest for the purpose of exercising control over management of any company; (12) invest its assets in securities of any investment company, except in connection with mergers, acquisitions of assets or consolidations and except as may otherwise be permitted by the 1940 Act; (13) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities, or instruments issued by U.S. banks; and (14) write or acquire options or interests in oil, gas or other mineral exploration or development programs. If a percentage restriction is adhered to at the time an investment is made, a later increase in percentage resulting from a change in value or assets will not constitute a violation of such restriction. With regard to limitations (8) and (9), each Portfolio may borrow money as a temporary measure for extraordinary or emergency purposes, enter into reverse repurchase agreements and purchase securities on a when-issued, delayed settlement or forward delivery basis, which activities may involve a borrowing, provided that the aggregate of such borrowings shall not exceed 33 1/3% of the value of each Portfolio's total assets (including the amount borrowed) less liabilities (other than borrowings) and may pledge up to 33 1/3% of the value of its total assets to secure borrowings. With regard to limitation (12), the 1940 Act currently prohibits an investment company from acquiring securities of another investment company if, as a result of the transaction, the acquiring company and any company or companies controlled by it would own in the aggregate: (i) more than 3% of the total outstanding voting stock of the acquired company, (ii) securities issued by the acquired company having an aggregate value in excess of 5% of the value of the total assets of the acquiring company, or (iii) securities issued by the acquired company and all other investment companies (other than treasury stock of the acquired company) having an aggregate value in excess of 10% of the value of the total assets of the acquiring company. The 1940 Act also currently prohibits an investment company from acquiring securities of a registered closed-end investment company, if as a result of the transaction, the acquiring company, other investment companies having the same investment adviser, and companies controlled by such investment companies, own more than 10% of the total outstanding voting stock of such closed-end company. In addition to the advisory fees and other expenses that a Portfolio bears directly in connection with its own operations, as a shareholder of another investment company, such Portfolio would bear its "pro rata" portion of the other investment company's advisory fees and other expenses. Therefore, to the extent that a Portfolio is invested in shares of other investment companies, the Portfolio's shareholders will be subject to expenses of such other investment companies, in addition to expenses of the Portfolio. With regard to limitation (14), the purchase of securities of a corporation, a subsidiary of which has an interest in oil, gas or other mineral exploration or development programs, shall not be deemed to be prohibited by the limitation. MANAGEMENT OF GLENMEDE FUND Glenmede Fund's officers, under the supervision of the Board, manage the day-to-day operations of Glenmede Fund. The Board members set broad policies for Glenmede Fund and choose its officers. A list of the Board members and officers and a brief statement of their current positions and principal occupations during the past five years is set forth in the Prospectus. Remuneration of Board Members Glenmede Fund pays each Board member, other than Mr. Church, an annual fee of $6,000 plus $1,250 for each Board meeting attended and out-of-pocket expenses incurred in attending Board meetings. Officers of Glenmede Fund receive no compensation as officers from Glenmede Fund. Set forth in the table below is the compensation received by each Board member for the fiscal year ended October 31, 1995.
Pension or Total Retirement compensation Benefits from Glenmede Aggregate accrued as Estimated Fund and Fund Compensation part of Annual Complex (1) Name of from Glenmede Fund's Benefits Upon paid to Person, Position Glenmede Fund expenses Retirement Directors ---------------- ------------- ---------------- ------------- -------------- Dr. H. Franklin Allen, Ph.D., $______ None None $______ Director Willard S. Boothby, Jr., $______ None None $______ Director John W. Church, Jr. None None None None Director Francis J. Palamara, $______ None None $______ Director G. Thompson Pew, Jr., $______ None None $______ Director
- -------------------------------- (1) Includes total compensation from Glenmede and The Glenmede Portfolios, both of which are advised by the Advisor. INVESTMENT ADVISORY AND OTHER SERVICES The Advisor is the wholly-owned subsidiary of The Glenmede Corporation (the "Corporation") whose shares are closely held by 63 shareholders. The Corporation has a nine person Board of Directors which, at November 30, 1995, collectively, owned 98.67% of the Corporation's voting shares and 41.96% of the Corporation's total outstanding shares. The members of the Board and their respective interests in the Corporation at November 30, 1995 are as follows: The Glenmede Corporation Percent of Percent of Board of Directors Voting Shares Total Shares Susan W. Catherwood 10.83% 1.23% Robert G. Dunlop 10.83% 5.16% Thomas W. Langfitt, M.D 11.07% 7.86% Robert E. McDonald 10.83% 1.16% J. Howard Pew, II 10.83% 1.45% J. N. Pew, III 11.07% 5.66% J. N. Pew, IV 11.07% 1.44% R. Anderson Pew 11.07% 6.20% Ethel Benson Wister 11.07% 11.80% ----- ----- 98.67% 41.96% ===== ===== As noted in the Prospectus, the Advisor is entitled to receive a fee from the Institutional International Portfolio for its services calculated daily and payable monthly, at the annual rate of .75% of the Institutional International Portfolio's average daily net assets. The Advisor has agreed to waive its fees to the extent necessary to ensure that the Institutional International Portfolio's annual total operating expenses do not exceed 1.00% of average net assets. During the fiscal years ended October 31, 1995, 1994 and 1993, the Institutional International Portfolio paid the Advisor advisory fees of $________, $114,956 and $81,255, respectively, and the Advisor waived fees in the amounts of $________, $1,110 and $9,038 respectively. As also noted in the Prospectus, the Advisor is entitled to receive a fee from the Emerging Markets Portfolio for its services, calculated daily and payable monthly, at the annual rate of .50% of the Emerging Markets Portfolio's average daily net assets. As more fully described in the Prospectus, the Sub- Advisor is entitled to receive a fee for its services from the Emerging Markets Portfolio, calculated daily and payable monthly at the annual rate of .75% of the Emerging Markets Portfolio's average daily net assets. For the period December 14, 1994 (commencement of operations) to October 31, 1995, the Emerging Markets Portfolio paid the Advisor advisory fees of $________ and paid the Sub-Advisor sub-advisory fees of $________. Since July 1, 1995, administrative transfer agency and dividend paying services have been provided to Glenmede Fund by ICC pursuant to a Master Services Agreement. See "Administrative, Transfer Agency and Dividend Paying Services" in the Prospectus for information concerning the substantive provisions of the Master Services Agreement. For the period July 1, 1995 to October 31, 1995, Glenmede Fund paid ICC fees of $________ for the Institutional International Portfolio and $_________ for the Emerging Markets Portfolio. From May 6, 1994 to June 30, 1995, administrative services were provided to Glenmede Fund by The Shareholder Services Group, Inc. ("TSSG"), pursuant to an Administration Agreement. For the period November 1, 1994 to June 30, 1995, Glenmede Fund paid TSSG administrative fees of $________ for the Institutional International Portfolio. For the period December 14, 1994 (commencement of operations) to June 30, 1995, Glenmede Fund paid TSSG administrative fees of $________ for the Emerging Markets Portfolio. For the period May 6, 1994 through October 31, 1994, Glenmede Fund paid TSSG administrative fees of $7,519 for the Institutional International Portfolio. Prior to May 6, 1994, The Boston Company Advisors, Inc. ("Boston Advisors"), an indirect wholly owned subsidiary of Mellon Bank Corporation, served as Glenmede Fund's administrator. For the period November 1, 1993 to May 5, 1994, and the fiscal year ended October 31, 1993 , Glenmede Fund paid Boston Advisors administrative fees of $6,453 and $10,064 , respectively, for the Institutional International Portfolio. Custody services are provided to the Institutional International and Emerging Markets Portfolios by The Chase Manhattan Bank, N.A., Brooklyn, New York. DISTRIBUTOR Shares of Glenmede Fund are distributed continuously and are offered without a sales load by Armata, pursuant to a Distribution Agreement between Glenmede Fund and Armata. Armata receives no fee from Glenmede Fund for its distribution services. PORTFOLIO TRANSACTIONS The Investment Advisory Agreements and the Sub-Advisory Agreement authorize the Advisor, and the Sub-Advisor for the Emerging Markets Portfolio, to select the brokers or dealers that will execute the purchases and sales of investment securities for each of the Portfolios and direct the Advisor or the Sub-Advisor to use their best efforts to obtain the best available price and most favorable execution with respect to all transactions for the Portfolios. The Advisor or the Sub-Advisor, if any, may, however, consistent with the interests of a Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to a Portfolio. Information and research received from such brokers will be in addition to, and not in lieu of, the services required to be performed by the Advisor or Sub-Advisor under the Investment Advisory Agreements and the Sub- Advisory Agreement. A commission paid to such brokers may be higher than that which another qualified broker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Advisor or Sub-Advisor determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Advisor or Sub-Advisor to a Portfolio and the Advisor's or Sub-Advisor's other clients. For the fiscal year ended October 31, 199_, brokers were selected by the Advisor and Sub-Advisor on the basis of research, statistical and pricing services with respect to the Institutional International and Emerging Markets Portfolios. During the fiscal years ended October 31, 1995, 1994 and 1993, the Institutional International Portfolio paid $_________, $33,893 and $22,099 in brokerage commissions, respectively. For the period December 14, 1994 (commencement of operations) to October 31, 1995, the Emerging Markets Portfolio paid $________ in brokerage commissions. Because shares of the Portfolios are not marketed through intermediary brokers or dealers, it is not Glenmede Fund's practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of shares which may be made through such firms. However, the Advisor may place portfolio orders with qualified broker-dealers who refer clients to the Advisor and the other Institutions. Some securities considered for investment by a Portfolio may also be appropriate for other clients served by the Advisor or Sub-Advisor. If purchase or sale of securities is consistent with the investment policies of a Portfolio and one or more of these other clients served by the Advisor or Sub-Advisors and is considered at or about the same time, transactions in such securities will be allocated among the Portfolio and clients in a manner deemed fair and reasonable by the Advisor or Sub-Advisor. While in some cases this practice could have a detrimental effect on the price, value or quantity of the security as far as a Portfolio is concerned, in other cases it is believed to be beneficial to the Portfolios. ADDITIONAL INFORMATION CONCERNING TAXES General. The following summarizes certain additional tax considerations generally affecting the Portfolios and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Portfolios or their shareholders, and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning. Potential investors should consult their tax advisers with specific reference to their own tax situation. Each Portfolio is treated as a separate corporate entity under the Internal Revenue Code of 1986, as amended (the "Code"), and intends to qualify as a regulated investment company. Qualification as a regulated investment company under the Code requires, among other things, that each Portfolio distribute to its shareholders an amount equal to at least the sum of 90% of its investment company taxable income and 90% of its tax-exempt income (if any) net of certain deductions for a taxable year. In addition, each Portfolio must satisfy certain requirements with respect to the source of its income during a taxable year. At least 90% of the gross income of each Portfolio must be derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, and other income (including, but not limited to, gains from options, futures, or forward contracts) derived with respect to the Portfolio's business of investing in such stock, securities or currencies. The Treasury Department may by regulation exclude from qualifying income foreign currency gains which are not directly related to a Portfolio's principal business of investing in stock or securities, or options and futures with respect to stock or securities. Any income derived by a Portfolio from a partnership or trust is treated for this purpose as derived with respect to the Portfolio's business of investing in stock, securities or currencies only to the extent that such income is attributable to items of income which would have been qualifying income if realized by the Portfolio in the same manner as by the partnership or trust. A Portfolio will not be treated as a regulated investment company under the Code if 30% or more of its gross income for a taxable year is derived from gains realized on the sale or other disposition of the following investments held for less than three months: (1) stock and securities (as defined in section 2(a)(36) of the 1940 Act); (2) options, futures and forward contracts other than those on foreign currencies; and (3) foreign currencies (and options, futures and forward contracts on foreign currencies) that are not directly related to the Portfolio's principal business of investing in stock and securities (and options and futures with respect to stocks and securities). Interest (including original issue discount and accrued market discount) received by a Portfolio upon maturity or disposition of a security held for less than three months will not be treated as gross income derived from the sale or other disposition of such security within the meaning of this requirement. However, income which is attributable to realized market appreciation will be treated as gross income from the sale or other disposition of securities for this purpose. With respect to covered call options, if the call is exercised by the holder, the premium and the price received on exercise constitute the proceeds of sale, and the difference between the proceeds and the cost of the securities subject to the call is capital gain or loss. Premiums from expired call options written by a Portfolio and net gains from closing purchase transactions are treated as short-term capital gains for Federal income tax purposes, and losses on closing purchase transactions are short-term capital losses. Any distribution of the excess of net long-term capital gain over net short-term capital loss is taxable to shareholders as long-term capital gain, regardless of how long the shareholder has held a Portfolio's shares and whether such distribution is received in cash or additional Portfolio shares. Each Portfolio will designate such distributions as capital gain dividends in a written notice mailed to shareholders within 60 days after the close of Glenmede Fund's taxable year. Shareholders should note that, upon the sale of Portfolio shares, if the shareholder has not held such shares for more than six months, any loss on the sale of those shares will be treated as long-term capital loss to the extent of the capital gain dividends received with respect to the shares. An individual's net capital gains are taxable at a maximum effective rate of 28%. Ordinary income of individuals is taxable at a maximum nominal rate of 39.6%, but because of limitations on itemized deductions otherwise allowable and the phase-out of personal exemptions, the maximum effective marginal rate of tax for some taxpayers may be higher. For corporations, long-term capital gains and ordinary income are both taxable at a maximum nominal rate of 35% (although surtax provisions apply at certain income levels to result in effective marginal rates as high as 39%). If the Emerging Markets Portfolio retains net capital gains for reinvestment, the Portfolio may elect to treat such amounts as having been distributed to shareholders. As a result, the shareholders would be subject to tax on undistributed net capital gains, would be able to claim their proportionate share of the Federal income taxes paid by the Portfolio on such gains as a credit against their own Federal income tax liabilities, and would be entitled to an increase in their basis in their Portfolio shares. If for any taxable year a Portfolio does not qualify for the special Federal income tax treatment afforded regulated investment companies, all of its taxable income will be subject to Federal income tax at regular corporate rates (without any deduction for distributions to its shareholders). In such event, dividend distributions would be taxable as ordinary income to shareholders to the extent of the Portfolio's current and accumulated earnings and profits and would be eligible for the dividends received deduction for corporations. Foreign Taxes. Income received from sources within foreign countries may be subject to withholding and other income or similar taxes imposed by such countries. If more than 50% of the value of a Portfolio's total assets at the close of its taxable year consists of stock or securities of foreign corporations, each Portfolio will be eligible and intends to elect to "pass-through" to its shareholders the amount of foreign taxes paid by it. Pursuant to this election, each shareholder will be required to include in gross income (in addition to taxable dividends actually received) his pro rata share of the foreign taxes paid by the Portfolio, and will be entitled either to deduct (as an itemized deduction) his pro rata share of foreign taxes in computing his taxable income or to use it as a foreign tax credit against his U.S. Federal income tax liability, subject to limitations. No deduction for foreign taxes may be claimed by a shareholder who does not itemize deductions, but such a shareholder may be eligible to claim the foreign tax credit (see below). Each shareholder will be notified within 60 days after the close of a Portfolio's taxable year whether the foreign taxes paid by the Portfolio will "pass-through" for that year. Generally, a credit for foreign taxes is subject to the limitation that it may not exceed the shareholder's U.S. tax attributable to his or her foreign source taxable income. For this purpose, if the pass-through election is made, the source of the Portfolio's income flows through to its shareholders with respect to a Portfolio, gains from the sale of securities will be treated as derived from U.S. sources and certain currency fluctuation gains, including fluctuation gains from foreign currency denominated debt securities, receivables and payables, will be treated as ordinary income derived from U.S. sources. The limitation on the foreign tax credit is applied separately to foreign source passive income (as defined for purposes of the foreign tax credit), including the foreign source passive income passed through by a Portfolio. Shareholders may be unable to claim a credit for the full amount of their proportionate share of the foreign taxes paid by a Portfolio. Foreign taxes may not be deducted in computing alternative minimum taxable income and the foreign tax credit can be used to offset only 90% of the alternative minimum tax (as computed under the Code for purposes of this limitation) imposed on corporations and individuals. If a Portfolio is not eligible to make the election to "pass through" to its shareholders its foreign taxes, the foreign taxes it pays will reduce investment company taxable income and the distributions by the Portfolio will be treated as United States source income. Federal Taxation of Certain Financial Instruments. Generally, futures contracts held by a Portfolio at the close of its taxable year will be treated for Federal income tax purposes as sold for their fair market value on the last business day of such year, a process known as "mark-to-market." Forty percent of any gain or loss resulting from such constructive sale will be treated as short-term capital gain or loss and 60% of such gain or loss will be treated as long-term capital gain or loss without regard to the length of time the Portfolio holds the futures contract ("the 40% - 60% rule"). The amount of any capital gain or loss actually realized by a Portfolio in a subsequent sale or other disposition of those futures contracts will be adjusted to reflect any capital gain or loss taken into account by the Portfolio in a prior year as a result of the constructive sale of the contracts. With respect to futures contracts to sell, which will be regarded as parts of a "mixed straddle" because their values fluctuate inversely to the values of specific securities held by the Portfolio, losses as to such contracts to sell will be subject to certain loss deferral rules which limit the amount of loss currently deductible on either part of the straddle to the amount thereof which exceeds the unrecognized gain (if any) with respect to the other part of the straddle, and to certain wash sales regulations. Under short sales rules, which also will be applicable, the holding period of the securities forming part of the straddle will (if they have not been held for the long term holding period) be deemed not to begin prior to termination of the straddle. With respect to certain futures contracts, deductions for interest and carrying charges will not be allowed. Notwithstanding the rules described above, with respect to futures contracts to sell which are properly identified as such, a Portfolio may make an election which will exempt (in whole or in part) those identified futures contracts from being treated for Federal income tax purposes as sold on the last business day of its taxable year, but gains and losses will be subject to such short sales, wash sales and loss deferral rules and the requirement to capitalize interest and carrying charges. Under Temporary Regulations, a Portfolio would be allowed (in lieu of the foregoing) to elect either (1) to offset gains or losses from portions which are part of a mixed straddle by separately identifying each mixed straddle to which such treatment applies, or (2) to establish a mixed straddle account for which gains and losses would be recognized and offset on a periodic basis during the taxable year. Under either election, the 40%-60% rule will apply to the net gain or loss attributable to the futures contracts, but in the case of a mixed straddle account election, no more than 50% of any net gain may be treated as long term and no more than 40% of any net loss may be treated as short term. Options on futures contracts generally receive Federal tax treatment similar to that described above. Certain foreign currency contracts entered into by the Portfolios may be subject to the "mark-to-market" process and the 40%-60% rule in a manner similar to that described in the preceding paragraph for futures contracts. To receive such Federal income tax treatment, a foreign currency contract must meet the following conditions: (1) the contract must require delivery of a foreign currency of a type in which regulated futures contracts are traded or upon which the settlement value of the contract depends; (2) the contract must be entered into at arm's length at a price determined by reference to the price in the interbank market; and (3) the contract must be traded in the interbank market. The Treasury has broad authority to issue regulations under the provisions respecting foreign currency contracts. As of the date of this Statement of Additional Information, the Treasury has not issued any such regulations. Other foreign currency contracts entered into by the Portfolios may result in the creation of one or more straddles for Federal income tax purposes, in which case certain loss deferral, short sales, and wash sales rules and the requirement to capitalize interest and carrying charges may apply. As described more fully above, in order to qualify as a regulated investment company under the Code, a Portfolio must derive less than 30% of its gross income from the sale or other disposition of securities and certain other investments held for less than three months. With respect to futures contracts and other financial instruments subject to the mark-to-market rules, the Internal Revenue Service has ruled in private letter rulings that a gain realized from such a futures contract or financial instrument will be treated as being derived from a security held for three months or more (regardless of the actual period for which the contract or instrument is held) if the gain arises as a result of a constructive sale under the mark-to-market rules, and will be treated as being derived from a security held for less than three months only if the contract or instrument is terminated (or transferred) during the taxable year (other than by reason of mark-to-market) and less than three months have elapsed between the date the contract or instrument is acquired and the termination date. In determining whether the 30% test is met for a taxable year, increases and decreases in the value of a Portfolio's futures contracts and other investments that qualify as part of a "designated hedge," as defined in the Code, may be netted. Other Tax Matters. Special rules govern the Federal income tax treatment of certain transactions denominated in terms of a currency other than the U.S. dollar or determined by reference to the value of one or more currencies other than the U.S. dollar. The types of transactions covered by the special rules include the following: (i) the acquisition of, or becoming the obligor under, a bond or other debt instrument (including, to the extent provided in Treasury regulations, preferred stock); (ii) the accruing of certain trade receivables and payables; and (iii) the entering into or acquisition of any forward contract, futures contract, option and similar financial instrument if such instrument is not marked to market. The disposition of a currency other than the U.S. dollar by a U.S. taxpayer also is treated as a transaction subject to the special currency rules. However, foreign currency-related regulated futures contracts and nonequity options generally are not subject to the special currency rules if they are or would be treated as sold for their fair market value at year-end under the mark-to-market rules, unless an election is made to have such currency rules apply. With respect to transactions covered by the special rules, foreign currency gain or loss is calculated separately from any gain or loss on the underlying transaction and is normally taxable as ordinary gain or loss. A taxpayer may elect to treat as capital gain or loss foreign currency gain or loss arising from certain identified forward contracts, futures contracts and options that are capital assets in the hands of the taxpayer and which are not part of a straddle. In accordance with Treasury regulations under which certain transactions that are part of a "section 988 hedging transaction" (as defined in the Code and the Treasury regulations) will be integrated and treated as a single transaction or otherwise treated consistently for purposes of the Code. Any gain or loss attributable to the foreign currency component of a transaction engaged in by a Portfolio which is not subject to the special currency rules (such as foreign equity investments other than certain preferred stocks) will be treated as capital gain or loss and will not be segregated from the gain or loss on the underlying transaction. It is anticipated that some of the non-U.S. dollar denominated investments and foreign currency contracts a Portfolio may make or enter into will be subject to the special currency rules described above. The Portfolio may recognize income currently for Federal income tax purposes in the amount of the unpaid, accrued interest with respect to bonds structured as zero coupon bonds or pay-in- kind securities, even though it receives no cash interest until the security's maturity or payment date. As discussed above, in order to qualify for beneficial tax treatment, a Portfolio must distribute substantially all of its income to shareholders. Thus, a Portfolio may have to dispose of its portfolio securities under disadvantageous circumstances to generate cash or leverage itself by borrowing cash, in order to satisfy the distribution requirement. Some of the debt securities that may be acquired by a Portfolio may be treated as debt securities that are originally issued at a discount. Original issue discount can generally be defined as the difference between the price at which a security was issued and its stated redemption price at maturity. Although no cash income is actually received by the Portfolio in a given year, original issue discount on a taxable debt security earned in that given year generally is treated for Federal income tax purposes as interest and, therefore, such income would be subject to the distribution requirements of the Code. Some of the debt securities may be purchased by a Portfolio at a discount which exceeds the original issue discount on such debt securities, if any. This additional discount represents market discount for Federal income tax purposes. The gain realized on the disposition of any taxable debt security having market discount will be treated as ordinary income to the extent it does not exceed the accrued market discount on such debt security. Generally, market discount accrues on a daily basis for each day the debt security is held by a Portfolio at a constant rate over the time remaining to the debt security's maturity or, at the election of the Portfolio, at a constant yield to maturity which takes into account the semi-annual compounding of interest. Exchange control regulations that may restrict repatriation of investment income, capital, or the proceeds of securities sales by foreign investors may limit a Portfolio's ability to make sufficient distributions to satisfy the 90% and calendar year distribution requirements. PERFORMANCE CALCULATIONS Each Portfolio computes its average annual total return by determining the average annual compounded rates of return during specified periods that equate the initial amount invested to the ending redeemable value of such investment. This is done by dividing the ending redeemable value of a hypothetical $1,000 initial payment by $1,000 and raising the quotient to a power equal to one divided by the number of years (or fractional portion thereof) covered by the computation and subtracting one from the result. This calculation can be expressed as follows: T = [( ERV )1/n - 1] --- P Where: T = average annual total return. ERV = ending redeemable value at the end of the period covered by the computation of a hypothetical $1,000 payment made at the beginning of the period. P = hypothetical initial payment of $1,000. n = period covered by the computation, expressed in terms of years. Each Portfolio computes its aggregate total return by determining the aggregate rates of return during specified periods that likewise equate the initial amount invested to the ending redeemable value of such investment. The formula for calculating aggregate total return is as follows: T = [( ERV ) - 1] --- P The calculations of average annual total return and aggregate total return assume the reinvestment of all dividends and capital gain distributions. The ending redeemable value (variable "ERV" in each formula) is determined by assuming complete redemption of the hypothetical investment and the deduction of all nonrecurring charges at the end of the period covered by the computations. Each Portfolio's average annual total return and aggregate total return do not reflect any fees charged by Institutions to their clients. Set forth below are the average annual total return figures for the Institutional International Portfolio since inception (August 1, 1992) and for the one year period ended October 31, 1995 (with fee waivers). 1 Year Ended 10/31/95: _____% Inception to 10/31/95: _____% Set forth below are the average annual total return figures for the Institutional International Portfolio since inception (August 1, 1992) and for the one year period ended October 31, 1995 (without fee waivers). 1 Year Ended 10/31/95: _____% Inception to 10/31/95: _____% The aggregate total return figure for the Institutional International Portfolio from inception (August 1, 1992) to October 31, 1995 with fee waivers was _____% and without fee waivers was _____%. The aggregate total return figure for the Emerging Markets Portfolio from inception (December 14, 1994) to October 31, 1995 with fee waivers was ______% and without fee waivers was _____%. GENERAL INFORMATION Dividends and Capital Gains Distributions Each Portfolio's policy is to distribute substantially all of its net investment income, if any, together with any net realized capital gains in the amount and at the times that will avoid both income (including capital gains) taxes on it and the imposition of the Federal excise tax on undistributed income and gains (see discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectus). As set forth in the Prospectus, each Portfolio normally distributes substantially all of its net investment income to shareholders in the form of a quarterly dividend. If any net capital gains are realized by a Portfolio, that Portfolio normally distributes such gains at least once a year. The amounts of any income dividends or capital gains distributions for a Portfolio cannot be predicted. Any dividend or distribution paid shortly after the purchase of shares of a Portfolio by an investor may have the effect of reducing the per share net asset value of that Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectus. Certain Record Holders As of November 30, 1995, the Advisor held of record 100% of the outstanding shares of the Emerging Markets Portfolio. For more information about the Advisor, see "Investment Advisor" in the Prospectus. To Glenmede Fund's knowledge, as of November 30, 1995, no person owned, beneficially or of record, 5% or more of the outstanding shares of the Institutional International Portfolio. As of November 30, 1995, the directors and officers of Glenmede Fund collectively owned less than 1% of the outstanding shares of the Institutional International and Emerging Markets Portfolio. FINANCIAL STATEMENTS Those portions of Glenmede Fund's Financial Statements relating to the Institutional International Portfolio for the fiscal year ended October 31, 199_ and to the Emerging Markets Portfolio for the period December 14, 199_ (commencement of operations) to October 31, 199_, appearing in the 199_ Annual Report to Shareholders, and the report thereon of ____________, independent accountants, also appearing therein, are incorporated by reference in this Statement of Additional Information. APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS I. Description of Commercial Paper Ratings Description of Moody's highest commercial paper rating: Prime-1 ("P-1") --judged to be of the best quality. Issuers rated P-1 (or related supporting institutions) are considered to have a superior capacity for repayment of short-term promissory obligations. Description of S&P highest commercial paper ratings: A-1+ -- this designation indicates the degree of safety regarding timely payment is overwhelming. A-1 -- this designation indicates the degree of safety regarding timely payment is either overwhelming or very strong. Description of Bond Ratings The following summarizes the ratings used by S&P for corporate and municipal debt: AAA - Debt rated AAA has the highest rating assigned by S&P. Capacity to pay interest and repay principal is extremely strong. AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from the highest rated issues only in a small degree. A - Debt rated A has a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher rated categories. BBB - Debt rated BBB is regarded as having an adequate capacity to pay interest and repay principal. Whereas it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories. Plus (+) or Minus (-): The ratings from AA to BBB may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. The following summarizes the ratings used by Moody's for corporate and municipal long-term debt: A-1 Aaa - Bonds that are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as "gilt edged." Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues. Aa - Bonds that are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in Aaa securities. A - Bonds that are rated A possess many favorable investment attributes and are to be considered upper medium grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment sometime in the future. Baa - Bonds that are rated Baa are considered medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well. Moody's applies numerical modifiers (1, 2 and 3) with respect to corporate bonds rated Aa, A and Baa. The modifier 1 indicates that the bond being rated ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the bond ranks in the lower end of its generic rating category. Those bonds in the Aa, A and Baa categories which Moody's believes possess the strongest investment attributes, within those categories are designated by the symbols Aa1, A1 and Baa1, respectively. II. Description of U.S. Government Securities and Certain Other Securities The term "U.S. Government securities" refers to a variety of securities which are issued or guaranteed by the United States A-2 Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States Government. Securities issued or guaranteed by Federal agencies and U.S. Government sponsored enterprises or instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, an investor must look principally to the agency, enterprise or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assert a claim against the United States itself in the event the agency, enterprise or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export Import Bank, Farmers Home Administration, Federal Financing Bank and others. Certain agencies, enterprises and instrumentalities, such as the Government National Mortgage Association are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the Treasury, if needed to service its debt. Debt from certain other agencies, enterprises and instrumentalities, including the Federal Home Loan Bank and Federal National Mortgage Association, are not guaranteed by the United States, but those institutions are protected by the discretionary authority for the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies, enterprises and instrumentalities, such as the Farm Credit System and the Federal Home Loan Mortgage Corporation, are federally chartered institutions under Government supervision, but their debt securities are backed only by the creditworthiness of those institutions, not the U.S. Government. Some of the U.S. Government agencies that issue or guarantee securities include the Export-Import Bank of the United States, Farmers Home Administration, Federal Housing Administration, Maritime Administration, Small Business Administration and The Tennessee Valley Authority. An instrumentality of the U.S. Government is a Government agency organized under Federal charter with Government supervision. Instrumentalities issuing or guaranteeing securities include, among others, Overseas Private Investment Corporation, Federal Home Loan Banks, the Federal Land Banks, Central Bank for Cooperatives, Federal Intermediate Credit Banks and the Federal National Mortgage Association. A-3 III. Foreign Investments Investors should recognize that investing in foreign companies involves certain special considerations which are not typically associated with investing in U.S. companies. Because the stocks of foreign companies are frequently denominated in foreign currencies, and because the Institutional International and Emerging Markets Portfolios may temporarily hold uninvested reserves in bank deposits in foreign currencies, the Institutional International and Emerging Markets Portfolios may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. The investment policies of the Institutional International and Emerging Markets Portfolios permit the Portfolios to enter into forward foreign currency exchange contracts in order to hedge the Portfolios' holdings and commitments against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in foreign countries. Although the Institutional International and Emerging Markets Portfolios will endeavor to achieve most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recovered portion of foreign withholding taxes will reduce the income received from the foreign companies comprising the Institutional International and Emerging Markets Portfolios. A-4 THE GLENMEDE FUND, INC. Equity Portfolio International Portfolio Small Capitalization Equity Portfolio Model Equity Portfolio CROSS REFERENCE SHEET Pursuant to Rule 495(a) under the Securities Act of 1933
Form N-1A Item Number Location - --------------------- -------- Part A Prospectus Caption - ------ ------------------ 1. Cover Page........................................... Cover Page 2. Synopsis............................................. Expenses of the Portfolios 3. Condensed Financial Information...................... Financial Highlights; Performance Calculations 4. General Description of Registrant.................... Cover Page; Investment Policies and Risk Factors; Common Investment Policies and Risk Factors; Investment Limitations; General Information 5. Management of the Fund............................... Investment Advisor; Administrative, Transfer Agency and Dividend Paying Services; Board Members and Officers; Purchase of Shares; Redemption of Shares; Shareholder Servicing Plan 6. Capital Stock and Other Securities .................. Purchase of Shares; Redemption of Shares; Dividends, Capital Gains Distributions and Taxes; General Information 7. Purchase of Securities Being Offered ................ Valuation of Shares; Purchase of Shares; Redemption of Shares 8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares 9. Pending Legal Proceedings............................ Not Applicable
THE GLENMEDE FUND, INC. 135 East Baltimore Street, Maryland 21202 ------------------------------------------------------------------------------ (800) 442-8299 ------------------------------------------------------------------------------ Prospectus--February __, 1996 INVESTMENT OBJECTIVES The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund") is a no-load, open-end management investment company. The Glenmede Fund consists of ten series of shares, each of which has different investment objectives and policies. The securities offered hereby are four of these series of shares (each referenced herein as a "Portfolio") of the Glenmede Fund listed below. Equity Portfolio. The objective of the Equity Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The Equity Portfolio seeks to achieve its objective by investing primarily in common stocks. The net asset value of this Portfolio will fluctuate. International Portfolio. The objective of the International Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The International Portfolio seeks to achieve its objective by investing primarily in common stocks and other equity securities of companies located outside the United States. The net asset value of this Portfolio will fluctuate. Small Capitalization Equity Portfolio. The objective of the Small Capitalization Equity Portfolio is to provide long-term appreciation consistent with reasonable risk to principal. The Small Capitalization Equity Portfolio seeks to achieve its investment objective by investing primarily in common stocks with market capitalizations of less than $1 billion. The net asset value of this Portfolio will fluctuate. Model Equity Portfolio. The objective of the Model Equity Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The Model Equity Portfolio seeks to achieve its objective by investing primarily in common stocks using The Glenmede Trust Company's (the "Advisor") proprietary equity computer model as an investment guide. The net asset value of this Portfolio will fluctuate. Total return consists of income (dividend and/or interest income from portfolio securities) and capital gains and losses, both realized and unrealized, from portfolio securities. Shares of the Portfolios are subject to investment risks, including the possible loss of principal, are not bank deposits and are not endorsed by, insured by, guaranteed by, obligations of or otherwise supported by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, The Glenmede Corporation or any of its affiliates or any other governmental agency or bank. ------------------------------------------------------------------------------ ABOUT THIS PROSPECTUS This Prospectus, which should be retained for future reference, sets forth certain information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about Glenmede Fund has been filed with the Securities and Exchange Commission. Such SAI, dated February __, 1996, as amended or supplemented from time to time, is incorporated by reference into this Prospectus. The 199_ Annual Report to Shareholders contains additional investment and performance information about the Portfolios. A copy of the SAI and the 199_ Annual Report may be obtained, without charge, by writing to Glenmede Fund at the address shown above or by calling Glenmede Fund at the telephone number shown above. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. EXPENSES OF THE PORTFOLIOS The following table illustrates the expenses and fees incurred by each Portfolio for the fiscal year ended October 31, 199_, as restated to reflect new contractual arrangements.
Small Capitalization Model Equity International Equity Equity Portfolio Portfolio Portfolio Portfolio --------- --------- --------- --------- Shareholder Transaction Expenses..................... None None None None Maximum Annual Client Fee............................ 1.00% 1.00% 1.00% 1.00% Annual Portfolio Operating Expenses (as a percentage of net assets) Investment Advisory Fees1........................ ___% ___% ___% ___% ----- Administration Fees............................... .__% .__% .__% .__% ---- ---- ---- ---- Other Expenses.................................... .__% .__% .__% .__% ---- ---- ---- ---- Total Operating Expenses.......................... .__% .__% .__% .__% ==== ==== ==== ====
- --------------------- 1 The Portfolios described in this prospectus do not pay any advisory fees to the Advisor, or its affiliates ("Affiliates"). However, investors in these Portfolios must be clients of the Advisor or Affiliates. The "Maximum Annual Client Fee" in the above table is the current maximum fee that the Advisor or an Affiliate would charge its clients directly for fiduciary, trust and/or advisory services (e.g., personal trust, estate, advisory, tax and custodian services). The actual annual fees charged by the Advisor and its Affiliates directly to their clients for such services vary depending on a number of factors, including the particular services provided to the client, but are generally under 1% of the client's assets under management. Investors also may have to pay various fees to others to become clients of the Advisor or an Affiliate. See "Investment Advisor." The purpose of the above table is to assist an investor in understanding the various estimated costs and expenses that an investor in a Portfolio will bear directly or indirectly. Actual expenses may be greater or lesser than such estimates. For further information concerning the Portfolios' expenses see "Investment Advisor," "Administrative Services" and "Board Members and Officers." The following example illustrates the estimated expenses that an investor would pay on a $1,000 investment over various time periods assuming (i) a 5% annual rate of return and (ii) redemption at the end of each time period. The example does not include fees for fiduciary and investment services which investors pay the Advisor or Affiliates as clients. See "Investment Advisor." As noted in the above table, the Glenmede Fund charges no redemption fees of any kind. -2-
1 Year* 3 Years* 5 Years* 10 Years* ------- -------- -------- --------- Equity Portfolio........................................ $__ $__ $__ $__ --- --- --- --- International Portfolio................................. $__ $__ $__ $__ --- --- --- --- Small Capitalization Equity Portfolio................... $__ $__ $__ $__ --- --- --- --- Model Equity Portfolio.................................. $__ $__ $__ $__ --- --- --- ---
*You would pay the same expenses on the same investment, assuming no redemption at the end of the period. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. -3- FINANCIAL HIGHLIGHTS The following tables provide financial highlights of each Portfolio for the respective periods presented. The data presented is derived from Glenmede Fund's Financial Statements included in Glenmede Fund's 199_ Annual Report to Shareholders, which Financial Statements and report thereon of _______________, Glenmede Fund's independent accountants, are incorporated by reference in the SAI. The following information should be read in conjunction with those Financial Statements. Glenmede Fund's Financial Statements for the periods ended October 31, 1991, 1990 and 1989 were audited by Glenmede Fund's previous independent accountants, _________________ L.L.P..
Equity Portfolio Year Year Year Year Year Year Year Ended Ended Ended Ended Ended Ended Ended October 31, October 31, October 31, October 31, October 31, October 31, October 31, 1995 1994 1993 1992 1991 1990 1989+ ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of year............... $ 13.23 $ 11.84 $ 11.21 $ 8.57 $ 10.04 $ 10.00 ------- ------- ------- ------ ------- ------- Income from investment operations: Net investment income.......................... 0.31 0.32 0.31 0.29 0.34 0.14 Net realized and unrealized gain/(loss) on investments............................... (0.17) 1.63 0.65 2.66 (1.44) (0.01) ------- ------- ------- ------ ------- ------- Total from investment operations............. 0.14 1.95 0.96 2.95 (1.10) 0.13 ------- ------- ------- ------ ------- ------- Less Distributions: Distributions from net investment income......................................... (0.29) (0.32) (0.33) (0.31) (0.34) (0.09) Distributions from net realized capital gains.......................................... (0.52) (0.24) -- -- -- -- Distributions from capital..................... -- -- -- -- -- (0.03) ------- ------- ------- ------ ------- ------- Total Distributions.......................... (0.81) (0.56) (0.33) (0.31) (0.37) (0.09) ------- ------- ------- ------ ------- ------- Net asset value, end of year..................... $ 12.56 $ 13.23 $ 11.84 $11.21 $ 8.57 $ 10.04 ======= ======= ======= ====== ======= ======= Total return++................................... 1.21% 16.60% 8.62% 34.81% (11.34)% 1.27% ======= ======= ======= ====== ====== ======= Ratios to average net assets/ Supplemental data: Net assets, end of year (in 000's)........... $64,046 $43,611 $18,049 $9,135 $5,903 $6,523 Ratio of operating expenses to average net assets.................................. 0.16% 0.20% 0.24% 0.22% 0.24% 0.42%* Ratio of net investment income to average net assets.................................. 2.40% 2.61% 2.91% 2.89% 3.59% 5.39%* Portfolio turnover rate...................... 109% 61% 30% 86% 91% --
- ------------------------- + The Portfolio commenced operations on July 20, 1989. ++ Total return represents aggregate total return for the period indicated. * Annualized. -4-
International Portfolio ----------------------------------------------------------------------------------- Year Year Year Year Year Year Year Ended Ended Ended Ended Ended Ended Ended October 31, October 31, October 31, October 31, October 31, October 31, October 31, 1995 1994 1993 1992 1991 1990 1989+ ----------- ----------- ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of year...............$ $ 12.69 $ 9.84 $ 10.89 10.48 $ 11.20 $ 10.00 ------- ------- ------- ------- ------- ------- ------- Income from investment operations: Net investment income.......................... 0.27 0.27 0.26 0.21 0.30 0.40 Net realized and unrealized gain/(loss) on investments................................ 1.50 2.98 (0.51) 1.00 0.22 0.81 ------- ------- ------- ------- ------- ------- Total from investment operations............. 1.77 3.25 (0.25) 1.21 0.52 1.21 ------- ------- ------- ------- ------- ------- Less Distributions: Distributions from net investment income........................................ (0.25) (0.26) (0.26) (0.28) (0.42) (0.01) Distributions from net realized gains.......... (1.16) (0.14) (0.54) (0.52) -- -- Distributions in excess of net realized gains......................................... (0.01) -- -- -- -- -- Distributions from capital..................... -- -- -- -- (0.82) -- ------- ------- ------- ------ ------- ------ Total Distributions.......................... (1.42) (0.40) (0.80) (0.80) (1.24) (0.01) ------- ------- ------- ------ ------- ------- Net asset value, end of year..................... $ 13.04 $ 12.69 $ 9.84 $10.89 $ 10.48 $ 11.20 ======= ======= ======= ====== ======= ======= Total return++................................... 14.26% 33.47% (2.73)% 12.12% 4.27% 12.07% ======= ======= ======= ====== ======= ======= Ratios to average net assets/ Supplemental data: Net assets, end of year (in 000's)........... $292,513 $221,515 $167,191 $176,397 $107,690 $91,181 Ratio of operating expenses to average net assets.................................. 0.16% 0.17% 0.23% 0.23% 0.22% 0.20%* Ratio of net investment income to average net assets.......................... 2.11% 2.31% 2.47% 2.99% 3.84% 3.84%* Portfolio turnover rate...................... 39% 34% 40% 46% 44% 47%
- ---------------------------------- + The Portfolio commenced operations on November 17, 1988. ++ Total return represents aggregate total return for the period indicated. * Annualized. -5-
Small Capitalization Equity Portfolio ----------------------------------------------------------- Year Year Year Year Year Ended Ended Ended Ended Ended October 31, October 31, October 31, October 31, October 31, 1995 1994 1993 1992 1991+ ----------- ----------- ----------- ----------- ----------- Net asset value, beginning of year.............. $ 13.97 $ 11.12 $ 11.02 $ 10.00 ------- ------- ------- ------- Income from investment operations: Net investment income......................... 0.16 0.14 0.16 0.16 Net realized and unrealized gain on investments............................... 0.23 3.60 0.09 1.02 ------- ------- ------- ------- Total from investment operations............ 0.39 3.74 0.25 1.18 ------- ------- ------- ------- Less Distributions: Distributions from net investment income....................................... (0.15) (0.15) (0.15) (0.16) Distributions from net realized capital gains................................ (0.26) (0.74) -- -- ------- ------- ------- ------ Total Distributions........................ (0.41) (0.89) (0.15) (0.16) ------- ------- ------- ------- Net asset value, end of year.................... $ 13.95 $ 13.97 $ 11.12 $ 11.02 ======= ======= ======= ======= Total return++.................................. 2.85% 33.86% 2.32% 11.84% ======= ======= ======= ======= Ratios to average net assets/ Supplemental data: Net assets, end of year (in 000's)............ $109,872 $68,418 $39,728 $39,631 Ratio of operating expenses to average net assets........................... 0.14% 0.14% 0.19% 0.20%* Ratio of net investment income to average net assets........................... 1.18% 1.08% 1.44% 2.24%* Portfolio turnover rate....................... 31% 63% 56% 29%
- ------------------------- + The Portfolio commenced operations on March 1, 1991. ++ Total return represents aggregate total return for the period indicated. * Annualized. -6-
Model Equity Portfolio ----------------------------------------------- Year Ended Year Ended Period Ended October 31, October 31, October 31, 1995 1994 1993+ ----------- ---------- --------- Net asset value, beginning of period........................... $ 10.92 $ 10.00 ------- ------- Income from investment operations: Net investment income........................................ 0.21 0.21 Net realized and unrealized gain on investments................................................. (0.31) 2.06 ------- ------- Total from investment operations........................... (0.10) 2.27 ------- ------- Less Distributions: Distributions from net investment income..................................................... (0.20) (0.20) Distributions from net realized capital gains.............................................. -- (1.15) ------- ------- Total Distributions........................................ (0.20) (1.35) ------- ------- Net asset value, end of year............................... $ 10.62 $ 10.92 ======= ======= Total return++............................................. (0.91)% 23.05% ======= ======= Ratios to average net assets/Supplemental data: Net assets, end of year (in 000's)........................... $20,654 $13,969 Ratio of operating expenses to average net assets.......................................... 0.24% 0.24%* Ratio of net investment income to average net assets......................................... 2.04% 2.47%* Portfolio turnover rate...................................... 287% 230%
- ------------------------------ + The Portfolio commenced operations on December 31, 1992. ++ Total return represents aggregate total return for the period indicated. * Annualized. -7- PERFORMANCE CALCULATIONS Each of the Equity, International, Small Capitalization Equity and Model Equity Portfolios may advertise or quote total return data from time to time. Total return will be calculated on an average annual total return basis, and may also be calculated on an aggregate total return basis, for various periods. Average annual total return reflects the average annual percentage change in value of an investment in the particular Portfolio. Aggregate total return reflects the total percentage change in value over the measuring period. Both methods of calculating total return assume that dividend and capital gains distributions made by the Portfolio during the period are reinvested in additional Portfolio shares. Each of the Equity, International, Small Capitalization Equity and Model Equity Portfolios may compare their total returns to that of other investment companies with similar investment objectives and to stock and other relevant indices such as the Standard & Poor's 500 Composite Stock Price Index ("S&P 500"), the Dow Jones Industrial Average, the Russel 2000 Index or the National Association of Securities Dealers, Inc.'s National Market and Automated Quotations Systems ("NASDAQ") Composite Index or to rankings prepared by independent services or other financial or industry publications that monitor the performance of mutual funds. For example, the total return of the Equity, International, Small Capitalization Equity or Model Equity Portfolios may also be compared to data prepared by Lipper Analytical Services, Inc. In addition, the International Portfolio's total return may be compared to the Morgan Stanley Capital International EAFE Index. Total return and other performance data as reported in national financial publications such as Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or in publications of a local or regional nature, may also be used in comparing the performance of the Equity, International, Small Capitalization Equity or Model Equity Portfolios. Performance quotations represent a Portfolio's past performance, and should not be considered as representative of future results. Since performance will fluctuate, performance data for a Portfolio should not be used to compare an investment in the Portfolio's shares with bank deposits, savings accounts and similar investment alternatives which often provide an agreed or guaranteed fixed yield/return for a stated period of time. Shareholders should remember that performance is generally a function of the kind and quality of the instruments held in a Portfolio, portfolio maturity, operating expenses and market conditions. Any management fees charged by the Advisor or institutions to their respective clients will not be included in the Portfolio's calculations of total return. See "Investment Advisor." INVESTMENT POLICIES AND RISK FACTORS The investment objective of each Portfolio is not fundamental and may be changed by the Board members without shareholder approval. EQUITY PORTFOLIO The objective of the Equity Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal . The Portfolio seeks to achieve its objective by investing primarily in common stocks selected on the basis of fundamental investment value. Crucial to the valuation process is a systematic examination of the earning and dividend paying ability of companies and denominating these characteristics by the market value of the underlying stock. Stocks purchased by the Portfolio will be primarily those traded on the various stock exchanges and the NASDAQ. Under normal circumstances, at least 65% of the Equity Portfolio's total assets will be invested in equity securities such as common and preferred stock and securities convertible into such stock. Factors considered in the -8- selection of securities include, without limitation, price earning ratios, price-to-cash flow ratios, reinvestment rates, dividend yields, payout ratios and earnings growth rates. The Portfolio's holdings will tend to be characterized by relatively low price-to-earnings ratios. There is no mandated income requirement for securities held by the Portfolio. The Equity Portfolio intends to remain, for the most part, fully invested in equity securities, which may include securities of companies located outside the United States, and will not engage in "market timing" transactions. See "Investment Policies and Risk Factors--International Portfolio" for a discussion of special risks and considerations involved in investing in securities of foreign companies. However, the Portfolio may invest a portion of its assets (up to 20% under normal circumstances) in preferred stocks, convertible debentures, and the following fixed income and money market securities: obligations of the U.S. Government and its guaranteed or sponsored agencies, including shares of open-end or closed-end investment companies which invest in such obligations (such shares will be purchased within the limits prescribed by the Investment Company Act of 1940, as amended (the "1940 Act")); short-term money market instruments issued in the U.S. or abroad, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, bankers acceptances, commercial paper rated A-1 by Standard & Poor's Ratings Group, Division of McGraw Hill ("S&P") or Prime-1 by Moody's Investors Service, Inc. ("Moody's"), or in equivalent money market securities; and high quality fixed income securities denominated in U.S. dollars, any foreign currency, or a multi-national currency unit such as the European Currency Unit. For a description of other securities in which the Equity Portfolio may invest, see "Common Investment Policies and Risk Factors." INTERNATIONAL PORTFOLIO The objective of the International Portfolio is to provide maximum, long-term total return consistent with reasonable risk to principal. The International Portfolio seeks to achieve its objective by investing primarily in common stocks and other equity securities of companies located outside the United States. The Portfolio is expected to diversify its investments across companies located in a number of foreign countries, which may include, but is not limited to, Japan, the United Kingdom, Germany, France, Switzerland, the Netherlands, Sweden, Australia, Hong Kong and Singapore. The Portfolio will invest an aggregate of at least 65% of its total assets in the securities of companies (other than investment companies) in at least three countries other than the United States. The securities which the Portfolio may purchase include the following: common stocks of companies located outside the U.S.; shares of closed-end investment companies which invest chiefly in the shares of companies located outside the U.S. (such shares will be purchased by the Portfolio within the limits prescribed by the 1940 Act); U.S. or foreign securities convertible into foreign common stock; and American Depository Receipts, which are U.S. domestic securities representing ownership rights in foreign companies. The International Portfolio may also enter into forward currency exchange contracts in order to hedge against uncertainty in the level of future foreign exchange rates in the purchase and sale of investment securities, but may not enter into such contracts for speculative purposes. A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts may be bought or sold to protect the Portfolio, to some degree, against a possible loss resulting from an adverse -9- change in the relationship between foreign currencies and the U.S. dollar. It should be realized that this method of protecting the value of the Portfolio's investment securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange at some future point in time. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time they tend to limit any potential gain which might result should the value of such currency increase. Investors should recognize that investing in the securities of foreign companies and the utilization of forward foreign currency contracts involve special risks and considerations not typically associated with investing in U.S. companies. These risks and considerations include differences in accounting, auditing and financial reporting standards, generally higher commission rates on foreign portfolio transactions, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investment in foreign countries and potential restrictions on the flow of international capital. Moreover, the dividends payable on the Portfolio's foreign portfolio securities may be subject to foreign withholding taxes, thus reducing the net amount of income available for distribution to the Portfolio's shareholders. Further, foreign securities often trade with less frequency and volume than domestic securities and, therefore, may exhibit greater price volatility. Also, changes in foreign exchange rates will affect, favorably or unfavorably, the value of those securities in a portfolio which are denominated or quoted in currencies other than the U.S. dollar. In addition, in many countries there is less publicly available information about issuers than is available in reports about companies in the United States. Foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards, and auditing practices and requirements may not be comparable to those applicable to U.S. companies. Further, a Portfolio may encounter difficulties or be unable to pursue legal remedies and obtain judgments in foreign courts. The International Portfolio intends to remain, for the most part, fully invested in equity securities of companies located outside of the United States. However, the Portfolio may invest a portion of its assets (up to 35% under normal circumstances) in the following fixed income and money market securities: obligations of the U.S. Government and its guaranteed or sponsored agencies, including shares of open-end or closed-end investment companies which invest in such obligations (such shares will be purchased within the limits prescribed by the 1940 Act); short-term money market instruments issued in the U.S. or abroad, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, banker's acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in equivalent money market securities; and high quality fixed income securities denominated in U.S. dollars, any foreign currency, or a multi-national currency unit such as the European Currency Unit. For a description of other securities in which the International Portfolio may invest, see "Common Investment Policies and Risk Factors." SMALL CAPITALIZATION EQUITY PORTFOLIO The objective of the Small Capitalization Equity Portfolio is to provide long-term appreciation consistent with reasonable risk to principal. The Small Capitalization Equity Portfolio seeks to achieve its objective by investing primarily in common stocks with market capitalizations of less than $1 billion, which are selected on the basis of fundamental investment value. Crucial to this valuation process is a systematic examination of the earning and dividend paying ability of companies and denominating these characteristics by the market value of the underlying stock. Stocks purchased by the Portfolio will be primarily those traded on the various stock exchanges and NASDAQ, -10- however, the Portfolio may purchase unlisted securities and penny stocks. Many different company types and industries may be represented by the securities purchased by the Portfolio. Factors considered by the Advisor in the selection of securities include, but are not limited to, price- to-earnings ratios, price to cash flow ratios, reinvestment rates, dividend yields, expected growth rates, and balance sheet quality. The Small Capitalization Equity Portfolio may invest in securities located outside the United States. Investors in the Portfolio should recognize that securities denominated in foreign currencies or a multi-national currency unit involve special risks. The Portfolio may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. See "Investment Policies and Risk Factors--International Portfolio" for a discussion of special risks and considerations involved in investing in securities of foreign companies. The Portfolio's holdings will tend to be characterized by relatively low price-to-earnings ratios. There is no mandated income requirement for securities held by the Portfolio. The Portfolio generally will be more volatile and have a higher expected growth rate than the overall market. In certain periods, the Portfolio may fluctuate independently of broad, larger capitalization indexes such as the S&P 500. Under normal market conditions, at least 65% of the Portfolio's total assets will be invested in equity securities of small capitalization companies. However, if warranted in the judgement of the Advisor, the Portfolio may invest a portion of its assets (up to 20% under normal circumstances) in preferred stocks and convertible debentures with a minimum rating of BBB by S&P or Baa by Moody's, and the following fixed income and money market securities: obligations of the U.S. Government and its guaranteed or sponsored agencies, including shares of open-end or closed-end investment companies which invest in such obligations (such shares will be purchased within the limits prescribed by the 1940 Act, as more fully described under "Investment Limitations" in the Glenmede Fund's SAI); short-term money market instruments issued in the U.S. or abroad, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, banker's acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in equivalent money market securities; and high quality fixed income securities denominated in U.S. dollars, any foreign currency, or a multi-national currency unit such as the European Currency Unit. For a description of other securities in which the Small Capitalization Equity Portfolio may invest, see "Common Investment Policies and Risk Factors." MODEL EQUITY PORTFOLIO The objective of the Model Equity Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The Model Equity Portfolio seeks to achieve its objective by investing primarily in common stocks . Under normal circumstances, at least 65% of the Model Equity Portfolio's total assets will be invested in common stock. The Advisor will actively manage the Portfolio based upon ongoing analysis of economic, financial and market developments. In managing the Portfolio, the Advisor will use its proprietary equity computer model, which ranks stocks, as an investment guide. Although the Advisor's proprietary equity computer model is a disciplined model, the Advisor will use its investment judgment in seeking to achieve the Portfolio's objective. The Advisor currently anticipates that its proprietary equity computer model will be run at least -11- weekly. From time to time, the Advisor may revise its proprietary equity computer model programs to maintain or enhance performance. Other factors considered by the Advisor in the selection of securities include, but are not limited to, price-to-book value ratios, earnings-to-yields ratios, price-to-cash flow ratios, return on equity ratios, debt-to-equity ratios, dividend yields, earnings growth rates and historic price patterns. The Model Equity Portfolio intends to remain, for the most part, fully invested. Common stocks in which the Portfolio may invest include, without limitation, American Depository Receipts which are listed on the New York Stock Exchange. The Model Equity Portfolio will not engage in "market timing" transactions. See "Investment Policies and Risk Factors--International Portfolio" for a discussion of special risks and considerations involved in investing in securities of foreign companies. However, for temporary purposes this Portfolio may invest a portion of its assets (up to 20%) in short-term money market instruments issued by U.S. or foreign issuers, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, bankers acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in similar money market securities. For a description of other securities in which the Model Equity Portfolio may invest, see "Common Investment Policies and Risk Factors." COMMON INVESTMENT POLICIES AND RISK FACTORS There can be no assurance that any of the Portfolios will achieve its stated investment objective. There are a number of investment policies common to the Portfolios. REPURCHASE AGREEMENTS Each Portfolio may enter into repurchase agreements with qualified brokers, dealers, banks and other financial institutions deemed creditworthy by the Advisor. Under normal circumstances, however, each of the Equity, International, Small Capitalization Equity and Model Equity Portfolios will not enter into repurchase agreements if entering into such agreements would cause, at the time of entering into such agreements, more than 20% of the value of the total assets of the particular Portfolio to be subject to repurchase agreements. The International Portfolio would generally enter into repurchase transactions to invest cash reserves. In a repurchase agreement, a Portfolio purchases a security and simultaneously commits to resell that security at a future date to the seller (a qualified bank or securities dealer) at an agreed upon price plus an agreed upon market rate of interest (itself unrelated to the coupon rate or date of maturity of the purchased security). The securities held subject to a repurchase agreement may have stated maturities exceeding 13 months. The Advisor currently expects that repurchase agreements with respect to the Equity, International, Small Capitalization Equity and Model Equity Portfolios will mature in less than 13 months. The seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement at not less than 101% of the repurchase price including accrued interest. The Glenmede Fund's administrator and the Advisor will mark to market daily the value of the securities purchased, and the Advisor will, if necessary, require the seller to deposit additional securities to ensure that the value is in compliance with the 101% requirement stated above. The Advisor will consider the creditworthiness of a seller in determining whether a Portfolio should enter into a repurchase agreement, and the Portfolios will only enter into repurchase agreements with banks and dealers which are determined to present minimal credit risk by the Advisor under procedures adopted by the Board of Directors. -12- In effect, by entering into a repurchase agreement, a Portfolio is lending its funds to the seller at the agreed upon interest rate, and receiving a security as collateral for the loan. Such agreements can be entered into for periods of one day (overnight repo) or for a fixed term (term repo). Repurchase agreements are a common way to earn interest income on short-term funds. The use of repurchase agreements involves certain risks. For example, if the seller of a repurchase agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a Portfolio may incur a loss upon disposition of them. Default by the seller would also expose a Portfolio to possible loss because of delays in connection with the disposition of the underlying obligations. If the seller of an agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a bankruptcy court may determine that the underlying securities are collateral not within the control of a Portfolio and therefore subject to sale by the trustee in bankruptcy. Further, it is possible that a Portfolio may not be able to substantiate its interest in the underlying securities. BORROWING The Portfolios may purchase securities on a "when issued," "delayed settlement" or "forward delivery" basis. As a temporary measure for extraordinary or emergency purposes, a Portfolio may borrow money from banks. However, none of the Portfolios will borrow money for speculative purposes. See "Common Investment Policies--`When Issued,' `Delayed Settlement' and `Forward Delivery Securities.'" LENDING OF SECURITIES Each Portfolio may lend its portfolio securities with a value up to one-third of its total assets to qualified brokers, dealers, banks and other financial institutions for the purpose of realizing additional net investment income through the receipt of interest on the loan. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. Loans will be made only to borrowers deemed by the Advisor to be of good standing. "WHEN ISSUED," "DELAYED SETTLEMENT" AND "FORWARD DELIVERY" SECURITIES The Portfolios may purchase and sell securities on a "when issued," "delayed settlement" or "forward delivery" basis. "When issued" or "forward delivery" refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. When issued or forward delivery transactions may be expected to occur one month or more before delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by a Portfolio in a when issued, delayed settlement or forward delivery transaction until the Portfolio receives payment or delivery from the other party to the transaction. A Portfolio will maintain a separate account of cash, U.S. Government securities or other high grade debt obligations at least equal to the value of purchase commitments until payment is made. Such segregated securities will either mature or, if necessary, be sold on or before the settlement date. Although a Portfolio receives no income from the above described securities prior to delivery, the market value of such securities is still subject to change. A Portfolio receives -13- no income from "when issued," "delayed settlement" or "forward delivery" securities prior to delivery of such securities. A Portfolio will engage in when issued transactions to obtain what is considered to be an advantageous price and yield at the time of the transaction. When a Portfolio engages in when issued, delayed settlement or forward delivery transactions, it will do so for the purpose of acquiring securities consistent with its investment objective and policies and not for the purposes of speculation. Each Portfolio's when issued, delayed settlement and forward delivery commitments are not expected to exceed 25% of its total assets absent unusual market circumstances, and each Portfolio will only sell securities on such a basis to offset securities purchased on such a basis. INVESTMENT COMPANY SECURITIES In connection with the management of their daily cash positions, the Portfolios may each invest in securities issued by other open-end investment companies with investment objectives and policies that are consistent with those of the investing portfolio. Each Portfolio limits its investments so that, as determined immediately after a securities purchase is made: (a) not more than 5% of the value of its total assets will be invested in the securities of any one investment company; (b) not more than 10% of the value of its total assets will be invested in the aggregate in the securities of investment companies as a group; and (c) not more than 3% of the outstanding voting stock of any one investment company will be owned by the Portfolio. As a shareholder of another investment company, the Portfolio would bear its pro rata portion of the other investment company's advisory fees and other expenses, in addition to the expenses the Portfolio bears directly in connection with its own operations. ILLIQUID SECURITIES No Portfolio will invest more than 10% of its net assets in securities that are illiquid. Unless specified above and except as described under "Investment Limitations," the foregoing investment policies are not fundamental, and the Board members may change such policies without shareholder approval. ---------------------- PURCHASE OF SHARES Shares of each Portfolio are sold without a sales commission on a continuous basis to the Advisor acting on behalf of its clients or the clients of its Affiliates ("Clients") and to other institutions (the "Institutions"), at the net asset value per share next determined after receipt of the purchase order by the transfer agent. See "Valuation of Shares." The minimum initial investment for each Portfolio is $25,000; the minimum for subsequent investments for each Portfolio is $1,000. Glenmede Fund reserves the right to reduce or waive the minimum initial and subsequent investment requirements from time to time. Beneficial ownership of shares will be reflected on books maintained by the Advisor or the Institutions. A prospective investor wishing to purchase shares in the Glenmede Fund should contact the Advisor or his or her Institution. It is the responsibility of the Advisor to transmit orders for share purchases to Investment Company Capital Corp. ("ICC"), Glenmede Fund's transfer agent, and deliver required funds to The Chase Manhattan Bank, N.A., Brooklyn, New York, Glenmede Fund's custodian, on a timely basis. Glenmede Fund reserves the right, in its sole discretion, to suspend the offering of shares of its Portfolios or reject purchase orders when, in the -14- judgment of management, such suspension or rejection is in the best interests of the Glenmede Fund. Purchases of a Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued except upon the written request of the shareholder. Certificates for fractional shares, however, will not be issued. REDEMPTION OF SHARES Shares of each Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request by the transfer agent. Generally, a properly signed written request is all that is required. Any redemption may be more or less than the purchase price of the shares depending on the market value of the investment securities held by the Portfolio. An investor wishing to redeem shares should contact the Advisor or his or her Institution. It is the responsibility of the Advisor to transmit promptly redemption orders to the transfer agent. Payment of the redemption proceeds will ordinarily be made within one business day, but in no event more than seven days, after receipt of the order in proper form by the transfer agent. Redemption orders are effected at net asset value per share next determined after receipt of the order in proper form by the transfer agent. Glenmede Fund may suspend the right of redemption or postpone the date of payment at times when the New York Stock Exchange (the "Exchange") is closed, or under any emergency circumstances as determined by the Securities and Exchange Commission (the "Commission"). See "Valuation of Shares" for the days on which the Exchange is closed. If the Board determines that it would be detrimental to the best interests of the remaining shareholders of Glenmede Fund to make payment wholly or partly in cash, Glenmede Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of securities held by a Portfolio in lieu of cash in conformity with applicable rules of the Commission. Investors may incur brokerage charges on the sale of portfolio securities received as a redemption in kind. Glenmede Fund reserves the right, upon 30 days' written notice, to redeem an account in any of the Portfolios if the net asset value of the account's shares falls below $100 and is not increased to at least such amount within such 30-day period. ADDITIONAL INFORMATION ON THE PURCHASE AND REDEMPTION OF SHARES OF THE INTERNATIONAL PORTFOLIO Glenmede Fund may, from time to time, in its sole discretion appoint one or more entities as its agent to receive purchase and redemption orders of shares of the International Portfolio and cause these orders to be transmitted, on a net basis, to Glenmede Fund's transfer agent. In these instances, orders are effected at the net asset value per share next determined after receipt of that order by the entity, if the order is actually received by Glenmede Fund's transfer agent not later than the next business morning. VALUATION OF SHARES The net asset value of the Portfolios is determined by dividing the total market value of each Portfolio's investments and other assets, less any liabilities of that Portfolio, by the total outstanding shares of that Portfolio. Currently the Exchange is closed on weekends and the customary national business holidays of New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day -15- (or the days on which they are observed). For the Equity, International, Small Capitalization Equity and Model Equity Portfolios, net asset value per share is determined as of the close of regular trading hours of the Exchange on each day that the Exchange is open for business . One or more pricing services may be used to provide securities valuations in connection with the determination of the net asset value of each Portfolio. EQUITY, SMALL CAPITALIZATION EQUITY AND MODEL EQUITY PORTFOLIOS Equity securities listed on a U.S. securities exchange for which market quotations are readily available are valued at the last quoted sale price as of the close of the Exchange's regular trading hours on the day the valuation is made. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued not exceeding the asked prices nor less than the bid prices. The value of securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Board. For the Equity, Small Capitalization Equity and Model Equity Portfolios, securities listed on a foreign exchange and unlisted foreign securities are valued as described below under "International Portfolio." INTERNATIONAL PORTFOLIO Equity securities listed on a U.S. securities exchange for which market quotations are available are valued at the last quoted sale price as of the close of the exchange's regular trading hours on the day the valuation is made. Securities listed on a foreign exchange and unlisted foreign securities are valued at the latest quoted sales price available before the time when assets are valued. Price information on listed securities is taken from the exchange where the security is primarily traded. Unlisted U.S. equity securities and listed securities not traded on the valuation date for which market quotations are readily available are valued not in excess of the asked prices or less than the bid prices. The value of securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Board. Foreign currency amounts are translated into U.S. dollars at the bid prices of such currencies against U.S. dollars last quoted by a major bank. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The International, Equity, Small Capitalization Equity and Model Equity Portfolios normally distribute substantially all of their net investment income to shareholders in the form of a quarterly dividend. If any net capital gains are realized, the Portfolios normally distribute such gains at least once a year. However, see "Dividends, Capital Gains Distributions and Taxes--Federal Taxes--Miscellaneous," for a discussion of the Federal excise tax applicable to certain regulated investment companies. Undistributed net investment income is included in a Portfolio's net assets for the purpose of calculating net asset value per share. Therefore, on the Equity, International, Small Capitalization Equity and Model Equity Portfolios' "ex-dividend" date, the net asset value per share excludes the dividend (i.e., is reduced by the per share amount of the dividend). Dividends paid shortly after the purchase of shares of the Equity, International, Small Capitalization Equity and Model Equity Portfolios by an investor, although in effect a return of capital, are taxable to the investor. -16- FEDERAL TAXES Each Portfolio intends to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). Such qualification relieves a Portfolio of liability for Federal income taxes to the extent its earnings are distributed in accordance with the Code. Qualification as a regulated investment company under the Code for a taxable year requires, among other things, that a taxable Portfolio distribute to its shareholders an amount at least equal to 90% of its investment company taxable income and 90% of its net exempt interest income (if any) for such taxable year. In general, a Portfolio's investment company taxable income will be its net investment income, including interest and dividends, subject to certain adjustments, and net short-term capital gains, excluding the excess of any net long-term capital gain for the taxable year over the net short-term capital loss, if any, for such year. Each Portfolio intends to distribute as dividends substantially all of its investment company taxable income each year. Such dividends will be taxable as ordinary income to each Portfolio's shareholders who are not currently exempt from Federal income taxes, whether such income or gain is received in cash or reinvested in additional shares. The dividends received deduction for corporations will apply to such ordinary income distributions to the extent the total qualifying dividends received by a Portfolio are from domestic corporations for the taxable year. It is anticipated that only a small part (if any) of the dividends paid by the International Portfolio will be eligible for the dividends received deduction. Substantially all of each Portfolio's net realized long-term capital gains, if any, will be distributed at least annually to its shareholders. A Portfolio generally will have no tax liability with respect to such gains and the distributions will be taxable to the shareholders who are not currently exempt from Federal income taxes as long-term capital gains, regardless of how long the shareholders have held the shares and whether such gains are received in cash or reinvested in additional shares. A shareholder considering buying shares of a Portfolio on or just before the record date of a dividend should be aware that the amount of the forthcoming dividend payment, although in effect a return of capital, will be taxable. A taxable gain or loss may be realized by a shareholder upon redemption or transfer of shares of each Portfolio, depending upon the tax basis of such shares and their price at the time of redemption or transfer. International Portfolio. It is expected that dividends and certain interest income earned by the International Portfolio from foreign securities will be subject to foreign withholding taxes or other taxes. So long as more than 50% of the value of the Portfolio's total assets at the close of any taxable year consists of stocks or securities of foreign corporations, the Portfolio may elect, for U.S. Federal income tax purposes, to treat certain foreign taxes paid by it, including generally any withholding taxes and other foreign income taxes, as paid by its shareholders. If the Portfolio makes this election, the amount of such foreign taxes paid by the Portfolio will be included in its shareholders' income pro rata (in addition to taxable distributions actually received by them), and each shareholder will be entitled (a) to credit his proportionate amount of such taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes his deductions, to deduct such proportionate amount from his U.S. income. To the extent that dividends paid to shareholders are derived from taxable interest or from long-term or short-term capital gains, such dividends will be subject to Federal income tax (whether such dividends are paid in cash or additional shares) and may also be subject to state and local taxes. -17- Miscellaneous. Dividends declared in October, November or December of any year payable to shareholders of record on a specified date in such months will be deemed to have been received by the shareholders and paid by a Portfolio on December 31, in the event such dividends are paid during January of the following year. A 4% nondeductible excise tax is imposed on regulated investment companies that fail to currently distribute specified percentages of their ordinary taxable income and net capital gain (excess of capital gains over capital losses). Each Portfolio intends to make sufficient distributions or deemed distributions of its ordinary taxable income and any net capital gain prior to the end of each calendar year to avoid liability for this excise tax. The foregoing summarizes some of the important tax considerations generally affecting the Portfolios and their shareholders and is not intended as a substitute for careful tax planning. Accordingly, potential investors in the Portfolios should consult their tax advisers with specific reference to their own tax situation. The foregoing discussion of tax consequences is based on tax laws and regulations in effect on the date of this Prospectus, which are subject to change by legislative or administrative action. Shareholders will be advised at least annually as to the federal income tax consequences of distributions made each year. Each Portfolio will be required in certain cases to withhold and remit to the United States Treasury 31% of taxable dividends or gross proceeds realized upon sale paid to shareholders who have failed to provide a correct tax identification number in the manner required, or who are subject to withholding by the IRS for failure properly to include on their return payments of taxable interest or dividends, or who have failed to certify to the Portfolio that they are not subject to backup withholding when required to do so or that they are "exempt recipients." STATE AND LOCAL TAXES Shareholders may also be subject to state and local taxes on distributions from Glenmede Fund. A shareholder should consult with his or her tax adviser with respect to the tax status of distributions from the Glenmede Fund in a particular state and locality. Glenmede Fund has obtained a Certificate of Authority to do business as a foreign corporation in Pennsylvania, and currently does business in that state. Accordingly, the shares of the Glenmede Fund will be exempt from Pennsylvania Personal Property Taxes. INVESTMENT ADVISOR The Advisor, a limited purpose trust company chartered in 1956, provides fiduciary and investment services to endowment funds, foundations, employee benefit plans and other institutions and individuals. The Advisor is a wholly-owned subsidiary of The Glenmede Corporation and is located at One Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania 19103. At November 30, 1995, the Advisor had over $8 billion in assets in the accounts for which it serves in various capacities including as executor, trustee or investment advisor. Under Investment Advisory Agreements (the "Investment Advisory Agreements") with Glenmede Fund, the Advisor, subject to the control and supervision of Glenmede Fund's Board and in conformance with the stated investment objective and policies of each Portfolio, manages the investment and reinvestment of the assets of each Portfolio. It is the responsibility of the -18- Advisor to make investment decisions for each Portfolio and to place each Portfolio's purchase and sell orders. The Advisor does not receive any fee from Glenmede Fund for its investment services provided to the Portfolios described in this prospectus. However, shareholders in Glenmede Fund who are clients of the Advisor, or an affiliate of the Advisor, pay fees which vary, depending on the capacity in which the Advisor or its affiliate provides fiduciary and investment services to the particular client (e.g., personal trust, estate settlement, advisory and custodian services). John W. Church, Jr., Senior Vice President and Chief Investment Officer of the Advisor, is the portfolio manager primarily responsible for the management of the Equity Portfolio . Mr. Church has been responsible for the management of the Equity Portfolio since April 1, 1993 and has been employed by the Advisor since 1979. Andrew B. Williams is the portfolio manager primarily responsible for the management of the International Portfolio. Mr. Williams has been responsible for the management of the International Portfolio since November 17, 1988. Mr. Williams has been employed by the Advisor since May 1985. Robert J. Mancuso is the portfolio manager primarily responsible for the management of the Small Capitalization Equity Portfolio. Mr. Mancuso has been primarily responsible for the management of that Portfolio since the date of this Prospectus. From January 1, 1993 to the date of this Prospectus, Mr. Mancuso was jointly responsible for the management of that Portfolio with Mr. Williams. Mr. Mancuso has been employed by the Advisor since November 1992. Prior to joining the Advisor, he was responsible for leading the equity research function at Penn Mutual Life Insurance Company. Ronald K. Stribley is the portfolio manager primarily responsible for the management of the Model Equity Portfolio. Mr. Stribley has been responsible for the management of the Model Equity Portfolio since the date of this Prospectus. From December 31, 1992 until the date of this Prospectus, Mr. Williams was the portfolio manager primarily responsible for the management of the Model Equity Portfolio. Mr. Stribley has been employed by the Advisor since April 1990. ADMINISTRATIVE TRANSFER AGENCY AND DIVIDEND PAYING SERVICES ICC serves as Glenmede Fund's administrator , transfer agent and dividend paying agent pursuant to a Master Services Agreement, and in those capacities supervises all aspects of the Funds' day-to-day operations, other than management of Glenmede Funds' investments. ICC is a wholly-owned subsidiary of Alex. Brown & Sons Incorporated ("Alex. Brown"). For its services as administrator, transfer agent and dividend paying agent, ICC is entitled to receive fees from Glenmede Fund equal to .12% of the first $100 million of the combined net assets of Glenmede Fund and The Glenmede Portfolios, an investment company with the same officers, Board and service providers as Glenmede Fund (the "Funds"); .08% of the next $150 million of the combined net assets of the Funds; .04% of the next $500 million of the combined net assets of the Funds and .03% of the combined net assets of the Funds over $750 million. For the period July 1, 1995 to October 31, 1995, ICC received fees at the rate of ____% (annualized) of the Equity Portfolio's average net assets, _____% (annualized) of the International Portfolio's average net assets, _____% (annualized) of the Small Capitalization Equity Portfolio's average net assets and ____% (annualized) of the Model Equity Portfolio's average net assets. For the period November 1, 1994 to June 30, 1995, Glenmede Fund's previous administrator received fees at the rate of ____% (annualized) of the Equity Portfolio's average net assets, ____% (annualized) of the International Portfolio's average net assets, ____% (annualized) of the Small Capitalization -19- Equity Portfolio's average net assets and ____% (annualized) of the Model Equity Portfolio's average net assets. SHAREHOLDER SERVICING PLAN Glenmede Fund has adopted a Shareholder Servicing Plan (the "Plan") effective January 1, 1995 under which each Portfolio may pay a fee to broker/dealers, banks and other financial institutions (including the Advisor and its affiliates) that are dealers of record or holders of record or which have a servicing relationship ("Servicing Agents") with the beneficial owners of shares in any of the Portfolios. Under the Plan, Servicing Agents enter into Shareholder Servicing Agreements (the "Agreements") with the Glenmede Fund. Pursuant to such Agreements, Servicing Agents provide shareholder support services to their clients ("Customers") who beneficially own shares of the Portfolios. The fee, which will be at an annual rate of .05%, is computed monthly and is based on the average daily net assets of the shares beneficially owned by Customers of such Servicing Agents. All expenses incurred by the Portfolios in connection with the Agreements and the implementation of the Plan shall be borne entirely by the holders of the shares of the particular Portfolio involved and will result in an equivalent increase to each Portfolio's Total Portfolio Operating Expenses. The Advisor has entered into an Agreement with Glenmede Fund. The services provided by the Servicing Agents under the Agreements may include: aggregating and processing purchase and redemption requests from Customers and transmitting purchase and redemption orders to the transfer agent; providing Customers with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; processing dividend and distribution payments from the Glenmede Fund on behalf of Customers; providing information periodically to Customers showing their positions; arranging for bank wires; responding to Customers' inquiries concerning their investments; providing sub-accounting with respect to shares beneficially owned by Customers or the information necessary for sub-accounting; if required by law, forwarding shareholder communications (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Customers; and providing such other similar services as may be reasonably requested. INVESTMENT LIMITATIONS Each Portfolio will not: (a) purchase more than 10% of any class of the outstanding voting securities of any issuer; (b) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities; (c) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in this Prospectus and the Statement of Additional Information and in connection with entering into futures contracts, but the deposit of assets in a segregated account in connection with the writing of covered put and call options and the purchase of securities on a when issued, -20- delayed settlement or forward delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts will not be deemed to be pledges of a Portfolio's assets or the purchase of any securities on margin for purposes of this investment limitation; (d) issue senior securities except that a Portfolio may borrow money in accordance with investment limitation (e), purchase securities on a when issued, delayed settlement or forward delivery basis and enter into reverse repurchase agreements; and (e) borrow money except as a temporary measure for extraordinary or emergency purposes, and then not in excess of 10% of its total assets at the time of borrowing (entering into purchasing securities on a when issued, delayed settlement or forward delivery basis are not subject to this investment limitation). Each Portfolio also will not: (a) with respect to 75% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities). If a percentage restriction for a Portfolio is adhered to at the time an investment is made, a later increase in percentage resulting from a change in value or assets will not constitute a violation of such restriction. If a Portfolio's borrowings are in excess of 5% (excluding overdrafts) of its total net assets, additional portfolio purchases will not be made until the amount of such borrowing is reduced to 5% or less. The investment limitations described here and in the SAI are fundamental policies of the Portfolios and may be changed only with the approval of the holders of a majority of the outstanding shares (as defined in the 1940 Act) of the affected Portfolio. In order to permit the sale of shares in certain states, Glenmede Fund may make commitments more restrictive than the investment policies and limitations described in this Prospectus and the SAI. Should Glenmede Fund determine that any such commitment is no longer in the best interest of Glenmede Fund, it will revoke the commitment by terminating sales of its shares in the state involved. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS Glenmede Fund was organized as a Maryland corporation on June 30, 1988. Glenmede Fund's Articles of Incorporation authorize the Board members to issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board has the power to designate one or more classes ("Portfolios") of shares of common stock and to classify or reclassify any unissued shares with respect to such Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios. The shares of each Portfolio have no preference as to conversion, exchange, dividends, retirement or other rights, and, when issued and paid for as provided in this Prospectus, will be fully paid and non-assessable. The shares of each Portfolio have no pre-emptive rights and do not have cumulative voting rights, which means that the holders of more than 50% of the shares of Glenmede Fund voting for the election of its Board members can elect 100% of the Board of Glenmede Fund if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each -21- fractional share held), then standing in his or her name on the books of Glenmede Fund. Glenmede Fund will not hold annual meetings of shareholders except as required by the 1940 Act, the next sentence and other applicable law. Glenmede Fund has undertaken that its Board will call a meeting of shareholders for the purpose of voting upon the question of removal of a Board member or members if such a meeting is requested in writing by the holders of not less than 10% of the outstanding shares of Glenmede Fund. To the extent required by the undertaking, Glenmede Fund will assist shareholder communication in such matters. At November 30, 1995, the Advisor was the record owner of substantially all of Glenmede Fund's outstanding shares. DISTRIBUTOR Armata Financial Corp. ("Armata"), located at 135 East Baltimore Street, Baltimore, Maryland 21202, serves as Glenmede Fund's distributor. Armata is a subsidiary of Alex. Brown. CUSTODIAN The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the custodian of Glenmede Fund's assets. TRANSFER AGENT ICC, located at 135 East Baltimore Street, Baltimore, Maryland 21202, acts as Glenmede Fund's transfer agent. INDEPENDENT ACCOUNTANTS ________________, Philadelphia, Pennsylvania, serves as independent accountants for the Glenmede Fund and will audit its financial statements annually. REPORTS Shareholders receive unaudited semi-annual financial statements and audited annual financial statements. COUNSEL Drinker Biddle & Reath, Philadelphia, Pennsylvania, serves as counsel to Glenmede Fund. -22- BOARD MEMBERS AND OFFICERS The business and affairs of Glenmede Fund are managed under the direction of its Board. The following is a list of the Board members and officers of Glenmede Fund and a brief statement of their principal occupations during the past five years:
Name and Address Age Principal Occupation During Past Five Years - ---------------------------------- --- ----------------------------------------------------------- H. Franklin Allen, Ph.D. 38 Director of Glenmede Fund; Trustee of The Glenmede The Wharton School of The Portfolios; Professor of Finance and Economics; Vice Dean University of Pennsylvania and Director of Wharton Doctoral Programs; Associate 2300 Steinberg Hall-Dietrich Hall Professor of Finance and Economics; Associate Professor of Philadelphia, PA 19104-6302 Finance. He has been employed by The University of Pennsylvania since 1985. Willard S. Boothby, Jr. 73 Director of Glenmede Fund; Trustee of The Glenmede 600 East Gravers Lane Portfolios; Director, Penn Engineering & Manufacturing Wyndmoor, PA 19118 Corp.; Former Director of Georgia-Pacific Corp.; formerly Managing Director of Paine Webber, Inc. John W. Church, Jr.* 62 Chairman, President and Director of Glenmede Fund; One Liberty Place Chairman, President and Trustee of The Glenmede 1650 Market Street, Suite 1200 Portfolios; Senior Vice President and Chief Investment Philadelphia, PA 19103 Officer of The Glenmede Trust Company. He has been employed by The Glenmede Trust Company since 1979. Francis J. Palamara 69 Director of Glenmede Fund; Trustee of The Glenmede P.O. Box 44024 Portfolios; Trustee of Gintel Fund and Gintel ERISA Fund; Phoenix, AZ 85064-4024 Director of XTRA Corp; Director, Central Tractor, Farm and Country, Inc.; Director, XTRA Corporation until 1988 Executive Vice President--Finance of ARA Services, Inc. G. Thompson Pew, Jr.* 53 Director of Glenmede Fund; Trustee of The Glenmede 310 Caversham Road Portfolios; Director of The Glenmede Trust Company; Bryn Mawr, PA 19010 Former Director of Brown & Glenmede Holdings, Inc.; Co.- Founder, Director, Principal and Officer of Philadelphia Investment Banking Co.; Director and Officer of Valley Forge Administrative Services Company. Mary Ann B. Wirts Executive Vice President of Glenmede Fund; Vice One Liberty Place 44 President 1650 Market Street, Suite 1200 and Manager of The Fixed Income Division of The Glenmede Philadelphia, PA 19103 Trust Company. She has been employed by The Glenmede Trust Company since 1982.
-23- Sheryl P. Durham, CFA Vice President of Glenmede Fund; Vice President of The One Liberty Place 37 Glenmede Trust Company. She has been employed by The 1650 Market Street, Suite 1200 Glenmede Trust Company since 1989. Philadelphia, PA 19103 Kimberly C. Osborne Vice President of Glenmede Fund; Assistant Vice President One Liberty Place 30 of The Glenmede Trust Company. She has been employed by 1650 Market Street, Suite 1200 The Glenmede Trust Company since 1993. From 1992-1993, Philadelphia, PA 19103 she was a Client Service Manager with Mutual Funds Service Company and from 1987-1992, a Client Administrator with The Vanguard Group, Inc. Michael P. Malloy Secretary of Glenmede Fund; Partner in the law firm of Philadelphia National Bank Building 36 Drinker Biddle & Reath. 1345 Chestnut Street Philadelphia, PA 19107-3496 Brian C. Nelson Assistant Secretary of Glenmede Fund; Vice President, 135 East Baltimore Street 36 Alex. Brown, ICC and Armata. Baltimore, MD 21202 Joseph A. Finelli Treasurer of Glenmede Fund. He has been a Vice President 135 East Baltimore Street of Alex. Brown since September 1995. Prior thereto, he Baltimore, MD 21202 38 was Vice President and Treasurer of Delaware Group.
- -------------- *Board members Church and Pew are "interested persons" of Glenmede Fund as that term is defined in the 1940 Act. For additional information concerning remuneration of Board members see "Management of the Funds" in the SAI. Shareholder inquiries should be addressed to Glenmede Fund at the address or telephone number stated on the cover page. -24- THE GLENMEDE FUND, INC. 135 East Baltimore Street, Baltimore, Maryland 21202 Prospectus Dated February __, 1996 Investment Advisor Administrator and Transfer Agent The Glenmede Trust Company Investment Company Capital Corp. One Liberty Place 135 East Baltimore Street 1650 Market Street, Suite 1200 Baltimore, Maryland 21202 Philadelphia, PA 19103 Distributor Armata Financial Corp. 135 East Baltimore Street Baltimore, Maryland 21202 Table of Contents Page Page Expenses of the Portfolios............................................... Financial Highlights..................................................... Performance Calculations................................................. Investment Policies and Risk Factors................................................................ Common Investment Policies and Risk Factors........................................................... Purchase of Shares....................................................... Redemption of Shares..................................................... Valuation of Shares...................................................... Dividends, Capital Gains Distribu- tions and Taxes........................................................ Investment Advisor ...................................................... Administrative Services.................................................. Shareholder Servicing Plan............................................... Investment Limitations................................................... General Information...................................................... Board Members and Officers............................................... No person has been authorized to give any information or to make any representations not contained in this Prospectus, or in Glenmede Fund's Statement of Additional Information, in connection with the offering made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by Glenmede Fund or its Distributor. This Prospectus does not constitute an offering by Glenmede Fund or the Distributor in any jurisdiction in which such offering may not lawfully be made. -25- THE GLENMEDE FUND, INC. Government Cash Portfolio Tax-Exempt Cash Portfolio Intermediate Government Portfolio International Fixed Income Portfolio CROSS REFERENCE SHEET Pursuant to Rule 495(a) under the Securities Act of 1933
Form N-1A Item Number Location - --------------------- -------- Part A Prospectus Caption - ------ ------------------ 1. Cover Page........................................... Cover Page 2. Synopsis............................................. Expenses of the Portfolios 3. Condensed Financial Information...................... Financial Highlights; Performance Calculations 4. General Description of Registrant.................... Cover Page; Investment Policies and Risk Factors; Common Investment Policies and Risk Factors; Investment Limitations; General Information 5. Management of the Fund............................... Investment Advisor; Administrative, Transfer Agency and Dividend Paying Services; Board Members and Officers; Purchase of Shares; Redemption of Shares; Shareholder Servicing Plan 6. Capital Stock and Other Securities .................. Purchase of Shares; Redemption of Shares; Dividends, Capital Gains Distributions and Taxes; General Information 7. Purchase of Securities Being Offered ................ Valuation of Shares; Purchase of Shares; Redemption of Shares 8. Redemption or Repurchase............................. Purchase of Shares; Redemption of Shares 9. Pending Legal Proceedings............................ Not Applicable
THE GLENMEDE FUND, INC. THE GLENMEDE PORTFOLIOS 135 East Baltimore Street, Baltimore Maryland 21202 - ------------------------------------------------------------------------------- 1-800-442-8299 - ------------------------------------------------------------------------------- Prospectus - February __, 1996 INVESTMENT OBJECTIVES The Glenmede Fund, Inc., a Maryland corporation ("Glenmede Fund"), and The Glenmede Portfolios, a Massachusetts business trust ("Glenmede Portfolios" and collectively with Glenmede Fund, the "Funds"), are no-load, open-end management investment companies. The Funds currently offer 12 series of shares, each of which has different investment objectives and policies. The securities offered hereby are six of these series of shares (known as "Portfolios") of the Funds listed below. Government Cash Portfolio. The objective of the Government Cash Portfolio is to provide maximum current interest income consistent with the preservation of capital and liquidity. The Government Cash Portfolio seeks to achieve its objective by investing primarily in short-term money market instruments issued by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises or instrumentalities sponsored by the U.S. Government and by entering into repurchase agreements secured thereby. It is anticipated that the Portfolio will maintain a constant net asset value or price of $1.00 per share, and an average weighted maturity of 90 days or less. Tax-Exempt Cash Portfolio. The objective of the Tax-Exempt Cash Portfolio is to provide maximum current interest income exempt from Federal income taxes consistent with the preservation of capital and liquidity. The Tax-Exempt Cash Portfolio seeks to achieve its objective by investing primarily in short-term, high quality municipal securities ("Municipal Obligations"). It is anticipated that the Portfolio will maintain a constant net asset value or price of $1.00 per share, and an average weighted maturity of 90 days or less. Intermediate Government Portfolio. The objective of the Intermediate Government Portfolio is to provide maximum, long-term total return consistent with reasonable risk to principal. The Intermediate Government Portfolio seeks to achieve its objective by investing primarily in mortgage-backed securities and medium-term fixed income securities issued by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises or instrumentalities sponsored by the U.S. Government. The net asset value of this Portfolio will fluctuate. Muni Intermediate Portfolio. The objective of the Muni Intermediate Portfolio is to seek as high a level of current income exempt from Federal income tax as is consistent with preservation of capital. The Muni Intermediate Portfolio seeks to achieve its objective by investing primarily in Municipal Obligations. The net asset value of this Portfolio will fluctuate. New Jersey Muni Portfolio. The objective of the New Jersey Muni Portfolio is to seek as high a level of current income exempt from Federal income tax as is consistent with preservation of capital. The New Jersey Muni Portfolio seeks to achieve its objective by investing primarily in Municipal Obligations. The net asset value of this Portfolio will fluctuate. International Fixed Income Portfolio. The objective of the International Fixed Income Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The International Fixed Income Portfolio seeks to achieve its objective by investing primarily in non-dollar denominated fixed income securities, such as those issued by foreign governments and governmental agencies and other agencies, enterprises or instrumentalities sponsored by foreign governments. The net asset value of this Portfolio will fluctuate. Total return consists of income (dividend and/or interest income from portfolio securities) and capital gains and losses, both realized and unrealized, from portfolio securities. Shares of the Portfolios are subject to investment risks, including possible loss of principal, are not bank deposits and are not endorsed by, insured by, guaranteed by, obligations of or otherwise supported by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, The Glenmede Corporation or any of its affiliates or any governmental agency or bank. There can be no assurance that the Government Cash or Tax-Exempt Cash Portfolios will be able to maintain a stable net asset value of $1.00 per share. - ------------------------------------------------------------------------------- ABOUT THIS PROSPECTUS This Prospectus, which should be retained for future reference, sets forth certain information that you should know before you invest. A Statement of Additional Information ("SAI") containing additional information about the Funds has been filed with the Securities and Exchange Commission. Such SAI dated February __, 1996, as amended or supplemented from time to time, is incorporated by reference into this Prospectus. The 199_ Annual Report to Shareholders contains additional investment and performance information about the Portfolios. A copy of the SAI and the 199_ Annual Report may be obtained, without charge, by writing to the Funds at the address shown above or by calling the Funds at the telephone number shown above. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. EXPENSES OF THE PORTFOLIOS Client Fees and Annual Portfolio Operating Expenses The following table illustrates the expenses and fees incurred by each Portfolio for the fiscal year ended October 31, 1995, restated to reflect new contractual arrangements.
Inter- Tax- New national Government Exempt Intermediate Muni Jersey Fixed Cash Cash Government Intermediate Muni Income Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- --------- --------- --------- --------- --------- Shareholder Transaction Expenses.......... None None None None None None Maximum Annual Client Fee................. 1.00%+ 1.00%+ 1.00%+ 1.00%+ 1.00%+ 1.00%+ Annual Portfolio Operating Expenses (as a percentage of average net assets) Investment Advisory Fees.............. ____% ____% ____% ____% ____% ____% Administration Fees................... ____% ____% ____% ____% ____% ____% Other Expenses...................... ____% ____% ____% ____% ____% ____% Total Annual Portfolio Operating Expenses................................ ____% ____% ____% ____% ____% ____%
- ----------------------------- + The Portfolios described in this prospectus do not pay any advisory fees to The Glenmede Trust Company, the investment advisor of the Funds (the "Advisor"), or its affiliates ("Affiliates"). However, investors in these Portfolios must be clients of the Advisor or Affiliates. The "Maximum Annual Client Fee" in the above table is the current maximum fee that the Advisor or an Affiliate would charge its clients directly for fiduciary, trust and/or advisory services (e.g., personal trust, estate, advisory, tax and custodian services). The actual annual fees charged by the Advisor and its Affiliates directly to their clients for such services vary depending on a number of factors, including the particular services provided to the client, but are generally under 1% of the client's assets under management. Investors may also have to pay various fees to others to become clients of the Advisor or an Affiliate. See "Investment Advisor." The purpose of the above table is to assist an investor in understanding the various estimated costs and expenses that an investor in a Portfolio will bear directly or indirectly. Actual expenses may be greater or lesser than such estimates. For further information concerning the Funds' expenses see "Investment Advisor," "Administrative, Transfer Agency and Dividend Paying Services" and "Board Members and Officers." The following example illustrates the estimated Annual Portfolio Operating Expenses that an investor would pay on a $1,000 investment over various time periods assuming (i) a 5% annual rate of return and (ii) redemption at the end of each time period. The example does not include fees for fiduciary and investment services which investors pay the Advisor or Affiliates as clients. See "Investment Advisor." As noted in the above table the Funds charge no shareholder transaction expenses of any kind. -2-
1 Year* 3 Years* 5 Years* 10 Years* ------- -------- -------- --------- Government Cash Portfolio.................. $__ $__ $__ $__ Tax-Exempt Cash Portfolio.................. $__ $__ $__ $__ Intermediate Government Portfolio.......... $__ $__ $__ $__ Muni Intermediate Portfolio................ $__ $__ $__ $__ New Jersey Muni Portfolio.................. $__ $__ $__ $__ International Fixed Income Portfolio....... $__ $__ $__ $__
*You would pay the same expenses set forth above on the same investment, assuming no redemptions at the end of the period. THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN. -3- FINANCIAL HIGHLIGHTS The following tables provide financial highlights of each Portfolio for the respective periods presented. The data presented is derived from the Funds' Financial Statements included in the Funds' 199_ Annual Report to Shareholders, which Financial Statements and reports thereon of ______________ , the Funds' independent accountants, are incorporated by reference in the SAI. The following information should be read in conjunction with such Financial Statements. Glenmede Fund's Financial Statements for the periods ended October 31, 1991, 1990 and 1989 were examined by the Funds' previous independent accountants, ----------------------.
Government Cash Portfolio ----------------------------------------------------------------------------------------------------------- Year Year Year Year Year Year Period Ended Ended Ended Ended Ended Ended Ended Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, 1995 1994 1993 1992 1991 1990 1989+ -------- -------- -------- -------- -------- -------- -------- Net asset value, beginning of year..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 -------- ------- ------- ------- ------- ------- Net investment 0.038 0.031 0.041 0.064 0.081 0.089 income................ Distributions from net investment income. $(0.038) $(0.031) $(0.041) $(0.064) $(0.081) $(0.089) -------- ------- ------- ------- ------- ------- Net asset value, end of year............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ==== ==== ==== ==== ==== ==== Total return++.......... 3.78% 3.18% 4.19% 6.59% 8.41% 9.27% ==== ==== ==== ==== ==== ==== Ratios to average net assets/ Supplemental data: Net assets, end of year (in 000's)............ $353,405 $247,816 $203,882 $253,260 $217,398 $229,555 Ratio of operating expenses to average net assets........... 0.11% 0.11% 0.13% 0.13% 0.15% 0.14%* Ratio of net investment income to average net assets... 3.82% 3.14% 4.18% 6.45% 8.08% 9.00%*
- ----------------- + The Portfolio commenced operations on November 7, 1988. ++ Total return represents aggregate total return for the period indicated. * Annualized. -4-
Tax-Exempt Cash Portfolio ---------------------------------------------------------------------------------------------------------- Year Year Year Year Year Year Period Ended Ended Ended Ended Ended Ended Ended Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, 1995 1994 1993 1992 1991 1990 1989+ Net asset value, beginning of year................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- Net investment income.... 0.025 0.023 0.033 0.047 0.057 0.061 Distributions from net investment income...... $(0.025) $(0.023) $(0.033) $(0.047) $(0.057) $(0.061) ----- ----- ----- ----- ----- ----- Net asset value, end of year............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ==== ==== ==== ==== ==== ==== Total return++........... 2.48% 2.34% 3.30% 4.83% 5.85% 6.27% ==== ==== ==== ==== ==== ==== Ratios to average net assets/ Supplemental data: Net assets, end of year (in 000's) $222,985 $106,590 $125,826 $ 81,394 $107,283 $ 69,047 Ratio of operating expenses to average net assets................ 0.13% 0.13% 0.15% 0.16% 0.15% 0.15%* Ratio of net investment income to average net assets................ 2.52% 2.33% 3.21% 4.78% 5.78% 6.31%*
- ----------------- + The Portfolio commenced operations on November 10, 1988. ++ Total return represents aggregate total return for the period indicated. * Annualized. -5-
Intermediate Government Portfolio --------------------------------------------------------------------------------------------------------- Year Year Year Year Year Year Period Ended Ended Ended Ended Ended Ended Ended Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, Oct. 31, 1995 1994 1993 1992 1991 1990 1989+ -------- -------- -------- -------- -------- -------- -------- Net asset value, beginning of year..... $10.84 $10.76 $10.61 $10.11 $10.28 $10.00 ------ ------ ------ ------ ------ ------ Income from investment operations: et investment income.. 0.64 0.66 0.74 0.87 0.88 0.86 Net realized and unrealized gain/(loss) on investments........ (0.96) 0.41 0.22 0.56 (0.07) 0.22 ------ ------ ------ ------ ------ ------ Total from investment operations........... (0.32) 1.07 0.96 1.43 0.81 1.08 ------ ------ ------ ------ ------ ------ Less Distributions: Distribution from net investment income..... (0.63) (0.67) (0.70) (0.93) (0.89) (0.80) Distributions from net realized capital gains - (0.32) (0.11) - (0.09) - ------ ------ ------ ------ ------ ------ Total Distributions... (0.63) (0.99) (0.81) (0.93) (0.98) (0.80) ------ ------ ------ ------ ------ ------ Net asset value, end of year................ $9.89 $10.84 $10.76 $10.61 $10.11 $10.28 ====== ====== ====== ====== ====== ====== Total return++......... (3.03)% 10.38% 9.34% 14.75% 8.32% 11.20% ====== ===== ====== ===== ==== ===== Ratios to average net assets/Supplemental data: Net assets, end of year (in 000's)............ $333,797 $581,823 $445,816 $265,963 $207,182 $187,012 Ratio of operating expenses to average net assets............ 0.12%** 0.14%** 0.16% 0.16% 0.14% 0.14%* Ratio of net investment income to average net assets................ 6.06% 6.03% 7.03% 8.22% 8.75% 9.07%* Portfolio turnover rate 165% 83% 39% 91% 94% 29%
- ----------------- + The Portfolio commenced operations on November 17, 1988. ++ Total return represents aggregate total return for the period indicated. * Annualized. ** The annualized operating expense ratios exclude interest expense. The ratios including interest expense for the years ended October 31, 1994 and October 31, 1993 were 0.14% and 0.16%, respectively. -6-
Muni Intermediate Portfolio - ------------------------------------------------------------------------------------------------------------------------------------ Year Year Year Period Ended Ended Ended Ended October 31, October 31, October 31, October 31, 1995 1994 1993 1992+ - --------------------------------------------------------------------------------------- ---------- ------------ --------- Net asset value, beginning of year........................................ $ 10.59 $10.00 $10.00 ------- ------ ------ Income from investment operations: Net investment income.................................................. 0.53 0.44 0.11 Net realized and unrealized gain/(loss) on investments................. (0.85) 0.59 (0.03) ------ ---- ------ Total from investment operations..................................... (0.32) 1.03 0.08 Distributions from net investment income.................................. (0.53) (0.44) (0.08) ------ ------ ------ Net asset value, end of period............................................ $9.74 $10.59 $10.00 ===== ====== ====== Total return++............................................................ (3.13)% 10.54% 0.74% ====== ====== ===== Ratios to average net assets/Supplemental data: Net assets, end of period (in 000's) $22,097 $94,803 $42,533 Ratio of operating expenses to average net assets......................... 0.25% 0.25% 0.25%* Ratio of net investment income to average net assets...................... 4.78% 4.41% 4.22%* Portfolio turnover rate................................................... 11% 10% 3%
- -------------------------- + The Portfolio commenced operations on June 5, 1992. ++ Total return represents aggregate return for the period indicated. * Annualized. -7-
New Jersey Muni Portfolio -------------------------------- Year Year Ended Ended October 31, October 31, 1995 1994+ Net asset value, beginning of period..................................................... $10.00 Income from investment operations: Net investment income................................................................ 0.32 Net realized and unrealized loss on investments...................................... (0.82) Total from investment operations................................................... (0.50) Distributions from net investment income................................................. (0.28) Net asset value, end of period........................................................... $9.22 Total return++........................................................................... (5.13)% Ratios to average net assets/Supplemental data: Net assets, end of period (in 000's)................................................. $4,564 Ratio of operating expenses to average net assets.................................... 0.60% Ratio of net investment income to average net assets................................. 3.60% Portfolio turnover rate.............................................................. 65%
- -------------- + The Portfolio commenced operations on November 1, 1993. ++ Total return represents aggregate total return for the period indicated. -8-
International Fixed Income Portfolio ---------------------------------------------- Year Year Period Ended Ended Ended October 31, October 31, October 31, 1995 1994 1993+ ----------- ---------- -------- Net asset value, beginning of period........................................... $ 10.45 $ 10.00 ------- ------- Income from investment operations: Net investment income....................................................... 0.65 0.40 Net realized and unrealized gain on investments............................. 0.34 0.59 -------- -------- Total from investment operations........................................... 0.99 0.99 -------- -------- Less Distributions: Distributions from net investment income (0.66) (0.45) Distributions in excess of net investment income............................ (0.46) - Distributions from net realized capital gains............................... (0.07) (0.09) -------- -------- Total Distributions........................................................ (1.19) (0.54) ------ ------ Net asset value, end of period................................................. $ 10.25 $ 10.45 ======= ======= Total return++................................................................. 9.79% 10.13% ======== ======= Ratios to average net assets/Supplemental data: Net assets, end of period (in 000's)........................................ $16,584 $15,801 Ratio of operating expenses to average net assets 0.24% 0.24%* Ratio of net investment income to average net assets 5.99% 6.04%* Portfolio turnover rate..................................................... 39% 27%
- -------------- + The Portfolio commenced operations on November 2, 1992. ++ Total return represents aggregate total return for the period indicated. * Annualized. -9- PERFORMANCE CALCULATIONS From time to time, the Government Cash Portfolio and the Tax-Exempt Cash Portfolio (each a "Cash Portfolio," collectively, the "Cash Portfolios") may advertise or quote its "yield" and "effective yield." The "yield" of either of the Cash Portfolios refers to the income generated by an investment in each such Portfolio over a seven-day period (which period will be stated in the advertisement or quote). This income is then "annualized." That is, the amount of income generated by the investment during that week is assumed to be generated each week over a 52-week period and is shown as a percentage of the investment. The "effective yield" is calculated similarly but, when annualized, the income earned by an investment in such a Portfolio is assumed to be reinvested. The "effective yield" will be slightly higher than the "yield" because of the compounding effect of this assumed reinvestment. The Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios may also advertise or quote yield data from time to time. The yield of such Portfolios is computed based on the net income of the Portfolio during a 30-day (or one-month) period, which period will be identified in connection with the particular yield quotation. More specifically, each such Portfolio's yield is computed by dividing the Portfolio's net income per share during a 30-day (or one-month) period by the maximum offering price per share on the last day of the period and annualizing the result on a semi-annual basis. The Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios' "tax-equivalent yields" may be advertised or quoted from time to time. The tax equivalent yield shows the level of taxable yield needed to produce an after-tax equivalent to each such Portfolio's tax-free yield. This is done by increasing each such Portfolio's yield (calculated as above) by the amount necessary to reflect the payment of Federal and/or State income tax at a stated tax rate. Each of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios may advertise or quote total return data from time to time. Total return will be calculated on an average annual total return basis, and may also be calculated on an aggregate total return basis, for various periods. Average annual total return reflects the average annual percentage change in value of an investment in the particular Portfolio. Aggregate total return reflects the total percentage change in value over the measuring period. Both methods of calculating total return assume that dividend and capital gains distributions made by the Portfolio during the period are reinvested in additional Portfolio shares. Each of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios may compare their total returns, and their yields, to that of other investment companies with similar investment objectives and to bond and other relevant indices such as those compiled by Merrill Lynch, Salomon Brothers, Lehman Brothers or others or to rankings prepared by independent services or other financial or industry publications that monitor the performance of mutual funds. For example, the total return or the yield of the Intermediate Government, Muni Intermediate, New Jersey Muni or International Fixed Income Portfolios may be compared to data prepared by Lipper Analytical Services, Inc. Total return and yield data as reported in national financial publications such as Money Magazine, Forbes, Barron's, The Wall Street Journal and The New York Times, or in publications of a local or regional nature, may also be used in comparing the performance of the Intermediate Government, Muni Intermediate, New Jersey Muni or International Fixed Income Portfolios. Performance quotations represent a Portfolio's past performance, and should not be considered as indicative of future results. Since performance will fluctuate, performance data for a Portfolio should not be used to compare an investment in the Portfolio's shares with bank deposits, savings accounts and similar investment alternatives which often provide an agreed or guaranteed fixed yield/return for a stated period of time. Shareholders should remember that performance is generally a function of the kind and quality of the instruments held in a Portfolio, portfolio maturity, operating expenses and market conditions. Any management fees charged by the Advisor or an Affiliate to its respective clients will not be included in the Portfolio's calculations of yield, effective yield, tax-equivalent yield or total return. See "Investment Advisor." -10- INVESTMENT POLICIES AND RISK FACTORS The investment objective of each Portfolio is not fundamental and may be changed by the particular Funds' Board members without shareholder approval. GOVERNMENT CASH PORTFOLIO The objective of the Government Cash Portfolio is to provide maximum current interest income consistent with the preservation of capital and liquidity. The Government Cash Portfolio seeks to achieve its objective by investing in short-term U.S. dollar-denominated money market instruments issued by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises or instrumentalities sponsored by the U.S. Government and by entering into repurchase agreements secured thereby. During normal market conditions, the Portfolio will invest at least 65% of its total assets in such instruments. The Portfolio may invest in the following securities provided they are "eligible securities," as defined below ("Eligible Securities"), which the Advisor believes presents minimal credit risk at the time of purchase: (i) straight-debt and mortgage-backed obligations issued by the U.S. Government or its sponsored agencies, enterprises or instrumentalities; (ii) securities of international institutions (Asian Development Bank, ExportImport Bank, Inter American Development Bank, International Bank for Reconstruction and Development, Government Trust Certificates, Private Export Funding Corp. and Agency for International Development) which are not direct obligations of the U.S. Government but which involve governmental agencies, instrumentalities or enterprises (such investments will represent no more than 25% of the Portfolio's total assets); and (iii) any publicly or privately placed, unrated securities issued by the U.S. Government, its agencies, enterprises or instrumentalities, including floating and variable rate securities, which, in the Advisor's opinion, are equivalent in credit quality to securities rated AAA by Standard & Poor's Ratings Group, Division of McGraw Hill ("S&P") or Aaa by Moody's Investors Service, Inc. ("Moody's"). The Portfolio will invest in securities maturing within 13 months from the date of purchase, except that securities collateralizing repurchase agreements may bear maturities exceeding 13 months, and the Portfolio may also purchase bonds with longer final maturities if such bonds pursuant to a demand feature provide for an earlier redemption date within 13 months from the date of purchase. Obligations of certain agencies and instrumentalities of the U.S. Government, such as the Government National Mortgage Association and the Export-Import Bank of the United States, are supported by the full faith and credit of the U.S. Treasury; others, such as those of the Federal National Mortgage Association, are supported by the right of the issuer to borrow from the Treasury; others, such as those of the Student Loan Marketing Association, are supported by the discretionary authority of the U.S. Government to purchase the agency's obligations; still others, such as those of the Federal Farm Credit Banks or the Federal Home Loan Mortgage Corporation, are supported only by the credit of the instrumentality. No assurance can be given that the U.S. Government would provide financial support to U.S. Government-sponsored agencies or instrumentalities if it is not obligated to do so by law. Securities issued or guaranteed by the U.S. Government, its agencies and instrumentalities have historically involved little risk of loss of principal if held to maturity. However, due to fluctuations in interest rates, the market value of such securities may vary during the period a shareholder owns shares of the Portfolio. See "Investment Policies -- Intermediate Government Portfolio" for a description of obligations of certain agencies, enterprises and instrumentalities of the U.S. Government. Securities in which the Government Cash Portfolio may invest may not earn as much income as longer term and/or lower quality securities. The Government Cash Portfolio will limit its purchases of any one issuer's securities (other than U.S. Government securities) to 5% of the Portfolio's total assets at the time of purchase, except that it may invest more than 5% (but no more than 25%) of its total assets in First Tier Securities (as defined below) of one issuer for a period of up to three business days. The Portfolio will also limit its purchases of Second Tier Securities (Eligible Securities which are not First Tier Securities) of one issuer to the greater of 1% of its total assets or $1 million. Eligible Securities are: (i) securities (or their issuers) rated in one of the two highest rating categories of a nationally recognized statistical rating organization (an "NRSRO"), provided that if they are rated by more than one NRSRO, at least one other NRSRO rates them in one of its two highest categories; and (ii) unrated securities determined to be of comparable quality at the time of purchase. First Tier Securities are: (i) securities (or issuers) rated in the highest rating category by the only NRSRO rating them; (ii) securities (or their issuers) in the highest rating category of at least two NRSROs, if more than one NRSRO has rated them; -11- (iii) securities that have no short-term rating, but have been issued by an issuer that has other outstanding short-term obligations that have been rated in accordance with (i) or (ii) above and are comparable in priority and security to such securities; and (iv) certain unrated securities that have been determined to be of comparable quality to such securities. For a description of other securities in which the Portfolio may invest, see "Common Investment Policies and Risk Factors." TAX-EXEMPT CASH PORTFOLIO The objective of the Tax-Exempt Cash Portfolio is to provide maximum current interest income exempt from Federal income taxes consistent with the preservation of capital and liquidity. The Tax-Exempt Cash Portfolio seeks to achieve its objective by investing primarily in short-term, high quality Municipal Obligations (defined below). Under normal circumstances, at least 80% of the net assets of the Portfolio will be invested in Municipal Obligations, the interest on which, in the opinion of bond counsel or the issuer's counsel, is exempt from regular Federal income tax and does not constitute an item of tax preference for purposes of the Federal alternative minimum tax ("Tax-Exempt Interest"). Glenmede Fund will use its best efforts to not invest any of the Tax-Exempt Cash Portfolio's assets in Municipal Obligations the interest on which constitutes an item of tax preference for purposes of the Federal alternative minimum tax. Municipal Obligations in which the Portfolio may invest include the following, provided at the time of purchase they are Eligible Securities which the Advisor believes presents minimal credit risk: project notes, demand notes, short-term municipal obligations (including tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax and revenue anticipation notes, construction loan notes, and short-term discount notes) rated SP-1+ or SP-1 by S&P or MIG-1 by Moody's; tax-exempt commercial paper rated A-1+ or A-1 by S&P or Prime-1 by Moody's; municipal bonds with a remaining effective maturity of 13 months or less, rated AA or better by S&P or Aa or better by Moody's; variable rate demand notes rated "VMIG-1" by Moody's; and any non-rated tax-exempt, privately placed securities which, in the Advisor's opinion, are equivalent in credit quality to an AA or Aa-rated security as determined by S&P or Moody's, respectively. The Portfolio will invest in securities maturing within 13 months from the date of purchase, except that securities collateralizing repurchase agreements may bear maturities exceeding 13 months; and the Portfolio may purchase bonds with final maturities exceeding 13 months if such bonds pursuant to a demand feature provide for an earlier redemption date within 13 months from the date of purchase. Municipal Obligations. The two principal classifications of Municipal Obligations are "general obligation" securities and "revenue" securities. General obligation securities are secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue securities are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special or specific excise tax or other specific revenue source such as the user of the facility being financed. Revenue securities include private activity bonds which are not payable from the unrestricted revenues of the issuer. Consequently, the credit quality of private activity bonds is usually directly related to the credit standing of the corporate user of the facility involved. Municipal Obligations may also include "moral obligation" bonds, which are normally issued by special purpose public authorities. If the issuer of moral obligation bonds is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the state or municipality which created the issuer. Municipal Obligations may include variable rate demand notes, provided they are Eligible Securities. Such notes are frequently not rated by credit rating agencies, but unrated notes will be purchased by the Portfolio if they are comparable in quality at the time of the purchase to rated Eligible Securities as determined by the Advisor. Where necessary to ensure that a note is an Eligible Security, the Portfolio will require that the issuer's obligation to pay the principal of the note be backed by an unconditional bank letter or line of credit, guarantee or commitment to lend. While there may be no active secondary market with respect to a particular variable rate demand note purchased by the Portfolio, the Portfolio may, upon the notice specified in the note, demand payment of the principal of the note at any time or during specified periods not exceeding 13 months, depending upon the instrument involved. The absence of such an active secondary market, however, could make it difficult for the Portfolio to dispose of a variable rate demand note if the issuer defaulted on its payment obligation or during the periods that the Portfolio is not entitled to exercise its demand rights. The Portfolio could, -12- for this or other reasons, suffer a loss to the extent of the default. The Portfolio invests in variable rate demand notes only when the Advisor deems the investment to involve minimal credit risk. The Advisor also monitors the continuing creditworthiness of issuers of such notes and parties providing credit enhancement to determine whether the Portfolio should continue to hold the notes. For a further discussion of Municipal Obligations, see the Appendix to the Statement of Additional Information. For a description of other securities in which the Portfolio may invest, see "Common Investment Policies and Risk Factors." INTERMEDIATE GOVERNMENT PORTFOLIO The objective of the Intermediate Government Portfolio is to provide maximum, long-term total return consistent with reasonable risk to principal. The Intermediate Government Portfolio seeks to achieve its objective by investing primarily in mortgage-backed securities and medium-term fixed income securities issued by the U.S. Treasury, U.S. Government agencies, or other agencies, enterprises or instrumentalities sponsored by the U.S. Government. The Portfolio seeks to achieve consistent results over the long-term. While portfolio securities will be traded, the Portfolio is not expected to engage in active trading under normal circumstances. The net asset value of the Portfolio will fluctuate, and it is anticipated that the Portfolio will maintain an average weighted maturity of 3 to 10 years. The Portfolio may invest in the following securities: (i) straight-debt and mortgage-backed obligations issued by the U.S. Government or its sponsored agencies, enterprises or instrumentalities; (ii) securities of international institutions which are not direct obligations of the U.S. Government but which involve governmental agencies, enterprises or instrumentalities; (iii) any other publicly or privately placed, unrated securities issued by the U.S. Government, its agencies, enterprises or instrumentalities, which, in the Advisor's opinion, are equivalent in credit quality to securities rated AAA by S&P or Aaa by Moody's; and (iv) mortgage-backed obligations which are privately issued with a rating of at least AA by S&P or Aa by Moody's or which if unrated, are in the Advisor's opinion equivalent in credit quality to either such rating. Any of the above securities may be variable or floating rate. Under normal circumstances, at least 65% of the Intermediate Government Portfolio's total assets will be invested in U.S. government securities and repurchase agreements relating thereto and no more than 35% of the value of its total assets will be invested in the securities described in (ii) and (iv) of the first sentence of this paragraph. Mortgage-Backed Obligations. Mortgage-backed obligations represent an ownership interest in a pool of residential mortgage loans, the interests in which are issued and guaranteed by an agency or instrumentality of the U.S. Government, though not necessarily by the U.S. Government itself. One such type of mortgage-backed obligation in which the Portfolio may invest is a Government National Mortgage Association ("GNMA") Certificate. GNMA Certificates are backed as to the timely payment of principal and interest by the full faith and credit of the U.S. Government. Another type is a Federal National Mortgage Association ("FNMA") Certificate; the principal and interest of which are guaranteed only by FNMA itself, not by the full faith and credit of the U.S. Government. Another type is a Federal Home Loan Mortgage Association ("FHLMC") Participation Certificate. This type of obligation is guaranteed by FHLMC as to timely payment of principal and interest. However, like a FNMA security, it is not guaranteed by the full faith and credit of the U.S. Government. Another type is a privately issued obligation with a rating of at least AA by S&P or Aa by Moody's or which if unrated, is in the Advisor's opinion equivalent in credit quality to either such rating. Mortgage-backed obligations issued by private issuers, whether or not such obligations are subject to guarantees by the private issuer, may entail greater risk than obligations directly or indirectly guaranteed by the U.S. Government. Mortgage-backed obligations are characterized by monthly payments to the security holder, reflecting the monthly payments, net of certain fees, made by the mortgagors of the underlying mortgage loans. The payments to the security holders (such as the Portfolio), similar to the payments on the underlying loans, represent both principal and interest. Although the underlying mortgage loans are for specified periods of time (such as thirty years) the borrowers can, and typically do, repay them sooner. Thus, the security holders frequently receive prepayments of principal, in addition to the principal which is part of the regular monthly payments. A borrower is more likely to prepay a mortgage which bears a relatively high rate of interest. Therefore, in times of declining interest rates, some of the Portfolio's higher yielding securities might be -13- repaid and thereby converted to cash and the Portfolio will be forced to accept lower interest rates when that cash is used to purchase additional securities. The Portfolio normally will not distribute principal payments (whether regular or prepaid) to its shareholders. Interest received by the Portfolio will, however, be distributed to shareholders in the form of dividends. For a further discussion of mortgage-backed obligations, see the Appendix to the Statement of Additional Information. Although government-guaranteed or sponsored securities reduce credit risk (the possibility that issuers of bonds will default on payments of interest and principal), the Portfolio's shares are still subject to the risk of market value fluctuations inherent in owning fixed income securities. The market value of securities held by the Intermediate Government Portfolio is expected to vary according to, among other factors, changes in prevailing interest rates and the average weighted maturity of the Portfolio maintained by the Advisor. In general, if interest rates increase from the time a fixed income investment is made, the market value of that investment is likely to decline. Similarly, if interest rates fall from the time a fixed income investment is made, the market value of that investment is likely to increase. Also, in general, for a given change in interest rates, a fixed income investment with a longer maturity is likely to fluctuate more in market value than a comparable investment with a shorter maturity. An investment in the Intermediate Government Portfolio is expected to be subject to such market risks. For a description of other securities in which the Intermediate Government Portfolio may invest, see "Common Investment Policies and Risk Factors." MUNI INTERMEDIATE PORTFOLIO AND NEW JERSEY MUNI PORTFOLIO The objective of each of the Muni Intermediate and New Jersey Muni Portfolios is to seek as high a level of current income exempt from Federal income tax as is consistent with preservation of capital. To the extent possible, the Muni Intermediate Portfolio seeks to achieve its objective by investing primarily in intermediate and long-term Municipal Obligations issued by the Commonwealth of Pennsylvania and its political subdivisions, agencies, instrumentalities and authorities ("Pennsylvania Municipal Obligations") and the New Jersey Muni Portfolio seeks to achieve its objective by investing primarily in intermediate and long-term Municipal Obligations issued by the State of New Jersey and its political subdivisions, agencies, instrumentalities and authorities ("New Jersey Municipal Obligations"). Municipal Obligations acquired by these Portfolios will be rated at the time of purchase within the three highest ratings assigned by Moody's (i.e., Aaa, Aa, A) or by S&P (AAA, AA, A) in the case of bonds, rated SP-1 or higher by S&P or MIG-2 or higher by Moody's in the case of notes, rated A-1 or higher by S&P or Prime-1 or higher by Moody's in the case of tax-exempt commercial paper or in unrated securities determined by the Advisor at the time of purchase to be of comparable quality. If a portfolio security is reduced below A by Moody's or S&P, the Advisor will dispose of the security in an orderly fashion as soon as practicable. The Muni Intermediate and New Jersey Muni Portfolios may not be able to achieve as high a level of current income under all market conditions as would be possible if they were permitted to invest in lower quality and longer term securities which, however, generally are less liquid, have greater market risk and are generally subject to more fluctuation of market value. See "Investment Policies--Tax-Exempt Cash Portfolio" for a description of Municipal Obligations and the Appendix to the SAI for a description of Moody's and S&P's ratings. To the extent possible, during normal market conditions at least 65% of the net assets of the New Jersey Muni Portfolio will be invested in New Jersey Municipal Obligations. It is anticipated that the New Jersey Portfolio and the Muni Intermediate Portfolio will each maintain an average weighted maturity of three to ten years. During normal market conditions: up to 20% of each Portfolio's net assets may be invested in securities which are not Municipal Obligations; and at least 80% of the Portfolio's net assets will be invested in intermediate and long-term Municipal Obligations, the interest on which is Tax-Exempt Interest. Each of the Portfolios may invest up to 20% of its net assets in Municipal Obligations, the interest on which is exempt from regular Federal income tax but is an item of tax preference for purposes of the Federal alternative minimum tax. During temporary defensive periods, each Portfolio may invest without limitation in obligations which are not Municipal Obligations and may hold without limitation uninvested cash reserves. Such securities may include, without limitation, bonds, notes, variable rate demand notes and commercial paper, provided such securities are rated within the relevant categories applicable to Municipal Obligations set forth above, or if unrated, are of comparable quality as determined by the Advisor and may also include, without limitation, other debt obligations, such as bank obligations which are also of comparable quality as determined by the Advisor. Each Portfolio may acquire "stand-by commitments" with respect to Municipal Obligations held by it. Under a -14- stand-by commitment, a dealer agrees to purchase, at the Portfolio's option, specified Municipal Obligations at a specified price. The acquisition of a stand-by commitment may increase the cost, and thereby reduce the yield, of the Municipal Obligation to which such commitment relates. Each Portfolio will acquire stand-by commitments solely to facilitate portfolio liquidity and does not intend to exercise its rights thereunder for trading purposes. Each Portfolio is classified as non-diversified under the Investment Company Act of 1940, as amended (the "1940 Act"). Investment returns on a non-diversified portfolio typically are dependent upon the performance of a smaller number of securities relative to the number held in a diversified portfolio. Consequently, the change in value of any one security may affect the overall value of a non-diversified portfolio more than it would a diversified portfolio. Additionally, a non-diversified portfolio may be more susceptible to economic, political and regulatory developments than a diversified portfolio with a similar objective. Since each of the Muni Intermediate and New Jersey Muni Portfolios will invest primarily in securities issued by issuers located in one state, each of these Portfolios is susceptible to adverse changes in value due to changes in the economic condition and governmental policies of that state and its political subdivisions, agencies, instrumentalities and authorities. A comparable municipal bond fund which is not concentrated in obligations issued by issuers located in one state would be less susceptible to these risks. If any issuer of securities held by one of these Portfolios is unable to meet its financial obligations, that Portfolio's income, capital, and liquidity may be adversely affected. With respect to the Commonwealth of Pennsylvania, although the balance in the General Fund of the Commonwealth (the principal operating fund of the Commonwealth) declined to a zero balance at the close of fiscal 1989, and a negative balance was experienced in fiscal 1990 and 1991, tax increases and spending decreases helped return the General Fund balance to a surplus at June 30, 1992 of $87.5 million and at June 30, 1993 of $698.9 million. The deficit in the Commonwealth's unreserved/undesignated funds of prior years was also reversed to a surplus of $64.4 million as of June 30, 1993. The concentration of investments by the New Jersey Muni Portfolio in New Jersey Municipal Obligations also raises special investment considerations. The State of New Jersey generally has a diversified economic base consisting of, among others, commerce and service industries, selective commercial agriculture, insurance, tourism, petroleum refining and manufacturing, although New Jersey's manufacturing industry has shown a downward trend in the last few years. New Jersey is a major recipient of Federal assistance and, of all the states, is among the highest in the amount of Federal aid received. Therefore, a decrease in Federal financial assistance may adversely affect New Jersey's financial condition. While New Jersey's economic base has become more diversified over time and thus its economy appears to be less vulnerable during recessionary periods, a recurrence of high levels of unemployment could adversely affect New Jersey's overall economy and its ability to meet its financial obligations. In addition, because New Jersey maintains a balanced budget which restricts total appropriation increases to only 5% annually to any municipality or county, the balanced budget plan may actually adversely affect a particular municipality's or county's ability to repay its obligations. See "Common Investment Policies and Risk Factors" for a description of other investment policies. INTERNATIONAL FIXED INCOME PORTFOLIO The objective of the International Fixed Income Portfolio is to provide maximum long-term total return consistent with reasonable risk to principal. The International Fixed Income Portfolio seeks to achieve its objective by investing primarily in non-dollar denominated fixed income securities. The Portfolio will primarily invest in fixed income securities denominated in foreign currencies, including the European Currency Unit ("ECU"), which are issued by foreign governments and governmental agencies, and other agencies, enterprises or instrumentalities sponsored by foreign governments. The Advisor will seek opportunities for investment return in securities denominated in currencies it believes to be undervalued. The Portfolio is expected to invest in securities in a number of foreign countries, which may include but are not limited to, Japan, the United Kingdom, Germany, France, Switzerland, the Netherlands, Sweden, Australia, Hong Kong and Singapore. The Portfolio will invest an aggregate of at least 65% of its total assets in the fixed income securities of at least three countries other than the United States. The net asset value of the Portfolio will fluctuate. -15- The Portfolio may invest in the following securities: (i) debt obligations issued or guaranteed by foreign national governments, their agencies, instrumentalities, or political subdivisions (including any security of an entity which is majority owned by such government, agency, instrumentality or political subdivision) and (ii) debt securities issued or guaranteed by supranational organizations established or supported by more than one national government, including but not limited to, the World Bank, the European Investment Bank, European Union and the Asian Development Bank. The Portfolio may also invest in obligations of the U.S. Government and its guaranteed or sponsored agencies, including shares of open-end or closed-end investment companies which invest in such obligations exclusively (such shares will be purchased within the limits prescribed by the 1940 Act); short-term money market instruments issued in the U.S. or abroad, denominated in dollars or any foreign currency, including short-term certificates of deposit (including variable rate certificates of deposit), time deposits with a maturity no greater than 180 days, bankers acceptances, commercial paper rated A-1 by S&P or Prime-1 by Moody's, or in equivalent money market securities; and other high quality fixed income securities denominated in U.S. dollars, any foreign currency, or a multi-national currency unit such as the ECU. The Portfolio invests in high grade debt securities. The Portfolio's investments will consist of securities rated at least AA by S&P or Aa by Moody's, or if unrated, securities which, in the Advisor's opinion, are equivalent in credit quality to securities so rated. The Portfolio may also invest in interest rate swaps, caps and floors. See "Investment Objectives and Policies -- Interest Rate Transactions" in the SAI. The International Fixed Income Portfolio may also enter into forward foreign currency exchange contracts only in order to hedge against uncertainty in the level of future foreign exchange rates in the purchase and sale of investment securities; it may not enter into such contracts for speculative purposes. A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. These contracts may be bought or sold to protect the Portfolio, to some degree, against a possible loss resulting from an adverse change in the relationship between foreign currencies and the U.S. dollar. It should be realized that this method of protecting the value of the Portfolio's investment securities against a decline in the value of a currency does not eliminate fluctuations in the underlying prices of the securities. It simply establishes a rate of exchange at some future point in time. Additionally, although such contracts tend to minimize the risk of loss due to a decline in the value of the hedged currency, at the same time they tend to limit any potential gain which might result should the value of such currency increase. The International Fixed Income Portfolio may utilize futures contracts, options and options on futures contracts as a hedge against changes resulting from market conditions and exchange rates in the values of the securities held in that Portfolio of which it intends to purchase or if the Portfolio's aggregate initial margins and premiums required in connection with new hedging positions do not exceed 5% of its net asset value. The Portfolio would not utilize futures contracts, options or options on futures contracts unless the transactions are economically appropriate for the reduction of risks inherent in the ongoing management of the Portfolio. The International Fixed Income Portfolio may write covered calls (options on securities owned by the Portfolio) and enter into closing purchase transactions with respect to such options. Also, the Portfolio may enter into futures contracts and options on futures contracts only to the extent that not more than 20% of the Portfolio's assets are invested in such instruments. The International Fixed Income Portfolio may engage in futures and options transactions only if it is consistent with its investment objectives and policies. Entering into futures contracts and trading options are highly specialized activities which entail greater than ordinary investment risks. To enter into a futures contract, the Portfolio must make a deposit of initial margin with its custodian in a segregated account in the name of its futures broker. Subsequent payments to or from the broker, called variation margin, will be made on a daily basis as the price of the underlying security or index fluctuates, making the long and short positions in the futures contracts more or less valuable. A call option for a particular security gives the purchaser of the option the right to buy, and a writer the obligation to sell, the underlying security at the stated exercise price at any time prior to the expiration of the option, regardless of the market price of the security. The premium paid to the writer is in consideration for undertaking the obligations under the option contract. A put option for a particular security gives the purchaser the right to sell the underlying security at the stated exercise price at any time prior to the expiration date of the option, regardless of the market price of the security. In contrast to an option on a particular security, an option on an index provides the holder with the right to make or receive a cash settlement upon exercise of the option. The amount of this settlement will be equal to the difference between the closing price of the index at the time of exercise and the exercise price of the option expressed in dollars, times a specified multiple. -16- The Portfolio may use over-the-counter bond options through any dealer or dealer bank which the Advisor determines is creditworthy for outright purchases and sales of securities. To the extent that over-the-counter bond options are determined to be illiquid, the Portfolio will not purchase such options if such purchase will cause the Portfolio's investments in all illiquid securities to exceed 10% of its total assets. The risks associated with the use of futures and options include: (i) imperfect correlation between changes in the price of the securities being hedged and the prices of futures and options relating to such securities; (ii) possible lack of a liquid secondary market for a futures contract or option, and the resulting inability to close a futures position which could have an adverse impact on the Portfolio's ability to hedge, and (iii) losses due to unanticipated market movements. The risk of loss in trading futures contracts in some strategies can be substantial, due both to the low margin deposits required, and the extremely high degree of leverage involved in futures pricing. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss or gain to the investor. Thus, a purchase or sale of a futures contract may result in losses or gains in excess of the amount invested in the contract. In contrast, purchasing options entails a risk of a complete loss of the amounts paid as premiums to the writer of the options. In addition, by writing a covered call option, the Portfolio forgoes the opportunity to profit from an increase in the market price of the underlying security above the exercise price except insofar as the premium represents such a profit. The Portfolio will not be able to sell the underlying security until the covered call option expires or is exercised or the Portfolio effects a closing purchase transaction by purchasing an option of the same series. For a further discussion of futures contracts and options, see "Investment Objectives and Policies -- Futures Contracts" in the SAI. The Portfolio is classified as non-diversified under the 1940 Act. Investment returns on a non-diversified portfolio typically are dependent upon the performance of a smaller number of securities relative to the number held in a diversified portfolio. Consequently, the change in value of any one security may affect the overall value of a non-diversified portfolio more than it would a diversified portfolio. Additionally, a non-diversified portfolio may be more susceptible to economic, political and regulatory developments than a diversified portfolio with a similar objective. Because the Portfolio invests significantly in securities denominated in foreign currencies, movements in foreign currency exchange rates versus the U.S. dollar are likely to impact the Portfolio's share price stability relative to domestic income funds. Fluctuation in foreign currencies can have a positive or negative impact on returns. Normally, to the extent that the Portfolio invested in foreign securities, a weakening in the U.S. dollar relative to the foreign currencies underlying the Portfolio's investments should help increase the net asset value of the Portfolio. Conversely, a strengthening in the U.S. dollar versus the foreign currencies in which the Portfolio's securities are denominated will generally lower the net asset value of the Portfolio. The Advisor attempts to minimize exchange rate risk through active portfolio management and efforts to identify risk from the Portfolio's holdings. Investors should recognize that investing in the securities of foreign companies and the utilization of forward foreign currency contracts involve special risks and considerations not typically associated with investing in U.S. companies. These risks and considerations include differences in accounting, auditing and financial reporting standards, generally higher commission rates on foreign portfolio transactions, the possibility of expropriation or confiscatory taxation, adverse changes in investment or exchange control regulations, political instability which could affect U.S. investment in foreign countries and potential restrictions on the flow of international capital. Moreover, the dividends payable on the Portfolio's foreign portfolio securities may be subject to foreign withholding taxes, thus reducing the net amount of income available for distribution to the Portfolio's shareholders. Further, foreign securities often trade with less frequency and volume than domestic securities and, therefore, may exhibit greater price volatility. COMMON INVESTMENT POLICIES AND RISK FACTORS There can be no assurance that any of the Portfolios will achieve its stated investment objective. There are a number of investment policies common to each of the Portfolios. -17- REPURCHASE AGREEMENTS Each Portfolio may enter into repurchase agreements with qualified brokers, dealers, banks and other financial institutions deemed creditworthy by the Advisor. Under normal circumstances, however, each of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios will not enter into repurchase agreements if entering into such agreements would cause, at the time of entering into such agreements, more than 20% of the value of the total assets of the particular Portfolio to be subject to repurchase agreements. The International Fixed Income Portfolio would generally enter into repurchase transactions to invest cash reserves. In a repurchase agreement, a Portfolio purchases a security and simultaneously commits to resell that security at a future date to the seller (a qualified bank or securities dealer) at an agreed upon price plus an agreed upon market rate of interest (itself unrelated to the coupon rate or date of maturity of the purchased security). The securities held subject to a repurchase agreement may have stated maturities exceeding 13 months, provided that with respect to the Cash Portfolios, the repurchase agreement itself matures in less than 13 months. The Advisor currently expects that repurchase agreements with respect to the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios also will mature in less than 13 months. The seller under a repurchase agreement will be required to maintain the value of the securities subject to the agreement at not less than 101% of the repurchase price including accrued interest. The Funds' administrator will mark to market daily the value of the securities purchased, and the Advisor will, if necessary, require the seller to deposit additional securities to ensure that the value is in compliance with the 101% requirement stated above. The Advisor will consider the creditworthiness of a seller in determining whether a Portfolio should enter into a repurchase agreement, and the Portfolios will only enter into repurchase agreements with banks and dealers which are determined to present minimal credit risk by the Advisor under procedures adopted by the Board members. In effect, by entering into a repurchase agreement, a Portfolio is lending its funds to the seller at the agreed upon interest rate, and receiving a security as collateral for the loan. Such agreements can be entered into for periods of one day (overnight repo) or for a fixed term (term repo). Repurchase agreements are a common way to earn interest income on short-term funds. The use of repurchase agreements involves certain risks. For example, if the seller of a repurchase agreement defaults on its obligation to repurchase the underlying securities at a time when the value of these securities has declined, a Portfolio may incur a loss upon disposition of them. Default by the seller would also expose a Portfolio to possible loss because of delays in connection with the disposition of the underlying obligations. If the seller of an agreement becomes insolvent and subject to liquidation or reorganization under the Bankruptcy Code or other laws, a bankruptcy court may determine that the underlying securities are collateral not within the control of a Portfolio and therefore subject to sale by the trustee in bankruptcy. Further, it is possible that a Portfolio may not be able to substantiate its interest in the underlying securities. REVERSE REPURCHASE AGREEMENTS The Government Cash and Intermediate Government Portfolios may enter into reverse repurchase agreements. In a reverse repurchase agreement a Portfolio sells a security and simultaneously commits to repurchase that security at a future date from the buyer. In effect, the Portfolio is temporarily borrowing funds at an agreed upon interest rate from the purchaser of the security, and the sale of the security represents collateral for the loan. The Portfolio retains record ownership of the security and the right to receive interest and principal payments on the security. At an agreed upon future date, the Portfolio repurchases the security by remitting the proceeds previously received, plus interest. In certain types of agreements, there is no agreed upon repurchase date and interest payments are calculated daily, often based on the prevailing overnight repurchase rate. These agreements, which are treated as if reestablished each day, are expected to provide the Government Cash Portfolio and the Intermediate Government Portfolio with a flexible borrowing tool. Reverse repurchase agreements are considered to be borrowings by a Portfolio under the 1940 Act. A Portfolio's investment of the proceeds of a reverse repurchase agreement is the speculative factor known as leverage. The Portfolio may enter into a reverse repurchase agreement only if the interest income from investment of the proceeds is greater than the interest expense of the transaction and the proceeds are invested for a period no longer than the term of the agreement. A Portfolio will maintain with the custodian a separate account with a segregated portfolio of liquid securities at least equal to its purchase obligations -18- under these agreements. The Advisor will consider the creditworthiness of the other party in determining whether a Portfolio will enter into a reverse repurchase agreement. Under normal circumstances each of the Government Cash and Intermediate Government Portfolios will not enter into reverse repurchase agreements if entering into such agreements would cause, at the time of entering into such agreements, more than 10% of the value of its total assets to be subject to such agreements. The use of reverse repurchase agreements involves certain risks. For example, the other party to the agreement may default on its obligation or become insolvent and unable to deliver the securities to the Portfolio at a time when the value of the securities has increased. Reverse repurchase agreements also involve the risk that a Portfolio may not be able to substantiate its interest in the underlying securities. BORROWING Each Portfolio may purchase securities on a "when issued," "delayed settlement" or "forward delivery" basis, and the Government Cash and Intermediate Government Portfolios may enter into reverse repurchase agreements. As a temporary measure for extraordinary or emergency purposes, a Portfolio may borrow money from banks. However, none of the Portfolios will borrow money for speculative purposes. See "Common Investment Policies--`When Issued,' `Delayed Settlement,' `Forward Delivery Securities' and `Reverse Repurchase Agreements.' " LENDING OF SECURITIES Each Portfolio may lend its portfolio securities with a value of up to one-third of its total assets to qualified brokers, dealers, banks and other financial institutions for the purpose of realizing additional net investment income through the receipt of interest on the loan. Such loans would involve risks of delay in receiving additional collateral in the event the value of the collateral decreased below the value of the securities loaned or of delay in recovering the securities loaned or even loss of rights in the collateral should the borrower of the securities fail financially. Loans will be made only to borrowers deemed by the Advisor to be of good standing. MUNICIPAL OBLIGATIONS The Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios may each invest 25% or more of its net assets in Municipal Obligations, the interest on which is paid solely from revenues of similar projects, and may invest up to 20% of its total assets in private activity bonds when added together with any taxable investments held by the Portfolio when, in the opinion of the Advisor, the investment is warranted. To the extent a Portfolio's assets are invested in Municipal Obligations payable from the revenues of similar projects or are invested in private activity bonds, the particular Portfolio will be subject to the peculiar risks presented by the laws and economic conditions relating to such projects and bonds to a greater extent than it would be if its assets were not so invested. "WHEN ISSUED," "DELAYED SETTLEMENT" AND "FORWARD DELIVERY" SECURITIES The Portfolios may purchase and sell securities on a "when issued," "delayed settlement" or "forward delivery" basis. "When issued" or "forward delivery" refers to securities whose terms and indenture are available and for which a market exists, but which are not available for immediate delivery. When issued or forward delivery transactions may be expected to occur one month or more before delivery is due. Delayed settlement is a term used to describe settlement of a securities transaction in the secondary market which will occur sometime in the future. No payment or delivery is made by a Portfolio in a when issued, delayed settlement or forward delivery transaction until the Portfolio receives payment or delivery from the other party to the transaction. A Portfolio will maintain a separate account of cash, U.S. Government securities or other high grade debt obligations at least equal to the value of purchase commitments until payment is made. Such segregated securities will either mature or, if necessary, be sold on or before the settlement date. Although a Portfolio receives no income from the above described securities prior to delivery, the market value of such securities is still subject to change. A Portfolio receives no income from "when issued," "delayed settlement" or "forward delivery" securities prior to delivery of such securities. -19- A Portfolio will engage in when issued transactions to obtain what is considered to be an advantageous price and yield at the time of the transaction. When a Portfolio engages in when issued, delayed settlement or forward delivery transactions, it will do so for the purpose of acquiring securities consistent with its investment objective and policies and not for the purpose of speculation. Each Portfolio's when issued, delayed settlement and forward delivery commitments are not expected to exceed 25% of its total assets absent unusual market circumstances, and each Portfolio will only sell securities on such a basis to offset securities purchased on such a basis. INVESTMENT COMPANY SECURITIES In connection with the management of their daily cash positions, the Portfolios may each invest in securities issued by other open-end investment companies with investment objectives and policies that are consistent with those of the investing portfolio. Each Portfolio limits its investments so that, as determined immediately after a securities purchase is made: (a) not more than 5% of the value of its total assets will be invested in the securities of any one investment company; (b) not more than 10% of the value of its total assets will be invested in the aggregate in the securities of investment companies as a group; and (c) not more than 3% of the outstanding voting stock of any one investment company will be owned by the Portfolio. As a shareholder of another investment company, the Portfolio would bear its pro rata portion of the other investment company's advisory fees and other expenses, in addition to the expenses the Portfolio bears directly in connection with its own operations. ILLIQUID SECURITIES No Portfolio will invest more than 10% of its net assets in securities that are illiquid. ELIGIBLE INSTRUMENTS--GOVERNMENT CASH AND INTERMEDIATE GOVERNMENT PORTFOLIOS During periods when federally chartered credit unions beneficially own shares of the Government Cash and Intermediate Government Portfolios, those Portfolios intend to observe limitations imposed under the National Credit Union Administration Rules and Regulations ("NCUA Regulations") governing eligible investments for federally chartered credit unions. Accordingly, during those periods, unless the laws, rules or regulations governing eligible investments for federally chartered credit unions are changed to permit such investments, those Portfolios intend not to invest in, among other investments: Government Trust Certificates; World Bank Obligations; securities of the Asian Development Bank, the Inter-American Development Bank; the International Bank for Reconstruction and Development; obligations of certain U.S. government enterprises and instrumentalities investment in which is not provided for by the Federal Credit Union Act; futures contracts; or options; and intend to observe limitations imposed under NCUA Regulations on investment in certain types of mortgage-related securities. With respect to collateralized mortgage obligations ("CMOs") and real estate mortgage investment conduits ("REMICs"), the Portfolios, in accordance with NCUA Regulations, will not invest in any CMO or REMIC that does not pass the average life, average life sensitivity and price sensitivity tests of the NCUA's "high-risk security" test, unless the purchase is made solely to reduce interest rate risk or the instrument is subject to the next sentence. The average life and average life sensitivity tests do not apply to a floating or adjustable rate CMO or REMIC, irrespective of whether it has been purchased to reduce interest rate risk, if (a) the interest rate is reset at least annually, (b) the interest rate is below the contractual cap of the instrument at the time of purchase or a subsequent testing date, (c) the index upon which the interest rate is based is a widely-used market interest rate index such as the London Interbank Offered Rate and (d) the interest rate of the instrument varies directly (not inversely) with the index upon which it is based and is not reset as a multiple of the change in the index. Additionally, during periods when Massachusetts state-chartered credit unions beneficially own shares of the Government Cash or Intermediate Government Portfolios, those Portfolios intend to observe limitations imposed under Massachusetts General Laws regarding eligible investments for Massachusetts state-chartered credit unions. Accordingly, during those periods, unless the laws governing eligible investments for Massachusetts state-chartered credit unions are changed to permit such investments, those Portfolios intend not to invest in obligations of certain U.S. Government agencies, enterprises and instrumentalities such as the Student Loan Marketing Association, the investment in which is not permitted under Massachusetts law. -20- Unless specified above and except as described under "Investment Limitations," the foregoing investment policies are not fundamental, and the particular Funds' Board members may change such policies without shareholder approval. ----------------------- PURCHASE OF SHARES Shares of each Portfolio are sold without a sales commission on a continuous basis to the Advisor acting on behalf of its or an Affiliate's clients ("Clients") and to other institutions (the "Institutions"), at the net asset value per share next determined after receipt of the purchase order by the transfer agent. See "Valuation of Shares." The minimum initial investment for each Portfolio is $25,000; the minimum for subsequent investments for each Portfolio is $1,000. Each Fund reserves the right to reduce or waive the minimum initial and subsequent investment requirements from time to time. Beneficial ownership of shares will be reflected on books maintained by the Advisor or the Institutions. A prospective investor wishing to purchase shares in any of the Funds should contact the Advisor or his or her Institution. It is the responsibility of the Advisor to transmit orders for share purchases to Investment Company Capital Corp. ("ICC"), the Funds' transfer agent, and deliver required funds to The Chase Manhattan Bank, N.A., Brooklyn, New York, the Funds' custodian, on a timely basis. Shares purchased in the Cash Portfolios before 12:00 noon (Eastern time) begin earning dividends on the same business day provided Federal funds are available to the particular Portfolio before 12:00 noon (Eastern time) that day. Each of the Funds reserves the right, in its sole discretion, to suspend the offering of shares of its Portfolios or reject purchase orders when, in the judgment of management, such suspension or rejection is in the best interests of the Fund. Purchases of a Portfolio's shares will be made in full and fractional shares of the Portfolio calculated to three decimal places. In the interest of economy and convenience, certificates for shares will not be issued except upon the written request of the shareholder. Certificates for fractional shares, however, will not be issued. REDEMPTION OF SHARES Shares of each Portfolio may be redeemed at any time, without cost, at the net asset value of the Portfolio next determined after receipt of the redemption request by the transfer agent. Generally, a properly signed written request is all that is required. Any redemption may be more or less than the purchase price of the shares depending on the market value of the investment securities held by the Portfolio. An investor wishing to redeem shares should contact the Advisor or his or her Institution. It is the responsibility of the Advisor to transmit promptly redemption orders to the transfer agent. Payment of the redemption proceeds will ordinarily be made within one business day, but in no event more than seven days, after receipt of the order in proper form by the transfer agent. Redemption orders are effected at net asset value per share next determined after receipt of the order in proper form by the transfer agent. Each of the Funds may suspend the right of redemption or postpone the date of payment at times when the New York Stock Exchange (the "Exchange") is closed, or under any emergency circumstances as determined by the Securities and Exchange Commission (the "Commission"). See "Valuation of Shares" for the days on which the Exchange is closed. If the particular Board determines that it would be detrimental to the best interests of the remaining shareholders of the particular Fund to make payment wholly or partly in cash, the Fund may pay the redemption proceeds in whole or in part by a distribution in-kind of securities held by a Portfolio in lieu of cash in conformity with applicable rules of the Commission. Investors may incur brokerage charges on the sale of portfolio securities received as a redemption in kind. Each of the Funds reserves the right, upon 30 days' written notice, to redeem an account in any of the Portfolios if the net asset value of the account's shares falls below $100 and is not increased to at least such amount within such 30-day period. -21- VALUATION OF SHARES The net asset value of the Portfolios is determined by dividing the total market value of each Portfolio's investments and other assets, less any liabilities of that Portfolio, by the total outstanding shares of that Portfolio. For the Cash Portfolios, net asset value per share is determined as of 12:00 noon (Eastern time) on each day that the Exchange is open for business (an "Exchange Business Day"). Currently the Exchange is closed on weekends and the customary national business holidays of New Year's Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day (or the days on which they are observed). For the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios, net asset value per share is determined as of the close of regular trading hours of the Exchange on each Exchange Business Day on which the Portfolio receives an order to purchase or redeem its shares. One or more pricing services may be used to provide securities valuations in connection with the determination of the net asset value of each Portfolio. GOVERNMENT CASH AND TAX-EXEMPT CASH PORTFOLIOS For the purpose of calculating each Cash Portfolio's net asset value per share, securities are valued by the "amortized cost" method of valuation, which does not take into account unrealized gains or losses. The amortized cost method involves valuing an instrument at its cost and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. While this method provides certainty in valuation, it may result in periods during which value, as determined by amortized cost, is higher or lower than the price the Portfolio would receive if it sold the instrument. The use of amortized cost and the maintenance of each Portfolio's per share net asset value at $1.00 is based on its election to operate under the provisions of Rule 2a-7 under the 1940 Act. As a condition of operating under that rule, each Cash Portfolio must maintain an average weighted maturity of 90 days or less, purchase only instruments deemed to have remaining maturities of 13 months or less, and invest only in securities which are determined by the Advisor, pursuant to procedures established by the Board, to present minimal credit risks and which are Eligible Securities, pursuant to procedures established by the Board. The Board has established procedures reasonably designed to stabilize the net asset value per share for the purposes of sales and redemptions at $1.00. These procedures include daily review of the relationship between the amortized cost value per share and a net asset value per share based upon available indications of market value. In the event of a deviation of over 1/2 of 1% between a Cash Portfolio's net asset value based upon available market quotations or market equivalents and $1.00 per share based on amortized cost, the Board members will promptly consider what action, if any, should be taken. The Board members will also take such action as they deem appropriate to eliminate or to reduce to the extent reasonably practicable any material dilution or other unfair results which might arise from differences between the two. Such action may include redemption in kind, selling instruments prior to maturity to realize capital gains or losses or to shorten the average weighted maturity, exercising puts, withholding dividends, paying distributions from capital or capital gains or utilizing a net asset value per share as determined by using available market quotations. The net asset value per share of each Cash Portfolio will ordinarily remain at $1.00, but each Cash Portfolio's daily dividends will vary in amount. There can be no assurance, however, that the Cash Portfolios will maintain a constant net asset value per share of $1.00. INTERMEDIATE GOVERNMENT PORTFOLIO Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market, at the most recent quoted bid price, or when stock exchange valuations are used, at the latest quoted sale price on the day of valuation. If there is not such a reported sale, the latest quoted bid price will be used. Net asset value includes interest on fixed income securities which is accrued daily. In addition, bond and other fixed income securities may be valued on the basis of prices provided by a pricing service when the Advisor believes such prices reflect the fair market value of such securities. The prices provided by a pricing service are determined without regard to bid or last sale prices but take into account institutional size trading in similar groups of securities and any developments related to specific securities. Debt securities with remaining maturities of 60 days or less are valued at -22- amortized cost, pursuant to which (i) such securities shall be valued initially at cost on the date of purchase or, in the case of securities purchased with more than 60 days maturity, at their market or fair value on the 61st day prior to maturity, and (ii) thereafter (absent unusual circumstances), a constant proportionate amortization of any discount or premium shall be assumed until maturity of the security. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Board. MUNI INTERMEDIATE AND NEW JERSEY MUNI PORTFOLIOS Municipal Obligations for which quotations are readily available are valued at the most recent quoted bid price provided by investment dealers, provided that Municipal Obligations may be valued on the basis of prices provided by a pricing service when such prices are determined by the administrator to reflect the fair market value of such Municipal Obligations. Municipal Obligations for which market quotations are not readily available are valued at fair market value as determined in good faith by or under the direction of the particular Board. Debt obligations with remaining maturities of 60 days or less are valued on the basis of amortized cost, pursuant to which (i) such securities are valued initially at cost on the date of purchase or, in the case of securities purchased with more than 60 days maturity, at their market or fair value on the 61st day prior to maturity, and (ii) thereafter (absent unusual circumstances), a constant proportionate amortization of any discount or premium shall be assumed until maturity of the security. INTERNATIONAL FIXED INCOME PORTFOLIO Bonds and other fixed income securities are valued according to the broadest and most representative market, which will ordinarily be the over-the-counter market, at the most recent quoted bid price. Securities that are primarily traded on U.S. or foreign exchanges (including securities traded through the National Market System) are valued at the last quoted sale price on the day of valuation. If there is no such reported sale, the latest quoted bid price will be used. Net asset value includes interest on fixed income securities which is accrued daily. In addition, bond and other fixed income securities may be valued on the basis of prices provided by a pricing service when the Advisor believes such prices reflect the fair market value of such securities. The prices provided by a pricing service are determined without regard to bid or last sale prices but take into account institutional size trading in similar groups of securities and any developments related to specific securities. Debt securities with remaining maturities of 60 days or less are valued at amortized cost, pursuant to which (i) such securities shall be valued initially at cost on the date of purchase or, in the case of securities purchased with more than 60 days maturity, at their market or fair value on the 61st day prior to maturity, and (ii) thereafter (absent unusual circumstances), a constant proportionate amortization of any discount or premium shall be assumed until maturity of the security. The value of other assets and securities for which no quotations are readily available (including restricted securities) is determined in good faith at fair value using methods determined by the Board. Foreign currency amounts are translated into U.S. dollars at the bid prices of such currencies against U.S. dollars last quoted by a major bank. DIVIDENDS, CAPITAL GAINS DISTRIBUTIONS AND TAXES DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS The Portfolios have the following dividend and capital gains policies: (a) The Cash Portfolios declare dividends daily and normally distribute substantially all of their net investment income to shareholders monthly. (b) The International Fixed Income Portfolio normally distributes substantially all of its net investment income to shareholders in the form of a quarterly dividend. (c) The Intermediate Government, Muni Intermediate and New Jersey Muni Portfolios normally will distribute substantially all of their net investment income to shareholders in the form of monthly dividends. -23- If any net capital gains are realized, the Portfolios normally distribute such gains at least once a year. However, see "Dividends, Capital Gains Distributions and Taxes--Federal Taxes--Miscellaneous," for a discussion of the Federal excise tax applicable to certain regulated investment companies. Undistributed net investment income is included in a Portfolio's net assets for the purpose of calculating net asset value per share. Therefore, on the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios' "ex-dividend" date, the net asset value per share excludes the dividend (i.e., is reduced by the per share amount of the dividend). Dividends paid shortly after the purchase of shares of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios by an investor, although in effect a return of capital, are taxable to the investor. FEDERAL TAXES Each Portfolio intends to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended (the "Code"). Such qualification relieves a Portfolio of liability for Federal income taxes to the extent its earnings are distributed in accordance with the Code. Taxable Portfolios. Qualification as a regulated investment company under the Code for a taxable year requires, among other things, that a taxable Portfolio distribute to its shareholders an amount at least equal to 90% of its investment company taxable income and 90% of its net exempt interest income (if any) for such taxable year. In general, a Portfolio's investment company taxable income will be its net investment income, including interest and dividends, subject to certain adjustments, and net short-term capital gains and excluding the excess of any net long-term capital gain for the taxable year over the net short-term capital loss, if any, for such year. Each Portfolio intends to distribute as dividends substantially all of its investment company taxable income each year. Such dividends will be taxable as ordinary income to each Portfolio's shareholders who are not currently exempt from Federal income taxes, whether such income or gain is received in cash or reinvested in additional shares. The dividends received deduction for corporations will apply to such ordinary income distributions to the extent the total qualifying dividends received by a Portfolio are from domestic corporations for the taxable year. It is anticipated that none of the dividends paid by the Government Cash and Intermediate Government Portfolios, and only a small part (if any) of the dividends paid by the International Fixed Income Portfolio will be eligible for the dividends received deduction. Substantially all of each Portfolio's net realized long-term capital gains, if any, will be distributed at least annually to its shareholders. A Portfolio generally will have no tax liability with respect to such gains and the distributions will be taxable to the shareholders who are not currently exempt from Federal income taxes as long-term capital gains, regardless of how long the shareholders have held the shares and whether such gains are received in cash or reinvested in additional shares. With respect to shares of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios, a shareholder considering buying shares of a fund on or just before the record date of a dividend should be aware that the amount of the forthcoming dividend payment, although in effect a return of capital, will be taxable. A taxable gain or loss may be realized by a shareholder upon redemption or transfer of shares of the Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios, depending upon the tax basis of such shares and their price at the time of redemption or transfer. International Fixed Income Portfolio. It is expected that dividends and certain interest income earned by the International Fixed Income Portfolio from foreign securities will be subject to foreign withholding taxes or other taxes. So long as more than 50% of the value of the Portfolio's total assets at the close of any taxable year consists of stock or securities of foreign corporations, the Portfolio may elect, for U.S. Federal income tax purposes, to treat certain foreign taxes paid by it, including generally any withholding taxes and other foreign income taxes, as paid by its shareholders. If the Portfolio makes this election, the amount of such foreign taxes paid by the Portfolio will be included in its shareholders' income pro rata (in addition to taxable distributions actually received by them), and each shareholder will be entitled (a) to credit his proportionate amount of such taxes against his U.S. Federal income tax liabilities, or (b) if he itemizes his deductions, to deduct such proportionate amount from his U.S. income. Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios. Exempt-interest dividends may be treated by shareholders as items of interest excludable from their gross income under Section 103(a) of the Code, unless -24- under the circumstances applicable to the particular shareholder the exclusion would be disallowed. (See "Additional Information Concerning Taxes" in the SAI.) Distributions of net income may be taxable to investors under state or local law as dividend income even though a substantial portion of such distributions may be derived from interest on tax-exempt obligations which, if realized directly, would be exempt from such income taxes. If the Portfolio should hold certain private activity bonds issued after August 7, 1986, shareholders must include, as an item of tax preference, the portion of dividends paid by a Portfolio that is attributable to interest on such bonds in their Federal alternative minimum taxable income for purposes of determining liability (if any) for the alternative minimum tax and the environmental tax applicable to corporations. Corporate shareholders must also take all exempt-interest dividends into account in determining certain adjustments for Federal alternative minimum and environmental tax purposes. For individuals, the alternative minimum tax rate is 26% for alternative minimum taxable income in excess of an exemption amount and 28% for any amount of alternative minimum taxable income in excess of the exemption amount plus $175,000. For corporations, the alternative minimum tax rate is 20%. The environmental tax applicable to corporations is imposed at the rate of .12% on the excess of the corporation's modified Federal alternative minimum taxable income over $2,000,000. Shareholders receiving Social Security benefits should note that all exemptinterest dividends will be taken into account in determining the taxability of such benefits. To the extent that dividends paid to shareholders are derived from taxable interest or from long-term or short-term capital gains, such dividends will be subject to Federal income tax (whether such dividends are paid in cash or additional shares) and may also be subject to state and local taxes. Miscellaneous. Dividends declared in October, November or December of any year payable to shareholders of record on a specified date in such months will be deemed to have been received by the shareholders and paid by a Portfolio on December 31, in the event such dividends are paid during January of the following year. A 4% nondeductible excise tax is imposed on regulated investment companies that fail to currently distribute specified percentages of their ordinary taxable income and net capital gain (excess of capital gains over capital losses). Each Portfolio intends to make sufficient distributions or deemed distributions of its ordinary taxable income and any net capital gain prior to the end of each calendar year to avoid liability for this excise tax. The foregoing summarizes some of the important tax considerations generally affecting the Portfolios and their shareholders and is not intended as a substitute for careful tax planning. Accordingly, potential investors in the Portfolios should consult their tax advisers with specific reference to their own tax situation. The foregoing discussion of tax consequences is based on tax laws and regulations in effect on the date of this Prospectus, which are subject to change by legislative or administrative action. Shareholders will be advised at least annually as to the federal income tax consequences of distributions made each year. Each Portfolio will be required in certain cases to withhold and remit to the United States Treasury 31% of taxable dividends or gross proceeds realized upon sale paid to shareholders who have failed to provide a correct tax identification number in the manner required, who are subject to withholding by the IRS for failure properly to include on their return payments of taxable interest or dividends, or who have failed to certify to the Portfolio that they are not subject to backup withholding when required to do so or that they are "exempt recipients." PENNSYLVANIA TAX CONSIDERATIONS Shareholders of the Muni Intermediate Portfolio will not be subject to Pennsylvania Personal Income Tax on distributions from the Portfolio attributable to interest income from Pennsylvania Municipal Obligations held by the Portfolio, either when received by the Portfolio or when credited or distributed to the shareholders. The exemption from Pennsylvania Personal Income Tax will also extend to interest on obligations of the United States, its territories and certain of its agencies and instrumentalities ("Federal Securities"). Shareholders of the Portfolio will not be subject to the Philadelphia School District Net Income Tax imposed on Philadelphia residents on distributions from the Portfolio attributable to interest income from -25- Pennsylvania Municipal Obligations or Federal Securities held by the Portfolio, either when received by the Portfolio or when credited or distributed to the shareholders. For purposes of the Pennsylvania Personal Income Tax and the School District Tax, distributions derived from investments in other than Pennsylvania Municipal Obligations and Federal Securities and distributions from net realized capital gains in respect of such investments will be taxable. Distributions qualifying as capital gain dividends for Federal income tax purposes are not taxable for purposes of the School District Tax, unless the underlying asset was held by the Portfolio for six months or less. Gain on the disposition of a share of the Muni Intermediate Portfolio will be subject to the Pennsylvania Personal Income Tax and the School District Tax, except that gain realized with respect to a share held for more than six months is not subject to the School District Tax. Shareholders of the Muni Intermediate Portfolio are not subject to the Pennsylvania personal property tax imposed by many counties in Pennsylvania to the extent that the Portfolio is comprised of Pennsylvania Municipal Obligations and Federal Securities. NEW JERSEY TAX CONSIDERATIONS It is anticipated that substantially all dividends paid by the New Jersey Muni Portfolio will not be subject to New Jersey personal income tax. In accordance with the provisions of New Jersey law as currently in effect, distributions paid by a "qualified investment fund" will not be subject to the New Jersey personal income tax to the extent that the distributions are attributable to income received as interest or gain from New Jersey Municipal Obligations, or as interest or gain from direct U.S. Government obligations. Distributions by a qualified investment fund that are attributable to most other sources will be subject to the New Jersey personal income tax. If the New Jersey Muni Portfolio qualifies as a qualified investment fund under New Jersey law, any gain on the redemption or sale of the Portfolio's shares will not be subject to the New Jersey personal income tax. To be classified as a qualified investment fund, at least 80% of the Portfolio's investment must consist of New Jersey Municipal Obligations or direct U.S. Government obligations; it must have no investments other than interest-bearing obligations, obligations issued at a discount, and cash and cash items (including receivables); and it must satisfy certain reporting obligations and provide certain information to its shareholders. Shares of the Portfolio are not subject to property taxation by New Jersey or its political subdivisions. To the extent that a shareholder is subject to state or local taxes outside New Jersey, dividends earned by an investment in the Fund may represent taxable income. The New Jersey personal income tax is not applicable to corporations. For all corporations subject to the New Jersey Corporation Business Tax, dividend and distributions from a "qualified investment fund" are included in the net income tax base for purposes of computing the Corporation Business Tax. Furthermore, any gain upon the redemption or sale of Fund shares by a corporate shareholder is also included in the net income tax base for purposes of computing the Corporation Business Tax. The foregoing is only a summary of certain New Jersey tax considerations generally affecting the Portfolio and its shareholders, and is not intended as a substitute for careful tax planning. Shareholders are urged to consult their tax advisors with specific reference to their own tax situations. OTHER STATE AND LOCAL TAXES Shareholders may also be subject to state and local taxes on distributions from the Funds. A shareholder should consult with his or her tax adviser with respect to the tax status of distributions from the Funds in a particular state and locality. The Glenmede Fund has obtained a Certificate of Authority to do business as a foreign corporation in Pennsylvania, and currently does business in that state. Accordingly, the shares of the Glenmede Fund will be exempt from Pennsylvania Personal Property Taxes. INVESTMENT ADVISOR The Advisor, a limited purpose trust company chartered in 1956, provides fiduciary and investment services to endowment funds, foundations, employee benefit plans and other institutions and individuals. The Advisor is a wholly-owned subsidiary of The Glenmede Corporation and is located at One Liberty Place, 1650 Market Street, Suite 1200, Philadelphia, Pennsylvania 19103. At November 30, 1995, the Advisor had over $8 billion in assets in the accounts -26- for which it serves in various capacities including as executor, trustee or investment advisor. Under Investment Advisory Agreements (the "Investment Advisory Agreements") with the Funds, the Advisor, subject to the control and supervision of the particular Fund's Board and in conformance with the stated investment objective and policies of each Portfolio, manages the investment and reinvestment of the assets of each Portfolio. It is the responsibility of the Advisor to make investment decisions for the Portfolios and to place each Portfolio's purchase and sales orders. The Advisor does not receive any fee from the Funds for its investment services provided to the Portfolios described in this Prospectus. However, shareholders in the Funds who are clients of the Advisor or an Affiliate pay fees which vary depending on the capacity in which the Advisor or the Affiliate provides fiduciary and investment services to the particular client (e.g., personal trust, estate settlement, advisory and custodian services). Mary Ann B. Wirts, Vice President and Manager of the Fixed Income Division of the Advisor, is the portfolio manager primarily responsible for the management of the Tax-Exempt Cash Portfolio . Ms. Wirts has been primarily responsible for the management of the Tax-Exempt Cash Portfolio since that Portfolio commenced operations. Ms. Wirts has been employed by the Advisor since 1982. Sheryl P. Durham, Vice President and Fixed Income Portfolio Manager of the Advisor, is the portfolio manager primarily responsible for the management of the Government Cash, Intermediate Government and International Fixed Income Portfolios . Ms. Durham has been primarily responsible for the management of those Portfolios since November 1989, November 1989 and August 1993, respectively. Ms. Durham has been employed by the Advisor since 1989. Laura LaRosa is the portfolio manager primarily responsible for the management of the Muni Intermediate and New Jersey Muni Portfolios. Ms. LaRosa has been primarily responsible for the management of those Portfolios since November 1994. Prior to her employment with the Advisor, Ms. LaRosa was Vice President of Institutional Sales at Hopper Soliday, Philadelphia from 1986 through October 1994. Ms. LaRosa has been employed by the Advisor since November 1994. ADMINISTRATIVE, TRANSFER AGENCY AND DIVIDEND PAYING SERVICES ICC serves as the Funds' administrator, transfer agent and dividend paying agent pursuant to a Master Services Agreement, and in those capacities supervises all aspects of the Funds' day-to-day operations, other than management of the Funds' investments. ICC is a wholly-owned subsidiary of Alex. Brown & Sons Incorporated ("Alex. Brown"). For its services as administrator, transfer agent and dividend paying agent, ICC is entitled to receive fees from the Funds equal to .12% of the first $100 million of the combined net assets of the Funds; .08% of the next $150 million of the combined net assets of the Funds; .04% of the next $500 million of the combined net assets of the Funds and .03% of the combined net assets of the Funds over $750 million. For the period July 1, 1995 to October 31, 1995, ICC received fees at the rate of _____% (annualized) of the Government Cash Portfolio's average net assets, ____% (annualized) of the Tax-Exempt Cash Portfolio's average net assets, ____% (annualized) of the Muni Intermediate Portfolio's average net assets, ____% (annualized) of the New Jersey Muni Portfolio's average net assets, ____% (annualized) of the International Fixed Income Portfolio's average net assets. For the period November 1, 1994 to June 30, 1995, the Fund's previous administrator received fees at a rate of ____% (annualized) of the Government Cash Portfolio's average net assets, ____% (annualized) of the Tax-Exempt Cash Portfolio's average net assets, ____% (annualized) of the Intermediate Government Portfolio's average net assets, ____% (annualized) of the Muni Intermediate Portfolio's average net assets, ____% (annualized) of the New Jersey Muni Portfolio's average net assets and ____% (annualized) of the International Fixed Income Portfolio's average net assets. SHAREHOLDER SERVICING PLAN The Funds have each adopted a Shareholder Servicing Plan (the "Plan") effective January 1, 1995 under which the Funds may pay a fee to broker/dealers, banks and other financial institutions (including the Advisor and its affiliates) that are dealers of record or holders of record or which have a servicing relationship ("Servicing Agents") with the beneficial owners of shares in any of the Portfolios. Under the Plan, Servicing Agents enter into Shareholder Servicing Agreements (the "Agreements") with the Funds. Pursuant to -27- such Agreements, Servicing Agents provide shareholder support services to their clients ("Customers") who beneficially own shares of the Portfolios. The fee, which will be at an annual rate of .05%, is computed monthly and is based on the average daily net assets of the shares beneficially owned by Customers of such Servicing Agents. All expenses incurred by the Portfolios in connection with the Agreements and the implementation of the Plans shall be borne entirely by the holders of the shares of the particular Portfolio involved and will result in an equivalent increase to each Portfolio's Total Annual Portfolio Operating Expenses. The Advisor has entered into an Agreement with each Fund for each Portfolio. The services provided by the Servicing Agents under the Agreements may include aggregating and processing purchase and redemption requests from Customers and transmitting purchase and redemption orders to the transfer agent; providing Customers with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; processing dividend and distribution payments from the Funds on behalf of Customers; providing information periodically to Customers showing their positions; arranging for bank wires; responding to Customers' inquiries concerning their investments; providing sub-accounting with respect to shares beneficially owned by Customers or the information necessary for sub-accounting; if required by law, forwarding shareholder communications (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Customers; and providing such other similar services as may be reasonably requested. INVESTMENT LIMITATIONS Each Portfolio will not: (a) purchase more than 10% of any class of the outstanding voting securities of any issuer; (b) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities; (c) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in this Prospectus and the Statement of Additional Information and in connection with entering into futures contracts, but the deposit of assets in a segregated account in connection with the writing of covered put and call options and the purchase of securities on a when issued, delayed settlement or forward delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts will not be deemed to be pledges of a Portfolio's assets or the purchase of any securities on margin for purposes of this investment limitation; (d) issue senior securities except that a Portfolio may borrow money in accordance with investment limitation (e), purchase securities on a when issued, delayed settlement or forward delivery basis and enter into reverse repurchase agreements; and (e) borrow money except as a temporary measure for extraordinary or emergency purposes, and then not in excess of 10% of its total assets at the time of borrowing (entering into reverse repurchase agreements and purchasing securities on a when issued, delayed settlement or forward delivery basis are not subject to this investment limitation). Each Portfolio, with the exceptions of the Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios, also will not: (a) with respect to 75% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities). Each of the Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios is classified as a "non-diversified" investment company under the 1940 Act, which means that each Portfolio is not limited by the 1940 Act in the proportion of its assets that it may invest in the securities of a single issuer. However, each Portfolio intends to conduct its operations so as to qualify as a "regulated investment company" for purposes of the Internal -28- Revenue Code of 1986, as amended, which generally will relieve the Portfolio of any liability for federal income tax to the extent its earnings are distributed to shareholders. In order to qualify as a regulated investment company for federal income tax purposes, each Portfolio will limit its investments and at the close of each quarter of the taxable year will not, with respect to 50% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities). If a percentage restriction for a Portfolio is adhered to at the time an investment is made, a later increase in percentage resulting from a change in value or assets will not constitute a violation of such restriction. If a Portfolio's borrowings are in excess of 5% (excluding overdrafts) of its total net assets, additional portfolio purchases will not be made until the amount of such borrowing is reduced to 5% or less. The investment limitations described here and in the SAI are fundamental policies of the Portfolios and may be changed only with the approval of the holders of a majority of the outstanding shares (as defined in the 1940 Act) of the affected Portfolio. In order to permit the sale of shares in certain states, each of the Funds may make commitments more restrictive than the investment policies and limitations described in this Prospectus and the SAI. Should a Fund determine that any such commitment is no longer in the best interest of the Fund, it will revoke the commitment by terminating sales of its shares in the state involved. GENERAL INFORMATION DESCRIPTION OF SHARES AND VOTING RIGHTS Glenmede Fund was organized as a Maryland corporation on June 30, 1988. Glenmede Fund's Articles of Incorporation authorize the Board members to issue 2,500,000,000 shares of common stock, with a $.001 par value. The Board has the power to designate one or more classes ("Portfolios") of shares of common stock and to classify or reclassify any unissued shares with respect to such Portfolios. Currently, Glenmede Fund is offering shares of ten Portfolios. Glenmede Portfolios was organized as a Massachusetts business trust on March 3, 1992. Glenmede Portfolio's Master Trust Agreement authorizes the Glenmede Portfolios' Board to issue an unlimited number of shares of beneficial interest with a $.001 par value. The Glenmede Portfolios' Board has the power to designate one or more series (Sub-Trusts) of shares of beneficial interest and to classify or reclassify any unissued shares with respect to such Sub-Trusts. Currently, the Glenmede Portfolios is offering shares of two Sub-Trusts, the Muni Intermediate and New Jersey Muni Portfolios. The shares of each Portfolio have no preference as to conversion, exchange, dividends, retirement or other rights, and, when issued and paid for as provided in this Prospectus, will be fully paid and non-assessable. The shares of each Portfolio have no pre-emptive rights and do not have cumulative voting rights, which means that the holders of more than 50% of the shares of a Fund voting for the election of its Board members can elect 100% of the Board of that Fund if they choose to do so. A shareholder is entitled to one vote for each full share held (and a fractional vote for each fractional share held), then standing in his or her name on the books of the particular Fund. The Funds will not hold annual meetings of Shareholders except as required by the 1940 Act, the next sentence and other applicable law. Each Fund has undertaken that its Board will call a meeting of shareholders for the purpose of voting upon the question of removal of a Board member or members if such a meeting is requested in writing by the holders of not less than 10% of the outstanding shares of the particular Fund. To the extent required by the undertaking, the particular Fund will assist shareholder communication in such matters. The Securities and Exchange Commission staff has expressed the view that the use of this combined Prospectus for the Funds may subject a Fund to liability for misstatements, inaccuracies or incomplete disclosure about the other Fund. At November 30, 1995, the Advisor was the record owner of 100% of the outstanding shares of each Portfolio. DISTRIBUTOR Armata Financial Corp. ("Armata"), located at 135 East Baltimore Street, Baltimore, Maryland 21202, serves as the Funds' distributor. Armata is a subsidiary of Alex. Brown. -29- CUSTODIAN The Chase Manhattan Bank, N.A., Brooklyn, New York, serves as the custodian of the Funds' respective assets. TRANSFER AGENT ICC, located at 135 East Baltimore Street, Baltimore, Maryland 21202, acts as the Funds' transfer agent. INDEPENDENT ACCOUNTANTS _______________, Philadelphia, Pennsylvania, serves as independent accountants for the Fund and will audit its financial statements annually. REPORTS Shareholders receive unaudited semi-annual financial statements and audited annual financial statements. COUNSEL Drinker Biddle & Reath, Philadelphia, Pennsylvania, serves as counsel to the Funds. BOARD MEMBERS AND OFFICERS The business and affairs of each Fund are managed under the direction of its Board. The following is a list of the Board members and officers of each Fund and a brief statement of their principal occupations during the past five years: -30-
Name and Address Age Principal Occupation During Past Five Years - ------------------------ --- --------------------------------------------------- H. Franklin Allen, Ph.D. 38 Director/Trustee of the Funds; Professor of Finance and The Wharton School of The Economics, Vice Dean and Director of Wharton Doctoral University of Pennsylvania Programs; Associate Professor of Finance and Economics; 2300 Steinberg Hall-Dietrich Hall Associate Professor of Finance. He has been employed by The Philadelphia, PA 19104-6302 University of Pennsylvania since 1985. Willard S. Boothby, Jr. 73 Director/Trustee of the Funds; Director, Penn Engineering & 600 East Gravers Lane Manufacturing Corp.; Former Director of Georgia-Pacific Wyndmoor, PA 19118 Corp.; formerly Managing Director of PaineWebber, Inc. John W. Church, Jr.* 62 Chairman, President and Director/Trustee of the Funds; Senior One Liberty Place Vice President and Chief Investment Officer of The Glenmede 1650 Market Street, Suite 1200 Trust Company. He has been employed by The Glenmede Philadelphia, PA 19103 Trust Company since 1979. Francis J. Palamara 69 Director/Trustee of the Funds; Trustee of Gintel Fund and P.O. Box 44024 Gintel ERISA Fund; Director, XTRA Corporation and Phoenix, AZ 85064-4024 Central Tractor, Farm and Country, Inc.; Former Executive Vice President-- Finance of ARA Services, Inc. G. Thompson Pew, Jr.* 53 Director/Trustee of the Funds; Former Director of Brown & 310 Caversham Road Glenmede Holdings, Inc.; Co-Founder, Director, Principal and Bryn Mawr, PA 19010 Officer of Philadelphia Investment Banking Co.; Director and Officer of Valley Forge Administrative Services Company. Mary Ann B. Wirts 44 Executive Vice President of the Funds; Vice President and One Liberty Place Manager of the Fixed Income Division of The Glenmede Trust 1650 Market Street, Suite 1200 Company. She has been employed by The Glenmede Trust Philadelphia, PA 19103 Company since 1982. Sheryl P. Durham, CFA 37 Vice President of the Funds; Vice President of The Glenmede One Liberty Place Trust Company and a Fixed Income Portfolio Manager at The 1650 Market Street, Suite 1200 Glenmede Trust Company since 1989. Philadelphia, PA 19103 Kimberly C. Osborne 30 Vice President of the Funds; Assistant Vice President of The One Liberty Place Glenmede Trust Company. She has been employed by The 1650 Market Street, Suite 1200 Glenmede Trust Company since 1993. From 1992-1993 she Philadelphia, PA 19103 was a Client Service Manager with Mutual Funds Service Company and from 1987-1992, she was a Client Administrator with The Vanguard Group, Inc. Michael P. Malloy 36 Secretary of the Funds; Partner in the law firm of Drinker Philadelphia National Bank Building Biddle & Reath. 1345 Chestnut Street Philadelphia, PA 19107-3496 Brian C. Nelson 36 Assistant Secretary of the Funds; Vice President, Alex. 135 East Baltimore Street Brown, ICC and Armata. Baltimore, MD 21202 Joseph A. Finelli 38 Treasurer of the Funds. He has been a Vice President of 135 East Baltimore Street Alex. Brown since September 1995. Prior thereto, he was Baltimore, MD 21202 Vice President and Treasurer of Delaware Group.
- ------------ * Board members Church and Pew are "interested persons" of the Funds as that term is defined in the 1940 Act. For additional information concerning remuneration of Board members see "Management of the Funds" in the SAI. -31- -------------------------------------------- Shareholder inquiries should be addressed to the Funds at the address or telephone number stated on the cover page. -32- THE GLENMEDE FUND, INC. THE GLENMEDE PORTFOLIOS 135 East Baltimore Street, Baltimore, Maryland 21202 =============================================================================== Prospectus Dated February __, 1996 Investment Advisor Administrator and Transfer Agent The Glenmede Trust Company Investment Company Capital Corp. One Liberty Place 135 East Baltimore Street 1650 Market Street, Suite 1200 Baltimore, Maryland 21202 Philadelphia, PA 19103 Distributor Armata Financial Corp. 135 East Baltimore Street Baltimore, Maryland 21202 - ------------------------------------------------------------------------------- Table of Contents Page Expenses of the Portfolios.................. Financial Highlights........................ Performance Calculations.................... Investment Policies and Risk Factors........ Common Investment Policies and Risk Factors.............................. Purchase of Shares.......................... Redemption of Shares........................ Valuation of Shares......................... Dividends, Capital Gains Distributions and Taxes................................. Investment Advisor.......................... Administrative, Transfer Agency and Dividend Paying Services.................... Shareholder Servicing Plan.................. Investment Limitations...................... General Information......................... Board Members and Officers.................. No person has been authorized to give any information or to make any representations not contained in this Prospectus, or in the Funds' Statement of Additional Information, in connection with the offering made by this Prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Funds or their Distributor. This Prospectus does not constitute an offering by the Funds or the Distributor in any jurisdiction in which such offering may not lawfully be made. -33- THE GLENMEDE FUND, INC. THE GLENMEDE PORTFOLIOS (800) 442-8299 STATEMENT OF ADDITIONAL INFORMATION February __, 1996 This Statement of Additional Information is not a prospectus but should be read in conjunction with The Glenmede Fund, Inc.'s ("Glenmede Fund") and The Glenmede Portfolios' ("Glenmede Portfolios" and collectively with Glenmede Fund, the "Funds") Prospectuses dated February __, 1996 (the "Prospectuses"). To obtain any of the Prospectuses, please call the Funds at the above telephone number. Capitalized terms used in this Statement of Additional Information and not otherwise defined have the same meanings given to them in the Funds' Prospectuses. Table of Contents Page INVESTMENT OBJECTIVES AND POLICIES....................................... PURCHASE OF SHARES....................................................... REDEMPTION OF SHARES..................................................... SHAREHOLDER SERVICES..................................................... PORTFOLIO TURNOVER....................................................... INVESTMENT LIMITATIONS................................................... MANAGEMENT OF THE FUNDS.................................................. INVESTMENT ADVISORY AND OTHER SERVICES................................... DISTRIBUTOR.............................................................. EXPENSES................................................................. PORTFOLIO TRANSACTIONS................................................... ADDITIONAL INFORMATION CONCERNING TAXES.................................. PERFORMANCE CALCULATIONS................................................. GENERAL INFORMATION...................................................... FINANCIAL STATEMENTS..................................................... APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS........................ INVESTMENT OBJECTIVES AND POLICIES The following policies supplement the investment objectives and policies set forth in the Funds' Prospectuses: Repurchase Agreements Repurchase agreements that do not provide for payment to a Portfolio within seven days after notice without taking a reduced price are considered illiquid securities. Futures Contracts Even though the following hedging instruments are not currently used by the International Fixed Income Portfolio, this Portfolio may, where appropriate, enter into futures contracts, options, and options on futures contracts for the purpose of hedging. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific security at a specified future time and at a specified price. Futures contracts which are standardized as to maturity date and underlying financial instrument are traded on national futures exchanges. Futures exchanges and trading are regulated under the Commodity Exchange Act by the Commodity Futures Trading Commission ("CFTC"). Although futures contracts by their terms call for actual delivery or acceptance of the underlying securities, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. Closing out an open futures position is done by taking an opposite position ("buying" a contract which has previously been "sold" or "selling" a contract previously "purchased") in an identical contract to terminate the position. Brokerage commissions are incurred when a futures contract is bought or sold. Futures traders are required to make a good faith margin deposit in cash or government securities with a broker or custodian to initiate and maintain open positions in futures contracts. A margin deposit is intended to assure completion of the contract (delivery or acceptance of the underlying security) if it is not terminated prior to the specified delivery date. Minimal initial margin requirements are established by the futures exchange and may be changed. Brokers may establish deposit requirements which are higher than the exchange minimums. Futures contracts are customarily purchased and sold on margin that may range upward from less than 5% of the value of the contract being traded. After a futures contract position is opened, the value of the contract is marked to market daily. If the futures contract -3- price changes to the extent that the margin on deposit does not satisfy margin requirements, payment of additional "variation" margin will be required. Conversely, change in the contract value may reduce the required margin, resulting in a repayment of excess margin to the contract holder. Variation margin payments are made to and from the futures broker for as long as the contract remains open. The International Fixed Income Portfolio expects to earn interest income on its margin deposits. Traders in futures contracts may be broadly classified as either "hedgers" or "speculators." Hedgers use the futures markets primarily to offset unfavorable changes in the value of securities otherwise held for investment purposes or expected to be acquired by them. Speculators are less inclined to own the securities underlying the futures contracts which they trade, and use futures contracts with the expectation of realizing profits from fluctuations in interest rates. The International Fixed Income Portfolio intends to use futures contracts only for hedging purposes. Regulations of the CFTC applicable to the International Fixed Income Portfolio require that all of its futures transactions either constitute bona fide hedging transactions or that the Portfolio's aggregate initial margins and premiums required in connection with new hedging positions do not exceed 5% of its net asset value. The International Fixed Income Portfolio will only sell futures contracts to protect securities it owns against price declines or purchase contracts to protect against an increase in the price of securities it intends to purchase. Although techniques other than the sale and purchase of futures contracts could be used to control the International Fixed Income Portfolio's exposure to market fluctuations, the use of futures contracts may be a more effective means of hedging this exposure. The International Fixed Income Portfolio would incur commission expenses in both opening and closing out futures positions. Restrictions on the Use of Futures Contracts. The International Fixed Income Portfolio will not enter into futures contract transactions to the extent that, immediately thereafter, the sum of the Portfolio's initial margin deposits on open contracts exceeds 5% of the market value of its total assets. In addition, the International Fixed Income Portfolio will not enter into futures contracts to the extent that the Portfolio's outstanding obligations to purchase securities under these contracts would exceed 20% of its total assets. -4- Risk Factors in Futures Transactions. Positions in futures contracts may be closed out only on an exchange which provides a secondary market for such futures. However, there can be no assurance that a liquid secondary market will exist for any particular futures contract at any specific time. Thus, it may not be possible to close a futures position. In the event of adverse price movements, the International Fixed Income Portfolio would continue to be required to make daily cash payments to maintain its required margin. In such situations, if the Portfolio has insufficient cash, it may have to sell portfolio securities to meet daily margin requirements at a time when it may be disadvantageous to do so. In addition, the International Fixed Income Portfolio may be required to make delivery of the instruments underlying futures contracts it holds. The inability to close options and futures positions also could have an adverse impact on the International Fixed Income Portfolio's ability to effectively hedge. The International Fixed Income Portfolio will attempt to minimize the risk that it will be unable to close out a futures contract by only entering into futures which are traded on national futures exchanges and for which there appears to be a liquid secondary market. There can be no assurance, however, that a liquid secondary market will exist for a particular futures contract at any given time. Successful use of futures by the International Fixed Income Portfolio also is subject to the Advisor's ability to predict correctly movements in the direction of the market. For example, if the Portfolio has hedged against the possibility of a decline in the market adversely affecting securities held by it and securities prices increase instead, the Portfolio will lose part or all of the benefit to the increased value of its securities which it has hedged because it will have approximately equal offsetting losses in its futures positions. In addition, in some situations, if the International Fixed Income Portfolio has insufficient cash, it may have to sell securities to meet daily variation margin requirements. Such sales of securities may be, but will not necessarily be, at increased prices which reflect the rising market. The International Fixed Income Portfolio may have to sell securities at a time when it may be disadvantageous to do so. The risk of loss in trading futures contracts in some strategies can be substantial, due both to the low margin deposits required, and the extremely high degree of leverage involved in futures pricing. As a result, a relatively small price movement in a futures contract may result in immediate and substantial loss (as well as gain) to the investor. For example, if at the time of purchase, 10% of the value of the futures contract is deposited as margin, a subsequent 10% decrease in the value of the futures contract would result in a total loss of the margin deposit, before any deduction for the transaction -5- costs, if the account were then closed out. A 15% decrease would result in a loss equal to 150% of the original margin deposit, before any deduction for the transaction costs, if the contract were closed out. Thus, a purchase or sale of a futures contract may result in losses in excess of the amount invested in the contract. Utilization of futures transactions by the International Fixed Income Portfolio involves the risk of imperfect or no correlation where the securities underlying futures contracts have different maturities than the portfolio securities being hedged. It is also possible that the International Fixed Income Portfolio could both lose money on futures contracts and also experience a decline in value of its portfolio securities. There is also the risk of loss by the International Fixed Income Portfolio of margin deposits in the event of bankruptcy of a broker with whom the Portfolio has an open position in a futures contract or related option. Most futures exchanges limit the amount of fluctuation permitted in futures contract prices during a single trading day. The daily limit establishes the maximum amount that the price of a futures contract may vary either up or down from the previous day's settlement price at the end of a trading session. Once the daily limit has been reached in a particular type of contract, no trades may be made on that day at a price beyond that limit. The daily limit governs only price movement during a particular trading day and therefore does not limit potential losses, because the limit may prevent the liquidation of unfavorable positions. Futures contract prices have occasionally moved to the daily limit for several consecutive trading days with little or no trading, thereby preventing prompt liquidation of futures positions and subjecting some futures traders to substantial losses. The trading of futures contracts is also subject to the risk of trading halts, suspensions, exchange or clearing house equipment failures, government intervention, insolvency of a brokerage firm or clearing house or other disruptions of normal trading activity, which could at times make it difficult or impossible to liquidate existing positions or to recover excess variation margin payments. Forward Foreign Exchange Contracts A forward foreign currency exchange contract involves an obligation to purchase or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract as agreed by the parties, at a price set at the time of the contract. In the case of a cancelable forward contract, the holder has the unilateral right to cancel the contract at -6- maturity by paying a specified fee. The contracts are traded in the interbank market conducted directly between currency traders (usually large commercial banks) and their customers. A forward contract generally has no deposit requirement, and no commissions are charged at any stage for trades. A foreign currency futures contract is a standardized contract for the future delivery of a specified amount of a foreign currency at a future date at a price set at the time of the contract. Foreign currency futures contracts traded in the United States are designed by and traded on exchanges regulated by the CFTC such as the New York Mercantile Exchange. A Portfolio would enter into foreign currency futures contracts solely for hedging or other appropriate investment purposes as defined in CFTC regulations. Forward foreign currency exchange contracts differ from foreign currency futures contracts in certain respects. For example, the maturity date of a forward contract may be any fixed number of days from the date of the contract agreed upon by the parties, rather than a predetermined date in any given month. Forward contracts may be in any amounts agreed upon by the parties rather than predetermined amounts. Also, forward foreign exchange contracts are traded directly between currency traders so that no intermediary is required. A forward contract generally requires no margin or other deposit. At the maturity of a forward contract, a Portfolio may either accept or make delivery of the currency specified in the contract, or at or prior to maturity enter into a closing transaction involving the purchase or sale of an offsetting contract. Closing transactions with respect to forward contracts are usually effected with the currency trader who is a party to the original forward contract. Options Investments in options involve some of the same considerations that are involved in connection with investments in futures contracts (e.g., the existence of a liquid secondary market). In addition, the purchase of an option also entails the risk that changes in the value of the underlying security or contract will not be fully reflected in the value of the option purchased. Depending on the pricing of the option compared to either the futures contract upon which it is based, or upon the price of the securities being hedged, an option may or may not be less risky than ownership of the futures contract or such securities. In general, the market prices of options can be expected to be more volatile than the market prices on the underlying futures contract or securities. Over-the-counter options are considered illiquid. The International Fixed Income Portfolio may enter into options only if not more than 5% of the Portfolio's assets are required as premiums. -7- Fixed Income Options Call and Put Options. The International Fixed Income Portfolio will write call options and put options on a covered or secured basis only, and will not engage in option writing strategies for speculative purposes. The Portfolio may write covered call options and secured put options from time to time on such portion of its portfolio, without limit, as the Advisor determines is appropriate in seeking to obtain the Portfolio's investment objective. The Portfolio may also purchase call options and invest up to 20% of its total assets in the purchase of put options if, at the time of such purchase, the Portfolio owns the security covered by such put option. Covered Call Writing. A call option gives the purchaser of the option the right to buy, and the writer has the obligation to sell, the underlying security at the stated exercise price during the option period. During the option period, the covered call writer has, in return for the premium on the option, given up the opportunity for capital appreciation above the exercise price should the market price of the underlying security increase, but has retained the risk of loss should the price of the underlying security decline. The International Fixed Income Portfolio will write call options only on a covered basis, which means that the Portfolio owns or has the right to acquire the underlying security subject to a call option at all times during the option period. Options written by the Portfolio will normally have expiration dates between three and nine months from the date written. The exercise price of a call option may be below, equal to or above the market value of the underlying security at the time the option is written. During the option period, a covered call option writer may be required at any time to deliver the underlying security against payment of the exercise price. This obligation is terminated upon the expiration of the option period or at such earlier time in which the writer effects a closing purchase transaction. A closing purchase transaction cannot be effected with respect to an option once the option writer has received an exercise notice. Closing purchase transactions are ordinarily effected to realize a profit on an outstanding call option, to prevent an underlying security from being called, to permit the sale of the underlying security or to enable the International Fixed Income Portfolio to write another call option on the underlying security with either a different exercise price or expiration date or both. The Portfolio may realize a net gain or loss from a closing purchase transaction depending upon whether the amount of the premium received on the call option is more or less than the cost of effecting the closing purchase -8- transaction. Any loss incurred in a closing purchase transaction may be wholly or partially offset by unrealized appreciation in the market value of the underlying security. Conversely, a gain resulting from a closing purchase transaction, or upon expiration of an unexercised option, could be offset in whole or in part or exceeded by a decline in the market value of the underlying security. If a call option is exercised, the Portfolio realizes a gain or loss from the sale of the underlying security equal to the difference between the cost of the underlying security and the proceeds of the sale of the security plus the premium received for the option less the commission paid. The value of a call option generally reflects the market price of the underlying security. Other principal factors affecting the value include supply and demand, interest rates, the price volatility of the underlying security and the time remaining until the expiration date. Secured Put Writing. A put option gives the purchaser of the option the right to sell, and the writer has the obligation to buy, the underlying security at the stated exercise price during the option period. The put writer assumes the risk of loss should the market value of the underlying security decline below the exercise price of the option. During the option period the writer of a put option may be required at any time to make payment of the exercise price against delivery of the underlying security. The operation of put options in other respects is substantially identical to that of call options. The International Fixed Income Portfolio will write put options only on a secured basis, which means that the Portfolio will maintain in a segregated account with the custodian cash or securities in an amount not less than the exercise price of the option at all times during the option period. The Portfolio will generally write secured put options when it wishes to purchase the underlying security at a price lower than the current market price of the security. In such event the Portfolio would write a secured put option at an exercise price which, reduced by the premium received on the option, reflects the lower price it is willing to pay. The potential gain on a secured put option is limited to the premium received on the option (less the commissions paid on the transaction) while the potential loss equals the difference between the exercise price of the option and the market price of the underlying securities when the put is exercised, offset by the premium received (less the commissions paid on the transaction). Purchasing Call Options. The International Fixed Income Portfolio may purchase call options only (i) in a closing purchase transaction as described under "Options -- Fixed Income Options -- Covered Call Writing," (ii) to offset its obligation under an over-the-counter option which it has written, or (iii) -9- to offset the convexity risk of futures contracts. The option purchased in an offsetting transaction could be either a listed or over-the-counter option on the same securities and having the same terms as the outstanding option. An offsetting over-the-counter option generally would be acquired from a dealer or financial institution other than the holder of the over-the-counter option written by the Portfolio. The purchased option would be exercised or closed out prior to or at the same time as the option written. Purchasing Put Options. The International Fixed Income Portfolio may invest up to 20% of its total assets in the purchase of put options on securities. At all times during which it holds a put option, the Portfolio is required to own or have the right to acquire the security covered by such option. The Portfolio may purchase put options in order to protect against a decline in the market value of the underlying security below the exercise price less the premium paid for the option ("protective puts"). The authority to purchase put options allows the Portfolio to protect unrealized gain in an appreciated security in its portfolio without actually selling the security. The Portfolio may sell a put option which it has previously purchased prior to the sale of the securities underlying such option. Such a sale would result in a net gain or loss depending on whether the amount received on the sale is more or less than the premium and other transaction costs paid on the put option which is sold. Any such gain or loss could be offset in whole or part by a change in the market value of the underlying security. If a put option purchased by the Portfolio expired without being sold or exercised, the premium would be lost. Options on Interest Rate Futures Contracts. The International Fixed Income Portfolio may purchase and write call and put options on futures contracts which are traded on an exchange and enter into closing transactions with respect to such options to terminate an existing position. The writer of an option on a futures contract is required to deposit initial and variation margin pursuant to requirements similar to those applicable to futures contracts. Premiums received from the writing of an option are included in initial margin deposits. An option on a futures contract gives the purchaser the right, and the writer the obligation, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call and a short position if the option is a put) at a specified exercise price at any time during the term of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option is accompanied by delivery of the accumulated balance in the writer's futures margin account which represents the amount by which the market price of the futures contract at -10- the time of exercise exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the futures contract. The Portfolio may use options on futures contracts in connection with hedging strategies. Generally, these strategies are employed in a similar manner and under the same market conditions in which the Portfolio may use put and call options on securities. While hedging can provide protection against an adverse movement in interest rates, it can also preclude a hedger's opportunity to benefit from a favorable interest rate movement. In addition, investing in futures contracts and options on futures contracts causes the Portfolio to incur additional brokerage commissions, and may cause an increase in the Portfolio's portfolio turnover rate. Miscellaneous. The International Fixed Income Portfolio may write or purchase options which are listed on an exchange as well as option which are traded over-the-counter. The Portfolio may close out its position as writer of an option only if a liquid secondary market exists for options of that series, but there is no assurance that such a market will exist, particularly in the case of over-the-counter options, which can be closed out only with the other party to the transaction. The Portfolio may be able to purchase an offsetting option which does not close out its position as a writer but constitutes an asset of equal value to the obligation under the option written. If the Portfolio is not able to enter into a closing purchase transaction or to purchase an offsetting position, it will be required to maintain the securities subject to the call, or the collateral underlying the put, even though it might not be advantageous to do so, until a closing transaction can be entered into (or the option is exercised or expires). Securities Lending. Each Portfolio may lend its investment securities to qualified institutional investors who need to borrow securities in order to complete certain transactions, such as covering short sales, avoiding failures to deliver securities or completing arbitrage operations. By lending its investment securities, a Portfolio attempts to increase its income through the receipt of interest on the loan. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Portfolio. Each Portfolio may lend its investment securities to qualified brokers, dealers, domestic and foreign banks or other financial institutions, so long as the terms, the structure and the aggregate amount of such loans are not inconsistent with the Investment Company Act of 1940 (the "1940 Act") or the -11- rules and regulations or interpretations of the Securities and Exchange Commission (the "Commission") thereunder. The Company may, from time to time, pay negotiated fees in connection with the lending of securities. Interest Rate Transactions The International Fixed Income Portfolio may enter into interest rate swaps and the purchase or sale of related caps and floors transactions. The Portfolio expects to enter into these transactions primarily to preserve a return or spread on a particular investment or a portion of its portfolio, to protect against currency fluctuations, as a duration management technique or to protect against any increase in the price of securities the Portfolio anticipates purchasing at a later date. The Portfolio intends to use these transactions as hedges and not as speculative investments and will not sell interest rate caps or floors where it does not own securities or other instruments providing the income stream the Portfolio may be obligated to pay. Interest rate swaps involve the exchange by the Portfolio with another party of their respective commitments to pay or receive interest, e.g., an exchange of floating rate payments for fixed rate payments with respect to a notional amount of principal. A currency swap is an agreement to exchange cash flows on a notional amount of two or more currencies based on the relative value differential among them and an index swap is an agreement to swap cash flows on a notional amount based on changes in the values of the reference indices. The purchase of a cap entitles the purchaser to receive payments on a notional principal amount from the party selling such cap to the extent that a specified index exceeds a predetermined interest rate or amount. The purchase of a floor entitles the purchaser to receive payments on a notional principal amount from the party selling such floor to the extent that a specified index falls below a predetermined interest rate or amount. The Portfolio will usually enter into swaps on a net basis, i.e., the two payment streams are netted out in a cash settlement on the payment date or dates specified in the instrument, with the Portfolio receiving or paying, as the case may be, only the net amount of the two payments. Inasmuch as these swaps, caps or floors are entered into in good faith for hedging purposes, the Advisor and the Portfolio believe such obligations do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to its borrowing restrictions. The Portfolio will not enter into any swap, cap or floor transaction unless, at the time of entering into such transaction, the unsecured long-term debt of the counterparty, combined with any credit enhancements, is rated at least "A" by S&P or Moody's or has an equivalent rating from an NRSRO or is determined to be of equivalent credit quality by the Advisor. If there is a default by the counterparty, the Portfolio -12- may have contractual remedies pursuant to the agreements related to the transaction. The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid. Caps and floors are more recent innovations for which standardized documentation has not yet been fully developed and, accordingly, they are less liquid than swaps. With respect to swaps, the Portfolio will accrue the net amount of the excess, if any, of its obligations over its entitlements with respect to each swap on a daily basis and will segregate an amount of cash or liquid high grade securities having a value equal to the accrued excess. Caps and floors require segregation of assets with a value equal to the Portfolio's net obligation, if any. PURCHASE OF SHARES The purchase price of shares of each Portfolio is the net asset value next determined after receipt of the purchase order by the particular Fund. Each Portfolio reserves the right in its sole discretion (i) to suspend the offering of its shares, (ii) to reject purchase orders when in the judgment of management such rejection is in the best interest of the particular Fund, and (iii) to reduce or waive the minimum for initial and subsequent investments from time to time. REDEMPTION OF SHARES Each Portfolio may suspend redemption privileges or postpone the date of payment (i) during any period that the Exchange is closed, or trading on the Exchange is restricted as determined by the Commission, (ii) during any period when an emergency exists as defined by the rules of the Commission as a result of which it is not reasonably practicable for a Portfolio to dispose of securities owned by it, or fairly to determine the value of its assets, and (iii) for such other periods as the Commission may permit. No charge is made by any Portfolio for redemptions. Any redemption may be more or less than the shareholder's initial cost depending on the market value of the securities held by the Portfolio. SHAREHOLDER SERVICES Shareholders may transfer shares of the Portfolios to another person. An investor wishing to transfer shares should contact the Advisor. -13- PORTFOLIO TURNOVER The Portfolios will not normally engage in short-term trading, but reserve the right to do so. A high portfolio turnover rate can result in corresponding increases in brokerage commissions; however, the Advisor will not consider turnover rate a limiting factor in making investment decisions consistent with that Portfolio's investment objectives and policies. The Portfolios' portfolio turnover rates for each of the past fiscal years are set forth under "Financial Highlights" in the Funds' Prospectuses. Changes in the Portfolios' turnover rates were due to market fluctuations and investment opportunities. The Glenmede Fund anticipates a variation in the portfolio turnover rate for the Model Equity Portfolio from that reported for the Portfolio's most recent fiscal year due to the change in how that Portfolio seeks to achieve its investment objective. INVESTMENT LIMITATIONS Each Portfolio is subject to the following restrictions which are fundamental policies and may not be changed without the approval of the lesser of: (1) 67% of the voting securities of the affected Portfolio present at a meeting if the holders of more than 50% of the outstanding voting securities of the affected Portfolio are present or represented by proxy, or (2) more than 50% of the outstanding voting securities of the affected Portfolio. Each Portfolio will not: (1) invest in commodities or commodity contracts, except that each Portfolio may invest in futures contracts and options; (2) purchase or sell real estate, although it may purchase and sell securities of companies which deal in real estate and may purchase and sell securities which are secured by interests in real estate; (3) make loans, except (i) by purchasing bonds, debentures or similar obligations (including repurchase agreements, subject to the limitation described in investment limitation (9) below, and money market instruments, including bankers acceptances and commercial paper, and selling securities on a when issued, delayed settlement or forward delivery basis) which are publicly or privately distributed, and (ii) by lending its portfolio securities to banks, brokers, dealers and other financial institutions so long as such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the Commission thereunder; -14- (4) purchase on margin or sell short, except as specified above in investment limitation (1); (5) purchase more than 10% of any class of the outstanding voting securities of any issuer; (6) issue senior securities, except that a Portfolio may borrow money in accordance with investment limitation (7) below, purchase securities on a when issued, delayed settlement or forward delivery basis and enter into reverse repurchase agreements; (7) borrow money, except as a temporary measure for extraordinary or emergency purposes, and then not in excess of 10% of its total assets at the time of the borrowing (entering into reverse repurchase agreements and purchasing securities on a when issued, delayed settlement or forward delivery basis are not subject to this investment limitation); (8) pledge, mortgage, or hypothecate any of its assets to an extent greater than 10% of its total assets at fair market value, except as described in the Prospectus and this Statement of Additional Information and in connection with entering into futures contracts, but the deposit of assets in a segregated account in connection with the writing of covered put and call options and the purchase of securities on a when issued, delayed settlement or forward delivery basis and collateral arrangements with respect to initial or variation margin for futures contracts will not be deemed to be pledges of a Portfolio's assets or the purchase of any securities on margin for purposes of this investment limitation; (9) underwrite the securities of other issuers or invest more than an aggregate of 10% of the total assets of the Portfolio, at the time of purchase, in securities subject to legal or contractual restrictions on resale or securities for which there are no readily available markets, including repurchase agreements which have maturities of more than seven days; (10) invest for the purpose of exercising control over management of any company; (11) invest its assets in securities of any investment company, except in connection with mergers, acquisitions of assets or consolidations and except as may otherwise be permitted by the 1940 Act; -15- (12) acquire any securities of companies within one industry if, as a result of such acquisition, more than 25% of the value of the Portfolio's total assets would be invested in securities of companies within such industry; provided, however, that there shall be no limitation on the purchase of obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities, or instruments issued by U.S. banks; and (13) write or acquire options or interests in oil, gas or other mineral exploration or development programs. Each Portfolio, with the exception of the Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios, also will not: (1) with respect as to 75% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities). Although not a matter of fundamental policy, pursuant to Rule 2a-7 under the 1940 Act, the Government Cash Portfolio will limit its purchases of any one issuer's securities (other than U.S. Government Securities) to 5% of the Portfolio's total assets at the time of purchase, except that it may invest more than 5% (but no more than 25%) of its total assets in First Tier Securities of one issuer for a period of up to three business days. Each of the Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios is classified as a "non-diversified" investment company under the 1940 Act, which means the Portfolio is not limited by the 1940 Act in the proportion of its assets that it may invest in the securities of a single issuer. However, each Portfolio intends to conduct its operations so as to qualify as a "regulated investment company" for purposes of the Internal Revenue Code of 1986, as amended, which generally will relieve the Portfolio of any liability for federal income tax to the extent its earnings are distributed to shareholders. In order to qualify as a regulated investment company for federal income tax purposes, the Portfolio generally will limit its investments such that at the close of each quarter of the taxable year it will not, with respect to 50% of its total assets, invest more than 5% of its total assets at the time of purchase in the securities of any single issuer (other than obligations issued or guaranteed by the U.S. Government, its agencies, enterprises or instrumentalities). -16- If a percentage restriction is adhered to at the time an investment is made, a later increase in percentage resulting from a change in value or assets will not constitute a violation of such restriction. With regard to limitation (11), the 1940 Act currently prohibits an investment company from acquiring securities of another investment company if, as a result of the transaction, the acquiring company and any company or companies controlled by it would own in the aggregate: (i) more than 3% of the total outstanding voting stock of the acquired company, (ii) securities issued by the acquired company having an aggregate value in excess of 5% of the value of the total assets of the acquiring company, or (iii) securities issued by the acquired company and all other investment companies (other than treasury stock of the acquired company) having an aggregate value in excess of 10% of the value of the total assets of the acquiring company. In addition to the advisory fees and other expenses that a Portfolio bears directly in connection with its own operations, as a shareholder of another investment company, such Portfolio would bear its "pro rata" portion of the other investment company's advisory fees and other expenses. Therefore, to the extent that a Portfolio is invested in shares of other investment companies, such Portfolio's shareholders will be subject to expenses of such other investment companies, in addition to expenses of the Portfolio. As a matter of policy which may be changed by the particular Fund's Board without shareholder approval, with respect to limitation (12), Portfolios other than the Government Cash Portfolio and the Tax-Exempt Cash Portfolio will not invest more than 25% of the value of their respective total assets in instruments issued by U.S. banks. With regard to limitation (13), the purchase of securities of a corporation, a subsidiary of which has an interest in oil, gas or other mineral exploration or development programs shall not be deemed to be prohibited by the limitation. As stated in the Prospectuses, each of the Funds may make commitments with respect to a Portfolio that are more restrictive than the investment policies and limitations described above and in the Prospectuses in order to permit the sale of a Portfolio's shares in certain states. All these commitments may not appear in the Prospectuses or this SAI. To permit the sale of shares of the Equity, Small Capitalization Equity and International Portfolios in Texas, Glenmede Fund has made commitments that those Portfolios will not invest in oil, gas or mineral leases, or in real estate limited partnership interests that are not readily marketable, and will not lend portfolio securities unless collateral values are continuously maintained at no less than 100% by "marking to market" daily and the practice is fair, just and equitable as determined by a finding -17- that adequate provision has been made for margin calls, termination of the loan, reasonable servicing fees (including finders' fees), voting rights, dividend rights, shareholder approval and disclosure, and the loan is within the limitations approved by the SEC. Should Glenmede Fund determine that any of these commitments is no longer in the best interests of the particular Portfolio, it will revoke that commitment by terminating sales of the Portfolio's shares in Texas and giving notice of such action to investors in Texas. MANAGEMENT OF THE FUNDS Each Fund's officers, under the supervision of the particular Board, manage the day-to-day operations of the Fund. The Board members set broad policies for each Fund and choose its officers. A list of the Board members and officers and a brief statement of their current positions and principal occupations during the past five years is set forth in the Funds' Prospectuses. Remuneration of Board Members Glenmede Fund pays each Board member, other than Mr. Church, an annual fee of $6,000 plus $1,250 for each Board meeting attended and out-of-pocket expenses incurred in attending Board meetings. Glenmede Portfolios pays each Board member, other than Mr. Church, an annual fee of $1,000 per year and -18- out-of-pocket expenses incurred in attending Board meetings. Officers of the Funds receive no compensation as officers from the Funds. Set forth in the table below is the compensation received by Board members for the fiscal year ended October 31, 1995.
Pension or Aggregate Aggregate Retirement Compensation Compensation Benefits Estimated Total Annual from from Part of Benefits Compensation Name of Glenmede Glenmede the Funds' Upon from the Person, Position Fund Portfolios Expense Retirement Funds - ------------------------------ ------------ ------------- ----------- ----------- --------------- Dr. H. Franklin Allen, Ph.D., $______ $______ None None $______ Director/Trustee Willard S. Boothby, Jr., $______ $______ None None $______ Director/Trustee John W. Church, Jr. $______ None None None None Director/Trustee Francis J. Palamara, $______ $______ None None $______ Director/Trustee G. Thompson Pew, Jr., $_______ $______ None None $______ Director/Trustee
INVESTMENT ADVISORY AND OTHER SERVICES The Advisor, The Glenmede Trust Company, is the wholly-owned subsidiary of The Glenmede Corporation (the "Corporation") whose shares are closely held by 63 shareholders. The Corporation has a nine person Board of Directors which, at November 30, 1995, collectively, owned 98.67% of the Corporation's voting shares and 41.96% of the Corporation's total outstanding shares. The members of the Board and their respective interests in the Corporation at November 30, 1995 are as follows: The Glenmede Corporation Percent of Percent of Board of Directors Voting Shares Total Shares - ------------------------ ------------- ------------ Susan W. Catherwood.................. 10.83% 1.23% Robert G. Dunlop..................... 10.83% 5.16% Thomas W. Langfitt, M.D.............. 11.07% 7.86% Robert E. McDonald................... 10.83% 1.16% J. Howard Pew, II.................... 10.83% 1.45% J. N. Pew, III....................... 11.07% 5.66% J. N. Pew, IV........................ 11.07% 1.44% R. Anderson Pew...................... 11.07% 6.20% Ethel Benson Wister.................. 11.07% 11.80% ====== ====== 98.67% 41.96% -19- As noted in the Prospectus, the Advisor does not receive any fee from the Portfolios for its investment services. However, all shareholders in the Portfolios are clients of the Advisor or an Affiliate and, as clients, pay fees which vary depending on the capacity in which the Advisor or Affiliate provides fiduciary and investment services to the particular client. Such services may include personal trust, estate settlement, advisory and custodian services. For example, for advisory services, the Advisor charges its clients up to 1% on the first $1 million of principal, .60% on the next $1 million of principal, .50% on the next $3 million of principal and .40% on the next $5 million of principal, with a minimum annual fee of $10,000. For accounts in excess of $10 million of principal, the fee would be determined by special analysis. Since July 1, 1995, administrative, transfer agency and dividend paying services have been provided to each of the Funds by ICC, pursuant to a Master Services Agreement between each of the Funds and ICC. See "Administrative, Transfer Agency and Dividend Paying Services" in the Prospectuses for information concerning the substantive provisions of each Master Services Agreement. For the period July 1, 1995 to October 31, 1995, the Funds paid ICC fees of $____ for the Government Cash Portfolio, $_____ for the Tax-Exempt Cash Portfolio, $_____ for the Intermediate Government Portfolio, $_____ for the International Portfolio, $_____ for the Equity Portfolio, $_____ for the Small Capitalization Equity Portfolio, $_____ for the International Fixed Income Portfolio, $_____ for the Model Equity Portfolio, $_____ for the Muni Intermediate Portfolio and $_____ for the New Jersey Muni Portfolio. From May 6, 1994 to June 30, 1995, administrative services were provided to each Fund by The Shareholder Services Group, Inc. ("TSSG"), pursuant to Administration Agreements. For the period November 1, 1994 to June 30, 1995, the Funds paid TSSG administrative fees of $________ for the Government Cash Portfolio, $_____ for the Tax-Exempt Cash Portfolio, $_______ for the Intermediate Government Portfolio, $________ for the International Portfolio, $_______ for the Equity Portfolio, $______ for the Small Capitalization Equity Portfolio, $________ for the International Fixed Income Portfolio, $________ for the Model Equity Portfolio, $________ for the Muni Intermediate Portfolio and $_______ for the New Jersey Muni Portfolio. For the period May 6, 1994 through October 31, 1994, the Funds paid TSSG administrative fees of $138,505 for the Government Cash Portfolio, $96,424 for the Tax-Exempt Cash Portfolio, $166,354 for the Intermediate Government Portfolio, $126,733 for the International Portfolio, $28,783 for the Equity Portfolio, $44,272 for the Small Capitalization Equity Portfolio, $7,491 for the International Fixed Income Portfolio, $9,019 for the Model Equity Portfolio, $13,154 for the Muni Intermediate Portfolio and $1,858 for the New Jersey Muni Portfolio. -20- Prior to May 6, 1994, The Boston Company Advisors, Inc. ("Boston Advisors"), an indirect wholly owned subsidiary of Mellon Bank Corporation, served as the Funds' administrator. For the period November 1, 1993 to May 5, 1994, the Funds paid fees to Boston Advisors of $106,343 for the Government Cash Portfolio, $63,862 for the Tax-Exempt Cash Portfolio, $236,483 for the Intermediate Government Portfolio, $108,217 for the International Portfolio, $23,504 for the Equity Portfolio, $35,777 for the Small Capitalization Equity Portfolio, $7,150 for the International Fixed Income Portfolio, $7,061 for the Model Equity Portfolio, $37,283 for the Muni Intermediate Portfolio and $1,378 for the New Jersey Muni Portfolio. For the fiscal year ended October 31, 1993, the Funds paid fees to Boston Advisors of $193,797 for the Government Cash Portfolio, $115,854 for the Tax-Exempt Cash Portfolio, $447,870 for the Intermediate Government Portfolio, $176,538 for the International Portfolio, $29,773 for the Equity Portfolio and $48,198 for the Small Capitalization Equity Portfolio and $65,070 for the Muni Intermediate Portfolio, and for the period November 2, 1992 (commencement of operations) to October 31, 1993, $13,347 for the International Fixed Income Portfolio and for the period December 31, 1992 (commencement of operations) to October 31, 1993, $8,588 for the Model Equity Portfolio. As described more fully in the Prospectuses, the Advisor provides shareholder support services to their clients who beneficially own shares of the Portfolios pursuant to a Shareholder Servicing Agreement ("Agreement") with each of the Funds. For the period January 1, 1995 to October 31, 1995, the Government Cash, Tax-Exempt Cash, Intermediate Government , Muni Intermediate, New Jersey Muni, International Fixed Income, Equity, International, Small Capitalization Equity and Model Equity Portfolios had servicing fees payable to the Advisor of $____, $_____, $____, $_____, $_____, $_____, $_____, $_____, $_____, and $_____, respectively. Custody services are provided to each Portfolio by The Chase Manhattan Bank, N.A., Brooklyn, New York. DISTRIBUTOR Shares of each Fund are distributed continuously and are offered without a sales load by Armata, pursuant to a Distribution Agreement between each Fund and Armata. Armata receives no fee from the Funds for its distribution services. The Funds bear their own expenses incurred in their operations including: taxes; interest; miscellaneous fees (including fees paid to their Board members); Securities and Exchange Commission fees; costs of preparing and printing prospectuses for regulatory purposes and for distribution to -21- existing shareholders; administration fees; charges of the custodian, dividend agent fees; certain insurance premiums; outside auditing and legal expenses; costs of shareholders' reports and shareholder meetings; and any extraordinary expenses. Each Portfolio also pays for brokerage fees and commissions, if any, in connection with the purchase and sale of its portfolio securities. PORTFOLIO TRANSACTIONS The Investment Advisory Agreements authorize the Advisor to select the brokers or dealers that will execute the purchases and sales of investment securities for each of the Portfolios and direct the Advisor to use its best efforts to obtain the best available price and most favorable execution with respect to all transactions for the Portfolios. The Advisor may, however, consistent with the interests of a Portfolio, select brokers on the basis of the research, statistical and pricing services they provide to a Portfolio. Information and research received from such brokers will be in addition to, and not in lieu of, the services required to be performed by the Advisor under the Investment Advisory Agreements. A commission paid to such brokers may be higher than that which another qualified broker would have charged for effecting the same transaction, provided that such commissions are paid in compliance with the Securities Exchange Act of 1934, as amended, and that the Advisor determines in good faith that such commission is reasonable in terms either of the transaction or the overall responsibility of the Advisor to a Portfolio and the Advisor's other clients. For the Funds' fiscal year ended October 31, 1995, however, no brokers were selected by the Advisor on the basis of research, statistical and pricing services provided to a Portfolio. During the fiscal year ended October 31, 1995, the Equity, International and Small Capitalization Equity Portfolios paid $______, $______ and $______ in brokerage commissions, respectively. During the fiscal year ended October 31, 1994, the Equity, International, Small Capitalization Equity and Model Equity Portfolios paid $212,177, $617,512, $180,822 and $212,005 in brokerage commissions, respectively. During the fiscal year ended October 31, 1993, the Equity, International, Small Capitalization Equity and Model Equity Portfolios paid $88,965, $401,382, $102,071 and $115,654 in brokerage commissions, respectively. The Government Cash, Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios do not currently expect to incur any brokerage commission expense on transactions in their portfolio securities because debt instruments are generally traded on a "net" basis with dealers acting as principal for their own accounts without a stated commission. -22- The price of the security, however, usually includes a profit to the dealer. Because shares of the Portfolios are not marketed through intermediary brokers or dealers, it is not the Funds' practice to allocate brokerage or effect principal transactions with dealers on the basis of sales of shares which may be made through such firms. However, the Advisor may place portfolio orders with qualified broker-dealers who refer clients to the Advisor. Some securities considered for investment by each Portfolio may also be appropriate for other clients served by the Advisor. If purchase or sale of securities is consistent with the investment policies of a Portfolio and one or more of these other clients served by the Advisor and is considered at or about the same time, transactions in such securities will be allocated among the Portfolio and clients in a manner deemed fair and reasonable by the Advisor. While in some cases this practice could have a detrimental effect on the price, value or quantity of the security as far as a Portfolio is concerned, in other cases it is believed to be beneficial to the Portfolios. ADDITIONAL INFORMATION CONCERNING TAXES General. The following summarizes certain additional tax considerations generally affecting the Portfolios and their shareholders that are not described in the Prospectus. No attempt is made to present a detailed explanation of the tax treatment of the Portfolios or their shareholders, and the discussion here and in the Prospectus is not intended as a substitute for careful tax planning. Potential investors should consult their tax advisers with specific reference to their own tax situation. Each Portfolio is treated as a separate corporate entity under the Internal Revenue Code of 1986, as amended (the "Code"), and intends to qualify as a regulated investment company. Qualification as a regulated investment company under the Code requires, among other things, that each Portfolio distribute to its shareholders an amount equal to at least the sum of 90% of its investment company taxable income and 90% of its tax-exempt income (if any) net of certain deductions for a taxable year. In addition, each Portfolio must satisfy certain requirements with respect to the source of its income for a taxable year. At least 90% of the gross income of each Portfolio must be derived from dividends, interest, payments with respect to securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, and other income (including, but not limited to, gains from options, futures, or forward contracts) derived with respect to the Portfolio's business of investing in such stock, securities or currencies. The Treasury Department may by regulation exclude from qualifying income foreign currency gains -23- which are not directly related to a Portfolio's principal business of investing in stock or securities, or options and futures with respect to stock or securities. Any income derived by a Portfolio from a partnership or trust is treated for this purpose as derived with respect to the Portfolio's business of investing in stock, securities or currencies only to the extent that such income is attributable to items of income which would have been qualifying income if realized by the Portfolio in the same manner as by the partnership or trust. A Portfolio will not be treated as a regulated investment Company under the Code if 30% or more of the Portfolio's gross income for a taxable year is derived from gains realized on the sale or other disposition of the following investments held for less than three months: (1) stock and securities (as defined in section 2(a)(36) of the 1940 Act); (2) options, futures and forward contracts other than those on foreign currencies; and (3) foreign currencies (and options, futures and forward contracts on foreign currencies) that are not directly related to a Portfolio's principal business of investing in stock and securities (and options and futures with respect to stocks and securities). Interest (including original issue discount and accrued market discount) received by a Portfolio upon maturity or disposition of a security held for less than three months will not be treated as gross income derived from the sale or other disposition of such security within the meaning of this requirement. However, income which is attributable to realized market appreciation will be treated as gross income from the sale or other disposition of securities for this purpose. With respect to covered call options, if the call is exercised by the holder, the premium and the price received on exercise constitute the proceeds of sale, and the difference between the proceeds and the cost of the securities subject to the call is capital gain or loss. Premiums from expired call options written by a Portfolio and net gains from closing purchase transactions are treated as short-term capital gains for Federal income tax purposes, and losses on closing purchase transactions are short-term capital losses. Any distribution of the excess of net long-term capital gain over net short-term capital loss is taxable to a shareholder as long-term capital gain, regardless of how long the shareholder has held the distributing Portfolio's shares and whether such distribution is received in cash or additional Portfolio shares. Each Portfolio will designate such distributions as capital gain dividends in a written notice mailed to shareholders within 60 days after the close of the Portfolio's taxable year. Shareholders should note that, upon the sale or exchange of Portfolio shares, if the shareholder has not held such shares for more than six months, any loss on the sale or exchange of those shares will be treated as long-term capital loss to the extent of the capital gain dividends received with respect to the shares. -24- An individual's net capital gains are taxable at a maximum effective rate of 28%. Ordinary income of individuals is taxable at a maximum nominal rate of 39.6%, but because of limitations on itemized deductions otherwise allowable and the phase-out of personal exemptions, the maximum effective marginal rate of tax for some taxpayers may be higher. For corporations, long-term capital gains and ordinary income are both taxable at a maximum nominal rate of 35% (although surtax provisions apply at certain income levels to result in effective marginal rates as high as 39%). If for any taxable year a Portfolio does not qualify for the special Federal income tax treatment afforded regulated investment companies, all of its taxable income will be subject to Federal income tax at regular corporate rates (without any deduction for distributions to its shareholders). In such event, dividend distributions (including amounts derived from interest on tax-exempt obligations in the case of the Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios) would be taxable as ordinary income to shareholders to the extent of the Portfolio's current and accumulated earnings and profits, and would be eligible for the dividends received deduction for corporations. Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios. As described in the Prospectus, these Portfolios are designed to provide investors with current tax-exempt interest income. Shares of the Portfolios would not be suitable for tax-exempt institutions and may not be suitable for retirement plans qualified under Section 401 of the Code, H.R. 10 plans and individual retirement accounts since such plans and accounts are generally tax-exempt and, therefore, would not only fail to gain any additional benefit from each such Portfolio's dividends being tax-exempt, but such dividends would be ultimately taxable to the beneficiaries when distributed to them. In addition, the Portfolios may not be an appropriate investment for entities which are "substantial users" of facilities financed by private activity bonds or "related persons" thereof. "Substantial user" is defined under U.S. Treasury Regulations to include a non-exempt person who regularly uses a part of such facilities in his trade or business and whose gross revenues derived with respect to the facilities financed by the issuance of bonds are more than 5% of the total revenues derived by all users of such facilities, who occupies more than 5% of the usable area of such facilities or for whom such facilities or a part thereof were specifically constructed, reconstructed or acquired. "Related persons" include certain related natural persons, affiliated corporations, a partnership and its partners and an S corporation and its shareholders. The percentage of total dividends paid by each Portfolio with respect to any taxable year which qualify as Federal exempt-interest dividends will be -25- the same for all shareholders receiving dividends for such year. In order for each Portfolio to pay exempt-interest dividends with respect to any taxable year, at the close of each quarter of its taxable year at least 50% of the aggregate value of each Portfolio's assets must consist of exempt-interest obligations. After the close of its taxable year, each Portfolio will notify its shareholders of the portion of the dividends paid by it which constitutes an exempt- interest dividend with respect to such year. However, the aggregate amount of dividends so designated by each Portfolio cannot exceed the excess of the amount of interest exempt from tax under Section 103 of the Code received by the particular Portfolio for the taxable year over any amounts disallowed as deductions under Sections 265 and 171(a)(2) of the Code. Interest on indebtedness incurred by a shareholder to purchase or carry such a Portfolio's shares generally is not deductible for Federal income tax purposes if the Portfolio distributes exempt-interest dividends during the shareholder's taxable year. While each Portfolio will seek to invest substantially all of its assets in tax-exempt obligations (except on a temporary basis or for temporary defensive periods), any investment company taxable income earned by a Portfolio will be distributed. In general, each Portfolio's investment company taxable income will be its taxable income (including taxable interest received from temporary investments and any net short-term capital gains realized by a Portfolio) subject to certain adjustments and excluding the excess of any net long-term capital gains for the taxable year over the net short-term capital loss, if any, for such year. Federal Taxation of Certain Financial Instruments. Generally, futures contracts held by the International Fixed Income Portfolio at the close of the Fund's taxable year will be treated for Federal income tax purposes as sold for their fair market value on the last business day of such year, a process known as "mark-to-market." Forty percent of any gain or loss resulting from such constructive sale will be treated as short-term capital gain or loss and 60% of such gain or loss will be treated as long-term capital gain or loss without regard to the length of time the Portfolio holds the futures contract ("the 40%-60% rule"). The amount of any capital gain or loss actually realized by the Portfolio in a subsequent sale or other disposition of those futures contracts will be adjusted to reflect any capital gain or loss taken into account by the Portfolio in a prior year as a result of the constructive sale of the contracts. With respect to futures contracts to sell, which will be regarded as parts of a "mixed straddle" because their values fluctuate inversely to the values of specific securities held by the Portfolio, losses as to such contracts to sell -26- will be subject to certain loss deferral rules which limit the amount of loss currently deductible on either part of the straddle to the amount thereof which exceeds the unrecognized gain (if any) with respect to the other part of the straddle, and to certain wash sales regulations. Under short sales rules, which will also be applicable, the holding period of the securities forming part of the straddle will (if they have not been held for the long term holding period) be deemed not to begin prior to termination of the straddle. With respect to certain futures contracts, deductions for interest and carrying charges will not be allowed. Notwithstanding the rules described above, with respect to futures contracts to sell which are properly identified as such, the International Fixed Income Portfolio may make an election which will exempt (in whole or in part) those identified futures contracts from being treated for Federal income tax purposes as sold on the last business day of the Fund's taxable year, but gains and losses will be subject to such short sales, wash sales and loss deferral rules and the requirement to capitalize interest and carrying charges. Under Temporary Regulations, the International Fixed Income Portfolio would be allowed (in lieu of the foregoing) to elect either (1) to offset gains or losses from positions which are part of a mixed straddle by separately identifying each mixed straddle to which such treatment applies, or (2) to establish a mixed straddle account for which gains and losses would be recognized and offset on a periodic basis during the taxable year. Under either election, the 40%-60% rule will apply to the net gain or loss attributable to the futures contracts, but in the case of a mixed straddle account election, no more than 50% of any net gain may be treated as long term and no more than 40% of any net loss may be treated as short term. Options on futures contracts generally receive Federal tax treatment similar to that described above. Certain foreign currency contracts entered into by the International or International Fixed Income Portfolios may be subject to the "mark-to-market" process and the 40%-60% rule in a manner similar to that described in the preceding paragraph for futures contracts. To receive such Federal income tax treatment, a foreign currency contract must meet the following conditions: (1) the contract must require delivery of a foreign currency of a type in which regulated futures contracts are traded or upon which the settlement value of the contract depends; (2) the contract must be entered into at arm's length at a price determined by reference to the price in the interbank market; and (3) the contract must be traded in the interbank market. The Treasury Department has broad authority to issue regulations under the provisions respecting foreign currency contracts. As of the date of this Statement of Additional Information, the Treasury has not issued any such regulations. Other foreign currency contracts entered into by the International or International Fixed Income Portfolio may result in the creation of one or more straddles for Federal income tax purposes, in which case certain loss deferral, short sales, and wash sales -27- rules and the requirement to capitalize interest and carrying charges may apply. As described more fully above, in order to qualify as a regulated investment company under the Code a Portfolio must derive less than 30% of its gross income from the sale or other disposition of securities and certain other investments held for less than three months. With respect to futures contracts and other financial instruments subject to the mark-to-market rules, the Internal Revenue Service has ruled in private letter rulings that a gain realized from such a futures contract or financial instrument will be treated as being derived from a security held for three months or more (regardless of the actual period for which the contract or instrument is held) if the gain arises as a result of a constructive sale under the mark-to-market rules, and will be treated as being derived from a security held for less than three months only if the contract or instrument is terminated (or transferred) during the taxable year (other than by reason of mark-to-market) and less than three months have elapsed between the date the contract or instrument is acquired and the termination date. In determining whether the 30% test is met for a taxable year, increases and decreases in the value of a Portfolio's futures contracts and other investments that qualify as part of a "designated hedge," as defined in the Code, may be netted. Special rules govern the Federal income tax treatment of certain transactions denominated in terms of a currency other than the U.S. dollar or determined by reference to the value of one or more currencies other than the U.S. dollar. The types of transactions covered by the special rules include the following: (i) the acquisition of, or becoming the obligor under, a bond or other debt instrument (including, to the extent provided in Treasury regulations, preferred stock); (ii) the accruing of certain trade receivables and payables; and (iii) the entering into or acquisition of any forward contract, futures contract, option and similar financial instrument if such instrument is not marked to market. The disposition of a currency other than the U.S. dollar by a U.S. taxpayer is also treated as a transaction subject to the special currency rules. However, foreign currency-related regulated futures contracts and non-equity options are generally not subject to the special currency rules if they are or would be treated as sold for their fair market value at year-end under the mark-to-market rules, unless an election is made to have such currency rules apply. With respect to transactions covered by the special rules, foreign currency gain or loss is calculated separately from any gain or loss on the underlying transaction and is normally taxable as ordinary gain or loss. A taxpayer may elect to treat as capital gain or loss foreign currency gain or loss arising from certain identified forward contracts, futures contracts and options that are capital assets in the hands of the taxpayer and -28- which are not part of a straddle. In accordance with Treasury regulations under which certain transactions that are part of a "section 988 hedging transaction" (as defined in the Code and the Treasury regulations) will be integrated and treated as a single transaction or otherwise treated consistently for purposes of the Code. Any gain or loss attributable to the foreign currency component of a transaction engaged in by a Portfolio which is not subject to the special currency rules (such as foreign equity investments other than certain preferred stocks) will be treated as capital gain or loss and will not be segregated from the gain or loss on the underlying transaction. It is anticipated that some of the non-U.S. dollar denominated investments and foreign currency contracts the International and International Fixed Income Portfolios may make or enter into will be subject to the special currency rules described above. Special Considerations Regarding Investment In Pennsylvania Municipal Obligations. The concentration of investments in Pennsylvania Municipal Obligations by the Muni Intermediate Portfolio raises special investment considerations. In particular, changes in the economic condition and governmental policies of the Commonwealth of Pennsylvania and its municipalities could adversely affect the value of the Portfolio and its portfolio securities. This section briefly describes current economic trends in Pennsylvania. Pennsylvania has historically been dependent on heavy industry although recent declines in the coal, steel and railroad industries have led to diversification of the Commonwealth's economy. Recent sources of economic growth in Pennsylvania are in the service sector, including trade, medical and health services, education and financial institutions. Agriculture continues to be an important component of the Commonwealth's economic structure, with nearly one-third of the Commonwealth's total land area devoted to cropland, pasture and farm woodlands. The population of Pennsylvania experienced a slight increase in the period 1980 through 1990 and has a high proportion of persons 65 or older. The Commonwealth is highly urbanized, with almost 85% of the 1980 census population residing in metropolitan statistical areas. The two largest metropolitan statistical areas, those containing the Cities of Philadelphia and Pittsburgh, together comprise approximately 50% of the Commonwealth's total population. -29- The Commonwealth utilizes the fund method of accounting and over 120 funds have been established for purposes of recording receipts and disbursements of the Commonwealth, of which the General Fund is the largest. Most of the Commonwealth's operating and administrative expenses are payable from the General Fund. The major tax sources for the General Fund are the sales tax (33.7% of General Fund revenues in fiscal 1994), the personal income tax (32% of General Fund revenues in fiscal 1994) and the corporate net income tax (10.2% of General Fund revenues in fiscal 1994). Major expenditures of the Commonwealth include funding for education (42.5% of total fiscal 1994 expenditures), public health and welfare (34.5% of the fiscal 1994 expenditures), transportation, and economic development. The constitution of the Commonwealth provides that operating budget appropriations of the Commonwealth may not exceed the estimated revenues and available surplus in the fiscal year for which funds are appropriated. Annual budgets are enacted for the General Fund and for certain special revenue funds which together represent the majority of expenditures of the Commonwealth. The Commonwealth reported a positive unreserved/undesignated fund balance in its governmental fund types applying generally accepted accounting principles ("GAAP") at the end of each fiscal year (ending June 30) from fiscal 1984, when its financial statements were first prepared on a basis consistent with GAAP, through fiscal 1989, and the General Fund recorded revenues and other sources in excess of expenditures and other uses for each fiscal year from 1985 through 1989 (except for fiscal 1988 in which a decline in fund equity of $246.7 million occurred). Although the balance in the General Fund of the Commonwealth (the principal operating fund of the Commonwealth) declined to a zero balance at the close of fiscal 1989, and a negative balance was experienced in fiscal 1990 and 1991, tax increases and spending decreases helped return the General Fund balance to a surplus at June 30, 1992 of $87.5 million and at June 30, 1993 of $698.9 million. The deficit in the Commonwealth's unreserved/undesignated funds of prior years was also reversed to a surplus of $64.4 million as of June 30, 1993. Current constitutional provisions permit the Commonwealth to issue the following types of debt: (i) electorate approved debt, (ii) debt for capital projects subject to an aggregate debt limit of 1.75 times the annual average tax revenues of the preceding five fiscal years, (iii) tax anticipation notes payable in the fiscal year of issuance and (iv) debt to suppress insurrection or rehabilitate areas affected by disaster. General obligation debt totaled $5,075.8 million at June 30, 1994. Certain state-created agencies issue debt supported by assets of, or revenues derived from, the various projects financed and the debt of such agencies is not an obligation of the Commonwealth although some of the agencies are indirectly dependent on Commonwealth appropriations. -30- Certain litigation is pending against the Commonwealth that could adversely affect the ability of the Commonwealth to pay debt service on its obligations including suits relating to the following matters: (a) the ACLU has filed suit in federal court demanding additional funding for child welfare services; the Commonwealth settled a similar suit in the Commonwealth Court of Pennsylvania and is seeking the dismissal of the federal suit, inter alia, because of that settlement. The District Court has denied class certification to the ACLU, and the parties have stipulated to a judgment against the plaintiffs to allow plaintiffs to appeal the denial of class certification to the Third Circuit (no available estimates of potential liability); (b) in 1987, the Supreme Court of Pennsylvania held that the statutory scheme for county funding of the judicial system to be in conflict with the constitution of the Commonwealth, but stayed judgment pending enactment by the legislature of funding consistent with the opinion and the legislature has yet to consider legislation implementing the judgment; in 1992, a new action in mandamus was filed seeking to compel the Commonwealth to comply with the original decision; (c) several banks have filed suit against the Commonwealth contesting the constitutionality of a law enacted in 1989 imposing a bank shares tax; in July 1994, the Commonwealth Court en banc upheld the constitutionality of the 1989 bank shares tax law, but struck down a companion law to provide credits against the bank shares tax for new banks; cross-appeals from that decision to the Pennsylvania Supreme Court have been filed; (d) litigation has been filed in both state and federal court by an association of rural and small schools and several individual school districts and parents challenging the constitutionality of the Commonwealth's system for funding local school districts -- the federal case has been stayed pending resolution of the state case and the state case is in the pre-trial stage (no available estimate of potential liability); (e) the ACLU has brought a class action on behalf of inmates challenging the conditions of confinement in thirteen of the Commonwealth's correctional institutions; a proposal settlement agreement has been submitted to the court and members of the class for their review (no available estimate of potential cost of complying with the injunction sought but capital and personnel costs might amount to millions of dollars); (f) a consortium of public interest law firms has filed a class action suit alleging that the Commonwealth has not complied with a federal mandate to provide screening, diagnostic and treatment services for all Medicaid- eligible children under 21; the District Court denied class certification, and the parties have submitted a tentative settlement agreement to the court for approval; and (g) litigation has been filed in federal court by the Pennsylvania Medical Society seeking payment of the full co-pay and deductible in excess of the maximum fees set under the Commonwealth's medical assistance program for outpatient services provided to medical assistance patients who also are eligible for Medicare; -31- the Commonwealth received a favorable decision in the federal district court, but the Pennsylvania Medical Society won a reversal in the federal circuit court (potential liability estimated at $50 million per year). Local government units in the Commonwealth of Pennsylvania (which include, among other things, counties, cities, boroughs, towns, townships, school districts and other municipally created units such as industrial development authorities and municipality authorities, including water and sewer authorities) are permitted to issue debt for capital projects: (i) in any amount so long as the debt has been approved by the voters of the local government unit; or (ii) without electoral approval if the aggregate outstanding principal amount of debt of the local government unit is not in excess of 100% of its borrowing base (in the case of a school district of the first class), 300% of its borrowing base (in the case of a county) or 250% of its borrowing base (in the case of all other local government units); or (iii) without electoral approval and without regard to the limit described in (ii) in any amount in the case of certain subsidized debt and self-liquidating debt (defined to be debt with no claim on taxing power, secured solely by revenues from a specific source which have been projected to be sufficient to pay debt service on the related debt). Lease rental debt may also be issued, in which case the total debt limits described in section (ii) (taking into account all existing lease rental debt in addition to all other debt) are increased. The borrowing base for a local government unit is the average of total revenues for the three fiscal years preceding the borrowing. The risk of investing in debt issued by any particular local government unit depends, in the case of general obligation bonds secured by tax revenues, on the credit-worthiness of that issuer or, in the case of revenue bonds, on the revenue producing ability of the project being financed, and not directly on the credit-worthiness of the Commonwealth of Pennsylvania as a whole. The City of Philadelphia (the "City") has been experiencing severe financial difficulties which has impaired its access to public credit markets and a long-term solution to the City's financial crisis is still being sought. The City experienced a series of General Fund deficits for Fiscal Years 1988 through 1992. The City has no legal authority to issue deficit reduction bonds on its own behalf, but state legislation has been enacted to create an Intergovernmental Cooperation Authority (the "Authority") to provide fiscal oversight for Pennsylvania cities (primarily Philadelphia) suffering recurring financial difficulties. The Authority is broadly empowered to assist cities in avoiding defaults and eliminating deficits by encouraging the adoption of sound budgetary practices and issuing bonds. In order for the Authority to issue bonds on behalf of the City, the City and the Authority entered into an intergovernmental cooperative agreement providing the Authority -32- with certain oversight powers with respect to the fiscal affairs of the City. The Authority approved the latest update of the City's five-year financial plan on May 2, 1994. The City has reported a surplus of approximately $15 million for the fiscal year ending June 30, 1994. In June 1992, the Authority issued $474,555,000 in bonds to liquidate the City's deficit balance in its general fund. Since then the Authority has issued an additional $944,125 in bonds to refund certain general obligation bonds of the City and to fund additional capital projects. The Authority's power to issue debt for a capital project or deficit expired on December 31, 1994, but its power to issue debt to finance a cash flow deficit extends until December 31, 1996. The foregoing information as to certain Pennsylvania risk factors constitutes only a brief summary, does not purport to be a complete description of Pennsylvania risk factors and is principally drawn from official statements relating to securities offerings of the Commonwealth of Pennsylvania that have come to the Funds' attention and were available as of the date of this Statement of Additional Information. Special Considerations Regarding Investment in New Jersey Municipal Obligations The State of New Jersey and its political subdivisions, agencies and public authorities are authorized to issue two general classes of indebtedness; general obligation bonds and revenue bonds. Both classes of bonds may be included in the New Jersey Muni Portfolio. The repayment of principal and interest on general obligation bonds is secured by the full faith and credit of the issuer, backed by the issuer's taxing authority, without recourse to any special project or source of revenue. Special obligation or revenue bonds may be repaid only from revenues received in connection with the project for which the bonds are issued, special excise taxes, or other special revenue sources and generally are issued by entities without taxing power. Neither the State of New Jersey nor any of its subdivisions is liable for the repayment of principal or interest on revenue bonds except to the extent stated in the preceding sentences. General obligation bonds of the state are repaid from revenues obtained through the state's general taxing authority. An inability to increase taxes may adversely affect the state's ability to authorize or repay debt. Public authorities, private non-profit corporations, agencies and similar entities of New Jersey ("Authorities") are established for a variety of beneficial purposes, including economic development, housing and mortgage financing, health care facilities and public transportation. The Authorities are not operating entities of the State of New Jersey, but are separate -33- legal entities that are managed independently. The state oversees the Authorities by appointing the governing boards, designating management, and by significantly influencing operations. The Authorities are not subject to New Jersey constitutional restrictions on the incurrence of debt, applicable to the State of New Jersey itself, and may issue special obligation or private activity bonds in legislatively authorized amounts. An absence or reduction of revenue will affect a bond-issuing Authority's ability to repay debt on special obligation bonds and no assurance can be given that sufficient revenues will be obtained to make such payments, although in some instances repayment may be guaranteed or otherwise secured. Various Authorities have issued bonds for the construction of health care facilities, transportation facilities, office buildings and related facilities, housing facilities, pollution control facilities, water and sewerage facilities and power and electric facilities. Each of these facilities may incur different difficulties in meeting its debt repayment obligations. Hospital facilities, for example, are subject to changes in Medicare and Medicaid reimbursement regulations, attempts by Federal and state legislatures to limit the costs of health care and management's ability to complete construction projects on a timely basis as well as to maintain projected rates of occupancy and utilization. At any given time, there are several proposals pending on a Federal and state level concerning health care which may further affect a hospital's debt service obligation. Housing facilities may be subject to increases in operating costs, management's ability to maintain occupancy levels, rent restrictions and availability of Federal or state subsidies, while power and electric facilities may be subject to increased costs resulting from environmental restrictions, fluctuations in fuel costs, delays in licensing procedures and the general regulatory framework in which these facilities operate. All of these entities are constructed and operated under rigid regulatory guidelines. Some entities which financed facilities with proceeds of private activity bonds issued by the New Jersey Economic Development Authority, a major issuer of special obligation bonds, have defaulted on their debt service obligations. Because these special obligation bonds were repayable only from revenue received from the specific projects which they funded, the New Jersey Economic Development Authority was unable to repay the debt service to bondholders for such facilities. Each issue of special obligation bonds, however, depends on its own revenue for repayment, and thus these defaults should not affect the ability of the New Jersey Economic Development Authority to repay obligations on other bonds that it issues in the future. -34- The state has, in the past, experienced a period of substantial economic growth with unemployment levels below the national average. Recently, however, the state has experienced an economic slowdown, and its unemployment rate has risen to the extent the state has lost its relative advantage over the nation. To the extent that any adverse conditions exist in the future which affect the obligor's ability to repay debt, the value of the Portfolio may be immediately and substantially affected. The following are cases presently pending or threatened in which the State has a potential for either a significant loss of revenue or a significant unanticipated expenditure: (i) several labor unions have challenged 1992 legislation mandating a revaluation of several public employee pension funds which resulted in a refund of $773 million in public employer contributions to the State and annual savings to the State of approximately $226 million for fiscal 1993 and thereafter; (ii) in June 1990, the State Supreme Court held the State's public school funding mechanism unconstitutional; legislation which was enacted to establish a new funding system has also been challenged; (iii) several cases filed in the State courts challenged the basis on which recoveries of certain costs for residents in State psychiatric hospitals and other facilities are shared between the State Department of Human Services and the State's county governments, and certain counties are seeking the recovery from the Department of costs they have incurred for the maintenance of such residents; (iv) a lawsuit filed in the United States District Court in 1990 alleges that the State Department of Human Services has established unreasonably low medicaid payment rates for long-term care facilities; (v) a number of taxpayers are seeking refunds of taxes paid to the Spill Compensation Fund, on the grounds, inter alia, that the State law is preempted by the Federal Superfund legislation; (vi) the 1990 Fair Automobile Insurance Reform Act has been challenged in several State court suits, including provisions to the Act dealing with the premium tax surtax which was intended to raise $300 million in 1993; (vii) a suit was filed in 1991 seeking to impose directly on the State the responsibility for funding the State's judicial system, which has been primarily funded by the counties; (viii) several union welfare benefit plans are challenging the State's hospital rate-setting system in a suit filed in United States District Court; the Court held in 1992 that certain provisions of the State system are preempted by Federal law; and (ix) the method by which various State agencies reduced their personnel has been challenged and the case is pending before the State Supreme Court. Although the Portfolio generally intends to invest its assets primarily in New Jersey Municipal Obligations rated no lower than A, MIG2 or Prime-1 by Moody's or A SP-1 or A-1 by S&P, there can be no assurance that such ratings will remain in effect until the bond matures or is redeemed or will not be -35- revised downward or withdrawn. Such a revision or withdrawal may have an adverse affect on the market price of such securities. PERFORMANCE CALCULATIONS The "yield" and "effective yield" of the Government Cash and Tax-Exempt Cash Portfolios (the "Cash Portfolios"), and the "tax- equivalent yield" of the Tax-Exempt Cash Portfolio, are calculated according to formulas prescribed by the Commission. The standardized seven-day yield of each of these Portfolios is computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account in the particular Portfolio having a balance of one share at the beginning of the period, dividing the net change in account value by the value of the account at the beginning of the base period to obtain the base period return, and multiplying the base period return by (365/7). The net change in the value of an account in the Cash Portfolios includes the value of additional shares purchased with dividends from the original share, and dividends declared on both the original share and any such additional shares, net of all fees, other than nonrecurring account or sales charges, that are charged by the Fund to all shareholder accounts in proportion to the length of the base period and the Portfolio's average account size. The capital changes to be excluded from the calculation of the net change in account value are realized gains and losses from the sale of securities and unrealized appreciation and depreciation. An effective annualized yield for the Cash Portfolios may be computed by compounding the unannualized base period return (calculated as above) by adding 1 to the base period return, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result. The Tax-Exempt Cash Portfolio's "7-day tax-equivalent yield" may be computed by dividing the tax-exempt portion of the Portfolio's yield (calculated as above) by one minus a stated Federal income tax rate and adding the product to that portion, if any, of the Portfolio's yield that is not tax-exempt. The Tax-Exempt Cash Portfolio's tax-equivalent yield, and the Cash Portfolios' yield and effective yield, do not reflect any fees charged by the Advisor to its clients. See "Investment Advisor." Set forth below is an example, for purposes of illustration only, of the current yield calculations for each of the Cash Portfolios for the seven day period ended October 31, 1995. -36- Government Cash Tax-Exempt Portfolio Cash Portfolio 10/31/95 10/31/95 --------------- -------------- 7-Day Yield (Net Change X 365/7 average net asset value) ____% ____% 7-Day Effective Yield ____% ____% 7-Day Tax-Equivalent Yield ____ ____%* - --------------------------------- * Assumes an effective Federal income tax rate of ____% The SEC yield of the Intermediate Government Portfolio, Muni Intermediate Portfolio, New Jersey Muni Portfolio and the International Fixed Income Portfolio for the 30-day period ended October 31, 1995 was ____%, ____%, ____% and ____%, respectively. These yields were calculated by dividing the net investment income per share (as described below) earned by the Portfolio during a 30-day (or one month) period by the maximum offering price per share on the last day of the period and annualizing the result on a semi-annual basis by adding one to the quotient, raising the sum to the power of six, subtracting one from the result and then doubling the difference. The Portfolio's net investment income per share earned during the period is based on the average daily number of shares outstanding during the period entitled to receive dividends and includes dividends and interest earned during the period minus expenses accrued for the period, net of reimbursements. This calculation can be expressed as follows: 6 Yield = 2 [( a-b + 1) - 1] --- cd Where: a = dividends and interest earned during the period. b = expenses accrued for the period net of reimbursements. c = the average daily number of shares outstanding during the period that were entitled to receive dividends. d = maximum offering price per share on the last day of the period. For the purpose of determining net investment income earned during the period (variable "a" in the formula), interest earned on any debt obligations held by the Intermediate Government, Muni Intermediate, New Jersey Muni or International Fixed Income Portfolios is calculated by computing the yield to maturity of each obligation held by the Portfolio based on the market value of the obligation (including actual accrued interest) at the close of business on the last business day of each month, or, with respect to obligations purchased during the month, the purchase price (plus actual accrued interest) and dividing the result by 360 and multiplying the quotient by the market value of the obligation (including actual accrued interest) in order to determine the interest income on the obligation for each day of the subsequent month that the -37- obligation is held by the particular Portfolio. For purposes of this calculation, it is assumed that each month contains 30 days. The maturity of an obligation with a call provision is the next call date on which the obligation reasonably may be expected to be called or, if none, the maturity date. With respect to debt obligations purchased at a discount or premium, the formula generally calls for amortization of the discount or premium. The amortization schedule will be adjusted monthly to reflect changes in the market values of such debt obligations. Undeclared earned income will be subtracted from the maximum offering price per share (variable "d" in the formula). Undeclared earned income is the net investment income which, at the end of the base period, has not been declared as a dividend, but is reasonably expected to be and is declared and paid as a dividend shortly thereafter. The Intermediate Government, Muni Intermediate, New Jersey Muni and International Fixed Income Portfolios' yields do not reflect any fees charged by the Advisor or an Affiliate to its clients. See "Investment Advisor." The Muni Intermediate and New Jersey Muni Portfolios' "tax- equivalent" yield is computed by dividing the portion of the yield that is exempt from Federal and/or State income taxes by one minus a stated Federal income tax rate and/or the State income tax rate and by adding that figure to that portion, if any, of the yield that is not tax-exempt. The 30 day tax- equivalent yield for the Muni Intermediate Portfolio and New Jersey Portfolio for the 30-day period ended October 31, 1995 was ____% and ____%, respectively (assuming a marginal Federal income tax rate of _____% and marginal Pennsylvania and New Jersey income tax rates of _____ and ____%, respectively). The Intermediate Government, Equity, International, Small Capitalization Equity, Muni Intermediate, New Jersey Muni, International Fixed Income and Model Equity Portfolios each compute their respective average annual total returns by determining the average annual compounded rates of return during specified periods that equate the initial amount invested to the ending redeemable value of such investment. This is done by dividing the ending redeemable value of a hypothetical $1,000 initial payment by $1,000 and raising the quotient to a power equal to one divided by the number of years (or fractional portion thereof) covered by the computation and subtracting one from the result. This calculation can be expressed as follows: 1/n T = [( ERV ) - 1] --- P Where: T = average annual total return. -38- ERV = ending redeemable value at the end of the period covered by the computation of a hypothetical $1,000 payment made at the beginning of the period. P = hypothetical initial payment of $1,000. n = period covered by the computation, expressed in terms of years. The Intermediate Government, Equity, International, Small Capitalization Equity, Muni Intermediate, New Jersey Muni, International Fixed Income and Model Equity Portfolios compute their aggregate total returns by determining the aggregate rates of return during specified periods that likewise equate the initial amount invested to the ending redeemable value of such investment. The formula for calculating aggregate total return is as follows: T = [( ERV ) - 1] --- P The calculations of average annual total return and aggregate total return assume the reinvestment of all dividends and capital gain distributions. The ending redeemable value (variable "ERV" in each formula) is determined by assuming complete redemption of the hypothetical investment and the deduction of all nonrecurring charges at the end of the period covered by the computations. Each Portfolio's average annual total return and aggregate total return do not reflect any fees charged by the Advisor to its clients. See "Investment Advisor." Set forth below are the average annual total return figures for the Intermediate Government, Equity, International, Small Capitalization Equity, -39- Muni Intermediate, International Fixed Income, Model Equity and New Jersey Muni Portfolios since inception and for the one year and five year periods ended October 31, 1995.
Small International Intermediate Capitalization Muni Fixed Government Equity International Equity Intermediate Income Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- --------- --------- --------- --------- --------- 1 Year Ended 10/31/95 _____% _____% _____% _____% _____% ____% 5 Years Ended 10/31/95 _____% _____% _____% _____ N/A N/A Inception to 10/31/95 _____% _____% _____% _____% _____% ____%
Model New Equity Jersey Muni Portfolio Portfolio --------- --------- 1 Year Ended 10/31/95 _____% _____ Inception to 10/31/95 _____% _____% Inception Dates: Intermediate Government Portfolio............................ 11/17/88 Equity Portfolio............................................. 07/20/89 International Portfolio...................................... 11/17/88 Small Capitalization Equity Portfolio........................ 03/01/91 Muni Intermediate Portfolio.................................. 06/05/92 International Fixed Income Portfolio......................... 11/02/92 Model Equity Portfolio....................................... 12/31/92 New Jersey Muni Portfolio.................................... 11/01/93 Set forth below are the aggregate total return figures for the Intermediate Government, Equity, International, Small Capitalization Equity, Muni Intermediate, International Fixed Income, Model Equity and New Jersey Muni Portfolios from inception to October 31, 1995. Portfolio Inception Date Aggregate Total Return - --------- -------------- ---------------------- Intermediate Government 11/17/88 _____% Equity 07/20/89 _____% International 11/17/88 _____% Small Capitalization Equity 03/01/91 _____% Muni Intermediate 06/05/92 _____% International Fixed Income 11/02/92 _____% Model Equity 12/31/92 _____% New Jersey Muni 11/01/93 _____% GENERAL INFORMATION Dividends and Capital Gains Distributions Each Portfolio's policy is to distribute substantially all of its net investment income, if any, together with any net realized capital gains in the amount and at the times that will avoid both income (including capital gains) taxes on it and the imposition of the Federal excise tax on undistributed income and gains (see discussion under "Dividends, Capital Gains Distributions and Taxes" in the Prospectus). As set forth in the Prospectuses, the Government Cash and the Tax-Exempt Cash Portfolios declare dividends daily and normally -40- distribute substantially all of their net investment income to shareholders monthly; the International Fixed Income, International, Equity, Small Capitalization Equity and Model Equity Portfolios normally distribute substantially all of their net investment income to shareholders in the form of a quarterly dividend and the Intermediate Government, Muni Intermediate and New Jersey Muni Portfolios normally distribute substantially all of their net investment income to shareholders in the form of a monthly dividend. If any net capital gains are realized by a Portfolio, that Portfolio normally distributes such gains at least once a year. The amounts of any income dividends or capital gains distributions for a Portfolio cannot be predicted. Any dividend or distribution paid shortly after the purchase of shares of a Portfolio by an investor may have the effect of reducing the per share net asset value of that Portfolio by the per share amount of the dividend or distribution. Furthermore, such dividends or distributions, although in effect a return of capital, are subject to income taxes as set forth in the Prospectus. Certain Record Holders As of November 30, 1995, the Advisor held of record 100% of the outstanding shares of each Portfolio other than the International Portfolio. For more information about the Advisor, see "Investment Advisor" in the Prospectus. To the Funds' knowledge, as of November 30, 1995, no person owned, beneficially or of record, 5% or more of the outstanding shares of the International Portfolio. As of November 30, 1995, the directors/trustees and officers of the Funds collectively owned less than 1% of the outstanding shares of each of the Funds' Portfolios. FINANCIAL STATEMENTS The Funds' Financial Statements for the year ended October 31, 199_ and the financial highlights for each of the respective periods presented, appearing in the 199_ Annual Report to Shareholders, and the reports thereon of __________________, the Funds' independent accountants, also appearing therein, are incorporated by reference in this Statement of Additional Information. -41- APPENDIX -- DESCRIPTION OF SECURITIES AND RATINGS I. Description of Bond Ratings Excerpts from Moody's description of its highest bond ratings: Aaa -- judged to be the best quality; carry the smallest degree of investment risk; Aa - -- judged to be of high quality by all standards; A -- judged to be of upper medium quality; factors giving security to principal and interest considered adequate but elements may be present which suggest a susceptibility to impairment sometime in the future; Baa -- judged to be of medium quality; lacking outstanding investment characteristics and in fact having speculative characteristics. Excerpts from S&P description of its highest bond ratings: AAA -- highest grade obligations; indicates an extremely strong capacity to pay interest and repay principal; AA -- also qualify as high grade obligations; indicates a very strong capacity to pay interest and repay principal and differs from AAA issues only in small degree; A -- qualifies as upper medium grade obligations; have strong capacity to pay interest and repay principal, although somewhat more susceptible to adverse effects of change in circumstances and economic conditions than higher rated bonds; BBB -- indicates adequate capacity to pay interest and repay principal, although adverse economic conditions are likely to weaken such capacity. Description of Moody's ratings of state and municipal notes: Moody's ratings for state and municipal notes, other short-term obligations and variable rate demand obligations are as follows: MIG-1/VMIG-1 -- Best quality, enjoying strong protection by established cash flows, superior liquidity support or demonstrated broadbased access to the market for refinancing; MIG-2/VMIG-2 -- High quality with margins of protection ample although not so large as in the preceding group. Description of Moody's highest commercial paper rating: Prime-1 ("P-1") - -- judged to be of the best quality. Issuers rated P-1 (or related supporting institutions) are considered to have a superior capacity for repayment of short-term promissory obligations. Excerpt from S&P rating of municipal note issues: SP-1+ -- overwhelming capacity to pay principal and interest; SP-1 -- very strong or strong capacity to pay principal and interest. Description of S&P highest commercial papers ratings: A-1+ - - this designation indicates the degree of safety regarding timely payment is overwhelming. A-1 -- this designation indicates the degree of safety regarding timely payment is either overwhelming or very strong. II. Description of Mortgage-Backed Securities Mortgage-backed securities represent an ownership interest in a pool of residential mortgage loans. These securities are designed to provide monthly payments of interest and principal to the investor. The mortgagor's monthly payments to his/her lending institution are "passed-through" to an investor such as the Government Cash Portfolio and the Intermediate Government Portfolio. Most issuers or poolers provide guarantees of payments, regardless of whether or not the mortgagor actually makes the payment. The guarantees made by issuers or poolers are supported by various forms of credit, collateral, guarantees or insurance, including individual loan, title, pool and hazard insurance purchased by the issuer. There can be no assurance that the private issuers or poolers can meet their obligations under the policies. Mortgage-backed securities issued by private issuers or poolers, whether or not such securities are subject to guarantees, may entail greater risk than securities directly or indirectly guaranteed by the U.S. Government. About Mortgage-Backed Securities. Interests in pools of mortgage-backed securities differ from other forms of debt securities, which normally provide for periodic payment of interest in fixed amounts with principal payments at maturity or specified call dates. Instead, these securities provide a monthly payment which consists of both interest and principal payments. In effect, these payments are a "pass-through" of the monthly payments made by the individual borrowers on their residential mortgage loans, net of any fees paid. Additional payments are caused by repayments resulting from the sale of the underlying residential property, refinancing or foreclosure net of fees or costs which may be incurred. Some mortgage-backed securities are described as "modified pass-through." These securities entitle the holders to receive all interest and principal payments owed on the mortgages in the pool, net of certain fees, regardless of whether or not the mortgagors actually make the payments. Residential mortgage loans are pooled by the Federal Home Loan Mortgage Corporation (FHLMC). FHLMC is a corporate instrumentality of the U.S. Government and was created by Congress in 1970 for the purpose of increasing the availability of mortgage credit for residential housing. Its stock is owned by the twelve Federal Home Loan Banks. FHLMC issues Participation Certificates ("PC's") which represent interests in mortgages from FHLMC's national portfolio. FHLMC guarantees the timely payment of interest and ultimate collection of principal. The Federal National Mortgage Association (FNMA) is a Government sponsored corporation owned entirely by private stockholders. It is subject to general regulation by the Secretary of Housing and Urban Development. FNMA purchases residential mortgages from a list of approved seller/servicers which A-2 include state and federally-chartered savings and loan associations, mutual savings banks, commercial banks and credit unions and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as to timely payment of principal and interest by FNMA. The principal Government guarantor of mortgage-backed securities is the Government National Mortgage Association (GNMA). GNMA is a wholly-owned U.S. Government corporation within the Department of Housing and Urban Development. FNMA is authorized to guarantee, with the full faith and credit of the U.S. Government, the timely payment of principal and interest on securities issued by approved institutions and backed by pools of FHA-insured or VA-guaranteed mortgages. Commercial banks, savings and loan institutions, private mortgage insurance companies, mortgage bankers and other secondary market issuers also create pass-through pools of conventional residential mortgage loans. Pools created by such non-governmental issuers generally offer a higher rate of interest than Government and Government-related pools because there are no direct or indirect Government guarantees of payments in the former pools. However, timely payment of interest and principal of these pools is supported by various forms of insurance or guarantees, including individual loan, title, pool and hazard insurance purchased by the issuer. The insurance and guarantees are issued by Governmental entities, private insurers and the mortgage poolers. There can be no assurance that the private insurers or mortgage poolers can meet their obligations under the policies. The Funds expect that Governmental or private entities may create mortgage loan pools offering pass-through investments in addition to those described above. The mortgages underlying these securities may be alternative mortgage instruments, that is, mortgage instruments whose principal or interest payment may vary or whose terms to maturity may be shorter than previously customary. As new types of mortgage-backed securities are developed and offered to investors, each of the Government Cash Portfolio and the Intermediate Government Portfolio will, consistent with its investment objective and policies, consider making investments in such new types of securities. Underlying Mortgages. Pools consist of whole mortgage loans or participations in loans. The majority of these loans are made to purchasers of 1-4 family homes. The terms and characteristics of the mortgage instruments are generally uniform within a pool but may vary among pools. For example, in addition to fixed-rate, fixed-term mortgages, the Intermediate Government Portfolio may purchase pools of variable rate mortgages (VRM), growing equity mortgages (GEM), graduated payment mortgages (GPM) and other types where the A-3 principal and interest payment procedures vary. VRMs are mortgages which reset the mortgage's interest rate periodically with changes in open market interest rates. To the extent that the Portfolio is actually invested in VRMs, the Portfolio's interest income will vary with changes in the applicable interest rate on pools of VRMs. GPM and GEM pools maintain constant interest rates, with varying levels of principal repayment over the life of the mortgage. These different interest and principal payment procedures should not impact the Portfolio's net asset value since the prices at which these securities are valued will reflect the payment procedures. All poolers apply standards for qualification to local lending institutions which originate mortgages for the pools. Poolers also establish credit standards and underwriting criteria for individual mortgages included in the pools. In addition, some mortgages included in pools are insured through private mortgage insurance companies. Average Life. The average life of pass-through pools varies with the maturities of the underlying mortgage instruments. In addition, a pool's term may be shortened by unscheduled or early payments of principal and interest on the underlying mortgages. The occurrence of mortgage prepayments is affected by factors including the level of interest rate, general economic conditions, the location and age of the mortgage and other social and demographic conditions. As prepayment rates of individual pools vary widely, it is not possible to accurately predict the average life of a particular pool. For pools of fixed rate 30 year mortgages, common industry practice is to assume that prepayments will result in a 12-year average life. Pools of mortgages with other maturities or different characteristics will have varying assumptions for average life. Returns on Mortgage-Backed Securities. Yields on mortgage-backed pass-through securities are typically quoted based on the maturity of the underlying instruments and the associated average life assumption. Actual prepayment experience may cause the yield to differ from the assumed average life yield. Reinvestment of prepayments may occur at higher or lower interest rates than the original investment, thus affecting the yields of the Portfolios which invest in them. The compounding effect from reinvestments of monthly payments received by a Portfolio will increase its yield to shareholders, compared to bonds that pay interest semi-annually. A-4 III. Description of U.S. Government Securities and Certain Other Securities The term "U.S. Government securities" refers to a variety of securities which are issued or guaranteed by the United States Government, and by various instrumentalities which have been established or sponsored by the United States Government. U.S. Treasury securities are backed by the "full faith and credit" of the United States. Securities issued or guaranteed by Federal agencies and U.S. Government sponsored enterprises or instrumentalities may or may not be backed by the full faith and credit of the United States. In the case of securities not backed by the full faith and credit of the United States, an investor must look principally to the agency, enterprise or instrumentality issuing or guaranteeing the obligation for ultimate repayment, and may not be able to assert a claim against the United States itself in the event the agency, enterprise or instrumentality does not meet its commitment. Agencies which are backed by the full faith and credit of the United States include the Export Import Bank, Farmers Home Administration, Federal Financing Bank and others. Certain agencies, enterprises and instrumentalities, such as the Government National Mortgage Association are, in effect, backed by the full faith and credit of the United States through provisions in their charters that they may make "indefinite and unlimited" drawings on the Treasury, if needed to service its debt. Debt from certain other agencies, enterprises and instrumentalities, including the Federal Home Loan Bank and Federal National Mortgage Association, are not guaranteed by the United States, but those institutions are protected by the discretionary authority for the U.S. Treasury to purchase certain amounts of their securities to assist the institution in meeting its debt obligations. Finally, other agencies, enterprises and instrumentalities, such as the Farm Credit System and the Federal Home Loan Mortgage Corporation, are federally chartered institutions under Government supervision, but their debt securities are backed only by the creditworthiness of those institutions, not the U.S. Government. Some of the U.S. Government agencies that issue or guarantee securities include the Export-Import Bank of the United States, Farmers Home Administration, Federal Housing Administration, Maritime Administration, Small Business Administration and The Tennessee Valley Authority. An instrumentality of the U.S. Government is a Government agency organized under Federal charter with Government supervision. Instrumentalities issuing or guaranteeing securities include, among others, Overseas Private Investment Corporation, Federal Home Loan Banks, the Federal Land Banks, A-5 Central Bank for Cooperatives, Federal Intermediate Credit Banks and the Federal National Mortgage Association. International institutions that issue securities which the Intermediate Government Portfolio may purchase include the Asian Development Bank, Inter-American Development Bank and the International Bank for Reconstruction and Development (the "World Bank"). IV. Description of Municipal Obligations Municipal Obligations generally include debt obligations issued by states and their political subdivisions, and duly constituted authorities and corporations, to obtain funds to construct, repair or improve various public facilities such as airports, bridges, highways, hospitals, housing, schools, streets and water and sewer works. Municipal Obligations may also be issued to refinance outstanding obligations as well as to obtain funds for general operating expenses and for loan to other public institutions and facilities. The two principal classifications of Municipal Obligations are "general obligation" and "revenue" or "special tax" bonds. General obligation bonds are secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue or special tax bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise or other tax, but not from general tax revenues. The Tax-Exempt Cash Portfolio may also invest in tax-exempt industrial development bonds, short-term municipal obligations (rated SP-1+ or SP-1 by S&P or MIG-1/VMIG-1 by Moody's), project notes, demand notes and tax-exempt commercial paper (rated A-1+ or A-1 by S&P or P-1 by Moody's), and municipal bonds with a remaining effective maturity of 13 months or less (rated AA or better by S&P or Aa or better by Moody's). Industrial revenue bonds in most cases are revenue bonds and generally do not have the pledge of the credit of the issuer. The payment of the principal and interest on such industrial revenue bonds is dependent solely on the ability of the user of the facilities financed by the bonds to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment. Short-term municipal obligations issued by states, cities, municipalities or municipal agencies, include Tax Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes, Construction Loan Notes and Short-Term Discount Notes. Project Notes are instruments guaranteed by the Department of Housing and Urban Development but issued by a state or local housing agency. While the issuing agency has the primary obligation on Project Notes, they are also secured by the full faith and credit of the United States. A-6 Municipal Obligations may also include "moral obligation" bonds, which are normally issued by special purpose public authorities. If the issuer of moral obligation bonds is unable to meet its debt service obligations from current revenues, it may draw on a reserve fund, the restoration of which is a moral commitment but not a legal obligation of the state or municipality which created the issuer. Note obligations with demand or put options may have a stated maturity in excess of 13 months, but permit any holder to demand payment of principal plus accrued interest upon a specified number of days' notice. Frequently, such obligations are secured by letters of credit or other credit support arrangements provided by banks. The issuer of such notes normally has a corresponding right, after a given period, to repay in its discretion the outstanding principal of the note plus accrued interest upon a specific number of days' notice to the bondholders. The interest rate on a demand note may be based upon a known lending rate, such as a bank's prime rate, and be adjusted when such rate changes, or the interest rate on a demand note may be a market rate that is adjusted at specified intervals. The demand notes in which the Tax-Exempt Cash Portfolio will invest are payable on not more than thirteen months notice. The yields of Municipal Obligations depend on, among other things, general money market conditions, conditions in the Municipal Obligation market, the size of a particular offering, the maturity of the obligation, and the rating of the issue. The ratings of Moody's and S&P represent their opinions of the quality of the Municipal Obligations rated by them. It should be emphasized that such ratings are general and are not absolute standards of quality. Consequently, Municipal Obligations with the same maturity, coupon and rating may have different yields, while Municipal Obligations of the same maturity and coupon, but with different ratings may have the same yield. It will be the responsibility of the Advisor to appraise independently the fundamental quality of the bonds held by the Tax-Exempt Cash Portfolio. Municipal Obligations are sometimes purchased on a "when issued" basis, which means the buyer has committed to purchase certain specified securities at an agreed upon price when they are issued. The period between commitment date and issuance date can be a month or more. It is possible that the securities will never be issued and the commitment cancelled. From time to time proposals have been introduced before Congress to restrict or eliminate the Federal income tax exemption for interest on Municipal Obligations. Similar proposals may be introduced in the future. If any such proposal were enacted, it might restrict or eliminate the ability of the A-7 Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios to achieve their investment objectives. In that event the Funds' Board members and officers would reevaluate the Tax-Exempt Cash, Muni Intermediate and New Jersey Muni Portfolios' investment objectives and policies and consider recommending to their shareholders changes in such objectives and policies. V. Foreign Investments Investors should recognize that investing in foreign companies involves certain special considerations which are not typically associated with investing in U.S. companies. Because the stocks of foreign companies are frequently denominated in foreign currencies, and because the Equity, International, Small Capitalization Equity, International Fixed Income and Model Equity Portfolios may temporarily hold uninvested reserves in bank deposits in foreign currencies, the Equity, International, Small Capitalization Equity, International Fixed Income and Model Equity Portfolios may be affected favorably or unfavorably by changes in currency rates and in exchange control regulations, and may incur costs in connection with conversions between various currencies. The investment policies of the International and International Fixed Income Portfolios permit the Portfolios to enter into forward foreign currency exchange contracts in order to hedge the Portfolios' holdings and commitments against changes in the level of future currency rates. Such contracts involve an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract. As foreign companies are not generally subject to uniform accounting, auditing and financial reporting standards and they may have policies that are not comparable to those of domestic companies, there may be less information available about certain foreign companies than about domestic companies. Securities of some foreign companies are generally less liquid and more volatile than securities of comparable domestic companies. There is generally less government supervision and regulation of stock exchanges, brokers and listed companies than in the U.S. In addition, there is the possibility of expropriation or confiscatory taxation, political or social instability, or diplomatic developments which could affect U.S. investments in foreign countries. Although the Equity, International, Small Capitalization Equity, and Model Equity Portfolios will endeavor to achieve most favorable execution costs in its portfolio transactions, fixed commissions on many foreign stock exchanges are generally higher than negotiated commissions on U.S. exchanges. Certain foreign governments levy withholding taxes on dividend and interest income. Although in some countries a portion of these taxes are A-8 recoverable, the non-recovered portion of foreign withholding taxes will reduce the income received from the foreign companies comprising the Equity, International, Small Capitalization Equity, International Fixed Income and Model Equity Portfolios. A-9 THE GLENMEDE FUND, INC. PART C. OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial Statements Included in Part A: Financial Highlights for the period from commencement of operations to October 31, 1994 for the Government Cash Portfolio, Tax-Exempt Portfolio, Intermediate Government Portfolio, Equity Portfolio, Small Capitalization Portfolio, Model Equity Portfolio, International Fixed Income Portfolio, International Portfolio, Institutional International Portfolio and Emerging Markets Portfolio. Included in Part B: None. (b) Exhibits 1. (a) Amended and Restated Articles of Incorporation of Registrant dated October 12, 1988. (b) Articles Supplementary dated August 16, 1989 to Amended and Restated Articles of Incorporation. (c) Articles Supplementary dated February 28, 1991 to Amended and Restated Articles of Incorporation. (d) Articles Supplementary dated March 3, 1992 to Amended and Restated Articles of Incorporation. (e) Articles Supplementary dated June 2, 1992 to Amended and Restated Articles of Incorporation. (f) Articles Supplementary dated September 30, 1994 to Amended and Restated Articles of Incorporation. (g) Articles Supplementary dated December 30, 1994 to Amended and Restated Articles of Incorporation. 2. By-Laws of Registrant. 3. Not applicable. 4. (a) Specimen Share Certificate for shares of the Government Cash Portfolio is hereby incorporated by reference to Exhibit 4 to Pre-Effective Amendment No. 2 to the Registration Statement ("Pre-Effective Amendment No. 2"). (b) Specimen Share Certificate for shares of the Intermediate Government Portfolio is hereby incorporated by reference to Exhibit 4 to Pre- Effective Amendment No. 2. (c) Specimen Share Certificate for shares of the International Portfolio is hereby incorporated by reference to Exhibit 4 to Pre-Effective Amendment No. 2. (d) Specimen Share Certificate for shares of the Tax-Exempt Cash Portfolio is hereby incorporated by reference to Exhibit 4 to Pre-Effective Amendment No. 2. (e) Specimen Share Certificate for shares of the Equity Portfolio is hereby incorporated by reference to Exhibit 4 to Post-Effective Amendment No. 6 to the Registration Statement ("Post-Effective Amendment No. 6"). (f) Specimen Share Certificate for shares of the Small Capitalization Equity Portfolio is hereby incorporated by reference to Exhibit 4 to Post- Effective Amendment No. 6. (g) Specimen Share Certificate for shares of the Institutional International Portfolio is hereby incorporated by reference to Exhibit 4 to Post- Effective Amendment No. 7 to the Registration Statement ("Post-Effective Amendment No. 7"). (h) Specimen Share Certificate for shares of the International Fixed Income Portfolio is hereby incorporated by reference to Exhibit 4 to Post- Effective Amendment No. 8 to the Registration Statement. (i) Specimen Share Certificate for shares of the Model Equity Portfolio is hereby incorporated by reference to Exhibit 4 to Post-Effective Amendment No. 9 to the Registration Statement. (j) Form of Specimen Share Certificate for shares of the Emerging Markets Portfolio is hereby incorporated by reference to Exhibit 4 to Post-Effective Amendment No. 12 to the Registration Statement. 5. (a) Investment Advisory Agreement between Registrant and The Glenmede Trust Company dated October 25, 1988. (b) Investment Advisory Agreement between Registrant and The Glenmede Trust Company dated July 31, 1992. (c) Amendment No. 1, dated September 13, 1994, to Investment Advisory Agreement between Registrant and The Glenmede Trust Company. (d) Supplement dated November 1, 1992, to Investment Advisory Agreement between Registrant and The Glenmede Trust Company, relating to the International Fixed Income and Model Equity Portfolios. (e) Investment Advisory Agreement between Registrant and The Glenmede Trust Company relating to Emerging Markets Portfolio dated December 12, 1994. (f) Sub-Investment Advisory Agreement among the Registrant, The Glenmede Trust Company and Pictet International Management Limited relating to the Emerging Markets Portfolio dated December 12, 1994. 6. (a) Distribution Agreement between Registrant and Armata Financial Corp. dated July 1, 1995. 7. Not Applicable. 8. (a) Custody Agreement dated December 13, 1994, as amended and restated May 1, 1995 between Registrant and The Chase Manhattan Bank, N.A. (b) Amendment dated May 1, 1995 to Custody Agreement between Registrant and The Chase Manhattan Bank, N.A. dated May 1, 1995. 9. (a) Master Services Agreement between Registrant and Investment Company Capital Corp. dated July 1, 1995. -2- (b) Amended and Restated Shareholder Servicing Plan dated December 6, 1995. (c) Amended and Restated Shareholder Servicing Agreement dated December 6, 1995. 10. Opinion of Counsel as to Legality of Securities Being Registered to be filed pursuant to Rule 24f-2 as part of Registrant's Rule 24f-2 Notice on Form 24f-4. 11. Consent of Drinker Biddle & Reath. 12. Not Applicable 13. (a) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the Institutional International Portfolio is hereby incorporated by reference to Exhibit 13 to Post-Effective Amendment No. 7 to the Registration Statement. (b) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the International Fixed Income Portfolio dated October 21, 1992. (c) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the Model Equity Portfolio is hereby incorporated by reference to Exhibit 13 to Post-Effective Amendment No. 9 to the Registration Statement. (d) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the Emerging Markets Portfolio dated December 12, 1994. 14. Not Applicable. 15. Not Applicable. 16. Not Applicable. 17. Financial Data Schedule 18. Not applicable. Item 25. Persons Controlled by or Under Common Control with Registrant Registrant is not controlled by or under common control with any person. Item 26. Number of Holders of Securities As of November 30, 1995, the number of record holders of securities was: Government Cash Portfolio - 1 Emerging Markets Portfolio - 1 Intermediate Government Portfolio - 1 International Fixed Income Portfolio - 1 Equity Portfolio - 1 Model Equity Portfolio - 1 Small Capitalization Portfolio - 1 Institutional International Portfolio - 3 International Portfolio - 3 Tax-Exempt Cash Portfolio - 1 -3- Item 27. Indemnification Reference is made to Article Ten of the Registrant's Amended and Restated Article of Incorporation herein by reference to Exhibit 1. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of counsel the matter has been settled by controlling precedent, submit to court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 28 (a). Business and Other Connections of Investment Advisor Reference is made to the caption of "Investment Advisor" in the Prospectus and in Part A of this Registration Statement and "Investment Advisory and Other Services" in Part B of this Registration Statement. Listed below are the directors of The Glenmede Corporation: Susan W. Catherwood Robert E. McDonald J.N. Pew, IV Robert G. Dunlop J. Howard Pew, II R. Anderson Pew Thomas W. Langfitt, M.D. J.N. Pew, III Ethel Benson Wister Item 28 (b). Business and Other Connections of Sub-Investment Advisor Sub-Investment Advisor - Pictet International Management Limited Pictet International Management Limited (the "Sub-Advisor") is an affiliate of Pictet & Cie (the "Bank"), a Swiss private bank, which was founded in 1805. The Bank manages the accounts for institutional and private clients and is owned by seven partners. The Sub- Advisor, established in 1980, manages the investment needs of clients seeking to invest in the international fixed revenue and equity markets. The list required by this Item 28 of officers and directors of Pictet International Management Limited, together with the information as to any other business, profession, vocation or employment of a substantial nature engaged in by such officers and directors during the past two years, is incorporated by reference to Schedules A and D of Form ADV filed by Pictet International Management Limited pursuant to the Investment Advisers Act of 1940 (SEC File No. 801-15143). Item 29. Principal Underwriters (a) In addition to The Glenmede Fund, Inc., Armata Financial Corp. ("Armata") currently acts as distributor for The Glenmede Portfolios, Total Return U.S. Treasury Fund, Inc., Managed Municipal Fund, Inc. and North American Government Bond Fund, Inc. Armata is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the National Association of Securities Dealers. Armata is a subsidiary of Alex. Brown & Sons Incorporated ("Alex. Brown"). Alex. Brown is a registered broker- dealer and a member of the New York Stock Exchange. -4- (b) Name and Principal Offices with Offices with Business Address Armata Registrant - ------------------ ------------- ------------- Jack S. Griswold Chairman and None Director F. Barton Harvey, Jr. Director None John M. Prugh President and None Director E. Robert Kent Director None Peter E. Bancroft Secretary None Timothy M. Gisriel Treasurer None (c) Not Applicable. Item 30. Location of Accounts and Records All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder will be maintained at the offices of: The Glenmede Trust Company One Liberty Place 1650 Market Street, Suite 1200 Philadelphia, Pennsylvania 19103 (records relating to its function as investment advisor) Pictet International Management Limited Cutlers Garden 5 Devonshire Square London, United Kingdom EC2M 4LD (records relating to its function as sub-investment advisor of Emerging Market Portfolio) The Chase Manhattan Bank, N.A. One Chase Manhattan Plaza New York, New York 10081 (records relating to its function as custodian) Investment Company Capital Corp. 135 East Baltimore Street Baltimore, Maryland 21202 (records relating to its functions as administrator, transfer agent and dividend disbursing agent) Armata Financial Corp. 135 East Baltimore Street Baltimore, Maryland 21202 (records relating to its functions as distributor) Drinker Biddle & Reath Philadelphia National Bank Building 1345 Chestnut Street Philadelphia, Pennsylvania 19107-3496 -5- (Registrant's minute books) Item 31. Management Services Not applicable. Item 32. Undertakings. (a) Registrant undertakes to comply with the provisions of Section 16(c) of the 1940 Act in regard to shareholders' rights to call a meeting of shareholders for the purpose of voting on the removal of directors and to assist in shareholder communications in such matters, to the extent required by law. Specifically, the Registrant will, if requested to do so by the holders of at least 10% of the Registrant's outstanding shares, call a meeting of shareholders for the purpose of voting upon the question of the removal of directors, and the Registrant will assist in shareholder communications as required by Section 16(c) of the Act. (b) Registrant undertakes to furnish to each person to whom a prospectus is delivered, a copy of Registrant's latest annual report to shareholders, upon request and without charge. -6- SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, The Glenmede Fund, Inc. has duly caused this Post-Effective Amendment No. 17 to its Registration Statement to be signed on its behalf by the undersigned, thereto duly authorized, in the City of Philadelphia, and Commonwealth of Pennsylvania on the 20th day of December, 1995. THE GLENMEDE FUND, INC. By /s/ John W. Church, Jr. ----------------------------- John W. Church, Jr. Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Post-Effective Amendment No. 17 to the Registration Statement of The Glenmede Fund, Inc. has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- /s/ John W. Church, Jr. Chairman, December 20, 1995 - ----------------------------- Chief Executive John W. Church, Jr. Officer /s/ H. Franklin Allen, Ph.D. Director December 20, 1995 - ----------------------------- H. Franklin Allen, Ph.D. /s/ Willard S. Boothby, Jr. Director December 20, 1995 - ----------------------------- Willard S. Boothby, Jr. /s/ Francis J. Palamara Director December 20, 1995 - ----------------------------- Francis J. Palamara /s/ G. Thompson Pew, Jr. Director December 20, 1995 - ----------------------------- G. Thompson Pew, Jr. /s/ Joseph A. Finelli Treasurer December 20, 1995 - ----------------------------- Joseph A. Finelli EXHIBIT INDEX
Exhibit No. Description Page No. - ----------- ----------- -------- 1(a) Amended and Restated Articles of Incorporation dated October 12, 1988 (b) Articles Supplementary dated August 16, 1989 to Amended and Restated Articles of Incorporation (c) Articles Supplementary dated February 28, 1991 to Amended and Restated Articles of Incorporation (d) Articles Supplementary dated March 3, 1992 to Amended and Restated Articles of Incorporation (e) Articles Supplementary dated June 2, 1992 to Amended and Restated Articles of Incorporation (f) Articles Supplementary dated September 30, 1994 to Amended and Restated Articles of Incorporation (g) Articles Supplementary dated December 30, 1994 to Amended and Restated Articles of Incorporation 2 By-Laws of Registrant 5(a) Investment Advisory Agreement between Registrant and The Glenmede Trust Company dated October 25, 1988 (b) Investment Advisory Agreement between Registrant and The Glenmede Trust Company dated July 31, 1992 (c) Amendment No. 1, dated September 13, 1994, to Investment Advisory Agreement between Registrant and The Glenmede Trust Company (d) Supplement dated November 1, 1992, to Investment Advisory Agreement between Registrant and The Glenmede Trust Company, relating to the International Fixed Income and Model Equity Portfolios (e) Investment Advisory Agreement between Registrant and The Glenmede Trust Company relating to Emerging Market Portfolio dated December 12, 1994 (f) Sub-Investment Advisory Agreement among the Registrant, The Glenmede Trust Company and Pictet International Management Limited relating to the Emerging Markets Portfolio dated December 12, 1994 6(a) Distribution Agreement between Registrant and Armata Financial Corp. dated July 1, 1995
Exhibit No. Description Page No. - ----------- ----------- -------- 8(a) Custody Agreement dated December 13, 1994, as amended and restated May 1, 1995 between Registrant and The Chase Manhattan Bank, N.A. (b) Amendment dated May 1, 1995 to Custody Agreement between Registrant and The Chase Manhattan Bank, N.A. dated May 1, 1995 9(a) Master Services Agreement between Registrant and Investment Company Capital Corp. dated July 1, 1995 (b) Amended and Restated Shareholder Servicing Plan dated December 6, 1995 (c) Amended and Restated Shareholder Servicing Agreement dated December 6, 1995 11 Consent of Drinker Biddle & Reath 13(b) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the International Fixed Income Portfolio dated October 21, 1992 (d) Purchase Agreement between Registrant and The Glenmede Trust Company relating to the Emerging Markets Portfolio dated December 12, 1994 - 2 -
EX-1.(A) 2 AMENDED AND RESTATED ARTICLES OF INCORPORATED EXHIBIT (1)(a) THE GLENMEDE FUND, INC. Articles of Amendment and Restatement The Glenmede Fund, Inc., a Maryland corporation having its principal office in Baltimore, Maryland and having its resident agent located in Baltimore City, Maryland (hereinafter called the "Corporation"), hereby certifies to the State Department of Assessments and Taxation that: FIRST: The amendment and restatement of the charter of the Corporation has been approved by a majority of the entire Board of Directors of the Corporation and that no stock entitled to be voted on the matter is outstanding or subscribed for. SECOND: The Corporation desires to amend its charter as currently in effect and the charter of the Corporation is hereby amended and restated in full as follows: Striking out Articles First through Fifteenth and inserting in lieu thereof the following: FIRST: I, THE UNDERSIGNED, Paul F. Gallagher, whose post office address is 1300 Morris Drive, Wayne, Pennsylvania 19482, being at least twenty-one years of age, do under and by virtue of the General Laws of the State of Maryland authorizing the formation of corporations, associate myself as incorporator with the intention of forming a corporation (hereinafter called the "Corporation"). SECOND: The name of the Corporation is The Glenmede Fund, Inc. THIRD: The purpose for which the Corporation is formed is to act as an open-end diversified management investment company under the Federal Investment Company Act of 1940 as then in effect and the Rules and Regulations from time to time promulgated and effective thereunder (referred to herein collectively as the "Investment Company Act of 1940") and to exercise and enjoy all of the powers, rights and privileges granted to, or conferred upon, corporations by the General Laws of the State of Maryland now or hereafter in force. FOURTH: The post office address of the principal office of the Corporation in this State is c/o Joseph M. Roulhac, Smith, Somerville & Case, 100 Light Street, Baltimore, Maryland. The name of the resident agent is State is Joseph M. Roulhac, a citizen of this State who resides in this State, and the post office address of the resident agent is Smith, Somerville & Case, 100 Light Street, Baltimore, Maryland. -1- FIFTH: The total number of shares of stock which the Corporation shall have authority to issue is 2,500,000,000 shares of stock, with a par value of one-tenth of one cent ($.001) per share to be known and designated as Common Stock, such shares of Common Stock having an aggregate par value of $2,500,000. Subject to the provisions of these Articles of Incorporation, the Board of Directors shall have the power to issue shares of Common Stock of the Corporation from time to time, at prices not less than the net asset value or par value thereof, whichever is greater, for such consideration as may be fixed from time to time pursuant to the direction of the Board of Directors. All stock shall be issued on a non-assessable basis. Pursuant to Section 2-105 of the Maryland General Corporation Law, the Board of Directors of the Corporation shall have the power to designate one or more classes of shares of Common Stock, to fix the number of shares in any such class and to classify or reclassify any unissued shares with respect to such class. Any such class (subject to any applicable rule, regulation or order of the Securities and Exchange Commission or other applicable law or regulation) she have such preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, terms and conditions of redemption and other characteristics as the Board may determine in the absence of contrary determination set forth herein. The aforesaid power shall include the power to create, by classifying or reclassifying unissued shares in the aforesaid manner, one or more classes in addition to those initially designated as named below. Subject to such aforesaid power, the Board of Directors has initially designated four classes of shares of Common Stock of the corporation. The names of such classes and the number of shares of Common Stock initially classified and allocated to these classes are as follows:
Number of Shares of Common Stock Name of Class Initially Classified and Allocated - ------------- ---------------------------------- Government Cash Portfolio................................................. 1,000,000,000 Tax-Exempt Cash Portfolio................................................. 1,000,000,000 Intermediate Government Portfolio......................................... 250,000,000 International Portfolio................................................... 250,000,000
At any time when there are no shares outstanding or subscribed for a particular class previously established and designated herein by the Board of Directors, the class may be liquidated by similar means. Each share of a class shall have equal rights with each other share of that class with respect to the assets of the Corporation pertaining to that class. The dividends payable to the holders of any class (subject to any applicable rule, regulation or order of the Securities and Exchange Commission or any other applicable law or regulation) shall be determined by the Board and need not be individually declared, but may -2- be declared and paid in accordance with a formula adopted by the Board. Except as otherwise provided herein, all references in these Articles of Incorporation to Common Stock or class of stock shall apply without discrimination to the shares of each class of stock. The holder of each share of stock of the Corporation shall be entitled to one vote for each full share, and a fractional vote for each fractional share of stock, irrespective of the class, then standing in his or her name on the books of the Corporation. On any matter submitted to a vote of stockholders, all shares of the Corporation then issued and outstanding and entitled to vote, irrespective of the class shall be voted in the aggregate and not by class except (1) when otherwise expressly provided by the Maryland General Corporation Law, (2) when required by the Investment Company Act of 1940, as amended, shares shall be voted by individual class; or (3) when the matter does not affect any interest of a particular class, then only stockholders of such other class or classes whose interests may be affected shall be entitled to vote hereon. Holders of shares of stock of the Corporation shall not be entitled to cumulative voting in the election of Directors or on any other matter. Each class of stock of the Corporation shall have the following powers, preferences and participating, voting, or other special rights and the qualifications, restrictions, and limitations thereof shall be as follows: 1. All consideration received by the Corporation for the issue or sale of stock of each class, together with all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation thereof, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same may be, shall irrevocably belong to the class of shares of stock with respect to which such assets, payments or funds were received by the Corporation for all purposes, subject only to the rights of creditors, and shall be so handled upon the books of account of the Corporation. Such assets, income, earnings, profits and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation thereof and any assets derived from any reinvestment of such proceeds, in whatever form the same may be, are herein referred to as "assets belonging to" such class. 2. The Board of Directors may from time to time declare and pay dividends or distributions, in stock or in cash, on any or all classes of stock; provided, such dividends or distributions on shares of any class of stock shall be paid only out of earnings, surplus, or other lawfully available assets belonging to such class. Subject to the foregoing proviso, the amount of any dividends or distributions and the payment thereof shall be wholly in the discretion of the Board of Directors. -3- 3. The Board of Directors shall have the power in its discretion to distribute in any fiscal year as dividends, including dividends designated in whole or in part as capital gain distributions, amounts sufficient, in the opinion of the Board of Directors, to enable the Corporation to qualify as a "regulated investment company" under the Internal Revenue Code of 1986, as amended, or any successor or comparable statute thereof, and regulations promulgated thereunder (collectively, the "IRC"), and to avoid liability for the Corporation for Federal income tax in respect of that year and to make other appropriate adjustments in connection therewith. 4. In the event of the liquidation or dissolution of the Corporation, stockholders of each class shall be entitled to receive, as a class, out of the assets of the Corporation available for distribution to stockholders, but other than general assets, the assets belonging to such class, and the assets so distributable to the stockholders of any class shall be distributed among such stockholders in proportion to the number of shares of such class held by them and recorded on the books of the corporation. In the event that there are any general assets not belonging to any particular class of stock and available for distribution, such distribution shall be made to the holders of stock of all classes in proportion to the net asset value of the respective class determined as hereinafter provided. 5. The assets belonging to any class of stock shall be charged with the liabilities in respect to such class, and shall also be charged with its share of the general liabilities of the Corporation, in proportion to the net asset value of the respective class determined as hereinafter provided. The determination of the Board of Directors shall be conclusive as to the amount of liabilities, including accrued expenses and reserves, as to the allocation of the same as to a given class, and as to whether the same or general assets of the Corporation are allocable to one or more classes. The Board of Directors may provide for a holder of any class of stock of the Corporation who surrenders his certificate in good form for transfer to the Corporation or, if the shares in question are not represented by certificates, who complies with procedures established from time to time by the Board of Directors, to convert the shares in question on such basis as the Board may provide into shares of stock of any other class of the Corporation. The holders of the shares of Common Stock or other securities of the Corporation shall have no preemptive rights to subscribe to new or additional shares of its Common Stock or other securities. -4- SIXTH: The number of directors of the Corporation shall be five (5) provided, however, that the number of Directors may be increased or decreased in accordance with the By-Laws so long as the number is never less than three. The names of the current directors who shall act until the first annual meeting or until their successors are duly chosen and qualify are: John W. Church, Jr., Willard S. Boothby, Jr., Otto F. Haas, Ph.D., G. Thompson Pew, and Francis J. Palamara. SEVENTH: The following provisions are inserted for the management of the business and for the conduct of the affairs of the Corporation: 1. The Board shall have power to fix an initial offering price for the shares of any class which shall yield to the Corporation not less than the par value thereof, at which price the shares of the Common Stock of the Corporation shall be offered for sale, and to determine from time to time thereafter the offering price which shall yield to the Corporation not less than the par value thereof from sales of the shares of its Common Stock provided, however, that no shares of the Common Stock of the Corporation shall be issued or sold for a consideration which shall yield to the Corporation less than the net asset value of such class determined in such manner and at such times as may be approved from time to time by the Board of Directors. For the purpose of these Articles of Incorporation, a 'national financial emergency' is defined as the whole or any part of any period (i) during which the New York Stock Exchange is closed other than customary weekend and holiday closings, (ii) during which trading on the New York Stock Exchange is restricted, (iii) during which an emergency exists as a result of which disposal by the Corporation of securities owned by such class is not reasonably practicable or it is not reasonably practicable for the Corporation fairly to determine the value of the net assets of such class, or (iv) during any other period when the Securities and Exchange Commission (or any succeeding governmental authority) may for the protection of security holders of the Corporation by order permit suspension of the right of redemption or postponement of the date of payment on redemption. The Board of Directors may, in its discretion declare the suspension relating to a national financial emergency shall terminate as the case may be on the first business day on which said Stock Exchange shall have opened or the period specified in (ii) or (iii) shall have expired as to which in the absence of an official ruling by said Commission or succeeding authority, the determination of the Board of Directors shall be conclusive. -5- 2. To the extent permitted by law, subject to the right of the Board of Directors to suspend the right of redemption of shares of Common Stock of the Corporation or postpone the date of such redemption in accordance with applicable provisions of law, including without limitation, in the case of a national financial emergency, the Corporation shall redeem shares of its Common Stock from its stockholders upon request of the holder thereof received by the Corporation or its designated agent during business hours of any business day, provided that such request must be accompanied by surrender of outstanding certificate or certificates for such shares in form for transfer and insofar as it may relate to shares for which no certificate has been issued shall be in accordance with such procedures as may be established from time to time by the Board of Directors, together with such proof of the authenticity of signatures as may reasonably be required with respect to such shares (or, on such request in the event no certificate is outstanding) by, or pursuant to the direction of the Board of the Corporation, and accompanied by proper stock transfer stamps. Shares redeemed upon any such request shall be purchased by the Corporation at the net asset value of such shares determined in the manner provided in Paragraph (1) of this Article SEVENTH at the time specified in the Corporation's then current prospectus. Payments for shares of its Common Stock so redeemed by the Corporation shall be made only from assets of the applicable class lawfully available therefor and out of such assets. Payment shall be in cash, except payment for such shares may, at the option of the Board of Directors, or such officer or officers as they may duly authorize for the purpose in their complete discretion, be made from the assets of that class in kind or partially in cash and partially in kind. In case of any payment in kind the Board of Directors, or its delegate, shall have absolute discretion as to what security or securities constituting assets belonging to such class shall be distributed in kind and the amount of the same; and the securities shall be valued for purpose of distribution at the value at which they were appraised in computing the current net asset value of the class of the Corporation's shares. Payments for shares of its Common Stock so redeemed by the Corporation shall be made by the Corporation as provided in the Corporation's then current prospectus. 3. The Board of Directors, may from time to time, without the vote or consent of stockholders, establish standards with respect to the minimum net asset value of a stockholder or minimum investment which may be made by a stockholder. The Board of Directors may authorize the closing of those stockholder accounts not meeting a specified minimum of net asset value by redeeming all of the shares in such accounts. EIGHTH: The Corporation is expressly empowered as follows: -6- (a) The Corporation may enter into a written contract or contracts with any person, including any firm, corporation, trust or association in which any officer, other employee, director or stockholder of the Corporation may be interested, providing for the delegation of the management of all of the Corporation's securities portfolio and also for the delegation of the performance of administrative corporate functions subject always to the direction of the Board of Directors. The compensation payable by the Corporation under such contracts shall be such as is deemed fair and equitable to both parties by the Board of Directors. Each such contract shall in all respects be consistent with and subject to the requirements of the Investment Company Act of 1940 as then in effect and regulation of the Securities and Exchange Commission (or any succeeding governmental authority) promulgated thereunder. (b) The Corporation may appoint one or more distributors or agents or both for the sale of the shares of the Corporation, may directly or indirectly compensate such person or persons for the sale of such shares and may enter into such contract or contracts with such person or persons as the Board of Directors of the Corporation in its discretion may deem reasonable and proper. (c) The Corporation may employ such custodian or custodians for the safekeeping of the property of the Corporation and its shares, such dividends disbursing agent or agents, and such transfer agent or agents and registrar or registrars for its shares, and may make and perform such contracts for the aforesaid purposes as in the opinion of the Board of Directors of the Corporation may be reasonable, necessary, or proper for the conduct of the affairs of the Corporation, and may pay the fees and disbursements of such custodians, dividend disbursing agent, transfer agents, and registrars out of the income and/or any other property of the Corporation. Notwithstanding any other provisions of these Articles of Incorporation or the By-Laws of the Corporation, the Board of Directors may cause any or all of the property of the Corporation to be transferred to or to be acquired and held in the name of the Corporation or nominee or nominees of such custodian satisfactory to the Board of Directors. (d) All contracts entered into pursuant to subsections (a), (b), and (c), of this Article EIGHTH shall in all respects be consistent with and subject to the requirements of the Investment Company Act of 1940 as then in effect and regulations of the Securities and Exchange Commission promulgated thereunder. (e) The same person, partnership (general or limited), association trust or corporation may be employed in any multiple capacity under subsection (a), (b), and (c) of this Article EIGHTH and may receive compensation from the -7- Corporation in as many capacities as such person, partnership (general or limited), association, trust or corporation shall serve the Corporation. The same person may be financially interested in or otherwise affiliated with persons who are parties to any or all of the contracts entered into by the Corporation pursuant to this Article EIGHTH. Any contract entered into pursuant to this Article EIGHTH may be made with any person even though an officer, other employee, director or stockholder of the Corporation may be such other person or may have an interest in such other person. No contract entered into by the Corporation with any other party pursuant to this Article EIGHTH shall be invalidated or rendered voidable because any officer, other employee, director or stockholder of the Corporation is such other party or has an interest in such other party. No person having an interest in such other party shall be liable merely by reason of such interest for any loss or expense to the Corporation under or by reason of said contract or accountable for any profit realized directly therefrom, provided that all provisions of applicable laws were complied with when the Corporation entered into the contract. NINTH: (a) The Corporation shall indemnify its directors and officers to the fullest extent allowed, and in the manner provided, by Maryland law, including the advancing of expenses incurred in connection therewith. Such indemnification shall be in addition to any other right or claim to which any director or officer may otherwise be entitled. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or who, while a director, officer, partner, trustee, employee or agent of another foreign or domestic corporation, partnership, joint venture, trust, or other enterprise or employee benefit plan, against any liability asserted against and incurred by such person in any such capacity or arising out of such person's position, whether or not the Corporation would have had the power to indemnify against such liability. To the fullest extent that limitations on the liability of directors and officers are permitted by the Maryland General Corporation Law, no director or officer of the Corporation shall have any liability to the Corporation or its shareholders for damages. This limitation on liability applies to events occurring at the time a person serves as a director or officer of the Corporation whether or not such person is a director or officer at the time of any proceeding in which such liability is asserted. (b) Nothing contained in this Article NINTH protects or purports to protect, or may be interpreted or construed to protect, any director or officer against liability to the Corporation or its stockholders to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office. -8- (c) Each provision of this Article NINTH shall be severable from the remainder, and the invalidity of any such provision shall not effect the validity of the remainder of this Article NINTH. TENTH: In furtherance, and not in limitation, of the powers conferred by the laws of the State of Maryland, the Board of Directors is expressly authorized: (i) To make, alter or repeal the By-Laws of the Corporation. (ii) From time to time to determine whether and to what extent and at what times and places and under what conditions and regulations the books and accounts of the Corporation, or any of them other than the stock ledger, shall be open to the inspection of the stockholders, and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by law or authorized by resolution of the Board of Directors or of the stockholders. (iii) Without the assent or vote of the stockholders, to authorize and issue obligations of the corporation, secured and unsecured, as the Board of Directors may determine, and to authorize and cause to be executed mortgages and liens upon the property of the Corporation, real or personal but only to the extent permitted by the fundamental policies of the Corporation recited in its registration statement filed pursuant to the Investment Company Act of 1940. (iv) In addition to the powers and authorities granted herein and by statue expressly conferred upon it, the Board of Directors is authorized to exercise all such powers and do all acts and things as may be exercised or done by the Corporation, subject, nevertheless, to the provisions of Maryland law, of these Amended and Restated Articles of Incorporation, and of the By-Laws of the Corporation. ELEVENTH: The Corporation acknowledges that it has obtained its corporate name by consent of The Glenmede Trust Company, a wholly owned subsidiary of The Glenmede Corporation, having an office at 229 South 18th St., Philadelphia, Pennsylvania, which consent was given in reliance and upon the provisions hereafter contained in this Article ELEVENTH. The Corporation agrees that if The Glenmede Trust Company should cease to be the investment adviser of the Corporation, the Corporation will, upon written demand of The Glenmede Trust Company forthwith (a) for a period of two years after such written demand, state in all prospectuses, advertising material, letterheads and other material designed to be read by investors or prospective investors, in a prominent position and in prominent type (as may be reasonably approved by The Glenmede Trust Company), that The Glenmede Trust Company no longer serves as the -9- investment adviser of the Corporation, and (b) delete from its name the word "Glenmede" or any approximation thereof. The Corporation further agrees that The Glenmede Trust Company may permit other persons, partnerships (general or limited), associations, trusts, corporations or other incorporated or unincorporated groups of persons, including without limitation any investment company or companies of any type which may be initially sponsored or organized by The Glenmede Trust Company in the future, to use the word "Glenmede" or any approximation thereof as part of their names. As used herein, "The Glenmede Trust Company" shall include any successor corporation, partnership, limited partnership, trust or person. TWELFTH: The books of the Corporation may be kept (subject to any provisions contained in applicable statutes) outside the State of Maryland at such place or places as may be designated from time to time by the Board of Directors or in the By-Laws of the Corporation. Election of directors need not be by ballot unless the By-Laws of the Corporation shall so provide. THIRTEENTH: The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. FOURTEENTH: Notwithstanding any provision of Maryland law requiring more than a majority vote of the Common Stock, or any class thereof, in connection with any corporation action (including, but not limited to, the amendment of these Articles of Incorporation), unless otherwise provided in these Articles of Incorporation the Corporation may take or authorize such action upon the favorable vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote thereon. FIFTEENTH: "The duration of the Corporation shall be perpetual." THIRD: These Articles of Amendment and Restatement include all provisions of the charter currently in effect. -10- IN WITNESS WHEREOF, these Articles of Amendment and Restatement have been executed on behalf of THE GLENMEDE FUND, INC. by its officers. Its Vice President hereby acknowledges the same to be the act of the corporation and states that, to the best of her knowledge, information and belief, the matters and facts set forth therein with respect to approval are true in all material respects under penalties of perjury. Attest The Glenmede Fund, Inc. By: /s/ Raymond J. Klapinsky By: /s/ Mary Ann B. Wirts --------------------------- -------------------------- Raymond J. Klapinsky, Mary Ann B. Wirts Secretary Vice President Date: October 12, 1988 ------------------------ -11- EX-1.(B) 3 ARTICLES SUPPLEMENTARY DATED AUGUST 16, 1989 EXHIBIT 1.(b) THE GLENMEDE FUND, INC. ARTICLES SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, at a meeting called for such purpose on June 6, 1989, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated - ------------- ---------------------- Government Cash Portfolio......................... 875,000,000 Tax-Exempt Cash Portfolio......................... 875,000,000 Intermediate Government Portfolio................. 250,000,000 International Portfolio........................... 250,000,000 Equity Portfolio.................................. 250,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles Supplementary to be signed in its named and on its behalf this 16th day of August, 1989. Attest: THE GLENMEDE FUND, INC. /s/ Raymond J. Klapinsky /s/ John W. Church, Jr. - ------------------------ ----------------------- Raymond J. Klapinsky John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. --------------------------- John W. Church, Jr. President EX-1.(C) 4 ARTICLES SUPPLEMENTARY DATED FEBRUARY 28, 1991 EXHIBIT 1.(c) THE GLENMEDE FUND, INC. ARTICLES OF SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, at a meeting called for such purpose on September 11, 1990, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated - ------------- ---------------------- Government Cash Portfolio........................... 875,000,000 Tax-Exempt Cash Portfolio........................... 625,000,000 Intermediate Government Portfolio................... 250,000,000 International Portfolio............................. 250,000,000 Equity Portfolio.................................... 250,000,000 Small Capitalization Equity Portfolio............... 250,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles Supplementary to be signed in its name and on its behalf this 28th day of February, 1991. Attest: THE GLENMEDE FUND, INC. /s/ Raymond J. Klapinsky /s/ John W. Church, Jr. - ------------------------ ----------------------- Raymond J. Klapinsky John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. --------------------------- John W. Church, Jr. President EX-1.(D) 5 ARTICLES SUPPLEMENTARY DATED MARCH 3, 1992 EXHIBIT 1.(d) THE GLENMEDE FUND, INC. ARTICLES SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, at a meeting called for such purpose on March 3, 1992, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated ------------- ---------------------- Government Cash Portfolio 625,000,000 Tax-Exempt Cash Portfolio 625,000,000 Intermediate Government Portfolio 250,000,000 International Portfolio 250,000,000 Equity Portfolio 250,000,000 Small Capitalization Equity Portfolio 250,000,000 Institutional International Portfolio 250,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles Supplementary to be signed in its name and on its behalf this 3rd day of March, 1992. Attest: THE GLENMEDE FUND, INC. /s/ Patricia L. Bickimer /s/ John W. Church, Jr. - -------------------------- ------------------------ Patricia L. Bickimer John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said Corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. ---------------------------- John W. Church, Jr. President -2- EX-1.(E) 6 ARTICLES SUPPLEMENTARY DATED JUNE 2, 1992 EXHIBIT 1.(e) THE GLENMEDE FUND, INC. ARTICLES OF SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principle office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, at a meeting called for such purpose on June 2, 1992, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated ------------- ---------------------- Government Cash Portfolio................... 375,000,000 Tax-Exempt Cash Portfolio................... 375,000,000 Intermediate Government Portfolio........... 250,000,000 International Portfolio..................... 250,000,000 Equity Portfolio............................ 250,000,000 Small Capitalization Equity Portfolio....... 250,000,000 Institutional International Portfolio....... 250,000,000 International Fixed Income Portfolio........ 250,000,000 Model Equity Portfolio...................... 250,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles Supplementary to be signed in its name and on its behalf this 2nd day of June, 1992. Attest: THE GLENMEDE FUND, INC. /s/ Patricia L. Bickimer /s/ John W. Church, Jr. - ------------------------- ----------------------- Patricia L. Bickimer John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said Corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. ------------------------- John W. Church, Jr. President EX-1.(F) 7 ARTICLES SUPPLEMENTARY DATED SEPTEMBER 30, 1994 EXHIBIT 1.(f) THE GLENMEDE FUND, INC. ARTICLES SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, at a meeting called for such purpose on June 7, 1994, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated ------------- ---------------------- Government Cash Portfolio.................... Tax-Exempt Cash Portfolio.................... 375,000,000 Intermediate Government Portfolio............ 250,000,000 International Portfolio...................... 225,000,000 Equity Portfolio............................. 225,000,000 Small Capitalization Equity Portfolio........ 225,000,000 Institutional International Portfolio........ 200,000,000 International Fixed Income Portfolio......... 225,000,000 Model Equity Portfolio....................... 225,000,000 Emerging Markets Portfolio................... 50,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles of Supplementary to be signed in its name and on its behalf this 30th day of September, 1994. Attest: THE GLENMEDE FUND, INC. /s/ Patricia L. Bickimer /s/ John W. Church, Jr. - -------------------------- ------------------------- Patricia L. Bickimer John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said Corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. ----------------------------- John W. Church, Jr. President EX-1.(G) 8 ARTICLES SUPPLEMENTARY DATED DECEMBER 30, 1994 EXHIBIT 1.(g) THE GLENMEDE FUND, INC. ARTICLES SUPPLEMENTARY TO ARTICLES OF INCORPORATION THE GLENMEDE FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland (the "Corporation"), hereby certifies to the State Department of Assessments and Taxation of Maryland that: FIRST: In accordance with the requirements of Section 2-208 of the Maryland General Corporation Law, the Board of Directors of the Corporation, by unanimous written consent dated as of November 30, 1994, adopted these Articles Supplementary reclassifying shares of the Common Stock of the Corporation. SECOND: The shares of Common Stock of the Corporation are reclassified as follows: Number of Shares of Name of Class Common Stock Allocated ------------- ---------------------- Government Cash Portfolio.................. 700,000,000 Tax-Exempt Cash Portfolio.................. 500,000,000 Intermediate Government Portfolio.......... 250,000,000 International Portfolio.................... 225,000,000 Equity Portfolio........................... 125,000,000 Small Capitalization Equity Portfolio...... 225,000,000 Institutional International Portfolio...... 150,000,000 International Fixed Income Portfolio....... 150,000,000 Model Equity Portfolio..................... 125,000,000 Emerging Markets Portfolio................. 50,000,000 THIRD: The shares of each series classified and allocated in Article Second hereof shall have all the rights and privileges as set forth in the Corporation's Articles of Incorporation, including such priority in the assets and liabilities of such series as may be provided in such Articles. FOURTH: The shares of each series classified and allocated in Article Second hereof have been classified or reclassified by the Board of Directors of the Corporation under the authority contained in the Articles of Incorporation of the Corporation. IN WITNESS WHEREOF, The Glenmede Fund, Inc. has caused these Articles Supplementary to be signed in its name and on its behalf this 30th day of December, 1994. Attest: THE GLENMEDE FUND, INC. /s/ Patricia L. Bickimer /s/ John W. Church, Jr. - ------------------------- ------------------------ Patricia L. Bickimer John W. Church, Jr. Secretary President THE UNDERSIGNED, President of The Glenmede Fund, Inc., who executed on behalf of said Corporation the foregoing Articles Supplementary to the Articles of Incorporation, of which this certificate is made a part, hereby acknowledges, in the name and on behalf of said Corporation, the foregoing Articles Supplementary to the Articles of Incorporation to be the corporate act of said Corporation and further certifies that, to the best of his knowledge, information and belief, the matters in fact set forth herein with respect to the approval thereof are true in all material respects, under the penalties of perjury. /s/ John W. Church, Jr. -------------------------- John W. Church, Jr. President EX-2 9 BY-LAWS OF REGISTRANT EXHIBIT (2) BY-LAWS OF THE GLENMEDE FUND, INC. ARTICLE I Fiscal Year and Offices Section 1. Fiscal Year. Unless otherwise provided by resolution of the Board of Directors the fiscal year of the Corporation shall begin on November 1 and end on the last day of October. Section 2. Registered Office. The registered office of the Corporation in Maryland shall be located at 100 Light Street, Baltimore, Maryland 21202, and the name and address of its Resident Agent is Joseph M. Roulhac, c/o Smith, Somerville & Case, 100 Light Street, Baltimore, Maryland 21201. ARTICLE II Meetings of Stockholders Section 1. Place of Meeting. Meetings of the Stockholders for the election of Directors shall be held in such place as the Board of Directors may by resolution establish. In the absence of any specific resolution, Annual Meetings of Stockholders shall be held at the Corporation's principal office in Pennsylvania. Meetings of Stockholders for any other purpose may be held at such place and time as shall be fixed by resolution of the Board of Directors and stated in the notice of the Meeting, or in a duly executed waiver of notice thereof. Section 2. Annual Meetings. The First Annual Meeting of Stockholders shall be held at such time and on such date as may be fixed by the Board of Directors by resolution. At the Annual Meeting, the Stockholders shall elect a Board of Directors and transact any other business which may properly be brought before the meeting. Thereafter, Annual Meetings of Stockholders will not be held if none of the following is required to be acted on by Stockholders under the Investment Company Act of 1940, as amended: (a) election of directors; (b) approval of the investment advisory agreement; (c) ratification of selection of independent accountants; and (d) approval of a distribution agreement. Section 3. Special Meetings. Special Meetings of the Stockholders may be called at any time by the Chairman of the Board or the President, or by a majority of the Board of Directors, and shall be called by the Chairman of the Board, President or Secretary upon written request of the holders of shares entitled to cast not less than twenty-five percent of all the votes entitled to be cast at such meeting provided that (a) such request shall state the purposes of such meeting and the matters proposed to be acted on, and (b) the Stockholders requesting such meeting shall have paid to the Corporation the reasonably estimated cost of preparing and mailing the notice thereof, which the Secretary shall determine and specify to such Stockholders. No Special Meeting need be called to consider any matter which is substantially the same as a matter voted on at any meeting of the Stockholders held during the preceding twelve months. Section 4. Notice. Not less than ten nor more than ninety days before the date of every Annual or Special Stockholders' Meeting, the Secretary shall cause to be mailed to each Stockholder entitled to vote at such meeting at his (her) address (as it appears on the records of the Corporation at the time of mailing) written notice stating the time and place of the meeting and, in the case of a Special Meeting of Stockholders shall be limited to the purposes stated in the notice. Notice of any Stockholders' meeting need not be given to any Stockholder who shall sign a written waiver of such notice whether before or after the time of such meeting, or to any Stockholder who shall attend such meeting in person or by proxy. Notice of adjournment of a Stockholders' meeting to another time or place need not be given, if such time and place are announced at the meeting. Section 5. Record Date for Meetings. The Board of Directors may fix in advance a date not more than ninety days, nor less than ten days, prior to the date of any Annual or Special Meeting of the Stockholders as a record date for the determination of the Stockholders entitled to receive notice of, and to vote at any meeting and any adjournment thereof; and in such case such Stockholders and only such Stockholders as shall be Stockholders of record on the date so fixed shall be entitled to receive notice of and to vote at such meeting and any adjournment thereof as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. Section 6. Quorum. At any meeting of Stockholders, the presence in person or by proxy of the holders of a majority of all the votes entitled to be cast at the meeting shall constitute a quorum for the transaction of business at the meeting, except that where any provision of law or the Articles of Incorporation require that the holders of any class of shares shall vote as a -2- class, then a majority of the aggregate number of shares of that class at the time outstanding shall be necessary to constitute a quorum for the transaction of such business. If, however, such quorum shall not be present or represented at any meeting of the Stockholders, any officer entitled to preside at, or act as Secretary of such meeting, shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the meeting as originally notified. Section 7. Voting. Each Stockholder shall have one vote for each full share and a fractional vote for each fractional share of stock having voting power held by such Stockholder on the record date set pursuant to Section 5 on each matter submitted to a vote at a meeting of Stockholders. Such vote may be made in person or by proxy. If no record date has been fixed for the determination of Stockholders, the record date for the determination of Stockholders entitled to notice of or to vote at a meeting of Stockholders shall be at the close of business (i) on the day on which notice of the meeting is mailed or (ii) on the day 30 days before the meeting, whichever is the closer date to the meeting. At all meetings of the Stockholders, a quorum being present, all matters shall be decided by majority vote of the shares of stock entitled to vote held by Stockholders present in person or by proxy, unless otherwise expressly provided by the laws of the State of Maryland the Investment Company Act of 1940, as from time to time amended, or the Articles of Incorporation, in which case such express provision shall control. At all meetings of Stockholders, unless the voting is conducted by inspectors, all questions relating to the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by the Chairman of the meeting. Section 8. Voting - Proxies. The right to vote by proxy shall exist only if the instrument authorizing such proxy to act shall have been executed in writing by the Stockholder himself or by his attorney thereunto duly authorized in writing. No proxy shall be voted on after eleven months from its date unless it provides for a longer period. Each proxy shall be in writing subscribed by the Stockholder or his duly authorized attorney and shall be dated, but need not be sealed, witnessed or acknowledged. Proxies shall be delivered to the Secretary of the Corporation or person acting as Secretary of the meeting before being voted. A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless at or prior to exercise of such proxy the Corporation received a specific written notice to the contrary from any one of them. A proxy purporting to be executed by or on behalf of a Stockholder shall be deemed valid unless challenged at or prior to its exercise. -3- Section 9. Inspectors. At any election of Directors, the Board of Directors prior thereto may, or, if they have not so acted, the Chairman of the meeting may appoint one or more inspectors of election who shall first subscribe an oath of affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability, and shall after the election make a certificate of the result of the vote taken. No candidate for the office of Director shall be appointed such inspector. Section 10. Stock Ledger and List of Stockholders. It shall be the duty of the Secretary or Assistant Secretary of the Corporation to cause an original or duplicate stock ledger to be maintained at the office of the Corporation's transfer agent. Such stock ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection. Any one or more persons, each of whom has been a Stockholder of record of the Corporation for more than six months next preceding such request, who owns or own in the aggregate 5% or more of the outstanding capital stock of the Corporation, may submit a written request to any officer of the Corporation. Within 20 days after such a request, there shall be prepared and filed at the Corporation's principal office a list containing the names and addresses of all Stockholders of the Corporation and the number of shares of each class held by each Stockholder, certified as correct by an officer of the Corporation, by its stock transfer agent, or by its registrar. Section 11. Action Without Meeting. Any action to be taken by Stockholders may be taken without a meeting if all Stockholders entitled to vote on the matter consent to the action in writing, and the written consents are filed with the records of the meetings of Stockholders. Such consent shall be treated for all purposes as a vote at a meeting. ARTICLE III Directors Section 1. General Powers. The business of the Corporation shall be under the direction of its Board of Directors, which may exercise all powers of the Corporation, except such as are by statute, or the Articles of Incorporation, or by these By-Laws conferred upon or reserved to the Stockholders. All acts done by any meeting of the Directors or by any person acting as a Director, so long as his successor shall not have been duly elected or appointed, shall, notwithstanding that it be afterwards discovered that there was some defect in the election of the Directors or of such person acting as aforesaid or that they or any of them were disqualified, be as valid as if the Directors or such other person, as the case may be, had been duly elected and were or was qualified to be Directors or a Director of the Corporation. -4- Section 2. Number and Term of Office. The number of Directors which shall constitute the whole Board shall be determined from time to time by the Board of Directors, but shall not be fewer than three, nor more than fifteen. Each Director elected shall hold office until his successor is elected and qualified. Directors need not be Stockholders. Section 3. Election. Initially the Directors shall be those persons named as such in the Articles of Incorporation. The Directors shall be elected annually by the vote of a majority of the shares present in person or by Proxy at the Annual Meeting of the Stockholders, except that any vacancy in the Board of Directors may be filled by a majority vote of the Board of Directors, although less than a quorum, except that a newly-created directorship may be filled only by a vote of the entire Board of Directors. However, if at any time after the filling of any vacancy, less than a majority of the Directors then holding office were elected by Stockholders, a Stockholders Meeting shall be called as soon as possible, and in any event within sixty days, for the purpose of electing an entire new Board of Directors. Section 4. Removal of Directors. At any Stockholders Meeting, provided a quorum is present, any Director may be removed (either with or without cause) by the vote of the holders of a majority of the shares present or represented at the meeting, and at the same meeting a duly qualified person may be elected in his stead by a majority of the votes validly cast. Section 5. Place of Meeting. Meetings of the Board of Directors, regular or special, may be held at any place in or out of the State of Maryland as the Board may from time to time determine. Section 6. Quorum. At all meetings of the Board of Directors a majority of the entire Board of Directors shall constitute a quorum for the transaction of business and the action of a majority of the Directors present at any meeting at which a quorum is present shall be the action of the Board of Directors unless the concurrence of a greater proportion is required for such action by the laws of Maryland, the Investment Company Act of 1940, these By-Laws or the Articles of Incorporation. If a quorum shall not be present at any meeting of Directors, the Directors present thereat may by a majority vote adjourn the meeting from time to time without notice other than announcement at the meeting, until a quorum shall be present. -5- Section 7. Regular Meetings. Regular meetings of the Board of Directors may be held without notice at such time and place as shall from time to time be determined by the Board of Directors provided that notice of any change in the time or place of such meetings shall be sent promptly to each Director not present at the meeting at which such change was made in the manner provided for notice of special meetings. Members of the Board of Directors or any committee designated thereby may participate in a meeting of such Board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other at the same time, and participation by such means shall constitute presence in person at a meeting. Section 8. Special Meetings. Special Meetings of the Board of Directors may be called by the Chairman of the Board or the President on one day's notice to each Director; Special Meetings shall be called by the Chairman of the Board, President or Secretary in like manner and on like notice on the written request of two Directors. Section 9. Informal Actions. Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if a written consent to such action is signed in one or more counterparts by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of proceedings of the Board or committee. Section 10. Committees. The Board of Directors may by resolution passed by a majority of the entire Board appoint from among its members an Executive Committee and other committees composed of two or more Directors, and may delegate to such committees, in the intervals between meetings of the Board of Directors, any or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, except the powers to declare dividends or distributions on stock, to issue stock or to recommend to Stockholders any action requiring Stockholder approval, amend the By-Laws, or approve any merger or share exchange which does not require stockholder approval. Section 11. Action of Committees. In the absence of an appropriate resolution of the Board of Directors each committee may adopt such rules and regulations governing its proceedings, quorum and manner of acting as it shall deem proper and desirable, provided that the quorum shall not be less than two Directors. The committees shall keep minutes of their proceedings and shall report the same to the Board of Directors at the meeting next succeeding, and any action by the committee shall be subject to revision and alteration by the Board of Directors, provided that no rights of third persons shall be -6- affected by any such revision or alteration. In the absence of any member of such committee the members thereof present at any meeting, whether or not they constitute a quorum, may appoint a member of the Board of Directors to act in the place of such absent member. Section 12. Compensation. Any Director, whether or not he is a salaried officer or employee of the Corporation, may be compensated for his services as Director or as a member of a committee of Directors, or as Chairman of the Board or chairman of a committee by fixed periodic payments or by fees for attendance at meetings or by both, and in addition may be reimbursed for transportation and other expenses, all in such manner and amounts as the Board of Directors may from time to time determine. ARTICLE IV Notices Section 1. Form. Notices to Stockholders shall be in writing and delivered personally or mailed to the Stockholders at their addresses appearing on the books of the Corporation. Notices to Directors shall be oral or by telephone or telegram or in writing delivered personally or mailed to the Directors at their addresses appearing on the books of the Corporation. Notice by mail shall be deemed to be given at the time when the same shall be mailed. Notice to Directors need not state the purpose of a Regular or Special Meeting. Section 2. Waiver. Whenever any notice of the time, place or purpose of any meeting of Stockholders, Directors or a committee is required to be given under the provisions of Maryland law or under the provisions of the Articles of Incorporation or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to such notice and filed with the records of the meeting, whether before or after the holding thereof, or actual attendance at the meeting of Stockholders in person or by proxy, or at the meeting of Directors of committee in person, shall be deemed equivalent to the giving of such notice to such persons. ARTICLE V Officers Section 1. Executive Officers. The officers of the Corporation shall be chosen by the Board of Directors and shall include a President, who shall be a Director, a Secretary and a Treasurer. The Board of Directors may, from time to -7- time, elect or appoint a Controller, one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. The Board of Directors, at its discretion, may also appoint a Director as Chairman of the Board who shall perform and execute such executive and administrative duties and powers as the Board of Directors shall from time to time prescribe. The same person may hold two or more offices, except that no person shall be both President and Secretary and no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law, the Articles of Incorporation or these By-Laws to be executed, acknowledged or verified by two or more officers. Section 2. Election. The Board of Directors shall choose a President, a Secretary and a Treasurer at its first meeting and thereafter at the next meeting following a Stockholders' Meeting at which Directors were elected. Section 3. Other Officers. The Board of Directors from time to time may appoint such other officers and agents as it shall deem advisable, who shall hold their offices for such terms and shall exercise powers and perform such duties as shall be determined from time to time by the Board. The Board of Directors from time to time may delegate to one or more officers or agents the power to appoint any such subordinate officers or agents and to prescribe their respective rights, terms of office, authorities and duties. Section 4. Compensation. The salaries or other compensation of all officers and agents of the Corporation shall be fixed by the Board of Directors, except that the Board of Directors may delegate to any person or group of persons the power to fix the salary or other compensation of any subordinate officers or agents appointed pursuant to Section 3 of this Article V. Section 5. Tenure. The officers of the Corporation shall serve for one year and until their successors are chosen and qualify. Any officer or agent may be removed by the affirmative vote of a majority of the Board of Directors whenever, in its judgment, the best interests of the Corporation will be served thereby. In addition, any officer or agent appointed pursuant to Section 3 may be removed, either with or without cause, by any officer upon whom such power of removal shall have been conferred by the Board of Directors. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise shall be filled by the Board of Directors, and, in addition, if pursuant to Section 3 of this Article V the power of appointment has been conferred by the Board of Directors on any other officer, by such other officer. -8- Section 6. President. The President, unless the Chairman has been so designated, shall be the Chief Executive Officer of the Corporation: he (she) shall preside at all meetings of the Stockholders and Directors, and shall see that all orders and resolutions of the Board are carried into effect. The President, unless the Chairman has been so designated, shall also be the chief administrative officer of the Corporation and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 7. Chairman of the Board. The Chairman of the Board, if one shall be chosen, shall preside at all meetings of the Board of Directors and Stockholders, and shall perform and execute such executive duties and administrative powers as the Board of Directors shall from time to time prescribe. Section 8. Vice-President. The Vice-Presidents, in order of their seniority, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors or the Chief Executive Officer may from time to time prescribe. Section 9. Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the Stockholders and record all the proceedings thereof and shall perform like duties for any Committee when required. He (she) shall give, or cause to be given, notice of meetings of the Stockholders and of the Board of Directors, shall have charge of the records of the Corporation, including the stock books, and shall perform such other duties as may be prescribed by the Board of Directors or Chief Executive Officer, under whose supervision he (she) shall be. He (she) shall keep in safe custody the seal of the Corporation and, when authorized by the Board of Directors, shall affix and attest the same to any instrument requiring it. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his (her) signature. Section 10. Assistant Secretaries. The Assistant Secretaries in order of their seniority, shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe. Section 11. Treasurer. The Treasurer, unless another officer has been so designated, shall be the Chief Financial Officer of the Corporation. He (she) shall have general charge of the finances and books of account of the Corporation. Except as otherwise provided by the Board of Directors, he (she) shall have general supervision of the funds and property of the Corporation and of the funds and property of the Corporation, and of the performance by the custodian of its duties with respect thereto. He (she) shall render to the Board -9- of Directors, whenever directed by the Board, an account of the financial condition of the Corporation and of all his (her) transactions as Treasurer; and as soon as possible after the close of each financial year he (she) shall make and submit to the Board of Directors a like report for such financial year. He (she) shall cause to he prepared annually a full and correct statement of the affairs of the Corporation, including a balance sheet and a financial statement of operations for the preceding fiscal year, which shall be submitted at the Annual Meeting of Stockholders and filed within twenty days thereafter at the principal office of the Corporation in the State of Maryland. He (she) shall perform all the acts incidental to the office of Treasurer, subject to the control of the Board of Directors. Section 12. Controller. The Controller shall be under the direct supervision of the Chief Financial Officer of the Corporation. He (she) shall maintain adequate records of all assets, liabilities and transactions of the Corporation, establish and maintain internal accounting control and, in cooperation with the independent public accountants selected by the Board of Directors shall supervise internal auditing. He (she) shall have such further powers and duties as may be conferred upon him (her) from time to time by the President or the Board of Directors. Section 13. Assistant Treasurer. The Assistant Treasurers, in the order of their seniority, shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors may from time to time prescribe. Section 14. Surety Bonds. The Board of Directors may require any officer or agent of the Corporation to execute a bond (including, without limitation, any bond required by the federal Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission) to the Corporation in such sum and with such surety or sureties as the Board of Directors may determine, conditioned upon the faithful performance of his (her) duties of the Corporation, including responsibility for negligence and for the accounting of any Corporation's property, funds or securities that may come into his (her) hands. ARTICLE VI Other Restrictions Section 1. Trading in Securities. Neither the investment adviser or any officer or director thereof, nor any officer or director of the Corporation shall take a long or short position in the securities issued by the Corporation, -10- except as permitted by applicable laws and regulations; provided, that the foregoing shall not prevent the purchase from the Corporation of shares issued by it by the officers or directors of the Corporation or of the investment adviser or by the investment adviser at the price available to the public at the moment of such purchase. In any case where an officer or director of the Corporation or of the investment adviser or a member of an advisory or portfolio committee of the Corporation is also an officer or director of another corporation and the purchase or sale of shares issued by that other corporation is under consideration, the officer or director or committee member concerned will abstain from participating in any decision made on behalf of the Corporation to purchase or sell any securities issued by the other corporation. Section 2. Loans to Affiliates. The Corporation shall not lend assets of the Corporation to any officer or director of the Corporation, or to any partner, officer, director or stockholder of, or person who has a material, financial interest in, the investment adviser of the Corporation, or the distributor of the Corporation, or to the investment adviser of the Corporation or to the distributor of the Corporation. Section 3. Conflict of Interest Transactions. The Corporation shall not permit any officer or director, or any officer or director of the investment adviser or distributor of the Corporation to deal for or on behalf of the Corporation with himself as principal or agent, or with any partnership, association or corporation in which he has a material, financial interest; provided that the foregoing provisions shall not prevent (a) officers or directors of the Corporation from buying, holding or selling shares in the Corporation, or from being partners, officers or directors of or otherwise financially interested in the investment adviser, sponsor, manager or distributor of the Corporation, (b) purchases or sales of securities or other property by the Corporation from or to an affiliated person or to the investment adviser or distributor of the Corporation if such transaction is exempt from or permitted by the applicable provisions of the Investment Company Act of 1940; (c) purchases of investments owned by the Corporation through a security dealer who is, or one or more of whose partners, stockholders, officers or director is, an officer or director of the Corporation, if such transactions are handled in the capacity of brokers only and commissions charged do not exceed customary brokerage charges for such services; (d) employment of legal counsel, registrar, transfer agent, dividend disbursing agent or custodian who is, or has a partner, stockholder, officer or director, who is an officer or director of the Corporation, if only customary fees are charged for services to the Corporation; (e) sharing statistical, research, legal and management expenses with a firm of -11- which an officer or directors of the Corporation is an officer or director or otherwise financially interested; (f) purchase for the portfolio of the Corporation of securities issued by an issuer having an officer, director or securities holder who is an officer or director of the Corporation or of any investment adviser of the Corporation, unless the retention of such securities in the portfolio of the Corporation would be a violation of these ByLaws or the Articles of Incorporation of the Corporation. ARTICLE VII Stock Section 1. Certificates. Each Stockholder shall be entitled to a certificate or certificates in form approved by the Board of Directors which shall certify the class and the number of shares owned by him in the Corporation provided that no stockholder shall be entitled to a certificate for fractional shares owned by him in the Corporation. Each certificate shall be signed by the President or a Vice-President and counter-signed by the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer. Section 2. Signature. Where a certificate is signed (1) by a transfer agent or an assistant transfer agent or (2) by a transfer clerk acting on behalf of the Corporation and a registrar, the signature of any such President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be a facsimile. In case any officer who has signed any certificate ceases to be an officer of the Corporation before the certificate is issued, the certificate may nevertheless be issued by the Corporation with the same effect as if the officer had not ceased to be such officer as of the date of its issue. Section 3. Recording and Transfer without Certificates. Notwithstanding the foregoing provisions of this Article VII, the Corporation shall have full power to participate in any program approved by the Board of Directors providing for the recording and transfer of ownership of shares of the Corporation's stock by electronic or other means without the issuance of certificates. Section 4. Lost Certificates. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been stolen, lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to have been stolen, lost or destroyed, or upon other satisfactory evidence of such theft, loss or destruction. When authorizing such issuance of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance -12- thereof, require the owner of such stolen, lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and to give the Corporation a bond with sufficient surety, to the Corporation to indemnify it against any loss or claim that may be made by reason of the issuance of a new certificate. Section 5. Transfer of Capital Stock. Transfers of shares of the stock of the Corporation shall be made on the books of the Corporation by the holder of record thereof (in person or by his attorney thereunto duly authorized by a power of attorney duly executed in writing and filed with the Secretary of the Corporation) (i) if a certificate or certificates have been issued, upon the surrender of the certificate or certificates, property endorsed or accompanied by proper instruments of transfer, representing such shares, or (ii) as otherwise prescribed by the Board of Directors. Every certificate exchanged, surrendered for redemption or otherwise returned to the Corporation shall be marked "Canceled" with the date of cancellation. Section 6. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such shares or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the General Laws of the State of Maryland. Section 7. Transfer Agents and Registrars. The Board of Directors may, from time to time, appoint or remove transfer agents and or registrars of transfers of shares of stock of the Corporation, and it may appoint the same person as both transfer agent and registrar. Upon any such appointment being made all certificates representing shares of stock thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers or by both and shall not be valid unless so countersigned. If the same person shall be both transfer agent and registrar, only one countersignature by such person shall be required. Section 8. Stock Ledger. The Corporation shall maintain an original stock ledger containing the names and addresses of all Stockholders and the number and class of shares held by each Stockholder. Such stock ledger may be in written form or any other form capable of being converted into written form within a reasonable time for visual inspection. -13- ARTICLE VIII General Provisions Section 1. Rights in Securities. The Board of Directors, on behalf of the Corporation, shall have the authority to exercise all of the rights of the Corporation as owner of any securities which might be exercised by any individual owning such securities in his own right; including, but not limited to, the rights to vote by proxy for any and all purposes, to consent to the reorganization, merger or consolidation of any issuer or to consent to the sale, lease or mortgage of all or substantially all of the property and assets of any issuer; and to exchange any of the shares of stock of any issuer for the shares of stock issued therefor upon any such reorganization, merger, consolidation, sale lease or mortgage. The Board of Directors shall have the right to authorize any officer of the investment adviser to execute proxies and the right to delegate the authority granted by this Section 1 to any officer of the Corporation. Section 2. Custodianship. (a) The Corporation shall place and at all times maintain in the custody of a custodian (including any sub-custodian for the custodian) all funds, securities and similar investments owned by the Corporation. Subject to the approval of the Board of Directors the custodian may enter into arrangements with securities depositories, as long as such arrangements comply with the provisions of the Investment Company Act of 1940 and the rules and regulations promulgated thereunder. The custodian (and any sub-custodian) shall be a bank having no less than $2,000,000 aggregate capital, surplus and undivided profits and shall be appointed from time to time by the Board of Directors, which shall fix its remuneration. (b) Upon termination of a custodian agreement or inability of the custodian to continue to serve, the Board of Directors shall promptly appoint a successor custodian. But in the event that no successor custodian can be found who has the required qualifications and is willing to serve, the Board of Directors shall call as promptly as possible a Special Meeting of the Stockholders to determine whether the Corporation shall function without a custodian or shall be liquidated. If so directed by vote of the holders of a majority of the outstanding shares of stock of the Corporation, the custodian shall deliver and pay over all property of the Corporation held by it as specified in such vote. -14- Section 3. Reports. Not less often than semiannually, the Corporation shall transmit to the Stockholders a report of the operations of the Corporation, based at least annually upon an audit by independent public accountants, which report shall clearly set forth, in addition to the information customarily furnished in a balance sheet and profit and loss statement, a statement of all amounts paid to security dealers, legal counsel, transfer agent, disbursing agent, registrar or custodian or trustee, where such payments are made to a firm, corporation, bank or trust company, having a partner, officer or director who is also an officer or director of the Corporation. A copy, or copies, of all reports submitted to the Stockholders of the Corporation shall also be sent, as required, to the regulatory agencies of the United States and of the states in which the securities of the Corporation are registered and sold. Section 4. Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year or its organization and the words "Corporate Seal, Maryland." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Section 5. Execution of Instruments. All deeds, documents, transfers, contracts, agreements and other instruments requiring execution by the Corporation shall be signed by the Chairman or the President or a Vice President and by the Treasurer or Secretary or an Assistant Treasurer or an Assistant Secretary, or as the Board of Directors may otherwise, from time to time, authorize. Any such authorization may be general or confined to specific instances. Except as otherwise authorized by the Board of Directors, all requisitions or orders for the assignment of securities standing in the name of the custodian or its nominee, or for the execution of powers to transfer the same, shall be signed in the name of the Corporation by the Chairman or the President or a Vice-President and by the Secretary, Treasurer or an Assistant Treasurer. ARTICLE IX Amendments The By-Laws of the Corporation may be altered, amended or repealed either by the affirmative vote of a majority of the stock issued and outstanding and entitled to vote in respect thereof and represented in person or by proxy at any annual or special meeting of the Stockholders, or by the Board of Directors at any regular or special meeting of the Board of Directors. -15- EX-5.(A) 10 INVESTMENT ADVISORY AGREEMENT EXHIBIT 5(a) INVESTMENT ADVISORY AGREEMENT AGREEMENT made this 25th day of October, 1988 by and between The Glenmede Fund, Inc. a Maryland corporation (the "Fund") and The Glenmede Trust Company, a Pennsylvania corporation (the "Adviser"). 1. Duties of Adviser. The Fund hereby appoints the Adviser to act as investment adviser to the Fund's Government Cash Portfolio, Tax-Exempt Cash Portfolio, Intermediate Government Portfolio and International Portfolio, and such other Portfolios as may be offered by the Fund, for the period and on such terms set forth in this Agreement. The Fund employs the Adviser to manage the investment and reinvestment of the assets of the Fund's Portfolios, to continuously review, supervise and administer the investment program of each of the Portfolios, to determine in its discretion the securities to be purchased or sold and the portion of each such Portfolio's assets to be held uninvested, to provide the Fund with records concerning the Adviser's activities which the Fund is required to maintain, and to render regular reports to the Fund's officers and Board of Directors concerning the Adviser's discharge of the foregoing responsibilities. The Adviser shall discharge the foregoing responsibilities subject to the control of the officers and the Board of Directors of the Fund, and in compliance with the objectives, policies and limitations set forth in the Fund's prospectus and applicable laws and regulations. The Adviser accepts such employment and agrees to render the services and to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services on the terms and for the compensation provided herein. 2. Portfolio Transactions. The Adviser is authorized to select the brokers or dealers that will execute the purchases and sales of securities for each of the Fund's Portfolios and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. Subject to policies established by the Board of Directors of the Fund, the Adviser may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Fund and other accounts as to which the Adviser exercises investment discretion. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty created by this Agreement or otherwise. The Adviser will promptly communicate to the officers and Directors of the Fund such information relating to portfolio transactions as they may reasonably request. -2- 3. Compensation of the Adviser. The Fund will pay no investment advisory fees to the Adviser for the services rendered by the Adviser under this Agreement. However, it is understood that each shareholder of the Fund will be required to have a pre-existing relationship with the Adviser under which the Adviser provides investment advisory, personal trust, estate, custodian or other services to such shareholder on an individual basis. The shareholder will pay a fee directly to the Adviser based on the services provided by the Adviser and the total assets of the shareholder managed by the Adviser, including the portion of such assets invested in the Fund. 4. Other Services. At the request of the Fund, the Adviser in its discretion may make available to the Fund office facilities, equipment, and other services. Such office facilities, equipment, and services shall be provided for or rendered by the Adviser and billed to the Fund at the Adviser's cost. The Adviser further agrees to assume the cost of printing and mailing prospectuses to persons other than current shareholders of the Fund and the cost of any other activities primarily intended to result in the sale of the Fund's shares. 5. Reports. The Fund and the Adviser agree to furnish to each other current prospectuses, proxy statements, reports to shareholders, certified copies of their financial statements, and such other information with regard to their affairs as each may reasonably request. 6. Status of Adviser. The services of the Adviser to the Fund are not to be deemed exclusive, and the Adviser shall be free to render similar services to others so long as its services to the Fund are not impaired thereby. -3- 7. Liability of Adviser. In the absence of (i) wilful misfeasance, bad faith or gross negligence on the part of the Adviser in performance of its obligations and duties hereunder, (ii) reckless disregard by the Adviser of its obligations and duties hereunder, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940 Act"), the Adviser shall not be subject to any liability whatsoever to the Fund, or to any shareholder of the Fund, for any error or judgment, mistake of law or any other act of omission in the course of, or connected with, rendering services hereunder including, without limitation, for any losses that may be sustained in connection with the purchase, holding, redemption or sale of any security on behalf of any Portfolio of the Fund. 8. Permissible Interests. Subject to and in accordance with the Articles of Incorporation of the Fund and the Articles of Incorporation of the Adviser, Directors, officers, agents and shareholders of the Fund are or may be interested in the Adviser (or any successor thereof) as Directors, officers, agents, shareholders or otherwise; Directors, officers agents and shareholders of the Adviser are or may be interested in the Fund as Directors, officers, shareholders or otherwise; and the Adviser (or any successor) is or may be interested in the Fund as a shareholder or otherwise; and that the effect of any such interrelationships shall be governed by said Articles of Incorporation and the provisions of the 1940 Act. -4- 9. Corporate Name. The Fund acknowledges that it has obtained its corporate name by consent of the Adviser, which consent was given in reliance and upon the provisions hereafter contained. The Fund agrees that if the Adviser should cease to be the investment adviser of the Fund, the Fund will, upon written demand of the Adviser forthwith (a) for a period of two years after such written demand, state in all prospectuses, advertising material, letterheads and other material designed to be read by investors or prospective investors, in a prominent position and in prominent type (as may be reasonably approved by the Adviser), that The Glenmede Trust Company no longer serves as the investment adviser of the Fund, and (b) delete from its name the word "Glenmede" or any approximation thereof. The Fund further agrees that the Adviser may permit other persons, partnerships (general or limited), associations, trusts, corporations or other incorporated or unincorporated groups of persons, including without limitation any investment company or companies of any type which may be initially sponsored or organized by the Adviser in the future, to use the word "GLENMEDE" or any approximation thereof as part of their names. As used in this section, "The Glenmede Trust Company" and "Adviser" shall include any successor corporation, partnership, limited partnership, trust or person. -5- 10. Duration and Termination. This Agreement, unless sooner terminated as provided herein, shall continue until the earlier of October 25, 1990 or the date of the first annual or special meeting of the shareholders of the Fund and, if approved by a majority of the outstanding voting securities of each Portfolio of the Fund, thereafter shall continue as to a particular Portfolio for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of such Portfolio of the Fund; provided, however, that if the holders of such Portfolio fail to approve the Agreement as provided herein, the Adviser may continue to serve such Portfolio in such capacity in the manner and to the extent permitted by the Fund's Board of Directors and the 1940 Act and Rules thereunder. This Agreement may be terminated by any Portfolio of the Fund at any time, without the payment of any penalty, by vote of a majority of the entire Board of Directors of the Fund or by vote of a majority of the outstanding voting securities of the Portfolio on 60 days' written notice to the Adviser. This Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days' written notice to the Fund. This agreement will automatically and -6- immediately terminate in the event of its assignment. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed postpaid, to the other party at any office of such party. As used in this Section 10, the terms "assignment," "interested persons," and "a vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section 2(a)(42) of the 1940 Act. 11. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it maintains for the Fund are the property of the Fund and further agrees to surrender promptly to the Fund any of such records upon the Fund's request. The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records which it maintains for the Fund and are required to be maintained by Rule 31a-1 under the 1940 Act. 12. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 13. Amendment of Agreement. This Agreement may be amended by mutual consent, but the consent of the Fund must be approved (a) by vote of a majority of those members of the Board of Directors of the Fund who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities of each Portfolio of the Fund. -7- 14. Severability. If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this Agreement to be executed as of this 25th day of October, 1988. ATTEST: THE GLENMEDE FUND, INC. By: /s/ Raymond Klapinsky By: /s/ John W. Church, Jr. -------------------------- ---------------------------- Raymond Klapinsky John W. Church, Jr. Secretary Chairman of the Board THE GLENMEDE TRUST COMPANY By: /s/ Augustus S. Ballard By: /s/ Thomas W. Langfitt --------------------------- ----------------------------- Secretary Thomas W. Langfitt President -8- EX-5.(B) 11 INVESTMENT ADVISORY AGREEMENT EXHIBIT (5)(b) INVESTMENT ADVISORY AGREEMENT Agreement made this 31st day of July, 1992 by and between the Institutional International Portfolio (the "Portfolio"), an investment portfolio of The Glenmede Fund, Inc., a Maryland corporation (the "Company"), and The Glenmede Trust Company, a Pennsylvania corporation (the "Adviser"). 1. Duties of Adviser. The Company hereby appoints the Adviser to act as investment adviser to the Portfolio for the period and on such terms set forth in this Agreement. The Company employs the Adviser to manage the investment and reinvestment of the assets of the Portfolio to continuously review, supervise and administer the investment program of the Portfolio, to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested, to provide the Company with records concerning the Adviser's activities which the Company is required to maintain, and to render regular reports to the Company's officers and Board of Directors concerning the Adviser's discharge of the foregoing responsibilities. The Adviser shall discharge the foregoing responsibilities subject to the control of the officers and the Board of Directors of the Company and in compliance with the objectives, policies and limitations set forth in the Portfolio's prospectus and applicable laws and regulations. The Adviser accepts such employment and agrees to render the services and to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services on the terms and for the compensation provided herein. 2. Portfolio Transactions. The Adviser is authorized to select the brokers that will execute the purchases and sales of securities for the Portfolio and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. Subject to policies established by the Board of Directors of the Company, the Adviser may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Company and other accounts as to which the Adviser exercises investment discretion. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty by this Agreement or otherwise. The Adviser will promptly communicate to the officers and Directors of the Company such information relating to portfolio transactions as they may reasonably request. 3. Compensation of the Adviser. For the services provided and the expenses assumed pursuant to this Agreement, effective as of the date hereof, the Portfolio will pay the Adviser and the Adviser will accept as full compensation therefor, a fee computed daily and paid monthly (in arrears), at an annual rate of .75% of the average daily net assets held in the Portfolio. -2- If in any fiscal year the aggregate expenses of the Portfolio exceed the expense limitations of any state having jurisdiction over the Portfolio, the Adviser will reimburse the Portfolio for such excess expenses. The obligation of the Adviser to reimburse the Portfolio hereunder is limited in any fiscal year to the amount of its fee hereunder for such fiscal year, provided however, that notwithstanding the foregoing, the Adviser shall reimburse the Portfolio for such excess expenses regardless of the amount of fees paid to it during such fiscal year to the extent that the securities regulations of any state having jurisdiction over the Portfolio so requires. Such expense reimbursement, if any, will be estimated, reconciled and paid on a monthly basis. 4. Other Services. At the request of the Company, the Adviser in its discretion may make available to the Company office facilities, equipment, and other services. Such office facilities, equipment, and services shall be provided for or rendered by the Adviser and billed to the Company at the Adviser's cost. The Adviser further agrees to assume the cost of printing and mailing prospectuses to persons other than current shareholders of the Company and the cost of any other activities primarily intended to result in the sale of the Company's shares. 5. Reports. The Company and the Adviser agree to furnish to each other current prospectuses, proxy statements, reports to shareholders, certified copies of their financial statements, and such other information with regard to their affairs as each may reasonably request. -3- 6. Status of Adviser. The services of the Adviser to the Company are not to be deemed exclusive, and the Adviser shall be free to render similar services to others so long as its services to the Company are not impaired thereby. 7. Liability of Adviser. In the absence of (i) wilful misfeasance, bad faith or gross negligence on the part of the Adviser in performance of its obligations and duties hereunder, (ii) reckless disregard by the Adviser of its obligations and duties hereunder, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940 Act"), the Adviser shall not be subject to any liability whatsoever to the Company or to any shareholder of the Company, for any error or judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder including without limitation, for any losses that may be sustained in connection with the purchase, holding redemption or sale of any security on behalf of the Portfolio. -4- 8. Permissible Interests. Subject to and in accordance with the Articles of Incorporation of the Company and the Articles of Incorporation of the Adviser, Directors, officers, agents and shareholders of the Company are or may be interested in the Adviser (or any successor thereof) as Directors, officers, agents, shareholders or otherwise; Directors, officers, agents and shareholders of the Adviser are or may be interested in the Company as Directors, officers, shareholders or otherwise; and the Adviser (or any successor) is or may be interested in the Company as a shareholder or otherwise; and that the effect of any such interrelationships shall be governed by said Articles of Incorporation and the provisions of the 1940 Act. 9. Corporate Name. The Company acknowledges that it has obtained its corporate name by consent of the Adviser, which consent was given in reliance and upon the provisions hereafter contained. The Company agrees that if the Adviser should cease to be the investment adviser of the Company, the Company will, upon written demand of the Adviser forthwith (a) for a period of two years after such written demand, state in all prospectuses, advertising material, letterheads and other material designed to be read by investors or prospective investors, in a prominent position and in prominent type (as may be reasonably approved by the Adviser), that The Glenmede Trust Company no longer serves as the investment adviser of the Company, and (b) delete from its name the word "Glenmede" or any approximation thereof. The Company further agrees that the Adviser may permit other persons, partnerships (general or limited), associations, trusts, corporations or other incorporated or unincorporated groups of persons, including without limitation any investment company or -5- companies of any type which may be initially sponsored or organized by the Adviser in the future, to use the word "GLENMEDE" or any approximation thereof as part of their names. As used in this section, "The Glenmede Trust Company" and "Adviser" shall include any successor corporation, partnership, limited partnership, trust or person. 10. Duration and Termination. This Agreement, unless sooner terminated as provided herein, shall continue until the earlier of July 31, 1994 or the date of the first annual or special meeting of the shareholders of the Portfolio and, if approved by a majority of the outstanding voting securities of the Portfolio, thereafter shall continue as to the Portfolio for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Company who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Portfolio; provided however, that if the holders of the Portfolio fail to approve the Agreement as provided herein, the Adviser may continue to serve the Portfolio in such capacity in the manner and to the extent permitted by the Company's Board of Directors and the 1940 Act and Rules thereunder. This Agreement may be terminated by the Portfolio of the -6- Company at any time, without the payment of any penalty, by vote of a majority of the entire Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Portfolio on 60 days' written notice to the Adviser. This Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days' written notice to the Company. This agreement will automatically and immediately terminate in the event of its assignment. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed postpaid, to the other party at any office of such party. As used in this Section 10, the terms "assignment," "interested persons," and a "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section 2(a)(42) of the 1940 Act. 11. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it maintains for the Portfolio are the property of the Company and further agrees to surrender promptly to the Company any of such records upon the Company's request. The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records which it maintains for the Company and are required to be maintained by Rule 31a-1 under the 1940 Act. -7- 12. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 13. Amendment of Agreement. This Agreement may be amended by mutual consent, but the consent of the Company must be approved by (a) by vote of a majority of those members of the Board of Directors of the Company who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities of the Portfolio. 14. Severability. If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this Agreement to be executed as of this 31st day of July, 1992. ATTEST: THE GLENMEDE FUND, INC: By: /s/ Patricia L. Bickimer By: /s/ John W. Church, Jr. --------------------------- -------------------------- Secretary Chairman of the Board THE GLENMEDE TRUST COMPANY: By: /s/ Mary V. Burke By: /s/ Dr. Thomas Langfitt --------------------------- -------------------------- Secretary President -8- EX-5.(C) 12 AMENDMENT NO. 1 TO THE INVESTMENT ADVISORY AGREEMENT EXHIBIT (5)(c) AMENDMENT NO. 1 TO THE INVESTMENT ADVISORY AGREEMENT The Investment Advisory Agreement dated July 31, 1992 between the Institutional International Portfolio, an investment portfolio of THE GLENMEDE FUND, INC., a Maryland corporation (the "Company"), and The Glenmede Trust Company, a Pennsylvania corporation (the "Advisor"), is hereby amended as follows: The first sentence of Section 10, Duration and Termination, is amended by the addition of the phrase "ending October 31 of each year" following the words "for periods of one year." The execution and delivery of this Amendment have been authorized by the Company's Board of Directors and signed by an authorized officer of the Company, acting as such, and neither such authorization by such Directors nor such execution and delivery by such officer shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the trust property of the Company as provided in its Article of Amendment and Restatement filed with the Maryland Department of Assessments and Taxation on October 12, 1988. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this amendment to be executed as of this 13th day of September 1994. ATTEST: THE GLENMEDE FUND, INC. By: /s/ Mary Ann B. Wirts By: /s/ John W. Church, Jr. --------------------------- ---------------------------- Title: Exec. Vice President Title: Chairman of the Board THE GLENMEDE TRUST COMPANY By: /s/ Mary V. Burke By: /s/ Al E. Piscopo --------------------------- ---------------------------- Title: Corporate Secretary Title: Executive Vice President The Glenmede Trust Company One Liberty Place 1650 Market Street, Suite 1200 Philadelphia, Pennsylvania 19103-7391 To whom it may concern: This letter is to confirm that the undersigned, The Glenmede Fund, Inc., a Maryland corporation (the "Company"), and The Glenmede Trust Company, a Pennsylvania trust company (the "Advisor"), acknowledge and agree that the Investment Advisory Agreement (the "Agreement") between the Institutional International Portfolio, an investment portfolio of the Company and the Advisor dated July 31, 1992, is hereby amended to provide for a termination date of October 31 of each year. The Advisor, as sole shareholder of the Institutional International Portfolio, approves this Amendment to the Agreement. If the foregoing is in accordance with your understanding, kindly indicate your acceptance of this Amendment by signing and returning the enclosed copy of this letter. Very truly yours, THE GLENMEDE FUND, INC. By: /s/ John W. Church, Jr. --------------------------- John W. Church, Jr. President Dated as of September 13, 1994 Accepted and Agreed to: THE GLENMEDE TRUST COMPANY By: /s/ Al E. Piscopo ------------------------- Authorized Signature -2- EX-5.(D) 13 SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT EXHIBIT 5(d) SUPPLEMENT TO INVESTMENT ADVISORY AGREEMENT The Glenmede Trust Company 229 South 18th Street Philadelphia, Pennsylvania 19103 This letter is to confirm that the undersigned, The Glenmede Fund, Inc., a Maryland corporation (the "Company"), and The Glenmede Trust Company, a Pennsylvania trust company (the "Advisor") have agreed that the Advisory Agreement between the Company and the Advisor dated October 25, 1988 (the "Agreement"), is herewith amended to provide that the Advisor shall be the advisor for the International Fixed Income and Model Equity Portfolios on the terms and conditions contained in the Agreement. If the foregoing is in accordance with your understanding, kindly indicate your acceptance of this Supplement by signing and returning the enclosed copy of this Supplement. Very truly yours, THE GLENMEDE FUND, INC. By: /s/ John W. Church, Jr. -------------------------- John W. Church, Jr. President Dated as of November 1, 1992 Accepted and Agreed to: THE GLENMEDE TRUST COMPANY By: /s/ Mary Ann B. Wirts ------------------------ Authorized Signature EX-5.(E) 14 INVESTMENT ADVISORY AGREEMENT EXHIBIT (5)(e) INVESTMENT ADVISORY AGREEMENT Agreement made this 12th day of December, 1994 by and between The Glenmede Fund, Inc., a Maryland corporation (the "Company"), with respect to the Emerging Markets Portfolio (the "Portfolio"), an investment portfolio of the Company, and The Glenmede Trust Company, a Pennsylvania corporation (the "Adviser"). 1. Duties of Adviser. The Company hereby appoints the Adviser to act as investment adviser to the Portfolio for the period and on such terms set forth in this Agreement. The Company employs the Adviser to manage the investment and reinvestment of the assets of the Portfolio, to continuously review, supervise and administer the investment program of the Portfolio, to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested, to provide the Company with records concerning the Adviser's activities which the Company is required to maintain, and to render regular reports to the Company's officers and Board of Directors concerning the Adviser's discharge of the foregoing responsibilities. The Adviser shall discharge the foregoing responsibilities subject to the control of the officers and the Board of Directors of the Company and in compliance with the objectives, policies and limitations set forth in the Portfolio' prospectus and applicable laws and regulations. The Adviser accepts such employment and agrees to render the services and to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services on the terms and for the compensation provided herein. In connection with its responsibilities set forth herein, the Company acknowledges and agrees that the Adviser may select a person to act as sub-adviser to render investment advisory services to the Portfolio. 2. Portfolio Transactions. The Adviser is authorized to select the brokers that will execute the purchase and sales of securities for the Portfolio and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. Subject to policies established by the Board of Directors of the Company, the Adviser may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser's overall responsibilities with respect to the Company and other accounts as to which the Adviser exercises investment discretion. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty by this Agreement or otherwise. The Adviser will promptly communicate to the officers and Directors of the Company such information relating to Portfolio transactions as they may reasonably request. 3. Compensation of the Adviser. For the services provided and the expenses assumed pursuant to this Agreement, effective as of the date hereof, the Portfolio will pay the Adviser and the Adviser will accept as full compensation therefor, a fee computed daily and paid monthly (in arrears), at an annual rate of .50% of the average daily net assets held in the Portfolio. If in any fiscal year the aggregate expenses of the Portfolio exceed the expense limitations of any state having jurisdiction over the Portfolio, the -2- Adviser will reimburse the Portfolio for such excess expenses. The obligation of the Adviser to reimburse the Portfolio hereunder is limited in any fiscal year to the amount of its fee hereunder for such fiscal year, provided however, that notwithstanding the foregoing, the Adviser shall reimburse the Portfolio for such excess expenses regardless of the amount of fees paid to it during such fiscal year to the extent that the securities regulations of any state having jurisdiction over the Portfolio so requires. Such expense reimbursement, if any, will be estimated, reconciled and paid on a monthly basis. 4. Other Services. At the request of the Company, the Adviser in its discretion may make available to the Company office facilities, equipment, and other services. Such office facilities, equipment, and services shall be provided for or rendered by the Adviser and billed to the Company at the Adviser's cost. The Adviser further agrees to assume the cost of printing and mailing prospectuses to persons other than current shareholders of the Company and the cost of any other activities primarily intended to result in the sale of the Company's shares. 5. Reports. The Company and the Adviser agree to furnish to each other current prospectuses, proxy statements, reports to shareholders, certified copies of their financial statements, and such other information with regard to their affairs as each may reasonably request. 6. Status of Adviser. The services of the Adviser to the Company are not to be deemed exclusive, and the Adviser shall be free to render similar services to others so long as its services to the Company are not impaired thereby. 7. Liability of Adviser. In the absence of (i) wilful misfeasance, bad faith or gross negligence on the part of the Adviser in performance of its obligations and duties hereunder, (ii) reckless disregard by the Adviser of its -3- obligations and duties hereunder, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940 Act"), the Adviser shall not be subject to any liability whatsoever to the Company or to any shareholder of the Company, for any error or judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder including without limitation, for any losses that may be sustained in connection with the purchase, holding redemption or sale of any security on behalf of the Portfolio. 8. Permissible Interests. Subject to and in accordance with the Articles of Incorporation of the Company and the Articles of Incorporation of the Adviser, Directors, officers, agents and shareholders of the Company are or may be interested in the Adviser (or any successor thereof) as Directors, officers, agents, shareholders or otherwise; Directors, officers, agents and shareholders of the Adviser are or may be interested in the Company as Directors, officers, shareholders or otherwise; and the Adviser (or any successor) is or may be interested in the Company as a shareholder or otherwise; and that the effect of any such interrelationships shall be governed by said Articles of Incorporation and the provisions of the 1940 Act. 9. Corporate Name. The Company acknowledges that it has obtained its corporate name by consent of the Adviser, which consent was given in reliance and upon the provisions hereafter contained. The Company agrees that if the Adviser should cease to be the investment adviser of the Company, the Company shall, upon written demand of the Adviser forthwith (a) for a period of two years after such written demand, state in all prospectuses, advertising -4- material, letterheads and other material designed to be read by investors or prospective investors, in a prominent position and in prominent type (as may be reasonably approved by the Adviser), that The Glenmede Trust Company no longer serves as the investment adviser of the Company, and (b) delete from its name the word "Glenmede" or any approximation thereof. The Company further agrees that the Adviser may permit other persons, partnerships (general or limited), associations, trusts, corporations or other incorporated or unincorporated groups of persons, including without limitation any investment company or companies of any type which may be initially sponsored or organized by the Adviser in the future, to use the word "GLENMEDE" or any approximation thereof as part of their names. As used in this section, "The Glenmede Trust Company" and "Adviser" shall include any successor corporation, partnership, limited partnership, trust or person. 10. Duration and Termination. This Agreement, unless sooner terminated as provided herein, shall continue until the earlier of October 31, 1995 or the date of the first annual or special meeting of the shareholders of the Portfolio and, if approved by a majority of the outstanding voting securities of the Portfolio, thereafter shall continue as to the Portfolio for periods of one year so long as such continuance is specifically approved at least annually (a) by the vote of a majority of those members of the Board of Directors of the Company who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Portfolio; provided however, that if the holders of the Portfolio fail to approve the Agreement as provided herein, the Adviser may continue to serve the Portfolio in such capacity in the manner and -5- to the extent permitted by the Company's Board of Directors and the 1940 Act and Rules thereunder. This Agreement may be terminated by the Portfolio of the Company at any time, without the payment of any penalty, by vote of a majority of the entire Board of Directors of the Company or by vote of a majority of the outstanding voting securities of the Portfolio on 60 days' written notice to the Adviser. This Agreement may be terminated by the Adviser at any time, without the payment of any penalty, upon 90 days' written notice to the Company. This Agreement will automatically and immediately terminate in the event of its assignment. Any notice under this Agreement shall be given in writing, addressed and delivered or mailed postpaid, to the other party at any office of such party. As used in this Section 10, the terms "assignment", "interested persons", and a "vote of a majority of the outstanding voting securities" shall have the respective meanings set forth in Section 2(a)(4), Section 2(a)(19) and Section 2(a)(42) of the 1940 Act. 11. Books and Records. In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records which it maintains for the Portfolio are the property of the Company and further agrees to surrender promptly to the Company any of such records upon the Company's request. The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records which it maintains for the Company and are required to be maintained by Rule 31a-1 under the 1940 Act. 12. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 13. Amendment of Agreement. This Agreement may be amended by mutual consent, but the consent of the Company must be approved by (a) vote of a -6- majority of those members of the Board of Directors of the Company who are not parties to this Agreement or interested persons orally such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) if required by the 1940 Act, by vote of a majority of the outstanding voting securities of the Portfolio. 14. Severability. If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties hereto have caused this Agreement to be executed as of this 12th day of December, 1994. ATTEST: THE GLENMEDE FUND, INC: By: /s/ Mary Ann B. Wirts By: /s/ John W. Church, Jr. -------------------------- -------------------------- Secretary Chairman of the Board THE GLENMEDE COMPANY: By: /s/ Mary V. Burke By: /s/ Al E. Piscopo -------------------------- --------------------------- Secretary Executive Vice President -7- EX-5.(F) 15 SUB-INVESTMENT ADVISORY AGREEMENT EXHIBIT (5)(f) SUB-INVESTMENT ADVISORY AGREEMENT THE GLENMEDE FUND, INC. (Emerging Markets Portfolio) December 12, 1994 Pictet International Management Limited Cutlers Gardens 5 Devonshire Square London United Kingdom EC2 M4LD Ladies and Gentlemen: The Glenmede Fund, Inc., a Maryland Corporation (the "Company"), and Glenmede Trust Company, a Pennsylvania Trust Company (the "Adviser"), each confirms its agreement with Pictet International Management Limited (the "Sub-Adviser"), as follows: 1. Investment Description; Appointment The Company desires to employ its capital relating to its Emerging Markets Portfolio (the "Portfolio") by investing and reinvesting in investments of the kind and in accordance with the investment objective(s), policies and limitations specified in its Articles of Incorporation, as amended from time to time (the "Articles of Incorporation"), in the prospectus (the "Prospectus") and the statement of additional information (the "Statement") filed with the Securities and Exchange Commission as part of the Company's Registration Statement on Form N-1A, as amended from time to time, and in the manner and to the extent as may from time to time be approved by the Board of Directors of the Company (the "Board"). Copies of the Prospectus, the Statement and the Articles of Incorporation have been or will be submitted to the Sub-Adviser. The Company agrees to provide copies of all amendments to the Prospectus, the Statement and the Articles of Incorporation to the Sub-Adviser on an on-going basis. The Company employs the Adviser as the investment adviser to the Portfolio, and the Company and the Adviser desire to employ and hereby appoint the Sub-Adviser to act as the sub-investment adviser to the Portfolio. The Sub-Adviser accepts the appointment and agrees to furnish the services for the compensation set forth below. 2. Services as Sub-Investment Adviser The Company and the Adviser hereby appoint the Sub-Adviser to act as sub-investment adviser to the Portfolio for the period and on such terms set forth in this Agreement. The Company and the Adviser employ the Sub-Adviser to manage the investment and reinvestment of the assets of the Portfolio, to continuously review, supervise and administer the investment program of the Portfolio, to determine in its discretion the securities to be purchased or sold and the portion of the Portfolio's assets to be held uninvested, to provide the Company and the Adviser with records concerning the Sub-Adviser's activities which the Company and the Sub- Adviser are required to maintain, and to render regular reports to the Company's officers and Board of Directors and the Adviser concerning the Sub-Adviser's discharge of the foregoing responsibilities. The Sub-Adviser shall discharge the foregoing responsibilities subject to the control of the officers and the Board of Directors of the Company and the Adviser and in compliance with the objectives, policies and limitations set forth in the Prospectus, Statement of Additional Information and applicable laws and regulations. The Sub-Adviser accepts such employment and agrees to render the services and to provide, at its own expense, the office space, furnishings and equipment and the personnel required by it to perform the services on the terms and for the compensation provided herein. 3. Portfolio Transactions The Sub-Adviser is authorized to select the brokers that will execute the purchases and sales of securities for the Portfolio and is directed to use its best efforts to obtain the best available price and most favorable execution, except as prescribed herein. Subject to policies established by the Board of Directors of the Company and the Adviser, the Sub-Adviser may also be authorized to effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Sub-Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Sub-Adviser's overall responsibilities with respect to the Company and other accounts as to which the Sub-Adviser exercises investment discretion. The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty by this Agreement or otherwise. The Sub-Adviser will promptly communicate to the officers and Directors of the Company and the Adviser such information relating to Portfolio transactions as they may reasonably request. 4. Information Provided to the Company The Sub-Adviser will keep the Company and the Adviser informed of developments materially affecting the Portfolio, and will, on its own initiative, furnish the Company from time to time with whatever information the Sub-Adviser believes is appropriate for this purpose. 5. Compensation of the Sub-Adviser For the services provided and the expenses assumed pursuant to this Agreement, effective as of the date hereof, the Portfolio will pay the Sub-Adviser and the Sub-Adviser will accept as full compensation therefor, a fee computed daily and paid monthly (in arrears), at an annual rate of .75% of the average daily net assets held in the Portfolio. If in any fiscal year the aggregate expenses of the Portfolio exceed the expense limitations of any state having jurisdiction over the Portfolio, the -2- Sub-Adviser will reimburse the Portfolio for such excess expenses. The obligation of the Sub-Adviser to reimburse the Portfolio hereunder is limited in any fiscal year to the amount of its fee hereunder for such fiscal year, provided however, that notwithstanding the foregoing, the Sub-Adviser shall reimburse the Portfolio for such excess expenses regardless of the amount of fees paid to it during such fiscal year to the extent that the securities regulations of any state having jurisdiction over the Portfolio so requires. Such expense reimbursement, if any, will be estimated, reconciled and paid on a monthly basis. 6. Expenses The Sub-Adviser will bear all expenses in connection with the performance of its services under this Agreement. The Portfolio will bear certain other expenses to be incurred in its operation, including, but not limited to, investment advisory, sub-advisory and administration fees; fees for necessary professional and brokerage services; fees for any pricing service; the costs of regulatory compliance; and costs associated with maintaining the Company's legal existence and shareholder relations. 7. Standard of Care In the absence of (i) wilful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser in performance of its obligations and duties hereunder, (ii) reckless disregard by the Sub-Adviser of its obligations and duties hereunder, or (iii) a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the Investment Company Act of 1940 ("1940 Act")), the Sub-Adviser shall not be subject to any liability whatsoever to the Company, any shareholder of the Company or to the Adviser, for any error of judgment, mistake of law or any other act or omission in the course of, or connected with, rendering services hereunder including without limitation, for any losses that may be sustained in connection with the purchase, holding, redemption or sale of any security on behalf of the Portfolio. 8. Term of Agreement This Agreement shall become effective as of December 12, 1994 (the "Effective Date") and shall continue until October 31, 1995 and shall continue thereafter so long as such continuance is specifically approved at least annually by (i) the Board or (ii) a vote of a "majority" (as that term is defined in the 1940 Act) of the Portfolio's outstanding voting securities, provided that in either event the continuance is also approved by a majority of the Board who are not "interested persons" (as defined in the 1940 Act) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. This Agreement is terminable, without penalty, on 60 days' written notice, by the Board or by vote of holders of a majority of the Portfolio's shares, or upon 90 days' written notice, by the Sub-Adviser. This Agreement will also terminate automatically in the event of its assignment (as defined in the 1940 Act and the rules thereunder). -3- 9. Services to Other Companies or Accounts The services of the Sub-Adviser to the Company and the Adviser are not to be deemed exclusive, and the Sub-Adviser shall be free to render similar services to others so long as its services to the Company and the Adviser are not impaired thereby. 10. Books and Records In compliance with the requirements of Rule 31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains for the Portfolio are the property of the Company and further agrees to surrender promptly to the Company any of such records upon the Company's request. The Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records which it maintains for the Company and are required to be maintained by Rule 31a-1 under the 1940 Act. 11. Governing Law This Agreement shall be governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania. 12. Amendment of Agreement This Agreement may be amended by mutual consent, but the consent of the Company must be approved by (a) by vote of a majority of those members of the Board of Directors of the Company who are not parties to this Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities of the Portfolio if required by the 1940 Act. 13. Severability If any provisions of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. -4- If the foregoing is in accordance with your understanding, kindly indicate your acceptance of this Agreement by signing and returning the enclosed copy of this Agreement. Very truly yours, GLENMEDE FUND, INC. By: /s/ John W. Church, Jr. ------------------------- GLENMEDE TRUST COMPANY By: /s/ Al E. Piscopo ------------------------- Agreed to and Accepted by: PICTET INTERNATIONAL MANAGEMENT LIMITED By: /s/ Rod Hearn ----------------- -5- EX-6.(A) 16 DISTRIBUTION AGREEMENT EXHIBIT 6(a) THE GLENMEDE FUND, INC. DISTRIBUTION AGREEMENT AGREEMENT made as of July 1, 1995, by and between THE GLENMEDE FUND, INC., a Maryland corporation (the "Fund"), and ARMATA FINANCIAL CORP., a Maryland corporation ("AFC"). W I T N E S S E T H WHEREAS, the Fund is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund wishes to appoint AFC as its exclusive distributor and AFC wishes to become the distributor, and NOW, THEREFORE, in consideration of the premises, and of other good and valuable consideration by each of the agreements, covenants and obligations herein contained, the parties hereto agree as follows: 1. Appointment. The Fund appoints AFC as the exclusive distributor of the Fund for the period and on the terms set forth in this Agreement. AFC accepts such appointment and agrees to render the services herein set forth for no compensation. 2. Delivery of Documents. The Fund has furnished AFC with copies, properly certified or authenticated, of each of the following: (a) The Fund's Articles of Incorporation and all amendments thereto; (b) The Fund's By-Laws and all amendments thereto (such By-Laws, as presently in effect and as they shall from time to time be amended, are herein called the "By-Laws"); (c) Resolutions of the Fund's Board of Directors authorizing the appointment of AFC as the Fund's Distributor and approving this Agreement; (d) The Fund's notification of Registration filed pursuant to Section 8(a) of the 1940 Act on Form N-8A under the 1940 Act, as filed with the Securities and Exchange Commission (the "SEC"); (e) The Fund's Registration Statement on Form N-1A under the Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act as filed with the SEC and all amendments thereto; and (f) The Fund's most recent prospectus (such prospectus and all amendments and supplements thereto are herein called "Prospectus"). The Fund will furnish AFC from time to time with copies, properly certified or authenticated, of all amendments or supplements to the foregoing, if any, and all documents, notices and reports filed with the SEC. 3. Duties as Distributor. AFC agrees that all solicitations for subscriptions for Shares of the Fund shall be made in accordance with the Fund's Articles of Incorporation and By-Laws, and its then current Registration Statement, Prospectus and Statement of Additional Information, and shall not at any time or in any manner violate any provisions of the laws of the United States or of any State or other jurisdiction in which solicitations are then being made. In carrying out its obligations hereunder, AFC shall undertake the following actions and responsibilities: (a) receive orders for purchase of Fund Shares, accept or reject such orders on behalf of the Fund in accordance with the currently effective Prospectus and Statement of Additional Information and transmit such orders as are so accepted to the Fund's transfer agent as promptly as possible; (b) receive requests for redemption from holders of Fund Shares and transmit such redemption requests to the Fund's transfer agent as promptly as possible; (c) respond to inquires from the Fund's shareholders concerning the status of their accounts with the Fund; and (d) take, on behalf of the Fund, all actions which appear to the Fund necessary to carry into effect the distribution of the Shares and perform such other administrative duties with respect to the Fund Shares as the Fund's Board of Directors may require. 4. Distribution of Shares. AFC shall be the exclusive distributor of the Fund Shares. It is mutually understood and agreed that AFC does not undertake to sell all or any specific portion of the Fund Shares. The Fund shall not sell any of the Fund Shares except through AFC and securities dealers who have valid Agency Distribution Agreements with AFC. Notwithstanding the provisions of the foregoing sentence, the Fund may issue its shares at their net asset value to any shareholder of the Fund purchasing such Shares with dividends or other cash distributions received from the Fund pursuant to an offer made to all shareholders. 5. Control by Board of Directors. Any distribution activities undertaken by AFC pursuant to this Agreement, as well as any other activities undertaken by AFC on behalf of the Fund pursuant hereto, shall at all times be subject to any directives of the Board of Directors of the Fund. The Board of Directors may agree, on behalf of the Fund, to amendments to this Agreement. 6. Compliance with Applicable Requirements. In carrying out its obligations under this Agreement, AFC shall at all times conform to: (a) all applicable provisions of the 1940 Act and any rules and regulations adopted thereunder as amended; (b) the provisions of the Registration Statement of the Fund under the 1933 Act and the 1940 Act; (c) the provisions of the Articles of Incorporation of the Fund; (d) the provisions of the By-Laws of the Fund; (e) the rules and regulations of the National Association of Securities Dealers, Inc. ("NASD") and all other self-regulatory organizations applicable to the sale of investment company shares; and (f) any other applicable provisions of state and federal law. 7. Expenses. The expenses connected with the Fund shall be allocable between the Fund and AFC as follows: (a) AFC shall furnish, at its expense and without cost to the Fund, the services of personnel to the extent that such services are required to carry out their obligations under this Agreement; (b) AFC shall, at its own expense and without cost to the Fund, finance appropriate activities which it deems reasonable that are primarily intended to result in the sale of the shares, including, but not limited to, advertising, compensation of underwriters, dealers and sales personnel, the printing and mailing of prospectuses to other than current shareholders, and the printing and mailing of sales literature; (c) the Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including, without limitation: the fees of the Fund's investment advisor; the charges and expenses of any registrar, any custodian or depository appointed by the Fund for the safekeeping of its cash, portfolio securities and other property, and any stock transfer, dividend or accounting agent or agents appointed by the Fund; brokers' commissions chargeable to the Fund in connection with portfolio securities transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and corporate fees payable by the Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of stock certificates representing Shares; all costs and expenses in connection with maintenance of registration of the Fund and its Shares with the SEC and various states and other jurisdictions (including filing fees and legal fees and disbursements of Fund counsel); the expenses of printing, including typesetting, and distributing prospectuses of the Fund and supplements thereto to the Fund's then current shareholders; all expenses of shareholders' and directors' meetings (except expenses relating to the materials sent by ICC and its affiliates to the Board) and of preparing, printing and mailing of proxy statements and reports to shareholders; fees and travel expenses of directors or members of any advisory board or committee; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption, whether in Shares or in cash; charges and expenses of any outside service used for pricing of the Fund's Shares; charges and expenses of the Fund's legal counsel, including counsel to the directors of the Fund who are not "interested persons" of the Fund (as defined in Section 2(a)(19) of the 1940 Act), and of independent accountants, in connection with any matter relating to the Fund (except expenses relating to tax returns); a portion of membership dues of industry associations; interest payable on Fund borrowings; postage; insurance premiums on property or personnel (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Fund's operations unless otherwise explicitly provided herein. 8. Delegation of Responsibilities. AFC may, but shall be under no duty to, perform services on behalf of the Fund which are not required by this Agreement upon the request of the Fund's Board of Directors. Payment or assumption by AFC of any Fund expense that AFC is not required to pay or assume under this Agreement shall not relieve AFC of any of its obligations to the Fund or obligate AFC to pay or assume any similar Fund expense on any subsequent occasions. 9. Compensation. For the services performed by AFC for the Fund, the Fund will pay to AFC no fee. 10. Agency Distribution Agreements. AFC may enter into agency distribution agreements (the "Agency Distribution Agreements") with any securities dealer who is registered under the Securities Exchange Act of 1934 and a member in good standing of the NASD, who may wish to act as a transmitting broker in connection with the proposed offering. All Agency Distribution Agreements shall be in substantially the form of the agreement attached hereto as Exhibit "A." 11. Non-Exclusivity. The services of AFC to the Fund are not to be deemed exclusive and AFC shall be free to render distribution or other services to others (including other investment companies) and to engage in other activities. It is understood and agreed that officers or directors of AFC may serve as officers or directors of the Fund, and that officers or directors of the Fund may serve as officers or directors of AFC to the extent permitted by law; and that officers or directors of AFC are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, officers or directors of any other person, or from serving as partners, officers or directors of any other firm or corporation, including other investment companies. 12. Confidentiality. AFC agrees on behalf of itself and its employees to treat confidentially and as proprietary information of the Fund all records and other information or data relative to the Fund, its prior, present or potential shareholders and/or customers of The Glenmede Trust Company, except after approval in writing by the Fund, which approval shall not be unreasonably withheld where AFC may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. AFC further agrees not to use such records, information or data for any purpose other than the performance of its responsibilities and duties hereunder. 13. Term and Approval. This Agreement shall become effective at the close of business on the date hereof and shall remain in force and effect until October 31, 1996 and from year to year thereafter, provided that such continuance is specifically approved at least annually: (a) (i) by the Fund's Board of Directors or (ii) by the vote of a majority of the outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act), and (b) by the affirmative vote of a majority of the directors who are not "interested persons" of the Fund (as defined in Section 2(a)(19) of the 1940 Act) and who do not have a financial interest in the operation of this Agreement, by votes cast in person at a meeting specifically called for such purpose. 14. Termination. This Agreement may be terminated at any time, on sixty (60) days' written notice to the other party without the payment of any penalty, (i) by vote of the Fund's Board of Directors, (ii) by vote of a majority of the directors who are not "interested persons" of the Fund (as defined in Section 2(a)(19) of the 1940 Act) and who do not have a financial interest in the operation of this Agreement, (iii) by vote of a majority of the Fund's outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act) or (iv) by AFC. The notice provided for herein may be waived by each party. This Agreement shall automatically terminate in the event of its assignment as defined in Section 2(a)(4) of the 1940 Act. 15. Liability. In the performance of its duties hereunder, AFC shall be obligated to exercise care and diligence and to act in good faith and to use its best efforts within reasonable limits in performing all services provided for under this Agreement, but shall not be liable for any act or omission which does not constitute willful misfeasance, bad faith or gross negligence on the part of AFC or reckless disregard by AFC of its duties under this Agreement. 16. Notices. Any notices under this Agreement shall be in writing, addressed and delivered or mailed postage-paid to the other parties at such address as such other party may designate for the receipt of such notice. Until further notice to the other parties, the addresses of the Fund and AFC are as follows: If to AFC: Armata Financial Corp. 135 East Baltimore Street Baltimore, Maryland 21202 If to the Fund: The Glenmede Trust Co. One Liberty Place 1650 Market Square Suite 1200 Philadelphia, Pennsylvania 19103 Attention: The Fund's President With a copy to: Mr. Michael P. Malloy Drinker Biddle & Reath Philadelphia National Bank Building 1345 Chestnut Street Philadelphia, Pennsylvania 19107-3496 17. Questions of Interpretation. Any question of interpretation of any term or provision of this Agreement having a counterpart in or otherwise derived from a term or provision of the 1940 Act shall be resolved by reference to such term or provision of the 1940 Act and to interpretations thereof if any, by the United States courts or in the absence of any controlling decision of any such court, by rules, regulations or orders of the SEC issued pursuant to the 1940 Act. In addition, where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is revised by rule, regulation or order of the SEC, such provision shall be deemed to incorporate the effect of such rule, regulation or order. Otherwise the provisions of this Agreement shall be interpreted in accordance with the laws of Maryland. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in duplicate by their respective officers as of the day and year first above written. [SEAL] THE GLENMEDE FUND, INC. Attest: By: /s/ John W. Church, Jr. ------------------------------ ---------------------------- [SEAL] ARMATA FINANCIAL CORP. Attest: By: /s/ Edward Veilleux ------------------------------ ---------------------------- Exhibit A THE GLENMEDE FUND, INC. One Liberty Place 1650 Market Square, Suite 1200 Philadelphia, PA 19103 SUB-DISTRIBUTION AGREEMENT , 19 ------------------------- --- Gentlemen: Armata Financial Corp. ("AFC"), a Maryland corporation, serves as distributor (the "Distributor") of The Glenmede Fund, Inc. (the "Fund"). The Fund is an open-end investment company registered under the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Fund offers its shares ("Shares") to the public in accordance with the terms and conditions contained in its Prospectus. The term "Prospectus" used herein refers to the prospectus on file with the Securities and Exchange Commission which is part of the Fund's registration statement under the Securities Act of 1933 (the "Securities Act"). In connection with the foregoing you may serve as a participating dealer (and, therefore, accept orders for the purchase or redemption of Shares, respond to shareholder inquiries and perform other related functions) on the following terms and conditions: 1. Participating Dealer. You are hereby designated a Participating Dealer and as such are authorized (i) to accept orders for the purchase of Shares and to transmit to the Fund such orders and the payment made therefore, (ii) to accept orders for the redemption of Shares and to transmit to the Fund such orders and all additional material, including any certificates for Shares, as may be required to complete the redemption and (iii) to assist shareholders with the foregoing and other matters relating to their investments in the Fund, in each case subject to the terms and conditions set forth in the Fund's Prospectus. You are to review each Share purchase or redemption order submitted through you or with your assistance for completeness and accuracy. You further agree to undertake from time to time certain shareholder servicing activities for customers of yours who have purchased Shares and who use your facilities to communicate with the Fund or to effect redemptions or additional purchases of Shares. 2. Limitation of Authority. No person is authorized to make any representations concerning the Fund or the Shares except those contained in the Fund's Prospectus and in such printed information as the Distributor may subsequently prepare. No person is authorized to distribute any sales material relating to the Fund without the prior written approval of the Distributor. 3. Compensation. As compensation for such services, you will look solely to the Distributor, and you acknowledge that the Fund shall have no direct responsibility for any compensation. 4. Prospectus and Reports. You agree to comply with the provisions contained in the Securities Act governing the distribution of prospectuses to persons to whom you offer Shares. You further agree to deliver, upon our request, copies of any amended Prospectus of the Fund to purchasers whose Shares you are holding as record owner and to deliver to such persons copies of the annual interim reports and proxy solicitation materials of the Fund. We agree to furnish to you as many copies of the Fund's Prospectus, annual and interim reports and proxy solicitation materials as you may reasonably request. 5. Qualifications to Act. You represent that you are a member in good standing of the National Association of Securities Dealers, Inc. (the "NASD"). Your expulsion or suspension from the NASD will automatically terminate this Agreement on the effective date of such expulsion or suspension. You agree that you will not offer Shares to persons in any jurisdiction in which you may not lawfully make such offer due to the fact that you have not registered under, or are not exempt from, the applicable registration or licensing requirements of such jurisdiction. You agree that in performing the services under this Agreement, you at all times will comply with the Rules of Fair Practice of the NASD, including, without limitation, the provisions of Section 26 of such Rules. You agree that you will not combine customer orders to reach breakpoints in commissions for any purposes whatsoever unless authorized by the then current Prospectus in respect of Shares of a particular class or by us in writing. You also agree that you will place orders immediately upon their receipt and will not withhold any order so as to profit therefrom. In determining the amount payable to you hereunder, we reserve the right to exclude any sales which we reasonably determine are not made in accordance with the terms of the Prospectus and provisions of the Agreement. 6. Blue Sky. The Fund has registered an indefinite number of Shares under the Securities Act. The Fund intends to register or qualify in certain states where registration or qualification is required. We inform you as to the states or other jurisdictions in which we believe the Shares have been qualified for sale under, or are exempt from the requirements of, the respective securities laws of such states. You agree that you will offer Shares to your customers only in those states where such Shares have been registered, qualified, or an exemption is available. We assume no responsibility or obligation as to your right to sell Shares in any jurisdiction. We will file with the Department of State in New York a State Notice and a Further State Notice with respect to the Shares, if necessary. 7. Authority of Fund. The Fund shall have full authority to take such action as it deems advisable in respect of all matters pertaining to the offering of its Shares, including the right not to accept any order for the purchase of Shares. 8. Record Keeping. You will (i) maintain all records required by law to be kept by you relating to transactions in Shares and, upon request by the Fund, promptly make such of these records available to the Fund as the Fund may reasonably request in connection with its operations and (ii) promptly notify the Fund if you experience any difficulty in maintaining the records described in the foregoing clauses in an accurate and complete manner. 9. Liability. The Distributor shall be under no liability to you except for lack of good faith and for obligations expressly assumed by them hereunder, and the Fund shall have no liability to you in connection with the matters to which this Agreement relates. In carrying out your obligations, you agree to act in good faith and without negligence. Nothing contained in this Agreement is intended to operate as a waiver by the Distributor or you of compliance with any provision of the Investment Company Act, the Securities Act, the Securities and Exchange Act of 1934, as amended, or the rules and regulations promulgated by the Securities and Exchange Commission thereunder. 10. Termination. This Agreement may be terminated by either party, without penalty, upon ten days' notice to the other party and shall automatically terminate in the event of its assignment (as defined in the Investment Company Act). This Agreement may also be terminated at any time without penalty by the vote of a majority of the members of the Board of Directors of the Fund who are not "interested persons" (as defined in the Investment Company Act) and who have no direct or indirect financial interest in the operation of the Distribution Agreement between the Fund and the Distributor or by the vote of a majority of the outstanding voting securities of the Fund. 11. Communications. All communications to us should be sent to 135 East Baltimore Street, Baltimore, Maryland 21202. Any notice to you shall be duly given if mailed or telegraphed to you at the address specified by you below. If the foregoing is in accordance with your understanding of our agreement, please sign and return to us one copy of this agreement. ARMATA FINANCIAL CORP. (Authorized Signature) ------------------------------ Confirmed and Accepted: Firm Name: -------------------------- By: -------------------------- Address: -------------------------- Date: -------------------------- EX-8.(A) 17 CUSTODY AGREEMENT EXHIBIT (8)(a) CUSTODY AGREEMENT AGREEMENT effective as of December 13, 1994 as amended and restated as of May 1, 1995 between THE CHASE MANHATTAN BANK, N.A. ("Bank") and THE GLENMEDE FUND, INC. (the "Fund"). WITNESSETH: WHEREAS, the Fund wishes to retain Bank to provide custodian services to the Fund for the benefit of the investment portfolios of the Fund listed on Exhibit A hereto, as the same may be amended from time to time by the parties hereto (each a "Portfolio," collectively, "Portfolios") and Bank is willing to furnish such services; NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. Custody Account. The Bank agrees to establish and maintain (a) a separate custody account for each Portfolio of the Fund ("Custody Account") for any and all stocks, shares, bonds, debentures, notes, mortgages or other obligations for the payment of money and any certificates, receipts, warrants or other instruments representing rights to receive, purchase or subscribe for the same or evidencing or representing any other rights of interests therein and other similar property (hereinafter called "Securities") from time to time received by the Bank or any subcustodian (as defined in the second paragraph of Section 3 hereof) for the account of the particular Portfolio of the Fund and (b) a separate deposit account(s) in the name of each Portfolio of the Fund ("Deposit Account") for any and all cash and cash equivalents in any currency received by the Bank or any subcustodian for the account of the particular Portfolio of the Fund, which cash shall not be subject to withdrawal by draft or check. The term "Property" as used herein shall mean all Securities, cash, cash equivalents and other assets of the Fund. 2. Maintenance of Property Domestically and Abroad. Securities in a Custody Account shall be held in the country or other jurisdiction as shall be specified from time to time in Instructions (as defined in Section 9 hereof), provided that such country or other jurisdiction shall be one in which the principal trading market for such Securities is located or the country of other jurisdiction in which such Securities are to be presented for payment or are acquired for the Custody Account, and cash in a Deposit Account shall be credited to an account in such country or other jurisdiction in which such cash may be legally deposited or is the legal currency for the payment of public or private debts. Cash may be held pursuant to Instructions in either interest or non-interest bearing accounts as may be available for the particular currency. To the extent Instructions are issued and the Bank can comply with such Instructions, the Bank is authorized to maintain cash balances on deposit for the Fund with itself or one of its affiliates at such reasonable rates of -2- interest as may from time to time be paid on such accounts, or in non-interest bearing accounts as the Fund may direct, if acceptable to the Bank. 3. Eligible Foreign Custodians and Securities Depositories. The Board of Directors of the Fund authorizes the Bank to hold the Securities in the Custody Account(s) and the cash in the Deposit Account(s) in custody and deposit accounts, respectively, which have been established by the Bank with one of its branches, a branch of a qualified U.S. bank, an eligible foreign custodian or an eligible foreign securities depository; provided, however, that the Board of Directors of the Fund has approved the use of, and the Bank's contract with, such eligible foreign custodian or eligible foreign securities depository by resolution, and Instructions to such effect have been provided to the Bank. Furthermore, if a Bank's branch, a branch of a qualified U.S. bank or an eligible foreign custodian is selected to act as the Bank's subcustodian to hold any Property, such entity is authorized to hold such Property in its account with any eligible foreign securities depository in which it participates so long as such foreign securities depository has been approved by the Board of Directors of the Fund. For purposes of this Agreement "qualified U.S. bank" and "eligible foreign custodian," shall have the same meanings as are given in Rule 17f-5 under the Investment Company Act of 1940, as amended ("Rule 17f-5") and "eligible foreign securities depository" shall be a depository within the meaning of Rule 17f-5(c)(2)(iii) and (iv). -3- Hereinafter the term "subcustodian" will refer to any Bank branch, any branch of a qualified U.S. bank, any eligible foreign custodian or any eligible foreign securities depository with which the Bank has entered into an agreement of the type contemplated hereunder regarding Securities and/or cash held in or to be acquired for a Custody Account or a Deposit Account. If, after the initial approval of the subcustodians by the Board of Directors of the Fund in connection with this Agreement, the Bank wishes to appoint other subcustodians to hold the Fund's Property, it will so notify the Fund and will provide it with information reasonably necessary to determine any such new subcustodian's eligibility under Rule 17f-5, including a copy of the proposed agreement with such subcustodian. The Fund shall within 30 days after receipt of such notice give a written approval or disapproval of the proposed action. If the Bank intends to remove any subcustodian previously approved, it shall so notify the Fund and shall move the Property deposited with such subcustodian to another subcustodian previously approved or to a new subcustodian, provided that the appointment of any new subcustodian will be subject to the requirements set forth in the preceding paragraph. The Bank shall take steps as may be required to remove any subcustodian which has ceased to meet the requirements of Rule 17f-5. -4- 4. Use of Subcustodians. With respect to Property which is maintained by the Bank in the physical custody of a subcustodian pursuant to Section 3: (a) The Bank will identify on its books as belonging to the particular Portfolio of the Fund any Property held by such subcustodian. (b) In the event that a subcustodian permits any of the Securities placed in its care to be held in an eligible foreign securities depository, such subcustodian will be required by its agreement with the Bank to identify on its books such Securities as being held for the account of the Bank as a custodian for its customers. (c) Any Securities in a Custody Account held by a subcustodian of the Bank will be subject only to the instructions of the Bank or its agents; and any Securities held in an eligible foreign securities depository for the account of a subcustodian will be subject only to the instructions of such subcustodian. (d) The Bank will only deposit Securities in an account with a subcustodian which includes exclusively the assets held by the Bank for its customers, and the Bank will cause such account to be designated by such subcustodian as a special custody account for the exclusive benefit of customers of the Bank. (e) Any agreement the Bank shall enter into with a subcustodian with respect to the holding of Securities shall require that (i) -5- the Securities are not subject to any right, charge, security interest, lien or claim of any kind in favor of such subcustodian or its creditors except for a claim of payment for its safe custody or administration and (ii) beneficial ownership of such Securities is freely transferable without the payment of money or value other than for safe custody or administration; provided, however, that the foregoing shall not apply to the extent that any of the above-mentioned rights, charges, etc. result from any compensation or other expenses arising with respect to the safekeeping of Securities pursuant to such agreement. (f) The Bank shall allow independent public accountants of the Fund such reasonable access to the records of the Bank relating to Property held in a Custody Account and a Deposit Account as required by such accountants in connection with their examination of the books and records pertaining to the affairs of the Fund. The Bank shall, subject to restrictions under applicable law, also obtain from any subcustodian with which the Fund maintains the physical possession of any Property an undertaking to permit independent public accountants of the Fund such reasonable access to the records of such subcustodian as may be required in connection with their examination of the books and records pertaining to the affairs of the Fund or to supply a verifiable confirmation of the contents of such records. The Bank shall furnish the Fund such reports (or portions thereof) of the Bank's external auditors as relate directly to the Bank's system of internal accounting controls applicable -6- to the Bank's duties under this Agreement. The Bank shall request for and furnish to the Fund such similar reports as may be furnished to it with respect to each subcustodian and securities depository holding the Fund's assets. (g) The Bank will supply to the Fund, care of its investment adviser, at least monthly a statement in respect to any Property in a Custody and a Deposit Account held by each subcustodian, including an identification of the entity having possession of such Property, and the Bank will send to the Fund an advice or notification of any transfers of Property to or from the Custody Account and Deposit Account, indicating, as to Property acquired for an investment portfolio of the Fund, the identity of the entity having physical possession of such Property. In the absence of the filing in writing with the Bank by the Fund of exceptions or objections to any such statement within sixty (60) days of the Fund's receipt of such statement, or within sixty (60) days after the date that a material defect is reasonably discoverable, the Fund shall be deemed to have approved such statement and in such case or upon written approval of the Fund of any such statement the Bank shall, to the extent permitted by law and provided the Bank has met the standard of care in Section 12 hereunder, be released, relieved and discharged with respect to all matters and things set forth in such statement as though such statement has been settled by the decree of a court of competent jurisdiction in an action in which the Fund and all persons having any equity interest in the Fund were parties. -7- (h) The Bank hereby warrants to the Fund that in its opinion, after due inquiry, the established procedures to be followed by each of its branches, each branch of a qualified U.S. bank, each eligible foreign custodian and each eligible foreign securities depository holding Securities of the Fund pursuant to this Agreement afford protection for such Securities at least equal to that afforded by the Bank's established procedures with respect to similar Securities held by the Bank (and its securities depositories) in New York. (i) The Bank hereby warrants to the Fund that as of the date of this Agreement it is maintaining a Bankers Blanket Bond sufficient to cover any of its liabilities hereunder and hereby agrees to notify the Fund in the event its Bankers Blanket Bond is canceled or otherwise lapses. 5. Deposit Account Payments. Subject to the provisions of Section 7, the Bank shall make, or cause its subcustodian to make, payments of cash credited to a Deposit Account only: (a) in connection with the purchase of Securities for the particular Portfolio of the Fund involved and the delivery of such Securities to, or the crediting of such Securities to the particular Custody Account of the Bank or its subcustodian, each such payment to be made at prices as confirmed by Instructions from Authorized Persons (as defined in Section 10 hereof); -8- (b) for the purchase or redemption of shares of the capital stock of the particular Portfolio of the Fund involved and the delivery to, or crediting to the account of, the Bank or its subcustodian of such shares to be so purchased or redeemed; (c) for the payment for the account of the particular Portfolio of the Fund involved of dividends, interest, taxes, management or supervisory fees, capital distributions or operating expenses; (d) for the payments to be made in connection with the conversion, exchange or surrender of Securities held in a Custody Account; (e) for spot or forward foreign exchange transactions to facilitate security trading, receipt of income from Securities or related transactions; (f) for other proper corporate purposes of the particular Portfolio of the Fund involved; or (g) upon the termination of this Custody Agreement as hereinafter set forth. All payments of cash for a purpose permitted by subsection (a), (b), (c) or (d) of this Section 5 will be made only upon receipt by the Bank of Instructions from Authorized Persons which shall specify the purpose for which the payment is to be made and the applicable subsection of this Section 5. In the case of any payment to be made for the purpose permitted by subsection (f) of this Section 5, the Bank must first receive a certified copy of a resolution -9- of the Board of Directors of the Fund adequately describing such payment, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom such payment shall be made. Any payment pursuant to subsection (g) of this Section 5 will be made in accordance with Section 17 hereof. In the event that any payment for a Portfolio of the Fund made under this Section 5 exceeds the funds available in that Portfolio's Deposit Account, the Bank may, in its discretion, advance the Fund on behalf of that Portfolio an amount equal to such excess and such advance shall be deemed a loan from the Bank to that Portfolio payable on demand, bearing interest at the rate of interest customarily charged by the Bank on similar loans. If the Bank causes a Deposit Account to be credited on the payable date for interest, dividends or redemptions, the particular Portfolio of the Fund involved will promptly return to the Bank any such amount or property so credited upon oral or written notification that neither the Bank nor its subcustodian can collect such amount or property in the ordinary course of business. The Bank or its subcustodian, as the case may be, shall have no duty or obligation to institute legal proceedings, file a claim or proof of claim in any insolvency proceeding or take any other action with respect to the collection of such amount or property beyond its ordinary collection procedures. 6. Custody Account Transactions. Subject to the provisions of Section 7, Securities in a Custody Account will be transferred, exchanged or delivered by the Bank or its subcustodians only: -10- (a) upon sale of such Securities for the particular Portfolio of the Fund involved and receipt by the Bank or its subcustodian of payment therefor, each such payment to be in the amount confirmed by Instructions from Authorized Persons; (b) when such Securities are called, redeemed or retired, or otherwise become payable; (c) in exchange for or upon conversion into other Securities alone or other Securities and cash pursuant to any plan of merger, consolidation, reorganization, recapitalization or readjustment; (d) upon conversion of such Securities pursuant to their terms into other Securities; (e) upon exercise of subscription, purchase or other similar rights represented by such Securities; (f) for the purpose of exchanging interim receipts or temporary Securities for definitive Securities; (g) for the purpose of redeeming in-kind shares of the capital stock of the particular Portfolio of the Fund involved against delivery to the Bank or its subcustodian of such shares to be redeemed; (h) in connection with any borrowings by the particular Portfolio requiring a pledge of Securities, but only against receipt of amounts borrowed; (i) in connection with any loans, but only against receipt of adequate collateral as specified in Instructions which shall reflect any restrictions applicable to the Fund; -11- (j) for delivery in accordance with the provisions of any agreement among the Fund, the Bank and a broker-dealer registered under the Securities Exchange Act of 1934 (the "Exchange Act") and a member of the National Association of Securities Dealers, Inc. relating to compliance with the rules of The Options Clearing Corporation and of any registered national securities exchange, or of any similar organizations, regarding escrow or other arrangements in connection with transactions by the particular Portfolio; (k) for release of Securities to designated brokers under covered call options, provided, however, that such Securities shall be released only upon payment to the Bank of monies for the premium due and a receipt for the Securities which are to be held in escrow. Upon exercise of the option, or at expiration, the Bank will receive the Securities previously deposited from brokers. The Bank will act strictly in accordance with Instructions in the delivery of Securities to be held in escrow and will have no responsibility or liability for any such Securities which are not returned promptly when due other than to make proper request for such return. (l) for other proper corporate purposes of the particular Portfolio of the Fund involved; or (m) upon the termination of this Custody Agreement as hereinafter set forth. -12- All transfers, exchanges or deliveries of Securities in a Custody Account for a purpose permitted by either subsection (a), (b), (c), (d), (e) or (f) of this Section 6 will be made, except as provided in Section 8 hereof, only upon receipt by the Bank of Instructions from Authorized Persons which shall specify the purpose of the transfer, exchange or delivery to be made and the applicable subsection of this Section 6. In the case of any transfer or delivery to be made for the purpose permitted by subsection (g) of this Section 6, the Bank must first receive Instructions from Authorized Persons specifying the shares held by the Bank or its subcustodian to be so transferred or delivered and naming the person or persons to whom transfers or delivery of such shares shall be made. In the case of any transfer, exchange or delivery to be made for the purpose permitted by subsection (h) of this Section 6, the Bank must first receive a certified copy of a resolution of the Board of Directors of the Fund adequately describing such transfer, exchange or delivery, declaring such purpose to be a proper corporate purpose, and naming the person or persons to whom delivery of such Securities shall be made. Any transfer or delivery pursuant to subsection (m) of this Section 6 will be made in accordance with Section 17 hereof. 7. Custody Account Procedures. With respect to any transaction involving Securities held in or to be acquired for a Custody Account, the Bank in its discretion may cause the Deposit Account for the particular Portfolio of the Fund involved to be credited on the contractual settlement date with the proceeds of any sale or exchange of Securities from the particular Custody -13- Account and to be debited on the contractual settlement date for the cost of Securities purchased or acquired for the particular Custody Account. The Bank may reverse any such credit or debit if the transaction with respect to which such credit or debit was made fails to settle within a reasonable period, determined by the Bank in its discretion, after the contractual settlement date, except that if any Securities delivered pursuant to this Section 7 are returned by the recipient thereof, the Bank may cause any such credits and debits to be reversed at any time. With respect to any transactions as to which the Bank does not determine so to credit or debit the particular Deposit Account, the proceeds from the sale or exchange of Securities will be credited and the cost of such Securities purchased or acquired will be debited to the particular Deposit Account on the date such proceeds or Securities are received by the Bank. Notwithstanding the preceding paragraph, settlement and payment for Securities received for, and delivery of Securities out of, a Custody Account may be effected in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction or market in which the transaction occurs, including, without limitation, delivering Securities to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) against a receipt with the expectation of receiving later payment for such Securities from such purchaser or dealer. -14- 8. Actions of the Bank. Until the Bank receives Instructions from Authorized Persons to the contrary, the Bank will, or will instruct its subcustodian, to: (a) present for payment any Securities in a Custody Account which are called, redeemed or retired or otherwise become payable and all coupons and other income items which call for payment upon presentation to the extent that the Bank or subcustodian is aware of such opportunities for payment, and hold cash received upon presentation of such Securities in accordance with the provisions of Sections 2, 3 and 4 hereof; (b) in respect of Securities in a Custody Account, execute in the name of the Fund on behalf of the particular Portfolio involved such ownership and other certificates as may be required to obtain payments in respect thereof; (c) exchange interim receipts or temporary Securities in a Custody Account for definitive Securities; (d) (if applicable) convert monies received with respect to Securities of foreign issue into United States dollars or any other currency necessary to effect any transaction involving the Securities whenever it is practicable to do so through customary banking channels, using any method or agency available, including, but not limited to, the facilities of the Bank, its subsidiaries, affiliates or subcustodians; (e) (if applicable) appoint brokers and agents for any transaction involving the Securities in a Custody Account, including, without limitation, affiliates of the Bank or any subcustodian; and -15- (f) reclaim taxes withheld by foreign issuers where reclaim is possible, provided that Bank has been provided with all documentation it may require. 9. Instructions. As used in this Agreement, the term "Instructions" means instructions of the Fund received by the Bank via telephone, telex, TWX, facsimile transmission, bank wire or other teleprocess or electronic instruction system acceptable to the Bank which the Bank believes in good faith to have been given by Authorized Persons or which are transmitted with proper testing or authentication pursuant to terms and conditions which the Bank may specify. Any Instructions delivered to the Bank by telephone shall promptly thereafter be confirmed in writing by an Authorized Person (which confirmation may bear the facsimile signature of such Person), but the particular Portfolio of the Fund involved will hold the Bank harmless for the Fund's (i) failure to send such confirmation in writing, or (ii) the failure of such confirmation to conform to the telephone Instructions received. Unless otherwise expressly provided, all Instructions shall continue in full force and effect until canceled or superseded. If the Bank requires test arrangements, authentication methods or other security devices to be used with respect to Instructions, any Instructions given by the Fund thereafter shall be given and processed in -16- accordance with such terms and conditions for the use of such arrangements, methods or devices as the Bank may put into effect and modify from time to time. The Fund shall safeguard any testkeys, identification codes or other security devices which the Bank shall make available to them. The Bank may electronically record any Instructions given by telephone, and any other telephone discussions, with respect to a Custody Account. 10. Authorized Persons. As used in this Agreement, the term "Authorized Persons" means such officers or such agents of the Fund as have been designated by a resolution of the Board of Directors of the Fund, a certified copy of which has been provided to the Bank, to act on behalf of the Fund in the performance of any acts which Authorized Persons may do under this Agreement. Such persons shall continue to be Authorized Persons until such time as the Bank receives Instructions from Authorized Persons that any such officer or agent is no longer an Authorized Person. 11. Nominees. Securities in a Custody Account which are ordinarily held in registered form may be registered in the name of the Bank's nominee or, as to any Securities in the possession of an entity other than the Bank, in the name of such entity's nominee. The particular Portfolio of the Fund involved agrees to hold any such nominee harmless from any liability as a holder of record of such Securities, but not if such liability is a result of such nominee's negligence. The Bank may without notice to the Fund cause any such Securities to -17- cease to be registered in the name of any such nominee and to be registered in the name of the Fund. In the event that any Securities registered in the name of the Bank's nominee or held by one of its subcustodians and registered in the name of such subcustodian's nominee are called for partial redemption by the issuer of such Security, the Bank may allot, or cause to be allotted, the called portion to the respective beneficial holders of such class of security in any manner the Bank deems to be fair and equitable. 12. Standard of Care. (a) The Bank shall be obligated to perform only such duties as are set forth in this Agreement or expressly contained in instructions given to Bank which are consistent with the provisions of this Agreement. (i) The Bank will use reasonable care with respect to its obligations under this Agreement and the safekeeping of Property. The Bank shall be liable to the Fund for any loss which shall occur as the result of the failure of a subcustodian or an eligible foreign securities depository to exercise reasonable care with respect to the safekeeping of such Property to the same extent that the Bank would be liable to the Fund if the Bank were holding such Property in New York. In the event of any loss to the Fund by reason of the failure of the Bank or its subcustodian or an eligible foreign securities -18- depository to exercise reasonable care, the Bank shall be liable to the Fund only to the extent the Fund's direct damages and expenses, to be determined based on, but not limited to, the market value of the Property which is the subject of the loss at the date of discovery of such loss, and without reference to any special conditions or circumstances. (ii) The Bank will not be responsible for any act, omission, default or for the solvency of any broker or agent (other than as provided herein) which it or a subcustodian appoints and uses unless such appointment and use were made or done negligently or in bad faith. (iii) The Bank shall be indemnified by, and without liability to the Fund and the particular Portfolio of the Fund involved for any action taken or omitted by the Bank whether pursuant to Instructions or otherwise within the scope of this Agreement if such act or omission was in good faith and without negligence. In performing its obligations under this Agreement, the Bank may rely on the genuineness of any document which it believes in good faith and without negligence to have been validly executed. -19- (iv) The Fund, on behalf of the particular Portfolio of the Fund involved, agrees to cause such Portfolio to pay for and hold the Bank harmless from any liability or loss resulting from the imposition or assessment of any taxes or other governmental charges, and any related expenses with respect to income from or Property in such Portfolio's Custody Account and Deposit Account. (v) The Bank shall be entitled to rely, and may act upon the advice of counsel (who may be counsel for the Fund) on all matters and shall be without liability for any action reasonably taken or omitted in good faith and without negligence pursuant to such advice. (vi) The Bank need not maintain any insurance for the exclusive benefit of the Fund. (vii) Without limiting the foregoing, the Bank shall not be liable for any loss which results from: 1) the general risk of investing, or 2) subject to Section 12(a)(i) hereof, investing or holding Property in a particular country including, but not limited to, losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities -20- industry; currency restrictions, devaluations or fluctuations; and market conditions which prevent the orderly execution of securities transactions or affect the value of Property. (viii) No party shall be liable to the other for any loss due to forces beyond its control including but not limited to strikes or work stoppages, acts of war or terrorism, insurrection, revolution, nuclear fusion, fission or radiation, or acts of God. (b) Consistent with and without limiting the first paragraph of this Section 12, it is specifically acknowledged that the Bank shall have no duty or responsibility to: (i) Question Instructions or make any suggestions to the Fund or an Authorized Person regarding such Instructions; (ii) Supervise or make recommendations with respect to investments or the retention of Securities; (iii) Subject to Section 12(a)(ii) hereof, evaluate or report to the Fund or an Authorized Person regarding the financial condition of any broker, agent or other party to which Securities are delivered or payments are made pursuant to this Agreement; or -21- (iv) Review or reconcile trade confirmations received from brokers. (c) The Bank shall provide to the Fund, on an annual basis, a report confirming that the arrangements hereunder remain in compliance with the rules of the Securities and Exchange Commission governing such arrangements. 13. Compliance with Securities and Exchange Commission Rules and Orders. Except to the extent the Bank has specifically agreed pursuant to this Agreement or in an exemptive order to comply with a condition of Rule 17f-5 or any interpretation or exemptive order promulgated thereunder by or under the authority of the Securities and Exchange Commission, the Fund shall be solely responsible to assure that the maintenance of Securities and cash under this Agreement complies with such Rule 17f-5. 14. Corporate Actions. (a) With respect to domestic U.S. and Canadian Securities (the latter only when held with DTC), the Bank will send to the Customer or the Authorized Person for a Custody Account such proxies (signed in blank, if issued in the name of the Bank's nominee or the nominee of a central depository) and communications with respect to Securities in the Custody Account as call for voting or relate to legal proceedings within a reasonable time after sufficient copies are received by the Bank for forwarding to its customers. In addition, the Bank will follow coupon payments, redemptions, exchanges or similar matters -22- with respect to Securities in the Custody Account and advise the Customer or the Authorized Person for such Account of rights issued, tender offers or any other discretionary rights with respect to such Securities, in each case, of which the Bank has received notice from the issuer of the Securities, or as to which notice is published in publications routinely utilized by the Bank for this purpose. (b) With respect to proxies and Corporate Actions (as defined below) not covered by paragraph (a) of this Section 14: (i) Whenever the Bank or its subcustodian receives information concerning the Securities which requires discretionary action by the beneficial owner of the Securities (other than a proxy), such as subscription rights, bonus issues, stock repurchase plans and rights offerings, or legal notices or other material intended to be transmitted to securities holders ("Corporate Actions"), the Bank will give the Fund notice of such Corporate Actions to the extent that the Bank's central corporate actions department has actual knowledge of a Corporate Action in time to notify its customers. (ii) When a rights entitlement or a fractional interest resulting from a rights issue, stock dividend, stock split or similar Corporate Action is received which bears an expiration date, the Bank or its subcustodians will -23- endeavor to obtain Instructions from the Fund or its Authorized Persons, but if Instructions are not received in time for the Bank to take timely action, or actual notice of such Corporate Action was received too late to seek Instructions, the Bank is authorized to sell such rights entitlement or fractional interest and to credit the applicable Deposit Account with the proceeds and to take any other action it deems in good faith to be appropriate in which case, provided it has met the standard of care in Section 12 hereof, it shall be held harmless by the particular Portfolio of the Fund involved for any such action. (iii) Proxies will only be voted pursuant to special arrangements which may have been agreed to in writing between the parties hereto. 15. Fees and Expenses. The Fund agrees to pay the Bank from time to time such compensation for its services pursuant to this Agreement as may be mutually agreed upon in writing from time to time and the Bank's out-of-pocket or incidental expenses, including (but without limitation) reasonable legal fees. The Fund hereby agrees on behalf of its respective Portfolios to cause the particular Portfolio of the Fund involved to hold the Bank harmless from any liability or loss resulting from any taxes or other governmental charges, and any expenses related thereto, which may be imposed, or assessed with respect to -24- such Portfolio's Custody Account and also agrees on behalf of its respective Portfolios to cause the particular Portfolio of the Fund involved to hold the Bank, its subcustodians, and their respective nominees harmless from any liability as a record holder of Securities in such Portfolio's Custody Account. The Bank is authorized to charge any account of the particular Portfolio of the Fund involved for such items specified in the previous sentence and the Bank shall have a lien on Securities in such Portfolio's Custody Account and on cash in such Portfolio's Deposit Account for any amount owing to the Bank in connection with such Portfolio from time to time under this Agreement. 16. Effectiveness. This Agreement shall be effective on the date first noted above. 17. Termination. This Agreement may be terminated by the Fund or the Bank by 60 days' written notice to the other, sent by registered mail. If notice of termination is given by the Bank, the Fund shall, within 60 days following the giving of such notice, deliver to the Bank a certified copy of a resolution of the Board of Directors of the Fund specifying the names of the persons to whom the Bank shall deliver such Securities and cash, after deducting therefrom any amounts which the Bank determines to be owed to it under Section 15 hereof. If within 60 days following the giving of a notice of termination by the Bank, the Bank does not receive from the Fund a certified copy of a resolution of the Board of Directors of the Fund specifying the names of the persons to whom the -25- cash in each Deposit Account shall be paid and to whom the Securities in each Custody Account shall be delivered, the Bank, at its election, may deliver such Securities and pay such cash to a bank or trust company doing business in the State of New York and qualified as a custodian under the Investment Company Act of 1940 and other applicable rules and regulations to be held and disposed of pursuant to the provisions of this Agreement, or to Authorized Persons, or may continue to hold such Securities and cash until a certified copy of one or more resolutions as aforesaid is delivered to the Bank. The obligations of the parties hereto regarding the use of reasonable care, indemnities and payment of fees and expenses shall survive the termination of this Agreement, and the obligations of each Portfolio of the Fund to indemnify and/or hold harmless other persons or entities under this Agreement shall be the several (and not the joint or joint and several) obligation of each Portfolio of the Fund. 18. Notices. Any notice or other communication from the Fund to the Bank is to be sent to the office of the Bank at: The Chase Manhattan Bank, N.A. Chase MetroTech Center Brooklyn, NY 11245 Attention: Global Custody Division or such other address as may hereafter be given to the Fund in accordance with the notice provisions hereunder, and any notice from the Bank to the Fund is to be mailed postage prepaid, addressed to the Fund at the addresses appearing below, or as the same may hereafter be changed on the Bank's records in accordance with notice hereunder from the Fund. -26- 19. Governing Law and Successors and Assigns. This Agreement shall be governed by the law of the State of New York and shall not be assignable by any party without the prior written consent of the other party, and shall bind the successors and assigns of the Fund and the Bank. 20. Headings. The headings of the paragraphs hereof are included for convenience of reference only and do not form a part of this Agreement. 21. Counterpart Execution. This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one agreement. 22. Confidentiality. Bank agrees on behalf of itself and its employees to treat confidentially all records and other information relative to the Fund and its prior, present, or potential shareholders, except, after prior notification to and approval in writing by the Fund which approval shall not be unreasonably withheld and may not be withheld where Bank may be exposed to civil or criminal contempt proceedings for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. -27- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below on the day and year first above written. THE CHASE MANHATTAN BANK, N.A. By: /s/ Matthew Goad --------------------------- Address for record: 4 Chase MetroTech Center Brooklyn, NY 11245 ------------------------------ THE GLENMEDE FUND, INC. By: /s/ John W. Church, Jr. ---------------------------- Address for record: One Liberty Place 1650 Market Street, Suite 1200 Philadelphia, PA 19103-7391 -------------------------------- -28- EXHIBIT A Portfolios covered by the Custody Agreement between The Chase Manhattan Bank, N.A. and The Glenmede Fund, Inc. Emerging Markets Portfolio Government Cash Portfolio Tax-Exempt Cash Portfolio Intermediate Government Cash Portfolio Equity Portfolio Small Capitalization Equity Portfolio Model Equity Portfolio International Fixed Income Portfolio International Portfolio Institutional International Portfolio -29- EX-8.(B) 18 AMENDMENT TO CUSTODY AGREEMENT EXHIBIT (8)(b) Amendment to Custody Agreement ------------------------------ Amendment dated May 1, 1995, to the Custody Agreement dated December 13, 1994, as amended and restated May 1, 1995, between The Glenmede Fund, Inc. ("Fund") and The Chase Manhattan Bank, N.A. ("Bank"). It is agreed that from the date hereof until such time as Bank acquires United States Trust Company of New York ("US Trust"): 1. The following shall be inserted at the end of ss.1: "Bank may appoint any bank qualifying under ss.17f(1) of the Investment Company Act of 1940, as amended, as its subcustodian with respect to Fund's U.S. and Canadian Securities (the latter only where held with The Depository Trust Company ("DTC")) and such bank shall be a 'subcustodian' for purposes of this Agreement. In that connection, Fund hereby approves the appointment by Bank of United States Trust Company of New York ("US Trust") as such subcustodian." 2. The following shall be inserted in the third line of ss.12(a)(iii) after the word "Bank": "or US Trust." This Amendment may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document. All counterparts shall be construed together and shall constitute one Amendment. IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have executed this Amendment as of the above-written date. THE GLENMEDE FUND, INC. THE CHASE MANHATTAN BANK, N.A. By:/s/John W. Church, Jr. By:/s/Matthew Goad ---------------------- ---------------------------- Title: President Title: Vice President ------------------ ------------------------ EX-9.(A) 19 MASTER SERVICES AGREEMENT EXHIBIT (9)(a) MASTER SERVICES AGREEMENT THIS AGREEMENT is made as of the 1st day of July, 1995 by and between THE GLENMEDE FUND, INC., a Maryland corporation (the "Fund"), and INVESTMENT COMPANY CAPITAL CORP., a Maryland corporation ("ICC"). W I T N E S S E T H: WHEREAS, the Fund is registered as an open-end, diversified management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"); and WHEREAS, the Fund desires to retain ICC to provide certain services on behalf of the Fund, as set forth in the Appendices to this Agreement, and ICC is willing so to serve. NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, it is agreed between the parties hereto as follows: 1. Appointment. The Fund hereby appoints ICC to perform such services and to serve such functions on behalf of the Fund as set forth in the Appendices to this Agreement, on the terms set forth in this Agreement and the Appendices hereto. ICC accepts such appointment and agrees to furnish such services and serve such functions. The Fund may have currently outstanding one or more series or classes of its shares of common stock ("Shares") and may from time to time hereafter issue separate series or classes of its Shares or classify and reclassify Shares of any series or class, and the appointment effected hereby shall constitute appointment for the provision of services with respect to all existing series and classes and any additional series and classes unless the Fund shall notify ICC to the contrary. 2. Delivery of Documents. The Fund has furnished ICC with copies properly certified or authenticated of the following documents and will furnish ICC from time to time with copies, properly certified or authenticated, of all amendments of or supplements thereto, if any: (a) Resolutions of the Fund's Board of Directors authorizing the appointment of ICC to act in such capacities on behalf of the Fund as set forth in the Appendices to this Agreement, and the entering into of this Agreement by the Fund; (b) The Fund's Articles of Incorporation and all amendments thereto (the "Charter") and the Fund's By-Laws and all amendments thereto (the "By-Laws"); (c) The Fund's most recent Registration Statement on Form N-1A under the Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act as filed with the Securities and Exchange Commission (the "SEC") relating to the Shares; and (d) Copies of the Fund's most recent prospectus or prospectuses, including amendments and supplements thereto (collectively, the "Prospectus"). 3. Services to be Provided; Fees. During the term of this Agreement, ICC shall perform the services and act in such capacities on behalf of the Fund as set forth herein and in the Appendices to this Agreement. For the services performed by ICC for the Fund, the Fund will compensate ICC in such amounts as set forth in the Fee Schedule attached hereto, as the same may be amended from time to time by the parties in writing. 4. Records. The books and records pertaining to the Fund which are in the possession of ICC shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the 1940 Act and other applicable securities laws and rules and regulations. The Fund, or the Fund's authorized representatives, shall have access to such books and records at all times during ICC's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by ICC to the Fund or the Fund's authorized representative at the Fund's expense. 5. Cooperation With Accountants. In addition to any obligations set forth in an Appendix hereto, ICC shall cooperate with the Fund's independent accountants and shall take all reasonable actions in the performance of its obligations under this Agreement to ensure that the necessary information is made available to such accountants for the expression of such accountants' opinion of the Fund's financial statements or otherwise, as such may be required by the Fund from time to time. 6. Compliance With Governmental Rules and Regulations. Except with respect to the responsibilities for monitoring and reporting on compliance and other services to be performed by ICC hereunder, the Fund assumes full responsibility for ensuring that the Fund complies with all applicable requirements of the 1933 Act, the Securities Exchange Act of 1934 (the "1934 Act"), the 1940 Act, and any laws, rules and regulations of governmental authorities having jurisdiction. ICC undertakes to comply with all applicable requirements of the 1933 Act, the 1934 Act, the 1940 Act, the Commodities Exchange Act (if applicable), and all laws, rules and regulations of governmental authorities having jurisdiction with respect to the performance by ICC of its duties under this Agreement, including the Appendices hereto. 7. Expenses. (a) ICC shall bear all expenses of its employees and overhead incurred in connection with its duties under this Agreement and shall pay all salaries and fees of the Fund's directors and officers who are employees of ICC. (b) The Fund assumes and shall pay or cause to be paid all other expenses of the Fund, including, without limitation: the fees of the Fund's investment advisor, administrator and distributor; the charges and expenses of any registrar, any custodian or depositary appointed by the Fund for the safekeeping of its cash, portfolio securities and other property, and any stock transfer, dividend or accounting agent or agents appointed by the Fund; brokers' commissions chargeable to the Fund in connection with portfolio securities transactions to which the Fund is a party; all taxes, including securities issuance and transfer taxes, and corporate fees payable by the Fund to federal, state or other governmental agencies; the cost and expense of engraving or printing of stock certificates representing Shares; all costs and expenses in connection with maintenance of registration of the Fund and its Shares with the SEC and various states and other jurisdictions (including filing fees and legal fees and disbursements of Fund counsel); the expenses of printing, including typesetting, and distributing prospectuses of the Fund and supplements thereto to the Fund's then current shareholders; all expenses of shareholders' and directors' meetings (except expenses relating to the materials sent by ICC and its affiliates to the Board) and of preparing, printing and mailing of proxy statements and reports to shareholders; fees and travel expenses of directors or members of any advisory board or committee; all expenses incident to the payment of any dividend, distribution, withdrawal or redemption, whether in Shares or in cash; charges and expenses of any outside service used for pricing of the Shares; charges and expenses of the Fund's legal counsel, including counsel to the directors of the Fund who are not "interested persons" of the Fund (as defined in the 1940 Act), and of independent accountants, in connection with any matter relating to the Fund (except expenses relating to tax returns); a portion of membership dues of industry associations; interest payable on fund borrowings; postage; insurance premiums on property or personnel (including officers and directors) of the Fund which inure to its benefit; extraordinary expenses (including, but not limited to, legal claims and liabilities and litigation costs and any indemnification related thereto); and all other charges and costs of the Fund's operation unless otherwise explicitly provided herein. -2- 8. Liability; Indemnification. Neither ICC nor any of its officers, directors or employees shall be liable for any error of judgment or for any loss suffered by the Fund in connection with the matters to which this Agreement, including the Appendices hereto, relates, except a loss resulting from willful misfeasance, bad faith or negligence on its or their part in the performance of, or from reckless disregard by it or them of its or their obligations and duties under this Agreement. Neither ICC nor any of its officers, trustees or employees shall be liable to the Fund in the performance of their obligations hereunder for any loss resulting from the willful misfeasance, bad faith or negligence of others not controlled by them or under their direction. ICC shall not be liable to the Fund and the Fund agrees to indemnify and hold harmless ICC and its nominees from all taxes, charges, expenses, assessments, claims and liabilities (including, without limitation, liabilities arising under the 1933 Act, the 1934 Act, the 1940 Act , and any state and foreign securities and blue sky laws, all as currently in existence or as amended from time to time) and expenses, including (without limitation) attorneys' fees and disbursements, arising directly or indirectly from any action or thing which ICC takes or does or omits to take or do at the request or on the direction of or in reliance on the advice of the Fund; provided, that neither ICC nor any of its nominees shall be relieved from any liability or indemnified against any liability to the Fund or to its shareholders (or any expenses incident to such liability) arising out of ICC's own willful misfeasance, bad faith, negligence or reckless disregard of its duties and obligations under this Agreement. Notwithstanding anything else in this Agreement or any Appendix hereto to the contrary, ICC shall have no liability to the Fund for any consequential, special or indirect losses or damages which the Fund may incur or suffer as a consequence of ICC's performance of the services provided in this Agreement or any Appendix hereto. 9. Responsibility of ICC. ICC shall be under no duty to take any action on behalf of the Fund except as specifically set forth herein or as may be specifically agreed to by ICC in writing. In the performance of its duties hereunder, ICC shall be obligated to exercise care and diligence and to act in good faith and to use its best efforts within reasonable limits in performing services provided for under this Agreement, but ICC shall not be liable for any act or omission which does not constitute willful misfeasance, bad faith or negligence on the part of ICC or reckless disregard by ICC of its duties under this Agreement. Notwithstanding anything in this Agreement to the contrary, ICC shall have no liability to the Fund for any consequential, special or indirect losses or damages which the Fund may incur or suffer by or as a consequence of ICC's performance of the services provided hereunder. 10. Non-Exclusivity. The services of ICC to the Fund are not to be deemed exclusive and ICC shall be free to render accounting or other services to others (including other investment companies) and to engage in other activities. It is understood and agreed that directors, officers or employees of ICC may serve as directors or officers of the Fund, and that directors or officers of the Fund may serve as directors, officers and employees of ICC to the extent permitted by law; and that directors, officers and employees of ICC are not prohibited from engaging in any other business activity or from rendering services to any other person, or from serving as partners, directors or officers of any other firm or corporation, including other investment companies. 11. Notice. Any notice or other communication required to be given pursuant to this Agreement shall be deemed duly given if delivered or mailed by registered mail, postage prepaid, to the Fund at the Glenmede Trust Company, One Liberty Place, 1650 Market Square, Suite 1200, Philadelphia, PA 19103, Attention: the Fund's President, with a copy to Mr. Michael P. Malloy at Drinker Biddle & Reath, Philadelphia National Bank Building, 1345 Chestnut Street, Philadelphia, PA 19107-3496 or to ICC at 135 E. Baltimore Street, Baltimore, Maryland 21202, Attention: Mr. Edward J. Veilleux. 12. Miscellaneous. (a) This Agreement shall become effective as of the date first above written and shall remain in force until terminated. This Agreement, or any Appendix hereto, may be terminated at any time without the payment of any penalty by either party hereto on sixty (60) days' written notice to the other party. -3- (b) This Agreement shall be construed in accordance with the laws of the State of Maryland. (c) If any provisions of this Agreement shall be held or made invalid in whole or in part, the other provisions of this Agreement shall remain in force. Invalid provisions shall, in accordance with the intent and purpose of this Agreement, be replaced by mutual consent of the parties with such valid provisions which in their economic effect come as close as legally possible to such invalid provisions. (d) Except as otherwise specified in the Appendices hereto, ICC shall be entitled to rely on any notice or communication reasonably believed by it to be genuine and correct and to have been sent to it by or on behalf of the Fund. (e) ICC agrees on behalf of itself and its employees (1) to treat confidentially all records and other information or data relative to the Fund, its prior, present, or potential record and beneficial shareholders and/or customers of The Glenmede Trust Company and (ii) not to use such records, information or data for any purpose other than performance of its responsibilities and duties under this Agreement or any Appendix attached hereto, except, after prior notification to and approval in writing by the Fund, which approval shall not be unreasonably withheld and may not be withheld where ICC may be exposed to civil or criminal contempt proceeding for failure to comply, when requested to divulge such information by duly constituted authorities, or when so requested by the Fund. (f) Any part of this Agreement or any Appendix attached hereto may be changed or waived only by an instrument in writing signed by both parties hereto. (g) This Agreement and each Appendix attached hereto shall extend to and shall be binding upon the parties hereto and their respective successors and assigns; provided however, that this Agreement and each Appendix attached hereto shall not be assignable without the written consent of the other party. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. THE GLENMEDE FUND, INC. By: /s/John W. Church, Jr. --------------------------------- Title: President INVESTMENT COMPANY CAPITAL CORP. By: /s/Edward Veilleux --------------------------------- Title: President Appendices: Administrative Services Accounting Services Transfer Agency Services -4- Date: July 1, 1995 --------------------- FEE SCHEDULE FOR SERVICES PROVIDED TO THE GLENMEDE FUND, INC. AND THE GLENMEDE PORTFOLIOS PURSUANT TO THE MASTER SERVICES AGREEMENT AND THE APPENDICES THERETO Investment Company Capital Corp. - Administrative Services - Accounting Services - Transfer Agency Services For the combined services listed above, Investment Company Capital Corp. will charge the following fees to the Glenmede Fund, Inc. and The Glenmede Portfolios based upon their combined net assets. Combined Net Assets Incremental Fee ------------------- --------------- $0 - $100,000,000 .12% over $100,000,000 - $250,000,000 .08% over $250,000,000 - $750,000,000 .04% Over $750,000,000 .03% ADMINISTRATIVE SERVICES APPENDIX to MASTER SERVICES AGREEMENT between The Glenmede Fund, Inc. and Investment Company Capital Corp. This Appendix is hereby incorporated into and made a part of the Master Services Agreement dated as of July 1, 1995 (the "Master Services Agreement") between The Glenmede Fund, Inc. and Investment Company Capital Corp. Defined terms not otherwise defined herein shall have the meaning set forth in the Master Services Agreement. 1. Services to be Provided. ICC will perform the following services on an ongoing basis: (a) supervise and manage all aspects of the Fund's operations, other than portfolio management and distribution; (b) provide the Fund with such executive, administrative, clerical and bookkeeping services as are deemed advisable by the Fund's Board of Directors; (c) provide the Fund with, or obtain, adequate office space and all necessary equipment and services, including telephone service, heat, utilities, stationery supplies and similar items for any offices as are deemed advisable by the Fund's Board of Directors; (d) arrange but, except for the preparation of tax returns, not pay for, the periodic updating of Prospectuses and supplements thereto, proxy material, tax returns, reports to the Fund's shareholders and reports to and filings with the SEC and state Blue Sky authorities; (e) provide the Fund with such administrative and clerical services for the maintenance of certain shareholder records as are deemed advisable by the Fund's Board of Directors; and (f) monitor and report on the Fund's compliance with all regulatory, tax and prospectus requirements. 2. Fees. For the service performed by ICC for the Fund pursuant to this Appendix, the Fund will pay to ICC compensation for such services as set forth in the Fee Schedule attached to the Master Services Agreement, as the same may be amended from time to time by the parties in writing. -6- ACCOUNTING SERVICES APPENDIX to MASTER SERVICES AGREEMENT between The Glenmede Fund, Inc. and Investment Company Capital Corp. This Appendix is hereby incorporated into and made a part of the Master Services Agreement dated as of July 1, 1995 (the "Master Services Agreement") between The Glenmede Fund, Inc. and Investment Company Capital Corp. Defined terms not otherwise defined herein shall have the meaning set forth in the Master Services Agreement. 1. Accounting Services to be Provided. ICC will perform the following accounting functions: (a) Journalize investment, capital shares and income and expense; (b) Verify investment buy/sell trade tickets when received from the Fund's investment advisor and transmit trades to the Fund's custodian for proper settlement; (c) Maintain individual ledgers for investment securities; (d) Maintain tax lots for each security; (e) Reconcile cash and investment balances with the custodian, and provide the Fund's investment advisor with the beginning cash balance available for investment purposes; (f) Update the cash availability throughout the day as required by the Fund's investment advisor; (g) Post to and prepare the Fund's Statement of Net Assets and Liabilities and the Statement of Operations; (h) Calculate various contractual expenses (e g. advisor and custody fees); (i) Monitor and report on the expense accruals and notify Fund management of any proposed adjustments; (j) Control all disbursements from the Fund and authorize such disbursements upon written instructions from the President or any other officer of the Fund or the investment advisor; (k) Calculate capital gains and losses; (l) Determine the Fund's net income; (m) Obtain security market quotes from independent pricing services approved by the investment advisor, or if such quotes are unavailable, then obtain such prices from the investment advisor, and in either case calculate the market value of portfolio investments; (n) Transmit or mail a copy of the daily portfolio valuation to the Fund's investment advisor; (o) Compute the Fund's net asset value in accordance with the Fund's current Prospectus and resolutions of the Fund's Board; (p) As appropriate, compute the yields, total return, expense ratios, and portfolio turnover rate; (q) Prepare a monthly financial statement, which will include the following items: - Schedule of Investments; - Statement of Net Assets and Liabilities; - Statement of Operations; - Statement of Changes in Net Assets; - Cash Statement; - Schedule of Capital Gains and Losses; (r) Prepare and file with the appropriate regulatory authorities (as applicable): - Federal and State Tax Returns; - Excise Tax Returns; - Annual, Semi-annual and Quarterly Shareholder Reports; - Rules 24(e)-2 and 24(f)-2 Notices; - Annual and Semi-Annual Reports on Form N-SAR; (s) Assist in Federal registration; Blue Sky registration and Blue Sky and Federal registration compliance processes; (t) Assist in the review of registration statements; (u) Monitor and report on compliance with Sub-Chapter M of the Internal Revenue Code; and (v) Prepare and furnish the Fund with performance information (including yield and total return information) calculated in accordance with applicable U.S. securities laws and report to external databases such information as may reasonably be requested. 2. Records. ICC shall keep the following records: (a) All books and records with respect to the Fund's books of account; and (b) Records of the Fund's securities transactions. 3. Liaison With Accountants. In addition to ICC's obligations relating to the Fund's independent accountants set forth in the Master Services Agreement, ICC shall act as liaison with the Fund's independent accountants and -2- shall provide account analyses, fiscal year summaries, and other audit related schedules. 4. Compensation. For services performed by ICC pursuant to this Appendix, the Fund will pay to ICC compensation for such services as set forth in the Fee Schedule attached to the Master Services Agreement, as the same may be amended from time to time by the parties in writing. -3- TRANSFER AGENCY SERVICES APPENDIX to MASTER SERVICES AGREEMENT between The Glenmede Fund, Inc. and Investment Company Capital Corp. This Appendix is hereby incorporated into and made a part of the Master Services Agreement dated as of July 1, 1995 (the "Master Services Agreement") between The Glenmede Fund, Inc. and Investment Company Capital Corp. Defined terms not otherwise defined herein shall have the meaning set forth in the Master Services Agreement. 1. Definitions. (a) "Authorized Person." The term "Authorized Person" shall mean any officer of the Fund and any other person, who is fully authorized by the Fund's Board of Directors, to give Oral and Written Instructions on behalf of the Fund. Initial "Authorized Persons" are listed in the Certificate attached hereto. (b) Oral Instructions. The term "Oral Instructions" shall mean oral instructions received by ICC from an Authorized Person or from a person reasonably believed by ICC to be an Authorized Person. (c) Written Instructions. The term "Written Instructions" shall mean written instructions signed by two Authorized Persons and received by ICC. The instructions may be delivered by hand, mail, tested telegram, cable, telex or facsimile sending device. 2. Description of Services. (a) General Services To Be Provided. ICC shall provide to the Fund the following services on an ongoing basis, if applicable: (i) Calculate 12b-1 payments; (ii) Maintain proper shareholder registrations; (iii) Review new applications and correspond with shareholders, if necessary, to complete or correct information; (iv) Direct payment processing of checks or wires; (v) Prepare and certify stockholder lists in conjunction with proxy solicitations; solicit and tabulate proxies; receive and tabulate proxy cards for meetings of the Fund's shareholders; (vi) Countersign securities; (vii) Direct shareholder confirmation of activity; (viii) Provide toll-free lines for direct shareholder use, plus customer liaison staff for on-line inquiry response; (ix) Mail duplicate confirmation to broker-dealers of their clients' activity, whether executed through the broker-dealer or directly with ICC; (x) Provide periodic shareholder lists and statistics to the Fund; (xi) Provide detail for underwriter/broker confirmations; (xii) Mail periodic year-end tax and statement information; (xiii) Provide timely notification to investment advisor, accounting agent, and custodian of Fund activity; and (xiv) Perform other participating broker-dealer shareholder services as may be agreed upon from time to time. (b) Purchase of Shares. ICC shall issue Shares and credit an account of an investor, in the manner described in the Prospectus, once it receives: (i) a purchase order; (ii) proper information to establish a shareholder account; and (iii) confirmation of receipt by, or crediting of funds for such order to, the Fund's custodian. ICC shall notify the Fund in case any proposed issue of Shares in the Fund shall result in an over issue as defined by Section 8-104(2) in the UCC, AND such an over-issue, shall refuse to countersign and issue, and/or credit, such Shares. (c) Redemption of Shares. ICC shall redeem the Fund's Shares only in accordance with the provisions of the Prospectus and each shareholder's individual directions. Shares shall be redeemed at such time as the shareholder tenders his or her shares and directs the method of redemption in accordance with the terms set forth in the Prospectus. If securities are received in proper form, Shares shall be redeemed before the funds are provided to ICC. When the Fund provides ICC with funds, redemption proceeds will be wired (if requested) or a redemption check issued. All redemption checks shall be drawn to the recordholder unless third party payment authorizations have been signed by the recordholder and delivered to ICC. (d) Dividends and Distributions. Upon receipt of certified resolutions of the Fund's Board of Directors authorizing the declaration and payment of dividends and distributions, ICC shall issue the dividends and distributions in Shares, or, upon shareholder election, pay such dividends and distributions in cash. Such issuance or payment shall be made after deduction and payment of the required amount of funds to be withheld in accordance with any applicable tax laws or other laws, rules or regulations. The Fund's shareholders shall receive tax forms and other information, or permissible substitute notice, relating to dividends and distributions, paid by the Fund as are required to be filed and mailed by applicable law, rule or regulation. ICC shall maintain and file with the IRS and other appropriate taxing authorities reports relating to all dividends and distributions paid by the Fund to its shareholders as required by tax or other law, rule or regulation. (e) Shareholder Account Services. If authorized in the Prospectus, ICC shall arrange for the following services, in accordance with the applicable terms set forth in the Prospectus: (i) the issuance of Shares obtained through any pre-authorized check plan and direct purchases through broker wire orders, checks and applications; (ii) exchanges of shares of any fund for Shares of the Fund with which the Fund has exchange privileges; (iii) automatic redemption from an account where that shareholder participates in an automatic redemption plan; and (iv) redemption of Shares from an account with a check writing privilege. (f) Communications to Shareholders. Upon timely Written Instructions, ICC shall mail all communications by the Fund to its shareholders, including, reports to shareholders, confirmation of purchases and sales of Shares, monthly or quarterly statements, dividend and distribution notices, and proxy material. -2- (g) Records. ICC shall maintain records of the accounts for each shareholder showing the following information: (i) name, address and U.S. Tax Identification or Social Security number; (ii) number and class of Shares held and number and class of Shares for which certificates, if any, have been issued, including dividends and distributions paid and the date and price for all transactions on a shareholder's account; (iv) any stop or restraining order placed against a shareholder's account; (v) any correspondence relating to the shareholder's account; (vi) information with respect to withholdings; (vii) any information required in order for ICC to perform any calculations contemplated or required by this Appendix or the Master Services Agreement; and (viii) ICC shall keep a record of all redemption and dividend checks returned by postal authorities, and shall maintain such records as are required for the Fund to comply with the escheat laws of any state or other authority. (h) Lost or Stolen Certificates. ICC shall place a stop notice against any certificate reported to be lost or stolen and comply with all applicable federal regulatory requirements for reporting such loss or alleged misappropriation. A new certificate shall be registered and issued upon: (i) the shareholder's pledge of a lost instrument bond or such other appropriate indemnity bond issued by a surety company approved by ICC; and (ii) completion of a release and indemnification agreement signed by the shareholder to protect ICC. (i) Shareholder Inspection of Stock Records. Upon requests from Fund shareholders to inspect stock records, ICC will notify the Fund and the Fund shall deliver Oral or Written Instructions granting or denying each such request. Unless ICC has acted contrary to the Fund's Instructions, the Fund agrees to release ICC from any liability for refusal or permission for a particular shareholder to inspect the Fund's shareholder records. (j) Withdrawal of Shares and Cancellation of Certificates. Upon receipt of Written Instructions, ICC shall cancel outstanding certificates surrendered by the Fund to reduce the total amount of outstanding Shares by the number of Shares surrendered by the Fund. (k) Telephone Transactions. In accordance with the terms of the Prospectus, ICC shall act upon shareholder requests made by telephone for redemption or exchange of Fund shares provided that (i) the shareholder has authorized telephone transactions on the Fund's Account Application or otherwise in writing, (ii) if the request is a redemption, the amount to be redeemed does not exceed $50,000 and (iii) ICC has complied with the identification and other security procedures required by the Fund in connection with telephone transactions. 3. Fees. As compensation for the services performed by ICC for the Fund pursuant to this Appendix, the Fund will pay to ICC such amounts as set forth in the Fee Schedule attached to the Master Services Agreement, as the same may be amended from time to time by the parties in writing. 4. Delegation of Responsibilities. ICC may subcontract to any third party reasonably acceptable to the Fund all or any part of its obligations under this Appendix; provided that any such subcontracting shall not relieve ICC of any of its obligations under this Appendix. All subcontractors shall be paid by ICC. 5. Instructions. Unless otherwise provided in this Appendix, ICC shall act only upon Oral and Written Instructions. ICC shall be entitled to rely upon any Oral and Written Instructions it receives from an Authorized Person (or from a person reasonably believed by ICC to be an Authorized Person) pursuant to this Appendix. ICC may assume that any Oral or Written Instruction received hereunder is not in any way inconsistent with the revisions of the Fund's Articles of Incorporation, or of any vote, resolutions or proceeding of the Fund's Board of Directors or shareholders. The Fund agrees to forward to ICC Written Instructions confirming Oral Instructions so that ICC receives the Written Instructions by the close of business on the same day that such Oral Instructions are received. The fact that such confirming Written Instructions are not received by ICC shall in no way invalidate the transactions or enforceability of the transactions authorized by the Oral Instructions. The Fund further agrees that ICC shall -3- incur no liability to the Fund in acting upon Oral or Written Instructions provided such instructions reasonably appear to have been received from an Authorized Person. If ICC is in doubt as to any action it should not take, ICC may request directions or advice, including Oral or Written Instructions, from the Fund. Provided ICC has met its standard of care specified in the Master Services Agreement, ICC shall be protected in any action it takes or does not take in reliance upon directions, advice or Oral or Written Instructions it receives from the Fund or from Fund counsel and which ICC believes, in good faith, to be consistent with those directions, advice or Oral or Written Instructions. Notwithstanding the foregoing, ICC shall have no obligation (i) to seek such directions, advice or Oral or Written Instructions, or (ii) to act in accordance with such directions, advice or Oral or Written Instructions unless, under the terms or other provisions of this Appendix, the same is a condition of ICC's properly taking or not taking such action. -4- EX-9.(B) 20 AMENDED AND RESTATED SHAREHOLDER SERVICING PLAN EXHIBIT (9)(b) THE GLENMEDE FUND, INC. AMENDED AND RESTATED SHAREHOLDER SERVICING PLAN Section 1. Each of the proper officers of The Glenmede Fund, Inc. (the "Company") is authorized to execute and deliver, in the name and on behalf of the Company, written agreements based substantially on the form attached hereto as Appendix A or any other form duly-approved by the Company's Board of Directors ("Agreements") with broker/dealers, banks and other financial institutions that are dealers of record or holders of record or which have a servicing relationship ("Servicing Agents") with the beneficial owners of shares in any of the Company's series listed on Exhibit I hereto (the "Portfolios"). Pursuant to such Agreements, Servicing Agents shall provide shareholder support services as set forth therein to their clients who beneficially own shares of the Portfolios in consideration of a fee, computed monthly in the manner set forth in the applicable Portfolio's then current prospectus, at an annual rate of 0.05% of the average daily net asset value of the shares beneficially owned by or attributable to such clients. Affiliates of the Company's distributor, administrator and adviser are eligible to become Servicing Agents and to receive fees under this Plan. All expenses incurred by the Portfolios in connection with the Agreements and the implementation of this Plan shall be borne entirely by the holders of the shares of the particular Portfolio involved. If more than one Portfolio is involved and expenses are not directly attributable to shares of a particular Portfolio, then the expenses may be allocated between or among the shares of the Portfolios in a manner determined by the Board. Section 2. The Company's administrator shall monitor the arrangements pertaining to the Company's Agreements with Servicing Agents. The Company's administrator shall not, however, be obligated by this Plan to recommend, and the Company shall not be obligated to execute, any Agreement with any qualifying Servicing Agents. Section 3. So long as this Plan is in effect, the Company's administrator shall provide to the Company's Board of Directors, and the Directors shall review, at least quarterly, a written report of the amounts expended pursuant to this Plan and the purposes for which such expenditures were made. Section 4. This Plan shall continue in effect until October 31, 1996 and unless sooner terminated, this Plan shall continue in effect thereafter for successive annual periods, provided that such continuance is specifically approved by a majority of the Board of Directors, including a majority of the Directors who are not "interested persons," as defined in the Investment Company Act of 1940, of the Company and have no direct or indirect financial interest in the operation of this Plan or in any Agreement related tothis Plan (the "Disinterested Directors") pursuant to a vote cast in person at a meeting called for the purpose of voting on this Plan. Section 5. This Plan may be amended at any time with respect to any Portfolio by the Company's Board of Directors, provided that any material amendment of the terms of this Plan (including a material increase of the fee payable hereunder) shall become effective only upon the approvals set forth in Section 4. Section 6. This Plan is terminable at any time with respect to any Portfolio by vote of a majority of the Disinterested Directors. Section 7. While this Plan is in effect, the selection and nomination of those Directors who are not "interested persons (as defined in the Investment Company Act of 1940) of the Company shall be committed to the discretion of such non-interested Directors. Section 8. The Company will preserve copies of this Plan, Agreements, and any written reports regarding this Plan presented to the Board of Directors for a period of not less than six years. Dated: December 6, 1995 -2- EXHIBIT I --------- THE GLENMEDE FUND, INC. ----------------------- Portfolio Fee - --------- (as a percentage of average daily net assets) Government Cash Portfolio .05% Tax-Exempt Cash Portfolio .05% Intermediate Government Portfolio .05% International Portfolio .05% International Fixed Income Portfolio .05% Equity Portfolio .05% Small Capitalization Equity Portfolio .05% Model Equity Portfolio .05% APPENDIX A THE GLENMEDE FUND, INC. SHAREHOLDER SERVICING AGREEMENT Ladies and Gentlemen: We wish to enter into this Shareholder Servicing Agreement ("Agreement") with you concerning the provision of administrative support services to your clients ("Customers") who may from time to time beneficially own shares in one or more series listed on Exhibit I hereto (the "Portfolios") of The Glenmede Fund, Inc. (the "Company"). The terms and conditions of this Agreement are as follows: Section 1. You agree to provide the following administrative support services to your Customers who may from time to time beneficially own shares of one or more Portfolios:1 (i) aggregating and processing purchase and redemption requests from Customers and transmitting promptly net purchase and redemption orders to our distributor or transfer agent; (ii) providing Customers with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; (iii) processing dividend and distribution payments from the Company on behalf of Customers; (iv) providing information periodically to Customers showing their positions; (v) arranging for bank wires; (vi) responding to Customers' inquiries concerning their investment; (vii) providing subaccounting with respect to shares beneficially owned by Customers or the information necessary for subaccounting; (viii) if required by law, forwarding shareholder communications from us (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Customers; and (ix) providing such other similar services as we may reasonably request to the extent you are permitted to do so under applicable statutes, rules or regulations. All services rendered hereunder by you shall be performed in a professional, competent and timely manner. Section 2. You will perform only those activities which are consistent with statutes and regulations applicable to you. You will act solely as agent or, upon the order of, and for the account of, your Customers. - -------- 1 Services may be modified or omitted in the particular case and items relettered or renumbered. Section 3. You will provide such office space and equipment, telephone facilities and personnel (which may be any part of the space, equipment and facilities currently used in your business, or any personnel employed by you) as may be reasonably necessary or beneficial in order to provide the administrative support services contemplated hereby. Section 4. Neither you nor any of your officers, employees or agents are authorized to make any representations concerning us or the shares except those contained in our then current prospectuses and statements of additional information, as amended or supplemented from time to time, copies of which will be supplied by us to you, or in such supplemental literature or advertising as may be authorized by our distributor or us in writing. Section 5. For all purposes of this Agreement you will be deemed to be an independent contractor, and will have no authority to act as agent for us in any matter or in any respect. By your written acceptance of this Agreement, you agree to and do release, indemnify and hold us harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions or inactions of or by you or your officers, employees or agents regarding your responsibilities hereunder or the purchase, redemption, transfer or registration of shares (or orders relating to the same) by or on behalf of Customers. You and your employees will, upon request, be available during normal business hours to consult with us or our designees concerning the performance of your responsibilities under this Agreement. Section 6. In consideration of the services and facilities provided by you hereunder, we will pay to you, and you will accept as full payment therefor, a fee as described in Exhibit I hereto, as amended from time to time. The fee rate payable to you may be prospectively increased or decreased by us, in our sole discretion, at any time upon notice to you. Further, we may, in our discretion and without notice, suspend or withdraw the sale of shares of any and all Portfolios, including the sale of shares to you for the account of any Customer or Customers. Compensation payable under this Agreement may be subject to, among other things, the National Association of Securities Dealers, Inc. ("NASD") Rules of Fair Practice governing receipt by NASD members of shareholder servicing plan fees from registered investment companies (the "NASD Servicing Plan Rule"), which became effective on July 7, 1993. Such compensation shall only be paid if permissible under the NASD Servicing Plan Rule and shall not be payable for services that are deemed to be distribution-related services. Section 7. You will furnish us or our designees with such information as we or they may reasonably request (including, without limitation, periodic -2- certifications confirming the provision to Customers of the services described herein), and will otherwise cooperate with us and our designees (including, without limitation, any auditors or legal counsel designated by us), in connection with the preparation of reports to our Board of Directors concerning this Agreement and the monies paid or payable by us pursuant hereto, as well as any other reports or filings that may be required by law. Section 8. We may enter into other similar Agreements with any other person or persons without your consent. Section 9. By your written acceptance of this Agreement, you represent, warrant and agree that: (i) in no event will any of the services provided by you hereunder be primarily intended to result in the sale of any shares issued by us; and (ii) the compensation payable to you hereunder, together with any other compensation you receive in connection with the investment of your Customers' assets in shares of the Portfolios, will be disclosed by you to your Customers to the extent required by applicable laws or regulations, will be authorized by your Customers and will not result in an excessive or unreasonable fee to you. Section 10. This Agreement will become effective on the date a fully executed copy of this Agreement is received by us or our designee. Unless sooner terminated, this Agreement will continue until October 31, ____ [initial term cannot exceed one year and must end on October 31] and thereafter will continue automatically for successive annual periods provided such continuance is specifically approved at least annually by us in the manner described in Section 11. This Agreement is terminable with respect to shares of any Portfolio, without penalty, at any time by us (which termination may be by a vote of a majority of our Disinterested Directors as defined below) or by you upon written notice to the other party hereto. Section 11. This Agreement has been approved by vote of a majority of (1) our Board of Directors and (ii) those Directors who are not "interested persons" (as defined in the Investment Company Act of 1940) of us and have no direct or indirect financial interest in the operation of the Shareholder Servicing Plan adopted by us regarding the provision of support services to the beneficial owners of shares of the Portfolios or in any agreement related thereto cast in person at a meeting called for the purpose of voting on such approval ("Disinterested Directors"). Section 12. All notices and other communications to either you or us will be duly given if mailed, telegraphed, telexed or transmitted by similar telecommunications device to the appropriate address or number stated herein (with a confirming copy by mail), or to such other address as either party shall -3- so provide in writing to the other. Section 13. This Agreement will be construed in accordance with the internal laws of The Commonwealth of Pennsylvania without giving effect to principles of conflict of laws, and is nonassignable by the parties hereto. If you agree to be legally bound by the provisions of this Agreement, please sign a copy of this letter where indicated below and promptly return it to us, at the following address: Investment Company Capital Corp., 135 East Baltimore Street, Baltimore, Maryland 21202; fax number (410) 637-6875; Attention: Brian C. Nelson. Very truly yours, The Glenmede Fund, Inc. Date: By: --------------------------- -------------------------------- Name: ------------------------------ Title: ----------------------------- Accepted and Agreed to: Servicing Agent ----------------------------------- (Firm Name) ----------------------------------- (Address) ----------------------------------- (City) (State) Fax #: ----------------------------- Attention: ------------------------- Date: By: --------------------------- -------------------------------- Name: ------------------------------ Title: ----------------------------- -4- EXHIBIT I --------- THE GLENMEDE FUND, INC. ----------------------- Portfolio Fee - --------- (as a percentage of average daily net assets) Government Cash Portfolio .05% Tax-Exempt Cash Portfolio .05% Intermediate Government Portfolio .05% International Portfolio .05% International Fixed Income Portfolio .05% Equity Portfolio .05% Small Capitalization Equity Portfolio .05% Model Equity Portfolio .05% EX-9.(C) 21 AMENDED AND RESTATED SHAREHOLDER SERVICING AGREEMENT EXHIBIT (9)(c) THE GLENMEDE FUND, INC. AMENDED AND RESTATED SHAREHOLDER SERVICING AGREEMENT Ladies and Gentlemen: We wish to enter into this Shareholder Servicing Agreement ("Agreement") with you concerning the provision of administrative support services to your clients ("Customers") who may from time to time beneficially own shares in one or more series listed on Exhibit I hereto (the "Portfolios") of The Glenmede Fund, Inc. (the "Company"). The terms and conditions of this Agreement are as follows: Section 1. You agree to provide the following administrative support services to your Customers who may from time to time beneficially own shares of one or more Portfolios:1 (i) aggregating and processing purchase and redemption requests from Customers and transmitting promptly net purchase and redemption orders to our distributor or transfer agent; (ii) providing Customers with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; (iii) processing dividend and distribution payments from the Company on behalf of Customers; (iv) providing information periodically to Customers showing their positions; (v) arranging for bank wires; (vi) responding to Customers' inquiries concerning their investment; (vii) providing subaccounting with respect to shares beneficially owned by Customers or the information necessary for subaccounting; (viii) if required by law, forwarding shareholder communications from us (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Customers; and (ix) providing such other similar services as we may reasonably request to the extent you are permitted to do so under applicable statutes, rules or regulations. All services rendered hereunder by you shall be performed in a professional, competent and timely manner. Section 2. You will perform only those activities which are consistent with statutes and regulations applicable to you. You will act solely as agent or, upon the order of, and for the account of, your Customers. - -------- 1 Services may be modified or omitted in the particular case and items relettered or renumbered. Section 3. You will provide such office space and equipment, telephone facilities and personnel (which may be any part of the space, equipment and facilities currently used in your business, or any personnel employed by you) as may be reasonably necessary or beneficial in order to provide the administrative support services contemplated hereby. Section 4. Neither you nor any of your officers, employees or agents are authorized to make any representations concerning us or the shares except those contained in our then current prospectuses and statements of additional information, as amended or supplemented from time to time, copies of which will be supplied by us to you, or in such supplemental literature or advertising as may be authorized by our distributor or us in writing. Section 5. For all purposes of this Agreement you will be deemed to be an independent contractor, and will have no authority to act as agent for us in any matter or in any respect. By your written acceptance of this Agreement, you agree to and do release, indemnify and hold us harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions or inactions of or by you or your officers, employees or agents regarding your responsibilities hereunder or the purchase, redemption, transfer or registration of shares (or orders relating to the same) by or on behalf of Customers. You and your employees will, upon request, be available during normal business hours to consult with us or our designees concerning the performance of your responsibilities under this Agreement. Section 6. In consideration of the services and facilities provided by you hereunder, we will pay to you, and you will accept as full payment therefor, a fee as described in Exhibit I hereto, as amended from time to time. The fee rate payable to you may be prospectively increased or decreased by us, in our sole discretion, at any time upon notice to you. Further, we may, in our discretion and without notice, suspend or withdraw the sale of shares of any and all Portfolios, including the sale of shares to you for the account of any Customer or Customers. Compensation payable under this Agreement may be subject to, among other things, the National Association of Securities Dealers, Inc. ("NASD") Rules of Fair Practice governing receipt by NASD members of shareholder servicing plan fees from registered investment companies (the "NASD Servicing Plan Rule"), which became effective on July 7, 1993. Such compensation shall only be paid if permissible under the NASD Servicing Plan Rule and shall not be payable for services that are deemed to be distribution-related services. Section 7. You will furnish us or our designees with such information as we or they may reasonably request (including, without limitation, periodic certifications confirming the provision to Customers of the services described herein), and will otherwise cooperate with us and our designees (including, without limitation, any auditors or legal counsel designated by us), in connection with the preparation of reports to our Board of Directors concerning this Agreement and the monies paid or payable by us pursuant hereto, as well as any other reports or filings that may be required by law. Section 8. We may enter into other similar Agreements with any other person or persons without your consent. Section 9. By your written acceptance of this Agreement, you represent, warrant and agree that: (i) in no event will any of the services provided by you hereunder be primarily intended to result in the sale of any shares issued by us; and (ii) the compensation payable to you hereunder, together with any other compensation you receive in connection with the investment of your Customers' assets in shares of the Portfolios, will be disclosed by you to your Customers to the extent required by applicable laws or regulations, will be authorized by your Customers and will not result in an excessive or unreasonable fee to you. Section 10. This Agreement will become effective on the date a fully executed copy of this Agreement is received by us or our designee. Unless sooner terminated, this Agreement will continue until October 31, 1996 and thereafter will continue automatically for successive annual periods provided such continuance is specifically approved at least annually by us in the manner described in Section 11. This Agreement is terminable with respect to shares of any Portfolio, without penalty, at any time by us (which termination may be by a vote of a majority of our Disinterested Directors as defined below) or by you upon written notice to the other party hereto. Section 11. This Agreement has been approved by vote of a majority of (1) our Board of Directors and (ii) those Directors who are not "interested persons" (as defined in the Investment Company Act of 1940) of us and have no direct or indirect financial interest in the operation of the Shareholder Servicing Plan adopted by us regarding the provision of support services to the beneficial owners of shares of the Portfolios or in any agreement related thereto cast in person at a meeting called for the purpose of voting on such approval ("Disinterested Directors"). Section 12. All notices and other communications to either you or us will be duly given if mailed, telegraphed, telexed or transmitted by similar telecommunications device to the appropriate address or number stated herein (with a confirming copy by mail), or to such other address as either party shall so provide in writing to the other. Section 13. This Agreement will be construed in accordance with the internal laws of The Commonwealth of Pennsylvania without giving effect to principles of conflict of laws, and is nonassignable by the parties hereto. If you agree to be legally bound by the provisions of this Agreement, please sign a copy of this letter where indicated below and promptly return it to us, at the following address: Investment Company Capital Corp., 135 East Baltimore Street, Baltimore, Maryland 21202; fax number (410) 637-6875; Attention: Brian C. Nelson. Very truly yours, The Glenmede Fund, Inc. Date: December 6, 1995 By: /s/John W. Church, Jr. ----------------- -------------------------- Name: John W. Church, Jr. ------------------------- Title: President ------------------------ Accepted and Agreed to: Servicing Agent The Glenmede Trust Company ------------------------------- (Firm Name) 1650 Market Street, Suite 1200 ------------------------------- (Address) Philadelphia, PA 19103-7391 ------------------------------- (City) (State) Fax #: (215)419-6197 ------------------------ Attention: John W. Church, Jr. -------------------- Date: December 6, 1995 By: /s/John W. Church, Jr. ------------------- -------------------------- Name:John W. Church, Jr. -------------------------- Title: Chief Investment Officer ------------------------ EXHIBIT I --------- THE GLENMEDE FUND, INC. ----------------------- Portfolio Fee - --------- (as a percentage of average daily net assets) Government Cash Portfolio .05% Tax-Exempt Cash Portfolio .05% Intermediate Government Portfolio .05% International Portfolio .05% International Fixed Income Portfolio .05% Equity Portfolio .05% Small Capitalization Equity Portfolio .05% Model Equity Portfolio .05% EX-11 22 CONSENT OF COUNSEL CONSENT OF COUNSEL ------------------ We hereby consent to the use of our name and to the reference to our Firm under the caption "Counsel" in the Prospectus that is included in Post-Effective Amendment No. 17 to the Registration Statement (No. 33-22884) on Form N-1A under the Securities Act of 1933, as amended, and Post-Effective Amendment No. 19 to the Registration Statement (No. 811-5577) on Form N-1A under the Investment Company Act of 1940, as amended, of The Glenmede Fund, Inc. This consent does not constitute a consent under section 7 of the Securities Act of 1933, and in consenting to the use of our name and the references to our Firm under such caption we have not certified any part of the Registration Statement and do not otherwise come within the categories or persons whose consent is required under said section 7 or the rules and regulations of the Securities and Exchange Commission thereunder. /s/ Drinker Biddle & Reath --------------------------- DRINKER BIDDLE & REATH Philadelphia, Pennsylvania December 21, 1995 EX-13.(B) 23 PURCHASE AGREEMENT EXHIBIT (13)(b) PURCHASE AGREEMENT The Glenmede Fund, Inc. (the "Fund"), a Maryland corporation, and The Glenmede Trust Company ("Glenmede Trust"), a Pennsylvania trust company, hereby agree with each other as follows: 1. The Fund hereby offers Glenmede Trust and Glenmede Trust hereby purchases one share (the "Share") of the Fund's International Fixed Income Portfolio for $10.00. The Fund hereby acknowledges receipt from Glenmede Trust of funds in the total amount of $10.00 in full payment for the share. 2. Glenmede Trust represents and warrants to the Fund that the Share is being acquired for investment purposes and not with a view to the distribution thereof. IN AGREEMENT WHEREOF, and intending to be legally bound hereby, the parties hereto have executed this Agreement as of the 21st day of October, 1992. THE GLENMEDE FUND, INC. ATTEST: /s/Sheryl P. Durham By:/s/John W. Church. Jr. - ----------------------- ------------------------ its: Vice President its: President THE GLENMEDE TRUST COMPANY ATTEST: /s/Sheryl P. Durham By:/s/Mary Ann B. Wirts - ----------------------- ------------------------ its: Vice President its: Vice President EX-13.(D) 24 PURCHASE AGREEMENT EXHIBIT (13)(d) PURCHASE AGREEMENT The Glenmede Fund, Inc., a Maryland corporation (the "Company") and The Glenmede Trust Company ("Glenmede Trust"), a Pennsylvania trust company, hereby agree with each other as follows: 1. The Company hereby offers Glenmede Trust and Glenmede Trust hereby purchases one share (the "Share") of the Company's Emerging Markets Portfolio for $10.00 per share. The Company hereby acknowledges receipt from Glenmede Trust of funds in the total amount of $10.00 in full payment for such Share. 2. Glenmede Trust represents and warrants to the Company that the Share is being acquired for investment purposes and not with a view to the distribution thereof. IN AGREEMENT WHEREOF, and intending to be legally bound hereby, the parties hereto have executed this Agreement as of the 12th day of December, 1994. ATTEST: THE GLENMEDE FUND, INC. /s/Mary Ann B. Wirts By:/s/John W. Church. Jr. - ------------------------- -------------------------- its: Exec. Vice President its: President ATTEST: THE GLENMEDE TRUST COMPANY /s/Kimberly C. Osborne By:/s/Mary Ann B. Wirts - ------------------------- -------------------------- its: Asst. Vice President its: Vice President EX-27 25
6 0000835663 THE GLENMEDE FUND 1 GOVERNMENT CASH PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 412,796,233 412,796,233 864,039 0 0 413,660,272 3,000,000 0 2,055,047 5,055,047 0 408,562,550 408,562,550 353,335,369 71,402 0 (28,727) 0 0 408,605,225 0 25,532,604 0 636,732 24,895,872 (26,819) 0 24,869,053 0 24,895,872 0 0 2,409,469,078 2,354,254,073 12,176 55,200,362 71,402 (1,908) 0 0 0 0 636,732 435,688,655 1.00 0.059 0.000 0.059 0.000 0.000 1.00 0.15 0 0
EX-27 26
6 0000835663 THE GLENMEDE FUND 2 TAX-EXEMPT CASH PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 225,039,254 225,039,254 1,338,092 168,801 0 226,546,147 0 0 738,144 738,144 0 225,882,724 225,882,724 223,032,394 0 0 (74,721) 0 0 225,808,003 0 8,205,058 0 318,981 7,886,077 (27,815) 0 7,858,262 0 7,886,077 0 0 913,203,200 910,357,600 4,730 2,822,515 0 (46,906) 0 0 0 0 318,981 213,869,678 1.00 0.038 0.000 0.038 0.000 0.000 1.00 0.15 0 0
EX-27 27
6 0000835663 THE GLENMEDE FUND 3 INTERMEDIATE GOVERNMENT PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 333,202,464 338,006,030 4,924,375 659 0 342,931,064 0 0 56,774 56,774 0 348,290,546 33,099,045 33,753,832 1,764,711 0 (11,984,533) 0 4,803,566 342,874,290 0 22,334,233 0 353,977 21,980,256 5,099,980 10,354,660 37,434,896 0 22,229,135 0 0 3,967,663 4,628,535 6,085 9,077,754 2,056,666 (17,127,590) 0 0 0 0 353,977 329,692,035 9.89 0.69 0.46 0.68 0.00 0.00 10.36 0.11 0 0
EX-27 28
6 0000835663 THE GLENMEDE FUND 4 INTERNATIONAL PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 313,552,861 346,657,196 1,569,412 932 0 348,227,540 4,865,814 0 152,833 5,018,647 0 308,982,124 27,034,127 22,426,690 1,031,327 0 59,344 0 33,136,098 343,208,893 7,741,637 844,391 0 549,057 8,036,971 14,395,636 (8,729,247) 13,703,360 0 7,792,634 14,630,296 0 4,780,814 1,348,160 1,174,783 50,696,092 1,072,118 8,876 0 303,868 0 0 549,057 308,081,164 13.04 0.32 0.23 0.32 0.57 0.00 12.70 0.18 0 0
EX-27 29
6 0000835663 THE GLENMEDE FUND 5 EQUITY PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 68,808,986 80,156,437 18,776 904 0 80,176,117 0 0 19,230 19,230 0 68,568,608 5,464,696 5,100,184 46,472 0 194,356 0 11,347,451 80,156,887 1,610,984 92,879 0 97,587 1,606,276 2,910,296 10,171,776 14,688,348 0 1,678,803 2,715,940 0 1,306,422 1,132,291 190,381 16,111,184 118,999 0 0 0 0 0 97,587 69,143,401 12.56 0.32 2.64 0.33 0.52 0.00 14.67 0.14 0 0
EX-27 30
6 0000835663 THE GLENMEDE FUND 6 SMALL CAPITALIZATION EQUITY PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 150,738,101 172,514,631 261,939 11 0 172,776,581 1,790,749 0 17,326 1,808,075 0 149,244,730 11,416,545 7,875,745 10,971 0 0 0 21,712,805 170,968,506 2,401,639 484,151 0 192,482 2,693,308 17,015,673 8,446,898 28,155,879 0 2,730,374 17,034,956 0 2,921,359 507,371 1,126,812 61,096,250 48,037 19,283 0 0 0 0 192,482 143,160,362 13.95 0.28 2.69 0.26 1.68 0.00 14.98 0.14 0 0
EX-27 31
6 0000835663 THE GLENMEDE FUND 7 INSTITUTIONAL INTERNATIONAL PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 42,962,255 44,397,257 138,415 352,650 0 44,888,322 618,264 0 64,515 682,779 0 42,870,858 3,582,959 1,351,835 (98,385) 0 (2,357) 0 1,435,427 44,205,543 483,545 95,790 0 198,554 380,781 361,563 (1,210,567) (468,223) 0 26,978 841,909 0 2,407,743 228,643 52,024 27,129,503 28,158 (2,357) 0 20,021 155,065 0 198,554 21,376,656 12.63 0.19 (0.13) 0.18 0.17 0.00 12.34 0.93 0 0
EX-27 32
6 0000835663 THE GLENMEDE FUND 8 INTERNATIONAL FIXED INCOME PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 23,597,289 25,520,098 1,462,409 978 0 26,983,485 0 0 24,028 24,028 0 24,699,050 2,434,306 1,618,404 311,915 0 15,020 0 1,933,472 26,959,457 0 1,711,993 0 58,891 1,653,102 102,337 1,630,200 3,385,639 0 1,482,934 24,321 0 1,006,117 190,265 50 10,375,019 78,750 0 714,685 0 0 0 58,891 25,441,749 10.25 0.66 0.78 0.61 0.01 0.00 11.07 0.23 0 0
EX-27 33
6 0000835663 THE GLENMEDE FUND 9 MODEL EQUITY PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 NOV-01-1994 OCT-31-1995 YEAR 1 15,642,594 15,973,243 26,841 791 0 16,000,875 0 0 20,336 20,336 0 15,606,911 1,545,474 1,944,140 37,322 0 5,658 0 330,648 15,980,539 532,237 29,837 0 37,172 524,902 2,726,152 (426,228) 2,824,826 0 516,246 2,225,023 0 43,417 655,217 213,134 (4,673,874) 28,666 (495,472) 0 0 0 0 37,172 18,742,835 10.62 0.32 1.38 0.31 1.67 0.00 10.34 0.20 0 0
EX-27 34
6 0000835663 THE GLENMEDE FUND 10 EMERGING MARKETS PORTFOLIO 1 U.S. DOLLARS OCT-31-1995 DEC-14-1994 OCT-31-1995 10-MOS 1 28,849,979 27,774,149 8,022 62,699 0 27,844,870 341,191 0 207,081 548,272 0 28,675,939 2,804,867 0 44,952 0 (348,325) 0 (1,075,968) 27,296,598 427,471 236,878 0 326,975 337,374 (411,130) (1,075,968) (1,149,724) 0 229,617 0 0 2,841,258 36,712 321 27,296,598 0 0 0 0 239,919 0 326,975 20,114,687 10.00 0.16 (0.31) 0.12 0.00 0.00 9.73 1.81 0 0
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